Landlords reducing LHA tenants

The National Landlords Association (NLA) latest survey reports that over half of private residential landlords are looking to reduce their tenants on housing benefits.

58 per cent of landlords surveyed said they were aiming to reduce the number of benefit tenants in their rental portfolios following concerns with the restructuring of LHA rates and the linking of LHA rates to the Consumer Price Index (CPI)

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CML prospects for 2011

Any body remember the 80s?  Are you really that old?  Me too.

If so the present economic shenanigans is all very familiar.

At the time the mood music was provided by Simply Red.  Ginger crooner Mick Hucknall belted out the line "Money to tight to mention"

Looking at the latest report from the Council of Mortgage Lenders (CML) that about sums up the current housing market.

Lending down, Economic activity down, Repossessions up.

The highlight is that the CML points to stable housing market and is positive about buy-to-let fueled by rising rents.

But until lending increases the market is likely to stay becalmed and money will remain too tight to mention.

Landlord insurance for LESS

Mortgage lending in 2011

According to the Nationwide Building Society, house prices fell by 0.3 per cent in May 2011, compared with the previous month, meaning on average, a home costs 1.2 percent less than April 2010. If houses are cheaper, are more people buying?

The short answer is no. The Council of Mortgage Lenders figures about Gross Mortgage Lending this month show that mortgage lending is also down. The CML find that Gross Mortgage Lending is:

• down to an estimated £9.8 billion in April,
• down 14% from £11.4 billion in March,
• and down 5% from £10.3 billion in April 2010.

So why are fewer people buying and what impact will this have? Mortgage lenders are more cautious about lending these days and there is the threat that interest rates will rise in the medium-term future. Standard & Poor's Ratings Services published a report this month forecasting interest rate hikes within the next 18 months. Jean-Michel Six (Chief Economist for Europe at S&P) commented:

"We expect housing markets to retreat in the U.K. and France, and remain in the doldrums in Spain and Ireland."

So the threat of interest rates rising is one factor affecting lending. Ian Williams of http://thinkmoney.co.uk/ commented on how this will impact on rental properties:

"Many setting up home for the first time have found it hard to secure lending, which has increased demand for rental properties as well as rental property fees. Rental fees are rising which may encourage buy-to-let landlords to increase their portfolios or encourage newcomers."

Third of landlords report rental arrears

A survey from BDRC Continental shows a large increase in rent arrears during the past two years.

34 percent of private residential landlords from the survey experienced tenants falling into rental arrears in the last 12 months.

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Changes in tax relief on holiday homes

Landlords need to be aware of changes to tax allowances that enable trading losses to be offset against the running costs of the holiday rental property.

Read full article in the Independent

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Comparing home insurance for landlords

Home insurance is an essential part of any finance package if you’re buying a home, and for potential homeowners there are plenty of opportunities to compare home insurance on the web. But for landlords with rental properties, there are a number of other considerations to factor in when you’re looking for a good deal on home insurance.

Thankfully, there are now more opportunities for landlords to find great deals on home insurance policies for their properties. As a landlord, the minimum you should be looking at is buildings insurance and a minimal value home content insurance, particularly if the property is partially or fully furnished. While it is advisable for tenants to take out their own contents insurance for their personal possessions, landlords also need to consider insurance against acts of vandalism or even non-payment of rent. Thankfully, there are now plenty of places where landlords can compare home insurance quotes online to get the best deal.

Stick with your insurer – or shift to a new provider?

When the time comes to renew your home insurance, it can be tempting to just ‘stick with what you know’ and simply renew your existing policy. But by using online sites to compare home insurance for landlords, you could find a much better deal that could cost you less and give you more comprehensive coverage with a different provider.
Landlord home insurance also needs to be more flexible than ordinary home insurance, because circumstances in rental property can change more quickly than in homes owned by the resident. This is particularly true in multiple occupancy properties, where tenants can come and go at regular intervals, or parts of the property may be unoccupied for some time. So look for policies that don’t have penalty clauses if you need to adjust them six months into the agreement.

Get the right cover

Before you decide on your home insurance provider, using comparison sites will allow you to look not just at the price of policies, but also what cover they actually provide. By shopping around you can save money and get peace of mind that your property is insured properly to its full value.