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Government End Outdated Law To Allow Short Term Letting In London

Government End Outdated Law To Allow Short Term Letting In London

New Measures Allow Londoners To Conduct Short Term Letting
Of Homes For Extra Cash

The UK Government have announced that they are set to introduce new measures that will bring to an end outdated rules from the 1970’s that prevented home owners in London from renting out their properties on a short-term basis to visitors.

Communities and Local Government (CLG), Secretary Eric Pickles said that there were almost 5 million overseas visitors to the capital between July and September 2013, and thousands of properties were advertised as being available as holiday lets on travel accommodation websites such as Airbnb.

However, under laws dating back to the 1970’s, Londoners who want to rent out their properties for less than 3 months, technically still have to apply for planning permission from the council, which does not apply anywhere else in the UK.

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Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Help-To-Buy Controversy Continues

The latest figures released by the popular property finding portal, Rightmove.co.uk coincide with the news that UK based mortgage lenders are worried that the second phase of the Government’s Help-To-Buy scheme risks distorting the true health of the UK property market.

The British Bankers Association (BBA) is a governing body that represents all the banks that are currently participating in the scheme including those who are planning to participate in it in the future, has called for Government clarification on the proposed exit strategy from the Help-To-Buy scheme, according to a report in the Daily Telegraph.The news comes just 2 weeks before the Chancellor of the Exchequer, George Osborne’s Autumn Statement on 5th December.

In a submission to HM Treasury, the BBA said, “Some members of the BBA are participating in the Government’s Help-To-Buy scheme, but further clarification is needed on exit strategies.”

Mortgage applications worth £365 Million (GBP) have been received since the second phase of the Help-To-Buy scheme was launched on 1st October 2013, to help aspiring home buyers get a foot on the property ladder.

The Royal Bank of Scotland, NatWest, Halifax and Bank of Scotland started offering residential mortgages under the umbrella of the Help-To-Buy scheme last month and mortgage lenders representing most of the UK mortgage market have confirmed they will eventually come on board, in order to capture a share of the market.

The Government initiative makes it easier for mainstream mortgage lenders to offer higher value mortgages with deposits as low as 5% by removing some of the risk they would face if the borrower defaults on repayments, because the mortgage products are underwritten by the Government as Spotlight has previously reported.

The Government are very happy to be underwriting Help-To-Buy mortgages because they are listed as a second charge on the mortgage, increasing the Governments property assets, allowing them to borrow money against their portion of the residential properties purchased under the Help-To-Buy scheme.

At least property investors enter the property market with an exit strategy in mind, but the Government have yet to reveal how they intend to exit from the property market when the scheme ends. No wonder mortgage companies are worried!

More Tenants Face Eviction Over Bedroom Tax

More Tenants Face Eviction Over Bedroom Tax

Bedroom Tax Blamed For Increasing
Eviction Numbers

The apparent shortage of 1 and 2 bed properties in either the social or private rented sector means that more tenants are facing eviction for non-payment of the Bedroom Tax because there are no suitable properties available for them to move into.

Mark Rogers, Chief Executive of the Circle Housing Group, one of the UK’s largest housing associations managing 65,000 residential properties, has warned of a rise in tenant evictions because of the government’s new under-occupancy penalty, more commonly known as the bedroom tax.

Mr Rogers said “It is inevitable that there will be a long-term increase in the number of people failing to pay their rent as there are simply not enough vacant smaller properties for people affected to move into to avoid the charge. Circle Housing Group are offering tenants financial advice and encouraging those affected to look at a house exchange scheme, which has seen a 26% rise, but an increase in evictions is also to expected. The under-occupation charge is hitting a lot of people very hard, as you would expect. They are losing money and by the very nature of being on benefits, they are on very low incomes. People can’t down-size because there aren’t enough properties for them to move in to. We did a survey and one finding was that if you let every single bedroom that came vacant, and you housed an under-occupier there, it would take eight years to clear the backlog. Our view is that  for the vast majority the transfer system is untenable. We won’t evict someone if we can’t find a solution for them. If they don’t take that solution that we offer, then we will evict, but we see it as our job to make sure we don’t go down that route. If that happens we see it as a failure; it is expensive to the local authority, it is expensive to the person, traumatic for the person, often not good for the community. We see evictions generally as a last resort. From our perspective I think as time goes on they will go up a little but our plan is that by using our solutions we minimise the impact.”

