Buy To Let News

Borrowers shelter in 10-year fixes

2006-09-11T21:36:00.000+01:00

Long-term home loans are growing in popularity due to concerns about more rate rises.
By Clare Francis (The Sunday Times)

"INTEREST rates were kept on hold last week, but borrowers are still flocking into fixed mortgages due to fears that base rate could go up later this year. Some are even opting to fix for 10 years because rates are lower than on five-year deals.

The Bank of England’s monetary policy committee (MPC) voted to keep interest rates at 4.75% last week, but most economists polled by Reuters, the data firm, think there will be a further quarter-point increase in November.

The risk of further rises has caused huge demand for fixed rates. Short-term fixes are still the most popular — 75% of people opted for two-year deals last month, according to Mortgagesdirect, a broker — but 10-year deals are looking increasingly competitive and you do not have the hassle of remortgaging every couple of years.

David Hollingworth at L&C Mortgages, a broker, said: “While the majority of people still prefer short-term deals because it gives them the flexibility to reassess their circumstances every few years, the cost of remortgaging is rising because fees have gone up so much. An increasing number of people are looking to lock into longer-term deals as a result.” "

This is something I arranged for most of my buy-to-let properties some time ago. I never thought that a two-year deal was a true fixed rate because of the shortness of the period.

Chris Bell

Online chain check for housebuyers coming up

2006-08-24T07:23:00.000+01:00

Sarah Arnott, Computing 24 Aug 2006

"The Land Registry is developing a prototype system to allow property buyers to check the status of all purchases in their chain.

The Chain Matrix software is the core of the Registry’s eConveyancing programme, says head of market change Julie Barry. ‘The system will allow purchasers to go online and track the progress, not just of their own transaction but the others that are relevant to them,’ she said.

‘You cannot see who the others are, or where the properties are, but you can see what stage they have reached in the run-up to completion.’"

I can see this being really useful to housebuyers frustrated by an apparent lack of progress in their sale or purchase.

Chris Bell

www.buytolettips.com

Bombing overseas investors

2006-08-15T07:38:00.000+01:00

Monday 14th August 2006: 16:00
By Jonathan Boyd

"Do you really still want that second home abroad?

Second homes abroad has been a thriving market in recent years, driven by a few key factors but clients may now ask whether to still consider it following the latest threats to the airline industry."

The latest bomb scares and airport reaction is going to add hassle to visiting investment properties in Europe. Something you need to take into account before you invest in property abroad. This is a good analysis of several factors involved in assessing overseas investment in property.

Chris Bell

Britains Top Ten small towns

2006-08-13T18:12:00.000+01:00

Another top ten! This time of pleasant towns in which to live. They are well spread throughout the country so you may well find there's one near you. Could make a good investment too!

Chris Bell

Top Ten hotspots in England

2006-08-13T18:05:00.000+01:00

Here's an interesting list of places to invest with reasons given as to why they have been chosen. The top three were Ipswich , Gillingham and Peterborough with massive development plans given as the reasons for their place at the top of the list.

It certainly provides a starting point for someone looking to invest in the English property market.

Chris Bell

New apartment prices fall

2006-07-11T21:22:00.000+01:00

11 July 2006

"The average price of a new home in the UK in June was £258,581, down 0.5% compared to May. But the fall was caused by an increasing oversupply of new apartments, said SmartNewHomes.com in their new homes index for July. All other property types increased in value over the month.

Despite apartments being the only property type to fall in price this month their domination of the housing mix (58.6%) has meant just a 1% fall in price has had a negative effect on the overall average cost of a new home.

Over the last three months new properties have fallen by 2.3% and over the year to last June they fell by 1.1% the new homes website said."

Anyone who invested in apartments recently is now likely to be in a difficult position with a choice of selling at a loss or letting for a lower than anticipated rent.

Chris Bell

Parents/Students Buy-To-Let Bonanza

2006-07-10T20:40:00.000+01:00

SUNDERLAND has recorded the biggest increase in house prices in a survey of 109 university towns and cities across the United Kingdom.

Parents who invested in property while their children went to university in the North East have found that the value has climbed by 147 per cent over five years. Prospective investors need not be put off, however: the average cost of a home in Sunderland remains nearly £5,000 lower than for the region as a whole.

A report by Halifax Estate Agents found that many parents, faced with the prospect of student debts totalling £20,000 or more after years of study, are studying house prices alongside university league tables and are turning to bricks and mortar to help to finance their children’s higher education.

The property generates an income while the student offspring is at university through rooms let out to other students. After graduation it can be let out to tenants, providing a steady income for many years thereafter.

However, parents whose children win places at the top universities will need to lay out large sums if they want to buy a property in those towns and cities, the report says.
London University colleges, which feature strongly in the top 20 of The Times top universities league table 2007, have property prices to match. The parents of a son or daughter who is enrolled at Imperial College, based in Kensington, West London, could pay on average £605,000 for a property in the area.

House prices in areas near the college, which is ranked third in The Times league, have risen by 64 per cent in five years.

For properties close to University College, the average price is more than £444,000, and for anything near the London School of Economics, parents would have to pay on average £310,000.

Outside London, property prices in some of the other top 20 university towns are almost as steep. In Oxford, the top seat of learning for the fifth consecutive year in The Times league table, and in Bath, ranked ninth, property prices are on average more than £250,000. A home in Cambridge, ranked second, costs on average £227,000, while in St Andrews, ranked 18th, the average is just under £200,500.

Durham recorded the highest house price growth of the top 20 university towns. The average cost of a home in the city is now more than £145,000, 122 per cent higher than in 2001.
House price inflation in Loughborough, which had the second-highest increase in the top 20, was 111 per cent over the same period.

Loughborough was also named England’s top provincial university and was rated best for student satisfaction. Nottingham is the least expensive top 20 university location in which to buy a property. The average price is £139,000.

Based on house price growth alone, the top-performing university towns and cities were predominantly in the North and had property prices below the regional average.

Claire Gibb, of the Kensington and Chelsea estate agents Bective Leslie Marsh, said that parents who invested found that the lettings market for student properties was buoyant. “Students frequently look to share in three or four-bedroom houses or flats, but their budgets often don’t stretch that far, so they look for one-bedroom or studio flats where their money goes further,” she said.

“We are always desperately looking for one-bedroom apartments. In August and September properties come and go so quickly on the rental market, the supply just disappears.”

Shared accommodation, whether for students or young professionals, is one of those areas where it is still possible to make good money in property. If you are considering property investment it is worth checking out the returns from renting out rooms individually rather than houses.

Chris Bell

www.studentpropertytycoon.com

1-in-7 are planning to buy a house by end of year

2006-06-07T05:00:00.000+01:00

"The number of people planning to move home has doubled since the beginning of the year as confidence in the property market remains strong, research shows.

Around 15% of people now claim they plan to buy a new house before next winter, compared with just 7% at the beginning of the year, according to Alliance & Leicester. The group said that while not everybody would act on these plans, the increase in intentions showed people felt confident about both house prices and borrowing.

The number of people looking to buy their first home has also increased by nearly a third since January, with 16% of under 30's, the key first-time buyer age group, now planning to move, up from 12% at the beginning of the year. Alliance & Leicester said despite high house prices affordability still remained good and was far better than during 1990 when many people defaulted on their mortgages.

It said people taking out a mortgage during the first three months of the year spent an average of 14% of their household income on interest payments, the lowest level since the second quarter of 2004, and well down on 1990's level of 27% debt. Among all mortgage holders, people had an average outstanding mortgage debt of £85,992 at the end of April, nearly 10% more than last year.

But despite this, affordability remained unchanged with interest accounting for 10% of their income due to lower interest rates and rising pay, increasing to 21% if capital repayments were taken into account.

• YouGov questioned 2,000 people during May. Data from the Bank of England, Council of Mortgage Lenders and the Department for Communities and Local Government was also used.
06 June 2006"

Seems like the 'house price crash' people are going to have to wait a bit longer!

Chris Bell

How HIP's will affect the housing market

2006-06-06T06:23:00.000+01:00

"A survey involving estate agents by HIP provider Simply HIP claims there will be a rise of 23 per cent in the number of houses for sale in the three months immediately before June 1, 2007, as householders hurry to put their properties on the market.

However, the survey also found, the number of people looking to purchase property during the same period is predicted to drop by 16 per cent as purchasers, especially first time buyers, try to offset the cost of buying a house onto the seller, by waiting until after June 1. That, say Simply HIP, equates to £6 billion worth of property potentially not selling compared to a similar time period without HIPs.

The research also predicted that 33 per cent would not market their homes for at least two months after June 1, 2007,as they would prefer to wait to see the effects of the new legislation and the associated costs."

There could be an interesting opportunity for property investors to buy as other buyers hold off buying before the introduction of HIP's.

Chris Bell

50% of buyers to cut out estate agents by 2010

2006-06-04T07:22:00.000+01:00

"Estate agent business to go into deep decline as buyers and sellers deal direct over the internet?

With over 1 million of the 1.4 million homes sold in the UK each year being viewed online, how long before the estate agency business goes into deep decline as buyers and sellers deal direct over the internet? Very soon according to IMRG who forecast at least 700,000 homes being sold in the UK each year without a traditional estate agent by 2010.

When the dotcom bubble was first rising, the prediction was that estate agency business would go the way of the travel agency business into deep decline. Why drag yourself around estate agencies offices when all the property details could be found on the internet, and why pay estate agents thousands of pounds in commission when you can sell direct?

The reality is that the internet is already well on the way to transforming the way houses are bought and sold. According to Rightmove's research, over 75% of successful home movers use the internet to search for property and therefore already the internet is used to view over 1,050,000 of all the properties sold each year in the UK. This % will undoubtedly increase further. Therefore the internet has already removed the need to drag yourself around estate agency windows to select the properties that you want to view. But for how much longer will agents continue to hold their dominant brokerage position when you can sell direct online and save thousands of pounds in commission?

Also how much longer will the agents dominance continue when the BBC's Whistleblower TV program unearthed supposedly reputable estate agents overvaluing properties, reporting low false offers, lying to customers, faking signatures, and taking back handers to enrich their own pockets at the expense of their clients. It is clear that agents do have a conflict of interest in that they only get paid if they secure a sale irrespective of whether the price represents fair value or not, and the more quickly the sale occurs the better. The owner on the other hand only achieves real success if he secures the proper market value for the property however long this takes.

What is becoming increasingly clear is that there is no conflict of interest if the owner chooses instead to use one of the new and innovative property sales websites. Their internet marketing packages ensure that any property can be seen by millions of potential buyers. All offers can be made directly to the owner via a secure email or SMS text system that completely bypasses the agent.

The best of these sites also provide services one would expect from a traditional estate agent, such as the installation of 'For Sale' boards and local press advertising. This provides a complete alternative to the traditional agent but with the added bonus of no agent taking a commission based fee and no conflict!

The advantage of this proven selling process is that the owner is not only in complete control and will save thousands of pounds in estate agency commission, but also they will not be at risk of losing thousands more pounds if an agent tries to encourage a sale to go ahead at below the market value. Clearly not all agents will act in this way but how do you know whether the agent advising you as to whether you should accept a particular offer needs desperately to secure your sale to pay his mortgage this month?

Traditionally home owners have perceived estate agents as synonymous with property selling and instructing an agent was seen as the only way to ensure that a property could be effectively marketed to as many potential buyers as possible. The internet is now changing this perception and the realization that home owners can just as readily sell their homes themselves if they are given the right marketing tools and full back up support to do this.

Currently over 1 million of the 1.4 million homes sold in the UK each year are viewed online although over 90% of the buyers and sellers are then tied in to negotiating through the estate agent. This change in perception will break the mould as to how people buy and sell their homes such that by 2010, at least 50% of all homes sold each year will not involve a traditional estate agent."

Interesting. The house seller will save on estate agent's commission but he will need to research the market to get a good idea of the market value of his home. Investors could benefit by locating underpriced houses.

Chris Bell

Look Out - New Tenancy Laws April 1st

2006-03-15T06:57:00.000Z

New Tenancy Laws
By Lorna Bourke

LONDON (Citywire) - Buy-to-let investors have less than a month to go before licensing of homes in multiple occupation (HMOs) becomes effective on April 6.

Licensing will affect a large number of landlords who let homes to flat sharers, the largest single group of tenants and vital to the buy-to-let market.

Under the Housing Act 2004, the government has introduced a new definition of HMOs. Under the new scheme an HMO will be any property shared by more than three unrelated tenants and which is not owned or managed by a public body, typically young flat sharers.

Not all HMOs require a licence. Mandatory licensing will come into effect for all HMOs with three or more storeys and if there are five or more tenants in two or more households.

HMOs that are not subject to mandatory licensing could nevertheless be liable to additional licensing or selective licensing, which local authorities could introduce in areas of low housing demand or with significant anti-social behaviour problems.
To qualify for a licence HMOs will also have to comply with prescribed amenity standards and will also be subject to inspection under the new Housing Health and Safety Rating System.

The aim of the law is supposed to be to prevent cowboy landlords from letting substandard property, but there is a real fear that some local authorities will simply use it as a revenue-raising exercise and slap high fees on landlords. Jan Bartlett, of the National Association of Estate Agents, said: 'Oxford city council has just set its fees for licensing at 800 pounds and the licence will last for five years. Nationwide, fees may vary from 400 to 1,000 pounds."

The Council of Mortgage Lenders has expressed very real concerns over HMOs, pointing out that if local authorities demand unattractive health and safety amenities such as wheelchair ramps, fire escapes and fire doors, this could reduce the value of the property if the landlord wants to sell it to an owner-occupier. The CML has also warned that some lenders may refuse to offer loans on properties which could be designated as HMOs.

"The Office of the Deputy Prime Minster should also be aware that enquiries by the CML amongst its members offering buy-to-let loans suggests that some will cease to offer such loans or will offer them under more restricted circumstances due to the additional threats to borrowers income streams from non-compliance with licensing requirements," warns the CML.

"Any increase in these (legislative) burdens will inevitably cause some landlords to cease renting HMOs or even to leave the private rented sector entirely. There remains a real risk that many landlords will choose to withdraw from letting of HMOs and that this will increase the pressure on accommodation for students, single people and others. This is not in the public interest."
"
It will be interesting to see how this plays out. I have always limited my investments to houses with a maximum of four letting rooms because this has always been talked about as the cut-off point i.e. those with five or more letting rooms were likelt to be subject to further legislation at some stage.

Chris Bell

Increased demand for rental properties

2006-02-21T07:54:00.000Z

Assetz News - Buy-to-let rides crest of a wave
20th February 2006

The number of buy-to-let mortgages advanced to landlords has jumped considerably in recent months, it has been revealed.

Landlords in the UK are buying more property, recent research has shown, and that has been backed up by the results of the latest figures from the Council of Mortgage Lenders (CML), which show record levels of buy-to-let loans in recent months.

The figures from the CML reveal that a record 130,400 loans were advanced during the second half of 2005, representing a massive 39 per cent rise from the first six months of the year, as many people began to look towards the buy-to-let sector.

Those results come following the announcement last week that nearly a third of landlords are currently buying new properties and adding to their portfolios in an effort to take advantage of the boom in the buy-to-let property sector. With prices still relatively stagnant, it is proving to be a popular time to buy for landlords, because many people looking to get a foot on the first rung of the property ladder still find the majority of properties too expensive.

As a result, there is an increasing demand for rental properties, with many of those unable to get onto the property ladder preferring to rent than shell out large amounts for a property. But while many people are willing to rent, it is the time for property investors to make their move in the property market, as prices are expected to increase over 2006, meaning that it is more prudent to buy now than wait until later in the year.

Recent surveys have shown that young people are overwhelmingly in favour of renting property in a popular, up and coming area rather than spend their money purchasing a property"

It's heartening to see signs of optimism in buy to let.

Chris Bell

London house market confidence returns

2006-02-18T08:02:00.000Z

London house market confidence returns
17 February 2006

The latest data from Haart estate agents shows that the average London house price has increased by 2% as confidence returns to the London housing market.

The average price of property in London is now £238,305 up from £233,317 in December. High salary levels, a shortage of good quality stock, record Christmas city bonuses and renewed confidence, particularly with first-time buyers, have all contributed to boosting house prices.

