Four years ago buying property overseas was all the rage and a lot of lucky people were able to do so without getting a foreign mortgage. According to the merchant bank, Close Brothers, these investors are now reaping the rewards of their investment.

For example, if you purchased an Italian property in Euros 4 years ago you will have seen the real value of your investment rise by approximately sixty five percent. The reason this is the case is a combination of a rise in property value of thirty percent and an increase in the value of the Euro in comparison to Sterling.

Close Treasury’s head of foreign exchange, Mark Taylor, comments:

“When British investors calculate the value of an overseas property they bought a few years ago, they not only need to look at how real estate prices have changed, but also what has happened to the exchange rate between Sterling and the local currency.”

He adds:

“Even though overseas property prices tend to have fallen in the last year, in many cases the fall in the value of Sterling will have offset this, and many people may still have seen the value of their homes increase in Sterling terms.”

The report goes on to add that a lot of Britons are taking advantage of this and selling up to realise the profits that are sitting on due to the weaker pound.

We all understand that there were some rogue landlords that made things tricky for tenants regarding their deposits. We even kind of understand why the government intervened with its approved tenant deposit scheme but it is interesting to see that even they do not get it right all of the time.

Last month, one of the governments approved agencies collapsed and went into liquidation owing a whopping 382,000 pounds, largely made up of tenants’ deposits.

Stephen Greenwood had apparently been in business 36 years prior to this fall from grace. The company gave the recession and the failure of a large Spanish investment as reasons for their liquidisation.

Of course, we all have a lot of sympathy for this as many of us have experienced the hardships that have come with this recession. We wish the Rugby estate agency firm that has taken over his properties,  Craig Walford, the best of luck.

He seems to be doing the best he can by the existing tenants, having worked 23 hours day in the initial stages to get things up and running and has now opened the doors to the former Greenwood’s office to accommodate the extra business.

In a move that many have been calling for and predicting for a very long time now, the Government has announced that the buy to let sector will now be regulated to protect the borrower.

This follows a comprehensive investigation by the government into the causes of the latest financial crisis, and means that people entering into a BTL agreement can now do so with some sense of security.

Exchequer Secretary, Sarah McCarthy-Fry, says “We are determined to reform the system for the future, to offer both stronger protection for consumers and greater stability in the housing market.” And most of us can only say “about time!”

Apparently, the sticking point regarding the regulation of the BTL industry involved the fact that expenditure in this area was regarded as investment finance. Many have rightly pointed out though that given the huge number of amateur landlords involved in BTL this is a bit of a misnomer.

The bad news about this regulation is that some mortgage lenders have issued a thinly veiled threat about how it will affect the number of BLT loans available. Anyone involved in this area knows that it is very hard to secure this kind of mortgage at the moment and it seems that mortgage lenders are saying that this regulation will make it even harder.

I am not sure why this should follow. If the regulations are designed to protect the consumer then surely only those loans that were abusing the rights of the consumer will disappear. The mortgage industry must agree that those should never have existed in the first place?

It appears that the low price put on a lot of housing at the moment is encouraging professionals such as lawyers and doctors to get involved in the buy to let sector.These people have cleaned out the stock of several leading house builders recently, especially in the northern cities.

According to Cluttons, the estate agents, they are also becoming increasingly active in London.
 
Speculation on why these youngish professionals have chosen now to get into the buy to let sector throws up a multi faceted answer. Most of these people are sick of the small return on their money from the average bank. With interest rates being so low, they would rather put their cash into something they can see returning handsome dividends in the long term.

Another issue that faces these people, in a lot of cases, is the prospect of future housing for offspring attending college and university. They see buying rental property now as killing two birds with one stone.

Hopefully, their asset will appreciate, and when the time comes they will have then somewhere to house children rather than being forced, or opting, to move from the family home.

In theory this sounds like a good plan. All we can hope is that they are prepared adequately for the rigors of becoming a landlord. Many people aren’t.

As I ended the last blog with some of the bad news floating around regarding the property sector, I have decided to begin this one with some more upbeat news.

It appears that house sales in the UK have been holding very well in last financial year. According to construction companies such as Redrow, UK house sales are very stable at the moment.  A spokesperson for Redrow had this to say this week after the company’s general meeting.

“Home sales in the financial year to date have been remarkably stable with net private reservations averaging 45 homes per week, including the normally seasonally weaker months of July and August,” the company said.

“Total net private reservations achieved in the first 18 weeks are 47 per cent ahead of the same period last year with cancellation rates having returned to historic norms.”

