News Company & Industry News

Demand outstrips supply as Yorkshire rental market enters new era

August 2010

Another year of rising demand for rental property shows no signs of abating, according to Yorkshire's largest residential letting specialists.

Linley & Simpson - whose eight-branch network includes offices in Leeds city centre, Horsforth and Roundhay, as well as Ilkley, York, Harrogate, Wetherby and Wakefield - has let more homes in the first eight months of 2010 than in any comparable timescale in its 12-year history.

More home-buyers continue to be unwilling or unable to step on to the property ladder, following the continental trend and preferring to rent - not least because of the flexibility it offers. A growth in the number of single-person households is also triggering extra interest in renting.

Director Will Linley said these changing trends were taking the residential letting market into a new era: "Recent months in particular have witnessed a shortage of properties available to rent. In some areas, our stock levels are down as much as 75 per cent on 'normal' levels, with around 18 times as many tenants now seeking accommodation.

"This is unprecedented. It has resulted in a rise in rental prices, some going up between 5 per cent and 10 per cent in the last few months. Void periods - which can be costly for landlords - are almost non-existent.

"We are letting more and more properties without the need to advertise them, and we've seen an increase in multiple applications for the same properties.

"We've recently turned down one prospective tenant - not on the grounds there was anything wrong with her application, but because another party was able to move quicker.

"She told us it was the fourth time she had suffered the same experience because other applicants were able to get there first."

The health of the rental market has also coincided with more investors taking advantage of Linley & Simpson's property acquisitions service, which guides prospective landlords through the maze of identifying, buying and letting out a rental property.

Under the directorship of Victoria Cribb, the initiative harnesses Linley & Simpson's long-standing knowledge and expertise of the regional rental market to deliver yields as high as 8.6 per cent on some buy-to-let properties.

She said: "Over the long term, property has historically proved itself to make a sound investment, provided that you make well-informed purchases.

"As our network within the industry expands, we are progressively able to identify stronger and stronger opportunities for our clients through a mix of good discounts and motivated vendors. The result is naturally high yields that outperform any bank or building society rate."

Buy-to-let lending shows signs of recovery

Buy-to-let lending is showing signs of recovery, according to figures from the Council of Mortgage Lenders.

The number of buy-to-let mortgages taken out in the second quarter was 24,900, 13% up on the figure for the previous three months (22,000) and 15% higher than the second quarter of last year (21,600).

CML director general Michael Coogan said: "The buy-to-let market has continued to grow, albeit slowly, since the credit crunch. With fewer people able to afford the entry costs to home ownership, as well as the pressure on social housing, tenant demand for private rented property will remain strong.

"Finance for private landlords, whether institutional or individual, is crucial if the UK is to have enough homes to meet the needs of the population.

"Funding conditions for lenders remain tight, but there is every reason to expect the buy-to-let sector to continue to make a powerful contribution to helping meet the country's varied housing needs."

The value of BTL lending in the first quarter was £2.4bn, of which £1bn was remortgaging.

Although business is only just over a quarter of its level of three years ago, both the number and the value of BTL loans were at their highest level since the fourth quarter of 2008, apart from the fourth quarter of 2009 when demand was inflated by the end of the Stamp Duty concession.

At the end of June, there were 1.26 million BTL mortgages outstanding, worth £149bn.

By value, BTL mortgages accounted for 12% of all mortgages - the highest proportion by value, as opposed to numbers, since records began.

BTL arrears cases have improved, but repossession rates remain higher than in the owner-occupier market, where lenders are more forbearing to prevent owners losing their homes. In the BTL market, a receiver of rent may also be appointed, instead of the lender taking possession of the property.

Tenant demand at all-time record high

Rocketing demand for rental accommodation has prompted the UK's largest letting agent to call for more incentives to encourage buy-to-let landlords to invest in the market.

According to Countrywide, tenant demand is at a record high, with up to nine tenants competing for properties.

