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Em Morley

Majority of tenants pleased with current landlord

Published On: June 15, 2015 at 3:09 pm

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Categories: Landlord News

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An encouraging survey has revealed that the vast majority of private rented sector tenants are satisfied with their landlord.

According to the research by Paragon Mortgages, 81% of UK tenants are pleased with their landlord, with 70% also saying that they felt their rent offered value for money.[1]

Homely

82% of people respondents to the survey also said that they felt that their rental property was their home, with 35% also saying that they expect to stay in the private rental sector for the forseeable future.[1]

However, the report also revealed that 12% of tenants would be uncomfortable when asking their landlord to extend their tenancy agreement and 6% said they had already asked for an extension and were refused.

57% of respondents said that they were happy with the length of their existing tenancy, with 17% saying they had were successful when asking for a longer term.[1]

Majority of tenants pleased with current landlord

Majority of tenants pleased with current landlord

Standards

John Heron, Director of Mortgages at Paragon, said that, ‘the research is really interesting. It is important that we understand the world from the tenant’s viewpoint so we can continue to deliver products that support better standards in the private rented sector.’[1]

‘There has been a lot of noise around the need for longer term tenancies for some time and I think there is a common misconception that landlords are not willing to be flexible in the tenancies they offer,’ he continued. ‘Our landlord research demonstrates that many are more than willing to extend terms and in 71% of cases, it was the tenant who chose to end the tenancy and not the landlord,’ he added.[1]

Concluding, Heron said that, ‘we are big supporters of offering longer term tenancies and we were one of the first buy to let lenders to announce we would support the Government’s new model lease and allow landlords to offer 36 months tenancies to those tenants who need that extra security, as we believe this is our social responsibility.’[1]

[1] http://www.propertywire.com/news/europe/uk-tenants-landlord-survey-2015061510630.html

 

 

Tesco bank slashes mortgage product rates

Published On: June 15, 2015 at 1:01 pm

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Categories: Finance News

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Tesco Bank has announced that it is to slash rates on its 95% LTV mortgage products.

The banks’ fresh 95% LTV product range includes offers such as a two year fixed rate deal from 4.19% and a five year fixed rate at 4.69%.[1]

Additionally, the bank has reduced the rate on a number of its two, three and five year fixed rate deals, alongside their two year tracker products. A 75% LTV two year tracker now starts from 1.25%.[1]

Tesco bank slashes mortgage product rates

Tesco bank slashes mortgage product rates

Delighted

David McCreadie, Managing Director of Banking at Tesco Bank, stated, ‘we are delighted to widen the options available to customers and first-time buyers in particular by launching these new highly competitive offers. We know it can be difficult for first-time buyers to get on the property ladder and we hope that the new rates on our 95% LTV mortgage products will make it a little bit easier.’[1]

[1] http://www.propertyreporter.co.uk/finance/tesco-announces-cuts-to-ftb-rates.html

 

Building societies better for mortgage deals

Published On: June 15, 2015 at 12:33 pm

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Property owners are better off choosing a mortgage deal with a building society as opposed to a high street bank, according to new research.

A report from Moneyfacts.co.uk has found that building societies offer customers substantially lower average rates on home loans.

Rates

The report found that a typical five year fixed-rate mortgage with a building society has an average rate of 3.21%, in comparison to 3.51% with banks. On a £150,000 loan, this could save property owners £1,440 over the course of the five year agreement.

Similarly, an average two year fixed-rate mortgage commands a rate of 2.78% with banks, but 2.54% with building societies. On a £250,000 mortgage, a homeowner would save £744 over two years by choosing to go against the banks.[1]

Disappointing

Charlotte Nelson, finance expert at Moneyfacts.co.uk, feels it is disappointing that banks are not proving more competitive in the mortgage market, considering the amount of Government assistance that they have received over recent years.

