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Sunday, May 24, 2015

Buy a portfolio of 336 apartments

Are you looking at scaling up your residential investment portfolio and adding a portfolio of over 300 buy-to-lets in one go? Have a look at Project Vero with a portfolio of new properties located mainly in the midlands and north-west. The asking price for this little selection of apartments will probably be in the order of £30 million but at that price you would get a gross yield of over 10%. The critical thing will be able to raise the finance.

Of the 336 flats, 308 are currently either let or are vacant pending letting, and the breakdown of these flats is detailed below:
 • 279 x Assured Shorthold Tenancies
 • 6 x Company Lets
 • 23 x Vacant
 • 308 Total  

Appropriate tenancy details relating to each tenancy type are contained within the Master Schedule. Sample AST’s adopted within each development can also be found within the download section of the website.

The remaining 28 flats situated within the Marco Sky development in Nottingham are currently being completed/fitted out, with practical completion due at the end of May 2015. 

Further information relating to this development can also be found within the Supporting Information page of this website. These tenancy details will be updated prior to inviting offers.

Current Gross Rent and Estimated Gross Rental Value (ERV) The total current gross rent reserved is £2,467,363 per annum.

A breakdown of rents per flat and aggregate rents relating to the additional 
car parking spaces are contained within the Master Schedule. A summary breakdown by tenancy type is detailed below:

 Tenancy Type                                Rent £pa
AST                                               £2,235,840
Company Let                                 £46,200
Licences (Car Parking Spaces)      £185,323
Total                                               £2,467,363

The ERV of the entire portfolio, including flats and car parking spaces, is in the region of £3,642,300 per annum.

An individual breakdown of ERV’s is contained within the Master Schedule.

Commercial mortgages - buy-to-let finance

Saturday, May 23, 2015

Digitised house purchase scheme

A new service of online conveyancing service aims to speed up the house buying process.  Veyo part funded by solicitors' representative body aims to give buyers more information and take the whole process online allowing buyers and sellers to track the process in real time.

The service will launch next week and comes about 4 years after the Land Registry abandoned plans to digitise transactions.

As always the success of the service will depend on the service being adopted by enough conveyancers to make it an industry standard.  Only time will tell!

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Thursday, May 21, 2015

Most affordable rental spots in London

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ONS House Price Data for March

The rate of annual house price growth has increased across the majority of the UK according to the Office of National Statistics house price index for March 2015

Scotland has done particularly well, recording its highest annual increase since July 2007.
  • UK house prices up 9.6% in the year to March 2015, up from 7.4% in the year to Feb 2015.
  • Annual growth rates - 9.4% England, 5.7% Wales, 14.6% Scotland, 7.5% Northern Ireland.
  • Strongest English regions - East (11.4%), London (11.2%), South East (11.2%) annual house price growth.
  • Excluding London and the South East, England's annual house price growth is now 8.1%. 
  • Seasonally adjusted, average house prices increased by 1.1% between February and March 2015.
  • First-time buyers paid 7.8% more than in March 2014. 
  • Owner-occupiers (existing owners) paid 10.3% more than in March 2014.

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Wednesday, May 20, 2015

House price growth driven by SE says ONS

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Universal Credit tips for social landlords

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Hertfordshire landlord fined £500

A Hertfordshire landlord has been fined £500 after not getting the heating fixed at her rental property.

Despite receiving an enforcement notice, landlord Jane Cleverly, left her rental flat in Heathfield Road, Hitchin without any working heating.

Ms Cleverly claimed that her own ‘financial difficulties’ had prevented her from getting things fixed, if so, the £500 fine, £50 victim surcharge, and £794.57 costs are not going to help her situation.

Councillor Bernard Lovewell, commented on the case -

“We hope this prosecution sends a clear message to private landlords in North Hertfordshire – the council will use enforcement powers whenever necessary to ensure the welfare and safety of our residents.”

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BTL lending activity stays strong

The Council of Mortgage Lenders statistics for March 2015 show further growth in the Buy-to-let sector.

18,200 buy-to-let loans were taken out in March, up by 12% on February and 21% more than March 2014's lending.

The total value of BTL loans taken out during March 2015 came in at £2.7billion, of these, 8,600 were for house purchases, up 8% on February. 

Buy-to-let remortgages made up the majority of the remainder, with 9,400, up 15% from February, and 29% on March 2014. The total value of BTL remortgages over the month came to £1.4billion. 

