Conveyancing, HIPS & EPCs - June 2008 Issue 30

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As I write this, mid-June 2008, things look pretty gloomy.

The credit crunch is putting the banks under extreme pressure (we still don’t know the full story) leading to a contracting property market because of a severe tightening of lending criteria and the end of cheap money.

Savills last week revised their forecast that residential property values could fall by 9%, to as much as 25%, by the end of 2009.

This in turn is severely affecting the construction industry which is seeing builders halting new development plans and even mothballing some current developments.

Rising redundancies in related industries will inevitably have knock-on effects to the economy as a whole, which is already feeling the effects of rising inflation and in particular higher commodity prices and quite dramatic fuel price rises. Households are also feeling the effects of rising food and fuel prices and therefore retailers’ profits will be hit, inevitably affecting commercial rents and tenancies.

The whole scenario looks set to lead to a full blown recession (the first we’ve seen in the UK for 18 years—so much for Gordon’s “the end of boom and bust”) unless moves by government and the Bank of England have their desired effect—so far there’s little evidence of this.

Fortunately for landlords residential rents and demand for renting is holding up very well, though the situation could deteriorate quickly if mass redundancies result. Established landlords with sizeable chunks of equity in their properties will inevitably ride our the storm and many well take advantage of distressed selling and falling values to add to their portfolios, ready for the up-turn—but things can get worse yet!.

Additionally, an overall shortage of UK housing should help shore up the market in many locations, especially as new development will slow down or stop.

The ones most likely to suffer are those overstretched newbie property investors, and in particular those owning new-build urban flats whose values are badly affected due to oversupply and poor tenant demand in some locations.

You didn’t need to be the Sage of Omaha or even those illustrious property education “experts” running overpriced property courses to see this coming a long time ago. For what some have paid for these courses you could have gleaned more wisdom buying 3 or 4 good investment books and spending a luxurious two weeks of study in one of the best hotels in the Caribbean!

For all those responsible for fleecing and then leading naive and unsuspecting investors into a living hell, to now say: “we were taken by surprise by the credit crunch”, is nothing short of scandalous in my view.

Tom Entwistle, Editor

This issue is wholly sponsored by Coverlet one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet

This month’s Topic - Conveyancing, HIPS and EPCs

Conveyancing is the legal and administrative process associated with transferring the ownership of land or buildings from one title holder to another.

Recent legislation has added HIPS and Energy Performance Certificates to the traditional conveyancing, surveying and mortgage finance services associated with property transfers.
The whole process starts once an offer has been made and accepted for a property, and solicitors’ details have been exchanged by the two parties.

This month’s Newsletter content has been provided by Dominic Toller, Director of Marketing and New Business at LMS - www.lms.com

LMS is one of the UK’s leading providers of outsourced conveyancing, remortgage, survey and energy services to Estate Agents, Solicitors and the lending industry, and is now one of the UK’s biggest suppliers of HIPs. Last year LMS successfully managed some 400,000 transactions, helping to enable more than £26 billion in loans for intermediaries and lenders.

Now, through its subsidiary ERS, LMS is also the biggest full employer of Domestic Energy Assessors in the UK (100), and has the capacity to complete 300,000+ EPCs per annum. LMS offer a range of services to property clubs and networks and to the residential, rental and social housing sectors. Read on to get a better understanding of what’s now involved in the modern UK conveyancing process…

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Newsletter - The 2008 Budget Review - April 2008 Issue 29

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The gloom, it seems, continues. A downbeat IMF report out last week concludes that the financial market crisis has developed into the biggest shock to the system since the 1930s Great Depression and predicts 1 trillion $ total losses (around £500 billion)

With oil and food price inflation rising, the report warns of a one-in-four chance of a global recession, with the world economy trapped between fire and ice—between slumping growth and rising inflation—the dreaded stagflation of the 1970s.

A vicious circle could be set in train: lack of confidence by the financial markets, lack of funds for investment leading to falling property and asset vales, reduced economic output, leading to job losses in turn leading to lack of investment—lasting for years.

