Tag Archives: Property blog

Which Commercial lenders are hungry for business? Commercial Finance, Landlord News, Latest Articles, Property News

Did you know that commercial lenders have three main categories of manager called Hunters, Farmers and Retailers?

This is very relevant if your business is dependent upon knowing which commercial lenders are hungry for business. Before I explain, please allow me to introduce myself. My name is Cliff Verrill, I’m a commercial finance broker and previously worked with Mark Alexander (founder of Property118.com) when he ran The Money Centre. We have remained very good friends.

I’m a member of the National Association of Commercial Finance Brokers (NACFB) and my current firm are sponsors of Property118, having supported the community with over £20,000 of investment in 2013 alone. You can read more about me on my Member Profile.

Now back to my explanation …… Continue reading Which Commercial lenders are hungry for business?


Barry’s story – it could have been you! Financial Advice, Landlord News, Latest Articles, Property News

Barry’s story was written by the Mark Alexander back in December 2010. It has since been updated and re-published several times. The dates, times and people are fictional but the story is based on real life events.

It’s a modern update of the classic “A Widow’s story”, this time written as a cautionary tale for landlords and their families.

Barry is 53 years old and married to Sharon. They have three teenage children; twin girls aged 15 and a 13 year old son. Barry worked as a self employed salesman in the plant hire business. Sharon had a part time secretarial job in a local school.

Barry and Sharon purchased their first investment property in 1996.

As property values have risen they have continuously remortgaged and used a proportion of the equity released as deposits to purchase additional rental properties. They also saved a proportion of the equity released for a rainy day. To accelerate the growth of their portfolio Barry and Sharon raised extra cash for deposits by remortgaging their home. The profits from Barry’s plant hire business covered the family’s commitments comfortably.

They had accumulated a portfolio of 23 properties with a combined valuation of £1,650,000, against which they had mortgages of £1,400,000.  The portfolio produces rental income of £87,000 per annum. Their rainy day fund amounted to just over £64,000. By having all of the above in place you might be forgiven for thinking that they had set themselves up with a very safe future.

On Sunday 21st December Barry had a bad day. He was on the way home that evening having just been out to fix a tenants leaking shower tray when the traffic on the M6 came to a grinding halt. Barry managed to stop his car, avoiding the lorry in front of him, but the car behind him ploughed into the back of him, wedging his car under the back of the lorry.

The emergency services managed to free Barry from the wreck and his only damage was shock, whiplash and major bruising to his legs. However, two days later Barry collapsed whilst out shopping for last minute Christmas presents. He was rushed to hospital where it was discovered that a blood clot in Barry’s leg had passed to his brain. Barry had suffered a major stroke.

He lost his speech and most of the use of one side of his body. The family were in tatters. Sharon had to give up work to care for him.

Up until having a stroke Barry had managed the property portfolio and taken care of most of the maintenance himself. Could Sharon care for her husband, her family and the management and maintenance of the property portfolio too?

They considered putting the properties on the market but soon realised that after deducting selling costs and CGT there wouldn’t be much money left over. They would also lose their income and they would be leaving their tenants in a difficult predicament too. Sharon has had to employ a lettings agent to manage the portfolio. Since then it has cost the family an average circa £3,000 a month to pay for ongoing maintenance and management.

Fortunately there has been some good news, at least financially. First, low interest rates have meant that Barry and Sharon’s mortgages have got much cheaper than when they started their property rental business. Many of their mortgages have reverted to tracker products due to their fixed rates coming to an end. They are focussing on Barry’s recovery. What will happen when interest rates go back up again though? How will the restrictions on finance cost relief for individual landlords affect them?

The real saviour for the family has been insurance. Fortunately, Barry and Sharon were astute enough to insure against these eventualities. They took out life assurance policies that pay out a regular monthly income right up to Barry’s 65th birthday. These policies were written on the basis that they also pay out in the event of a critical illness. The family are therefore confident that these provisions will see them through these troubled times and out the other side. They will then revert to plan A, which was to live off surplus rental income over and above the mortgage payments on their portfolio or to sell the properties and live off their gains.

What insurance provisions have you made for your family?

How are you investing the windfall of increased cashflow that record low interest rates have produced for your family?

Have you made similar provisions to Barry and Sharon?  If you haven’t it may not be too late, we want to help.  If you have already taken advice and put insurances into place we would like to introduce you to one of our recommended advisers to review your policies and ensure they are competitive. Most important of all, to ensure that the right person gets the right money at the right time.


Tax Implications of Buy To Sell Refubishment Latest Articles

Hi all

I was hoping someone could give me a bit of advice.

I am looking to diversify my investment portfolio (mainly stock market investments) by looking at investing for the first time at Property.

Having done a bit of reading, and looking at property prices (particularly down in London where I am based), I have come to the conclusion that the best approach to take is to buy a property to refurbish then sell on.

I have a fairly sizeable fund available, and the idea is to either buy something at auction.

As this is going to be my first project, I am planning on doing this as a personal project and not within the structure of a limited company. The plan is, that if this project goes well and I think I will undertake further projects to then consider setting up a limited company for further projects. Tax Implications of Buy To Sell Refubishment

My first question to you all is:

(1) Having just moved back to the UK working overseas, I do not own my own property, but instead rent. What would be the tax implication on any capital gain profits I making on flipping a property after I complete refurbishments. If I do not own a residential property, would my Buy To Sell property be considered my primary residence if I continue to live in rented property whilst I refurbish, or would I have to live in the property whilst I am undertaking refurbishments. If the property is classed as my main residence, what are the capital gain tax implications for this? Would all profits not be taxable or is there a capital gains allowances.

