UK Landlords urged to comply with Energy Performance Certificate

The UK landlords have been urged by Paragon Mortgages to comply with Energy Performance Certificate (EPC) regulation effective October 2008.

It would be legally binding on landlords to show an EPC to prospective tenants while offering a property for rent. Failure to comply will incur a fine and would prevent the landlord from letting. This could result in longer void periods.

Paragon’s trends research revealed that a large number of landlords still did not obtain EPC. The data indicated that a whopping 81% had no EPC for any of their rental property while only 5% were reported having obtained EPC for all of their properties till date.

27% of landlords were planning to get the certificate before October 1, but 54% would like to wait until the expiry of the current agreement. 8% were ready to take a risk by waiting until enforcement officers contacted them regarding an EPC. 11% flatly refused to obtain the EPC for any of their rental properties.

Paragon Mortgage’s M.D. John Heron warned that landlords could not afford to ignore regulations since it would prolong void periods and hoped that more number of landlords would comply with regulation pretty quickly before expiry of 6-months Assured Short-hold Tenancies. He advised landlords to get EPCs before letting property next time.

Bryant Homes selling new apartments at half their prices

House builder Taylor Wimpey’s Bryant Homes, desperate with the worsening housing market, was selling off its Manchester based new building apartments below half the original asking price.

According to property dealer Saadat Khan of Comfortable Living (NW) Ltd based in Manchester, two-bedroom apartments in Blackley district were on sale for GBP146,000 when first released a year ago.

Khan bought 25 out of 48 apartments in The Hawthorns and was reselling them at GBP 79,000 on the leasehold terms similar to those offered by Bryant Homes. Though he did not divulge how much he paid but acknowledged that his mark-up was maximum 5%. He informed that cash-starved builders were ready to sell homes at huge discounts.

It meant that they were receiving cash while their shares prices were down 97%. He claimed that his firm launched Comfortable Start as a means to help first-time buyers in buying home with instant equity to lend them protection from falls in market.

Khan explained that discount obtained in bulk buying was passed on, almost fully, to the first time buyer. They were selling homes which people could live in comfortably.

A large number of builders have tried shared equity schemes for their unsold apartments in city areas like Blackley by holding on to 25% thereby reducing the amount buyer needed to borrow. But the schemes failed in many cases since buyers were still unable to afford mortgage.

Bryant Homes did not comment.

Do not hesitate in seeking services of estate agents for letting

Many experts of property rental agencies suggest that landlords should not hesitate in seeking services of professionals in letting their properties for sake of saving small charges in return for security of rental deal.

According to these experts, it is difficult for a lone landlord to assess rental value of the property in the most complex and ever-changing market conditions. It is also difficult to decide whether property should be furnished or unfurnished for renting.

The key to taking these decisions, according to the experts, is flexibility. If the landlords stick to looking for young professional couple for renting their property, they would only end up prolonging void period of their property and losing on rental income.

This can be easily avoided by hiring services of experienced and reliable letting agents to get a secure deal for your property.

The agent would ensure that nothing is left to chance in drawing up a tenancy agreement by adding specific clauses to protect your interests. There are issues like maintenance of property and tenant not paying rent, which needed to be handled carefully without breach of laws and regulations. The agent would render proper advice to give you peace of mind.

Renting out property is fraught with difficulties and the landlords who fail to follow correct guidelines put unnecessary squeeze on their income.

Tips for presenting a property to let

Property letting is one of the most opted for alternatives by property owners in the UK. Having finalised the rental price for your property to let, the next important step in letting is the presentation of property to the potential tenant. Offering the property in good order is as vital as pitching the right price. A good presentation of the property generates initial interest in the tenant.

You should describe your property in brief, covering information about its internal and external order and the facilities available locally. The first thing to attract potential tenants would obviously be the price and secondly the images of property which may be presented through photographs. The tenant should be shown internal shots of the property first before showing exterior.

While taking photographs for property to let advertisement, tide up areas like kitchen and lounge nicely. Remove all the clutter and mess from the place. Offer vision of a nice place to live in to the potential tenant. A clean and tidy lounge or kitchen photograph in the ad would generate more enquiries than poorly presented interiors. It’s also worthwhile having your property professionally cleaned to make it more presentable, and if you’re based in the capital, using professional home cleaners in London is a good idea.

Apart from presenting photographs, potential tenants should also be furnished some more details which may include:

• Number of bedrooms and bathrooms
• Facilities in kitchen
• List of devices such as fridge, washing machine etc.
• Furnishing, décor style and quality
• Flooring
• External features – garden, vehicle parking area
• Utility bills and council tax details

A good property description would help you in gaining more interest in your property and getting a good tenant for letting.

Lloyds TBS and HBOS merger could affect property lending severely

The merger between HBOS and Lloyd TBS could seriously jeopardise mortgage lending in the UK.

HBOS has been playing a critical role as it accounted for 20% of total lending in the country as per the information furnished by Sir Bob Kerslake who heads the government appointed Homes and Communities Agency. He mentioned that though it was too early to foresee impact of the merger, there was little doubt that it would have serious effect on property lending.

Sir Bob went on to add that HBOS had much higher percentage of first-time buyers than anyone else in their customer base. He was unsure how this would play out in the days to come. He observed that a collapse would have made things still worse and hoped that Halifax’s policies would be continued to avoid even more serious effect than what had been experienced so far.

The UK property industry is holding banks responsible for reduction in mortgage lending which led to 12.5% crash in the house prices in course of 12 months. Lloyd and HBOS command 28% of the mortgage market in the UK.

