All posts by Ruban Selvanayagam

Property Investor’s Factfile – June 2018 Commentary

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Property Investor Facts and Figures - June 2018

June 2018 Property Investor´s Factfile The Property Investor’s Factfile presents a range of relevant data for buy-to-let investors, traders and developers. Below are some noteworthy observations over the last month: Property Market Trends After a 3.1% drop in April (the largest since September 2010), the Halifax reported 1.5% house price growth in May.  On an annual basis, prices were 1.9% higher in three months leading up to May relative to the same period in 2017.  Russell Galley, managing director, commented that continued labour market strength alongside falling inflation, rising wages and low interest rates were “underpinning prices”; According to the Nationwide house price index, UK houses prices fell by 0.2% in May, but grew by 2.4% year-on-year.  Chief economist, Robert Gardner, commented to the FT: “Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the... [Read More]

Property Investor’s Factfile – May 2018 Commentary

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May 2018 Property Investor´s Factfile The Property Investor’s Factfile presents a range of relevant data for buy-to-let investors, traders and developers. Below are some noteworthy observations over the last month: Property Market Trends The latest Halifax house price index reported that prices dropped by 3.1% in April, the largest since September 2010. Arguing that a strong jobs market will support a certain level of market buoyancy, managing director Russell Galley commented that: “housing supply, as measured by the stock of homes for sale and new instructions, is still very low”; Other data from the Halifax indicated that UK flats had grown in value by an average of 48% over the last five years (from £157,061 in Q1 2013 to £232,135 in Q1 2018).  This was followed by terraced houses (41%), semi-detached houses (39%), bungalows (38%) and detached houses (27%); Sam Tombs... [Read More]

Rental Deposits Made Easy

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Particularly in larger towns and cities, landlords and build-to-let management companies are increasingly dealing with a more transient tenant-customer base, many of whom are looking for ‘service-focused’ offerings and flexible tenancy agreements. With higher churn and concerns over cash flow, the demand for solutions that streamline the tenancy management process from start to finish is evidenced by the emergence of a number of PropTech companies operating in the space. Ripe for disruption is the tenancy deposit collection process.  For many, paying what can be a substantial sum of money to secure rental accommodation is a major burden – particularly in London and the South East.  At the same time, landlords simply want to ensure that they take on trustworthy tenants without having to spend a considerable amount of time and effort ensuring the correct boxes are ticked. In response, a number of insurance firms... [Read More]

Property Investor’s Factfile – April 2018 Commentary

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Property Investor - Buy-to-Let - Facts and Stats - April 2018

April 2018 Property Investor´s Factfile The Property Investor’s 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.  Below are some noteworthy observations over the last month: Property Market Trends Data published by the Halifax reported strong annual price inflation in the East Midlands and East Anglia, at 7.3% and 7.2% respectively, followed by Scotland at 6.7% and Yorkshire and the Humber at 6.1%.  However, with prices in London seeing their sharpest annual fall since 2011, Paul Smith, economics director at IHS Markit (that collated the data) commented: “The subdued performance of the UK housing market, especially in the south of England, seems to reflect a general lack of appetite amongst households at present... [Read More]

Section 24 “Landlord Tax” – Expert Insights on Phase 2

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With the second phase of Section 24 of the Finance (No. 2) Act 2015 now in motion, the buy-to-let sector is bracing itself for yet another shock to the system. First in line for punishment are the heavily geared sole-trader landlords operating within higher or additional taxpaying thresholds.  Then there are those unwittingly being pushed into the high tax bracket due to their inability to deduct a further 25% of mortgage interest costs.  Although the 20% mortgage cost credit may attenuate some of the damage, these situations are likely to worsen in the coming years as the Section 24 screws are tightened. With the Chancellor’s priorities clearly elsewhere, most of the sector has now come to terms with the fact that any chances of top-down reform are slim – at least for the foreseeable future.  As a result, over the... [Read More]

Property Investor’s Factfile – March 2018 Commentary

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March 2018 Property Investor´s Factfile The Property Investor’s 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.  Below are some noteworthy observations over the last month: Property Market Trends According to the Halifax, property prices are rising at their slowest rate since 2013 – growing by 1.8% in the three months to February.  Managing director Russell Galley, nonetheless, responded with some relatively positive feedback on the data: “While we expect price growth to remain low, the low mortgage rate environment, combined with an ongoing shortage of properties for sale, should continue to support house prices over the coming months”; Nationwide data reported that house prices fell 0.3% between January and February (after rising... [Read More]

Build to Rent – Where Next?

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Where Next for Build to Rent - British Property Foundation - The Property Investor's Blog

Amongst a series of industry talks and discussions at this year’s British Property Federation’s annual conference, the ongoing expansion of the UK institutional private rented sector was frequently discussed across the day’s agenda. Following a headline presentation by Jaqui Daly director of investment research and strategy at Savills, one of the panel discussions saw Marie Hunt, executive director and head of research at CBRE; David Montague, chief executive at L&Q; Andrew Bruce at the Scottish Futures Trust and Martijn Vos, senior real estate portfolio manager at APG AM explore the contemporary build to rent (BTR) investment case, the sector’s expansion and some of the pertinent concerns. The Exponential Growth of Build-to-Rent Multiplying fivefold since 2013, contrary to what some believed was a market “fad”, the growth of purpose-built rental schemes is showing little sign of slowdown.  According to Jacqui Daly, there are... [Read More]

Allsop on Early 2018 Property Auction Activity

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With ongoing evidence that the London and South East markets may already be undergoing a correction phase, it is always worth observing behaviour in the property auction room to gauge where things stand amongst investors and traders.  We spoke to Gary Murphy – partner at one of the UK’s largest property auctioneers Allsop – shortly after their mid-February sale (the first of 2018)… As it’s now possible to watch Allsop’s auctions live online, it was interesting to see that there was a healthy level of sales happening in the room? Yes, we were all quite surprised at how buoyant and vibrant the room was – particularly as there has been lot of concern about certain areas of the market cooling off.  The enthusiasm for buying decent stock in the London and South East has not waned.  I must say we... [Read More]

Property Investor’s Factfile – February 2018 Commentary

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Property Investor Factfile - Buy-to-Let and Property Trading - February 2018

February 2018 Property Investor´s Factfile The Property Investor’s 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.  Below are some noteworthy observations over the last month: Property Market Trends Halifax reported both a slower level of annual house price growth alongside a drop in the number of new properties coming to market.  Property prices in the 3 months to January 2018 were 2.2% higher than over the same period in 2017 (down from a 2.7% rise reported in December 2017 data).  Prices have been flat on a quarter-on-quarter basis and the January data also reported an overall price drop of 0.6% (following a 0.8% fall in December 2017).  Nonetheless, Russell Galley was reasonably... [Read More]

How Does Buy-to-Let Mortgage Underwriting Work?

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Secure the best buy-to-let mortgage deal

Following the raft of legislative and regulatory roll-outs in recent years, buy-to-let’s ongoing transformation looks set to trigger an exodus of highly-geared landlords in the coming years.  Some also predict that the sector’s overall attractiveness as an asset class amongst retail investors may also dissipate. Nonetheless, for the majority that choose to remain, and perhaps even astutely capitalise on this new operational environment, a robust financial plan to protect current and future holdings will be a must. Therefore, in addition to effective tax planning, cost management and other strategies to buffer against the inevitable market turbulence, understanding how to access cost-effective mortgage finance is of paramount importance. In this post, we outline some of the factors that contribute to how mortgages and remortgages against buy-to-let properties are underwritten – which we hope you can apply on a more practical level... [Read More]