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Thursday, April 29, 2010

Private rented sector consultation

RICS has responded to an HM Treasury consultation looking at how investment in the private rented sector in the UK can be increased.

Go here to download the RICS consulation response- Increasing investment in the private rented sector

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Letting agent leaves TDS

Another large letting agency firm hasstopped using the Tenancy Deposit Scheme and switched to Mydeposits.

LSL, parent company of Your Move and Reeds Rains, has 584 lettings branches. The move to Mydeposits follows that of Countrywide Residential Lettings. Both firms made the decision to quit following large price hikes by the Tenancy Deposit Scheme.

Read more in Estate Agent Today

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Gordon Brown digging deep

It really is comedy gold.

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Property price twitter and tweeting

Roll on the election.

House price will continue to rise in 2010 and then crash - ThisisMoney
House prices versus average earnings. What next? - ThisisMoney
Annual house price growth hits 10.5 percent - Telegraph
House price growth hits 3 year high - Times
House price rises 10.5 percent - ThisisMoney

Election fears squeeze house prices - Independent
House prices up 2.6 percent in April - Independent

Stamp duty changes no boost to buyers - Metro
The revival of off-plan buying - Times
Internet searches show we are back on the property hunt - Telegraph

Is the value of your house about to drop? - Lovemoney via Yahoo

See all the property price tweets

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Landlord stabbed by tenant

A tenant, Michal Kalinowski, 22, is accused of murdering his landlord Peter Berkley, 43, because he "resented" being pursued for rent he owed, Preston Crown Court heard.

He stabbed Mr Berkley with such force that one knife wound penetrated his skull, jurors were told.

Mr Kalinowski, of Abbeyshead, Skelmersdale, denies murder.

Read full BBC article

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Student landlord slashes rents

Landlords renting to students have been the beneficiaries of the recent rise in student numbers and the corresponding rents.

However, landlords in University towns need to be afraid ....very afraid

Latest reports are that the big boys are prepared to reduce their rents to attract business away from private landlords and keep their properties full occupied.

This news relates to the UK's largest student accommodation's announcement that it is prepared to reduce it's rents by offering student tenants discounts of up to £2000 if they sign up before the 28th of May.

Unite’s managing director of property management, Shane Spiers, said: “We have always prided ourselves on having the highest quality student accommodation, and now we are cheaper than our competitors. In these tough economic times, we think it is important to help students with their university costs where we can.”

Private landlords have always been able to compete with the big boys on price, but maybe this latest development is an attempt by the big boys to gobble up a greater amount of market share.

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No money down finance - pt 2

This is part 2 of the 3 part look at how no money down finance of a buy-to-let purchases work.

To see part 1 go here.

Strategy 2 -Structured Purchase.

Overview on typical purchase of £70k with £100k value:

* Finance company supplies the buyer with a business development loan for £28,505
* Buyer purchases property for full market value and puts in a £25k deposit.
* Vendor pays third party finance company (PJT Finance Ltd) £30k on completion
* Finance company discharges the business development loan.

So the order of things from the buyer perspective.

Negotiate deal. eg £100k OMV for £70k PP (OMV = Open market value, PP = Purchase price)

Buyers contacts broker and organises a mortgage valuation based on buying at £100k OMV

Purchase solicitors instructed to start sale process, order searches etc. and told purchase price to TBA after result of valuation of buy-to-let property.

Vendors solicitors instructed and also told PP is TBA after val. After valuation is done both solicitors are instructed at full market value.

Val comes in at £100k Vendor then given an Irrevocable letter of authority to sign for the difference (£100k - £70k = £30k) which the buyer takes and sends to the vendor solicitor.

Landlord buyer applies for Business Development loan for £28,505. He sends the amount needed for completion immediately to the purchase solicitor by CHAPs transfer so that the sale can happen same day.

Purchase solicitor draws down mortgage funds of £75k and takes the £25k deposit and sends £100k to vendor solicitor.

Vendor solicitor pays £30k to finance company as per the letter of authority and £70k to vendor as agreed.

Finance company uses the £30k to clear the £28,505.00 Business development loan and pay their fee for this loan of £1,495.00.
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Wednesday, April 28, 2010

Property guru exposed tonight!

