LendInvest Expands Into Scotland with Buy-to-Let Offering

Online property finance platform LendInvest has announced the expansion of its services into Scotland. LendInvest will offer Buy-to-Let property financing as the “Scottish property market booms.” LendInvest states that recent research shows that property prices in Scotland have soared to an 11 year high, with Glasgow reporting the fastest growing house prices in the UK.

LendInvest sharest that its current 2 year fixed rates start at 2.89% with five years starting at 3.19%. ICR assessment rate is 5% across all products, with the exception of the 5 year fixed interest product which remains at 3.6%.

Scottish borrowers will also have access to a £750 legal fee cashback offer on 5-year fixed to 75% LTV.

This most recent move comes months after the announcement that LendInvest has received £200 million in funding from the National Australia Bank for the business to expand its capacity to lend in the UK BTL market.

Ian Boden, Sales Director at LendInvest, said that Scotland has always been a priority market for LendInvest.

“For a location with such huge potential, it’s surprising that the Scottish market continues to be undersupplied by active mortgage providers,” said Boden. “Following the fantastic reception we’ve had for our BTL product so far in England and Wales, we are excited to be delivering the same high quality loans to the Scottish market.”

 

LendInvest Joins Brilliant Solutions’ Lender Panel For Buy-to-Let Mortgage Product Distribution

LendInvest, a UK-based online marketplace for mortgages, announced on Thursday it has joined mortgage club Brilliant Solutions’ lender panel in order to bring its Buy-to-Let (BTL) mortgage product distribution to a wider network of brokers. 

LendInvest claims that Brilliant Solutions is an “industry expert” in specialist mortgage products. Through this expansion of the duo’s partnership, Brilliant Solutions’ members will now enjoy a superior submission service, as well as access to LendInvest’s full BTL product range, and BTL online platform. 

LendInvest recently made a series of changes to its BTL products, including introducing additional products at 65% and 70% LTV and Cash Back contribution towards legal fees on its 75% LTV 5 year fixed rate products.”

Speaking about the partnership and joining the lender panel, Ian Boden, Sales Director at LendInvest, stated:

“With an industry-wide reputation for their knowledge of specialist loan products, Brilliant Solutions’ expertise will be a welcome addition to our mortgage distribution network. As we continue to actively expand our broker networks in the BTL space, partners like Brilliant Solutions will ensure our offering is being delivered to the customers that need them.” 

Matthew Arena, Managing Director at Brilliant Solutions, went on to add:

 “We are pleased to add LendInvest to our direct to lender mortgage club proposition and look forward to working with them to build their presence in the intermediary market. LendInvest are expanding their products all of the time and is a lender that brokers should really get to know closely.”  

LendInvest Launches Bridge to Let Product for Borrowers

UK online lending platform LendInvest, a marketplace for property finance, has launched a new “Bridge-to-Let” service for borrowers seeking to refurbish a property before exiting to a Buy-to-Let mortgage.

Currently, bridge to let loans are available for amounts from £75,000 to £750,000. Terms are up to 12 months with a max loan to value of 75% and a monthly interest rate of 0.60%.

LendInvest says these new BTL products are “available for light refurbishment of residential properties, including HMOs with a maximum of six bedrooms.”

Matthew Tooth, Chief Commercial Officer at LendInvest, commented on the new product:

“With the second anniversary of our BTL product launch in sight, we can confidently explore how we can add further value for our borrowers when building their BTL portfolios. In launching our Bridge-to-Let product, we are able to provide flexible finance that landlords need during those important early stages of a BTL investment. At LendInvest we build our products in a way that allows us to serve our borrowers at each and every stage of their project. Keeping our customer front of mind allows us to continue delivering the right products to market, at speed.”

LendInvest is a Fintech that has been profitable for quite some time – a rarety in the Fintech sector. Expectations are for the company to seek a listing on the London Stock Exchange at some point in the not so distant future.

LendInvest Partners With Mortgage Technology Expert Mortgage Brain to Bring Buy-to-Let Product to Wider Audience

UK-based marketplace lending platform LendInvest announced last week it has formed a new partnership with mortgage technology expert, Mortgage Brain, to bring its Buy-to-Let product to a wider audience of intermediaries as it seeks to continue to expand its distribution panel. 

According to LendInvest, Mortgage Brain’s first and second charge online and desktop sourcing systems – MortgageBrain Anywhere and MortgageBrain Classic, which enables brokers to source and access the best deals for their clients from the whole of the market. Its software systems also streamline the sourcing process, allowing lenders to deliver finance to those who need it at speed.

