Written By Em

Em Morley

Leeds BS offer free remortgage deals

Published On: July 22, 2015 at 2:43 pm

Tags: Leeds Building Society,mortgages,remortgage deals

Leeds Building Society has today announced that it has extended its variety of interest only mortgages, adding two new fee-free deals for remortgages.

Recently, the Society added to its standing interest only mortgages available up to 50% LTV by introducing part and part interest only mortgages up to 75% LTV, with up to 50% LTV on interest only and the rest on a capital and repayment basis.[1]

The pair of fee-free deals are 2.29% two year fixed rate interest only remortgage up to 50% LTV and a 2.49% two year fixed rate part and part interest only remortgage up to 75% LTV.[1]

Both remortgage deals come with free valuations for homes worth up to £500,000 and fees assisted legal services in order to lower the cost of switching rates.

Leeds BS offer free remortgage deals

Expected

Martin Richardson, Leeds Building Society General Manager of Business Development, commented, ‘since we introduced part and part interest only mortgages two months ago, the vast majority of applications have been for remortgages. This is broadly in line with what we expected-we anticipated part and part would appeal in particular to existing interest only borrowers who had yet to make any progress paying down their original loan.’[1]

‘This alternative offers them the opportunity to start reducing their outstanding capital without the payment shock they’d experience if they changed to a full repayment mortgage. This category of borrowers can include existing interest only homeowners who may be facing an endowment shortfall,’ Richardson concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/fee-free-remortgage-range-launched-at-leeds.html

Property Redress Scheme Publishes First Report

Published On: July 22, 2015 at 2:04 pm

Author: Em Morley

Categories: Landlord News

Tags: letting agent complaint,letting agent redress scheme,Property Redress Scheme,tenant complains

The Property Redress Scheme (PRS) has published its first interim report, covering the period from last summer to the end of 2014.

Property Redress Scheme Publishes First Report

Its first full annual report will be for this year.

Commercial insurance firm, Hamilton Fraser, operates the PRS. It is not an ombudsman service, but provides an authorised redress scheme.

The report says that unresolved complaints can be taken to the Head of Redress.

The PRS states that its case assessors try to resolve cases. If one or both parties do not accept the decision, the complaint can be taken to either formal mediation or an ombudsman to make the final binding decision.

For last year, the PRS had 1,300 members by 1^st October. This is when it became compulsory for letting agents to belong to a redress scheme. By the end of 2014, this had risen to 2,506 members, of which 31% were sales agents and 79% were letting agents.

The majority of agents (82%) had signed up for the cheapest offer, costing £95 plus VAT per head office and the same per branch. When a complaint is taken higher, a cost of £60 plus VAT is charged to the agent, if they have Client Money Protection insurance and £90 plus VAT if they do not.

Head of Redress at the PRS, Sean Hooker, says that of the agents in the report that do not meet legal obligations, “very few intentionally break the rules but are simply inexperienced and lacking in guidance.”¹

Last year’s report does not include any complaints data or statistics, but these are expected for the 2015 annual report.

¹http://www.propertyindustryeye.com/new-redress-scheme-publishes-first-report/

Over 100,000 Transactions for First Time This Year

Published On: July 22, 2015 at 1:00 pm

Author: Em Morley

Categories: Landlord News

Tags: house sales,property transactions,residential property sales,selling a property

Over 100,000 Transactions for First Time This Year

Last month, there were 114,780 residential property transactions in the UK, according to HM Revenue & Customs (HMRC).

This is higher than the seasonally adjusted figure of 104,590, which is often the quoted amount.

Using the non-seasonally adjusted data, the number for June is significantly higher than the 99,190 transactions in May. It also beats the high of 114,720 in August last year.

This is the first time this year that monthly figures have surpassed 100,000 for home sales.

HMRC reports that in 2014, there were over 1.2m transactions.

Landlords using court bailiffs rise

Published On: July 22, 2015 at 12:44 pm

Author: Em Morley

Categories: Landlord News

Tags: court baliffs,eviction orders,problem tenants

The number of landlords using bailiffs from the county court in order to repossess their property from problem tenants has risen to a record high over the past twelve months.

A report from specialist information provider Thomson Reuters shows that there were 41,489 landlord repossession cases in county courts in the year to March 2015. This was a rise from 37,706 from the previous year.[1]

Breaking point

Thomson Reuters suggest that despite a rise in wages, tenants are still struggling to keep up to date with their rental payments. Daniel Dovar, barrister and co-author of the report, noted, ‘rising rents on residential property have stretched the finances of an increasing number of tenants to breaking point.’ He feels that, ‘this trend is likely to be particularly pronounced in the capital, where London’s residential property market has pushed rental costs to record highs.’[1]

Legally, landlords must follow proceedings to recover possession of their residential property, should nuisance tenants refuse to leave. A warrant of execution must be applied for, should the property owner wish county court bailiffs to remove tenants from a home.

Landlords using court bailiffs rise

Accelerated procedure notices

Additionally, Thomson Reuters found that during the last twelve months, there has been an 11% rise in the use of accelerated procedure notices. This kind of procedure is designed to speed up the eviction process when landlords wish to evict tenants without recouping unpaid rent. Judges are then able to make a decision on whether to evict tenants based on paperwork submitted, rather than a full court hearing.