But there are now some signs that the credit crunch may be contained and although the 1/4% cut in in Bank Rate this week to 5% has had little initial impact, analysts are predicting that the rate is headed to 4% in the next 12 months. The BOE could also do more to stimulate confidence & growth, helping borrowers.

The problem at the moment is that the cost of money (the wholesale interbank lending rate (LIBOR) is around 1 percentage point above Bank Rate, which means that mortgage rates are stubbornly refusing to come down quickly.

Previous house price crashes have only occurred in serious recessions, so it remains to be seen if this scenario is enough to precipitate one in the UK.

With house prices up around 180% in 10 years, 300% over 20 years and 9,000% over 50 years, owners should have some room for manoeuvre, though overstretched newcomers who have paid over the odds are already feeling pain.

Currently, average house prices are around 6 times male average earnings, a traditional guide, though some experts now argue the measure is obsolete with 2-earner couples.

Average house prices could fall by around 10% this year with commercial values expected to correct by between 20 & 30%, hopefully before picking up again in 2 years or so.

Given this background and despite evidence of a relatively strong economy in the UK, it brings into question our government’s handling of first the Northern Rock crisis (vis-à-vis Bear Stearns), the recent budget and it’s room for manoeuvre in a crisis because of government debt.

In this issue Maurice Patry FCA, of Landlords Tax Services Limited reviews some of last month’s budget measures with particular reference to landlords.

Maurice says, “the 2008 Budget is wide ranging, and this summary deals only with key points. It is not an exhaustive review. Whatever is contained in the Budget should be treated with caution; the final version that becomes law may differ significantly from the Budget. You should not rely on summaries. Use it as a guide only and take professional taxation advice which takes into account your personal circumstances.”

This issue is wholly sponsored by Coverlet one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet

Landlord’s Insurance from Coverlet

One major change affecting landlords is the abolition of taper relief and the introduction of a unified CGT rate of 18%.

This caused consternation in the small business community until the Chancellor introduced some special exemptions.

It could be a windfall for some short-term BTL investors wanting to get out quickly, but it could also have an adverse effect on an already shaky property market if too many investors rush for the exit.

The Landlord & Buy-to-Let Show this week is one of the highlights of the year for Landlords—18-19 April 2008 at London Olympia.

Over 80 exhibitors—sold out—& a comprehensive seminar programme:

-Friday, 16.30 & Saturday, 16.00 Tom Entwistle, LandlordZONE—Selecting & Managing Your Tenants:
The Key to Success in the Rentals Business

-Friday, 15.30—The BBC’s Sarah Walker will outline how to Present your Property for Quick Rental at the Best Possible Price, and Adding Value to Your Investment

-Friday, 14.30—Keep up-to-date with the law: Landlord Law’s Tessa Shepperson looks at Essential Legal Points for Landlords

-Saturday, 12.00 Leaseholder Rights from ALEP (The Association of Leasehold Enfranchisement Practitioners) as they explain How to Negotiate the Minefield of Owning a Flat…

Hope to see you there,

Tom Entwistle, Editor

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Welcome to the March 2008 edition of the LandlordZONE® Newsletter.

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With the continuing turmoil in the financial markets as I write the question now is not if there will be problems with the economy in general and property markets in particular, but just how bad will it get?

Whichever way you look at it the collapse of the US bank Bear Sterns (the US equivalent of Northern Rock) and it’s subsequent takeover by JP Morgan Chase it’s a significant event, in some respects the like of which has not been seen since the 1930s.

Had Bear Stearns not owned its headquarters building, the sale price of $240 million or $2 a share (under review but down from $160), would not have been possible. At $1,000 a sq. foot the building is worth $1.2 - $1.3 billion, so the actual value of Bear Stearns less their headquarters at 385 Madison Avenue would be minus $1 billion.

This all makes the message that dropped on my mat the other day inviting me to a seminar on property investing all the more ironic. “How You Could Give Up Work and be a Property Millionaire Instead”

Well it’s always good to be optimistic and there’s always a danger in talking ourselves into a recession, but the organisation putting these out is off the scale of what I would term responsible investment advice.