LendInvest then reported that this partnership follows recent changes to LendInvest’s Buy-to-Let product in which it dropped its headline 5 year fixed rate to 3.60% with the ICR being assessed at the product pay rate, of  3.60%. The lender also reduced its product fees to 1% for all standard property and HMO mortgages. By partnering with Mortgage Brain, LendInvest will be able to roll out its Buy-to-Let product to the Mortgage Brain’s customer base of over 22,000 intermediaries.  Speaking about the partnership, Mark Lofthouse, CEO at Mortgage Brain, stated:

“We’re delighted to have completed this partnership with LendInvest. By making its BTL product available our customers now have an even greater choice and the added certainty of being able to offer a first-class mortgage advice service that meets the individual needs of their clients.”

Ian Boden, Sales Director at LendInvest, added:

“Partnering with a market leader in optimising the loan sourcing process like Mortgage Brain, marries directly with our goals as a lender. Internally, our team work continuously to alleviate pain-points in the application process, and we strongly believe this should start at the point of search. As we ramp up the distribution of our BTL product one year on, Mortgage Brain’s extensive and diverse member-base will be a true asset.”

Scaling: Online Property Marketplace LendInvest Lends £83 Million in December

Online property lender LendInvest is reporting their best month ever in December. According to the platform, £83 million was lent for UK properties during the month. LendInvest receives the backing of both retail and professional investors.

LendInvest said the record-breaking amount of originations was fueled by several changes in their Buy to Let and Bridge products. The platform was also helped by a hiring surge in their lending team.

LendInvest added that it had secured further “significant capital investment” throughout the year to meet the increasing demand for property loans. This included the launching of a second Retail Bond on the London Stock Exchange, followed by the closing of a £150 million funding deal with Nomura and Magnetar.

Ian Thomas, Co-founder and Chief Investment Officer at LendInvest said that during a short month in terms of business days they achieved a “fantastic new record of loan originations for the business.”

“This year the team have truly gone above and beyond in ensuring we are delivering the finance our borrowers need, at speed – our focus now is keeping this momentum going into 2019.”

Since launching in 2008, LendInvest has originated over £1.7 billion in property loans for their profitable business. LendInvest said it is currently looking to fill additional vacancies in both their underwriting and BDM roles to manage the influx of loan applications.

LendInvest Sees Opportunity in Buy to Let Outside London

LendInvest, an online marketplace for mortgages, has published the latest LendInvest Buy-to-Let Index report. The quarterly BTL Indes reviews 105 postcodes in England and Wales ranking four different characteristics: Rental Price Growth, Rental Yield, Transaction Volume, Capital Value Growth.

According to LendInvest, key findings for this most recent report indicate:

  • Colchester (#1) again tops the charts as number one spot for BTL investment
  • Stockport (#2) overtakes regional leader Manchester (#3), followed closely by Leeds at #11 signaling the increasing scope of investment opportunity in the North
  • Midlands and Central England postcodes continue to climb the table as Wolverhampton (#7) and Peterborough (#8) break into the Top 10
  • South Eastern cities lose momentum as long-term table topper Luton falls to #10 place

Ian Boden, Sales Director at LendInvest, says that with Brexit looming all eyes are on the performance of the UK property market:

“This quarter has returned some interesting results. Smaller towns in both the North and Midlands are making swift gains up the table to rival the typical hot spots in each region. Stockport has taken the lead over Manchester this quarter, and Harrogate is in hot pursuit of its larger neighbour Leeds. Looking towards the center of the UK, Midlands cities Wolverhampton and Peterborough have smashed into the Top 10, joining successful regional capital Birmingham. The growing opportunity for BTL investors in these regions reflects a knock on effect of investment in these key cities.”

 

The Top 10 buy-to-let postcodes

Yield

Capital gains

Rental price growth

Transaction volume growth

Colchester

3.60%

3.61%

6.50%

-6.24%

Stockport

3.75%

6.34%

3.18%

-7.57%

Manchester

5.29%

4.26%

3.42%

-8.04%

Birmingham

4.49%

4.67%

3.44%

-7.47%

Canterbury

3.66%

7.83%

0.64%

-8.10%

Coventry

4.17%

6.36%

1.31%

-7.43%

Wolverhampton

4.15%

4.47%

2.90%

-7.20%

Peterborough

4.04%

4.02%

3.34%

-7.11%

Enfield

3.62%

3.35%

4.25%

-8.15%

Luton

3.70%

5.31%

2.17%

-7.73%

The Bottom 10 buy-to-let postcodes

 

Yield

Capital gains

Rental price growth

Transaction volume growth

East Central London

2.84%

-11.63%

2.17%

-6.54%

Llandrindod Wells

2.97%

2.56%

-8.47%

-8.72%

Slough

2.94%

-1.86%

-2.76%

-8.91%

Durham

4.40%

-4.32%

-1.53%

-6.37%

Cleveland

4.16%

-1.51%

-3.14%

-5.58%

Crewe

3.59%

-2.16%

-0.87%

-8.00%

Galashiels

3.45%

-1.72%

0.50%

-8.31%

Hull

3.90%

-4.71%

2.52%

-6.64%

Telford

3.87%

-3.14%

2.02%

-8.19%

South West London

2.93%

-1.76%

1.74%

-8.47%

LendInvest Debuts Exclusive Five-Year Fix Product Through Buy to Let Club

Following the recent changes on its marketplace lending platform, UK-based LendInvest announced the launch of an exclusive five-year fix product through the lender’s Buy to Let Club. The lender reported that the product is Designed for landlords who wish to utilize a higher fee, lower interest rate loan, and allows the borrower to leverage their cash flow.

