EWS1 form

In December 2019 RICs, The BSA and UK Finance introduced the external wall fire review process for buildings over 18 metres (approx. 6 stories), as well as some properties below that height, where the external wall systems are comprised of potentially combustible material.

Regrettably this process has not proved to be reliable or robust and as a result Fleet Mortgages are unable lend on any properties where our surveyors find a requirement for an EWS1 form.

Please speak to one of our sales team if you have any questions or need further details.

Regional Analysis

North

Regional Analysis

  • According to data from Fleet, rental yields in the North are the highest in England & Wales. The North East in particular sees yields as high as 7.9% despite a fall of 1.5% compared to the same period in 2019.
  • Furlough support and eviction moratorium may be postponing the full effect of the pandemic on rental demands and yields.
  • According to data from Fleet, we saw a 13% increase from 25% to 38% in property purchases amongst portfolio landlords since Q4 2019, whilst remortgaging is set to fall further over the next 12 months.

Key Takeaways

  • What type of properties are Landlords in the North buying?
  • By analysing purchase transactions in Q1 of 2021, we established that 77% of properties bought by Landlords inthe North are houses, of which 56% are terrace houses. Only 21% of purchase transactions came from flats with the remaining coming from HMO and bungalow properties.

  • Are Landlords buying or re-mortgaging?
  • Data from Fleet suggests that Landlords in the North are more likely to re-mortgage properties than to purchase. 58% Of mortgages advanced during Q1 2021 was for the purpose of re-mortgaging a buy-to-let property.

  • How are Landlords buying investment properties in the North?
  • In the North, 70% of purchase transactions came from limited company special purpose vehicles (SPV) properties. This is not too dissimilar to what we have seen elsewhere in the country.
  • What rental yields can a landlord expect when buying a property in the north?
  • Data from Fleet Mortgages puts the average rental yield for properties in North East at 9.1% in Q1 2021, down from 9.3% in the same period in 2020. This is the highest level of rental yields seen in England and Wales according to Fleet’s data.

     
 

Student Lets

With a rising number of undergraduates in full-time study, student HMOs have been on the rise in 2020, as Landlords, and developers recognise the potential for consistent yields in this market.

  • How does the North compare?
  • The North attracts large numbers of students every year with cities such as Manchester and Leeds housing five universities each and four in Liverpool –some of the most densely populated student areas outside of London.
  • North East is among the best buy-to-let investments areas with average yields at 7.9%, followed by Yorkshire and Humberside at 6.9% and finally the North West with 6.6%. All of which are above the UK average of 5.7% in Q4.
  • Competition within the student HMO market
  • Students are picky about where they will live, ruling out broad areas if they’re not close to campus or to key social hotspots such as the town centre and student unions. Even within an acknowledged student area, there is often a radius outside of which rents drop away quickly.
  • Landlords are advised to familiarise themselves with the area, speak to local letting agents and make sure they understand the price dynamics fully before investing. There are reports where new student developments have affected valuations or achievable rents in the more traditional market.
  • New student developments have been pushing up standards in the traditional student letting sector by including attractive shared areas, en suite bathrooms and kitchens with all inclusive wi-fi and bills.

Housing Market and Forecasts

What can we expect from the property market post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.

  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’

  • As it stands, annual house price inflation is currently at a level last seen in October 2014. Although, this is partially due to the base effect of a stall in housing activities in Q2 2020 when the market was closed.

  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.

  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.

  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.

  • Current low interest rates and a higher risk appetite from lenders, allow new and existing landlords to borrow more. Landlords are also enjoying a higher return from their property investment portfolios

  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further. Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.

  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next.

 

 

Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the ONS, the three northern regions (North East, North West and ‘Yorkshire and The Humber’) currently see a demand surplus in rental properties. This is because the northern regions show an above average level of growth in rental prices compared to other regions in England and Wales.

For comparison,  the average rental price increase for England and Wales is 1.3% whilst the North West sees average rental price increases of 1.85% and Yorkshire and The Humber sees growth of around 1.6%.

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in The North
Fleet Mortgages are actively financing buy-to-let properties in the North

Source: Fleet Mortgages

RegionAve. Rental Yield (Q1 2020) Ave. Rental Yield (Q1 2021)

North East

9.3%

9.1%

North West 8.2% 7.8%
Yorkshire & Humberside 8.4% 8.2%

England & Wales

6.3%

6.3%

Much like the rest of England & Wales, many regions saw a fall in rental yields as property prices rose over the past 12 months.

Hotspots in the north are generally situated in and around town and city centres as seen in the diagram.

According to data from Fleet Mortgages, the 3 northern regions see the highest levels of rental yields in England and Wales. By comparison, the lowest region of rental yields can be seen in Greater London at just 5.0%.

