Positive start for landlords

Landlords have reason to be optimistic as a recent survey predicts house price growth of 3% plus in 2018. Those in the UK's top 20 cities have even more reason to cheer, as they have been forecast 5% plus growth.

As every landlord knows 2017 was indeed a very hard and stressful year, these future predictions in property values will no doubt give all concerned a boost.

This is in line with the projection for 2017 of 4% growth due to a pick-up in regional housing markets offsetting weak price growth in London. Large regional cities could register house price rises of up to 25% over the next two to three years. The likes of Manchester, Birmingham and Glasgow have seen market activity increase, and this has delivered above average price growth of 6-8% for the last 12 months.

In contrast, while London has seen a 70% increase in house prices since 2009, it is facing a drawn-out period where house prices and earnings need to re-align.

With all the tax hikes introduced by the Government over the last year this will come as very welcome news.

Good year for landlords – 2018?

According to reports, many of the changes set to be introduced to buy-to-let in 2018 will be hugely beneficial in the long term and that 2018 has the potential to be a momentous year for landlords.

Despite previous years being marked by declarations that “the death of buy-to-let” was upon the industry, landlords have continued to enjoy healthy rental yields while performing what is an essential service to millions of tenants across the UK.

Some plus points:

1) Tenancies standardised to 12 months rather than six months will be good news for landlords as they can avoid frequent void periods and the hassle of maintaining a property between tenancies.

2) Universal credit reforms will help landlords let to tenants receiving this benefit, who tend to stay in properties for longer periods.

Still a very good time to re-mortgage

Data shows that there were a record number of buy-to-let loans for re-mortgaging in November, and represent an impressive increase from earlier months.

This is despite regulations implemented at the end of September which require stricter affordability criteria from those with more than three buy-to-let properties. It may be that the rumours of a base rate rise, which have since proven well-founded as the Bank of England increased base rate by 0.25% at the start of November, spurred landlords on to review their mortgage deal.

Mortgage rates have indeed risen following the base rate rise. This might also explain why re-mortgaging among homeowners saw a similar boost, with the number of loans up by 17% month-on-month in November and the value seeing a 16.4% increase.

Buy-to-let re-mortgage activity very high and increasing

Re-mortgaging activity has increased significantly in recent months, helped in no small part by record low mortgage rates and continued house price rises across most parts of the country.

This combination is helping buy-to-let landlords re-mortgage to a lower interest rate and save vast amounts on repayments in the process, so it is no wonder re-mortgaging has reached record levels.

The proportion of buy-to-let re-mortgages has risen by11% over the last 12 months, thanks to an increase in mortgages available to landlords, presenting them with an opportunity to switch mortgage firms to find more attractive rates.

Re-mortgaging overall is up almost 20% year-on-year, supported in part by the fact that lenders have launched some new products widening criteria to more niche markets, helping to drive re-mortgaging.