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Saturday, September 05, 2015

Latest Auction Opportunities

The latest investment auction opportunities are available on the Allsop website.  As usual a mix bag of property investments across the UK.

An unusual one that took my eye was the Roof space available within a historic property in Helston, Cornwall.  An ideal holiday home conversion.

The good thing is that this lot unusually is available with a reserve.  It could mean that you really do bag an auction bargain.

Mortgage Search - finance my investment

Fastest rising property price tube stops

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Friday, September 04, 2015

SNP's proposals for Scotland's rental sector

If I was a landlord of Scottish rental properties I'd be seriously considering whether now was the time to sell.

Nicola Sturgeon set out the SNP's 'Programme for Government' in her speech at the Scottish Assembly in Edinburgh on Tuesday.

She announced -"Alongside our continued investment in affordable housing and help for homeowners, we will improve conditions in the private rented sector. Our Private Tenancies Bill will modernise a law that affects hundreds of thousands of tenants and landlords across Scotland. 

The Bill will improve security for tenants and provide clear rights and safeguards for landlords. I can also announce today that the Bill will include provisions for rent controls in rent pressure areas."

The aim of the SNP's proposed Private Tenancies Bill are to:
  • Replace the Assured Tenancy with a Scottish Private Rented Tenancy.
  • Remove the ‘no-fault’ ground for repossession, meaning a landlord can no longer ask a tenant to leave simply because the fixed-term has ended.
  • Provide comprehensive and robust grounds for repossession that will allow landlords to regain possession in specified circumstances.
  • Provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce local rent controls for rent pressure areas.
  • Create a more streamlined, clearer to understand tenancy system that is fit for the modern private rented sector.

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Thursday, September 03, 2015

Our most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Lender
85% 4.99% Discount 2 Years 2.5% £130.00 No Kent Reliance Semi Exclusive
85% 5.19% Fixed 2 Years 2.5% £130.00 No Kent Reliance Semi Exclusive
85% 5.29% Discount 2 Years 2.5% £130.00 No Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 3% Fixed 2017-10-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
80% 3.25% Fixed 2017-10-31 £2495 £150.00 Free valuation Mortgage Trust Exclusive
80% 3.29% Discount 2 Years 0% £0.00 No Hanley Economic Exclusive
80% 5.39% Variable 0 Years 2% £0.00 No Saffron Light Refurbishment
75% 2.35% Fixed 2 Years 2.5% £0.00 Free Valuation Newcastle Building Society
75% 2.75% Fixed 2017-10-31 2.5% £150.00 Free valuation Mortgage Trust Exclusive
75% 3.69% Fixed 2 Years 2% £125.00 No Foundation Prime
75% 3.79% Fixed 2 Years 1.5% £100.00 No Axis Bank
75% 3.89% Fixed 5 Years £999 £0.00 Free Valuation Newcastle Building Society
75% 4.59% Fixed 5 Years 2% £100.00 No Axis Specialist
70% 4.99% Fixed 2 Years 2% £125.00 No Foundation Light Adverse
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.

Advice on new smoke alarm laws

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Improving London's private rented sector

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Local housing booms and busts - analysis

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Your Move's average rent map

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Property management software - warning

The latest announcement from free landlord property management software start up Bangaloow highlights the dangers of using unproven free cloud based software who have announced that they are discontinuing their service.

Property Hawk's free Property Manager is almost 10 years old and goes from strength to strength with over 200 users logging on each day.  Our free property management software will always be available to landlords on a free to use basis.

To have a look at the most recent public comments about our cloud based software you just need to login.  Why not make up your own mind up by trialing our free property management software.

Landlord software - cloud based - free property management software

Barnet's Additional Licensing consultation

Barnet Council is continuing on with its goal to introduce ‘Additional Licensing’ of its HMOs.

The Council is proposing that any PRS property, house or flat, occupied by more than one person will require a licence. The scheme also proposes to include 'bedsit type accommodation and other properties where facilities are shared, and some kinds of buildings consisting of poorly self-contained flats.'

Chairman of Barnet's Housing Committee, Tom Davey commented  “This consultation is about some very important proposals aimed at helping to make sure the quality of private rented accommodation in the borough is high.

“We are keen to hear people’s views and I would like to encourage as many people as possible to take the time to consider the proposals and let us know what they think.”

The  consultation period runs until 17 September 2015, so get your opinions heard.

