Welcome to the latest weekly news insight from Track Capital.
We have had a great week here at Track Capital HQ and confidence is definitely apparent in the market with developers starting to bring new property launches to us. Including new Manchester and Birmingham projects launching next week.
The property news this week has been positive overall, with a balance of the shock tactics we usually see from the media to gain clicks. Nationwide reported house price growth ‘slows sharply’. We encourage you to conduct independent due diligence, when you look at the stats, they focus on prices being down -1.7% month on month but prices annually have increased 1.8% showing the resilience of the UK market.
Either way, we are cautious not to always present the ‘everything is perfect’ picture but more so in our conversations with investors we try to put things into perspective, all we need to do is look at the big picture, example below of the average property values from Nationwide shown below.
Lenders are coming back to the market, activity is apparent and the market is moving but data is very premature so keep checking in with us to see how it progresses. But as far as we can see, it looks promising. We are advising our investors to capitalise on a market where there is uncertainty to get the best possible deals because once certainty/confidence creeps back into the market, sellers and developers will not be so lenient and willing to negotiate.
Property news this week
- Kensington ups LTV to 80% and resumes HTB & BTL – The is really promising news to see a mortgage company such as Kensington introduce higher loan-to-values and Help To Buy lending. This would indicate that lenders are feeling more confident about the property market. Companies such as Barclays and TMW are all slowly bringing back more products. The confidence has definitely been helped with the reinstating of physical valuations. Let’s hope that this continues as it can be an indication of the property market being in a good position.
- Liverpool named UK’s best buy-to-let area to invest in – We have been singing Liverpool’s praises for quite some time at Track Capital and have always said it is a great investment area with great fundamentals. Previously, Totally Money’s BTL Yield Map 19/120 had Liverpool at the top with the L1 postcode averaging a 10% yield. Now, Mojo Mortgages have reiterated this with L7 coming out on top with a very attractive 10.30% yield and five more Liverpool postcodes in the top 20 with yields ranging from 7.40% to 10.30%. If you haven’t researched Liverpool as a buy-to-let area for you to consider already then we recommend you do so. Great entry prices and yields make it a hotspot with room to grow.
- BTL house purchases up 7% during Q1 – The drop in first-time buyers seemed to have been made up by investors in Q1 this year according to UK Finance’s latest figures. Purchases of buy-to-let properties increased by 7% and while the Coronavirus lockdown may have temporarily hampered this incline we can be optimistic by the positive signal’s since the property market reopened and believe that investors will still remain active in the market, which is something that is needed to keep it strong.
- Will surveyors apply a Covid-19 ‘haircut’ to property values? – A very interesting article from Bob Young of Fleet Mortgages. This demonstrates the pressure that will be on the head of surveyors going out for mortgage companies and it is going to be interesting to see of they down value properties in a cautioned way. Are they going to cover their backs and include a post-coronavirus price drop in anticipation. With surveyors being back for not very long, the main data they have for comparable evidence will be property completions pre-coronavirus so this may lead to them applying a slight ‘haircut’ to the price to prevent them being pressed by lenders if the market fall slightly (this happened with the financial crash). I (Tobi) will be a test dummy as I have a mortgage valuation going ahead on an investment property I am currently purchasing and I had a pre-coronavirus mortgage valuation done but then the mortgage company pulled the original product so I had to start the process again with another lender. Let’s see what the surveyor says this time and if they give it a ‘haircut’.
New Manchester Launch – 20% Below Market Value
As well as the pay monthly Birmingham launch coming next week, just this afternoon we have finalised discussions on a new Manchester scheme. Whilst we don’t like to use the phrase to often, this scheme merits it, it’s offered at 20% below market value and approved for short-term lets, meaning investors can expect projected yields of 10% net.
This is a genuinely rare opportunity, we challenge you to find a development for sale in Manchester today at this value, from £135,000, that allows for short-term lets. If interested email [email protected] and we will send you the details, alternatively, you can call the team on +44(0)203 627 3987.
Team Track Capital