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?
  • During the final quarter of the year, in the North, 86% of purchase transactions came from houses, of which 63% were terrace housing. Only 11% of purchase transactions came from flats with the remaining coming from HMO and bungalow properties.
  • Are Landlords buying or re-mortgaging?
  • Landlords in the North are more likely to re-mortgage properties during the final quarter of the year. 65% Of mortgages advanced during this period 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 7.9% in Q4 2020, down from 9.4% in the same period in 2019 the largest fall in England & Wales. For comparison, the average fall in rental yields in England & Wales was 0.3% in the same period.  Yorkshire & Humberside and the North Western regions saw much smaller falls in yields of 0.1% and 0.4% respectively.
  • The countercyclical nature if BTL
  • We learned from the Great Financial Crisis that rental demand is not as susceptible to a recession than property ownership. During that recession households opt for a shorter-term financial commitment offered by renting rather than a longer-term commitment of property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Anticipate a change in the way we work
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres (such as London) as tenants are no longer tied to a property near the office, and may look further afield where they might get more property for their money, albeit we have not seen any evidence to suggest this is becoming a trend.

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.

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.
Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

According to data from the ONS, the North East shows the slowest levels of rental inflation in North increasing by 1.2% over the past 12 months. By contrast, Yorkshire and The Humber and the North West are seeing a demand surplus in rental properties which explains the above average growth in rental price compared to the rest of England.

For comparison,  the largest annual rental price increase in the 12 months to November 2020 was in the South West, at 2.3%, unchanged since October 2020.

In the 12 months to November 2020, rental prices for the UK excluding London increased by 1.5%, down from 1.6% in the 12 months to October 2020. London private rental prices increased by 1.1% in the 12 months to November 2020, up from 0.9% in 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 (Q4 2019) Ave. Rental Yield (Q4 2020)

North East

9.4%

7.9%

North West 7.0% 6.6%
Yorkshire & Humberside 7.0% 6.9%

England & Wales

6.0%

5.7%

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

According to data from Fleet Mortgages, the average rental yield of properties financed in the northern regions are higher than the average of the rest of England & Wales. By comparison, the lowest region of rental yields can be seen in Greater London and the South East at 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?
  • In the Midlands, 83% of purchase transactions came from houses, of which terrace houses take up 51%. Flats are far less popular, accounting for just 13% of properties owned by landlords in the Midlands.
  • Are Landlords buying or re-mortgaging?
  • Re-mortgaging properties are currently on an upward trend in England & Wales. According to Fleet data, the Midlands is no different with 60% of completed cases being re-mortgages and only 40% being purchased during Q4 of 2020.
  • How are Landlords buying investment properties in the Midland
  • 61% 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 6.9% and 6.4% respectively in Q4 2020. For comparison, the average rental yields in England & Wales 5.7% in the same period.
  • The countercyclical nature of BTL
  • We learned from the Great Financial Crisis that rental demand is not as susceptible to a recession than property ownership. During that recession households opt for a shorter-term financial commitment offered by renting rather than a longer-term commitment of property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Anticipate a change in the way we work
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres (such as London) as tenants are no longer tied to a property near the office, and may look further afield where they might get more property for their money, albeit we have not seen any evidence to suggest this is becoming a trend.

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.

Index of Private Housing Rental Prices

According to data from the Office of National Statistics (ONS), Midlands, both the East and West Midlands shows high levels of rental inflation at 2.2%, much higher than the average inflation in England across all regions 1.4%.

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

Rental Yields & Hotspots in The Midlands

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

RegionAve. Rental Yield
(Q4 2019)
Ave. Rental Yield
(Q4 2020)

East Midlands

6.7%

6.9%

West Midlands 6.9% 6.4%

England & Wales

6.0%

5.7%

East Midlands was one of the only two regions to see an increase in rental yields in England and Wales during the same period in Q4 2019.

This is impressive considering East Midlands also ranks joint second in terms of highest rental yields. However, it should be noted that compared to 6 months ago, East Midlands saw rental yields of just 4.4%, one of the lowest across all regions at the timer.

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?
  • It appears Landlords in East Anglia are buying houses 64% of purchase transactions, of which 38% are terrace housing. The next most popular properties in East Anglia are flats 31%.  Fleet Mortgages have received very few applications for HMO’s from the East.
  • Are Landlords buying or re-mortgaging?
  • Data suggests that Landlords from East Anglia are more likely to re-mortgage 66% than purchase 34%.   This trend very similar to what we observed pre-COVID-19.
  • How are Landlords buying investment properties in East Anglia?
  • 56% of all purchase transactions came from limited company special purpose vehicles (SPV), a popular way of buying investment properties at present time. The percentage of landlords that current buys properties using a Limited Company structure is significantly higher than pre COVID-19.
  • 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 5.3% in Q4 2020, down from 5.7% in the same period in 2019. This puts East Anglia below the average for rental yields in England & Wales (5.7%). This is not surprising as East Anglia has seen very stagnant rental yields in recent years.
  • The countercyclical nature of BTL
  • We learned from the Great Financial Crisis that rents are not as susceptible to a recession than property prices.  This does not come as a surprise as occupants opt for a shorter-term financial commitment offered by rent than the cost and longer-term commitment that comes with property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand as a result of higher unemployment, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Changing working environments
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres as tenants are no longer tied to a property near to the office, and may look further afield where they might get more value for their money, albeit we have not seen any evidence to suggest this is becoming a trend. 

