Press Centre
Estate Agents & Letting Agents in Leeds

Here you will find the latest Hudson Moody Wass and property news.

Tenants face rent rises as supply of rental properties falls

Tenants are facing higher rents as the supply of rental properties continues to fall due to George Osborne’s hefty, punitive tax changes, new figures suggest.

The Association of Residential Letting Agents (ARLA) report that the number of properties registered per letting agent fell year-on-year by 5% in April, which mean that renters will almost certainly face an even tougher time following the chancellor's stamp duty reforms, as landlords naturally seek to recoup their costs by hiking up rents, amid a shortage of homes on the rental market.

Years of failing to build the amount of residential properties needed has squeezed rental costs up significantly in recent years, and now it seems that Osborne’s misguided housing market policy risks exacerbating the issue, as his outright assault on buy-to-let landlords ignores the fact that the private rental sector offers an essential service for millions of adults who choose to rent.

The decline in the number of rental properties available, owed largely to higher stamp duty costs and lower mortgage tax relief, is widely expected to place upward pressure on rental values, as reflected by the fact that two-thirds of ARLA agents predict that the stamp duty reforms will push rental values up for tenants down the line.

David Cox, managing director of ARLA, said: “We expect that fewer investors will be taking on buy-to-let properties over the next six months, following the [stamp duty] price hikes, meaning that once these properties [existing stock of available homes to let] are filled we’ll see supply nosedive once again.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



The Power of Crossrail: Where you should invest along the Elizabeth line

The Elizabeth line may be the new purple Tube line with the royal seal of approval, but where are the buy-to-let hotspots along the new ‘Lizzie line’? We asked Robert Nichols, managing director of London estate agents Portico, to identify the areas that he thinks are worth investing in? 

Rightmove recently reported that asking prices for homes along the ‘Lizzie line’ have soared by up to a third in the last 12 months, and they are continuing to rise, with analysts predicting average price increases of £133,000 between now and when the line launches in 2018/19.

If you, as a buy-to-let investor, are looking to benefit from both capital growth, high yields or both, here is a list of top buy-to-let hotspots that you may wish to consider.

Forest Gate

Forest Gate has enjoyed significant gentrification over the past few years, thanks to the Olympic Games and the opening of Westfield shopping centre. The anticipated arrival of Crossrail is now gentrifying the district even further, and making the area extremely attractive to tenants looking for affordable accommodation.

The transport links appeal to tenants, too. There is an Overground train to the City that takes 13 minutes, and when the Elizabeth line opens, locals will be able to catch a train to Tottenham Court Road in just 17 minutes. The Zone 3 district also offers a wealth of affordable, Victorian houses, and is a haven for investors. The average price of a two bedroom property currently stands at £275,000 and yields in the area stand at 4.7% according to our interactive yield map. We predict property prices to rise by 10% by the time Crossrail is complete.

Farringdon

Farringdon is set to become one of Britain's busiest train stations, and the only station from which passengers will be able to reach three London airports, plus access Crossrail, Thameslink and Underground trains.

Investing in central London in the areas around Tottenham Court Road such as Fitzrovia and Bloomsbury and towards the City in Farringdon have not been considered risky but rather stable in terms of the potential for assured capital growth in recent years, increasing on average by 5% every year in value. The Farringdon area guarantees to produce a good return in rental income, due to the continuously increasing demand to live in central areas close to the commercial and transport hubs and Universities - and landlords in the area experience, on average, only a one week void period between tenancies.

The desirability of the area is being enhanced by the Crossrail development, which will improve connections to these areas from outer areas of London, and encourage further investment and economic growth.

Acton

Thanks to regeneration and slashed journey times, the areas on the western part of the new line have seen huge property price growth. Acton Main Line, with journey time savings of about half an hour, is definitely one to watch. Transport infrastructure and regeneration is making a real difference to Acton, and there are some extremely desirable areas to live, such as Poet’s Corner, the Mill Hill Conservation Area, or anywhere along the Bedford Park borders due to the recent demolition of the South Acton Estate. The area directly around the imminent Crossrail station is also extremely sought-after. A huge numbers of savvy buyers have already put down roots in the area, and the average two bedroom, purpose-built property stands at a reasonable £400,000.

Properties around Acton Mainline station fetch healthy yields of 4%, but yields are highest around the western end of Uxbridge road at 4.6%. We expect property prices in Acton to have risen by at least 15-20% by the time Crossrail is complete.

