The line ‘neither up nor down’ from the nursery rhyme, ‘The Grand Old Duke of York’ could soon become the theme tune for The Bank of England’s Monetary Policy Committee after its decision to again maintain interest rates at 5.0 percent. Such was the expectation that this would be the fifth consecutive month of no movement that it has led to a fairly muted response from the property industry on this occasion.
The decision has further been overshadowed by the news from America that the government has ‘done a Northern Rock’ and bailed out its two biggest mortgage lenders Fannie Mae and Freddie Mac with an injection of up to $100 billion.It was hailed as a positive move by the world’s stock exchanges where shares began to rally. But there was further drama when the London Stock Exchange had to close down for seven hours on Monday after its IT systems went into meltdown.
The system appeared unable to cope with the amount of traffic being generated by the announcement. An investigation into how and why this happened has been launched.The Forum of Private Business (FPB) believes the Bank of England has missed another opportunity to stimulate the growth of small businesses, which are increasingly struggling as a result of the credit crunch.
“A rate cut would have boosted small firms’ confidence, as well as that of consumers, and would have helped them trough the difficult times that they face in the current credit crunch,” said Nick Palin, the FPB’s Director of Finance and Administration.
He added that a commitment to reducing interest rates in the run-up to the Budget in 2009 would be an indication that these issues are being taken seriously by the Government.James Thomas, head of residential development and investment at Jones Lang LaSalle, said: “The continued challenges in the mortgage market, coupled with sluggish economic performance, suggest that the downward trend in house price is likely to continue well into 2009. Interest rates will most likely be kept on hold until year end, with several cuts in 2009 which would provide a much welcome relief for homebuyers”.
Lucian Cook of Savills residential research said: “Like most other market commentators, our response to this week’s government initiatives designed to help the housing market was lukewarm at best.“By contrast, a serious cut in interest rates, fed through to reduced mortgage costs, would begin to address the issues which are really blighting the market. “While we recognise that inflationary factors make a meaningful cut unlikely in the foreseeable future, from the perspective of the housing market this is desperately needed, both to stimulate activity and ease the concerns of home owners.”
Mortgage rates are back to where they were in August 2007 at the onset of the credit crunch, according to research by price comparison website Moneyfacts. The average rate on a two-year fixed deal is now 6.59% – almost the same as 6.56% in August 2007 and down from 7.08% in early July.
However, the costs associated with mortgages remain high, Moneyfacts said. The better rates are only available to those with big deposits and lenders are also charging higher fees. Moneyfacts said that the average mortgage arrangement fee was now £964 compared with £803 in August 2007.
Furthermore, there is less competition in the marketplace, with only 3,748 products on offer compared with 13,027 in August 2007. Borrowers are also required to put down much higher deposits than a year ago. An average of 20% is now the norm, Moneyfacts says. “The pricing is getting back to where we were a year ago, but the appetite for lending is diminished,” said Darren Cook, a spokesman for Moneyfacts.
Better margins : While the rates are at similar levels, banks are potentially making more profits on mortgages than a year ago. Official interest rates, on which fixed mortgage rates are indirectly based, are now 5% compared with 5.75% in August 2007, which means lenders are getting better returns on the products offered.
Last summer 33 lenders were offering borrowers 100% mortgages compared with just two lenders in August this year. Abbey, Nationwide and HBOS have been among the lenders that have been cutting their rates. Lending to homeowners has slumped dramatically in 2008, because the credit crunch has dried up the supply of funds available to banks.
Source : http://news.bbc.co.uk
Are you from those landlords whose tenants do not pay the rent on due date? If so then here are some of the rent collection tips helping you to get the rent without any hurdle.
The first important tip is to screen the applicant before he actually becomes your tenant. It is wise to obtain his credit report, eviction history report and other relevant information. Give a call to his previous landlord to ask about the applicant’s behavior and character. Moreover, you can have a visit over the place where the applicant is staying currently as it will give you an idea about how the applicant keeps the property. After screening about the applicant well, you can rent your place to the applicant if you find him suitable.
