B2L sector needs more innovation to keep thriving - Mortgage Strategy
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AppId is over the quota AppId is over the quota 2 July 2012 | By Phil Rickards, Head of sales, BM Solutions The rental sector is one of the few parts of the property market that continues to flourish despite the instability of the UK and European economies. Demand for rented property remains high and there is little reason to foresee any significant change to this sector. The rental market is becoming an important part of the UK’s housing landscape, as highlighted in a report by Halifax, which suggests half of 20 to 45 year olds think Britain will become a nation of renters within a generation. A recent report by BDRC for BM Solutions shows that in Q1 2012, the year-on-year comparable outlook from landlords remains stable and generally upbeat. But landlords do feel that the prospects for rental yields are weakening, even though Q1 yields rose slightly to 6.2% on average. From a lending perspective, the growing number of new entrants to the buy-to-let market is good news competition in the market place. However, 57% of landlords surveyed feel that the market would benefit from greater competition so there is clearly more to do here. Buy-to-letgross lending totalled £3.7bn in the UK in Q1 2012 - 11% of the £33.6bn of total gross mortgage lending, done over the same period. The rapid recovery of the buy-to-let sector is highlighting the need for continued innovation in the sector. High service standards, innovative products, and quick response and turnaround times are needed to sustain growth levels. The BM Solutions/BDRC research also revealed that buy-to-let borrowers tend to agree that lenders do not properly consider their individual circumstances as a landlord. A further three-quarters agree that the buy-to-let market needs greater innovation. We work closely with intermediaries and landlords when devising our product ranges and services, and use feedback to make changes to our service proposition. Growth of buy-to-let The BDRC/BM Solutions report shows that there is a continued trend in landlords looking to increase the size of their portfolios rather than reduce this year. Of them 15% expect to increase their portfolio in the next six months and this figure rises to 20% in the next 12 months. In the past three months landlords have bought an average of 1.8 properties, while those divesting sold on average 1.4 properties. And 72% of landlords carry borrowing on all or some of their letting portfolio, with an average of around eight individual buy-to-let loans held. Those with no borrowing or a mix of properties tend to have a more profitable business model. The findings of the report reveal that outright ownership continues to be concentrated at the smaller end of the market, while larger landlords tend to be more highly leveraged. And while there are tentative signs of a recovery in average rental yields in Q1 2012, they are still some way off the 6.7% seen in Q3 2011. It remains the case that portfolio landlords achieve the highest yields, with interesting regional variations also emerging. In Q1 2012, the North-West commanded the highest rental yield. If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat!function(d,s,id)var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id))js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);(document,"script","twitter-wjs"); View the original article here
http://bit.ly/NNBLz1
AppId is over the quota AppId is over the quota 2 July 2012 | By Phil Rickards, Head of sales, BM Solutions The rental sector is one of the few parts of the property market that continues to flourish despite the instability of the UK and European economies. Demand for rented property remains high and there is little reason to foresee any significant change to this sector. The rental market is becoming an important part of the UK’s housing landscape, as highlighted in a report by Halifax, which suggests half of 20 to 45 year olds think Britain will become a nation of renters within a generation. A recent report by BDRC for BM Solutions shows that in Q1 2012, the year-on-year comparable outlook from landlords remains stable and generally upbeat. But landlords do feel that the prospects for rental yields are weakening, even though Q1 yields rose slightly to 6.2% on average. From a lending perspective, the growing number of new entrants to the buy-to-let market is good news competition in the market place. However, 57% of landlords surveyed feel that the market would benefit from greater competition so there is clearly more to do here. Buy-to-letgross lending totalled £3.7bn in the UK in Q1 2012 - 11% of the £33.6bn of total gross mortgage lending, done over the same period. The rapid recovery of the buy-to-let sector is highlighting the need for continued innovation in the sector. High service standards, innovative products, and quick response and turnaround times are needed to sustain growth levels. The BM Solutions/BDRC research also revealed that buy-to-let borrowers tend to agree that lenders do not properly consider their individual circumstances as a landlord. A further three-quarters agree that the buy-to-let market needs greater innovation. We work closely with intermediaries and landlords when devising our product ranges and services, and use feedback to make changes to our service proposition. Growth of buy-to-let The BDRC/BM Solutions report shows that there is a continued trend in landlords looking to increase the size of their portfolios rather than reduce this year. Of them 15% expect to increase their portfolio in the next six months and this figure rises to 20% in the next 12 months. In the past three months landlords have bought an average of 1.8 properties, while those divesting sold on average 1.4 properties. And 72% of landlords carry borrowing on all or some of their letting portfolio, with an average of around eight individual buy-to-let loans held. Those with no borrowing or a mix of properties tend to have a more profitable business model. The findings of the report reveal that outright ownership continues to be concentrated at the smaller end of the market, while larger landlords tend to be more highly leveraged. And while there are tentative signs of a recovery in average rental yields in Q1 2012, they are still some way off the 6.7% seen in Q3 2011. It remains the case that portfolio landlords achieve the highest yields, with interesting regional variations also emerging. In Q1 2012, the North-West commanded the highest rental yield. If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat!function(d,s,id)var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id))js=d.createElement(s);js.id=id;js.src="//platform.twitter.com/widgets.js";fjs.parentNode.insertBefore(js,fjs);(document,"script","twitter-wjs"); View the original article here
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