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Thursday, February 27, 2014

Home ownership hits a low

Home ownership in the UK has fallen to its lowest level since according to the  English Housing Survey data from the Department for Communities and Local Government.

In 2012/13 the nation had 14.4 million homes under home opwnership and 7.7 million rented homes.

The figure of 65.2 percent of homeowners is the lowest level for twenty five years, having declined from a 2003 high of 70.9 percent.

The press are full of it, so read more below -

This is Money
The Guardian
The Telegraph

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Net migration soars increasing rental demand

Latest figures from the Office of National Statistics show a sharp increase in net UK migration.

In the year period ending Sept 2013, the figure climbed to 212,000. A rise of 58,000 on the previous 12 month period.

The sharp increase was largely due to migrants from the European Union, with many arriving from France, Spain, Italy and Poland.

Net migration remains far higher than the Governments proposed 'tens of thousand' target and tallied with the forecast shortfalls of new build property will only continue to add to upward pressure on rent and property values in the medium term.

However, property investors should not underestimate either political will, or global economic meltdowns to impact negatively in the longer term.

“Study the past if you would define the future.” ― Confucius

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Wednesday, February 26, 2014

A bunch of live property auctions tomorrow

McHugh and Co in London have a property auction at 12.00pm today, 26th February.

Then there are a bunch of live property auctions going on tomorrow, the 27th Febuary that you might like to tune into.

CP Goodwood in Birmingham starts at 11.00am, then both the Auction House House in London and Hardman Heady in London start at 12.00pm, the Auction House Beds & Bucks starts at 2.30pm, West Midlands Property Auction in Wolverhampton starts at 7.30pm,

Tune in via here

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Landlord sent to the naughty step

If a landlord receives an improvement notice from their council then we advise them to act on it.

Nobody particularly likes being told what to do, maybe us landlords more than most, but acting on the order of the council is always advisable in the long run.

This case in the Bolton News underlines the point clearly. A landlord was sent a notice to improve the electrical safety of her rental property, she didn't, so she got fined £4000 and had her name tarnished in the local press.

My guess would be that the situation could of been resolved for a lot less money and hassle if the landlord had acted. Now she is £4000 down and still needs to carry out the work.

Come on landlords, stop being stubborn, otherwise, you'll have to go and sit on the naughty step.

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Gross yield 14%

Landlords looking for a high gross yield should have a look at this Grade 2 listed building in Warrington.  Anybody looking to take on this block will have to factor in the management of the 56 ASTs.  At the usual rate of say 12% of gross rent that will reduce the current rent of £509,340 by about £60,000. 

Are there arbitrage opportunities in the future to sell off the units to private buyer over the next few years?  Could be a good long-term investment.  From the look of these Land Registry figures the original buyer may well have caught a cold. Interesting...

Barton Court, Central Way, WARRINGTON, WA2 7TE

Subject to contract


    •    56 individual long leasehold flats (8 x one bedroom and 48 x two bedroom)
    •    Located next to Warrington Central Railway Station
    •    Total current rent £509,340 (annual equivalent)
    •    Gross Yield 14.1%
    •    Let subject to multiple licences to occupy on terms
    •    ranging from 3 months to 12 months
    •    Average occupancy over last three years – 92%
    •    Allocated parking
    •    Grade II Listed

Offers in excess of £3,600,000

Michael Gorman +44 (0)113 236 6683
Anthony Hart +44 (0)113 243 7950

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Tuesday, February 25, 2014

Live property auctions at lunchtime today

There are a couple of live property auctions going on today that you might like to tune into.

One at Eddisons in Manchester and the other is Barnet Ross in London.

Tune in via here

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New builds will fail to meet demand

Help to Buy and an improving economy have helped to boost confidence in the housing market. New builds are seeing an increase, with 54,700 starts in the first six months of 2013. This is an increase of 31 percent from the same period in 2012.
Savills are predicting the increase of new builds in the private sector will continue through 2014 and beyond. They predict that construction rates will increase by 8% a year over the next five years, bringing the number of properties built by private house builders to 107,000 in 2018. 

However, this improving outlook compares to a historic high of 203,320, back in 1968 and a more recent 2007 peak of 154,210.

It will therefore be down to the political whims of Government to meet what is only expected to be a further shortfall of supply. Savills are predicting an increase in output from the public sector. They are forecasting growth in the number of homes delivered by local authorities,  from 1,665 this year to 10,000 in 2018, and increased delivery from housing associations from 26,000 new homes in 2014 to 34,000 in 2015.

