Buy-to-let flourishes in credit crunch

Casualties of the tougher lending criteria applied to mortgages are expected to fall into the welcoming arms of buy-to-let landlords - who could see rental income climb as much as 14pc this year, according to estate agents Knight Frank.

Emma Thelwell, Daily Telegraph - 30/10/2007

Despite a slew of warnings earlier this year that Britain’s love-affair with buy-to-let property could meet a grisly end, with overstretched landlords defaulting on their mortgagees, the market has been healthier than expected as the number of mortgage approvals drop and people turn to renting.

Liam Bailey, head of research at Knight Frank, said: “Buy-to-let activity has remained high, confounding many of the more pessimistic economic commentators, and in many markets investment activity has risen to record levels.” - full article

Bricks and slaughter

If you were travelling on the London Underground this summer, you might have noticed a prominent advertising campaign promising a once-in-a-lifetime escape from commuter-land. “Quit the Rat Race, Become a Property Millionaire,” screamed a series of 10ft-high posters. They sat alongside advertisements for foreign travel, video games, Jack Daniel’s whiskey - all products tempting you away from rush-hour and the clammy monotony of a 9-to-5 working life. It was not a subtle message, and its website, freedom2fortune.com, hammered home what must be the two strongest yearnings of the average wage slave: freedom and fortune.

Henry Tricks, FT - 24th September 2007

Almost 70 years ago, Londoners penned into the fast-growing commuter belt that stretched from Dagenham in the east to Rayners Lane in the west were offered a similar escapist fantasy, also centred on property. The board game Monopoly, invented in depression-era America, was designed to while away hours of penury and pre-television monotony by encouraging speculation and greed. Tim Moore, author of Do Not Pass Go, a celebration of Monopoly published last year, describes it as “a game that filled all those unemployed hours, and did it by pressing a satisfying wedge of fantasy dollars into your hand with the opportunity to develop this into a barely manageable mountain of cash through ruthlessness and wily investment”. It was, he says, an ideal way to forget the fallout of the 1929 stock market crash - full article

Thousands of families face ruin from the buy-to-let timebomb

Like so many young professionals hoping to cash in on Britain’s property boom, Paula Collins, a 26-year-old recruitment consultant from London, thought her money would be safe.

The buy-to-let market was booming and the deal from a Manchester developer seemed too good to pass on.

ZOE DARE HALL, Daily Mail - 29th October 2007

The two-bedroom flat in the Castlefield area was valued at £175,950, but the developer was offering a 15 per cent discount, taking the price down to £149,500 - and best of all, no downpayment was required - full article

Bank of England warning for commercial property sector

The Bank of England today warned the commercial property sector could be set for more trouble due to turmoil in the financial markets.

David Doyle, Property Week - 25 Oct 2007

In the Bank’s bi-annual Financial Stability Report, commercial property is identified as vulnerable because of the previous boom in the sector.

The slowing of price inflation after the bullish markets of early 2007 combined with a large development pipeline that may with a potential for over capacity could lead to the cash crisis re-emerging in the property industry, the Bank said - full article

See also: Bank of England Financial Stability Report - 25 October 2007

Get the best deal from renting a home

Demand for rented accommodation has grown strongly in recent months as potential first-time homebuyers become increasingly nervous about the slowing property market and frustrated by more expensive mortgages.

Jo Thornhill, Mail on Sunday - 23 October 2007

The knock-on effect is that rents are rising for the first time in years, making it even more important that renters should cut costs and know their rights.
Negotiate on rent

Graphic designers Claire Spollery and Matt Downer have been renting for five years and have just moved into a new luxury flat.

Though the couple’s dream is to own their own home, like millions of other would-be property buyers, the market is too expensive for them to get on the ladder.

‘Property prices where we live are astronomical,’ says Claire. ‘We’re trying to save hard, but renting is the only option for us at the moment.’ - full article

‘Simplistic and blinkered’ BTL opinions condemned

Assetz has criticised the Chartered Institute of Housing and the Institute of Director’s calls for penal tax charges on buy-to-let investors.

Mortgage Finance Gazette - 23 October, 2007

Stuart Law, Chief Executive Assetz, commented: “We have recently witnessed a flurry of rather ill considered opinions and proposals for a change in legislation, many from organisations who should know better.

“Paul Diggory, president of the Chartered Institute of Housing, has recently condoned the ill-considered view that buy-to-let investors have priced out first-time buyers and caused the affordable housing crisis, blatantly ignoring the fact that house prices have risen solely as a result of low interest rates over an extended period. He has also recommended the removal of the existing tax relief available for buy-to-let investors, which allows them to offset this against their rental income tax returns - full article

Looking for a PART E Planner?

Since the updated Part E building regulations in 2003, new build homes and conversions have had to comply with stricter sound insulation requirements.

Nearly 5 years on, Sound Service (Oxford) reflects on whether tougher regulations have improved the lives of new homeowners.

Document E, Resistance to the Passage of Sound 2003 edition, plus amendments in 2004, stipulates single figure sound insulation ratings for both airborne radiated noise, at separating party floors and walls, and for impact noise at party floor level.

Continue reading Looking for a PART E Planner?…

One third of landlords still unaware of Tenancy Deposit Scheme

More than one third of UK landlords are still unaware of the Tenancy Deposit Scheme (TDS), according to an independent survey commissioned by The Money Centre, one of the country’s largest independent buy-to-let mortgage brokers.

The findings mean that many landlords could find themselves committing a civil offence and forced to pay a tenant three times the amount of the deposit as well as losing their automatic right to regain possession of the property at the end of a tenancy agreement.

The survey, conducted in August and September, found that 36% of landlords questioned were unaware of the Tenancy Deposit Scheme, introduced by the Government on 6th April 2007 to protect tenancy deposits and provide a fairer system for settling disputes about the return of a deposit at the end of a tenancy. When it comes to investors with only one buy-to-let property, this figure was even higher, with 43% unaware of the scheme. A further 20% of respondents said they were aware of the scheme but did not fully understand it, leaving less than half (44%) who said they were aware of the scheme and understood it.

Continue reading One third of landlords still unaware of Tenancy Deposit Scheme…

Energy Rating Top Tips for Home Sellers

Improve the saleability of your property by improving its energy rating using these top tips provided by the ultimate home information pack (HIP) resource – hipCENTRAL (www.hipcentral.co.uk).

Low Cost

• Check that you have Thermostatic Radiator Valves (TRVs) fitted. If not these can be purchased for less than £10 and fitted by a plumber for a similar price.

Continue reading Energy Rating Top Tips for Home Sellers…

How the roof fell in on America’s property gamblers

An era of buying homes to turn a quick buck has imploded, reports James Doran in New York

The Observer - Sunday October 21, 2007

If you want to know if Britain is heading for a housing market crash, you don’t have to listen to the Cassandras at the IMF - just take a look at what has become of the American market.
To understand the housing crisis across the pond, it is important to understand how US home ownership has been transformed in recent years, and with it the American Dream. Over the past two decades it has become less a means of securing an affordable place to live with the prospect of a solid bricks and mortar investment for your old age and more a means of get-rich-quick speculation - full article