The first quarter of 2015, has seen the buy-to-let lending sector grow it share of total gross mortgage lending to the highest proportion since records began in 2006, now standing at 18%, although this is more a reflection of shrinking home-owner activity.

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Tuesday, May 19, 2015

Voluntary accreditation scheme launched

Durham County Council has launched a voluntary accreditation scheme for landlords.  The cost is £150 and for that a landlord has access to:
  • guidance on best practice
  • access to a credit referencing system
  • assistance in cases of anti-social behaviour amongst their tenants
In return a landlord will need to meet a code of practice giving their tenants the reassurance that they will offer good quality and well managed accommodation.

"The Private Landlord Accreditation Scheme is a win/win situation for the rental market in County Durham” claims a council spokesman.

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Monday, May 18, 2015

The most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
85% 4.99% Fixed 2 Years 2% £130.00 No Kent Reliance Semi Exclusive
85% 5.19% Fixed 5 Years 2% £130.00 No Kent Reliance Semi Exclusive
85% 5.09% Discount 2 Years 2% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 3% Fixed 2017-05-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
80% 3.25% Fixed 2017-05-31 £2495 £150.00 Free valuation Mortgage Trust Exclusive
80% 3.5% Discount 2 Years 0% £0.00 No Hanley Economic Exclusive
80% 5.39% Variable 0 Years 2% £0.00 No Saffron Light Refurbishment
75% 4.69% Fixed 2 Years 1.5% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
75% 5.39% Variable 0 Years 2.5% £0.00 No Saffron Light Refurbishment
75% 2.25% Fixed 2017-04-30 2.5% £150.00 Free valuation Mortgage Trust Exclusive
75% 3.5% Fixed 2017-04-30 0% £150.00 Free valuation Mortgage Trust Exclusive
75% 4.39% Fixed 2 Years 1.5% £130.00 No Kent Reliance Semi 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.

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Interactive maps show UK's best BTL returns

This is Money have published three interactive maps produced by Lendinvest showing the differing investment performance of BTL properties across areas of the UK.

Using Zoopla's  property prices and rental data, Lendinvest have mapped average rental yields, capital growth and a combined 'overall investment performance'. 

The postcodes with the best rental returns are in Birmingham, Ipswich, Liverpool and Glasgow, however when capital gains are factored in London wins out.

The capital's stella property price growth out-performing the rest of the UK's BTL's for overall returns.

Capital growth remains king.

New Gov. bound to fall short of building targets

If this tweet is anything to go by, so much for the Tory's promise of building hundreds of thousands of new homes.

Expect yet another Government to fall short of their building targets.

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Parts of London set to soar

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Rightmove talk up post-election market

The talk is positive following the return of the Tory boys to government, this time with a majority.

Rightmove recorded a pre-election drop of 0.1% (-£242) on  property coming to market, but now expect the majority Tory government to bring a surge of new sellers.

Miles Shipside, Rightmove housing market analyst commented -
“Whilst activity was buoyant in early spring with demand for suitable housing outstripping the supply of property for sale in much of the country, it seems that pre-election jitters finally came home to roost in the final weeks of electioneering, with the average price of property coming to market dropping at this time of year for the first time in five years. This is an election-driven price stall which gives some buyers only short-term relief from the back-drop of a long-term housing shortage, and many estate agents are now reporting a resurgence in interest following the surprise election result. Election uncertainty and particularly the threats of financial penalties to landlords and those with properties valued at over £2 million put a brake on the market, and their removal gives a reason for a rebound in activity and prices.”
“The underlying supply/demand imbalance has meant the election uncertainty has not had a negative price outcome in seven out of ten regions in the country. However, having been faced with an all-time asking price high in April of £286,133 nationally, any drop is welcome to those at the upper end of the stretched affordability curve.”

“Buyers should note that there is often a surge of property supply after an election, as those who have held off coming to market decide to take the plunge. Many potential sellers may have held back expecting a period of hung-parliament uncertainty, but they could now decide to catch the late spring market. In a traditional tight-stock market an increase in supply of available property and greater competition among sellers to attract buyers may moderate their price expectations and make them more open to an offer. The previous election saw jumps in new seller numbers in all regions of the country, with London and Wales leading the way with over 20% more properties coming to market. There may be a window for buyers to act now in this late spring market before prices rise in the next few months.”
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Durham's landlord accreditation scheme

Durham Council are going for a softly, softly approach with their landlord licensing scheme.

