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Saturday, February 27, 2010

How do you spot a landlord?

In the booming naughties landlords; neigh property investors could be seen strutting their stuff outside gleaming city centre tower blocks doing their latest deals to expand their ever growing portfolios. Easy money, flash cars, ever lengthening lines of credit. We were slick man!

Now the bubble has burst. The towers of shiny buy-to-let towers are home to negative equity and dodgy tenants.

Back to basics now for landlords. It's more a case of rolling up your sleves and getting down to a bit of DIY or flat cleaning to save on costs. These days you are much more likely to spot a landlord by the fact that they are sporting a 'fleece' than a Boss or Armani suit.

Just to confirm this trend I dusted down my 'fleece' the other day and my does it feel good.

So landlords be candid - What are you wearing these days?

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Friday, February 26, 2010

LESSON 1 - Property Marketing

Property marketing is one of the most essential steps in letting your buy-to-let property. There is no point having an investment property that stays empty and you end up having the expense of a void.

Part of the success of your marketing campaign will be down to where and how you advertise your buy-to-let investment. If you don’t use a letting agent you can choose to market your property using the increasing array of free and budget property marketing portals. If you are going to market your buy-to-let property yourself.

Here’s some advice on writing a rental advert.

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Wednesday, February 24, 2010

Interest rates set to stay low for a number of years

For those landlords balancing on the edge of a cliff when it comes to future interest rates remaining low to keep hold of their property portfolios then heres some good news in the form of The Bank of England deputy governors announcement that they may have to keep low interest rates for the long term to compensate for strains in the banking system. - read more in ThisisMoney

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Property price obsessive turns into Gollum.

As we continue to go this way and that away, on our property price outlook, I read an interesting reflection that charts the scale of the eighties housing crash from Love Money journalist Cliff Darcy.

If you are too young to remember it then it is well worth a read.

What is interesting is that the writer sold his house a few years back, presumably to rent and take advantage of predicted property price falls, in the interim period he reports his old house has increased in value by 30%. Ouch! That can make you bitter, so I'm guesssing that as with many of the doom-mongerers there is a element of self interest in his opinions, but to his credit he is honest to declare that.

I do loathe some of the online property price obsessives, especially the hardcore, who inhabit various property price forums. These gnarly characters have spent the last 5 years trying to summon up an almighty property crash to enable themselves to jump on the property ladder. However, unfortunately for these self-servers the great 'goddess of property values' has frustrated them and has continued to levitate prices beyond historic trends, whilst they continue to fester in their rented flats.

Imagine how frustrating it has been for these over analytical property gamblers, sat paying rent and been forced to watch property prices tread water, many of them are turning into Gollum type creatures that twist and snarl in their bitterness.

Maybe their predictions will finally come true, but in the meanwhile, 'the pain, the suffering, my precious.'

Many of their posts are disguised as anti-capitalist, however their whole attitude smacks of self interest and envy, the poor dark souls.

As a cautious bunny myself, in these uncertain economic times I am only looking at very high yield property investments, capital appreciation should be left right at the back of any investment decisions as let's be realistic potential short term capital loss will probably be just around the corner.

If prices do crash at least some will be happy, but one things certain, some souls will never be happy, however rich or poor they are.

"We wants it, we needs it. Must have the precious. They stole it from us. Sneaky little hobbitses. Wicked, tricksy, false! "

Read about the eighties property crash

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Are auction results predicting a double dip in house prices?

I recently recounted my impressions of doom and gloom in the auction sales room.

It seems that my feelings that not all property investors are that convinced about a quickly recovering property investment maybe not that far from the mark.

This recent article in Thisismoney indicates that according to the Zoopla Auction index confidence is slipping. It recorded a figure of a 28% discount of sale price compared to the private treaty market in January compared to only 19% in December.

Is the house price recovery running out of steam? What do you think.

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Tuesday, February 23, 2010

New Flyde Landlords Forum starts off in Blackpool

Blackpool landlords are invited to a new landlord forum organised by Flyde Borough Council.

The new landlord forum is to have its first meeting at 5.30pm on the 4th of March in the council chamber at Blackpool Town Hall.

The Flyde Coast Landlords’ Forum hopes to become a opportunity for local landlords to share their ideas and knowledge on renting property.

