Saturday, January 31, 2009
The Self Assessment Tax deadline is 31 January. That means that we have a peak of visitors on our site in the days leading up to the end of the month. And we've had the odd problem with our server getting overloaded. We're improving our mechanisms for managing the load. We tell ourselves that it's a sign of the success of Property Hawk.
We're in good company - pretty much every website has had its moment of being overwhelmed. Our favourite story of the inauguration of Barack Obama was that so many American women wanted Michelle Obama's gloves that they crashed the maker's website. Poor old J.Crew.
Thankfully, Michelle Obama is not a landlord, or if she is she's one of the few that hasn't registered on Property Hawk. So we should be all right until next January.
Arc Legal Assistance has launched a tenant referencing and legal expenses package with AXA that provides landlords with direct access to information on tenants before entering into agreements.
Where do professional landlords go for their discounted insurance?
In an exclusive contract with financial risk analysts, Experian, Arc enables landlords insured by AXA to run credit and other financial checks on residential tenants using Experian’s ‘Check My Tenant’ tool – one of the most advanced and comprehensive tenant verification services available, a service previously only available for letting agents - and for commercial tenants, the ‘Busibody’ business credit checking tool.
The service will be offered in addition to legal expenses cover to customers of AXA’s Buy to Let and Small Commercial Property Owners product. The cover includes costs of tenant eviction, defence of criminal prosecutions and pursuit of non-tenancy property disputes. Commercial property owners also receive business legal costs insurance, which covers the other commercial risks that professional landlords face such as employment disputes and tax investigations*.
Mike Keating, managing director of personal lines intermediary at AXA, said: “Arc’s experience in this sector means we benefit from their ability to develop tailored services for landlords, delivering real value to the customer. Direct access to tenant’s references ensures landlords have all the relevant information they need to protect their assets.”
Richard Finan, director of Arc, added: “Working with Experian enables Arc to offer a powerful referencing tool as a key part of our specialist landlord and tenant products. We work with many other referencing companies, however Experian were the only provider able to deliver a ‘direct to landlord’ solution for AXA. We have built a very specific niche in this sector and will continue to grow and develop bespoke products that offer important differentiators to insurers and brokers alike.”
Friday, January 30, 2009
A campervan was the mobile office for Tenant Services Authority staff when they came to Kent this week.
Members of the new regulatory body, set up in December as a watchdog for social housing, pulled up in Margate and Ramsgate as part of the National Conversation campaign to ask tenants what they think of the quality of service they get from their landlord.
Information gathered by the TSA will be used to help it to create a standards framework against which all councils and housing associations will be measured.
As of December 1, 2009, the TSA, backed by the Housing Regulation Act 2008, will be able to check on how landlords are performing and if necessary take action against those who are not up to standard.
After all the regulation that private landlords have had to face it's reassuring that social landlords are also under the cosh. The jury is out as to whether the TSA turns out to be another toothless wonder.
Thursday, January 29, 2009
The BBC report on a rising problem for the police and landlords as more and more secret cannabis farms sprout up.
Something for landlords to watch out for is that often the prospective 'tenant farmers' will offer to pay six or nine months rent up front when letting average residential homes.
So next time a prospective tenant offers to pay in advance, think twice before you grab that bundle of cash.
In total, 7 per cent of private landlords questioned had been involved in some repossession activity by a lender in Q4 2008. A further 4 per cent had missed at least one mortgage payment in 2008. - Read more in the Ft Advisor
They moved into the swanky Mayfair property, in Charles Street last November. The owners, Timekeeper Limited, were not amused, and were granted a county court order for immediate possession yesterday. Landlords heh!
Please post your thoughts on squatters?
Have you ever had squatters?
Please post your thoughts on the need for a more 'Permanent School of Thought', potential sites and access to funding.
The mandatory licensing for landlords becomes more and more inevitable as Local Authorities seem unable to resist the temptation to meddle in the way landlords run their business and then control what they do.
The Housing Act 2004 introduced mandatory licensing for Housing in Multiple
It also introduced a little known clause which allows Local Authorities to introduce their own selective licensing schemes which affect all landlords in dedicated areas.
Property Hawk has learned this week of tough new powers being sought in Port Talbot in Wales by the local council to require landlords to obtain a license before letting out their property.
An area of Aberavon nicknamed White City is being used to pilot a new licensing scheme that will force landlords to register rented homes and bring them up to a minimum standard.
Called selective licensing, the scheme will cover just a dozen or so streets that have a disproportionately high level of anti-social behaviour, which in turn is linked to the area's large number of rented properties.
"I think it's an excellent scheme," said Aberavon councillor Anthony Taylor.
"We don't want bad landlords and if they do come in, this will give us the power to deal with them."
Chris Horne Editor of the UK's leading independent website for landlords comments:
"This potential creeping licensing and regulation of the private rental sector is typical of this governments attempt to regulate landlords through the back door. Once a percentage of local authorities have introduced their own individual licensing schemes, how long before the Government decide to make licensing mandatory for all landlords?"
The recently published Rugg report hinted at the potential for wholesale licensing of landlords in the private rental sector. If one thing is certain, this government will not be able to resist the temptation to meddle and when they do, whats the betting that they will make a hash of it?
Today's call to government to create a new policy to encourage companies to provide private rental housing (The British Property Federation Conference, 27 January 2008), whilst being well-meaning will never become a reality.
Private landlords currently make up two thirds of the rental sector in the UK, and companies have around 10 percent of ownership.
It's also important to remember that many companies, particularly in Greater London, who in the past would have offered employees accommodation as part of their remuneration package, have benefited from rising house prices and sold off their rental property portfolio.
Despite these realities, The British Property Federation is keen to encourage private institutions, such as pension funds, to claim their stake in the rental market. It believes this will lead to a higher quality of stock, which is easier to manage, and which will encourage ‘good quality’ tenants.
Companies like Property Investment for Pensions plc, an AIM trading company investing in London residential property, are likely to develop; focusing on prime, modern blocks of flats in the main.
But, house building is down year-on-year (as at 2008), and today's tough financial conditions have caused the vast majority of developments to come to a grinding halt, because no one is buying. It seems likely they will follow in the footsteps of companies, such as Unite and Grainger, who have done an excellent job in raising the quality of stock thus far. However, the vast majority will look towards new build in metropolitan areas, but I am not convinced as to where these properties will be based.
