Property Articles

In the UK, everyday more and more novice landlords are tempted into the buy-to-let investment sector not only by a range of new and competitive products by the mortgage lenders but also by the success stories of the other property investors.The buy-to-let mortgages are now a lot easier to obtain and a lot more competitive compared to five or six years ago.

Although traditionally the lenders required a 130% rental to mortgage repayment ratio to secure a margin of safety during the vacant periods, some lenders are now allowing the predicted rental income to be 100% of the mortgage repayments. There are even products out there that require no indication of rental income.

The financial experts seem to be divided about these new products in the marketplace. Some experts argue that a lot of the novice landlords may be badly exposed by further interest rate rises that are widely forecasted for the rest of 2007 and potentially in 2008 too. According to this group of experts this situation is creating a lot of high risk investors that will be adversely affected by even marginal interest rate increases and this could potentially be the downfall of the buy-to-let investments in this country. Whereas the others argue that “when used properly by the experienced landlords”, these products do offer a lot of choice and flexibility, which can only strengthen the buy-to-let market.

Overall, it is down to the individual landlord to decide how much risk they wish to take but our advice to any novice landlords would be to seek independent financial advice from the experts before making any such decisions.Appleton Estates would be happy to put you in touch with Independent Financial Advisers should you wish to explore the buy-to-let property investments.

Finally, the Government has taken a step back on the Home Information Packs amid plenty of pressure from all the main players in the real estate business.

If you have been planning to sell your property in England and have not had a chance to get a Home Information Pack (HIP) yet, you are most probably one of the many people who can breathe a sigh of relief.
HIPs were originally scheduled to become mandatory for all properties put on the market in England, starting June 1st 2007.

However, Ruth Kelly, the Communities and Local Government Secretary, made a statement to the House of Commons on the 22nd of May announcing that the introduction of the HIPs has been postponed to August and only those properties with four or more bedrooms will have to have a HIP.

The official reason for this move has been given as not having enough energy efficiency assessors.
This will be the main trial for the HIPs and as the number of qualified energy efficiency assessors increase, the HIPs will be phased in for the smaller properties as well.

Also the vendors will not be required to have a HIP obtained prior to putting their property on the market. People will be allowed to start marketing their properties without the completion of their HIPs.

Many estate agents and the biggest estate agency bodies in the United Kingdom, who have been ferociously lobbying against the initiative for a long time, have welcome the news and are enjoying their victory.

Amid financial pressures from the EU, the councils are under more pressure from the government to switch to a fortnightly waste collection.

According to an article on the BBC website, there are currently, around 200 local authorities in the UK are collecting refuse fortnightly. It will not be long before a council in our area will start trialling the new system.

You can access the official Waste Strategy of Royal Borough of Windsor and Maidenhead on the following page:

http://www.rbwm.gov.uk/web/wm_waste_strategy.htm

Reading Borough Council’s page is the following on refuse collection:

http://www.reading.gov.uk/environmentandplanning/wasteandrecycling/yourrefuserecyclingcollections/

We would like to especially draw our landlords’ attention to the great article on the “Waste Collection from Tenanted Properties” on the Reading Borough Council website.
Also, there is a campaign on the BBC Action Network on the subject at the following address:

http://www.bbc.co.uk/dna/actionnetwork/G1121

Time, advice and convenience.

The first rule of successful letting is finding reliable tenants. Active marketing with leading-edge technology, unrivaled local knowledge, and excellent business relationships with local employers mean that Appletons can put you ahead of the game straightaway.

Then there is our tailored advice: Appletons are working with you every step of the way; from letting basics to keeping you up-to-date with the new legislations, risk management and ways to protect your investment.

Finally Appletons also help you with money saving options to make the whole letting experience easier, such as specially negotiated landlord insurances.

Appleton-Estates.com has signed up to the non-mandatory signed up to the Ombudsman for Estate Agents (OEA) code of practice.

The Ombudsman for Estate Agents (OEA) is an independent, non-statutory dispute resolution service for dealing with disputes between Member Agencies and customers who are buying and selling residential property in the UK.