According to LendInvest, the five year fixed rate of 2.75% is available up to 75% LTV through the distributor, with a product fee of 4.99% which can be added to the loan. Affordability is then calculated at an Interest Cover Ratio (ICR) of 140% for higher rate taxpayers; 125% for limited companies and basic rate taxpayers, at an assessment rate of 4.19% against the total gross loan amount. The mortgage is available on loans up to £500,000 for purchase and remortgages, and suitable for standard property types and HMO’s.

While sharing more details about the product, Ian Boden, Sales Director at LendInvest, stated:

We are thrilled to be working closely with Buy to Let Club to bring a product to market that’s tailor-made for portfolio landlords. We believe that the market is clearly shifting towards professional property investors who are seeking a lender that understands the dynamics of their business along with their need to manage cash flow.”

Ying Tan, Managing Director of Buy to Let Club, added:

“LendInvest has been a welcome addition to the market since its launch into Buy-to-Let loans last November. The market is in need of the innovative approach to loan provision LendInvest is adding through its use of technology to streamline the application process. It’s terrific to see the business bringing that same innovation to product design.”

LendInvest Product Changes: Removes Debenture & Reduces ICR Assessment Rates For Buy-to-Let Loans

UK-based marketplace platform for mortgages LendInvest recently announced it has removed its debenture and floating charge to its Buy-to-Let (BTL) loan product. The online lender reported that it will no longer require a debenture or floating charge on limited company applications.

According to LendInvest, as part of its platform changes, title insurance will also be available at no cost to the borrower on all remortgage cases up to £750,000, with the exception of HMO and MUFB property types. It was noted that title insurance streamlines the loan application process and provides cover for issues that regularly crop up in the due diligence process. LendInvest is also reducing the standard legal fees where Title insurance is used.

LendInvest also revealed that it will be reducing ICR assessment rates BTL loan to 5% across all of the lender’s products with the exception of the 5-year fixed interest product which remains at 4.19%. Speaking about the changes, Ian Boden, Sales Director at LendInvest, stated:

“Driving faster completion whilst entrenching a robust underwriting process is always front of mind for the team. We retain a prudent LTV and assess  each landlord’s full portfolio, allowing us to make these key changes to our application process and deliver the right loan to our borrowers at speed with this new competitive offering.”

The changes made to LendInvest’s platform follows the recent release of its latest LendingInvest Buy-to-Let Index report, which ranks 105 postcode areas around England and Wales based on the combination of four critical metrics, capital value growth, transaction volumes, rental yields, and rental price growth. The following was founded in the latest report:

  • Luton (#1) reclaims top spot for the third time since December 2016
  • Birmingham (#4) holds firm ahead of Manchester (#5) as the Midlands town presents key investment opportunity
  • Regional capitals Cambridge and Bristol break into the Top 10 (#6 and #8)
  • Inner London postcodes bounce back one year on; South East London jumps from #79 (June 2017) to #33

LendInvest Debuts First Official BTL Legal Panel Six Months After Product Launch

LendInvest announced on Thursday it has named firms JMW Solicitors LLP and Lightfoots Solicitors as its first official panel of solicitors for its Buy-to-Let product. According to the online lender, JMW Solicitors is one of the North West’s leading full-service law firms, with significant experience in handling a range of real estate finance cases for both institutional and private lenders. Lightfoots are experts in complex property finance cases and have over 30 years experience providing legal services to mortgage lenders. Both firms are experienced in dealing with introducer-led business, offering dual representation and coverage across England and Wales.

LendInvest reported that the appointments will allow LendInvest to manage a higher deal flow, while still providing quality service at speed. They also build on the business’ existing partnership with both firms, who currently sit on the lender’s panel for a number of its short-term loan products. Ian Boden, Sales Director at LendInvest, stated:

“We want to provide the best end-to-end experience for our borrowers, which is why we choose our legal partners very carefully. Having two of the leading conveyancing firms in our space on the new panel is very encouraging only six months post launch, and sets us in great stead for ramping up our deal flow for the rest of the year. We are actively seeking to work with firms that are doing things differently, and more importantly, are open to taking innovative initiatives to tackle traditionally slower processes.”

Jodi Lund, Partner at JMW Solicitors also commented:

“We are delighted to be expanding our work with LendInvest as the business continues to move from strength to strength. As a firm, we are acutely aware of the specialist requirements of the BTL investor. Turn around times are generally quicker, meaning we allocate experienced solicitors who are experts in ensuring a smooth customer journey throughout the conveyancing process.”

