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Saturday, November 01, 2014

Landlords criticised by the Guardian for minimising risk

The Guardian are at it again with their thinly veiled anti landlord coverage.

It's not necessary what they say it's the way it is said and what story they pick out from the many angles they could choose. Surprisingly, the story isn't about the many private landlord who bend over backwards to make sure that the tenants boiler is fixed.  Or how happy a tenant is with where they live. No.

Large landlords avoid tenants on zero hours contracts
Instead they highlight the fact that unsurprisingly a private landlord would prefer a tenant earning a shed load of cash on a permanent contract rather than one on a zero hours contract where the tenant has no guarantee income every month. The story seems to have two parts. One that zero-hours contracts are not a great credit risk.  The other aspect seems to highlight the fact that landlords are 'ruthlessly' rational when assessing the likelihood of receiving their rent.

Landlords are not a charity but a business that benefit us all
When will the Guardian get the fact that landlords are not a charity (I would point out that charities are not a charity either - most run on a pretty shameless business footing). Each landlord clearly works in their own interest to minimise their risks and maximise their overall returns. Collectively, we as a country gain as the UK benefits from approaching 4.9 million households being housed by private landlords according to buy-to-let mortgage lender Paragon. Government predictions indicate that by 2032 one third of properties will be in a house owned by a private landlord. These tenants are being housed at not only NO expense to the public purse but also increasingly by a sector that is also a great tax revenue generator because of record rental profits.

All this is conveniently overlooked if you are trying to portray residential landlords as the nations No.1 bogey man!

Landlord training - unique insights  - letting essentials

Thursday, October 30, 2014

ARLA's evidence for the Tenancies Bill

ARLA have put forward their evidence as part of the APPG for the Private Rented Sector's inquiry into the Tenancies (Reform) Bill 2014-2015 that is being pushed by the Lib-dem MP, Sarah Teather.

Teather's bill seeks to end the much hyped ( by Shelter anyway ) practice of 'revenge evictions'.

ARLA have gathered a lot of evidence that suggests revenge evictions are far less common than the likes of Shelter claim them to be. 

ARLA have evidence that the cases of 'revenge evictions' are far from the epidemic claimed by Shelter, with ARLA's data proposing that out of 3,956,000 tenancies it may be that approximately 7,120 end due to a revenge eviction.

These figures contrast wildly with Shelter's claim, that "in the past year alone, more than 200,000 people have faced eviction because they asked their landlord to fix a problem in their home."

Others in the industry have questioned Shelter's figures, with the Residential Landlord Association accusing the tax payer funded charity of “irresponsible scaremongering".  

Strutt and Parker's Autumn London Residential Quarterly

Agents, Strutt and Parker have published their Autumn London Residential Market View.

Unsurprisingly, they are pushing an optimistic outlook for the capital, citing the IMF's prediction that the UK will finish 2014 as the fastest growing large developed economy, with only the US potentially overtaking us 2015. 

Cambridge landlord fined

A Cambridge landlord has been fined. A Maggior Coppola was described as ‘unscrupulous’ by the court after refusing to carry out repairs on a rental property described as been at risk of fire.

Environmental health officers for  Cambridge City Council’s had found the House in Multiple Occupation to be unsafe, with a risk of fire and smoke spreading throughout the property.

They issued Coppola with an improvement notice of the required maintenance and upgrades that needed to be carried out by a deadline in October 2013. Coppola failed to comply with the notice.

Coppola was fined £10,000 for failing to comply with an improvement notice, and pleaded guilty to four offences under the 2004 Housing Act, as well as a further offence under the Local Government (Miscellaneous Provisions) Act 1976.

On top of the fine, Coppola was left with court costs of £2,500.

Property prices a game of two halves

This year's property market continues to be a game of two halves, the booming first half of 2014 has been followed by five slow months according to the latest Nationwide House Price Index.
Nationwide House Price Index for October recorded a small O.5% rise, following on from September's tiny 0.1% fall, and the three previous months of stagnant growth. 

October's small increase has brought the Nationwide's 12 monthly growth figure down from 9.4% to a flat 9%.

Their average property price is now £189,333.

The Nationwide says it reflects a loss of momentum in the property market, with their chief economist, Robert Gardner saying 

“The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year,” 

The Nationwide's figures reflect the Land Registry data released on Tuesday, that showed September's average sales prices had seen a monthly fall of 0.2%.

Financial Adviser muses further as to whether the housing market has lost momentum.

Wednesday, October 29, 2014

Savills research on Crossrail's potential uplift

Crossrail will transform the connectivity of certain locations across London. 

Savills have put together a map entitled ' Tracking Crossrail’s value uplift potential '.

It pinpoints those areas that the agent predicts are mostly likely to gain.