Overall, Savills predict that the UK will see119,000 new build completions in 2014, rising to 167,000 by 2018. A figure that is still way short of the 240,000 new properties that the country is expected to need to keep up with housing demand.

In terms of supply alone, landlords can expect to see continued upward pressure on both property prices and rents.

Obviously other factors may play their part.

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Our most popular BTL mortgages

Max LTV Initial Rate Term Completion fee Booking fee Incentives Overall Cost for Comparison Lender
85% 4.99% Fixed 2 Years 2.5% £130.00 No 6.8% APR Kent Reliance Semi Exclusive
85% 5.99% Discount 2 Years 2.5% £130.00 No 7% APR Kent Reliance Multi Let & Ltd Co. Semi Exclusive
80% 4.47% Fixed 2016-11-30 2% £0.00 No Saffron BS Semi Exclusive
80% 4.09% Discount 0 Years £499 £100.00 No 4.3% APR Hanley Economic Exclusive
75% 3.69% Fixed 2019-05-31 2.5% £250.00 4.9% APR Hinckley & Rugby Exclusive
75% 4.47% Fixed 2016-11-30 2% £0.00 No Saffron Light Refurbishment
75% 2.84% Fixed 2016-04-30 £2495 £130.00 No Accord Exclusive
75% 2.99% Fixed 2016-04-30 £2495 £130.00 Free valuation Accord Exclusive
75% 2.88% Tracker 2 Years 2.5% £150.00 Free valuation for purchases and remortgages & free legals on remortgages 5.3% APR Mortgage Trust Exclusive
75% 3.5% Discount 0 Years 0% £0.00 No 3.6% APR Hanley Economic Exclusive
65% 5.27% Fixed 2016-11-30 2.5% £0.00 No Saffron BS Ex-Pat Semi Exclusive
60% 2.45% Discount 2 Years £1950 £250.00 One free Valuation on properties valued up to £1,000,000 5% APR Hinckley & Rugby Exclusive

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.

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Councils told to back PRS

Councils have been told to get behind the private rental sector by a new report entitled : Making Renting Viable.

It essentially calls for Local Authorities to use their power as landowner to promote new private rented housing by using their land to promote new private rental accommodation.  Councils have for decades being using their land holding to promote 'socially responsible schemes' and regeneration.  However, traditionally this has meant a stand off between private schemes for sale or an element of social housing.  Developers who are looking at selling their property have traditionally resisted any social housing element because of their private buyers not wishing to live with social housing tenants.  Private sector tenants I'm sure do not have the same stigma.  In this respect it is a great idea.

The built in resistance

The problem to make this idea fly is that Councils particularly Labour councils are fundamentally a posed to the private rental sector.  The solution to overcome this inertia is to require each local authority to meet a target for Private Rental provision.  Unfortunately, this doesn't sit well with the Coalitions idea of localism.  Interesting idea but I fear that the 'implementation gap' may well be insurmountable for many Local Authorities.  The Telegraph also offers their view on the Report.

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Monday, February 24, 2014

Buy to rent - the sensible option?

The debate in the FT continues apace.  After a very strong case for renting put by Designer Ben Pentreath a couple of weeks ago we have a new angle.  The so called buy to rent.  This is where you buy a cashcow investment and then use the surplus income of your rental property to allow you to rent a property that you couldn't otherwise afford.  This way if you follow my advice of the repayment route you will end up with a valuable income generating investment, but also be able to live the dream living somewhere you could only ever afford if you won the lottery.  The best of both worlds?  Maybe....

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Saturday, February 22, 2014

Waking up to a repayment world

I have built my property portfolio on debt.  Absolutely, nothing wrong with that.  It's what investors call a geared investment.  When prices go up then it's a way to increasing wealth and assets.  My approach during my property investing decades is largely to use interest only mortgages and wait for rising living standards, house prices and inflation to inflate away the relative size of the debt.

A repayment world.

It appears increasingly clear to me that we are facing a very different world.  I really can't see property prices increasingly significant ahead of inflation for decades.  Interest rates can only go one way which will counterbalance the recovering confidence in the property market.  I'm increasingly thinking that as far as property investment unless you fancy yourself as a bit of a 'wheeler dealer' or developer, the only way is a repayment mortgage.  I currently have two in my property portfolio.  They give me great joy, as every year without fail I owe less and assuming prices don't fall - I'm richer!

In this new reality, I would advise all landlords to consider the repayment option of mortgage first, unless you are looking to build a portfolio rapidly and desperately need the extra cashflow.  I still think that debt for investment is good.  However, this time the reality is that it won't just go away.

