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15% Fewer Rental Properties Put On The Market In August

Number of properties newly listed for renting falls throughout the country.

The crowdfunding platform Property Partner have compared the number of rental properties being put on the market between the 1st and the 28th of August to the number that entered during the same time frame in July. The results showed a drop of 15% between the months.

Dan Gandesha, C.E.O. of Property Partner points out part of this fall is due to normal seasonal changes in activity as the busier summer period comes to an end. Mr Gandesha adds that July saw unusually high activity with “the highest numbers of buy-to-lets being advertised since the stamp duty hike in April whereas last month experienced some dramatic falls in most parts of the U.K..”

Tough Environment For Traditional Landlords

Mr Gandesha sees an environment in which “traditional landlords have had it hard of late. Alongside the stamp duty surcharge, the banks have imposed tougher lending criteria, and cuts to mortgage interest tax relief will begin to take effect next year.”

Difficulties faced by landlords could translate to tenants having to pay more as Mr Gandesha explains, “profits have been hit and this could force many landlords to sell up. If September fails to pick up and there’s a shortage of available rental properties, rents could be pushed up. Hopefully for tenants, this won’t be the case.”

Breakdown By Region

Falls were seen across the country with new buy-to-lets in Canterbury, in the South East down 30%. Wakefield in the North of England and Loughborough in Central England also made the list of the most affected. Overall, the North East that saw the greatest drop with Hartlepool leading the trend.

Further down the list of those affected, Manchester saw a fall of 18.4%. London 16.4% and Birmingham 16%.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

New Push To Grow The Interest-Only Mortgage Market

Leeds Building Society looks to widen the market for interest-only mortgages.

The chief commercial officer of Leeds Building Society, Richard Fearon believes that mortgages that do not include repaying the capital value of a property have “become the domain of the wealthy”. He adds his company wish to serve “the mass affluent too, the self-employed, and those wanting more flexibility.”

Market Yet To Recover Fully After 2008 Credit Crisis

The credit crunch of 2008 led to greater restrictions in many areas of credit provision. This squeezing of the market was combined with greater regulator scrutiny, cited by many organisations as a contributing factor behind them leaving the market. The activity of the regulators of the City gave rise to stricter rules presented in the 2014 Mortgage Market Review.

Mr Fearon states that throughout this time L.B.S. “never left the interest-only market” and he now expects that “we will see other lenders get interested in coming back to the market over time.”

As of the end of 2015, Council for Mortgage Lenders data shows that Britain had £238bn of interest-only stock, of which £208bn was purely interest-only.

The New Products

L.B.S. is increasing the percentage they are willing to loan based off a property’s value from 50% to 60% across all interest-only mortgages. Part-and-part mortgages can also get 60% loan-to-value mortgages with a further 15% available through their capital repayment component.

Affordability tests will be the same as capital repayment mortgages and stress-tested in conditions of up to a 7% interest rate.

Predictions

Market research carried out by the Financial Conduct Authority and GfK found that by the year 2020, around 600,000 interest-only mortgages will mature. Almost half of all interest-only mortgages are predicted to have a shortfall and a third of shortfalls in 2020 are expected to be greater than £50,000.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Shared ownership

Shared ownership

10 tips to help you on your way

1) Manage your expectations, because housing associations are not charities. If you default on rent or a mortgage, your home may be repossessed. The association will not bail you out if your home falls into negative equity or if you struggle to find a buyer down the line.

2) You may be banned from subletting. This could mean no lodgers or live-in partners, and no earning a quick buck on Airbnb. Check before you buy.

3) You may need to pay stamp duty. Most buyers opt to pay just on the portion of the home they will own and, if this is less than £125,000, you will be exempt. If it is above, you will be hit with a bill, and if you buy an increased share of the property, you might have to pay extra stamp duty too- and you will need a solicitor to do your conveyancing.

4) Rents usually increase annually, based on the Retail Price Index, plus one per cent. Over a year, this will add about £100 to £150 to the running costs of a £250,000 property (full price).

5) Don’t get seduced by the idea of fabulous extras, such as swimming pools. Shared owners are usually, and rather unfairly, excluded from using them. They also often have to use a different front door to people who have bought on the open market. “Poor doors” segregate lower-income residents, and are widely considered a scandal.

6) Shared owners often also get shunted to the worst part of a development – overlooking railway lines, a busy road, or on lower floors with no views. Ask to see a model, and certainly detailed plans, of the entire development.

7) As with any new home, you must find out how long the development around you is going to take to complete. Shared-ownership sections often get built early, which could mean years of building noise. And what if you want – or need – to sell up within a year or two.

8) Take a cool-headed look at potential price growth. If new transport links are planned, it will be a good bet. If it is in a run-down location with no sniff of regeneration, then you will be the first to be hit when any downturn happens.

9) When you want to sell, you might not be able to take full advantage of the market. The housing association will first offer the property to buyers on its waiting list for a set price (based on an independent estimate) and will not get into any bidding wars. On the plus side, there’s no gazumping or gazundering. If it does not sell, you will be able to pitch it on the open market.

10) You aren’t likely to become a property millionaire. If you buy a 50 per cent share of £500,000 flat and its price rises by 20 per cent, when you sell, you will make £50,000. However, you have to pay a fee to the housing association if it markets the property. If you sell through an estate agent, you will pay a fee of up to 3.5 per cent of the entire selling price. This could knock as much as £21,000 off your profit, so shop around for agents with lower rates.

For more help and advice please do not hesitate to contact us @HoskinMortgages