Ilford

Ilford will finally be on the Tube map as a result of Crossrail. Though it is not considered one of the most elegant places to live, it is certainly becoming gentrified as a result of TFL’s transport plans, and is one of the most affordable places to live in London - which is a huge plus for tenants.

New build apartments, trendy eateries and bars are shooting up in the east London borough, signalling that a wave of new investors andtenants will soon be moving in. As mentioned, it's one of the best-value areas in London, and though property prices have been rising since the announcement of Crossrail, the average price of a two bedroom property in the area is still a reasonable £280,000. We predict property prices to rise by 10% in the run up to Crossrail completion, and expect the area to prosper as a result, so it is a brilliant place to both live and invest.

Romford

Romford is becoming an increasing popular choice for tenants, as many are being driven out of the capital because of rising rents. The Essex town offers affordable rent, a quick commute, (you can get to Liverpool Street in 20 minutes), and a wealth of trendy cafes, delis, late night bars and independent shops and boutiques.

House prices have already reached record highs in the area due to infrastructure plans, but we predict they will continue to soar until Crossrail is fully operational in 2019. An investor can pick up a two bedroom property in the area for around £227,000.

Robert Nichols is managing director of Portico, with branches in Acton, Battersea, Bloomsbury, Camden, Clapham, Dulwich, Fulham, Hammersmith, HighburyIslington and West Hampstead.


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



Where to invest in buy-to-let properties for the best rental yields

Property investors looking to invest in the buy-to-let market should look to university towns in the North West to find the best returns, says Peter Armistead of Armistead Property.

Although London is very popular for landlords, recent research from LendInvest shows that the North West has been the most lucrative area for average annual rental yields over the past five years.

Average annual returns between 2010 and 2015, place Manchester and Liverpool at the top for rental yields, but capital growth and return on investment is dominated by the South. Manchester comes out on top with average annual rental yields over five years with 6.02% followed by 5.15% in Liverpool. London yields are surprisingly low - just 4.86% in outer London and 4.71% in the City. 

According to Savills, the five largest rental markets outside London are Manchester, Liverpool, Leeds, Bristol and Birmingham — all popular university cities, where an average of 23% of the population live in the private rented sector.

Landlords will find the best returns in urban areas, with a concentration of students and young professionals.  Yields in houses of multiple occupation (HMOs) can be high. If you are targeting the student or young professionals market, buy a multiple-bedroom property near the university or City. Students and young professionals are looking for high spec accommodation with good appliances and a quality finish, that have good transport links nearby, such as train stations and main roads.

 It is important to remember that yields are calculated before maintenance costs, void periods,  mortgage payments and letting agent fees. So before acquiring a rental property, ensure you factor in all these costs.

An average residential property in Manchester is just £155,000, while a flat in a good area, costs as little as £120,000.  A property in Manchester can provide a 5% minimum cash rental yield and a typical 12% total cash yield, including 7% capital appreciation. Demand for rental accommodation is strong and by comparison with other regions, housing is cheaper.

House prices in London are about five times what they are in Manchester, but salaries are only 30% higher. Manchester is a very affordable place to live and demand for property is soaring in the City, thanks to the expansion of the MetroLink tram system, the trendy Northern Quarter and the BBC Media City.  It has vibrant restaurants, bars, clubs plus a great music scene, galleries and museums.

In the second half of this year, we may start to see a shift in investment focus away from London and towards the more lucrative and profitable BTL areas in the UK. Many investors will be looking at ways to protect potential new investments in 2016 from the impact of the Chancellor new tax measures.

If investors can purchase cheaper properties with better yields, they will have the opportunity to protect and boost their profits in the longer term. Certainly the recent changes have made it a lot harder to make money in BTL. But where there are challenges, there are opportunities if you can think outside the box.

As a landlord, Peter Armistead personally owns properties as well as through his company, Armistead Property.  


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



One in five homes in Portugal sold to overseas buyers

The extent to which Portugal’s improving housing market is being propped up by foreign buyers was laid bare by figures showing that 20% of Portuguese property purchases in the first quarter of this year were made with overseas money.

New figures published by the Real Estate Association APEMIP show that thousands of Britons are taking advantage of a combination of favourable economic factors, including a strengthening Portuguese housing market, improving domestic economy and strong sterling exchange rate against the euro.

In terms of foreign buyers, British nationals represented 18% of the total, second only to the French, which secured a 26% share of the market.

