November, 2009
New builds not popular with buy to let landlords
A letting agent in London has produced figures showing that buy to let landlords far prefer older property to new build apartments. Ludlowthompson.com report that only 12% of landlords planning to buy additional property in the next six months intend to buy newly built homes. In March the figure was 26%.
This is further evidence of the over-supply of flats and the difficulties being faced by developers trying to sell them. In the boom, builders rushed to develop blocks of flats but as the market turned down it became clear that there far too many of them around. Stephen Ludlow said “New build flats are often built in huge blocks with other identical units. They are almost a commodity. New apartments can lose their premium over second – hand property within a couple of years”.
However, buy to let landlords seem reasonably confident about the market because 73% of buy to let investors in the survey expect prices to rise over the next six months and 89% expect rents to rise or stay the same. 24% of landlords expect voids to decrease over the next six months. The survey was reported by Ludlowthompson on the 11th November 2009.
Have you seen bargain basement prices for new build flats in your area?
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More good news for landlords
The Council of Mortgage Lenders reported on the 12th November that buy to let lending rose by 10% in the three months to September compared to the previous three months. Buy to let loans to landlords rose in number from 21,600 to 23,700 between those periods. A spokesman for the CML said “At this stage the recovery is modest but the figures show that buy-to-let is here to stay.”
The CML believe that transactions will reach 810,000 in 2009 and 850,000 in 2010.
One firm of estate agents and surveyors reckons that landlords investing in property a year ago would be sitting on a 2.4% return taking in to account the rental income and a slight drop in property prices. One thing is for sure, cash on instant access accounts at the bank is earning very little so it is no surprise that people are tempted to become landlords. However, there continues to be uncertainty about the future for house prices and it is still difficult to secure finance for property projects.
What is your view – is it a good time to become a landlord?
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Insurance fraud costs us all – even false travel claims
The Association of British Insurers estimates that insurance fraud costs £1.9bn a year. That means that the premiums of honest people are being inflated by the activities of the criminal minority. Motor insurance fraud alone is reckoned to cost £3.5m.
Insurers are working harder than ever to spot fraud. In the travel insurance sector insurance companies detected 4,300 fraudulent claims in 2008 with values totaling £5m. Recently a gang of people received prison sentences for staging fake accidents so they could put in fraudulent claims against the innocent victims.
The Insurance Fraud Bureau has been set up by the insurance industry to coordinate action against insurance crime. Their website is full of useful information (www.insurancefraudbureau.org). People can use it to report suspected fraud in confidence.
If you are worried that your valid insurance claim may be turned down or disputed it is a good idea to keep receipts or other proof of ownership. For travel insurance or homeowner insurance for example, photographs of your valuable possessions will be very helpful. If you have something stolen remember to report to the police and obtain a reference number.
Do you suspect anyone of exaggerating or completely fabricating an insurance claim? Let us know or better still contact the insurance fraud bureau.
Remember, all fraud costs us – even small cliams on winter sports travel insurance policies for example, it all adds up!
Property prices up – good news for landlords
Housebuilders Taylor Wimpey have just announced that they have run out of houses to sell this year. If you want to buy a new home you will have to wait until it is completed next year and pay more because they are putting up their prices. Meanwhile the property website Rightmove says it had its busiest ever month in August. Apparently the normal summer slowdown just did not happen. Mortgage lender Halifax say that prices rose 1.2% in October.
What no one can be sure about is whether this is just a flash in the pan. If it is the beginning of a sustained recovery then many landlords will see the value of their equity increase and lenders prepared to support them as they increase their portfolios. Accidental landlords who were forced to rent out their property because they could not sell it will be in the happy position of owning an asset generating an income as well as going up in value. It all depends on what is around the corner.
Does anyone have any recent experience of buying, selling or renting property? The “experts” cannot agree on what will happen next- what do actual landlords think?
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Buy to let market strengthening
The Times (October 26th 2009) reported figurs from the Royal Institution of Chartered Surveyors showing a revival in buy to let activity for the three months to September 2009.
The RICS survey shows a 2% increase in the number of surveyors seeing an increase in demand for buy to let properties as against those seeing a fall in demand. Flats are unpopular with 15% of surveyors reporting a fall rather than a rise in demand but the picture is very different for houses where demand is rising. The North West is the area where demand from buy to let landlords is rising most strongly and the West Midlands is the area where demand is weakest.
Landlords and potential landlords have been struggling to cope with the shortage of lenders interested in buy to let finance but these figures suggest that the market may be recovering. The auctioneers Allsop say that landlords made up 85% of bidders for property in July. Perhaps people with cash in the bank earning minimal interest prefer the idea of an investment that can produce a rental stream and maybe even some capital appreciation if the market strengthens.
Is the market improving – what do you think? Leave a response and let us know.
If cash rich investors are looking for a better return then they will also need landlord insurance to protect that investment. Click4quote.com provide buy to let insurance for new and experienced landlords so ger a quote with us today.