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Wednesday, February 19, 2014

New two year fixed rate BTL

Property Hawk Mortgages are now able to offer a pair of excellent two year fixed rates with Accord Buy to Let.

The rates start at 2.84% fixed until 30/04/2016 and include a 2.99% fixed rate with a free valuation. Both products are available up to 75% LTV.

An application fee will normally apply. Minimum loan is £100,000.

Search the whole BTL mortgage market free


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.

The most expensive rental property?

A Mayfair mansion has just come to the rental market. The £15000 a week rent works out at £780,000 a year and makes this possibly the UK's most expensive residential let.

This six storey, 8145 square feet town house boasts four reception rooms, five bedroom suites and a gym.

The property is estimated to be worth £35 million, meaning that despite its astronomical rent, it still only achieves a gross rental yield of 2.2 percent.

View photos and a floor plan here 

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Average tenant pays £296k in rent

The average home owner rents for seven years before purchasing their first property, costing them £41,900 on rental payments according to research from Santander Mortgages - 'no bias then'.

The mortgage lender also concludes that based on an average rent of £474 per tenant, per month, those individuals who rent for their lifetime will end up spending a total of £296,000 on rent.

It's worth landlord's remembering - a happy tenant is a valuable long term asset.

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NLA call for re-think of landlord licensing

The National Landlords Association are using a social media campaign to get councils to re-think the use of selective landlord licensing in parts of England. The NLA are arguing it is both expensive to implement and unfairly punishes law-abiding landlords.

Carolyn Uphill, chairman of the NLA, said: ‘Selective licensing is a powerful tool at the disposal of local authorities, but it is only one of many available and should only be used when appropriate. Licensing is expensive and has the potential to have a disproportionate impact on the compliant majority who are not at fault while allowing the criminal minority to continue beneath the radar. Councils already have a vast array of existing powers available to them to deal with criminals and we believe that targeted intelligence-led enforcement against rogue operators is a better solution.'
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Auction yields fall

The latest results from Allsop auction shows  that the property market is gaining it's lustre with investors.

Speaking about the auction in February Gary Murphy, Partner and auctioneer for Allsop highlighted the fact that the auction room was the fullest it had been since early 2007.  There was strong interest from owner occupiers, buy-to-let investor and small builders / developers prices were pushed to close to or exceed private treaty prices. 

Auction prices tend to foreshadow the rest of the property market as prices clearly reflect what buyers are prepared to and able to pay.

Interestingly, the yield on assured shorthold property dropped significantly below 10% to 8.47%.  It looks like landlords and investors are able to finance their investment and now have the confidence to get their cheque books out.

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Tuesday, February 18, 2014

Most popular BTL mortgages

Max LTVInitial RateTermCompletion feeBooking feeIncentivesOverall Cost for ComparisonLender
85%4.99% Fixed2 Years2.5%£130.00No6.8% APRKent Reliance Semi Exclusive
85%5.99% Discount2 Years2.5%£130.00No7% APRKent Reliance Multi Let & Ltd Co. Semi Exclusive
80%4.59% Discount2 Years2.5%£130.00No6.7% APRKent Reliance Semi Exclusive
80%4.09% Discount0 Years£999£100.00No4.3% APRHanley Economic Exclusive
75%3.5% Discount0 Years0%£0.00No3.6% APRHanley Economic Exclusive
75%5.39% Variable0 Years2.5%£0.00No Saffron Light Refurbishment
75%5.39% Fixed2016-11-302.5%£0.00No Saffron Light Refurbishment
75%4.69% Discount3 Years2%£0.00No Saffron BS Semi Exclusive
75%2.88% Tracker2 Years2.5%£150.00Free valuation for purchases and remortgages & free legals on remortgages5.3% APRMortgage Trust Exclusive
65%5.39% Variable0 Years2.5%£0.00No Saffron BS Ex-Pat Semi Exclusive
60%2.45% Discount2 Years£1950£250.00One free Valuation on properties valued up to £1,000,0005% APRHinckley & Rugby Exclusive

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.

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Discussion Document on PRS

It's time for landlords to have their say.

The Department of Communities and Local Government have published a discussion document considering what can be done to tackle the the issue of 'rogue landlords' without impacting on the good ones.

This discussion document is the first stage in the Governments promise to review the state and conditions of the Private Rented Sector and is part of their 'Improving the Rented Housing Sector Policy'.

Responses to the document need to be sent by 21st
March 2014

Responses are to be sent to the email -

Download the discussion document here

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East Midlands Landlord Expo

This years East Midlands Landlords and Letting Agents Expo is to be held on Thursday 15th May at the East Midlands Conference Centre in Nottingham.