How Can Fleet Help?
North East

Chris Barwick

BDM
North East
07464 544446
chris.barwick@fleetmortgages.co.uk

Chris has worked in Financial Services for over 10 years, he has extensive experience of Mortgage lending having been an adviser and held an underwriting mandate.

With his background in mortgages and his desire to help intermediaries provide an excellent service to their customers, Chris enjoys nothing more than meeting with brokers and providing solutions to their customers’ BTL needs.

James Belcher

Telephone BDM
North East
01252 931357
james.belcher@fleetmortgages.co.uk

With 4 years in Estate Agency prior to joining Fleet Mortgages, James brings an existing passion for the Buy to Let market into his role as Internal BDM.

James takes pride in working with intermediaries, discussing how to deliver the best outcomes for their clients, and bringing what Fleet Mortgages has to offer to life.

North West

Chris Barwick

BDM
North East
07464 544446
chris.barwick@fleetmortgages.co.uk

Chris has worked in Financial Services for over 10 years, he has extensive experience of Mortgage lending having been an adviser and held an underwriting mandate.

With his background in mortgages and his desire to help intermediaries provide an excellent service to their customers, Chris enjoys nothing more than meeting with brokers and providing solutions to their customers’ BTL needs.

Lucy Freeman

Telephone BDM
North West
01252 931375
lucy.freeman@fleetmortgages.co.uk

Coming from a mortgage adviser background and learning the ropes at Cheltenham & Gloucester, Lucy enjoys working closely with brokers as the Midlands Telephone BDM, Got a new case?

Got a question? Please give Lucy a call.

Midlands

Regional Analysis

  • East Midlands was one of just two regions which saw a rise in rental yields over the 12 months leading up to December 2020.
  • 61% of purchase transaction in Midlands came from limited companies, a popular way for landlords to invest.
  • East and West Midlands both show the high levels of rental price inflation at 2.2%, over 50% higher than the average of England & Wales. This suggests a surge in demand for rental properties in Midlands.

Key Takeaways

  • What type of properties are Landlords in the Midlands buying?
  • By analysing purchase transactions, we established that 80% of properties bought by Landlords in the Midlands are houses, of which 47% are terrace houses. Flats in this region are far less popular and only account for 15% of properties owned by landlords.
  • Are Landlords buying or re-mortgaging?
  • Re-mortgaging properties are currently popular in England & Wales. According to data collated by Fleet, the Midlands is does not follow this trend and has a much more even split between purchase and re-mortgage transactions. 52% of completed cases in Q1 are re-mortgages and 48% were purchased during Q1 of 2021.
  • How are Landlords buying investment properties in the Midland
  • 73% of purchase transactions come from Limited Companies, a popular way of buying investment properties at present.
  • What rental yields can a landlord expect when buying a property in the Midlands?
  • Data from Fleet Mortgages puts the average rental yield for properties in East and West Midlands at 6.7% and 6.5% respectively for Q1 2021. For comparison, the average rental yields in England & Wales 6.3% in the same period.

Student Lets

With a rising number of undergraduates in full-time study, student HMOs have been on the rise in 2020, as Landlords, and developers recognise the potential for consistent yields in this market.

  • How do the Midlands compare?
  • The Midlands attracts large numbers of students every year with cities such as Birmingham housing five universities alone with a further 2 each in Leicester and Nottingham – the Midlands is one of the most densely populated student areas outside of London.
  • According to Fleet’s data, Midlands sees an above average return for buy-to-let investments with average yields at 6.9% in East Midlands and 6.4% in the West. Both of which are above the UK average of 5.7% in Q4 of 2020.
  • Competition within the student HMO market
  • Students are picky about where they will live, ruling out broad areas if they’re not close to campus or to key social hotspots such as the town centre and student unions. Even within an acknowledged student area, there is often a radius outside of which rents drop away quickly.
  • Landlords are advised to familiarise themselves with the area, speak to local letting agents and make sure they understand the price dynamics fully before investing. There are reports where new student developments have affected valuations or achievable rents in the more traditional market.
  • New student developments have been pushing up standards in the traditional student letting sector by including attractive shared areas, en suite bathrooms and kitchens with all inclusive wi-fi and bills.

Portfolio Landlords

The typical landlord has 8.1 properties in their portfolio and generates an average rental yield of 5.7%.

