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Buy-to-let turns 25! How property investing surged in popularity

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Buy-to-let celebrates its 25th birthday today. The first mortgage products with its name on were officially launched on September 24, 1996, when the lending industry gathered in central London.

Since then, the number of buy-to-let mortgage products has surged and today there are 2.65 million landlords in Britain, of whom 59 per cent are aged 55 or above. 

Meanwhile, despite suggestions that buy-to-let interest may have peaked, the number of mortgage deals available to landlords have increased today to 3,031, Moneyfacts has revealed.

Almost 160,000 buy-to-let loans were issued during the first six months of this year

Almost 160,000 buy-to-let loans were issued during the first six months of this year

The buy-to-let sector is thriving, despite tax clampdowns and the recent challenges of the pandemic that included a ban on tenant evictions, with many investors searching for a better return than they would get on cash.

Almost 160,000 buy-to-let loans were issued during the first six months of this year, according to UK Finance. 

That equates to £26billion worth over that period and compares to an overall £540billion in buy-to-let gross advances between 2000 and 2020.

The massive growth of the sector can be categorised into four periods, according to a new study by buy-to-let specialist lender Paragon. 

These are rapid early growth, the global financial crisis, recovery, and the introduction of tax changes and regulation.

Rapid early growth 

John Heron, the former director of mortgages at Paragon Bank, said buy-to-let mortgages were officially launched at an event at the RAC Club, on London’s Pall Mall, in 1996.

He said the mortgage products were designed specifically with ordinary landlords in mind.

‘At this time, with no financial products tailored to meet the needs of residential landlords, the only legitimate way of financing a property portfolio was through commercial mortgages,’ he explained.

‘With high interest rates and low loan-to-values, as well as terms rarely exceeding 10 years, these represented only a poor fit and did little more for the market than frustrate much needed growth.

‘Working with Andrew Reeves and his colleagues at ARLA, as well as key specialist intermediaries, we designed a product that catered specifically for the needs of landlords.

‘Borrowers could get finance at up to 75 per cent of the value of the property and affordability would be assessed on the income the property generated and well as the landlords wider financial circumstances. In addition, landlords would be able to make the most efficient use of capital available and maximise their return due to the option to take out interest-only mortgages.’

Although buy-to-let was introduced in 1996, it was from the 2000s onwards when it really took off, as the property market emerged from the 1990s doldrums and started to boom.

Between 2000 and 2007, gross advances grew from £3.9billion to £45.7billion, according to UK Finance.

During the same period, the number of buy-to-let mortgages advances rose from 48,400 to 346,000.

However, with the rapid expansion of the products, concerns increased about the over-exposure of lenders and borrowers to certain sections of the market, such as city centre new-build flats. And the global financial crisis exposed these fears. 

The average house price has marched upwards over the past 25 years, Nationwide's figures show, although the financial crisis sent prices tumbling between 2007 and 2009

The average house price has marched upwards over the past 25 years, Nationwide’s figures show, although the financial crisis sent prices tumbling between 2007 and 2009

Global financial crisis

The global financial crisis struck in 2007 and the ability of banks to lend to customers changed almost overnight.

Northern Rock crashed and lenders such as Bradford & Bingley-owned Mortgage Express disappeared, as their parent companies were absorbed by other financial services companies. 

Meanwhile ‘non-bank’ lenders such as Paragon were unable to lend due to the closure of the financial markets and a struggle to access to funding.

Lending fell sharply from £45.7billion in 2007 to £28.5billion the following year and to just £8.6billion in 2009.

Between 2008 and 2010, the number of loans written for buy-to-let house purchase halved from 103,990 to 49,400.

Between 2008 and 2010, the number of loans written for buy-to-let house purchase halved from 103,990 to 49,400

Between 2008 and 2010, the number of loans written for buy-to-let house purchase halved from 103,990 to 49,400

Recovery

Following the financial crisis, the buy-to-market became more prudent, with lenders taking an increasingly cautious approach to underwriting mortgages.