The 211 branches had 50,480 new tenants register in the second quarter of this year – a 16% rise on the first quarter.

The sharpest increase was in June, with over 18,000 new tenants registering, the highest number in a single month since Countrywide records began in 2003, and 22% more the previous month.

However, the rise in tenant demand is in sharp contrast to the fall in the number of new properties being offered to rent. They have fallen 6% in the last three months.

The excessive level of demand has led to marginal increases in rental prices. As more families turn to renting, four-bedroom properties have seen the highest increase, with the average rent rising to £1,090 per calendar month.

There is now an average of 5.5 tenants vying for each property compared to 4.9 tenants in the first three months of the year. The highest demand is for two-bedroom houses in the South-West where 8.9 tenants competed for each property.

This level of demand is having a significant impact on the market, with properties being snapped up on average within two weeks – three days less that in Q1 and six days less in Q4 2009.

John Hards, Countrywide Residential Lettings co-managing director, said: "The number of tenants entering the market is at unprecedented levels – and we have yet to enter the peak season. Student demand for private rental accommodation will increase further with university applications at record levels.

"The buy-to-let sector remains a good source of investment. However, the Government needs to do more to incentivise new landlords in order to ease the current shortage of properties. If tenant levels continue to rise at the same rate, this will be further exacerbated."

A new report from specialist lender Paragon also confirmed the huge growth in tenant demand.

Nigel Terrington, Paragon Group chief executive, said: "Tenant demand has been rising consistently for two years and shows no signs of slowing down. Would-be home buyers continue to be unwilling or unable to step on to the property ladder, whilst longer-term social changes, such as greater numbers of single-person households and economic migrants, are also creating more demand for rented property.

"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand. Pressure is building on the finite number of properties in the sector, because the lack of buy-to-let mortgage availability has prevented landlords from growing their property portfolios.

"It is clear that confidence is high amongst the landlord community, which is reflected in the greater appetite for investment. There is obviously a dislocation between landlords' intention to purchase and their actual ability to do so, given the continued scarcity of buy-to-let mortgage finance. Landlords still value residential property as an investment vehicle."

Supply of rental stock continues to tighten

The availability of rental properties is worsening, according to research out today from ARLA.

Covering the second three months of this year, the latest quarterly survey shows that 70% of ARLA agents say there are more tenants than properties available. This is an increase from 59% on the first quarter and compares with 24% last September.

In the South-East, 76% of member offices report more tenants than properties.

Ian Potter, operations manager of ARLA, said: "This situation has been deteriorating rapidly in recent months, as the supply and demand of homes to buy is also swinging out of kilter – making the prospect of a severe rental housing shortage ever more likely.

"In his Budget, the Chancellor did little to incentivise investment in the private rented sector. In fact, the rise in Capital Gains Tax may actually discourage potential landlords from investing."

The latest LSL buy-to-let index also shows tight supply, which it says is bolstering rents.

The company, which includes national chains Your Move and Reeds Rains, said rents rose by 1% in June – the fifth consecutive month to show a rise. The average rent is now £673 per month, the highest level since the peak in November 2008.

But David Brown, commercial director of LSL Property Services, said the real problem for landlords was not CGT but the restricted availability of buy-to-let mortgages.

He said: "This has been the underlying factor holding back investment in the sector and the number of new rental properties hitting the market."

Buy-to-let loans are coming back!

The independent market analyst Datamonitor has published a new report, 'Buy-to-let Mortgages and the Rental Sector' which forecasts that while gross advances will remain flat in 2010, they are set to rise dramatically by 2014.