Joe Middleton, Partner at Lightfoots Solicitors added:

“Working alongside a lender with such a diverse product range is great, in the sense that we have the opportunity to see our relationship evolve and diversify with the business’ growth. Returning to form LendInvest’s first legal panel for it’s BTL product is a testament to our existing relationship with the lender, and our performance as a conveyancer for the company’s bridging products.”

 

LendInvest Announces Launch of Buy-to-Let Online Calculator for Intermediaries

On Tuesday, LendInvest announced the launch of its new buy-to-let (BTL) online calculator for intermediaries. According to LendInvest, the calculator is considered the latest in a series of ongoing improvements to the lender’s online calculators, aimed at making the loan application process as easy and straightforward as possible. It’s also a tool that’s been specially designed to work well in tandem with LendInvest’s fully online BTL application system.

“LendInvest’s buy-to-let calculator is designed to give the most accurate borrowing range and cover criteria for single properties, HMO’s (houses of multiple occupation) and MUFB’s (multi-unit freehold blocks). Intermediaries can use the online tool to swiftly calculate LTV, annual rental yield and the maximum gross loan amount in one single place. The calculator caters for both individual and limited company applications.”

LendInvest also reported that it launched its BTL product in late November 2017 and has already established a broker panel of more than 200 intermediaries. LendInvest BTL loans are available for amounts between £50,000 and £5 million and on terms of up to 30 years. Loans are available for professional individuals and limited companies, a maximum loan-to-value of 80% applies. Ian Boden, Sales Director at LendInvest, added:

“At LendInvest, our priority is making sure the right technology is in place to make our brokers’ lives easier. This new calculator is focused on delivering a simple, no-fuss experience for our intermediaries so they can make quick, and more importantly, accurate decisions for their clients.”

 

LendInvest Announces 200 Buy-to-Let National Broker Panel

LendInvest, announced on Tuesday the formation of a national broker panel, comprising more than 200 brokers, packagers, and other deal introducers, following the launch of its buy-to-let (BTL) product in late November 2017. The lender stated:

“LendInvest BTL mortgages are only available via intermediaries who consequently play an important role in raising awareness of the product offering among high quality, prospective borrowers. The lender’s ability to assemble a panel of over 200 brokers in the ten-week period that included the Christmas and New Year hiatus demonstrates the appetite of brokers to get behind good quality products in the market.”

LendInvest noted that its BTL loans are available for amounts between £50,000 and £5 million, and on terms of up to 30 years. A maximum loan-to-value of 80% applies. They have been priced to be highly competitive in the current specialist BTL market, and include attractive 2, 3 and 5-year fixed rate products. Loans are available for professional individuals and limited companies.

“The BTL product has been developed with portfolio landlords in mind and caters for the full spectrum of the residential property investment market. In the weeks since the product’s launch, LendInvest reported it has processed several hundred signed BTL applications and completed a number of its first cases.”

Ian Boden, Sales Director at LendInvest, added:

“It has been very gratifying to sign up so many broker and other intermediary partners in the few weeks since we launched our first BTL loans. We are hugely appreciative of their support at such an early stage. It has really allowed us to hit the ground running with the new product, confident that there is strong market demand for the sorts of loans we are offering. As the panel beds down and traction grows, we expect demand for LendInvest BTL loans to increase significantly through the year.”

LendInvest Launches Buy-to-Let Loans for Professional Landlords & Investors in England, Wales, & Scotland

LendInvest, a specialist property finance lender, announced on Thursday it has launched a buy-to-let (BTL) loan product targeted at experienced, professional property investors and landlords operating in England, Wales and Scotland. According to the platform, BTL loans are available for amounts between £50,000 and £5 million, and on terms of up to 30 years. A maximum loan-to-value of 80% applies.

“The loans are available via intermediaries. They have been priced to be highly competitive in the current specialist BTL market, and include attractive 2, 3 and 5-year fixed rate products. Loans are available for professional individuals and limited companies. The BTL product has been developed with portfolio landlords in mind and caters for the full spectrum of the residential property investment market.”

LendInvest then noted it has a fully online platform that brokers can use to apply for the BTL product for their clients. The end-to-end, paperless system was specially designed to alleviate pain points in the typical BTL mortgage process that will be very familiar to brokers and their clients, speed up applications, and provide greater administrative support to LendInvest’s experienced underwriting team. It will allow LendInvest to issue decisions (both in principle and final) very swiftly, as well as being agile and responsive to get borrowers’ deals done in as little time as possible.

