Landlord Basics » property advisors

New Initiative Offers Property Investors Protection Against Squatters

Rowena — Thu, 11 Nov 2010 08:53:10 +0000

With the number of people turning to squatting increasing, Grant Shapps has revealed a new initiative to help property investors and homeowners to protect their properties from squatters.

Offering a ‘proactive’ approach to handling this problem; what many property experts are becoming increasingly worried about is who is turning to squatting.

Unable to afford to rent or invest in property, new research has discovered that many young professionals are turning to squatting as a solution to their housing problems. As a result, properties which look or appear vacant are becoming increasingly targeted.

So how does Shapps suggest overcoming this problem?

In his legal guide, he began first by reassuring property investors/homeowners that the law is on their side, before offering them the following tips:

· Keep void periods in your property to a minimum

· Make sure your property investment looks occupied at all times

· Increase security in the property by limiting accessibility

However, despite these tips, Katherine Hibbert from the Advisory for Squatters has revealed one key concern to Shapps initiative i.e. that he is wrongly informing property owners that the law is on their side. Squatters technically have to locate a property which is empty in order to squat in it. This means, the law actually only protects property investments that are in use as homes and not those that are empty.

And if this information is to be taken seriously, then now more than ever it is essential to make sure that your property let is never vacant…

Luckily with statistics revealing that 5.8 tenants are currently vying for every property and properties are only remaining empty for less than a week, preventing squatters from infiltrating your property should become a lot easier.

3m Property Owners At Risk Of Interest Rate Increases

Rowena — Fri, 05 Nov 2010 13:12:45 +0000

Property advisors have become increasingly concerned that interest rates may increase earlier than expected after last week’s report revealed unexpected growths in the economy.

And this could put the hundreds of property owners who are already facing rising taxes, increased inflation and the prospect of job losses, under increased financial pressure.

Even if interest rates rose by just 2 percentage points, this could leave 3 million property owners unable to afford their mortgage payments!

Commenting on this issue, the Council of Mortgage Lenders (CML) has stated that usually property owners would be advised to take out a fixed rate mortgage in order to safeguard their income. However, after examining the financial position of property owners further they discovered that a large proportion of property owners currently as unable to afford or access a fixed rate deal.

Prevented through a combination of falling property prices and strict lending criteria, this has left thousands of property owners unable to remortgage their property elsewhere as their property hasn’t got enough equity in it. It would seem that many lenders are only willing to offer their best rates to customers who have got at least 25% equity in their homes, meaning those who have got less cannot qualify.

Tenant Applications Rise To 61,000

Rowena — Fri, 29 Oct 2010 07:44:33 +0000

A record breaking 61,000 property owners are believed to have applied to become tenants during Q3 of this year according to property website Countrywide – 19% more than the previous quarter.

During their research, Countrywide noted that tenant applications had risen by 44% overall during 2010, with as many as 20,000 applications coming in during July alone.

Inspired by restricted mortgage availability and the government’s latest benefit cuts, thousands of property owners have chosen to venture onto the buy to let market. However whilst on the outset this is good news for property investors, property advisors are becoming increasingly concerned that we may soon run out of properties.

And they could be right…

With the number of properties available to rent dropping by 6.9% during Q3 -27% less than Q3 of last year – there are now 5.8 tenants vying for every property investment.

Discussing this problem, Countrywide strongly believes the government needs to do more to get: more properties onto the market; more property investors investing as well as make finance more easily accessible. If they don’t we could soon be confronted with a housing epidemic…

And examining Countrywide’s statistics something needs to be done fast. During their research they discovered:

Property lets are being rented out on average within 13 days of entering onto the property market – 7 days less than at the beginning of 2010
2 bedroom properties are in demand with 10.2 tenants vying for every one available

Million Pound Properties Defy The Odds

Rowena — Thu, 28 Oct 2010 07:46:45 +0000

The government may feel that we are entering into an ‘age of austerity’; however new statistics released by the Halifax would appear to suggest otherwise.

During a recent study, they discovered that an impressive 2,992 million pound property sales occurred during the first 6 months of this year – 118% more than the beginning of 2009.

