Written By Em

Em Morley

Now is a Good Time to Invest in Property

Published On: August 18, 2014 at 5:04 pm

Tags: investing in property,property investment

Investing in the improving property market can be appealing, however, it could provide an unsuccessful investment, and declines in returns.

Now is a Good Time to Invest in Property

When looking to invest, it is always important to consider the timing. The property market has been growing in the last year, since the economy has improved. Now could be a good time to invest in the sector, as long-term strength is possible.

Nationwide recently states that house prices in the second quarter (Q2) of this year have seen greater values than 2007’s heights. Some feared that this would cause another housing bubble, however the market is still stable.

Zoopla have reported lately that 92% of people in the UK think that property prices will rise in the next six months and farther.¹ This would create high capital returns in the market. If the economy increases the predicted between 2.5% and 3% by the end of the year, potential profits would only improve.

The rental market reflects this. Buy-to-let landlords are to see the highest returns of any asset class investor. HomeLet says that rental accommodation has grown by 7.5% in the last year, putting landlords in a solid position.1

Recently, landlords have been adding to their portfolios, due to rising rents, dropping arrears, and shorter average void periods. These all cause long-term strength in the private rental market.

The amount of buyers is also dropping around the country, after the Help to Buy success. There are now many potential tenants in the UK, more than there has ever been previously. This keeps demand and returns high.

¹ http://www.landlordexpert.co.uk/2014/08/17/why-now-is-the-right-time-to-invest-in-uk-property/

Landlords Advised, Don’t Make Small Claims on Insurance

Published On: August 13, 2014 at 4:51 pm

Author: Em Morley

Categories: Landlord News

Tags: landlord insurance,landlord insurance claims

Landlords advised don’t make small claims on insurance as an expert states that the loss of a no claims discount (NCD) could push up future premiums.

Director at let property insurance specialists Cover4LetProperty, Richard Burgess, says that one claim could force the annual cost of a landlord policy up by 20%.¹

Landlords Advised, Don’t Make Small Claims on Insurance

He says: “Certainly with our policies, and with some of those offered by other providers too, a 20% NCD is automatically deducted from the cost of the annual premiums, so that landlords get cost-effective, affordable cover.

“Of course, should a successful claim be made on a policy, then at renewal, the new cost will not include the NCD, meaning the premiums will appear to increase quite dramatically.”

Burgess provides an example of a landlord who makes a claim for £200. As the policy has a £100 excess, the landlord receives £100 from the insurer if the claim is approved.

However, at renewal, the landlord will generally find that the cost of their policy has risen by about 20%, perhaps more. As the average annual premium stands at £208, the landlord will have to pay £249.60. Going forwards, they will also need to re-establish their NCD over the years

Burgess adds: “In the long run, landlords could end up paying out a lot more for the cost of their cover than if they had not claimed for a small amount. We suggest that in the event of a claim, in the first instance you contact your broker for advice, as that is what we are here for.”

¹http://www.landlordtoday.co.uk/news_features/Beware-of-making-small-claims-on-your-landlord-insurance

NLA Warns of Fraudulent Landlords

Published On: August 13, 2014 at 11:16 am

Author: Em Morley

Categories: Landlord News

Tags: fraudulent landlords,rogue landlords

Following a fresh number of complaints from misled tenants, the National Landlords Association (NLA) has warned renters to remain vigilant in the face of growing numbers of fraudulent landlords.

After receiving a sizeable number of complaints in August 2010, the NLA says that it has again been contacted about rogue landlords operating on websites such as Gumtree.

Fake

NLA Warns of Fraudulent Landlords

An investigation from the NLA uncovered a number of fraudsters who use fake NLA branding or lettering to convince would-be renters to pay advanced fees. Rogue landlords seem to target foreign nationals who are searching for property online. In particular, those looking for university accommodation are very vulnerable to these types of scams.

