Written By Em

Em

Em Morley

It is the Cheapest Time to Get a Mortgage

Published On: January 12, 2015 at 2:55 pm

Author:

Categories: Finance News

Tags: ,,

Mortgages are currently the cheapest on record, revealed new figures.

Two-year fixed and variable rate deals have dropped to new lows as mortgage providers attempt to entice borrowers.

Banks and building societies are trying to attract new buyers after demand dropped in the last half of 2014.

However, stricter lending rules have made it more difficult for some borrowers to get a mortgage in the last few months.

There are concerns around a forthcoming rise in interest rates and many buyers are waiting to see if the Bank of England (BoE) increases its base rate from the current historic low of 0.5%.

But the BoE is not due to raise the base rate until the end of 2015, or even 2016. Lenders are therefore offering super-low offers.

It is the Cheapest Time to Get a Mortgage

It is the Cheapest Time to Get a Mortgage

Experts believe that now could be one of the best times ever to enter into a fixed rate mortgage, before rates do increase.

The average interest rate for a two-year fixed rate home loan, with a deposit of at least 25%, was only 2.08% in December, the lowest figure since records began in 1995.1

This deal is the most common type for borrowers, and dropped from 2.17% a month earlier.

Interest rates on a two-year variable rate with a discount have also never been lower, down from 1.81% to 1.63% in a month. Lifetime trackers are near record lows, at 2.86%.1

Citi, the global bank, says that these numbers indicate: “Key mortgage rates generally continued to fall in December, and many mortgage rates now are at or around record lows.”1

From financial website Moneyfacts, Sylvia Waycot says: “mortgage lenders are now fighting for our attention.

“Almost daily, new deals are being launched as each lender tried to out-do its competitor, which at last is some great news for the borrower.”1

The BoE says that demand for mortgages has “decreased significantly” in the last quarter of 2014.1

This is apparently down to the Bank’s mortgage market review, which made lenders check that borrowers can afford to meet their monthly repayments if interest rates were to rise.

Banks must now conduct thorough checks on aspiring buyers’ spending habits before they can offer them a home loan, which has seemingly led to less approvals.

1 http://www.dailymail.co.uk/news/article-2907341/Mortgage-rates-plummet-lenders-bid-business-demand-decreased-end-2014.html

 

 

Rutland Beats London with House Price Rises

Published On: January 9, 2015 at 4:51 pm

Author:

Categories: Property News

Tags: ,

It may be the smallest county in mainland England, but house prices in Rutland are increasing faster than most places in the country, even out-performing Greater London.

Properties in the rural county rose by 19% in value last year, compared to 18% in the capital.1

The average home in Rutland, located in the East Midlands, grew by around £50,000 in 12 months, to hit £305,000.1

Rutland Beats London with House Price Rises

Rutland Beats London with House Price Rises

The average property price in England and Wales is £279,000.1

Research conducted by LSL Property Services revealed that Slough performed strongest out of all unitary councils or counties, with 21% growth.1

Following this was Rutland, Southend-on-Sea, Windsor, Maidenhead, Herfordshire, and Medway.1

Although it is 90 miles from central London, Rutland is becoming a popular commuter area, with trains taking around an hour from Grantham, and Peterborough.

There are several esteemed independent schools in the county, including Uppingham, where Stephen Fry, Phil Spencer, and Rick Stein were attendees.

Rutland was abolished as a county in 1974, when it became part of Leicestershire. However, it was reinstated as a county after a 23-year campaign.

In 1997, Rutland was allowed to be governed by its own council, and it became the smallest unitary authority in England.

In 2007, the Royal Mail officially accepted Rutland as a postal county again.

Murray Estate Agents’ Cheryl Farrow says: “Rutland is a very quaint county with pretty villages and towns, a nature reserve and great schools.

“We do get a lot of people from the south moving here and either commuting to London or retiring here.

“There are fast train links from nearby Grantham, and Peterborough, but it is a quiet county with small high streets and independent retailers.