Yet what is puzzling property advisors the most is: where is all this money coming from? Especially when most of the UK population cannot find the finance to invest in property?

Analysing these figures, property advisors feel that demand from wealthy foreign property investors has prompted much of this growth. Taking advantage of the sterling’s current weakness and drawn by the ever strong performance of the London property market, UK property investment has grown in popularity.

As it stands there are currently a 170,000 property investments worth £1 million+ in the UK, with London accounting for the largest number.

Yet it would seem that rich property investors (both from the UK and abroad) appear to favour the following property locations the most:

Liverpool and Cheshire rank at the top for many property investors
London and the South East are believed to have accounted for 89% of all million pound property sales during the first 6 months of this year
Kensington and Chelsea have already benefited from 398 million pound property sales during this year alone

Flatsharing Population To Swell By 9.4%

Rowena — Wed, 27 Oct 2010 08:30:56 +0000

Changes announced during the Spending Review last week, has already got property advisors contemplating the impact housing benefit cuts will have on the property market, especially the proposed changes being done to flatsharers…

According to the government’s new reforms, the threshold for the Shared Room Rate (SRR) in housing benefit will rise from 25 years old to 35 from the beginning of April 2012, meaning more than 260,330 tenants may no longer be able to qualify for their own flat or house.

As a result, property advisors are predicting that this benefit change could swell the flatsharing population from 2,765,000 to a staggering 3,025,330 – a 9.4% increase!

And this could prove quite profitable for property investors…

With rents already reaching record levels, average flatsharer rents could rise by £33 from £348 to £381 per month.

However even with this increased potential for profits, property advisors are concerned about the increasingly amount of pressure this move will put on the property market.

With buy to let demand from first time buyers and graduates already exceeding supplies, these benefit spending cuts could put further strain on property investors to provide affordable accommodation as flatsharers and financially strapped families also flood onto the buy to let market.

As UK property prices fall, Chinese buyers continue to profit

Rowena — Tue, 26 Oct 2010 09:40:03 +0000

With UK property prices falling in line with predictions, one group of buyers making the most of the cheaper prices are the Chinese. Wealthy Chinese buyers have traditionally bought properties in London, near universities for their children to live in while at university in the city.

London estate agent Winkworth has experienced a steady stream of Chinese buyers over the years. Clerkenwell is proving to be a particularly popular area for Chinese buyers, due to it being close to University College London and the London School of Economics.

The weaker sterling is adding to the attractiveness of buying in the UK. ‘It effectively means a 30% price reduction for a Chinese buyer,’ said Charles Peerless, director of the Clerkenwell and City Branch of Winkworth.

Recent months however have seen more Chinese clients buying purely for investment purposes due to sky high prices in their native market. Roughly half are looking for two or three bedroom properties with yield around the £500,000 mark, Peerless added. And they usually keep the property for years, after their children have left university, as it can bring in a good rent.

‘Chinese buyers like the UK system, particularly the legal side. They feel safe with it. Many are looking to build property portfolios, especially if the rental yields look good at around 4 to 5%,’ he explained.
Many Chinese buyers are starting to use buying agents. ‘Buyers from south east Asia have been reluctant to instruct buying agents but there is not a tangible sea changes,’ said Guy Meacock of Prime Purchase in London. ‘As with Russians, who until the last few years did not appreciate the benefit of paying someone upfront to find them a property, Chinese buyers are now starting to see the value that a buying agent can add in terms of providing market insight and intelligence,’ he added.

Affluent Chinese investors are also buying new properties around London’s former wharves and docks.

During the last 12 months more than 30% of buyers at its Canary Wharf offices have been Chinese, according to Knight Frank, mainly looking for two bedroom flats up to around £600,000.

Affluent areas around London like Surrey, Buckinghamshire and Kent are also getting interest from Chinese buyers. In fact around 20% of clients searching for country homes are from Hong Kong and mainland China.

Property Market Flooded By Councils

Rowena — Wed, 20 Oct 2010 07:39:05 +0000

For the first time ever, councils are offering up a collection of property assets at auction which in the past they have been hesitant to let go off.