One of the first things on the agenda will be to look to establish a new accreditation scheme for local landlords.

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BMV property - I've spotted a property bargain!

I've spotted a property bargain. A massive 2 bed victorian conversion apartment that estate agents love to call a penthouse. It's potentially got 3 beds if the space is reconfigured. It sold in 2007 for £160,000. It being marketed at just under £90k. I'm aiming to get it for £80k exactly 50% its recent sale price and probably a good £25k below its real value after refurbishment.

So why are you telling me this?

I'm minded of all those middle men who spend a huge amount of effort telling landlords what a great investment this investment is and it is 30% below market value (BMV). My answer is why? If it's such a great deal why aren't you buying this residential investment for your own residential property portfolio.

Want to know more about my property bargain?

This ones mine all mine! You can sod off!

Why would I want to tell you about such a great deal...

What it does indicate is that there are some property bargains out there.

My advice to landlords is - get searching.......for yourself.

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Foxtons case LATEST: OFT secures High Court Order

For many landlords the Foxtons case on tenancy renewal fees seems to be have rumbling on for ever without any real resolution. We learnt just a couple of weeks ago that Foxtons had withdrawn their High Court appeal putting paid to any hope on the clarification on the legal standing of charging tenancy renewal fees.

In the latest development the Office of Fair Trading ( OFT ) has secured a final High Court Order against Foxtons to prevent the letting agent using certain terms in it's landlord agreements.

However this Order fails to clarify the situation on tenancy renewal fees.

Where the Order is clear though is that the practice of some letting agents of putting conditions in their agency agreements with landlords relating to the subsequent sale of a landlords property are unfair and no longer binding. The specific conditions are:

• Terms which require landlords to pay renewal commission to Foxtons after the sale of their property to a third party because the original tenant remains in occupation.
• Terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant.

It is understood that Foxtons have now reworded their standard contract to omit these conditions. However the OFT have indicated in their press release that they will be writing to other letting agents that still include these conditions reminding them they need to comply with the law.

So that's nice and clear isn't it?

Well no not quite. The OFT under it's remit is only able to protect consumers. This term may not necessarily apply to all landlords. Where a landlord has one or maybe two properties and therefore does not rely on letting out property as their main income the law may view them as a consumer of professional service; and therefore subject to the protection provided by the OFT under consumer law. However, large portfolio landlords who rely on their letting business for their income may be considered to be a business and therefore will not benefit from the same level of protection as is provided by the consumer protection regulations and the OFT.

Are landlords consumers or are we a letting business?

This case and the involvement of the OFT highlights a huge area of uncertainty over how landlords are considered by the law. Are we consumers that need protecting from unscrupulous business types? Or are landlords actually 'rough and tough' business men and women who are quiet capable of looking after themselves?

The government and the law can't quiet seem to decide.

What do you think?

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Monday, February 22, 2010

Drugs booklet for Landlords

Bedfordshire Police have had more than 200 drug cases involving property. They have produced a booklet for landlords to help them spot, prevent and act on any problems they may have with illegal drug use and manufacture in their properties.

It's here: Keeping illegal drugs out of rental properties It contains a lot of useful and detailed advice and grim photos of what to look out for.

It seems that this problem is not going to go away.

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Tesco set to sell houses - in the aisle passed the crisps but if you get to biscuits you've gone too far.

Tesco look set to launch a new property website in the next few weeks after the OFT announced relaxation of trading in the estate agency field.

Tesco is expected to charge a few hundred pounds to sell a property which is a massive saving on existing estate agency fees.

The news comes in advance of confirmation that Google will be launching its property search facility in the UK.

The property portals will come under fire alongside high street estate agencies as a price war hots up, and as landlords know, "every little helps!"

Fingers crossed, Lidl, Aldi and PoundStretcher will all enter the market over the coming years.

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Police push landlord insurers to stop covering damage from cannabis farms

A worrying bit of news for landlords is the push by police to make landlords liable for any damage caused by tenants who use their rental properties as a cannabis farm.

Scottish police are currently trying to persuade landlord insurers that they should stop covering landlords for any damage caused by the use of their rental properties as cannabis farms.

Scottish police estimate that 1 in every 230 rental properties in Scotland are used as a cannabis farm.

This is worrying news for landlords on a number of levels, both the change in landlord insurance liabilities and the high frequency of the problem.

