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Buy-to-let Borrowing for an Ageing UK Population

Buy-to-let Borrowing for an Ageing UK Population

Traditionally borrowing gets harder as you get older, but it is now getting easier to secure a buy-to-let mortgage when you’re over 60. This doesn’t mean over 60s can’t get a mortgage. But lenders might impose an age limit for taking out the mortgage, plus a maximum age for when the mortgage term will need to end.

When it comes to buy-to-let, retired borrowers may have previously found it difficult to secure a mortgage to purchase a buy-to-let property. Lenders were reluctant to offer them finance, particularly if they were still in debt in their retirement.
With around 1,000 mortgage deals available for terms of up to 40 years, which means a buy to let borrower aged 45 years old can easily expect to have a mortgage on a private rented home for 45 years. This seems to be working as the latest buy to let mortgage data from lender trade body UK Finance reveals landlord remortgages are outnumbering loans to buy new homes to let by nearly three to one. Borrowing to buy a new property to rent dropped by 7.7 per cent to 4,800 for the 12 months to the end of February 2019. Remortgages were up 2.1 per cent with 14,400 loans agreed over the same term.

“While theoretically age should not be as big a concern for Buy to Let lenders as for a residential property, the reality is that it is still a factor and many borrowers do face upper age limits. When it comes to BTL mortgages, repayments aren’t usually covered by pension savings or work salary as with residentials. Instead, affordability will usually be determined by the expected rental income from tenants (alongside the usual factors such as loan to value and other individual circumstances).”

Online Mortgage Advisor
Buy-to-let lenders are encouraging borrowers to stay in the market well into retirement as they lift age limits on mortgages. Figures from consumer group Which? suggest two out of three of the 2,057 deals available to landlords have a maximum age limit of at least 85 years old. Some go farther – with 9 per cent offering mortgages to borrowers up to 90 years old and a fifth without any age limit at all.
Age limits might still be a factor, but when it comes to determining whether a buy-to-let investment is affordable or not, many lenders will focus more on the rental cover than the age of the borrower. As long as borrowers can demonstrate that the monthly rent payable on the property is enough to cover mortgage repayments by between 125% and 145%, the investment will be determined as affordable.
With the population living longer, people are still wanting or needing to borrow money for a multitude of reasons. Now lenders aren’t standing in the way as the number of buy-to-let products available on the market is at its highest level since the beginning of the financial crisis in 2007, with many of these products will be available to landlords requiring finance, regardless of their age.

For regular updates on buy-to-let investment opportunities, be sure to follow the Surrenden Invest team on social media.

How long will the London housing market pause for thought?

How long will the London housing market pause for thought?

There are a number of indicators that the pre-Brexit, pent up buyer demand for London property is shortly to be unleashed. Chestertons’ Winter 2018/19 London Residential Property Market Report asserts that the “bottom of the market may be in sight,” while the rate of decline in the capital’s sales prices have slowed. Indeed, demand at the prime end of the market bounced back during the latter half of 2018.

“We’ve seen many buyers – both owner-occupiers and investors – taking a ‘wait and see’ approach in London as the Brexit deadline of 29 March approached. However, the delaying of that date to 12 April – and the 31 October – is testing purchasers’ patience. Add in the prospect of prices in London bottoming out and we could see a swift and decisive rise in transactions over the coming weeks and months.”

Jonathan Stephens, MD, Surrenden Invest
Prices in London fell during 2017 and again during 2018. Given the ongoing political impact of Brexit on sterling, this has made for some interesting opportunities for overseas investors. With indications that the market is bottoming out, many investors will now be looking to snap up properties at bargain (for London) prices while they have the chance.
At the same time, it’s likely that many of those waiting to buy property for their own use will also act in the coming weeks and months. As Brexit looks increasingly likely to drag on, many would-be purchasers may be prompted to act before London’s prices begin to rise too steeply again. As such, 2019 – or at least the latter half of it – could turn out to be a good year for property in and around the capital.

