Recessions have some of the most unexpected effects. No two are the same.

As I have discussed on here before the biggest problem facing the rental market at the moment is the influx of people who never really wanted to be landlords in the first place.

Anyone who ever watched Sarah Beeny’s Property Ladder or any one of a number of similar shows will have seen that most people who go into the property development market want to fix the place up and make a quick sale for a fast buck.

Only a few choose to move into the highly specialised field of letting the property out.

This has changed recently though, with people being caught out by the sudden drop in house prices and then deciding to rent their properties. As you can imagine this has flooded the rental market somewhat and the law of supply and demand dictates that this in turn has forced rents down. (more…)

Lots of people being forced into the rental market for the first time by the current financial crisis are discovering something the rest of us have known for a while; the inventory is the key to any dispute.

What is on the inventory is written in stone. It cuts both ways of course. Tenants can argue that damage to furnishing, walls or carpets was there before they moved in but if it is not listed on the inventory then they have no chance of a successful complaint.

Landlords can try to claim an expensive vase went missing when the tenant departed but if it has been left off the inventory then they can forget it.
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The Financial Times published an article last week on the fact that buy to let mortgages are consistently bucking the trend of falling interest rates. This is having an adverse affect on people’s ability to jump back into the market.

Even though the price of property has dropped temptingly low some landlords are being forced to shelve their investment plans because of still crippling interest rates in this sector.

The Times quotes figures of 6.3 % on the average two year fixed term by to let mortgage.
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As we enter a time of year that can be very fraught even in the best of economic circumstances, it seems that landlords disagree over the effect the recession is having on their property business prospects.

I don’t think anyone would deny that times are tough.

It seems that in some parts of the country tenants are proving very difficult to find. Given the time of year many landlords worry that if they have a property that is standing empty now it could easily remain that way for some time into 2009.

And it is true that the ‘time served’ landlords are facing heavy competition from people who have had the business forced upon them when they are unable to sell their extra property. And there are properties from the abandoned sales market flooding the sector.

Despite all this some landlords seem to think that it is not all doom and gloom. One landlord on a popular forum is quoted as saying the credit crunch is the best thing that ever happened to time served landlords. (more…)

Everybody is certainly feeling the squeeze out there in the market at the moment and landlords are not immune.

In some grim news from the fund manager Managing Partners Limited (MPL) it seems there are a couple of new statistics of interest to us, and neither of them are very up lifting. In the last 18 months repossessions per day in the buy to let sector have doubled.

Coupled with the news that in the last year buy to let repossessions are up by 302 percent it is tempting to feel a little despondent. MPL estimate that around five properties belonging to landlords were repossessed a day in January.

Jeremy Leach, the managing director of MPL was hardly encouraging either when he stated
“The number of properties belonging to landlords that are re possessed is only going to rise. Mortgage rates have been increasing and deals have been hard to come by. That coupled with falling property prices has meant that more landlords have been finding it difficult to make their payments.” (more…)

Halifax Landlord Insurance has just completed a report that lets us in on the secret of how most landlords think. It makes for very interesting reading.

Some things I don’t consider to be much of a shock.

The news that most landlords (77%) prefer to let their property to a female tenant did not surprise me. Rightly or wrongly, I think this fits with the general population’s stereotypical notion that the female sex is less reckless and perhaps a little more tidy.

It is also not a huge shock that most of us prefer our tenants to be of a certain maturity.  Sixty seven percent of us would prefer our tenants to be over the age of 25.

Not that we have anything against youth, I am sure, but we were all young once and that is probably the problem. (more…)

There are a lot of people out there who literally fear anything going wrong with their property because they have such grave concerns about the practices of some tradesmen. This is very understandable in the general population as they have little to do with tradesmen on a daily basis and have no idea who to trust.

I was a little surprised to find out that landlords suffer from the same fears. According to a survey commissioned by eGenie.co.uk 75% of landlords delay repairs to their properties because they fear over charging by the people they hire. That is an awfully high figure.

According to Tim Meyer UK manager of eGenie.co.uk “It is understandable people feel scared about having shoddy work or getting ripped off, particularly when money is tight”. In normal circumstances I would agree with Mr Meyer but as professional landlords I think we are in a unique position to develop a set of trustworthy contacts that can help us out in these situations. (more…)

A report due out soon by the Item Club seems destined to confirm what most of us already know, Britain is in a recession.

The report is set to state that Britain faces the biggest fall in output since the Great Depression; they put the fall in investment at 15%.  Peter Spencer, Item’s chief economist also states that the fall is likely to continue with another 2.7% drop over the course of this year.

He says “The time for caution is past. It looks a frighteningly long way down to the recessionary rocks below. All of the economic statistics are in free fall.”

He may be a gloom merchant but at least he has an interesting turn of phrase, he also has some advice for the government. According to him the government ought to buy toxic assets from the banks and quickly. (more…)

The latest rip off scam by clever fraudsters involves the rapidly approaching January 31st self assessment tax deadline. It is likely to run after that too with the target being people who are expecting a genuine tax refund.

HM Revenue and Customs released a statement recently warning us about this scam and calling it ‘the most sophisticated phishing scam that we have encountered.’

It involves an email pretending to be from HMRC itself and asking for your bank or credit card details so your rebate can be paid out. HMRC warns that falling for this scam could have dire consequences.

Obviously the bogus tax officials will attempt to clear out any bank account you give them the details for, equally as scary is the fact that your details could be passed on to organised crime gangs. The resulting identity theft can result in a massive hit to your credit rating. Something we know can be deadly in our game.

HMRC are very concerned about this and are working closely with police in the UK and internationally to close these fraudsters down, with some success. Scam networks in Austria, Mexico and the USA have been stopped. However, the danger remains. (more…)

As a landlord or property investor, you will have seen how the whole property market has been turned on its head over the past 15 months.
 
The main problems that have surfaced as a result of the credit crunch are: (more…)