Homeownership reaches lowest level in 30 years

Homeownership reaches lowest level in 30 years

Posted Posted in Buy-to-Let

Homeownership reaches lowest level in 30 years in England a new report by thinktank Resolution Foundation has revealed. The widening gap between earnings and property prices have been blamed for the drop in the amount of people who own property. The report highlights that the problem is country wide and extends to locations outside of London. “London has a well-known and fully blown housing crisis but the struggle to buy a home is just as big a problem in cities across the north of England,” Stephen Clarke, Resolution Foundation, commented. Greater Manchester, for example, has seen a massive drop in the amount of people owning their own house since 2000s. In 2016 just 58% of households in Manchester were homeowners. This figure marks a significant drop to the 72% recorded in 2003. Read more…  Government to Build more Homes According to Yorkshire Building Society, house building targets across the UK have be missed by 1,199,180 since 2004. The huge housing deficit and rising property prices has meant that homeownership is out of the reach of many first-time buyers. The Government must build 300,000 homes each year in England to help solve the housing crisis, an increase of 50% from its current target (House of Lords Economic Affairs Committee) however, it seems highly unlikely that these targets will be met. Can Build-to-Rent Help? Private developers and investors have provided a much needed lifeline to the UK’s property market in the form of build-to-rent sector. Developments like The Residence Manchester from Experience Invest offer property investors a way to purchase off plan apartments with a discounted price. The development will contain 300 new-build apartments ranging from 1, 2 and 3 bedroom units. The city centre location will provide much needed housing for the local area. However, The Residence won’t be just another […]

Experience Invest invites you on a virtual walkthrough of a new buy-to-let project in Manchester

Posted Posted in Buy-to-Let

Experience Invest has just released a new walkthrough video of its latest buy-to-let project in Manchester. The Residence is a new £70 million Build-to-Rent project which overlooks the River Irwell in Manchester. The construction will see 300 apartments build across two landmark towers. Offering stunning river views and overlooking Manchester’s vibrant city centre, The Residence will contain large one bed, two bed and three bed apartments. Follow the link to see inside The Residence Manchester which is exclusive to Experience Invest. Limited number of units Due to the high demand for Build-to-Rent apartments in Manchester, the development is now 70% sold out. Apartments are available with a 16% exclusive investor discount and, due to the location’s prime location, investors will be able to capitalise rising property prices and the continued regeneration and expansion of Manchester’s city centre. According to the experts at Jones Lang LaSalle, property prices in Manchester could rise by 26.4% over the next four years. Investors entering The Residence with a 16% discount will secure strong capital growth potential in the mid-to long-term. Upon completion, investors will receive 7% NET per annum which will assure for 3 years. Throughout the construction period 3% interest will be paid on all deposited funds. UK’s no.1 location for buy-to-let returns In a time where the UK’s government has actively put plans into place to discourage buy-to-let investment to enable first-time buyers to get onto the market, The Residence will provide assured rental returns for 3 years. Rental returns which are higher than comparable properties in the local area and in London. According to HSBC, Manchester is the UK’s best location for buy-to-let return. Due to Manchester’s on-going regeneration and its status within the Northern Powerhouse, rents are predicted to rise by 26.3% between 2016 and 2020 (JLL). Click the icon […]

To let signs outside houses

Buy-to-Let Rents Show Robust Growth in January 2016

Posted Posted in Buy-to-Let, Experience Invest, UK Housing

You’ve arrived at the Experience Invest blog. We work hard to bring you all the latest British residential and commercial property news you need to know. New figures indicate that UK buy-to-let rents showed robust growth in January 2016. Investor returns ‘Buy-to-let refers to the practise of purchasing a residential property and then letting it out to tenants in order to earn rental profit. The Guardian reports that a study conducted by economists at the Wriglesworth Consultancy showed that buy-to-let returns rose by almost 1,400% from 1996, the year specialist buy-to-let mortgages were introduced, to the end of 2014. Rental growth The Latest HomeLet Rental Index suggests that buy-to-let returns remained strong for investors heading into 2016. Property news portal Introducer Today wrote that the Index suggested that UK rents (excluding Greater London) increased by 5.5% in the last year, while Greater London rents rose by 6.2% during the same period. The Index showed that UK rental growth remained strong in the three months to January 2016. During this period, rents rose in 11 out of 12 UK regions when compared with the same period the year before. Excluding Greater London, the average UK rent now sits at £740 per month. Strong demand Commenting on the release of the Index Martin Totty, CEO of Barbon Insurance Group, which owns HomeLet, said: “There is still strong demand for rental properties, driven mainly by the impact of the long term structural imbalance in supply and demand of property.” Meanwhile, the average rent for a new tenancy in Greater London is now £1,510. The Index suggested that rent prices for new tenancies in the UK capital rose at their slowest rate for two years over the past 12 months. Continuing, Totty added: “In recent years, the capital has seen much faster rates of increase […]