  • Property purchases continue to rise amongst portfolio landlords
  • According to data from Fleet, we have seen a shift from portfolio landlords re-mortgaging properties to purchasing. In Q4 of 2019, we saw just 25% of landlords purchasing properties whilst in the same period in 2020, we can see that 38% of landlords are now purchasing. This trend seems to be in line with BVA BDRC Landlord Panel research which suggests that only 28% of portfolio landlords intend to re-mortgage a property over the next 12 months whilst 65% of portfolio landlords plan to use a BTL mortgage to fund their next purchase. This suggests property purchases will continue to rise in 2021.
  • This increase in purchasing is likely due to the Stamp Duty Land Tax reductions which have been applied until March 2021 inclusive. This gives landlords and Homeowners alike the incentive to purchase a property at a lower cost.
  • Fleet’s data also suggests a rise in property purchases via a limited company, in Q4 of 2019, we can see that exactly half of all purchases by a portfolio landlords were via a limited company. This has increased to 67% in the same period in 2020 a substantial increase. This again is likely due to tax relief provided in a limited company structure.

Housing Market and Forecasts

What can we expect from the property market post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.

  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’

  • As it stands, annual house price inflation is currently at a level last seen in October 2014. Although, this is partially due to the base effect of a stall in housing activities in Q2 2020 when the market was closed.

  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.

  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.

  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.

  • Current low interest rates and a higher risk appetite from lenders,  allow new and existing landlords to borrow more.  Landlords are also enjoying a higher return from their property investment portfolios

  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further.   Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.

  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next

Index of Private Housing Rental Prices

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the Office of National Statistics (ONS), both the East and West Midlands shows high levels of rental inflation at 2.2% and 1.85% respectively, much higher than the average inflation in England across all regions which currently sits at 1.3%.

An above average level of rental price increase suggests that the demand for rental properties in Midland outstrips the supply.

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in The Midlands

Fleet Mortgages are actively financing buy-to-let properties in the Midlands

RegionAve. Rental Yield
(Q1 2020)
Ave. Rental Yield
(Q1 20201)

East Midlands

7.2%

6.7%

West Midlands 7.2% 6.5%

England & Wales

6.3%

6.3%

Despite the high levels of rental yield seen by both East and West Midlands, they also saw the largest falls as seen by the year-on-year comparison for Q1.

However, the Midlands combined still sees above average levels of rental yields which suggests that demand for rental properties still outstrip the supply available.

How Can Fleet Help?

Katy Williams

BDM
Midlands
07464 927175
katy.williams@fleetmortgages.co.uk

Katy has first-hand experience of arranging and handling all types of buy to let transactions, having been working in mortgages for over 7 years, both in the intermediary market and for high street lenders and most recently a Specialist lender/packager.

This valuable experience will enable her to understand the challenges brokers face when trying to place cases and ensure they are managed through to completion. Katy will be a great asset to firms in the Midlands, who will benefit from her experience and understanding of their role.

Lucy Freeman

Telephone BDM
Midlands
01252 931375
lucy.freeman@fleetmortgages.co.uk

Coming from a mortgage adviser background and learning the ropes at Cheltenham & Gloucester, Lucy enjoys working closely with brokers as the Midlands Telephone BDM, Got a new case?

Got a question? Please give Lucy a call.

East Anglia

Regional Analysis

  • According to data from Fleet, rental yields in East Anglia average 5.3%, down from 5.7% during the same period in 2019.
  • Furlough support and eviction moratorium may be postponing the full effect of the pandemic on rental demands and yields.
  • Rental price increases in East Anglia are at a similar level to the average in England & Wales, suggesting a reasonable balance between supply and demand in the region.

Key Takeaways

  • What type of properties are Landlords in East Anglia buying?
  • By analysing purchase transactions, we established that 66% of properties bought by Landlords in East Anglia are houses, of which 35% are terrace houses. The next most popular property type in East Anglia are flats, accounting for 26% of properties.

  • Are Landlords buying or re-mortgaging?
  • Data collected by Fleet Mortgages in Q1 2021 suggests that Landlords from East Anglia are more likely to re-mortgage (60% of transactions) than purchase new investment properties (40% of transactions). This trend is very similar to what we observed pre-COVID- 19. However, we have seen a gradual shift from landlords re-mortgaging to purchasing over the past 12 months.

  • How are Landlords buying investment properties in East Anglia?
  • 67% of all purchase transactions came from limited company special purpose vehicles (SPV) in Q1 of 2021. A popular way of buying investment properties at present time.

  • What rental yields can a Landlord expect when buying a property in East Anglia?
  • Data from Fleet Mortgages puts the average rental yield for properties in East Anglia at 5.6% in Q1 2021, down from 5.7% in the same period in 2020. This puts East Anglia below the average for rental yields in England & Wales (6.3%). This is not surprising as East Anglia has seen relatively stagnant rental yields over recent years.

