Some Landlords Get All the Luck

I read the news article here about the lucky, London landlord who was milking poor 'Gordon the Brown heffer' .

This landlord has been getting £12,458 a month in rent from Ealing Council.

Now that's on a property valued at £1.2 million which gives over a 12%yield on a house, that an incredibly high yield. Thats what you call a top class milker and should be entered into the next Landlord Country Show, a lot of landlords would want to breed off such a high yielding animal.

Estate agents Foxtons said similar properties command rents of only about £6,000 a month.

Imagine that, fellow landlords, a tenant paying a guaranteed rent £6000 a month higher than the real rental value, that's an additional profit of £72,000.

Who said that landlords wouldn't be able to afford fancy cars after the credit crunch. This landlord can buy a new porsche each year, for cash, thanks to the government.

All I can say is some landlords get all the luck.

Has the world gone mad - or has mad cow disease come back to bite us.

One things for sure. Gordon has well and truly spent the budget and as we head into recession the bad management of the economy will start to reveal itself.

The man who has governed our purses for the longest period of economic growth in history will reveal that hes managed to spend it all, the milk has ran dry.

(sorry I just think Gordon Brown is a 'dozy cow', that's not to say that I believe 'the udder one' to be desperately bright)

Whose for powdered eggs. Scrambled or poached.

Darling Margo

Rate cut - good news for landlords?

The surprised base rate cut of 0.5% announced yesterday by the Bank of England is obviously great news for many landlords. Those landlords who are on base rate trackers will be celebrating in November when many of the lower mortgage payments will start to 'kick in'. Our own Hawkeye was predicting a fall in interest rate only last week but he like many analysts was expecting rate reductions to feed through over the next 18 months.


Hold the Champagne!

However, before landlords go over board by cracking open the champagne to herald a new age of cheap money. We would advise them that the good news may be limited. Whilst base rates have come down this may not mean that borrowing and borrowing costs will be getting any easier or cheaper for many landlords. This is because the main factor influencing the costs and the availability of credit for many landlords is long term LIBOR. This remains stubbornly high as banks refuse to lend to each other. Currently it remains at about 1.3% above base rate. In recent years LIBOR was at a level very close to that of the Bank of England base rate.

The other thing that landlords should be aware of when considering their finance options is that many buy-to-let lenders will use the reductions in the base rate to restore lending margins on their buy-to-let products. This means that buy-to-let borrowing costs will fall more slowly than any falls in base rates.

All we can hope as landlords is that the Government who have offered the banks a huge £50billion in new funds don't forgot the landlords and property investors when agreeing the conditions on each individual funding package.

Where do professional landlords go for landlord insurance?

In short Property Hawk welcomes the cut, but we advise landlords to save the champagne for another day!

Landlords look at a ever shrinking buy-to-let mortgage market place.Try our multi buy-to-let mortgage enquiry form to get 4 major brokers to help secure you the best BTL mortgage product in difficult times.

'Dont Panic Landlords'

Landlords should stand at ease, by their beds.

Alistair Darling has come to the rescue of the Buy-to-let mortgage market with his 60 Billion rescue plan for the banks.

"Don't panic Captain Mannering - Alistair's got the Home Front covered"

Why the bank bail out is good for landlords

The Government this morning announced a £50 billion part nationalisation of UK banks.

This may seem a million miles away from the day to day realities of many landlords, busy trying to keep their properties let, EPCs done, drains unblocked and roofs water tight. But it has important implications.

Most landlords have borrowed or need to borrow money to finance the acquisition of their portfolio. Many have relied on shorter term loans for funds to refurbish these investment properties ready for letting.

The recent developments on the world capital markets where banks have stopped lending to each other and then have also stopped lending to anybody else because they have been running out of cash. This has proved a severe threat to the business model of many landlords.

We have witnessed the drying up of lending to landlords over the last year where the number of buy-to-let mortgages has gone from thousands to hundreds. Moneysupermarket.com reported last week that the number of buy-to-let mortgages had slumped by 25% in just one week.

The Governments plan, is a bold one and whilst I have been a critic of many aspects of their financial management, this plan should be embraced for it's vision and decisiveness and should provide security for lenders and borrowers. By allowing banks to access funds it should encourage banks to start lending to landlords, even if it is on a much more restricted and costly basis.

Hatred of Landlords Continues

I found this link to some very excited people commenting on Rosie Millard from the Times recent article saying that 'Buy-to-let was not dead.'

What is absolutely priceless is the hate and aggression that pours out of some of these posts regarding landlords and buy-to-let.

Some of them are so over the top it quite made me chuckle and almost took my mind off the worsening financial crisis.

The question is why you would hang out in a forum talking about property prices? Surely it would only make sense for landlords and property investors to hang out there.

Maybe landlords are starting to hate themselves?

Anyway, there's nowt as strange as folk.

Back to the future for landlords

I remember vividly the autumn of 1989. The start of the football season, the nip of autumnal air, the seasonal calm before the winter storm.

It was also the time that I took the first steps onto the property ladder.

Where do professional landlords go for their landlord insurance?

Buoyed with youthful enthusiasm and a determination to make my own home the start of a property empire that would provide the basis for a financial freedom far into the future. I bought a 3 bedroomed terrace located in an 'up and coming' part of town sold the idea by the acres of newsprint at the time devoted to the next property "Hot spot".

The property boom of the late 80's was finally running out of steam after the earlier removal of joint MIRAS by the Chancellor at the time Nigel Lawson. The Prime Minister Margaret Thatcher was unpopular and was soon to be ousted by her party. The country was about to be plunged in a deep depression after a decade long explosion in credit. Sound familiar?!


How did I survive?
For me as a first time property owner and landlord, I had to face the realities of the property bust after a decade long property boom. Luckily for me I had always intended to buy my property partly for investment purposes with the intention that I was to let out at least one of the bedrooms.

This meant that despite capital values falling, I was always able to pay the mortgage, out of what I later was to learn was strong cashflow. If there is one thing that a landlord should focus on it has to be cashflow.

Find out how to keep a check on your cashflow using the FREE Property Manager

Keep the cash coming in to service your debt and your buy-to-let lender will be happy and you as the landlord will get a good nights sleep.

The next 12 years I remained in negative equity with that particular property which I had originally bought for £36,500 but then loaded it with £4,000 worth of endowment payments. I thought about and tried on several occasions to sell, but each time the thought of making a large capital loss put me off. So I kept letting the 3 bed terrace out and most of the time the rent from the property covered my costs of servicing the debt.

Then one day and it was literally one day I was suddenly aware that prices in the area were on the rise. £40,000...50,000...60,000 within a year they had gone from £40 to £80,000. It was almost embarrassing. After a lifetime of appearing not being able to give away my investment property, somebody was going to give me £40,000 of net cash for it?! I sold, fearing the market had gone mad. Unfortunately, for me the market continued to rise but not at the brake neck rate it had.

What this hopefully, illustrates to landlords who are fretting over what to do about falling prices and negative equity is that landlords have faced this situation before. Therefore, don't panic, be patient and eventually this approach will in the future be generously rewarded.