December 2007 Issue 25
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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
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