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Wednesday, July 30, 2014

Capital growth still out-weighs yields for me

Not all of the UK has been bathed in sunshine when it comes to their property prices. The old northern industrial towns such as Doncaster have remained very much in the shade, and any shoots of recovery remain shriveled and starved of the light emulating out from the capital.
 
According to this Mail article, Doncaster's property prices are lower than they were ten years ago. The average house price in the town is just £95,869, compared to its 2007 peak of £118,686.

This got me thinking about investment returns and the balance between rental yields and capital growth.

I was recently surprised by the small differential in the latest rental yields across the regions - with less than one percent dividing the highest, the 6.4 percent in the North West, and the lowest, 5.5 percent in Central London.

It strikes me that buying in the area with the strongest potential for capital growth is key for investors to make decent returns.

I'm sad to say that many of those old industrial northern towns don't sing out with future prosperity to me, and though they may offer slightly better rental yields, I can't see them ever performing that well where it really counts - in capital growth.

Look to the prosperous towns and cities to make the most of your long term property investments.

 
Take advantage of our discounted landlord insurance rates

Tuesday, July 29, 2014

Bloomberg speculate UK property crash

Bloomberg are speculating on the London property bubble crashing the economy - well, they just would.

Whereas the IMF are sounding far more positive about the UK's prospects.

The International Monetary Fund are encouraging the BoE to keep interest rates low and to instead use  other measures to keep property price growth restrained, such as the stricter lending regulation imposed as part of April's mortgage market review.

It also wants to see increased supply in the property market to help battle excessive house price inflation over the coming years.

The IMF retains a positive outlook for the UK economy, revising their UK growth predictions to 3.2% for this year and 2.7% for 2015.

Take advantage of our discounted landlord insurance rates


Most popular buy-to-let mortgages



Max LTVInitial RateTermCompletion feeBooking feeIncentivesLender
85%5.99% Discount2 Years2.5%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
85%5.99% Discount2 Years3%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
85%4.99% Fixed2 Years2.5%£130.00NoKent Reliance Semi Exclusive
80%4.99% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
80%3.99% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
75%4.69% Discount3 Years2%£0.00NoSaffron BS Semi Exclusive
75%3.79% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
75%2.75% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
65%5.27% Fixed2017-03-312.5%£0.00NoSaffron BS Ex-Pat Semi Exclusive
60%2.45% Discount2 Years£1950£250.00One free Valuation on properties valued up to £1,000,000Hinckley & Rugby 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

 

Email:info@propertyhawkbtlmortgages.co.uk

 

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.

Apparently most landlords want student tenants

There are some surveys I just don't get, but I am a bit stupid.

A new survey reckons that letting agents and landlords think students make the best tenants. 

The landlord survey conducted by Glide and Accommodation for Students reckons that the majority of letting agents and landlords think students make the best tenants. 

According to their data, 69% of landlords and letting agent preferred letting to students.

Ok, but that seems a pretty high figure. I mean there are a lot of landlords that would argue until they were blue in the face why you should never let an eighteen year old, hell bent on hedonistic oblivion, near your precious rental property.

I had a closer look into Glide's claims. Maybe I wasn't looking harder enough, but I couldn't see any mention of how many landlords/letting agents they asked and where they sourced their respondents. 

Was it three landlords they met in a pub, or thirty thousand and where did they find them? 

I mean if they were all student landlords or letting agents that were already focused on letting to students, it figures that they like letting to students, but it is hardly a cross section of the private rental sector.

That's a bit like asking customers in a sushi restaurants if they like sushi, then saying 100% of Brits like sushi, but no they don't - I for one hate the cold, slimy, fishy stuff.

Can anyone from Glide or Accommodation for Student shine any light on their numbers?

Leeds BS update BTL rates

The Leeds Building Society has updated their BTL mortgage rates. Their max 60% LTV loans now start at 2.65% on a two year fixed with a £1,999 fee.

70% LTV products start at 3.19% for a two-year fixed rate with a fee of £999, and offers a free standard valuation up to £335 and free in-house legal services.

Search the whole BTL mortgage market free  
 

Email:info@propertyhawkbtlmortgages.co.uk

Tel: 029 2069 5446

Buy-to-let mortgages up 40%

The variety and number of buy-to-let mortgage products has hit a post crash high according to Moneyfacts.

They have reported that the number of buy-to-let mortgage products in July now stands at 665.  This is up 43% from the same time last year.

