Tenants and cash taken care of: landlords let go as agents fill the void

Guaranteed rent schemes mean investors are assured of their income and spared all the hassle, says Sue Hayward. But convenience can come at a price

The Independent on Sunday - 21 October 2007

Being a landlord can be hard work. You have to find tenants, collect rent and sort out repairs. And if a tenant does a moonlight flit or simply refuses to pay, it can be a costly and drawn- out process to recover what is due to you. As a result, many landlords are turning to guaranteed rent schemes.

With these, a letting agent will guarantee the landlord a specified rent for a set period – usually a year. It is up to the agents to find tenants and the profit lies in any money they make above what is owed to their client. Landlords can benefit because they know exactly how much they will earn and do not have to budget for any “void” periods – the time a property is left un-let. In addition, they do not have the hassle of finding and vetting new tenants, and the agents will sort out repairs – although they will charge for this service - full article

UK house market is ‘heading for crash’

UK house market is ‘heading for crash’
Estate agent boards in Leicester
Gary Duncan, Economics Editor

The property boom of the past ten years has left the British housing market in danger of following the slump in American house prices, the International Monetary Fund said yesterday.

Gary Duncan, Economics Editor, The Times - 18 Oct 2007

In a bleak warning, the IMF found that homes in Britain were overpriced by up to 40 per cent — far more than the overpricing in the US before the current property slump began there. The finding will fuel fears over housing market prospects after growing evidence recently that prices have already begun to fall in some parts of Britain.

The warning came as it emerged yesterday that the Bank of England discussed whether to lower interest rates this month to shore up Britain’s growth. But there was substantial reluctance among the Bank’s Monetary Policy Committee to rush into lowering borrowing costs, with only one of the nine-strong panel voting for a rate reduction - full article

Buy-to-let set to push up prices

Experts fear there won’t be enough affordable housing in the future.

AVERAGE house prices in Surrey are likely to smash through the half-a-million pound barrier in the next five years, according to a new report.

Surrey Advertiser - 19th Oct 2007

Experts have predicted that investors buying homes to rent will inflate prices in the county by 50% by 2012.

Currently, buyers must pay almost 14 times their annual wage to get on the property ladder. The average cost of a home in the county is £335,000.

This means to get a mortgage for an average home, the household income needs to be about £90,000.

The report, entitled Home Truths: The Real Cost of Housing 2007-2012, has been published by the National Housing Federation (NHF), which represents housing associations and registered social landlords across the country - full article

Tales of a landlady: Tax reforms

The latest tax reforms benefit professional landlords.

As I have lamented before in this column, we landladies don’t seem to be the most popular of people these days. Scarcely a week passes without us being accused of distorting the housing market or preventing first-time buyers from getting a foot on the first rung of the ladder.

Rosie Millard, The Times - 14 Oct 2007

Which makes it all the more surprising that Alistair Darling, the chancellor, appears to have written us all a rather large cheque in his prebudget report last week.

Most of the initial attention was focused on the changes that Darling announced on inheritance tax. These will, of course, allow us to pass on to our children far more of the enormous profits we have made from our buytolets when we depart for the hereafter. Of more immediate significance, however, to those who own one or more investment properties, is what the chancellor plans to do about capital-gains tax - full article

Why are they empty?

Lorna Blackwood investigates the mystery of the UK’s million vacant homes

THE urgent need to build more homes is exercising industry experts, homeowners and officials across the country. Undersupply is blamed for fuelling the massive price rises in recent years, which have pushed home-ownership out of the reach for many.

The Times, 19 Oct 2007

But, as the Government cajoles housing associations, developers and councils to get three million new homes built by 2020, questions are being raised about the number of buildings that lie empty.

The Government signalled its determination to tackle the issue in the Chancellor’s PreBudget Report, which promised measures to help to bring empty homes back into use.

Details of the scheme were sparse. Bricks and Mortar spoke to industry experts to find out what it means for householders - full article

LandlordZONE Newsletter - October 2007

This edition looks at issues involving mortgages and the current market conditions for buy to let.