The consultation questionnaire is on Barnet Council's engage website or call them on 020 8359 7454 to give them piece of your mind.
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Ealing HMO landlord fined £70k

Ealing landlord, Gunapalan Vamathevan has been handed fines totalling £70,000 for four unlicensed  Houses in Multiple Occupation.

Vamathevan failed to act on a number of improvement notices and prohibition orders issued by the council.

The four HMO's, 51 and 53 - 55 Old Oak Common Lane and 10 St Andrews Rd in Acton, W3, were subject to a total of  nine offences at Ealing Magistrates’ Court on Thursday, 6 August.

Alongside the fines, Vamathevan is required to pay court costs of £5,395 and a victim surcharge of £120.

A grand sum of £75,215.

Wednesday, September 02, 2015

Savills Nottingham property auction tomorrow

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Prices softening according to Nationwide's HPI

Nationwide's House Price Index for August 2015 shows softening growth.

UK house prices increased by 0.3% in August, slowing the annual rate of growth to 3.2%.

Nationwide's Chief Economist,  Robert Gardner, commented:

“UK house prices increased by 0.3% in August, though the annual pace of house price growth edged down to 3.2% from 3.5% in July. The annual rate of price growth was the weakest since June 2013; this partly reflects the high base for comparison, since prices increased at a particularly strong rate in August 2014.

This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%.

“However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July new buyer enquiries picked up. "

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The importance of a pet clause

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1 in 5 landlords might give up on BTL

According to a specialist landlord law firm, Access Legal, one in five landlords believe they will be “out of business due to government tax break cuts” announced by Chancellor George Osborne in his recent budget.

20 per cent of the 2,000 landlords who responded to a questionnaire said the changes to mortgage interest relief and wear and tear tax relief could force them to sell up.

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Gulf between salaries and house prices

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Tuesday, September 01, 2015

Newport HMO landlord fined £10,000

A HMO landlord from Newport, Wales has been fined £10,000. prosecuted for failing to licence her property and manage it safely, making it difficult to escape in case of a fire.

When inspected by environmental health officers, the unlicensed HMO was found insufficient lighting and blocked fire escapes.

Kaneeza Abid, admitted to 10 offences under the 2006 Management Regulations.

Abid was also handed the council costs of £1,229 plus a victim surcharge of £120.

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Gov. respond to petition against interest relief change

The Government have responded to the 24,000 strong petition against the removal of mortgage interest tax relief for higher tax payers.

The Government's response is -

The Government is committed to a fair tax system so is restricting relief on landlord property finance costs to the basic rate of tax, reducing the generosity for wealthier landlords.

The Government is committed to a fair tax system so is restricting tax relief landlords can claim on property finance costs to the basic rate of income tax.

Landlords are currently able to offset their mortgage interest and other finance costs against their property income, reducing their tax liability. This relief is not available for ordinary homebuyers and not available to those investing in other assets such as shares. Currently the landlords with the largest incomes benefit the most, receiving relief at their marginal tax rates of 40% or 45%.

By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system. This recognises the benefits to the economy that investment in property can bring but ensures the landlords with the largest incomes will no longer benefit from higher rates of tax relief.

By unifying the treatment of finance costs for all individual landlords, the Government is reducing the distortion between property investment and investment in other assets, and reducing the advantage landlords may have in the property market over ordinary homebuyers.

Less than 1 in 5 (18%) of individual landlords are expected to pay more tax as a result of this measure. Taking account of the other measures from the Summer Budget, the Office of Budget Responsibility (OBR) have not adjusted their forecast for house prices. The OBR expect the impact on the housing market will be small. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.

Note - at 100,000 signatures, the petition will be considered for debate in Parliament

If you haven't already, sign the petition against the removal of mortgage interest tax relief for higher tax payers.

If you are unsure as to what the implications of the changes might be, read our latest article showing just what the loss of mortgage interest relief would mean for landlords.

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Mortgage approvals hit 17 month high

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Are prefab boxes the answer?

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Economic growth to push up prices

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The yanks are coming to UK's PRS

As the tide turns against the small independent landlord ( changes to tax relief, ever increasing regulation, licensing, ending of council tax relief on empty property ...the list goes on), the big boys are moving in to take a slice out of the UK private sector pie.

Now the yanks are coming. Atlas Residential, a US Build To Rent giant has bought a 145,500 sqft site in Southampton. Their plan is to build, then manage, 211 private rental flats on the site.

An Atlas spokesman commented“Our view of property management is highly amenity- and customer service-centric and we look forward to delivering that philosophy to the UK renter, whom we believe will react very positively to it. We look forward to expanding our UK footprint with Rockspring and capitalising on this emerging, yet rapidly growing, asset class” 

Atlas's partner in the venture, Rockspring, has gross assets of €7.9 billion.

