astj n

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Saturday 18th October 2014

Latest Comments

Total Number of Property118 Comments: 6

astj n

12:34 PM, 28th March 2020, About 2 years ago

Coronavirus - Covid 19 - Open Letter To All Landlords And Tenants

Reply to the comment left by Mark Alexander at 28/03/2020 - 11:26Well done to Anon for posting his very helpful article that I have already shared today with another landlord who is affected directly.
To say things are changing quickly would be a gross understatement. I have seen today the action taken by Direct Line insurers at
I would take the view that the fact there is no legal framework available that would enable an insurer to pay claims now that evictions have been suspended for three months by the government and the fact landlords are able to apply for a three month payment holiday on their BTL mortgages if necessary, is to conflate different issues as settling a landlord’s claim for loss of rent is not a precursor to a lender or the landlord evicting the tenant and a suspension of mortgage payments is no substitute for loss of rent. But what does my view on these non sequiturs count for?
I don’t know whether any other insurers have yet followed suit and I suspect Direct Line’s position may be open to legal challenge.
Direct Line do acknowledge though that “Once this three-month period has ended, and providing the Government re-establishes the legal process, we will be able to progress with the claim as per the policy guidelines.”
With the crafty caveat “Following the end of this period landlords and their tenants will then need to work together to establish affordable repayment.”
We can guess what that means and claims will only be entertained when landlords can demonstrate they have been unable to recover the rent arrears. “Surely you have not tried hard enough yet to recover your rent Mr Landlord. Please make a bit more effort.”

Might this be the start of another Property 118 crusade?... Read More

astj n

17:08 PM, 26th August 2016, About 5 years ago

Capital gains on BTL to be taxed as income

My reading, as a lay man, of this thread is the same as John Pipllman's and that the changes apply only to non-UK resident companies. This seems clear, not just, as John says from where it appears in the draft legislation but also from the Background note to the New Clause 12 (page 7 of John's link) that explains the intention to change the present situation where non-resident companies are charged to CT only on the profits attributable to a permanent establishment they have in the UK, so as to ensure a level playing field between UK developers and those based in offshore jurisdictions.

The Law Society is rightly concerned that if the proposed amendment has not been subject to proper consultation and scrutiny then it sets a disturbing precedent as it "may result in many investors paying income tax rather than a capital gains tax on the disposal of their buy-to-let investments."

It would be helpful if the Law Society would clarify whether their concerns here are for BTL investors generally or just non-UK resident investors.... Read More

astj n

17:25 PM, 9th May 2016, About 5 years ago

Mortgage Express - Are they looking to break mortgage contracts?

Hi Jim,

I am sorry not to have replied sooner to your post of 1 May. The information I can give is very much along the same lines as Trendo’s post of 3 May. The short answers to your two questions are:

1 Yes
2 No

By way of further information about my my specific case, I contacted UKAR as soon as I had a firm offer on a property I intended to sell and, as I have a number of MEx mortgages, all at 1.75% above BOE base rate, I was passed to my Relationship Manager.

UKAR’s approach was to assess the value of each of my properties using the House Price Index (I guess because they have no better indicator and in the absence of professional valuations that would not be feasible in each individual case), and to compare my outstanding mortgages against 85% of the HPI values to measure the L/V of each property and of the portfolio as a whole. According to that measurement my mortgages all exceeded their 85% benchmark by one to three percentage points.

I reached an agreement with my Relationship Manager that, provided I paid the amount in full to redeem the mortgage plus a further sum from my after tax net proceeds of sale to reduce another mortgage, UKAR would not exercise their Right to Consolidate as provided for in my Mortgage Terms and Conditions.

I think it is fair to say that UKAR’s stance in my case was determined by the following factors:

- I have no arrears, have never missed a payment on any mortgage and none of my mortgage accounts is subject to an event default;

- I offered to make quarterly (I receive rents every three months) lump sum payments to pay down my other mortgages in order to bring the whole portfolio into line with the 85% test and I gave a verbal undertaking to do this over the next twelve months

I should make two further points. First, I had already disclosed that, for other reasons, my plan is to sell a number of properties that are subject to MEx mortgages.

