37% of landlords yet to get rents from tenants

National Landlord’s Association (NLA) in its recent research has found that 37% of landlords have not been paid rents by their tenants.

The survey also points out that 44% of landlords could not get their rental payments in last 6 months and NLA suggests that it is one of the major causes for significant rise in mortgage arrears and repossessions among buy-to-let borrowers.

Although the court system is found to be quite right for recovery of rents, NLA reports that only 50% of landlords have sought courts’ help to recover their losses because of inordinate delays, sometimes more than 3 months, in hearing of cases.

According to Davis Salusbury, chairman NLA, tenants must give top priority to payment of rent since delay of one month in today’s difficult conditions could be “the straw that breaks camel’s back.” He insists that mortgage has to be paid regularly.

Salusbury also informs that only 35% of buy-to-let mortgages pertain to rental properties and contrary to media reports, most landlords are not facing any threat of repossession or loss of asset.
His advice to landlords and tenants is to communicate with each other and tackle their financial problems together.

Sellers beware, Hips is now in force

The controversial Hips (Home Information Packs) which have been criticised as “waste of time” are now into force from April. The sellers will have to put it in place before going for sale of property.

Prior to introduction of new changes, vendors were able to order a Hip before putting up ‘for sale’ board, but now they are required to furnish additional details in new questionnaire.

The seller is supposed to provide pre-sale information such as council tax band, utilities, parking arrangements and details of structural alterations in the new Property Information Questionnaire (PIQ). This information will help buyer in deciding whether to make an offer.

The Association of Home Information Pack Providers (AHIPP) believes that changes in Hips will be beneficial to the buyers.

Contrary to this belief, the National Association of Estate Agents (NAEA) argues that 89% of property professionals disagree with AHIPP’s views. NAEA, which has been opposing packs since day one, considers them as costly, unnecessary and a total failure.

NAEA also alleges that people are refraining from putting their property on sale because of Hips, as they are required to pay up to £400 for it irrespective of sale or no sale.

However, if any vendor or estate agent puts a property on sale without PIQ or Hips he/she could be fined £200.

As per the new changes, property owners will be required to wait 3 to 5 days to get required information for a pack.

Housing market seeing end of the tunnel as approvals for mortgage go up

Bank of England news brought some relief to the UK housing market as number of mortgage approvals went up compared to last month.

According to figures released by the Bank of England, mortgage approvals grew to 38,000, up 6000 in February compared with January and highest since May, 2008.

Many market observers believe that this increasing trend is probably an indication of revival of activity in housing market.

But Capital Economics’ Vicky Redwood opines that approvals are not consistent with falling house prices and need to double in number.

Market got another good news from property analysts, Hometrack, who reported that homes were selling quicker and buyers’ interest was also going up. It reported increase in number of registrations for the second consecutive month, up 9% in March, following 17% rise in February 2009.

The Hometrack’s survey involved 1,800 surveyors and agents across Wales and England and revealed that increase in aspiring buyers looking for good bargains is providing much-needed boost to the housing market.

The survey revealed 19% rise in sales agreed, although it considered this volume much below the normal levels. According to Richard Donnell, estate agents are becoming more optimistic about the market.

However, the Halifax house price index showed 2.3% fall in February and an annual drop of 17.7%.

Shortage of properties to cater rental demand boosts investment

There is spurt, for the first time in last 2 years, in purchase of more homes by landlords than in selling. Developers are also keen on letting rather than selling properties.

But it does not mean that developers are desperate or landlords are foolhardy. The data regarding demand for rentals points out that it is set to rise due to acute shortage of mortgage and increasing realisation among people about benefits of rental accommodation.

As a result of increasing repossessions, long wait for social housing and owning a home becoming almost impossible for young people, demand for letting is going up more than supply, as revealed in the findings of most surveys. It will be even more difficult for the firs-time buyers to get mortgages if the Financial Services Authority decides to ban 100% mortgages and puts “three times a borrower’s income” cap on home loans, as reported in the media.

According to report by the Centre for Cities, by 2021 demand for rental will be so high that one in five homes will have to be a rental property. Hometrack’s research head, Richard Donnell, believes that rental sector does have a larger role to play. According to him in the last few months rents have been increasing continuously in some areas as many prospective buyers were opting for renting. He predicts this will gather momentum as fewer people will afford to buy.

RBS to pass on only half of base cut to borrowers

Mortgage borrowers are being denied full base rate cut by RBS and its subsidiary NatWest. They will pass on only 50% of it to the customers.

The Bank of England had announced 0.5% base rate cut on SVRs (Standard Variable Rates) yesterday. Read the rest of this entry »

Increasing number of UK property owners preferring overpayments on mortgages

More number of property owners seems keener on clearing their mortgages as early as possible by making overpayments. The number of these owners has increased by 50% in the last year.

Research figures from The Co-operative Bank reveal that 80% of people are doing this believing that it made financial sense because of low return on saving rates. Read the rest of this entry »

Current distress in property market most favourable for investors

While many investors are extremely worried over their investment in property market, Ducalian, a property investment consultancy believes that distressed residential property market in the UK is most ideal for professional investors. Read the rest of this entry »

Landlords alerted over excess payment of building insurance

A customer friendly insurance broker has a word of advice for landlords possessing portfolios that contain blocks of flats and they may be overpaying for insurance without being aware of it.

Neil Cook, a broker employed at Ember JD Insurance, has cautioned about activities of certain brokers and managing agents. According to him some hidden commission charges are being collected by both at the expense of landlords. Read the rest of this entry »

Developer Persimmon suffers loss of £780 million

A prominent UK house developer Persimmon has registered whopping loss of £780 million for the year 2008 amid serious housing downturn, after being forced to write down its land bank value. Read the rest of this entry »

Rents drop further but yields remain unchanged

The latest rental index indicates market is flooded with excess stock. Number of advertisements of rental properties on websites has increased 43% in last 6 months with rise of 8% in January alone.

Rental prices have fallen by 4.8% over last year and 1.2% over January 2009. Read the rest of this entry »