The property market crashed during the financial crisis and while some brave investors bought while prices were down, the lack of mortgage financing made it hard for most people to do so.

The property market then began to eventually pick up and lending recovered strongly in the years after 2010, rising from £9.6billion that year to £37.9billion in 2015.

Tax changes and regulation

The expansion of the buy-to-let mortgage sector and return of rising house prices saw concerns that an increasing number of landlords were competing against first-time buyers for the same properties.

In a drive to increase home ownership and grow the number of first-time buyers, the Government introduced measures in 2016 to curb landlord house purchases.

In April that year, a 3 per cent stamp duty surcharge was introduced, while a phased end of mortgage tax relief from 2017 was also announced.

In addition, more regulation was introduced, including more stringent underwriting rules for portfolio landlords with four or more properties.

The result of these measures was a reduction in buy-to-let house purchases. The number of loans reduced from 117,500 in 2015 to 73,400 in 2018. Conversely the number of buy-to-let loans for remortgage purposes grew.

The future of buy-to-let

Paragon said that lenders are now looking to the future and are considering environmental issues, as well as dealing with lots more regulation and red tape.

The Government has proposed that all rented housing will require a minimum EPC of C by 2028. Six in 10 rented homes are still rated below the C category.

It means the buy-to-let sector will have to play its part in reducing the overall impact of residential property currently responsible for around a quarter of UK emissions.

Any policy in this area could end up influencing things like the type of properties that landlords choose to buy and sell in the future, Paragon concluded.

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‘After divorce, I’ve fallen in love. But something is holding me back’

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Question: I’m a divorced man, and I think I’ve fallen in love. This woman I care about so much brought me back to life after my divorce woes and I feel happy when we’re together. My life would certainly change if the relationship progressed and I feel the need to hit the brakes. Is it fear holding me back? Some advice would be great.

Answer: I think it is great that you are able to identify fear as the block to your relationship and it is worth looking at this. You have had a divorce, so your experience of relationship breakup is real and is clearly causing you to pause before heading into a committed relationship again. Some areas worth checking are your capacity for self-awareness, your relationship patterns and habits and your history of decision making.

Looking at self-awareness first – are you conscious of what motivates your actions and speech? In terms of self-awareness, there are many aspects of our ourselves which we are aware of, but we do need help with uncovering the full picture. For example, we can often see that someone we live or work with is stressed but they themselves would not know or acknowledge this and think that they are operating from a calm and collected place. It might be worth you checking with friends what they see in your new relationship and how they see you behaving. Do you seem happier to them, or is there wariness or caution in your approach to your partner? Your friends or family will be able to evaluate your wellness (or not) without the emotion or fear that you may have operating.

Ask for some honest opinions and remember if you ask for advice, take it on board as they may have more objectivity than you do. We all have relationship patterns and habits, so it is worth looking at yours to see if this is influencing your current impasse. These patterns typically start with our family of origin. For example, if there were difficulties (silences, anger, distances, or lack trust and love) in your parents’ relationship it is likely that you have a capacity to put up with or repeat such patterns in your own relationships.

Send your query anonymously to Trish Murphy

It helps to talk it over with someone you trust, so that you can hear the emotion that is going on in your voice and then act to disperse it

It sounds as though you are mistrusting of someone who has “brought you back to life” and it is worth looking at whether this caution is coming from your own past experience or from fear of getting into a relationship pattern similar to your parents’ one. It takes courage to challenge our patterns and the nature of habit is that it operates outside of conscious thinking, so we can respond without even knowing where we are coming from, eg we push someone away just as intimacy is growing. Behaviour such as this could derive from a generational fear of rejection, or a fear of closeness, or of being discovered as not what we seem to be. It is good to explore such habits as we can struggle to see them operating and they can operate as a huge block in our lives.

