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Thursday, June 30, 2016

Post Brexit - look at a fixed rate BTL

During a period of uncertainty, landlords may prefer a fixed rate buy-to-let mortgage

Buy-to-let remortgages - fixed rate options

With any major change such as leaving the EU, it is realistic to prepare for a period of uncertainty. With this is mind, UK landlords may consider remortgaging their existing properties on to a fixed rate product.

Buy-to-let rates are very competitive at the moment and this could be a good time for landlords to fix their mortgage payments so that they know what their monthly outgoings will be.

Property Hawk Mortgages has a wide selection of buy-to-let remortgage products available, some of which include incentives such as a free valuation or free legals. These could be an excellent choice for landlords who want the certainty of fixed monthly payments.

btl fixed rate mortgages june 2016

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.

Lack of supply to prop up property prices

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Singapore bank suspends London property loans

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Over-regulation of BTL - warns CML

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Asian banks assess 'risky' London property

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Wednesday, June 29, 2016

Banks suspend large deals for landlords

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UK annual property price growth at 5.1%

Nationwide has released its House Price Index for June 2016.

The bank states annual UK house price growth now stands at 5.1%, up from 4.7% in May. 

The average UK property price is now £204,968.

Nationwide's Chief Economist, comments-

“The rate of annual UK house price growth has remained fairly stable over the past twelve months, confined to a fairly narrow range of between 3% and 6% - this trend was maintained in June with price growth at 5.1%, up slightly from the 4.7% recorded in May.

It has become difficult to gauge the underlying pace of demand in recent months, due to the surge in house purchase activity in March ahead of the introduction of Stamp Duty on second homes on 1 April.

It will therefore be difficult to assess how much of the likely fall back in transactions in the quarters ahead is because buyers brought forward purchases to avoid additional Stamp Duty liabilities, and how much is due to increased economic uncertainty following the referendum result. Gauging the likely impact on house prices will be even more difficult.

Ultimately conditions in the housing market will be determined by conditions in the wider economy, especially the labour market. It is too early to assess the impact of the referendum vote on the economy. However, it is encouraging that the labour market had remained robust in recent months, with solid employment growth and the unemployment rate declining to an eleven-year low in April. Borrowing costs also remained close to historic lows.

Moreover, the lack of homes on the market – with estate agents continuing to report a record low number of properties on their books – will also provide underlying support for prices even if demand softens." 

Regional disparities continue to grow

“Regional house price trends also maintained the pattern prevailing in recent quarters, with southern areas of England recording the fastest rates of house price growth in Q2.

It remains the case that the pace of house price growth tends to decline as you move from the south to the north of the country, even though prices in the south are already well above pre-crisis levels, while in Northern Ireland, Scotland, Wales and the North of England prices remain well below their 2007 highs. "
regional house price growth june 2016

Where to invest post-Brexit?

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How will Brexit affect landlord law?

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Tuesday, June 28, 2016

Mortgage interest relief calculator for landlords

The Telegraph have created a buy-to-let tax calculator that gives landlords an idea how much they are set to lose as the changes to mortgage interest relief are phased in during the course of the next five years. 
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ONS reports annual rental growth falls to 2.5%

Rents in Great Britain's PRS have risen  2.5% over the past 12 months according to ONS rental data for May 2016.

Annual rental inflation is now 2.6% in England, 0.4 % in Scotland and  unchanged in Wales.

The South East showed the highest rate of annual growth at 3.4%.

The average monthly rent in Great Britain is now £512.50, compared with £500 a year ago. 

King of BTL caught in Brexit turmoil

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CML predict a slowing market but no crash

CML lending data for May 2016 saw gross mortgage lending at £18.2 billion, 4% up on April, and 14% up on last May. It is the highest May lending figure since the pre-crash May 2008.

CML's economist Mohammad Jamei comments  -

“As expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties”

CML Brexit concerns

The CML predict the Brexit result will cause a fall in property transactions but no crash in prices thanks to a 'mismatch between supply and demand'.