“The older properties are good looking houses and highly sought after, so, when one does come on the market, they sell very well and for a premium.”1

1 http://www.dailymail.co.uk/news/article-2902594/London-house-price-rises-beaten-Rutland-Average-prices-county-went-19-year-compared-18-capital.html

Buy-to-Let Could see Boost from Pension Changes

Published On: January 9, 2015 at 3:33 pm

Author:

Categories: Landlord News

Tags: ,,

Regulation changes to pensions could drive a boost in the buy-to-let sector, as so-called silver landlords look to invest in the market.

Direct Line for Business (DL4B) have conducted research revealing that 32% of people aged 45-64 with a pension would consider using some or all of their pension to buy a buy-to-let home as an alternative investment.1

Buy-to-Let Could see Boost from Pension Changes

Buy-to-Let Could see Boost from Pension Changes

The amount of silver landlords could rise substantially after the pension regulation changes come into force from April 2015, meaning that those reaching retirement and pensioners can access as much or as little of their pensions as possible.

As property prices and rents rise, buy-to-let is becoming an appealing option for many, says letting expert Kate Faulkner, who claims that strong returns can be seen over 15 to 20 years.

Faulkner says: “Given the recent pension liberation announcement, for some it could be good to diversify their investments when approaching retirement, but landlords need to seek financial, or expert advice and ensure they understand the returns that property can deliver and especially the tax implications.”1

Buy-to-let can provide a regular income, and also offer the opportunity for capital appreciation. Research indicates that 43% of would-be silver landlords would consider this option based on the regular income provided.1

23% aspiring investors are attracted to the supposed security of buy-to-let, 17% by the anticipated capital appreciation, and 9% would like to leave an inheritance for their children.1

Those nearing retirement predicated the high returns possible for landlords at an average of 10%-14%.1

Jazz Gakhal, Head of DL4B says: “Buy-to-let can be a flexible investment, providing an immediate source of income as well as being a long-term asset. As such, it is understandable that people approaching retirement age are considering investing their pension pots in property.

“However, prospective landlords should understand that buy-to-let does not come without financial risk. Legal expenses for repossessions and potential damage to property are but just a few of the costs that can take significant chunks out of landlords’ annual yield.

“Taking the necessary precautions such as carrying out full reference checks on prospective tenants, inspecting your rental property regularly, and taking out landlord insurance can help to minimise some of the risks faced by landlords.”1

1 http://www.landlordexpert.co.uk/2015/01/09/uk-buy-to-let-could-get-a-boost-from-new-pension-changes/

 

 

 

Tenants have the Right to See References

Published On: January 9, 2015 at 2:49 pm

Author:

Categories: Property News

Tags: ,

Tenants have the Right to See References

Tenants have the Right to See References

A newspaper’s consumer column has revealed the supposed right for a tenant to see a reference about them, even when the referee has not given consent. It could even
name the referee. This could be an issue for letting agents and landlords.

The Observer’s Anna Tims was sent a letter from a renter, saying: “I have been turned down my a letting agent for a flat as I failed the referencing. It couldn’t tell me why, so I contacted Blinc Referencing, which handled the process. It refused to tell me. Are they allowed to do this? Is this a data protection issue? MH, London.”1

Tims subsequently contacted Blinc, who said that they withhold references to protect referees.

Blinc’s director, Darren Bignall, states: “We would be able to write to the referees to ask if they would be happy for us to provide the applicant with a copy of the full reference. If they decline, then we would not be able to do so.”1

However, Tims believes that this approach opposes consumer protection laws. The Competition and Markets Authority (CMA) say that the tenant has a right to know the reasons for their decline, and this outweighs the referee’s confidentiality rights.

“The failure to explain why a check was failed may count as a misleading omission since it deprives the tenant of the chance to defend their case. You have the right under the Data Protection Act to request a copy of your personal data,”1 says Tims.

