This recent data has highlighted that 22 per cent of all buy-to-let business lending in the first quarter of 2013 was given to first-time landlords, a figure which has been rising since the middle of 2009.

This has been in conjunction with the sharp fall in non-rental housing demand since the global financial crisis hit in 2008, with more and more households choosing to opt for shorthold leases rather than committing to a long-term mortgage.

The third quarter of 2012 saw the highest level of buy-to-let business from this group, reaching 24 per cent, meaning that the figures have remained consistent over the past six months.

Paragon’s report further revealed that optimism in the sector has been at its highest in over three years, with 30 per cent of landlords saying that they were positive about their future portfolios. This level of positivity has not been reached since the middle of 2010.

The optimism within the market is also extending to buy-to-let investors, primarily led by low void periods and high rental yields being seen in the sector. In the first three months of the year, the average void period was 2.8 weeks, a drop from the three weeks average seen in the previous quarter, highlighting a star rise in the demand for rental sites. Furthermore, the average yield in the sector now stands at 6.2 per cent, proving healthy returns for potential investors.

The landlord market seems to be on a trend, especially with an increase in the number of private investor landlords who own between one and five properties. Director of mortgages at Paragon John Heron said: “These landlords have access to more flexible finance and are able to agree deals much more quickly.”

Mr Heron went on to state that investor landlords are further attracted to the market because they have less to lose. As many of them will have other assets such as bonds and gilts, they are much more resistant to any changes that may occur in fluctuating trends, and thus they can handle any potential dips in the sector.

Regardless of their portfolio, all landlords should make sure that they are fully protected with comprehensive landlords insurance.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

The new report highlights that by the end of the first three months of the year, 13.4 per cent of the £1.2 trillion that was lent through mortgages was buy-to-let lending. This is a rise from 13 per cent seen in the final quarter of 2012. Furthermore, building societies and banks were able to loan £4.2 billion to landlords in the same period, representing 12.4 per cent of all mortgages, and marking a 13 per cent rise compared to last year. In total, buy-to-let mortgages in the UK now stand at £166 billion.

All of this borrowing has meant that landlords in the UK have been able to buy 17,730 new houses, totalling £1.9 billion. This is the strongest performance for any quarter since the global financial crisis hit in 2008.

Industrial analysts have suggested that the Funding for Lending scheme, which launched in August 2012, has contributed towards these positive figures. With the buy-to-let mortgage rate falling from an average of 5.09 per cent to 4.28 per cent, it is therefore no surprise that lending has increased to landlords insurance policy holders, who are trying to make the most of the great rates and wide accessibility of mortgages available.

David Whittaker, managing director of Mortgages for Business, said: “The economy may be firing blanks but the buy-to-let market is going great guns. High yields, stagnant property prices and improved financing options are encouraging investors to add to their portfolios.

“Landlords are understandably trying to take full advantage of the returns on offer. The Funding for Lending scheme too has helped by loosening the supply of credit to lenders, and they are passing the savings on to investors.”

The CML report further revealed that more landlords were controlling their mortgages well, with there only being 1.4 per cent in arrears by 2.5 per cent of a loan’s outstanding balance. Furthermore, only 8,000 houses were repossessed in the quarter, compared to 9,600 this time last year.

It is hoped that the recently launched Help-to-Buy scheme will also contribute towards these positive trends. 

Under new legislation, all landlords insurance policy holders will have to make such a check on potential tenants or they could be fined thousands of pounds.

Landlords will have to check both the visas or passports of tenants before they move in, especially if a single property will have multiple tenants from different backgrounds.

The main aim behind the scheme is to make landlords active virtual agents of the UK Border Agency, but there are still doubts on whether property owners will be able to prove if the documents are real or not. Furthermore, the process must be properly enforced in order to be proved a success.

This news came in conjunction with an announcement that employers would also face heftier fines if they took on an illegal immigrant in their workforce.

The changes are part of a wider new immigration law. New changes announced will also limit the number of benefits that migrants from Europe can receive in the UK, charge migrants who use NHS services, and ensure that people live in a specific area for two years before they can receive social housing.

Furthermore, criminals who claim to live in the UK because their family is also there, will have their claims weighed against how serious their initial crime was.