Jamei comments  -

“Looking ahead, there is likely to be considerable uncertainty as a result of the referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait-and-see attitude until the dust begins to settle.

Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance.”

London property feels the Brexit chill

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Monday, June 27, 2016

Friday, June 24, 2016

The Brexit property news

So were you an inner or outer?  This morning brings a shock to all of us landlords.  Do we think it's going to bring economic melt down or are you happy with your savings in brick and mortar.  Here are some of the early thoughts on the effect of Brexit on property from the property press:

More thoughts on Brexit implications for landlords:

As one landlord helpfully pointed out a positive from Brexit could be the demise of the Energy Performance Certificate (EPC).  A piece of legislation that arrived on our shores as a result of a European Directive aimed at improving the energy efficiency of buildings but in reality saddling landlords with an added expense and a useless piece of paper.  That could go on the bonfire of useless pieces of regulation heaped on us by the EU.

House prices are predicted to fall as a little bit of nervousness enters the housing market.  However, outside London will this really effect us?  Most landlords such as myself see rising house prices as a long-term bonus when they sell.  For most of us it's all about the day to day issues of managing your properties and ensuring that they remain fully rented and generating income.  Brexit will not disrupt the continued high levels of tenant demand and the steady rise in rents as demand for rental property and housing generally outstrips supply.

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Thursday, June 23, 2016

Crowdfunding for 'tenant tax' Judicial Review

Landlords try to gather funds via 'crowdfunding' to bring a Judicial Review to fight Government plans regarding a loss of mortgage interest relief .

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Trouble ahead for BTL investors - Times Money

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Wednesday, June 22, 2016

Age breakdown of UK's HB claimants

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Swansea tenant guilty of murdering his landlord

A Swansea tenant has been convicted of murdering his landlord. 

David Craig Ellis, 41, was found guilty today at Swansea Crown Court.

Swansea Crown Court had heard how David Craig Ellis, 41 had beaten his landlord to death with a hammer before disposing of 59 year old Alec Warburton's body in a old quarry in Dolwyddelan, Conwy.

Ellis put Warburtons body in the boot of his car,  drove 140 miles up the motorway to the unused quarry, where he dumped the body, before making his escape by ferry to Ireland.

Later arrested by the Garda, Ellis confessed to the murder.

More details -

Where the US leads we follow

With the UK Housing Act pushing increased privatisation of public housing should America's experience be a warning of our future.
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Rents surge £100 in 8 years

The Rentindex reveals that rent increases have continued on their steady seasonally adjusted course over the last 8 years.

Following their rise of over 5% over the last 12 months they are now £100 above their level at the start of 2008 when the Rentindex was first established.

How do I get paid 12 months rent upfront?

SDLT chaos - man overpays £13,000

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Wolverhampton landlord fined £3,000

A Wolverhampton landlord has been ordered to pay nearly £10,000 in fines and costs.

Delbag Singh Fagura was found guilty of nine building regulation offences as well as a charge of failing to disclose information after he had refused to confirm his ownership of a block of six rental flats in Telford.

Telford & Wrekin Council's building regulation team had visited the block and gathered evidence to show the rental block failed to meet a number of fire safety regulations.

Singh Fagura was fined £3,000, alongside £6,000 in legal costs and a victim surcharge of £200.

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Tuesday, June 21, 2016

Fire risk assessment - holiday lets

Chris Horne

I am in the process of buying my first ever holiday let.  As we know the legislation is different to buy-to-lets along with the tax treatment.  The advantage for holiday lets is that the business for furnished holiday lettings are assessed as a trade not an investment which allows me to offset a far greater number of expenses.

However, as ever there is more legislation to contend with including the requirement to carry out a fire risk assessment for paying guests.

How do I get 12 months rent up front?

UK tenancy fees mapped

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The risk of foreign property investments

This story underlines why I would never invest in any kind of off-plan foreign property.