HMO's fair best under tax relief reversal

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Rent controls - a warning from Scotland

This piece in the Scotsman by Dr John Boyle warns about the unforeseen consequences of rent controls.

He argues as we do at Property Hawk is what we need is more housing for everybody not arbitrary controls on price that distorts markets and fail everybody in the long run.

Germany is often cited as a modern economy where rent controls and restrictions are used to combat fast rising rent increases.  However, here there are other tax incentives in place to stimulate investment in the PRS.  This is the opposite to the UK where the Chancellor is planning to remove one of the few tax breaks for landlord by limiting mortgage interest relief for higher rate tax payers.

Tellingly a recent survey of Scottish tenants reveals that only 86% of tenants received a request for a rent increase during their tenancy. Hardly an indication of rocketing rents.

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Sunday, August 30, 2015

A thousand BTL products available

Tel: 029 2069 5446

Saturday, August 29, 2015

I've bought a penthouse apartment

Well, I've got to that time in my life were I'm due a mid life crisis.  It's either going out and blowing my savings on a ridiculous red projectile super car like a Ferrari that costs me a fortune to run and repair or some other rash statemental gesture to prove my youth and underlying vigor.

Being a sensible type of chap; I've opted instead to splash my cash on a penthouse apartment.  I'm rather glad I did.  I've been squirrelling away my spare cash into shares since the financial crash and these investments largely have done ok.  Looking at the uncertainties surround global stockmarkets and in particular China I'm quite glad I was forced to sell up.

When my penthouse opportunity presented itself because it was a repossession;  buying the property with was a huge advantage when it came to negotiations and the ultimate acceptance of my offer.  I will fill you in exactly why in future blog posts.

What features did I look for in my penthouse?

Lets be clear I never set out to buy a property.  I do love property.  It's in the blood.  I can't pick up the Sunday papers without ogling and swooning over the fantastic bits of real estate that you can buy, rent and visit.  Everything from cute country cottages, Georgian townhouses, grand country houses, exotic beach front villas. They all offer a visual feast and a split second of fantasy before they all crashing down as you realise buying a log cabin in Alaska probably isn't going to fit into your busy work and business life.

I would argue that my penthouse found me.  There it was.  All unloved. Raped and abandoned with it's spiral staircase ripped out and sold on eBay by the malicious owner to grab a couple of hundred quid before loosing the lot and getting booted out by the mortgage company.  This was love at first sight.  My penthouse, sat on a beautiful listed Georgian building in the centre of the historic Lace Market in Nottingham. A new build pod with mezzanine floor and glazing giving you a window on the world and out onto a proper balcony.  Not just one of those Juliet things that is no use to anybody.  Having refurbed a host of buy-to-let property in my time I am tired of buying apartments & updating letting boxes; with budget fittings, laminate flooring from wickes and the cheapest IKEA kitchens.  Don't get me wrong they can look good.  But it ain't ever going to give you the wow factor.  My penthouse was different.  These are the features that attracted me to my penthouse and ultimately why I think it's going to be more financially rewarding than owning a Ferrari.

The features that made me buy my penthouse apartment:

1. It was a proper penthouse apartment.  It was built as a penthouse.  It has double height ceiling space in the main living area rather than been crammed into a loft conversion with weird ceiling angles and protruding dormer windows.  It feels like a palace in the sky.
2. It's in a upmarket location set within a Conservation Area, above a Georgian listed building surrounded by beautiful Victoria lace factories.  There is no point in buying your penthouse in some dodgy part of town.  How are you going to live the dream if you have to run the gauntlet of alcoholics, drug dealers and urban squalor.
3. It has lovely electronically operated wrought iron gates.  Hey, when I pull up in my Porsche (not brought yet but I can still fantasize) I feel a million dollars when the gates swing open and I enter the underground car lift!
4. Most of the properties in the block are owner occupied.  These apartments in this block are brought by people to occupy generally as their home.  The astronomical service charge (£4000 a year) puts off most landlords looking for a decent net rental yield.  This means when I do sell I will be selling to somebody looking for a home not a tight arsed investor (I classify myself as one) looking for rental yield.
5. The property is unique.  One thing that this property has given me is the ability to create a unique pad.  With so many properties particularly in the city centre built to the same space cramming rabbit hutch format.  This place with it's glazing, mezzanine floor with spiral staircase and panoramic city view offers me an opportunity to create a pad that is truly unique and what's more somebody will be prepared to pay for.
6. The actual name of the property is the Penthouse.  This isn't an apartment that is stuck in the attic and the estate agent has euphemistically labelled.
7. I have always steered away from the luxury end of the rental market because of the risk.  However, the capital appreciation opportunities represented by my penthouse acquisition I suspect will far outway any marginal additional income from another mid range buy-to-let property.  However, what I would say is 'right property, right time'.

