The Landlord Works is a free website targeted at property investors but can be harnessed by mortgage advisers to help clients manage a property portfolio, access a discounted self-assessment tool or educational guides alongside tools relating to managing time and income.
According to the English Private Landlords Survey, published in 2019, nearly two thirds of landlords believe the industry had changed for the worse, predominantly due to the increase in regulation, legislation and tax.
Paul Wooton, director of home propositions at Nationwide (pictured) said the project had been in development for two years and is recognition that UK landlords need support, in alignment with brokers.
“Advisers often say to us that they don’t know where to go when landlords are asking them about broader topics like legislation and regulation across the sector. We’ve also spoken to over 100 landlords trying to understand what a landlord wants and tested the site with them.”
With around 155 key pieces of buy-to-let legislation and Nationwide data suggesting 300 landlords a day search for support on tax, landlords have stressed that this information needs to come from a trusted source, said the mutual.
Wooton said: “This is what differentiates us from other providers. First and foremost this is about us and our belief that if you can provide the tools, guidance and support, that frees up the landlord to provide a decent home for their tenants.
“We have 16m members some of whom who are renting. They are seeking more support and we can offer that through first-time buyer mortgages and the industry work we carry out, but we also need to offer tools and guidance to landlords to provide better homes for tenants.”
The site does not offer a buy-to-let mortgage application submission tool for The Mortgage Works products yet.
The Landlord Works allows landlords to connect multiple bank accounts to their profile to allow them to manage their finances. It also includes an open banking-driven tool for property management.
Sara Bennison, Nationwide’s chief product and marketing officer, said: “The private rented sector is in dire need of reform, but to get there, landlords need to be given every ounce of support.”
“As a mutual we are committed to improving the housing system and the private rented sector is a major part of that, particularly today. It is why we are working with a range of other organisations on the Future of Home and how we can collectively address some of the issues and make a positive difference.”
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said: “As one of the first major lenders to support limited company applications, The Mortgage Works has consistently been one of the most supportive lenders for the increased professionalisation of landlords.”
He added: “It is very positive to see Nationwide and The Mortgage Works strengthen their collaboration with intermediary partners even further with the launch of The Landlord Works, which we believe will be hugely beneficial to our clients.”
Borrowers using the scheme will have access to the lender’s range of 95 per cent LTV mortgages, which start from 2.89 per cent, and can be used to buy a house or flat.
The Deposit Unlock scheme is a mortgage indemnity scheme, developed by the Home Builders Federation and insurance broker Gallagher Re, and aims to help borrowers secure a new build property with small deposits.
The scheme will be available for over 1,000 new build sites across England, Scotland and Wales, and will then expand to include more Housing Building Federation and Homes for Scotland members.
Both first-time buyers and second stepper borrowers can access new build loans of between £25,000 and £750,000 as part of the scheme.
Borrowers will also be able to access the Society’s Green Reward if a property has a Standard Assessment Procedure rating of 86 plus or an Energy Performance Certificate of B or higher. It offers cashback worth between £250 and £500 depending on the rating.
Newcastle Building Society launched its first 95 per cent LTV mortgages as part of the scheme earlier this year. This includes a two-year fixed rate at 3.5 per cent and a five-year fixed rate priced at 3.75 per cent.
Henry Jordan, Nationwide Building Society’s mortgages director, said that the need for more new homes has never been more apparent and the scheme would be a “long-term alternative” to the Help to Buy scheme.
He said: “During the pandemic we spent much more time in our homes and for many of us it highlighted the need for a more suitable property. Many people are looking for a home that is energy efficient as climate change becomes a priority and energy bills continue to rise.
“Our homes are where we have one of the biggest individual impacts on climate change and we remain committed to helping make the homes we lend on greener and more sustainable, which is why we continue to reward those who buy the most energy efficient properties with cashback offer under our Green Reward scheme.”
Steven Rance, Gallagher Re’s managing partner of mortgage indemnity reinsurance, said: “We are delighted to welcome Britain’s biggest building society as the first major lender to go live with the house builder-owned scheme, massively extending its reach to help low-deposit buyers right across England, Scotland and Wales realise their dream of home ownership.