Landlords thinking of using property sourcing companies should watch tonight's feature at 5pm about Ajay Ahuja on Sky News and 5 News.

Love him or hate him so called property guru Ajay Ahuja is never out of the news.

Recently it was revelations on the BBC's Inside Out. Tonight it's the turn of Sky News to have a pop at the controversial property mentor for sourcing property.

We have warned landlords to find their own property but many inexperienced property investors fall under the spell of so called property sourcing companies and live to regret it.

Expert legal advice

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BTL property investment returns

So is Buy-to-let still a good investment?

This fairly decent appraisal in a Citiwire article looks through some of the figures and comes to the conclusion that landlords will have to rely on capital gains to provide a return above a five year bond or gilt.

Advising wannabe property investors that they will need to be prepared to take a 10 year view to see decent returns from BTL property investing.

"Get rich quick" it ain't, and if anyone tells you otherwise slap them, especially if they have a perma-tan, a slick suit, a broad smile and keep wanting to shake your hand.

Read full Citiwire article

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BTL Bovey portfolio sale

Just in case anyone is still interested in the BTL buffoon Bovey saga here's more on the sale of his BTL portfolio.

According to a spokesman for Knight Frank the 694 properties are being offered to selected investors from a 'very short' list, but added that discussions were in the early stages.

An interesting way to go about selling property, 'selecting' buyers.

Has the whiff of bullsh*t and hype about it. So no change there then.

Free BTL mortgage search tool here

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New 3yr fix at 4.58%

Leek United are back, Leek United are back....WOOOW WOOOOW!

No......not the football team. I'm talking about Leek United Building Society who make a welcome return to the buy-to-let mortgage market this week.

They have launched two fixed rate products, effectively a 2 and 3 year fixed at 4.58%.

Most appealing to landlords is the fact that both products are available up to 75% LTV and unusually they are available to first time landlords, making them particularly attractive to aspirant landlords looking for finance.

The fee is also pretty reasonable at £995.

This mortgage scores 4 stars rating from Moneyfacts and is also listed as a best buy.

United look to have scored with this buy-to-let mortgage! Sorry couldn't resist it.........

NEW FIXED RATE MORTGAGES: 4.58% to 31.7.12, max 75%, fee £995; 5.59% to 31.7.13, max 75%, fee £995, both with refund valuation & £250 rebate.

Mortgage Search

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Professional landlords to expand

Around 28 per cent of landlords plan to buy more properties to rent out during the coming year, rising to 40 per cent among investors who already own five or more properties according to figures released by LSL Property Services.

Just under half of landlords think now is a good time to invest in property, mainly due to rising tenant demand.

Problems with obtaining mortgage finance

But nearly two-thirds of investors thought it was now harder to get a mortgage than it had been three years ago, with 28 per cent saying it was much more difficult.

Only 11 per cent of smaller landlords had successfully obtained a mortgage during the past year, rising to 23 per cent among larger investors.

Figures from the Council of Mortgage Lenders show that only 93,500 buy-to-let mortgages were advanced during 2009, a quarter of the number seen in 2007.

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Tuesday, April 27, 2010

Landlords Bible - offline

Regular users of Property Hawk many have notice that our FREE 200 page online book The Landlords Bible on all aspects of being a landlord and letting property is currently offline.

The Stig is currently upgrading our software. As we speak he has busily tinkery away and regular service will commence shortly.

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Agents not guaranteeing rent

A recent survey of letting agents carried out be Let Insurance Services reveals that only half of all letting agents discuss rent guarantee insurance with their landlords, with only one third offering to arrange it.

Non payment of rent
is probably the biggest risk factor faced by landlords.

Michael Portman, managing director of Let Insurance Services commented:

“There may not be a legal duty of care to advise clients of the existence of insurance, but there is a professional obligation. It is best practice among regulated agents to warn landlords of the various risks and how they can mitigate them.

For more advice on rent guarantee insurance.

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Rock expands BTL range

The Northern Rock has expanded it's range of buy-to-let mortgages to now include 3 and 5 year fixed rates. Rates for a 5 year fix start at 5.89% and are available up to 60% LTV.