It is true that the “in-love” feeling can sometimes mask some of the adored person’s characteristics and this is why we always need the “head” as well as the “heart” when making decisions. What is your decision-making like normally? Do you have enough knowledge of this person to make a decision about joining your lives together? Have you spent enough time with them and their circle of friends to make an informed choice? Sometimes the feeling of intense connection at the beginning of a relationship can make us lose sight of the fact that we don’t know the other person very well and in these situations we would do well to slow it down and let our judgement work when the time is right. If you are happy that you have enough knowledge and information to make this decision, then you are probably right that it is fear that is stopping you moving forward.

A little fear is natural and can even help us, for example we drive under the speed limit oftentimes out of fear of getting a speeding ticket. However too much fear can be debilitating, and it can completely bock our intelligence. All relationships involve risk, in that we have to trust that someone else will value us and not reject us. Fear is such a powerful emotion it can cover other more rational and sane judgements and so we need to ensure that we are not just operating from that place.

It helps to talk it over with someone you trust, so that you can hear the emotion that is going on in your voice and then act to disperse it. However, it is worth knowing that fear and panic are closely aligned so we need to tackle them slowly and incrementally or else we go into a kind of frozenness. Overcome small fears first – this might involve speaking with some honesty with your partner – and gradually build up to the bigger fears. Your confidence and self-awareness will grow along the way and this can only benefit you. 

Click here to send your question to Trish or email tellmeaboutit@irishtimes.com

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Lighthouse workers end up with front-row seats for Storm Barra

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Four lighthouse workers who went to Fastnet Lighthouse in west Cork to carry out maintenance on Friday ended up having front-row seats for Storm Barra as they had to stay onsite due to the conditions.

The lighthouse recorded a wind gust of 159km/h on Tuesday morning but Irish Lights electronic engineer Paul Barron said that it was a safe place to be as the country battened down the hatches to face the storm.

Mr Barron and his colleagues Ronnie O’Driscoll, Dave Purdy and Malcolm Gillies made the journey to Fastnet on Friday to do maintenance work and were due back on Tuesday but their helicopter flight was cancelled because of the storm. They hope to arrive back on the mainland on Thursday.

Mr Barron said they are passing their time onsite by watching Netflix and having a few steaks and rashers. He admitted it was a day to remember on the lighthouse which is 54 metres above the sea.

“There is a team of four of us out here. It has been quite a rough day. We started off this morning at around 2am and by 10am or 11am we were in the eye of the storm. I was in the merchant Navy before as a radio officer so I have seen a lot of bad weather. I am with Irish Lights 32 years but I haven’t normally seen it like this. We wouldn’t normally be out in this. You are talking 9m swells with winds gusting up to 90 knots.”

He captured some footage of the storm on his phone. During the worst of the weather the men found it hard to hear each other as it was so noisy during the squalls.

The tower was “shuddering a bit” but Mr Barron managed to shoot video footage which attracted attention online and even a call from Sky News.

He says the lighthouse has kitchen facilities and they always bring additional food in case of emergency.

“It could be a fine summer’s day and there could be thick fog and the chopper wouldn’t take off so we always bring extra food. We are passing the time by watching Netflix! This is a good place to be in the eye of a storm. This lighthouse has been built a hundred years so it has seen a lot of storms.”

As for families being concerned about the men Mr Barron jokes that their loved ones are probably relieved they aren’t at home hogging the remote control.

Meanwhile, in Cork city centre the river Lee spilled on to quays and roads on Tuesday morning but no major damage to property was caused. Debris and falling trees kept local authority crews busy and power outages were reported in a number of areas across the county.

At least 23 properties were flooded in Bantry in west Cork. The council had placed sandbags along the quay wall and the fire brigade had six manned pumps around the town.

In north Cork, a lorry driver had a lucky escape in Fermoy when his vehicle overturned on the motorway during the high winds. Traffic diversions were put in place following the incident.

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Top tips on how to avoid a large energy bill this winter

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Five easy tips and five things to avoid to get the most from your heating this winter – and dodge a big energy bill

  • We reveal some simple steps to lowering your heating bills this winter 
  • Tips include tucking curtains in behind your radiators to stop heat escaping










Rising energy bills mean the cost of keeping warm is an issue for many households this winter.

