A study by Reuters into the latest [...]]]>

The sub-prime failings of American mortgage companies, Freddy Mac and Fannie Mae caused the U.S housing market meltdown, a key contributor to the financial crisis that dragged the rest of the world into a recession, is finally beginning to show signs of improving 5 years after the initial collapse.

A study by Reuters into the latest housing data in 10 key states shows that conditions are improving in ‘battered real estate markets’ across the USA, including Florida, Arizona, Colorado, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania and Virginia where real estate prices plummeted by up to 75% in the past 5 years, as a consequence of the crisis.

The gradual recovery in residential property prices in battleground states ahead of the Presidential election later this year reflects well on President Obama and his economic measures to tackle the current housing slump.

To date, high foreclosures and declining property values have held back the U.S.A’s economic recovery, but a general improvement in the real estate market should help speed up the revival.

Mark Rom, an associate professor at Georgetown University’s Department of Government, told the press: “The housing market is a lot in the news and that will certainly weigh [on voters].”

The latest data from the National Association of Realtors show that real estate / residential property prices climbed slowly in 50% of US cities during the first quarter of 2012.

The Chartered Institute of Environmental Health (CIEH) surveyed a number of local authorities across the UK and uncovered an alarming number of failed prosecutions against bad landlords due to public sector cuts.

One local authority stated: [...]]]>

Many Local Authorities are struggling to crack down on rogue landlords because of a lack of public sector funding.

The Chartered Institute of Environmental Health (CIEH) surveyed a number of local authorities across the UK and uncovered an alarming number of failed prosecutions against bad landlords due to public sector cuts.

One local authority stated: “We generally have no budget to prosecute.”

Another local authority said that it had been unable to take anything through to the prosecution stage since 2009 because their legal department was so small.

A third council said that it had “practically disbanded its  private sector housing team”.

In other areas, one environmental health officer was expected to cover the large geographical area of 2 local authorities, following a restructure.

Head of policy at CIEH, David Kidney, said: “This survey confirms our worst fears that many councils are finding it increasingly difficult to conduct investigations due to cutbacks in government housing expenditure. This is impairing the ability of EHOs to tackle abuses in the private rented sector. As we have said, it makes no economic sense to cut back investment in housing. The equation is a simple one: poor housing leads to poor
health which needs to longer NHS queues, which end up putting a further squeeze on the nation’s resources. The Government’s obsession with cutting spending is putting some of the most vulnerable people at risk. We must have an informed, evidence-based discussion about housing in this country.”

Sterling rises more than 14% against the South African Rand

Britain’s economy may be in the throes of a double dip recession but its currency is flying high. The Pound (GBP) has [...]]]>

In the past 12 months, the Pound (GBP) has risen 8.6% against the Euro, but twice as much against the Indian and Brazilian currencies

Sterling rises more than 14% against the South African Rand

Britain’s economy may be in the throes of a double dip recession but its currency is flying high. The Pound (GBP) has strengthened against a basket of international currencies, according to figures compiled by foreign exchange specialists, Moneycorp, meaning British buyers of overseas property can get much more bang for their buck. Well, Pound anyway.

Sterling’s solid performance against the Euro has grabbed most of the headlines – it’s up 8.6% on this time last year. But that’s small beer compared to the Pound’s extraordinary 18% appreciation against the Indian Rupee, or its 17.7% increase against the Brazilian Real.

Other countries are also offering substantially better value thanks to the soaring Pound.

Anyone relocating to South Africa will see their Pounds go 14.1% further against the Rand, while Brits buying in Sri Lanka can enjoy an exchange rate that’s 15.1% better than it was in May 2011.

Meanwhile, anyone looking for a pied-à-terre in Poland or Prague will see their Pound buy 15.9% more Polish Zloty and 12.6% more Czech Koruna respectively than it did this time last year.

The following table shows the top countries where your Pound will currently stretch further compared to 12 months ago:

* 2012 rate taken at 9.50am on 8/5/2012
** 2011 currency rate – taken as average during period 9/5/11 to 14/5/11

But it’s not all one-way traffic. Moneycorp data shows that the Pound has weakened 4% against the Chinese Yuan and 3.8% against the Kenyan Shilling relative to this time last year.And for anyone buying in the US, the Pound is worth 1.2% less against the US Dollar than May 2011.