The key findings are:

• Investor confidence will be bolstered by the stabilisation of house prices
• Demand for rental property amongst tenants is rising faster than supply
• Rents are starting to stabilise
• Since the start of 2009, a greater proportion of landlords have bought rather than sold property
• Just two lenders currently account for 80 per cent of buy-to-let lending
• Arrears and possessions have been no higher in the buy-to-let sector than in the market as a whole
• Supply of mortgage finance will be unable to satisfy investor demand

The report forecasts that gross advances will remain flat this year, rising to £15.8 billion in 2012, £20.2 billion in 2013 and £25.6 billion in 2014. Council of Mortgage Lenders figures show that buy-to-let gross advances totalled £8.5 billion in 2009.

Nigel Terrington, chief executive of The Paragon Group, comments on the report, £Buy-to-let lending hit its lowest level since 2001 last year and the market is dominated by just two lenders. Investor demand has never been the issue, it has always been mortgage finance supply, which has been severely restricted since the closure of the wholesale funding markets.

"There are a number of socio-economic and demographic factors that will drive demand for rented property in the future, such as inward migration, the rate of new household formation and the composition of those households, growing student numbers and a greater propensity to rent amongst young people. The private rented sector needs to expand to cater for these growing markets, yet it is being inhibited by the lack of available finance."

Quick success for Linley & Simpson's Property Acquisitions venture

YORKSHIRE'S biggest residential letting specialists is celebrating the first success of a new venture that takes the headache - and risk - out of searching, buying and renting out a home.

Linley & Simpson Property Acquisitions Ltd was launched to help landlords and property investors take full advantage of the rising strength of the rental property market across its network of eight branches - York, Harrogate, Wetherby, Ilkley, Wakefield and three in Leeds.

Within six weeks of briefing the company, retired Leeds teacher Ann Lea was the owner of two riverside flats on Wakefield's burgeoning waterfront - complete with established tenants and an income that beats the savings rates of any bank or building society.

She was the first to take ownership of a rental property as a result of the new venture, which guides and advises clients every step of the way to maximise returns.

Victoria Cribb, from Linley & Simpson Property Acquisitions, worked closely with Ann to identify the right properties at the right price in the right location - from a landlord's perspective. After viewing a number of potential properties, Ann settled on buying two modern apartments at one of Wakefield's most attractive new developments.

Ann said: "The true value of the service was the partnership that was set up, where I still felt that I was in control and able to ultimately make the key decisions.

"It was an imaginative approach which suited my situation as a relative newcomer to the buy-to-let 'world'. Victoria quickly came to understand my requirements, to manage my expectations and to guide my deliberations, and finally to nurture my confidence into being able to believe in my ability to make an informed choice."

Victoria said: "This is both a time and cost effective way of augmenting property portfolios, with a clear focus on making every Pound of investment go as far as possible.

"As well as drawing upon our extensive market knowledge and insight, clients can be reassured they are working with specialists who are among the most trusted and successful names in residential letting here in Yorkshire, achieving more than 25,000 lets since launching 12 years ago."

She added: "Integrity and impartiality are the key themes of our approach. We have to be successful for our clients as the litmus test at the end of the process is to let the property – we are judged very much on the results we achieve.

"Interest in the venture is growing, as is our buy to let property database, and, following in Ann's initial footsteps, we now have a number of other investors who are poised to take ownership of new properties across our Yorkshire network. This is another clear signal of the buoyancy of the rental market in the county's sought-after areas."

* For further details, contact Victoria by calling her on 0113 237 0160; emailing her at victoria@linleyandsimpson.co.uk; or visiting the dedicated website www.LSbuytolet.co.uk

Rise in new mortgage sales hides 'two-speed market' as homeowners fail to refinance

The number of mortgages taken out to buy a home rose to the highest level for almost two years in October as the housing market continued to rally.

The Council of Mortgage Lenders said that 55,000 mortgages were taken out for purchases in October, the highest monthly total since December 2007. The figure is more than double the January 2009 low of 23,000 and is a 9 per cent rise on the previous month.

The number of home loans advanced to remortgage borrowers and first-time buyers remained unchanged between September and October. However, the figures were viewed as a sign that low interest rates for those with large deposits, together with recent house price rises, are encouraging those who are able to move to take advantage of the favourable market conditions.