In addition to benefitting from this fast and efficient online system, brokers will also continue to receive a personalized service from a named LendInvest case manager assigned to their applications. Sharing more details about the BTL mortgage process, Ian Boden, Sales Director at LendInvest, stated:

“Today we’re bringing to market a BTL product that has been created to counter the complaints and concerns we hear from brokers about the quality and accessibility of BTL loans currently on offer. Our online proposal system has been specially designed to be highly efficient, quick and easy to navigate, and lets brokers dip in and out of their clients’ applications at times that suit them. Combining these benefits with highly competitive rates, we’re confident LendInvest BTL loans will fast become a commonplace feature of the specialist lending market.”

Ian Thomas, Co-Founder & Chief Investment Officer at LendInvest, added:

“Following a successful pilot phase, we are very pleased to launch our BTL product into England, Wales and Scotland. This launch is a natural next step for LendInvest, taking us into the longer duration specialist lending space for the first time. Offering BTL loans is a critical strategic step that not only serves to address a continuing funding shortage, but takes us closer to our long-term ambition of becoming a leading whole-of-market mortgage lender.”

Big News: Citi Provides Warehouse Facility to LendInvest in Buy to Let Expansion

LendInvest, a Fintech marketplace platform for property finance, has agreed a long-term warehouse facility with Citi boosting its entry into the UK’s £40 billion buy-to-let (BTL) market. Under the terms of the financing, Citi will provide a funding line to LendInvest that will be used to finance specialist BTL loans, designed for professional, experienced landlords and investors. Initially, the BTL product will be piloted with a select group of mortgage brokers, with the loans being rolled out to the wider market over the coming months.

LendInvest’s BTL product will be supported by an online mortgage application and case management portal. The end-to-end, paperless, technology-driven system is specially designed to alleviate pain points in the mortgage process for brokers and borrowers.

LendInvest added that it now has more than £500 million of lending capital on tap from its institutional investors creating the largest institutional capital base of any UK Fintech. LendInvest currently manages more than £750 million.

LendInvest shares that Citi joins a broad range of institutional investors investing in LendInvest’s secured property loans, including Macquarie Bank, Merseyside Pension Fund and a listed UK challenger bank. Simultaneously, LendInvest allows individuals and other corporate investors to access its investment opportunities via its Online Investment Platform for high net worth and sophisticated investors, a discretionary fund, and a £500m bond program listed on the London Stock Exchange. To date, investors have funded over £1.1 billion of loans to help borrowers buy, build or renovate 4,000 UK homes.

Chris Philp, PPS to the Chancellor of the Exchequer, commented on the new arrangement between Citi and LendInvest;

“This partnership between LendInvest and Citi is a great example of major institutions getting behind UK FinTech in a serious way, and confirms London’s status as a leading destination for global FinTech investment. LendInvest’s push into buy-to-let is a great example of FinTech moving into more hard-to-disrupt markets that could be otherwise left behind by financial innovation.”

LendInvest’s BTL loans will be available on terms up to 30 years. Entry into the BTL market was described as a natural next step for LendInvest, that will accelerate the company’s volume of lending.

Christian Faes, Co-founder & CEO at LendInvest, said that institutional capital coming to his company was from some of the largest institutions in the world and a solid validation of their business model.

“This new funding line from Citi shows how our business has evolved from disruptive FinTech startup to established scale-up business as we move towards the mainstream mortgage market. Citi’s backing equips us with the firepower to expand into longer-term lending, as we take our superior technology and processes into the professional portfolio landlord market. It also gives us an opportunity to work closely with a team that is world-class in the global mortgage market and a well-established player in the securitisation space.”

LendInvest was advised by the Financial Services Corporate Finance team at EY.

CEO of Assetz Capital Stuart Law Criticizes UK Government’s Approach to Boost Housing Market

The UK housing market has struggled for years as high demand has challenged supply. The markets have reacted naturally by driving housing costs up. Home buyers and renters have struggled to keep up. London has become one of the most expensive property markets in the world.

Earlier this year as part of a policy statement regarding the housing market, Prime Minister Theresa May stated;

“Our broken housing market is one of the greatest barriers to progress in Britain today. Whether buying or renting, the fact is that housing is increasingly unaffordable – particularly for ordinary working class people who are struggling to get by. Today the average house costs almost eight times average earnings – an all-time record. As a result it is difficult to get on the housing ladder, and the proportion of people living in the private rented sector has doubled since 2000. These high housing costs hurt ordinary working people the most. In total more than 2.2 million working households with below-average incomes spend a third or more of their disposable income on housing.”

The UK government has since announced actions seeking to address the lack of supply but Stuart Law, CEO of Assetz Capital, questions the viability of current policy. Law is warning both politicians and consumers about the risk that is being taken with the buy-to-let (BTL) market and the consequences it could have on the UK housing market.

“Currently we find ourselves in a very precarious position when it comes to the housing market. The Bank of England and the UK government are currently squeezing the BTL part of market with higher stamp duty, new mortgage interest tax and extensive affordability tests for new buy to let mortgages,” said Law. “These changes have already reduced the BTL mortgage market by around 50 percent in the past year and this will lead to many fewer rental properties coming to the market, pushing up rents.”