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Demand May Outstrip Supply As Lenders Brace For Help-To-Buy Stampede

Demand May Outstrip Supply As Lenders Brace For Help-To-Buy Stampede

Demand May Outstrip Supply As Mortgage Lenders Brace For Help-To-Buy Stampede

Over 600,000 residential properties are eligible for the £12 Billion (GBP) scheme, while Zoopla says buyers will still need average £10,000 (GBP) deposit

More than 600,000 residential properties on the market are eligible for inclusion in the £12 Billion (GBP) second phase of the Help-To-Buy scheme, according to the latest in a series of surveys leading to predictions that UK mortgage lenders will be inundated due to the expected demand for the government-backed mortgages.

Details of the 95% mortgages, which are available to existing property owners as well as first-time buyers, are to be unveiled by Chancellor of the Exchequer, George Osborne, with some banks expected to invite loan applications within hours of the announcement expected next week.

The second phase of the Government’s flagship scheme to allow more first-time buyers and second steppers, wider access to the UK’s residential property market has already been brought forward by three months, with high street bank Santander claiming that up to 1.7 million people want to use the scheme.

The Help-To-Buy scheme will cover existing residential properties as well as new-build properties, but as yet there are no plans to allow Buy-To-Let property investors use the scheme.

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Planning Minister Slams Irresponsible Councils

Planning Minister Slams Irresponsible Councils

Government Planning Minister Claims Planning Laws are sending UK housing back to the 19th Century

Planning Minister Nick Boles has stirred up a real hornets’ nest by claiming that local authorities that save green fields instead of building residential properties are irresponsible, and building new homes must be prioritised above preserving fields.

Nick Boles argued that homes create more human happiness than fields, whilst revealing the Government is determined to speed up the rate of residential house building, despite strong opposition.

Mr. Boles slammed local authorities in an interview with the Daily Mail stating:”Deeply irresponsible councils and communities that refuse to co-operate with the government’s expansion plans will risk losing their hospitals and high street shops as their populations shrink. I understand that rural campaigners are very worried when green-field land is replaced by the sheer ugliness and soullessness of housing estates. However, current planning laws are sending Britain back to the 19th century when only the well-off could afford their own home. The sum of human happiness that is created by the houses that are being built is vastly greater than the economic, social and environmental value of a field that was growing wheat or rape.”

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UK PRS Tenant Demand Increases Again

UK PRS Tenant Demand Increases Again

There was good news for UK property investors and buy-to-let landlords who are looking to expand their rental property portfolios, as it has been reported that the number of new applicants seeking to rent PRS properties in March increased by 21% from the number of applicants seen in February.

Tenant demand continues to outstrip supply as the number of residential properties available to rent only increased by 5%.

According to Sequence, who are part of the Connells group, average rents for March 2013 were £704 (GBP), unchanged from February.

London rents averaged £1,375 (GBP), almost twice the national average.

The number of agreed new tenancies was up 13% on the previous month, and up 19% on 2012, reflecting the strong current rental preferences and tenant demand.

Spareroom.com reported that flat sharers are paying nearly 7% more than they were a year ago, with rent for a double room including bills now averaging £497 (GBP) per month compared with just £465 (GBP) a year ago.

In London, average room rents are £660 (GBP) per month, 20% higher than they were in 2011.

Matt Hutchings, Director of Spareroom said: “The fact that room rents are rising at a rate well above inflation is worrying. The bright side is that at least there is not the added cost of utility bills to factor in. All inclusive is a silver lining in an increasingly bleak rental market.”

Buy to let landlords and property investors are extremely confident about the UK rental market, with high levels of tenant demand, strong rental yields and low void periods.

A survey by specialist mortgage lender Paragon also showed that landlords are more positive about the availability of buy-to-let mortgages, with 32% saying they thought finance was reasonably available.