The number of loans to home movers - a group that does not include first-time buyers - rose by 15 per cent between September and October, with the bulk of borrowers opting for tracker mortgages as evidence grows that interest rates are set to remain low for the long term.

Michael Coogan, director-general of the Council of Mortgage Lenders, said: "We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year's sustained increases in house prices, are encouraging more people to buy or move.

"But the same low rates that are driving house price activity provide little incentive for borrowers to refinance their loans. This, coupled with tightness in lending criteria, continues to hold back the remortgage market."

Signs from the mortgage market indicate that credit conditions are easing and that lenders are more willing to lend.

In the last eight months, while bank base rate has been kept on hold, the total number of residential mortgages available has increased from 1209 to 1624, the majority of which being two-year fixed-rate deals.

Average rates on two-year fixed deals continue to see significant falls, standing at 4.93% today.

Rates remain less favourable on longer term deals, where the average five-year fixed stands at 6.15%. The average three-year rate continues to increase, standing today at 5.60%.

Michelle Slade, spokesperson for Moneyfacts.co.uk, said: "In such uncertain times, borrowers and lenders alike seem to prefer shorter-term deals, where changes can be made relatively quickly if market conditions change dramatically.

"If lenders maintain the increased margins they have placed on mortgage deals, this short-term view is likely to prove more expensive for borrowers in the long run.

"Increased competition in the two-year market has increased the competitiveness of the deals available, but at £928, the average arrangement fee remains more than £100 higher than on longer deals.

"Borrowers' love affair with shorter-term deals means lenders benefit from the increased frequency with which arrangement fees become payable.

"Lenders appear to be discouraging borrowers from taking medium to longer term deals by charging higher rates, as extended periods of repayment, together with uncertainty over the economy in the medium term, bring a higher risk of default.

"By opting for a five-year deal, borrowers are likely to benefit from a more stable mortgage market when they come to remortgage. Increased equity in their homes from rising property prices will increase their chances of being eligible for a more competitive deal at a lower LTV band."

High net worth investor confidence in property is back, says Barclays

High net worth investor confidence in property is returning, with 76% of investors seeing opportunities in residential investment and 68% seeing opportunities in commercial investment, according to a report by Barclays Wealth.

Twice as many investors – 35% of the 2,000 surveyed – plan to increase their property allocation rather than decrease it over the next two years.

The global report in conjunction with the Economist Intelligence Unit, Prospects for Property: On Solid Foundations, showed that investors believe that property has better long term prospects than other asset classes.

In the survey, 25% of investors also believed that recent price falls have made property seem cheap.

The US was seen as the most attractive market after their own domestic markets, with 16% of investors saying they anticipated the best returns there.

Rory Gilbert, managing director and head of UK high net worth, UK & Ireland private bank at Barclays Wealth commented: "The tumble in property values has shaken even the most seasoned investors' confidence. Despite this, these findings suggest that investors believe we are approaching the beginning of the end of the downturn. It appears that those surveyed are prepared to not only exploit undervalued opportunities, but also to commit further to property over the next two years in the belief that they will benefit from favourable returns.

"However, whilst there seems to be a good deal of confidence emerging, investors should ensure that they don't over commit themselves, or concentrate their property portfolios too narrowly, whilst there is still a degree of volatility in the markets. Wider market data suggests that initial indications of recovery in property could be a false dawn, or the start of a slow upturn. The next 12 months will be crucial in getting a clearer idea of what the longer term property investment landscape will look like."

Buy-to-let is back!

Landlords are feeling more optimistic, but what are the long-term prospects for buy-to-let?

There is nothing like a housing market crash to test a landlord's mettle. The economic slowdown of the past two years has wiped out inexperienced investors, who plunged into buy-to-let too late expecting overnight riches. But the savvy, who took a longer-term view, have survived the worst of the recession and are feeling cautiously optimistic about the future.