“Many property investment companies are looking closely at London again right now, as the market correction that has taken place over the past couple of years makes property ownership in the capital more attractive, particularly given the recent upward movement in rents and therefore yields. As such, London and the commuter belt certainly bear watching over the rest of this year.”

Jonathan Stephens, MD, Surrenden Invest
London’s property market is, of course, vast, as is the commuter belt that surrounds the city. Two areas likely to be of particular interest in the near future are Gerrards Cross and Reading, both of which offer a fast, direct commute into central London, as well as a good quality of life for the whole family. If the predictions of the market bottoming out and pent-up demand being unleased play out, it is likely that interest in both of these areas will spike significantly.

For regular updates on investing in London and other key UK cities, be sure to follow the Surrenden Invest team on social media.

First Time Buyers, Brexit and Boris Johnson

First Time Buyers, Brexit and Boris Johnson

An influx of deals agreed over the last several months will cause a substantial rise in House prices over the summer – according to new data from property experts Reallymoving and Rightmove.

Fuelled by past frustrations of political indecision, home buyers see the nearing deadline of Brexit as an essential milestone for establishing stability and future prosperity in the market. Investors encouraged by the light at the end of the tunnel now also see an opportunity to capitalise on exceptional value through buying in the last remaining months ahead of Brexit.
House pricing indexes forecast growth of upwards of 1.2% in August, followed by growth of 3.8% in September – marking a crucial turning point in the recovery of what has otherwise been a tough couple of years in the property market. (Reallymoving)
This Summer is also set to see renewed interest and appetite from overseas buyers with the promise of lower stamp duty and purchasing costs for home buyers and investors alike. The introduction of increased Stamp Duty in 2014 was arguably the leading driver in the 20% decline in property prices in areas of Central London in the following year; questions now linger as to whether the introduction of lower Stamp Duty will spark an immediate correction in house values and send prices soaring.
With the prospect of Boris Johnson in No.10 looking more likely than ever, Johnson’s condemnation of high taxation appears to be well received with investors drawn to the Country who have in the past been unmotivated by unattractive costs associated with investment.

“The spring market was more robust than expected and this has prompted positive growth through the summer, particularly for deals agreed in May which are translating to sales in July.”

Jonathan Stephens, MD, Surrenden Invest
A plan to cut stamp duty on home purchases in Britain may just be the boost needed by the slumping London property market and give first time buyers the opportunity to get on the property ladder across the UK.

“We have seen a spike in interest in commuter belt locations around the UK’s largest cities, London, Birmingham, Manchester and Newcastle. With high sales in growth location sites such as Gerrards Cross, Luton and Digbeth. There is huge pent-up demand in the UK property market amidst the political unrest if the UK is able to agree a deal with the EU we could see a rush of properties hitting the market in the late autumn along with a surge in buyer demand..”

Jonathan Stephens, MD, Surrenden Invest


For regular updates on Brexit and Property Investment in key UK regional cities, follow the Surrenden Invest team on social media.

Location focus: London Luton Airport Enterprise Zone

Location focus: London Luton Airport Enterprise Zone

London Luton Airport is the fifth busiest airport in the UK, according to Inside Flyer, with more than 15 million passengers passing through its terminals. Luton is also the UK’s leading business aviation airport, and one of the top three business aviation airports in Europe. Leading businesses including Gulfstream, Harrods, Signature Flight Support and Landmark Aviation all have a significant presence there.

Luton’s airport is the cornerstone of the town’s economy, accounting for around 10% of overall employment in the area. In 2015 it was granted enterprise zone status by the government.

“Becoming an enterprise zone marked a new phase in London Luton Airport’s development, as well as in the development of the town itself. It signalled confidence in the unique capabilities that Luton has to offer and in its future potential.”

