Tenant trends shifting
‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾
The amount of consumers opting to rent living accommodation is now surpassing the number of rental properties available and landlords are now beginning to extend their portfolios in a bid to supply the new demand.
“The shift, which is mainly due to the unstable economic climate, slow recovery of the property market and the difficulty which consumers find in obtaining high street mortgages, gives rise to the increase of renters rather than owners”, according to Sim Sekhom, of Legal for Landlords. “We have seen a major increase of enquiries regarding legal services ranging from landlords with single properties to those with large portfolios, which reflects the current shift in the lettings v ownership trend”.
This trend appears to be backed up by research from the Housing Intelligence Group ‘Hometrack’. New buyers rose by only 3.3% during March 2010, while estate agents in England & Wales reported an increase of 5.6% of properties for sale.
Following this shift, a number of private banks have emerged offering the experienced Landlord new Buy-To-Let lending.
- The First Bank of Nigeria will lend between £2.5m & £25m, allowing an advance up to 60 per cent, LTV at a rate of around 4 per cent, with a 2 per cent fee.
- Clydesdale Bank offer a B-T-L mortgage with a 5.99 per cent, 2 year fixed rate deal, with a £1,499 fee. Requiring rents to cover mortgage repayments by 130 per cent and will advance up to 70 per cent LTV. Maximum loan is £500,000 and offers free valuation and legal fees.
- Coventry Building Society have a 3.85 per cent loan with up to 60 per cent LTV, offers over repayment facility and payment holidays, free valuations up to £680 and free legals on remortgages. Minimum loan is £25,000.
- Natwest offer a 4.99 variable loan up to 75 per cent LTV. The arrangement fee is £1,999 with free legals and an overpayment facility.
It is yet undecided what effects this will have on rents if this increase of tenants, rather than owners persists.
By
Madalena Penny