I believe it will take a long time for corporations to enter the private rental sector (PRS). For those that do have either equity or cash reserves in the current climate, then the availability of funding to gear this up is limited. There is however opportunity for private landlords who have minimal gearing at the moment, or cash reserves to invest at a time when house prices are competitive.
The main investment source for institutions should indeed be in pension funds (as cited at the conference), but we are in an era where investment in pensions is at an all time low.
There is also an ethical issue around new build versus existing properties. Already a sizeable proportion of London’s housing stock lies empty and in poor condition. Therefore, isn’t there argument for private landlords to refurbish on their doorstep? And, wouldn’t this be better supported by The Government offering tax incentives for landlords to renovate property in their local area?
Despite these misgivings, it is extremely encouraging to see such lively debate being generated on the PRS. In particular it highlights the notion that renting, rather than buying, a home will no longer be taboo in the UK.
CEO of upad.co.uk London Rental Portal
The next MPC meeting on 4 February with its announcement on 5 February is heading towards a 0.5% cut in Bank of England Base Rate (BBR) down to 1%.
The prevailing view is that 1% will be the last of the cuts in BBR and thereafter the Government and BoE will adopt other tactics including quantitative easing although Danny Blanchflower who sits on the MPC still believes that rates could yet go as low as 0.25% or 0.5%. His view isn't shared by the SWAP markets where 1 year SWAP rate has gone up slightly to 1.71% and 3 year SWAP is at 2.50% (27 Jan 2009).
The premium between BBR and LIBOR rate is only reducing slowly and stands at 68bps ie 2.18%. Whilst there are good technical reasons restricting downward movement, the margin this close to the next announcement is indicative of a 0.5% reduction.
Wednesday, January 28, 2009
( probably not when seen against capital depreciation on property values )
So, despite the horrific state of the property market, a new report claims that around three-quarters of buy-to-let landlords are "turning a profit" on their property investments. - Over to the Stock Exchange to see more
What about the other quarter? - Margo loves all 100% of landlords
If any landlords were wondering what the staff of Paragon Mortgages do all day since they stopped lending any money, well, stop wondering.
They have been busy compiling a Buy-to-let Tax Guide, which can be downloaded at www.paragon-mortgages.co.uk/files/taxguide.pdf or by visiting the Literature Library at the www.paragon-mortgages.co.uk website.
John Heron, managing director of Paragon Mortgages, says: ‘Good tax planning is key and the last thing that landlords need is a tax demand that they did not anticipate.
"How you implement, manage and run your tax affairs could have a major impact on your property investments and their financial profitability.
"The January 31 deadline is just under a week away, so landlords need to make sure they are ready."
Well it keeps the staff away from the coffee machine, only kidding, I'm sure the Paragon staff are very busy ........ I was just wondering , what do you, never mind.
Landlords love Margo, don't you?
Where do professional landlords go for landlord insurance?
The BBC would like to hear stories and views from as many different people as possible from all over the UK.
Landlords, letting agents, property investors, estate agents. Whatever your story, if you would like to share your property experience, the BBC would like to hear from you.
Please email firstname.lastname@example.org.
Todays, 28/1/09, at 330pm, Money Box Live on Radio 4, Vincent Duggleby will take questions from tenants and landlords about renting and letting and put them to a panel of expert guests. more about the show
• John Socha, vice-chairman, National Landlords Association
• Hayley Rowley, Citizens Advice
• Vivien Gambling, of the Housing Law Practitioners Association and Lambeth Law Centre
The telephone number for questions is 03700 100 444
Love to landlords everywhere - your darling Margo.
Monday, January 26, 2009
There are lots of numbers in the new edition of The UK Housing Review 2008-09. There’s a little summary here that sets out the main sections for those with a longer attention span and £40 to spare. The research confirms that the private rented sector grew to over 3 million properties in 2007, there are more homes entering the sector than are being sold and the overall quality of private rented housing is improving.
In making decisions about property management, research is very important, of course it is.
Back at your desk, you can always keep checking the facts about an area that you are interested in here.
If you are still adding up, Property Sparrow wants to remind you to fill in your sheet to count how many sparrows you saw at the weekend. Who knows, the most successful areas for landlords may turn out to be those with an increase in house sparrows.
The 31st January tax deadline is fast approaching. Remember, if you have made any losses on your rental income in the 2007-2008 tax year then get these registered with HMRC as you will be able to carry them forward and offset them against future profits!
How is local housing allowance calculated?
The normal rules for calculating housing benefits are very complicated. Local housing allowance was supposedly 'designed' to simplify the process of making a claim. Heard that one before?!!! It does this by introducing a 'standard local rent' which is set according to:
* the number of rooms a tenant needs (this is based on the number of people living in their rental property) and
* how much rent a landlords charges for similar properties in the area.
Where do professional landlords get discounted landlord insurance rates?
To find out what the standard local amount for a particular type of property in the area a landlord can visit the LHA Direct website. Alternative'y, a landlord could also ask the housing benefit department or look on the council's website.
Tenant will be assessed by the Local Authority as needing a bedroom for each of the following they have in their household:
* adult couple
* other adult aged over 16 or over
* any two children of the same sex up to the age of 16
* any two children regardless of sex under the age of 10
* any other child.
As with housing benefit, the amount the tenant will receive will also depend on their income, savings and whether any non-dependent deductions apply.
To find out more about how much benefit your tenant might be expected to receive, you should contact your local authority who should have information on the LHA allowance for your area and your type of rental property. For example Wigan rental property
Find out more about the LHA
Sunday, January 25, 2009
Landlords are 'losers', according to the Times.
There's no getting away from it ' we are a bunch of losers'. LOOOOOOSEERRRRR!!
With our ever increasing and ever humiliating losses we should draw solace from our re-discovery of our humility, and re-focus on the important things in life, family and friends.
Without them you are a true loser.
With the announcement that the economy is officialy in recession, ( finally, it's come as a relief, like watching paint dry), maybe we are just losers amongst millions of other losers.
I have been predicting that a lot of landlords and wannabe property tycoons will go under in 2009, how many, is difficult to call, but probably more than most people think.
