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.
Large Loan Buy to Let Mortgages
Posted on 29/03/2012
During the credit crunch detractors of buy-to-let attempted to tarnish the industry with the same brush as sub-prime. These attempts have proven unfounded. Instead buy-to-let continues to show resilience, and has often been described as a shining light in what continues to be a challenging housing market.
2011 has seen many new entrants to the lending market. As a result the buy-to-let mortgage space has become increasingly more competitive.
One example is the larger buy-to-let mortgages. Currently, most buy-to-let lenders cap their lending at £350,000, or reduce their LTV significantly at this level. This restriction limits lending for higher value properties more commonly found in the London area.
In 2011 house prices in London experienced a 2.7% increase in annual prices with the average house price in London at £345,208. Higher property prices in London make it harder for first time buyers to buy property creating strong rental demand as evidenced by London having one of the lowest void periods in the country of 2.4 weeks.
A lending cap of £350,000 creates the anomalous situation whereby investors of high quality London properties are unable to obtain sufficient funding for properties despite their high rental demand and resilience to falling prices.
Strong house prices and high rental demand are characteristic of the London market, and are fundamental to any successful property investment. Existing lending criteria is counter-intuitive and deters many potential investors from investing in higher value properties.
The reason for the restriction from a lenders perspective is that there is a higher probability of default on higher value properties if a landlord faced void periods given the size of the mortgage and the associated costs.
This is certainly true of a large house worth £750,000 in the Cotswolds which has less rental demand and requires a certain type of tenant. However this is less true of a Victorian house in Kensington of the same value, where the strong rental demand will mitigate the risk of void periods.
The restriction has benefitted private banks and boutique lenders who are more open to larger mortgages and have taken business which should fit nicely on the books of a mainstream buy to let lender
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.