Richard Lambert, chief executive officer of the National Landlords Association, said to AOL: “Every landlord should thoroughly reference a tenant prior to offering a tenancy; this is standard best practice which safeguards the landlord’s business.

“Tenant checks should include not only an identity check, as suggested, but also whether the tenant has any County Court Judgments, possible aliases and include references from their employer and a previous landlord. Such checks should highlight any immigration irregularities.”

It is estimated that two million buy-to-let landlords will be affected by these new plans. Full details on what they need to do so they will not be persecuted are yet to be revealed.

The changes come just a year after last year’s Queen’s Speech, that promised there will be laws put in place which would reduce regulation on businesses in the private sector, even though all this new extra red tape has now been introduced.

As more and more parents choose to live closer to a favoured school, tenants will be willing to pay higher rents, if it means that their child gets into their school of choice. According to website Rentoconomy, the rent of a two-bedroom home in London will cost 30 per cent higher if it is situated close to a high-ranking institution. Furthermore, property website PrimeLocation suggests that rents are 7.8 per cent higher in the top 50 school areas, than anywhere else in the UK.

Landlords insurance policy holders will often choose to charge higher rents in such areas because the price of a property is in fact 35 per cent higher.

Analysts do encourage landlords not to mention a specific school however when they are advertising their property, because they cannot guarantee that tenants’ children will actually get into said school.

According to the Telegraph, James Wyatt, director of Barton Wyatt estate agency in Surrey, said: “Parents will rent whatever they can within the school boundary, which leads to a massively distorted market where rents can increase by 40 per cent plus. It’s wonderful for the landlords working in the area.”

Other factors that influenced high rents included the location of a tenant’s job and various transport links. If an individual works in Canary Wharf for example, they will want to live anywhere near the Jubilee Line, hence why areas such as St John’s Wood and Canada Water have become firm favourites. This means that landlords can charge higher premiums in such places. Other major transport hubs in the capital city include Mayfair and Hyde Park, according to a recent Savills report.

The Savills research suggested that properties that are within a five-minute walk of a hotspot would come with an extra 15 to 20 per cent rise on its price tag.

Neal Hudson from Savills Research added: “The importance of connectivity cannot be understated. This is particularly true in London, where renting has grown by 86 per cent over the past 10 years and 52 per cent of renters are under 35, so ease of access to work during the day, and to entertainment at other times is a primary consideration. As a result, they will pay a premium for proximity to public transport.”

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

In order to encourage economic growth, the £80 billion Funding for Lending scheme, which was launched in August 2012, has been extended by the coalition government so that businesses can pass on cheap loans and mortgages onto landlords insurance policy holders.

The scheme originally aimed to offer cheap credit to small and medium sized enterprises (SMEs), with a government guarantee that every pound which was lent to such businesses would mean that banks could receive £10 of cheap loans from the Bank of England. However, the scheme has been widened so that these small enterprises can now lend the money onto landlords, in order to encourage growth in the housing market.

This news comes after it was recently announced that the UK narrowly missed falling into a triple-drip recession, with the economy growing by 0.3 per cent in the first three months of 2013.
 

According to the Financial Times, Rob Wood, chief UK economist at Berenberg Bank, said: “It could be a no-brainer. Lend to a landlord … and get ten times that lending back as essentially free funding, then recycle some of that back out again on mortgages or BTL (buy-to-let).”

Ministers hope that these changes will encourage landlords to increase their property portfolios, which will not only develop the market, but will pump further money into a struggling economy. Tenants may then be able to benefit from cheaper rental rates, alleviating pressure from the benefits changes, under the recently launched Universal Credit system.

However, these new plans have faced criticism from industry experts, who suggest that money has been injected into mortgages for those who already benefit from large equity stakes. Campaigners have argued that the money should have been spent instead on offering better rates for business mortgages or for first time home buyers.

Chancellor George Osborne added: “We all know there are no easy answers to problems built up over many years, and I can’t promise the road ahead will always be smooth, but by continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future.”

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

Areas in the North of England such as Manchester, Hull, Nottingham and Blackpool have benefited landlords insurance policy holders greatly due to lower house prices and an increase in rental demand in recent years. However, topping the list was Southampton, which has the highest rental yield of 7.82 per cent on average, due to the average property in the area costing only £138,311 and the average rent equating to a hefty £901 a month.