UHY Hacker Young, the accountancy group, said this week that it is handling an increasing number of buy-to-let portfolios falling into receivership; about half had been privately owned.
If that is you, I wish you all the best. Remember family and friends will stick by you.
Saturday, January 24, 2009
Whenever landlords go to meet a prospective tenant, when re-letting a property, they go with hope in there heart.
According to Halifax Landlord Insurance we are hoping for a female doctor, originally from London,as our ideal tenant.
The research states that if not a doctor, landlords would happily accept other medical professions, a nurse or possiblly a carer.
I've got to admit, that would be very close to being my perfect tenant, but not quite.
I would place a slight edit on my wish list for 'the perfect tenant', could we make it a male doctor, with George Cloonie's looks and Leslie Philips charm.
Ding - Dong !
Your darling Margo
Please phone this landlord an ambulance - I'm over heating.
Despite aggressive cutting of the Bank of England base rate many landlords have not seen the benefits being passed on in the form of lower buy-t0-let mortgage rates.
For latest buy-to-let mortgage info and to search the buy-to-let mortgage market
Michelle Slade, analyst at Moneyfacts.co.uk, said: “Falling house prices have caused the equity in many landlords’ portfolios to reduce, but with no deals available for less than a 20 per cent deposit, many have no option but to move onto the lender’s standard variable rate (SVR) at the end of their existing deal.
Buy-to-let lenders not passing on rate cuts
“For some this may be no great hardship, but some lenders have not passed on cuts to their buy-to-let SVRs, as they have to their residential version.
“Despite a four per cent drop in bank base rate since last year, landlords have seen little impact with the average fixed rate dropping just 0.03 per cent. Tracker mortgages have come down but the average margin above base has increased to an astonishing 3.18 per cent.
“Buy-to-let lenders have also tightened criteria, restricting the size of portfolios that landlords can have, both in number of properties and maximum total advance.
“The Mortgage Works has become the first lender to introduce a collar to its pay rate calculation, meaning borrowers will have to earn bigger rental incomes; not an easy feat in these difficult times.”
Landlords have had a rough ride in the last year and it looks like 2009 won’t be any easier.
Friday, January 23, 2009
Check it out on: How an AST saved me £7000! It's a useful tip that might just save you some money the next time the opportunity presents itself.
These are tough times and as the recession takes hold many of us are now looking at ways of tightening our belts further. At this time of year, we are all looking at our expenditure for the coming year and deciding whether we can afford the family holiday, next term’s school fees, credit card payments, utility bills…. I could go on.
Those borrowers with Base Rate Buy to Let tracker mortgages have seen mortgage payments come down over the coming months but those locked in to relatively high fixed rate Buy to Let mortgages are now looking at ways to refinance to improve the monthly cashflow.
With residential mortgage rates now available below 4% and Buy to Let rates below 5%, now could well be the right time to pay a penalty on your existing mortgage deal, lock into a lower rate and reduce your monthly mortgage commitment. Paying a penalty and refinancing may not be right for everyone so please ensure that you get proper advice from your mortgage adviser.
If you are lucky enough to have a mortgage with the Bradford & Bingley Group (Mortgage Express, Keystone, and some GMAC/Kensington borrowers) you may well be aware that Bradford & Bingley will waive all repayment penalties if you refinance away from then before end of June 2009.
I've just found this one for the Academy of Residential Inventory Clerks. They've made a real effort and I'm not knocking there services, but the intro seems to fall half way between a bad power point presentation and Battlestar Galatica, and the site is full of corporate looking glamour boys and girls looking sharp. Its not the property letting world I know . Check out the initial video intro - website comedy gold.
Let me have your suggestions for worst property related website ( Propertyhawk.co.uk can't be a nomination - but you wouldn't would you? Surely PropertyHawk would receive the award for Best Property website or maybe Zoomf would snatch it away from us - always the bridesmaid)
Bringing light relief to landlords on a Friday afternoon.
Thursday, January 22, 2009
Need to save money on your landlord insurance - get discounted professional landlord rates
We are constantly looking at ways to improve the letting software to make it easier to use or bring in new and helpful functions. Over the next couple of months we want to bring in some upgrades that we think will make the software easier to use.
I've cobbled together a list of ideas that we have had from our users and put down some of our favourites. You see if you agree. Tell us which are the most important and even suggest ones that we haven't even thought of. It's your software so tell us. Post your comments below.
Here is a list of some of our ideas for proposed upgrades:
1. Multiple portfolios. We have gathered that many landlords have more than one portfolio often in partnership with other landlords. Also we see that our FREE software is quite popular with letting agents. So we are looking at allowing landlords to create more than one portfolio assigned to their account. Good idea?
2. Multiple rent payments. Numerous landlords have commented that they want to be able to make more than one rental payment to a single rent, for instance where a tenant receives housing benefit. We think this is essential, do you agree?
3. Editable tenancy agreement. Over the last couple of years we have had a number of landlords who want to customise their tenancy agreement. There are dangers in doing this in that landlords can end up with an unenforceable tenancy agreement, but we recognise the needs of landlords to personalise their tenancy agreement. Useful or unecessary?
4. Editing a tenancy. Do you find it confusing when you edit a tenancy or when you want to renew a fix term tenancy with the same tenant. Let us know about your experiences?
5. Taxation. We think that more info should be shown when it comes to calculating a landlords income tax. Do you want to see a break down of the calcs. Would it be useful to download the info to send to your accountant. Don't be shy - tell us.
6. Email forms. Would it be useful to be able to email forms to your tenants or is this just an unecessary "whistle and bell".
POST YOUR COMMENTS FOR THE UPGRADE OF THE PROPERTY MANAGER 2 BELOW.
Why do we bother? I mean many landlords are seeing paper losses whichever way they look at their figures.
On top of all that there's the risk of landlords getting a 'nightmare tenant'.
Ive just been reading about this London Landlord who has had to sit and wait two years to get rid of a tenant provided by her local council.
The tenant has finally been evicted after costing the landlord over £10,000. The article
Why do landlords bother?
And nobody likes us.
Your darling Margo, bringing love to all landlords especially those with nasty tenants.