Read more in the Scotsman

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Landlords are accused of exploiting the housing benefit system

Landlords have been accused of exploiting high housing benefit rates by council leaders.

They argue that private landlords set their rents at £1 or £2 below the maximum allowed by the Department for Work and Pensions, which has led to rents of almost £2,000 a week.

Read this full article in the Times

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Why be a landlord?

Looking at the headlines of doom and gloom. Falling property prices, dodgy tenants and increasing levels of legislation affecting landlords. New entrants to the sector could legitimately ask the question.........Why would I want to be a landlord?

Being a landlord isn't all slick property deals and ever rising rents.

However, as most people including my girlfriend with her new job have to make the laborious Monday morning trek into work. I'm thankful that I put my cash and effort into property investment in my early twenties. Having been 'retired' since 37 apart from keeping my tenants happy and my properties fully let I'm glad I don't have to do the round of meetings, cap doping and pointless performance reviews.

In fact I'm off to South East Asia this week for a couple of weeks to explore Malaysia, the Philippines and the Gulf. It will be really interesting to see the economic down turn from a different global perspective and see the spectacular Dubai property bubble with my own eyes.

So landlords that's why I became a landlord. What about you?

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Lodger landlord NEW website

Householders that take in a lodger and want to know what their responsibilities want to check out the new website called The Lodger Landlord. It is produced by Tessa Shepperson of Landlord Law fame and is full of useful hints and tips about letting out part of your home to the marauding tenant class.

Have a look at her FREE 21 days of tips of being a lodger landlord.

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Sunday, February 21, 2010

Handy BTU Calculator for Radiator Sizes

For landlords and property developers who want to work out the radiators required for a property I found this handy calculator for room BTUs.

What can I say a gift from me to you, have fun with your BTU calculations.

Have fun with refurbishment!

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Saturday, February 20, 2010

Rental Guarantee Investments - How are they doing?

I wonder how those property investors who went for the 'rent guarantee offers' on the big blocks of BTL apartments from the likes of Galliard.

The concept was very appealing to some investors, like Daren Forsyth, who enjoyed the guaranteed high rents as a safe way into property investing as reported by the Telegraph back in 2007.

However, many of these rent guarantee schemes were offered on over valued BTL towers that were in investment terms our very own Dubai monster bubbles, that have often seen the worst of the property price falls.

Galliard homes are offering their apartments as a 'fire sale'.

I also suspect that many investors have failed to secure the same levels of rental values when they came to re-let after the rental guarantee period ended. I may be wrong.

Let us know how you got on if you took up these rental guarantee investments.

Alan are you still smiling?

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Farm land sees increase in values

Buy land, they're not making it anymore. -- Mark Twain

Farmland prices rebounded during H2 2009 (by between 4% and 8% depending on the measure).

The consensus amongst surveyors is that a very thin market is likely persist during 2010 and this in turn is expected to drive farmland prices even higher.

Get the full RICS report here

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Student landlord - NEW fund launched

Landlords looking at the fast growing student accommodation market may be interested in the latest property investment fund launched by PILinvestments, the alternative asset fund specialist.

How to become a student landlord

The Crosslane Student Accommodation Fund NO.1 will buy a portfolio of private sector student halls in university cities across the UK. The properties will then be managed by Crosslane. The funds criteria are:

• Initial fund raise of £50 million equity

• Diversified Portfolios of suitable assets have been identified with initial pipeline available for immediate acquisition.

• Debt funding up to 67.5% loan-to- value across Fund portfolio.

• 7 year investment term.

• Targeted IRR of 12-14% based on conservative assumptions for rental growth and yield compression.

• 4% distribution per annum.

The student rental accommodation market has proved to be one of the most resilient of the property sectors during the downturn as student numbers continue to increase leading to above inflation rental increases in most areas.

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Friday, February 19, 2010

Normal service NOW resumed........

Hi fellow landlords.

Just to say if you did try and access Property Hawk this morning you may have some problems accessing the site. I have been assured by the Stig that everything is under control. It was a little technical issue with our hosting company which has now been sorted.

For those who are morning the lack of our weekly email. We are hoping that it should be winging it's way to you during the weekend.

So apologies for any inconvenience & hope you all have a good weekend.