 

Student Lets

With a rising number of undergraduates in full-time study, student HMOs have been on the rise in 2020, as Landlords, and developers recognise the potential for consistent yields in this market.

  • How does East Anglia compare?
  • East Anglia attracts large numbers of students every year with established universities such as Cambridge, UEA and Essex University all providing large student populations. As of 2019, each university had over 15,000 students enrolled.
  • East Anglia proves to be one of the most consistent earners, despite having relatively low yields compared to other regions in England. The regions see yields over the past 5 years, averaging 5.3% during this period.
  • Competition within the student HMO market?
  • Students are picky about where they will live, ruling out broad areas if they’re not close to campus or to key social hotspots such as the town centre and student unions. Even within an acknowledged student area, there is often a radius outside of which rents drop away quickly.
  • Landlords are advised to familiarise themselves with the area, speak to local letting agents and make sure they understand the price dynamics fully before investing. There are reports where new student developments have affected valuations or achievable rents in the more traditional market.
  • New student developments have been pushing up standards in the traditional student letting sector by including attractive shared areas, en suite bathrooms and kitchens with all inclusive wi-fi and bills.
 

Portfolio Landlords

The typical landlord has 8.1 properties in their portfolio and generates an average rental yield of 5.7%.

  • Property purchases continue to rise amongst portfolio landlords?
  • According to data from Fleet, we have seen a shift from portfolio landlords re-mortgaging properties to purchasing. In Q4 of 2019, we saw just 25% of landlords purchasing properties whilst in the same period in 2020, we can see that 38% of landlords are now purchasing. This trend seems to be in line with BVA BDRC Landlord Panel research which suggests that only 28% of portfolio landlords intend to re-mortgage a property over the next 12 months whilst 65% of portfolio landlords plan to use a BTL mortgage to fund their next purchase. This suggests property purchases will continue to rise in 2021.
  • This increase in purchasing is likely due to the Stamp Duty Land Tax reductions which have been applied until March 2021 inclusive. This gives landlords and Homeowners alike the incentive to purchase a property at a lower cost.
  • Fleet’s data also suggests a rise in property purchases via a limited company, in Q4 of 2019, we can see that exactly half of all purchases by a portfolio landlords were via a limited company. This has increased to 67% in the same period in 2020 a substantial increase. This again is likely due to tax relief provided in a limited company structure.
 

Housing Market and Forecasts

What can we expect from the property market post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.

  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’

  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.

  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.

  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.

  • Current low interest rates and a higher risk appetite from lenders, allow new and existing landlords to borrow more. Landlords are also enjoying a higher return from their property investment portfolios

  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further. Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.

  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next.

Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the Office of National Statistics (ONS), East Anglia – which in this case is called ‘East of England’ experienced an average increase in private housing rental prices of 1.3% over the past 12 months leading up to February 2021.`

Regions where housing rental price inflation is equal to the nation’s average suggests that the demand for rental properties in the East of England is matched by its supply.

As a comparison, The lowest annual rental price growth was in the London where rental prices increased by just 0.8% in the 12 months leading to February, and the largest annual rental price increase was in the South West at 2.3%

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in East Anglia
Fleet Mortgages are actively financing buy-to-let properties in East Anglia

Source: Fleet Mortgages

RegionAve. Rental Yield (Q1 2020) Ave. Rental Yield
(Q1 2021)

East Anglia

5.7%

5.6%

England & Wales

6.3%

6.3%

Many properties financed by Fleet in East Anglia are concentrated in the larger towns such as Norwich, Peterborough and around the outskirts of London.

East Anglia saw below average levels of rental yield inflation in the 12 months leading up to March 2021 at just 5.6%, 0.7% below the average of England & Wales. This suggests that supply for rental properties in East Anglia currently outstrips demand.

How Can Fleet Help?

Jacqui Simmons

Senior BDM
South East
07977 439721
jacqui.simmons@fleetmortgages.co.uk

Jacqui has an excellent track record of working with brokers and packagers to help them identify business opportunities and further develop their businesses.

Jacqui’s previous roles have included sales and business development positions in the intermediary market, including specialist buy to let lenders; Mortgage Express, Castle Trust and Magellan Homeloans. Jacqui will no doubt be a huge asset to firms in the South East who will benefit from her dedication to providing service excellence

Michael Maynard

Senior BDM
South East
01252 931355
michael.maynard@fleetmortgages.co.uk

Coming from a background of Estate Agency and New Homes, Michael has continued to learn about the property sector within Fleet Mortgages. Currently studying for his CeMAP qualification, Michael is here to take calls from Intermediaries, and guide them on our criteria to assist in getting BTL cases through to completion.