(2) Second question, going forward, if the intention is to go down the buy to sell route, as opposed to Buy To Let, am I better off doing this as a Limited company. I have already read Mark Alexander’s post on his preferred method of doing Buy To Lets as an individual as opposed to a Limited Company, but wondered what the best structure would be for Buy To Sell.

Thanking you all in Advance.

Jim


My views on consultancy with Mark Alexander Latest Articles

I really had too much to say about the article offering “One to one consultancy with Mark Alexander” for a comment so I have decided to write an article of my own.

I first met Mark in 2002, he has always been very open with advice and sharing his experience believing that what you give you get back in return. There are far too many charlatans in the property market who hide their advice as some sort of ‘secret to be sold’ which often turns out to be nonsense, or just plain illegal. Investing in property has never been a get rich quick scheme for the lazy or ill informed and never will be.

After having spent 13 years indoctrinated in the Banking industry I decided on a complete change in path. Inspired by what Mark had achieved and his inclusive culture of wanting everyone around him to achieve as well, I took a leap of faith and purchased a franchise in Mark’s commercial finance brokerage in order to be a part of his success and culture. This started with a full time 3 week course run by Mark on Buy to Let, and believe me when I say I thought I knew it all when it came to financing property. Yes I was technically competent, but what I was not prepared for was the eye opening light bulb moments of combining all of that information with business strategies.

I did know my Grandparents bought their house for £2000, inflation erodes debt, cashflow is most important to businesses and how to finance property, but what I hadn’t done was combine all this knowledge into a cohesive strategy.

There is no trick or “Snake Oil” required to successfully invest in property, you just have to look at it using common business sense and strategies to minimise risk. Using interest only loans over the longest possible term to buy property is a perfect example. Some perceive this as high risk, but is in fact the opposite if you combine the old business adage of “cashflow is king”, a strategy of retaining maximum control and the fact that inflation erodes the value of loans over time whilst property generally increases in value at a rate exceeding inflation in the long term.

Yes we have tried to share everything we possibly can on Property118, but in my view collecting the information and knowledge is not the same as the “Oh Yeah” light bulb moments when you hear it from Mark, specifically target to your own personal needs.

We are in some ways very different as you can tell by our articles (Mark always jokes that nobody reads mine), but we both have a passion for imparting what we can to help get people on the right track. I speak to many readers that call in and even if they already own property it often surprises me how little they have thought about it as a business. However, that is my fault for forgetting what seems like common sense for me now was not at one time.

I am always more than happy to help and every investors circumstances are different, but if you are not sure of your path then I hand on heart know Mark can make what seems complicated at first become very simple and obvious after explaining it to you in person.

These are a few things you might not know about Mark Alexander:

In 1990 he started a commercial finance brokerage in his back bedroom. The business went on to rank #38 in The Sunday Times Profit Track 100 in 2008 before he retired a year later.

In 1992 he was a founder member of the National Association of Commercial Finance Brokers “NACFB”. This was a voluntary position. The NACFB is now located in Temple buildings alongside the leading barristers chambers, just a short walk from the Houses of Parliament. NACFB members are now responsible for nearly £10 billion of commercial lending a year.

Mark’s landlord taxation strategy “Milking the Buy to Let” was picked up by the ACCA and communicated to all member accountancy firms – see >>> http://www.property118.com/landlord-tax/

The “Deed of Assurance” which Mark designed was highly commended by Ombudsman Services and is now being considered by the DCLG Private Rented Sector ‘Think Tank’ as an alternative to long term tenancies >>> http://www.property118.com/?p=40949

Mark presented 30 buy to let workshops a year from 2003 to 2008. They were so popular that we had to hire the same stage crew as Robbie Williams and venues including the Reebok Stadium, Emirates Stadium, Aston Villa FC and Leicester City FC.

In 2013 Mark completed a six month Consultancy contract for a leading provincial law firm.

Mark’s training notes on website search engine optimisation are a must read for any business that wants to increase its website expose. Details here >>> http://www.property118.com/?p=33446

His strategies and guidance have inspired literally thousands of landlords to build multi million pound property portfolio’s from which they have attained financial freedom and security for their families.

He has met with hundreds of established landlords who are asset rich yet time and cash poor. It really doesn’t have to be that way. Mark has an amazing gift of being able to help people out to understand, visualise and implement alternative and often life changing strategies. Several of his former clients felt totally trapped by their property portfolio’s before they met him. They’ve since gone on to double, treble and even quadruple their property portfolio’s, have six or seven figure bank balances and most importantly, the time to enjoy life to the full. That’s the real value of professional help.

Mark founded Property118.com three years ago. It operates a not for profit model and is funded entirely by donations and sponsorships. The website is now part of the Google News Publisher Network and has nearly 200,000 subscribers.

It’s not just letting, property investment and development strategies that Mark can help you with, he is also extremely experienced in business, marketing, law, tax, funding, financial services, website development and SEO.

My view of Consultancy is that all people need some guidance at some point in much the same way as all the best sports people need a coach and mentor. Even the likes of Tiger Woods, Ronaldo and Andy Murray all have coaches. The questions posed on Property118 demonstrate the need for Consultancy.

Mark isn’t doing this for the money, but if he offers the service for free or too cheaply he will be swamped with wannabes. If he charges what he previously earned then very few people who need his advice would be able to afford it. Therefore, he’s pitched it somewhere between what an accountant and solicitor would usually charge and will take it from there. All proceeds will be reinvested into the further development of Property118 which is both my own and Mark’s passion and his semi retirement hobby. Mark has many other income streams to fund his personal financial requirements.