“Deposit Unlock demonstrates cross-industry collaboration at its best, with house builders, lenders and the insurance industry coming together for the common good.”
According to Nationwide’s house price index, average house prices increased slightly month-on-month by 0.1 per cent, which is down from the two per cent monthly rise in August.
The average house price fell slightly from £248,857 in August to £248,742 in September.
According to Nationwide’s chief economist Robert Gardner house prices are 13 per cent higher than before the pandemic in early 2020.
The report added that on a regional level it was a “mixed picture” with Wales, Northern Ireland and Scotland reporting price acceleration whilst most English regions recorded a slowdown.
Wales recorded the strongest annual growth in the third quarter at 15.3 per cent, while Northern Ireland increased 14.3 per cent and Scotland was up 11.6 per cent.
England’s annual house price growth slowed to 8.5 per cent in Q3 from 9.9 per cent in Q2. Yorkshire and the Humberside reported the strongest growth at 12.3 per cent year-on-year, followed by North West with an 11.4 per cent rise over the same period.
London’s annual growth slowed to 4.2 per cent from 7.3 per cent last quarter. The surrounding outer metropolitan region, which includes Luton, Watford, Sevenoaks and Woking, also softened to 6.8 per cent in the third quarter from 8.2 per cent in the second quarter.
MT Finance’s director Tomer Aboody said that despite the annual dip in house price growth, prices were significantly higher than before the pandemic which put the “slowdown in perspective”.
He added: “Although some regions have seen a stronger increase in values, such as Wales, Northern Ireland and some parts of England, these have historically been at a lower pricing point than other regions where growth has been slower.
“Any rise is therefore more visible and significant, although historically this could also be reflected in a declining market, where potentially ‘non-prime’ areas are the first and biggest fallers in percentage points.”
Affordability becoming more “stretched”
Gardner said that as house prices continued to rise affordability was more challenging, especially for first-time buyers.
He said that a 20 per cent deposit on a first-time buyer home was around 113 per cent of gross income, a record high.
Gardner added that in 10 out of 13 UK regions, the ratio between typical mortgage payments and home pay was above the long-run average. This compares to before the pandemic when only one region, London, was above the long-run average.
He said: “Recent price patterns suggest an element of rebalancing is occurring where most of the regions that have seen the strongest price growth are those in which affordability is still close to or below the long-run average.”
SPI Capital’s chief executive Anna Clare Harper said competition for customers was high and with banks offering mortgages of up to 100 per cent and around 3,000 products available it was “no surprise that affordability is becoming stretched”.
She added: “For those considering their next property purchase, it’s important to remember one thing: just because you can borrow to acquire property with a low deposit, or at an initially low interest rate, it doesn’t mean you should. Both capital and interest repayments must be paid.
“That said, with rising construction costs, it’s likely that the UK continues to suffer from a shortage of housing stock, which in turn means prices are expected to continue to grow.”
Housing outlook
Gardner said that the outlook towards the end of the year “remains uncertain” but activity would likely dampen for a period after the stamp duty holiday ended in September.
He added: “Moreover, underlying demand is likely to soften around the turn of the year if unemployment rises as government support winds down, as seems likely.
“But this is far from assured. The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic – such as wanting more space or to relocate – to continue to support activity for some time yet.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said the stamp duty concession had brought forward home buying decisions, so prices were not rising as rapidly as it came to an end.
He said: “However, these figures also confirm what we are seeing on the ground, that there is still plenty of life left in the market – in fact, many prefer buying and selling in a less frenzied atmosphere – underpinned by a continuing shortage of stock, particularly of three and four-bedroom family houses.
“Looking forward, we don’t expect to see major changes although the increase in supply is helping to moderate prices further and bring more balance to the market.”
The largest cuts were applied to its first-time buyer range, with its two-year fixed rate at 85 per cent LTV going down by 0.17 per cent to 1.62 per cent. It comes with a £1,499 fee.
Its two-year fixed rate at 95 per cent LTV, also with a £1,499 fee, has been reduced by 0.05 per cent to 2.94 per cent, whilst its three-year fixed rate at 90 per cent LTV with a £999 fee has gone down by 0.1 per cent to 2.02 per cent.