Chinese investors meanwhile covered 13% of the Portuguese property market, with many buyers lured to Portugal by its golden visa scheme which gives foreign investors who spend €500,000 (£380,780) on a property in Portugal the right to live in the country.

Lisbon, Porto and the Algarve remain the most popular locations for overseas nationals acquiring homes in Portugal, APEMIP said.

With transactions in Portugal growing, APEMIP chairman Luís Lima estimates that that the volume of property sales in Portugal are likely to increase by up to 40% during the course of 2016 in relation to last year.


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



Rogue landlord slapped with 24,000 fine

A Birmingham landlord has been handed a fine of more than £24,000 after being prosecuted for a string of offences.

Salih Mahfood Hassan Mohamed, who owns a house split into bedsits, was charged with multiple offences including a mould and rubbish-blocked exit, failing to ensure that the fire alarm was maintained in good working order, and for not applying for a House in Multiple Occupation (HMO) licence and 10 breaches of the HMO Management Regulations, to which he pleaded guilty at Birmingham Magistrates Court.

The court heard how Mohamed, 49, of Newtown Road, Sparkhill, failed to renew his HMO licence when it expired in May 2014 and in September 2015.

West Midlands Fire Service referred the case to the council because they were concerned about the living conditions at the property.

Cllr Peter Griffiths, cabinet member for Housing and Homes, said: “HMO licensing exists because tenants living in this type of accommodation are almost 17 times more likely to be killed in a fire than an adult living in a similar single-occupancy house.

“Mr Mohamed left the country for a period of time but whilst he ensured that a friend continued to collect the rent on his behalf, he failed to keep his tenants safe, leaving them to live in appalling conditions and at considerable risk.

“I welcome the fine imposed by Birmingham Magistrates Court.

“The council has over 1,800 licensed properties. Most landlords are responsible and law abiding, but the council’s HMO Licensing Team will continue to pursue and prosecute those that aren’t.

“We are investing in our work on rogue landlords and will pursue all those who fail to operate within the law.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



Going bananas at auction

It is essential that you conduct your own due diligence before buying property at auction, as Andy Thompson, auction consultant at Edward Mellor, explains.

As well as the demands of day to day stuff, I’ve been juggling my evenings with renovating my own property and squeezing in a few property talks along the way. My last talk was with Scott at the Midway in Stockport. We were guest speakers for Claire Hamlett-Ledger’s ‘Property Mentor’ group and it was great to meet more eager investors, keen to pursue their property dream. This was my third talk in as many weeks and was a good opportunity to hone my skills whilst meeting more aspiring property investors.

I told the story of one of our very good clients, Alex, an American businessman now living in Valencia, who has grown a 30+ property portfolio with me over the last three years. He focuses mainly on East Manchester and now boasts a burgeoning property portfolio. Alex’s story is inspiring for people to see how successful you can be in a relatively short period of time if you set your goals properly.

As well as the success stories, I have fun telling some of the more shocking tales to come out of the auctions.

I remember an old client of mine, Malcolm – now based in Mayfair but originally from the East End and owner of the strongest Cockney accent you’ve ever heard. We got on well and worked together a lot in 2010 when Malcolm had bought a portfolio of 98 properties in North Manchester which he then sold off individually at auction.

Each auction cycle we would go through his list properties and decide which we should sell. We were working together so regularly and with such big numbers it was easy to lose perspective with what we were dealing with. Whenever I used to getting a bit over-eager, Malcolm would point out that we aren’t selling bananas here. But you’d be forgiven for thinking we might be with some of the stories I can recall of carefree buyers dropping a clanger on auction day.

Take Mr Singh, for example. We met a couple of years back, the day before one of our auctions. He was booked in for a chat to discuss how to invest in property. He had recently sold his company and together with a small inheritance and savings, he had £500,000 to invest. Apart from his family home, he had never bought a property before and was as green as grass with the concept of auctions and wanted to know how it all worked.

We discussed various investment models that would suit his circumstances and I explained how the process of buying a property from auction worked. Given that our next auction was less than 24 hours away, I suggested he should come along just to observe and get a feel for things.

Skip to the next day and Mr Singh arrived at the venue nice and early. I said “hello”, showed him around and explained that because he wasn’t bidding he didn’t need to register and could come and go as he pleased. It was a busy day. The auction room was buzzing, and I was run ragged all afternoon. I remember towards the end of the day, looking across the room as the crowds dispersed to see Mr Singh standing amongst the successful buyers… with a bidding paddle in his hand.