The London housing market has had a very strong start to the year, said haart. At the end of last year sale transactions increased by 100% over a 12 month period and the level of activity has carried over to the New Year with a 10% swell in applicants. As a result the average time to sell a property has dropped by 5 days to 20 days as more buyers return to the market.

Along with increased activity in the housing market there are strong signs that first-time buyers are coming back with a vengeance with a further 1% increase in first-time buyer levels raising it to 24% in January, the highest levels since the index began.

Paul Smith, chief executive of Spicerhaart comments: 'The rise in activity levels, and more pertinently first-time buyer levels, reflects a marked increase in confidence.'
'Potential buyers that have been waiting for the market to turn have finally accepted that it is not going to crash. As a result of the improved confidence and market activity we are seeing properties, at the right price, being snapped up in days, even hours.'
'With the high activity levels from the end of 2005 carrying into January house prices are set to continue to rise into certainly the first half of this year when a months worth of pent up activity is released."

London is in a special situation and I would not expect this strength to be reflected in the regions.

Chris Bell

Ten tips for buy-to-let

2006-02-17T06:52:00.000Z

Ten tips for buy-to-let
Simon Lambert, This is Money
17 February 2006

POOR old buy-to-let. Once upon a time it was David Beckham, Wayne Rooney and Kate Moss all rolled into one - making headlines on a daily basis with every move endlessly analysed.

But now it's become an ex-reality television star - struggling to make the news while the stock market has all the flashbulbs popping as the FTSE 100 soars.

But while it's not quite the hot property it once was, investors looking for steady growth are returning to the buy-to-let market.

Industry experts predict 2006 will be a solid year for buy-to-let and say with the days of rocketing short-term capital growth gone, long-term investors are set to benefit.

Like any investment, buy-to-let comes with no guarantees, but for those who have more faith in bricks and mortar than stocks and shares here are This is Money's top ten tips:"

You'll have to click on the headline to get the actual buy-to-let tips! But this article is a good lead into the 'This Is Money' website.

Chris Bell

Property investment clubs and inflated valuations

2006-02-17T06:40:00.000Z

Property Article | Reuters.co.ukClick here for full article
Thu Feb 16, 2006 8:40 AM GMT

By Lorna Bourke
LONDON (Citywire) - Buy-to-let valuations on new properties face increasing scrutiny and investors could soon find it more difficult to arrange a loan. However, a well informed adviser can make all the difference.

Last December Matthew Wyles, director of Mortgage Works, pulled out of buy-to-let lending on new property developments, with the immortal words: 'Owing to the current oversupply of newly built property, valuation in this sector is more of an art than a science.'

Wyles was dropping a heavy hint that questionable practices were being used to inflate the true value of this type of property.

The surprise was not that Mortgage Works was withdrawing from new build lending, but that Wyles was reacting to what everyone in the market knew had been going on for a long time.

The Council of Mortgage Lenders (CML) and the Royal Institution of Chartered Surveyors (RICS) are still locked in debate about how to solve what has been described as a valuation problem rather than a buy-to-let issue, but no one wants to admit that anyone is at fault.

'The reality of the situation is that lenders have to lend and some cannot afford to pull out of this market,' says a broker who does not wish to be identified. 'While the market was rising, the lenders were not concerned.'

The lenders deny contributing to the situation by accepting inflated valuations and turning a blind eye to what only became a problem when house prices slowed.

'There are issues clearly in the property investment club area but they have not flowed through into the buy-to-let and main residential mortgage market," says John Heron of buy-to-let lender Paragon."

Take care with property investment club offerings - as you should whenever someone appears to be offering you guaranteed profis on a plate.

Chris Bell

Investors warned to avoid property

2006-02-06T05:02:00.000Z

FT.com / World / UK - Investors warned to avoid property
By Jim Pickard,Property Correspondent
Published: February 4 2006

"Investors should steer clear of buying UK properties for the next few years, the head of real estate at HSBC Private Bank has warned.

Willie Gething, managing director of property at the organisation, said the market - with the exception of London - looked like a bad bet, in terms of net yields and likely price increases.

HSBC Private Bank is one of the three biggest private client advisers, vying with the likes of Coutts and Citigroup to offer investment advice to the well-heeled. It has more than 4,500 clients in Britain.

The group has started advising clients against investment in property, both residential and commercial, in most of the UK. Instead, said Mr Gething, they should be allocating their money to international indirect property funds, which offer higher returns and a wider spread of risk.

There were perfectly valid personal reasons for buying a UK property, such as emotional attachment or finding somewhere to live, said Charles Ellingworth, the group's marketing director. "But for pure investors it is now very hard to justify at current yields," he said.

Net yields - the annual rental return on a building - are in some parts of the country as low as 3 per cent, lower than the cost of borrowing.

Thousands of investors are, nevertheless, still taking on big debts to build up large property portfolios. "People in Britain are still out there buying their flats on 98 per cent leverage, which is fine in the current interest rate environment, but if interest rates move up their investment becomes negative," said Mr Gething. "These buy-to-let investors are still fighting last year's war."

The group predicted house prices, excluding London, would be no higher in five years time. However, prices in central London, were due for a recovery after treading water for the past few years.

As for commercial property, Mr Gething predicted that prices would continue to rise this year because of the "weight of money" trying to get into the market. Yet this was not sustainable in the long-term."

A reasonable view. Anyone buying now and expecting to be rewarded with capital gains on their property portfolio is very likely to be disappointed. However there is another view that can be taken by the long term investor. By gradually accumulating a portfolio over the next four or five years, and taking advantage of the buyers' market, an investor is likely to be buying at a low point in the market leaving the door open for capital gains beyond five years.

Chris Bell

Offplan investors "buy-to-regret"

2006-02-04T06:14:00.000Z

IFAonline - BTL threat to banking profits
Friday 3rd February 2006: 11:00
By Julie Henderson

Fund manager George Luckraft is predicting there could be an imminent rise in the number of unsold or vacant buy-to-let properties, which will in turn make banking stocks less attractive as an investment.

Speaking earlier this week at the Axa Framlington Live roadshow in London, Luckraft - manager of the Framlington UK equity income fund - said while UK banking shares had in recent months contributed strong income gains, the housing market could yet see a 'wobble' created by overcapacity of buy-to-let properties and alongside a rise in the number of bad debts, and this could in turn affect the profitability of UK banks.

More specifically, he suggests while the housing market has seen a relatively 'soft' landing in the last few months, banks could begin to feel the pressure of buy-to-let lending as he predicts there will be an increase in the number of 'off-plan' property deals which go uncompleted by the original buyer, as well as an increase in the number of properties which fail to make sufficient rental revenue.

Luckraft pointed out he his long-held view is recent growth in buy-to-let properties may be a poor investment - preferring to label them as "buy-to-regret" - where "The banking sector saw pure signs of life, thanks to the soft landing in the housing market. There are still significant risks [in buy-to-let], particularly with the large number of flats to rent in areas such as London," according to Luckraft.

"The average price is still 5% below value, and the growth of amateur landlords focuses on location, location, location, rather than the practicalities of an investment. I suspect we could see a lot of [offplan] investors not completing on the deal, and returning the keys, which could then produce a wobble in the market,” he continues."

A lot of people are already regretting their 'investment' in offplan apartments. This is going to become a much bigger story when the scale of the problem comes to light. The motto: when it comes to investment don't just follow the crowd to 'easy money land' - think!

Chris Bell

Get ready for a flat and boring market

2006-01-31T06:49:00.000Z

2006 will be a year of consolidation for UK house prices:
Tuesday, 03 Jan 2006

Writing for MyFinances Jonathan Said, economist at the centre for economics and business research, predicts 2006 will be a year of consolidation for UK house prices.

The United Kingdom's housing market is not on a roller coaster ride, although at first glance this may not be easy to see.

When the slowdown in the housing market started in 2004 it was easy to claim that a steep descent was in finally in sight, fifteen years after the last one. Many did and still do.

But whilst some correction must be made for the housing boom, houses are not excessively over-valued. And the correction is likely to take place gradually over the next five years rather than abruptly.

When potential house buyers decide whether or not to enter the housing market they do not compare the price of the house they would like to buy with how much they earn. Rather they compare how much they earn with how much they will have to spend every year in interest payments on their mortgage.

The ratio of house prices to average earnings rose sharply during the recent housing boom to reach 7.5 compared to 6.4 in the 1989 boom. Because of this many have been fooled into thinking that current house prices are not sustainable and that they must collapse.

But interest rates are much lower now than they were in the 1989 house price bubble and as a consequence houses are much more affordable. Average mortgage payments as a percentage of average household incomes reached 45 per cent in 1990 but fell to just thirteen per cent in 2003. This ratio currently stands at around nineteen per cent.

Prices will also be sustained by the limited housing supply. In the short term construction companies may limit new house builds as their profit margins get squeezed. Further ahead, at 160,000 the current number of housing completions is not enough to support the four million population growth forecast in the next fifteen years. This is exacerbated by the UK’s changing demography — the person-to-household ratio is forecast to slip from 2.7 in 1981 to 2.3 in 2020.

Looking at the prospects for 2006, the housing market should remain weak. With government curtailing expenditure growth (this has been propping up households’ incomes), taxes continuing to stream in and oil prices adding to household costs, house price inflation should be subdued through the year.

For an accurate forecast for the year we should look toward interest rate expectations. A weak high street forced a downward change in interest rate expectations in the summer. This prevented a cut in consumer borrowing and as a result house prices have proved more resilient than previously expected.

Currently markets expect interest rates to come down in 2006. If expectations do not change average annual house price inflation for 2006 may slow but remain positive at around two or three per cent. However if inflation worries cause the Bank of England to refrain from lowering the cost of borrowing any further, house price inflation could just about turn negative in 2006.

Although the housing market remains overvalued, the adjustment to the long term trend will be through slower growth and not through freefall. After getting used to news of a ‘house price bubble’, we should now prepare our ears for a ‘sluggish housing market’ as we wait for a return to trend growth toward 2012. '

An excellent analysis that sums up my view of where house prices are heading over the next few years - discounting possible major economic shocks.

Chris Bell

Spain easily most popular location to buy a foreign homes

2006-01-27T06:45:00.000Z

Brits with foreign homes set to double:
"The number of Brits who own property abroad is set to double to a massive 4.4 million, according to research by Barclays.

Five percent of people surveyed (the equivalent of 2.2 million people in the UK, according to Barclays figures) said they would definitely buy a property abroad in the future. This would double the number of Britons owning property abroad bringing the overall total to 4.4 million.
What's more, the number of Britons owning property abroad could end up being even higher still as a staggering 37 percent of respondents (the equivalent of over 16 million people in the UK) said that they were considering a purchase abroad.

Suzanne Clay, Head of European Business Development at Barclays commented: "The trend towards owning property abroad shows no sign of abating and could go through the roof if people were more confident of a hassle-free purchase."
Indeed, respondents did express many concerns about the buying process. The most significant worry amongst people considering a purchase abroad (58% within this group) was that they would get caught out by local legal or tax issues. There were also concerns about keeping empty property secure (17%) and being able to understand the local language well enough (14%). But surprisingly only 8 percent of people considering buying overseas were worried about being taken for a ride and paying too much.

The results of Barclays survey showed that the most popular countries for Brits planning to buy abroad were as follows:
1 Spain (inc Balearics and Canary Islands) 30%
2 USA 15%
3 France 14%
4 Italy 10%
5 South Africa 6%
6 Dubai 5%
7 Portugal 5%
8 Bulgaria 3%
9 Croatia 2%
10 Morocco 1% "

With all the talk of Bulgaria and other Eastern European countries being the new places for overseas investment it's interesting to see just how far ahead Spain is in the popularity stakes. It's also surprising to see how many intend to invest in Dubai.

Chris Bell

Desperate in Dubai - desert dream turns to dust for property investors

2006-01-24T01:24:00.000Z

A gathering storm? - Overseas - Times Online
"Dubai's glittering skyline may look great in the brochures, but many British homebuyers regret their decision to invest there.
John Arlidge The Sunday Times

The view from the 41st-floor terrace of Grosvenor House hotel in Dubai is the oddest - and most optimistic - anywhere. To the right, towering cranes outnumber palm trees. To the left, lines of half-built skyscrapers snake into the shimmering desert haze. Out to sea, 300 sand islands form a map of the world. It is no surprise estate agents bring clients here to sell the dream of desert living.

"Impressive, isn't it?" says Michael Grant, of Cluttons Dubai, as he points out the lagoons and skyscrapers of Dubai Marina, whose residents include the comedian Jim Davidson. Cluttons has been hired to sell Miramar, a luxury tower block to be built in the marina in which flats start at £670,000 and rise to £2m. "Frankie Dettori and Vinnie Jones are buying into the development because they believe it represents the best that Dubai has to offer," Grant gushes.

Sun, sand, celebrities and hard sell: a typical morning in a country that likes to describe itself as 'the eighth wonder of the world'. But there is another Dubai, where life is anything but wonderful. It is a place Laurie McWhan knows all too well.

McWhan is standing in the shadow of the Grosvenor House hotel, on a patch of wasteland next to a low-rise apartment block. "I shouldn't be here getting covered with dirt; I should be sitting up there on my terrace, enjoying a glass of wine in the sun," he says, pointing to the seventh floor.

McWhan’s desert dream has turned to dust. The 44-year-old from Islington, north London, and his wife, Marie, bought an off-plan flat in the Waves development in Dubai Marina two and a half years ago for £127,000. The developer, Damac, said it would be ready last May. It is still not finished.

“They now say it will be ready this spring, which means I can move in next summer at the earliest,” says McWhan. “Three years after I made my investment, I don’t have my house, a year’s potential rent of £12,000 is down the drain, and all they have offered me is a few thousand pounds in compensation. It’s scandalous.”

McWhan wishes he had never invested in Dubai, and he is not alone. British residents at Jumeirah Islands, a development of 800 villas and lagoons in the desert, are so incensed at what they term “shoddy workmanship and poor management” that they have written an open letter of complaint to Dubai’s new ruler, Sheikh Mohammed bin Rashid al-Maktoum."

Check out the rest of this article

Why is no-one warning of the risks of investing in Dubai. Even without the current problems this must be one of the most problematic places to invest in property. There's just no 'reason' for the existance of developments on this scale in this patch of sand. Stay away - if you're already invested get out while you can.

Chris Bell

Anatole Kaletsky (Times Online) on why house prices can keep on rising

2006-01-20T05:56:00.000Z

Opinion - Anatole Kaletsky Times Online: "Why are house prices rising even as the economy falters? Good question
Anatole Kaletsky

THE AVERAGE British family earned £2,000 in the first week of this month, according to the front pages of several newspapers, simply by sitting in their house. This figure was admittedly based on one volatile and not altogether reliable house-price survey. But given that £2,000 is more than four times average weekly earnings and that several of other indicators have recently been suggesting a surprisingly frisky property market in the past few months, the story of instant enrichment for homeowners raised some perennial questions about the state of modern Britain.

First, are house prices on an up-trend? Secondly, how can house prices keep rising, even in an economy with faltering growth? Thirdly, what does it mean for society if people can earn more money by sitting in their houses and watching the price rise, than by going out to work?

The first two of these questions were answered, albeit tangentially, by the Governor of the Bank of England on the very day the property windfall story appeared in the press. Mervyn King pointed out that the prices of houses and other assets were being boosted above "normal" levels by "unusually" low interest rates - but asset prices could be sharply corrected if interest rates were to rise above the rock-bottom levels now seen not only in Britain, but around the world. "

Check out the full article. Kaletsky, an economist I have a lot of time for, explains the global factors that mean house prices may go on rising.

Chris Bell

Sarah Beeny: Property investment in 2006

2006-01-20T05:44:00.000Z

Property finance news - Sarah Beeny: Property investment in 2006
Tuesday, 17 Jan 2006

Sarah Beeny has an impressive CV: after setting up her own property development firm at 24 she went on to become a highly successful developer and then to host Channel 4's Property Ladder and Streets Ahead.

So she seemed the ideal person to ask whether it is still a good time to buy a property, as growth in house prices grinds to a halt. "I personally think any time is the right time to buy a home," Sarah told MyFinances. "You earn money so you can live somewhere you want to live. So I think that if it's a home, now is absolutely the right time.

