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Neil 's Articles
About Neil
Neil's career began in banking in 1990. He has also managed a building society branch and worked in business development. He became an Associate Partner of The Money Centre in 2003 and subsequently took on the role of Head of Operations which included training, quality control, project management and compliance. Neil has been a Partner of Property118.com since day one, responsible for operational management which includes, amongst many other things, updating the buy to let mortgage sourcing calculator and quote engine.
NLA to make accreditation training compulsory for landlord members
24/05
In a recent press release the National Association of Landlords NLA have announced plans committing that all its landlord members will be accredited by 2020.
In a speech on ‘Delivering excellence in the private-rented sector’, Carolyn Uphill, Deputy Chairman of the NLA, outlined the Association’s ‘Vision for Accreditation’.
The NLA believes that landlord accreditation is a key tool to improving standards in the private-rented sector and it actively encourages all landlords – members and non-members – to become NLA accredited landlords.
The ‘Vision for Accreditation’ aims to give all members a means of objectively demonstrating their knowledge and competence as landlords. And in making NLA accreditation a more central aspect of its membership, the NLA hopes to show how NLA member landlords are different from other, non-accredited, landlords.
The NLA accreditation requires landlords to complete the NLA foundation course (either in attendance, at one of the seminars hosted across the UK, or online) and maintain their knowledge via continued professional development (CPD). Attending landlord meetings and conferences, additional landlord development courses and reading NLA literature all contribute to CPD.
The emphasis on management skills and professional development ensures landlords understand their obligations, enabling them to uphold the many standards and regulations governing the private-rented sector. It is a scheme that comes highly regarded by landlords, policy makers and local authorities alike.
Carolyn Uphill, the NLA’s Deputy Chairman, says:
“We believe that NLA membership should be synonymous with landlord professionalism and accreditation is a significant factor in helping us achieve this. To have all our members accredited is an ambitious target but realistic in the lead time provided.
“By demonstrating a level of competence represented by NLA accreditation, members will be able to set themselves apart through evidence of their commitment to quality and standards.
“We all need to work together as an industry to improve the reputation of our sector and NLA members can play an important role through leading by example.”
Property118 in conjunction with our own Good Landlords Campaign promoting best practice in the Private Rental Sector supports the efforts of the NLA to improve the level of professionalism in our industry.
Bank of England report good news for a change
22/05
I have been attending the Bank of England quarterly seminars since 2007 and was completely flummoxed by the opening statements reporting good news for a change.
They are confidently predicting consistent growth for the first time in a long while of 0.5% on GDP per quarter for the next year. This is however with the caveat that there are no negative unforeseen external influences such as a worsening of the European situation.
It does appear that the markets are showing more confidence over the European economy with 10 year bond prices dropping over the whole of Europe with even 10 year Greek bonds falling to 10%. What that means is the market must be reasonably confident that Greece will not default in the next 10 years or they would not get their money back. I am not so sure I would personally want to take that gamble though!
This new found confidence and our recent avoidance of a triple dip recession has not affected predictions for the Bank of England base rate to stay at 0.5% for at least 2-3 years. The economy is not seen as robust enough to sustain the negative growth influences of a rate rise and the underlying inflation figures once you strip out the regulated sector are under the target of 2% reducing any perceived pressure to increase rates.
The Bank is targeting continued improvements to availability in the mortgage market, which is being assisted by Guaranteed Loan schemes. However they are cautious that real sustained long term improvements in supply can only be made by a healthy competitive market place and we should try and avoid the reliance on guaranteed schemes that the Americans are finding hard to now replace with the free banking system on its own. Any return to a more competitive mortgage market should be good for Buy to Let investors as lenders will naturally diversify and fill the supply gap in more profitable areas such as Buy to Let.
The Bank of England have recently paid for a consultant statistician from America to look at their figures and simplify their reports. This can be seen in the GDP chart below showing fewer and wider bands for predicted growth over the next few years.
Funding for Lending scheme changes allow BuytoLet investment
29/04
The Bank of England Funding for Lending scheme will now allow Small and Medium sized enterpises (SMEs) to lend the money available on to property investors.
