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Rates cut on wide range of buy to let and holiday let mortgages

Suffolk Building Society is taking up to 30bps off its fixed Buy to Let, Buy to Let Light Refurbishment, Expat Buy To Let and Holiday Let products.

It is also slicing up to 30 bps off its 95% resi mortgages, giving an affordability boost to first time buyers and those with smaller deposits.

A society spokesperson says: “We’re pleased to be able to offer landlords more affordable rates across various Buy To Let product types to help lower their monthly costs. And of course, lower payrates help with BTL affordability, enabling them to access the loan amounts they require.

“As well as new regulations around energy efficiency and the introduction of a new Decent Homes Standard requiring improvements, landlords are also facing further changes from the upcoming Renters’ Rights Bill. In addition, the Budget may bring further change. As a result, landlords face uncertainty so saving money where possible is always a positive.”

She adds: “With house prices still rising, and the average UK house price standing at £289,723, there’s a clear need to support first time buyers with their property ownership ambitions. First time buyers are in the spotlight at the moment and rightly so.

“With the cost of living and the ability to save up a sizeable deposit becoming even more challenging, higher LTV products go some way to help those looking to get on the property ladder. It also provides an alternative for those looking to remortgage and borrow extra for home improvements too.

The following are now available for both purchase and remortgage:

Buy to Let

  • 80% LTV 2 Year Fixed capital and interest has been reduced by 20bps to 5.39%, max loan £1m.
  • 80% LTV 5 Year Fixed capital and interest has been reduced by 30bps to 5.19%, max loan £1m.

Buy to Let Light Refurbishment

  • 80% 2 Year Fixed capital and interest has been reduced by 20bps to 5.49%, max loan £1m.
  • 80% 5 Year Fixed capital and interest has been reduced by 30bps to 5.29%, max loan £1m.

Expat Buy to Let

  • 80% 2 Year Fixed capital and interest has been reduced by 16bps to 5.69%, max loan £1m.

Holiday Let

  • 80% 2 Year Fixed capital and interest has been reduced by 14bps to 5.55%, max loan £1m.

Residential

  • 95% LTV 2 Year Fixed capital and interest has been reduced by 30bps to 5.39%, max loan £500,000
  • 95% LTV 5 Year Fixed capital and interest has been reduced by 24bps to 5.05%, max loan £500,000

Original Post from https://www.landlordtoday.co.uk

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Supply-demand imbalance narrows as rates fall

For the property market, there are strong parallels between January and September this year, according to Knight Frank.

 

The number of sub-4% mortgages is growing as financial markets bet on multiple rate cuts over the next year as inflation is tamed. It was a similar story in the early weeks of 2024.

Knight Frank’s head of residential research, Tom Bill, points out that the catch last time was that underlying inflation did not come under control as quickly as headline inflation and any new year optimism had faded by the middle of February.

So, what’s the hurdle now following a 0.5% rate cut by the US Federal Reserve last week and a UK services inflation reading (5.6%) in August that met expectations?

“The snag this time is political rather than economic,” Bill explained. “Uncertainty hangs in the air ahead of the Budget on 30 October.”

He continued: The government has warned it will be “painful” and speculation has focussed on changes to inheritance tax, capital gains tax and pension tax relief among others.”

Consequently, buyers are more cautious than they were in January, as the chart shows.

The number of new prospective buyers in the four weeks to 14 September in the UK was 15% below the five-year average, Knight Frank data shows. Meanwhile the number of market valuation appraisals (which are requested by owners looking to sell) was 12% higher.

Furthermore, there was an average of 6.7 new buyers for every new sales instruction in the same period, which compared to a figure of 16 in early January, underlining the strength of demand at the start of the year.

Despite the comparable interest rate outlook, buyers have been slower to come forward in September than January.

“Lenders have brought down their rates ahead of what should be a busy autumn period,” said Simon Gammon, head of Knight Frank Finance, citing the fact that a sub-4% two-year fixed-rate deal was now available. “We just need the property market to respond now.”

One of the reasons that sellers are more active is the possibility that capital gains tax will rise in the Budget from its current level of 24% for higher-rate taxpayers. Some second home-owners and landlords sitting on taxable gains are looking to sell before 30 October.