Law points to the government’s intention of freeing up BTL properties for buyers but he believes they are going about it all wrong;

“The new changes will bring to market a lot of cheaper housing for first time buyers for sure but we’ll see capital growth slow or even go negative as supply begins to exceed demand for a few years caused by landlords selling their properties.”

Law is of the opinion that current policy will drive housing prices lower but will also slow homebuilder activity. This will also suppress GDP growth. Simultaneously, fewer rental properties will drive rental costs higher.

“The housing markets most likely to be affected by the tighter restrictions on the BTL market will most likely be London and the South East as the new taxes have highest impact there and we are already starting to see a shift out of London for BTL landlord activity and already seeing downward pressure on prices there,” added Law.

Law is concerned of larger, unintended consequences of new taxes and incentives in the midst of Brexit uncertainty;

“The bigger potential problem is that consumer and market confidence is known to be based substantially on the housing market and any price drops could be at exactly the wrong time – as Brexit kicks in, which could lead to catastrophic consequences across the board if it turns out to be a hard Brexit with bad economic consequences and now housing market feel good factor to help counter it. The Government and Bank of England has put these new measures in place far too early and far too aggressively and would be wise to moderate these plans and let the BTL market continue to grow at a more modest pace whilst putting in place real housing market supply solutions that truly deliver new stock, not the woolly housing papers we have seen to date.”

Law warns that suppressing BTL market risks the overall housing market;

“The problem is that the tough decisions on expanding cities, towns and villages around the country are guaranteed vote losers for any party due to NIMBYism and we unfortunately expect politicians to be more bothered about their own short term success than the real long term success and stability of the country.”

 

 

Today Stuart Law, founder and CEO of one of the UK’s largest and fastest growing P2P platforms Assetz Capital, issued a warning to politicians and consumers about the risk that is being taken with the buy-to-let market and the consequences it could have on the UK housing market.

 

Stuart Law commented: “Currently we find ourselves in a very precarious position when it comes to the housing market. The Bank of England and the UK government are currently squeezing the BTL part of market with higher stamp duty, new mortgage interest tax and extensive affordability tests for new buy to let mortgages. These changes have already reduced the BTL mortgage market by around 50 percent in the past year and this will lead to many fewer rental properties coming to the market, pushing up rents.

 

“One of the main Government’s intention is to free up BTL properties for first time buyers, which is obviously a pressing issue, but this isn’t the way to go about it best. The new changes will bring to market a lot of cheaper housing for first time buyers for sure but we’ll see capital growth slow or even go negative as supply begins to exceed demand for a few years caused by landlords selling their properties.

 

“Low or negative house price growth will slow housebuilder activity and supress GDP growth and renters will suffer the most perhaps as fewer rental properties available will drive rental costs up. The housing markets most likely to be affected by the tighter restrictions on the BTL market will most likely be London and the South East as the new taxes have highest impact there and we are already starting to see a shift out of London for BTL landlord activity and already seeing downward pressure on prices there.

 

“The bigger potential problem is that consumer and market confidence is known to be based substantially on the housing market and any price drops could be at exactly the wrong time – as Brexit kicks in, which could lead to catastrophic consequences across the board if it turns out to be a hard Brexit with bad economic consequences and now housing market feel good factor to help counter it. The Government and Bank of England has put these new measures in place far too early and far too aggressively and would be wise to moderate these plans and let the BTL market continue to grow at a more modest pace whilst putting in place real housing market supply solutions that truly deliver new stock, not the woolly housing papers we have seen to date.

 

“The problem is that the tough decisions on expanding cities, towns and villages around the country are guaranteed vote losers for any party due to NIMBYism and we unfortunately expect politicians to be more bothered about their own short term success than the real long term success and stability of the country.”

Property Partner Tops £50 Million in Buy-to-Let Funding

Property Partner, a buy-to-let online marketplace launched in 2015, has surpassed £50 million in funding. The peer to peer lender also shared interesting statistics regarding platform performance, including:

  • The number of investors has increased 57% to 10,361 in 12 months
  • £12.5 million of property has changed hands on platform’s resale or secondary market
  • Property Partner has seen £1.24 million in dividends returned to investors since launch, with an average rental yield of 3.5% (net of all costs)
  • 375 properties have been funded in total

Property Partner said the solid results came during a period of economic uncertainty as Brexit repercussions continued to impact the real estate market and the broader UK economy.  The Property Partner platform allows investors to buy shares in a range of properties and benefit from rental income and any capital appreciation on a diversified portfolio.

The purchase, tenancy, and management are handled by Property Partner’s in-house team, thus removing much of the hassle out of property investment. Property Partner says investors benefit from increased liquidity through its resale exchange and also have the option to exit their holding at market value after five years, at fair market value.