Money

Once a potential tenant has been conned into thinking that there is a genuine tenancy agreement, a fraudster will often send emails or a letter to prove their legitimacy. This is where many are convinced to hand over cash. On receipt, fraudulent landlords will become unreachable and the tenant will be out of pocket.

It is imperative that tenants should not send any payment to advertisers online before they are completely certain about their legitimacy. Clues that landlords are fake include receiving communication with poor grammar and unofficial markings. Overseas tenants looking for accommodation in the UK should ask for the advice of their employer or university. They will in turn be able to advise tenants of accredited landlords and local agents.

Tips

The NLA has come together with the National Crime Agency and the National Union of Students to offer guidance on how to avoid and tackle rental fraud. These tips include:

Not sending money until the tenant is completely sure that their source is genuine.
The use of Government approved deposit schemes.
Overseas applicants seeking assistance from employers and universities.
Asking for relevant paperwork connected to the property, such as safety certificates, to prove that the landlord is genuine.

Victims of rental fraud short alert the police by visiting www.actionfraud.police.uk

Guide for Checking Tenants’ Immigration Status

Published On: August 9, 2014 at 5:01 pm

Author: Em Morley

Categories: Landlord News

The Government has published a factsheet explaining the new requirements of landlords under the Immigration Act 2014.

Under the highly controversial new legislation, from autumn 2014, landlords in certain arrears will be obliged to check their tenants’ right to rent in the UK, before they rent out their property to them.

Private residential property is the only sector affected by these checks, and will apply from the start of new tenancy agreements. Landlords will not be required to check the immigration status of their existing tenants.

Guide for Checking Tenants’ Immigration Status

The Home Office factsheet explains that in the majority of cases, the right to rent check “just means checking that a prospective tenant has certain documents, like a passport or a biometric residence permit.”¹

Landlords are then required to photocopy these documents as proof that they have conducted the check.

Landlords are also advised that they will probably not have to contact the Home Office, however, the Home Office will offer a checking service for more complicated cases.

To begin with, the immigration requirements will only apply in one area of the UK. This place will be announced in September.

At that stage, the Home Office will provide draft codes of practice, guidance, and online resources, which will include a guide to help landlords and tenants identify whether they are affected, and how to carry out a check if they are.

The obligations may also apply in more areas from 2015.

The Home Office’s factsheet on right to rent checks says that failure to comply could result in a civil penalty of up to £3,000.1

The factsheet states that the checks will be “very simple, and in most cases landlords will be able to conduct them without contacting the Home Office.”1

They also claim that the Government will deliver a comprehensive set of services to aid landlords in undertaking the checks, including online guidance, and a telephone helpline which will provide general information, and a case-checking service for more complicated cases.1

Until the rules come into force, landlords and tenants can refer to the right to work check, which is a similar guide to the one the Government will be providing for landlords.

¹http://www.landlordtoday.co.uk/news_features/Home-Office-issues-guidance-for-checking-tenants’-immigration-status

Why are Young Adults still Living at Home?

Published On: July 30, 2014 at 4:52 pm

Author: Em Morley

Categories: Property News

Tags: young people still living at home

The housing and homelessness charity Shelter have appealed for politicians to stop fuelling loan schemes that push up house prices, and instead build more affordable properties for the generation that cannot move out of their parent’s homes.

The charity referred to figures from Census data that reveal there are 1.97 million young adults in England who still live with their parents, and are employed. This equates to a quarter of everyone aged 20-34 in jobs.

A separate study discovered that of 250 young adults who live with their parents, almost half of them are not moving out because they cannot afford to either rent or buy a home, Shelter found.

Chief Executive of Shelter, Campbell Robb, says: “With the crippling cost of housing leaving over a million young adults trapped in their childhood bedrooms no matter how hard they work or save, empty nest syndrome could soon become a thing of the past.

“The clipped wing generation are finding themselves with no choice but to remain living with mum and dad well into adulthood, as they struggle to find a home of their own. And those who aren’t lucky enough to have this option instead face a lifetime of unstable, expensive private renting.