But Knight Frank does not expect meaningful downwards pressure on prices over the final months of 2024; the agency’s latest UK forecast is 3% price growth in 2024.

Bill added: “Demand has evidently picked up to some extent as rates drop, but sellers should be aware that buyer exuberance will be in short supply, particularly this side of the Budget. People are also still rolling off favourable fixed-rate deals agreed in recent years when rates were low.

“A Budget that is less painful than feared could therefore trigger a relief bounce and higher levels of housing market activity, which would be positive for the whole economy. Each transaction adds £10,000 on average to GDP, estimates from Knight Frank and the HBF have shown.

“It could also have the reverse effect, particularly in higher-value markets.

“Either way, the biggest obstacle – uncertainty – will be overcome in five weeks’ time.”

Original Post from propertyindustryeye.com

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New housing policies: Angela Rayner’s speech at Labour Party Conference

New housing policies Angela Rayner’s speech at Labour Party Conference

Angela Rayner set out measures to protect renters from fire safety defects, damp and mould in her speech at the Labour Party conference yesterday.

The deputy prime minister and housing secretary, committed to “building homes fit for the future”, while also pledging to bring forward a Remediation Acceleration Plan this autumn to speed up the removal of unsafe cladding on high-rise buildings.

Other measures Rayner announced on Sunday included consulting on a new “decent homes standard” for the social and private rented sectors, and a new law to make landlords respond to complaints about disrepair within legally binding timescales.

Here is part of Rayner’s speech relating to housing at the Labour Party Conference yesterday:

“14 years of Tory chaos has not just left its mark on people’s jobs, but on homes too.

Not enough are being built. The Tories failed to meet their targets year, after year, after year.

Michael Gove handed back nearly £2 billion to the Treasury in unspent housing funds. Mortgages have soared. Leaseholders are left at the mercy of eye-watering charges. Renters face crippling rent hikes in damp and mouldy homes. Homelessness is all around us.

The simple aspiration of a safe, secure and affordable home is further out of reach than ever and we can’t go on like this. So change must begin at home.

We are tackling the Tories’ housing emergency.

We will get Britain building and building decent homes for working people.

A new planning framework will unlock the door to affordable homes and provide the biggest boost to social and affordable housing in a generation.

And Conference, our renters’ bill will rebalance the relationship between tenant and landlord and end no fault evictions – for good.

Our long-term plan will free leaseholders from the tyranny of a mediaeval system.

And a cross-government taskforce will put Britain back on track to ending homelessness.

Whether you’re a leaseholder, a tenant, a home-buyer or without somewhere to live – this government is on your side.

But my mission is not just to build houses, it is to build homes.

Because we cannot build at any cost. These new homes must be warm, secure and most importantly safe.

We will give families the security they need to have the best start in life.

I know first-hand the difference a decent home can make.

When I was growing up we didn’t have a lot. But we had a safe and secure home. Today, not everyone does.

Working with the Prime Minister on the Grenfell Inquiry was the most sobering moment of my career: 72 lives lost, 18 children, all avoidable. A fatal failure of market and state. A tragedy that must never happen again.

It is completely unacceptable that we have thousands of buildings still wrapped in unsafe cladding seven years after Grenfell.

And that’s why we will bring forward a new remediation action plan this Autumn to speed up the process and we’ll pursue those responsible – without fear or favour.

This must lead to new, safer social housing for the future.

Under the Tories, new social housing plummeted.

We will reverse that tide – with an ambition to be build more social homes than we lose, within the first financial year of this Labour Government.

In my first weeks in office, I set out how we will start this council housing revolution.

But Conference, with Government support must come more responsibility.

This is why today I want to give you my promise that this Labour Government will take action to ensure all homes are decent and safe, and residents are treated with the respect they deserve.

And Conference, of course, many Housing Associations, councils and landlords do good by their tenants and I know how hard they’ve had it after 14 years under the Tories.

Which is why I will work in partnership with the sector to deliver the change.

