Written By Em

Em

Em Morley

Landlords Think Now is a Good Time to Invest

Published On: September 5, 2012 at 2:22 pm

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Recent figures collated from existing landlords suggest that now could be a good time to invest in the buy-to-let market.

Invest

The survey suggests that around half of landlords feel that it is a profitable time to invest, with only 1% believing that they should cut the size of their property portfolio.

Similarly, the survey suggested that around 40% of landlords questioned thought that they would raise rents in the coming year.

Landlords Think Now is a Good Time to Invest

Landlords Think Now is a Good Time to Invest

Revival

Responding to the Council of Mortgage Lenders’ announcement that lending in the buy-to-let market had risen by 5% in the last quarter, one property investment specialist was not surprised. Co-founder of Kingsbridge and Carter Oliver Barber thinks: “Buy-to-let investors will see a gradual profit revival in the years ahead, with regional cities such as Leeds, Manchester and Birmingham offering better returns than London.”[1]

Barber likens the anticipated revival to a “bull market”, suggesting that the rise will last for around fourteen years. He goes on to say: “Those investing in the market now are likely to make the best returns over time.”[1]

Short-term pains

Jeremy Raj, partner at law firm Wedlake Ball, disagrees with Barber and believes that more should be done to change the short-term rental market. Raj believes that short-term tenancies “deter developers and means instability for tenants who are not just young, single people but increasingly families wanting and needing more security.”[1]

He goes on: “Rental price volatility and lack of guaranteed income, something the current British rental system encourages, hardly fosters enthusiasm.”[1]

Raj also attacks previous Governments, arguing: “The 1988 Housing Act effectively signalled the end of long-term, Rent Aid protected tenancies and introduced the Assured Shorthold Tenancy.”[1]

[1] http://www.landlordexpert.co.uk/2012/09/05/half-of-uk-landlords-think-now-is-a-good-time-to-invest-in-more-buy-to-let-properties/

 

 

Landlords Urged to Look for Drugs

Published On: September 3, 2012 at 5:22 pm

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After a recent substantial drug find in Aberdeen, landlords across the UK have been warned to be vigilant and take the appropriate measures to protect against criminal activity in their own home.

Cannabis

During the raid on the property in Aberdeen, policed seized over £30,000 worth of cannabis, following a tip-off from a member of the community. A woman was subsequently arrested for selling the drug, which had been grown within the property.

Landlords are warned that the cultivation of cannabis is moving more into rented accommodation. With this in mind, landlords should conduct frequent checks.

Telltale signs that a tenant may be cultivating cannabis include large electricity bills, constantly closed windows and an agitated response when others try to gain access to the property.

Police can also help concerned landlords check a property for cannabis by using thermal imaging equipment. This specialist equipment can check if a property is unusually warm which could be a sign of cannabis cultivation under heat lamps.

Risks

Away from legal issues, the cultivation of cannabis in a property can cause long-lasting or fatal damage. Heat lamps used to grow the drug are an obvious fire risk, not only to the property in question but also for neighbours. It has also been known for people cultivating the drug to create temporary electrical circuits that avoid the main house provider. This makes the risk of both fire and electrocution a real possibility.

First Time Buyers Competing with Landlords

Published On: September 3, 2012 at 3:39 pm

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Foreign investors have begun investing in the residential lettings market within London. They have expanded from commercial property investments in the capital.

This flow of financiers has boosted Britain’s buy-to-let market. As a result, house prices are remaining steady whilst rents are being pushed up, and first time buyers are priced out.

Ray Boulger is a mortgage specialist at John Charcol and comments that landlords are swarming out first time buyers. He also states that if buyers weren’t challenging landlords, then prices could be affordable.

First Time Buyers Competing with Landlords

First Time Buyers Competing with Landlords

The revival of the buy-to-let market and a shortage in housing has led to a sharp increase in rents. The growth of lenders making more buy-to-let deals available has stemmed from this rise in rents.

Rents reached a record high this year with the average price per month at £725 in July.

Discouraged first time buyers in the private rented sector, alongside a lack of lending to those without substantial deposits, has forced a drive in rents. Competition for properties is also allowing landlords to increase their rental prices.

As a consequence of this situation, rents are rising notably quicker than overall inflation. Wage growth was at 2.6% in July while house prices fell 0.6%. These figures have attracted buy-to-let landlords into the market.

Buy-to-let is also tempting to lenders as well. Low interest rates are helping in keeping arrears and repossession rates below those in the owner-occupier market. Greater availability of buy-to-let deals is enabling landlords to out-compete first time buyers.

Arrears rates are 1.56%, below the average of 2% for the whole market. With these rates down, lenders are more confident in this sector and are meeting the need for finance from investors.

In 2011, lending grew by 40% to £14bn and rose by 20% from March to June this year based on the same period last year.

Yields were at 5.3% in July, and with rents still on the rise, buy-to-let generates greater returns than lots of standard investments. As a result, private landlords hold 12.8% of the UK housing stock, compared to 10.5% before the recession. In 1999, this figure was at just 1%.

It is expected that the owner-occupier market will fall further as the responsible lending requirements of the Financial Services Authority will force more people into rented accommodation.

The idyllic property-owning democracy is now loosening, as just 66% of houses are owner-occupied, compared with 71% in 2003.

Landlords Think it is a Good Time to Buy Property

Published On: September 3, 2012 at 3:12 pm

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Investors believe that now is the best time to buy properties, due to current house prices and a demand for rental accommodation.