Alex Lawson, senior broker at Moneycorp, commented:”Everyone’s talking about how the Pound is soaring against the Euro and that’s understandable given the continuing question marks over the single currency’s future. While the EU is by far the most popular place for Brits to buy a second home, Sterling’s strength has made a purchase far more attractive in other countries, too. 17.7% on the Brazilian Real and just over 14% on the Rand gives anyone buying in those countries significantly more purchasing power.”

46% of homeowners regard current residential property values to be fair and reasonable according to the [...]]]>

Optimism among residential property owners is increasing with more than one third expecting residential property prices to be higher by this time next year, despite the uncertainty surrounding the UK housing market, according to the latest survey by Rightmove.

46% of homeowners regard current residential property values to be fair and reasonable according to the consumer confidence survey, showing that the British public now have a more optimistic outlook for the UK property market, than in recent years

Concerns stated by the public in the survey include

• Mortgage-related issues
• Mortgage availability
• High deposits
• Being able to find a suitable property

The survey of 40,000+ home movers showed that some 6% worried about being able to meet mortgage payments and the same proportion were also concerned about property values changing.

Despite the slump in the UK property market over the last three years, public home ownership ambitions remain undaunted by the UK’s double dip recession.

According to the CML, some 9,600 residential property repossessions were recorded in the first three months of 2012, approximately the same amount recorded in the same quarter [...]]]>

New figures released by the Council of Mortgage Lenders (CML), show that the number of residential property repossessions remained relatively stable in the first quarter of this year.

According to the CML, some 9,600 residential property repossessions were recorded in the first three months of 2012, approximately the same amount recorded in the same quarter in 2011, although repossession statistics are up by 10% on the fourth quarter of 2011.

The CML have stated that the results of their findings correspond with a typical seasonal trend in UK property.

As a direct result of its findings for the first quarter of the year, the council of mortgage lenders may have to revise the repossession forecast for 2012 downwards from the expected 45,000 repossessions.

However, in a statement, the organisation added: “Continuing pressures on household finances, changes to welfare benefits and an upward drift in mortgage rates all have the potential to disrupt the current stable picture.”

The CML also indicated that the first quarter of 2012 saw a drop in the number of mortgages with arrears of 2.5% or more of their outstanding balance, dropping from 160,300 to 157,800 on a quarterly basis.

The RICS report found that 19% more chartered surveyors observed residential property price [...]]]>

UK Residential Property Prices Slip Again

New research by the Royal Institution of Chartered Surveyors (RICS) has revealed that the revival of the UK residential property market has apparently run out of steam following the end of the stamp duty holiday for first-time buyers in March this year.

The RICS report found that 19% more chartered surveyors observed residential property price decreases than increases in April 2012 and 17% of them predicted further slippage of UK residential property prices in the near future.

6% of chartered surveyors also reported a drop in residential property sales as opposed to a rise, the first time this has happened since September 2011.

Peter Bolton King, Housing spokesman for RICS, stated that the results of the research are far from surprising: “With the recent surge in activity brought on by March’s stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall”.

Many of the negative forecasts for UK residential property in the near future are based on the fact that many of property sales would ordinarily have happened throughout the year, but the scramble to push through deals and invest in property before the end of the stamp duty holiday in March has seriously affected the annual pattern of residential property sales.

With UK residential property prices on the slide once again it is time for property investors to keep the market afloat whilst snapping up property bargains across the country. Wales and the West Midlands have experience the largest drops in residential property values, so these areas could see heavy interest from investors.

It may appear unfortunate, but more and more people over the age of 60 are beginning to realise that it’s not too late to do something!

It must be extremely scary to reach the end of your [...]]]>

Are You Really Too Old To Become A Landlord?

There are scores of the current generation who are already facing the nightmare that is an under-funded retirement.

It may appear unfortunate, but more and more people over the age of 60 are beginning to realise that it’s not too late to do something!

It must be extremely scary to reach the end of your working life, only to discover that your pension is massively underfunded.

When it happens to retiree’s, almost the same story comes out every time, “I had a property in the 80s, if only I’d kept it, and bought another”.

Nowadays – 60 is the new 40!

People still have time to build a decent rental property portfolio, and they can guarantee their rental income from the property by utilising Rent Guarantee Insurance products, providing a regular and healthy income stream, but there isn’t time to wait.

In many cases, mainstream mortgage lenders are happy to lend on PRS Buy-To-Let properties up until an applicant’s 75th birthday.

