Streetwise Property Alert 18th September 2013

Welcome to today’s email…

BTL Rental News

According to the latest Countrywide Monthly Lettings Index, the average BTL rent has now reached a two-year high of £867. Yields are an average of 6.1 per cent, up 0.7 per cent over the past year. Wales saw the highest yields at 6.6 per cent followed by the Midlands at 6.5 per cent, the North at 6.4 per cent and the East of England and Greater London at 6.2 per cent.

‘August is traditionally a busy period for the rental market with tenants, particularly families, wanting to move into their new rented accommodation before the start of the school term in September. However, demand is not being met by supply and currently there is a particular lack of family-sized properties available to rent, especially in the South of England.’

‘Improved conditions in the sales market are attracting reluctant landlords to sell these types of properties specifically in the catchment areas for good schools. With four or five tenants vying for every property, tenants need to act quickly.’

Best-Buy BTL Mortgages has named its top five fixed-rate BTL mortgages by loan-to-value (LTV).

60 Per Cent LTV

Principality Building Society

3.19 per cent to 31 August 2015

Maximum loan-to-value 60 per cent

Fees: arrangement £900, booking £99

Rate fixed for two years

Incentives: free valuation and legal fees

65 Per Cent LTV

Coventry Building Society

3.79 per cent to 31 July 2015

Maximum loan-to-value 65 per cent

£999 fee

Minimum advance of £25,000

Incentives of free valuation for all borrowers and free legal fees for those remortgaging

Option to make overpayments or take payment holidays

70 Per Cent LTV

Virgin Money

3.65 per cent to 1 November 2015

Maximum loan-to-value 70 per cent

£999 fee

Minimum advance £50,000

Option to make overpayments up to 10 per cent of outstanding balance each year.

75 Per Cent LTV

Nottingham Building Society

3.49 per cent to 1 November 2015

Maximum loan-to-value 75 per cent

£990 arrangement fee

Minimum advance £50,000

Incentives of free valuation and £150 rebate.

Those remortgaging in England and Wales are also offered free legal fees

80 Per Cent LTV

Yorkshire Bank

4.79 per cent fixed to 30 September 2015

Maximum loan-to-value 80 per cent

Fees: arrangement £999

Available to first-time buyers

Rate fixed for two years

Allows overpayments

Do visit in the first instance; great site.

Off-Plan Caution

Good article on buying off-plan property in The Independent today. We all know the upside – agents and developers tell us all the benefits.

The article highlights one or two of the downsides. Let’s quote, ‘Buying off-plan relies on prices going up – if they don’t, you will have lost money before you’ve even set foot in it. Signing a contract in good times is never a guarantee that the value will not collapse while it is being built.’

‘A new home is sold at a premium of 5 per cent to 10 per cent. This year, property investment advisers Huntley Hooper said older homes in central prime London produced quadruple the return of new ones over five years to the end of 2012 (a return of 42.7 per cent compared with 10.7 per cent).’

‘Developers can go bust, taking your deposit with them and, if you have to pull out of the deal, the developer could hold you to the contract you signed, which means that if they have to re-sell at a lower price, you will pay the difference. “You may be able to secure a better price, but be wary of deals saying ‘buy off-plan and save 40 per cent’ – they
can’t really justify this as a sale price hasn’t yet been established.” Food for thought.

All for now, see you soon.