By choosing Appleton-Estates.com, you can be assured that we agree to abide by the OEA Code of Practice, which sets out a framework within which Members must operate and sets the standards of service they should provide.

The Code is mandatory and rigorously enforced. Compliance levels and consumer satisfaction are closely monitored. If things go wrong, and you have a dispute with a Member Agency, you can refer your complaint to the Ombudsman for resolution. The Ombudsman is completely independent of the Member Agencies, and will provide a free, fair and speedy review of complaints falling within his Terms of Reference.

As a member agency we have agreed to co-operate with the Ombudsman and to abide by any decisions that the Ombudsman comes to.

On Thursday, the Bank of England has decided to raise interest rates by 0.25 point to 5.5%, highest point in six years; as widely predicted by many analysts.

This is the first increase since February and is expected to tackle the inflation rate as well as the ever-increasing property prices.

Some homeowners are already feeling the pain of increased mortgage payment, with fears of more rate rises to come as early as next month.

Commenting on the decision, the BSA’s Director-General, Adrian Coles, said;

“Consumers should not panic as a consequence of this rise, but should try to assess how it will affect their finances. For people on variable rate mortgages, the increase in the interest rate will see their mortgage payments rise.

“For some, especially people who have also taken out personal loans or credit cards, this could mean a problem paying the mortgage.

“If this is the case then they need to contact their building society as a matter of urgency. When they do, they will find a sympathetic response and help to get their finances sorted. This could include rescheduling their repayments. Talking to your building society is particularly important as further rate rises are still a possibility.

“Not paying your mortgage can put your home at risk. Building societies want to avoid this if at all possible.

“For the 55% of building society mortgage holders who have a fixed rate product, the rate rise will make little immediate difference.”

Adil Akkus, the director of Appleton Estates said: “If the current interest rate trend manages to cool down the property prices, it may increase the rental demand among the potential first-time buyers.”

Remember, your property may be repossessed if you do not keep up payments on your mortgage.

An increasing number elderly people are considering to make use of the money locked up in their home to enjoy their retirement years through equity release schemes.

With the UK property boom over the last decade, most people have seen the value of their home increase significantly. The equity release plan is a way of people trying to make the best of this increase of their home.
Especially the retired people are keen on releasing some hard cash out of the rising value of their homes in order to increase their spending.

The equity release plan allows the home owner to release tax-free cash from their home in order to boost their finances in retirement.
There are several different schemes on the market but most of them have the same principal of giving the owner a loan on the value of their property.

There are two main equity release plans widely on offer:

• lifetime mortgages,
• home reversion plans.

The lifetime mortgage seems to be the more popular of the two plans.

The owner receives the loan as cash, as a lump sum or on a monthly basis, and continue living in their home.

The lender then recovers the loan either by selling the property after the owner’s death or when the owner sell the property - for example to move into a care home.

Whatever you do, please seek expert independent financial advice. The equity release schemes are often easy to get into but generally hard to get out of.

A recent research highlights that more than 77% of property investors target their local area for investment; mostly within a 5-mile radius of their principal residence.

Adil Akkus, the director at Appleton Letting Agents in Reading commented: “The landlords who manage the day-to-day running of their investment properties need to target those areas that are as close to their main residence as possible in order to be able to deal with any problems. A good relationship with their tenant is very important.

However, at Appletons, we provide our landlords a great flexibility with our distinguished residential property management service. Many landlords who opted for investing further afield, in the Maidenhead, Reading and the surrounding areas of Berkshire, have employed our management services over the years. We oversee the everyday management of their properties, leaving the investors to concentrate on other areas of their portfolio management.

We have a considerable amount of very satisfied landlords from overseas as well as from other areas of the UKc.”

Landlords across the UK are expanding their portfolios as demand continues to grow within the buy-to-let market. Now 8% of the overall housing stock in the UK is accounted for by the buy-to-let mortgages; moreover the buy-to-let market is worth more than £73 billion.