Maizie Whitney

Telephone BDM
South East
01252 931365
maizie.whitney@fleetmortgages.co.uk

Coming from a property background, Maizie has previously worked for an Estate Agency and as an Asset Manager and has continued to strengthen her knowledge of the Buy to Let industry whilst working at Fleet.

Maizie is always proactive in ensuring brokers and intermediaries are up to date with Fleet’s proposition and is here to help guide them through the process from start to finish.

South West / South Wales

Key Takeaways

  • What type of properties are Landlords in the South West buying?
  • By analysing purchase transactions, we established that 70% of properties bought by Landlords in South West and Wales are houses, the next most popular property type were flats, accounting for 26% of properties and the remainder of properties made up of HMOs and bungalows.
  • Are Landlords buying or re-mortgaging?
  • Landlords in the South West and Wales see a relatively even split between purchase transactions and re-mortgaging. This seems to go against the trend where most regionals generally prefer to re-mortgage a property.
  • How are Landlords buying investment properties in the South West?
  • 60% of all purchase transaction came from landlords using a limited liability company to purchase a property, whilst 40% of purchase transactions came from private investors. This follows the trend compared to the rest of England where it is generally more popular to use a limited company to purchase investment properties.
  • What rental yields can a Landlord expect when buying a property in the South West?
  • Data from Fleet Mortgages puts the average rental yield for properties in South West at 6.1% in Q1 2021, slightly down from 6.2% in the same period in 2020. This puts the South West marginally below the average rental yield for properties in England & Wales 6.3%.

Housing Market and Forecasts

What can we expect from the property market post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.
  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’
  • As it stands, annual house price inflation is currently at a level last seen in October 2014. Although, this is partially due to the base effect of a stall in housing activities in Q2 2020 when the market was closed.
  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.
  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.
  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.
  • Current low interest rates and a higher risk appetite from lenders,  allow new and existing landlords to borrow more.  Landlords are also enjoying a higher return from their property investment portfolios
  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further.  Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.
  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next.

Portfolio Landlords

The typical landlord has 8.1 properties in their portfolio and generates an average rental yield of 5.7%.

  • Property purchase continue to rise amongst portfolio landlords
  • According to data from Fleet, we have seen a shift from portfolio landlords re-mortgaging properties to purchasing. In Q4 of 2019, we saw just 25% of landlords purchasing properties whilst in the same period in 2020, we can see that 38% of landlords are now purchasing. This trend seems to be in line with BVA BDRC Landlord Panel research which suggests that only 28% of portfolio landlords intend to re-mortgage a property over the next 12 months whilst 65% of portfolio landlords plan to use a BTL mortgage to fund their next purchase. This suggests property purchases will continue to rise in 2021.
  • This increase in purchasing is likely due to the Stamp Duty Land Tax reductions which have been applied until March 2021 inclusive. This gives landlords and Homeowners alike the incentive to purchase a property at a lower cost.
  • Fleet’s data also suggests a rise in property purchases via a limited company, in Q4 of 2019, we can see that exactly half of all purchases by a portfolio landlords were via a limited company. This has increased to 67% in the same period in 2020 a substantial increase. This again is likely due to tax relief provided in a limited company structure.
Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the Office of National Statistics (ONS), the South West saw the highest levels of rental price increase (2.3%) in England over the 12 month period leading to February 2021.

For comparison, the region with the lowest level of rental price increase was London with just 0.8% inflation over the past year

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in the South West & Wales

Fleet Mortgages are actively financing buy-to-let properties in the South West

Source: Fleet Mortgages

RegionAve. Rental Yield (Q1 2020) Ave. Rental Yield (Q1 2021)

South West

6.2%

6.0%

Wales

8.4%

5.8%

England & Wales

6.3%

6.3%

The majority of properties financed by Fleet in the South West and Wales are concentrated in the larger cities such as Bristol and Cardiff. However, Fleet does offer mortgages across the region.

According to data from Fleet Mortgages the average rental yield of properties financed in the South West was 6.0%, marginally down from 6.2% in Q1 2020.

Both regions currently see a below average level of rental inflation compared to the rest of England & Wales which suggests that supply for rental properties currently outstrips the demand.

How Can Fleet Help?

Josh Parker

BDM
South West
07471 992978
josh.parker@fleetmortgages.co.uk

Josh joined Fleet Mortgages in December 2018 after spending almost 6 successful years with a specialist lender in the later life lending market. He successfully completed his CeMAP & CeRER qualifications and hopes to also complete his final DipFA exam in the next few weeks.