House Price Index for Sept 2014

The Land Registry updated its House Price Index yesterday.

The September 2014 data shows a slight dip in sale prices on the average property in England and Wales, down 0.2% on the August Index.

The media will no doubt headline with, 'market cools' or 'end of boom' or such like, but let's all not panic yet.

London remained as the best performing region over the year, retaining an increase of 18.4 per cent.

Our most popular BTL mortgages this week

Max LTVInitial RateTermCompletion feeBooking feeIncentivesLender
85%4.99% Fixed2 Years3%£130.00NoKent Reliance Semi Exclusive
85%5.49% Discount2 Years3%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
80%3.99% Fixed2016-12-31£2495£150.00Free valuationMortgage Trust Exclusive
80%4.99% Fixed2016-12-310%£150.00Free valuationMortgage Trust Exclusive
80%4.09% Discount2 Years£750£250.00NoHanley Economic Exclusive
75%2.39% Fixed2016-12-312.5%£150.00Free valuationMortgage Trust Exclusive
75%3.79% Fixed2016-12-310%£150.00Free valuationMortgage Trust Exclusive
75%2.5% Discount2 Years£1995£250.00One free Valuation on properties valued up to £1,000,000Hinckley & Rugby Exclusive
75%5.39% Variable0 Years2.5%£0.00NoSaffron Light Refurbishment
70%2.5% Fixed2016-11-30£2495£245.00Free valuation (maximum of £781 for properties up to £1,000,000) and free legals for remortgages.Skipton Exclusive
65%2.99% Fixed2017-01-31£1995£150.00Free valuationMortgage Trust Exclusive
65%3.49% Fixed2017-01-310%£150.00Free valuationMortgage Trust Exclusive
60%2.45% Discount2 Years£1950£250.00One free Valuation on properties valued up to £1,000,000Hinckley & Rugby Exclusive
60%2.25% Fixed2016-11-30£2495£245.00Free valuation (maximum of £781 up to property value of £1,000,000)and free legals for remortgages.Skipton Exclusive
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 
Search the whole BTL mortgage market free
Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Dangers of paid for online property software

I was emailed this week because I had registered an interest in some online property management software. I like to keep up with the competition! The email was telling me in a very nice way that the monthly subscription cost of the online property management software was set to rise from £19.97 to £29.97 + VAT a massive 50% increase OUCH!

Dangers of paid for property management software

The problem for landlords using this paid for software is that you can't take your data with you.  To leave and stop paying would mean you loose everything and all those hours of data entry come to nothing!

Property Hawk has made a virtue of the fact that our rather good PM3.0s property management software which has been around for over 8 years has been and will always be free.  This way you can keep using it as long as it remains useful for you how many properties you have in your portfolio.

Tuesday, October 28, 2014

One third of properties in PRS by 2032

Buy-to-let originated in 1996 with the arrival of the buy-to-let mortgage. At this time the private rental sector consisted of just 2.4 million homes.

This figure has since doubled to 4.9 million according to buy-to-let mortgage lender Paragon.

Government predictions indicate that by 2032 one third of properties will be in the private rental sector.

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Monday, October 27, 2014

Should associations be flogging property investments?

I was a little shocked the other day when I got a marketing email from one of the main landlord associations promoting a new build investment in Manchester promising an alleged 20% discount to the 'usual' price and returns of over 13%.

Landlord Association taking money to promote investments.
My shock was that this landlord association was emailing me and clearly taking money to promote a property investment and therefore in the same breath endorsing these companies. In our mind at Property Hawk you cannot offer advice about not investing in highly promoted schemes often with misleading advertising blurb and then say that you are on a landlords side. We have and never will accept money to advertise property because we simply believe that landlords are all individuals and therefore their investment criteria will vary. What might work for one landlord financially may not be right for another landlord. Our recent Lettings Essentials Course proved that beneath the badge of landlord there is a great variety in the landlord family and many different business models for letting businesses that all work well but very differently.

Property Hawk proud but 'penniless' 
I can't help feel that this particular landlord association has undermined it's claim to offer impartial advice if they are then promoting individual developers and investments. You may not agree. Here at Property Hawk we wear the badge of independence with pride; even if pride may be short hand for 'penniless'. Can you hear the violins…I can!

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Saturday, October 25, 2014

Thrills & spills of being a landlord

It makes me laugh. The diversity of "living the landlord dream".

Online management of property
In the morning, in my capacity of Director of Property Hawk I have been 'shooting the breeze' with two guys from a billion pound company, discussing the possibility of how we can allow landlords to manage their whole rental operation from their phone or laptop. A digital end to end solution from getting in tenants, to managing the day to day operation of getting a CP12 (landlord gas safety certificate) to being able to sort out possession proceedings of a property through the courts.