Secondly, UKAR already had full details on file of all my properties concerning mortgages, income, expenditure, letting history including information on voids, gross and net yields, tenancy agreements, detailed business plan going forward, including stress test results for increases in interest rates, etc following a very thorough, three hour face-to-face meeting with my then Relationship Manager in 2012.

My impression is that UKAR, as any lender, will risk assess their loans and in effect the borrower and their approach will be influenced by these criteria.

Although I believe I have a sound business model and would like to think I conduct my BTL operation in a responsible and professional way, I nonetheless had real concerns about approaching UKAR about this mortgage redemption because of accounts reported extensively in the landlord community. As it transpired, the fears and concerns I had were not well founded and as a result of the open dialogue I have had, I have a far clearer knowledge of where I stand. In answer to your question, I certainly have not had any "bad dealings" with UKAR either in 2012 or this year and have been able to reach an understanding on my circumstances that is acceptable to both sides.... Read More

astj n

10:16 AM, 30th April 2016, About 5 years ago

Mortgage Express - Are they looking to break mortgage contracts?

I am puzzled by many of the comments in this thread. Until a month ago I had eleven MEx interest only mortgages, the first of these taken in 2004. Looking back through my records for each of these mortgages there has been an annual adjustment of interest due and paid in every year since 2008, in the early years as much as £40 but since 2011 usually only a matter of a few pence either way. In previous years there have never been any wider consequences so far as I can discern nor any ulterior or sinister motive. UKAR seem to have felt it necessary to send a letter this year and the result is a fair amount of confusion and a great deal of concern. Are contributors to this thread saying this is the first year such an adjustment has been made to their mortgage(s) because that is not my experience?

I recently sold one property and redeemed the mortgage. UKAR called for an additional £1,500 approximately, said to be interest due following a change to MEx's basis of accounting in 2005. The verbal explanation I was given was entirely consistent with Trendo's account in his contribution of 20 April and the amount I was required to pay represented 27/30ths of my June 2005 mortgage interest payment. As far as I can see this is a completely separate and unconnected matter to the main issue raised in this thread.... Read More

astj n

13:51 PM, 29th February 2016, About 6 years ago

Purpose Build Student Accommodation VS HMOs - the future?

Hi Laurie,

None of us, except perhaps GO, can predict the future or we would not be having to try so hard to extricate ourselves from our present pickle. But I agree with the points Leon makes and particularly the fact that so many young people look forward to the experience of living with a few new-found friends, enjoying the relative freedom that a shared house offers. By and large they have come from a family home that resembles such an environment, something that purpose-built accommodation cannot offer however hard it tries to escape from an institutionalised feel. This is totally different from the mindset overseas, and particularly France, for example where students almost invariably go to uni. in their home town.

The days have long gone when university education was for a small minority and good A-level results were a stepping stone to a good job. Many young people and parents now regard a university education as a priority if not a necessity, subject of course to grades. The market is therefore not only very substantial but in my view is secure with continually growing numbers going to university and in need of accommodation.

I have been involved in student shared housing, also mainly 100 year plus Victorian terraced houses in Leeds and York, for the last 20 years where there has already been a noticeable increase in new purpose-built accommodation. Such buildings will undoubtedly have their attractions for certain sectors such as overseas students and very wealthy UK students and I believe it is a case of finding the right niche in the market. The private student landlord does not need, and usually cannot, compete with all the facilities offered in purpose-built blocks but does need to move with the times and ensure properties meet a much higher standard of furnishing and decor than hitherto and the provision of such things as business grade wi-fi broadband included in the rent should be the norm. If you have been letting student houses for ten years and spend money maintaining them, your properties are obviously in the right locations and to a standard to cater for the demand. It's not purpose-built blocks that are the enemy you need to be concerned about!

Anthony... Read More