NEW FIXED RATE MORTGAGES with fee of 2.5% of advance: 5.59% to 1.6.13, max 60%; 6.19% to 1.6.13, max 70%; 5.89% to 1.6.15, max 60%; 6.49% to 1.6.15, max 70%.
NEW FIXED RATE MORTGAGES with fee of 1.5% of advance: 6.09% to 1.6.13, max 60%; 6.69% to 1.6.13, max 70%; 6.39% to 1.6.15, max 60%; 6.99% to 1.6.15, max 70%.
NEW FIXED RATE MORTGAGES with no fee: 6.89% to 1.6.13, max 60%; 7.49% to 1.6.13, max 70%; 7.19% to 1.6.15, max 60%; 7.79% to 1.6.15, max 70%. W.e.f. 20.4.10.

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Grill the Minister!

Landlord wanting to grill the Housing Minister John Healey have an opportunity to do it tomorrow in a live Webinar.

I would like to see him 'well done'!

Personally I'm going to want to ask him why change the planning regs relating to HMO properties to cure 'studentification' when it's clear that student numbers have peaked and also how he think the legislation which is not retrospective will help those areas that have already changed into so called student ghettos.

I don't expect a straight answer.

Landlords may also want to quiz the Minister about the Local Housing Allowance (LHA) and the proposed landlord licence.

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Monday, April 26, 2010

Property funds outlined

This BBC article outlines various property fund options for investors.

Take your pick of high end London property, student property or housebuilders.

Property investment funds are the ideal option for investors who don't want to get their hands dirty.

Other property fund news is the proposal that the property funds F&C Commercial Property Trust (FCPT), managed by F&C REIT, be merged with the UK Commercial Property Trust (UKCPT) under plans by Ignis, the asset manager of UKCPT that is owned by the Phoenix Group.

Phoenix said that the merger would create one of the biggest UK-listed property companies.

Read more on this in the FT

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Uncertain forecasts for BTL

BTL basks in the sunshine of increased rents, increased house prices and reduced arrears, according to one article from Simple Insurance and yet another article forecasts clouds on the horizon for landlords according to the Financial Times.

Who'd be a weather, political, or ecoomic forecaster?

We need to get Derren Brown on the case.

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HMO landlords get Gov. rating

According to the site, local councils are rating HMO landlords and sharing the information on a secret database, according to information disclosed on a government web site.

The database classes a landlord as good, bad or average and is one of the factors considered when making a decision whether a landlord or a manager is a fit and proper person for running an HMO.

The database is managed by a London council but councils from all over England are accessing the information and adding their own landlord intelligence.

Read full article here

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Landlords looking to enlarge

28% of landlords polled by LSL Property Services plc looking to expand their property portfolio in the next year. Landlords with five or more properties, are more likely to say they are looking to increase their property investments – with four in ten saying they expected their portfolios to grow, compared to 26% of smaller scale landlords (with less than 5 properties).

I wonder how much of this is macho property investing bravardo?

Enlargement often is something that men aspire to, but the pain and work involved can often be off putting when it comes to the crunch, but I suppose no pain, no gain!

"My portfolios bigger than yours."

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Common landlord questions

Ruth Bamford answers some common questions from landlords on tenancy law and rights in this follow up BBC article that follows on from a previous tenant questions article.

Read article here

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Landlords lose interest option

A worrying prospect has been highlighted in the Irish investment market where some Irish landlords are facing the prospect of not being allowed to have their interest only facility renewed by their buy-to-let lender.

Commenting on the prospect Frank Conway of the Mortgage Corporation:

"We could be in for a bloodbath in the small-time landlord sector where many properties were financed through interest-only loan facilities on the expectation that this market was all about capital appreciation and relatively quick exit," said Mr Conway.

Property Hawk is not aware that at this stage that any UK banks are planning the same for the UK buy-to-let market.

Lenders such as the nationalised Bradford and Bingley have made attempts to encourage landlords to make over payment to their buy-to-let mortgage account by waiving charges on over payments.

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Saffron BS 75% LTV 5 YR FIX

Saffron BS has returned to the buy-to-let mortgage market with a new tracker year and cracking 5 yr fixed rate mortgage.