The chances of me finding a similar property investing opportunity would be non existent, I could search for years without finding something similar, which is exactly why I had to have it!

Landlord insurance - landlord insurance brokers - your choice

Thursday, August 27, 2015

Nationwide's HPI for August sees 0.3% rise

Nationwide's house price index has recorded a 0.3% rise in August, bringing their annual growth rate down from 3.5% to 3.2%.

According to the bank, the average UK property price is £195,279.

Chief economist at Nationwide, Robert Gardner commented on the latest set of data -

‘This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%,’

‘However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July whilst new buyer enquiries picked up,’

‘Clearly house price trends are determined by a wide range of factors, but labour market developments are amongst the most important. The strength of the UK labour market in recent years is a key reason why house prices have recovered more quickly,’

‘There is a strong correlation between employment and house price growth since the financial crisis across the major developed economies. House prices remain further below their pre-crisis peaks in countries where employment is also well below pre-crisis levels,’

‘Supply side developments also play an important role in explaining the divergence in house price performance. The UK experienced a much smaller increase in building activity in the run up to the financial crisis. As a result, there was much less of an overhang of unsold properties to be worked off in recent years,’

‘However, with UK house building running well below the expected rate of household formation in recent years and with demand for homes rising, a significant increase in construction activity is required if affordability is not to become stretched in the years ahead,’

Newcastle BS enters BTL market

Property Hawk Mortgages is pleased to announce that Newcastle Building Society has entered the buy-to-let mortgage market with a highly competitive range of products starting at 2.35%. 

All rates are available up to 75% loan-to-value and come with a free valuation. 

These excellent products are available exclusively via Property Hawk Mortgages.

Newcastle BS buy-to-let products -
  • 2.35% 2 year fixed with 2.50% completion fee
  • 2.49% 2 year discount with £999 completion fee and no Early Repayment Charges
  • 2.69% 2 year fixed with £1999 completion fee
  • 3.59% 5 year fixed with 2.50% completion fee
  • 3.89% 5 year fixed with £999 completion fee

All products have a free valuation and are available up to 75% LTV.

Andy Young at Property Hawk Mortgages says: 

"We are delighted to be working with Newcastle Building Society and look forward to helping develop and distribute its buy-to-let mortgage offering. It is great to see another buy-to-let lender entering the marketplace, offering even wider choice to landlord clients."

“Newcastle’s new buy-to-let range has some competitively priced products starting a 2.35% and also includes a 5 year fixed rate option, which are becoming more popular with landlords. The free valuation will also be attractive to those looking to reduce upfront costs.”
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.

Buy-to-let mortgages top 1000

The number of available buy-to-let mortgage deals has hit 1000 for the first time since April 2008 according to Moneyfacts.

In April 2008 just before the financial crash there were 1,128 deals. This plummeted to 476 by August 2008.

There has been a slow recovery in mortgage products available with 460 in August 2013, 681 in August 2014 and today 1,011 buy-to-let mortgage products available. There has also been a considerable change in the mortgage rate since the credit crunch with the average variable mortgage rate dropping from 6.66% in April 2008 to 3.6% today. Fixed rates have also fallen from 6.48% to a lowly 3.8%.

Mortgage Search - all of market - expert broker

Wednesday, August 26, 2015

Fluctuations and reflexes in an ever-changing market

Andy Young, at Property Hawk Mortgages says:

The buy-to-let mortgage market has always been subject to ebbs and flows caused by a number of influencing factors that affect the lending policies of finance providers in the sector. Some factors that exert pressure on lenders include FCA announcements, Bank of England interest rates, LIBOR movements, European Union policies, UK government policies, corporate lending targets, approaches to risk exposure and market competition.

The weight these factors bear upon lenders appears to vary significantly as each lender establishes its lending criteria and product design according to its own pricing models and risk strategies. This can result in seemingly contradictory pricing fluctuations among lenders and sudden changes to criteria.

As a broker operating in the buy-to-let market this can cause uncertainty, making the placement of some cases a tricky endeavor and one that can change greatly from one week to the next. Therefore at Property Hawk Mortgages we keep a close eye on the market and monitor the daily changes that occur.