The buy to let mortgage, introduced 11 years ago, has helped, along with the AST, to transform the rental market in the UK at a time when social and demographic changes demanded a big increase in rental accommodation. This has been good for the country and the economy.

Sponsored by Cover4LetProperty.co.uk Market leading Insurers for the Buy to Let Industry.

However, during this time house price inflation has been unprecedented—the average house price has risen threefold since 1991.

This has led to claims from some quarters that BTL landlords are to blame for the plight of first time buyers and that tax relief on buy to let mortgages should be removed.

Continue reading LandlordZONE Newsletter - October 2007…

LandlordZONE Newsletter - October 2007

October 2007 Issue 23
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Welcome from the Editor:

Welcome to the Oct 2007 issue of the LandlordZONE Newsletter.

We’re living in turbulent times.

If you are interested in the broader picture from a renowned authority I recommend you read Alan Greenspan’s timely biography—The Age of Turbulence—Adventures in a New World.  Greenspan, chairman of US federal reserve for nearly 20 years, knows a thing or two about markets and has produced a very readable analysis.

Following the credit crunch of recent weeks, triggered by the US housing downturn and the emergence of the so called “sub-prime” mortgage debacle, we’re all now wondering if the UK housing market will follow suit.

A bleak warning by the IMF that Britain’s homes are 40% overvalued—higher than the US market before it’s collapse, at 9 times average earnings (up from 5 times in 2001) - does nothing to allay our fears.

But if the worst should happen, and it might not - then what?

Well, there’s a strong letting market in the UK, a continuing housing shortage and low unemployment.

If you are not overstretched financially and you can manage your tenancies well, why worry about the value of your property in the short-term?

In fact there could be some real buying opportunities in the near future for those with the resources to add to their portfolios, but use good advisors and brokers.

All this is nothing new - we could be going back to normal conditions, where making money from property is about wise investments, managing tenancies well and making long-term gains.

Tom Entwistle, Editor, LandlordZONE.co.uk

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Buy to Let Motgages

This edition of the LandlordZONE Newsletter looks at the some issues involved with mortgages and the current market conditions for buy to let.

The buy to let mortgage, introduced 11 years ago, has helped, along with the AST, to transform the rental market in the UK at a time when social and demographic changes demanded a big increase in rental accommodation. This has been good for the country and the economy.

Continue reading LandlordZONE Newsletter - October 2007…

10 reasons why falling house prices could benefit YOU!

It looks like the housing boom is finally running out of steam.

Some parts of the country are already seeing prices fall and the number of people moving has dropped sharply.

Mirror.co.uk - 17 October 2007

Mortgage lending is also down and the number of inquiries from potential buyers have dipped at their fastest rate for more than four years.

While few people expect a house price crash, it does look as if rising interest rates have finally slammed on the brakes - full article

National Landlords Association joins NALS Board

NALS (The National Letting Scheme), the Government backed accreditation scheme for lettings and management agents operating in the private rented sector has welcomed the National Landlords Association (NLA) to its Board of Directors.

The NLA protects and promotes the interests of private sector, residential, landlords throughout the UK and is by far the largest landlord association.

David Salusbury, Chairman at the NLA, said:

“The industry is going through a period of extreme change and the invitation to join the Board at NALS makes perfect strategic sense. NALS has a pivotal role in the sector when it comes to encouraging best practice for lettings agents and ensuring the protection of landlords and tenants. We are keen to align ourselves with professional independent organisations of this stature and ensure the industry is fully represented in this period.”

Continue reading National Landlords Association joins NALS Board…

Lost the plot over capital gains

Politicians have never very well understood the law of unintended consequences. You have only to look at recent government U-turns over home information packs and alternatively secured pensions to see that ministers never really think through how changes in policy are likely to affect behaviour. And so it is again with this year’s rushed PreBudget Report.

Andrew Ellson, Personal Finance Editor, The Times - 13th Oct 2007

In an act of shallow appeasement of the unions, Alistair Darling decided to crack down on the so-called fat cats of private equity. But by using the unwieldy sledgehammer of capital gains tax (CGT) reform to crack this particular nut, the Chancellor has created a rather unexpected cast of winners and losers and unleashed distortions that could hit the housing and stock markets - full article