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Monday, July 25, 2016

Cheaper mortgages on the way

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Call to abolish SDLT surcharge on BTL's

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Sunday, July 24, 2016

The rise and fall of seaside towns

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Saturday, July 23, 2016

Holiday lets letting agent charges

I have just completed the purchase of my first ever holiday rental property in Bakewell you can see a picture of the kitchen above.

A day after completing the purchase I've also had my first booking at the beginning of September which gives me just over a month to furnish the shell with the likes of beds, wardrobes, kitchen equipment.  This is all new for me as I always let out my buy-to-let properties unfurnished.  I'm now manically surfing the web in search of furniture and design inspiration for my Scandinavian design masterpiece overlooking the River Wye.  It's going to be a busy Summer.

Charges for holiday home letting agent

I know as a buy-to-let landlord I've always balked at the cost of letting out my property with a letting agent.  The costs of this are between 10 -16% depending on the exact details your opt for and what part of the country.  London as always tends to be more costly.  However, these all pale into insignificance for holiday rentals.  I've just looked at the costs through the agent I've have ended up with (it's a long story) holiday cottages and my gross rent for a week has been whittled down from £440 to £312.66 that works out at a whopping 29%.  Ridiculous particularly when all they do is provide an internet platform and contact service for the holiday home owners.  They don't conduct any of the viewings or day to day management...that's all left to the owners.  What makes it even more untenable is that to the cost through Airbnb is 3%...yes just 3% to be a host.  In fact there is no charge at all to list your holiday home the 3% charge is just to cover the finance charges that they incur from the finance companies for handling the payments.  You can guess what I'll be doing this weekend...registering my new holiday home on Airbnb!

Landlord insurance - all risks - professional rates

Thursday, July 21, 2016

Rogue landlord argues he is a humanitarian

A Southend landlord who was given one month to pay a fine of £40,000 in May has returned to court to appeal his fine.

Found guilty of breaching 15 regulations governing houses in multiple occupation, Robert Crow, 67, argued that Southend Council officers were trying to bankrupt him as he had 'just 30p' in his pocket, following the failure of the council to pay housing benefit to his tenants.

The court listened to Mr Crow declaring he was a "humanitarian landlord” and not the rogue that had been painted in the council's prosecution. The landlord argued that even though the council inspectors found his HMO to be squalid, with some tenants living beneath a tarpaulin covering the back yard, his acts helped house tenants that otherwise would have been homeless - going on to claim some paid no rent to live at the property.

Speaking to the Southend Echo, Crow claims

“I have been tainted as this terrible, nasty rogue landlord, but I’m just trying to keep people alive. They said I was forcing people to live in squalor, but I’m taking them off the street.”

The court granted a new magistrates’ hearing for Monday, August 1st, until which time Mr Crow will be required to pay back £50 a week on his £40k fine.

Sadiq Khan's battle with bad landlords

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Gov update on changes to landlord tax relief

The Government have provided updated information on the changes to tax relief for residential landlords.

These changes are to be gradually introduced over 4 years, starting in April 2017 and completed by 6th of April 2020.

Read in full - the Government's changes to tax relief for residential landlords

Universal Credit roll out delayed again

The Government have announced yet another delay to the full roll out date of Universal Credit.

The latest forecast - March 2022, but let's not hold our breathe.

Robert Devereux, the permanent secretary at the Department for Work and Pensions (DWP) attempted to defend the delay by saying

"The complexity of this undertaking is probably the largest thing this department has ever done."

Savills UK auction on Monday - catalogue

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Surge in foreign property buyers since Brexit

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The risks of renting to foreign students

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CML lending data positive for June

The Council of Mortgage Lenders have released a positive lending outlook for June.

The CML estimate lending during June will reach £20.7 billion, up 3% on June 2015 and the highest level of June lending since 2008.

The June lending estimate moves up by 16% on May's sluggish £17.8 billion.

This will bring Q2 total lending to £56.1 billion, up 8% on Q2 2015

CML's senior economist Mohammad Jamei comments:

"The result of the EU referendum is likely to affect the housing market, but there remains considerable uncertainty. Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed.

