Tag Archives: investment
Netherlands has best buy to let yields in European Union
The Netherlands is the best location for buy to let properties in the European Union with the highest rental yields of 6.57% as of April 2016, new research shows. Belgium and Portugal are also attractive locations for buy to let investments, taking second and third respectively in the EU buy to let league table compiled from research by international currency firm World First. Average yields were 6.47% in Belgium and 6.29% in Portugal while Sweden was at the bottom of the list with the worst yield at 2.88% with the UK with 4.28% placed 21 out of 29 countries. With an average rental yield of 6.57%, the Netherlands came top due largely to the relatively low price of buying property. The average one bedroom apartment costs just over £110,000 and a three bedroom house costs around £211,000. In the UK, the average price of a one bedroom apartment is £179,000 and a three bedroom house is £343,000. The firm suggests that Sweden has such low yields due to rental controls and a market that favours tenants and this climate will deter seasoned buy to let landlords looking for a decent return on their investment. France at 3.22% and Italy at 3.55%, already established hotspots for holiday homes, also have lower rental yields than their European neighbours and whilst they may make a great retirement or summer home for sun seekers, they may not be ideal locations for buy to let investors. The research also reveals slight differences when investing in buy to lets in city centres compared to suburbs and rural areas. For buy to let in city centres, Belgium takes the lead with yields of 6.54%. This is partly due to the dominance of Brussels as an expat destination for those working at or within the European Parliament, European Commission, Council of the European Union, and the European Council. For properties outside the city centre, the Netherlands again has highest yields at 6.78%, closely followed by Turkey at 6.65% and Portugal at 6.57%. World First research also shows that currency fluctuations in the past year have significantly impacted the affordability of property on the continent with property prices in Sweden 12% more expensive in 2016 compared to April last year. It also says that the recent weakness of the pound has also added over 11% to the price of property in the Eurozone with the average one bed apartment in the Netherlands rising from just over £117,000 to over £130,000. ‘With the recent changes to stamp duty tax for buy to let landlords, UK property investors looking to add to their portfolio might want to consider looking further afield to get the best returns,’ said Edward Hardy, market analyst at World First. ‘Our research shows that within the EU, the Netherlands, with relatively affordable property prices, holds the highest level of returns in Europe. On the other hand, countries that have policies in place to regulate rental prices like… Continue reading
Economic uncertainty affecting home lending in the UK
House purchase approvals in the UK fell 19.4% month on month in April and were down 14.9% compared to a year ago largely due to economic uncertainty within the lending market, new research suggests. However, the proportion of small deposit lending climbed to 19.1%, up from 17.1% in March as first time buyer borrowing began to fill the gap left by the buy to let sector as April saw a slowdown in house purchase approvals, according to the latest Mortgage Monitor from chartered surveyors e.surv. The reports says that economic uncertainty is playing a role in this drop, as is the new tax regime for buy to let purchases which saw a surcharge of 3% introduced on additional homes at the beginning of April. ‘The mortgage market is entering a more turbulent phase. As lenders steer for safety, three different forces are at work. First and foremost are the effects of the looming European Union referendum on confidence and certainty for the UK. Whichever way the result, financial markets could see rapid shifts in the days and weeks beforehand and especially immediately afterwards,’ said Richard Sexton, director of e.surv chartered surveyors, ‘It’s crucial for lenders to manage risks in the coming months. There now looks to be completely different interest rate speculation on the horizon and all eyes will be on the Bank of England to see the next steps taken. With some calls to cut interest rates rather than raise them, lenders will have to remain even more alert to economic conditions. And slowing growth is a further sign which is adding to doubts over economic security in general,’ he explained. ‘Despite all these ongoing risks, the underlying core of the lending market appears strong enough to weather such tests. For some first time buyers, prospects are improving and despite rising house price costs, lenders remain keen to help credit worthy borrowers get on the property ladder,’ he added. The report also shows that the proportion of small deposit lending to buyers with a deposit worth 15% or less of their properties’ total value climbed in April to account for 19.1% of overall house purchase loans granted, up from 17.1% the previous month. April 2015 saw small deposit lending comprise just 16.3% of overall house purchase approvals. April saw, in absolute terms, 10,985 small deposit loans granted, down 10% from the 12,202 granted in March. However this total was just 0.3% behind the 11,018 small deposit loans approved in April 2015. The number of completed sales to first time buyers picked up considerably in March. The latest First Time Buyer Tracker from Your Move and Reeds Rains revealed that March saw 32,500 first time buyer sales, up 47.7% from 22,000 in February. Sales to first time buyers also grew on an annual basis, rising 34.9% from 24,100 in March 2015. ‘With the buy to let sector finally stepping out of the spotlight, attention is turning to the bottom of the property ladder. This… Continue reading
Call for UK Government to do more to provide affordable homes
Councils in the UK have called on the Government to do more to tackle affordable housing as prices continue on an upward trajectory. A report on housing need in the UK published by the Association for Public Service Excellence (APSE) and the Town and Country Planning Association (TCPA) calls for urgent Government action to deliver the homes needed in the UK. It also reveals that 72% of councils think the National Planning Police Framework (NPPF) hinders building of affordable housing, 96% of councils say that their need for affordable housing is severe or moderate and 7% think starter homes will help address affordable housing. In particular they says that it is the viability test laid out in the NPPF that is hampering their ability to build social and affordable housing. However 11% of councils think that the viability test will provide the numbers that we need to tackle the biggest housing crisis of a generation, an increase of 19% compared to a year ago. ‘With 96% of councils describing their need for affordable homes as severe or moderate, and 89% worried that the extension of Right to Buy will lead to less affordable homes, it is clear that there is a real crisis,’ said Kate Henderson, chief executive of the TCPA. ‘Councils are concerned that government policy is not enabling them to deliver genuinely affordable housing. We need to have a housing strategy that provides affordable homes to all people,’ she added. The report sets out recommendations to tackle the challenges of providing the necessary housing, saying that the government need to put in place a housing strategy that provides decent homes for everyone in society. The report also recommends that councils are not forced to sell off their social housing to fund the extension of Right to Buy with the research showing that nine of 10 councils are worried that the extension of Right to Buy will lead to less housing available for social rent. ‘Our main message is we need Government to put in place a housing strategy for the nation that provides decent homes for all. Whilst efforts have been concentrated on so called affordable homes this is often not the case and these homes remain out of reach for the vast majority of people,’ said Paul O'Brien, APSE chief executive. ‘The situation is even worse for those dependent on social and genuinely affordable housing for rent. Current housing policy is in need of demolition. The time has come to start afresh by putting local authorities and new council homes at the heart of a new housing strategy,’ he pointed out. The report also showcases innovation in local government, including effective new models of housing delivery, and the report calls for the government to give back control to local authorities over their investment plans, rents and assets. This is the second housing research collaboration between… Continue reading