Despite the rise the figure remains a long way down from the pre-credit crunch figures of 3,662 mortgages.  A heady and distant memory!

Mortgage Search - expert broker

Monday, July 28, 2014

Self employed buy-to-let mortgage

If like me you are self employed and looking for a buy-to-let mortgage be it a remortgage or one to buy an new property you will probably need a SA302?

What is an SA302?

It was a new one to me.  Apparently, it was a form introduced back in 2009 by HMRC to verify the amount of tax you have paid. As buy-to-let lenders have tightened up on their lending criteria many mortgage companies have utilised the SA302 as a basic proof of income.  This is useful for many of us landlords who often have income from multiple sources and therefore don't fall into that neat PAYE category whlist wouldn't exactly class ourselves as 'short of a penny'.

Where can a landlord get an SA302?

Surely I can download a SA302?  Well you can by logging in to your self assessment page and then going to your tax return options.  This will then allow a landlord to select a tax year and download the relevant information.  The only problem is with downloading your own SA302 is that many mortgage companies will not accept these downloaded versions.  I don't know why...in case somebody has tried to forge them perhaps?  So a landlord is better off phoning the HMRC direct on 0845 900 0444 and getting them to send them a copy.  It should take about 10 days in the post.  I've just applied for mine and hopefully this will unlock the 5 year fixed rate remortgage that I'm going for.  I'll keep you posted!

Mortgage Search - best 5 year fixed rates

Saturday, July 26, 2014

Landlord training - 'letting essentials'



Over the years Property Hawk has assisted many established and new landlords with expert advice on letting property.  Now we have got together with Rebecca Brough from our legal partners, Fidler & Pepper, to run a series of Landlord training events looking at the essentials landlords need to know to manage their own buy-to-let rental properties legally and more effectively. These are informal days, where it is as much about asking questions and exploring best practice than it is about going 'back to school.'

Landlord Essentials will give you, whether you are a newbie landlord, an experienced letting agent or property portfolio owner, the insight to create a tenancy, reference your tenants, use a guarantor agreement, give notice and end a tenancy. We also look at what happens if your tenant stops paying the rent and disappears. How do you trace them and then get your money back?

Details of Training Day
This full days training on the 17th October costs £95, includes lunch and refreshments and takes place in picturesque Bakewell, a short distance from Sheffield and junction 29 of the M1.


During the day the course will cover:
  • The Tenancy Agreement -  EPC, Gas Safety Certificate, Utilities, References, Guarantors – deed of Guarantee, credit checks
  • Deposits - Deposits, Deposit Schemes, Rules, Penalities, Remedies
  • During tenancy - Repairing obligations, Right to inspect – difficulties, Tenant’s right to quiet enjoyment, Gas Safety Certificates – HSE guidelines
  • Ending the tenancy - Tenant wants to leave, Landlord wants to end the tenancy, Illegal eviction and abandonment, Break clauses, Section 21 notices and court process, Section 8 Housing Act 1988 and court process
  • Tracing an absconding tenant - Tips, Getting your money back, Using a tracing agent   
 BOOK NOW     

 

For more information:
 Tel:  0845 868 4070 or e-mail: training@propertyhawk.co.uk



Study in active management - 10% yield

Dukes Lodge, 246 Duke Street, SHEFFIELD, S2 5QQ

This property in Sheffield is a study in how to manage a property by an active landlord.  They are rewarded for their hard work by an almost 10% yield.  Don't think that it just happens.  This isn't the best of areas in Sheffield or though it's a handy location near the train station and city centre.  I can tell at a glance that this property has been actively managed.  The property clearly has been improved, the vacancy rates over the last 3 years are practically non existent.  The type of units are just the type to be inhabited by young singles, with probably a high turnover of tenants.  The yield at almost 10% is high but you would need to factor in a few days of management and maintenance time each week.  Having said that the property provides and opportunity for a healthy net income from it's £65,000+ of rent.  Don't expect much capital appreciation in the short-term even with the recently improved Park Hill Flats just up the road. With rents and occupancy maxed out it definitely one for an active manager landlord who wants income.
  • Freehold
  • 14 Studio apartments
  • Fully let
  • Subject to AST's
  • Current rent passing £65,280 pa
  • Gross Initial Yield 9.7%
  • Off-street parking for all apartments
Offers invited in excess of £675,000 subject to contract

For more information contact:

Jack Robson +44 (0)113 243 7952 jack.robson@allsop.co.uk
James Wilson +44 (0)113 236 6679 james.wilson@allsop.co.uk

Mortgage Search - expert broker

Thursday, July 24, 2014

PM3s, newly painted and ready to use

PM3S is officially a week old.