Further details of Mark’s consultancy services can be found HERE.Neil


Learning from experience Advice

It can be a lot less expensive and stressful to learn from other peoples experience than to learn by making your own mistakes. Sharing is caring 🙂

I do not profess to have a monopoly on good ideas for landlords and I still learn something new about buy to let property investment every day. The strategies explained in the linked articles below are based on over two decades of experience. I choose to look upon these strategies as maps across a minefield. I may or may not have found the shortest possible route but my strategy is now tried and tested through two full market cycles.

After 20 years in the landlord business I decided to document my buy to let property investment strategy and tips on how to become a landlord. This was then broken down into chapters which I consider to be the most important ingredients of a successful buy to let property investment strategy. I update these articles regularly – last updated 18th December 2013

 Basic fundamentals of a buy to let property investment strategy

Basic fundamentals of a buy to let property investment strategy

This is a general overview of the roots of my buy to let property investment strategy. Many of the chapters below will not make sense unless you read them in order, this being the starting point. read this chapter 

Property Research Made Easy

Property Research made Easy

People selling properties earn commission – “trust but verify”. There are several websites where you can complete your research from your own PC before making a purchase decision. This article explains how. read this chapter

 Interest only vs repayment mortgages

Interest only vs repayment mortgages

Have you ever wondered why most buy to let property investors opt for interest only as opposed to repayment mortgages? read this chapter

 Balancing high gearing risks with high liquidity

Balancing high gearing risks with high liquidity

High gearing effectively means borrowing as much as possible. In this article I will explain the pro’s and cons of high gearing and how to minimise risk. read this chapter

 Calculating rental yields and returns

Calculating rental yields and returns

My Landlords Calculator allows you to analyse returns and other important numbers relating to any residential investment property deal with ease. read this chapter

 Buying property below market value and associated due diligence

Buying property below market value and associated due diligence

We all love a bargain don’t we, especially a property which is being sold below market value. However, just because something is cheap doesn’t mean it’s a good investment. read this chapter

 My first buy to let property investment

My first buy to let property investment

We all have to start somewhere, for me it was just before interest rates soared to 15% as we entered the late 80’s and early 90’s property crash. This is the story of how and why I survived and went on to build my property portfolio. read this chapter

 Finding perfect tenants and minimising risk

Finding perfect tenants and minimising risk

In the 25 years my family have been landlords we have only had to go to Court twice to seek possession, this is despite having granted over 1,000 tenancies. We have not had one single tenancy deposit dispute referred to arbitration or the small claims courts. read this chapter

 Landlord Tax

Landlord Tax

My landlord tax strategy is based upon the intended outcome, NOT income. I suspect your core tax strategy isn’t much different to mine, i.e. make as much money as possible and pay as little tax as legally possible, but how?. read this chapter

 Capital Gains Tax on a property you have lived in

Capital Gains Tax on a property you have lived in

Would you like to know how a £100,000 taxable capital gain can be structured to create a zero tax liability? read this chapter

 Financing beyond retirement age

Financing beyond retirement age

Most landlords believe that if/when they reach the age of 75 they will have to sell at least some of their properties to pay off all remaining mortgage balances. However, that needn’t be true. read this chapter

 Landlords Life Insurance Calculator

Landlords life insurance strategy and calculator

I created my landlords life insurance strategy and built a calculator to work out the minimum amount of life cover necessary to enable my family to retain my property portfolio when my final day of reckoning arrives. read this chapter

 10 tips for landlords before its too late

10 tips for landlords before it’s too late

Know when to stop investing and start living – Learn to delegate and empower. Review your portfolio and your financial position regularly – Stay informed – Succession planning and much more. read this chapter

Mark Alexander

One to one consultancy with Mark Alexander

My fees are £150 per hour plus VAT. All meetings are held at my home in mid Norfolk . I also offer a session from 11am to 3pm at a reduced rate of £500 plus VAT for the four hour slot, including a working lunch.

find out more

 Being a Landlord can be a lonely business - is something bugging you?

Being a Landlord can be a lonely business – is something bugging you?

The more properties you own, the more problems you encounter. Unless you mix regularly with other landlords it is difficult to know who to talk to about challenges what to do for the best isn’t it? read this chapter

Please share this series of articles with anybody you know who is new to being a landlord or just thinking about it. There are plenty of golden nuggets in this series of articles for the seasoned professionals too. ENJOY! 


Landlord & Property Website Awards 2013 Latest Articles

And the winners of the Simply Business Landlord & Property Website Awards 2013 are ….. Best Property Forum

Landlord & Property Website Awards 2013The best landlord forum in 2013

#1 Property118.com

Simply Business said ….

“Our number one pick for this edition of Landlord & Property Owners Awards is property118.com. The portal offers a remarkable number of tools and resources for landlords and property owners alike. It is simple to find specific information on the website and most of the published content is free to access. Property118.com manages an active community of nearly 200,000 subscribers and makes participations in its forum discussions easy.”

Mark Alexander

Mark Alexander founder of Property118.com

A message from us “We would like to say a big THANK YOU to all our readers, our members, our sponsors and all the people who post their questions and comments on our forums.”  

Property118.com helps 1,000′s of landlords, tenants and letting agents every day to better understand their legal rights and responsibilities. Please help support our campaign and CLICK HERE

UK Property Research Tool
What you need to know and where to find the information

Congratulations must also go to the runners up of course. They were ….