Josh has a wealth of knowledge and experience and is responsible for developing new and existing relationships in South Wales and the South West. Josh believes in building and maintaining a strong personable service and will continue Graham Le Bas’s promise “I will respond to contact on the same day – guaranteed”

Anna Gibbons

Telephone BDM
South West
01252 916786
anna.gibbons@fleetmortgages.co.uk

Anna has a strong background in B2C Sales in the Financial Services industry. Having already worked in Sales Support for Fleet, she has a strong understanding of our systems, products and criteria and will assist you with all aspects of your application.

Anna also has experience of working in other key areas of the business, offering excellent all-round knowledge of Fleet’s proposition.

South

Regional Analysis

  • According to Fleet data, the average rental yield across the South 5.1%.
  • Urban areas with the highest rental yields include – Southampton and Portsmouth.
  • The South saw some of the highest levels of private housing rental price increases over the course of 2019.

Key Takeaways

  • What type of properties are Landlords in the South buying?
  • In the South, there is a relatively even split of property types. Terrace Houses 35% are the most popular amongst landlords, followed by houses 33% and finally flats accounts for 27% of investment properties in the South.
  • Are Landlords buying or re-mortgaging?
  • Re-mortgaging is currently on an upward trend in England & Wales. According to Fleet data, the Southern region is no different with 75% of mortgage applications being for the purpose of refinancing.
  • How are Landlords buying investment properties in the South?
  • In the South, 43% of purchase transactions came from limited company special purpose vehicles (SPV) properties.
  • What rental yields can a Landlord expect when buying a property in the South?
  • The South saw average rental yields of 5.1% in 2019. This remains largely unchanged since 2018.
  • Rental yields in the South are below the average rental yield inflation in England & Wales.
  • The areas in the South which saw the highest levels in rental yield inflation is Portsmouth.
Index of Private Housing Rental Prices

Source: Office for National Statistics - Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

According to data from the Office of National Statistics (ONS), the average inflation of rental prices is 1.8% in the South.

England saw an average inflation of 1.4%. This suggests that demand for properties in the South is greater than the supply for private housing hence higher levels of inflation.

To compare, the region with the lowest levels of price inflation was the North East, which only saw an average increase of 0.5%.

Rental Yields & Hotspots in the South

Fleet Mortgages are actively financing buy-to-let properties in the South

Source: Fleet Mortgages

RegionAve. Rental Yield (2018) Ave. Rental Yield (Year to date - 2019)

South

5.0%

5.1%

England & Wales

5.4%

6.0%

The majority of properties financed by Fleet in the South are concentrated in the larger towns situated near coastal towns such as Brighton.

The South as a whole sees below average rental yields at just 5.1%. To give a comparison, the highest level of inflation was in the North which saw rental yields of 8.0% in 2019.

According to Fleet data, there are several rental hotspots in the South, this includes Reading, Portsmouth and Oxford; all of which have a largely university student demographic. It is also noticeable that there are hotspots just outside of the M25, west of London.

How does the rest of UK fair?

According to the most recent release ‘Index of Private Housing Rental Prices, UK’ (November 2019) as provided by ONS.

How does the rest of UK fair?

All UK countries have experienced rises in their private rental prices since 2015. However, since 2015, rental prices in England have increased more than those in Wales, Scotland and Northern Ireland. That is until recently, during the back end of 2019, rental prices in Northern Ireland had overtaken England with the highest level of growth in rental prices.

According to Lucia Cook, a leading market commentator and head of research at Savills. It is forecasted that rent will continue increasing with an average increase of 15.4% UK wide by the end of 2024. Rent in London, however, is expected to perform better reaching levels as high as 18.8%.

Despite this, London is forecasted to have a relatively slow year in 2020 by comparison and will only see rental increases by around 2%.

How does the rest of UK fair?

Comparisons of rental yields from Q4 2018 and Q4 2019 shows that England & Wales saw a general increase in rental yields with exception of the North West which saw a fall of just 0.1% and the South West which remained the same as last year.

This shows promise for landlords and in particular portfolio landlords, with the average increase over England & Wales as a whole to be 0.7% greater than in 2018, landlords should therefore see a greater return on investments.

Table 1: Q4 2018 rental yields vs Q4 2019 rental yields (Fleet Mortgages Data)

How Can Fleet Help?

Giovanna Streatfield

Giovanna has over 20 years’ experience in Financial services working in both Insurance and Mortgage services. Having gained extensive experience as a Mortgage Broker, Giovanna understands the help and support needed when dealing with clients. For the last 2 years, she has used her wealth of knowledge to help support brokers when working as a Business Development Manager for a High Street Bank.

She now joins Fleet to focus solely on meeting with brokers and providing solutions to their customers BTL needs.

Maizie Whitney

Telephone BDM
South
01252 931365
maizie.whitney@fleetmortgages.co.uk

Coming from a property background, Maizie has previously worked for an Estate Agent and as an Asset Manager and has continued to strengthen her knowledge of the Buy To Let industry whilst working at Fleet.