The 5 year mortgage has it rate fixed at 5.98% should be of particular interest to landlords because it is the only one according to Property Hawks mortgage search which currently offers 75% LTV on a 5 year fix.

It also has a very low flat rate application fee of £499.

One downside for this buy-to-let mortgage product is that it's not available for first time buyers.

The mortgage has a 4 star rating from emoneyfacts and is also Moneyfacts 'BEST BUY'.

More details:

NEW VARIABLE TRACKER RATE MORTGAGE available to second time buyers & remortgage: 4.59% for 2 years, max 75%, fee 2.5% of advance, BBR + 4.09% for 2 years. NEW FIXED RATE MORTGAGE available to second time buyers & remortgage: 5.98% to 30.6.15, max 75%, fee £499. W.e.f 20.4.10.

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Saturday, April 24, 2010

How to sex up property

For all you property ladies out there and maybe some gents too; property heart throb Phil Spencer has a new venture.

Phil Spencer, the good cop in the Spencer Allsopp double act is the latest TV property expert to batter down your internet connection looking to be let into your cyberspace with his new website.

Maybe he's been boyed by the success of fellow property TV guru Sarah Beeny's exploits.

Cynics would say that after the failure of his joint venture with Kirsty, the homefinding business Garrington & with his TV partnership unlikely to last much longer; that he is now desperately looking at striking out on his own.

With the market for property gurus a crowded market. He may have to start 'doing' property again. What he may find is that to do is a bit more difficult than tell a bunch of amateurs where they are going wrong.

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Friday, April 23, 2010

NEW carpet - YOU decide

I've got a new tenant moving in Wednesday.

Nice guy. I'll call him Craig for sake of anonymity. I guess he's probably about 19, 20 tops.

I suspect he may be gay, but whatever..

He's certainly very keen to turn my flat into a nest which is always good news. He's already pushing me to allow him to decorate. I'm wary that I don't end up with a kaleidoscope of colour. I've explained if the colours are neutral I'm cool providing they are agreed in advance.

Carpet dilemmas!!!!

Now one issue that has arisen is the state of the carpet. It's in a pretty shabby condition - not through age (it's only 3 -4 years old). It's because of the previous tenant has giving it a bit of a hammering! Now I could have tried to claim the costs of replacement back from the deposit held by DPS.

However, the inventory prepared by the letting agent wouldn't have given me a hope against the onslaught of a Tenancy Deposit Scheme (TDS) adjudicator and they might give me £40 towards cleaning which wouldn't bring the lustre back to my neutral carpet. dilemma! Do I grant Craig his wish of a lovely new covering for his bachelor pad?

The other alternative is I make him wait.....the proverbial tenant carrot.

I'm meeting Craig on Wednesday to go through the 'check in' so your views are needed ASAP! In the words of Big Brother - YOU decide!

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Belvoir letting agents investigated

The York and Hull offices of letting agency chain Belvoir have been closed, with liquidators called in by the franchisee.

Belvoir issued this statement: “Following a routine audit of two of the offices within its 140-plus UK network of franchised letting agents, Belvoir wishes to announce that on March 16, 2010, the franchise agreements with Andrew Graham and ‘Hamlyn Investments Ltd’ which operated the Belvoir Letting offices in York and Hull, were terminated with immediate effect.

“This action was deemed necessary after Belvoir identified several irregularities in the way that these offices were conducting their client accounts and other general office procedures."

Read the full article in Estate Agent Today

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Tips for selling property

If been a landlord has all go too much.

Have a look at the Ten top tips for selling property in this Times article.

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When will interest rates rise?

Many economists are predicting a rise from the current 0.5 percent to 0.75 percent in December and then to 1.25% by around Feb/March of 2011, reaching 2.25% by the end of 2011.

However there are many factors that are explored in ThisisMoney article that might cause things to move differently.

Speculate away!

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Thursday, April 22, 2010

Landlords stay positive

Landlord are trying to stay confident according to a recent Simply Business survey with just under 80 percent of landlords saying they were confident about buy-to-let over the next 12 months.