#2 Landlord Law

Landlord Law is a portal with lots of free legal advice for landlords. The website is managed by solicitor Tessa Shepperson, who also runs the popular Landlord Law Blog.

#3 Homes & Property

Homes & Property is a very extensive portal covering property buying, selling, and management. The website is owned and managed by the Evening Standard.

#4 Landlord Zone

Landlord Zone is a property portal with an impressive amount of high quality content for both landlords and property professionals.

#5 Landlord Today

Landlord Today is one of the best UK landlord blogs online. It is kept up to date and often offers users the opportunity to consult experienced property professionals.

#6 Property Wide

Property Wide, part of the Countrywide Group, is a great source of information on services such as conveyancing and surveying.

#7 Property Owl

Property Owl is a network with a well managed community of users focused on property development and management.

#8 Landlord Expert

Landlord Expert is the website of the Landlord Associaton, which has over 36,000 members. It contains free landlord documents, forms, and legal advice.

#9 Property Hawk

Property Hawk is a landlord portal that has been active since 2006, and which is full of valuable content. The website offers free cloud-based property management software.

#10 Property Investment Project

Property Investment Project is a blog with an extensive database of forms, tools, and articles specifically designed for landlords. It also has a lively discussion forum.


Daniel Burton from Unida Place Resurfaces Latest Articles

Channel 4 TV have tracked down Daniel Burton of Unida Place in Scunthorpe. The self proclaimed “Rent to Rent Guru” vanished from London back in August this year leaving both landlords and tenants 10’s of thousands of pounds of of pocket. More details in this 5 minute News clip courtesy of Channel 4 TV. Daniel Burton Unida Place

Mark Alexander, founder of Property118.com said….

“obviously we feel for the tenants who have lost their deposits but landlords arguably have an even bigger problem. They let their properties to Unida Place in good faith but probably have a very small chance of being compensated for any losses they will now suffer as a result of lost rent, damaged properties, fines for unlicensed HMO’s and any Court awarded damages for evictions undertaken by Unida Place and unprotected deposits. Many of these landlords will still be housing tenants who paid Daniel Burton’s company but rents were not passed to them. Burton’s agreements with tenants are equally spurious, possibly even unenforceable.  These tenants will probably hold the property owners responsible for their losses. We saw the potential of a disaster such as this looming and had a Rent to Rent agreement professionally drafted by renowned contracts Solicitor Justin Selig to hold operators such as Daniel Burton personally accountable to property owners. Sadly Mr Burton didn’t use this Rent to Rent agreement.

Fortunately, not all Rent to Rent operators are rogues and many of them want to to the right thing by their landlord and tenant customers. More ethical operators are prepared to put their money where their mouth is and have purchased the Rent to Rent contract template, as have many property owners who are attracted to the concept of the scheme which can work well if operated by a financially sound and trustworthy business.”


The Property Geek Blog Latest Articles

It’s not often you will find me eulogising about a website for new and wannabee landlords.You might be forgiven for thinking they could be seen as competing with part of what we do here at Property118 but that’s not the reason I promise you. The reality is that they are often are an alluring upsell for wannabee property billionaires who are taught by “guru’s” that “by this tine next year Rodney you will be a property millionaire”. Yes, in the main they are all run by Plonka’s just like Del-Boy, the very same people who give up their evenings and weekends to present Get Rich Quick courses in dreary hotel conference suites, complete with their rented Aston Martin parked right outside the front door of the hotel of course! – LOL

Property Geek Blog

However, I’ve found a website for newbie landlords that’s very different to the above stereotype and I really like what they have to say, it’s called Property Geek.

So why am I telling you about Property Geek?

The Property118 motto is that “Caring is Sharing”. I created Property118 to facilitate the sharing of best practice amongst UK landlords and associated professionals. Property118 operate a not for profit model and are funded entirely by donations and sponsorships, we don’t even sell advertising hence we have no competition. Credit where it’s due then, and in this case it’s the Property Geek website.

The person it belongs to is not paying me to write this article by the way, in fact, he doesn’t even know I’m writing it. Just in case you’re wondering, we are not related or old mates either. I only came across the Property Geek a few months ago.

The Property Geek blog is run by one of the presenters of the Property Podcast, I did an interview with them recently and have since provided content for their future podcasts – see >>> http://www.propertygeek.net/podcast-mark-alexander/

If you are new to property investment or you are just considering dipping your toe into the water, the Property Geek blogs I’ve listed and linked to below are definitely well worth a read …

1) There’s no rush

2) In defence of the day job

Rob Dix is the man behind the Property Geek blog and as he’s a member here at Property118, therefore he will get the notification email when I publish this article. I would love to be a fly on the wall when he reads it, better still have a hidden camera to film his reaction.

Please let me know what you think.

Property Geek


What accountancy software do landlords use? Latest Articles, Tax & Accountancy, Tax and Accountancy

Hi all,

I’m fairly new to property investing and brand new to this site. Thanks Property Geek, Rob Dix, for your podcast on Mark Alexander that pointed me here.

Quick question; what accountancy software does this community recommend? What accountancy software do landlords use?

I currently only have three properties, but plan to scale to a lot more. I use spreadsheets for now, but it may be nice to use something with cool, pre-customised reporting and dashboards.

I’m going to use odesk to find a Virtual Assistant to do the book-keeping for me: they could use excel, but again, I want to know if there is something better out there. I’ve checked out Xero, but it seems more relevant to a trading company.

Any recommendations?

Thanks

Martin


Calling all Wikipedians Latest Articles

Neither Property118 nor myself have a page on Wikipedia and that makes me 🙁

Can you help?

