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FT: The Future’s Bright for Buy-to-Let

Monday, June 28th, 2010

The Financial Times ran a feature on Saturday 26th June on the future of the Buy-to-let market in the UK in light of the recent Budget.

The main points were as follows:

In the last property boom, buy-to-let was essentially a bet on house prices, funded by cheap mortgage debt. Today’s investors need to have a lot more capital to get past go – buy-to-let mortgages typically require a minimum deposit of 25 per cent. This has kept many wannabe landlords off the buy-to-let ladder in recent years. But for cash-rich investors with gumption, all the indicators suggest now’s a great time to invest. The key attraction? Rising rents, which are improving rental yields across the country.

“There’s going to be a massive supply shortage of property to rent or buy over the next 10 years, which means rents will rocket,” argues Kate Faulkner, founder of consultancy Designs on Property.co.uk.

“The coalition government has done buy-to-let landlords far bigger favours with the cuts it has already made,” says Faulkner. Scrapping regional housing targets and ending the practice of “garden grabbing” means the number of new homes brought to market will dwindle – and in affluent areas of the south-east, prices and rents could soar.

This trend is supported by listed estate agency chain Winkworth, which registered a 40 per cent drop in the availability of rental property on its books in April and May. “There’s massive demand for rental property but no new rental stock being brought on to the market by landlords,” reports chief executive Dominic Agace. “In general, rents have gone up by 10 per cent but the cost of mortgage finance is still around 4.5 per cent,” he says. “The more equity you have, the better return you’re going to get – but rental yields are starting to look attractive.”

As the area of greatest rental demand, London is set to lead the way. One investor has already banked a 25 per cent annual rent rise on a London buy-to-let investment. Neil Young, chief executive of property investment firm the Young Group, says: “That’s not the norm but it’s not an isolated example. Typically we’re increasing rents between 5-10 per cent on renewals.”

Source: FT.com

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Findlay Property in the Sunday Times

Monday, June 21st, 2010

The Irish Sunday Times interviewed Simon McDonnell for his thoughts on the forthcoming UK budget and how it will affect investors. Here is an excerpt from Sunday’s article:

WATERLOO SUNRISE

Simon McDonnell, a Dublin director of Findlay Property (findprop.co.uk), which specialises in finding and managing investment properties for Irish clients in London, says: “Irish tax residents will not be affected, because they are exempt from capital gains tax in the UK. This could give Irish buy-to-let investors the edge over their UK counterparts.

“I’m not sure whether an increase in capital gains tax will be as significant as some sections of the British media expect. Interest rates, unemployment and availability and flow of credit are going to be far more important.”

The proposed tax increases and last month’s scrapping of Home Information Packs — reports which vendors had to provide at their own expense — made experts wonder what was in store for the
residential market.

“These dual factors will bring more property to the market and with it a little nervousness,” says McDonnell, adding that uncertainty could be played to Irish buyers’ advantage.

“Uncertainty in the market will throw up opportunities for investors. There could also be an increase in rents and yields, as investor presence in the market becomes much more income driven
rather than led by capital gains.”

McDonnell says that London has been traditionally strong with Irish investors and landlords because of its rental record. “The continued net migration of people into London, the challenges in the planning system and the lack of green- or brown-field sites to develop limit the supply of property and will continue to exert upward pressure on rents in central London,” he says.

SOURCE: Irish Sunday Times

Posted in Buy to let, Findlay Property News, UK economy | No Comments »

RICS - UK Home Rental Gauge Has First Increase Since 2008,

Wednesday, May 26th, 2010

A U.K. gauge of residential rents increased for the first time in almost two years in the three months through April as a decline in supply benefited landlords, according to a poll of brokers.

The number of real-estate agents saying rents increased exceeded those reporting declines by 30 percent, according to a survey by the Royal Institution of Chartered Surveyors. Responses were balanced in the previous quarter. In the year- earlier period, 58 percent more respondents reported falling rents, a record low for the survey.

A recovery in the housing market may have spurred “accidental landlords” to sell their properties, cutting the number of rental homes on the market, RICS said. Thirty percent more respondents saw a rise in demand than recorded a drop, the strongest reading since the quarter though January 2009. Brokers expect rents to continue increasing in the next three months.