Paragon said that landlords with small portfolios and new property investors just starting out in buy-to-let are finding it easier to get mortgage finance than professional landlords with large rental property portfolios.

Discoveries That Change Property Investors Lives

Discoveries That Change Property Investors Lives

I was fortunate to attend the PIN National Conference at the weekend and I found the attitude of new property investors is far hungrier than my own property ambitions were when I first started out.

These days property investors are becoming far more creative than they were a few years ago and new ideas and investment strategies are emerging almost daily that enable investors to control and profit from property using other people’s money, other peoples mortgages and even ways to profit without actually owning property.

I started my property investment journey in 2005 when I bought my first property at a price that was significantly well below the true market value (BMV) and used that to leverage my position and raised enough finance to enable the purchase of a few more investment properties.

I entered the property investment arena reluctantly on the advice of my wife and I wish I had listened to her a few years earlier as I would have not dragged my feet and we would have bought significantly more investment properties before the peak of the UK property market was reached in 2007, followed by the property crash in 2008 as the financial reasoning of many western nations was rocked by the collapse of the US real estate market and the aftermath affected property markets around the world.

My wife had realised far quicker than I had that there was profit to be made in property and she set about educating me on the benefits. It was one of those discoveries that changed my life and I remain eternally grateful to Rachel for opening my eyes to the possibilities that property investment can bring.

The property crash forced property investors to examine the strategies that had previously enabled them to profit from property and the contraction of financial availability meant that investors had to become even more creative in order to obtain investment properties. Among the new strategies was the emergence of Lease Options (LO) as a method to control property without owning it outright in the UK. The opportunities seized on by property investors already existed and was already being used by investors to control residential property in other countries. This investment method kept savvy investors ahead of the game and has now become widely adapted as a mainstream strategy.

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Residential Property Sales Hit Three-Year High

Residential Property Sales Hit Three-Year High

Residential property transactions in the UK reached their highest level in three years, as would be buyers begin to take advantage of the continuing record low interest rates and the increased availability of residential mortgage loans, according to a survey of estate agents.

The monthly market survey from the Royal Institute of Chartered Surveyors (RICS) found that the increased availability of cheaper residential property mortgages and home loans has been boosted by the Bank of England’s (BoE) Funding for Lending Scheme (FLS) and this in turn has led to a pickup in residential property transactions.

Surveyors reported that many agents have sold an average of 17.4 residential properties to new first time buyers in February – up from the previous average of just 16.8 in February 2013, but property transactions remain significantly below the unprecedented levels reached in the early-mid 2000s, at the height of the last UK property boom.

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Help To Buy Could Boost UK Property Market

Help To Buy Could Boost UK Property Market

The Help To Buy mortgage indemnity scheme proposed by Chancellor of the Exchequer, George Osborne, in the budget announcement made last week is expected to raise both property transaction levels and property prices.

The Help To Buy mortgage indemnity scheme which kicks in next January is designed to generate £3.5 Billion (GBP) of new lending, could be administered by ‘bad banks’ Northern Rock Asset Management and Bradford & Bingley, now in the umbrella of UK Asset Resolution.

Lenders would have to pay to participate in the scheme, but the price has not yet been set.

Estate agents expect Help to Buy to enable people to buy both existing properties and new build homes with 95% mortgages.

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No Buy To Let Mortgages For Landlords with Benefit Tenants

No Buy To Let Mortgages For Landlords with Benefit Tenants

It has emerged that one of the property investor’s best mortgage resources is going to have restrictions placed on their Buy To Let mortgage products.

The Mortgage Works, who were once the lender of choice for hundreds of UK property investors, have changed their mortgage acceptance and lending criteria to such an extent that they will no longer accept buy to let properties that will be inhabited by any tenants claiming any form of state benefit, local housing allowance (LHA) housing benefit or even the upcoming Universal Credit.

As the major buy to let mortgage lender used by portfolio landlords, this news is a real blow for anyone with DSS tenants or even working tenants claiming Housing Benefit.

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