Now, the next thing is that the landlord should explain to the tenant about the terms and conditions of the renting place right from the very first day. Send him a notice if he fails to pay the rent on due date. This will enforce him to pay the rent on time from the next time. Be stern and do not accept the excuses of the tenant as it may give him an idea that you are fine with late rent.
Keep the entire parlance in written either sent the mail or email for avoiding the situation like he said or she said situation. In lease agreement, specify the due date, grace period and late fee charge.
Remember that it is essential from the beginning of the Landlord-Tenant relationship to clear out all the lease agreement effectively so that unwanted problems would not raise up ever in future.
Source: http://landlordtenant.org.uk/
Loan Against Property – Fulfill your hidden demands by putting any residential or commercial property as security.
SOARING rents because of the rental accommodation shortage is prompting many people to think about buying an investment property, especially since the sharemarket has taken such a tumble lately.
By taking such a step, many unwary investors may find themselves caught up in myriad financial and tax complications, and be burnt when they discover the true costs of being a landlord, said HLB Mann Judd tax partner Peter Bembrick. “The way that finances are set up to buy investment property is critical,” said Mr Bembrick. “There are also a number of deductions that can be claimed but not all of them are treated the same way for tax purposes.”
He said it was important investors understood what these were because it could affect cash flow. If things weren’t set up properly, a tax deduction could be disallowed. Mr Bembrick listed the points all potential property investors should consider.
- With a new or refinanced loan, the tax deductibility of the interest is determined by the actual use of the money, not the security used. This means that the security for the loan could be the family home or other personal assets and not necessarily the investment property. However, it is usually best to put available cash into the family home or to pay for personal expenses and use borrowed money for the investment.
- If you make extra payments on the investment loan, and the loan’s redraw facility is used to take out money for personal use, the interest attributable to the redrawn funds will no longer be deductible.
- Costs associated with taking out a loan for investment purposes, such as the loan establishment fee, can’t be claimed outright. Instead they are claimed either over the lesser of five years or the term of the loan.
- Travel expenses, such as for inspections, are deductible so long as the main purpose of the trip is to visit the property. Often landlords are asked to apportion expenses for the private part of the trip.
- When properties are held with another party, the net income or loss must be divided in the exact proportion of the ownership.
- There is a difference between depreciable assets and capital works. A cooktop, stove and dishwasher are depreciable, but kitchen cupboards and sinks are not.
- Carpets and curtains are depreciable, as are carpets in the common areas owned by the body corporate.
- If investors have lived in the property first, they can claim an exemption from capital gains tax in some circumstances when they sell the property, so long as they had no other main residence during that period.
- Apart from income tax considerations, things that need to be thought through before buying an investment property include asset protection, retirement and estate planning, financing and capital gains tax when the property is sold.
source:http://www.news.com.au
For the novice landlord, managing the first property can be quite vexing if you end up signing with a tenant that is uncooperative, and does not comply with the contract conditions. However, if you engage in a proper screening method you will be sure to select the right person to live in your space.
The screening process begins from the very moment that the person speaks on the phone with you. You must be perceptive and attune to how that person operates within a very short period of time. Ask yourself, if the person is punctual when you schedule a viewing of the place. Is he or she well dressed? Ultimately, you want to find out whether or not this person is going take care of your space during the time that he is living in it.
If the person is interested in moving into the space, then you will need to take a holding fee in order to begin the grunt work of screening. Have the prospective tenant fill out a full application form. This form should include information like employment details, previous address and landlord if applicable, credit rating, both personal and business references. You should also include behavioral questions on the form like; number of children that will be living in the apartment, pets, whether or not the individual is a smoker.
It is important to see which pieces of information the prospective tenant was apprehensive about releasing; it may be an indication that something is afoot. No matter how nice the person may seem, never take a chance and always check references. Your screening process is your insurance that you have chosen the right person. The individual must be responsible and trustworthy.
If you believe that you have chosen the right person then it is appropriate to draft a lease agreement, outlining all aspects of the lease. Once you have done that, you can begin to work on the tenant-landlord relationship.