It's a long term investment, the market may dip a little bit, move a little bit up, but you're going to be there for ten years so who cares, really." However, she added that now was certainly not the time to go into property investment in an attempt to make an easy profit.

In the last year and a half property prices have gone from recording annual returns of up to 20 per cent, to making a meagre three to five per cent. But while the market has slowed, the prospects of rapid falls are equally far away. "Unless interest rates change dramatically, or relatively dramatically, I don't see the market moving particularly in any direction," Sarah said. And this situation has made it difficult for investors. With house prices high, and rental yields at three to four per cent, property is no longer a simple avenue to making money.

Without rising house prices driving up capital gains, the returns are paltry. "You can get [similar returns] in the post office, and you don't have to fix the boiler, or deal with difficult tenants, or people who don't pay their rent, or fix the roof," Sarah noted. And this means the market is not as attractive as it once was, and despite the success she has experienced, property development is far from the easiest route to a profit.

"Would I start now? No, I don't think I would," Sarah said. But that is not to say there is no room to make money. She pointed out that property is still a relatively secure long-term investment: "So as long as you're not stretching yourself really thin, you're not desperately struggling to do it, it's not a bad place to put a big lump of money. "But most of the people investing at the moment are hocking themselves up to the eyeballs, and struggling to just about pay the interest on a buy-to-let, which just seems nuts to me, absolutely nuts."

However, there are still opportunities - and as any homeowner knows, property is far more than just a simple job. "In any market, in any country, there are developers who make money. So I say all of this doom and gloom, but there will always be people who make money, because people always want homes," Sarah explained. And how to make this money? "It's not so much area based, it's about the figures," she said. "If you've got a little two-up two-down with no structural problems that just needs a little bit of decoration, you're not going to get rich from it, probably. But if you have a site that's got big problems with pollution, or it's got subsidence or a complicated site that's in a difficult location, there will be more of a margin because it's bigger risk."

And for those not wanting to take on the risk? "You can make money from it if you treat it as a job," she said. "Let's say a decorator is paid £5,000 to decorate a big house, but if you decorate it yourself then it will only cost you £1,000 in paint and you make £4,000. Assuming you can sell it. "But you are earning the same amount of money as if you were going and painting someone else's house. That's the salary that a decorator would earn. You're not making the money from developing, as much as you're doing the work and not paying someone else to - so you could make that by setting up a building company."

Of course, there is another reason to be a property developer. "If you really love property, and buildings, lifestyles and how people live, that's a good reason for going into development. "Personally, I really love buildings of all sorts. So while I said I wouldn't enter the property business now, I would - because I do really love it. But I think that if it’s a get rich quick scheme then I'd go and do something else.

"I think a lot of people were under the impression that property development was a way of becoming a millionaire in six months, while doing nothing, and I don’t think that's the case. And I'm not sure it ever has been, really." Sarah Beeny can be seen on Channel 4's Property Ladder and Streets Ahead, she is also developing a new project, a dating site with a twist - www.mysinglefriend.com. "

Sarah talks a lot of sense.There's no easy money in property development for 'get rich quick' amateurs.

Chris Bell

Tips for buying abroad

2006-01-14T07:49:00.000Z

Independent Online Edition > Homes
By Rob Griffin Published: 14 January 2006

Will 2006 be the year you finally take the plunge and buy a property abroad? If the answer's yes then you certainly won't be alone. An estimated 80,000 Britons are expected to splash out on a second home over the coming months. And while most will be used for holidays and short breaks, an increasing number will be bought as long-term investments and rented out to generate income.

According to Chris Hall of Norwich-based Villas Abroad, demand from potential buyers is still strong - even though the stagnant UK market means they often can't fund the purchase out of equity in their homes. "There are an increasing number of cheap flights available now which has really helped the market, while a number of people are also looking at property to supplement their pension," he says. "There is also more interest in buying abroad after Christmas because that's the time families sit down and discuss their plans."

So where should you look to buy? Is it best to concentrate on tried and tested destinations such as France, or be more adventurous and opt for somewhere like Slovakia or even Serbia and Montenegro? According to Peter Esders, a partner at law firm John Howell & Co, there's no easy answer. Different people, he maintains, will have different ideas, budgets, priorities and tolerance to risk."

Click title for full article covering a number of European countries.

Take care to seriously study the financial implications of your intended purchase. If you are buying off-plan will you be able to sell... who to? If you are buying to let will there be enough tenants or holidaymakers to fill all the available accommodation? If you are buying for capital appreciation are you in early enough or have you missed the boat?

Chris Bell

Interest rates left on hold for fifth month

2006-01-13T07:51:00.000Z

Guardian Unlimited Money Special_reports
Ashley Seager Friday January 13, 2006 The Guardian

The Bank of England yesterday left interest rates at 4.5% for the fifth month running as manufacturing output expanded at its fastest pace in seven months.

Expectations are growing in the City, however, that the continued sluggishness of the economy could force the Bank to reduce borrowing costs again in the coming months.

By contrast, financial markets are expecting the European Central Bank, which also left interest rates on hold at 2.25% yesterday, to raise borrowing costs again, probably in March, as it seeks to contain inflation, which is running at 2.2% in the eurozone.

The Bank of England's monetary policy committee has made it clear that it is no hurry to move interest rates either way while it assesses the strength of consumer spending over the Christmas period and whether pay deals in the new year turn out to be inflationary.

But many in the City feel inflation is well under control and that consumer spending, which has driven the economy for years, has weakened, even if Christmas sales at retailers such as Marks & Spencer, Jessops and John Lewis have been better than expected.

With consumer confidence weak, debt levels high and new borrowing shrinking, few expect the signs of strength to persist. 'I am doubtful that a strong spending recovery will be sustained as other indicators of consumer activity have remained weak,' said Roger Bootle, head of the consultancy Capital Economics. 'I think there is a good chance that rates will be cut by 0.25% in February. And even if the committee holds back for longer, I still see interest rates falling to 4% by the end of the year."

Good news for landlords and the whole property market.

Chris Bell

Private landlords could find it harder to get mortgages

2006-01-13T07:31:00.000Z

Private landlords could find it harder to get mortgages
firstrung.com

Private landlords could find it harder to get mortgages
Private landlords could find it harder to get mortgages as a result of the government's new licensing regime, lenders have warned.
Compulsory licensing of houses in multiple occupation above a certain size will be introduced in April, along with a raft of new health and safety requirements applying to all private rented properties.
Landlords who fall foul of the new regime, introduced by the Housing Act 2004, could face fines of up to £20,000.
Lenders are poring over the details of the rules to decide if they need to tighten their requirements to cover the additional risks presented by landlords. If landlords are hit by large penalties, it could affect the ability of some to meet their mortgage repayments.
Andrew Moss, product development manager at Bradford & Bingley, the largest buy-to-let lender by balance outstanding, said all lenders offering products to private landlords would be examining the effect of the new regime.
'I would expect all lenders to be reviewing the buy-to-let plans and see what impact they have on how they lend,' he said.
'We will look at what the government has put on the table and see if there is any need for us to change our lending criteria.
There is an impact on the private rented sector through what the government is planning and as lenders we need to take that into account.'
Andrew Heywood, senior policy advisor at the Council of Mortgage Lenders, said lenders were concerned. The costs to the sector in carrying out the new regulatory requirements could outweigh the benefits in protecting tenants, he said. 'What we are saying is that the scale and scope of the licensing should reflect the real risks involved,' he said. 'We remain unconvinced about that.'
There were also concerns about the cost of an HMO license. A single license could cost as much as £1,000, he said.
Mike Stimpson, chair of the National Federation of Residential Landlords, said he was not surprised lenders were looking at requiring more cover for their mortgages.
'If I was granting mortgages I would look for a better balance between what I would loan and what any income on the property would be,' he said. 'There is going to be at least a 5 per cent increase in costs [on running homes].'
But he said commercial pressure on lenders to sell mortgages to landlords could help keep costs down.
The additional cost to landlords of meeting the regulatory requirements meant that tenants would also be facing higher rents, he warned.
'We don't care if the government hits the bad landlords hard but what they are doing is hitting all landlords.'

UK student housing boom

2006-01-13T07:24:00.000Z

Bristol-based property experts King Sturge say tuition fees will not halt the UK student housing boom. The firm says that universities are increasingly looking to replace their ageing residential accommodation...

12:56 - 12 January 2006
Bristol-based property experts King Sturge say tuition fees will not halt the UK student housing boom. The firm says that universities are increasingly looking to replace their ageing residential accommodation as student numbers continue to rise - despite the uncertainty caused by £3,000-a-year tuition fees introduced this year.

King Sturge believes the number of high-quality, modern, city centre, student residences will continue to grow over the coming years.

The company found that while the number of commerciallyoperated halls of residences had risen 50 per cent since its last research was published in January 2004, that figure still only represented 6.7 per cent of all full-time students in Higher Education (HE).

King Sturge's latest research indicates that more than 25,000 student beds have planning consent.

Bristol-based Unite Group is the largest national commercial provider of student beds, having completed more than 30,000 and with another 8,000 in the pipeline.

Philip Hillman is the national head of King Sturge's student accommodation group and is based in Bristol.

He said: 'Modern, quality-built and well-located residences should show sustained rental growth for the foreseeable future.

Older schemes in secondary locations may struggle to compete with the high-quality, city centre schemes now being developed."

Mr Hillman believes student numbers will continue to rise to meet the Government's target of getting 50 per cent of school leavers into HE.He said: "The UK population of 18-year-olds is predicted to rise to more than 800,000 in 2009 and then begin to decline gradually to around 684,000 in 2020.

"In addition, there has been a fall in the number of new student numbers from China, which has been offset by a 24 per cent increase in new students from the EU."These fluctuations in overseas student numbers, the possibility of an increasing proportion of 18-year-olds wanting to go to university and the unknown impact of tuition fees from 2006 onwards, make it difficult to predict longer term trends."

Unite chief executive Nicholas Porter said the £10 billion per year injected into the economy by overseas students promised a bright future for student accommodation. He said: "The rise in overseas students wanting safe, managed, accommodation ensured that we had a strong year in 2005."

The private landlord providing student accommodation needs to upgrade to compete with these new developments.

Chris Bell

French property prices rise

2006-01-13T07:16:00.000Z

thisfrenchlife.com: French property prices rise

PROPERTY prices across France rose by 10.3% in 2005 according to figures from the French National Association of Estate Agents (FNAIM).

This was actually down on 2004 when prices rose by 15%, but if you look further back there has been a 107% increase in prices since 1998.

The slow down has been blamed on the economic conditions in France but FNAIM expected things to be slightly worse and were surprised to see an increase in the number of properties passing through agents' books.

Apartment prices rose by 10.6% in 2005, down from the near 18% increase seen the year before, whilst the price of a house has risen by 9.9% against a 12.5% rise in 2004.
According to the Halifax UK property prices "

New-build flats have fallen in value by 5.6% in the past three months

2006-01-08T09:03:00.000Z

Guardian Unlimited Money Property For sale - at a price that's far too high: Lenders issue warning about valuations on new-build homes

Phillip Inman, Rupert Jones and Lucy Barnard
Saturday December 17, 2005 The Guardian

Are you being ripped off by a dubious valuation on a new-build apartment? Mortgage lenders said this week that they are becoming increasingly concerned at valuations on new-build flats which are inflated to the point where a Manchester home can have a Monaco price tag.

The Council of Mortgage Lenders (CML), which represents the bulk of banks and building societies, says the public is being duped by surveyors who rubber-stamp developers' advertised prices for apartments at far higher levels than the market can sustain.

New-build flats have mushroomed in the capital and city centres across the country, and now account for 50% of all homes being built in Britain. Many are sold 'off-plan' before they are built, with developers accustomed to getting the deposit cash in early. Punters make a commitment with only computer-generated images and plans submitted to local authorities as a guide."

Check out the complete article - click on the title.

How many thousands of, admittedly naive, investors are now looking at massive losses due to the 'off-plan' apartment scam. If an offer looks to good to be true (15% instant equity!) then it usually is. Buying off-plan made money during the boom but it started to be massively promoted by unscrupulous developers and investment clubs as the market turned cold. Easy money can sometimes be made in property investment - when you find it yourself. When people are 'giving' you easy money watch out.

Chris Bell

Estate agents admit to pushing up values

2006-01-08T08:29:00.000Z

FT.com / Your money / Your home - Estate agents admit to pushing up values
By Roger Blitz in LondonPublished Published: January 6 2006

"Estate agents, members of a profession not especially known for frankness and honesty, have confessed to a practice long suspected by homebuyers and sellers: overvaluing people’s homes.

The National Association of Estate Agents on Friday conceded that housebuilders’ accusations of “aspirational pricing” by estate agents, which they claimed had contributed to the stalling of the market last year, were mainly valid. “I would accept that,” said Peter Bolton King of the association. “Some estate agents persistently overpriced over the past year.”

There were examples, he said, of agents overvaluing properties solely to get instructions from homeowners. But there were also big numbers of homeowners who refused to lower valuations in spite of months of inactivity.

This week Redrow said aspirational pricing by estate agents was contributing to what Neil Fitzsimmons, its chief executive, said was the worst market for new and secondhand homes for 30 years. Property transactions in the year to November were 13 per cent lower than the previous 12 months, according to official statistics.

The chief executives of Persimmon and Wimpey on Friday said aspirational pricing had made market conditions more difficult. John White of Persimmon said that adding 20 per cent to a property’s value might be achievable in a buoyant market but in tougher times it likely to leave property prices “marooned”. "

A lot of houses are hanging around unsold because of overpricing - those that want to sell just have to be realistic about what the market will bear. According to Hometrack the average price acheived by vendors is just 94.5% of the asking price.

Chris Bell

Four Investment Hotspots For 2006

2006-01-07T01:08:00.000Z

Find a Property - 2006: Investment Hotspots

The market will be slow in 2006. So where will investors turn to find properties that offer more bang for their buck?...
According to prestige estate agency Knight Frank, there are four market sectors that will be a good bet for investors in 2006.

These are: Midland and Northern second-tier towns and cities; south coast towns; prime property in central London; and student accommodation.

1. Room For Growth: The North and the Midlands
Knight Frank reckon that many locations in city centres will under-perform the market in 2006 as strong supply, especially of apartments, more than satisfies short-term demand.

However, they also believe that there are locations where market immaturity or major regeneration projects should provide rich pickings. They point to the following towns and cities in the North and the Midlands as places where your property pound will stretch further: "

Buy-to-let sharks are biting investors overseas

2006-01-07T00:48:00.000Z

Independent Online Edition > Mortgages
By David Prosser, Personal Finance Editor
Published: 07 January 2006

Unscrupulous property advisers are targeting UK investors with overseas buy-to-let schemes that could ultimately prove disastrous, a leading estate agent is warning.

Ludlow Thompson says schemes launched in Turkey, Bulgaria and Dubai have been heavily advertised in the UK, offering guaranteed rents for one or two years. While the guaranteed rents look attractive, they often bear no relation to what investors could charge tenants. Once the guaranteed period comes to an end, investors may not be able to get anywhere near the guaranteed rent, or even be sure they will be able to find tenants.

In one scheme identified by Ludlow Thompson, a Turkish investment company is offering a 40 per cent return over two years on a newly built development. In many cases, developers are leaving guaranteed rental properties unlet - or letting them out at much lower returns. Stephen Ludlow, the agent's director, said: 'If there is no rental demand for the property, the investor could see their yield fall off a cliff once the guarantee runs out.'

The warning follows growing concern about a bubble in the buy-to-let market. Pension advisers are worried that many investors had put cash into their plans in to invest in buy-to-let following changes to the law last April. These changes were scrapped in December.

Although guaranteed return schemes look attractive, investors can end up worse off over the longer term, if they get stuck with low-yielding property that proves difficult to sell.
'A lot of investors have bought new-build flats in the UK on guaranteed rents and been disappointed with rental performance once the guarantee has expired,' Ludlow warned".

What happens after the guarantee ends should have been the first question on the minds of property investors when looking at these schemes. Unfortunately it seems too many have been too trusting in the promoters of these marketing schemes. Whenever I see 'rent guarantee' it's an immediate warning signal.