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Brexit fears shake London property market

The good news - it will be all over by Friday.
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Monday, June 20, 2016

The non-resident landlord scheme

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Rents have risen slower than earnings for the past decade

Rents in the Private Rental Sector have crept up, at a slow and reasonable rate.

So, so much for the 'greedy landlord' myth one particular charity likes to push via the media to help get signatures on its chuggers clipboards.

As PH has always said - the majority of landlords are reasonable people, looking for reasonable tenants, to pay a reasonable rent, for a reasonable property, for as long a period as is reasonably possible.

Isn't it time we all started to look at the UK's housing problems more reasonably and stop slinging the blame around?

In last 10 yrs ave earnings rose 25% & rents by 23%. #Inform editor's pick.
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Free tickets - tomorrows London Landlord Show

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Average asking price hits a high

Despite  slowing house price growth( 8.2% according to the first UK House Price Index ) sellers are remaining optimistic.

Rightmove's Asking Price HPI for June 2016 has reported a record high for the average UK asking price, up 0.8% during June to £310,471. UK asking prices have seen an annual rise of 5.5%. 

Key points from Rightmove's June data -

  • Asking prices for property coming to market up 0.8% (+£2,320) to new high of £310,471
  • Lack of supply lead to drop in average selling period to 57 days, the fastest ever.  
  • Referendum jitters putting off sellers, new listings down 5.3% on June 15
Rightmove's Miles Shipside, comments:

“In many parts of the country, the over-riding factor of supply outstripping demand has so far overcome buyers’ usual reluctance to make major financial decisions at times of political uncertainty. Most seem to be getting on with the certainties they can control, namely if you find a suitable property snap it up. Indeed the figures for average time to sell indicate that properties are being snapped up more quickly than ever."

With today’s tighter lending criteria, marking a property as sold before you’re certain that the buyer has the means to pay for it could mean missing out on other more suitable purchasers. It takes time to check that a prospective buyer can get a mortgage, and ensure that all other buyers in the chain are also in a position to proceed. In spite of these extra delays and necessary diligence, the length of time to sell is the lowest we’ve ever measured. However, this does not mean that sellers can be over-ambitious on their asking prices, as buyers’ affordability is increasingly stretched and they’re shopping around so their budgets go further. If you set too high a price your property can become stale and be ignored by suspicious buyers even if later reduced to a more sensible figure. Given that housing markets dislike uncertainty, which could become a reality in the event of a Brexit vote, any dampening of buyer activity might mean that more realistic pricing would be an even more critical factor to achieve a sale.

If you’re debating whether to trade up and make a big financial commitment you naturally might hesitate before putting your property on the market just a few weeks before you know the vote outcome. With mere days to go the number of new listings is still about 95% of the norm for this time of year, so the drop-off is relatively small in spite of what many are calling the biggest vote of our generation. This could mean that people are struggling to assess what the impacts might be, or are choosing to ignore them until they become more apparent. A vote to Remain should mean that the housing market quickly returns to its previous norm, but a vote to Leave would create political and economic uncertainty, which historically has had more serious repercussions.”
Wishful thinking by optimistic sellers?


In or out?

Who knows?

rightmove house price map june 2016

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Saturday, June 18, 2016

Can landlords get closer to God?

Property Image

St. Pauls Court, St. Pauls Street, Bury, BL9 6BF

Here at Property Hawk we are all about spirituality as well as about landlords maximising the returns from their investments.

Now potentially you can do both by landlords investing in this converted church in Bury.

The property investment opportunity

The  Freehold Residential Investment Opportunity comprises of 22 flats and parking.  It is freehold and consists of 22 self contained apartments 1 of which has been sold off.  The total rent from 18 let apartments is £111,180 per annum and fully let revenue should be up to £130,920 per annum giving a gross yield of 8.45% (based on ERV).

Asking price is £1.55 million +.

 How to advertise your rental property for free

London council clamps down on Airbnb

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Will a London crash bust UK house prices?