They do themselves and the industry few favours and I feel the main effect will be to “come back and bite”, not just themselves, but a lot of others in the industry as well.
Looks like we’re in for a rough ride.

Tom Entwistle, Editor.

This issue is wholly sponsored by Coverlet one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet

Landlord’s Insurance from Coverlet

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Don’t miss these Landlord & Property Shows Coming Soon…

These three shows promise some really worthwhile products and some of the industry’s experts will be offering some sage advice for these difficult times:

The Property Investor Show is the largest and longest established property exhibition in the UK – N.E.C. Birmingham 11-13 April.

The seminar programme will feature:

Tom Entwistle (founder of LandlordZONE)
John Socha (Vice Chairman, National Landlords Association)
Richard Bowser (editor of Property Investor News)
David Lawrenson (author and founder of Lettingfocus.com)
Jim Haliburton (H.M.O. specialist)
 If you are planning to visit register online for FREE

—————————————

Thousands of landlords and buy-to-let investors are expected to visit the free to attend:

Invest in Property Show Friday 27th & Sat 28th March held at Oldbillingsgate in the heart of the City is sponsored by the Sunday Times.

The City Edition is dedicated to delivering informative, educational and independent advice. Guest Investment Speaker—US Guru—Robert Shermin

A Beginners Guide To Making Property Investments—Stefano Lucatello, Caroline Hollingworth, Irene Tzortzoglou
Evaluating Property Investment Opportunities—James Gonzalez, Ben Mason, Nick Dare, Rebecca van Lierde Molinoff
Property Investors Masterclass—Johannes Conradi, Liz Peace.
Introduction to Leveraging Indirect Property Investment Opportunities.

Full Seminar Programme

————————————

The Landlord & Buy-to-Let Show: 18-19 April 2008 at London Olympia.

Over 80 exhibitors & a comprehensive seminar programme:

Friday, 16.30 & Saturday, 16.00 – Tom Entwistle, LandlordZONE—Selecting & Managing Your Tenants: The Key to Success in the Rentals Business

Friday, 15.30—The BBC’s Sarah Walker will outline how to Present your Property for Quick Rental at the Best Possible Price, and Adding Value to Your Investment

Friday, 14.30—Keep up-to-date with the law: Landlord Law’s Tessa Shepperson looks at Essential Legal Points for Landlords

Saturday, 12.00
Leaseholder Rights from ALEP (The Association of Leasehold Enfranchisement Practitioners) as they explain How to Negotiate the Minefield of Owning a Flat…

Full Seminar Programme.

We look forward to seeing you at these shows!

Download LandlordLOG in Adobe® .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGMar08.pdf

The links to the journal are also posted at:
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http://www.landlordlog.com/

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It’s important that landlords are aware of this development as all residential and commercial buildings are affected from 1st of October at the latest, with some commercial buildings being affected earlier.

Remember, heavy fines are on the cards for non-compliance.

Energy Performance Assessors are likely to be in demand so prudent landlords may consider getting their properties up to standard and assessed early, especially if re-letting is likely.

The Landlord’s Energy Savings Allowance scheme (LESA) allows landlords to claim the cost of buying and installing energy saving measures against their tax bill, so take alook.

Content for this month’s newsletter has been supplied by Jane Needham B.Sc(Hons) MRICS, Chartered Surveyor, Accredited Domestic Energy Assessor.

Jane, who answers questions on the LandlordZONE Forum as a Topic Expert on Energy Assessment, Business Rates and Council Tax matters, has 18 years’ experience as a property professional.

It’s property show season again and we start off with one of the UK’s biggest events: 7-9 March 2008 at ExCeL London, The Homebuyer & Property Investor Show
Friday the 7th has been designated “Landlord’s Day” so there will be more exhibitors of interest to landlords that day.

LandlordZONE will be exhibiting and Editor Tom Entwistle is giving a presentation:

15:45—Tom Entwistle—LandlordZONE—Investing in Commercial Property: Successful Strategies for the Private Investor in 2008

Other seminars of interest:

10:45 - Paul Shamplina of Landlord Action—Dealing with Tenants From Hell

16:30 - David Lawrenson, consultant, author & regular contributor to the LandlordZONE Newsletter -  What type of property will show both capital and rental growth over the next 5 -10 years?