This is a very encouraging sign of renewed growth in the housing sector that can only benefit the entire economy.
 
On the down side the same companies were quick to point out that the lack of mortgages available from the banks is still a matter for concern. As we know, that concern is twice as relevant in the buy to let sector as banks seem determined to keep options very limited in this area. We can only hope that banks see the error of their ways and loosen their purse strings sometime in the near future.

Residential landlords provide tenants with any number of portable electrical devices in their tenancy contract. They need to check for its safety as per the law. It is advisable to conduct regular safety checks on appliances which become part of the rental agreements.

This is because the landlord can be held responsible in the face of an injury by way of an electric shock or if the appliances become defective. The UK is no stranger to fires caused by electrical devices. Close to 20 percent of these are caused by faulty electric equipments that end up in a short circuit. Government statistics suggests that more than 14,000 Britons suffer varying degrees of injuries due to problems with their electrical appliances.

The UK’s Electrical Safety Council has issued that we will be held responsible if tenants are injured due to defective appliances found in the rental properties.

It can prove costly for us as such injuries can mean rejection of insurance policy, apart from the major fines and criminal prosecution. The best way to avoid this mess is to sign the portable appliance testing (PAT) at regular intervals. This inexpensive testing can be done using dedicated testing equipment. It is better to be safe than sorry.

The UK buy to let market is all set to hit the ground as a forecast suggests that portfolios will rise by an average of 0.8% over the next 12 months. This is significant as property prices have been falling for the last two years and rental income has also seen a decline for the last 12 months or so.

However, differing information regarding property values in the UK exist, with some areas responding better than others. Rental income has started to level off and it looks like the worst is over. This is coming at a time when buy to let entrepreneurs have witnessed their property values collapse and many borrowing money on previous property acquisitions. It has led to a number of portfolios falling like a pack of cards.

The property sector for years has enjoyed the status of being very lucrative for a large number of UK business people but the economic downturn has soured things and left many bankrupt.

The positive interpretation of the 2010 property market goes against the prediction of many analysts who expect a further fall in this sector in the coming year. Only time will tell what to expect. Till then landlords can hope for the best.

The private rental sector is showing signs of stability after a phase of uncertainty caused by falling rents and rising vacancy.

Britain’s Excel Centre survey shows that more than one in five rents have increased over the last 12 weeks and an additional 39 percent of rents have remained stable at current levels. This spells good news for residential landlords, as rents are either rising or staying the same for a large majority of rental properties.

Thankfully, the demand for residential rental properties has seen a 50 percent jump over the past six months, and conditions look conducive for the current landlords as well as for those who are looking to buy a stake in the rental sector.

However, property values continue to remain low throughout much of the UK. A large number of properties in the UK are still selling below the original asking price. One in ten properties sold for the listed amount and 50 percent of residential property for 10 percent below the original asking price.

Nevertheless, this could be an opportunity to expand our portfolios and is a boon to first time buy-to-let business entrants.

The renewed interest among investors is a positive sign. 75 percent of estate agents noted a marked growth in demand.

Now criminal convictions of tenants can have serious consequences for a landlord’s insurance cover.

7.3 million people with criminal convictions are present in the UK and many likely to be the tenant population. Undeclared unspent convictions have the potential to be material facts in the assessment of risk resulting in invalidated insurance cover, if the crime has any relevance to the policy risk.

This is because insurance contracts are based on the principle of ‘uberrima fides’ (utmost good faith) on both parties involved in the contract. So the duty of full disclosure lies with the landlord who is the policy holder.

There is lot of uncertainty and confusion among landlords. So, what can we do as landlords? Do we ask the question in the tenancy application form, include a disclosure clause in the tenancy agreement, or just simply ignore it?

Some smart home insurers have an outright policy of not insuring people with unspent criminal convictions; irrespective of the relevance.

I feel this has stirred up quite a hornet’s nest. One has to decide between actively seeking the information from the tenant and thereby getting the insurers remove to the cover or just ignoring the issue.

More clarification is needed from the insurers to prevent landlords being effectively uninsured.

Today sees the launch of Windows version 7, Microsoft’s new operating system. Let’s hope that the release of this new operating is a much bigger success than Vista. One thing can be said for sure, at least it has been delivered on time.

Our website visitors and customers have been asking for a while whether our landlords software solutions will be ‘Windows 7’ compatible.

The answer is off course ‘Yes’.

Our development team have had access to the new Windows 7 operating system and have been making sure that our software runs smoothly on it.

To learn more about the technical requirements of our software, please refer to our technical specifications section.