Landlords Think it is a Good Time to Buy Property

Landlords Think it is a Good Time to Buy Property

The buy-to-let market is one of the most prosperous in the current UK climate, as the sector achieves at a higher rate than the conventional buy-to-sell market.

A recent survey reveals that buy-to-let investors are confident in the present market conditions, and are considering expanding their property portfolios and invest further at this time.

The study was conducted by LSL Property Services, and found that 48% of buy-to-let investors believe that now is a good time to increase their number of investments, with just 1% claiming that they need to reduce their portfolios.

Results of the research also found that 82% believe now is a good time to buy due to house prices, while 53% named strong tenant demand.

These astounding facts are due to property prices remaining lower than five years ago, meaning that people do not want to sell. These low prices are attractive to investors, who can achieve high rental returns from the ever-high demand for rental property. Confidence in the market is also rising, as properties are bought with a business attitude for long-term assets.

“House prices are still subdued in many parts of the country and tenant demand is still growing,” Commercial Director of LSL Property Services, David Brown, says. “This is presenting landlords with the opportunity to secure strong yields on properties, and boosting confidence in buy-to-let as a long-term investment.”

Brown adds: “The majority of landlords expect tenant demand will increase in the future, and as long as lending to first time buyers remains in the doldrums, and new house building remains subdued, we won’t see demand for rental accommodation tail off.

“In these conditions, while affordability may increasingly come into play as landlords set rents, they are far more likely to continue to rise than tumble in the coming 12 months.”1

1 http://www.landlordexpert.co.uk/2012/09/02/landlords-believe-now-is-perfect-for-buying-more-property/

 

 

App Helps End Deposit Disputes

Published On: September 3, 2012 at 12:36 pm

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Shelter Scotland has launched a new iPhone app, aimed at stopping disputes between private landlords and tenants over deposit repayments.

Housemate

The new application, named Housemate, is designed to create a full digital record of both the contents of a rental property and their condition. It is hoped that the loggings made by the application will be so conclusive that there will be little in way of argument between landlords and tenants at the conclusion of a tenancy agreement.

Housemate has been introduced to coincide with Scotland’s new Tenancy Deposit Scheme, which became active in July. Despite being primarily designed to assist Scotland’s privately rented sector, the application can be utilised for any kind of property. At present, the application is only compatible with the iPhone, with work continuing to ensure that it will eventually be available on all platforms.

Proof

Director of Shelter Scotland, Graeme Brown, believes that the application will prove to be highly beneficial to tenants and landlords alike. Brown said: “Too many tenants have all or part of their deposit withheld unfairly and their chances of arguing successfully for its return are often compromised by a lack of evidence.” However, he states that with Housemate, “both tenant and landlord will have the proof they need.”[1]

App Helps End Deposit Disputes

App Helps End Deposit Disputes

 

Brown went on to say that Housemate not only creates “a full record of what a property contains and the condition it’s in,” but also “photographic evidence.” This can subsequently be shared via email, a process that Brown describes as “simple but highly effective.”[1]

Mr Brown said that his company’s wish was: “For users of Housemate, arguments over deposits will become a thing of the past and landlords and tenants alike can enjoy a positive, mutually-beneficial relationship.”[1]

Simplicity

Housemate is being sponsored by property services organisation Orchard and Shipman. Director of Operations, Angela McLachlan, said: “Tenants and landlords are often unsure what to expect from or how to create an inventory. This app demystifies the entire inventory process.”[1]

McLachlan suggests: “The great thing about Housemate is its simplicity.” She says that the application is “easy to navigate,” and is “very easy to create a comprehensive photographic and written inventory.”

In addition, McLachlan suggests that one of the applications’ main benefits is that one can “add tenant amendments to the inventory in real-time in the presence of the tenant.” This in turn, “helps to build a positive relationship between landlord and tenant from the outset which is key to any successful tenancy.”[1]

To download Housemate for your iPhone, you can do so for free from www.shelter.org.uk/housemate

[1] http://scotland.shelter.org.uk/news/archive/2012/september_2012/new_app_to_prevent_disputes_over_rent_deposit

 

 

 

Squatting in Residential Property is Criminal Offence

Published On: September 1, 2012 at 2:32 pm

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From tomorrow, it is a criminal offence to squat in a residential property in England and Wales.

Squatting in Residential Property is Criminal Offence

Squatting in Residential Property is Criminal Offence

The maximum penalty for the offence will be six months’ imprisonment, and/or a £5,000 fine.

Squatting means someone has intentionally entered a residential building as a trespasser and either lives there, or plans to live there without the property owner’s consent.

Under the new legislation, it will no longer be necessary for the owner to ask the trespasser to leave before they can involve the police.

Police will now have a specific responsibility to enter a property and arrest anyone believed to be squatting. They can also ignore squatter’s rights notices.

It will be more difficult for trespassers to claim trespassers’ rights, as their habitation will be a criminal offence.

The new offence will not concern residential tenants that remain in a property that they have not paid rent for. Those who fail to pay rent will be subject to ordinary eviction processes.

It will also not apply to those who believe they have permission to live in a residential property. For example, if a rogue letting agent has allowed an unsuspecting renter to live in someone else’s property.

The offence will neither concern squatters who have already been living in a residential property before 1st September.

The offence was included in the Legal Aid, Sentencing and Punishment of Offenders Act 2012.