13:30 - John Socha - of the National Landlords’ Association—Lettings 2008 - Threats and Opportunities (also on Saturday & Sunday)

12:45 - Christopher Tanner - Blevins Franks Mortgage Brokers—The state of Buy-to-Let mortgage finance post-Credit Crunch

13:45 - Andrew Callen—lawyer, HMO’s and Positive Cashflow
Full Seminar Details —We look forward to seeing you at the event!

Tom Entwistle, Editor

EPCs for all sales and lettings of property are due to come into force on a phased scheme. By 1 October 2008 let residential property MUST have a valid EPC when it is let.

The EPC scheme will apply to commercial property from 6 April 2008 (1000 sq M+) 1 July 2008 (500 Sq M +) and 1 Oct 2008 (All)

An EPC can only be carried out by an Accredited Energy Assessor. For let residential property this must be an accredited Domestic Energy Assessor.

Registered EPCs are held on a central register and can only be accessed by the landlord or person who is responsible for commissioning the EPC, although it must be made available for viewing by prospective buyers or tenants.

An EPC is valid for ten years on let property. If changes are made to the property which may affect the energy efficiency of a property, then a new EPC should be commissioned before a new letting takes place.

The theory goes that from the EPC, a potential tenant can see just how much it is likely to cost to heat and run the house for a year. Publicity will be aimed at tenants encouraging them to assess properties through the EPC before taking up a tenancy. The impact of this for the landlord is that tenants will be more aware of these issues and will become more selective on energy efficiency.

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I thought your readers may be interested to know about the real cause of this tragic accident. This is the third death in as many years.

The hot water system that has failed relates to copper hot water cylinders, the type found in most airing cupboards. When the thermostat fails to a boiler or immersion heater obviously the water can reach boiling point, if this happens the water expands quickly and enters the cold water storage tank (cistern) which is usually located in the roof space, above the airing cupboard.

However it must be noted that in the cases of the deaths the cold water tank was situated above the bathroom.

Let’s move on. When the boiling hot water enters the cold water tank it can cause the tank to flex and soften, I’m referring to a tank made of black coloured plastic, and it only happens with modern tanks made of plastic. When these tanks were first produced they were made of galvanised steel, then copper plate, then fibreglass - none of these types of tanks are are particular risk because they are rigid in fabrication.

The problem now begins to start, but only if the board that the tank is placed on does not fully support the tank. The rule is that the support board must extend on all sides of the tank by at least 150mm ( 6″ ), which will provide adequate support. If the support is not present the tank can soften and split and out comes the boiling hot water.

If the tank has been replaced and the original tank was one of the rigid types there is a chance that the fitter (plumber) has used the same board, but it’s not big enough for the new tank. Most modern tanks hold more water and are thus biggger than the previous types. However just because the thermostat fails it does not mean to say that this sequence of events will happen, generally the system just shuts down.

What should owners of property do? First of all check to see if you have a copper cylinder in the airing cupboard, secondly get into the roof space (or wherever the cold water supply tank is situated) and check the size of board supporting the tank. It should also be noted that this board needs to be at least 18mm thick, preferably made of plywood. If the board is not the right size, and you feel confident enough to drain down the system, you can replace the board yourself, if not then obviously you can call in a qualified plumber. You could also get the thermostats checked out by an electrician, but to be honest they could be tested today and fail tomorrow.

Whilst writing if any of you out there, or one of your staff, are looking for plumbing qualifications, our college is available for advice and training to City & Guilds standards.

Best Regards

John Smith R.P., A.M.I.P.H.E.
Course Director

http://www.theconstructioncollege.org/

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Welcome from the Editor:.

Happy New Year everyone—let’s hope it’s a good one for landlords, though the signs are it’s a likely to be very tough in the economy for everyone: landlords, businesses and consumers alike.

The commercial sector seems to have taken the biggest hit so far with CB Richard Ellis reporting a 4.1% drop in values in December alone and 10.3% in Q4 2007.

