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TODAY'S OTHER NEWS

BTL landlords urged to take advantage of ‘bargains’ and add to portfolios

With the residential property market reopening for business, investor confidence in the sector is starting to improve with Mortgages for Business among a growing number of companies encouraging buy-to-let landlords to take advantage of existing market conditions and potential ‘bargains’ by preparing to add to their property portfolios this year. 

The buy-to-let broker believes that there is plenty of room for negotiations when buying property, especially in London and the Home Counties.

Steve Olejnik, managing director of Mortgages for Business, said: “We can’t know exactly what’s going to happen to the market, but we expect a temporary, short-term fall across London and the south east in the region of about 15%. 

“But there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth.

“I think values will be back at February 2020 levels by the spring or summer of next year.

“Landlords who have not asked for a repayment holiday will be well set to snap up some bargains with the help of lenders have demonstrated a willingness to lend since the third or fourth week of the pandemic.”

Mortgages for Business has identified vanilla BTL properties and HMOs as good investment options at the moment.

Olejnik added: “Yields from the various types of property remained pretty steady throughout 2019 and suggest property will offer a better return than many other investments in the future – especially to smart, professional landlords looking outside the box at HMO investments.

“Talk to your broker now. If you want to grow your portfolio, you will want to build up a war chest when you next remortgage and should look to refinance for capital.”

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    Landlords encouraged to buy more properties so they can be shafted all over again with unfair taxes and legislation. I won't be adding to my portfolio, I'll be reducing it.

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    If you have any around the Norwich area I could be interested at the right price, always buy in a falling market

     
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    Hi Shane. I would really welcome a conversation with you about this. Is that possible. Regardless of where your properties are. I have an idea that could make this work for both of us. Thanks

     
  • Mark Wilson

    With rents falling prices will fall to match, so I suspect yields will not alter. I would also expect more Government intervention and the courts will be more reluctant to see people made homeless. So hard to know what is a bargain.

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    The difference is the lower purchase price is a permanent saving but the potentially lower rent is a temporary reduction in yield and will improve over time, as will the property values due to market forces once things begin to normalise.

    Buying now or soon is a win win for solvent investors with the cash or 50% plus deposits.

    I have always bought when most are selling and have turned a £6000 deposit into around £3 million of equity and £250k gross annual rental income over a period of 22 years. I can afford to take a risk in the current climate and may well do so.

     
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    @Robert, agree totally, I buy when people tell me not to, but always buy for cash, over 30 yrs now, not gone wrong yet, no regrets

     
  • Paul Barrett

    Typical stupid mortgage business.
    Not factoring in the very real risk of feckless tenant rent defaulting and the dysfunctional eviction process which is going to become even more dysfunctional; if that were possible!!?

    LL should be selling off and deleveraging as fast as they can to derisk their business.
    Savvy LL won't be buying more properties.
    But what they will do is sell and move investment to country properties.

    LL will be consolidating not expanding their business.
    Let all those alleged FTB and tenants that S24 was supposed to facilitate go and buy these alleged bargain properties few of which will be EPC C status.

    Mortgage brokers will be going out of business.
    Few LL will be buying.
    Much remortgaging of course.

    Not much new business so lenders have no alternative than to cannibalise eachother to increase or maintain market share.
    Gonna be tough times for BTL lenders



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    So btl interest rates will fall - another win opportunity for brave solvent landlords.

     
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    Hi Paul. I would really welcome a conversation with you about this. Is that possible. Regardless of where your properties are. I have an idea that could make this work for both of us. Thanks

     
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    As a landlord for over 25 year's I can honestly say the obvious rental market is crazy and I could fill my properties ten times over as the demand outweigh the supply and my rents have increased by 10-15% over last 3-4 YEAR-HOWEVER I cannot wait 2 sell up and stop being a full time parent and babysitter to the tenants. Any property which becomes empty I am offloading-Not just 2 make my life simplified but its a massive issue getting tenants out and the 2 months Statutory notice is a joke and most tenants know this and just sit tight for up to 6 months until the final Warrent of execution+ballifs turn up to Reposess etc- I would never BTL again because its an absolute nightmare when you want your property back and want to dispose of your assett-

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    Dennis, please don't take this the wrong way but I'm a landlord of more than 30 yrs now, been there, seen it all and got the tee shirt, but there are no shortage of very good decent working tenants out there just be very selective of the tenants you let to and then these problems don't arise too often, no DSS , no single mums, no one under 25, and no curry eaters

     
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    Andrew, nothing wrong with a good curry... occasionally !

     
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    Agree, rents are going up not down, demand is up not down, location on location will always differ. Sale Prices will not fall but if they do very very short term. Big purchasing surge coming. Been in and out and ran with the cycle, yes this period is different so different Nobody has been through it before because we have never had this situation before. So you professional LLs out there, keep your properties tidy and upgraded at every opportunity and you will always find a good tenant, just trust nobody and work your portfolio 24/7 or find another business. Simples!

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    Headline in the Edinburgh News today...

    "DJ Alexander: Edinburgh's biggest letting agent says 2008 crash a 'tea party' compared to Covid-19 as around 15 jobs to be cut"

    Someone must be telling porkies ?!?

     
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    I think a big tax earthquake is coming. Landlords are easy targets. We're seen as the evil greedy capitalists who have ruined society for everyone.

    Paul Barrett

    Yep expect to see very soon a 6% SDLT surcharge and increasedCGT rates for investment property sales.
    Easy win for Govt with the vast majority of the electorate supportive of such policies.

