Landlords You Need To Know – The Top 10 Tips

Being a landlord can be confusing, new regulations changes to the licencing system. New regulations coming in, almost it seems every week. No wander landlords in Wolverhampton and the West Midlands are feeling overwhelmed

1. Cashback is back

Certain lenders are offering cashback on buy to let mortgages.

2. Mortgage interest tax relief

Landlords are continuing to feel the pain of the cuts to mortgage interest tax relief. Which will is still being phased in until April 2020.

The 2019-20 tax year begins in April, meaning Wolverhampton landlords will only be able to claim 25% of their mortgage tax relief when filing their tax returns.

3. HMO licensing

Changes brought in last October mean Wolverhampton landlords who let shared properties in Wolverhampton or indeed any part of the country, will now fall under House in Multiple Occupation (HMO) licensing rules.

In October, the three-storey rule was removed, so any large flat or house share of five or more people now requires an HMO licence.

Local schemes – certain parts of Wolverhampton fall under the article 4 regulation

Article 4 directions restrict permitted rights either in relation to a particular area or site, or a particular type of development anywhere in the local authority’s area. When an article 4 direction is in effect, a planning application may be required for development that would have otherwise been permitted.

4. The Buy-to-let Lender trend

During such uncertain economic times, it is important for landlords to keep up to date with the buy to let mortgage market. Landlords usually need to prove the rent they’ll receive will cover at least 125% of their mortgage payments. Certain lenders depending on product and criteria request 130% – 140% interest cover ratio.

5. Energy efficiency (EPC)

The minimum energy efficiency standards were launched in April last year, what does this mean well, any renewed tenancies and all newly rented out properties have to have a minimum energy rating of E or above from April 2020 if the EPC is below E landlords will not be able to continue letting the property.

6. Letting fees ban

A ban on letting agents charging fees to tenants will come into force on 1 June 2019. From 1 June, the only costs landlords and agents will be able to charge tenants for will be: Rent.

A refundable deposit, capped at six weeks’ rent. The cap could be five weeks’ rent for properties where the annual rent is less than £50,000. A refundable holding deposit to reserve the property, capped at one week’s rent. Changes to the tenancy requested by the tenant, capped at £50. Early termination of the tenancy requested by the tenant.

Defaults by the tenant, such as fines for late rent payments or lost keys. These must be “reasonable costs”, with evidence given in writing by the landlord or agent. Issues for which the tenant is at fault, such as the replacement of lost keys. Utilities, communications services and council tax. Contract changes or termination when requested by the tenant.

7. Stamp duty surcharges

The 3% buy-to-let stamp duty surcharge appears to be here to stay

8. Brexit

You will have to search the market hard for your dream home because of Brexit lots of sellers are waiting for a certain outcome. If you wait for the market to move subject to Brexit you will pay a lot more for your first home and also the saga of Brexit and its aftermath could dare I say it go on for years.

9. Eviction rules

MPs have been debating section 21 eviction rules after campaigners claimed that the current laws can result in homelessness.

At the moment landlords can give a section 21 notice of possession to tenants to inform them they wish to take back possession of a property at the end of a fixed term. However watch this space as this could be on the cards for Wolverhampton Buy to Let landlords.

10. Client money protection

From the 1st of April, all letting agents in England will need to be members of an approved Client Money Protection (CMP) scheme. These schemes protect the rent a tenant pays to the letting agent, for example if the agent goes out of business the tenant should get most of their money back.

If you’d like a free consultation with an expert and a professional recommendation on the best mortgage for you, call Paul on 01902 213201

Wolverhampton Property and Brexit

According to Rightmove the largest property portal in Britain sooner or later there will be a Brexit rally. This is likely to affect property prices in Wolverhampton at some point during the summer. Rightmove has said asking prices on its portal jumped by an average of 1.1% an increase of £3,447 in the month to April 6th. People looking to sell or purchase their home will start to realise that whilst the Brexit extension saga continues, not much is happening and they might as well continue with their property plans.  We have a level of stability at the moment in uncertain times, but the property market has always been unpredictable and always will be.

There is the potential for property prices in Wolverhampton to fall over the short term, but once the Brexit bounce back occurs when it is finally sorted, demand will pick up. When you put the ingredients of cheap mortgage rates and a, pent – up demand together prices will pick up. The reason for mentioning this is whether you are a buy to let investor, a first – time buyer or looking for your next home it is better to conduct your purchase now whilst the market is stable. If you start the process when full confidence in the property returns, the competition will be fierce and it will cost you more money!

Speak to Paul for mortgage advice on 01902 213201

Securing A Mortgage

This time of year is busy for the property market first time buyers are entering into the market searching for their ideal home. But whilst looking for your dream home you also need to discuss your mortgage needs with an independent mortgage broker. There is no point finding your dream only to be told further down the line that you cannot raise finance on the property. You need to meet a lenders criteria, to obtain a mortgage so you can be given a decision in advance. Speak to an independent mortgage broker and get yourself mortgage ready.