I will clamp down on damp and mouldy homes by bringing in Awaab’s Law in the social rented sector this autumn and we’ll extend it to the private rented sector too.

We will consult and implement a new Decent Homes Standard for social and privately rented homes, to end the scandal of homes being unfit to live in.

We will also ensure social housing staff have the right skills and experience. And I will ensure 2.5 million housing association tenants in this country can hold their landlord to account for their high quality services and homes. So that repairs and complaints are handled faster, but more importantly, so social housing tenants are treated fairly.

I am under no illusion about the mountain we have to climb.

We all saw that this summer: violent extremists preyed on our communities and local councils were left picking up the pieces.

Local leadership is the foundation of strong communities.

That’s why I have put local government back where it belongs, at the heart of my department’s name and mission.”

Original Post from propertyindustryeye.com

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Rogue letting agency ordered to pay £50,000 for a series of offences

An agency in North West London has been found guilty of a series of offences under the Housing Act 2004 at two Houses in Multiple Occupation (HMOs) in Camden.

At Highbury Corner Magistrates Court, London Living Group Limited of 1a Chalk Farm Parade, Adelaide Road, London, England, NW3 2BN and its company director, Alvaro Odeh-Torro, of London Road, Leigh-on-Sea, Essex, SS9 and  Chalk Farm Parade, Adelaide Road, London, NW3 were, between them, convicted of a total of eight offences under the Housing Act 2004, committed at two Camden properties, and collectively fined a total of £47,200 with costs of £3,000.

Both properties were licensed as HMOs and were inspected after the Council obtained information that Mr Odeh-Torro and his company were involved with the management of the property. Mr Odeh-Torro is well known to Camden Council after it had taken earlier enforcement action against other companies (Alterna Limited and LRTR Limited) for similar offences under the Act previously and issued financial penalties for breaches of the Act against companies of which was a director.

An inspection of 25 Carrol Close on 2 February 2023 found that the property was being occupied by more households than was authorised by the HMO licence (an offence under s.72(2) of the Act. Officers also noted several issues breaching the Management of Houses in Multiple Occupation (England) Regulations 2006 including defective fire doors.

The inspection of 68-70 Falkland Road on 9th March 2023 also found that an undersized room was being occupied despite the HMO licence specifically stating that the room should not be occupied.

Mr Odeh-Torro and London Living Limited also pleaded guilty to offences under s.238 of the Housing Act 2004 after they were found to have provided false or misleading information to the Council relating to the receipt of rental payments from the tenants.

Cllr Sagal Abdi-Wali, cabinet member for Better Homes at Camden Council, which successfully prosecuted the agency said: “Around a third of Camden residents rent from private landlords and they deserve to live in properly regulated, safe homes and to be treated fairly.

“Most of our landlords are decent law-abiding people. However, for too long, a minority have been able to let housing that is unsuitable while exploiting their tenants and woefully disregarding their wellbeing and safety

“Our private sector housing service are continuing to improve the standards in Camden’s private housing sector, empowering renters to take action and helping good landlords to run successful businesses

“Our message to landlords and letting agents is that we are here to work with you; to provide advice and assistance first of all and to ensure you can meet your obligations.”

Original Post from propertyindustryeye.com

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Estate agency touting yields limited success as over 90% of homes sold with first agent

Estate agency touting yields limited success as over 90% of homes sold with first agent

Some estate agents believe that more than 50% of homes sell with a second agent, but this is simply not the case, according to property data and analytics company TwentyCi.

This stat regarding more than half of homes being sold with a second agent has been floating around the market for a number of years, points out Christopher Watkin, a regular contributor to EYE.

This statistic has often been quoted by industry leaders and PropTech suppliers, and typically goes unchallenged, but fresh findings suggest something very different.

“Historically for the last decade, it was believed that only 40 to 50% of properties sold with the first estate agent,” Watkin said. “This [new data] dispels the myth that a second agent is more successful.”

The data reveals that more than 18 out 20 UK homes sell with the first estate agency listed to market the property.