Other locations that made up the top five are Blackpool, Kingston upon Hull, Manchester and Nottingham, in that ranking. Generally, seaside towns proved to be the best bet for landlords. The HSBC report highlighted that 17 out of the 50 best areas were on the coast, with Blackpool leading the pack at a 7.81 per cent yield. Property prices may be slightly higher than in northern cities, but high rental rates make these a worthy investment for property owners. Other significant coastal towns include Bournemouth, Brighton and Torbay, at 5.81 per cent, 5.48 per cent and 5.16 per cent yields respectively.

Peter Dockar, head of mortgages at HSBC, said: “Buy-to-let remains a good investment for those looking for above average returns. Twenty-three of the top 50 areas offer yields above five per cent significantly more than is available from more traditional savings options.

“However, it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded, so it is key landlords do their research as often the most popular locations may not offer the best return.”

In contrast, high property prices in London mean that the capital city only offers low yields for landlords. According to new Office for National Statistics (ONS) data, house prices in London have risen by a mammoth six per cent in the last year, and even though London has seen rents rising the fastest than anywhere else across England and Wales, properties have proved not very profitable for landlords. The borough that offered the highest yield was Southwark, but this was only at 6.15 per cent. Only three boroughs in the top ten highest yields within London were in central areas.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

The report highlights that remortgaging reflected 69 per cent of all residential buy-to-let exchanges in the first three months of 2013, compared to 43 per cent in the previous quarter. This is actually the highest figure for a quarter since the start of 2011.

Furthermore, a recent survey by the Royal Institution of Chartered Surveyors (RICS) revealed that surveyors were selling an average of 17.4 homes in February alone, a rise from the 16.8 the year before. The RICS survey expects that this figure is set to rise even further in the next quarter, estimating a healthy 19 per cent increase.

It is important to note however that transactions are still very low compared to ten years ago, suggesting that landlords are still finding it difficult to expand their portfolios.

Industry analysts have suggested that a healthy housing market, the wide availability of mortgages and a boosted ‘Funding For Lending’ scheme have all contributed to this rise in approved mortgages.

Peter Bolton King, RICS’ global residential director, said: “A buoyant, healthy property market is central to economic recovery and, while these are still very much early signs, it is encouraging that sales are beginning to pick up.”

Experts hope that these sales are set to further improve, in conjunction with the ‘Help-to-Buy’ scheme, which was launched at the start of the month (April 2013). The governmental programme was announced by chancellor George Osborne in the Budget earlier this year, and allows individuals on any stage of the property ladder to buy a new home, at just a five per cent deposit. Furthermore, the government will be able to lend up to 20 per cent of the property’s value through an equity loan, meaning that the buyer only has to pay 80 per cent of the property’s value.

Stephen Stone, chief executive at Crest Nicholson, added: “Help-to-Buy has been billed as a real game changer for the housing market, and it’s absolutely essential that we continue to offer purchasers some much-needed financial support to help bridge the deposit gap and secure an affordable mortgage.”

Analysts will be keeping an eagle eye when the second quarterly figures are officially announced later this year, in order to paint a clearer picture of how the housing market is shaping up for landlords.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

The report by the largest lettings agent in the UK highlights that, on average, one bedroom properties had yields of 6.8 per cent, whilst homes with two bedrooms offered 6.4 per cent yields in the first three months of 2013.

This is in contrast to three and four bedroom yields which stood at 6.2 per cent and 5.6 per cent respectively.

The new figures further suggest that rental rates have also risen much more in the first quarter of the year for smaller properties.

With the average rent of a one-bedroom property standing at £673 at the end of March, this is an increase of 3.3 per cent from £651 in March 2012.

Even though two-bedroom homes also saw an increase of 3.3 per cent, from £733 to £758, three-room sites only saw a 2.3 per cent rise to £872 whilst four-bedroom properties rents only increased by 0.3 per cent from £1,394 to £1,398.

The results are based on a survey of 50,000 properties across England, Wales and Scotland.