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Thursday, June 16, 2016

BTL mortgage availability to get worse

Search the whole BTL mortgage market free 

BTL mortgage arrears lowest since 2007

Thanks to falling rent arrears, lower tenant evictions, low interest rates, rent inflation and a stable housing market, landlords are managing to better meet their mortgage repayments.

LSL reports that during Q1 2016 they saw a drop in  buy-to-let mortgage arrears, seeing just 9,300 cases over the period, down  9.7% from Q4 2015.

The quarterly figure is the lowest recorded since Q4 2007.

btl mortgages arrears graph q1 2016

LSL Adrian Gill comments: 

“Landlords’ finances are the healthiest they’ve been for nearly a decade. 

Any new risks for landlords are now as a result of anti-renting policies – well-intentioned but possibly misguided attempts to further improve the private rented sector. Landlords witnessing this storm of regulatory change will need to build their cash reserves and reassess their business models. But they are in a very good position to do so.

Looking ahead, the next hurdle put up by the Government will be the coming changes to the tax relief of mortgage interest. For many smaller landlords and for those without significant external income, the phasing out of tax allowances at the higher rate could be minimal if they don’t fall near the higher tax bands in the first place. But professional landlords with more than a couple of properties could be hit harder.

Regardless of their situation all landlords should know where they stand – with a
revised plan and the proper advice to make sure they can continue to operate successfully under the new rules."

Wednesday, June 15, 2016

Specialist BTL tracker with Axis Bank

Property Hawk Mortgages launches new specialist buy-to-let tracker with Axis Bank.

The BTL two year variable rate product with Axis Bank is available for limited companies, HMOs, expats and student lets. 

The initial rate is 3.69% (LIBOR + 3.10%) up to 75% LTV with a 1.5% completion fee and no early repayment charges.

Jane Simpson, at Property Hawk Mortgages, says: 

“Property Hawk Mortgages is a highly experienced buy-to-let mortgage specialist and we are pleased to launch this new product with Axis Bank, which we are expecting to be popular with brokers and their landlord clients.

The rate is especially competitive in niche areas of the buy-to-let market. We are seeing a steady demand for limited company and HMO buy-to-let mortgages and this product stacks up well against other rates that are available in this specialist area.

It has a rental calculation of 125% at 5% which is appealing in today’s environment of rising rent stress tests and there are no early repayment charges, which may be an attractive feature for some applicants. The product is also a good option for expat landlords where choice can sometimes be limited.”

Tel; 029 2069 5446



BTL lending nosedives 86% after SD hike

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Ticking time bomb for landlords

Estate Agency Maskells are predicting a mass sell-off of BTL property by investors during 2018/19.

Maskells Principal, Charles Curran’s believes new policy & regulatory changes alongside mortgage lending and tax changes, will push landlords into selling up. 

Charles Curran predicts a rush of BTL property to hit the sales market between April 2018/2019 due to the first & second tranches of removal of interest rate relief coinciding with rising interest rates caused by the increase in capital charges for banks under Basel III.

As concern grows, Curran predicts BTL transaction volumes to slow in March 2017, causing a jump in rents in 2018-2019 as the supply in the rental market dries up and fails to meet ever increasing demand.

Charles Curran, Principal at Maskells Estate Agents, comments: 

“The BTL market has provided so much of the rental stock the country depends on, but the government’s tinkering could lead to a sell-off. This situation does seem akin to a slow motion train crash: BTL landlords with mortgages are standing on the track in a game of chicken with regulatory locomotive, hoping to time their exit as best as possible. This high-risk game will almost undoubtedly leave casualties.

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SDLT when buying a second home

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Sheffield landlord fined £5,000

Landlord, Mohammed Fathy Mohamed Khalif has been ordered to pay £5,000 after ignoring improvement notices issued by Sheffield City Council under the Housing Act 2004 and a notice under the Building Act 1984.

The court heard how Khalifa had failed to make  any of the required improvements to his rental property in Grimesthorpe rented to a family with two children.

