Currently viewing the tag: "Buy-To-Let property"
Buy To Let Investment Beating Pension Investments

Buy To Let Investment Beating Pension Investments

Buy To Let More Popular Than Traditional Pension Saving

There has been a lot of editorial commentary in the media focusing on the surge in UK Buy To Let property investment over recent weeks.

There are numerous reports that the total value of properties owned by 2.5 Million buy-to-let investors is fast approaching the total amassed in workers’ pension schemes built up over decades of employment.

The Telegraph reckons that a total of £1.25 Trillion (GBP) has been invested in buy to let property and this figure is still increasing compared to £1.6 Trillion (GBP) that has been invested in pensions.

Changes to pension legislation announced by Chancellor George Osborne in the Spring 2014 budget, could see more money taken out of pensions and put into the UK’s Buy To Let (BTL) market.

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Buy-To-Let Property Investors Reap High Rental Rewards

Buy-To-Let Property Investors Reap High Rental Rewards

Activity In UK Buy-to-Let Property Market
Continues To Increase

Activity in the UK Private Rental Sector (PRS) has reached an historic high, with demand continuing to heavily outstrip the supply of available rental properties, according to the latest National Rental Report by Sequence, owners of Barnard Marcus, Fox & Sons and other well known high street property chains.

The Sequence rental index shows that activity in the UK’s private rental sector hit an 11-year high last month, with strong tenant demand driving up rents to a new monthly average of £751 (GBP).

New tenancies being agreed have increased by 6%, when viewed on a monthly basis, and the figures were actually up 18% when viewed annually.

The strong demand for rental property from would-be tenants is helping to fuel a rise in the cost of average rents, with prices up 2% month-on-month and 6% compared to July last year.

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Buy-To-Let Remortgaging Eclipses Property Purchase Borrowing

Buy-To-Let Remortgaging Eclipses Property Purchase Borrowing

Buy-To-Let Remortgage Surge

Buy-to-let remortgages have witnessed a huge surge in demand during the second quarter of 2013, as existing landlords refinance to raise capital for further rental property purchases.

Remortgaging activity has eclipsed all other types of mortgage transactions covering multiple property types, other than granting new mortgages for buy-to-let property purchases.

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HMRC Target Tax Dodging LandlordsHer Majesties Revenue and Customs (HMRC) estimate that more than 30% of UK private rental sector landlords are evading paying any tax on their rental income at a cost of £550 Million (GBP) to British taxpayers.

HMRC reckon that approximately 1 million PRS landlords failed to declare any revenue from their UK rental properties in the past tax year, compared with 1.9 million PRS landlords who paid over 1.8 Billion (GBP) in tax on their rental incomes over the same time frame.

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Avoid Property Fraud

Avoid Property Fraud

There has been a great deal of stuff and nonsense bandied about by the media concerning property fraud over recent months, however, most of it has been fairly erronious.

To mark the launch of the UK Land Registry’s “Property Fraud Hotline” earlier this month, here are a few tips to help landlords and property owners to protect the registration of their assets.

  1. Property fraud can happen in many ways. Fraudsters may attempt to acquire ownership of a property either by using a forged document to transfer it into their own name, or by impersonating the registered owner. Once they have raised money by mortgaging the property without the owner’s knowledge, they disappear without making repayments leaving the owner to deal with the consequences.
  2. The property fraud line on 0300 006 7030 is available from 8.30am to 5pm Monday to Friday. An online reporting form is also available at http://www.landregistry.gov.uk/contact-us/report-fraud or customers who prefer to email or wish to contact Land Registry outside business hours.
  3. The line is not a substitute for reporting allegations of fraud to Action Fraud on 0300 123 2040 (who will pass your report on to the police) or for taking independent legal advice.
  4. In 2011, half of the 52 claims paid out by Land Registry for fraud and forgery were by non-family members. Of these, 22 involved properties with an absent owner and amounted to £1.5 Million (GBP) out of the total £7.2 Million (GBP) paid for fraud and forgery claims.
  5. Two publications for property owners are available free from Land Registry – Public Guide 17 How to safeguard against property fraud and Public Guide 2 Keeping your address for service up to date.
  6. With the largest transactional database of its kind detailing over 23 million titles, Land Registry underpins the economy by safeguarding ownership of many billions of pounds worth of property.
  7. As a government department established in 1862, executive agency and trading fund responsible to the Secretary of State for Business, Innovation and Skills, Land Registry keeps and maintains the Land Register for England and Wales. The Land Register has been an open document since 1990.
  8. For further information about Land Registry visit www.landregistry.gov.uk