Good news for first time buyers, the mortgage lenders are fighting for your business at the moment. However first time buyers need to help themselves and save a decent deposit, if you have a 10% deposit you are more likely to have a choice of lenders to select from instead of a handful if you have say 5% deposit.

Your credit score

You need to find out what your credit score is and then have a look at your credit report, most but not all lenders use Experian so if you use this one to generate your credit report it will give you a broad idea of your chances of obtaining a mortgage. If your credit score is low or the credit report does not make for light reading you can still get a mortgage. There are specialist lenders who will look at each clients mortgage case and make a sensible decision, but the interest rates will be higher and the choice of lenders will be limited. At Apple Finance we place challenging mortgages cases on a regular basis. So don’t let the thought of a impaired credit report stop you from having a conversation with us about your mortgage plans.

At this point when you have a credit report to hand, make contact with Paul at Apple Finance about your mortgage needs on 01902 213201





Can you buy property with NO deposit

A call came into the office in Wolverhampton, it was from a potential first time buyer here’s what they said –

“I want to get out of renting and buy my first property. I am nearly 30 and it seems to be nearly impossible, despite me having a good job and a decent salary”. I said okay lets discuss your circumstances and took down some basic information to build up a picture of their situation. They then said “can I have one of those 100% mortgages I have heard about because I want to keep my savings for a new car”. I replied you will need your parents to place a 10% deposit into a savings account tied to the particular bank who is offering the mortgage product, they were talking about for 3 years. To which they replied my parents have not got that sort of money to put into a savings account. Now the client did not proceed with this mortgage product but they have since applied for a mortgage with a 10% deposit of their own. What I say to clients is if you have 10% deposit then you will have a wider choice of lenders and stand a stronger chance of obtaining your dream home in Wolverhampton.

Most people want to buy their own home, and as a country we have a sense of pride in our homes and our clients have invested in property in the West Midlands for many years. In the long term, house prices should go up in line with average earnings. This includes inflation so, overall, we should expect a rise of 3 to 4 per cent approximately. This is probably the same or more than your mortgage’s interest rate, and means your capital gain on the property should match or exceed your mortgage costs. Some will say “this is a lot better than renting”. But renting is the best route for certain individuals depending, on their job and lifestyle and buying a home is not for everyone.

If you need to discuss your mortgage options then call me Paul on 01902 213201



House prices in Wolverhampton are on the up

House prices in the West Midlands rose by 5.2 per cent In the 12 months to January while those in Staffordshire went up 3.1 per cent. The West Midlands is the second fastest growing region for house prices across the country.

Wolverhampton £151,536   January 2019        January 2018   £142,764   6.1 increase

Cannock               £169,152    January 2019      January 2018   £159,973   5.7 increase

Walsall                £165,986     January 2019      January 2018   £157.785   5.2 increase

Dudley                 £171,643   January 2019        january 2018  £165,194    3.5 increase

Shropshire          £212,168                                January 2019        January 2018  £206,359   2.8 increase

Stafford              £203,618    January 2019       January 2018   £198,404   2.6 increase

The next biggest rise was in Wolverhampton, with house prices going up by 6.1 per cent over the year. Home Buyers are now paying an average of £151,536, compared to £142,764 in January last year. Wolverhampton City (yes don’t forget it is a city now.) was the only local area to boast an increase between December and January, with prices creeping up by 0.1 per cent.

Wolverhampton City was the only local area to boast an increase between December and January, with prices creeping up by 0.1 per cent. In Staffordshire, houses in Cannock now sell for an average of £169,152, a 5.7 per cent increase on the average of £159,973 in January last year. Staffords house prices rose by 2.6 per cent in 12 months. The average cost of a house in the borough is now £203,618, compared with £198,404 last year.

The average house price in the West Midlands is £184,544 compared to £190,590 in Staffordshire. House prices in Wolverhampton are below the national average of £228,147. Despite still being behind the UK average, there is reason for home owners across the region to be optimistic due to high levels of growth. The Midlands and North are showing robust house price growth: Wales showed the fastest house price growth in Britain, followed by the Midlands. So the house values in Wolverhampton are still behind the national average, well this represents excellent value for first time buyers and Buy to let investors. As always if you need mortgage advice call Paul on 01902 213201



Are the good times over for buy to let landlords

At the moment the property market In the West Midlands is showing no signs of slowing down compared to other parts of the country like the home counties and London. For buy to let investors the past 20 years have been good, the previous crash around 2008 now seems more like a slight dip. House prices in Wolverhampton are now at an all time high, things have changed for Investors however, the government has been tightening the legislation for landlords for some time and investment property prices are high.

Are the good times really over for buy to let landlords I am not so sure, I think the next few years could be unusually rewarding. If there are less buy to let landlords entering the market and certain portfolio landlords are reducing their housing stock, then sooner or later more competitively priced investment properties, will come to market.

