Scotland Property News covers all aspects of the residential property management and investment world via Be-Home Group News
New research shows that houses in multiple occupation (HMOs) are set to be the most popular type of investment for property investors this year.
Shawbrook Bank has released the findings of its latest survey, examining the investment expectations of its property investor clients and their wider outlook for 2016.
The findings reveal that a third of those surveyed cited HMOs as their preferred property type, which is almost double that of July 2015 when only 16% of investors responded in the same way.
The second most favoured property type in this year’s survey was terraced housing (28%), followed by flats and maisonettes (22%).
Karen Bennett, sales and marketing director of commercial mortgages at Shawbrook, said: “We’ve seen a surge of interest in HMOs over the past year and our recent broker and client barometers confirm a big appetite in the market.
“This asset class has undergone significant change over the past decade with some very clear tenant and investor profiles emerging to bring some real quality to the sector. Whilst the high yields make for an attractive investment, caution must be taken with regard to planning and licensing requirements, along with the challenges and pitfalls of the valuation process.”
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Two new custodial deposit schemes have launched, meaning landlords who prefer a custodial deposit scheme now have a choice of three providers.
TDS Custodial and My Deposits will hold the tenant’s deposit money for the duration of the tenancy. Previously the Deposit Protection Service (DPS) was the only provider to offer a custodial scheme with TDS and My Deposits both offering just insurance-backed schemes.
TDS chief executive Steve Harriott said: “As the UK’s leading provider of tenancy deposit protection, we know that landlords and agents in the private rental sector want more choice when it comes to meeting their legal obligations to protect tenancy deposits.
“The launch of TDS Custodial now gives them that choice, providing a fast, free and secure service that removes the hassle from protecting their tenant’s money. Those who make the switch to TDS Custodial can expect a quick transfer of the deposit into our scheme at the start of the tenancy, and an even quicker repayment once the tenancy comes to an end. It really couldn’t be simpler.
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An industry body says proposals by the Bank of England to curb buy to let lending are “premature.”
The Bank’s Prudential Regulation Authority says individual lenders should increase ‘stress tests’ on borrowers who would have to prove they could cover interest payments in a worst case scenario of interest rates rising to 5.5 per cent for a full five years.
But the Residential Landlords Association says that while no landlord should take on debt that they cannot afford, describes the proposals as premature given the introduction of a stamp duty surcharge and a phased reduction in mortgage interest tax relief for landlords.
“The Bank needs to be careful that it does not over-react to the current surge in buy to let applications which are aiming to beat the tax increases coming in April. It is likely that the impact of these will significantly reduce the demand for borrowing. We would urge the Bank to tread carefully and avoid any premature moves that could stifle the supply of the one million rental properties the country desperately needs” says David Smith, the RLA’s Policy Director.
The BofE are worried about the property market overhearing in the UK.
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The UK Apartrment Association – which describes itself as the first organisation exclusively servicing this country’s Build To Rent sector – is launching in the UK.
It says it is the “first international chapter” of the National Apartment Association, which is the leading organisation in North America’s very well established and large Build To Rent sector, known there as Multi-Family Housing.
The NAA over there has around 170 organisations involved, representing developers, landlord bodies and tenant groups operating 8.1m Build To Rent apartments throughout the US and Canada.
The UK chapter has not taken the ‘softly softly’ line of some in the build to rent sector with regard to buy to let landlords, who make up the vast majority of the lettings market.
Instead in a statement it says one of UKAA’s primary roles will be to “differentiate the build to rent, multi-family housing market from the amateur ad hoc rental service provided by small-scale landlords that currently make up the bulk of rental properties.”
The UKAA is launching with founding members including Roger Southam, (chief executive of block management company Chainbow), Jonathan Ivory (managing director of the UK division of US build to rent firm Atlas Residential), and Richard Gerritsen of Yardi, a global software supplier to the real estate industry.
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