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Investment in UK student property boosted by Indian Government legislation

Investment in Student Property.

The recent legislation by the Indian government which raised the allowance for inInvestment in Student Property.vestment in real estate outside the country by up to the equivalent of 125000 US per person, per financial year, is boosting demand for student property in the UK, according to The Mistoria Group – leading student property investment specialists.

The yields in India for residential rental property has been historically low at around 1-2%, but appreciation is high, between 10-30 % per annum.  Over the last 3-4 years, property prices have corrected, but rentals have not improved.  Hence, Indian investors are more keen to look overseas.

Investing in UK student property offers investors a long-term investment option, as typical rents are significantly higher than a comparable buy-to-let property in the same city.

The average gross cash rental yields for the student property sector in the North West of England were 13% for the first three quarters of 2014, well ahead of the 6.37% forecast for average student property yields across the UK, for this year.

Mish Liyanage, Managing Director of The Mistoria Group explains: “We have experienced an increase in demand from Indian Investors over the last few months, all of whom are looking for investment in student property.

“Since 2011, investment in student property has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK.

“It has also continued to be one of the most resilient investment sectors, with rental incomes and property values remaining stable, or increasing.  The attraction of the Investment in student property sector has been driven by structural undersupply and positive rental growth year on, despite the economic downturn.

“Our research shows that students will pay more in the UK for high quality, well-maintained accommodation than for the traditional run down and neglected shared houses, because there really isn’t a big price difference between poor and high quality accommodation. A HMO (House in Multiple Occupation) property can provide an 8% minimum cash yield, though we provide a typical 13% cash yield, including 5% capital appreciation.

“What’s more, the domestic student population is continuing to expand, with an extra 30,000 university places offered in 2014.  UCAS have reported they are expecting an all-time high of 500,000 applications this year.

Sandeep Singh, an Indian lawyer and a real estate investor comments: “The UK is considered a safe market without a lot of hassles for overseas landlords looking for passive income.  The UK law does not prohibit international investment from foreign nationals. To add to this, there are no legal hassles regarding title of property and the prices of real estate in Indian cities are very much comparable with prices in UK major cities.

“Since the legislative changes, the UK student market has become highly attractive for Indian investors as it offers high yields, good asset growth and hands off investment.”

Mistoria Group was formed in 2009 by entrepreneur, Mish Liyanage. Together with a group of highly qualified, successful property professionals, he ensures that each client receives a bespoke solution tailored to their specific property needs. For further information, please visit www.mistoriagroup.com or call 0161 707 6106.

 

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Buy to Let lending has hit a new high

Buy to let lending has shown a healthy yearly increase.

For Sale MIST SALES website
Buy to let lending.

The latest report on buy-to-let lending has shown a healthy yearly increase for the sector.  According to research released in October. However, compared to November 2013 there was a visible 9% increase and 14% by value.

The data that has been released that there was a 17,700 buy-to-let loans during the month of November, which shows lending of around £2.4bn.

The number of loans did decrease by 10% and the value of these loans was 11% lower than figures which

Within the overall total of buy-to-let loans in November. The number of buy-to-let house purchase loans decreased by 12% compared to October but up 6% in comparison to November last year. The total was £1.1bn in value which was down 8% on October but up 10% on November last year.

The number of remortgage loans decreased in November, they went down 8% in October then risen up to 12% compared to November last year. These loans had a large total value of £1.3bn which shown it had dropped 7% in October but up 18% in November last year.

Why choose a Buy to Let fixed term product?

Due to these figures and the recent high in buy to let lending a new 10 year buy to let fix has been launched. The company Mortgage Works has recently announced that they have launched a new 10 year buy to let fix which they are aiming at landlords who are looking for longer term payment security. The new option is the longest fixed product in the buy to let sector and is currently the only 10 year deal for landlords on the market.

As part of the move to expand customer choice and offer competitive longer term rates, they are also launching a brand new 5 year fixed rate product. All 5 year and 10 year fixed rate deals continue to be stressed at 4.99% with a rental cover requirement of 125%.

The Mortgage Works have said that their 10 year fixed rate product is currently the only option like this in the market for those landlords who are looking to secure their payments for the long term not just the short. It will fill a gap in the market that has seen a trend towards opting for longer term options.

If you need more information on buying the ideal property for a buy to let mortgage please email info@mistoriasales.co.uk or call us 0161 707 6106. Mistoria Estate Agents dedicates it’s efforts to selling property for private clients and sourcing property for the property investment market. We have a dedicated team of property professionals with a wealth of experience whose remit is to introduce buyers to our clients.

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Stamp duty: how will it change the market overhaul

Stamp duty, what does it actually mean?

Stamp duty history

Stamp duty is said to be an unpopular tax due to the house prices in previous years and how it was charged. The system was first introduced by Gordon Brown before he was in charge of the nations finances. Stamp duty was set rate; 1% above £60,000 in 1997.stamp duty

Stamp duty changes

Stamp duty reforms will give the housing market an extremely needed boost which will spark up a surge in sales in the next year.

George Osborne reduced the burden of stamp duty on buyers in the mainstream house market which switches the old system to a new graduated one. Some RICS members shown that property surveyors and agents in England have belief that there will be a visible increase of up to 5% in sales over the next 12 months because people will put their homes back on the market in hope to get a higher price and a more straight forward sale.

The stamp duty reform could reverse the trend in buyer enquiries that has been visible in recent months and it will also encourage more vendors to put their properties back onto the market. There is expectations that transactions could increase by up to 5% over the next year.

The changes mean 98% of buyers will pay less which is shown in the band below;

0% up to £125,000

2% to £250,000

5% to £925,000

10% to £1.5m

12% any above.

For example if you buy a new home and it costs £125,000 or under you will pay no stamp duty. If you buy a new home and it costs between £125,000-£250,000 you will pay £1,000 stamp duty which is 2% of the property value that falls in the relevant band shown above.

When buying a new home you will need to submit a stamp duty land tax return form and pay what you owe within 30 days of completion. Even if the price of your new home is below £125,000 you must still submit a return form even though you wont need to pay any stamp duty. Your solicitors will usually deal with the stamp duty forms and other queries but you can do it yourself, either way you are responsible for making sure its paid on time if it’s not you can receive a charge of £100.

Mistoria Estate Agent’s can help with the understanding of how the stamp duty may effect you when purchasing a property, we also have a close relationship with many solicitors so we can also help with the chasing up of making sure the stamp duty land tax return form is submitted on time to avoid receiving a extra charge of £100. For further information please email us at; info@mistoriasales.com or call us on;  0161 707 6106.