Nick Dunning, commercial director at Countrywide, said: “As our data shows one and two bedroom properties are providing greater yields than larger properties for landlords; 6.8 per cent average yields for one bedroom properties means that there are some really good opportunities for investors with relatively low budgets.”

An example Mr Dunning used was a one-bedroom flat in Nottingham, which was recently sold to a landlord for £51,000 and is now offering a rental yield of at least 6.9 per cent. This good news further continued with the announcement that property arrears had fallen in the last year for landlords across all property types.

Mr Dunning added: “With rents rising, arrears falling and some significantly improved buy-to-let mortgage products compared to those available in the last two years, the findings are very encouraging for investors who are looking to start or expand their property portfolio this year.”

Regardless of the size of the property that they own, all landlords are encouraged to get full and comprehensive landlords insurance in order to protect themselves in the future.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

Landlords insurance policy holders in the capital city have been warned that they may be the first group that are affected by such changes. The specific boroughs where individuals’ benefits will be capped at £350 and couples will not be allowed to receive more than £500 are Bromley, Enfield, Croydon and Haringey.

The cap will affect those who are on a series of benefits, such as jobseeker’s allowance, employment support, incapacity benefit, and child benefit. Housing benefits will further be capped, through the recently introduced ‘bedroom tax’, which will penalise any tenant who is living in a home with any spare bedrooms. Many landlords have been warned that financially struggling tenants may lead to rental arrears forming.

Changes already came into force earlier this week (April 15th), with the cap set to be launched across the UK from July 15th. Ministers hope the new scheme will be fully implemented in every county by September.

Governmental officials have argued that tenants who may be struggling will receive full support and advice from their local Jobcentre Plus branch. This will include information on budgeting, housing options, childcare access and support on how to negotiate with landlords about reducing their rent payments.

Talking to the Today programme, employment minister Mark Hoban said: “This is about fairness. There are people in this country making difficult choices about where they live and who don’t claim housing benefits. If they want to escape the benefits cap, the best way to do it is to move into work.”

The changes have faced sharp criticism from some ministers. The Labour mayor of Lewisham Sir Steve Bullock slammed the plans last year, stating that 825 homes in his borough would be affected; a quarter of which would lose out on at least £150, meaning they would have to move out of their existing homes.

The capital city is a major focal point for the coalition due to the rapid rise of property prices in London in recent years. Furthermore, analysts are suggesting that if families have to move out from the centre, they will not be able to afford transport costs to commute to work.

Property owners have been encouraged to take out landlords insurance in order to protect themselves from future void payments.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.

The rental firm, which has offices in Birmingham, Tamworth and Lichfield, has suggested that there has been an increase in the number of older landlords in recent years.

According to the Tamworth Herald, there has been a 30 per cent rise in the number of landlords aged over 60 since 2008, and therefore a culture of ‘silver fox’ landlords has been developing in the private sector.

Analysts have suggested that older individuals have decided to become landlords insurance policy holders due to worries that their saved pensions may not be enough to fuel their lifestyles during retirement. 

Others have decided to retire in foreign lands and therefore have chosen to cover their mortgages by renting out their existing property in the UK. The released equity here can then be used as a secure deposit for another property. Alternatively, some landlords have chosen to rent out their retirement property instead.

Either way, it seems as though the number of over-60 landlords is on the rise across the UK.

Dorian Gonsalves, chief executive officer at Belvoir, said: “I would say that the number has hit its highest level in the last year. At first we were surprised by the rising number of enquiries that we were processing on behalf of first time buy-to-let investors in their 60s.

Generally, the recent slump witnessed within the housing market has allowed landlords to take advantage of low-cost properties. The market fluctuations have been steadier in recent years so individuals have been able to see exactly where they stand, and with low bank interest rates, more and more pensioner landlords are seeing a return on investment.

Les Marratt who owns Belvoir’s Boldmere office, added: “They are not young career landlords. These are people that, late in life, have found themselves in a scenario they never thought they would be in. And they are finding that investing in property can be a lot more transparent than trying to understand the intricacies of complicated pension funds.”

It is recommended however that all starter landlords not only take out landlords insurance but always seek professional advice whenever in doubt, regardless of how old they are.

Landlords should always consider getting comprehensive cover from specialist landlord insurers such as Rentguard.