Sheffield Council's Private Housing Standards team reported on a number gas and electrical defects at the rental property.

Councillor Jayne Dunn, cabinet member for housing at Sheffield City Council, said:

"We are prosecuting more people than ever and we will continue until landlords get the message that we will not accept unlawful behaviour in Sheffield. I hope the large number of good landlords in our city see that we are tackling the minority that tarnish the whole sector.”

Khalifa will now have to carry out the required works or face further action.

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Majority of London landlords back 'name and shame'

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Serious rent arrears falls 4%

The LSL Property Services Tenant Arrears Tracker has recorded a 4% fall in serious rent arrears.

  • 3,100 fewer households were in serious rent arrears in Q1 compared to Q4 – a 4% fall. 
  • Eviction orders fell by 3% in Q1. 
  • Just 1% of UK renters are in serious arrears – (86,200 households down from 89,300 in Q4) 
LSL's Adrian Gill comments: 

“Fewer tenants in serious arrears reflect the health of the jobs market. With an extra 44,000 jobs created in the first quarter of this year, thousands of tenants have been able to get their finances back on track and pay down late rent. Serious rent arrears peaked in Q3 2012, when 124,800 households owed more than two months’ rent – and when unemployment in the UK stood at 7.9%. Since then a boom in employment has been responsible for lifting many of the most precarious tenant households out of serious rent arrears and onto a more sustainable course. The direction of travel looks very positive.

A reduced risk of serious rent arrears will be welcome news for existing landlords, facing so many artificial challenges posed by government meddling. But no-one should be complacent – managing a property is never simple. Some landlords are being held back from buying property by the Stamp Duty Surcharge. If this stems the flow of new homes into the rental market, then shortages in some areas could push up rents – hitting affordability.”

350,000 tenants at risk of eviction

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Tuesday, June 14, 2016

A Roman answer to the housing crisis

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MLAR mortgage lending stats for Q1

The pre-April BTL surge is reflected in the Q1 lending data in the Mortgage Lenders and Administrators Return (MLAR) statistics.

BTL advances (which include BTL remortgages) increased over the year from £7.7 billion advanced in Q1 2015 to £13.5 billion in Q1 2016.

Outstanding BTL balances are now £185.3 billion, equating to 15.2% of total residential balances, the highest proportion since the series began.

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First UK HPI published

The first of the Government's newly combined House Price Index has been published. Combining Land Registry, Registers of Scotland and Land and Property Services Northern Ireland data this new UK HPI replaces the ONS and Land Registry HPIs.

The new UK HPI for April 2016 shows annual house price inflation slowing slightly at 8.2% (down from 8.5% in  March ).

Average UK house price rose from £207,780 in March to £209,054 in April.

In terms of countries, England continues to see price growth whereas Scotland, Wales and Northern Ireland continue to bounce along on more static trajectories.

Read full data of the April 2016 UK House Price Index

Could Brexit make tenant checks harder?

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Monday, June 13, 2016

Saturday, June 11, 2016

Tenant referencing of the future

Could this be the referencing of the future?

The world for renting and letting is migrating online.  We already allow you to manage your property portfolio with our free Property Management Software.

Now, I've come across a new way of referencing your tenants. By delving into their social media accounts it enables landlords to see what sort of people their prospective tenants are.  I

Is this morally wrong, or just using the latest technology to ensure landlords stay one step a head of scamming tenants?

How does the new tenant referencing system work?

The new company, Tenant Assured, looks at a potential tenant's Facebook, Twitter, Instagram and Linkedin profiles and using analytical software will look at public and private messages to try and get a unique insight into an individuals attitudes and life events, including looking at whether the prospective tenant has any financial stresses.

Apparently the analytic software looks at:
  • Bayesian belief systems
  • Psycholinguistics
  • Natural language processing
  • Machine learning
This so, Tenant Assured maintains it will give landlords a better understanding of what makes a prospective tenant tick and whether they really are going to stop paying your rent or do a runner.