Wednesday, January 21, 2009
Microsoft on Thursday embarked on the first company-wide job cuts in its 34-year history as it announced plans to cut up to 5,000 workers over the next 18 months. FT Article
"Landlords we love you, though you may be far way we think of you"
The property agent is not going to hire its usual superyacht, which it normally hires for the property industry's annual meet and greet in Cannes.
The 63metre, Lady Lola (list price for charter, roughly £285,000 per week) and the magnums of champagne will be replaced by some display boards , balloons and glasses of Cava.
Instead the Savills crew will be land locked in the exhibition hall alongside the other agents.
They should be relieved that they are at least still afloat after the worst year on record in the global property market.
If the property market storms continue many uk estate agents will be lucky to stay afloat.
"To the lifeboats - Women and estate agents first."
Read more in the Telegraph
Which part of the country has the most dodgy tenants. According to latest stats released by the DPS it's those in the South East.
Where do professional landlords go for discounted landlord insurance?
Tenants in the South East of England are most likely to damage property according to new analysis from The Deposit Protection Service (The DPS).
More than 40 percent of DPS disputes between landlords and tenants have occurred in that region. In some circumstances tenants have trashed houses, let gardens go wild or have simply disappearing without notice.
More than half of the disputes in the South East (52 percent) were the result of tenants damaging the property. More than a third (36 percent) was due to the property not being cleaned, while the rest concerned poor repair of the garden.
The North East saw the second highest level of disputes (15 percent), followed by the South West (12 percent), North West (11 percent) and West Midlands (11 percent).
An analysis of cities found that London topped the list for DPS disputes, followed by Bristol, Manchester, Newcastle upon Tyne and York.
Kevin Firth, director of The DPS, said: “Exasperated landlords have sent us all sorts of complaints about tenants from vomit on the carpets to carpets vanishing completely.
“One landlord discovered that his property was being used as a brothel, while we have had several unsuspecting landlords whose properties have been transformed into cannabis factories.
What part of the country do you think the worst tenants come from. Are we being a bit unfare to 'southern' tenants?
Tuesday, January 20, 2009
At the same time it calls for the Government to bring in compulsory licensing for all letting agents.
'The fact is that at the moment anybody can work as a lettings agent. It is ludicrous and, more to the point, dangerous, as it may create great risks for consumers in the current climate,' said Ian Potter, operations manager of ARLA.
Are ARLA right or are they just trying to drum up business?
THE housing minister, Margaret Beckett, claims there are signs of an “upturn” in the property market despite official figures showing prices plummeting at an unprecedented rate.
She disclosed the government was already worrying about the next housing boom, and was intervening to ensure any recovery in prices does not squeeze people out of the market.
See more in the Times Article
Any landlord letting property will be focused at this time of year of completing their self assessment tax return. They will also be no doubt keen to minimize their tax liability.
Landlords save money and time by using our FREE tax calculating software
One way they can do this is to ensure that they claim all the expenses incurred in running their letting business from home.
Home office use
The HMRC apply the 'wholly and exclusively' rule when assessing whether an expense is a legitimate expense that can be claimed in the running of a landlords letting business.
This means when a landlord uses part of their home in running their business, they can claim the associated costs if the business has the sole use of that part of the landlords home. For instance if a landlord uses a bedroom as a home office or even a dining room table exclusively for business purposes. A landlord will not have to have separate bills relating to their letting business as clearly this would be impractical for a domestic arrangement. Instead they need to apply the principle of apportionment in calculating the business costs.
Claiming for minor business use
Tax inspectors are told not to question claims for minor uses which cost less than £2 per week. A minor use would cover the use of a kitchen table to do accounts for a couple of hours a week. Therefore a landlord should include a minimum claim of up to £104 a year minor business use expense because the HMRC won't question the deduction and will not need to see bills or receipts.
Major business use
Where a landlord runs a larger letting business that may include using a dedicated room in their home as an office, then landlords need to make sure that their claim is consistent with the size of their letting business if they want to avoid a tax inquiry by the HMRC. This is because the HMRC keeps template accounts for every type of business by comparing accounts and tax returns. This data shows what percentage a landlords turnover your general costs should be and that breaks down into how much as a percentage of turnover may be spent on travel, telephone, stationary, etc.
A landlord can claim two basic sorts of business cost. FIXED COSTS (costs that stay the same over a given period) and RUNNING COSTS (vary according to circumstances)
FIXED COSTS: insurance, council tax, mortgage interest, rent, repairs and renewals (exterior and rooms used for business)
RUNNING COSTS: cleaning, heat light power, telephone & internet, metered water charge
Apportioning the costs
Apportionment often plays a big part in claiming business expenses. The factors taken into account include:
1.Area of the office: Percentage floor area of a landlords home eg bedroom equating to 10%
2.Time: How many hours is room used for business purposes eg 2 hours a day
3.Useage: What proportion does the business consume of any measurable supplies eg this is frequently calculated by combing categories 1 & 2. For example dining room used comprising 15% of floor area used for 2 hours a day. Or bedroom equating to 10% of floor area used specifically for office.
Significant expenses for professional landlords
Landlords should therefore think carefully about claiming all the expenses incurred in running their letting business. For many larger and professional landlords their are significant expenses that they can claim for when running their letting business from home. They should always make sure that they can evidence any claim made in case the HMRC hits them with a tax inquiry.
Monday, January 19, 2009
- Copying all emails and paste to file.
- Storing exchanges of letters.
- Keeping bank statements to confirm late payment of rent.
- Creating detailed inventories with photographs of the garden, every room and key objects such as the inside/tops of cookers and then both parties sign to confirm the condition of the property at check-in.
- Keeping receipts to confirm repairs and replacements.
- Keeping Post Office receipts to confirm posting of letters. Proof of posting.
- Visiting the property three or four times a year and writing a log of the visit, signed by tenant and landlord and left with the tenant (keep a copy), to confirm any issues that the tenant needs to address. Photograph your visit if, for example, the cooker is dirty, rooms are excessively untidy or the garden is full of weeds.
- Devising a House Handbook to be left at the property containing detailed information on the operation of appliances, what to do in emergencies etc, to demonstrate your duty of care.
Banks are still very nervous about many landlords and property investors and are continuing with a highly cautious outlook.
