Monthly Archives: October 2017

The Private Rented Sector (PRS) – Will the Trickle Become A Torrent?

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Now firmly embedded into most high-profile property development-related events, one of the many panel discussions at this year’s MIPIM[1] explored the current direction of the institutional Private Rented Sector (iPRS). Chaired by Damian Wilde[2], panellists Richard Snook[3], Bill Hughes[4] and Jacqui Daly[5] collectively delved into a number of topics related to build to rent’s sustained growth, how the sector fits into the wider picture of housing provision, some of the imminent macro-related risks and how modular housing has the potential to accelerate future delivery[6]. The Role of Private Rented Sector in the Coming Decade Richard Snook provided some background as to how “generation rent” has developed to its current form – largely extracted from the 2016 PwC housing market outlook report. As seen in the chart below, the noticeable increase in mortgaged property ownership during the Thatcher years contrasted with … [Read More]

The Changing Face of Buy-to-Let Property Investing

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Doubling in size since 2002, the Private Rented Sector (PRS) is now the second largest tenure in England. Today, some 5.34 million (20%) of all households live in rented accommodation – many of them owned by buy-to-let landlords. A Brief History of the Buy-to-Let Sector Many ascribe this massive growth to the introduction of the buy-to-let mortgage in 1996.  Particularly in the early 2000s, secured lending against rental property reached massive highs.  Prior to the credit crisis it was even possible to finance close to 100% of a property’s value as speculative lenders became willing to accept very little collateral.  Somewhat predictably, the property crash that followed the “crunch” led to a sharp decline in buy-to-let borrowing between 2009 and 2010. However, the market recovered quicker than many were expecting.  From 2010 to 2016, for example, new buy-to-let mortgage levels … [Read More]

Property Investor’s Factfile – October 2017 Commentary

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October 2017 Property Investor´s Factfile The Property Investor Blog´s monthly factfile presents a range of relevant data from national / London house prices, the latest buy to let Limited Company (SPV) loan rates, LIBOR / SWAP rates and rentals to mortgage debt figures and information on the first-time buyer sector.  Some noteworthy observations from the last month are outlined below: According to Rightmove, property asking prices dropped by 1.17% in September – representing the third fall in the previous four months.  Observing that some northern regions were still showing marginal signs of upwards price pressure, co-founder Miles Shipside repoted that: “estate agents are clearly advising many sellers that they have to lower their price expectations to fit in with buyers’ stretched financial resources, with that price compromise hopefully generating extra buyer interest”.  According to Rightmove, the drop has been “exacerbated” by London’s stagnating asking price … [Read More]

What Does Universal Credit Mean for Landlords?

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Launched in 2013, Universal Credit’s underlying aim was to simplify the welfare system by merging six of the main social security benefits into one.  Monthly Local Housing Allowance (or housing benefit) payments will now be pooled into a single sum alongside Income Support, income-based Jobseeker’s Allowance, income-related Employment Support Allowance, Working Tax Credit and Child Tax Credit. By the end of 2017, the roll-out is to be “accelerated” into a further 150 new areas [1].  With the number of claimant households expected to grow from 570,000 today to 8 million in 2022, the implications for landlords who house LHA tenants are noteworthy (see the Department of Work & Pensions landlord’s guide here). A Disaster Waiting to Happen? Part of the former coalition government’s drive to “make work pay”, i.e. rewarding people for transitioning into gainful employment, the initial phasing of Universal … [Read More]