They are promoting their new county-wide 'private landlord accreditation scheme'.

The scheme is voluntary, but any landlords signing up for the scheme must adhere to a set Code of Practice.

Read Durham County Council’s Private Landlord Accreditation Scheme

To be accepted onto the screen a landlord must be seen as 'fit and proper' and not be found to have -
  • A conviction for illegal eviction or harassment of tenants in the last seven years 
  • A conviction for violence towards any persons in the last seven years. 
  • A conviction for mortgage, Housing Benefit or Council Tax fraud or breach of grant 
  • conditions within the last three years. 
  • Failed to comply with any statutory notice or House in multiple Occupation requirements resulting in prosecution or works being carried out in default in the last three years. 
  • Breached Selective Licence or any laws relating to housing, public health or environmental health. 
  • A conviction for non-compliance of a Planning Enforcement Notice relating to a residential property within the last three years. 
  • Practiced unlawful discrimination on the grounds of sex, colour, race, ethnic or national origins or disability. 
  • Other convictions which would indicate the unsuitability of the applicant under the scheme. 

The scheme costs to join. Starting at £150 for a landlord of up to ten properties, £250 for 11- 50 properties, £350 for 51-100 properties, £500 for 100+ properties.

The council claims the benefits to membership are -
  • Information and guidance to promote good management practices
  • Recognition of landlords offering good quality accommodation
  • A certificate awarded for recognition to display on premises
  • Advertising of empty properties on our Durham Key Options website; the website accessed by people looking and registering for social housing
  • Access to a waiting list of potential tenants
  • Pre-tenancy support for tenants
  • A tenant referencing service
  • Post tenancy support
  • A tenancy agreement
  • A template inventory
  • Anti-social behaviour assistance

Saturday, May 16, 2015

Who is responsible for the gardening?

Spring has sprung and vegetation growth is proceeding at pace.  I have already had 2 gardening issues brought to my attention this week by my tenants.

The first from a tenant who wants me to cut back the front garden to allow their two small children to have an area to play in. The other is from a tenant who was flagging up an issue regarding a bush that is just about to engulf their satellite dish.  So is the gardening maintenance the tenant or the landlords responsibility?

Who is responsible for the gardening?

Well the starting point for any disputes on who is responsible for the gardening comes from the tenancy agreement.  In the case of Property Hawk's free tenancy agreement it is clear as stated in para 3.13 that The Tenant agrees with the Landlord to:
Keep the garden and/or drive of the Premises clean and tidy and to mow the lawns as
often as necessary and to keep the flower beds free from weeds and hedges trimmed,
and not to lop, top, cut down, remove, or otherwise injure any trees, shrubs, or plants
growing upon the Premises, or to alter the general character of the garden.
However, many tenants conveniently 'overlook' this aspect of their tenancy agreement but legally it's there in black and white and it's a good position for a landlord to 'negotiate' from.

The practicalities of tenants with a gardens

Whilst I'm aware that legally the responsibility of the garden maintenance falls on my tenants.  The practicalities are often somewhat different.  The tenants frequently claim that they don't have the time or the resources to keep the garden under control.  Of course my thoughts are:  "and I do!?" Clearly, if the garden required a sit on mower for the tenant to keep an acre of lawn cut then no unreasonably the tenant could claim they don't have the necessary equipment.  But how much does a set of garden shears cost?  If necessary I'd offer to buy them for the tenant.

The reality is that many tenants like the benefits of enjoying some outside space with their rental property but don't like the inconvenience associated with maintaining it.  They consider wrongly that it's the landlords responsibility just as in the case of decoration to keep they garden pristinely manicured.

A landlords options on maintaining the garden

Legally, as I've already stated above the tenancy agreement is clear that with a Property Hawk tenancy agreement as most others standard ASTs will put the onus on the tenant.  If they don't want to undertake maintenance then a landlord is clearly within their rights of having first given the tenant reasonable notice to carry out the work, then to employ a gardener and charge the tenant for it. 

Legalities vs management

The challenge for any landlord such as myself is to balance the legal rights and wrongs with the fact that you want to keep your long-term reliable tenants on side.  To fire off an email stating the contents of paragraph 3.13 of the Assured Shorthold Tenancy Agreement (above) would probably do little to endear me to my tenant.  So how do I proceed?  In reality the cost of a gardener to go round a cut back a litter bit of vegetation will cost me not much more than £50 quid.  This has to be weighed against the tens of thousands of pounds of rent I've received from this tenant to date.  I might have to swallow my pride along with the gardening bill; but sometimes the practicalities of keeping your long-term tenants happy have to be balanced against their clear legal responsibilities.