According to John Stewart who is economic affairs director at the Home Builders Federation, lack of mortgage availability was the major cause for fall in housing prices and differed with the view that reluctant buyers, who were waiting to see the bottom of the market, were responsible for the crash. He considered lack of liquidity in the mortgage system as the basic problem for mortgage availability.

Get familiar with the laws and responsibilities before letting your property

First time buyers who intend renting their homes should get well acquainted with the laws and responsibilities to avoid pitfalls in letting at a later date.

Renting out your home due to relocation or buying another property for rental income, makes you a landlord with more responsibilities.

The first thing you must not forget is to notify your mortgage lender about your decision for renting. Failure to notify would amount to breach of contract. The lenders charge higher upfront fees and interest rates for buy-to-let mortgages.

It is very important to inform your insurance provider. Your policy would be invalidated if you do not keep them posted.

If you seek services of letting agent to ease yourself with work of getting references, drafting tenancy agreements etc, ensure that agent is member of the National Association of Estate Agents or Association of Residential Letting Agents and the Royal Institution of Chartered Surveyors which are governed by strict code of conduct and lend more security to letting process.

Even if your property remained vacant for some period, you are responsible for upkeep of property such as DIY maintenance, painting and plumbing.

You are also responsible to put tenant’s deposit into any Government-authorised Tenancy Deposit Protection Scheme. The deposit is held in to the scheme till end of the tenancy contract. If the landlord fails to notify within 14 days, the tenant can obtain a court order directly and make landlord repay the deposit.

Get best returns on your property by letting it to holiday makers

If you have made an investment in a property to let, renting it to holiday makers would be one of the good options for getting the best returns from investment as compared to opting for a long-term tenant.

There are of course merits and demerits in going with this option. Property for holiday letting requires high standard of regular upkeep and maintenance. The biggest advantage is the income you can churn out from lettings for shorter holidays.

The holiday makers would always be looking if your place suited them for the kind of holiday and good time they had wanted to enjoy.

Ensure you furnish your property well so that it meets all the necessities of the holiday makers you want to attract. If you were intending to let your property to families, ensure providing washing machine, fridge, TV etc. Add facilities like hot tub or an open fire place. These may involve bigger investment but would keep your property occupied through out the year and may fetch you higher prices.

Do not hesitate to spend on advertising your property. Be quick in answering to customer enquiries, one who responds quickly gets the customer fast. You must assign somebody to greet your tenant and lend personal touch to their stay for holiday.

Finally request them to give a written feedback about their experience with your letting, which would help you in making improvements and utilising good feed back for future marketing.

Local government department confirms fall in house prices

The house price index published by the Communities and Local government department (DCLG) confirmed that house prices in July 2008 were lower by 0.3% than those prevailing in July 2007, in spite of a surprise increase of 1% in prices in July 2008.

The house prices had fallen by 11% last year mainly due to the credit crunch which had choked mortgage fund flow.  The DCLG survey which is based on data of completed sales indicates drop in the prices for the ninth consecutive month. The average UK property price currently stood at £217,171, though the downturn is not uniform across the country.

Prices in England are down by 0.3% while those in Northern Ireland and Wales are respectively down by 10.3% and 0.8%. Scotland though was an exception where prices rose by 3.6% over last year. However surveys by the lenders Nationwide and Halifax pointed out that drop was much steeper in the year to August than reported by the DCLG.

The difference in two reports could be attributed to use of different methodologies by DCLG and the lenders. Lenders price index is computed on the basis of prices quoted at the time of mortgage loans whereas DCLG computation is based on previous months data obtained from 60 mortgage providers for the sale of 50,000 houses.

How to secure successful re-mortgaging in the credit crunch

Welcoming the downward trend in mortgage interest rates, buy-to-let investors and property owners need to get organised to clinch best deals from lenders and banks during current credit crunch.

Delay could mean that borrower was in position to revert to lender’s variable rate at the time of re-mortgaging. The Property Owners Directory has cautioned that re-mortgage products were very few and delay on borrowers’ part could lead to loss of opportunity in the tough market.

There are around 1.4 million mortgage deals that would end in 2008 and all would be looking for re-mortgage, as reported by the Financial Services authority.

The Bank of England recently reported that number of loans for re-mortgage in July had fallen to 69,000 down from 80,000 in June.

Property owners should hasten up the process for re-mortgage as soon as they come across a good deal while ensuring to complete legal formalities efficiently. If the documentation is readied earlier, the lawyers would be in position to complete legal process quickly and secure the deal with the lender.

A lawyer would need documents like Planning Permission, Buildings Regulations Completion Certificate for already carried out alterations and a copy of tenancy agreement in case of rented property.

Published tips for re-mortgaging are available with Property Owners Directory.

Government eases planning restrictions on homeowners

Thousand of homeowners in the UK are set to benefit from government’s relaxation on planning restrictions pertaining to loft conversion and extensions.

The new measure would come into force from October 2008. It will help those families that cannot afford shifting to other places for accommodating additional members in their existing homes.

The easing of restrictions would mean constructions of up to two storeys, not extending beyond ten feet from back of the property, without consent of planning from local authority.

No planning permission will be required for a loft conversion, as long as it does not extend beyond 8 inches from the eaves and is well within 50 cubic metres in size.

Statistics indicate that 11% of families shift house each year, while 50% of those change properties within 5 years for the sake of more space. The mortgage squeeze and collapse of housing market has made it difficult for many families to sell homes for spacious accommodation.

The government‘s relaxation of restrictions would remove the red tape associated with procedures for getting permission.

Government also exempted payment of council tax for the addition of extra rooms.

Easing of planning restrictions would result in the withdrawal of 80,000 planning applications from the system and savings of nearly £40 million.

The Royal Institution of Chartered Surveyors welcomed government’s new regulation.