Hands on management 
In contrast in the afternoon I spent half an hour trying to explain to one tenant the scientific causes of condensation and mould. This was quickly followed by physically manhandling a fridge freezer from one of my garages into the back of Micks (pictured above) waiting van. Comically it was not possible to extract the said fridge through the front entrance. Instead I was left trying to smuggle it down the side passage of the adjoining property without being spotted.

All in a days work for a jobbing landlord and highlighting the fact that are still a long way from every landlords dream of a hands free, hassle free direct residential property management. Occasionally though it's great to dream!

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Thursday, October 23, 2014

18 years of BTL growth set to cont...

Figures from Paragon say that private landlords now own 18% percent of the UK's housing stock. These five million rental properties are owned by two mullion landlords, which by my calculation makes it an average of two and a half properties each.

The Paragon report, titled "18 Years of Buy-to-Let" reflects on the period from the birth of BTL in 1996 to now. 

The report looks at the phenomenal trajectory of BTL lending, with the private rented sector now worth close to £1 trillion and only looking to increase. BTL mortgage lending continues to rise at a rate of 20 percent per year, and with a resurgent lending market now with more than 700 different BTL mortgage products on offer.

The Government's own study into the private rented sector predicts landlords will come to own more than a third of the UK's residential property by 2032.

Beyond that, who knows...

John Heron, Managing Director of Paragon Mortgages, said: “The buy-to-let market has been a force for good for the wider UK housing market. Before the development of buy-to-let landlords had few options when considering how best to finance a rented property. The finance that was available was expensive and poorly matched to the customer’s needs. It was particularly difficult for new landlords to start to build a portfolio.

Buy-to-let has changed all this. It enabled landlords to access finance that was better designed to meet the specific needs of the rental market at much more competitive interest rates and thus helped expand quality and choice in the PRS.

Whilst most people continue to aspire to home-ownership, and the mortgage industry plays a critical role in facilitating this, for many the PRS remains a housing choice out of both convenience and need. Mortgage lenders can and do work alongside landlords and the letting agency industry to make sure that renting privately provides safe, efficient and flexible housing for those that rely upon the sector for a home.”

IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available.  

 Search the whole BTL mortgage market free
Tel: 029 2069 5446
 Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Frank Knight tenant survey infographic

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Wednesday, October 22, 2014

Suspended student property fund

I have spoken many times about putting your faith in so called experts and fund managers to manage your assets or avoid the hassles of direct property management. The plus is you cede the day to day hassle of property management to somebody else. No more text, emails and calls informing you that the kitchen ceiling is dripping water, the central heating doesn't work or that my garden is over grown and what are you going to do about it?

Brandeaux fund devalued 
This week the FT carried a report about the Brandeaux student fund investing in student properties. The fund had to be closed to prevent an outflow of cash. The fund was due to float on the stockmarket but this float was suspended because of insufficient investor appetite. The value of the fund has been cut due to a revaluation and investors are likely to only receive 93% of the previous value. At the current time there is no exit route for investors. To read more about the travails of the investors have a look at this piece in the Investment Week. 

What it does say to me is that frequently fund managers are more bothered about collecting their big fat fees when a fund floats than about the long-term performance and welfare of the individual investors.  So bare this in mind before investing ALL your cash with somebody else!

Landlord insurance - professional rates - expert brokers

Tuesday, October 21, 2014

Affordability the primary concern for all tenants

Knight Frank have published their Tenant Survey 2014. The survey represents the opinions of 3,500 tenants in the UK private rented sector.

Amongst  the report's charts, statistics and drawn out conclusions, it identifies one very interesting key point - tenant's from all age groups, regions and income groups have the same primary consideration -  affordability.  

Nearly two thirds of the 3,500 respondents marked up affordability as their main concern when picking their rental property.

It appears cost overrides all other decision factors, including location and space.

The flat might be perfect, but if the rents too high....

Trend line better reflects rent reality

The endless rental data pumped out by letting agencies, property portals and to some extent, ourselves, has become increasingly skittish. Average rents fluctuate from week to week, even day to day - this week I've somehow managed to read that rents are both up and down.

As with so many things in this press release hungry world, nothing makes any sense.

'Statistics, damn lies and statistics' as they say.

For a more stable and trajectory of what is actually happening to rents I use the trend line from our Rent Index graphs.

The Blue trend line smooths out monthly glitches, seasonal peaks and concentrates on creating a more rounded, long term view on where rents have been.

As you can see from this recent snapshot, the BLUE trend line shows a slow steady climb in rents from 2008 to 2014.

This probably reflects the reality for most landlords, instead of the press release up/down approach that drives column inches.