Jonathan Stephens, MD, Surrenden Invest
The enterprise zone incorporates three sites: Century Park and adjacent land; Airport Business Park and adjacent land and Stirling Place. The massive programme of work will include a £100 million road infrastructure scheme and the creation of a £200 million Mass Passenger Transport system that will connect the airport terminal directly with Luton Airport Parkway train station. Commercial offices and retail premises are also incorporated into the ambitious plans.
London Luton has a two-hour-drive catchment area that exceeds that of London Heathrow, at 23 million people. It contributes £1.3 billion annually to UK GDP and £648 million to the Treasury. Luton’s enterprise zone status means that the airport and its surrounding area can offer reduced business rates to new companies, as well as to existing businesses that are looking to grow and/or relocate.
The zone has been a catalyst for economic growth, drawing £1.5 billion of private investment into Luton. This has not focused solely on aviation but has created a wide range of opportunities – including in Luton’s property market, which has becoming increasingly attractive to buy to let property UK investors as the enterprising town has thrived.

“Luton is already an inviting investment prospect as a result of its affordability and excellent access to London. The influx of investment into the town, and the resulting regeneration of a number of local facilities – as well as the airport’s expansion – have made it an even more attractive proposition.”

Jonathan Stephens, MD, Surrenden Invest
London Luton Airport is currently undergoing the biggest expansion project in its history. The £160 million, three-year transformation will see passenger capacity increased to 18 million travellers by 2020 – an uplift of 50%. The airport’s redevelopment will see the addition of new boarding gates, a boarding pier and a host of retail outlets. The infrastructure enhancements will also include a new bus interchange, dual carriageway and multi-storey car park, making London Luton Airport even more accessible and traveller-friendly.

“This is a new era for LLA. We are the fastest-growing major London airport and are now in a position to play an increasingly important role in the UK’s aviation network.”

Nick Barton, CEO, London Luton Airport
Perfectly positioned to take advantage of it all, the beautifully designed apartments of The Orion are just a 10-minute drive from London Luton Airport. The one- and two-bedroom homes deliver luxury living within an easy commute from London (Luton railway station is just minutes away, providing direct trains into St Pancras in as little as 22 minutes).
Priced from £172,900 and with 6% net yield per annum assured, The Orion’s apartments provide an excellent opportunity for investors to be part of Luton’s rosy future and enjoy all the advantages that come with the airport’s designation as an enterprise zone.

For regular updates on investing in Luton and other London commuter belt destinations, follow the Surrenden Invest team on social media.

New Rental Market Snapshot keeps investors up to speed

New Rental Market Snapshot keeps investors up to speed

Here at Surrenden Invest we do all we can to make our property investment company stand out from the crowd. Part of that includes sharing the knowledge and market insights that we have with our community of investors. We believe that knowledge is a powerful thing and is essential in choosing the right investment opportunities at the right time. That’s why we’ve launched our Rental Market Snapshot Guide

“Whether you want an overview of the UK rental market as a whole or a concise, detailed look at some of the country’s leading cities, the Rental Market Snapshot is the ideal investment companion. Making money from buy to let property UK opportunities is all about achieving strong yields as well as the potential for healthy capital growth. Surrenden Invest delivers a range of resources to support this.”

Jonathan Stephens, MD, Surrenden Invest
The data-driven Rental Market Snapshot considers not just current rental prices in each of the major cities it covers (Birmingham, Manchester, London, Liverpool and Newcastle) but also a range of other market performance metrics. These include average tenancy lengths and void periods, as well as factors such as what proportion of renters end their tenancies early. All of these can impact on the rate of yield that buy to let investors can expect.
Wider market drivers such as the kind of properties that renters are seeking are also considered, as well as the growing relevance of the private rented sector as a whole.

“The UK rental market is a huge topic. What we’ve done with the Rental Market Snapshot is to capture the essence of the market as it stands today, while also exploring the historical factors that have led us to that point. We’ve looked forward was well as back, which is particularly important for investors who are currently looking at a range of cities for their next investment.”

Jonathan Stephens, MD, Surrenden Invest
Birmingham is one of the most exciting cities in the UK right now when it comes to buy to let investment. Surrenden Invest has been highly active there in recent years. Its latest – and most impressive – Birmingham development is No. 76 Holloway Head. The 34 luxurious apartments enjoy an outstanding B1 location, just two minutes from the Bullring, Grand Central and New Street Station. The swanky Mailbox retail destination, meanwhile, is almost on the doorstep. This ultra-prime location has been chosen in order to capitalise on the demand for true inner city living that’s at the heart of the action – one of the trends noted in the Rental Market Snapshot.

