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. Continue reading →

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. Continue reading →

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.

Leslie Strathie HMRC Chief Executive warns us  “We never use emails, telephone calls or external companies in these circumstances. We only ever contact customers who are due a refund by post.”
If we remember this and don’t click on any web links in emails we don’t trust then all should be well.

If you do happen to receive one of these scam emails HMRC would be very interested to see it so do the right thing and forward it on to them.

As landlords we are all used to treading the fine line between treating our tenants fairly while making sure that our investment is protected. This has gotten increasingly difficult over time.

Recently, the government approved the tenancy deposit scheme, mydeposits.co.uk confirmed what we all knew; it is getting harder and harder to withhold a tenant’s deposit.

It comes down to the fact that the burden of proof lies with us. So, even if a tenant has damaged our property to an extent well in excess of their deposit, unless we can prove it beyond doubt we have to return their money.  In fact figures from the last part of 2008 confirm that of 125 disputes dealt with by the independent adjudicator only around 12 where decided completely in the landlord’s favour.

How do we make sure that we increase the odds for ourselves?

It seems that the best way is to do a comprehensive inventory that includes photographic evidence.
Each room needs to be photographed from all angles. Carl Haagensen of Redbrick Inventories felt he had spotted a gap in the market and now offers this expert service in an attempt to help landlords and letting agents manage the problem of property damage more efficiently. Continue reading →

The New Year has started and the newspapers are already speculating on how many jobs will be lost in the coming year. Headlines such as the following are grabbing readers’ attention:

‘600,000 people to lose their jobs in 2009’
‘One in ten people to lose their jobs in 2009’
‘One person every 56 seconds will lose their job in 2009’

Indeed, it is a worrying time for all with challenging times ahead for landlords.

If the statistics are true then there is a strong chance that the vast majority of landlords will face defaulting tenants, tenants who leave properties after a very short stay or tenants struggling to pay their rent.

I always say that our tenants are going to determine how much cashflow we make from our properties. Therefore, the way in which we deal with these challenges will dictate what success we have both in the short and long-term.

I think the most important factor to our success this year is to keep tenants in our properties, and have them paying rent that is close to market rent as possible. By all means you should be charging market rent, but if tenants lose their jobs or start to struggle with payments then you need to put a payment plan into action asap. Continue reading →

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 →

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 →

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 →

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 →

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 →