Acting in preparation for Wednesday’s spending review which will review the countries deficit, one property auctioneer Lambert Smith Hampton has revealed of the 125 property investments currently up for auction, 100 have been supplied by local authorities.

Comprising of 14 industrial lots from Barnsley; offices in Leicester and Liverpool, and a number of rentals and directly-owned assets; sold at the right price these properties could prove an incredible asset for budding property investors…

Discussing this move by local councils, property advisors believe this decision to sell has been inspired by the need to reduce the UK’s budget deficit by £83bn.

However, will selling these properties benefit the property market?

Property advisors are dubious…

Should the government prove to be the dominating occupier in a region, and go on to put too many properties onto the property market, this could negatively impact on existing rental prices and bring them down.

Currently the governments is believed to own 115m sq ft of offices – 35% in London and the South East and 12.5% in the North West, so only time will tell if these property locations experience drops in rental values or not.

Outcome Of The Property Boom

Rowena — Thu, 07 Oct 2010 07:43:40 +0000

Nearly 4 years on from the property boom of 2006/7, property advisors are still reviewing the effects property price growths had on the global property market…

Comparing the UK to the US, Spanish and Australian property markets, it would appear that each of these countries has experienced a different outcome simply because of the way they handled property demand.

Once a property investment hotspot for budding investors, when the recession hit 3 years ago US property prices were hit hard.

Yet analysing their property expansion up until this point, it is easy to see how this happened…

In the 5 years leading up their 2006 peak, annual completed property developments increased by 50%.

But this is not all… As land was so readily available for the creation of new property developments this caused an oversupply of properties, the majority of which are still for sale even now.

UK, Spain and Australia

Even though all 3 of these property locations witnessed dramatic property price drops during the recession, none of them ever fully deflated. In fact, Australia has since quickly rebounded…

Speaking on their recovery, property advisors feel this is partially because new property developments never managed to keep up with increasing property prices. As a result, there was no oversupply of properties for sale when the recession took hold making it possible for them to recover now.

Tenants Too Slow To Act

Rowena — Thu, 30 Sep 2010 07:38:24 +0000

New research has revealed that hundreds of potential tenants are failing to access quality London property investments because of the increasing pace of the London rental market.

Following a survey by property advisors Cluttons, it has been revealed that the average time a property let stays empty is now only 5 days – 75% less than August.

And advisors are predicting that this waiting period will get shorter as property supplies continue to shrink amongst increasing demand…

In fact competition is so fierce that Cluttons are telling tenants to make sure they have got access to a holding deposit – prior to viewing a property – in case they decide to put in a bid.

And they have got good reason to offer this advice…

Their Islington office recently succeeded in letting out one property investment, at the landlord asking price, within 30 minutes of it coming onto the market. Whilst their Hyde Park office also recently saw one student’s parent literally fly into the UK solely to put down 1 years rent – in cash – so he didn’t have to wait for his international bank transfer to come through.

And this is incredible news for property investors who chose to stick it out during the recession…

Instead of having to weeks to let out a rental property, property investors can now confidently let out their properties in a matter of hours.

Property Repossessions Continue to Fall

Rowena — Thu, 23 Sep 2010 07:38:08 +0000

A recent survey conducted by the Financial Services Authority (FSA) has discovered that the number of properties under repossession have fallen to their lowest levels since 2008.

Reporting only 9,978 property repossessions between April and June – 5% less than the quarter before – this is great news for many property owners who have been fearful that they may lose their homes.

However, despite this drop many property advisors are still concerned that this could all change…

Currently protected by historically low interest rates, only 37,000 people have fallen into mortgage arrears between April and June (8% less than the previous quarter). Yet should interest rates begin to rise again, property advisors fear we could see a dramatic shift in the opposite direction with more property owners falling into arrears.

For the time being, the majority of organisations are seeing the same results – fewer repossessions.The Council of Mortgage Lenders for instance have only noted 9,400 repossession in the last quarter, a shift that has caused them to revise their forecast for 2010 and change their prediction from 53,000 repossessed properties to only 39,000 for the whole year.