Tenant demand is up, rents have improved and although many landlords are still feeling frustrated by the lack of credit, the buy-to-let mortgage market is expanding modestly again. Buy-to-let may still be some way from a full recovery but the long-term prospects for the rental market remain strong and landlords with money in the bank are taking advantage of reduced property prices and low interest rates to expand their portfolios.

"There has never been a better time to capitalise on the buy-to-let market," says Jim Parker, a landlord of 15 years and spokesman for the National Landlords' Association (NLA) in Scotland. "There is virtually no return from the banks, but there are some great bargains out there. Housing is in short supply and rents are increasing. If you have the deposit to put down, now is the time to buy."

Parker has bought three houses in the past six months to add to his portfolio of 37 properties in Fife. It was his first shopping spree in four years. "We stopped buying when prices started rising rapidly. It made no financial sense to buy at the height of the boom."

He is not the only investor snapping up bargains. Figures from the Council of Mortgage Lenders (CML) show that buy-to-let lending rose by 10 per cent in the three months to September compared with the previous three months. Most of that growth is the result of borrowing for house purchases rather than remortgaging.

Studies from the Royal Institution of Chartered Surveyors (RICS) and the Association of Residential Letting Agents (ARLA) also indicate a rise in the number of investors hunting property. Buy-to-let players are seeing positive returns from property for the first time since the credit crunch began, according to research from LSL Property Services, owners of several chains of national letting agents.

Those who bought in April 2009, at the bottom of the market, have reaped a return of 7.4 per cent in rent and rising prices, the equivalent to an annual return of more than 15 per cent. Even those who called the market too early and bought a year ago, have made a return of 2.4 per cent. The worst time to invest was February 2008. Anybody who bought then would have lost more than 11 per cent by February this year.

David Brown, commercial director of LSL Property Services, says: "October was a watershed month for property investors. The spectre of losses on their investments is finally being exorcised and they can look forward to property providing them with a decent return again."

The oversupply of rental property, caused largely by a flood of homes put up to let by owners who failed to sell, has vanished as the housing market picks up. Less competition from so-called accidental landlords has tipped the market in favour of the professionals once more.

The long-term prospects are also good. Some two million households rent through the private sector in the UK, according to ARLA and that figure is set to rise. Lucy Morton, president of ARLA and managing partner at W. A. Ellis, the London agents, says: "Demand for rental homes in Central London has been rising since May as the City starts to hire professionals from Europe and the US again."

The clamour for rental homes is also coming from potential first-time buyers who are still unable to secure a mortgage and former homeowners who have sold but have failed to find suitable new homes with so few properties on the market.

Farther down the line, ARLA predicts that the demand for rental homes is set to grow by 20,000 to 30,000 a year over the next decade, largely because of the rise in divorce, immigration and job mobility.

However, not all landlords are enjoying the benefits. The economic downturn is still claiming buy-to-let victims who borrowed too much and bought overpriced properties at the height of the market.

Many of those who invested late remain painfully overstretched and are unable to cover the cost of their mortgages. The CML statistics show that although there are fewer landlords in arrears, the number of properties taken into possession rose between July and September, from 1,400 to 1,600.

Tougher lending criteria imposed by the banks now makes it impossible for those who borrowed large percentages of the value of their property to remortgage and get the best deals. But even serious players are feeling frustrated by the lack of credit available.

James Fraser, a landlord of 13 years, wants to expand his portfolio of 20 houses in Stevenage for the sake of his partner Karen Smith and their five-week-old daughter Daisy.

Having started his portfolio in 1996 with the purchase of a one-bedroom flat for £12,000, he had plenty of equity to cushion the economic blows. "With interest rates down, I'm paying almost nothing on some of my tracker mortgages so profitability is up," says the representative for the NLA in Hertfordshire and Essex. "Estate agents keep offering me some great deals and I would love to be buying now but I can't raise the deposits banks demand."

