London buy-to-let bounces back

London’s buy-to-let market saw the most purchase applications across the UK in the second quarter of 2018 for the first time in a year, data shows.

London also saw an 8.97% increase in buy-to-let completions in the second quarter from the one before. This is the first quarter in which London has had the biggest share in completions (15.79%), since Q3 of 2017. The London market has slowed of late, these findings may reflect a sign of recovery in investment in the city.

Whilst property prices and stamp duty costs have undoubtedly quelled the investment ambitions of some landlords in the capital, there are those still willing to put their faith and money into London’s bricks and mortar.

In all 15.34% of applications were in London, overtaking the South East (13.76%). The North West recorded stronger activity than previously with an 11.11% share. The market has seen an overall increase in the volume of buy-to-let mortgage purchase applications amongst new and existing landlords in the first two-quarters of 2018.

Limited company buy-to-let mortgages

A very buoyant buy-to-let market has led to an increase in competition from lenders, which in turn means better deals and lower interest rates. All this means very good news for the landlord. What is very significant is that all lenders are starting to increase the number of Limited Company products they are offering.

Figures just released show that lenders are taking the new tax changes that have affect landlords very seriously by increasing their product range.

Less than three years ago only a few lenders offered Limited Company buy-to-let mortgages but now this is all changing very rapidly. Currently over 65% of the lenders offer Limited Company deals and these numbers are increasing daily.

What is also very good news for the borrower is the wider range of deals that are on offer, from fixed rate through to trackers. All this is good news as competition in the Limited Company area hots up, thus driving down costs.

Buy-to-let still offers sound returns

Buy-to-let investments will continue to offer attractive rates of return compared to other asset classes, but investors will increasingly search out cheaper and higher yielding properties, research has found.

The report also predicts that interest rates are set to rise by a quarter of a point in the next few months and that house price growth will have slowed to between 2 or 3% a year by the end of 2018.

The special report on the buy-to-let market looks at the macro and micro economic environment for buy-to-let investors and the factors that are likely to influence landlords investment choices over the coming years. It also highlights the need for a flexible and competitive buy-to-let mortgage market. This is to facilitate continuing investment in a sector of the housing market that has grown in significance as home ownership has declined and demand for good quality residential property has increased.

Time to reduce the cost of your mortgage?

A mortgage is many landlords single biggest monthly bill – and that makes it a prime opportunity for saving money.

There are two reasons for this. The first is borrowers failing to shop around for the best rate when mortgaging, while the second is not moving when short-term mortgage deals end.

Britain’s mortgage market is dominated by fixed rates and our favourite deal remains the short-term two-year fix.

But if they don’t arrange a new mortgage in time (which many don’t) they will move to a more expensive default standard variable rate.

And that’s why banks and building societies like short-term fixed rates too. Enough landlords don't move mortgages when they end for them to be a nice little earner.