Bank of England cuts interest rate to 5%

The Bank of England sparked applause in financial markets and relief among homeowners across the country today when it cut interest rates for the second time this year and the third in five months.

Gary Duncan, Economics Editor, The Times - 10 April 2008

The quarter-point cut in borrowing costs follows earlier cuts in February and December, and lowers rates to 5 per cent, a level last seen at the start of 2007.

The move, widely expected in the City, was confirmed by the Bank’s Monetary Policy Committee (MPC) amid mounting fears over the economic toll from the growing credit squeeze and an accelerating slide in house prices.

Homebuyers and the City will hope that the MPC’s latest effort to shore up economic prospects will help to ease resurgent money market strains and end the mortgage drought that has seen the ready availability of home loans dry up, and the cost of those still on the market jump - full article

UK lenders cut mortgage rates after BoE move

Several of Britain’s top lenders cut their variable lending rates by 25 basis points on Thursday, matching a move by the Bank of England to pass on some relief to homeowners facing a jump in mortgage costs.

LONDON, April 10 (Reuters)

HBOS (HBOS.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), Lloyds TSB (LLOY.L: Quote, Profile, Research) and building society Nationwide said they would match the UK interest rate cut for their standard variable rates, effective from May 1 for existing customers.

Royal Bank of Scotland/NatWest (RBS.L: Quote, Profile, Research) and HSBC (HSBA.L: Quote, Profile, Research) said they were reviewing their variable rates.

A quarter percentage point cut had been expected by economists as the BoE attempts to cushion the economy from the global credit crunch - full article

Rate cut demanded as property prices slide

The Bank of England is under intense pressure to cut interest rates again tomorrow after house prices fell by the biggest margin since the early 1990s crash and ministers tried to prevent a spate of repossessions.

Philip Webster and Grainne Gilmore, The Times - 9th April 2007

Gordon Brown insisted that the latest falls — 2.5 per cent, or nearly £5,000 for a typical property in March, according to the Halifax — were containable after the big gains of the past decade. The figures showed, however, that annual house price growth has slowed to its lowest level for 12 years. Property prices rose by only 1.1 per cent during the past 12 months, meaning that they are falling annually in real terms.

The falls were even more dramatic in some regions, such as the West Midlands, where they fell by an average of £9,000 during the first three months of the year, and Wales, where the average cost of a home has dropped by about £8,000.

Annual house price growth has turned negative in three regions, with prices now lower in Wales, the West Midlands and the South West than they were a year earlier - full article

IMF fears credit crisis losses could soar towards $1 trillion

Losses from the credit crisis by financial institutions worldwide are expected to balloon to almost $1 trillion (£507 billion), threatening to trigger severe economic fallout, the International Monetary Fund said yesterday.

Gary Duncan and Suzy Jagger, The Times - 9th April 2008

In a grim assessment of the deepening crisis delivered days before ministers from the Group of Seven leading economies meet in Washington, the IMF warns governments, central banks and regulators that they face a crucial test to stem the turmoil.

“The critical challenge now facing policymakers is to take immediate steps to mitigate the risks of an even more wrenching adjustment,” it says in its twice-yearly Global Financial Stability Report - full article

Landlords: 10 ways to beat the crunch

Banks have tightened their criteria for buy-to-let loans. Paul Farrow suggests some handy tips on how to get your houses in order

Owning a second property used to be a sure-fire way to make money. Until recently, the wannabe amateur landlord – spurred on by a plethora of property makeover programmes that made making money from bricks and mortar look easy – would have found their bank managers in a receptive and generous mood.

The Telegraph, 7th April 2008

Cheap buy-to-let mortgages were easy to come by as lenders relaxed their criteria, no longer demanding a hefty 30 per cent deposit or that the rent comfortably covered the mortgage. Now the market has soured, banks are increasingly picky about who they lend to. Falling property values are causing headaches for investors who were in it for a quick buck.

Rather than panic, it’s a good a time to check your buy-to-let portfolio to see whether you are making the most of it. Here are 10 things you can do to help you get your houses in order - full article

Thirteen Million of London’s Working Hours Lost Each Year

To Tardy Tradesmen

Aspect Maintenance aims to turn bad reputation of property maintenance industry on its head-

A recent YouGov survey[i], sponsored by leading London-based property maintenance company, Aspect Maintenance (www.aspect-maintenance.co.uk), has uncovered that over thirteen million working hours are lost in London each year[ii], while company employees wait in for property maintenance engineers to turn up.

Around 4,733,000 million people are employed in London today[iii]. The poll of 996 people in London, of which 631 were employed, has revealed that nearly one third of those have had to take time off work in the last year, to wait at home for a property maintenance engineer.

Over half[iv] of the capital’s full-time employees stated that the property maintenance engineer failed to turn up at the time promised. And, 47 percent of those surveyed had stacked up six hours or more of their time waiting in for a tradesman.

Continue reading Thirteen Million of London’s Working Hours Lost Each Year…

Over a third of landlords are at risk of committing a civil offence

Almost one year on from its introduction, 40 per cent of UK landlords are still unaware of the Tenancy Deposit Scheme (TDS) leaving them at risk of committing a civil offence and being forced to pay tenants three times the deposit amount.

The Tenancy Deposit Scheme was introduced by the Government on April 6th 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.

But nearly a year on, independent research commissioned by The Money Centre, one of the country’s largest independent buy-to-let mortgage brokers, has found that 40 per cent of landlords questioned are still unaware of the scheme. A further 22 per cent of respondents said they were aware but did not fully understand it, leaving only 38 per cent confirming they were aware of the scheme and understood it.

Continue reading Over a third of landlords are at risk of committing a civil offence…

Commercial Rent Arrears Recovery - PainSmith Solicitors Legal Update - April 2008

For commercial landlords with tenancies created under the Landlord and Tenant
Act 1954, the imminent introduction of the Tribunals, Courts and Enforcement Act
2007 (“the Act”) is set to have an effect on the way in which they recover any rent
arrears. The new procedure which has been introduced in order to comply with the
European Convention on Human Rights can be found under ss 71 to 87 of the Act
and is known as Commercial Rent Arrears Recovery (CRAR).

Commercial Rent Arrears Recovery - PainSmith Solicitors Legal Update - April 2008

The provisions are anticipated to come into force later this year and they are firstly
set to abolish the well recognised common law right to distrain1 for arrears of rent.
In its place will be CRAR which replaces the traditional remedy with a clear modern
day system which will allow commercial landlords to instruct enforcement officers
(i.e bailiffs) to collect arrears of rent. If a landlord seeks to utilise this statutory
remedy they will be required to follow a more stringent procedure which involves
the satisfying of some strict pre-requisites including the service of notices and the
obtaining of a Court Order.

Continue reading Commercial Rent Arrears Recovery - PainSmith Solicitors Legal Update - April 2008…

Arbitration - PainSmith Solicitors Legal Update - April 2008

Many property professionals will be familiar with arbitration clauses. In the past
these used to be relatively popular but, with the advent of Tenancy Deposit
Protection and the end of the TDSRA scheme their usage has tended to fall away.
This is unfortunate, as when dealing with higher value claims a well crafted
arbitration clause can actually produce a quicker, cheaper and more effective form
of settlement for both sides.

Arbitration is governed under the Arbitration Act 1996 which was designed to set
out a quick, effective, but thorough form of arbitration to be used in the United
Kingdom. The Act has been so effective in so doing that its forms have been
adopted by other countries and it is the de facto standard for international
arbitration.

Continue reading Arbitration - PainSmith Solicitors Legal Update - April 2008…