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Doom & gloom in the sale room....

I was at a property auction on Tuesday looking to pick up a 1 bed room apartment near me.

Buying at auction

It was actually a two bed top floor victorian conversion. Somehow they had managed to squeeze two beds into a space of some 468 sq ft. As you can imagine it was tight. My idea was to turn it into a spacious 1 bed and add in a couple of large dormers to open it up and lighten up the space.

I've notice recently that rentals on spacious 1 beds have been creeping up touching the same rents as those for smaller 2 beds. Is it a case that because of the slump tenants are trading down and forgoing the extra bed?

The access to the property was via an external fire escape so that would rule out tenants that were scared of heights. It was never prime and I'd set myself a realistic target that had factored in refurbishment and purchase costs of £14,000.

The property needless to say went for it's guide price of £60,000 , £5,000 more than my upper limit and £10,000 more than real bargain territory. Oh well - there are plenty more properties out there and I'm only going to buy if I can find a real bargain or a significant development angle.

'Lack of enthusiasm to bid'

What struck me in the sale room which was full of prospective purchasers was the general lack of enthusiasm amongst the attendees. Despite the auctioneers attempts with bout of wit and cajoling to whip prospective investors into action, most seemed only prepared to bid if they were going to get a real bargain. A few let properties with high yields attracted some attention but their was no real enthusiasm to bid. A massive contrast to a few years ago.

'Property ain't a one way bet'

To me this is good- it's slowly dawning on property investors and speculators that property investment aint a one way ticket to instant riches and that the 'crash' was not a temporary blip to be followed by an instant recovery. I suspect that prices will drift for a good part of this decade whilst governments and banks rebuild their balance sheets.

It means that now we have got over the concept that all property investment isn't gold. I can get on with finding some real property investment nuggets without idiot speculators pushing prices up to unsustainable levels.

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Principality drops leading rate variable tracker to 3.39%

Principality BS has reduced it's market leading buy-to-let mortgage variable tracker rate to 3.39%.

The tracker rate to 31.3.12 has been reduced 0.1% from 3.49% to 3.39%. The fee for this buy-to-let mortgage remains unchanged at 3.5%. Unfortunately the LTV available on this buy-to-let mortgage is on the low side at only 60% so the mortgage would not be suitable for landlords looking to gear up their portfolio.

Moneyfacts has given this buy-to-let mortgage a full 4 stars out of 5 on the basis of it's competitive interest rate. The full range of their revised buy-to-let mortgages are given below:

NEW VARIABLE TRACKER RATE MORTGAGES: 3.39% to 31.3.12, max 60%, fee 3.5% of advance, BBR + 2.89% to 31.3.12; 3.89% to 31.3.12, max 60%, fee 2.5% of advance, BBR + 3.39% to 31.3.12.

FIXED RATE MORTGAGE of 4.69% to 31.3.12 withdrawn & replaced.

NEW FIXED RATE MORTGAGE: 4.59% to 31.3.12, max 60%, fee £999, with incentive for remortgages of free legal fees. W.e.f. 19.2.10.

Ring 01424 205 373 or email to get No Broker Fee Mortgage Advice

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Thursday, February 18, 2010

Google get go ahead from OFT

The consumer watchdog today recommended relaxing rules for new entrants such as Google and Tesco to offer rival property search websites that will compete with traditional estate agents.

The Office of Fair Trading (OFT) said that allowing new companies to set up search portals regulation-free would "shake up" the traditional estate agency model, resulting in better choice and lower prices.

Read more in the Times

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The majority of renters want to buy

According to Rightmoves recent survey 61 percent of renters said they would like to buy a home but could not afford to.

Just 13pc of people who plan to rent said they were doing so out of choice, rather than necessity.

This was the third consecutive quarter where the number of people who felt they were being forced to rent due to high house prices had increased.

Read more in the Telegraph

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Portsmouth Council Start Landlord Accreditation Scheme - Laughable!

Portsmouth City Council are launching a landlord accreditation scheme with the aim of boosting standards in the private rented sector.

The new landlord accreditation scheme includes a website that will include a list of approved landlords and rental properties in the city.

Landlords who sign up will have to pay an annual membership fee of £50 and upwards depending on the size of their portfolio.