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.
 
Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

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

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 South East where rental prices increased by 0.9% in the 12 months to November 2020. This was followed by London, at 1.1%.

In the 12 months to November 2020, rental prices for the UK excluding London increased by 1.5%, down from 1.6% in the 12 months to October 2020. London private rental prices increased by 1.1% in the 12 months to November 2020, up from 0.9% in 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 (Q4 2019) Ave. Rental Yield
(Q4 2020)

East Anglia

5.7%

5.3%

England & Wales

6.0%

5.7%

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

East Anglia saw below average levels of rental yield inflation in 2020 at just 5.3%, 0.4% below the average of England & Wales. Which suggests supply outstrips demand for rental properties.

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

Regional Analysis

  • According to data from Fleet, rental yields in the South West average 5.5% in Q4 2020, marginally up from 5.4% a year earlier.
  • The South West sees the highest level of rental price increase (2.3%) over the 12 months leading to November 2020. This level is far above the average seen in England and Wales at 1.35%.
  • Furlough support and eviction moratorium may be postponing the full effect of the pandemic on rental demands and yields.
 

Key Takeaways

  • What type of properties are Landlords in the South West buying?
  • It appears Landlords in the South West are buying houses (74% of purchase transactions) rather than flats (19%).  The remaining 7% are split between bungalows and HMOs.
  • Are Landlords buying or re-mortgaging?
  • Landlords in the South West and Wales are more likely to re-mortgage properties during the final quarter of the year. 72% Of mortgages advanced during this period was for the purpose of re-mortgaging a buy-to-let property.
  • How are Landlords buying investment properties in the South West?
  • 38% of all purchase transaction came from landlords using a limited liability company to purchase a property, whilst 62% came from private investors. This goes against the trend compared to the rest of England where it is generally more popular to use a limited company to buy 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 5.5% in Q4 2020, slightly up from 5.4% in the same period in 2019. This puts the South West marginally below the average rental yield for properties in England & Wales 5.7%.
  • The countercyclical nature of BTL
  • We learned from the Great Financial Crisis that rental demand is not as susceptible to a recession than property ownership. During that recession households opt for a shorter-term financial commitment offered by renting rather than a longer-term commitment of property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Anticipate a change in the way we work
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres (such as London) as tenants are no longer tied to a property near the office, and may look further afield where they might get more property for their money, albeit we have not seen any evidence to suggest this is becoming a trend.

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 South West & Wales compare?
  • The South West and in particular Wales, attracts large numbers of students every year with cities such as Cardiff and Swansea seen as major hubs for students in Wales – During the 2018-2019 academic years, Cardiff and Swansea housed 53,000 students between them.
  • The South West sees rental yields similar to that of the average of England & Wales and was one of the few regions which saw an increase in yields over the 12 months leading to December 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 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

According to the latest data from the Office of National Statistics (ONS), the South Western areas show the most promising levels of growth in rental prices. Looking at the graph, we can see that rental inflation in the South West reached 2.3% during the 12 months to November 2020.

 

This suggests demand for rental properties outstrips supply in the South West relative to England as whole.

In the 12 months to November 2020, rental prices for the UK excluding London increased by 1.5%, down from 1.6% in the 12 months to October 2020. London private rental prices increased by 1.1% in the 12 months to November 2020, up from 0.9% in the same period.

Rental Yields & Hotspots in the South West

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

Source: Fleet Mortgages

RegionAve. Rental Yield (Q4 2019) Ave. Rental Yield (Q4 2020)

South West

5.4%

5.5%

England & Wales

6.0%

5.7%

The majority of properties financed by Fleet in the South West 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 5.5%, marginally up from 5.4% in Q4 2019. The South West was one of only 2 regions that saw an increase in rental yields compared to the same period in 2019.

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 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?
  • It appears Landlords in the South East are buying houses (75% of transactions), followed by flats (22%).  Fleet Mortgages have received very few applications for bungalows and HMO’s in this region.
  • Are Landlords buying or re-mortgaging?
  • Not too dissimilar to the trend observed across the rest of the country Landlords are more likely to re-mortgaging their portfolios during the final quarter of the year.  In general, industry data points to heightened levels of re-mortgaging during pre COVID-19.  This continued in Q4 with 72% of the mortgages Fleet advanced during this period being for the purpose of re-mortgage.
  • How are Landlords buying investment properties in the South East?
  • 49% of purchase transactions in the South East were done through Limited Liability Companies 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 2019. Rental yields in the South East are below the average in England & Wales.
  • The countercyclical nature of BTL
  • We learned from the Great Financial Crisis that rental demand is not as susceptible to a recession than property ownership. During that recession households opt for a shorter-term financial commitment offered by renting rather than a longer-term commitment of property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Anticipate a change in the way we work
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres (such as London) as tenants are no longer tied to a property near the office, and may look further afield where they might get more property for their money, albeit we have not seen any evidence to suggest this is becoming a trend.  More specific to the South East, if commuters (to London) continue to work from home we may see greater demand for rental properties outside the Capital, in particular the Home Counties.  This would put upward pressure on rental demand and one can anticipate renal yields to increase.  This would be good news for landlords in the South East.