I understand that other people have to compile the page and the more input the better?  Calling all Wikipedians

If this is the case I suggest the following as a starting point.

Property118 forum

An online forum and news feed with a mission to facilitate the sharing of best practice amongst UK landlords and letting agents.

Founders of The GOOD Landlords Campaign.

Funded entirely by sponsorships and donations.

Google News Publisher.

Claims to have nearly 200,000 subscribers to its weekly newsletters.

Founded by Mark Alexander – Twitter handle @iAmAlandlord


SEAL – South East Alliance of Landlords Landlord News, Latest Articles

SEAL - South East Alliance of Landlords

Members of the South East Alliance of Landlords (SEAL) are putting together a bedsit task force to go Street to Street in Southend in a war on neighbours from hell.

Judith Codarin, secretary of SEAL said: “We will choose sections of streets that are troublesome. We will find anyone who lives there and listen to issues. We will try to find landlords who aren’t members, talk to them and try to get them to join.”

SEAL was formed to coordinate a response to Southend-on-Sea Borough Council’s plans to introduce Selective Licensing. It represents owners of almost 6,200 properties with hopes to represent 95 per cent of the local rental sector within three years.

SEAL – South East Alliance of Landlords

SEAL members can be easily identified by a sticker in a front window of their properties.

All but one of the 65 complaints received to date, varying from maintenance issues to more complex Freehold problems, have been resolved by SEAL, the last received to be dealt with within the next few days.

Self-regulation in this way is hoped to free up Southend Council to concentrate on non-members, but with only four Council officers to police over 6,000 other rental properties tenants home-owners are still suffering from a few bad landlords and nightmare neighbours.

Chairman Martin Ransom hopes to set up a new arm capable of helping landlords bring low-quality housing up to standard and said: “We have brought in a new member of the board with experience in this area. He has worked with a specific landlord, with whom the council has had historical issues. He has worked with him to get him up to standard.”

As quoted on their own website “By becoming a member of SEAL, you are demonstrating that you are willing to agree to a higher standard of management. It is vital that SEAL membership is widespread throughout the Borough of Southend as the larger our membership base, the more we can demonstrate to the Council our effectiveness. It is important also that membership continues to grow, as if SEAL fails, the Council retains the power to reconsider Selective Licensing.”

Mark Alexander, founder of Property118 and The GOOD Landlords Campaign commented “it is refreshing to see this kind of initiative and especially one so well supported. We have a long held opinion that Selective Licensing is not the answer to anti-social behavioural problems or criminal elements operating in the Private Rented Sector. We hope the group will take a look at the enforcement model being adopted by Lewisham Council and learn from that. The SEAL initiative could prove to be a superb method of routing out and reporting the worst offenders. Sadly a handful of criminals can spoil the reputation of an entire sector. Enforcement is required, NOT a stealth tax on good landlords which is ignored by the true villains.”


Tracker Mortgages Press Release Buy to Let News, Landlord News, Latest Articles

We are encouraging everybody who has registered for the Tracker Mortgage Class Action campaign to contact their local press with a copy of the Press Release below. Please copy/paste into an email, send it to your local Newspaper and follow up with a call to their financial editor.

Tracker Mortgages Press Release

PRESS RELEASE

Local landlords have been shocked by a bombshell letter received from lender West Bromwich Building Society which has doubled their mortgage payments almost overnight.

Buy-to-let borrowers with three properties or more have been targeted by West Brom to bail out their balance sheet by increasing their tracker mortgage rate – in direct contradiction to the terms of the mortgage offer signed by the landlords.

The building society has engaged a team of lawyers to scour the small print of a booklet issued with the original mortgage offer and is using a well-hidden clause to justify the increase, based on a rationale of “prudence and efficiency”.

Borrowers are furious as their tracker mortgages, promised to track at 0.99% above base rate have been increased by 2% with effect from the beginning of December. The rise will add between £200-£400 to the average monthly mortgage payments, inevitably forcing rent rises as leases are renewed.

As anger grows amongst the 6,700 affected borrowers, a legal campaign is already well in hand. Solicitor Justin Selig of The Law Department says, “I have had a look at the paperwork and there doesn’t seem to be any reference to the ability to increase the margin, so I don’t know how they think they can get away with it. This is definitely worth fighting.”

Mark Alexander of the Property118 landlords forum is co-ordinating the campaign and says, “Whether you are a client of West Brom, Bank of Ireland (which has also done the same) or indeed you have a tracker mortgage elsewhere you need to help fight this case. Your tracker mortgages may not be with West Brom or Bank of Ireland, however, that does not mean that you are safe. You may be OK today but what about next week, next month or next year?”

The Property118 forum is raising a fighting fund to take a Class Action Lawsuit to the courts. Currently nearly 700 people have committed. A template complaint letter to the building society and financial ombudsman is also available on the website.

 


Tenants Charter – Mr Pickles, have you gone completely mad? Buy to Let News, Landlord News, Latest Articles, Legal, Property Investment News, Property Market News, Property News, Tenant Eviction

Tenants Charter

Open Letter to Mr Eric Pickles – Communities Secretary – re Tenants Charter

Dear Mr Pickles

Have you gone completely mad?

I am reading in The Times Newspaper today that you are to announce a “Tenants Charter” which will allow tenants to demand two to five year tenancy agreements.

Do you realise that most buy to let mortgage borrowers would be in default of their mortgage contracts if they were to offer tenancy agreements with fixed terms longer than 6 or 12 months?

Do you realise that most modern leases (e.g leasehold flats) contain conditions on subletting not exceeding 12 months in term?