Banks concern over falling rents and falling property values leaves many landlords looking like high risk customers, especially as so many landlords are sat on interest only mortgages without having elected any repayment vehicle.
Certainly not the one that I have inhabited for the last 40 odd years. Having said that, it probably is the same one as the Government appeared to be on, whilst they were supposedly regulating our banks to ensure the stability of our economy and financial system.
Professional landlords benifit from discounted landlord insurance
One in ten private landlords have received physical and verbal threats to themselves or their family as a result of a tenant dispute, according to a new poll carried out by The Letting Protection Service (LPS), a new online service designed for private landlords.
Their figures apparently show....??????
The new figures show that 11% of private landlords have been subjected to verbal or physical threats from a tenant while 38% of landlords have had to involve the police or seek legal counsel. Of those surveyed, 71% of landlords have been left out of pocket, by tenants who on first impressions seemed the perfect paying guest.
Do you as a landlord feel that these figures are reflective of your experience. I'd be interested to know. Maybe it's me after all that has been on a different planet!!
Saturday, January 17, 2009
Earlier this week I attended a networking event where Julie Blunt of Interact Training Solutions delivered a timely reminder of how setting proper goals for your business can help us all have a truly prosperous New Year. Whether your property business is a new one or well established it is all too easy to get so involved with the day to day management that you lose sight of your ultimate aims. Setting aside some time now to review your progress and plan your next steps will pay dividends later on. With Julie's permission I would like to share with you all her 7 top tips for fabulous goals.
Before you start, indulge in a little time travel. Where do you want to be in 5 years time? Close your eyes for a few moments and really visualise what it will be like - What are you doing? What can you see and hear? Who are the people you are with? How are you feeling?
(Piggy says - "Don't underestimate the power of doing this one simple thing - when you open your eyes and begin to write, this long term aim will help you define your goals much more clearly.")
Julie's top tips for fabulous goals.
- S pecific - So you're really clear about what you want to achieve
- M easurable - so you can check if you've achieved it
- A ligned - To make sure your goals support each other
- R ealistic - So they are achievable
- T imebound - So you know when you've got there!
(Piggy says - "I know you all know about SMART goals but how often do you put it into practice?")
- Base goals on the outcome you want, not how you might get there. For instance, rather than setting a goal to contact an estate agent 3 times a month, set a goal to increase your portfolio by ...% by this method.
- Set separate (but linked) goals for each of three areas - your portfolio management, your portfolio growth and your finances. (Piggy says -In the current economic climate don't forget that cashflow is as much about reducing expenses as it is about increasing income! For independent advice on reducing property costs contact email@example.com)
- Make sure they support what's really important to you - for example, if you want to spend more quality time with your family, you might not want to set a goal involving international travel!
- Keep them on the radar. Find somewhere to display them so they're always visible (such as on a notice board). Use visual images to represent your goals and pin those up too.
- Break down longer term goals into short term milestones - and build in rewards at each stage. How will you celebrate achieving each target?
- Make sure your goal is inspiring. You need to make sure the goal will continue to motivate you not just now but into the future, and when you face barriers to achieving it.
- Take action! - even for the longer term goals, you need to get some early momentum by taking a small step towards it TODAY! So, pick up the phone to make a call, or research something on the internet. Even a small step in the right direction will start to create a change.
For more help and advice with personal development please contact Julie Blunt at www.interacttraining.co.uk
And here at NSP Resources we would like to wish you all a Piggin Brilliant New Year! :)
One of the largest expenses incurred by a landlord running a letting business is the loan interest paid on any buy-to-let loan secured for their property rental business.
However, it is not just the loan interest paid on any buy-to-let mortgage. Other loans that were used in connection with their buy-to-let business can also be included as an allowable expense when a landlord calculates their rental profit. Landlords should remember that it is only the interest on the loan that can be included; any sum used in the repayment of capital needs to be excluded.
The Property Manager 2 FREE letting software available on www.propertyhawk.co.uk allows landlords to calculate their rental profits and tax liability. Landlords should add in the loan interest for each buy-to-let loan. Where they have a loan which is not secured against a buy-to-let property they can create a property called 'general'. They then can add in the loan interest paid against this to record a complete record of all the loan interest paid.
Friday, January 16, 2009
Everywhere you turn there are articles about the types of jobs that are immune from the downturn. On MSN there’s a strange list of career areas considered to be safe during the credit crunch.
In second place there’s social housing. Working for a housing association, Property Sparrow thinks that this is nonsense. It’s taken a while to bite but most housing associations are now facing tricky times: very few shared ownership sales and the new regulator for housing associations, the Tenant Services Authority, is flexing its muscles on financial risk. The levels at which affordable housing provided by housing associations is subsidised varies across the country. Before the credit crunch they were down to about 40% of the total cost and associations borrowed nearly all of the rest or relied on shared ownership property sales or new developments for outright sale to prop up their income. It’s no different to any other sector. Problems with their borrowing arrangements are coming home to roost. Many are now reluctant to recruit new staff and jobs to do with new development, all forms of project management or servicing the corporate centre can be vulnerable.
Anyway, there’s a glaring omission from these types of lists.
Here’s a safe job. It’s a service industry, it involves the public, there are rules and regulations to prevent you from making serious errors and if you keep your mind on it there’s a reasonable chance that you will earn some money. You will be indispensable in it; no one can take it away from you against your will.
It has 8 letters and begins with L.
However are we just storing up trouble for many years to come?
Landlords should start making a war chest.
Your darling Margo
Thursday, January 15, 2009
Can I claim the costs of a mortgage or remortgage?
The costs of obtaining finance for a landlords letting business are a legitimate expense in running a landlords letting business.
The following therefore are legitimate costs in obtaining finance for a landlords letting business.
- legal costs in securing a new loan such as conveyancing costs incurred in a remortgage
- buy-to-let mortgage brokers commission
- valuation fees associated with buy-to-let mortgage
- fees paid for set up of buy-to-let mortgage
Bad news for landlords seeking high LTV buy-to-let mortgage I'm afraid. The Post Office which were operating a buy-to-let mortgage operated by Bank of Ireland have become the last lender to withdraw a 85% LTV deal. Buy-to-let mortgage deals like the economy, fashion and the economy are all heading back to the 1980's I'm afraid.