I have my concerns that the website will be as dead as a fish up a tree without a flannel in a few years time, on many of these schemes the properties aren't properly checked, so anyone who pays the membership will be allowed in, and tenants won't refer to it anyway.

Lets hope this new landlord scheme is worth the fanfare and not one of those embarrassing moments that the councillors will try to forget in a few years time.

Laughing gnome anyone?

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Tenant stops paying the rent -what do I do?

For many landlords the 'nightmare scenario' is where the tenant stops paying their rent. What do you do?

I recently had a case of a tenant who stopped paying their rent. What a landlord has to avoid at all cost is not to be tempted to wade in there and try and take possession of their buy-to-let property. If they do - there is a very real chance that they will end up being charged for harassment.

In my case I kept my cool and having served my section 21 notice I then had to serve my court form N5B for possession.

Luckily this did the trick and the tenant recommenced payment of rent.

This meant I avoided having to try and trace the tenant and try and reclaim the overdue rent.

Landlord that want to avoid being exposed to a tenant who stops paying rent can take out rent guarantee insurance.

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Traditionally there will often be a history of renting student houses for a particular period in your area and in ours it is either 10 or 11 months, however in a large nearby town it is almost always 12 months. Students usually pay the full rent for the whole of the tenancy regardless of whether it includes all or part of the summer holiday.

'Our houses are let for 12 months'

I have broken with tradition in our area. Our student houses are let for the full rent for 12 months. Our tenancies are from August 1st to July 31st. Students almost always check-out a couple of weeks before the end of their tenancy and we ask their permission to enter the property during this time to prepare for the next group of students. Having established a good relationship with the students and responded promptly to maintenance requests during the tenancy they always agree.

'So, why do students pay for 12 months, when locally most are 10 or 11 month lets?'

We have always quickly let all our properties, because we are in the higher quality end of the student market. There is a local accreditation scheme, run by the District Council, where landlords’ properties are inspected and awarded a certificate, which ranges from basic up to 5 star. All our properties are 5 star accredited and this enables us to charge a premium rent.

We also carefully researched the area and purchased properties in what students consider a more desirable area. Once students have compared our houses with others they almost always snap up our properties regardless of the length of the letting period.

There are some other good reasons to let for the full rent for 12 months.

Students may want to return or stay in their house during the summer holiday to work away from home. They may be on a longer course, for example, medical students and work placements or they may want to store their belongings (and often their many friends!) over the summer. We have known parents stay during this time for a cheap holiday in the area!

Financially landlords have to pay Council Tax and probably water rates and a mortgage during a void. Spreading the annual cost of these over a 10 or 11 month let raises your monthly rent. A property let over 12 months, will potentially bring in a greater annual rent, but could be offered at a comparatively lower monthly rent to other local shorter tenancies.

Renting properties to students is a business and landlords should seek to gain the maximum return on their investment and consider the challenge of promoting a longer let to the norm in their area. Most student properties are let at least six months before the start of the tenancy, so test the water and offer your houses initially for full rent for 12 months.

After your success, other local landlords may follow your example and you will never again have to consider offering your property for half rent over the summer period!

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Proof if you ever needed it that life aint fair

You may have heard that a couple have recently bagged a lottery win of over £50 million.

What you may not have known is that one of the winning couple Justine Laycock, 41 was an estate agent.

Proof if you ever needed it that LIFE AINT FAIR!

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Wednesday, February 17, 2010

Is the King & Queen of buy-to-let in trouble?

According to the latest reports in the Mail poor old Fergus the king of buy-to-let is having a torrid time down in Kent with his 700+ property portfolio.

The Mail also seems to suggest that Fergus is mistreating his tenants and has dubbed him the 'Van Hoogstraten' of Kent after the infamous landlord.

They also imply that he is in trouble with his lenders but then reading on he has also swapped his fixed rate buy-to-let mortgage with a very attractive variable rate. Surely he must be creaming in rental profits even if half of his properties are empty?

Is this a case of the papers appointing a King only then to try to knock'em down again?

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Tuesday, February 16, 2010

Another BTL Property Fire Sale from Galliard

I've just received an email regarding another of these supposed 'Galliard fire sales'

This one is focused on the 22 storey development 'Vision 20' in Ilford

I quote Galliard "This will be a stock liquidation sale and prices have been reduced by up to a massive £135,000 making the opportunity to buy at 'Vision 20' one not to be missed."

