The last couple of days have seen a host of stories about landlords, buy-to-let mortgages - and often the main messages have been contradictory.
Research from the Association of Residential Landlords, ARLA, is claiming that tenant demand is decreasing whilst landlords are increasingly willing to buy new investment properties. At the same time, a third of landlords questioned by Paragon Mortgages found that buy-to-let finance is becoming more readily available.
So, are we facing a situation where landlords will be struggling to fill their flats? Far from it. Taking a closer look at the ARLA survey, tenant demand is based on members stating whether they believe there are more tenants than properties. This quarter, 54% said they felt demand outstripped supply, down from 57% last quarter. So, more than half of the landlords asked feel that demand continues to outstrip supply.
This will remain the same for the foreseeable future, especially in a city like Edinburgh. Here, demand continues to grow because the number of students coming to the city grows (and is forecast to grow) year on year.
At the same time, recent graduates are no longer in a position to buy a property immediately after they finish university which has lead to growth in the professional lets market. Combine these developments with researching the property you're interested in and investing in a sought-after area and property remains a solid investment.
Wednesday 19 June 2013
Thursday 13 June 2013
Changes afoot for BTL mortgages
Similar to their residential counterparts, buy-to-let mortgages require applicants to tick a number of boxes before money changes hands.
Traditionally, requirements for BTL mortgages are based on both the property's potential as an investment and the buyer's financial background, including their annual income.
BTL mortgage provider BM Solutions, which is owned by Lloyds has now changed its criteria and removed the minimum annual income requirement of £25,000. The lender's reason behind the change? They believe that the affordability of a BTL property depends more on the actual property and the rental income it is likely to achieve than the buyer's finances.
Buyers are still required to state their annual income on the application, though. A step in the right direction? We're undecided. Whilst we agree with the notion that the success of a BTL investment is largely down to the selected property, there is an argument to check the buyers finances on a more general basis to ensure they can afford the property in the long term.
On a different note, Prime Minister David Cameron used this week's Prime Minister's Questions to clarify that the government's Help to Buy scheme will not extend to BTL mortgages, but is squarely aimed at owner-occupiers. Also excluded are those without a UK credit history to avoid foreign buyers benefitting from the scheme.
Traditionally, requirements for BTL mortgages are based on both the property's potential as an investment and the buyer's financial background, including their annual income.
BTL mortgage provider BM Solutions, which is owned by Lloyds has now changed its criteria and removed the minimum annual income requirement of £25,000. The lender's reason behind the change? They believe that the affordability of a BTL property depends more on the actual property and the rental income it is likely to achieve than the buyer's finances.
Buyers are still required to state their annual income on the application, though. A step in the right direction? We're undecided. Whilst we agree with the notion that the success of a BTL investment is largely down to the selected property, there is an argument to check the buyers finances on a more general basis to ensure they can afford the property in the long term.
On a different note, Prime Minister David Cameron used this week's Prime Minister's Questions to clarify that the government's Help to Buy scheme will not extend to BTL mortgages, but is squarely aimed at owner-occupiers. Also excluded are those without a UK credit history to avoid foreign buyers benefitting from the scheme.
Tuesday 4 June 2013
Property investment is back - with a vengeance!
Over the last three weeks, the Cullen Property team has bought just over £1 million's worth of prime Edinburgh residential property on behalf of investor clients.
Whilst you could argue this recent activity is a fluke, we're convinced that it's a lot more than that: proof that the buy-to-let property sector is once again growing, both in size and popularity with investors. If you've been following property news - or our blog - you'll find that the writing has been on the wall for a little while.
For several months now, finance has been easier to arrange with the range of products available to prospective landlords growing and better deals becoming available. At the same time, investor confidence in the (recovering) property market has grown and, with interest rates remaining at record lows, property is once more becoming an attractive option to prepare for retirement.
The latest figures from the Nationwide also show that property prices across the UK are consistently growing - a definite sign of returning confidence.
So, what did our team source for our investors? We hand-picked traditional tenement flats with at least three, but more often four+ bedrooms in areas that are popular with students. Whilst a couple of the properties selected require some refurbishment, all have high net rental yields which is essential for successful property investment.
Whilst you could argue this recent activity is a fluke, we're convinced that it's a lot more than that: proof that the buy-to-let property sector is once again growing, both in size and popularity with investors. If you've been following property news - or our blog - you'll find that the writing has been on the wall for a little while.
For several months now, finance has been easier to arrange with the range of products available to prospective landlords growing and better deals becoming available. At the same time, investor confidence in the (recovering) property market has grown and, with interest rates remaining at record lows, property is once more becoming an attractive option to prepare for retirement.
The latest figures from the Nationwide also show that property prices across the UK are consistently growing - a definite sign of returning confidence.
So, what did our team source for our investors? We hand-picked traditional tenement flats with at least three, but more often four+ bedrooms in areas that are popular with students. Whilst a couple of the properties selected require some refurbishment, all have high net rental yields which is essential for successful property investment.
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