But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases.

We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 4 August, given the uncertain outlook that has set in after the vote result."

Wednesday, July 20, 2016

Leeds Landlord Show next week - free tickets

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London "green Belt' now sacrosanct

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Heartless landlord handed prison sentence

A landlord from Wembley has been handed a four month prison sentence and ordered to pay fines and costs totalling £20,000.

Rohan Sheikh was found guilty of illegally evicting six tenants from an unlicensed House of Multiple Occupancy (HMO) on Wembley Park Drive after they complained about poor living conditions and damp. Mr Sheikh has already been convicted of the assault of one tenants during the illegal eviction that took place in February this year. Mr Sheikh pleaded guilty to all charges.

Tenants were given 2 hours to vacate the property, but the landlord had failed to seek the required possession order from the courts.

The court also heard of the poor state of repairs at the illegal HMO property - damp, holes in ceilings and walls, filthy carpets, dumped rubbish in the front garden.

One Brent councillor described Mr Sheikh as a 'heartless landlord'.

Sheikh has appealed his sentence and is out on bail pending his hearing. 

Read more -

PRS - the new home of poverty

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Tuesday, July 19, 2016

The new housing minister - a quick guide

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London property prices fall for third month

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Impact of Brexit on prime property prices - Savills report

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UK to avoid recession and house price crash

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ONS latest property price data

The ONS has published its House Price Index using data from May's sales.

The UK annual property price growth is now at  8.1% ( the same as April 2016).

This puts the  average UK house price at £211,000, up £16,000 over the course of 12 months, and £2,400 higher than April's figure.

uk property prices ONS data may 2016

Broken down by country - 
  • England -  average property price is £227,000, up 8.9% over the year.
  • Wales - average property price is £143,000, up  3.6% over the year.
  • Scotland - average property price is £143,000, up  4.0% over the year.
  • Northern Ireland  - average property price is  £118,000, up  3.6% over the year.
Then by English region.

regional house prices may 2016 ONS

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Prime London property could drop 40%

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Slough leads on property price growth

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Monday, July 18, 2016

0.9% fall in asking prices post-Brexit

The first bit of ppst-Brexit house price data is through with Rightmove’s asking price data for July 2016 (two weeks pre-Brexit vote and 2 week post ) has the average asking price down 0.9% (-£2,647)  from June.(although a holiday slowdown does typically result in  falls of  0.4% in July).

asking prices july 2016

Rightmove's Miles Shipside comments:

“As far as the price of property coming to market is concerned, the fall of 0.9% is within the range that we have seen at this time of year since 2010. With the onset of the summer holiday season new sellers typically price more conservatively and the average drop in the month of July is 0.4% over the last six years. Perhaps unsurprisingly this July’s fall is marginally larger, as political turbulence has a track record of unsettling sentiment. Indeed last year saw a seasonally unusual 0.1% fall in the run up to the May election, and a June and July price surge as a result of the post-election boost. Average new seller asking prices were up by 3.1% over that two-month period.

Housing markets do not like uncertainty, with positive sentiment typically driven by confidence and momentum, supported by low borrowing costs. There seems to be little prospect of an increase in historically low mortgage rates in the short to medium term, with even greater certainty readily available with increasingly competitive five-year or even ten-year fixed rates. Agents in areas where stock shortages were driving momentum before the referendum say activity has recovered quickly, with buyers’ fear of losing a scarce property a key factor. They say that very few deals have fallen through as a direct result of post-Brexit jitters. Those areas of the country whose housing markets were struggling or readjusting earlier in the year, such as parts of London, will continue on what is often a fairly lengthy path of price reductions to encourage buyers to return in numbers.

While confidence has been unsettled, the governmental instability in the few days after the referendum now seems to be being addressed far more quickly than was originally imagined. This is not a new credit crunch and the effect on banks and mortgage lending should be limited. As long as lenders keep mortgage deals attractive and available, the underlying demand for home-ownership should overcome most uncertainties.

