85% of landlords unaware of HMO changes

HMO landlords who are not up to scratch with new laws face large fines and expensive restructuring work. Research reveals more than 85% of landlords are unfamiliar with new laws set to come into effect next year.

New proposals mean landlords of homes of multiple occupancy will require new licences. Some 60,000 HMOs currently require a licence. A further 170,000 properties could need one under proposals which aim to improve housing conditions. The proposals could impose minimum standards of room sizes, storage facilities and waste disposal.

They would apply to all HMOs including conversions and properties of multiple use. Previously only HMOs of three stories or more have required a licence.

More deals than ever

There are more buy-to-let products available on the market than at any time in nearly 10 years, new research shows. According to data there are currently 1,725 buy-to-let products available compared to 1,339 this time last year.

As landlords will know the buy-to-let market has had an understandably bumpy ride of late, considering all the regulation and tax changes it has had to contend with.

The market has clearly recovered from the tougher affordability rules that were put in place in January when it saw a drop in the number of products available to landlords. Since then, the number of deals on offer has gone from strength-to-strength.

So, despite reduced buy-to-let activity in the first quarter of this year, competition among lenders remains high as providers fight to retain their standing in a diminished market. As a result, rates have also fallen, with the average two-year buy-to-let fixed rate down from 2.91% in August to 2.86% in September and another record low.

Interest rates rising?

The Bank of England is likely to raise interest rates in the “coming months” to dampen down inflation, Bank of England Governor Mark Carney has signalled. Speaking at the International Monetary Fund’s headquarters in Washington yesterday, he reaffirmed that any rate rise would be at a gradual pace. Carney said: “If the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then, with the further lessening in the trade-off that would imply, some withdrawal of monetary stimulus is likely to be appropriate over the coming months in order to return inflation sustainably to target.” He added: “Any prospective increases in Bank Rate would be expected to be at a gradual pace and to a limited extent, and to be consistent with monetary policy continuing to provide substantial support to the economy.” He also talked about Brexit, which he said would cause inflation to rise and have a worsening effect the longer it takes to secure new trade deals.

Landlords re-mortgaging

Buy-to-let re-mortgaging activity has been surging ahead in recent months, with yet more figures highlighting the strength of this sector of the market – and by all accounts, it's set to become stronger still in the coming months.

Figures show that re-mortgaging activity continues to support mortgage lending as a whole, with a total of 26000 re-mortgaging approvals granted during July. This is higher than the monthly average of 24000 recorded over the previous six months, suggesting a definite summer surge in the market.

This isn't the only set of figures to highlight the level of activity either. Additional data shows that re-mortgaging activity rose to 36% of the entire valuations market in July. It's a similar story in terms of the value of those approvals: the total stood at £4.8bn for July, unchanged from June but up from the £4.6bn recorded the previous year, which is also the average seen over the previous six months.

Landlords are very keen to reduce their overheads and re-mortgaging to a lesser interest rate is one way to achieve this aim. The savings to be had are worth the effort especially if the current mortgage is on a standard rate.