Rents holding firm

The average rent was £845 in October, up 2.45% year-on-year, according to the latest Your Move buy-to-let index. Your Move found that the typical yield in every surveyed region was flat between September and October, at 4.6%.

Research also revealed that properties in every region in October generated a slightly smaller return than a year ago. Considering all the tax changes landlords will take a small amount of comfort in these findings.

Across England and Wales, rents have grown by 2.45% in the last year although some areas, such as the East of England, have performed above that level. In the year to October 2017, the East of England saw rents rise faster than every other region surveyed.

Rents increased 3.6% in the period, and the average rent is now £887 per month.

Landlords and Brexit

The majority of landlords are undeterred by the prospect of leaving the EU a recent survey has found.

Just one in ten landlords would postpone expanding their property portfolios because of Brexit, whilst 3% of landlords said they would increase their investment in the buy-to-let market. The research found that market forces including stamp duty, capital gains tax and stricter mortgage lending rules mean that more than half (58%) of landlords owning at least five properties and 44% overall have re-evaluated their investment plans in the past year.

Just 1% of landlords with larger portfolios and only 3% overall consider the Government to be supportive of the buy-to-let market. Despite the current uncertainty, a third of landlords (34%) with five or more properties plan to invest over the next two years. Landlords still are very confident that the future value of property will carry on increasing thus making buy-to-let properties profitable.

Buy-to-let has good stability

The cost of buy-to-let mortgages has remained mostly unaffected by the second phase of Prudential Regulation Authority changes, coupled with months of rate rise predictions, according to new data.

Despite another period of change and uncertainty, which led to the long-awaited rise in interest rates, several mainstream buy-to-let mortgages have reduced in cost since August – with some falling for the second consecutive quarter.

The price of a 60% and 70% loan-to-value (LTV) two-year buy-to-let (BTL) tracker, for instance, is now 1.6% lower than it was three months ago, this is indeed good news for the troubled landlords around the country.

Meanwhile, the cost of a two-year fixed-rate BTL mortgage with a 60% LTV is currently 1% lower than it was at the start of August. The fixed two-year at 70% and 80% LTV have remained steady, with no movement in cost in the last three months.

Positive growth for Landlords

House prices rose last month at their fastest rate since February, despite confidence in the market at its lowest level in five years. According to the latest figure, annual house prices went up 4.5% in the three months to October – up from 4% in September. This is the third month in a row that house prices have gone up, suggesting the market is recovering following the Brexit vote.

The average price of £226,000 is the highest on record and 2.8% higher than in January this year. The latest report stated that low mortgage rates and shortage of properties on the market, combined with high employment, would continue to support prices. It said that last week’s base rate rise by the Bank of England was unlikely to affect the market. This is very welcome news for the hard-hit landlords around the country.

Recent research revealed that confidence in the UK housing market has fallen to its lowest level in five years, with the ability to raise a deposit seen as the biggest problem to getting on the housing ladder. This is supporting figures that landlords are having a sound year for letting. With demand for housing outstripping supply, property prices continue to rise although not at the rates seen in years gone by.