If you’re putting your property on the market and are keen to sell, then pitching your asking price too high would be counter-productive in the current environment. Buyer affordability is already stretched and they will be looking for extra reassurance that they’re getting the best priced home to suit their needs. Pricing competitively will tempt buyers, some of whom are sitting on their hands. Sellers may be extra-willing to negotiate in some less active parts of the country, so there could be opportunities for a mutually beneficial deal for buyers combined with a speedier sale for sellers.”

The summary so far based on two weeks of post-Brexit-vote statistics is that the housing market remains steady, underpinned by the same fundamentals that have led to its recovery since the last downturn.”

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A BTL mortgage market update

So, what now for landlords?

Jane Simpson at Property Hawk Mortgages says:

It may be some time before we get a clear vision of what the ‘new normal’ is for landlords in the UK buy-to-let sector. The full impact of government regulatory and tax changes over the next couple of years remains to be seen and landlords will surely be considering the best ways to proceed with their buy-to-let businesses in the changing environment.

It is clear however, that tenant demand remains strong and may be increasing. As issues relating to home ownership continue there is a large proportion of the UK population living in rented properties and landlords play a crucial role in servicing the PRS. It is important therefore that landlords continue to provide good quality rental accommodation and are not forced to sell-up unnecessarily.

Despite the recent tax changes that appear to be an attempt to dampen the buy-to-let market, landlords can still find opportunities to make their property investments work for them. There has been a lot of commentary recently about the potential benefits of using a corporate structure to hold property portfolios in order to avoid new tax levies and this is certainly something that some landlords are considering.

There are also plenty of options for landlords seeking out properties that could provide above average returns. For example, auction properties in need of refurbishment, student lets or semi-commercial properties.

Buying property at auction is potentially a great way to bag a bargain as purchases can sometimes be made from urgent sellers below the current market-value. It is also an opportunity to find cheaper properties that may need some light refurbishment work in order to make them attractive on the rental market. Either option provides the potential to make a profit on the increased post-purchase value of the property.

Most landlords buy auction properties using either cash or a short-term bridging solution and may look to obtain a buy-to-let mortgage immediately afterwards. There are a number of buy-to-let lenders who will consider a ‘day one remortgage’ including Aldermore, Axis Bank, Fleet Mortgages, Foundation Homeloans, Kent Reliance, Mortgage Trust, Paragon Mortgages, Shawbrook Bank and Virgin Money.

Student lets are another possibility, which can often provide higher than average yields as rent can be charged to a number of different tenants for one property. Although some landlords may shy away from students, thinking that they may make unreliable tenants, there really is no evidence to support this and it could be a missed opportunity.

Research for the National Landlord Association (NLA) found that students are least likely to miss rent payments and also provide the highest yields. However, student accommodation tends to endure more wear and tear so may incur higher maintenance costs.

Property Hawk Mortgages currently has fourteen lenders on its panel that will considering student lets, including Aldermore and Godiva with a maximum of 4 students, Precise with up to 8 students, Paragon with up to 20 students and Shawbrook with no maximum.

For landlords concerned by the buy-to-let stamp duty increase, semi-commercial properties can provide an opportunity for property investors to avoid the additional 3 per cent charge. For example, currently a single freehold that includes a commercial property, such as a shop with living accommodation above, is not subject to the levy increase. So potentially, an investor can buy the single freehold property and then create separate leases for the commercial element and the residential element. The flat above the shop could then be considered for a buy-to-let mortgage.

At Property Hawk Mortgages we get enquiries on a wide range of different property types in locations all around the UK and it is no surprise that the valuations and expected rental income varies considerably even for properties that seem very similar. It is certainly advisable for landlords to carefully research the areas they are buying in and to seek out those that can provide the best returns. For landlords who don’t need to provide hands on management of their properties, looking further afield may also provide some excellent possibilities.