There is a very good reason why mortgage lenders have these conditions in their mortgages. It is because it is so difficult to obtain possession when a tenant reneges on a contract. Bad payers are regularly getting away with up to 5 months of rent free living. Theoretically a landlord can apply to obtain possession by serving two weeks notice once a tenant is two or months in arrears on rent. However, after that 10 weeks has expired it can take several months to get a Court date. Even when a possession order has been granted it then takes several more weeks before bailiffs can be appointed to enforce the order. If you want landlords and mortgage lenders to provide greater security of tenure to tenants then you are going to have to sort out the possession rules for landlords first.

Section 21 of the housing act transformed the UK Private Rented Sector which was in rapid decline until the 1988 act was introduced. Forcing landlords to offer long term tenancy agreements will force the PRS back into the dark ages and reduce incentive for further investment into the sector.

Does Government not recognise the need for a healthy PRS?

Does government not realise that a huge sector of the working population rely on the housing flexibility the PRS provides in terms of job mobility?

Do you have any idea of how your speech today could destabilise the Private Rented Sector?

I totally understand that good tenants, particularly young families with children of school age, need a fair deal and it cuts both ways in that most landlords want good tenants to stay long term. It makes economic sense for landlords to have quality long term tenants,

So why have you not even considered promoting the Deed of Assurance?

Perhaps you are unaware of the effectiveness and simplicity?

A Deed of Assurance is a document in which a landlord promises to pay an agreed level of compensation to a tenant if possession is obtained within a given time period. 

A Deed of Assurance is a relatively simple legal agreement which sits alongside an Assured Shorthold Tenancy Agreement “AST”. It is a separate agreement between landlord and tenant which does not affect the landlords rights to serve notice or to obtain possession, therefore it does not affect the rights of a mortgage lender either. However, it does offer tenants peace of mind.

From a tenants point of view, a Deed of Assurance provides far more flexibility than a long term tenancy because they are only tied in for 6 months and can then move on if they need to. What a Deed of Assurance offers in addition to an AST is peace of mind.

The compensation amount offered by the landlord is negotiable but obviously the idea is to agree something which is meaningful to both parties. For example, I offer to pay anything between £1,000 and £5,000 compensation if I obtain possession within the agreed period, providing the tenancy conditions have been observed impeccably by the tenant of course. If tenants fail to pay rent on time or breaches other contractual terms within the tenancy agreement their right to claim compensation for being evicted during the Deed of Assurance is forfeited. I have been offering a Deed of Assurance to my tenants for a few years now and I am delighted to report that my relationships with new tenants have never been better.

I do not expect a reply from you Mr Pickles but I do hope you will consider the implications of acting on the advice of the people who have been influencing you up to this point.

Yours sincerely

 

Mark Alexander


Nearly Legal SEO Discussion Landlord News, Latest Articles, Property News

This Twitter discussion with Nearly Legal will make the lawyers reading this smile, and hopefully a few more business think a bit deeper about SEO and the true value of the internet.

To download your copy of my SEO Made Easy PDF document please complete the form below.Nearly Legal

SEO Made Easy - Marketing Your Business Online

SEO Made Easy - Marketing Your Business Online

Satisfaction Guaranteed

I only want happy customers. Therefore, to guarantee that you have nothing to lose I have decided to make this promise to you. If you are not entirely satisfied with the information contained in the document just email me within 3 days explaining why and I personally guarantee to refund your money, whether I agree with you or not.


My tenants have asked about taking in a lodger Latest Articles, The GOOD Landlords Campaign

I have rented a 4 bed house to four professional sharers for the last 7 years. Three of the sharers have been in the property from day one, the remaining tenant has been there for two years. My tenants have asked about taking in a lodger

When the new tenant moved in two years ago they were given a new six month AST, they were served a section 21 notice in accordance with my strategy and then given a 5 year Deed of Assurance which assured them that I would pay compensation of £3,000 if I obtained possession within 5 years for reasons other than default.

The tenant who moved in 2 years ago has now decided to buy a flat. The remaining tenants want to stay. They have found a replacement but he has failed financial referencing and now they, like me, are unsure what to do.

The reason the new person has failed referencing is that he has only been in the country for 4 months and his employment contract is temporary.

If the new tenant had passed referencing the plan was to issue a new AST, serve a new section 21 (1) b and grant a new 5 year Deed of Assurance.

Given that such an arrangement would make all tenants jointly and severally liable this concerns the original three tenants. A default on the part of the new tenant would leave them out of pocket and I might have to seek possession in the event of the new tenant defaulting if they don’t pay his rent. They are actually more concerned about this than I am. Apart from that they are very comfortable with the new tenant as he is a long standing friend of one of the existing tenants cousins and they all get on well with him socially. He also works for the same employer as two of the existing tenants.

One solution we have considered is for the three existing tenants to stick with their existing contract which is now a statutory periodic tenancy and with the benefit of their Deed of Assurance for three remaining years. The proposal is that I would give them permission to take in a lodger and they would have a lodger agreement with the incoming tenant.

The benefit of this arrangement is that if the incoming tenant defaults my existing tenants could throw him out within a week and then find another lodger, thus protecting their tenancy and Deed of Assurance.

In principal I am comfortable with this arrangement but I would like to share this concept with the Property118 community to see if you can think of any complications which I might have overlooked.