Investor’s holdings are “ring-fenced” in Special Purpose Vehicles (SPVs) and money held on account is protected by the Financial Services Compensation Scheme (FSCS), according to Property Partner. Property Partner’s ultimate goal is to bring to the residential property market the same level of liquidity present in equity markets.

Dan Gandesha, CEO and founder of Property Partner, called the milestone a significant achievement that underlined the enormous potential of the market they are targeting;

“Not many investors want to give up the amount of time required to invest in residential property and that’s why I think the way we make it easy and accessible is gaining a lot of attention,” said Gandesha. “Traditional landlords spend months identifying, buying, upgrading and letting properties. We can get our investors to the same point in minutes with no stress or hassle. Even in a period of relative political and economic uncertainty, growth in the numbers of investors using Property Partner has been strong, as has the level of investment.”

Property Partner reports it is constantly investing in its technology to improve the investor experience. The latest feature was the introduction of its Bid Engine, which allows investors to place bid orders for property shares in its resale marketplace at prices they are willing to pay. When the market moves in the same direction orders are filled automatically and the investor notified. The secondary market appears to be providing robust liquidity for investors as well.

 

HomeUnion Ranks Highest Growth Single Family Rental Markets. Seattle Tops the List

House Real Estate FixOnline real estate management firm, HomeUnion, has published a list of single-family rental (SFR) rental markets in the US that pinpoints the highest growth markets. According to their data, Seattle tops the list, with house rent growth of 6.7 percent.  On the other end of the spectrum is El Paso with a 7.1% decline in year-over-year rents.

Steve Hovland, Director of Research at HomeUnion, says that hot markets have some pretty obvious characteristics: strong job growth and people who are more interested in renting than buying.  Some markets that you may expect to be at or near the top, have cooled according to Hovland;

“… a degree of softness has impacted the most heated rental markets, like San Francisco and San Jose, which has pushed those metros to the bottom of our list. We’re seeing declines in rents for the most expensive Bay Area neighborhoods, as well as slowing rent growth in San Jose submarkets. However, rents remain extremely high on a relative basis in both these markets – in the $4,000 range.”

HomeUnion seeks to match investors with potential rental properties. All online.

Here is the List of Highest Growth Home Rental Markets in the US

Metro

SFR Rent

Year-Over-Year Rent Change

Seattle

$2,220

6.7%

Dallas

$1,600

5.6%

Atlanta

$1,280

4.9%

Phoenix

$1,340

4.8%

Orlando

$1,420

4.6%

Raleigh

$1,460

4.2%

Los Angeles

$2,540

4.2%

Tampa

$1,380

4.1%

San Diego

$2,520

4.0%

Oakland

$2,880

4.0%

Portland

$1,840

3.9%

Philadelphia

$1,640

3.4%

Jacksonville

$1,320

3.2%

Cleveland

$1,200

3.2%

Orange County

$3,120

2.8%

Austin

$1,700

2.8%

Boston

$2,460

2.8%

San Antonio

$1,400

2.4%

Denver

$2,060

2.3%

Memphis

$1,040

2.1%

Here is a list of markets with the lowest rent growth in the U.S.:

Metro

SFR Rent

Year-Over-Year Rent Change

El Paso, Texas

$1,160

-7.1%

San Francisco

$4,320

-5.0%

Oklahoma City

$1,140

-4.6%

Wichita, Kan.

$1,000

-4.3%

Pittsburgh

$1,060

-3.6%

Houston

$1,600

-2.8%

Miami

$2,200

-2.7%

San Jose

$3,660

-2.6%

Birmingham, Ala.

$1,000

-2.3%

Little Rock

$920

-1.9%

Baltimore

$1,820

-0.6%

New York City

$2,200

-0.4%

Milwaukee

$1,280

0.8%

Honolulu

$2,960

0.9%

Washington, D.C.

$2,120

1.3%

Chicago

$1,580

1.3%

Indianapolis

$1,160

1.4%

Albuquerque, N.M.

$1,040

1.5%

New Orleans

$1,280

1.9%

Las Vegas

$1,360

1.9%

Source: HomeUnion Research Services
*Rents are same-house, year-over-year rents.

Proplend Asks: Is it Time to Let Go on Buy to Let?

Buy-to-Let

This week, online marketplace for commercial property loans, Proplend, asked an important question: Is it time to let go on buy to let?

The website stated in its blog:

Proplend“In our article on 26th November 2015, just after the Autumn Statement, we briefly summarised the news and impact for buy to let investor community. The third budget statement of the calendar year carried with it a second wave of bad news for the private buy to let investor. After having the higher rate tax relief removed (phased in from April 2017) in the Spring budget, the Chancellor announced that new buy to let and second home purchases would be subject to a 3% stamp duty premium from April this year. This means a £175,000 property purchase will see stamp duty rise six fold from £1,000 to £6,250 and a £400,000 purchase rise from £10,000 to £22,000.