    LL are the low hanging fruit.
    LL expect to be plucked!!!

     
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    I think LL's outside West London you haven't a clue what we are being put through. I can see plainly other parts UK are not bullied to the same extent. London boroughs have taken millions of £'s out of the Private Sector housing in each Borough and more coming, or course they have no in put we pay for all, all, all, then they try & tell tenant private rents are too high that they actually caused by licensing schemes, Stamp duty, restriction of several kinds + penalties, of course it only applies to one half of Community, if you house the people milking the system nothing applies + you can have 16 weeks up front as a sweetener. Big Developers are exempt & subsidized so no level playing field for us. Several more additional encumbrances coming 1st October, like Mandatory for 5 people or more regardless of how many story's, additional licensing for 4 or more people, Selective Licensing in selected areas as I understand it for any number of people but not if you House the Family's or so called connected persons nearly all on benefit, I only ever had 2 Family's come to me that were paying for themselves in 42 years. They all wants to be on the Council and the Council loves them, 2'500 in temporary accommodation in one Borough + 9'000 lined up on waiting list, they are not stupid if they can get it subsidized or free for ever, I see some now on it in 3rd generation, they can't understand how life should be any other way, why would they pay a mortgage.

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    Michael, mandatory licensing for 5 or more people HMOs came in in 2018.

     
    Paul Barrett

    Unfortunately the feckless welfare scrounger lifestyle is a well supported one.

    Such scroungers are in the upper 25% of income earners in the UK!!!

    Welfare scroungers aren't poor.
    The poor are the ones who commute to work paying massive fares and end up with far less net income than a welfare scrounger.

    Via the medium of smartphones the whole world knows how to work the UK welfare and NHS system.
    That is why all the illegals are trying to get here.

    It us only the mug workers with self respect that refuse to ponce off the welfare system though financially they would achieve a far better work life balance.
    Work alleged 16 hrs pw week and unlimited welfare awaits.

     
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    25 million extras in UK--all want cheap housing

    another 50 yesterday

    Paul Barrett

    Yep apparently the supermarkets are selling sufficient food etc for a population of 80 million when the UK allegedly has a 65 million population.
    Surely that 65 million population can't be consuming food for another 20 odd million!!??

    I know there are a lot of fat people but that is taking it just too far!!!

    Somebody is doing the eating and I DON'T believe it is a 65 million population!!

     
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    Ok Peter I digress but it was 5 people 3 story's or more people since 2006 as know to my cost having to renew 3 times several time over even though I never let rooms, total extortion racket. The worst thing that ever happened to Private sector housing creating over crowding by the tenant, causing sub-letting & making LL powerless to act, while making him the responsible person with no instrument to remedy.

  • Paul Barrett

    Rather than antagonising Govt even more LL should not snap up bargain properties.
    Rather let us see if FTB etc snap them up.
    If this doesn't occur then LL could put in an offer.
    Govt is doing its level best to eradicate the small private LL.
    If LL snap up bargain properties that will just motivate a frustrated Govt to introduce even more penal policies in additional attempts to eradicate the small LL.
    LL would do better if they sold up and deleveraged to leave them more financially resilient to rent defaulting tenants.
    Remember these mortgage brokers are just chasing their fees; they won't care if a LL is repossessed because they can't pay the mortgage due to rent defaulting tenants.
    Of course LL should remortgage to cheaper deals when worthwhile.
    But taking on more mortgage debt is inadvisable in light of the propensity for tenants to stop paying rent when suffering for whatever reasons loss of income.

    It is clear that Govt intends to make it difficult if nigh on impossible to get rid of rent defaulting tenants.
    LL need to carefully consider how resilient they would be to such circumstances or potentially find themselves bankrupted by repossessing lenders.
    Taking on even more mortgage debt for additional properties is most unwise.

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    Investing in property is still without doubt the soundest safest investment you can make. The yield really isn't the issue the factor is if you break even .i have property without any loans but it will still only yield 2-3 percent. Properties real worth is the value it is increasing year on year. The initial idea of letting is to get someone to pay for that investment.
    I'm only jealous that I wasn't old enough around about 1990-97 period to invest in property . IN Windsor in 1997 you could buy a three bedroom semi for 70k which today is worth over 500k . 70k in 1997 today with a inflation calculator is around about 130k . what investment without huge risk would give you such a return

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    Investing in property rather than a private pension was the best thing I done, buy for cash, or keep borrowings to a minimum, and pay them off ASAP , and take a long term view, I was buying in the 90 - 97 period, corner shops and run down terraced houses out of auction rooms in Norwich 15 - 25k a time, but even then people were saying that I was mad to be doing so, my solicitor once said to me why don't you let me know before you go to an auction, my answer, because you would try and talk me out of it. Gut feeling has always worked for me.

     
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    Not a chance that I would buy now. I only have a few properties and will simply focus on deleveraging. If I was able to set off mortgage payments against the rent I may have considered it but no point now. And there is no way that this policy would be reversed to allow mortgage payments to be set off again.

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    Richard you are right not to buy now if you are borrowing to do so, better to get your borrowings reduced first, this buying opportunity is for cash buyers only.

     
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    Andrew - Correct - Property is King.

    I often get cold calls from people offering Investment plans and the like.
    My first question to them is always can they give me an investment that over time will deliver around 6/8% return with 99% security and an almost guaranteed capital growth over time in the region of 4+%.

    Funny how quickly the phone calls stop coming!!!!!!!

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