Couple this with tough trading conditions going forward and it doesn’t appear that we have reached the bottom on the high street yet.

Those investors who helped pump £5billion into commercial property funds over the last 2 years—the likes of New Star, Norwich Union and Scottish Widows funds—have lost 15 to 20% of their value. REITs have faired even worse—British Land and Land Securities REITs have fallen by 44.9 and 35.2% respectively.

Residential property values have so far faired better. But with UK house prices the most overinflated in the world, according to research by Policy Exchange, a correction or at lease a long “flat” market seems inevitable.

House prices in Britain have risen for 13 years on the run with average prices going from £70,000 in 1997, when labour came into power, to just under 200,000 today—a rate of more than 4% above inflation—a compounded increase of around 180%

Historically, values go in 20 year cycles and it’s unlikely to be different this time. But despite the gloom and the pain felt by Northern Rock and Paragon Mortgages, it’s possible the liquidity crunch, which has brought far more expensive mortgages, may yet be contained?

If that’s the case, and there’s still a very big but, there are some positives:
- inter-bank credit spreads returning to normal
- employment levels still high
- reasonable growth prospects
- a house building program which will fall short of forecast demand of 3.5m homes
- 2 further cuts in interest rates forecast—then we may get away with a flat property market for a year or three, avoiding a real crash?

However, this week’s stocks sell-off is a real worry for the UK economy.

But falling stocks & property prices says there will eventually be bargains around for those brave enough.

Most landlords are sanguine—they take a long term view. Recent figures from A&L show that 1 in 10 landlords is employed so they see their properties as an investment for the future rather than part of their income. More than two-thirds of landlords surveyed say they are buying more properties.

Tom Entwistle, Editor, LandlordZONE.co.uk

This Month’s Issue - Gas Checks

Despite all the economic gloom the chances of an investor landlord losing his shirt are far less than might be imagined, if you keep your nerve and cut running costs.

Tenant demand is holding up very well and demographic and economic factors bode well for the future of renting.

The key to success is keeping your properties occupied with good reliable tenants and maintaining that all-important cash flow.

However, when times get tough economies may be needed and one of the biggest is taking on the management of the property yourself—DIY property management is not rocket science—it boils down to preparation, some extra work and common sense.
What landlords sometimes forget is their biggest risk of all comes from claims against them for negligence.

Landlords who manage have responsibilities which must be complied with and they MUST carry adequate Landlord’s Insurance—normal household insurance policies will just not do it!

The horrific case of the scalded baby is a case in point—see News—and one of the main responsibilities on a landlord’s shoulders is Gas Checks.

In this issue we look at some of the important aspects of ensuring that gas is safe in your properties.

Read the FULL Newsletter to find out more…

This issue is wholly sponsored by Coverlet4LetProperty one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet4LetProperty

Landlord’s Insurance from Coverlet

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Download LandlordLOG in Adobe® .pdf format:
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The links to the journal are also posted at:
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Welcome from the Editor: Season’s Greetings to everyone from LandlordZONE.

I’ve said this before—we’re living in interesting times - and very worrying times they are too for many investors and particularly new landlords.

There are some ominous signs as we look to 2008, not just in housing and commercial property but in the economy as a whole.

There have been some dramatic falls in the price of some property funds (as much as 40 to 50%) and to a lesser extent property prices themselves.

If you are too highly geared and rushing for the door right now then there’s a price to pay for liquidity.

As the governor of the Bank of England said recently, “Property prices are a matter of opinion, debt is real” I will add this: income is real too—it’s tenants you need right now!
Given time, if you have it, these prices will come back, in abundance, but in the meantime we may still see further falls.

On the other hand, as the arch contrarian investor Anthony Bolton, Fidelity’s star investment fund manager with a record of 20% growth over many years, is calling the bottom of commercial property stocks. He is reputed to be buying in, arguing that the share values have fallen far more than their underlying assets—the properties themselves.

Despite all this the government regulation bandwagon affecting landlords rolls relentlessly on: HIPS, HMO Licensing, Tenancy Deposits Scheme and they’ve just announced a full scale review of the Private Rented Housing Sector - is this the precursor to yet more legislation?