The Funding for lending scheme has been extended another year until January 2015 and from 2014 banks will be able to borrow £10 of cheap Bank of England money for every £1 the lend to SMEs. This has double the previous allowance of £5 for every £1 banks lend.
This doubling of incentive to try and stimulate the economy could have a very positive effect for property investors for the first time as Buy to Let is still seen as relatively low risk by banks compared to taking an educated gamble on a start up business.
Rob Wood, chief UK economist at Berenberg Bank, said ‘It could be a no-brainer. Lend to a landlord and get 10 times that lending back as essentially free funding, then recycle some of that back out again on mortgages or BuytoLet.’
£80 billion has been set aside by The Bank of England for this scheme to kick start the economy and get lending available to business, but to date the take up by banks has been disappointing with £14 billion being taken between August and December last year. However it is hoped that the extended scheme and greater incentive will boost the take up and for the Private Rental Sector add a much needed injection of competitive financing.
Holiday Lets purchased using commercial finance on the increase
26/04
Members of The National Association of Commercial Finance Brokers (NACFB) have reported a steady increase in Holiday lets being purchased using commercial finance along with the number of lenders and products to support this business.
Investors and Lenders are being attracted by the higher potential income that can be generated by holiday lets in locations of strong demand, seeing this as a good income generator for investors and lowering the perceived risk to lenders’ security.
As reported recently by the Independent “the second home sector grew again last year. The rise means there are now over a quarter of a million homes across England that have been brought as holiday homes or lets.”
It is important to determine what the property is to be used for and to make the distinction between a Buy to Let (which will be let on assured short-hold tenancies) and a holiday let, which will allow the owner to use the property for holidays and to let out for short-term.
Lenders are now offering specific mortgage packages to support this growth in popularity of holiday lets, recognising the appetite of borrowers for second homes, and Brooklands commercial finance have sought out examples for us of some of the best deals and criteria currently on the market:
- Rates from 3.65%
- LTV’s up to 75% (100% with additional security)
- Low arrangement fees (and free valuations in some instances)
- Interest only available
- Whole of mainland UK
- Established and new holiday lets
- Rental Stress testing at 120% of the mortgage payments
- Minimum incomes required £20,000 for sole applicant and £30,000 for joint
- Minimum property values £50,000
- Maximum property values £500,000 or more with business case
- First time investors are acceptable.
If you would like any assistance to finance a Holiday Let please email info@property118.com with your requirements and contact number and we will ask our preferred brokers Brooklands commercial finance (members of the NACFB) to assist.
Or call me on 01603 489118
Awaiting FSA second response to Bank of Ireland differential increase
30/03
Martin Wheatley the current head of conduct at the Financial Services Authority (FSA) has been strongly criticised by the Treasury Select Committee (TSC) for the FSA’s response to the Bank of Ireland differential increase for thousands of it’s tracker rate customers.
In a letter by Andrew Tyrie MP (chairman of the TSC) Mr Wheatley was accused of “not addressing the main issues”.
He went on to say “Your response does not tell the Committee whether you were concerned at the action of the Bank of Ireland, what assessment you have made of the impact its decision might be on the rest of the industry, nor how the FCA would act in the event of lenders taking this sort of action in the future,”
In the FSA’s first response to the TSC Mr Wheatley had said the FSA did not plan to take any action against Bank of Ireland over its rate hike that hit 13,500 customers with higher mortgage repayment costs despite no change in under-lying interest rates.
“As these mortgages fall outside of our regulatory remit we do not plan to take further action in respect of the increase to the differential (the difference between base rates and the additional interest charged by the bank). We have reviewed the terms and conditions provided to us by the Bank of Ireland UK and did not identify any concerns which led us to believe the terms may be unfair,”
From next month Mr Wheatley is due to take charge of the FCA, which will be responsible for the regulation of all issues surrounding financial conduct in the UK and this distraction could be the cause for such little time being taken for the consideration of consumers in his first response.
