Yearly Archives: 2008

Overseas Investors Get Ready To Re-Invest in the UK Property Market

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The sharp fall in sterling and the possibility of interest rates touching zero has started to lure overseas property investors back to the UK. The property market has declined by 15% to 20% from its highs of a year earlier, and this means that cash rich investors in particular are able to snap up properties at significant discounts.

The pound has almost become equal to the Euro and has suffered losses against the yen, dollar and Swiss franc. As the economic outlook gets gloomier many feel that sterling will continue to decline.

Apparently Americans and Europeans have started to show more interest in UK properties although they have not yet started to buy. Investors from Asia too are showing interest in luxury flats as well as houses in London. Continue reading →

In Difficult Times Landlords Find They Need To Spend More

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Times are tough for many landlords in the UK because of an oversupply of rented accommodation. However, there are things that a landlord can do to continue attracting the best tenants.

The biggest challenge facing the more established landlords is the newer breed of landlords that has emerged over the last 12 months.

This new breed of landlord is the one who has struggled to sell their property and has therefore decided to let the property out instead.

This new breed of buy-to-let landlord is posing a threat to the conventional ones with their modernized properties. This means that the more traditional landlords are finding their houses lying vacant for months as tenants are deciding to rent these more modern properties instead.

To compete with the modern investor, landlords must now renovate their properties and give them a facelift. Continue reading →

Do You Make Your Tenants Apply For Your Property?

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Making sure you get the right tenant in your property is the biggest worry a landlord has.

Therefore as part of your vetting process you should get your tenants to complete a tenant application form.

Presenting your tenant with an application form and saying that they have to complete it to ‘apply’ to rent your property will quickly get rid of the time wasters and leave you with the ones who are serious about renting your property.

On your application form you should look to capture the following key pieces of information about the tenant:

– Previous address
– Current employment details including references
– Proof of ID (passport or driving licence number)
– Guarantor details (i.e. who will pay the rent if they default)
– Emergency contact details
– Previous landlord details
– Other information (i.e. whether they smoke, have pets, have a car etc)
– Copy of last three months bank statements

Remember, if the tenant is not happy to provide any of the information above then you should really look to move the tenant on. At the end of the day you want a professional and profitable relationship with your tenants. Continue reading →

Have Things Really Got So Bad That Landlords Are Giving Up the Fight?

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Apparently, an increasing number of estate agents are reporting that landlords have become so frustrated with declining property prices and increasing rent arrears, that many have decided to cut their losses and sell-up!

They are not prepared to wait for the market recovery as they don’t feel it will be coming anytime soon, and they are finding it difficult to cope in the current market conditions.

So, are landlords right to bailout now, especially when the market has already fallen by over 15%? Continue reading →

Is It Time Landlords Got Serious About Rent Guarantees?

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As a fall out from the economic downturn and credit crunch, unemployment in on the increase. Only yesterday it was announced that unemployment was now over 1.8 million. This of course means that more and more tenants who are living in rented accommodation are starting to default on rent payments, as a result of losing their jobs.

The biggest expense a landlord has is paying the mortgage on the property and, therefore, if rent is not promptly paid and arrears build up then there is a risk that the landlord could end up being repossessed.
 
Landlords who do not have a rent guarantee in place are not covered by rental insurance and run a great risk of not being able to collect rent and the legal expenses incurred to tackle the problem.

As more and more landlords have had to tackle the issue of defaulting tenants, the take up of rent-guarantee-insurance has been on the rise in recent months.

Basically, a rent guarantee scheme will pay the landlord the rent that the tenant owes if they default. Continue reading →

New Property Management Software Tool Launched for RLA Members

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Over the last few months we have been busy developing a scaled sown version of our property management solution for the Residential Landlords Associations’ (RLA) members.

And the good news is that it has been officially launched today!

This software tool is free for any existing members of the RLA, and will provide you with the following benefits:

– property management – create your properties within the software
– tenant management – quickly set-up your tenants and create their tenancies, detailing the income you are receiving
– legal document generation – automatic generation of all legal documents including AST, Section 8 and Section 21
– reminder system – set up the software to remind you about expiring safety certificates, insurance policies, tenancy agreements etc.  Continue reading →

HMRC Asked to Get Tough on Buy-To-Let Landlord Tax Dodgers

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Buy-To-Let landlords are being classed as a ‘high risk’ sector that avoids paying their fair share in taxes and, therefore, should be singled out for tougher punishments.

The Telegraph recently reported that The Public Accounts Committee was deeply concerned that respectable professionals like barristers and hospital consultants, were encouraging the black market with their undisclosed activities.

A report said that that the Buy-To-Let landlords, many of who had been remortgaging their main residence to join this previously booming market, were not declaring their income and profits from their property portfolios. This meant that the government was losing out on a significant amount in taxes from landlords.

The amount they are losing out on now will be even greater after the recent interest rate cuts. Continue reading →

Landlords Frustration Grows as More and More Tenants Default

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Three quarters of buy-to-let landlords are faced with the problem of an increasing number of tenants defaulting when paying rent. According to the National Landlords Association (NLA), as the economic downturn continues, 71% of landlords believe that in the coming year they will face even more rent arrears.

Currently 37% of landlords are suffering from overdue rents and are becoming increasingly concerned that in the next twelve months the situation will worsen.

The Association of Residential Letting Agents said that this situation has arisen at a time when people who are unable to sell their houses in a falling market are trying to let out their units. This has therefore led to a surplus of rented accommodation in the rental market.

This oversupply of rented accommodation has in turn led to a fall in rents in many areas of the country. The expected income for landlords has been reduced by 2.5% during the last three months, ending in November, and in central London rents have fallen by 8.1%. Continue reading →

New Breed of Landlords Continue to Flood the Market, But is it A Wise Choice?

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With the continued drop in property prices and ever tightening of mortgage lending, more properties ‘available for rent’ are coming on to the market.

An increasing number of property owners faced with plummeting prices are no longer prepared to accept ‘silly offers’ for their properties. Instead of yielding to modest offers they are now welcoming tenants as a new breed of landlords.

This means that instead of selling in the current market, would be sellers are taking advantage of the market slump by letting the property out and then biding their time for property prices to increase again before selling.

Although this may sound like a sensible strategy, these new landlords need to fully understand their roles and responsibilities.

For example they need to make sure that:

– Their mortgage lender will allow them to let the property
– The insurance policies are changed from residential to buy-to-let related policies
– They have the correct safety certificates and energy performance certificates in place
– They understand that they need to protect tenant’s deposits
– etc… Continue reading →

Applicants with Good Credit History Being Refused Refinancing Because of Sharp Fall in Valuation of Houses

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It will come as no surprise that mortgage lenders are refusing to re-refinance credit worthy landlords (and general homeowners) because they no longer have enough equity in their property.

There are three main reasons why those who have a good credit rating are not being allowed to remortgage:

a) The falling property prices over the last year has caused a number of people to go into negative equity
b) Surveyors are under-valuing properties even further as they are scared that if things go wrong they could get sued by vendors. This means that landlords and homeowners are being told they are in negative equity or do not have enough equity in their property to remortgage.
c) The amount of equity required to refinance has now shot up to as much as 40% and this has meant that again they no longer have enough equity in the properties to remortgage. Continue reading →