 

“These two announcements shift the buy to let goal posts and will make it difficult for investors to receive a desired return on investment. The bad news could continue as the Government has hinted at giving the Bank of England more power when it comes to limiting buy to lets, in the form of Loan to Value (LTV) restrictions on lending. This would not only affect new purchases but also those investors looking to re-mortgage their existing properties to release funds.

 

buy to let 2“The Government is under pressure to address the housing crisis and although these measures won’t increase the housing supply, they will satisfy one of their key objectives and increase the properties available to first time home buyers. They also hope that it will move the Private Rented Sector (PRS) into the hands of professional landlords ahead of predicted adoption of the Scottish licensing system.

 

“Last but not least the final pressure point on buy to let investors comes in the form of a pending rise in interest rates. A zero inflation rate continues to postpone the inevitable but a rate rise will come and it could have a dramatic effect on the investment’s profitability.”

Proplend went on to cite Telegraph Money, which suggests that buy to let investors purchasing mortgage property today are set to lose money within five years regards of where (in Britain) they invest:

“Using current house price, rental and mortgage rate data, the calculations suggest landlords who borrow a typical 75pc of a property price today will be losing money each month by 2021 in ten out of 11 British regions, including London.”

Is this considered bad news for property back investments? Proplend noted that’s not the case:

Model house with to let sign. Image shot 01/2004. Exact date unknown.“An area of property investment that was previously the reserve of professional investors and fund managers is an investment into debt rather than equity. In other words you lend someone money against their property and receive regular interest rather than buying the property yourself. By investing in debt rather than equity, you receive a regular fixed income over a fixed period of time while considerably reducing your risk and exposure to the fluctuations of the property market. Stop making mortgage interest payments and start receiving them.

 

“This has been made possible by the advancement of Peer-to-Peer Lending (P2P Lending), which enables private investors to lend directly to borrowers where their loan is secured against their property.”

 

Buy-to-Let Index: LendInvest Shares Industry Trends

LendInvest, the world’s largest P2P mortgage platform, has published its UK Buy to Let (BTL) Index tracking the changes in yields, gains and trends. LendInvest is incorporating data since 2010 to help highlight perspective.  According to the company, there persists interesting differences within regional UK markets.Christian Faes

“This quarter’s findings are surprising in their likeness with figures for the last period. If a buy to let bust really was just around the corner, we should be seeing more differentiated findings in these numbers,” explained Christian Faes, CEO of LendInvest. “Next year, we could see some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new BTL stamp duty hikes take effect. Inner London margins may narrow slightly, creating opportunities for house prices in other postcode areas, particularly those in the south of England, to better compete.”

Key findings this quarter include:

  • Northwest remains lucrative for landlords. Manchester, Liverpool, Cardiff, Coventry and Oldham come out top for rental yields, followed closely by Sunderland, Blackburn and Durham
  • London & Southeast leads house price growth. All Top 15 performing postcode areas for capital gains located in London and surrounding regions
  • Inner London takes only 18th place for rental yield, but claims 1st position for capital gains
  • Capital gains continue to track average house price. 80% of the 15 best postcode areas for capital gains also feature in Top 15 for average house price
  • Rental yields are no indication of average house price. Only 1 of the Top 15 postcode areas for rental yield also features in Top 15 for house price (i.e. Outer London)

Top Postal Codes LendInvest

“The Chancellor’s planned changes to mortgage interest tax relief and stamp duty for landlords will help to professionalise the buy to let market, for the benefit of tenants and aspiring homeowners. Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market. In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner-occupiers and first-time buyers drawn to densely populated urban area for work,” stated Faes. “Across the country, there is still no one place for market-leading yields and capital gains. 2016 could be the year of the “cross-country landlords” – professional landlords who live in one city and rent out houses in another. We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise.”

Top Postal Codes for Capital Gains LendInvst

The UK, specifically London, remains one of the hottest real estate markets in the world.  Inner London  capital gains and ROI in property continue to generate solid annual returns.  LendInvest utilized data from both Zoopla and the Land Registry to uncover the data.

Brief: Elevate Capital Picks Profile Software to Power Peer-to-Peer Lending

Elevate Capital OffersYoung buy-to-let lender Elevate Capital is using Profile Software‘s peer-to-peer lending solution. Profile has created FMS.Next, an online banking solution, that can power P2P lending platforms.

Elevate launched in early 2015 and has been slowly ramping operations. According to a statement provided by Profile, “Elevate, as an emerging player in the real estate finance sector through the P2P lending channels in the U.K., wanted to implement a solution that would ensure a smooth launch of its web-based investment and fundraising operations while safeguarding their business objectives and demanding timeplan. After an international vendor evaluation, Elevate selected  the FMS.next P2P Lending solution, due to the comprehensive suite of functionality it had available to support online alternative finance (p2p lending, crowdfunding) operations, and the technical and financial expertise of its software team.”

Profile has been around since 1990 so providing direct lending software is a new service for the international company.