Welcome to the June 2008 edition of the LandlordZONE® Newsletter.
Conveyancing, HIPS & EPCs – June 2008 Issue 30
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.
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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