“Rather than pumping more money into schemes like Help to Buy, we need bolder action that will meet the demand for affordable homes and not inflate prices further.

“From helping small local builders find the finance they need, to investing in a new generation of part rent, part buy homes, the solutions to our housing shortage are there for the taking.”¹

Some areas are more heavily affected by this problem, according to Shelter.

Why are Young Adults still Living at Home?

Castle Point in Essex sees 45% of their employed 20-34 year olds still living at home, while in Knowsley in Merseyside, the number is 42%.

The amount of young people still living with their parents in Solihull is 38%.

Sarah, 32, lives with her parents at their family home in Croydon. She works in online advertising, but has ended up living on and off with her mum and dad for the last decade.

She says: “I’m trying really hard to save up and get my own place, but today’s rollercoaster house prices means the goal posts keep moving.

“If I move out now, the reality is I’ll be stuck paying expensive rents for the rest of my life. I know I’m lucky to have a job and somewhere to live, but the thought that I’m going to be living like a teenager into my late 30s or even 40s is really disheartening.”1

Sarah’s fears are highlighted in the fact that those renting will spend about 30% of their income on housing, whereas homeowners pay just 20% on their house, says the English Housing Survey.

The proportion of young people in rental accommodation has been increasing, as house prices rise steadily, and most are priced out of the market.

This is accentuated in London, where the cost of rent has risen by over 11% in the past year, and the average annual income is only 2.23 times higher than the annual cost of renting, reveals the HomeLet rental index.

Average monthly rents in London is a staggering £1,142, more than double that in the rest of the UK, where rents cost an average of £694 a month.

Property values were also up in London, by a huge 20.1%, giving the average property a value of £492,000, comparing to £262,000 in the rest of Britain, a rise of 10.5% annually.

¹http://www.thisismoney.co.uk/money/mortgageshome/article-2708634/Nearly-2m-young-adults-live-home-parents-says-Shelter.html

UK Property Investors still want Bargains Abroad

Published On: July 19, 2014 at 5:12 pm

Author: Em Morley

Categories: Property News

Tags: investing in overseas property,uk property investors

The amount of enquiries from British buyers looking to purchase properties overseas has risen by 38% in the second quarter (Q2), in comparison to Q2 2013.

These findings come from Conti, the overseas mortgage specialists, who also found that between January to June this year, enquiries increased by 58% compared to the first half of 2013.

UK Property Investors still want Bargains Abroad

The preferred location for British buyers is Spain, with 59% of total enquiries. Next is France with 27%, and Portugal follows with 8%.

Inexpensive properties and low interest rates are making houses abroad affordable for British investors, alongside the high property prices of the UK.

Currency rates are also prompting purchases, with the pound increasing to a worth of €1.26.

This can make a substantial difference when buying a house. In the summer of 2013, a property within Europe worth €200,000 would have cost £175,439. Now, it would save you £16,709, at £158,730.

Clare Nessling, Director of Conti, says: “Prices are good, rates are low and lending conditions are improving, so it’s perhaps no surprise that buyers are returning to the market.”¹

Britons are the biggest foreign purchasers of Spanish properties, owning around 170,000 houses, especially along the Costas.

Spain does not seem to be recovering from the drop in house prices that started in 2007. At the high point of the market, Spain built 700,000 flats and houses every year; around four times the amount of new builds in Britain. However, since the economic crisis, many Spanish developers have gone into liquidation, and homes have been given to Spanish banks to sell. This has increased cheap housing stock in the country.

Paul Payne of Costa Blanca estate agency Masa, comments: “If you are prepared to be away from the coast, savings are a lot bigger.”

Paul says he is “flying out more Britons in the next eight weeks than in the last two years” for viewings.1

¹http://www.landlordexpert.co.uk/2014/07/18/uk-property-investors-still-hungry-for-overseas-bargains/