Chris Bell

New-build flats not the ideal property investment

2005-11-26T04:44:00.000Z

Property funds lure pension investors - Money - Times OnlineThe Sunday Times September 25, 2005

Firms are touting plans that gamble your retirement pot on the housing market, writes David Budworth

COMPANIES have been cashing in on the growing appetite to put buy-to-let into pensions with the launch of several residential property funds in recent weeks. From April 6 next year - A-Day - investors can purchase buy-to-lets and holiday homes with their personal pensions for the first time. "

But it is a later part of the article that caught my interest...

"However, investors should beware the hard sell by developers. Stephen Ludlow of Ludlow Thompson, an estate agent, said: ?While completed properties in new developments may initially fetch 10% to 15% more than older properties, they can lose their premium within months, rather like a new car as it leaves the forecourt.?

The average price of a new-build flat or maisonette slipped 1.2% in 2004 because of a glut of supply, while all other types of property rose in value by an average of nearly 12%, according to Land Registry figures."

Chris Bell

Latest French hotspot for investment property

2005-11-23T00:29:00.000Z

Assetz News - French Limousin "the new Provence"

22nd November 2005

"The still largely undiscovered French province of Limousin is experiencing an influx of British property buyers and is set to become 'the new Provence', national newspaper Le Monde has predicted.

And despite the invasion of Brits and inevitable interest in the property market, Limousin remains France's cheapest province. Reports in the Sunday Times found that buyers could snap up a beautiful three-bedroom house with a garden for just �80,000 - a fraction of the price of other regions. A farmhouse with some land could also be yours for a mere �135,000 in the southern region.

But all this could be set to change as new access to the region is predicted to bring in thousands more property hunters for the same opportunities. Investors are being advised to snap up the best pick quickly. Already, there are 14 flights a week from Britain to the region, and Ryanair predicts that by 2006, up to 300,000 Brits will be using the route. Furthermore, the airline estimates that up to one in ten of them will be looking to buy property."

Worth checking out if France is on your target list of places where you would like to invest in property.

Chris Bell

Can property investors trust letting agents?

2005-11-23T00:00:00.000Z

Find a Property - Rental Returns Overestimated
22 Nov 2005

Recent research from Landlord Mortgages accuses some lettings agents of exaggerating rental returns...

The specialist buy-to-let investor used researchers to pose firstly as a prospective tenant and then as a potential property investor for a two bedroom flat in developments across the UK. Would the rental quotes they were given be the same. Apparently not, says Landlord Mortgages. It appears that some agents were quite happy to up their quote when they thought they were dealing with a potential investor.

The worst offenders - for the second consecutive year - were in London and Birmingham where the rents quoted to investors were inflated by 25 per cent and 13 per cent respectively."

The message is not to rely on what letting agents tell you as a property investor - also try posing as a potential tenant. And of course check what is being asked for similar advertised rental properties in the area.

Chris Bell

The SIPP Myth Debunked - House Price Crash forum

2005-11-21T09:57:00.000Z

The SIPP Myth Debunked - get full article
Bubble Pricker Oct 1 2005, 09:19 PM Post #1

"People keep posting and asking about SIPPs. We have chewed this topic over months ago at HPC, but as always, Joe Public only wakes up to the story belatedly and then rushes to jump on a bandwagon.

So very briefly, to debunk SIPPs once and for all, a very brief (and thus not accurate in all details summary):

1. A SIPP is a self-invested personal pension. These have existed for a long time. They are nothing other than personal pensions, which have also been around for a long time, in which the beneficiary can make his/her own investment decisions, rather than putting the money in (often poorly performing and high charging) unit trusts. There is nothing new about SIPPs. The only thing that is new from April 2006, is that most restrictions about the classes of assets in which SIPPs can invest will be lifted. Right now, SIPPs can only invest in shares, bonds and commercial property. From April 2006, they will be allowed to invest in just about anything, including residential property.

2. A SIPP fund, like any other pension fund, is a fund separate from the personal assets of a person. The SIPP funds are legally owned by a trustee for the benefit of the person whose pension the SIPP will eventually provide. The SIPP fund is therefore not legally owned by the beneficiary; this is very important, as we will see in a moment."

Check out the full article for a really clear explanation of SIPP's, why they are being hyped, and what the reality will be for house prices and the housing market.

Chris Bell

Find out all about UK property auctions

2005-11-20T09:18:00.000Z

I just came across this web site - Essential Information Group. It claims to be 'The leading name in UK property auction information.'

http://www.eigroup.co.uk/

It shows properties up for auction by auction houses throughout the UK. If you are seriously interested in buying at auction this would be a very convenient site to use - although to get full details of the property for auction and the auction house concerned you have to join the subscription service.

Chris Bell

Home Information Packs 'to cause spike in property supply' - opportunity for investors

2005-11-20T09:02:00.000Z

Assetz News - Packs 'to cause spike in property supply'
18th November 2005

The government's decision to bring forward the release of its heralded Home Information Packs could cause a huge disruption in the market during the industry's busiest period next year, according to the Council of Mortgage Lenders (CML).

Lenders had advised that the introduction of the packs be delayed until later next year. But the government yesterday announced that they will become mandatory for the housing market from June 1st, sparking fears that the market would be swamped with properties for sale before the change takes place, which could force house prices down further."

In an earlier post I commented how HIP's could provide an opportunity for property investors to negotiate good deals. But the pre-introduction period, if it does lead to additional houses being put on the market early to avoid the charges, could be another opportunity for canny buyers.

Chris Bell

The Home Information Pack draft regulations - Office of the Deputy Prime Minister (ODPM)

2005-11-13T08:04:00.000Z

The Home Information Pack draft regulations - Office of the Deputy Prime Minister (ODPM) - now published

From 2007 the law will require anyone selling their home to put together a Home Information Pack for potential home buyers. The Pack will bring together all of the key information needed at the start of the home buying and selling process.

"THE HOME INFORMATION PACK DRAFT REGULATIONS

Introduction

These draft regulations are concerned with:
the meaning of Home Information Packs (HIP)
the contents of the Packs
forms for providing HIP information
assembly and authenticity of HIPs
exceptions to the duty to have a HIP
enforcement of HIP duties

The regulations are being published in draft to provide an opportunity for comments on the drafting, accuracy and practical application of the provisions set out in the regulations. In the case of the draft forms, we are seeking comments on the content. The design of the forms, including their translation into Welsh, will be undertaken following the consultation. This is part of a process aimed at ensuring that the regulations work effectively when home information packs are introduced. The consultation is not seeking comments on wider issues surrounding the contents and applications of HIPs. These were the subject of earlier consultations - see the background note below."

If you would like to see the regulations that will soon cover house buying and house selling, and make your own comments, this is the place to find them.

Chris Bell

How to become a landlord (1)

2005-11-13T07:40:00.000Z

Simple steps to becoming a landlord
"I have bought a two-bedroom, newly built city-centre flat for 'buy to let' and optimistically propose to find my own tenant. Could you recommend a guide to the process and its pitfalls, with particular interest in obtaining access to a credit check facility on prospective tenants?

Lorna Vestey writes: I advise any novice landlord to use an Association of Residential Letting Agents agent at least for the first let. However, the process is preparation, advertising, showing, references, insurance, tenancy agreement, deposit/rent, inventory, utilities/council tax, management.

First, buy The Which? Guide to Renting and Letting (Which? Books £11.99) and join the National Landlords Association (www.landlords.org.uk; 0870 241 0471) which has an informative site and an advice line. When you have found a prospective tenant, take references (employer and previous landlord, if possible) and follow them up. Credit checks and subsequent insurance on non-payment of rent can be provided by specialists Paragon (www.paragon-plus.co.uk; 0800 0925 901).

Make sure you use a proper Shorthold Tenancy Agreement (in the Complete Residential Lettings Kit Lawpack, £14.99, from good stationers). Prepare an inventory and have this signed, too. Use an inventory clerk so any later disagreements can be dealt with by an independent party.

The pitfalls are mainly dud tenants and allowing a tenancy to become established without the proper paperwork being in place. Do not let anyone have the keys, or move in early, and ensure you meet the requirements to be able legally to obtain repossession of the flat at the end of the tenancy.

Lorna Vestey is a former partner of a blue-chip London estate agency."

This struck me as a really effective summary of what you need to do to become a landlord... other than how to select your market and buy a suitable house, of course.

Chris Bell

Is older investment property in Bulgaria best?

2005-11-12T05:26:00.000Z

Independent Online Edition - After buying an old house near the Black Sea, Robert Nurden has tips on how to handle the process:
Published: 02 November 2005

There were bureaucratic snarl-ups, the sale was delayed, there were disagreements between vendor and agent and misunderstandings between agent and buyer (me), and solicitor and buyer. Essential personnel in the local authority were away when they were needed, and when the time came for exchange of contracts, a vital document was missing. Eventually the sale went through - two months late.

Nothing new there, then. Except that this was Bulgaria, where I had summoned up the courage to buy a charming, stone, newly renovated two-bedroom bungalow with a quarter acre of land in the picturesque hill-top village of Avren, 20 minutes from Varna and the Black Sea. Its huge flat roof had an ancient bread oven in one corner and commanded pan-oramic views of the Kamchiya valley. Price: £37,000. It was a nerve-racking business, but when isn't it?

I had originally gone to Bulgaria to inspect a new-build apartment block in Sofia, where I had put down a deposit on a two-bedroom flat - price: £35,000. Rather than use it, I was going to rent it out and treat it solely as an investment.

But while I was there, I saw ads for country houses selling for as little as £5,000. I abandoned the apartment idea and concentrated on old houses in the Varna area. On the internet I found agents Living Bulgaria, whose English managing director, Martin Hunt, agreed to show me round some rural properties.

Being near the Black Sea resorts, they were pricier than inland. Mine was the first one I saw. It was in good condition after extensive renovation, and the owner was English.

It was only after we had driven an hour inland that the £5,000 price tag became a reality. There were any number of properties with up to an acre of land on the market for under £15,000. Most were empty and needed considerable work but they were certainly not shells. Every owner, as far as I could see, was desperate to sell.

For the most part the houses belonged to elderly couples, who were waiting to join relatives in the city. They needed the cash: one went down on bended knee hoping I would buy. He owned a smallholding of an acre, and a 200-year-old farmhouse with five bedrooms, balconies, countless outbuildings stuffed with yokes and carts, two cellars, wine press, olive press, and a well. A couple from Colchester were thinking of sinking their life savings into it and setting up a guesthouse."

If you are thinking about buying an investment property in Bulgaria consider buying a house like the writer of this article. In the long term it I think it will turn out to be a far better investment than buying an off plan apartment. Apartment blocks can be thrown up by property developers at will and there will eventually be a glut. Houses with land in great locations (not in the middle of nowhere!) are always going to have a uniqueness and rarity which gives them value.

Chris Bell

Spain wakes up to property threats

2005-11-11T05:46:00.000Z

"Despite numerous surveys and reports suggesting that eastern Europe is the hot destination for the buy to let market, many Spanish property developers have not been listening - until now.

The threat from countries such as Bulgaria and the Czech Republic had been dismissed for a long time by property developers in Spain, especially while the property price boom continued and prices remained high. But as property price inflation has cooled during recent months, Spanish daily El Mundo has revealed that property professionals are now getting a little worried by the new competition.

While the buy to let market has seen a major increase in countries in eastern Europe, the traditional haunts of British investors have felt something of a squeeze, which is now beginning to bite in Spain. However, the new competition could prove to be of value to property investors, as Spanish developers realise that they no longer have the monopoly on foreign investment and will have to work hard to ensure prices remain low.

Otherwise, there is a threat that people will start to look elsewhere, in a move that would be very damaging for the Spanish market and economy as a whole. Therefore the Spanish government will also be looking to reduce the cost of new buildings in the country as a way to deliver fresh impetus to the market and attract more investors back to the region."

Be extra careful if you are considering investing in Spanish property. If capital appreciation is what your looking for think about investing in the hotspots e.g. Bulgarian property or other Eastern European property.

Chris Bell

Save 10% on house prices

2005-11-11T04:51:00.000Z

"Savvy buyers can save as much as ten per cent on the asking price of a house, according to new figures.

Home buying service The County Homesearch Company reveals that its agents, acting on behalf of buyers, have been receiving this level of discount on properties across the country.

'There has been a significant change in pattern from the start of the year. House prices across the country are showing near zero growth and our home searchers are generally being able to negotiate discounts from the asking price,' said County Homesearch managing director Jonathan Haward.

But with the stagnant market and discounts available, buyers are becoming overly confident.

Buyers have become pickier when it comes to the homes available to them, and while the market has shifted in their favour, complacency means over-ambitious buyers are still losing out when it comes to securing their dream home.

'There is still a shortage of good homes for sale as sellers have sat tight and as a result our clients have become more choosy and think they have the luxury of more time to make a decision,' Mr Haward explained."

For the property investor a 10% discount should be a starting point. If you look at enough deals on investment properties and make enough low offers you will find a few will be accepted if you only deal with house owners who are desperate to sell.

How to find desperate sellers

Chris Bell

Europeans boosting UK buy-to-let

2005-11-10T01:24:00.000Z

9th November 2005

"The growing number of immigrants arriving in the UK from the newly-accepted EU states is having a major impact on the country's buy-to-let market, it has been claimed.

According to Richard Everitt of estate agents Winkworth, the influx of people from eastern Europe and even Russia is helping to drive the UK's buy-to-let market despite the fact hat the overall housing sector has been in decline over the past 12 months. Speaking to the Independent, Mr Everitt also highlighted that many of the new arrivals are not – as many feared prior to the accession of the new states – unqualified people hoping to live off the UK's welfare state. Instead, he reveals that many are talented and qualified professionals intent on furthering their careers.

As such, the properties that are being let to many of the new arrivals are at the higher end of the buy to let market, providing a much needed boost for property investors in the UK.

One example of the people taking advantage of their country's accession to the EU can be seen from the increase in the number of Poles arriving in the UK. Poland became part of the EU on May 1st 2004 and since then there has been a steady flow of Polish people arriving in the UK to live and work. They have helped to ensure that the buy to let sector has continued to remain buoyant as the housing market continues to slow."

Judging from personal experience, I am sure this is true.

Chris Bell

Home Information Packs: a problem and an opportunity

2005-11-09T07:14:00.000Z

(Filed: 09/11/2005)

"Seller's packs unravelled

Government plans for a seller's pack could damage an already fragile market, TV presenter Kirstie Allsopp tells Caroline McGhie

If she had her trademark stiletto boots to hand, she might use them right now on the Deputy Prime Minster John Prescott. Not the sort of thing we expect from Kirstie Allsopp, presenter of almost all the property programmes you can think of. Her work hut, where she wrote her book How To Buy A House, is as sweet as a Wendy house at the bottom of the garden. Her little flat in North Kensington is full of pretty things, from china-blue floral curtains to silver-framed photographs of a blessed childhood. But today she is genuinely irate and it rather suits her.

Her dark eyebrows are arched, making her look more Monica Bellucci than Mary Poppins. Yet she still has a Bedales ring to her voice, befitting the eldest daughter of Lord Hindlip, the former chairman of Christie's. She is about to flit by helicopter to a mansion in Devon for the weekend with her property developer boyfriend Ben Andersen, who sells Notting Hill to the stars. So what has curdled the cream?

The Government plans to introduce Home Information Packs (HIPs) in 2007, in order to speed up the housebuying process in England and Wales. Anyone selling a home will have to produce an HIP, which includes paying for your own survey (or "home condition report"). A "dry-run" will start next summer. Her argument against them begins with some Kirstie gems."

Check out the original Telegraph article. While everyone is speculating about the effect SIPP's will have on the market very little has been said about the possibly much bigger effect of HIP's: that is, a depressing effect on the housing market because of the costs involved for the seller. But they could also provide an opportunity for the smart property investor who seeks out buying opportunities direct from the potential house sellers.

Chris Bell

King of real estate 'getting out'

2005-11-08T08:11:00.000Z

"The world's best real estate investor has made billions in the U.S. market. Now he's cashing out and buying overseas. Should you cash out too?
By Shawn Tully

Tom Barrack is driving a dusty Chevy Suburban around his 1,200-acre mountain ranch near Santa Barbara, Calif. Nestled between the Ronald Reagan estate and Michael Jackson's Neverland, Barrack's spread is a medley of vineyards, pastures, and paddocks. Barrack cruises past the lovingly restored manor house, a rambling adobe aerie framed by allees of cabernet franc, then weaves through a cluster of stables sheltering 60 horses that munch homegrown wild oats. Even in this magical setting, real estate is never far from his thoughts. He stops the Suburban at his favorite spot, a vast polo field planted with delicate, lime-hued Bermuda grass that's easy on the horses' hooves.