But there are some simple steps that can be taken to reduce your energy bill without compromising on keeping cosy.

We take a look at 10 top tips for saving money on your heating, which include things to do and things to avoid doing. 

These include tucking curtains in behind your radiators to stop heat escaping, while not putting clothes on the radiators to dry, as this will block the heat from dispersing through the room.

We provide a list of little fixes that will help to keep your energy bills low this winter

We provide a list of little fixes that will help to keep your energy bills low this winter

John Lawless, of designer radiator company BestHeating, said: ‘Winter weather always sparks the debate around leaving your heating on low all-day versus a couple of hours a day. 

‘Sure, your boiler will have to work a little harder to heat up a cold home when you first switch it on but having it on constantly will use more energy than just switching it on when you need it.

‘The best thing to do to lower bills and keep warm is to insulate your home, prevent draughts, and set up better heating controls. Don’t have the heating on full whack in a room you don’t use, just heat the room you spend the most time in.

‘Our advice is to heat smarter. You can’t control the weather but you can control your heating and how your home loses that heat.’

NetVoucherCodes.co.uk agrees, saying: ‘Saving energy can help you be more energy-efficient and considerate of the environment, but it’s also a great way to save money.’

Here are the top ten tips…

The things you can do

1. Use thick curtains

Having thicker curtains helps reduce the amount of colder air coming in, while also helping to reduce the amount of hot air escaping.

The thicker the material, the more heat will be contained. Also tuck your curtains behind your radiator to stop even more heat escaping.

INSULATING PIPES 

Pipes can be insulated by covering them with a foam tube. 

This includes the pipes between a hot water cyclinder and a boiler. 

That will reduce the amount of heat lost and keep your water hot for longer. 

It is as simple as choosing the correct size from a DIY store and then slipping it around the pipes.

2. Cover up exposed pipes

Exposed pipes allow for heat to escape easily. Try covering them in an insulating material to maximise their efficiency.

3. Only heat the rooms you spend most time in

Heating rooms in your home that you don’t spend much time in will not only be a waste of energy, but also a waste of your money.

4. Cover up draughts

You can lose a lot of heat from gaps in your doors and window frames. Make sure you fill in these gaps with a draught proof material, such as draught-proof strips or even just a thick cloth for a quick solution.

5. Turn your thermostat down by one degree celsius

Experts have proven that reducing the temperature of your home by one degree celsius saves you up to £80 a year.

Drying clothes on your radiator will block the heat from dispersing through the room

Drying clothes on your radiator will block the heat from dispersing through the room

Things to avoid

1. Dry your clothes on the radiator

Drying clothes on your radiator will block the heat from dispersing through the room and will have to be left on much longer to have the same effect without a blockage.

2. Keep the heating on all day

Your home will take longer to heat up if you keep turning it on and off, but it will save you more money by putting your heating on a timer for a few hours a day. Try setting a timer on your boiler, so it only turns on for a few hours a day.

3. Allow your radiators to get dirty

If you notice any cold spots at the bottom of your radiators when the heating is on full this could mean you have a build-up of sludge in the system.

This stops the hot water circulating properly, stopping your radiators from getting hot enough when you need the heating the most. Give your radiators a good clean to make sure you aren’t wasting money on heating.

4. Turn your thermostat above 18 degrees Celsius

Research shows that the average thermostat setting in Britain is 20.8 degrees celsius. However, experts have stated that 18 degrees celsius is warm enough for a healthy and well dressed person to remain comfortable during winter. This will be controversial suggestiong for many, for whom 18 degrees might feel a bit chilly – and how you feel at 18 degree central heating will depend on how well your home is insulated.

5. Don’t place large furniture in front of your radiator

Blocking your radiator with furniture, such as sofa or a table, will stop the flow of warm air. This blockage will cause your boiler to work harder to heat your home, resulting in expensive heating bills.

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