Some 93 per cent of all buy-to-let deals have disappeared in the last year, and deals of between ten per cent and 15 per cent, which used to make up 61.1 per cent of the market, are no longer available.
Landlords now really need at least a 30 per cent deposit to get the best deals and even then they are paying a high price.
80% LTV buy-to-let mortgages
There are now only 5 lenders doing a 80% LTV and I expect them to reduce their rate in the coming weeks. These lenders are : Bath BS, Ecology BS, Clydesdale Bank, Northern Bank and the Yorkshire Bank. Landlords who need to access a mortgage with a high LTV shouldn't waste any time in getting an application under way. Otherwise they are likely to find that 80% products will go the same way as the 85% Post Office mortgage pretty damm soon.
Wednesday, January 14, 2009
We've talked about market sentiment in this blog quite a lot recently.
Obviously property buying is not currently the flavour of the month or the past year to that matter.
However the British TV viewer still, apparently, can't get enough of the property shows on TV.
It might be this British obsession with property and escaping to a new life that re-ignites the property market in 2009 or at least get the embers glowing.
The power of TV on peoples minds is yet to be truly measured and the fueling of peoples mind by continued TV property porn might be enough to get it all started again.
Go Kirsty and Phil save the UK economy, because Gordon and Alistair don't have a clue what to do.
Your darling Margo,
Warmth for landlords in a cold climate
In this article tenants are starting to call landlords to account. Voicing there concerns on the suitability of some landlords to rent out property.
Landlord vetting could be just around the corner. Landlords should get their references in order and hope nobody finds out about previous convictions.
Your darling Margo,
Love and warmth even to the most revolting of landlords,
Free tenancy agreements for landlords FOREVER.
Tuesday, January 13, 2009
As we see a decrease in new graduates finding decent employment we will also see a decrease in the ' young professional' tenant class.
This class of cash rich ( although often credit laden ) 20 -30 year old single or dinky (double income , no kids yet ) helped to fuel the BTL boom in apartment living, but with less and less new graduates securing graduate jobs, what lies ahead?
Well, this tenant class looks likeley to shrink, as more new graduates are forced to return to share the parental home or go into larger house shares to save on personal expenditure, to help pay off debts in these times of restrictive credit.
Less tenants demanding property could see continued falling rents in the 'young professional ' rental property market.
Further hits for city centre BTL landlords to come in 2009.
Monday, January 12, 2009
The Local Housing Allowance is one subject that seems to raise the heckles of landlords judging by the response to our recent article about the way the Local Housing Allowance is being implemented differently for private landlords and public sector landlords such as housing associations.
The old Housing Benefit system
For those landlords that may not have come across the Local Housing Allowance it is this governments replacement for the old system of housing benefit. This system as most landlords would testify was far from perfect. There were often delays in the Local Authority processing the application from the tenant which often meant landlords were waiting several months to receive their rent despite having to shell out the mortgage payments. Also the benefit payment was not always for the whole market rent. The housing benefit office at the local authority would make a judgement about the maximum rent charged for the particular rental property. This may have been less than the market rent. Also where the tenant is judged to be able to be afford to make a contribution towards the rent then the amount of the housing benefit payable could be less than the maximum rent. In both cases resulting in a shortfall of rent meaning that the landlord would have either to chase the tenant for the difference which often amounts to a few tens of pounds a month or in many cases not bother and take a defacto rent cut. The big advantage for landlords of the housing benefit system was that at least landlords would get paid direct by the Council meaning that once the process had been completed their rent was guaranteed. NO LONGER!
FREE to join our landlord community and manage your investment property online
The government in their wisdom have decided to replace the housing benefit system with the Local Housing Allowance (LHA), but only for private landlords mind - not for Housing Associations or other social landlords. WHY? Because they think its a good idea for tenants to have complete control of their rental money so they get used to handling their own finances. This makes sense in a kinda idealistic, wishy washy, I'm not responsible for the consequences, dreamy world that most Labour politicians inhabit. However, for landlords that have to live in the real world there are a number of drawbacks of the Local Housing Allowance:
1. Inevitably the Local Housing Allowance will lead to a higher number of rental voids as vulnerable or inexperienced tenants spend their rental money not on rent but other things, leaving the landlord short and in very many cases the tenant eventually homeless.
2. The local housing allowance is anti competitive. The introduction of the Local Housing Allowance only for private landlords and not for social landlords introduces a two tiered system of benefit that favours the social landlords who continue to received payment direct and discriminates against private landlords who will be faced by higher costs of rent retrieval and potentially higher voids. Private landlords who for the most part are amateur landlords (they work as well) are much less well equiped to deal with defaulting tenants than their social landlord rivals who should be professional housing providers with all the additional resources at their disposal such as dedicated legal teams and rent collection departments.
3. The big attraction to private landlords of renting to benefit receiving tenants is the certainty that they will get rental payment direct from the state. A blue chip tenants effectively. Take that out of the equation because of the Local Housing Allowance and what incentive have good landlords with attractive properties got to rent to a benefit receiving tenant rather than an employed professional tenant? NONE!
The result will clearly be less landlords to provide accommodation to tenants receiving Local Housing Allowance giving these tenants even less choice and less attractive rental property than before.
4. Finally, excuse my ignorance about the aims of the Local Housing Allowance which enabled the tenants to have responsibility over their life and money. Well isn't that what the previous system of housing benefit did. Tenants could choose to rent more or less expensive property and where they wanted a better standard of accommodation then they just had to budget for it by making extra payments over and above the maximum rent. Surely this is already a way of exposing tenants to financial discipline without taking a gamble that the tenant wont pay the rent, the landlord might not get paid and the tenant becomes an added burden to the already over stretched social housing sector?
POST YOUR VIEWS ABOUT THE LOCAL HOUSING ALLOWANCE BELOW
Here are a couple of case studies, including an ex BBC 'Changing Rooms' designer.
Love to landlords - your darling Margo.
Saturday, January 10, 2009
I came across a recent article which claims that HSBC was the most competitive lender through 08. This got me to thinking who is the best buy-to-let lender. I like the Mortgage Business who are owned by the Nationwide. They have kept interest rates low but were not tempted by the excesses of lending shown by some lenders during the credit boom.