Then Barrack launches into a parable. 'I feel totally safe playing polo on a field full of pros,' says the bronzed 58-year-old. 'But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back.' It's the same with the U.S. real estate market right now: 'There's too much money chasing too few good deals, with too much debt and too few brains.' The amateurs are going to get trampled, he explains, taking seasoned horsemen, who should get off the turf, down with them.

Says Barrack: 'That's why I'm getting out.' "

A great article by someone who should know what he's talking about. Read it all.

Chris Bell

How is your house sale going??

2005-11-08T06:50:00.000Z

"good grief !!

I thought the penny would have dropped by now that selling houses in UK and hoping to start out in Oz flush with cash was a thing of the long dead past.

Has one not heard that house prices in Australia are overpriced as they are in UK, that major house price falls across the east coast of Oz have already begun.

That the Australian dollar is far too strong to be sending large quantities of Sterling over right now.

That mortgage rates in Oz are almost 8% and climbing

I will not go into the subject of work practices - just do not expect open arms, bags of money and promotion for washing up on Ozzie shores from windswept UK.

On my part - I have done the full circle, sold up in UK, Bought in Oz, sold up in Oz and now back in UK

FWIW - I would stop listening to smarmy estate agents and the bull on TV about house prices "never falling", and that the "lift" in house prices are just round the next corner. I would start listening to what the buyer is willing to pay and accept the fact house prices have fallen month on month across country.

We are now in a house price falling cycle, it is going to get nasty as more and more people are stung with job losses in UK. Credit debt increases, divorce and family breakup occurs, business bankruptcy and the death of the newbie BTL landlord. All these factors are going to cause prices to fall rapidly.

At the bottom end of the property ladder - cheap state housing projects and housing association "deals" will remove what is left of the FTB group from the housing market - stagnation followed by house prices plummeting are the obvious next step.

Selling at the price buyers are willing to pay in hard cash / mortgage in line with today's buyers in your area is the only way to go, swallow the loss if you have to and start out again in Oz with renting.

Put the money in the bank and wait out house price falls in Oz and buy up when the price is right.

As for those who are utterly mad enough to withdraw equity on a house and then watch the house prices falling month on month will really get to understand the meaning of the word negative equity D-E-B-T.

I can just hear it now .... "teacher" what do you call those people who go into debt re-mortgaging and then going to a new country and getting into more D-E-B-T at this stage in the property cycle when house prices have stagnated and ready to fall ?.

BTW - recovering debt via Australia is easier than you think

I sold off 2 houses in UK in '98, and bought houses and flats in Oz over the last 7 years "WHEN PRICES WERE A THIRD OF WHAT THEY ARE NOW, I sold the lot last year and returned to UK.

Take it from me, it is the guy with cash in the bank who is king in UK as well as in Oz when it comes to house buying - and will be for the next few years.

I am starting to cherry pick buying quality property again in UK for letting purposes, I am offering 20 - 30% below the offer price and I am getting results.

I have never regretted the move and the selling/buying property. Thank god I did it while property prices were in a sharp rising market in Oz with capital used for the purchases from sterling at a time when the Ozzie dollar was crap.

Those times are well and truly over.

The dread of falling house prices and related debt misery will seem like an endemic plague to homeowners with large mortgage DEBT and little capital and plummeting house prices - save yourself the hassle of negative equity and try thinking outside the box.

It takes balls migrating, and it takes cold hard reasoning to ensure financial freedom."

A great post I saw on a forum.
Chris Bell

Buying below market value - is it a myth?

2005-11-06T06:56:00.000Z

6/11/05 http://firstrung.co.uk

"The housing market is well known for its snappy abbreviations. The latest phenonema described in three letters is the apparent successful purchasing of property at BMV, (below market value). The property is then either rented out or flipped, a term used to describe re-selling the property quickly for a modest profit.

Many purchasers obtain property at reductions by preying on distressed sellers. In fact some purchasers have actively begun to market their desire to buy. Small advertisments in the property sections of local newspapers are a popular method. Usually highlighting that the purchaser is a cash buyer and can help stop the threat of repossession. Typically the buyer will advertise that they are willing to pay approx.10% below the current market value, a value that they set in negotiation with the vendor.

There are inherent problems with this method of purchase and the resulting position the re-seller may find themselves in. Firstly in establishing a price there are few benchmarks for comparison. There is no trade data available, other than the various reports available and searching price databases for similar properties, to establish what a below market price for the property actually is. Even the most experienced surveyors are struggling to agree valuations in the current climate.

If the adage of the house is only worth what someone is prepared to pay for it is reliable, then this would surely suggest that the BMV figure is irrelevant. The BMV price is in fact the true value. An argument could be put forward that the purchaser is simply helping to chase values down."

Now I don't know where the 10% figure comes from since anyone seriously involved in property development would be looking for a much bigger reduction. In fact, the average buying price in today's market is only 93% of the asking price - already a 7% reduction. The real point is that you have to follow up a lot of properties (20 to 100) that are being put on the market by distressed sellers to enable you to find a real bargain that will make you money when you renovate and sell.

To find out how a professional property developer finds bargain properties click here.

Chris Bell

Property abroad Gold Rush?

2005-11-06T05:50:00.000Z

Brits with property abroad set to double, reveals new research from Barclays.
The number of Brits who own property abroad is set to double to 4.4 million, according to new research by Barclays. Five percent of those surveyed already own a home abroad (the equivalent of 2.2 million people in the UK) and a further five percent said that they are definitely going to buy a property overseas in the future. In addition, a staggering 37 percent of respondents said that they were considering a purchase abroad.

However, before the dream can become a reality, there are concerns that need to be overcome:
58 percent of those who are definitely or considering buying are concerned about getting caught out by local legal or tax issues.
17 percent were worried about keeping the property secure while it is empty.
A further 14 percent were concerned about being able to understand the local language well enough.
Only eight percent were worried about being taken for a ride and paying too much for a property.

And if a red-tape, trouble-free purchase could be guaranteed, the following countries would be the destinations of choice - with a couple of surprise destinations outside the European property hotspots making the top five.
Top countries for Brits planning to buy abroad:
1 Spain (inc Balearics and Canary Islands) 30%
2 USA 15%
3 France 14%
4 Italy 10%
5 South Africa 6%
6 Dubai 5%
7 Portugal 5%
8 Bulgaria 3%
9 Croatia 2%
10 Morocco 1%
11 Don't know 9%

Suzanne Clay, Head of European Business Development at Barclays comments: 'The trend towards owning property abroad shows no signs of abating..."

In a gold rush there are those who strike it lucky and there are those that lose. A cautionary note about Spain... I recently spoke to someone who had purchased two apartments off-plan but when they were complete she was unable to find buyers - and she could not find any tenants either. She has now had to re-mortgage her UK home to raise the cash to pay the mortgages on her Spanish 'investment'. There is a huge amount of new building flooding the Spanish market.

Chris Bell

Smart way to gain tax relief on property investment top-up loans

2005-10-22T06:07:00.000+01:00

Scotsman.com Business
RONNIE LUDWIG

"THANKS to a little-known change in the tax laws, property investors can obtain income tax relief of up to 40 per cent on top-up mortgages.

Under rules introduced in 1998 - but seldom taken advantage of - the method of calculating profits from property letting for tax purposes is done on the same basis as the profits of a trade. It is a subtle change. But, it is a long-established principle that, where the value of balance sheet assets in a business has been replaced by bank borrowing, the interest on the borrowing will qualify for relief.

Applying this to buy-to-let property opens the door for thousands of investors to obtain income tax relief on top-up mortgages - even if the funds borrowed are not used in their property letting business: they could be used to pay off your mortgage on your principal home, for school fees or even a new car purchase.

Take the example of an investment property which originally cost £100,000, upon which a £40,000 mortgage is secured. If you want to double the mortgage to £80,000 - but will spend the additional £40,000 in a way that has nothing to do with the property - you can obtain full tax relief against your rental income for the whole amount of the interest paid on the increased mortgage.

If you put the extra money borrowed into your pension fund, top-rate income tax relief is due on both the interest paid and sum borrowed once invested into your pension. But, to obtain tax relief for the full amount of interest paid, the total borrowings must not be more than the cost of the property.

There is, however, a way around this. Consider the case of someone who bought an investment property several years ago for £100,000, with a mortgage of £40,000, but the property value has surged to £200,000. They want to increase the mortgage by £100,000 to £140,000, use the extra cash to invest in their pension, clear other debt and go on a world cruise.

This is possible if the investor transfers the property to their spouse's name, thereby starting a new property investment business. From that point, total borrowing is not restricted to the original purchase price and can be based on the full current market value.

There would be no capital gains tax on the transaction, because it is an inter-spouse gift. Nor would there be any inheritance tax payable, again due to the inter-spouse exemption."

• Ronnie Ludwig is a partner at chartered accountant Saffery Champness in Edinburgh

Now this is a move I was not aware of... but it reinforces my belief that you should take specialist advice when it comes to tax matters. The local accountant who does your income tax returns will just not be aware of the many opportunities for reducing tax that exist.

Chris Bell

House prices are 'slowly dropping'

2005-10-22T05:37:00.000+01:00

icCoventry Oct 20 2005
By Stephen Hallmark

House sales in Coventry and Warwickshire increased for the third consecutive month in September - but prices continue to fall. The housing market survey published this week by the Royal Institution of Chartered Surveyors (RICS) has shown that prices are slowly dropping.

Chartered surveyors in the region remain cautious about the outlook for prices over the next three months. Just over half - some 52 per cent - of chartered surveyors in the area reported a fall in prices while 41 per cent said they had remained static. Only six per cent reported an increase.

Richard Franklin, a West Midlands spokesman for RICS, said: 'As we enter autumn, we are seeing the beginning of realistic house prices across Warwickshire and the West Midlands.
'The days of rocketing prices have disappeared for the time being and sellers need to pitch the price at the right level in order to sell their property.

'While sales activity has increased, it has not picked up during September as much as we have witnessed in previous years, especially in the new-build market which normally experiences its biggest sales at this time.'

Mr Franklin said the region had seen a gradual rise in demand, which had been helped by August's interest rate cut. He added: 'But buyers continue to maintain their upper hand in the market as levels of unsold property remain high, giving them more room to negotiate on prices.' "

Amidst the articles talking up the market this strikes a more realistic note.

Chris Bell

Indian summer for property market

2005-10-21T07:31:00.000+01:00

"The UK property market is enjoying something of an Indian summer, with positive signs building as the months go by.

House prices and mortgage searches reached new highs on Moneyextra's mortgage comparison tool in September, while the National Association of Estate Agents (NAEA) reports a return of first-time buyers to the market.

The NAEA's September figures also show an increase in the number of sales agreed, complimenting the latest Bank of England data showing 107,000 mortgages were approved in August - the highest figure since June 2004.

Today it was also revealed that last month £28.1 billion was leant in mortgages, according to the Council of Mortgage Lenders (CML), 4.3 per cent higher than in August and 11 per cent more than in the same month last year.

But while buyers return and mortgage lending increases, analysts remain sceptical that property values are set to climb consistently again.

Rather, this late increase in market activity is generally attributed to the Bank of England's decision to cut interest rates in August and sellers becoming more realistic about how much their properties are worth.

The NAEA's figures show a fall in the average difference between asking prices and sales prices for the first time since July.

But with wages growing faster than house prices, and the public's confidence returning, the market looks set to be steady for some time to come.

'Compared with the same time last year, the prospects are looking healthy. We expect the market to be lively come January,' said the NAEA's Christopher Hall. "

The news about the property market is very mixed at the moment... which is just what you would expect after the strong market of the last few years. We are in a period of consolidation which could last for many months before the market makes a decisive move either up or down - keep up with the economic and property market news to get an idea which way the move will be. Take predictions on house price movement with a pinch of salt and look for evidence.

Chris Bell

The myth that SIPPs will give a big boost to property prices

2005-10-17T06:35:00.000+01:00

17th Oct 2005, a Monday

The introduction of SIPPs in April will have a limited impact on either savings or house prices, a new report finds. Lee Grandin, MD of Landlord Mortgages, the UK's largest buy-to-let broker, explained: 'The advantages of investing in residential property through a SIPP will only be of interest to a relatively small proportion of the population - it is simply too costly for most consumers. Therefore I don't believe that they will have the monumental effect on the residential property market that some people are predicting.'

'You would need a pension fund of at least £80,000 and to borrow an additional £40,000 to purchase the average UK buy-to-let property. From anecdotal evidence, I really don't think that most UK consumers have this sort of money either in their pension pot or their back pocket.

'And even if they could access to this sort of capital, they can only contribute 100% of their salary or up to £215,000 (whichever is the lesser amount) into their SIPP each year. So unless they already have an existing pension fund of sufficient size, they are going to need to save for several years before you can think about investing in residential property.

'From the perspective of an existing landlord or even a holiday home owner, Sipps are also not that exciting. In order to include a property you already own into a SIPP, you would need to sell it to the schemes trustees and potentially incur a huge capital gains tax bills.'

He concluded: 'Anything, that encourages people to save for their retirement should be applauded but I really don't think that the new regulations for SIPPs will have a revolutionary effect on the residential property market or solve the pensions crisis."

There has been a lot written about the big boost to property prices that SIPP's will produce when they are introduced. I tend to agree with the view that the effect will be very limited so those looking forward to a big increase in the value of their investment property will be disappointed.

Chris Bell

13 percent drop in Manhattan real estate prices

2005-10-09T07:28:00.000+01:00

October 5, 2005

The Big One isn't the long-predicted California earthquake or even a hurricane named Katrina. The genuine big one will arrive with a deafening pop, the sound of the real estate bubble bursting. In the past few years there have been plenty of false sightings, but now comes something truly ominous: a 13 percent drop in Manhattan real estate prices in a mere three-month period ending October 1. As if that were not bad enough, more unsettling news of the same nature is reported in Boston, Washington and San Francisco, the places that have led the national upward zoom in real estate prices for the past several years.

The rise in real estate prices has resulted in a huge jump in unearned income for homeowners. By taking home equity loans and cashing out--that is, refinancing the mortgage--every time their houses went up in value, the millions made billions. According to Federal Reserve chairman Alan Greenspan, they made $600 billion last year on the hypothetical appreciation of their properties. That adds up to about 7 percent of their spendable, after-taxes income. That's twice as much money put into people's hands as Bush's tax cuts.

That money went into retail spending at the mall, on vacations, new cars and other forms of happy doodadderie. If house prices stop going up, the 7 percent vanishes and there must be a huge drop in retail sales, which are the single largest force keeping the prosperity balloon in the air."

Makes you wonder what the real estate market will be doing in a couple of years time...

Chris Bell

Apartment prices plunge in Auckland, New Zealand

2005-10-09T07:10:00.000+01:00

Sep 27, 2005

The stage is set for Auckland's central city apartments to fall in value by up to 40% over the next few years with prices already falling amid an oversupply, according to a property analyst. Kieran Trass, who's also a director of investment mortgage brokers Hybrid Group says buying into Auckland's CBD apartment market now is equivalent to catching a falling knife.

Auckland's CBD apartment values are already falling because of factors including a severe oversupply, dwindling international student numbers, lack of demand from tenants and subsequently plummeting returns, Trass says. A flood of supply of apartments available to buy or rent is resulting in a 'distressed' market, he says. 'Now may look like a great time to buy into this distressed market as apartments can be bought at prices much lower than their inflated asking prices, but caution in any distressed market is wise.'

The number of apartments in the CBD has nearly doubled from that of just two years ago to over 12,000, with another 4,000 under construction and another 3,000 planned in the next few years, Trass says. He says the number of apartments on the market for sale could increase within the next 18 months to more than 5,000, or 25% of Auckland's CBD apartments.

The current oversupply is forcing down rents and sale prices, Trass says. For example, a studio apartment in central Auckland whose owners were originally getting $350 a week just over a year ago had to reduce the rent to $200 to secure a tenant for just three months. Studios of around 30 square metres which were originally being sold for around $150,000 are now only worth about $100,000, if you are lucky, he says."