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Thursday, May 14, 2015

Some words of warning

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Prices rise as buyers battle short supply

The Royal Institute of Surveyors ( RICS) have blamed the election uncertainty for the diminished supply of property to the sales market.

According to the latest RICS UK Residential Market Survey, the fall in new instructions lead to price rises in April across all parts of the UK as buyers battled with a shortage of supply. 

For the first time since August 2014, RICS surveyors saw prices rise in every area of the UK, with 72% predicting further price rises over the next twelve months.

As regards the rental market, surveyors report seeing strong demand and expect to see continued rental growth over 2015.

House prices were driven up again in April as the data showed the third consecutive monthly decline in supply with new instructions falling at their fastest rate since May 2009, according to the latest RICS UK Residential Market Survey.

Jeremy Blackburn, RICS Head of UK Policy commented 

"The affordability and availability of homes in the UK is now a national emergency and addressing this crisis must be the priority for the new government. The last time we were building 300,000 homes was in 1963 under Harold Macmillan’s Conservative government, which utilised both public and private building.

We need a coherent and coordinated house building strategy across all tenures. This should include measures that will kick-start a supply-side revolution, such as mapping brownfield, addressing planning restrictions and creating a housing observatory to assess the underlying economic and social drivers of housing and provide the impetus for solutions."

Blackburn warns that -

"Introducing demand-side measures such as extending Right to Buy will not see the Conservatives deliver on their promise of 1m homes by 2020."

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Homelet sees rising rents

Homelet's Rental Index for April 2015 shows the following key points for the three months leading up to April -
  • Average tenant income up 2.5% higher on last year.
  • London average rents for new tenancies up 7.5% on last year, now £1,436pcm.
  • UK average rental value (excluding London ) up by 7.4% on last year, now £730pcm.

Homelet's Rental Index is compiled from new tenancies, via their tenant referencing service, amounting to up to  1,700 applicants every day. 

Wednesday, May 13, 2015

London's Nine Elms regeneration zone

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The BofE Inflation Report predicts property prices rising

The Bank of England have published their May 2015 Inflation Report, from which justified the Committee's decision to maintain the Bank Rate at 0.5% and the stock of purchased assets at £375 billion.

In the Money and Assets chapter of the BofE, May 2015 Inflation Report they conclude that rises in property prices were largely a result of low levels of housing supply, reflected by the fall in demand for mortgages since mid-2014.

Overall, the Bank of England staff predict 1⁄2% rises per month in the second half of 2015.

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Housing Minister pledges the obvious

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RICS comment on new Government

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Pre - election slump in rent ends

Residential rents have been on a downward slide leading up to the election according to the Rentindex - the UKs only real time barometer on UK buy-to-let rents.

The Rentindex shows that over the last 3 months rents which still exhibit a long-term upward trend, have slumped 3%. 

Rents though have very recently recovered by 0.7% over the last month perhaps reflecting landlords relief that rent controls were no longer on the post election menu.

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Tuesday, May 12, 2015

New housing minister - Take 2 - No change!

Mark Francois, the MP for Rayleigh and Wickford was reported to have replaced Brandon Lewis as Housing Minister in Cameron's new ministerial line up.

Fifty year old, Francois has a little experience of the sector, as the vice-chair Basildon Council's housing committee in the early nineties. Other than that, the ex- Territorial Army man, studied History and worked as a banker, before getting consultancy work as a lobbyist.

The other thing we know about him is, he likes snacking - Peparami, Mars bars, Snickers, Kit Kats, wine gums, Twiglets, Jaffa Cakes, chocolate biscuits and Pringles are just some of his favourites.

Housing Minister - no change

However, contrary to the original announcement on Monday No.10 confirmed today (Tuesday) that in fact Brandon Lewis (a landlord himself) has been retained in post as Housing Minister.

I'd love to know the inside track on this rapid reverse.  Did civil servants discover something about Francois past that might have come back to bite.  Or was it just that a new post for Brandon was not forthcoming?  Or was it just a good old fashioned civil servant 'cock up'.

Either way the civil servants in the ministry will be left with serious egg on their face.