Buy-to-let
rental rewards
Landlords have never had it so good – except for the lack of
available mortgage nullance
basis, this was the first increase since demand is strengthening landlordsnull
the corresponding nullarter in nullnull. pricing power, particularly as nullccidental
by
John Heron,
nulloking forward, taking into account landlordsnullnullthose homeowners that let
managing
both changes to property values and their property because they were unable
director, sales and purchases, nullnullof landlords to sell nullhave been leaving the market as
nullragon
enullect to see their portfolio value house prices have stabilised. nullcidental
nullrtgages
increase over the nenull 1nullmonths, landlords caused a spike in the supply
compared to null who enullect values to of property during nullnull, increasing the
nullspite the nullancial difnullnullties of the fall. The remaining nullnullbelieve that their bargaining power of tenants.
past tnull nullarsnull landlords are enjoying portfolio value will remain stagnant and,
some of the best market conditions overall, landlords enullect the average Yields
since the launch of buy-to-let in 1996. value of their portfolios to be null1null nullields, a portfolionulls annual rental income
Tenant demand is strong and growing, higher at the end of null1null as a percentage of its total value,
tenant arrears are declining, portfolio strengthened in null after falling in null.
values are increasing and rental incomes Benefits The average yield across landlordsnull
are strengthening. To cap it all, the cost nullndlords are also benefiting from a portfolios was 6.null for the period, up
of finance on their enullsting mortgages slow housing market and the lack of from 6.null in the third nullarter of the
is lower than it has ever been, and available mortgage finance for first-time year. nullields had been rising since the
therefore profit margins are wider. buyers, people with small deposits and first nullarter of nullnull in line with general
nullst year was one of stability after the those with impaired credit histories. weakness in the housing market, but fell
volatile events of nullnull, which was These are the people that would for the first time in five nullarters in the
marked by rising arrears, falling house normally purchase property but have three months to the end of nullptember
prices and the nationalisation of one of been unwilling or unable to in the current nullnull. nullndlords enullect yields to be
the buy-to-let marketnulls largest lenders, environment, so are renting instead. largely nullt during null1null predicting they
nulladford nullnullngley. nullmbined with socioeconomic and will end the year at 6.1null
nullragonnulls nullivate nullnted nullctor demographic changes that are currently nullt it is not all good news for
Trends report tracks landlordsnullviews of taking place in the null, such as rising landlords, with regulation topping their
the nullnulls buy-to-let market and wider net migration and student numbers list of concerns for null1null nullarly sinullout
private rented sector on a nullarterly and general population growth, this of 1nullnullnullnulllandlords said they were
basis. nullr null report revealed landlords translates into healthy levels of tenant worried about the level of regulation
are in an optimistic mood, but also demand for private rented property. renullired in relation to the running of their
frustrated by the lack of available property business during the year.
mortgage finance. tenant demand nullndlords operating in the private
nullnullarter of landlords stated that tenant rented sector are already heavily
Valuations demand grew in null, compared to 1null regulated with an estimated null nullts of
nullnotable aspect of the null report was who said it declined, with the remaining nullrliament and null sets of regulations
landlordsnullview of the value of their 6null believing that tenant demand was governing the sector, but more could be
portfolios, which had fallen throughout stable. nuller a third of landlords enullect on the way. The nullvernment recently
late nullnull and early nullnull. nullwever, the tenant demand to strengthen further reiterated its intention to launch a
general improvement in house price in null1null with nullnullstating it will end national register of landlords, as well as
indices during the latter half of nullnull this year higher than nullnull levels. This putting forward plans to launch a nullrip
was renullcted in landlordsnullportfolio compares to null who predict it will be nullvisornullstyle website which would allow
valuations. The average weighted lower and nullnullwho believe it will be tenants to post their views on landlords
portfolio sinull increased by nullnull, from stable, while 1null are unsure how tenant and their properties.
null.null million in null to null.null million in demand would move. null addition, null Treasury recently
null. null a three nullarter moving average null is believed that rising tenant concluded a consultation on whether
mortgage introducer march 2010
29
MI p29-30.indd 7 23/02/2010 11:03
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