Demand for Buy-to-Let Mortgages to Rise in Next Few Months: Experience Invest

Demand for Buy-to-Let Mortgages to Rise in Next Few Months

Posted Posted in Buy-to-Let, Experience Invest

Welcome back to the Experience Invest blog, where we bring you the latest UK residential and commercial property news. On that note, recent reports that demand for specialist ‘buy-to-let mortgages’ could be set to increase in the first few months of 2016 captured our attention. Growing sector First introduced in 1996, ‘buy-to-let mortgages’ have been enabling investors to purchase or refinance residential property relatively successfully for the last two decades. An estimate from the Royal Institution of Chartered Surveyors (RICS) suggests average UK rents rose by 3% in 2015. RICS further predicts that the cost of renting a house in the UK could increase at a faster pace than the price of purchasing a residential property throughout the next five years. Activity in 2015 Specialist brokers, Mortgages for Business recently shed more light on buy-to-let mortgage sector activity. Online industry publication Property Wire reported that according to Mortgages for Business, buy-to-let remortgage deals outstripped purchases by more than two to one last year, accounting for 64% of market activity in 2015. Multi-unit freehold blocks made up 88% of remortgaging activity in 2015. Meanwhile, houses in multiple occupation accounted for 78% of buy-to-let remortgaging deals last year. Commenting on this data, Mortgages for Business managing director David Whittaker said: “For some time now landlords have been making considerable savings through remortgaging. Many have also been releasing equity to make improvements and plan further purchases.” Trend reversal But Whitaker expects this trend to reverse in the first few months of 2016. Continuing, the managing director explained: “I anticipate that we will see a reversal of this trend in the first quarter of this year as landlords hurry to expand their portfolios before the stamp duty surcharge kicks in on 1st April.” Elaborating, Whitaker noted: “The number of enquiries for purchase finance is […]

Further Tax Implications for the Buy-to-Let Market: Experience Invest

Further Tax Implications for the Buy-to-Let Market

Posted Posted in Buy-to-Let, Experience Invest

Welcome back to the Experience Invest, where we report on the latest residential property investment news. The buy-to-let market has suffered further tax implications, today we are discussing the facts, as well as the reaction of industry to those changes. An extra tax on property from April 2016 The chancellor George Osborne announced in his autumn Statement that buy-to-let landlords and those buying second homes in the UK would have to pay a 3% surcharge on each stamp duty band, from April 2016. The extra stamp duty has been introduced so that people buying a home and families are not ‘squeezed out’ of the housing market, according to the chancellor. The new tax will raise an estimated £880 million for the government by 2021, but will add a significant amount to the cost of buying property for investors and second home buyers. Investors and second home buyers must pay an extra 3% in stamp duty Purchasers in this group will now have to pay from 3% tax on any property valued up to £125,000, up to 15% on a property valued over £1.5 million, as illustrated in the table below. Stamp duty rates on purchases (Source: HMRC) Property value Standard rate Buy-to-let and second home rate from April 2016 Up to £125,000 0% 3% £125,000 to £250,000 2% 5% £250,000 to £925,000 5% 8% £925,000 to £1,500,000 10% 13% Over £1,500,000 12% 15% The industry reacts Corporate investors are exempt from the charge, which has caused many to believe that the tax is a direct attack on small, private investors. The industry has raised concerns that the new stamp duty could result in house prices being pushed up in the short term, as investors clamour to buy property before the April deadline. While in the longer term, it could result […]

Experience Invest: buy-to-let

The Bank of England Has the Power to Regulate the Buy-to-Let Market

Posted Posted in Buy-to-Let, Experience Invest

Welcome back to the Experience Invest blog, where we discuss the latest trends in the residential market, student accommodation and care home investments. This week we learnt that the Bank of England has the power to regulate the buy-to-let market, just as it does the rest of the residential market. To prevent house prices escalating in an environment of increasing demand for homes, measures were put into place to limit the number of residential mortgages provided by banks to individuals wishing to borrow more than 4.5 times their income. The measures, which also require banks to ensure customers are able keep up with their loan repayments should interest rates rise, apply to buy-to-let mortgages too. Prior to this week, it was commonly believed by many in the industry that these rules did not apply to the buy-to-let market. For many, buy-to-let is an attractive investment option, offering long-term rental returns, especially for those who are able to raise a substantial deposit. The current relatively low mortgage rates make the prospect even more appealing. The news, which could mean that buy-to-let mortgages may be harder to come by, came to light at a Treasury Select Committee. The Chancellor, George Osborne was asked whether he agreed with the Governor of the Bank of England, Mark Carney that buy-to-let mortgages were a threat to the recovery of the UK economy. Osborne’s response confirmed that the Bank of England and the Financial Policy Committee had been granted additional powers over the buy-to-let market. The stricter regulations surrounding mortgages were originally implemented to prevent the boom and bust scenarios of the past. However some experts are warning that by restricting the buy-to-let market, supply of readily available homes will fall further, causing demand for residential property to escalate further. Ray Clancy, Editor of Property Wire, […]

Experience Invest: Rent

Rents Reach Record High in England and Wales

Posted Posted in Buy-to-Let, Experience Invest

The team at Experience Invest are experts in UK residential investments. This week we consider the latest Buy-to-Let Index from estate agents Your Move and Reeds Rains, part of the LSL Property Services group. The Your Move and Reed Rains Buy-to-Let Index, which is based on analysis of 20,000 properties across England and Wales, reveals the cost of renting a home rose by 1.6% during August and September, taking the average monthly rent to a record high of £816 per month. Rents on the rise Rental costs have risen steadily in prime locations across the UK for a number of years. Statistics show that rents are now almost 25% higher than they were at the start of this decade. With consumer price index inflation at just above 14% during this period, the figure is closer to 10% in real terms – a still significant number. According to a news article on the BBC website, property values ‘rose by between 3.85 and 8.6% over the same period in the UK’. Location specific The research, which was released this week, highlights the areas particularly hit by rental increases in the last year as London, South East, South West, and East and West Midlands. Rents in London have seen the sharpest increase – rising by 11.6% in the last year. Tenants in the capital can expect to pay an average of £1,301 per month. While rents in the South East and South West have not risen as steeply, average monthly rents have still increased over the last year – reaching a new high of £831 and £691 per month respectively. In the East Midlands rents now stand at £603 per month – up 6.7% from a year ago; and £592 per month in the West Midlands up 8.8%. “Rents have been growing faster […]