Certainly, there has been a flurry of activity in recent months as interested parties have reacted to the continued growth in the buy-to-let market. On the one hand we have seen more new lenders enter the market including TSB Mortgages and Newcastle Building Society, keen to capitalise on the opportunity in this sector.

On the other hand, some parties have expressed concern over a potential ‘buy-to-let boom’ which may have caused other lenders to consider imposing stricter controls on their loans.

For example, Natwest and Accord have both increased their rental income calculation recently, which significantly impacts the amount of money that landlords can borrow. Natwest has increased its notional rate by 25 basis points from 5.25% to 5.50%. So, for a property with a monthly rental income of £700, the maximum borrowing has been reduced from £128,000 to just over £122,000.

In fact, many lenders have a rental calculation in the region of 125% at 5% at the moment, which means that buy-to-let clients can struggle to reach the maximum loan-to-values that are on offer. However, for landlords looking for lower rent stress tests there are a number of lenders who have a pay rate calculation which can increase the maximum loan available considerably. For example, Fleet Mortgages with a rental calculation of 125% at 4.07% gives a maximum loan of just over £165,000 (for a monthly rental income of £700).

This also demonstrates how important it is to look beyond just the headline rate being advertised by lenders and to examine the overall product offering when finding a suitable buy-to-let mortgage.

Despite signs that some lenders are imposing slightly stricter criteria, the growth in the market in terms of number of lenders and products has continued to create a highly competitive environment.

There are currently around 750 products on Property Hawk Mortgages’ free online buy-to-let mortgage finder and the pressure on pricing is ever present.

Newcastle Building Society launched its new buy-to-let range with Property Hawk Mortgages in August, providing a boldly priced selection of products starting at 2.35% up to 75% LTV. This is a very attractive rate and it is proving very popular, however there are at least 10 lenders currently offering sub 2.50% rates. Natwest, Virgin and Accord are also offering rates below 2.00% up to 60% LTV (at the time of writing).

To discuss your buy-to-let requirements please contact the Property Hawk Mortgages Support Team.
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.

Rogue landlords have little to fear from councils

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Tips to increase your BTL profits

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Rents rising twice as fast as living costs

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Doubling of people remortgaging

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Tuesday, August 25, 2015

BTL seems safe in comparison

Despite the doom-mongerering press predicting the death of BTL, bricks and mortar seems secure in comparison to other investments  -

Legionnaires Disease – What are a Landlords responsibilities?

Some of a landlords legal requirement are set out by the HSE legionnaires -  what you must do;  but there is also a lot of other contradictary information that clouds the issues. For instance does a landlord have to carry out a Risk Assessment? Does this have to be in writing? – the HSE guidance is equivocal.

A landlord responsibility under the Health and Safety at Work Act

There are legal duties placed on landlords by the Health and Safety at Work Act. To carry out a risk assessment, the Responsible person ( Landlords ) must be competent which is defined. Since 2013 there has been a lot of publicity from companies suggesting its now a legal requirement to have a legionnaires certificate for rented property.  The cost of these certificates are often three figures.
The HSE have confirmed  that certificates are not mandatory for most residential properties. However, the safety, duties and responsibilities on landlords are defined and have legal sanctions.
For example, there is certain information that a landlord must provide to tenants.

Courses On Landlords Duties Regarding Legionnaires Disease

Arising from legal sanctions introduced in 2013, there are courses available on Landlords duties regarding Legionnaires disease from half or a full day. A full day’s course can cost around £200.
A half-day course is now available with Chris Daniel that succinctly but thoroughly covers the subject is available.  What a landlord can expect to gain from this course:

* To have the Legionnaires disease duties and responsibilities of a landlord thoroughly but succinctly explained.
* A customised and abbreviated summary of around a hundred pages of HSE literature on the subject. [ Summary is 16 pages ]
* The knowledge gained will provide a landlord with the level of Competence required to comply with HSE guidance in most Residential properties.
* An example of a Risk Assessment ( including Schematic diagram and written scheme of control ) and Information for tenants leaflet,
* Practical demo of testing of water temperature.
* Bound Reference book containing the above and example documentation.

BONUS session, – 60 minutes of General Landlord advice on common topics
Course dates for Legionnaires Course  :
Croydon, 7/10/1510am-2pm.
Watford, 16/10/15. 10am-2pm
Cost – £67.00  ( Don’t forget to claim this against your Tax )