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 South East compare?
  • The South East attracts large numbers of students every year with Hampshire alone housing four universities.
    The South East is a consistent earner for buy-to-let investment yields and provides stability in a portfolio.
  • The South East has seen the most stable levels of rental yields outside of London and currently see yields of 5.0%.
  • 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.
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 just 0.8% in the South East.

 

England & Wales saw an average rental price inflation of 1.35%. 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 post COVID-19 as office workers decide to move from London to Home Counties as early indications sugges.

In the 12 months to November 2020, rental prices for the UK excluding London increased by 1.5%, down from 1.6% in the 12 months to October 2020. London private rental prices increased by 1.1% in the 12 months to November 2020, up from 0.9% in 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 (Q4 2019) Ave. Rental Yield (Q4 2020)

South East

5.3%

5.0%

England & Wales

6.0%

5.7%

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 5.0% during the final quarter of the year. To give a comparison, the highest level of inflation was in the North which saw rental yields of 7.9% 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

Regional Analysis

  • According to data from Fleet, rental yields in Greater London averaged 5.0% in Q4 2020, a drop of 0.1% in the same period in 2019.
  • London’s rental prices and yields remain largely unchanged during the Covid-19 Pandemic due to its saturated market.
  • Furlough support and eviction moratorium may be postponing the full effect of the pandemic on rental demands and yields.

Key Takeaways

  • What type of properties are Landlords in Greater London buying?
  • In Greater London according to Fleets data, houses 53% and flats 46% are the most popular property type amongst landlords, with the remaining 1% consisting of HMOs and bungalows.
  • Are Landlords buying or re-mortgaging?
  • Re-mortgaging properties are currently on an upward trend in England & Wales. According to Fleet data, Greater London is no different with 77% of properties being re-mortgaged and only 23% being purchased.
  • How are Landlords buying investment properties in Greater London?
  • 54% of purchase transactions come from Special Purpose Vehicles (SPV) Limited Companies, a popular way of buying investment properties at present.
  • What rental yields can a Landlord expect when buying a property in greater London?
  • 54% of purchase transactions come from Special Purpose Vehicles (SPV) Limited Companies, a popular way of buying investment properties at present.
  • The countercyclical nature of BTL
  • We learned from the Great Financial Crisis that rents are not as susceptible to a recession than property prices.  This does not come as a surprise as occupants opt for a shorter-term financial commitment offered by rent than the cost and longer-term commitment that comes with property ownership.
  • Early indications are promising
  • Whilst the economic backdrop paints a bleak picture and negative outlook for rental demand as a result of higher unemployment, early indications are more promising with no suggestion of sharp falls in rental yields.  Perhaps this is as a result of pent up demand and more households being formed as a result of the lockdown. How sustainable this is we shall find out over the Summer and Autumn.
  • Short term lets
  • If weakness in the tourism industry persists then short term lets could enter the wider rental market and increase rental supply which in turn puts downward pressure on rents and rental yields. However, a year of staycationing may fill the tourist gap.
  • Changing working environments
  • This crisis taught office workers that it is possible to work from home.  This could lead to further structural changes in rental demand in urban centres as tenants are no longer tied to a property near to the office, and may look further afield where they might get more value for their money, albeit we have not seen any evidence to suggest this is becoming a trend. 

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 London Fair?
  • London attracts the large numbers of students every year with 33 established universities located in the Greater London area, cumulating to over 500,000 university students during the 2019 academic year.
  • London is among the most reliable buy-to-let investments areas with average yields at 5.0%, this yield has remained largely unchanged over the past 5 year.
  • Competition within the student 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. 
Index of Private Housing Rental Prices

Rental Inflation Last 12 Months

According to data from the Office of National Statistics (ONS), London sees one of the smallest increases in housing rental prices compared to other regions in England & Wales.
 
Having a housing rental price inflation below the the nation’s average of 1.3%, suggests that the demand for rental properties in London is currently outstripped by its supply.
 

As a comparison, The lowest annual rental price growth was in the South East where rental prices increased by 0.9% in the 12 months to November 2020. This was followed by London, at 1.1%.

In the 12 months to November 2020, rental prices for the UK excluding London increased by 1.5%, down from 1.6% in the 12 months to October 2020. London private rental prices increased by 1.1% in the 12 months to November 2020, up from 0.9% in 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
(Q4 2019)
Ave. Rental Yield
(Q4 2020)

Greater London

5.1%

5.0%

England & Wales

6.0%

5.7%

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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