Maizie is always proactive in ensuring brokers and intermediaries are up to date with Fleet’s proposition and is here to help guide them through the process from start to finish.

South East

Regional Analysis

  • According to Fleet, the average rental yield across the South East during Q4 of 2020 was 5.0%, down marginally from 5.3% in the same period in 2019.
  • The South East sees the largest number of properties being financed through a re-mortgage in England & Wales.
  • Furlough support and eviction moratorium may be postponing the full effect of the pandemic on rental demand and yields.

Key Takeaways

  • What type of properties are Landlords in the South East buying?
  • By analysing purchase transactions, we established that 78% of properties bought by Landlords in the South East are houses of which 39% was terraced housing. The remainder of purchase transactions came from Flats. Fleet receives very few applications for bungalow and HMO properties in this region.
  • Are Landlords buying or re-mortgaging?
  • Unlike trends seen in other regions of England and Wales, the South East sees a relatively even split between re-mortgaging (51%) and purchase transactions (49%).
  • How are Landlords buying investment properties in the South East?
  • 69% of purchase transactions in the South East were completed via a Limited Liability Company SPV set up for the sole purpose of acquiring BTL Properties.
  • What rental yields can a Landlord expect when buying a property in the South East?
  • The average rental yield in the South East is 5.0% in Q4 2020, a fall of 0.3% since the same period in 2020. Rental yields in the South East are below the average in England & Wales.
     

Housing Market and Forecasts

What can we expect from the property market post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.
  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’
  • As it stands, annual house price inflation is currently at a level last seen in October 2014. Although, this is partially due to the base effect of a stall in housing activities in Q2 2020 when the market was closed.
  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.
  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.
  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.
  • Current low interest rates and a higher risk appetite from lenders,  allow new and existing landlords to borrow more.  Landlords are also enjoying a higher return from their property investment portfolios
  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further.   Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.
  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next.
Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the Office of National Statistics (ONS), the average inflation of rental prices in the South East currently sits at 1.0%. This is low if you consider the average rental price in England & Wales saw an average rental price inflation of 1.30%.

This suggests that supply of rental properties in the South East outstrips the demand hence the below average level of inflation. We anticipate this trend to change during and post COVID-19 as office workers decide to move from London to home offices, as early indications has suggested.

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in The South East
Fleet Mortgages are actively financing buy-to-let properties in the North

Source: Fleet Mortgages

RegionAve. Rental Yield (Q1 2020) Ave. Rental Yield (Q1 2021)

South East

5.6%

5.1%

England & Wales

6.3%

6.3%

Many properties financed by Fleet in the South East are concentrated in the larger towns situated close to the M25 such as Reading and near the coastal towns such as Brighton and Portsmouth.

The South East observed below average rental yields of 5.1% during Q1 of 2021. To give a comparison, the highest level of inflation was in the North which saw rental yields of 9.1% during the same period.

How Can Fleet Help?

Jacqui Simmons

Senior BDM
South East
07977 439721
jacqui.simmons@fleetmortgages.co.uk

Jacqui has an excellent track record of working with brokers and packagers to help them identify business opportunities and further develop their businesses.

Jacqui’s previous roles have included sales and business development positions in the intermediary market, including specialist buy to let lenders; Mortgage Express, Castle Trust and Magellan Homeloans. Jacqui will no doubt be a huge asset to firms in the South East who will benefit from her dedication to providing service excellence

Charlie Gregory

Telephone BDM
South East
01252 916756
charlie.gregory@fleetmortgages.co.uk

Coming from an estate agency background, Charlie has been able to develop strong working relationships throughout the sales process.

By speaking to brokers and intermediaries about our criteria, and guiding them through the process end-to-end, Charlie is continuously improving his B2B skills.

Greater London

Key Takeaways

  • What type of properties are Landlords in Greater London buying?
  • By analysing purchase transactions, we established that 51% of properties bought by Landlords in London are flats, followed closely by houses at 45%. A very even split between the two property types.
  • Are Landlords buying or re-mortgaging?
  • Re-mortgaging properties are currently popular in England & Wales. According to Fleet data, Greater London is no different with 64% of properties being re-mortgaged and only 36% being purchased. However, we can see that over the past 12 months leading up to March 2021, there has been a 11% decrease in re-mortgaging activity compared to the same time last year.
  • How are Landlords buying investment properties in Greater London?
  • 61% of purchase transactions come from Special Purpose Vehicles (SPV) Limited Companies, a preferred way of buying investment properties at present.
  • What rental yields can a Landlord expect when buying a property in greater London?
  • According to Fleet data, Greater London saw an average rental yield of 5.0% in Q1 2021. Greater London had seen stagnant rental yield inflation since 2014, ranging between 4.8% and 5.1% rental yields. A year on year comparison shows that London has fallen by 0.1% in terms of rental yields.