For regular updates on investing in the UK buy to let market, be sure to follow the Surrenden Invest team on social media.

Liverpool to London in just 85 minutes

Liverpool to London in just 85 minutes

The omission of Liverpool from the original plans for the HS2 high speed rail network was a major blow to the city. However, Liverpudlians didn’t give up on the potential for their home to benefit from the new network. Instead, they focused on ways to turn it to their advantage.

The Linking Liverpool campaign called for a high speed rail link between Liverpool and Manchester, effectively allowing Liverpudlians to tap into the HS2 network via the link. Transport for the North, whose remit includes the improvement of transport across the North of England, has backed the plan as part of its £70 billion, 30-year northern transport plan.

“It makes absolute sense that as many northern cities as possible should benefit from HS2, so the proposed Northern Powerhouse Rail link between Liverpool, Manchester and Leeds is a key project for the area. It’s also one that has the potential to impact on property prices and yields, for those looking for buy to let property UK opportunities in the right locations.”

Jonathan Stephens, MD, Surrenden Invest
The L3 postcode district is one such location. A sought after area of central Liverpool, it provides easy access to the best that the city has to offer, both in employment terms and for entertainment purposes. The area is home to The Tannery – a collection of elegant new homes in a striking building that reflects the city’s industrial past, paying homage to the leather works that formerly occupied the site and from which the new building takes its name. The buy to let apartments already hold strong appeal to local professionals, boasting a communal courtyard, roof garden and concierge service.
Adding a reduced Liverpool to London journey time of around 85 minutes into the mix will certainly give the development a boost – along with the wider economic prospects of Liverpool city centre. The Liverpool to Manchester leg of the journey will take approximately 22 minutes if the Northern Powerhouse Rail link goes ahead as planned. The onward journey from Manchester to London would then take around one hour and 25 minutes on the HS2 network.

“Keeping abreast of local transport and regeneration initiatives is an important part of identifying current and future buy to let opportunities that have the potential to positively impact investors. Coupled with the fact that northern cities are outstripping the UK average when it comes to property price growth, Liverpool has an incredibly strong investment case right now.”

Jonathan Stephens, MD, Surrenden Invest

To keep track of the latest developments impacting the buy to let sector in Liverpool and other UK regional cities, follow Surrenden Invest on social media.

Northern cities stand out from the crowd

Northern cities stand out from the crowd

Property investment companies with a nose for good opportunities have been focusing on the potential of the North England for some time. Cities such as Manchester, Liverpool and Newcastle have much to offer those looking to profit from property. Now, JLL’s latest Northern England Residential Forecasts report has confirmed the wisdom of looking to the North.

“In recent years Northern England’s major cities have established themselves as stand out performers in terms of residential investment and development.”

JLL Northern England Residential Forecasts, February 2019
The key to the success of property investments in these northern cities is the imbalance between the increased demand for centrally located homes and the supply thereof. The JLL report urges investors to ‘find the gap’ when it comes to these markets, which is precisely where property investment companies come in.

“The vast size of cities such as Liverpool, Newcastle and Manchester means that no two investment opportunities are equal. A few hundred metres can make all the difference when it comes to the yield that a property can deliver. That’s why it’s so important for investors to work with a property company with local knowledge when they’re seeking buy to let property UK opportunities.”

Jonathan Stephens, MD, Surrenden Invest
The North is outstripping the national average considerably when it comes to house prices. UK house prices rose by an average of 2.7% in the year to Q3 2018, according to JLL, while in the North West that figure stood at 4.9%. Yorkshire and The Humber saw growth of 4.4%.
Both the North West and Yorkshire and The Humber offer an excellent entry point for investors, thanks to their average home values being below the national average. In the North West, the average home costs £165,000, while in Yorkshire it costs £164,000. The average UK home price is £231,000 (all figures as at Q3 2018).
The Tannery in Liverpool is as shining example of why investment in the right northern hotspots is so attractive. The stylish homes enjoy a superb central location, while investment starts from just £85,000, with net yields of 6%. Premium specifications and a concierge service mean that the homes hold strong appeal to professional tenants, while the provision of luxury furniture packs makes life easier for tenants and investors alike.
JLL’s forecasts for Liverpool project a continuation of the city’s success over the year ahead. The firm believes the city will achieve 2.4% growth in new development prices, against a UK average of 2.2%, and an increase of 3.0% in city centre rents (UK average: 2.4%). All at a time when buy to let landlords are enjoying greater returns.

