Buy-to-let news to Friday, January 5th, 2018

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Brexit uncertainty impacting prime central London rental market

Ongoing uncertainty over the impact of Brexit is likely to continue to influence investor attitude when it comes to investing in property in prime central London (PCL), while many tenants are looking for rental bargains.

That is the view of one letting agent who has seen many buy to let landlords slow down their property investment in this area of the Capital, until they have a clearer picture on Brexit’s implications.

“Until such time as there are foreseeable consequences of Brexit, the market will remain in limbo,” Lynsey Schipper, head of letting at Lurot Brand, commented.

“Tenants that have to move will move, for the same reasons people have always been forced to move - births, deaths and marriages.

“Everyone else, particularly those in a more stable position due either to their own independence or the nature of the business they work in, will likely renew where they are and continue playing the waiting game.”

Schipper suggested that in the present environment, many tenants in the private rental sector are looking for cheaper rental properties.

She said: “Tenants currently renewing [their tenancy] will inevitably continue to try and negotiate the rent down; and avoid where possible a lengthy fixed term commitment, realising the pressure is on for PCL landlords.

“Landlords unfazed by Brexit and positive about the future of London are less likely to accept a significant drop in rent, even if they would prefer to avoid remarketing the property, it is not a case of ‘at any cost'.“

Scottish landlords urged to ensure their letting agents remain compliant

Scottish letting agents must register for schemeScottish landlords are being urged to ensure that the letting agents they use remain compliant, when a new registration system takes effect.

Letting agents are running out of time to ensure they are registered for Scotland’s letting agent code of practice, which will begin taking applications during January.

The code of practice aims to protect landlords and tenants, whilst getting rid of poor quality housing. It also seeks to raise standards within the private rental sector, building a more effective industry with mutual benefits for tenants, landlords and letting agents.

Under new rules, anyone carrying out what is deemed to be letting agency work north of the border, who is not registered, will be committing a criminal offence, with fines of up to £50,000 and prison sentences of up to six months a possibility for offenders.

The deadline for joining the new register of letting agents is the end of September 2018 and letting agents and those involved in property management have been urged to complete registration.

There is a fee for registration, covering a three-year period, based around how many offices a letting agency operates. For one office, the cost is £495, for two to three offices it is £595 and for businesses operating four or more offices, there is a £700 charge.

The Scottish Government has defined a letting agent as someone carrying out work for a private landlord who has the intention of letting out a property to a tenant, or people managing a property, with a role covering rent collection, property inspections and the arrangement of repairs and maintenance.

People conducting the above tasks on a property located in Scotland will have to register, even if they are located outside of Scotland.

“Landlords need to be aware that some key legislation changes are on the horizon and they should be making sure that their letting agency will be compliant with the new rules,” urged Brian Moran, lettings director of Your Move Scotland.

Government to launch Rent Recognition Challenge

Government to launch app competition for tenant credit scoringIn a bid to help tenants demonstrate their creditworthiness to landlords and mortgage lenders, the Government is set to launch a £2 million ‘Rent Recognition Challenge’ to find someone to build technology to facilitate this.

The Treasury competition is aimed at encouraging entrepreneurs to develop a digital app, which will allow tenants to record and share rent payment details, giving a clearer picture of their credit score for mortgage and rental applications.

“People’s monthly rent is often their biggest expense, so it makes sense for it to be recognised when applying for a mortgage. Without a good credit score, getting a mortgage can be a real struggle,” commented Stephen Barclay, the Economic Secretary to the Treasury.

“Most lenders and credit reference agencies are unable to take rental data into account, because they don’t have access to it. The Rent Recognition Challenge will challenge firms to develop an innovative solution to this problem and help to restore the dream of home ownership for a new generation,” he added.

By including payment history on credit scores, landlords and mortgage lenders will be better placed to assess a tenant’s ability to pay rent or mortgage payments on time, while the system is likely to reflect a fairer credit overview on tenants with a good history.

The competition gets under way in January and will close in March 2018, with the development phase taking place from April 2018 to October 2018.

The six winning bids will receive £100,000 in grant funding to help create prototype products.

Rate roundup

Rates round-upBelow are the top 3 buy to let mortgage deals, by lowest initial rate, for fixed, tracker and variable products.

This table updates twice daily with the latest deals from a diverse range of specialist and high street lenders. Call our team to discuss any deal or click through for the full range.

Rate Product Monthly cost LTV Lender fee APR
1.39% then 5.00% Fixed for 26 months Fixed for 26 months £115 60% £2,178 4.70% Enquire
1.50% then 5.19% Variable for 24 months Variable for 24 months £125 75% £295 4.78% Enquire
1.49% then 5.00% Tracker for 24 months Tracker for 24 months £124 60% £2,178 4.76% Enquire
1.73% then 4.99% Fixed for 26 months Fixed for 26 months £144 70% £2,239 4.75% Enquire
1.50% then 5.19% Variable for 24 months Variable for 24 months £125 75% £295 4.78% Enquire
1.89% then 5.00% Tracker for 24 months Tracker for 24 months £157 70% £2,178 4.82% Enquire
2.94% then 4.99% Fixed for 24 months Fixed for 24 months £245 80% £1,825 4.94% Enquire
2.89% then 5.19% Variable for 24 months Variable for 24 months £240 80% £295 4.98% Enquire
3.90% then 5.50% Tracker for 24 months Tracker for 24 months £325 80% £500 5.43% Enquire
4.59% then 6.58% Fixed for 24 months Fixed for 24 months £382 85% £3,110 6.73% Enquire
4.64% then 6.58% Variable for 24 months Variable for 24 months £386 85% £3,110 6.74% Enquire

 

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.

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