“With sellers back in the housing market, supply has fallen back in the lettings sector,” RICS spokesman Jeremy Leaf said in a statement. “This is good news for landlords as rents are set to move higher in the coming months and yield returns are likely to improve.”

Demand for houses continued to outstrip that for apartments, though by less than in the previous quarter, RICS said. Tenant demand and rent increases were strongest in London and the East.

The last time more agents reported rent increases than declines was in the second quarter of 2008.

SOURCE: BLOOMBERG

Posted in Buy to let, East London, Hackney, Lettings, Uncategorized | No Comments »

House prices in land-deprived regions

Monday, February 1st, 2010

The FT ran an interesting story over the weekend saying that prices in land-deprived regions are likely to remain permanently inflated, which is why the world’s most expensive cities will remain that way.

This idea rings true if you think of property hot spots around the world; Manhattan, Singapore, London - where space is a finite commodity.

UK house prices posted strong gains in January after weak advances at the end of last year, with year-on-year gains approaching double-digit territory, according to a closely watched index.

The Nationwide house price index for January surged 1.2 per cent, showing a year-on-year gain of 8.6 per cent.

Read the full article here.

Manhattan - a classic example of land deprivation

Posted in Buy to let, East London, UK economy | No Comments »

Gold V Buy-to-let

Wednesday, November 11th, 2009

Poor interest rates and falling property prices have left wealthy investors looking for alternative asset classes to put their money into. A weak dollar yesterday pushed the gold price to a record high of $1,072 an ounce. Shoppers at department store Harrods are now able to buy the ultimate luxury accessory – gold bars.

Have these shoppers not heard of high yield buy-to-let investments with good capital growth potential in Central London? You could go to Harrods, or you could go to Findlay.

Some gold

Posted in Buy to let, EU economy, East London, Hackney, Uncategorized | No Comments »

Savills: Buy a House in London Next Year & Sell in 2015

Thursday, November 5th, 2009

The “ideal” time to buy a London home and cash in on price rises is the end of next year, housing economists said today.

Property prices in the capital are on track to fall 4.1 per cent again next year, wiping out this year’s recovery from January’s low.

But from 2011 they are expected to soar for the following five years by 31 per cent, researchers at estate agent Savills predicted.

Source: Savills

Posted in Buy to let, UK economy | No Comments »

Irish Easing Back Into Buyers’ Market

Thursday, October 29th, 2009

The New York Times has run a story on signs that British and Irish buyers, once the leading foreign players in several hot property markets, are starting to invest again after a long spell on the sidelines…

East London Report - The Times

Wednesday, October 28th, 2009

The London Times has published a feature on how Hackney has experienced huge price rises especially in Dalston and London Fields with prices up 18 per cent between October 2006 and October 2008, according to the Land Registry.

So, The Times asks is it too late to bag a bargain and are there further large price rises to come?

Nope! Findlay Property are still finding bargains for its clients. Call us on +44 20 7254 9444 to discuss.

Source: The Times

Posted in Buy to let, East London, Hackney, Lettings | No Comments »

London house prices will jump nearly 40% by 2014

Wednesday, October 14th, 2009

According to estate agency Knight Frank, house prices will end this year 2% higher than they were at the beginning of the year led by the recovery in London and the South-East.

But the agency predicts that throughout next year prices will fall 3% nationally — the classic “W”-shaped recession — although London will continue to grow with prices rising by 3% next year and by 9% in 2011. Five years out, by 2014, London prices will be 38% higher than today while the national gain will be just 19%.

Source: Evening Standard

Posted in Buy to let, Hackney, UK economy | No Comments »

The Return of the 90% Mortgage

Wednesday, September 30th, 2009

HSBC is making £500m available to homebuyers who have 10% deposits.

Martijn van der Heijden, head of mortgages at HSBC, said the housing crash seemed to be over and prices were recovering.

“It is a different picture today - houses prices seem to have bottomed and rates are low - and many of those who put off their purchase last year are starting to look around again,” he said.

Figures released today by the Bank of England showed that mortgage lending continued to improve last month.

Posted in Buy to let, Mortgage, UK economy | No Comments »