Property Hawks View

Hey, here at Property Hawk, we are always open to new ideas.  I say give it a go.  We have already seen the power of the likes of landlords using Facebook to catch out rogue tenants.  What I would also  do is combine these latest techniques with traditional tenant referencing and also our tips of vetting tenants. It's now even possible to reference your tenants for FREE.

If you put this together with ensuring that if there is any doubt in the tenants ability to pay rent on a regular basis that there is a guarantor in place then you should have a very high chance of getting a good honest tenant that pays rent on time and a strongly performing tenancy.

Letting Referencing -  get started

Friday, June 10, 2016

May's property market slowest for 5 years

Home sales saw their slowest May for five years according to LSL Property Services.

The agency puts the slow market down to a post BTL surge to beat the SLDT surcharge and those Brexit jitters that the journo's keep harking on about.

  • The average UK property price (excluding London, SE and East) fell by 0.4% in May.
  • London’s average property price fell  0.3% (£1,769). 

housing transactions graph may 16

Adrian Gill, from LSL comments: 

“The housing market is holding its breath ahead of the EU referendum and after a rapid sprint at the start of the year. This 0.4% dip in average house prices in England & Wales since April will be a welcome respite for those hoping to get their first foot on the ladder. May’s correction in property values also follows on from a surge in activity earlier in the year, when second-home buyers and landlords brought forward their purchases to avoid the stamp duty surcharge. That tax hike and the Government’s anti-landlord policies are weighing down the market, but the main factor is short-term confidence ahead of the 23rd June referendum.

The year-on-year growth in house prices has also slowed, decelerating to 6.8% in May, from 7.7% in April. With the Chancellor predicting that a Brexit from the EU would reduce property values by at least 10%, many buyers are holding off until after the uncertainly surrounding the referendum has been resolved.
In London, house prices have slipped from last month’s record high, falling 0.3% (£1,769) month-on-month. This has pushed average property values in the capital back under the £600,000 mark, with the value of a typical home in the city falling to £598,421. However, this decline in property values has not spread across the entire capital. While house prices in the most expensive eleven boroughs have declined by an average of £4,000 (0.5%) from the previous month, values in the cheapest eleven boroughs continue to rise, jumping £3,000 (0.8%) month-on-month. But despite maintaining property values well above the rest of the UK, the demand for homes in London continues to grow. In the three months between February and April, sales of homes in London increased by 15%, compared to the same period last year. The majority of this upswing in sales came from flats. As landlords often prefer to provide flats to rent, these properties were a popular choice before the stamp duty surcharge came into force in April.

With so much uncertainty in the UK economy, home sales have been subdued. While the total number of property sales did increase from the previous month, this month has seen the fewest May property sales since 2011, when the UK was still recovering from the recession. This uncertainty surrounding the EU referendum will not be resolved until 23rd June at the earliest. However, home sales for the first five months of the year are still 3% higher than the same period in 2015, due to the investment from landlords earlier in the year. This suggest that over the long-run, landlords won’t be put off by the reduction in mortgage tax relief, as many believe the sector will still be profitable despite the Government’s attempts to drive them out of the market."

One positive, David Brent will be pleased to hear that Slough prices have risen 23.3% over the past 12 months  thanks to Crossrail and new tech jobs.

Read the LSL HPI for May 2016

Thursday, June 09, 2016

A tenancy deposit deductions guide

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Berlin bans Airbnb and short term rentals

The Berlin ban of Airbnb and other short-term letting has been upheld by the city court.

The new law that began in May stops landlords letting more than 50% of their apartment on a short-term basis without a city permit.

I expect other cities could follow.

Barcelona a strong contender, with a new Mayor elected on a 'quieten tourism' agenda, but maybe London's housing crisis could cause Khan to act, or Rome... Paris, Milan.

Airbnb landlords be warned - you may need a back up plan.

SDLT anomaly for landlords renting who want to buy

It appears that as the updated SDLT laws are drafted, a landlord who lives in a house rented from someone else, who then goes on to buy a home to live in is subject to the additional 3 per cent SDLT on that purchase, despite the purchase becoming their main residence.