Buying off-plan seems like easy money... and it is for a while. But once the market turns it's a quick way to lose a lot of money. You have just got to know where you are in the property cycle (not too late!) for your particular market when you buy apartments off-plan - or you'll just have no-one to sell on to. There are plenty of developers and property dealers still pushing apartments as a good investment so take care.

Chris Bell

New Homes Attracting Investors

2005-09-29T07:23:00.000+01:00

Find A Property 27 Sep 2005

There won't be a repeat of last autumn's hibernation in the new homes market this year, according to Linden Homes...
Research carried out by the house builders reveals a 47.9 per cent increase in reservations for new homes across the UK, rising from 1,484 in the first two weeks of September 2004 to 2,196 in the same period this year. The company has also seen an impressive 83 per cent of their new units in Sunningdale and Dorking sites snapped up by investors last week.

Speaking about the figures, Philip Davies, Chief Executive of Linden Homes, says: 'I am encouraged by the numbers of investors returning to the market this September and making reservations. 'Professional landlords with plenty of cash have held their nerve over the summer but many were choosing not to expand their portfolios until now. They are investing for the long term and are not expecting a return to the house price inflation of previous years.'

'Market Gathering Momentum'
August's reduction in interest rates has helped to restore buyers' faith in the market, says Linden Homes, and househunters are now expecting prices to remain stable into 2006. Philip Davies continues: 'The combination of a more realistically priced second hand home market and a general lowering of expectation regarding sale prices mean we can look forward to the market gathering momentum over the autumn period.'

A bit of good news for the housing market. Get a good deal and buy for the long term and you should be ok, even if the market continues to weaken in the short term.

Chris Bell

Look out for mortgage rip-offs

2005-09-29T07:08:00.000+01:00

By Cliff D'Arcy (TMFCliff) September 27, 2005

As the housing market comes off the boil, sneaky mortgage lenders are frantically looking for ways to keep the gravy train going. One way to lure in over-stretched buyers (especially first-timers) is to offer ultra-low interest rates. For example, you can fix your mortgage for five years at an annual rate as low as 4.39%, which looks pretty attractive at first glance!

However, with the Bank of England's base rate currently just 4.5% a year, a lender won't make much money from this deal. Hence, mortgage lenders have come up with ways to boost their profits by raising fees and other charges. Here are three tricks to watch out for!

1. Soaring arrangement fees
The majority of homebuyers or remortgagers (especially those who are over-stretched) probably don't look beyond the attractive headline rates on offer. However, they should, because the devil's in the detail, especially in the Best Buy tables!
Essentially, mortgage lenders are giving with one hand and taking away with the other. Those Best Buy headline rates are offset by rapidly rising arrangement fees, especially for remortgages. Indeed, taking additional fees and costs into consideration, it's unusual for the lowest headline rate to be the cheapest home loan."

These extra costs can now be quite significant for the property investor so take care to consider them when you are looking for a new mortgage.

Chris Bell

full article

More ways for landlords to profit from their properties

2005-09-27T07:43:00.000+01:00

There's more to being a landlord than collecting rent. Chris Partridge reveals some extra sources of income
Published: 22 June 2005

So you think you have done everything you can to maximise the return on your buy-to-let investment, from redecorating in cool, contemporary colours to installing new kitchen appliances. But the rent is just the bread and butter. Creative landlords can often identify extra ways of making money to put jam on it.

So you think you have done everything you can to maximise the return on your buy-to-let investment, from redecorating in cool, contemporary colours to installing new kitchen appliances. But the rent is just the bread and butter. Creative landlords can often identify extra ways of making money to put jam on it.

Moneymaking wheezes include renting out spare parking spaces, putting mobile phone masts on the roof, and selling wall space for advertising billboards.

Sites for billboards are in demand, and the poster advertising companies have surveyors looking for potential sites nationwide. But they always welcome enquiries from landlords, says Cliff Pratt, development director for Clear Channel.

"The things that make a site valuable are audience delivery and length of visibility," he explains. "A wall with passing glimpses from a B-road will be worth little, but a site visible for a long distance of a main A-road will be valuable."

The return varies from one or two thousand pounds a year for a 20ft hoarding somewhere in the countryside to over £100,000 a year for a piece of land with room for a high-technology lightbox on a major London approach, such as the Cromwell Road, Pratt says.

Billboard operators will do free surveys for landlords who think they have a suitable spot. If the survey is positive, the operator will do the rest. "We handle obtaining planning permission on behalf of the owner and thereafter we are responsible for finding advertisers, maintaining the site and paying insurance and business rates," Pratt says. Planning permission is almost impossible to obtain in purely residential areas, he says, so the best type of property for billboards is a shop with flats above, on a corner site, with a big blank wall on one side.

Some landlords gain extra income by allowing a mobile phone company to erect a mast on the property - but it's a controversial area. Demand for mast sites is soaring, partly due to increasing demand and also because the new 3G video phones need base stations closer together than those for current mobiles.

The best sites for mobile phone masts are the tops of high buildings or higher ground in the countryside, but the networks are also looking for side walls to mount antennas to fill in holes in coverage. If your mobile always cuts out behind your building, it might be worth investigating if your network has a problem in the area that you might be able to help with. In the countryside, mains power must be reasonably close by.

Planning permission will be needed for a mobile phone mast. In the town, it can help to disguise the antenna as an architectural feature (the flagpoles on many churches are, in fact, mobile phone masts), and in particularly sensitive country areas masts have been disguised as trees.

The income from a mobile phone mast varies, depending on the area and the type of installation - a big base station shared by all the networks will bring in much more than a small infill antenna.

The main drawback to a mobile phone installation is the controversy over possible health risks from the microwave radiation they emit. Living under them is unlikely to cause problems, but tenants may be deterred. It is probably not a good idea to offer the site if the property is next to a school. The new police mobile communication system, Tetra, seems to have provoked particular attention from protest groups.

The creative landlord can often find unexpected commercial opportunities at their property, says Ian Dickson, of Winkworth, in west London: "I passed a house in Twickenham the other day, on the way to the rugby, and they had given permission for a hot-dog stand in the front garden," he says. Even such occasional uses should be licensed but rarely are. The main danger in giving permission for retail activities in the front garden is that the neighbours will complain about the crowd, noise or smell.

Letting out the parking space that comes with your buy-to-let flat, leaving your tenant to find their own space, can cause problems. The secret is to buy a small flat in a development with lots of big flats and houses nearby. "Mostly, tenants in one-bed flats don't have cars but the owners of nearby million-pound houses will have more cars than parking spaces," says Dickson.

Corner houses often have gardens with direct frontages onto a road that may provide rentable parking spaces, but planning permission may be needed to allow access over the pavement.

So you think you have done everything you can to maximise the return on your buy-to-let investment, from redecorating in cool, contemporary colours to installing new kitchen appliances. But the rent is just the bread and butter. Creative landlords can often identify extra ways of making money to put jam on it.

So you think you have done everything you can to maximise the return on your buy-to-let investment, from redecorating in cool, contemporary colours to installing new kitchen appliances. But the rent is just the bread and butter. Creative landlords can often identify extra ways of making money to put jam on it.

Moneymaking wheezes include renting out spare parking spaces, putting mobile phone masts on the roof, and selling wall space for advertising billboards.

Sites for billboards are in demand, and the poster advertising companies have surveyors looking for potential sites nationwide. But they always welcome enquiries from landlords, says Cliff Pratt, development director for Clear Channel.

"The things that make a site valuable are audience delivery and length of visibility," he explains. "A wall with passing glimpses from a B-road will be worth little, but a site visible for a long distance of a main A-road will be valuable."

The return varies from one or two thousand pounds a year for a 20ft hoarding somewhere in the countryside to over £100,000 a year for a piece of land with room for a high-technology lightbox on a major London approach, such as the Cromwell Road, Pratt says.

Billboard operators will do free surveys for landlords who think they have a suitable spot. If the survey is positive, the operator will do the rest. "We handle obtaining planning permission on behalf of the owner and thereafter we are responsible for finding advertisers, maintaining the site and paying insurance and business rates," Pratt says. Planning permission is almost impossible to obtain in purely residential areas, he says, so the best type of property for billboards is a shop with flats above, on a corner site, with a big blank wall on one side.

Some landlords gain extra income by allowing a mobile phone company to erect a mast on the property - but it's a controversial area. Demand for mast sites is soaring, partly due to increasing demand and also because the new 3G video phones need base stations closer together than those for current mobiles.

The best sites for mobile phone masts are the tops of high buildings or higher ground in the countryside, but the networks are also looking for side walls to mount antennas to fill in holes in coverage. If your mobile always cuts out behind your building, it might be worth investigating if your network has a problem in the area that you might be able to help with. In the countryside, mains power must be reasonably close by.

Planning permission will be needed for a mobile phone mast. In the town, it can help to disguise the antenna as an architectural feature (the flagpoles on many churches are, in fact, mobile phone masts), and in particularly sensitive country areas masts have been disguised as trees.

The income from a mobile phone mast varies, depending on the area and the type of installation - a big base station shared by all the networks will bring in much more than a small infill antenna.

The main drawback to a mobile phone installation is the controversy over possible health risks from the microwave radiation they emit. Living under them is unlikely to cause problems, but tenants may be deterred. It is probably not a good idea to offer the site if the property is next to a school. The new police mobile communication system, Tetra, seems to have provoked particular attention from protest groups.

The creative landlord can often find unexpected commercial opportunities at their property, says Ian Dickson, of Winkworth, in west London: "I passed a house in Twickenham the other day, on the way to the rugby, and they had given permission for a hot-dog stand in the front garden," he says. Even such occasional uses should be licensed but rarely are. The main danger in giving permission for retail activities in the front garden is that the neighbours will complain about the crowd, noise or smell.

Letting out the parking space that comes with your buy-to-let flat, leaving your tenant to find their own space, can cause problems. The secret is to buy a small flat in a development with lots of big flats and houses nearby. "Mostly, tenants in one-bed flats don't have cars but the owners of nearby million-pound houses will have more cars than parking spaces," says Dickson.

Corner houses often have gardens with direct frontages onto a road that may provide rentable parking spaces, but planning permission may be needed to allow access over the pavement."

Some good ideas here. Why not check out your properties and see if any of these can work for you? And keep them in mind when you're buying your next investment property too.

Chris Bell

Landlord nightmares - how many of these do you relate to?

2005-09-27T07:26:00.000+01:00

Price falls aren't the only worry in buy-to-let land, as seasoned pros confess all to ROSIE MILLARD

We are querulous types, it seems. Everybody thinks we are sitting laughing our heads off, tycoon-style, when the opposite appears to be more the case. A survey of my buy-to-let buddies has revealed the top 10 fears that keep us awake at night.

1. Bad tenants
The sort who pass all the references and credit checks and just turn out bad, says Oscar Lennox, who owns a clutch of buy-to-let flats in central Leeds. That is my key fear. One of my flats was raided at 5am and my tenant taken away by the police under suspicion of fraud and rape. All his references were wonderful.
Landlord fear factor: 50%
Likelihood: 20%

2. Price crash
A collapse in property values would, of course, wreck thousands of pension plans, nest eggs and mortgages, and smash the fragile structure on which many buy-to-let businesses are constructed. I started buying in 1999, says Lennox. Some of my flats have almost doubled in value since then. A crash is unlikely, but not impossible. The only defence against it is to make sure your portfolio comprises quality property, because quality will always sell. Of course, if prices do go down, a comforting thought is that rents are likely to go up.
Landlord fear factor: 20%
Likelihood: anybody's guess

3. Fire
“Getting a phone call to say that somebody has been hurt in a fire is my biggest fear,” says Andrew Levy of the Brand New Heavies, who owns several houses in Margate and London. “My houses are all covered and have no liabilities, but when personal safety is at risk, I get scared. I would feel very responsible if somebody got hurt.”
Landlord fear factor: 15%
Likelihood: fit those smoke alarms

4. Trashing of flat
“Mercifully, my London flats are at the other end of the market where I avoid what I most fear,” says Susan Browne, who owns properties in South Kensington. “But I also have a property in Sydney, Australia, that was utterly trashed by corporate tenants. There wasn’t a piece of furniture left undamaged. I am now in the process of going through a tribunal.”
Landlord fear factor: 15%
Likelihood: 15% (as long as you avoid medical students, who specialise in trashing flats)

5. Squatters
“Squatters are my numero uno fear,” says landlady Barbara Goldsmith, who has 40 flats across the country, “because I have had them. The property in question was empty for a couple of weeks. I had new tenants ready to move in. My builder went in to fit a couple of doors and came back with a white face. ‘There are 15 people in there with about five dogs,’ he gasped. I had to go to court to get them out. Oh, they know the law. My advice is to get good insurance. I had top insurance and they paid for everything. The bill came to £14,000.”
Landlord fear factor: 10%
Likelihood: depends on your locks

6. Voids
“I don’t think anybody at first realises what a disaster this is, financially,” says Browne. “It’s not just loss of revenue, but the fact that you are still having to pay council tax, services and keep the flat presentable. Voids can quickly send you into the red, so you must be flexible when negotiating a price. You are far better off asking for £300 a week than holding out for £375.”
Landlord fear factor: 10%
Likelihood: 90%, but reassure yourself that it happens to everybody at some point

7. Sitting tenants
“This is my Room 101,” says Richard Savage, who rents out several holiday cottages in Gloucestershire. “It happened to my father. He had a small bungalow in Cornwall that he rented out to somebody for six months. Thanks to my father’s incompetent solicitor, the man realised that as long as he paid the rent, he could not be moved. He ended up staying until he died, 30 years later. It was meant to be a family holiday home, but there was nothing that could be done. Of course, with assured shorthold tenancy agreements now this is much rarer.”
Landlord fear factor: 5%
Likelihood: zero if you bother to use a proper contract

8. Complaining tenants
“We get wonderful tenants from the holiday company Rural Retreats, but about once a year somebody does this,” says Savage. “You know perfectly well that what they are complaining about is totally fatuous, but they try it on in the hope they’ll get some kind of compensation or get away without paying a bill. They go on and on and never give up. These are litigious times, remember. I suspect there are guidelines as to how to do it on the internet.”
Landlord fear factor: 3%
Likelihood: 3%

9. Fireworks (rural areas only)
“The neighbours get very unhappy about it, so we have to advise tenants not to bring in fireworks for birthdays or New Year,” says Savage, whose cottages are in swathes of silent countryside. “Because they aren’t the fireworks we all grew up with, are they? I’m talking minor military weapons, giving out fountains of flame.”
Landlord fear factor: 2%
Likelihood of annoying neighbours: 1%, unless on November 5, in which case 95%

10. Collapse of entire rental market
Highly unlikely, unless you are a born pessimist.

Interesting... but I would put voids and a property price crash at the top of the list.

'House prices to double by 2025' - a positive view for property investors

2005-09-26T07:09:00.000+01:00

23rd Sep 2005, a Friday

Property prices are set to double over the next 20 years, according to new research from Mint. The internet bank suggests the price of an average property will rise to over £330,000 by 2025 following a rise in solo living and second home ownership.

Mint examined the trends likely to influence spending in the UK over the next 20 years, and their effect on spending patterns. It predicts that the price of the average house will increase from £163,334 in 2005 to £335,674 in 2025, with many people expected to seek to buy a second home. The report also suggests that the growth in single person households will continue over the next two decades fuelling more demand for affordable properties.

According to the report, single occupancy will increase from 30% today to 35% in 2021. And it says that disposable housing - flat pack homes, module housing and pre-fabricated properties - will be the main beneficiary of this trend."

Long term property investors can be assured property prices will rise... but when and how much... who knows.

Chris Bell

Foreign workers boost house prices - an opportunity for landlords

2005-09-26T07:02:00.000+01:00

23rd Sep 2005, a Friday

Eastern European workers are helping to drive up house prices in Northern Ireland, the Royal Institution of Chartered Surveyors (RICS) has claimed. Tom McClelland, the group's Northern Ireland property spokesman, said the market had bucked trends in the rest of the UK as investors met demand for rental accommodation from skilled migrant staff. McLelland called for higher density building in urban areas in a bid to ease the pressure on first-time buyers.