Surprisingly considering what has happened so far, the FSA promised in 2008 to police tracker mortgage rates, saying “tracker interest rate floors need to be clear and unambiguous to the consumer and consistently and prominently spelt out in the lender’s documentation. If it is not, you run the real risk of both breaching our disclosure requirements and having an unfair contract term you can’t enforce”
Unsurprisingly it has been reported that this month the Bank of Ireland chief executive Richie Boucher had been awarded his first pay rise to just over €840,000 (£700,000), a €12,000 increase, despite losses of more than €2bn at the lender.
Mark Alexander said “Property118 will be taking legal advice from Justin Selig of The Law Department on Tuesday next on whether we should instruct barristers to proceed now with a class action, or await the second response from the FSA to the Treasury Select Committee letter from Andrew Tyrie. Justin Selig has kindly sent me copies of the FSA response and the subsequent letter to the FSA from Martin Wheatley MP. I have to say, the questions in the second letter are far stronger and more direct than the first. It seems quite clear to me that Mr Tyrie believes the BoI contract terms to be unfair and he’s looking for the FSA to agree the same. The FSA response will be very interesting indeed.”
Switch to a BuytoLet mortgage within six months of purchase
26/03
New commercial finance facilities are offering the option to switch bridging finance to a BuytoLet mortgage within the normal 6 months period other lenders require you to wait.
Borrowers are now able to bridge 70% of initial purchase price and then, within six months, switch to a BuytoLet remortgage based on 70% of the ” new, higher valuation figure.
The best available product is 0.69% per month for the bridging finance and then 4.7% plus Libor for the Buy to Let term facility.
The 2013 Budget and how it affects Landlords and property Investors
21/03
The 2013 Budget is hoped to boost the housing market and construction industry. Yesterday Chancellor George Osborne announced new plans to help people buy their first homes homes with the Help To Buy Scheme and an extension of the previous NewBuy Guarantee scheme to include older houses as well as new-builds.
For three years from the start of 2014 the government will support £130bn of first time buyer mortgages by guaranteeing 15% of the loan leaving borrowers at risk of losing only their 5% deposit and lenders liable for only 80% of the purchase price.
Lenders taking part should therefore be happier to accept smaller deposits as security for loans, but it is still a relatively small proportion of the total mortgage market worth £1.2 trillion, according to the Council of Mortgage Lenders (CML).
The theory is that giving more people the ability to purchase a home will increase demand for property resulting in an increase in price and promoting an increase in supply (more construction) to fill the demand. It is very simple Supply and Demand economics that will work, but it is the amount that it works by that is the question.
Of all the sectors that contribute to the UK’s GDP it is the construction industry that has been most badly affected helping to drag us back into a double dip recession and a stagnating economy, so it makes sense for the government to try and stimulate demand for construction.
The Housing Market is also a very important barometer for confidence in the economy and when people feel confident they spend money and invest in business which includes Landlords.
Any kind of confidence boost in the housing market has got to be a good thing for Landlords and property investors in the long run. If the value of property strengthens then lenders will feel more confident to lend on better rates and Loan to Values. Landlords may eventually be able to remortgage again after the death of the remortgage market for the last four years. We will no longer be stuck locked into existing lenders and at the mercy of their desire to either get rid of Buy to Let mortgages or fleece Landlords for greater profit margins as the Bank of Ireland are trying to do.
A competitive Buy to Let market is essential for the long term planning of Landlords taking control back from the banks and into the hands of investors once again.
However we cannot get too excited as it all depends on the degree by which government support works that is all important, and with the revision of GDP growth forecasts halved it would indicate that there is a long road to recovery to travel yet.
BuytoLet Lender BM Solutions allows Student and Benefits tenants
BM Solutions relaxes its BuytoLet lending criteria to allow landlords to rent to students and benefit claimants
It was recently reported that BM Solutions was looking at changes to its BuytoLet underwriting criteria and the rumors were that they would be looking to remove its £25,000 minimum income requirement.