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Leicester landlords face alarming fines

According to the Hinckley Times, landlords could find themselves fined for each time the fire brigade attends a false alarm at a rental property.

A fine of £290 has been proposed if a rental property creates repeat false fire-alarm call-outs involving fire officers from the Leicestershire Fire and Rescue Service.

Leicester's Fire Chiefs have decided to start charging private residential landlords for false alarms after receiving 2,700 automatic fire alarm call-outs last year of which only 80 turned out to be real.

Leicestershire Fire and Rescue Service hope the introduction of fines would 'encourage better management of alarm practices'.

There proposals follow a similar scheme introduced by the London Fire Brigade back in January. In the first four months of London's scheme 224 invoices were issued of which 33 were paid.

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The best yields for buy-to-let revealed

As a landlord have you ever wanted to be show where the best yields across the UK are for buy-to-let?

Sheffield City Centre best for yields?
The postcode S1 which for those in the know has the best yield in the UK according to the totallymoney website.  For those in the know this is not surprising.  Sheffield city centre like many provincial city centres is benefiting from a boom in rents as International students from the likes of China and the Middle East bid up the cost of renting the best quality new apartments.  The average rent is showing as £645 giving a yield of over 11% on the quoted capital value of just under £60k.  The reality is that to achieve that kind of rent a landlord would be looking at paying over £80,000 for a 2 bed apartment and that after paying the ground rent and service charge a landlord would be lucky to have £500 in their pocket each month (even less if they had a mortgage).  The figures have been distorted by the large number of ex council properties in the area that would only be suitable to LHA tenants.

International students a lucrative market
On the recent Letting Essential Course I was talking to one newbie landlord that had created her own specialist letting business by letting new builds almost solely to these types of tenants on a 12 month Assured Shorthold Tenancy Contract.

Dangers of letting to international students
The danger with international students is it's very difficult to insure against bad debts.  If they disappear off to China then how will you get your money back.  Even a guarantor agreement is not likely to be much help.  So far she has been lucky so fingers crossed.

The yield table is an interesting  tool but like all statistics a landlord needs to delve behind the headlines and understand what they really mean.

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Monday, October 20, 2014

This weeks most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
85% 5.29% Fixed 2 Years 2.5% £130.00 No Kent Reliance Semi Exclusive
85% 5.99% Discount 2 Years 3% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 3.99% Fixed 2016-12-31 £2495 £150.00 Free valuation Mortgage Trust Exclusive
80% 4.99% Fixed 2016-12-31 0% £150.00 Free valuation Mortgage Trust Exclusive
80% 4.09% Discount 2 Years £750 £250.00 No Hanley Economic Exclusive
75% 2.39% Fixed 2016-12-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
75% 3.79% Fixed 2016-12-31 0% £150.00 Free valuation Mortgage Trust Exclusive
75% 2.5% Discount 2 Years £1995 £250.00 One free Valuation on properties valued up to £1,000,000 Hinckley & Rugby Exclusive
75% 5.39% Variable 0 Years 2.5% £0.00 No Saffron Light Refurbishment
70% 2.5% Fixed 2016-11-30 £2495 £245.00 Free valuation (maximum of £781 for properties up to £1,000,000) and free legals for remortgages. Skipton Exclusive
65% 2.99% Fixed 2017-01-31 £1995 £150.00 Free valuation Mortgage Trust Exclusive
65% 3.49% Fixed 2017-01-31 0% £150.00 Free valuation Mortgage Trust Exclusive
60% 2.45% Discount 2 Years £1950 £250.00 One free Valuation on properties valued up to £1,000,000 Hinckley & Rugby Exclusive
60% 2.25% Fixed 2016-11-30 £2495 £245.00 Free valuation (maximum of £781 up to property value of £1,000,000)and free legals for remortgages. Skipton Exclusive
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.  Please check our website regularly to see the most up-to-date products available. 

Search the whole BTL mortgage market free
Tel: 029 2069 5446
Your home may be repossessed if you do not keep up repayments on your mortgages.  
The Financial Services Authority does not regulate some forms of mortgage.

Hammersmith landlord fined

A London landlord, Royston Cooper has been fined nearly £30k for various breaches of the Housing
Act at a HMO in Hammersmith.

The fine breaks down into £15,000 for not having a HMO license, £5,000 for not maintaining the boiler,  £5,000 for not fixing a leaking soil pipe in the toilet, and another £3,000 for not responding to a request for information, court costs of  £2,160, and a victim surcharge of £120.

The five architectural students who were letting the property reported the landlord to Hammersmith and Fulham Council.

Cooper, 47, of Billingshurst, West Sussex failed to appear at Hammersmith Magistrates’ Court.

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Average rents fall by 0.3% reports Homelet

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