Category Archives: Property Investment Strategy

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]

Property Investor’s Factfile – January 2018 Commentary

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Property Investor Facts and Figures (Buy-to-Let and Property Trading – January 2018

January 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 The Halifax reported slower growth in property prices over the course of 2017 (2.7% relative to 6.5% in 2016).  Managing director of Halifax Community Bank Russell Galley commented: “we expect annual price growth to continue in the range of 0-3% at the end 2018”.  Galley also stated that: “prices [in 2018] are likely to be supported by the ongoing shortage of properties for sale, low levels of housebuilding, high employment and a continuation of low interest rates making mortgage servicing affordable in relative terms”; Similar... [Read More]

Expert Property Market Forecasts (2018)

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Expert Property Market Forecasts 2018

What follows is an extended post collating a wide array of commentary from property industry thought-leaders, who kindly took the time to reflect on the market moving into 2018. In addition to high-level insights into macro influences, price and rental trends, it is interesting to see the experts delve into a number of specific topics. Examples include the notable demographic shifts occurring across the country alongside the real effects of the Universal Credit (UC) rollout, Local Housing Allowance (LHA) freezes and the widening risks of homelessness. The continued evolution of the build-to-rent, property crowdfunding and online auction sectors have also been explored in some depth. For higher tax paying private landlords, taking heed of the intensifying effects of Section 24 of the Finance Act is frequently mentioned, as are some useful tips to best prepare, and indeed capitalise, for what... [Read More]

Property Investor’s Factfile – December 2017 Commentary

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Property Investor’s Buy-to-Let and Trader Factfile – December 2017 Commentary

December 2017 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.  Some noteworthy observations over the last month are outlined below: Property Market Trends According to Halifax data, between October and November house prices rose by 0.5% (for the fifth consecutive month), reaching 0.5% (3.2% higher than in January). Russell Galley, managing director at Halifax Community Bank commented: “slower growth patterns are likely to continue for the foreseeable future” and also that “increasing affordability issues, as price increases continue to outstrip wage growth, are likely to curb housing demand and cause price growth to ease”; Land Registry-tracked property prices grew by 0.4% between August and September and... [Read More]

Landlords: Understand Your Section 24 Tax Position Now (Not Later)

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Landlords - Understand Your Section 24 (Finance Act 2015) Tax Position Now (Not Later)

As the tapered erosion of mortgage interest tax relief continues to take effect, it is ever important for individual landlords to take stock of their specific financial positions so that the right preparations can be made. With criticisms by The Institute for Fiscal Studies, The Institute of Chartered Accountants, representative landlord bodies and a broad spectrum MPs all falling on deaf ears, the chance of any kind of Section 24 reversal is currently looking slim.  At best, landlords can hope for some form of retrospective exemption – for example, where properties purchased prior to July 2015 (when the legislation was announced) could potentially claim full mortgage interest relief. How Will Section 24 of the Finance (No. 2) Act 2015 Affect My Tax Bill? The magnitude of the impact will entirely depend on what particular tax band a landlord is operating in. In... [Read More]

How to Apply for a Limited Company Buy-to-Let Mortgage

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Image of a mortgage contract - representing how more buy-to-let investors are using Limited company mortgages to expand their property portfolios.

Given the repercussions of Section 24 of the Finance (No.2) Act 2015 on personally-owned properties[1], a growing number of investors are using Limited company buy-to-let mortgage to expand their portfolios.  Although current capital costs are generally higher relative to individual purchases, competition amongst a wider pool of lenders may encourage better rates in the coming years (provided there are no macroeconomic circumstances that would force wholesale LIBOR and SWAP rates upwards). Checklist for Limited Company Buy-to-Let Property Purchases Applying for a Limited company (Special Purpose Vehicle) mortgage is arguably more complex than even the stringent Prudential Regulation Authority (PRA) regulations for individually owned property purchases / non “like-for-like” remortgages[2]. Extracted from our professional property investors eBook, the checklist below aims to summarise some of the key points to run through during the initial stages of the Limited company purchase process.... [Read More]

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]

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]

Buy-to-Let Property Investor´s Financial Calculator

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Buy to Let Financial Calculator

Particularly given the changing economics of the buy-to-let sector, and what we feel is the need to adopt a judicious approach to the relative merits of a given deal, the financial calculator has been developed to facilitate a more detailed analysis.  Please click here or fill your details in the short “JOIN OUR E-MAIL LIST” form to receive the file (as well as the accompanying notes and our professional property investor’s e-book). Built in Microsoft Excel, the calculator has been split into 7 sections: Headline Figures: provide users with a cursory glance (using data extracted from the following section).  Note that this particular spreadsheet caters only to single-let residential property analysis (not Houses of Multiple Occupation, multiple units, developments, refurbishments etc.); Detailed Figures / Information: a breakdown of 46 fundamental metrics and essential data sources based on inputting a handful of... [Read More]

Buy-to-Let Property Investor´s eBook

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The first edition of the PS Investor Services eBook has been compiled in a buy-to-let operational environment where, particularly in recent years, recurring fiscal and regulatory intervention has seemingly become customary. The 28,000+ word digital document aims to dissect the principal issues of concern in the coming years and will be of interest to investor-landlords who embrace a longer term and professional outlook to property wealth accumulation. Readers will also find hints, tips and and a wide range of up-to-date resources relevant to the buy-to-let industry’s fast-changing operational environment. Please click here or fill your details in our contact box to receive the e-book (as well as our financial calculator and accompanying notes). The easily accessible PDF has been split into 10 chapters, broadly outlined below: Formally introduced in January 2017, the core aim of the Prudential Regulation Authority (PRA) revised affordability... [Read More]