“By delivering specialist, localised knowledge about the cities in which it offers investments, Surrenden Invest will remain at the forefront of the UK buy to let sector over the years ahead, finding the gaps that deliver the best results for all those interested in investing in UK buy to let opportunities.”

Jonathan Stephens, MD, Surrenden Invest

For regular updates on investing in northern cities such as Liverpool, Manchester and Newcastle, be sure to follow the Surrenden Invest team on social media.

Housing market latest – wage growth enhances buyer affordability

Housing market latest – wage growth enhances buyer affordability

Wage growth in the UK is outstripping house price growth at its fastest rate since 2011, enhancing buyer affordability. This is contributing to both mortgage approvals and housing transactions holding up well, despite the ongoing political uncertainty related to Brexit. Indeed, the February 2019 Zoopla/Hometrack UK Cities House Price Index states that, “Data on transactions remains resilient with no obvious Brexit impact at a national level.”

According to the report, there was no material drop in mortgage approval activity or transaction volumes during the latter half of 2018, when compared with the five-year average. Furthermore, HMRC figures show that transaction volumes actually increased slightly during the first two months of 2019.

“The latest figures are further evidence of the UK housing market’s resilience in the face of the Brexit debacle. Improving buyer affordability enhances that resilience even more, with strong transaction levels supporting a buoyant market for both owner occupiers and investors.”

Jonathan Stephens, MD, Surrenden Invest
Annual wage growth stands at 3.4% according to Rightmove’s latest House Price Index. That compares to an average annual rate of house price growth of 2.0%.
Annual wage growth stands at 3.4% according to Rightmove’s latest House Price Index. That compares to an average annual rate of house price growth of 2.0%. Not only that, but the National Living Wage in the UK has just risen by 4.9%. As of 1 April 2019, the national minimum wage rose from £7.83 per hour to £8.21 for those aged 25+. Workers aged 21-24 also saw an increase, from £7.38 per hour to £7.70, while those aged 18-20 saw a rise from £5.90 to £6.15.
The impact of this can best be seen at a local level. In three out of four southern regions, for example, Rightmove reports that new sellers’ asking prices are cheaper than they were a year ago, giving buyers a distinct advantage when considered in light of their increased purchasing power.
Further north, many regional cities have been outstripping the price growth of their southern counterparts over the past three years, thanks to rising employment levels, as well as enhanced affordability. Two cities – Leicester and Manchester – have even achieved price growth of 17% since the Brexit vote, creating fantastic capital growth for those who timed their purchases right around the time of the referendum.
Manchester remains high on many investors’ priority list – and for good reason. The city is home to an impressive array of redevelopment projects, the largest of which is the NOMA development. The 20-acre, mixed use site is being regenerated at a cost of £800 million, making it the largest development project in North West England, eclipsing even MediaCityUK (also in Manchester). Such vast developments bring a wealth of opportunities, both for those who live in the city and for those looking to invest there.
Just 300 metres from NOMA, Ancoats Gardens provides an exciting residential property investment UK opportunity, offering net yields of 6.0%. Available from £229,714 and already under construction, the one, two and three-bedroom apartments offer bright, spacious homes backed by cutting edge facilities in a top location. Residents will benefit from an on-site coffee lounge for relaxing or working from home, a large, private gym that’s spread across two levels and a truly stunning rooftop garden providing views across the city.

To find out more about investing in one of England’s best-performing regional cities, follow the Surrenden Invest team on social media.