Building societies better for mortgage deals

Building societies better for mortgage deals

 

Nelson said that, ‘Moneyfacts.co.uk has compared the mortgage offerings of building societies and banks and found that building societies are the undeniable winners. Not only do building societies come out on top when it comes to rates but the gap between those from banks is getting wider, suggesting that borrowers may need to look away from traditional banks to get the best deal.’[1]

 

She continued by stating that it is, ‘disappointing that despite all the money given to banks from the Government-backed Funding for Lending Scheme and the ever-growing price war between providers that banks are still failing to compete on the overall cost.’ Concluding, Nelson said, ‘now that local building societies are offering a genuine alternative to banks, perhaps it is time for borrowers to look closer to home to get the best mortgage deal.’[1]

 

[1] http://www.express.co.uk/finance/personalfinance/583511/Mortgages-spurn-the-banks-save-hundreds-pounds

 

 

Longer commutes could equal lower costs

Published On: June 15, 2015 at 11:40 am

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An interesting report from online estate agent e.Moov has suggested that property owners working in London could cut their costs in half, if they are prepared for a longer commute to the capital’s main train stations.

Location to station

The location of a property is proving to be the most important factor for investors. With average price houses in the capital standing at £588,000 however, purchasing property in London means that preferred locations are being sacrificed in favour of affordability.

With a timely commute proving inevitable for many owners, the e.Moov research looks at how investing in more further afield regions can save investors money.

e.moov looked at areas around London’s key train stations, then looked at other regions with roughly double the commute into the capital. Their findings could tempt many to consider increased travel times for the benefit of more money in their pockets.

Kings Cross

Commuters into Kings cross from regions such as Edgware face a commute time of around 33 minutes. Property prices in this area average at £443,772 but commuters willing to travel just under an hour to work may be tempted by homes in Peterborough, where costs are £190,000.

Waterloo  

A direct commute from Southampton to Waterloo takes just one hour and ten minutes. Prices in the city average at £248,000 and the region is a popular location for retirees. However, with savings above £300,000 on regions such as South Wimbledon, where a commute to Waterloo still takes 35 mins, doubling the travel time seems a viable money saving option.

Longer commutes could equal lower costs

Longer commutes could equal lower costs

Victoria

Commuting from the east side of the capital is proving more popular with increase in developments such as the C2C line and a rise in affordable property in places such as Essex. Kent is also proving a popular location in which to invest and an area such as Rochester offers a commute of 51 minutes into London, with property prices averaging at £226,000.

This is in comparison to regions such as Walthamstow, where commutes to Victoria average at 34 minutes. A property in Rochester is £143,650 cheaper than the average price for a home in Walthamstow.

Liverpool Street

A seemingly short hop across the capital from areas such as Shepherds Bush to Liverpool Street can still take 30 minutes. Property prices in Shepherds Bush average at nearly £700,000. However, commuting from places such as Ipswich, despite taking roughly 1 hour to Liverpool Street, can save vast amounts of money in terms of home prices. Property costs in Ipswich average at roughly £220,000, less than a third of the average home in Shepherds Bush.[1]

Changing trends

eMoov’s founder Russell Quirk, suggests, ‘we’ve seen the commuter trend move from the outer London boroughs to surrounding areas outside of the capital. Who’s to say this won’t continue as house prices in these new commuter zones catch up with their new found demand?’[1]

Quirk continued by saying, ‘although an hour’s commute might seem a lot, when you consider the money you save for 25 to 30 extra minutes on the train and how much more you get for your money, it could really make sense.’[1]

 

[1] http://www.propertyreporter.co.uk/property/doubling-your-commute-could-halve-your-property-costs.html

 

Property Expert Advises Buyers and Renters

Published On: June 15, 2015 at 10:58 am

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Property expert Kate Faulkner gives her tips and facts on renting and buying a home.

Tenant fees

As of yesterday, all letting agents must display any fees that tenants will have to pay. If your agent has not done this, they cannot charge you.

Tenant fees vary from agency to agency, but generally include an application fee – which could increase for over one tenant – and a couple’s fee. If you have a guarantor, this will involve another fee.

Tenants may also have to pay for referencing, a contribution to the tenancy agreement and/or inventory and a tenancy renewal fee.

If you agree to a property, you will be required to pay 4-6 weeks’ rent in advance as a deposit and also pay the first month’s rent in advance.