What was he doing with a bidding paddle? You guessed it! Without doing any homework, no checking of legal packs, no research whatsoever, he had bought five properties and spent his £500,000!  Just like that.

Sure enough, the next day he called me to say he had made a mistake. I had to deliver the bad news that he had already committed to buying these properties and if he was to back out he would lose his deposits, totalling approximately £50,000.

He had a very expensive lesson to learn. You might be surprised to hear this, but it is not an uncommon occurrence. Auctions are public - anyone can attend and bid for the properties.

If you want to take the risk and bid blind for a property you know little or nothing about, I can’t stop you. But, if I could give one piece of advice, it would be to do your homework first and take advantage of all the help and advice on offer.

Because as my mate, Malcolm, would say; “you’re not buying a box of bananas”.

Skip to the next day and Mr Singh arrived at the venue nice and early. I said “hello”, showed him around and explained that because he wasn’t bidding he didn’t need to register and could come and go as he pleased. It was a busy day. The auction room was buzzing, and I was run ragged all afternoon. I remember towards the end of the day, looking across the room as the crowds dispersed to see Mr Singh standing amongst the successful buyers… with a bidding paddle in his hand.

What was he doing with a bidding paddle? You guessed it! Without doing any homework, no checking of legal packs, no research whatsoever, he had bought five properties and spent his £500,000!  Just like that.

Sure enough, the next day he called me to say he had made a mistake. I had to deliver the bad news that he had already committed to buying these properties and if he was to back out he would lose his deposits, totalling approximately £50,000.

He had a very expensive lesson to learn. You might be surprised to hear this, but it is not an uncommon occurrence. Auctions are public - anyone can attend and bid for the properties.

If you want to take the risk and bid blind for a property you know little or nothing about, I can’t stop you. But, if I could give one piece of advice, it would be to do your homework first and take advantage of all the help and advice on offer.

Because as my mate, Malcolm, would say; “you’re not buying a box of bananas”.

Edward Mellor’s next auction will take place in Manchester on Wednesday 8th June, but if you are interested in any of the lots available, make sure you conduct all necessary due diligence before bidding.  


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



New homes sales fall in Australia

Sales of new homes in Australia fell in April following a surprisingly strong surge the previous month, according to the latest industry report.

The Housing Industry Association (HIA) said its survey of large volume housebuilders revealed that new home sales declined by a seasonally adjusted 4.7% in April, down from March when they jumped 8.9%. But despite the fall in sales, the survey pointed to healthy home construction levels – which will naturally impact on future housing supply in the country.

“The trend in new home sales reiterates that the peak for the cycle has passed, but the descent we’re now observing is very mild,” said HIA economist Diwa Hopkins.

“This signals the potential for very healthy home construction activity throughout 2016, much as we have been anticipating.”

Sales of detached homes declined by 3%, while sales in the unpredictable multi-unit sector dropped 10.8%.

“Our forecasts reflect an expectation that a modest decline in new home building in 2016 will be largely driven by a decline in multi-unit construction, following the successive record levels that occurred in 2015 and 2014,” Hopkins added. 


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



Housing starts in England fall 9%

The number of new homes that were built in England in the first quarter of this year fell, government figures show.

A total of 32,950 homes were completed in Q1 2016, a fall of 9% on the previous quarter and 3% lower year-on-year, while the figures also reveal that there were 35,530 housebuilding starts in England, down 3% when compared to the final quarter of last year.

The data from the Department of Communities and Local Government (DCLG) follows on from recent figures provided by the National House-Building Council (NHBC) which revealed that new home registrations in the first quarter of 2016 were down 8% on Q1 2015.

Despite the dip, housebuilding activity in England remains officially at its highest level since the 2008 crash.

Annual housing starts totalled 139,680 in 2015/2016, up 12% compared with 2014/2015. This is good news for the government which has a target of building 1m new homes by 2020.

“Despite a slow overall start to the year, industry confidence remains high and housebuilders are progressing well with their plans for growth in 2016, as seen by the increase in the number of new home completions,” said NHBC chief executive Mike Quinton.

New housebuilding starts are now more than double (107%) what they were in the trough of the first quarter of 2009 but remain 27% below the peak seen in the first quarter of 2007.