The UK Land Registry’s trial of a free restriction for absent owners is being continued, so far around 5,000 properties have been protected in this way since the trial began in February 2012.

Designed to help prevent forgery, the restriction requires a solicitor or conveyancer to certify they are satisfied that the person selling or mortgaging the property is the true owner.

There is no Land Registry fee for property owners who wish to register this restriction as long as they do not live in the property, (i.e landlords).

Owner occupiers will have to pay a small fee.

UK Land Registry Launches Property Fraud Hotline

UK Land Registry Launches Property Fraud Hotline

A new fraud line has just been launched that allows property owners who are concerned that their property might be subject to a fraudulent sale or mortgage quickly alert the UK Land Registry.

Callers can speak to specially trained staff for practical guidance about what to do next.

The telephone number is 0300 006 7030

Lines are open from 8.30am to 5pm Monday to Friday.

The types of properties most vulnerable to fraudulent registrations or even mortgage fraud are usually empty, tenanted or mortgage-free residential properties.

Individuals at a higher risk of fraud include owners who do not live in the property because they live abroad, buy to let landlords, are in long term hospital or residential care or where a relationship has broken down. Other high risk property types include a landlord’s previous residential address that has since become a rental property controlled by the owner.

Examples of property fraud include situations where a buy to let landlord gets a call from a local estate agent saying that one of his rental properties seems to be being marketed for sale or where a relative learns the property has been ’stolen’ by a fraudster impersonating the deceased proprietor.

Alasdair Lewis, Director of Legal Services said: “Fraud affects all parts of today’s society and everyone in it, costing this country an estimated £38 billion each year. Government has a zero tolerance to fraud against the public purse but in order to fight fraud, everyone needs to work together. The need for everyone to play their part is just as relevant in the fight against property fraud as in other contexts. Our award-winning Counter-Fraud Unit works closely with the police and other agencies to reduce the risk of property fraud. Since September 2009, our measures have prevented fraud valued at £52 million but with an average indemnity payout of some £150,000, fraud is still a fundamental risk to our business.”

Additionally, as part of its commitment to a range of counter-fraud measures, Land Registry’s trial of a free restriction for absent owners is being continued. Around 5,000 properties have been protected in this way since the trial began in February 2012.

Designed to help prevent forgery, the restriction requires a solicitor or conveyancer to certify they are satisfied that the person selling or mortgaging the property is the true owner. There is no Land Registry fee for home owners who wish to register this restriction as long as they do not live in the property. Owner occupiers pay a small fee.

Land Registry’s Counter-Fraud Unit picked up the top prize in the Fraud Prevention Category at the inaugural Fighting Fraud Awards, supported by the National Fraud Authority, in December 2012.

Land Registry’s top tips to help owners protect their property from fraudsters:

  • Make sure your property is registered. If you become an innocent victim of fraud and suffer a financial loss as a consequence, you may be compensated.
  • Once registered, have up-to-date contact details so we can reach you easily.
  • You can have up to three addresses on the register, email addresses or an address abroad can be used. The more information you provide, the more chance we have of reaching you if we need to.
Landlords Forced Into Remortgaging

Landlords Forced Into Remortgaging

More landlords are remortgaging compared to 12 months ago, with a number being forced by their existing lenders to find alternative funding from elsewhere, although some are also remortgaging voluntarily in order to expand their portfolios.

According to research from specialist buy-to-let broker Mortgages for Business, an increasing number of landlords are remortgaging more complex buy-to-let property.

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Timely repairs can increase buy to let rental yields

Timely repairs can increase buy to let rental yields

Reducing repair and maintenance costs for a Buy-To-Let landlord can make the difference between a property producing a healthy yield or being a lemon with a high void rate and a poor return.