What is it about some governments and regulation? Do they subscribe to the old sea captain’s maxim: keep ‘em busy and tired and they won’t cause you any trouble? Whatever happened to “small government is good government”?

One example of the problem is Heritable Bank’s recent study of the HMO licensing scheme—one year on. The report concludes that the scheme is harming the buy to let market and is calling for a review. They cite huge inconsistencies in local authority fees and their interpretations and enforcement of overly complex rules.

In this issue we look at another big change: the Local Housing Allowance. Controversially, the scheme will insist that Housing Benefit rents cannot be paid to landlords—these must go to the tenant first.

Tom Entwistle, Editor, LandlordZONE.co.uk

This Month’s Issue - Local Housing Allowance

In this issue we take an look at the implications for landlords of the Local Housing Allowance (LHA), due to be implemented as a nationwide scheme from the 7th April 2008.

All new claims, changes of address etc will be affected, from then and eventually all claims will come into LHA.

You might think that this does not concern you if you don’t let to Housing Benefit (HB)tenants. Don’t you believe it!

Any tenant at any time can become a HB tenant if they fall on hard times—if their partner leaves them or if they are suddenly made redundant. You need to be aware of these new rules.

Renting to Housing Benefit tenants can be an attractive proposition to many landlords and depending upon the area where your property is situated, it may be ideally suited to your market.

If you work closely with your local authority, such as the Hammersmith and Fulham example advertised in this issue, you should have no trouble keeping your properties 100% occupied—housing shortages mean there is a steady demand, and you will find the local authority very keep to help you.

One aspect that’s worrying many landlords though is the new requirement that the allowance is to be paid direct to the tenant—here in this Newsletter we will explore the issues for landlords.

Read the FULL Newsletter to find out more…

This issue is wholly sponsored by Coverlet4LetProperty one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet4LetProperty

Landlord’s Insurance from Coverlet

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Download LandlordLOG in Adobe® .pdf format:
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The links to the journal are also posted at:
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Welcome from the Editor:

Welcome to the November 2007 issue of the LandlordZONE Newsletter
It’s not all doom and gloom, though you might think so reading some parts of this Newsletter and the press this last week.

But to the contrarian investor it’s times like this that present real opportunities—as John D Rockefeller said—buy straw hats in winter. Markets always overreact and there will undoubtedly be some real bargains to be had when property is no longer a topic of popular conversation.

Established landlords know how to weather a storm like this because they know their markets, they know how to manage tenancies, they keep costs under tight control and they have kept their borrowing within sensible limits.Some will even be fortunate enough to strategically pick up bargains and grow their portfolios over the coming months and years.

If you are unfortunate enough to find yourself in difficulties there just two options: (1) pull all the stops out to meet those mortgage payments and see it though by marking personal sacrifices, or (2) cut your losses before you lose it all.

Just to cheer us all up the Landlord Show will be held 6th December at the NEC Birmingham with a record number of exhibitors and registered visitors.

I shall be giving a seminar on “Selecting Tenants & Managing Tenancies” [in good times and bad] so don’t miss it.

Tom Entwistle, Editor, LandlordZONE.co.uk

Dark Clouds Looming, but there are Opportunities as Well!

This edition of the LandlordZONE Newsletter looks at the services that Auction Houses can offer for those who are looking at disposing of properties and also those perhaps looking at adding to their portfolios.

Modern economies need credit like we all need oxygen—to sustain growth and property -whilst governments and central banks must juggle interest rates and money supply for control.
But when these things get out of hand these institutions are still, it seems, quite impotent, at least in the short term.

Writing in 2005 (Crunch Time for Credit) author Edward Chancellor says: “The credit bubble that has developed in the UK and US economies over recent years is unsustainable and has ‘badly corrupted’ the economies of the two countries, with potentially serious destabilising results… [the] Housing markets look particularly vulnerable”. Quite prescient at the time.

The Bank of England is now worried that slowing growth and rising inflation pose risks to the UK and the global economies (Inflation Report November 2007)
Despite the markets expecting 3 cuts in interest rates by this time next year, a general slowdown now looks inevitable.