The expo aims to provide an arena to develop the awareness and importance of improving housing standards and landlord management across the East Midlands and to help landlords to find the best products and service deals available.

The day will include information seminars, guest speakers and a live Graham Penny property auction. 

Subjects covered will range from the future of the PRS to how the Credit Unions can provide confidence to landlords who rent to housing benefit tenants. Along with many exhibitor companies and local authorities offering advice, products and services to help manage property businesses more effectively.

The free event is open to all those involved in the PRS sector, from large property portfolio landlords, letting agents, to accidental landlords, or even those thinking of whether to investing in the rented sector.

To find out more about this free event visit:

Latest ONS house price report

The latest data from the Office of National Statistics showed that the average UK house prices reached £250,000.
The average annual increase in England was 5.7%, Wales 4.8%, Scotland 0.5% and Northern Ireland 4.8%.
Across the English regions, London continued to perform most strongly with rises of (12.3%), the East (4.6%) and the West Midlands (4.3%).

Download the full ONS report here

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Rents widen between South and North

Homelet data shares an increasing gulf between the average rent in the south compared to the north.

Figures show rents are now 69 % more expensive in Greater London, the South East and South West compared to the rest of the UK.

This compares to a difference of 37 % back in January 2008.

"A lack of affordable housing stock in the south could be one of the drivers for the growing divide we’re seeing," said Gary Abraham, HomeLet’s Sales and Marketing Director.

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Monday, February 17, 2014

Investment cupboards in the sky

I've recently written about a friend who is looking to invest in an apartment in Nottingham.

I was there at the beginning back in 2007, when single level city pads were called flats not apartments.  I watched as the waves of new and converted blocks transformed the urban landscape, propelled ever onward by cheap money from the banks and waves of eager investors first from Ireland, then from the rest of the UK and the Far East.

The legacy

What we now have, is the equivalent of cupboards or rabbit hutches in the sky.  As far from the Utopian dream of Le Corbusiers city in the sky and the Manhattan bohemian life of acres of loft living as it is possible to get.  The reality is that these are nothing more than boxes in the sky.  Most have small rooms and smaller bedrooms.  Fine, for renting out to footloose professionals who crave a little urban excitement before settling down to rear a brood in dependable suburbia with detached properties, gardens and even their own garage.  Not so great if you are looking to buy a livable and exciting alternative to a 3 bedroom semi.

The investment fallback

The reality for all investors is that unless your city centre investment (outside London) has some kind of curb appeal.  A mezzanine floor, Georgian windows or historic features and ambience perhaps, you will be selling your investment to an investor as part of your exit strategy.  This means that they will be looking at yields, return on capital and the competition.  Therefore, if you are looking at a city centre apartment investment.  Remember to look for something that will not only let well, but will also give it the edge and make it appeal to owner occupiers as well as landlords as part of your investment strategy.

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Thursday, February 13, 2014

BoE to keep rates until 2015

Well, it looks like landlords can sleep soundly for another year. The Bank of England seem to be happy to sever their stated link to unemployment with the raising of base rate.

With unemployment now expected to dip below the original trigger of 7% by March this year, the BoE seem to be ready to ignore that particular line in the sand.

Reporting good economic growth, the BoE  shared concerns over the fragility and balance of the current recovery, with Mark Carney indicating that the current weakness of the economy would not support a interest rate rise before at least 2015.

Read more from the Telegraph 

Read more from the BBC

Read more from the Scotsman

Read more from the Financial Times

Read more from the Guardian

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RICS report lack of new listings

January saw the lowest number of properties hit the sales market since July 2012.

This restrictive supply has created further upward pressure on prices in some areas.

Read the full January 2004 RICS report here
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Wage growth key to property prices

Anybody who thinks that we are at the start of the next property boom should get real. 

Why?  Understanding what propels property values up is key.  The two things that do this are finance and real wages. In previous booms, in the 80s it was the latter, in the 90s and noughties, falling real interest rates and increasing finance availability compounded to produce the ultimate bubble. 

This time around we will have neither for a very long time.  Banks will be shackled from reckless lending for at least a decade, and any real wage growth will be elusive until the end of the decade.

My advice is to lock into a cash cow, prey for rampant inflation, and pay down your debt with a repayment mortgage.  That way you will ultimately have a debt free income producing asset. In that respect you can't go wrong given that in this country because of the good old planning system we will never build enough houses. 

God bless the Planners!