With this in mind, property repairs and maintenance can be a crucial focal point for landlords when analysing the potential rental yields from any buy to let property.

Ensuring that all windows are energy efficient and watertight is just one area for landlords to improve the energy efficiency of their rental property. It only takes a missing piece of silicone or a small hole in the grouting for water to seep in and pool under tiles or floor boards. If left, the minute leak can become an expensive disaster.

Landlords should always make sure that all areas exposed to the elements remain water tight whatever the weather before a tenant moves in as putting it right when tenanted can cause a great deal of time lost and damage to the professional relationship between landlord and tenant.

When a rental property becomes vacant at the end of a tenancy, landlords or their agents should ascertain the overall condition of the property and identify any potential work that may need doing to get it ready for re-habitation, and that work should be carried out by qualified and trusted tradesmen.

The overall condition of a private rental sector (PRS) property can often attract a similar quality of tenant. If the rental property is in need of a number of repairs or overall improvement and landlords fail to carry out the necessary works, more often than not, the type of tenant attracted will be of a lower standard and they may not be bothered with maintaining the upkeep of the property, causing further financial headaches for the landlord.

Improving the look and quality of a rental property can often be achieved through quick and inexpensive jobs being done such as repainting walls and gloss work and thorough deep cleaning of high use areas such as kitchens and bathrooms.

Landlords should include clauses within the tenancy agreement (AST) to make the tenants responsible for some of the upkeep of the property and these points should be highlighted to new tenants when they are preparing to sign the AST.

Such things as regular cleaning and cutting the grass can be included and it should also be clearly indicated in the tenancy agreement that any changes to the property must be put in writing to the landlord or letting agent.

A commercial radio advert which suggested that people would be better off putting their money into property rather than keeping it in the bank has sparked a furore and landed an estate agent in trouble with the authorities.

The radio advert, approved by the Commercial Radio Companies Association prior to broadcast, was pulled following complaints.

Three complaints to the Advertising Standards Authority, (ASA), claimed that the advert was misleading because it did not make it clear that there were risks associated with investments. Two of the complainants believed the advert misleadingly presented buy-to-let as a low-risk investment.

Two of the complainants also challenged whether the advertiser was regulated by the Financial Services Authority (FSA) and, if not, whether the ad was suitable to be broadcast on radio.

The company responsible for the advert, Aldermartin Baines & Cuthbert (ABC), told the ASA that they offered many properties that reflected yields of between 7% and 12% but had been guided to suggest a 5% yield, which was very conservative and definitely deliverable. They claimed that they had also been very careful to ensure the ad spoke in very general terms and did not guarantee any return or yield. ABC also said that accountants and financial advisers had contacted them and commended them on the advert.

The company did not accept that the ad misleadingly presented Buy-To-Let as a low risk investment. They said that whilst the radio ad did not mention ‘low risk’, it focused on the issues of inflation eroding the value of money, either on deposit or as the debt of a mortgage, and that if a deal was considered risky, banks would not lend on it particularly in the current economic climate.

The Commercial Radio Companies Association said they were happy with the content of the advert as, in their view, it had been carefully worded so as not to misleadingly imply that investing in a buy-to-let property was low risk or risk-free.

They said the advert was for buy-to-let property promoted as a buy-to-let ‘investment’. They understood that buy-to-let property was outside the FSA’s remit because it was an ‘investment’ not felt to be in need of FSA regulation. They did not feel that banning such adverts from radio would be fair or proportionate.

The ASA considered the advert misleadingly presented buy-to-let investment as low risk and did not make clear the potential risks associated with such an investment. It stated that the risks involved were not limited to tenants not paying their rent and felt that the overall impression was that the advert presented buy-to-let investment as an alternative, or a preferable option, to saving.

The ASA noted that buy-to-let property was not regulated by the FSA and considered the advert to be promoting an investment and despite the CRCA’s comments, it upheld the public’s complaints and subsequently banned the broadcast of the radio advert .

There Will Never Be A Better Time To Invest In Property

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