Data from the report shows that there were 29,821 accelerated procedure notices in 2014/15, up from 26,939 in the previous year. Mr Dovar commented that, ‘the increase in the use of APN’s shows that private landlords are increasingly willing to give up on unpaid rent in favour of evicting their tenants quicker. The sooner a landlord can remove the tenants the sooner they can re-let the property, which allows them to avoid lengthy periods with no rental income,’ he added.[1]

‘With demand for rental property outweighing supply and forcing rents upward, the opportunity cost to a landlord of having a property occupied by someone that can’t pay the rent has increased. Private landlords are also under increasing pressure to meet their mortgage payments on buy-to-let investments, they simply don’t have the time to go through the potentially lengthy process of recovering unpaid rent,’ Dovar added.[1]

[1] http://www.credittoday.co.uk/article/17891/online-news/record-high-in-landlords-use-of-county-court-bailiffs-?utm_content=bufferb2c15&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

New Consultation on Cut of Wear and Tear Allowance

Published On: July 22, 2015 at 11:58 am

Author: Em Morley

Categories: Landlord News

Tags: landlord law changes,landlord wear and tear relief,new wear and tear relief,wear and tear allowance

HM Revenue & Customs (HMRC) has launched a 12-week consultation on the cut of the wear and tear allowance, which was announced in the July Budget.

At present, landlords of fully furnished rental properties can claim an annual allowance of 10% of the rent they receive for general wear and tear.

New Consultation on Cut of Wear and Tear Allowance

From April 2016, the Government plans to replace the allowance with a tax relief system that will allow all landlords of residential property to deduct the costs that are actually incurred on replacing goods.

The new relief applies to landlords of unfurnished, part furnished and fully furnished properties, but not of furnished holiday lets.

The new scheme enables landlords to claim tax relief on “movable furniture”, for example, carpets, curtains, fridges, cookers, washing machines and televisions. If you would normally expect to get the item in a removals van, then you are likely to be able to claim for its replacement.

Integral fixtures, such as baths, sinks, boilers and fitted kitchen units, are not covered by the scheme.

The new system, however, does not seem to support betterment.

For example, if a landlord replaces a washing machine with a washer-dryer, HMRC accepts that this is an improvement. But this will not benefit the landlord. If the new washer-dryer costs £600, but the cost of a like-for-like washing machine would be £400, then the replacement relief would be £400.

This may therefore discourage landlords from replacing basic goods with better items that would benefit the tenants.

Additionally, the new system will offer relief for the cost of the replacement, but minus any proceeds received from the old item. For instance, if the old washing machine is sold for £200, the relief will reduce.

Within the consultation, the impact assessment states that the change will save £205m in its first year.

However, the change will give landlords extra administrative responsibilities, as they must keep a record of their expenditure.

Comments close on 9^th October 2015 and a response document is expected later this year. Draft legislation is due before the Finance Bill 2016.

Read the consultation document here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447125/150715_Wear_and_tear_condoc.pdf.

Home values rise by £7k in first half of year

Published On: July 22, 2015 at 11:46 am

Author: Em Morley

Categories: Property News

Tags: house price growth,house values,UK property prices

Latest Landbay Rental Index Reveals Best and Worst Areas for Growth in England

New data from Zoopla indicates that house prices across Britain increased by nearly £7,000 during the opening six months of the year. This rise was equivalent to 2.7%.

At the start of July, the average UK property price stood at £270,674, which was up by £6,974 on £263,699 recorded at the beginning of 2015.[1]

Rates

Research from Zoopla suggests that all regions of the UK experienced some property value growth in the first half of the year, albeit at different rates. Scotland recorded the highest rate of growth, with property values increasing by 6.6%. The average value of a home north of the border is now £183,230.[1]

The next best performing areas were the North West and North East of England, where prices rose by 3.1% and 3% respectively. However, Wales was the worst performer, with an average property price rise of just 1% over the period.[1]

When looking at the top 50 largest cities in Britain, Scotland again performed well, with Edinburgh recording the largest price growth of 8.2%, representing a £20,465 increase of a property price in the city. Aberdeen came in third with a 6.4% rise over the six months, behind Colchester with 7.6%.[1]

Home values rise by £7k in first half of year

Recovery

Lawrence Hall of Zoopla said, ‘while national property price growth saw a slow start to the first half of the year, it recovered strongly towards the end of the period.’ He feels that, ‘the strong regional figures across the board indicate an economy which is returning to health, with a series of Government incentives designed to encourage home-buying helping to boost demand for property in all parts of Britain.’[1]

Hall believes that, ‘the real winner here is Scotland. The surge in property values can, in part, be explained as a post-referendum bounce, as businesses a capital flood back to Scotland, after withholding investment during the volatile September referendum period.’[1]

Concluding, Mr Hall stated, ‘a post-General Election feel-good factor must not be discounted as more devolution promised has given property prices a bounce as Scots anticipate more jobs and investment coming their way.’[1]

[1] http://www.propertyreporter.co.uk/property/average-home-values-rise-by-7k-during-h1.html