House prices - risk to economy

House price rises continue to outstrip real income growth.  This is a danger to the UK economy according to BoE Deputy Governor Jon Cunliffe.

The response from the BoE was to instigate restrictions on lenders so that they can only lend up to 4.5 times a buyers income.

The latest Nationwide graph shows how despite the down turn and a big initial fall the ratio has started to rise again and remains stubbornly above the long-term average of just over 4.  Can house prices resist gravity for ever?

Landlord mortgages - finance my investment

Doncaster follow mandatory licensing path

The domino effect gathers pace, as councils cotton on to the vote winning and revenue raising concept of mandatory landlords licensing. Two positives that council can rarely marry. Win, win! If I ran a council, I'd go for it.

Doncaster Council is the next one to join the list.They are now consulting on licensing in the Hexthorpe area. A twelve week consolation period bass just started, with a proposed starting date in December.

The council proposes landlords will be charged £500 for the five year licence.

The consultation started this week and will take 12 weeks. If it is approved - and in most recent cases involving local authorities the original proposals have been rubber-stamped after consultation - the new regime will begin in December.

Alongside the usual legal requirements, the licence will require a landlord to meet certain timescales for repairs and meet set guidelines for security, management and the external appearance of the rental property.

Failure to obtain a licence could get a landlord a fine of £20,000, or failure to meet a standard could result in a maximum £5,000 for each failed compliance.

Let us sit back with a cup of tea and wonder at the magnificence of an idea's impurity.

 

BofE ponder BTL mortgage restrictions

The Bank of England are taking a sniff at the BTL mortgage market as they begin to consider placing similar lending restrictions to those placed on the homeowner market.

The Bank are wanting to insure against a property crash, so are evaluating what might be done to restrict risk.

Though BTL is still perceived as less vulnerable to a rate rise, if an individual landlord was to fall foul of the inevitable interest rate hikes, or collapse in values, their property portfolio would place an amplified burden on the market.

With the Financial Policy Committee (FPC) telling banks that homeowners need to cope with repayments if interest rates rise by three percentage points, this same equation might well be applied to BTL lending.

The FPC has reported , “The FPC considered the need to monitor mortgage lending activity beyond the scope of the recommendation to ensure that financial stability risks did not shift to other lending institutions or forms of lending,”

“This included close monitoring of the buy-to-let market, which would not be directly affected by this recommendation but where there was scope for financial stability risks to arise from increases in borrower indebtedness.”

Search the whole BTL mortgage market free 

The bank built on BTL

Paragon, the BTL lender opened itself as a bank back in Feburary. The new Paragon Bank has now launched their first savings accounts and they look pretty good.

One account, its 2 year fixed saver, offers 2.1 percent.

Paragon Bank says its aim is to offer ‘straightforward and competitive savings and loans'.

New free landlord software in Beta

The new version of our free software PM3s is ready for users to trial.

Login using your existing login details ( there is no need to re-register, just see it as an alternative doorway to your property data )

All new data will be shared across all versions of the Property Manager.

Go here to login -  https://www.propertyhawk.co.uk/pm3s 

Manchester students trash rental properties

Renting to students can offer a great rental yield. There is a downside, so before you start, just check out these photos, showing the state students left their rental properties in Manchester.

I'm gonna fight for my right to party!