For new customers moving home, the lender has cut rates by up to 0.11 per cent, including its two-year fixed rate at 85 per cent LTV, which has decreased by 0.05 per cent to 1.57 per cent.
Its three-year fixed rate at 90 per cent LTV has also fallen by 0.1 per cent to 1.94 per cent. Both come with a £1,499 fee.
Its two-year fixed rate at 95 per cent LTV has decreased by 0.1 per cent to 1.94 per cent. It is subject to a £999 fee.
Nationwide is also cutting rates by up to 0.11 per cent for existing members moving home for two and three-year fixed rates products between 75 per cent and 95 per cent LTV.
In addition, rate cuts of 0.11 per cent are being applied to some further advance, family deposit mortgage and switcher rates.
Henry Jordan, Nationwide’s director of mortgages, said: “By improving the competitiveness of our two and three-year fixed rate products, we are aiming to support those mortgage customers with smaller deposits who are looking for payment security.”
According to research carried out by Nationwide, there is only a 1.7 per cent house price premium for the most energy-efficient properties compared to an average home.
The worst-rated properties attract a small discount compared to a D rated residence.
Nationwide’s analysis suggests that a more energy efficient property rated A or B attracts a modest premium of 1.7 per cent compared to a similar property rated D (the most commonly occurring rating). There is little difference for properties rated C or E compared with D.
There is a more noticeable discount for properties rated F or G – the lowest energy efficient ratings. Indeed, an F or G rated home is valued 3.5 per cent lower than a similar D rated property.
Andrew Harvey, Nationwide’s senior economist, said: “Decarbonising and adapting the UK’s housing stock is critical if the UK is to meet its 2050 emissions targets, especially given that the housing stock accounts for around 15 per cent of the UK’s total carbon emissions.
“With this in mind, we used our house price data to explore the extent to which owner occupiers pay a premium or discount for a home due to its energy performance rating.
“Overall, our research suggests that, for now at least, energy efficiency has only a modest influence on house prices for owner occupiers, where an impact is only really evident for the best and worst energy efficiency ratings.
“However, the value that people attach to energy efficiency is likely to change over time, especially if the government takes measures to incentivise greater energy efficiency in future to help ensure the UK meets its climate change obligations.”
How energy efficient are our homes?
Energy efficiency of the UK’s housing stock is gradually improving, said Nationwide. The latest data from 2019 shows 40 per cent of the housing stock is now rated C or higher, up from 14 per cent of the stock in 2009.
The government aims to update as many homes as possible to energy efficiency rating C by 2035 “where practical, cost-effective and affordable”. It also aims for all fuel poor households, and as many rented homes as possible, to reach the same standard by 2030.
Harvey said: “Over the past 10 years energy efficiency has improved significantly thanks to the higher energy rating of newly-built properties, and the improvements carried out on many existing homes, such as loft and cavity wall insulation.
“Nevertheless, this means that 60 per cent of the housing stock is still rated D or below.
“As noted above, newly built properties typically have a much higher EPC rating – 94 per cent are rated C or above, although the stock increases very slowly, typically by c.one per cent per annum. However it is important to note that, while they are energy efficient once built, a significant proportion of new homes’ carbon footprint – between 25 per cent and 50 per cent – relates to its construction.”
For new customers moving home, its two-year fixed rate at 60 per cent loan to value (LTV) has been cut by 0.04 per cent to 0.87 per cent. It is subject to a £1,499 fee.
Its two-year tracker in the same tier is also a sub-one per cent deal, falling by 0.4 per cent to 0.99 per cent. It comes with a £999 fee.
The products add to the lender’s existing sub-one per cent deals, along with the introduction of a five-year fixed rate sub-one per cent mortgage product in July.
Other reductions for new customers moving home, include the three-year fixed rate at 95 per cent LTV, which has been reduced by 0.25 per cent to 2.99 per cent and comes with a £999 fee.
In its first-time buyer range, rates have decreased by up to 0.3 per cent, with its fee-free two-year fixed rate at 75 per cent LTV falling by 0.3 per cent to 1.44 per cent.
Its two-year fixed rate at 95 per cent LTV has been cut by 0.25 per cent to 2.99 per cent. It is subject to a £1,499 fee.