London property market snapshot – buyers hold their breath

London property market snapshot – buyers hold their breath

It seems that prime central London property buyers are collectively pausing as they wait to see what the future holds in store. Figures from the LonRes research firm show a 14% drop in the number of prime housing transactions in the capital in 2018 compared to 2017. The steep fall means that transactions in prime London are now at their lowest level since 2008.

“Property buyers are holding their breath to see how Brexit unfolds, at least so far as central London is concerned. However, London is a vast city and not all areas are experiencing the same dip in transaction levels. With choice outlying areas offering good value for money, there are still benefits to buying property in London at the moment, despite the UK’s political upheaval.”

Jonathan Stephens, MD, Surrenden Invest
Indeed, Foxtons reports that one result of the drop in transactions (and therefore new rental instructions) is that demand for private rented homes is outstripping supply at record levels, with nearly nine registered tenants for every new rental property.
The pace at which London house prices have outstripped salaries also comes into play, with the average deposit now 1.3 times higher than the average salary. Savills calculates that the average Zone 1 property costs £1.4 million. To secure a 75% mortgage, the buyer would need a household income of £247,484 per annum, along with a cash deposit in the region of £371,227. All of which explains why many of those who live in central London rent their homes instead of buying them.
Further out, however, London becomes much more affordable. The average property price in Zone 5 is £452,186, meaning that an annual salary of £75,364 and a deposit of £113,046 would be sufficient to fund the purchase of a home.
A number of commuter towns around the capital offer even better value for money, while direct rail connections make travelling into London perfectly achievable on a daily basis. It is areas such as these that are still generating a high level of interest from investors, according to the Surrenden Invest team.

“The commuter belt is big business right now. Buy to let property UK opportunities are alive and well in many parts of the capital and investors are continuing to seek out below market valuation properties that carry strong potential for capital growth. The high level of demand from renters means that the market still has much to offer to buyers who are careful about the locations in which they invest.”

Jonathan Stephens, MD, Surrenden Invest

To find out more about investing in and around London, as well as in other UK regional cities, follow the Surrenden Invest team on social media.

Free resources for property investors

Free resources for property investors

According to the Office for National Statistics (ONS), the number of households who rent privately has risen by 61% in a single decade. The ONS data shows 2.8 million households renting privately in 2008, compared to 4.5 million in 2017.

Figures from Foxtons, meanwhile, show that intense demand from private tenants has carried on into 2018. The firm reported an average of just under nine registered tenants for every new rental listing – its highest ever level. 2018 renter registrations increased by 8% over the course of the year, when compared to 2017 levels.
With demand outstripping supply, there’s a strong case for investing in buy to let property in sought after areas – provided the sums stack up.

“It’s important to understand the full financial commitment of investing in a buy to let property. In addition to the cost of the home itself, investors need to factor in outgoings such as stamp duty and mortgage interest, as these will have a bearing on the overall yield.”

Jonathan Stephens, MD, Surrenden Invest
As a property investment company that is keen to support investors to profit from their property decisions, the Surrenden Invest team has created two new calculators as part of the company’s revamped website.
The mortgage calculator uses monthly mortgage payments based on currently available buy to let mortgage products to indicate how much an investor’s mortgage repayments are likely to be. Surrenden Invest provides it as a free-to-use resource for anyone considering investing in a buy to let property.
Surrenden Invest’s other free resource is its stamp duty calculator. Stamp duty is payable to HMRC within 14 days of the purchase of a residential property, including an investment property. The amount due depends on whether it is your first or second (or subsequent) property and on the value of the property. With different rates of stamp duty applied based on different price bands, working out what you will owe can involve several sums. The Surrenden Invest calculator performs all of these in under a second, providing an instant indication of how much stamp duty a particular buy to let investment will require an investor to pay.

“We would encourage all those who are considering investing in residential property, whether for the first time or the tenth, to use our mortgage and stamp duty calculators. It takes less than a minute to use both calculators, thus providing investors with a fast, accurate indication of what the buy to let property they are considering is really going to cost them.”

Jonathan Stephens, MD, Surrenden Invest

For regular updates on investing and additional free resources, keep in touch with the Surrenden Invest team on social media.