This can't be right? If it is, then surely an amendment is needed.

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House prices predicted to drop in the short term

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Wednesday, June 08, 2016

West Brom told to refund landlords

I must admit I counted if they would see it through, but they have.

Congratulations to Property118 and all those involved in getting  justice following West Brom BS disgusting behaviour over the changes to the mortgage conditions on West Brom's discounted tracker rate BTL's. The BS was certainly full of a lot of BS.

If a contract isn't binding then where the flip does that leave us?

The Property118 action failed in the high court last year,  but with dogged commitment they've managed to turnaround the decision at the Court of Appeal.

Welldone for sticking it out 118 and the posse!

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House price growth likely to slow

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Early morning HMO raids by Luton Council

Luton Council's Rogue Landlord team carried out a series of early morning raids on suspected unlicensed Houses in Multiple Occupation

The early morning raids on five HMO properties on Biscot Road, Luton were carried out on Thursday 2nd June by council officers assisted by the police.

Officers reported the unlicensed Houses in Multiple Occupation (HMOs) to be in unsatisfactory condition, lacking adequate fire safety measures and to include a number of unauthorised and potentially unsafe constructions.

Robin Porter, corporate director, underlined the Luton Council's policy on HMO's: 

"Every landlord that houses different families sharing the same facilities under one roof must register for an HMO licence. We will not hesitate to prosecute landlords who show a disregard for the law and their responsibilities towards occupants”.

Right to Rent Guidance Updated

A revised Right to Rent Code of Practice came into play 25th May 2016.

The main change, a added pinch of realism - the introduction of a clause to prevent the risk of landlords facing prosecution if they are fooled or conned by a forged document. 

The updated Gov. guidance now reads that landlords need only take 'reasonable steps' to check a tenants documents. 

Thank goodness. It's so easy to make a convincing copy of a document - a laptop, a half decent printer and a slice of ingenuity and ...voila!

How are we supposed to know whether many of these documents are real or not?

Rental data from Homelet for May

Homelet's latest rent index using data from May 2016 shows -
  • Three months to May 2016 saw slowing rent rises in line with house price growth
  • Average rent in the UK (excluding Greater London now £771 pcm, an annual growth of 4.4%
  • Average rent in London now £1,563, an annual growth of 6.2%
Despite Brexit jitters, rents rose in 11 out of the 12 regions, with Scotland the best performing region, with annual rental growth at 10.6%.

Chief Executive Martin Totty, reflects:
“The May HomeLet Rental Index continues to show a rental market characterised by steady growth in rents as the number of tenants looking for property runs ahead of the supply in the market – that remains the picture in most regions of the country. While this growth has begun to slow, which tenants will welcome, landlords will also be encouraged by the vote of confidence in the sector evidenced by the increase in Buy to Let completions in the past few months.

Short-term factors can and do have an impact on the marketplace – as a market leader in tenant referencing, HomeLet has seen a noticeable increase in the applications for new tenancies immediately after the rush to complete buy-to-let property purchases ahead of last month’s increase in stamp duty rates.

Across the housing market, it may be that uncertainty ahead of this month’s European Union referendum vote is a factor – some people may even be choosing to rent rather than buy given the unpredictability of the outcome and its impact; as we saw at the time of the 2008 financial crisis, house prices and rents are not immune from wider economic shocks.

However, looking beyond shorter-term factors, net population growth and the rising rate of employment remain the key demand-side drivers for residential property; they look set to continue to run ahead of public and private sector initiatives to increase supply and keep pace.”

Read in full - Homelet Rental Index for May 2016

Tuesday, June 07, 2016

Savills property report on Cambridge

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Annual HPI remains at 9.2% reports Halifax

Nothing to see here - Halifax's HPI rate remains the exactly the same at 9.2%.

The average UK property now stands at £213,472 according to the bank.