Periodically reports are published from various sources hailing the new buy-to-let hotspots and these could be worthy of investigation by landlords. For example, Hull was named best coastal town for buy-to-let investment by LendInvest with returns of up to 10.7%; a recent article in Mortgage Introducer highlighted Glasgow as an attractive buy-to-let proposition, with evidence of flats that come on to the rental market in the city attracting up to ten different applicants. Properties can be more affordable in Glasgow and high tenant demand helps ensure a reasonable rental income.

At one point in time it was quite difficult to arrange finance for properties in Scotland due to the different legal system and most lenders chose to avoid it. However, there is now a wider, albeit still reduced, choice of lenders for properties in Scotland, although some still restrict the areas of the country they will consider.

In summary, it seems likely that the buy-to-let sector will persevere, although the market may be somewhat subdued for the remainder of the year and into 2017 as landlords consider their options and work out the best way forward. However, there are still plenty of opportunities for buy-to-let investors and the most rewarding properties may be found in some unassuming places.

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.

A Fair Wear and Tear Guide by Mydeposits

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Thursday, July 14, 2016

BofE keep base rate at 0.5%

The Bank of England have kept the base rate at 0.5% despite all the talk of dropping it to 0.25%.

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House prices rise 0.6% in June say LSL

The data from LSL Property Services House Price Index for June is out.

The largely pre-Brexit data has annual property price growth at 6%, with the average property now costing £293,444.

All good, but hold on let's wait for next months Brexit fall-out. 

In brief LSL has -
  • Transaction numbers climb back to 2015 levels but Brexit looms large 
  • London house prices down 1.4% (£8,400) month-on-month – biggest fall since May 2011 
  • Slough and Luton top the leader board for annual house price growth at 21% 
  • Transactions in June 2016 were down 13% on June 2015

  •  2016  is looking uncertain
Adrian Gill, LSL director, Adrian Gill, comments: 

“Brexit is going to have a wide range of influences on the market, both positive and negative. How they will all balance out is far from clear, but they are going to increasingly dominate the market in the months ahead.”
house prices lsl june 2016

Read the post-Brexit RICS forecasts for property prices

Londoners negotiating on property

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RICS do their best to calm property prices

Following the great and unwashed of Britain calling for Brexit the RICS UK Residential Market Survey for June 2016 reflects the mass uncertainty.

Nobody really has a clue as to what's going to happen next, (none more so than the leaders of the Brexit campaign).

It's left both property sellers and buyers in a spin, like chickens wondering if now is quite the right time to be crossing the road.

Nobody wants to buy a property, only to find that it's dropped 10% before they've finished unwrapping their salad bowls.

The RICS have done their best to calm nerves Their guess work is clearly designed to look as if whilst acknowledging the risk of a short-term drop, some back-stroking for buyers regards longer-term values, might be enough reassurance.

However, realistically, I'm picturing there's been a lot of coin tossing going on in agent's back offices up and down the land.

Key points from the RICS survey -

  • Buyer enquiries down for the third month in a row - now lowest since 2008
  • A sharp fall in agreed sales - further short term drops predicted
  • 12 month price falls predicted for London and East
  • Longer term outlook positive

Drop in supply and demand

Increasing numbers of agents are reporting steep falls in both new buyer enquiries and supply of properties for sale.

Agent predictions in the short term ( 3 months )

Agents are predicting a further drop in sales activity over the coming three months, with agents giving their most negative short-term outlook since 1998.

Although the Brexit fall out doesn't appear to have hit prices yet, with London the only region where agents are reporting actual price falls.

That said, in the short term agents are increasingly predicting price falls in the short term (next 3 months ).

Agent predictions in the mid term ( 1 year )

Agents predict over the next 12 months the dip in prices is only expected to persist in London and East Anglia and longer term.

Agent predictions in the long term ( 5 years )

Prices are still expected to rise, although at a slower rate than previously anticipated. A cumulative increase of 14% on property prices projected over the course of the next five years.

Rents predictions

Agents are predicting rents to remain resilient.

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Half of middle class children in rented accommodation

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Pros and cons of BTL in 2016

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