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PRS Fraud Warning Re-Issued By NLA

PRS Fraud Warning Re-Issued By NLA

NLA Warning About Rental
Fraudsters Re-Issued

The National Landlords Association (NLA) has re-issued its 2010 warning to landlords, letting agents and tenants about online fraudsters operating in the UK’s private rental sector after resurgence of complaints over suspect practitioners.

The NLA began to receive a large number of complaints back in August 2010, concerning fraudsters who operate online, using popular free websites such as Gumtree to attract unwitting victims, and the landlord association has now started to receive a new wave of complaints.

The NLA investigated and uncovered several online rental property fraudsters who would trick tenants into paying them an advance fee to rent a property by using underhand tactics such as official landlord association branding or fake letters claiming to be from NLA local representatives to support their demand for up-front payments in order to lure their victims in to a false sense of security.

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Banks To Be Stress Tested On 35% Drop In House Prices

Banks To Be Stress Tested On 35% Drop In House Prices

Banks Stress Tested On 35% Drop In House Prices
And 5% Rise In Interest Rates

UK and Continental banks are to be stress tested using a worst case scenario in an effort to assess if they could cope with a house price slump of 35% or a sudden spike in interest rates to more than 5%, the exercise will be monitored by the Bank of England.

Sky News broke the story on Monday ahead of an official announcement on Tuesday by the Prudential Regulation Authority (PRA), after learning that banks would be subjected to an armageddon style scenario to see if they have sufficient capital to withstand another economic slump.

A series of commercial real estate losses is expected to be applied to the banks’ balance sheets as part of the tests, but it’s not certain whether or not the interest rate hike will be quantified as part of the tests, but the 35% slump in property prices could reveal if banks and building societies would need to raise billions of pounds of fresh capital to survive, unless they can demonstrate their ability to withstand such a huge slump.

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Owning Property Is Better For Financial Security

Owning Property Is Better For Financial Security

Mortgage Payments Vs Savings: Property Provides Better Returns Over Traditional Saving Methods

There was a report in the Daily Express last week that said property owners have saved more than others with traditional savings accounts and ISA’s.

The report reckoned that the Bank of England’s record low interest rate has saved property owners almost £20,000 (GBP) over the last six years in inflated mortgage payments. However traditional savers have lost out by almost the same amount, prompting calls for more help for savers and warnings that borrowing could create a new debt crisis.

Bank of England statistics reveal that the record low interest rate of 0.5%, reached 5 years ago today, has been a mixed blessing for the UK.

Interest rates started to tumble back in 2008 and by March 2009 the Bank of England’s base rate had reached 0.5%, promoting cheaper borrowing.

Property owners with a £100,000 Standard Variable Rate (SVR) mortgage could have saved almost £20,000 (GBP), because mortgage payments were around £3,300 (GBP) a year lower than they were in early 2008 before the financial crash ended the previous property boom.

Savers with £100,000 (GBP) in cash ISAs lost around £18,500 (GBP) over the same period.

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More Severe Weather Warnings For UK Property Owners

More Severe Weather Warnings For UK Property Owners

Landlords Urged To Ensure Insurance Is Up To Date Before Severe Weather Hits Again

There was more bad news for property owners and landlords this week as the UK Meteorological Office (Met Office) has issued further severe weather warnings for the week ahead, bringing more misery for landlords and property owners in the South of England already seriously affected by flooding.

Met office staff have predicted a “Valentine’s Day Massacre” as the UK prepares to be battered by 80mph winds and more torrential rain on Friday 14th February, however there will be much more rain before then, with a slightly weaker weather front expected earlier in the week (Tuesday 11th – Wednesday 12th February).

Government departments, local authorities and agencies are working together to do everything they can to help communities at risk, but landlords are urged to check that they are adequately covered by specialist landlord insurance policies.

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I read about this at the weekend and as I have been considering investing my pension fund in overseas property, I thought it wise to share this with other property investors who may have already considered what originally looked like a superb investment opportunity.

 The Financial Services Authority (FSA) has issued an ‘alert’ about Harlequin Property and the Serious Fraud Office (SFO) has been asked to investigate.

Harlequin Property proposal for luxury resort

Artist impression of Harlequin Property proposal for luxury resort

Up to 3,000 UK based property investors have poured up to £250 Million (GBP) of their savings into a controversial Caribbean property scheme which is now facing the threat of legal action.