On the remortgage side, rates have fallen by up to 0.4 per cent. The largest reduction is on the mutual’s two-year tracker rate at 60 per cent LTV, which is now a sub-one per cent deal, and has gone from 1.39 per cent to 0.99 per cent. It has a £999 fee.
Lenders have been slashing rates in recent months, with HSBC, Santander, Yorkshire Building Society, Halifax and TSB among those to bring out sub-one per cent deals.
According to Moneyfacts, the lowest rate on the market as of 2 September is a two-year fixed rate at 60 per cent LTV from TSB, which has a rate of 0.84 per cent.
The lowest three-year fixed rate is a Santander product, which is at 60 per cent LTV and has a rate of 0.93 per cent, whilst the lowest five-year fixed rate is a HSBC product at 60 per cent LTV, priced at 0.96 per cent.
Barclays reduces rates by up to 0.53 per cent
Barclays has cut rates on select purchase and remortgage products by up to 0.53 per cent and brought out a sub-one per cent deal at 0.85 per cent.
The sub-one per cent deal is a two-year tracker product up to 60 per cent LTV, which has gone from 1.38 per cent to 0.85 per cent. It is subject to a £999 fee.
This is the lowest rate that the lender offers.
The lender had brought out some sub-one per cent deals last week, with its two-year fixed rate purchase and remortgage product and two-year fixed rate in its reward range, both at 75 per cent LTV, now standing at 0.99 per cent.
Its fee-free two-year tracker option has fallen from 1.79 per cent to 1.4 per cent, whilst its two-year fixed rate at 85 per cent LTV has gone from 2.05 per cent to 1.95 per cent.
The lender has also brought out a five-year fixed rate at 75 per cent LTV with a rate of 1.52 per cent.
This compares to a month-on-month contraction between June and July of -0.6 per cent, with the increase this month described as “substantial” by Nationwide’s chief economist Robert Gardner.
Nationwide’s house price index said that the average house price in August came to £248,857, and it also noted annual house price change was 11 per cent, which is the fourth month of double-digit increases.
Gardner said: “The bounce back in August is surprising because it seemed more likely that the tapering of stamp duty relief in England at the end of June would take some of the heat out of the market.”
He added that it was the strength may reflect strong demand for properties priced between £125,000 and £250,000 to take advantage of stamp duty relief in place until September, despite savings being lower.
He said: “Lack of supply is also likely to be a key factor behind August’s price increase, with estate agents reporting low numbers of properties on their books.”
This was echoed by founder and chief executive officer of GetAgent.co.uk, Colby Short, who added: “We’re simply not seeing the market decline that many expected, both as a result of the stamp duty holiday being phased out, and the wider economic influence of increasing unemployment levels.
“This is undoubtedly due to the continued imbalance between current demand and the level of stock available to satisfy the appetite of the nation’s homebuyers. While these two factors remain out of kilter, house prices will continue to climb.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Prices are still underpinned by an acute shortage of stock in some areas but ample supply of mortgage finance.
“Confirmation of post-furlough working arrangements is contributing to a release in more pent-up demand which, if the strong signs on the ground are anything to go by, is likely to continue until the end of the year at least.”
Property price outlook
Gardner continued that underlying demand would remain “solid” in the near term, pointing to growing consumer confidence as well as low borrowing costs. He added that lack of supply in the market would also buoy prices.
However, he said that towards the end of the year activity is likely to soften as stamp duty holiday ends, but the strength of the labour market would be a crucial factor.
He said: “Underlying demand is likely to soften around the turn of the year if unemployment rises, as most analysts expect, when government support schemes wind down. But even this is far from assured.
“The labour market has remained remarkably resilient to date and, even if it does weaken, there is scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, added: “As we head into autumn, we expect more of the same for now. With lenders reducing rates across loan-to-values, and not just for those with the biggest deposits, there are opportunities for first-time buyers and home movers alike.”
Director of Benham and Reeves, Marc von Grundherr, said: “We’re seeing no letup in the extreme levels of house price growth seen in recent months. These hot market conditions are likely to remain beyond the summer months and well into autumn as we enter what is traditionally one of the busiest times of the year for the UK market.”
He said that there could be a slight dip at the end of year, but marginal monthly declines could just be due to seasonal influences.