1 http://www.landlordtoday.co.uk/news_features/Tenants-referees-may-not-have-right-to-confidentiality

Property price growth up in December

Published On: January 9, 2015 at 1:10 pm

Author:

Categories: Property News

Tags: ,,,

Property prices enjoyed a strong end to 2015, according to the latest survey from building society Nationwide.

The survey suggests that values increased by 0.8% in the last month, in comparison to November.

Happy New Year

2015 saw house prices increase by 4.5%, with the average property value in Britain now standing at £196,999. In a separate report, the Land Registry for England and Wales reports that house prices rose by 5.6% in the year to September.

Looking into 2016, the Nationwide said that with property price growth almost parallel to that of salaries, it expects a similar pace of growth in the next year.

The Halifax however has recorded an even greater rate, suggesting that property prices are rising twice as fast. In its most recent survey, the lender indicates that prices increased by 9% in the last year.

Capital Gains

London was found to be the strongest performing area for the 5th year in succession, with average house prices up by 12% annually. This said, Nationwide does not expect house prices in the capital to continue to grow at such a rate next year, with unaffordability already stifling many in the city.

At present, prices in the capital are 50% above their pre-financial crash peak in 2007. In comparison, values in Northern Ireland are 44% beneath their pre-crisis levels, despite increasing by 6.5% in the final quarter of 2015.

Property price growth up in December

Property price growth up in December

In the UK as a whole, the Nationwide said that prices are up by 7% over the course of the year. Scotland was the only part of Britain to see a dip in average prices, with prices in the last quarter of the year down by 1.9% compared to the same period in 2014

‘Further healthy gains in employment and rising wages are likely to bolster buyer sentiment, while borrowing costs are expected to rise only gradually,’ observed Robert Gardner, Nationwide’s chief economist. ‘However, the main concern is that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability.’[1]

Concerns

Additionally, Mr Gardner predicted average house price growth of between 3% and 6% during 2016. He went on to say that he had concerns over regional variation in property values, meaning strong house price growth in some areas linked to higher rates of employment.

‘The gap in employment in London is particularly striking, with the number of people in employment up 14% compared to the pre-crisis period,’ he noted.[1]

Howard Archer, chief UK and European economist at IHS Global Insight also warned that average property values would be, ‘constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the probability that interest rates will start rising gradually during 2016.’[1]

[1] http://www.bbc.co.uk/news/business-35197410?ocid=socialflow_twitter&ns_mchannel=social&ns_campaign=bbcnews&ns_source=twitter

 

 

Landlord’s Repossession Rights

Published On: January 8, 2015 at 4:15 pm

Author:

Categories: Landlord News

Tags: ,

Around four million properties are privately rented in England, and it is estimated that 20% of households will be within this sector by 2016.

With such a large proportion of the housing stock belonging to the industry, it is not surprising that things can go wrong. This can sometimes lead a landlord to repossess their rental property, or recover lost rent.

If a landlord needs to repossess their property, they should ensure that they stay within the law. There are a few reasons for ending a contract and taking hold of the home:

  1. Refurbishment

Properties that have been damaged, suffered problems, or are unsuitable for tenants may need major repairs, requiring the property to be empty.

  1. Landlord's Repossession Rights

    Landlord’s Repossession Rights

    Selling

The landlord has the right to sell their property when they decide.

  1. Rent arrears

This issue should be dealt with immediately, before the landlord loses too much income.

  1. Abandonment

This is a rare situation, but should it happen, the landlord should ensure that the property has definitely been abandoned before going in and finding new tenants.

  1. Bad rapport

If the tenant and landlord do not have a good relationship, landlords can face many problems, including loss of rent. Landlords should always act quickly and professionally.

Repossessing a rental property can be expensive, as rent can be lost, and there are costs for regaining the house, including legal expenses.

The section 8 notice is pricey and time-consuming. The better option is a section 21 notice, needing two months’ notice before the Assured Shorthold Tenancy (AST) ends, or when it is over. Landlords should always observe the law and protect deposits.