Halifax's data for May's sales sees the annual rate of HPI in the three months to May remain static at 9.2%. 

The 3 month average sale price (March-May) was up 1.4% on the previous 3 month average ( Dec-Feb)

Martin Ellis, Halifax housing economist, comments: 

“Low interest rates, increasing employment and rising real earnings, continue to support housing demand. The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms.

Increasing affordability issues, caused by a sustained period of higher-than-earnings house price growth, should curb housing demand and result in some slowdown in house price growth as the year progresses.”

halifax hip may 16 chart
View the  - Halifax House Price Index for May 2016

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Monday, June 06, 2016

Gloom and doom article on UK property prices

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Rent stress tests and respite for limited companies

In recent weeks we have seen a number of buy-to-let lenders make changes to their rental calculations and thereby imposing more stringent tests on landlords’ affordability. The Mortgage Works (TMW) was the first to increase its rent stress test from 125 per cent to 145 per cent in what appears to be an early response to the PRA’s proposals for further regulation of the buy-to-let mortgage market.

Following TMW’s lead, Newcastle Building Society and Woolwich quickly followed suit, Foundation Home Loans announced its intention to do the same and we may see more lenders making changes in the coming weeks.

Raising rental calculations is a rational decision by lenders as the impending tax relief changes being phased in from 2017 will certainly affect the profitability of many buy-to-let property businesses in the UK. A 145 per cent rental calculation is a realistic allowance to cover all landlords’ costs and the lower tax relief, however we may see some lenders developing their own approaches to affordability tests that take other factors besides rental income into consideration.

There is justifiable concern among industry pundits that if such rent stress test increases are seen across the buy-to-let mortgage market, it will become more difficult for landlords to purchase new properties especially in areas such as London and the South East where rental yields can be lower than in other parts of the UK.

Although we are likely to see the trend continue, we may find some lenders looking to create a competitive edge in the market not by offering lower rates, but by requiring lower rent stress yields. For example, New Street Mortgages is a new entrant to the buy-to-let mortgage market and currently has a 115 per cent at pay rate calculation for properties in Central London.

Although the tax relief changes and increasing rental calculations are not good news for landlords, there may be opportunities to avoid such measures by using a corporate structure to purchase and hold buy-to-let properties. Limited companies are not subject to the tax relief changes and with corporation tax being reduced to 17 per cent by 2020, they could provide a more financially viable way to invest in buy-to-let. Landlords considering using a limited company for their buy-to-let business should seek advice from a qualified tax expert before doing so.

In the coming months we may see more lenders taking a different stance towards rent stress tests for limited companies. For example, Foundation Home Loans is only increasing its rental calculation to 145 per cent for personal buy-to-let applications. Limited company applications will remain subjected to the current 125 per cent rental coverage ratio.

The good news for landlords who are looking for a limited company buy-to-let mortgage is that there is a growing number of products to choose from and a wider choice of lenders. Many of these lenders including Aldermore, Axis Bank, Fleet Mortgages, Foundation Home Loans, Paragon Premier and Precise have 125 per cent rental calculations.

For landlords looking for longer term fixed rates for a limited company, there are a number of five year fixed rates below 5.00% available that have 125 per cent at pay rate rental calculations.


  • Axis Bank – 4.59% 5 year fixed with 2% completion fee up to 75% LTV. Rental calculation of 125% at 4.59% 
  • Foundation Home Loans – 4.39% 5 year fixed with £1999 completion fee up to 75% LTV. Rental calculation of 125% at 4.39%
  • Precise Mortgages – 4.59% 5 year fixed with 1.5% completion fee up to 75% LTV. Rental calculation of 125% at 4.59% 

The buy-to-let market is undergoing changes in response to the government’s apparent clamp down on the sector, but landlords are likely to adapt to the new environment and find ways to make their investments work. Buy-to-let will prove its resilience and continue to be an important part of the UK housing market.

- Jane Simpson at Property Hawk Mortgages

Tel: 029 2069 5446