Central Southampton 1 bed apartment yields 6%

This large 1 bed unit has just come on the market at £130,000. It is located on the 1st floor, has allocated parking and extends to just under 450sq.ft. It is in need of redecoration and some updating but it will prove popular with tenants given its location close to Portswood (Waitrose is a 5 min walk), Southampton Common, The University and the City Centre. Your tenant pool will be varied and will include: professionals, post grads, medical staff and uni lectures who favour this location. Properly presented the unit will achieve £650 to £675pcm, which even after allowing for some refurb work will return 6%. The property last sold at the height of the market in December 2007 at £138k, so relatively speaking not bad value. And the all-important EPC rating is fine at C. This could be a nice tidy little buy2 let

Will Southampton property prices surge as pensioners invest in Buy-to-Let?

A new generation of pensioner landlords is expected to flood the buy-to-let market, pushing up house prices for first-time buyers, as more people turn to property to fund their retirement.

The number of people planning to take money out of their house to supplement their pension has increased dramatically, according to a study from YouGov and investment adviser, Old Mutual Wealth.

The study showed that 11pc of those approaching retirement plan to buy a second home to rent out, compared to the 6pc of pensioners who currently rely on this form of income.
Annuity reforms which come into effect in April, allowing baby-boomers to withdraw their pension in one lump cash sum, are expected to fuel a wave of purchases of one and two bedroom flats to rent.

This surge, combined with the UK’s chronic housing shortage, particularly in Greater London and the South East, will drive up prices for those not yet on the ownership ladder.

Analysis from the property group, Savills, has identified approximately £3  trillion of net housing wealth tied up in owner-occupiers’ homes, much of which is held by older households who have paid down the bulk of their mortgage debt and seen significant house price growth.

“Pre-retirees face much more pressure to use some of that latent wealth, given pressures on pensions and an increasing need to help their children get on or move up the housing ladder. That means they are much more likely to consider downsizing, either reinvesting the sums released into rental property or passing it down a generation,” said Lucian Cook, head of residential research at Savills. 
The YouGov data also found that 15pc of those preparing to retire are planning to downsize from their main home, compared to 2pc of the current pool of pensioners. If a proportion of these move into retirement villages, it will free up more family homes and curb price growth for those moving into their second or third house.

“This [pensioners downsizing] is likely to free up some family housing while also increasing demand for smaller properties, offsetting some of the constraints on transaction levels that result from mortgage regulation and potentially narrowing some of the gap in pricing on different rungs of the ladder,” said Mr Cook.
However, those approaching retirement could have an unhealthy over-reliance on property, warned Adrian Walker, a director at Old Mutual Wealth.

“For many people, their home is the place where they brought up their children and can have a strong emotional attachment. Giving that up can be a struggle and people have historically preferred to hold on to the family home and pass it on to their children,” he said.
“But attitudes are changing. More people understand that they may need to use value tied up in property in order to help fund retirement.”

A Labour win in May’s general election could also upset retirement plans. The introduction of rent controls, a policy advocated by the Labour leader, Ed Miliband, could deter reputable landlords and drive up rents for tenants, experts have warned.

http://www.telegraph.co.uk/finance/property/11399655/Pensioner-landlords-could-drive-up-house-prices-for-first-time-buyers.html

Mixed market messages from mortgage monitor

There were 65,778 house purchase approvals across the UK in January, a whopping 9.1 per cent increase over December and the largest single month-on-month increase since April 2009.

This comes despite a drop in the number when analysed over the past 12 months as a whole. The approvals granted in January were actually 12.9 per cent lower than those of January 2014, which recorded 75,557. 

Loans to higher LTV borrowers grew 20.1 per cent between December and January. The first month of 2015 saw 10,064 loans to borrowers with deposits worth 15 per cent or less of their property’s total value, compared to 8,378 in December.

While this month-on-month growth is partly due to the increase in the total number of approvals, higher LTV borrowers also occupied a larger proportion of borrowers in January – 15.3 per cent of borrowers were higher LTV, compared to 13.9 per cent December. 

On an annual basis, the proportion of higher LTV borrowers is 1.7 percentage points higher than January 2013, when they made up 13.6 per cent of all house-purchase loans. 

The data was compiled for online surveying firm e-surv.

http://www.estateagenttoday.co.uk/index.php?option=com_k2&view=item&id=1973:mixed-market-messages-from-mortgage-monitor&Itemid=583

Southampton landlords are you aware of the new regulations that will affect your property?

Landlords and potential landlords may not be aware that new regulations have been passed by parliament which requires private rented accommodation to reach minimum levels of energy efficiency by the 1st April 2018.

Properties must now achieve a minimum rating of at least E on the EPC. This means that it will be illegal to let properties rated at F and G. So if you are buying a buy 2 let property please make sure you study the EPC and cost out any works that maybe require to achieve the E rating - we would recommend bring the property up to a higher standard of C or B. On a small property these works could easily exceed £5000. If this work is not undertaken prior to April 2018, it will be illegal to let the property and you will have a forced void while the works are carried out. Even if you decide to sell the property the extent of these works will be factored into any selling price.

So if you are acquiring new properties, please study the EPC in more detail then you have to date! And if your existing properties fall short then plan your remedial works well in advance on the April 2018 deadline.

Fire service call for all private landlords to install smoke alarms

New laws must be introduced to ensure all private landlords install smoke alarms, say fire and rescue authorities.

Currently, landlords are not legally obliged to install smoke alarms unless they are renting out HMOs. This means there are 3.5 million smaller private rental homes which legally do not have to have them. The Government passed a law in 2013 which would require all private landlords to provide smoke alarms. However, this has gone out to consultation and has not yet been brought into force.

Fire and rescue authorities in England and Wales are calling for the law to be enacted so all private landlords are obliged to install them. They also want electrical wiring to be inspected annually – in the same way landlords are obliged to obtain gas safety certificates every year.

The call comes as latest figures show more than 200 people die in fires in their homes every year. (This figure covers both rental and owner occupier properties.) Householders are at least four times more likely to die in a fire if they do not have a working smoke alarm.

Fire and rescue authorities are taking a lead by giving out free alarms and launching safety awareness campaigns. However, given the tough austerity climate, they argue it must be down to private landlords to ensure alarms are installed.

Mandatory smoke alarms are set to be a key issue at the Local Government Association’s (LGA) annual fire conference in Gateshead on 10 and 11 March. The call forms a central part of the LGA's key report ‘The Fire and Rescue Service: Making our Nation Safer', which was launched on Saturday. This document sets out a blueprint for the next government, with a series of proposals for how fire and rescue services can improve fire safety and save the public purse money.

Cllr Jeremy Hilton, chair of the LGA's fire services management committee, said: "Many people will be shocked that most landlords are not obliged to install smoke alarms. The current laws are outdated and inadequate – and without question lives are being put at risk.

"While the majority of private landlords are reputable and voluntarily install alarms, there are a small minority who don't, needlessly putting lives at risk. They have a duty of care to ensure their tenants are safe.

"This is why we are calling on the Government to enact the law and ensure all private landlords install smoke alarms – and save hundreds of lives every year.

"A working smoke alarm can make the difference between life and death and should be seen as every bit as essential as a lock on the front door. By spending just a few pounds, landlords can save lives.

"In the meantime, we would urge anyone who hasn't got one fitted already to make sure they are not needlessly putting themselves at risk of the death and destruction fire can cause by getting in touch with their localhttp://www.landlordtoday.co.uk/news_features/Fire-service-call-for-all-private-landlords-to-install-smoke-alarms