'We have seen Northern Ireland house prices rise further in the last number of months fuelled largely by investors who are benefiting from a buoyant rental market, with rental demand coming locally as well as from workers from the EU accession countries,' he said.
'We are also seeing more and more educated workers from eastern Europe coming to Northern Ireland, helping keep the economy growing, which in turn is fuelling demand in the housing market.

'Add to this the growing number of health professionals from abroad who are moving from the rental market to become owner occupiers. In Northern Ireland we have tended to build at low density on green fields and around small hamlets, where there is little or no infrastructure, forcing us into cars and creating the growing traffic congestion that we see.'

I'm sure this is the case in other areas of the country too. Build up your contacts with say, Poland, and you can have an endless stream of new tenants through recommendation. It's working for me.

Chris Bell

Guaranteed rent scheme for buy-to-let landlords in Edinburgh

2005-09-26T06:41:00.000+01:00

Fri Sep 23, 2005 10:50 AM BST
By Lorna Bourke

LONDON (Citywire) - Property agents Orchard & Shipman have launched a new buy-to-let scheme in Edinburgh for private landlords that looks an attractive, no hassle, way of getting into this investment market. Orchard & Shipman has done a deal with the City of Edinburgh to provide up to 1,500 homes to beat the city's homeless crisis. The scheme offers long-term contracts to private sector landlords with a guaranteed rent for the whole period. These properties are financed by buy-to-let landlords and help local authorities to fulfil their statutory obligations to house the homeless. Orchard & Shipman has long experience of similar schemes with other local authorities.

Private Sector Leasing schemes are attracting growing interest from local authorities in England and Wales as well as Scotland. Orchard & Shipman already manage nearly 1,000 properties for the London Borough of Hillingdon and for Spelthorne Council.

Buy-to-let landlords who already own property in Edinburgh, and investors wanting to buy to participate in this scheme, will have the security of a long let of up to five years, with no voids, rents paid quarterly in advance, no management fees and the return of the property in good condition at the end of the period. If the tenants damage the property, it is repaired. Landlords get a market rent, less about 15 percent, but the money is guaranteed to be paid irrespective of whether the property is tenanted or not as the rent is guaranteed by the local authority."

If you are facing a tough letting market in Edinburgh look into this... but check out the carefully how rent levels compare and the level of expenditure e.g. on upgrading and repairs, that you are committing yourself to.

Chris Bell

Inner city apartments - disaster brewing for buy-to-let investors

2005-09-14T06:41:00.000+01:00

"'Up to last May 2004, prices were quite bouyant, but I suspect that, in the last twelve months or so, prices have actually dropped, maybe 15 or 20 percent. If you bought into one of these flats with a 95% mortgage you could actually be looking at negative equity now. There are 5000 flats being built at the moment in Docklands and the newer blocks are like 'ghost blocks' really. A third have people living in them, another third are people who bought them to rent them, trying to rent them and they are mostly empty. Then you have another third which the builder is desperately trying to sell. So you have people competing with each other in the same block to sell the flats and that`s depressing the prices.'

When Peter Bill, the editor of the Estates Gazette, mentions the words negative equity the housing market should sit up and take notice. To then compound his concerns by stating that prices have fallen by 15-20% in the Docklands area could help prick the price bubble that has existed in the area for far too long.

Citing his fears on a TV programme, neatly sandwiched between two episodes of the country`s favourite soap, will have been music to the ears of any first time buyer who wishes to see sense restored to a market place that even experts are now confirming is experiencing a fall.
Could it be the City 'lifestyle apartments' which lead and suffer the worst from any potential downturn? If history is to be repeated then this was the sector that experienced the worst downturn in the early nineties.

However, the massive over development of areas such as Docklands could see falls in excess of most expert predictions. A vast proportion of these developments were for the BTL market. Many 'investors' have come to realise that the mythical urban professional, willing to pay in excess of their landlord`s mortgage, does not exist in the volume required to make a decent return. In fact the over supply of properties, in relation to desirable tenants, has forced rents down massively. Time will tell on how inexperienced landlords develop an exit strategy from an increasingly difficult situation. "

This is a situation faced by property investors all over the UK. Yet unscrupulous promoters of these 'investments' are still operating. When the mass media finally get hold of this story it's going to be a big scandal.

It also has a knock-on effect on other buy-to-let investors as apartment owners, desperate to get tenants, undercut local rental values.

The only bright side is that there will be plenty of bargain-priced apartments available for sale in the coming years for the property investor who avoided buying with the crowd.

Chris

Landords - check the terms of your tenancy agreement

2005-09-09T05:57:00.000+01:00

Reuters.co.uk: OFT issues new guidance to buy-to-let landlords
Thu Sep 8, 2005 8:04 AM BST

The Office of Fair Trading is concerned some tenancy agreements or leases place an unfair burden on the tenant and has issued new guidance to landlords on how the regulations apply to tenancy contracts. The aim is to help landlords stay within the law and provide clear and fair contract terms for tenants.

The OFT receives more than 200 complaints every year about unfair terms in standard tenancy contracts, such as financial penalties, exclusions of the landlord's liability for repairs and unfair termination and eviction clauses. It is very important for landlords to get it right because if a contract is deemed to be unfair, it is unenforceable.

The OFT guidance outlines why some standard contract terms used in tenancy agreements are considered to be potentially unfair and includes possible ways of revising them. Examples of unfair terms include those that exclude or limit the landlord's liability, for example by transferring the landlord's legal obligations to the tenant. Leases which impose potentially excessive penalties on tenants for failure to meet the terms of the contract - for example, by charging excessive rates of interest on late payments of rent - would also be regarded as unfair. Clauses which enable the landlord to vary the terms of the contract, to impose new rules on the tenant or increase the rent at short notice would fall into the same category, as would requirements to give an excessive amount of notice before leaving.

A consumer leaflet, 'Unfair tenancy terms - don't get caught out', which gives a brief overview of the OFT's views on unfair terms in tenancy agreements, is also available. The guidance and the consumer leaflet are available from the OFT website (www.oft.gov.uk) or by phone on 0800 389 3158.

If you're not up to speed in what you can put in a tenancy agreement check this out.

Chris

Find the best buy-to-let mortgage for you

2005-09-09T05:36:00.000+01:00

Mortgage Introducer: Directory of BUY TO LET Lenders

Click on the lender's name below to see their complete directory listing.
A
Abbeywww.abbey.com
Allied Irish Points www.aibgb.co.uk
Amber Homeloanswww.amberhomeloans.co.uk
B
Bank Of Irelandwww.1st-start.co.uk
Bank Of Scotlandwww.bankofscotland.co.uk
BM Solutions www.bmsolutions.co.uk
Bristol & Westwww.bristol-west.co.uk
Buckinghamshire BSwww.bucksbuildingsociety.com
C
Capital Home Loans
Chelsea BSwww.thechelsea.co.uk
Cheltenham & Gloucesterwww.cheltglos.co.uk
Chesham BSwww.cheshambsoc.co.uk
Cheshire BSwww.thecheshire.co.uk
Chorley & District BSwww.chorleybs.co.uk
Clydesdale Bankwww.cbonline.co.uk
Coventry BSwww.coventrybuildingsociety.co.uk
Cumberland BS
D
Derbyshire BSwww.thederbyshire.co.uk
Dudley BS
Dunfermline BSwww.dunfermline-bs.co.uk Back to top
E
Earl Shilton BS
Ecology BSwww.ecology.co.uk
Exclusive Connectionswww.exconn.com Back to top
F
First Trust Bankwww.firsttrustbank.co.uk
Furness BSwww.furnessbs.co.uk
Future Mortgageswww.future-mortgages.co.uk
G
GMAC Residential Fundingwww.gmacrfc.co.uk
Genesis Home Loanswww.ghlplc.co.uk
H
HSBC www.hsbc.co.uk
Harpendon BS www.harpenden-bs.co.uk
Heritable Bankwww.heritable.co.uk
High Street Home Loans www.highstreethomeloans.com
Holmesdale Bank www.holmesdale.org.uk
I
Ipswich BSwww.ipswich-bs.co.uk
Irish Permanent Intwww.ip-intl.com
K
Kensington Mortgage Companywww.kmc.co.uk
Kent Reliance BSwww.krbs.co.uk Back to top
L
Leeds & Holbeck BSwww.leeds-holbeck.co.uk
Leek United BSwww.leek-united.co.uk
Lloyds TSB Scotlandwww.lloydstsb.com
Loughborough BSwww.theloughborough.co.uk
M
Manchester BSwww.themanchester.co.uk
Mansfield BSwww.mansfieldbs.co.uk
Melton Mowbray BSwww.mmbs.co.uk
Mercantile BS & Mercantile Directwww.mercantile-bs.co.uk
Mortgage Expresswww.mortgage-express.co.uk
Mortgages PLC
Mortgage Keyswww.mortgagekeys.co.uk
Mortgage Trust www.paragon-group.co.uk
N
National Countries BS
Natwest Mortgage Serviceswww.natwest.co.uk
Newbury Mortgage Services
Northern Bankwww.nbonline.co.uk
Northern Offshore Banking & Financial Services www.nbonline.co.uk
Northern Rockwww.northernrock.co.uk
Norwich Unionwww.norwichunion.com
P
Paragon Mortgageswww.paragon-mortgages.co.uk
Pink Home Loanswww.pink.uk.net
Platform www.platform.co.uk
Portman BSwww.portman.co.uk
Preferred Mortgageswww.preferredmortgages.com
R
Royal Bank Of Scotlandwww.rbs.co.uk
S
SPMLwww.spml.co.uk
Scarborough BSwww.scarboroughbs.co.uk
Scottish Widows Bankwww.scottishwidows.co.uk
Shepshed BS www.theshepshed.co.uk
Skipton BSwww.skipton.co.uk
Stafford Railway BS
Standard Life Bankwww.standardlifebank.com
Stroud & Swindon BSwww.stroudandswindon.co.uk
T
The Mortgage Business www.t-m-b.co.uk
The Mortgage Operatio n www.mortgageuk.com
The Mortgage Workswww.themortgageworks.co.uk
U
UCB Home Loans www.ucbhomeloans.co.uk
Ulster Bankwww.ulsterbank.com
Universal BSwww.theuniversal.co.uk
W
West Bromwich BSwww.westbrom.co.uk
Woolwichwww.woolwich.co.uk
Y
Yorkshire Bankwww.ybonline.co.uk

Here's a useful list of buy-to-let lenders if you want to do your own research on mortgages for your investment properties. Personally, I get a mortgage broker to do this for me!

Chris

Top property hotspots

2005-09-06T00:27:00.000+01:00

Manchester district tops property hotspots
Hilary Osborne
Monday September 5, 2005

First-time buyers looking for a property with potential should head to east Manchester, according to research published today. A study of Britain's 2,800 postcode districts focusing on their desirability and potential return on investment found the district of Openshaw in greater Manchester to be the top hotspot for those looking to get on to the property ladder. Many of the top 10 hotspots produced by Royal Bank of Scotland (RBS) were in the north or Wales, but in the top 20, most areas of the UK were represented.

Researchers for RBS looked at 20 factors they thought would be important to new buyers, including transport links, demographics and recent house price growth. Five factors were deemed to be of key importance, but top of the list was a below average ratio of house prices to local earnings.

The top 10 housing hotspots:
1 Openshaw, Manchester (M11)
2 Middlesborough, Teeside (TS1)
3 Ardwick, Manchester (M12)
4 Falkirk, Scotland (FK1)
5 Ferndale, South Wales (CF43)
6 Kingston-upon-Hull (HU3)
7 Blaenrhondda, South Wales (CF42)
8 Stratford, London (E15)
9 North central Stoke-on-Trent (ST1)
10 Leven, Scotland (KY8)

Check out the RBS web site and study their First Time Buyer Property Index - it's good information for buy to let property investors as well as ftb's.

Chris

Buy to let: speculation out, long-term investment in

2005-09-03T07:33:00.000+01:00

"Numbers of new property investors entering the buy to let market have almost halved in the past year, figures released by the Mortgage Trust have revealed. The Trust's borrowers survey has shown that the number of new investors has fallen from 23 per cent in July 2004 to 12 per cent in May of this year.

The market slowdown has discouraged many of the purely speculative and opportunistic that had been fuelling buy-to-let growth in recent years - certainly not a bad thing for those prepared to wait for the big returns on their investments, says Mortgages for Business managing director David Whittaker.

The decline of part time property investment has also bought those who are prepared to stay in the market other dividends, such as more flexible and affordable mortgage lending. Buy-to-let mortgage lenders have had no choice but to ease restrictions on their products to keep property investment capital flowing, say analysts. Buy-to-let lending criteria has fallen to as little as five per cent deposits requirements and rental interest cover of only 110 – 125 per cent, compared to the 130 per cent of a year ago."

Quick capital growth is a thing of the past. New investment in rental property must now stack up from an income point of view.

Chris

House prices fall in August

2005-09-02T06:54:00.000+01:00

Thu 01 Sep 2005

LONDON (SHARECAST) - House prices fell last month, according to the latest official survey, though the outlook remains positive with more expressions of interest from buyers.

The Nationwide reported a 0.2% fall in prices in August compared with a 0.2% rise the month before, while the annual rate of growth slowed to 2.3% from 2.6% the previous month.

The annual pace of growth is now at its slowest since May 1996, while the average UK asking price for a house is now £157,310 compared with £153,743 last year."

I think we'll see this trend continue.

Chris

Property investment by the seaside

2005-09-02T06:46:00.000+01:00

01 September 2005

Seaside properties are rocketing in price. A research report by Halifax Estate Agents said seaside properties across the country were continuing to sell for much more than their inland counterparts, with prices in Falmouth rising 125.5 per cent more than the national average over the last ten years.

Picturesque scenery and the classic Cornish feel of Mevagissey saw the village attracting the fifth largest rises in the country, with the average house price shooting from £47,890 in 1995 to the current level of £174,990 - an increase of more than 265 per cent.

Colin Kemp, managing director of Halifax Estate Agents, said: 'What is clear from this research is that homebuyers are still prepared to pay more to enjoy living by the sea.'

Have you thought of looking for the next second home hotspot?

Chris

Tenant deposits - important changes coming up

2005-09-02T06:31:00.000+01:00

Tips for student deposits 01 September 2005

The start of a new academic year is fast approaching and many students across the country will have already begun the search for next year's accommodation. Over the coming weeks, as parents and students alike hand over cheques for deposits, many may not realise that from October next year such an easy arrangement will no longer be possible. In the meanwhile, the National Landlords Association urges landlords and student tenants to play fair on deposits and offers some tips to ensure that the exchange of deposits goes as smoothly as possible.

As part of wide ranging changes to regulation of the private rented sector under the Housing Act 2004, deposits will have to be placed in an authorised tenancy deposit scheme. Two forms of tenancy deposit scheme are envisaged: a custodial scheme and an insurance scheme.

Under a custodial scheme landlords will pay deposits into a specified account. The money will then be kept in the account until the end of the tenancy. Either the landlord or tenant can apply at any time after the tenancy has ended for the deposit to be returned to them. If both parties agree on how the deposit should be split the administrator of the scheme has to pay out the amounts within 10 days of receiving the request.

In the case of an insurance scheme the landlord keeps the deposit on the basis that at the end of the tenancy an amount agreed between tenant and landlord will be paid to the tenant. The insurance will come into play if, at the end of a tenancy, the landlord does not pay back part or all of a deposit within 10 days of a tenant's request. If this is the case the tenant can approach the scheme administrator. The landlord will then be required to pay the amount into an authorised account within 10 days of receiving notice from the administrator. Once a dispute has been settled the administrator must pay the tenant within 10 days. The insurance will come into effect if the landlord fails to pay the deposit into the account as requested.

I haven't decided what method to use - they both involve extra admin. I have also seen other ways of dealing with this issue. No doubt we'll read a lot more about this.

Chris

Yorkshire - best return for property investors

2005-09-01T06:59:00.000+01:00

Why landlords love Yorkshire - in2perspective
1st Sep 2005

Despite the market slowdown, regions such as Yorkshire and the North West are continuing to outperform other parts of the country, according to the latest Paragon Mortgages Buy-to-Let Index.