The initial reaction by some market commentators was that to remove the £25k minimum income would lead to the door being opened to low income households who are more at risk of defaulting, albeit that it could open the door to buyers outside of London, and would be of particular help for self-employed clients.
Another rumored criteria change was regarding the Lloyds restriction on its BuytoLet criteria which only allows a maximum of three buy-to-let properties per customer, across the whole of the Lloyds Banking Group (which now includes major lending brands such as BM Solutions, Halifax, C&G).
So, what has changed? How have BM Solutions relaxed their criteria? Previously, the lender’s list of exclusions included student lets, tenants claiming housing benefit, rent rebates or rent allowance, asylum seekers and tenants benefiting from diplomatic immunity.
With immediate effect BM Solutions has now adjusted its criteria to allow BuytoLet landlords to rent properties to students and benefit claimants. They are also now willing to offer loans on properties with a maximum of five occupants, a stipulation attached to all properties, although BM Solutions has never lent on House of Multiple Occupation, where tenants sign individual tenancy agreements and this still hasn’t changed.
This news comes just over a week after The Mortgage Works has also in dropped its restriction on lending to landlords with tenants who are on housing benefits.
Other lenders which will lend to landlords with student tenants include The Mortgage Works, Godiva, Abbey for Intermediaries, Woolwich, Aldermore and Virgin Money.
Howard Reuben, Principal of H D Consultants says that these most recent criteria changes are testimony that Lloyds is pursuing more business. He says “This criteria update appears to back up the news that BM Solutions is looking increase business via criteria rather than chasing the rate. This is a controlled measure which will provide some relief to a number of landlords”
From 19th March, BM Solutions has announced new semi-exclusive products starting at 3.89% up to 75% LTV available for purchase and remortgage, and which also benefits from a £500 cashback too.
To discuss any Buy-to-Let deal with our preferred broker please call us on 01603 489118 or email info@property118.com
If you would like to add your own requirements and search for the most popular available Buy to Let products please click here
Lending Criteria to Consider when Purchasing a Buy to Let Flat
11/03
I had a question concerning this from our reader Dan today, but many Buy to Let investors I talk to are unprepared when looking to purchase a flat about considering what lenders will take as suitable security. Banks often have a surprisingly vast array of criteria that needs to be considered when lending.
I have compiled a list of questions a lender will ask and factors to consider when purchasing a flat. Although fairly in depth, I would not consider this exhaustive as after 15 years I know it is still possible to run across circumstances not seen before. read on
Development Finance Terms and Criteria update
28/02
We are working with a range of dedicated Development finance lenders for our readers to get the best criteria terms and conditions available in the current market.
The Lenders are all long established and recognise that a good development project carried out by an experienced developer deserves consideration based on individual merit, rather than a “computer says no” attitude.
Below is an update of some of the latest examples of Development finance Terms and Criteria that are currently on offer:-
- Residential and Commercial Development
- New build or conversion
- 65% day 1 value, 100% build costs
- Rates from 0.75% per month
- No exit fees
- Non-status loans/poor credit history
- Interest rolled up into the loan or serviced
- Arrangement fees added to the loan
- Transparency – No early repayment penalties or hidden charges
- Interest calculated only on the amounts drawn
- Available for deals in England, Scotland and Wales
We have witnessed some quite amazing proposals from clients who have identified significant opportunities to either rescue a previously failed development project or to create their own vision of a project. We also know that no two propositions are the same, each having their own unique profiles.
To discuss any commercial deal with our preferred commercial finance broker please use the relevant links below, call us on 01603 489118 or email info@property118.com
For Development finance please click here.
For Commercial mortgages please click here.
For Bridging finance please click here.
If you would like to add your own requirements and search for the most popular available Buy to Let products please click here
Negative Interest Rates a possibility?
26/02
Paul Tucker the deputy Bank of England governor has told the Treasury Committee that negative interest rates should be considered.
A negative interest rate on bank reserves held at the Bank of England would theoretically encourage an increase in lending to stimulate the economy as banks would be charged for keeping money at the Bank of England rather than lending it out. read on
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