At aged 60 you still have 20 good years left to provide for a happy retirement, especially with the leaps and bounds of medical advances.

Twenty years could see a great deal of capital growth and a substantial amount of rental income. Twenty years provides the opportunity for a whole lot of living to be done.

And if you’re under 60 and reading this: Why wait until you’re 60 to learn the lesson? Get into property investment now and get started providing for your retirement.

The Co-Op Bank announced this week that it was scrapping residential “Interest Only” mortgage products [...]]]>

Mainstream Buy to let mortgage lenders are changing their products and lending policies as they prepare for the new rules to be implemented that will tighten up on the necessary criteria borrowers must meet, causing a stir in the market.

The Co-Op Bank announced this week that it was scrapping residential “Interest Only” mortgage products but the lender has confirmed that landlords can still obtain interest-only mortgage loans for the purchase of buy to let rental properties.

Platform will continue to offer interest only mortgages for the purposes of purchase and refinance for landlords, but has pulled all similar products for residential homeowners offered through the Co-Op, Platform and Britannia.

LloydsTSB also withdrew “Interest Only” residential home loans but similar “Interest Only” Buy-To-Let mortgage products for landlords will remain in place for the foreseeable future.

LloydsTSB have said that they intend to reduce loan exposure by cutting all UK mortgage lending by 3% stating that borrowing costs on the wholesale money markets were too high.
Instead, LloydsTSB want to raise more cash from their own savers to underwrite all forms of lending and want to raise deposits by 3% .

Banks, building societies and mainstream mortgage lenders tend to view the UK buy to let market as a business with rent from tenants used to underwrite interest payments and long-term capital appreciation, as the property increases in value, is accepted as a suitable repayment method.

Landlords can utilise Rent Guarantee insurance from specialist landlord service providers to ensure that their rental income remains uninterrupted and they can cover their Buy To Let mortgage payments.

Property investors and landlords don’t need to panic and should shop around for the best deal on the market. However, meeting the increased criteria could prove too much for some investors and they may be forced to seek alternative vehicles for finance or use alternative investment strategies such as Lease Options to control property.

The statement comes at a time when a recent Paragon Mortgages report revealed that during the last 3 months, [...]]]>

Investing in specialist Landlord Insurance is vital for UK Landlords

Investing in a specialist landlord insurance policy is something all buy-to-let property owners should do, but it is the one vital area where people mistakenly try to curb their financial expenditure, it has been claimed.

The statement comes at a time when a recent Paragon Mortgages report revealed that during the last 3 months, UK BTL landlords have increased the size of their rental property portfolio’s by an average of 1.8 properties each.

Sim Sekhon, spokesman for Legal4Landlords explains: “Property investors put a lot of time and effort into finding the right properties for their Buy-To-Let property portfolio’s and need to ensure that they have the right insurance cover in place to adequately protect their property assets. If property investors choose the wrong insurance policy, it can have disastrous financial consequences as they discover that they are not covered for malicious damage. Standard buildings insurance cover will not protect landlords in the event of malicious damage to the property by tenants or any loss of rent if the tenants leave unexpectedly. Unfortunately landlords only discover that their insurance is completely inadequate after they try to claim, leaving them with damaged property and a huge bill to make it habitable again. A situation that many landlords simply cannot afford to be in. Landlords should always read the small print and make sure they are comprehensively covered by a specialist landlord insurance policy”.

Regular home insurance will not cover a residential property unless the owner actually resides at the property.

Many residential buildings insurance policies actually state in the small print that the policy will be deemed void if the property is used for rental purposes, so it is vital landlords get the correct level of insurance cover.

Landlord insurance provides a more comprehensive level of protection and it is important that all property investors who are landlords of buy-to-let properties invest wisely in it.

Laura Howard from Moneysupermarket.com explained how a good landlord’s insurance policy should include third-party liability in case of damage caused to the structure of a property by a tenant and includes covering the cost of re-housing tenants if a fire or flood makes the rental property uninhabitable.

Ms Howard also advised landlords to make sure the policy takes in to account any furniture provided by the property owner and provides liability cover in the event that a tenant or their visitor is injured at the property and claims against the landlord.

The Association of Residential Letting Agents (ARLA) advises landlords that failing to seek permission from or not informing their current mortgage provider that the property is to be rented out could also invalidate any subsequent claim.

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