Who do you think is the best buy-to-let lender - post your views below.
Buy-to-let mortgage latest:
- Bank of Ireland Mortgages
- All buy-to-let MORTGAGE PRODUCTS withdrawn, w.e.f. c.o.b. 9.1.09....more
- 09 Jan 2009
- Bristol & West Mortgages
- All buy-to-let MORTGAGE PRODUCTS withdrawn, w.e.f. c.o.b. 9.1.09....more
- 09 Jan 2009
- Northern Bank (NI)
- Buy-to-let VARIABLE BASE RATE TRACKER MORTGAGE reduced by 0.50%. w.e.f. 9.1.09....more
- 09 Jan 2009
- Birmingham Midshires Solutions
- ALL buy-to-let VARIABLE BASE RATE TRACKERS reduced by 0.50% w.e.f. 8.1.09....more
- 09 Jan 2009
- Britannia BS
- Buy-to-let STANDARD VARIABLE MORTGAGE RATE reduced to 4.99%, w.e.f. 1.12.08. FIXED RATE MORTGAGES of 7.69% for 2 years & 7.39% for 5 years, now have fees of £599, w.e.f. 9.1.09....more
- 09 Jan 2009
- RBS IP NatWest
- END DATES on buy-to-let FIXED RATES extended to 31 March, w.e.f. 9.1.09....more
- 09 Jan 2009
- Bath BS
- NEW FIXED RATES of 5.75% & 5.99% for 2 years and NEW VARIABLE RATE MORTGAGE for holiday lets only of 5.74% for term launched, w.e.f. 8.1.09....more
- 09 Jan 2009
- Northern Rock
- END-DATES on buy-to-let MORTGAGES extended to 1.3.11, w.e.f. 8.1.09....more
- 08 Jan 2009
- Giraffe Money
- Buy-to-let FIXED RATE MORTGAGE of 7.99% to 31.3.14 withdrawn, w.e.f. 7.1.09....more
- 08 Jan 2009
- Lloyds TSB Scotland
- Buy-to-let VARIABLE TRACKER RATE MORTGAGES withdrawn, w.e.f. 7.1.09....more
- 08 Jan 2009
- NatWest Int Personal Banking
- Buy-to-let VARIABLE BASE RATE TRACKER MORTGAGES reduced by 0.50%, w.e.f. 8.1.09....more
- 08 Jan 2009
- Royal Bank of Scotland Int Ltd
- Buy-to-let VARIABLE BASE RATE TRACKER MORTGAGES reduced by 0.50%, w.e.f. 8.1.09....more
- 08 Jan 2009
- Cheltenham & Gloucester
- ALL Buy-to-let VARIABLE TRACKER RATE MORTGAGES withdrawn w.e.f. 8.1.09....more
- 08 Jan 2009
- Leeds BS
- Buy-to-let VARIABLE MORTGAGE RATE reduced by 0.45% to 5.79% w.e.f. 8.1.09....more
- 07 Jan 2009
- Bank of Scotland Int Ltd
- Buy-to-let VARIABLE TRACKER RATE MORTGAGE of 6.50% for term withdrawn....more
- 07 Jan 2009
- The Mortgage Works
- NEW Buy-to-let FIXED RATE MORTGAGE of 3.49% to 31.3.10 and VARIABLE TRACKER RATE MORTGAGE of 3.99% to 31.3.10, w.e.f. 6.1.09....more
- 06 Jan 2009
- All buy-to-let MORTGAGE PRODUCTS re-launched as per previous range, w.e.f. 5.1.09....more
- 05 Jan 2009
Friday, January 09, 2009
Landlords we are fortunate. I know we probably don't feel like it at the moment: winging tenants, disappearing buy-to-let mortgages, rising amounts of regulation and off course the falling value of our investment property (to find out by how much check out Margo's post below).
A recent report in the FT over the rising numbers of homeowners and I dare say landlords experiencing a loss on the sale of their residential property.
Research compiled by UKValuation highlighted the areas in the UK where the largest number of houses were sold at a loss. Two areas led the way, Newcastle and Nottingham which registered sales generating a loss equaled 340 and 448 respectively. The average loss was around 10%. These two areas have both experienced high levels of speculative building of city centre apartment often sold at so called discount to unsuspecting buy-to-let investors. This may explain the figures.
Why should landlords feel lucky? Well the silver lining that unlike many owner occupiers we don't have to sell. I know at the moment it's a very small consulation but in the present climate taking any positive is quite an achievement.
This calculator from the Nationwide BS enables landlords to get a rough idea of the value of their portfolio as it counts down.
Landlords can have fun and work out how much less they are worth than last year.
Your darling Margo
Bringing landlords sunshine through the rain.
Thursday, January 08, 2009
After opening the doors to Belvoir Boston just over one year ago proprietor Donna Burrell has met with great success – now, with three members of staff and more than 100 properties on her books Donna recalls her journey...
Question: Why did you want to run a lettings agency?
Answer: “I decided to open the business after returning from working abroad,” says Donna. “I could see a lot of potential in working for myself and knew I didn’t want to work for anyone else.
“I searched for months and months for the right business opportunity and finally decided on the lettings industry. I could see great potential in the lettings market - buy-to-lets have gone crazy over the last couple of years and it’s surprising how many people own two or more houses.
“In fact, the lettings market seemed the recession-proof option. In the current climate more and more people are offering their homes to rent rather than selling them at a loss – renting is really common in Europe and it seems to be taking off over here too.
“Added to this I’d always been interested in property - I’d been both a tenant and landlord myself – and, a bad experience with the agency which let my own house while I was working abroad made me think I could better. I wasn’t impressed with their service at all.”
Question: Why Belvoir?
Answer: “Belvoir seemed the perfect solution for me,” says Donna. “I already knew of the brand, plus the Grantham Central Office isn’t too far from Boston, so they’d be near by if I needed them. I couldn’t believe it when Belvoir Boston was still available and I applied straight away.”
Question: How did you feel when you opened the doors for the first time?