It is important that you build a strong relationship with your tenant so that standards are upheld the fullest. If you come to find out that your tenant is paying on time, complying with contract stipulations, taking good care of your property, and allows access to the property for maintenance and the like, you should do everything in your power to keep that person as a tenant.
Source : http://ezinearticles.com
A survey carried out recently by the Deposit Protection Service shows that large numbers of landlords admit to failing to protect their tenants deposits.
After collating evidence based on interviewing hundreds of landlords from across England and Wales, The DPS found 62 per cent of landlords had not registered their deposits, 18 per cent were registered with The DPS, 14 per cent with other schemes – and amazingly six per cent did not know!
The DPS carried out the survey after hearing mounting anecdotal evidence that landlords were continuing to keep the deposits “in their back pockets” despite it being a clear breach of the law.
Source: http://www.landlordlaw.co.uk
Housing crashes are always worse than expected. A mood in which people believe that property prices only ever go up is usually a reliable leading indicator of a crash. The psychological factor in housing booms (and busts) is too little noticed, presumably because it is difficult to pin any kind of numbers on a zeitgeist. Still, it matters greatly.
An only mildly muted state of irrational exuberance was, roughly, where we stood at the start of this year. The consensus among observers – City economists, the CBI, the mortgage banks and the academics – was that property prices over the next 12 months would be “broadly flat”.
The team at the Halifax, for example, put out a press release in the following confident terms: “The UK economy is in sound shape. Strong market fundamentals, a structural housing supply shortage and pent-up demand from a large number of potential first-time buyers will support house prices, preventing a sustained and significant fall.” Even allowing for a vested interest, that was a truly brave face.
source : http://www.landlordzone.co.uk
Nearly one in two estate agency staff in the UK are thought to be at risk from data theft at work, because they are using an out of date web browser.
New research has revealed 45 per cent of all internet users don’t keep their browser, such as Internet Explorer or Firefox. correctly up-to-date. And national computer support company is warning that leaves estate agencies’ computers vulnerable to malicious programs.
Technical director Peter Turner said, “If you don’t keep your computer up-to-date it is easier for a piece of malicious software, known as malware, to install itself and transfer data from your computer over the web. For estate agents and their staff that is a very worrying prospect.”
Peter added that keeping computers up-to-date is free and easy – but people simply forget to do it. He said: “Updates for programs such as web browsers are released a couple of times a year, and are mostly free to download and use. It’s remembering to do it where most companies go wrong.
“The answer is not to ban staff from using the internet at work. Instead the managers of estate agencies should stay aware of when browsers are being updated and take time to protect their company. “We recommend every agency gives someone specific responsibility for keeping their computer’s web browsers up-to-date, or hire in IT experts to keep them protected.”
The browser security research was done by Google and IBM. Ulysses IT specialises in computer support for law companies across the UK. The business was established in 1998 and operates as an outsourced IT department for clients, mostly on a pay as you go basis.
source: http://www.landlordzone.co.uk
To create the largest representative body for landlords in the UK, the National Landlords Association (NLA) and the National Federation of Residential Landlords (NFRL), who together represent nearly 20,000 landlords, have announced to merge.
It has been researched among the membership of both organisations that there is a need for a national unified voice for private-residential landlords. After a lot of time of negotiations between the governing bodies of the NFRL and NLA, this merger rightly reflects landlords’ views which are represented with one voice to policy-makers.
The larger NLA, combining the strengths of both organisations, will better represent the needs of all landlords at a time when the private-rented sector faces major challenges. The merger will mean a wider range of products and services being made available to members as well as a significant development of local landlord networks.
Current members of the NFRL will automatically become members of the NLA. The five existing directors at the NLA will remain in place but will be augmented by two former NFRL directors. The new NLA, with almost 20,000 paid-up landlord members, is now a big voice for the private-rented sector and this will increase commercial benefits to the members but also a greater ability to influence policy at all levels. All landlords deserve to have their opinions and views represented clearly.
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