One question which is bugging me is whether I should get the outgoing tenant to sign a Deed of Surrender and how this might affect the remaining three given that the AST is joint and several.  Would I also need to get the remaining three tenants to sign something to release the outgoing tenant from the joint and several liability and for them to accept the liability is now joint and several between the remaining three? We could just start a new AST and Deed of Assurance with the remaining three tenants, however, this is not preferable to me not them. The reason is they would be tied in for 6 months and I wouldn’t be able to seek possession for 6 months either.

I look forward to reading your comments.

Kind regards

 

Mark Alexander


Ready Made Property Tweets Latest Articles, Property Investment Strategies

If like me you are a big fan of Twitter you will no doubt enjoy sharing information with your fellow landlords.

I have just completed the mammoth task of completely updating my buy to let property investment strategy and I will be tweeting about it over the next few days.

Below are some of the tweets I’ve already sent. By all means use them to link through to any articles that might interest you and/or click the re-tweet button Ready Made Property Tweetsat the bottom right of each tweet.

 

 

 

 


Rental Yields Explained – Listen to the audio Advice, Buy to Let News, Fun Stuff, Latest Articles, Personal Development & Motivation, Property Investment News, Property Investment Strategies, Property News

Our friends Rob Bence and Rox Dix from the Property Podcast have produced an excellent audio programme which explains various options to calculate rental yields. Rental Yields Explained

They have also added a very cool, funky intro to their Podcast so do check it out, I even get a mention 🙂 iAmAlandlord is my Twitter handle by the way – which makes no sense to this blog unless you listen to the audio.

You don’t need any special software or devices to listen to the Podcast, all you need is speakers to be connected to your PC and turned on and to click on the play button on the bar below.

If you are not good with maths or calculators you can apply everything you will learn from the audio very simply by using our Landlords Calculator below.

Enjoy!

You need to be a member to use this calculator. If you are already a member please log in - see orange text at the top right of this page. If you are not a member please see http://www.property118.com/membership/40048/


NLA warns landlords of “no win no fee” deposit protection lawyers Latest Articles, NLA - National Landlords Association

Speaking recently on BBC Radio 4 Carolyn Uphill, Chairman of the National Landlords Association (NLA) warned landlords to ensure their tenants’ deposits are properly protected and that they’ve fully complied with Tenancy Deposit Protection (TDP) law.

The warning comes after a growing number of information requests to TDP schemes from ‘no win no fee’ claims companies who, on behalf of tenants, are targeting landlords who may not have fully protected deposits.

All landlords in England and Wales must by law protect their tenants’ deposits within a Government authorised TDP scheme and must also ensure that they pass on important information about where and how it was protected – known as the Prescribed Information – to the tenant within 30 days from the start of the tenancy.

Failure to do so could lead to heavy penalties and claims companies seem to be inviting tenants who haven’t received their prescribed information to make a claim against their landlord – even if the deposit is protected.

Carolyn Uphill, Chairman of the NLA said:

“You have to ask where the financial loss for the tenant is. The majority of tenant’s deposits are being protected and ninety nine per cent of tenancies end without any issues over the return of the deposit. Where problems do arise, the tenant has access to a free and impartial decision using the scheme’s dispute resolution service.

“Of course, where there is blatant disregard for the law landlords can have no argument and must be brought to rights. However, these claims firms are looking to exploit those landlords who have protected their tenant’s deposits but may not have properly issued the prescribed information.

“In practice this could simply mean not providing their tenant with a leaflet about where the deposit is protected.

“This sort of action is morally questionable, unnecessarily punitive and will only work to undermine the good relationship that exists between the majority of landlords and their tenants”.

Eddie Hooker, CEO of Tenancy Deposit Scheme my|deposits, also commented:

“It has always been the landlord’s responsibility to protect the deposit and a vital part of the process is to pass the Prescribed Information on to the tenant.

“Landlords must be aware that they are ultimately responsible even if they use a letting agent. Our advice is to check with your agent or directly with your deposit protection scheme to ensure all of your deposits have been properly protected.

“Those who fail to comply with either step of the legislation leave themselves open to potential fines of up to three times the deposit value and could fall prey to these kinds of claims companies.

Mark Alexander, founder of Property118 recently highlighted the marketing activity of these companies – see this thread.

Mark Alexander also commented:-

Following the case of Superstrike Limited vs Rodrigues at the Court of Appeal it is now unclear whether landlords should have re-issued Prescribed Information when when a tenancy became Statutory Periodic at the end of a fixed term. The ruling was that deposits taken pre April 2007 should have been protected when a new statutory periodic tenancy came into being after Tenancy deposit Protection laws came into force. This is because it is now clear from legislation that a Statutory Periodic Tenancy is a new tenancy and that all deposits taken in respect of new tenancies should be protected. What is not clear is whether a deposit which was protected and remained protected needs to be re-protected and new deposit protection certificates and prescribed information to be served. The guidance issued by the Deposit Protection Schemes is  unclear on this point and concludes that only new legislation or a ruling in the High Courts will clarify this matter. To date, no lawyers have publicly announced a solution which could protect landlords and letting agents from claims if such a ruling goes the wrong way.

Tenants Claimline

 


Buy to Let Property Sales – Partnering With Estate Agents Buy to Let News, Landlord News, Latest Articles, Letting, Lettings & Management, Property Development, Property For Sale, Property Investment News, Property Investment Strategies, Property News

Earlier this year we spotted an opportunity to set up a buy to let Estate Agency. However, due to lack of resource (time) very little has been done other than a dozen or so sales on behalf of developers, plus setting ourselves up with The Property Ombudsman Service and organising Professional Indemnity insurance to keep ourselves legal of course.Buy to Let Estate Agency

The reason we haven’t got around to growing the buy to let Estate Agency business is that our passion is facilitating the sharing of best practice amongst landlords and letting agents on the Property118 forum which I set up just over two years ago. Prior to that I was a commercial finance broker and I’ve been a landlord since 1989.

