First Time Landlords are on the increase

first time landlords buy to let mortgagesRecent research by Paragon has revealed first time landlords to be on the increase. And the number of first time landlords obtaining the advice from a Mortgage Broker to acquire a Buy-to-Let mortgage has been steadily increasing since 2009. Perhaps, understandably, this sector of the market was most active in 2002 and the lowest level of activity reported was in 2008.

Paragon predicts that many ‘Professional Landlords’ (defined by Paragon as those with 6 or more properties) may remain somewhat subdued as raising finance may be restricted for them. With the ‘Private Investor Landlords’ (those with 1-5 properties) picking up much of the slack, along side first time Landlords. From our experience at Harvey Bowes, mortgage brokers, we are seeing activity across the spectrum with experienced landlords looking to remortgage properties within their portfolio to create further deposits for on going purchases.

Some lenders consider a Landlord to be experienced if they have owned a rental property for more than 6 months and this opens the door to more opportunities in respect of higher LTV (loan to value) products being available. It also means that with some lenders there is no minimum income requirement for experienced Landlords and this is another way in which increased opportunities are available to those who have already made a start on their property investment journey.

The activity reported by Paragon is certainly in agreement with our experience at Harvey Bowes Limited, as mortgage brokers we have seen a huge increase in BTL enquiries, not least from First Time Landlords looing to make a start in the market. With banks offering little return on money saved, the prospect of buying property has greater attraction. It is also reported by Halifax that house prices have increased to an average house price of £166,094 which is a 4% increase in the last 12 months.

Since the Funding for Lending scheme got underway, we have also seen a price war between lenders resulting some excellent buy to let deals; and while interest only mortgages are difficult to obtain in the residential market, they are more easily available with Buy to Let mortgages. This means that with the right property and the right mortgage to fund it, healthy monthly cash-flow can be achieved right from the start of ones investment.

For first time Landlords it may be tempting to purchase low value properties in areas in need of regeneration, however, one should always consider rental demand carefully when selecting an investment property. Void periods result in the Landlord funding the mortgage payments and other associated costs, which is a key reason why areas of strong rental demand are important to developing a successful investment strategy.

If you are looking for advice on BTL mortgages, contact the team at Harvey Bowes today on 029 2115 6918.


NHBC report House Building on the increase

The number of new homes registered with NHBC in the first quarter of 2013 are the highest for 5 years. Figures are reported at just under 26,000 and in the same period for 2013 the number is a little short of 32,000 – that is a significant 22% increase.

Schemes which make new homes more accessible, such as the New-Buy Scheme and other Government initiatives such as the Affordable Housing Programme is attributed with helping to fuel this growth. The largest reported growth is from London, with projects such as the development of the Battersea Power Station redevelopment having a significant impact.

South Wales is also a hot bed of activity in the new development arena. The large scale re-generation taking place in Newport is much needed, with Bellway Homes and Taylor Wimpey to name just two of the developers with large projects. Most noticeable is the development along the west side of the River Usk and the huge new home development which has commenced on the old Llanwern Steel Works site. This St Modwen development includes housing, office and industrial space, public open space and a range of community facilities. It is reported that the project will take 20 years to complete and will include 4,000 new homes, catering for all sections of the housing market, with 20 per cent of the total being “affordable” homes and the balance ranging from apartments to large detached houses.

mortgage broker cardiffCardiff is also seeing continued new home development. There are currently several large new home developments from some of the UK’s largest developers, such as Taylor Wimpey, Charles Church, Persimmon and more. In nearby Penarth Crest Nicholson have an exciting development names ‘Penarth Heights’ from which, many of the properties in the development boast fantastic views of Penarth Marina and right across Cardiff Bay to include the Millennium Stadium.

The development of new homes along with the schemes available to help first time buyers get on the ladder is a positive step in the right direction for the economy.

To find out more about the New-Buy scheme, or for any mortgage enquiries, contact the team at Harvey Bowes today on 029 2115 6918.