Mortgage Availabilty Rising – Prices Still Well Below 2007 Peak

A study last month by Moneyfacts.co.uk has shown that the number of mortgages on the market is greater than 3,000 for the first time in 15 months and 42 per cent more than were on the market last July.

Recent additions that investors are to note are the introduction of a new 75% LTV product by Aldermore to compete with the likes of Birmingham Midshires, Cheltenham & Gloucester & Natwest as well as the emergence of the first 80% LTV we have seen in a while by the Mortgage Works.

Nationwide also announced today that house prices are 9.5% below their 2007 peak with transaction volumes still relatively low despite a slow return of more sellers in recent months. It is likely that the announcement of anticipated capital gains increases may prompt some landlords with more than one property to sell before tax rates go up which will shift the demand-supply balance back in favour of buyers, halting house price rises.

Buying below market value today and locking away equity is still very wise when taking the medium to long term view, particularly if buying wisely for monthly cashflow as well as growth.

80% Loan-to-value Buy-to-let mortgages are back

The Mortgage Works have launched a new range of buy-to-let mortgage products which include 80% loan-to-value products at very competitive rates.

This is very positive news for the buy-to-let sector as this is the first mainstream lender to offer 80% finance in over a year.

Highlights include;

  • 80% LTV, 4.69% until 31.07.2011, thereafter 4.99% (variable) 5.4% APR, 2.5% arrangement
  • 80% LTV, 5.69% until 31.07.2011, thereafter 4.99% (variable) 5.4% APR, 1.5% arrangement
  • 80% LTV, 5.99% until 31.07.2011, thereafter 4.99% (variable) 5.4% APR, £1,795 arrangement
  • 80% LTV, 5.49% until 31.01.2012, thereafter 4.99% (variable) 5.5% APR, 2.5% arrangement
  • 80% LTV, 5.99% until 31.07.2012, thereafter 4.99% (variable) 5.7% APR, 2.5% arrangement
  • 80% LTV, 5.99% until 31.07.2013, thereafter 4.99% (variable) 5.8% APR, 3% arrangement

Many of the brokers we speak to on a daily basis believe that other mainstream lenders such as BM and C&G will follow suit shortly and introduce an 80% LTV product to remain competitive.

*PLEASE NOTE: these are a guide and accurate as of 20/05/2010. Terms & conditions attached to the loans vary and for full information you should contact the Mortgage Works Direct or call the office and we will put you in touch with our recommended mortgage broker.

Finance Update From Mortgage BTL

Landlord confidence grows in buy-to-let market

A majority (64%) of UK landlords feel more confident about the buy-to-let market as 2010 begins, according to the latest rental confidence index from Upad. The figure represents a 6% increase from the same survey in December. (Mortgage Solutions 13/1)

Landlords enjoy a much healthier 2009

Landlords enjoyed a 7.6% annual return on their investments by the end of December 2009, according to the latest index from LSL Property Services. The value of their properties rose 3% in the year while rental income added a further 4.6%. This means in 2009, a typical landlord made a return of £12,740. By contrast, in 2008, a typical landlord would have lost 8.8% or £15,100. Arrears performed very well in 2009. On average 11.7% of rent was unpaid by the date it was due, down from 14.5% in 2008.
(Mortgage Solutions 15/1)


http://www.mortgagebtl.com/

Rental Income Boosted by Shortage of Supply in Residential Buy-to-Let Sector

Supply of residential property available to rent has plummeted around 20% in the last quarter according to the UK’s Largest Lettings Chain. This news comes as the market corrects itself from drastic changes in:

1)      The availability of finance available for homeowners. With finance more difficult to obtain for want to be homeowners and first time buyers over the last 18 months, many have been left with no option but to look for rented accommodation.

2)      The Lack of new properties being built. With house builders and developers also having experienced drastically increased difficulty in obtaining suitable finance for new projects, the number of new homes produced has fallen sharply. Coupled with the current population boom in the UK, simple economic theory suggests that increased population (demand) and a falling number of new homes (supply) will cause rent (prices) to increase.

A survey carried out by Countrywide Residential Lettings over more than 200 of its’ offices found that the number of enquiries from new tenants increased by 11% in the 3 months leading to October.

Co-managing director of CRL John Hards said: “The rental market is now in the midst of a correction as the excess supply of properties brought on by the downturn in the sales market is disappearing and rental stock is coming under increased demand from the growing number of tenants. The rental market is at crossroads: the economy is fragile and unemployment is still rising. However, we are already seeing the first signs of rent increases due to strong tenant demand, and this looks set to continue.”

So long as finance remains difficult for homeowners and developers we are likely to see continued rent increases across the UK – good news for landlords while interest rates remain so low!

Alpha Property Investment

20 November 2009

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SOLD – Leicester City Centre Flats 25% Below Market Value


Kitchen

Deal Summary

  • 4 Flats Available
  • 1,2 and 3 bedrooms
  • 25% Below Market Value
  • Leicester City Centre Location
  • Excellent Rental Market
  • Cashflow positive
  • New leases of 99 years


Deal Structure

The structure we have put in place enables our clients to purchase these properties at a  discount of 25%, which represents instant equity between £18,000 and £20,000. Furthermore the rental income will exceed the mortgage payments, thereby generating a monthly positive cashflow.

Here is a 2 bed example:

2 Bed Flat

Valuation:                         £75,000

Discount:                             25%

Purchase Price:                 £56,250

Instant Equity:                £18,750


Monthly Cash-flow

Rental Assessment:              £450

Mortgage  (BM 4.35%):         £204

Ground rent &Service charge £ 41

Profit                                    £205


Location

The flats are very well situated in Leicester city centre with all its amenities including shops, restaurants, bars and extensive leisure facilities. Leicester train station with direct links to London, Birmingham and Nottingham is only 400 yards away.  The M1 motorway is the gateway to London to the south as well as Nottingham, Sheffield and Leeds to the north.

The centrality and convenience of the location means there is a very buoyant rental market for these flats.


Pictures

Living roomBedroom









To obtain further information about this deal,  please contact us by

E-Mail:  Info@ventispropertyinvestment.com

Phone: 0208 940 9556