It’s unlikely these cuts will reduce borrowing costs significantly, if at all, as further tightening of lending criteria will continue, following the so called Credit Crunch…

Read the FULL Newsletter to find out more…

This issue is wholly sponsored by Coverlet4LetProperty one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet4LetProperty

Landlord’s Insurance from Coverlet

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Download LandlordLOG in Adobe® .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGNov07.pdf

The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/

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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.

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.

The five successive interest rate rises, now the credit crunch and so called “sub-prime” debacle in the US, have led to a slowing down of the housing market and to lenders being much more circumspect when it comes to approving loans.

Both these claims need to be challenged as far as genuine investor BTL landlord is concerned!

The speculators, some of whom have been buying to leave empty, and the growing number of second home owners, have no doubt had some effect on distorting the housing market, though this could change rapidly if we see a real downturn.

A recent CAB report claims that some landlords are using the possession procedure (Section 21) to avoid repairs, making their tenants live in squalor.

The so called below market value (BMV) strategy now being advocated by some advisors (nothing new if you’re a savvy investor landlord), if it is not applied ethically, is likely to be further grist to the mill to the critics of BTL.

Several high profile TV programmes out in the last week have been highlighting the seedier side of property investment and showing some of the horror stories on both sides—landlord AND tenant.

All of this does the image of the landlord no good whatsoever, as if it wasn’t bad enough already in some quarters.

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This issue is wholly sponsored by Cover4LetProperty one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet4LetProperty.co.uk

Landlord’s Insurance from Cover4LetProperty

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Download LandlordLOG in Adobe .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGOct07.pdf

The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/

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Welcome from the Editor:

Welcome to the September 2007 issue of the LandlordZONE Newsletter.

What a week it’s been in the markets. I’ve never seen a run on a bank before, not quite in such a dramatic fashion anyway.
From the market reports you read the property market is heading anywhere between a slow-down and a complete crash. Read David Smith’s blog for a conservative view economicsuk.com to housepricecrash.co.uk for the whole range of views.
There’s no doubt large sections of the commercial property market have dropped back, perhaps by 10% already. The residential market is less certain in my view, as there’s so many positive factors supporting it.
Any set-back can be seen as an opportunity in the investment world and those sitting on a cash mountain pray for times like this - it’s not all bad.
Buy-to-Let generally should hold up well as even with a crash, it won’t be any easier for FTBs to get a mortgage and actually get in the market - there will still be a health demand for renting, and rents may rise.
If you’re in London at the Property Investor Show this Saturday (Excel Centre, Docklands) I shall be giving another seminar on “Investing in Commercial Property: Successful Strategies for the Private Investor”come along and see it.
Tom Entwistle, Editor, LandlordZONE.co.uk

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Student Lettings - Make Money in the Student Lettings Market.

It’s that time of year again - holidays are over and we’re back to a busy time for student landlords, and landlords in general, as not only are students off to university, many other working and professional tenants are starting new jobs.

The student rental market is here to stay and it’s expanding. Remember Tony Blair’s mantra - Education, Education, Education - well student numbers have risen dramatically and will continue to do so into the future as we move to a high-tech information based economy - the new economy demands educated people…

Read the FULL Newsletter to find out more…

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This issue is wholly sponsored by Cover4LetProperty one of the leading providers of insurance for the rental property market.

Landlord’s Insurance from Coverlet4LetProperty.co.uk

Landlord’s Insurance from Cover4LetProperty

===========================================================

Download LandlordLOG in Adobe .pdf format:
http://www.landlordzone.co.uk/BlogNews/LandlordLOGSept07.pdf

The links to the journal are also posted at:
http://www.landlordzone.co.uk/BlogNews/newsletter-archive.htm and at
http://www.landlordlog.com/

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Why not forward this e-mail to a friend and if you think they will benefit from this service register at:

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It’s increasingly difficult to ensure that you receive your Subscribed Newsletter due to personal and server based spam filters. When a new issue is ready links will be posted at http://www.landlordlog.com/ and in the newsletter archive on LandlordZONE (see link above) but another way is to Subscribe to our RSS Newsfeed.

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