Housing Market and Forecasts

What can we expect from the property post Covid-19?

  • A previous forecast made by Capital Economics during the early stages of the pandemic, predicted that house prices would fall due to the adverse affects of Covid-19.

  • In a more recent article they stated, ‘A quick economic recovery, sustained fiscal support, and the housing specific measures in the Budget mean it is likely that policy makers will successfully mitigate the adverse impact of the pandemic on the housing market.’

  • As it stands, annual house price inflation is currently at a level last seen in October 2014. Although, this is partially due to the base effect of a stall in housing activities in Q2 2020 when the market was closed.

  • Those who remained in stable employment during the pandemic were able to save a deposit to buy which further helps support the housing market.

  • This increase in house price is likely to give landlords confidence in further investing in properties. We can also expect new landlords to join the market looking for investment opportunities given the relatively low return from other assets.

  • The extension of the stamp duty land tax (SDLT) holiday to the end of June is boosting activity in the housing market. This reduction in stamp duty costs coupled with low interest rates is likely to incentivise landlords and investors alike to purchase BTL properties.

  • Current low interest rates and a higher risk appetite from lenders,  allow new and existing landlords to borrow more.  Landlords are also enjoying a higher return from their property investment portfolios

  • Against a backdrop of increasing demand for housing (fuelled by the Governments’ 95% LTV mortgage guarantee scheme) house prices is likely to increase further. Recently Capital Economics revised their forecast for house price inflation and predicts house prices to rise by 3% in 2021 and 2.5% in 2022.

  • Now that the UK has left the EU and with the vaccine programme well underway, we look forward to a period of stability and sustainable growth in house prices this year and next.

Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

According to data from the Office of National Statistics (ONS), London sees the lowest increases in housing rental prices compared to other regions in England & Wales.

Having a housing rental price inflation below the nation’s average suggests that the demand for rental properties in London currently outstrips by the supply.

As a comparison, The highest annual rental price growth was in the South West where rental prices increased by 2.3% in the 12 months leading to February 2021.

Source: Index of Private Housing Rental Prices, UK - Office for National Statistics (ons.gov.uk)

Private rental prices paid by tenants in the UK increased by 1.4% in the 12 months to February 2021. Growth in private rental prices paid by tenants in the UK has generally slowed since the beginning of 2016, driven mainly by a slowdown in London over the same period.

Rental Yields & Hotspots in Greater London
Fleet Mortgages are actively financing buy-to-let properties in Greater London

Source: Fleet Mortgages

RegionAve. Rental Yield
(Q1 2020)
Ave. Rental Yield
(Q1 2021)

Greater London

5.1%

5.0%

England & Wales

6.3%

6.3%

According to Fleet’s data, rental yields in Greater London have been relatively stagnant over the past few years and is likely to continue in this manner.

This is likely due to the saturated market already in London. This competition within London has allowed for rent prices to remain relatively stable. It also proves to be a consistent earner despite offering lower yields than other regions

How Can Fleet Help?
North London

Stuart Kay

Senior BDM
North London
07929 264379
stuart.kay@fleetmortgages.co.uk

With 25 years experience dealing with brokers and their clients, Stuart aims to provide ideas to create business and solutions to convert business.

Find out how he can help your business by calling him on 07929 264379.

James Belcher

Telephone BDM
North London
01252 931357
james.belcher@fleetmortgages.co.uk

With 4 years in Estate Agency prior to joining Fleet Mortgages, James brings an existing passion for the Buy to Let market into his role as Internal BDM.

James takes pride in working with intermediaries, discussing how to deliver the best outcomes for their clients, and bringing what Fleet Mortgages has to offer to life.

Central London

Andrea Gizzy

BDM
Central London
07377 246387
andrea.gizzy@fleetmortgages.co.uk

Andrea has numerous years of experience within the Mortgages Industry, and is CeMAP qualified.

Andrea’s criteria and product knowledge is second to none, and she prides herself on providing outstanding customer service.

Michael Maynard

Telephone BDM
Central London
01252 931355
michael.maynard@fleetmortgages.co.uk

Coming from a background of Estate Agency and New Homes, Michael has continued to learn about the property sector within Fleet Mortgages.

Having been with Fleet for nearly two years and earning his CeMAP qualification in that time, Michael is accomplished at dealing with tricky enquires from intermediaries and guiding them on our criteria to assist in getting BTL cases through to completion.

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