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Some landlords struggling to get buy to let finance, research suggests
Despite a choice of 900 buy to let mortgages available on the market, lack of finance is hindering almost a quarter of UK landlords, new research has found. The situation is preventing them from expanding their property portfolios, according to the study conducted by online letting agent Property Let By Us. Overall one in 10 landlords has had difficulty securing a mortgage over the last 12 months but 82% of landlords have managed to successfully secure a mortgage at a when the buy to let market has been challenging for landlords. Indeed almost 80% of landlords are reporting rent arrears, nearly a quarter of landlords have served an eviction notice and 7% have had to resort to the courts to evict tenants. The good news is that void periods are down as demand continues to outstrip demand. ‘While the booming buy to let market looks like good news for landlords, the real picture is not so rosy. Spiralling rents are great news for yields, but the down side is that it brings with it a higher risk of rent arrears,’ said Jane Morris, Managing Director of Property Let By Us. ‘Securing finance also looks like it is going to get tougher for landlords. A new high street crackdown now means landlords will need a bigger deposit and face tighter checks for a buy to let loan. High Street lenders are introducing strict criteria in a crackdown on the buy to let boom, which is feared to be pushing up house prices across the UK,’ she explained. ‘The amount landlords will be able to borrow is expected to fall by thousands and they are likely to face new tough lending criteria to secure a buy to let loan. Landlords must also prove that they are not wholly reliant on their rental income and that they will also be able to cope with void periods and any repairs to the property,’ she added. Morris also pointed out that some lenders are introducing new affordability checks, which require landlords to answer such questions as how much they spend on household bills and childcare before they can get a loan. Lenders may also refuse loans to anyone dependent solely on a rental income and some providers expect applicants to have income of at least £25,000 a year from other sources. ‘Landlords need to thoroughly research lenders and ensure they meet the lending criteria before applying for a mortgage,’ Morris concluded. Continue reading
UK housing repossessions continue downward to record low
Residential property repossessions in the UK, already at their lowest since records began, continued to fall in the second quarter of 2015, according to latest data to be published. In that period, the repossession rate was 0.02%, equivalent to just one in 5,000 mortgages and the data from the Council of Mortgage Lenders also shows that arrears continued to fall as well. Overall there were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of last year. Of these, 1,800 were in the owner occupier market, and 700 in the buy to let market. However, the CML report points out that as in the first quarter, the current flow of repossessions probably continues to remain lower than the underlying trend would imply, even though arrears are also falling. In terms of arrears, the total number of mortgages with arrears equivalent to 2.5% or more of the mortgage balance was 106,400.This equated to 0.96% of all mortgages, again, the lowest rate since quarterly records began in 2008. CML director general Paul Smee pointed out that this is the first quarter in which the CML has been able to publish fully consistent data on arrears and possessions across both the owner occupier and the buy to let markets. As a result of improvements to the underlying data surveys, some back data has been restated. Of all loans with arrears of more than 2.5% of balance some 100,700 were owner occupier and 5,700 buy to let. In both the owner occupier and buy to let markets, the number and proportion of mortgages in arrears fell or remained static in all arrears bands and none experienced a worsening. Continue reading
Land owners in Scotland urged to register voluntarily for new mapping process
Registers of Scotland (RoS) is to work with Scottish Land and Estates to make sure that landowners in Scotland are part of the process that will see all privately owned land registered and mapped by 2024. The Scottish Government has asked RoS to complete the country’s land register by 2024 for privately owned land and property and by 2019 for publicly owned titles. At the moment, around 58% of all Scottish properties are on the register and around 27% of Scotland's land mass. Almost all the remaining properties are held on the General Register of Sasines. Property currently transfers from the Sasine to the Land Register through change in ownership, or by the owner voluntarily applying for registration. However from April next year this register will close to standard securities, such as a remortgage, and any change to title will automatically come on to the land register. Landowners are being urged to register their land voluntarily with officials pointing out that benefits will include clarity of title on the map based system, which provides greater certainty and security about what is owned. A voluntary registration also includes a state backed warranty of the information contained in the title deed. The Keeper of the Registers of Scotland has a new lever known as Keeper Induced Registration (KIR) where she can register land and property with no involvement of the owner. The details of how this process will work have yet to be finalised and a public consultation will be held later this year. ‘Our commitment is to take reasonable steps to ensure that ownership of land is visible and to ensure that landowners or their named representatives are accessible and contactable,’ said David Johnstone, chairman of Scottish Land and Estates. ‘As owners and managers of land, members are concerned about the process and professional costs of voluntary or keeper induced registration of title and in particular the impact of any changes from a practical perspective. In general, we are concerned to ensure the integrity and accuracy of the land register for landowners across Scotland and will continue to work closely with Registers of Scotland as it progresses this work to achieve its target,’ he explained. Charles Keegan, head of Land Register Completion at Registers of Scotland, said that when titles are added to the map based public register, RoS will provide a title sheet that provides greater clarity on what is owned and should make any future transactions quicker and easier. ‘We look forward to continuing to work with Scottish Land and Estates members going forward on registering their titles and would encourage anyone with an interest in voluntary registration to get in touch with the team,’ he added. Continue reading