Developer discounts spark buy-to-let spree

Investors are snapping up newly built flats in northern cities at substantial discounts, clearing out the unsold stock of several leading housebuilders.

Many such buyers are accountants, doctors and solicitors who are becoming landlords for the first time, weary of the low rates of interest from deposit accounts and attracted by the returns available from lettings.

The same professionals are also increasingly active in London's property market, according to Cluttons, the estate agents, either acquiring rental flats or homes for their grown-up children.

As a result, the housebuilders were willing to offer reductions of up to 17 per cent, which is said was the typical price decline from the market's peak, plus another double-digit discount.

Deals are also being done with the banks that have acquired apartment blocks after the administration of the developers. One example is Waterside, a scheme in Liverpool, where City Lofts, a business now in administration, was the developer.

The glut of unsold inner-city apartments in northern towns and cities — including some properties that were hastily and shoddily built in the construction spree of the boom — was one of the factors behind the housing market downturn.

The recession is now officially over for buy-to-let as mortgage lending to the sector picks up once again and landlords look to take advantage of more affordable property prices and high tenant demand.

That is the claim from website Lettingsearch.

Buy-to-let investors are beginning to fight their way back into the property market as prospects for the sector improve following a sustained period of restricted financing and, until recently, weak rental yields.

With banks finally increasing their buy-to-let lending in quarter three, a period of sustained investment in the industry is set to follow.

Many professional landlords still have liquid cash available to invest and are now likely to look to expand their portfolios over the next few months, buying property at the more affordable levels before prices climb too far. Investments in other asset classes continue to under-perform, and as a result, City bonuses will also be channelled into investment property, bolstering the buy-to-let sector further.

Investment in the sector will be underpinned by strong and rising tenant demand for lettings accommodation, as homeowners and first-time buyers turn away from the sales market and will fuel heightened activity in the property market as a whole.

Phil Calderbank, Director at lettingsearch.co.uk, said: "Mortgage lenders are once again recognising the important role lettings has to play in the property market and as investors with liquid cash make a move to take advantage of affordable property, strong tenant base and improving returns, I think we can safely say that the recession is now over for buy-to-let.

"Many so-called reluctant landlords have discovered a new income stream and we believe some of these people will stay in buy-to-let and even expand their portfolio. This will further strengthen the buy-to-let sector.

"The current rate of house building cannot meet the demand from potential buyers, and while lending to homeowners remains scarce and the uncertainty over unemployment looms on the horizon, we will see people choosing lettings from every rung of the ladder."

The recent reduction in rental market stock could lead to "quite strong rental growth" in the long term, according to one property industry expert.

Lucian Cook, director of residential research at estate agent Savills, said that there are various other reasons why the private rented sector is set to increase in size.

He explained that a number of would-be first-time buyers will be "effectively excluded" from buying property due to mortgage constraints and deposit requirements.

These people will therefore spend more time renting homes, which will boost demand for landlords' services.

His comments came after various industry organisations - such as the Association of Residential Letting Agents - claimed that the so-called accidental landlord phenomenon from earlier in the year has started to fade away, with those who were forced to rent out property now looking to sell it instead.

"I suspect that you will see stock on the rental market become eroded over a period from here on in [and] get back to much more normal levels," Mr Cook remarked. "I suspect that will also bring some degree of stability into rental levels."

Property website Zoopla has now successfully completed the integration of all of its websites onto a single "super portal".

The firm said that it would offer enhanced services to its users with more features for consumers and greater exposure and leads for its agent members.

As a result of combining the best features from each of the websites in its stable – PropertyFinder.com, HotProperty.co.uk and ThinkProperty.com – Zoopla.co.uk will now offer a range of new services to the millions of home movers who visit the website each month and a far broader audience for its thousands of estate agent members.

Zoopla CEO Alex Chesterman said: "Following our acquisitions over the summer, it was important for us to consolidate onto a single brand and technology platform as quickly as possible in order to deliver the benefits to our users.