But there is concern that predicted rises in interest rates and new tax breaks for first-time buyers could spell danger for professional landlords.

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Public sector tenants get risky

Nurses, teachers, police officers, council workers used to make the perfect tenants.

Cast iron job security, regular pay cheques.

However, landlords might reconsider the security that tenants form the public sector offer as the cuts in public sector workers have already started according to the Times 225,000 public sector jobs are already set to go.

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Social tenants - direct payments

Direct payments of housing benefit should be extended to social tenants, an influential think tank has argued.

A report from Demos on welfare reform suggests housing association and council tenants should receive the same individual choice and control over their rent payments as those renting privately.

Read full article in Inside Housing

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London property fund launch

According to reports in the FT Estate agency Black Katz has unveiled plans to raise £4.5m for a five year closed-ended property fund that will aim to buy undervalued properties in London.

The fund will refurbish the properties and then let them to professional tenants.

The London Residential Property fund will target net returns of 12 per cent for investors.

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Wednesday, April 21, 2010

Gas safety certificate - come on!

Apparently a third of landlords are renting out properties without a up to date gas safety certificate.

Now if that's you get it sorted out.

Firstly you are putting lives at risk, and secondly you're putting yourself at risk of potentially been imprisoned if anything was to happen.

To get organised you can attach an annual reminder for your landlord gas safety check to a tenancy in our free property management software so you won't forget.

Go do it now!

Theres a discussion here on the typical costs of obtaining a gas safety certificate.

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Cash really is king

I had an encouraging experience yesterday.

I'm up and hunting to add to my property portfolio.

Not because I think house prices are going to surge upwards. Actually I expect them to drift for the next 5 years or so whilst who ever in power has to respond to UKs huge public debt.

No. More because there are bargains out there & whats more you are not having to fight off hoards of idiot amateur investors trying to out bid each other & because with five year fixed rate mortgages at less than 6% I'm happy to lock into this & wait for interest rates and inflation to rise.

I've just put down an offer on one two bed maisonette. It needs a little cosmetic work costing about £5k or so but it's in a reasonable spot for renting out - good pubs, good bus route, etc. Plus it has a garage.

My offer was in cash. As usual with a property transaction there is a human aspect to it all. The vendor has a matrimonial situation so can't move out straight away until they have sold their other property. I'm in no rush. So I went into the agents with my proof of funds. A recent statement from my stockbroker showing my depleted portfolio that just about crept into 6 figures.

Landlord treated like royalty about being treated like royalty. Straight away a rather subservient assistant passed me on to the branch manager. He sat me down & explained that the property had a number of offers and the domestic back story which I already knew. He than flicked about on his computer in my full view so I could see the offers they had received already on the property but none were in cash. However, rather than dismissing me as a pathetic under bidder he listened intently to my reasoning that I wasn't going to over pay and that I wasn't desperate to do a deal and was happy to wait. He than took down my requirements and started to run through a whole plethora of properties.

The moral of this story is that market has staged a a degree. But if you are a landlord looking for a really good deal - try and plump up your bank balance because.

Cash really is king!

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Rental arrears fall

Latest figures from LSL Property Services indicate that there is an improving position for tenant arrears.

Tenant arrears fell to a new low of £227 million in March, or 10.1% of all rent.

The proportion was down from 11.2% at the turn of the year and at its lowest level since LSL began compiling the figures in 2008.

The firm's spokesman, David Brown, says: "We're not just seeing an improving picture for landlords - but tenants too."

He adds: "The performance of arrears was a surprise story of the recession, and they have exceeded expectations again in the first quarter of 2010."

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Tuesday, April 20, 2010

Letting agent horror stories

It's always worth landlords keeping a beedy eye on their letting agents, it is worth taking the default optinion that your letting agent is going to try to rip you off.

Keep up your guard at all times and sporadically check up on the things they are telling you, basically try your best to catch them out.

This required distrust is underlined by this recent post in the Daily Mail recounting the story of a dodgy letting agent who avoided securing the tenancy deposit and then rented out the property whilst telling the landlord it was still empty.

Don't trust them, letting agents are your enemy, so keep them close to you and watch out for the dagger in the back.

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