For those of our users still clinging to the old PM3 interface we can assure you the new version is perfectly safe and ready to use.

You don't need to download, re-register or change your deodorant to use it.

Simply use your existing login details (email and password ) and login to PM3s here.

See it as a newly painted front door to all your existing property data.




Latest regional rental yields

BM Solutions latest regional rental yield data had put the North East, North West, Midlands and Wales at equal top. The four regions achieve an average gross rental yield of 6.4pc.

What strikes me is the minimal range between the highest yielding areas and the lowest. Even Central London's yields are less than a percentage lower despite the rocketing prices.



Wednesday, July 23, 2014

Using a company to pay less property tax

Should landlords form a company to reduce their tax liablities.  This excellent updated guide from Taxcafe goes through the implications with worked examples and is now available at the Property Hawk taxation bookshop.

Subjects covered include:

* How companies are taxed - the clearest explanation you will find anywhere.
* All the benefits and drawbacks of using a company.
* How to cut your tax bill by 40% with a company.
* How to reduce your tax bill by an extra 30% by bringing your spouse/partner into the company.
* How company owners can enjoy massive additional tax savings by varying their income from year to year.
* Tables showing the exact tax savings you could enjoy by using a company.
* How corporation tax reductions in 2013, 2014 and 2015 are making companies even more attractive as tax-saving devices.
* Other important tax issues including home office expenses, motoring and travel expenses, pension contributions, borrowing money and property taxes.

One consideration before incorporating a company to hold your residential investment portfolio is the administrative burden of running a limited company so any landlord going down this route will have to carefully weigh the tax savings with the 'hassle factor'.  Have a look at this recent post about setting up a limited company to administer a letting business.




Tuesday, July 22, 2014

PRS full of older singleton tenants

The rental sector is a flood with older singletons according to research from Experian.

They have identified that the second largest group tenant type, after students, is the 35 to 55 singleton.

These Brigitte and Brian Jones's are typically renting two or three bedroom Victorian or Edwardian shared terraced properties with other singletons, despite earning approaching an average salary between £20k to £29k. Seemingly average is not enough to afford your own place.


Many of them are newly separated and are described as having a "midlife stopgap" - sadly their red Ferrari
s are on hold, whilst they take ownership of their very own shelf in a shared fridge.


A scarcity of first time buyers

The percentage of house sales going to young first time buyers (18 - 30 year olds ) dropped to just 3 percent of last months sales, according to data from the National Association of Estate Agents.

This compares to the 12 percent share of sales made to this same segment of buyers back in August 2013.

The drop reflects rising prices and the introduction of more stringent affordability requirements on residential mortgages.

A spokesperson for the NAEA commented

“Things are getting even tougher for first time buyers. Not only do you now need to stump up ridiculously large sums of money in terms of deposits and stamp duty to be able to get on the ladder, but new (mortgage) rules mean buyers will also have to prove they can easily afford repayments now and in the future,” said Mr Hayward.

Million landlords face a tax investigation

According to the latest report in the Mail almost a million landlords could face a tax investigation because the have failed to register with HM Revenue & Customs (HMRC)

Landlords  are not registering for tax
This is based on the fact that  the number of landlords now equals 1.4 million whilst only 500,000 have registered with HMRC.  In theory there are over 900,000 landlords that could be quizzed by the HMRC about their buy-to-let property and tax affairs.   For many landlords historically there appeared no need to register with HMRC because not making rental profits.  The difficulty for many landlords is that since interest rates have fallen to the floor is that they are now making significant rental profits.  HMRC are aware of this and could now be pressing to find un paid taxes.  Accountancy, firms have estimated that unpaid taxes could equal in the order of £550 million.