"We have taken the best-in-class features of all of our websites and combined these to deliver on our goal of offering consumers the UK's best property market resource and our agent members the most efficient source of applicant leads, appraisal leads, exposure and tools to help them win more business."

Investors have opted to buy more property over the last year, new research from the Association of Residential Letting Agents (Arla) has revealed.

The study indicated that the average residential landlord investor has boosted their property portfolio from 6.3 to seven homes in less than 12 months.

According to the survey, buy-to-let investment has almost doubled in the last five years, with the average number of properties per landlord increasing from four in 2004 to its current level.

Ian Potter, operations manager at Arla, said: "Low interest rates and proportionately higher rental yields are making the buy-to-let market attractive again to experienced investors."

The 0.5 per cent Bank of England interest rates Mr Potter refers to are expected to be kept at the same level for the rest of the year and most of 2010.

Indeed, many economists are predicting that the cost of borrowing will stay at this record low throughout next year.

Gross lending in the buy-to-let mortgage market grew in the third quarter for the first time in two years, according to the Council of Mortgage Lenders.

At £2.1billion, lending was 10% higher than in the previous three months. The third quarter also saw a similar first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700. But the welcome recovery in buy-to-let lending was from a low base, with current lending volumes sharply lower than their peak in 2007.

The number of outstanding buy-to-let loans grew to 1,205,000, representing 11% of all mortgages by the end of the quarter (compared to 1,180,000 three months earlier). The value of outstanding buy-to-let mortgages increased by 2.5% to £144.2billion.

Within the buy-to-let market, both lending for house purchase and remortgaging grew in the last three months. As with the mainstream mortgage market, however, house purchase lending was appreciably stronger. Remortgaging capacity was constrained by the unavailability during the quarter of any buy-to-let mortgages at over 80% loan-to-value (LTV). Landlords with existing mortgages at a higher LTV are therefore effectively obliged to stay on their existing lenders' reversion rates. But with variable interest rates remaining low, it is relatively painless for them to do so and there is little pressure to re-finance.

Low borrowing costs are also contributing to a continued improvement in cases of buy-to-let arrears and the number of landlords facing enforcement action. For the third quarter in a row, there was a decline in the number of buy-to-let mortgages with arrears of more than 1.5% of the balance. In the last three months, the number has fallen from 22,900 to 20,500, representing 1.7% of outstanding buy-to-let mortgages.

The number of properties taken into possession rose in the third quarter, from 1400 to 1600, equivalent to 0.14% of all buy-to-let mortgages. Over the same period, however, there was a sharp decline - from 2500 to 1700 - in the number of arrears cases in which a receiver of rent was appointed, often as an alternative to seeking possession of the property.

CML director general Michael Coogan said: "At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome.

"Future demand for housing in all tenures supported by lenders will remain strong, despite mortgage funding constraints and low construction rates. With funding for social housing under pressure, the private rented sector has a strong future. Mortgage lenders will have an important role to play in it, and will continue to help improve choice and standards for private tenants."

Market Leap for Landlords

The Rental market is notoriously difficult to predict. Every week, different indices, reports and surveys are published, providing material for market watchers. Do they always agree? Rarely. Does it matter? Rarely. What is good for Landlords is usually portrayed as bad news for tenants.

Some of the latest facts and figures from Paragon Mortgages will bring a smile to any landlord's face. Its quarterly survey shows they can expect an average 0.8% increase in the value of their portfolios over the next 12 months. Paragon sees this as evidence that the falls in house prices have bottomed out. What might be more surprising is that 14% of landlords expect to make further investments in the same period. Whether mortgage finance becomes available to make this a possibility remains to be seen.

The property website Findaproperty.com offers yet more good news (for landlords, anyway). It says rents rose in September, making them 1.2% higher than in April. I must admit I haven't noticed this particular market improvement quite yet. Apparently, the increase is due to lack of supply caused by the decision of many so-called "reluctant landlords" to sell up. This will be offset, however, to the extent that the professional landlords succeed in expanding their own portfolios.

