Buy to Let Blog
Ying Tan's Blog
Ying Tan is widely acknowledged as the guru of the Buy to Let mortgage Industry and expert on the property investment housing market.
Ying is regularly called upon by the mortgage media to provide comment on all areas of the market and is a regular speaker at various events.
In 2010, Ying was voted Best Specialist Mortgage Broker at the prestigious British Mortgage Awards by senior figures within the mortgage Industry.
Ying's blog will be updated frequently to provide an insight into his thoughts about what is happening in the Buy to Let market place.
Landlords Set to Win Big in 2012
Posted on 26/01/2012
2012 offers a wealth of opportunity for the UK Buy-to-Let market. With rents rising across England and Wales by 3.5% according to the LSL Buy-to-Let Index, landlords are gearing up to take advantage of this year’s lucrative opportunities.
There could be a reserved 2-5% increase in rents outside of London, while in London, rents could potentially increase by around 5-10%, propelled by events such as the London Olympic Games.
Stamp Duty Holiday
Posted on 26/01/2012
The Government’s holiday for first time buyers on Stamp Duty Land Tax will come to an end in two months’ time, on Saturday 24th March 2012.
After the tax exemption has come to an end first time buyers will face a tax of one per cent on house purchases between £125,000 and £250,000, and a three per cent tax on purchases over £250,000.
Buy to Let Mortgages in 2012
Posted on 13/01/2012
Buy to Let continues to be the shining light in what is still a challenging economic environment. However with lenders both new and old increasing their appetite for buy to let in 2012, the availability of competitive products at increasingly higher LTVs should ensure the choice of BTL funding is good. This will be the catalyst for Buy to Let investors to increase their portfolios with more confidence. Also, with static house prices there will be more accidental landlords who choose to let their property out to buy another property to live in, holding on to their existing property until house prices improve. With this in mind, rents are likely to continue to rise this year although slower than in 2011, which saw large rises. This is due to the fundamental economics of supply and demand. There are still 5 or 6 tenants chasing every tenancy agreement. This in turn means that yields will creep up as rent rise and house prices stay flat. On the other hand, rental arrears are on the rise and this needs to be managed to ensure that void periods and missed payments do not change a profitable investment to a loss making investment. Getting a good rent guarantee in place can help with this and ensuring thorough references and due diligence on tenants is conducted before accepting them into your property. A buy to let property investment is only as good as the tenants and their ability to maintain their rents so ensuring that a good quality paying tenant is in place is imperative.
There are a number of options for first time landlords, and as lenders start to relax their criteria, this is improving. However, current lending criteria still favours small to medium sized landlords of 1 to 10 properties. Smaller landlords have more options at the moment (1 to 10 properties). Where there is a void of lenders at the moment is for landlords with in excess of 10 properties. Arguably those large landlords who have the survived the credit crunch and their portfolios are now flourishing should be given more favourable rates since they are experts in the area and run their portfolios like a business.
It is more tax efficient to gear up on your property investment and makes your own money work harder for you. Nevertheless, with property prices being static, caution should be taken when leveraging beyond 75% unless they are obtain a significantly good price. This is mainly due to the fact that at sub 75% LTV the products are competitive enough to ensure a good cash flow for the landlord. In the current climate cash is KING.
The London and South East continue to outperform much of the country with regards to investment. House prices are generally higher than anywhere else in the UK and with the pending Olympics games bringing increased tourism into the Capital, you can expect rents to perform well in this area. We do, however, expect property prices will remain relatively flat this year, which is testament to the overall resilience of the housing market given the economic challenges the country has faced over the last 3 -4 years.
With interest rates low and volatility in the stock market, investing in bricks and mortar remains a good long term investment. A tangible asset that you can add value to, and thus have greater control in impacting on the value. With other investments you have no control.