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Parking your cash in London

For those who can't afford to invest in the London property market, here's a 'cheaper' alternative.

An underground parking space has just gone on the market priced at £400,000, making it the UK's most expensive parking space.

It can fit two cars and is close to London’s Royal Albert Hall, and apparently the tarmac is in good condition throughout.

Such an expensive parking space might sound a ridiculous investment, but in terms of capital growth, just 10 months ago, a similar space in the same car park, went on sale for £275,000.

That's 31 per cent growth in under a year. So parking might just be one way for the average property investor to tap into the growth in the capitals super rich.

For other affordable prime London options, investors might consider window boxes, bin stores or park benches.

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Wednesday, February 12, 2014

Penalities for non-protection of Deposits

There has been some discussion on different forums that some landlords  are being ordered to pay 3x the amount of deposit if they fail to protect it within 30 days of receipt.

The law is quite clear and is set out in the Housing Act.  It states that a tenant can bring a claim against the landlord if the landlord has not protected the  deposit  within 30 days of receipt. 

The Judge has no discretion in this area and must order that the landlord either protect the deposit or return it.  He must also order that the landlord pay the tenant compensation. 

What the Judge does have discretion over is  how much compensation the landlord must pay  - the minimum is an amount equivalent to 1 x the amount of the deposit, the maximum is 3 x the amount of the deposit.
What the Judge awards will depend on what the Judge's view of the specific case before him.   If the landlord is a professional landlord and has ignored the law it is likely that he will be ordered to pay 3 x, if the landlord is a first time landlord with one property, or it was a genuine mistake, it is likely he will be ordered to pay 1 x deposit - however this is not set in stone.    The Judge will order what he considers just on the day.

The best thing to do is to make sure you protect the deposit within 30 days of receipt.  This applies to situations when you  have only received part of the deposit - it is still a deposit and must be protected.  If you receive another installment at a later date you can then protect that.

If you require any legal assistance regarding tenancy deposits or any other tenancy issues please email me at

Rebecca Brough

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Auction properties 35% distressed sales

Anybody who thinks that the credit crunch/financial crash/property slump is over is kidding themselves.  Evidence.  Have a look at Allsop's auction report for 2013.  Hidden amongst the tables and data is the fact that last year still 35% of the sales were by distressed sellers ( administrators / liquidators/mortgagees).

It all proves that if you have the cash even 6 years on from the crash there are opportunities to profit from the property downturn.  One word of caution is that just because the seller is distressed it doesn't mean that you will get a property investment bargain at auction.  There are lot's of other investors looking at doing exactly the same and the bidding process can artificially force up prices (we are all competitive).  The secret is to be patient and know the market and obviously have the right finance in place.  Then when a bargain does come along ...then you can pounce! 

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Tuesday, February 11, 2014

Average earnings fall behind property prices

If average UK earnings had stayed in pace with average UK property prices then, today's average wage would be £55,000, but it isn't. In fact the average salary is barely half that at £25,932.

Now, call me a worry bunny, - "Worry bunny!", but this kind of shortfall doesn't bode well for long term property investment for property in the 'average areas'.

This statistic only reinforces my long held view that the UK will continue on its divisive path - those with a lot and those with a lot less.

In terms of property prices, the gap between those average areas and the more affluent parts will continue to widen. My advice buy quality if you can afford it. Wealth will only continue its migration to the top.

For anyone who believes where America leads, we follow, I think this video underlines my view perfectly.

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Property fund scrapped

Here's a quick reminder that property investments can both go up and down, for those convinced that bricks and mortar are a one way bet.

Aviva Investors are scrapping its 200 million pound property investment fund after it fell in value by 19 percent over the past three years.

Aviva reported they had already begun selling off the fund’s asset

Read more in FT Advisor

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Monday, February 10, 2014

Fed up remortgaging your BTL?

Fed up of remortgaging every couple of years?

These market-leading term trackers could be just the ticket!

Property Hawk Mortgages are offering two exclusive buy-to-let term trackers with Hanley Economic Building Society starting at 3.50%.

They could be an excellent choice for landlords looking for a longer term rate.

An application fee will normally apply.

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.

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Isle of Man review landlord registration

The Isle of Man's Department of Social Care (DSC) has made some changes to its voluntary landlord registration scheme following consultation and feedback from landlords. 
The scheme is expected to be made mandatory from autumn 2014 as part as Landlord and Tenant (private Housing Bill)

Landlords can sign up to the voluntary scheme now. licences will last for three years and will automatically be transferred to the mandatory Scheme if the new legislation goes through. 

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