Rental prices have yet to bounce back in Liverpool, Bournemouth and Leicester, according to separate research by the website Gumtree.com. Tenants can find the best value-for-money deals in Derby, Bolton and Sheffield, apparently. So, tenants, take heart. The rental market differs from one end of the street to the other. Sometimes landlords can appear to the winners, but sometimes you can get the upper hand.

NAEA Press Release following Publication of CML Figures

Financial Services Authority - FSA sets out major reforms for the mortgage market.

The Financial Services Authority (FSA) has set out proposals for the major reforms required in the UK mortgage market to ensure that it works better for consumers and is sustainable for all market participants.

The proposals, published in the mortgage market review discussion paper, reflect the FSA's changed approach to a more intrusive and interventionist style of regulation.

The review's key features are:

• Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay;
• Banning 'self-cert' mortgages through required verification of borrowers' income
• Banning the sale of products which contain certain 'toxic combinations' of characteristics that put borrowers at risk
• Banning arrears charges when a borrower is already repaying and ensuring firms do not profit from people in arrears
• Requiring all mortgage advisers to be personally accountable to the FSA
• Calling for the FSA's scope to cover buy-to-let and all lending secured on a home

New Venture Offers Investors Unrivalled Expertise in Expanding Their Property Portfolio

A NEW venture designed to help landlords and investors take full advantage of the strength of the rental property market has been launched by Yorkshire's biggest residential letting specialist.

For those looking to buy investment properties, Linley & Simpson Property Acquisitions Ltd breaks new ground by using its expertise in the letting market to guide clients through every step of the way.

The launch of the bespoke service comes as demand for rental properties across the agency's offices in Harrogate, Wetherby, York, Wakefield, Ilkley, Horsforth, Roundhay and Leeds city centre hits an all-time high - with more than 2,000 prospective tenants on its waiting list.

It also coincides with what experts increasingly believe is the bottom of the fall in house prices, meaning that there is exceptional value-for-money to be had by investing in the right properties.

And for those investors who act quickly, they can also benefit from the stamp duty holiday - saving the 1% tax on those homes bought for under £175,000 by December 31.

The search, acquisition and letting process aims to be as hassle-free as possible, with Linley & Simpson using its unrivalled expertise and inside knowledge of the Yorkshire letting market to:

• Offer expert and objective advice, based on current and future market trends
• Identify the right properties in the right locations with maximum rental potential
• Negotiate the best possible purchase price from developers/vendors/estate agents
• Provide access to expert and independent financial advice on buy-to-let mortgages
• Advise on, and coordinate, any refurbishment and preparation work through specialist interior designers and contractors
• Offer preferential conveyancing rates from its specialist legal partners
• Find suitable tenants through its network of eight offices and a website which attracts 250,000 individual users a month
• Manage the tenancy, with prompt rental payments
• Secure competitive returns and long-term investments

In addition, the new service has the potential to bring together like-minded investors to buy empty properties on newly-built developments, pooling their purchasing power to achieve bulk discounts.

And, as a further dimension, it links existing Linley & Simpson landlords who may be looking to sell with others who wish to buy further investment property - saving on estate agency fees and other associated costs.

Spearheading the new venture from Linley & Simpson's head office at Street Lane, Leeds, is Victoria Cribb. She said: “This is both a time and cost effective way augmenting property portfolios. We aim to give investors a successful and stress-free way of making every Pound of their investment go as far as possible.

"For financial reasons as well as personal choice, more and more people are choosing to rent their home rather than buy. Our new service offers expert and impartial advice for those investors who want to take advantage of current market conditions."

"As well as drawing upon our market knowledge and insight, clients can be reassured they are working with specialists who are among the most trusted and successful names in residential letting, achieving more than 25,000 lets since launching 12 years ago."