This follows the January sale of Galliards Dockland development.

It begs the question, 'when is a sale a real sale?' Which is a question I have pondered before.

I was in Homebase at the weekend looking at some kitchen cupboards for a refurbishment. There was a Sale on and so I asked the sales guy to explain it. He informed me that there was always a sale on, they just restructure the nature of the sale reductions every few weeks.

So I sought clarification "This unit that is listed at £1000, is 50 percent off with a further 30 percent off that, which makes it £350"

"That's right." he replied."But there is always a similar deal on"

The fact is the unit was never worth £1000 in the first place, which begs the question is it even a sale? I'll let you make your own conclusions on that.

Which is why I will be getting the units from Ikea, the pricing is realistic and transparent, and their sales are real.

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Haven't got a clue....then consult

You know what they say in government.

Haven't got a clue or don't want to make a decision then consult.

This is the governments latest tactic when it comes to the private rental sector.

In announcing the latest consultation exercise the government minister, commenting on the publication of the consultation document, the Exchequer Secretary to the Treasury, Sarah McCarthy-Fry said:

"The consultation we are launching today will ensure that we fully understand the contribution the PRS can make, and identify any substantive barriers to investment.”

So if they by their own admittance don't know whats going on why are they hitting landlords with a barrage of legislation.

I've decided to consult on this one so any views please feel free to post.

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Foxtons bottle it.....letting agent renewal fees.

The news last week that Foxtons has decided to abandon it's high court challenge against the previous ruling on the charging of tenancy renewal fees may seem surprising.

However, in many ways it is not.....

The original decision last Summer gave many landlords an unrealistic expectation that it was only a matter of time before they would be able to claim back thousands of pounds in letting agents fees. However, this ideas may well be misfounded.

If we go back to the original decision by Mr Justice Mann the decision on the case related purely to the way the terms and conditions in the Foxtons agreement were worded and as to whether they were unfair when managed against the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs). He ruled they were describing them as a 'trap' or 'timebomb'.

Foxtons appears to have done the sensible thing. They have reworded their contracts so that the clauses relating to renewal fees is no longer buried obscurely in the contract and the OFT and courts have accepted these. In a press release on Wednesday Foxtons indicated that they had a set of new terms of business with new terms and a renewal commission at a lower rate than the initial commission and do not seek to charge that renewal charge for more than two years.

It seems that no letting agent wants to confront full on the legality of the 'renewal fees' issue for fear of potentially loosing them and then also having to pay back all the previous letting agency renewal fees.

It looks like letting agents will have to be pushed into a test case to establish this. Any well healed landlords volunteering?

For more info have a look at this Citywire story.

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Monday, February 15, 2010

Lenders urge government not to regulate buy-to-let mortgages

Buy-to-let lenders represented by the Council of Mortgage Lenders (CML) have urged the Treasury NOT to regulate buy-to-let mortgages according to latest reports in the FT.

The CML has argued that buy-to-let loans mortgages are commercial transactions between commercially aware individuals and therefore should not require the same level of control that affects residential borrowers.

Property Hawk would support this view. Obtaining a buy-to-let mortgage itself is a commercial decision and those landlords deciding to use buy-to-let finance will have sufficient understanding of how they work and the risks involved.

Buy-to-let loans are not the real danger

What is more potentially dangerous is the intermediate companies, such as Imagine Homes. The failed buy-to-let investment business set up by Grant Bovey. This business and many like it have peddled and packaged a myth of residential investment as a one way investment bet. it is these businesses which packaged the investment product in a way that new investors were deluded into thinking that being a landlord was just like investing in a saving account that should be regulated.

Regulating buy-to-let mortgages would just penalise often experienced landlords that are more than aware that investing in property is NOT a one way ticket. The very fact that these investors are obtaining a loan individually and are not paying middle men stupid fees demonstrates that they have their commercial head screwed on properly and therefore do not need to be subject to further controls and restrictions in buy-to-let lending.

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RBS enable investors to bet on property price falls

For those landlords and property investors who want to see property prices as a two way bet, the Royal Bank of Scotland is looking to launch a product that will allow investors to bet on house price falls.

There's confidence from a state owned bank.

Read more on this interesting new two way bet

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