Answer: “Excited and apprehensive at the same time,” remembers Donna. “Strangely enough I was mopping the floor on the Sunday in preparation for Monday’s opening when my first tenant walked in looking for a property to rent. He was definitely the sign of things to come... and, when I did open the doors properly on the Monday I had more than 60 tenant enquires in just one day!
“The flood-gates had opened and tenant after tenant came in. I realised then that there was a massive demand for rental properties in Boston and this meant I could then go to the landlords and tell them that tenants were queuing up. It was a good feeling and a brilliant achievement.”
Question: What’s been your success in the first year?
Answer: “I’m really pleased with how things are going,” she says. “I took on my first employee last December and now have an additional full-time and part-time person too. And, as for properties, I have nearly a 100 fully-managed properties, plus others that are let only.”
Question: What’s the most satisfying thing about the job?
Answer: “I’m managing a lot of properties with a massive amount of responsibility,” says Donna. “After all, I am dealing with people’s biggest assets – their homes. Positive landlord and tenant feedback is very satisfying and it’s great to know you’re doing a good job. I never turn anyone away and always strive to find suitable properties for tenants who are struggling to find properties on their own – it certainly feels good seeing them settle into their new homes.”
Question: What are your hopes for the future?
Answer: “To keep doing more of the same and to keep growing,” she says. “Ideally, maybe in the next year or so, I’d like to take on another office and grow my territory but this will need some extensive research first.
“As for now, Belvoir Boston has grown faster than I ever thought it would,” she continues. “When I opened the doors on November 19, 2007, I didn’t realise what a fantastic journey I was about to embark on. It just goes to show that if you’ve got a dream you should hang on to it - sometimes they really can come true!”
• To find your nearest Belvoir office, visit their website at http://www.belvoirlettings.com/
Donna’s top tips for running a successful lettings agency
* Always remain exceptionally professional
* Always follow through on promises made
* Have an open and friendly attitude
* Try to get involved in community events
* Join the local Chamber of Commerce or Ladies’ Circle to get known on the local business circuit
* Good customer service skills are essential
* Listen to the needs of landlords and tenants and work out a solution together
* Ensure you’re accurate in what you say at all times
* Keep informed - try and find out as much as you can about industry laws and regulations so you can pass key information on to landlords and tenants
* Ask for feedback from landlords and tenants, plus get testimonials too
* Encourage potential landlords and tenants to feel relaxed by setting out your office in an approachable and friendly way
* Aim to be the number one lettings agent in your area
The experts at Belvoir Lettings reveal the dos and don’ts of buying at auction
What mistakes do buyers often make at auction? How can you spot a bargain? And, how can you ensure that you’re investing in a money spinner NOT a money pit? Here, the experts at Belvoir Lettings reveal all...
“The main problems buyers seem to have at auction stem from lack of research beforehand, bidding excitement resulting in paying too much, not sticking to their budget, and not factoring in renovation costs, timescales and market forces,” says Gary Legge, proprietor of Belvoir Bourne. “Buyers need to ask themselves why the property’s up for auction too.”
Before hearing the gavel go down at auction it is essential to be fully prepared. Study the auction catalogue, visit the property you’re interested in if possible and set yourself a realistic budget… and stick to it! Remember, as well as the buying price you may also have to pay renovation and refurbishment costs, repairs and maintenance, running costs, service test costs, solicitor’s fees – plus, have some change left over for a contingency fund.
Proprietor of Belvoir Sheffield Rick Flay advises, “Don’t let emotion make you overbid. And, don’t enter the bidding process too early as all you are doing is helping push the price up – remember, it’s the last bid that counts not the first. Also, don’t be bullied into bidding in amounts that the auctioneer wants - if he says I need another £5000, you can bid higher than the previous amount by £1 if you want to!”
A clever buyer will also think about what they’re trying to achieve before bidding on a property at auction. An investment property needs to deliver what it promises.
“You can get fantastic bargains at auction but is it a bargain if it's going to sit empty for a few months every year or if it's going to cost a fortune to refurbish or convert before you can even let it?,” says Terry Lucking, proprietor of Belvoir Peterborough and Corby.
“As there is currently an acute oversupply of rental material you've got to look at the long-term investment and it's extremely important that the property works for you financially,” he continues.
“To do this it is paramount that you keep the property occupied. Because of the current rental oversupply, tenants are now buying with the eye. To keep your property occupied it must be in a good area, it must look pretty on the marketing material and, when a tenant walks in, they need to go wow!
Wayne Mearns, proprietor of Belvoir Southend-on-Sea adds, “Ensure you know the area and popularity of such a property so that you may ensure that re-letting is quick.”
So, is your auction property going to be a money spinner or a money pit?
“Don't get too excited about an auction property being cheaper than the open market,” continues Terry. “10 or 20k cheaper may sound attractive at first but this could soon get absorbed if the property is left empty for a few months each year or if extensive renovation is needed.
“If you're a builder, investor or can do the work yourself then you may be able to convert competitively and steal a deal. But if you need to spend a fortune employing contractors to modernise a property, buying at auction could be a false economy for you.
“Surely it's better to put deposits down on multiple already-refurbished properties than buying cheap and spending your capital on kitchens and bathrooms - you probably won't be able to release this capital for at least six months.”
Terry strongly advises that you don't get emotionally washed away with the deal either. “Question your own judgement,” he says. “And, be prepared for others to question your judgement too. Before bidding go and see your local letting agent and get their expert opinion on whether the property is going to be a financially-sound investment for you.”
Proprietor of Belvoir Southend-on-Sea Wayne Mearns adds, “Always inspect the property prior to the auction with a letting agent. We are not specialists at maintenance but we know what the most common faults are when buying an investment property and what will need to be done to bring the property up to a good letting standard.”
• To find your nearest Belvoir office, visit their website at http://www.belvoirlettings.com/
Don’t... overbid in the excitement of the sale
Don’t... be bullied into large bidding increments by the auctioneer
Don’t... be late. Ensure you arrive early enough to survey your surroundings, sum up the competition and get a good bidding spot
Don’t... be tempted to bid for a property you haven’t done your homework on because the one you originally wanted got snapped up by another bidder
Do... buy with your head not your heart
Do... do your research
Do... stick to your budget
Do... factor in renovation costs
Do... ask yourself why the property is up for auction