Of 1,776,709 UK homes sold sold subject to contract with an estate agency since 1st January 2023, under a sole agency agreement, 1,655,754 of those UK homes (93.2%) sold stc with the initil estate agent marketing the property.
Only 120,955 UK sold stc with the second UK estate agent marketing the home (6.8%).
Watkin cautions that the success achieved by those initially instructed to market a property “is not a charter for estate agents to overvalue to secure the listing”.

He continued: “It must noted that while 1.77m properties have sold STC since the 1st January 2023, over 2.9m UK homes have been listed since January 2023, meaning only around 60% of properties listed have had a sale agreed on them. Once you take into account sale fall throughs, that drops to only 53% of listings exchanging and completing (when the agent is paid).”

“The key challenge for estate agents is not just securing the listing first time but ensuring the property is priced correctly from the outset to guarantee a successful sale. This data should serve as a wake-up call for UK agents and homeowners alike – overvaluing might massage your ego in the short term with your listing’s market share, in the long-term, you are setting yourself up and the homeowners you serve to failure, wasted time, lost homes they want to buy, and ultimately, financial loss for everyone.”

Original Post: https://propertyindustryeye.com/

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Agent reveals massive corruption and forgery by tenants on industrial scale

An agent claims he and his peers in other agencies face massive struggles with forged IDs, digitally-altered supporting documents and undeclared financial issues.

In the last month Benham and Reeves, a London firm, detected eight forged passports or IDs; 40 digitally-altered bank statements, utility bills, payslips or proof of address; 50 forged employment references; and 30 undeclared county court judgements (CCJs) and  individual voluntary arrangements (IVAs).

Agency director Marc von Grundherr says: “The lettings market has become a key target for fraudsters due to the illicit profits they can generate quickly and over a short period of time and nowhere more so than in London, where demand is high and rental values are at their highest.

“Landlords themselves must be on guard but even more so, it’s down to letting agents to provide that vital line of defence which simply can’t be upheld through technology alone.

“The reality is that some agents simply don’t do an adequate job. Unfortunately, every agent does things differently and so landlords really need to be sure their agent is going the extra mile.

“For us that means strict digital ID verification but it also includes a manual check of all documentation, rigorous checks of employment references including domain names, registration details and IP addresses cross referenced with payslips and bank statements, an online search of the applicant including a review of their social media profiles, open-source tools and search engines, information sharing with the police and more.

“So whilst it’s inevitable that some crooks will slip through the net, this threat can be drastically reduced by taking a proactive approach to tenant verification and not leaving it technology alone.”

He says that while digital and AI technology has evolved rapidly and can process vast amounts of data in a timely fashion, rogue tenants have also evolved with it, becoming increasingly more inventive in how they trick the system.

von Grundherr also cites four real world examples of how a more thorough human-and-tech approach has helped prevent huge financial loss:

• High net worth fraud: A supposed art dealer with an undisclosed CCJ of £12,151 provided altered bank statements and was found to be in arrears at an undisclosed tenancy while claiming Universal Credit. Without careful cross-referencing, this fraudster could have easily slipped through the cracks.

• Organised crime network: Several applications from different tenants shared suspicious similarities, such as identical email formats and switched referees. All references were found to be fraudulent, leading to police involvement. This case highlighted the importance of scrutinising not just individual applications but patterns across multiple ones.

• Cloned company scam: Multiple applications were made by employees of a fake media company. Altered bank statements, fake payslips, and undisclosed addresses linked these applicants to a newly formed lettings business likely involved in illegal activities. The discovery of these links prevented a potentially large-scale fraud.

• Fraudulent barrister: A barrister applied with what appeared to be legitimate documents. However, closer inspection revealed altered bank statements and a gambling addiction. The applicant had also provided fake landlord details to hide arrears at their current tenancy. This case underscores the importance of not taking professional status at face value and digging deeper.

Original Post from lettingagenttoday.co.uk

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Record number of former rentals up for sale

New figures out today show the rental housing crisis is worsening – with the number of former rental homes up for sale hitting record highs

The NRLA said the data, from property portal Rightmove, is bad news for all tenants looking for a home, with a bold new approach needed if the Government is to tackle the massive imbalance between supply and demand.

It says pro-growth taxation measures are vital to stem the tide, with NRLA Policy Director Chris Norris saying October’s Budget offers the perfect opportunity to introduce changes.