Yorkshire has seen rental incomes rise over the month from £9,383 in June to reach £10,495 in July. Over 12 months, rents in Yorkshire have risen by 36.7%.
Landlord property values in the region have increased by 38.6% since July 2004 to reach £143,684. Despite a large increase in property values, Yorkshire remains one of the highest yielding regions in the country, at 7.3%.

The North West has also seen a strong buy-to-let market over the last year, notwithstanding a slight decline in rents this month. Rental incomes in the region have risen by almost 30% and property values by over 34% since July 2004. Yields in the North West, at just under 7%, remain above the national average of 6.7% and on a par with the South West and East Anglia.

At the same time Greater London, consistently one of the lower yielding regions, has seen yields rise slightly to 5.8% this month as both rental incomes and property values rose. "

The ripple effect in action... these are historic returns and the trick, of course, is to spot the next hotspot (or hot region) and invest before the big price rises. With relatively low house prices, a strong rental market for students and expanding employment opportunities Yorkshire came up trumps.

Chris

Dear Property Investor, do you have a tenant problem?

2005-08-31T06:45:00.000+01:00

Landlord Action UK

Landlord Action recovers rent and property from bad tenants.
We are not solicitors. We are FAST and our FIXED FEES include
everything - courts, solicitors, barristers, bailiffs and VAT.

We are a unique service for corporate and private landlords, anywhere in England and Wales. Within 48 hours we will have someone visit your tenant. It's not surprising that the London Evening Standard calls us 'A Blessing for Landlords"

If you have serious tenant problems check out this site. They've been going for nearly five years so they should have plenty of experience with any situation you can throw at them. (I haven't needed them yet - I like to think it's through careful tenant selection - but maybe it's just luck!)

Chris

How to invest in property for as little as £1

2005-08-31T05:32:00.000+01:00

Wednesday, 15 Jun 2005 12:21

People wanting to invest in property can do so for as little as £1, after the launch of Opromark, an online property exchange.

Investors can buy stakes in any of the properties listed on the market, and are paid a share of the rental income made from the property as well as benefiting from rises in the value of their shares.

The exchange was created by Andrew Black, founder of online gambling exchange Betfair - which is now believed to be worth as much as £100 million.

'Opromark opens up the buy-to-let market to a broader range of investors, including those struggling to get on the housing ladder, by making the minimum investment £1 and ensuring that investors can diversify their investment cost effectively across a range of residential properties,' said Opromark chief executive Stephen Kenny.

Opromark offers several advantages to traditional buy-to-let investing.

These include the ability to spread risk across a number of diverse properties, the fact that there is no mortgage cost to the investment and so no interest rate risk, a dedicated property professional to manage the property and its tenants, and the fact that investments can be made for as little as £1."

I haven't looked into this one but it seems an interesting idea. As for the disadvantages, check out how you can get your money out; also be aware that only part of the rental income is paid out as a dividend - the remainder is absorbed by costs. I could see this working in a booming house market, but today...?

Chris

More residential properties coming up for auction

2005-08-31T00:16:00.000+01:00

A more difficult property market for sellers has pushed more vendors to offer their properties for sale at auction. These are often traditional properties that need improvement and modernisation and are not being shifted by estate agents in the present climate. Property investors should look out for a greater number of opportunities coming up at auction.

Chris

Make Sure you negotiate a big discount for your next property investment

2005-08-30T00:34:00.000+01:00

Guardian Unlimited House prices drop despite rate cut
Press Association Monday August 29, 2005 5:08 AM

House prices fell for the 14th month in a row during August with the cut in interest rates doing little to revive the market, figures showed.

The average cost of a home in England and Wales fell by 0.1% during the month, following July's drop of 0.2%, according to property website Hometrack. The group said prices had now fallen by 3.7% during the past 12 months to average £161,000, nearly £7,000 less than in June last year, and the market was showing no sign of imminent recovery.

John Wriglesworth, Hometrack's housing economist, said it was a buyer's market with people generally securing discounts of well over 6% of a property's asking price, the equivalent of around £12,000 of savings on an average priced property.

If you're aiming to buy further investment properties you should be looking for a big discount in today's market. However I think there will be even better bargains in the months to come as amateur property investors get squeezed out.

Chris

Sell in Spain - buy in the UK

2005-08-25T07:37:00.000+01:00

Scotsman.com Property - More set to buy second homes in UK: "

Thu 25 Aug 2005 MICHAEL BLACKLEY

THE second homes market in the UK is set to experience growth at unprecedented levels over the next decade as Britons choose to invest at home rather than abroad, according to a new report. It predicts the market in the UK will be worth £53 billion by 2015, with the number of people owning a second home in the UK soaring from 328,000 now to 405,000 - significantly above the 249,000 estimated to be owned by Brits overseas.

The research, by Direct Line and the Centre for Future Studies, found warmer summers will make the west coast of Scotland a more attractive area for a holiday home. Glasgow, meanwhile, could become a second home hotspot for those who want to buy property in the city to live in during the working week before retreating to their more rural main home at weekends and holidays. It also highlighted the Scottish Borders as another second home hotspot for investors, as the Borders rail link will make the area much more commuter-friendly and the average price of property is likely to increase as a result.

Andrew Lowe, head of home insurance at Direct Line, said: 'A strong economy, warming climate and a regenerated urban landscape are the key factors set to make Britain more attractive than ever as a second home location.' Part of the reason for the predicted growth in the second home market is that more people fall into typical profile of the second home owner - affluent 45-64 year olds.

Mark Hordern, of the Glasgow Solicitors Property Centre, said the west coast of Scotland has a lot to offer and will continue to be popular with the UK's second home owners."

Worth investigating. With a warmer climate in the UK popular second home locations are bound to be in higher demand. Find them and get in before eveyone's talking about it.

Chris

Landlords hit by oversupply of buy to let flats

2005-08-25T01:39:00.000+01:00

Scotsman.com Property - Property News - Troubled waters for landlords: "

Thu 25 Aug 2005

GREG GORDON

It seems like only yesterday that every man and his dog wanted to be a buy-to-let investor. Buying off-plan on the waterfront was a passport to riches and staring off into the horizon all we could see were calm waters offering exponential capital growth and a tidy sum each year from rental profits. As the reality of both over-supply of investor-friendly flats and over-optimistic predictions takes hold, however, the tranquil waters of buy-to-let have taken on a distinctly choppy cast.

Paul Mugmaioni, a director of rental sector investors Quality Street dates the sea change in the newbuild rental market to the interest-rate hike around a year ago. That rate raise, allied to a general cooling in the housing market, precipitated a mass investor exodus from buy-to-let and a climate where the speculators consolidated their positions while looking elsewhere for investment opportunities.
The rental expert estimates that oversupply in the rental sector and the effect of large-scale development on supply, particularly at Glasgow Harbour, has seen landlords' annual rental yields slashed and in some cases, the value of some waterside apartments have dropped by 30 per cent. "

Buying off-plan city centre apartments was an easy way to make money a few years ago - now it's a quick way to lose it despite the hyped-up claims of those still promoting this kind of investment. Beware!

Chris

It's getting tougher for student landlords

2005-08-24T23:16:00.000+01:00

The housing market in Nottingham is changing as students choose swish new apartments over traditional homes.:

DAVID BYERS reports:

"Everyone knows, or thinks they know, what student homes are like. The traditional stereotype of a student house or flat has it at best cheap and cheerful, at worst damp and depressing.

But the students did not seem to mind. They had chosen their digs, after all, and when things got tough they could always run back to their parents in the suburbs for comfort. Yet now students seem to have had enough of living like students - and landlords are counting the cost.

A flurry of smart purpose-built accommodation complexes, such as Raleigh Park and St Peter's Court, are luring thousands of students with cut-price rent deals with broadband and bills included.

This is one of the reasons being given for a significant increase in the number of empty homes in Nottingham."

It also means times are tough for Angela Barbaro, owner of Notts-based AB Property Management, who has worked in the student and professional housing business for 19 years. The agency has 14 properties for students in its portfolio - yet ten of these, in Lenton, Forest Fields and Clifton, are sitting empty, and have done for months.

"Up until last year it was hard, but this year it has been unbelievably difficult," she said. "Huge buildings are being put up which have a big knock-on effect for landlords, who simply can't compete. At St Peter's Court, 700 students have moved in there, by the business school. Raleigh Park is another big development, with several hundred places. And a new building in Gregory Boulevard takes 400 students.

"All of this purpose-built accommodation has broadband and bills all inclusive for about £70 a week. A private landlord will charge £65 without bills. It really isn't viable to charge anything less.

"I don't like renting for students because the market's stagnant - I don't take any more student properties."

So should landlords be selling up or lowering their rents to attract students? Neither, according to Ms Barbaro.

"Working with landlords is quite difficult because they never want to put their hand in their pockets," she said. "But the key to landlords renting their properties is to do them up to look smart and add additional facilities: decent showers, bathrooms, broadband internet - to offer students a decent deal. Some landlords do and some don't. And the ones that don't are the ones whose properties are being left empty. I'd say 40% of landlords I know have done up their properties, gutted them, put in broadband and created a nice house. But 60% have not."

It's tough, and it costs money, but as a landlord you just have to keep an eye on the marketplace and do what it takes to stay competitive.

Chris

The Property Investor Show - don't miss it

2005-08-24T07:28:00.000+01:00

The Property Investor Show, ExCel Centre, London, 23-25 September 2005: "The Property Investor Show is the ideal place for obtaining reliable and up to date market information. Access to good information is the key to successful investing and with over 100+ seminars offering you the help and advice you need to make the right choices.
INVESTORS
Already well established amongst property investors for both UK and overseas markets, The Property Investor Show has earned a place in every serious investor's diary. An information, networking and advice forum - it's no wonder the show has become the largest property investment exhibition in the UK, and such a firm favourite amongst investment professionals.
1ST TIME INVESTORS
You don't have to be a professional to come to the show. If you're a 1st time investor - you will find The Property Investor Show 2005 an invaluable resource for planning your next move and helping you to make the most of the property opportunities open to you. You can talk to the top experts in the industry, using these sources to make informed decisions about your next property acquisition.
OVERSEAS PROPERTY
Roughly half of this year's show will be dedicated to overseas property. This gives you the opportunity to compare established overseas markets such as Spain, France & the USA with new emerging markets like Cyprus, Croatia, Hungary and Bulgaria. Or the chance to look further a field still, at diverse places like Australia, Brazil, China, Thailand or the Caribbean. All these countries will be represented by agents and developers along with specialists who will help you with all you need for buying, selling, and even moving overseas.
WITH EXPERT LED SEMINARS TO ANSWER EVERY QUESTION
As always at The Property Investor Show, the seminar programme is impressive!

A great day out for the property investor and very informative too. The seminars are very popular so book in advance if you can.

Chris

An opportunity for canny investors?

2005-08-23T08:23:00.000+01:00

NAEA: "Figures released by the National Association of Estate Agents (NAEA) today show that 61% of its members feel that the introduction of Home Information Packs (HIPs) in 2007 will create an unrealistic housing market.

An influx of homes is expected to flood the market in the months before the introduction of HIPs, as sellers attempt to avoid the increased cost of selling a property. The cost of the HIP, paid for by the homeowner, is expected to be between £600 and £1,000. It could be even more for larger than average properties. This will be a further addition to the rising expenses that homeowners currently face. "

Keep an eye on this one. This could be an opportunity to negotiate an even better deal in the current buyers market.

Chris

Experienced investors are not sheep

2005-08-22T19:29:00.000+01:00

Money - Times Online:

"Continued uncertainty over the future direction of house prices is deterring the opportunist investors who saw buy-to-let as a way to make a quick buck. However, many experienced landlords consider the current climate a good time to expand their portfolios.

These investors are taking advantage of a weak housing market. Potential buyers have been holding off because they fear big price falls, and this has pushed up rental demand. Investors are also benefiting from a knock-on effect: many vendors have been struggling to sell because buyers are reluctant to enter the market. This allows investors to negotiate discounts.

Nigel Terrington, chief executive of Paragon Group, which owns two specialist buy-to-let lenders, Paragon Mortgages and Mortgage Trust, said: Many investors have an incredible network with the local estate agents and they know who is selling, which properties have been on the books for a while and which vendors need a quick sale. They are then able to buy below market value."

There's no time like a slack market to look for a bargain - go for it!

Chris

Improving schools give big boost to house prices

2005-08-22T09:01:00.000+01:00

Hometrack has analysed property price changes in the catchment areas of the ten most improved state schools in England since 2001, revealing that top grades at your local comprehensive can double the rate of increase of the value of your property if it’s within the catchment area.

In total the average property prices in the ten catchment areas has soared by 76% since 2001, in stark contrast property prices have only increased by 39% in the immediate surrounding areas. However in some areas, property prices have soared by a staggering rate in excess of 120%, such as the area in close proximity to Waverley School in Small Heath, Birmingham.

Hometrack 19 July 2005

Just shows that being near an improving school makes a really big difference to the capital growth you get. This really should be a factor the buy to let investor takes account of.

Chris

Starting out in buy to let

2005-08-22T00:31:00.000+01:00

If you are interested in starting a property investment portfolio but don't have a wad of cash handy, start small by renting out a room in your own home in order to save for the deposit for your first investment. There is a 'rent a room' tax allowance for individuals which for the year 2005-2006 is £4250.

(Although, to be frank, I never heard of anyone actually paying tax on income they got from letting a room in their own home!)

Chris Bell

Should you be remortgaging now?

2005-08-21T08:39:00.000+01:00

Over three quarters of property investors and homebuyers are now considering remortgaging this year, according to the Property Investor Show.

The reduction of the base rate from 4.75% to 4.5% at the beginning of this month was the first change in the rate since August 2004 and the first downward move since July 2003.

Lee Grandin, managing director of Landlord Mortgages who will be exhibiting at the Property Investor Show in September, comments: “There has been a visible surge in remortgaging over the last few years. Recently we have seen many buy-to-let investors opting for lifetime trackers as they are at their lowest rates above the base rate. One product we offer is only 0.39% over the Bank of England base rate for the lifetime of the mortgage. The other popular option is three-year fixed rate mortgages which suit investors as they offer some stability but don’t tie them in for too long if rates do come down.”

I normally prefer fixed rate mortgages but these lifetime trackers seem worth investigating. When did you last check that you're getting the best deal on your mortgage package?

Chris Bell

Buy to let pushes up university property prices

2005-08-21T08:05:00.000+01:00

House prices in university towns have soared by 88 per cent in five years and more than doubled in some cases. Issuing the figures yesterday, Halifax, the biggest mortgage lender, said that parents who invested in property for their children while at university would have had a good return on their money.

It said the average cost of a home in the towns and cities of the 20 best-performing universities had slightly outstripped the national average, with prices across the country as a whole rising by 83 per cent since 2000.

Manchester had the biggest rise, the cost of property soaring by 114 per cent to an average £136,603. Bath was next, with a 113 per cent rise to £253,208. In York the cost increased by 109 per cent and prices at least doubled in Birmingham, Sheffield, Nottingham and Durham.
Prices in 14 of the leading 20 university towns and cities exceeded the national average, with only Oxford, Cambridge, London, Warwick, Guildford and Reading lagging.

Telegraph 21 August 2005

Investing in student property has been lucrative for landlords and it's still worth investigating. Do your research. Good properties within walking distance of universities will always have a ready market in student tenants.

Chris Bell

Better Get Your Fixed Rate Mortgage Now

2005-08-21T07:11:00.000+01:00

Homeowners and buyers thinking about opting for a fixed rate mortgage should get in quickly; lenders are starting to withdraw cheap deals from the market.

According to mortgage brokers Savills Private Finance, in the past 10 days Portman Building Society has raised its five-year fix from 4.45 to 4.59 per cent, Northern Rock placed its fixed-rate range on withdrawal notice (meaning it can pull them at short notice) and Abbey withdrew its fixed rate mortgage deals and replaced them at rates of 0.1-0.15 per cent higher. Alliance & Leicester also put its two-year fix on withdrawal notice, while Newcastle withdrew its two-year 4.22 per cent fixed deal.

Sunday August 21, 2005
The Observer

Seems that with oil prices rising and inflation starting to rear its ugly head the Bank of England won't be cutting interest rates any time soon as was previously expected. Now could be the time for buy to let investors to make sure they fix their interest rates.

Chris Bell