Right now mortgage deals are looking great with a low base rate and lenders becoming generous with their products and terms. Lenders have to lend to stay in business and because the buy to let market has shrunk slightly, they are now constantly improving their mortgage products to entice investors. This combination of factors a low base rate, high lender competition and a shrinking investor pool will not be around forever. So you now need to review the lending across your portfolio and speak to Paul at Apple Finance mortgage brokers about how you can take advantage while lenders are in pain, this is your mortgage gain.  01902 213201


Wolverhampton where homes are affordable

The property market in Wolverhampton and the whole of the midlands needs first time buyers, at the moment there are plenty of first time buyers around. A couple were in our Wolverhampton office the other day and they commented “ We are so glad you can arrange a mortgage for us but are there any properties out there at the moment”  To which I replied “ You will have to search the market hard for your dream home because of Brexit lots of sellers are waiting for a certain outcome”

They then replied shall we wait, I said ” If you wait for the market to move subject to Brexit you will pay a lot more for your first home and also the saga of Brexit and its aftermath could dare I say it go on for years”. I also added “First time buyers are now the majority purchasers in the property market place the first time since 1995, mortgage rates are low conditions are good”

The top 10 most affordable postcodes are:

    1 WV2 – All Saints, Wolverhampton = £101,617

    2 B19 – Birchfield, Birmingham = £111,711

    3 WS2 – Pleck, Walsall = £113,297

    4 B6 – Aston, Birmingham = £114,364

    5 WV1 – City Centre, Wolverhampton = £114,565

    6 DY2 – Town Centre, Dudley = £117,328

    7 WV13 – Willenhall, Walsall = £119,398

    8 WS3 – Bloxwich, Walsall = £119,488

    9 B7 – Nechells, Birmingham = £119,958

    10 B21 – Handsworth, Birmingham = £119,968

My name is Paul from Apple Finance contact me for a no obligation independent review of your mortgage finances on  01902 213201

Looking for a mortgage

Looking for a mortgage then make sure that you speak to a Independent mortgage broker who helps first time buyers and clients looking to remortgage. Who specialises in buy to let and commercial mortgages.  Contact  Paul on 01902 213201

The Brexit Property Crash

What happened to the terrible – terrible Wolverhampton property crash due to Brexit?  Sorry it never happened. Look at the figures, and they show a pretty stable housing market. The Halifax index is up 0.8 per cent over the past 12 months, the Nationwide index up 0.1 per cent and the Department for Communities and Local Government’s index up 2.5 per cent. Transactions in the last quarter of 2018 were 0.8 per cent higher than a year earlier.

People selling their properties in Wolverhampton and the West Midlands in general are not dropping their prices by massive amounts as previously predicted by the media. (London based media). No one has satisfactorily explained why the housing market should suffer from Brexit, unless you believe George Osborne’s pre referendum forecast that unemployment would surge by between 500,000 and 800,000 in the event of a Leave vote.

Will people stop moving house or buying property in Wolverhampton just because we are no longer in the EU? If you do have any questions about obtaining a mortgage to buy a property or re-mortgaging your current property get in touch and we can have a chat.

More first time buyers now than the last 20 years

First time buyers make up the biggest part of the property market in the UK for first time in over 20 years. First time buyers reached 372,000 in 2018, accounting for the majority of home purchases for the first time since 1995. This is a rise of 2% in the last 12 months, continuing an upward trend over the last seven years. Although growth in 2018 was at a slower rate than 2017 when it was 7.6% and 2016 when it was 9%, first time buyers overall have increased by 92% from an all-time low of 192,300 in 2008.

First time buyers now account for just over 50% of all house purchases with a mortgage, an increase from 38% a decade ago. The average price paid for a typical first home has gone up by 39%, from £153,030 in 2008, to £212,473 in 2018, and the average deposit has increased by 57% from £21,133 to £33,252 over the same period. Meanwhile, the average deposit put down by a first time buyer was 14% of the purchase price in 2008 at £21,366, jumping to 20% in 2009, the highest over the last decade. In 2018 the average deposit has come down to 15% of the purchase price, although the average property price has continued to increase.

Terraced houses, closely followed by semi-detached properties have continued to be the first-time buyer’s home of choice over the past decade, making up 67% of mortgages for first homes in 2018. New buyers coming on to the Wolverhampton property market are vital for the overall wellbeing of the housing market, and the continued growth in first time buyers shows a healthy movement in this area, despite a shortage of homes and the ongoing challenge of raising a deposit.

Last year was the first year that first time buyers accounted for the majority of the market since 1995, which shows that the factors reducing some of the associated costs, such as continued low mortgage rates and stamp duty, are supporting the increasing number of people taking their first step on to the property ladder. So what are you waiting for first time buyers of Wolverhampton if you are unsure about raising mortgage finance for your first home because you are self employed or have credit issues contact Paul at Apple finance on 01902 213201 for free mortgage advice.