He said: “Today’s data will be a serious concern for all those renters struggling to find somewhere to call home.  With demand already massively outstripping supply, Rightmove suggests the situation is set to get worse.

“Every rental home that is sold simply exacerbates the imbalance between supply and demand. Whilst some of these properties will inevitably end up on the owner-occupied market, that will be of little comfort to those households struggling to access quality housing.

“What we need is a housing strategy that recognises the need for more of every type of property, including high quality homes for private rent. That’s why the Budget needs to announce pro-growth tax plans to meet the needs of renters across the country.”

Rightmove says the proportion of former rental properties moving into the sales market is at its highest on record, which indicates; “more landlords are selling up, some potentially driven by the mooted increase in Capital Gains Tax in the Autumn Statement on 30th October.”

What does the data say?

The findings show that:

  • 18% of properties now for sale were previously on the rental market, compared with 8% in 2010.
  • The hotspot is London, where nearly a third (29%) of homes for sale were previously for rent, followed by Scotland (19%) and the North East (19%)
  • The previous five-year average for homes moving from the rental to sales market in Great Britain is 14%, suggesting that this isn’t a sudden mass exodus of landlords
  • The number of new properties coming to the market for sale is now 14% ahead of last year.

More information

Original Post from https://www.nrla.org.uk

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Landlords ‘forced to sell up’ over Government’s energy upgrade plans

Landlords 'forced to sell up' over Government's energy upgrade plans
  • New rules mean warmer homes for tenants, but upgrades may be expensive

Landlords may choose to sell their properties due to the cost of meeting Government energy efficiency targets for rented homes, experts believe.

The Government confirmed this week that all rented properties in England must have an Energy Performance Certificate (EPC) of ‘C’ or above by 2030.

The requirement was part of the Government’s election manifesto, and was repeated by energy security secretary Ed Miliband at this week’s Labour Party conference. The plan will be consulted on later this year.

Experts say many landlords may be forced to sell properties rather than meet the new EPC rules, unless the Government offers extra support.

A spokesperson for the National Residential Landlords Association (NRLA) said: ‘Some landlords may find that they are unable to finance the improvements needed, particularly in areas with lower property values.

‘However our past research has shown that over 80 per cent of landlords had either made or planned to make energy efficiency improvements, with most using or planning to use their own savings or rental profits to fund the upgrades.’

A spokesperson for the British Landlords Association said: ‘Yes, some landlords are already selling.’

The cost of upgrading rented properties to an EPC rating of C and above can cost thousands of pounds.

In theory this should also improve the value of the property, but it does mean landlords having to shoulder an upfront cost. For some properties, especially older ones, the cost rises substantially.

NRLA figures show that solid wall insulation can cost more than £20,000, especially in homes built without cavity walls.

Landlords with more modern properties will typically pay £9,000 to meet the new EPC standards, Government figures show.

However, an NRLA spokesperson added: ‘The costs of these changes vary greatly depending on the type of property.

‘It is also important to take into consideration how landlords are impacted by the region their properties are based in. Our research in 2021 found that in some local authority areas of the North and Midlands, the estimated costs of improving home energy are around 25 per cent of property values.

‘By contrast, in affluent parts of London and the South East the cost of retrofitting with heat pumps represents less than 2 per cent of overall property value.’

It may not be possible for landlords to meet the 2030 deadline, either.

The NRLA spokesperson said: ‘If there is clarity at an early stage on what’s required, sufficient tradespeople, and a financial package that means landlords can plan upgrades, 2030 may be possible.

‘But equally, if the expectation is to retrofit every rental property not currently EPC C or above by 2030 there is an enormous amount of work to do in a very limited period of time.

‘Otherwise, landlords may struggle to afford the high cost of home improvements, and may miss the 2030 target altogether, reducing the number of rental homes available and pushing up rents.’

Asked if landlords would meet the deadline, the BLA spokesperson simply said: ‘No.’

There is also a chance that rents might have to rise to cover the cost of energy upgrade work.