The opportunity is a very simple one. Nearly 200,000 landlords and associated professionals subscribe to our daily newsletters and engage on the Property118 forum. Some of these people are no doubt in the market to buy more property. It occurred to us that most properties are sold with vacant possession, however, for landlords that can be a bit of a nightmare as both the vendor and the purchaser both experience costly void periods.

Rightmove and the Zoopla Property Group portals are ideal to sell properties with vacant possession but if a landlord wants to sell or buy a tenanted property these portals are far from perfect as there’s no search facility for buy to let property. Furthermore, their interfaces are not geared up to show rental yields, returns on capital invested, costs of letting etc. At Property118 we have created a landlords calculator to work all of these things out

As we haven’t got time to source properties to sell, never mind to prepare sales particulars, do floor plans, arrange viewings and progress chase offers through to completion, our idea is to work on a split commission basis with other agents.

We will showcase properties on the Property118 forum and link to them in the daily Newsletters. Enquirers will be landlords who may well already own properties in the area, hence for agents who partner with us on this venture, all referrals will be good leads for future sales and letting opportunities as well as prospective purchasers of the property which is being marketed.

From the landlords perspective, they will be presented with properties which are already let and will have no void periods and perhaps most importantly, without any buyers premium attached to them. The sales particulars will include details of the tenancy including:-

  • rent currently being paid
  • profile of the tenant
  • time already in the property
  • management fees currently being charged
  • other expenses relating to the management/maintenance of the property

This information, together with an indicative financing quotation will enable us to calculate not only rental yields but the cash on cash equivalent annual returns after all costs including mortgage, insurance, lettings and management, a sensible maintenance budget and where appropriate any ground rents or service charges. This will enable investors to compare cashflow returns on their money to the returns they are currently receiving elsewhere on their investments. The potential for capital growth is obviously a primary reason for people to invest into property too of course.

We will not allow this activity to overwhelm what we do here at Property118, therefore, we will cherry pick the properties we want to promote based on those which we believe make sense to buy as investments.

It is unlikely that we will be in a position to accept instructions directly from landlords to sell their properties due to the lack of infrastructure to provide a sufficiently professional service, i.e. floor plans, viewings, for sale signs etc. Therefore, any such enquiries will be referred back to the agencies we end up partnering with. Landlords are, of course, also welcome to introduce us to any agencies they are already working with as we will not get tied into any exclusive contracts. Our independence is vitally important to us.

I would like to have a chat with any agents who see some mileage in this opportunity. I have some ideas on splitting commissions but I am very open minded at this stage as the project is very much in its infancy.

Mark Alexander - Your Property ConciergeIf you would like to chat please comment below, email me  – mark@property118.com or call me on 07834 754 223.

Regards

Mark Alexander – founder of Property118.com


Introducing The Property Podcast Buy to Let News, Guest Articles, Landlord News, Latest Articles, Property Market News, Property News

As a property investor, you probably spend a good chunk of time driving, and sitting at your desk doing mind-numbing paperwork. Instead of just listening to Radio 4 (or your local dubstep pirate station – we’re not judging), wouldn’t it be great if there was a radio show all about property that you could tune into?

That’s why we created one, called The Property Podcast – “we” being Rob Bence from RMP Property and Rob Dix from Property Geek.

You’ll find our latest episode embedded at the end of this post – with the content courtesy of a certain Mark Alexander. Mark was kind enough to write a guest post for us explaining a framework for solving any property problem, so on the podcast we explained the framework and gave some examples of how to make use of it.

So what exactly is a podcast?

A podcast is like a radio show that anyone can create, and they’re all listed on iTunes. You can listen to them at your computer, but they’re at their best when you download them to your phone or iPod for listening on the move.

The Property Podcast is now being downloaded over 20,000 times every month, and is consistently one of the five most popular business podcasts in the UK. It has 72  five-star ratings on iTunes, and we get emails every day from listeners who say it’s helping them to get ahead in property.

We’ve heard from people who’ve listened to The Property Podcast while feeding their baby in the middle of the night, while walking the dog, and even in the dentist’s chair! One listener told us he’d listened for five hours straight to catch up on old episodes – a form of masochism we’d not necessarily condone…

How to listen to The Property Podcast

We publish a new half-hour episode every Thursday morning. In each show we focus on a specific topic of the week, share a favourite resource, and look at one of the news stories that’s caught our eye. We aim to give practical advice to newbies, but with plenty for established investors too – with time to spare for a lot of bad jokes.

The easiest way to listen to The Property Podcast is to subscribe on iTunes using this link. That way every new episode will be automatically downloaded, and synchronised to your iPod or iPhone. Or, if you prefer, you can just listen on our website.

Start listening now!

Check out our episode inspired by Property118 founder, Mark Alexander (see below) then leave a comment letting us know what you think or join our mailing list to be notified about future episodes.

Property PodcastWe’re looking forward to having you on board!


Rising numbers of amateur and accidental landlords Latest Articles

Landlord Action logoThe number of amateur and accidental landlords has undoubtedly risen over the last few years as those struggling to sell their properties have instead opted to test the rental market.

Despite having no previous experience, many of these landlords have tried to cut corners by not instructing a reputable letting agent and attempting to self-manage their property. This is when most run into trouble. Continue reading Rising numbers of amateur and accidental landlords


Property Forum and News website where UK landlords and letting agents share best practice