Tax advice
Landlords need to be aware that where they do make a rental loss that they can off set this against future rental profits.  Whilst clearly HMRC have limited resources and will not be able to launch investigations against every unregistered landlord.  At the same time there is an increasing risk that landlords who do not declare their rental income will be targeted & investigated.  Chris Horne a serial landlord and Editor of Property Hawk a leading website for landlords comments:

"The nature of many landlords is that start off with one property which makes no money so they don't feel they need to notify HMRC.  Over the years that 1 property perhaps builds into a portfolio of 5 or maybe 10 properties.  Perhaps they have sold a property along the way to allow them to build up their rental business and purchase more investment properties.  Over time they have a significant rental business but have not declared it to the tax authorities.  Landlords in this situation, feel trapped because they are worried about the fact they have not registered and how the tax authorities will deal with them.  I know this because it is exactly what happened to me.

Landlords are therefore always best to disclose their income from the outset to avoid this happening.  If this situation has arisen then they should seek professional tax advice but a full disclosure to the tax authorities will often be treated more leniently than been discouvered as part of an investigation."

Calculate my rental tax return

Monday, July 21, 2014

Most popular BTL mortgages

Max LTVInitial RateTermCompletion feeBooking feeIncentivesLender
85%5.99% Discount2 Years2.5%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
85%5.99% Discount2 Years3%£130.00NoKent Reliance Multi Let & Ltd Co. Semi Exclusive
85%4.99% Fixed2 Years2.5%£130.00NoKent Reliance Semi Exclusive
80%4.99% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
80%3.99% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
80%4.87% Fixed2019-08-31£995£0.00NoSaffron BS Semi Exclusive
80%4.47% Fixed2017-03-312%£0.00NoSaffron BS Semi Exclusive
75%4.69% Discount3 Years2%£0.00NoSaffron BS Semi Exclusive
75%3.79% Fixed2016-10-310%£150.00Free valuationMortgage Trust Exclusive
75%2.75% Fixed2016-10-31£2495£150.00Free valuationMortgage Trust Exclusive
65%5.27% Fixed2017-03-312.5%£0.00NoSaffron BS Ex-Pat Semi Exclusive
60%2.45% Discount2 Years£1950£250.00One free Valuation on properties valued up to £1,000,000Hinckley & Rugby 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

 

Email:info@propertyhawkbtlmortgages.co.uk


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.

Who is the new housing minister?

Anybody in a pub quiz would be forgiven for not knowing who the current Housing minister is.

This is because there have now been 4 housing minister in 3 years under the current coalition government.  This actually makes a phenomenal 15 in 17 years meaning that a Minister can expect to stay in post for no more than a year.

Brandon Lewis takes over from Kris Hopkins who was Minister for just 10 months.  Brandon Lewis will be responsible for housing and planning and reports indicate that he has the advantage of being a landlord himself hopefully giving him some useful insights on what it's like.

Property Hawks advice to Brandon is not to get too comfortable and it's probably not worth getting his decorating gear out to redecorate the office.  Ironically, the average Housing Minister is in post less time than the average tenant stays in their rental property which has now reached a record 20 months in length.  Surely, this is not a good basis for long-term housing policy?

Landlord insurance - professional rates - online brokers

Saturday, July 19, 2014

Lenders rule out mortgage income cap

I've spoken before about RBS move to cap lending on their buy-to-let mortgages to a maximum income multiple of 4.99 being a political rather than a business decision.

I also proffered the view that I thought it unlikely that other lenders would follow RBS' lead.

Reports in the FTAdviser indicate that this is the case.

The worry remains however, that the Bank of England could act to limit lending if they perceive that the housing market runs out of control.  In the past monetary policy through the use of interest rates would be the go to mechanism.  The current Governor Mark Carney seems reluctant to raise interest rates for fear of choking of economic recovery in the rest of the economy.

Landlord should keep a careful eye on the mortgage market for signs that policy makers may be prepared to act.

Thursday, July 17, 2014

Basic navigation of our new free landlord software

We've set the new version of our free property management software live today.

Property Manager 3s has an updated interface, that places key data onto Summary Screens, for portfolio, individual property addresses and specific tenancies.


A Title bar at the top of the screen displays the selected property address and selected tenancy.

Title bar
Function menu and click-able counters
We have also installed a pair of permanent menus.

Firstly, a left hand Function menu, containing category headings. These headings are click-able, to reveal their sub-category of options.

The Function menu also contains click-able blue counters, showing number of tenancies, forms, properties, rent demands, file uploads and tasks in your portfolio.










Alongside the Function Menu, a permanent horizontal Button bar, runs just beneath the Title bar.
This Button bar contains additional options buttons and action buttons. We hope you like the PM3s upgrade.

Button bar