The NRLA said: ‘Upgrading to an EPC C will require a higher level of investment – and the ability of landlords to fund this themselves will vary, particularly given the regional variability in their options to leverage finance from their property values.

‘Some landlords may have to increase rents to match increased maintenance costs, but this will depend largely on the landlord’s individual circumstances and the type of property.’

The BLA said that rents would not rise for EPC reasons, but only as they are rising already due to many landlords already leaving the letting sector.

Finding up-to-date figures on the number of rented properties in England that are below EPC band C is tricky.

There are around 4.5 million rented homes at EPC ratings of D or below in the UK, according to data analysts Outra in 2023 – not just England, where the 2030 rule applies.

The last Government figures show that 8 million properties in England were below band C – or 31 per cent of the total 25.2million properties – but this dates back to the 2021 census and is for all homes, not just rented ones.

Original Post from https://www.thisismoney.co.uk/

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WARNING: Eviction reforms will make landlords ‘choosier’ about tenants

Landlord Action’s Paul Shamplina (main image) has predicted a rise in landlords using rent guarantee insurance as well as tougher referencing to protect themselves against the fall-out of eviction reforms.

A perfect storm of tighter grounds for possession and the end of Section 21, along with a lack of investment in the courts and a chronic shortage of bailiffs – as well as higher landlord costs and higher rents creating a greater risk of arrears – means landlords will want to be more stringent with referencing, he tells LandlordZONE.

Once the Renters’ Rights Bill is passed, landlords must instead use a Section 8 and the government’s new Guide to the Renters’ Rights Bill helpfully explains how the legislation will ensure landlords “enjoy robust grounds for possession”.

It will provide protections for tenants who temporarily fall into rent arrears, “supporting both parties by preventing tenancies which are otherwise viable from ending”. This means an increase in the mandatory threshold for eviction from two to three months’ arrears and an increase in the notice period from two weeks to four.

“This will allow tenants more time to repay arrears and remain in their homes, while ensuring landlords do not face unsustainable costs. Landlords can also continue to use the discretionary rent arrears grounds, for example if rent is repeatedly late,” says the guide.

Worry

Shamplina believes that for landlords, it means starting the process – if they have to go to court – with an extra months’ rent arrears added. “The worry for landlords unfortunately is court delays, getting court orders and having them enforced,” he says. “The process is taking longer which adds to the landlord’s costs.”

Landlord Action is getting more instructions from landlords to enforce money orders against tenants which can be very challenging to collect as many tenants have to be tracked down and don’t have much money.

“Post-Covid, rent arrears are getting bigger and landlords feel that some tenants try and get away with it so will pay to try and get it enforced – and this will show up as a county court order,” he adds.

The ultimate guide to handling the eviction process

READ

Original Post from landlordzone.co.uk

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Airbnb boss reveals plans to go into longer-term property rentals

Landlords may soon be able to rent their homes out via Airbnb to more than just holiday makers, its co-founder has revealed.

The CEO of Airbnb Brian Chesky (main image) yesterday told a conference in the US that he considers ‘longer term rentals’ of more than 28-days duration to be the next big growth area for his renting platform.

He said that longer-term rental now account for up to a fifth of all bookings on Airbnb, a trend spurred on by the pandemic, and that he wants to focus the business on rentals of up to three months.

“Offering significant more things is the future of this company,” he said, going on to say that he was “100%” looking at residential lettings of more than 30-days as a new market. “This is going to be a huge opportunity,” he added.

This would put him in direct competition with the many letting agencies all over the world who offer ‘corporate lets’ and is clearly a landlord market that he wants to dive into, namely rentals of between 30 and 90 days.

Crackdowns

But Chesky’s comments are also an attempt to dodge the crackdowns many city and holiday hotspot councils have introduced as many landlords have switched to the much-more profitable holiday lets market, which offers revenues of up to five times normal ‘long-term’ lettings, albeit with more work and costs attached too.

Labour recently announced that it intends to bring in a national registration scheme for holiday lets as well as the requirement for all new holiday lets to gain planning permission before they can be marketed via platforms such as Airbnb and Booking.com.

Watch the interview in full.

Original Post from landlordzone.co.uk