Property Expert Advises Buyers and Renters

Property Expert Advises Buyers and Renters

Should you buy rather than rent?

Some tenants fear that they are paying more dead money in rent than they would pay on a mortgage.

If you rent and pay £500 per month, your annual rent is £6,000. If the value of the rental property is about £120,000 and you have a 5% deposit on a 95% mortgage at a 5% rate, then you are paying as much dead money in rent as you would pay in mortgage interest.

Kate’s simple calculation is to work out if your rent is 5% or less than the value of the home you rent. If it is, then the dead money paid to the landlord is the same as you would pay to the mortgage provider.

Is buying cheaper than renting?

Generally, if prices are dropping or are static, it is probably cheaper to rent than buy. The following costs presume that utility bills, Council Tax and service charges are the same:

  • Renting: One off tenant/reference fee, monthly rent, annual contents insurance and renewals.
  • Buying: One off fee for buying, the deposit, monthly mortgage repayments, annual maintenance, and building and contents insurance.

Buying a property

The biggest cost when buying a home is the deposit, which is paid at the time of exchange. A cheque must be sent to the legal firm five working days before exchange.

Deposits are typically 5% or 10% at the time of exchange, then the remaining balance is paid at completion, this could be 15% or 20% if your deposit is 25%.

Stamp Duty is usually the second highest cost, paid when you complete the purchase. This tax is not paid on properties worth less than £125,000. Read more about Stamp Duty reform here: /why-cutting-stamp-duty-could-lead-to-an-increase-in-prices/.

Lenders and brokers also charge for mortgages, but you should only be charged when you have decided on the right mortgage. Charges can be fixed and could be a few hundred pounds up to several thousand. They could be a percentage of the money you borrow, such as 1-3%. You should be aware of any fees before you confirm the mortgage.

When you exchange on a property, you must have buildings insurance in place, which will be around a few hundred pounds.

Survey fees range from £250 + VAT for a condition report, to £400 + VAT for a homebuyer report, to over £1,000 + VAT for a comprehensive building survey.

Legal fees range from around £300 + VAT to more than £1,000 + VAT for a home over £500,000. You could pay extra fees for leasehold properties or shared ownership houses. These are typically £100 + VAT.

Removal costs start from about £300 + VAT for a small move to £2,000 + VAT for moving a big home over a long distance.

 

 

UK property asking prices rise again

Published On: June 15, 2015 at 9:51 am

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Confidence seems to have returned to the UK property market following the election, with some asking prices in London increasing by over £10,000 in the last month.

The latest Home.co.uk price index shows that average property price rose across England and Wales for the fourth straight month. However, the report also shows that the supply of property for sale was behind demand in every area apart from Greater London.

Increases

Property asking prices increased by 2% over the last month in the Greater London region and by 1.1% overall throughout England and Wales. This increase takes the average annual home price appreciation for England and Wales to 5.9%, with further price rises predicted for this year.[1]

Freed from the threat of political uncertainty, the prime central London market has not yet regained the momentum lost in the past eighteen months. Property prices are seemingly stagnant, with flats in some areas spending up to 50% more time on the market than they did in June 2014.[2]

Furthermore, time on market data also shows an increase in momentum in Scotland, Wales and the North of England during the last 12 months. However, southern areas have also indicated slight increases in marketing times, with greater house prices lessening demand.

UK property asking prices rise again

UK property asking prices rise again

Relentless

Doug Shephard, director of Home.co.uk, said that, ‘whilst 2015 is looking like a much better year for the northern regions, Scotland and Wales, hopes that the market in London and surrounding southern regions might slow to a more sustainable pace, have been swept aside by further relentless price rises.’ Shephard feels that this will, ‘create significant cause for concern at the Bank of England.’[3]

‘For the time being the key economic drivers of ultra low interest rates and low supply of property for sale remain,’ he continued. ‘Buy-to-let landlords and first-time buyers alike are able to borrow very large sums to purchase property at very low rates of interest. And this situation looks set to drive prices higher in the near term,’ he added.[4]

 

[1] http://www.propertywire.com/news/europe/uk-asking-prices-growth-2015061210623.html