Some 32% more new homes were delivered in London in 2015/16 compared with the previous year, with local authorities in Basildon and Haringey seeing completions soar by 279% and 1,039% respectively over the same period.

Wakefield also saw a spike in completions for the year, which were up 59% from 1,028 to 1,634.

However, in spite of the rise in completions annually, there is still not enough being done to “fix the broken housing market”, according to Jan Crosby, head of housing at KPMG.

Crosby said: “We are still only seeing around 140,000 homes being built per year, over 100,000 less than we need.

“At the rental end of the market, the picture is even more worrying as completions by housing associations fell by 24% last quarter on the previous, showing the effect of recent cuts to their revenue streams and a likely knock on to housing some of our society’s most vulnerable.” 


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



2,303 new UK landlords every week

For many people buy-to-let continues to look an attractive income investment at a time of low saving rates and stock market volatility as illustrated by fresh data revealing that the number of landlords in the UK rose by 7% in 2013-14 to reach 1.75m.

Figures from estate agent ludlowthompson, based on data from HM Revenue & Customs, showed 1.75m people declared income from property during the year, up from 1.63m in 2012-13, as they seek to take advantage of attractive returns from but-to-let that currently beat all other mainstream investments, including commercial property, UK government bonds, shares and cash.

Landlords collectively earned £14.2bn in net income from their rental properties during the year, up from £13.1bn the previous year.

“The returns routinely outperform those of other investments,” said Stephen Ludlow, chairman of ludlowthompson.

The data provided by HMRC is the latest available on landlord numbers, but the actual volume is widely expected to have increased since, as indicated by a surge in mortgage borrowing by landlords ahead of the stamp duty change on 1 April.

The government has frequently promoted the benefits of homeownership, pledging to help young people by turning “generation rent into generation buy”, but that has not deterred investors.

The chancellor George Osborne is now hoping that the 3% stamp duty on second properties will slow the buy-to-let boom, along with reduced tax breaks for landlords. From 2017, the ongoing cost will start to increase for landlords who pay the higher rate of tax as relief on mortgage repayments starts to be withdrawn.

Thompson added: “Investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments.

“Buy-to-let investments are a highly popular alternative to the volatility investors often risk when investing in the stock market.”


Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!



US property market looks ripe for investment

Investors should keep their eye on the property market in the United States which continues to go from strength to strength.

Residential property prices in the US are currently rising at a healthy rate and yet the signs are that home values may increase further in the near term as the supply-demand imbalance in the market continues to widen.

The latest index report from Zillow shows that US property prices increased by 4.9% in April compared with the same period last year, while there are now 3.4% fewer homes for sale than there were 12 months ago.

The fall in the volume of homes on the market, particularly smaller entry level properties, is making it particularly tough for first-time buyers with bidding wars breaking out across many parts of the country, according to the report.

Svenja Gudell, chief economist at Zillow, said: “New construction has been sluggish over the past year. We’re building about half as many homes as we should be in a normal market. There still aren't enough homes on the market to keep up with the high demand from every type of home buyer.

“In many markets, those looking to buy a home in the bottom or middle of the market will need to be prepared for bidding wars and homes selling for over the asking price. This summer's selling season's borders will most likely be blurred again as many buyers are left without homes and will need to keep searching.”

The latest Zillow report shows that property markets across much of the US continue to recover from the damage done during the housing bubble of 2005-07, making various parts of the country ripe property investment. 

Chinese investors are the biggest foreign buyers of US property

For many years, Canadians were the top foreign buyers of homes in the USA. But recently, Chinese investors have overtaken them to become the biggest foreign buyers of property in the country.

The National Association of Realtors says in the year ending March 2015, buyers from China snapped up $28.6bn (£19.6bn) worth of properties in the US, while Canadians spent $11.2bn (£7.7bn), and Indians spent $7.9bn (£5.4bn).

“Right now in China, the real estate market in China is bombed. Very bad. A lot of people are selling in China and buying in Manhattan or Long Island,” said Lin Pan, partner of Lin Pan International Realty.

The average Chinese buyer is spending almost double the average of all foreign purchasers and more than triple the amount spent by Americans.

“For whole United States homebuyer the average price is $255,000 (£174,460). The average price foreign buyers pay is $499,000 (£341,347). But for Chinese buyers, their number goes to $830,000 (£567,845) on average," Lin added. 


Article courtesy of Property Investor Today | Sign up for Property Investor Today newsletter | Get this news on YOUR site!



professional memberships and affiliated logos