Many investors say they fear financial calamity after being persuaded by pension advisers to put large sums into projects run by Essex-based  Harlequin Property, who promised to build 6,000 luxury villas in St Lucia, St Vincent, Barbados and the Dominican Republic.

So far only 300 have been constructed.

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The Financial Services Authority (FSA) have warned landlords and homeowners about ‘property hijacking’, the practice whereby fraudsters attempt to raise mortgages on empty properties that they do not own.

The FSA says it has observed a notable increase in cases of UK property hijacking.

The warning has gone out to all UK mortgage brokers, but agents and landlords should also be aware of the potential for fraud.

In its smaller firms regulation round-up for April 2012, the FSA warned UK mortgage brokers that: “There have been attempts by fraudsters to raise mortgages on unencumbered properties which they do not own – property hijacking. This demonstrates the importance of undertaking appropriate due diligence when engaging in new relationships, to ensure that you know who you are dealing with and can identify any trends or anomalies in the business being offered.”

A stark warning was issued to UK landlords from the AA’s Home Emergency Response service over boilers working harder in rental properties during the coming winter months

Research revealed today by the AA’s Home Emergency Response service shows that under 45% of landlords say they have a carbon monoxide (CO) detector installed in their rental property.

This is less than half the number who have a smoke alarm in their own home (97%).

Whilst the number of rental properties with smoke alarms is encouraging, there is still work to be done to bring this to 100%.

However, the proportion of PRS rental properties without CO2 detectors gives significant cause for alarm, and increasing the number of these could help arrest a worrying trend.

Analysis of figures from the Health and Safety Executive shows that in the last five years, the number of incidents of carbon monoxide poisoning has risen by 90%.

Although the number of fatalities has remained relatively stable, with provisional figures for 2010/11 showing 14 deaths, the number of non-fatal cases of carbon monoxide poisoning has almost doubled between 2006/07 and 2010/11 – from 184 to 343.

As carbon monoxide is colourless, odourless and tasteless it is very difficult to detect without a monitor. With the initial symptoms of carbon monoxide poisoning similar to those of flu it is also often hard to identify when someone is affected, particularly in winter.

Carbon Monoxide detectors manufactured after November 2006 should conform to EN50291.

Tom Stringer, head of the AA Home Emergency Response service, said: “Carbon monoxide is known as the silent killer as it is so hard to spot. One of the main sources of carbon monoxide in the home is faulty gas appliances such as boilers. We would encourage all homeowners to get their appliances serviced, before the hard work of the winter really kicks in. They should also fit a CO detector which are relatively inexpensive but make sure they conform to the relevant British Standard. They should also be positioned correctly in accordance with the manufacturer’s instructions. And as with any detector, they should be regularly checked to maintain their effectiveness.”

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The UK’s Council of Mortgage Lenders have warned that the UK property market could be plunged further into turmoil if the Government starts making first-time buyers pay stamp duty again.

At present, first-time buyers are exempt from paying tax on legal documents, such as the deeds to a house, if they pay less than £250,000 for the property.

However, this concession is due to expire next March, prompting concern from the Council of Mortgage Lenders (CML), who revealed that sales of homes that would have been exempted slumped when a similar concession ended in December 2009.

The body feels that a similar fall in house price purchase could occur if the Government does not extend the exemption, further adversely affecting already teetering confidence in the housing market.

CML Director General, Paul Smee, said: “The CML believes it would be a mistake to pull the plug on the concession – at least until the housing market returns to a firmer footing.”

Its stance is seemingly reinforced by the fact that 87% of revenue generated by stamp duty comes from homes which cost more than £250,000

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Senior UK politicians and financiers have warned the Independent Commission on Banking that its recommendation could imperil Britain’s banks.

The report due out in less than a fortnight, comes at a time when British banking shares are trading at near two year lows.

Investors fear that a separation of the investment banking and deposit taking parts of the bank, to protect depositors from losses within the investment arm, will require significantly more capital and will therefore reduce banking profitability.

Opponents argue that this reform will reduce the amount of funds available to be lent and such a move would be detrimental to the recovery.

While this is a valid argument those keen to see the move argue that five years into the credit crisis, no wholesale banking reform has taken place.

The Governor of the Bank of England has stated on numerous occasions that the current structure is the worst possible. Banks have become too big to fail and whilst profits are privatised and paid out through handsome bonuses. If the risks to produce these high profits go sour, the losses are left to be picked up by us, the taxpayers of the United Kingdom.

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