Latest news
Headlines (click to skip)
• LETTING AGENT?… Hmmm, I Don’t Think So!
• SALES; Current Local Statistics
• Do High Up Front Costs Put You Off Selling Your Property?
• LETTINGS; Landlords plan to purchase more properties
• 2011 Rental Index Regional Map
• MORTGAGE NEWS : What’s Right For You?
• Latest Exclusive Deals
DECEMBER 2011
MAIN FEATURE
LETTING AGENT?… Hmmm, I Don’t Think So!
Greek crisis. Italian crisis. French banks in crisis. Protestors sitting in cathedrals and not going anywhere. X Factor scandals...
It seems that the focus of our media has been so distracted by potential melt-down, disaster and insipid covers of Queen songs that they've forgotten to resort to unduly negative stories about the property market to attract readers. So this leaves me free to discuss other issues you will be glad to hear!
So what has grabbed my attention this month, well in the main it’s been the amount of so called Letting Agents popping up. Many homeowners are turning to letting their property rather than selling so need to be aware that all is not always as it seems.
There is a trend just now where business’s whose main income stream is failing are deciding, hey, why don’t we go into Lettings!! Recently I’ve seen Solicitors, Mortgage Advisors and of course Estate Agents attempting to move into the sector, based on reports that the rental market is booming, but without the first idea of what is involved in running a Letting Agency. They are lured by the potential of a monthly income stream and this is very dangerous for unsuspecting Landlords. These Letting Agents, and I’m struggling to call them that as the real term for them is probably not printable, are taking a short term, we need to pay the bills, view to what is a long term investment for a Landlord. They will put anyone into the property so they can get that cash flow.
LANDLORDS BEWARE!
Good news is they are easy to spot as they have nothing to offer of any value so simply attempt to sell their services on price. They have not invested in staff who have a background and training in Lettings, and think the job is simply to get someone to pay money for a flat so they can take their management fee. They will talk about how they will market your property but have no substance to how they will manage it. On many occasions they will offer Rent Guarantee Schemes! Wow you say, they will guarantee the rent? Reality is they won’t, they will pay for an insurance product that seemingly guarantees the rent because they have no idea how to actually manage a property effectively and collect rents efficiently. Unfortunately these products in general do not work, as the tenant has to pass the stringent conditions of the insurance, plus there are so many loopholes for the insurance company to avoid paying out. But do these so called Letting Agents care? Of course not, because their short term philosophy means all they care about is getting the Landlord to sign on the dotted line.
A Letting Agent who is providing a managed service is actually managing the long term investment of the Landlord and thus should have a long term philosophy and approach to their business for the relationship to work and for the Landlord to see his investment protected and not wrecked by undesirable tenants or lack of maintenance.
Some Questions you should always ask a Letting Agent:
- How long have they been letting property?
- How many staff do they have dealing with Lettings?
- How many properties do they currently have under management?
- Do they have any testimonials from existing clients?
- What is their procedure for handling late and unpaid rent?
- What is their tenant application process and how do they select the right tenant for your property?
Current Local Statistics
Average Sold House Price in North Lanarkshire £101,688
Average Sold House Price in Scotland £160,395
Breakdown:
| Airdrie | £108,962 |
| Bellshill | £88,645 |
| Coatbridge | £95,615 |
| Motherwell | £113,799 |
| Shotts | £79,792 |
| Wishaw | £91,973 |
A total of 87,511 asking prices in September were slashed by an average of £15,968, according to the property website Home. Both the number of reductions and the size of the discount were larger than in August, and the reduction is the greatest since last November.
Do High Up Front Costs Put You Off Selling Your Property?
I'm trying to guage the fellings of potential property sellers in Scotland towards the level of up-front costs that they have to bear if they want to put their property on the market. In particular, is it putting people off selling?
In most cases, the main upfront costs of selling your property will be:
- Home Report
- Estate agent marketing fee
- Advertising (solicitors' property centre advertising e.g. GSPC, newspaper advert, etc)
Do these costs put you off selling your property? Or does the level of up-front cost in fact make it impossible for you to sell at the moment? As a firm of estate agents, we are interested in what property sellers feel so that we can adapt our service to their needs and, essentially, give you want you want. Your feedback is therefore really helpful. If you would like to let us know your feelings on this subject please email us at sales@homelinkproperties.co.uk
More than one in three buy-to-let landlords planning to purchase again due to superb opportunities
Landlords are increasingly upbeat about the outlook for the buy-to-let market in the UK, according to specialist lender CHL Mortgages.
In its latest regular survey of landlords, 72% of the respondents said they were positive about the future of buy-to-let, up from a figure of 67% in summer 2011 and 64% 12 months earlier.
There was also a rise in the number of landlords who plan to buy more investment properties in the next 12 months, with 35% planning to make further acquisitions, up from 33% in the summer.
But those looking to purchase more property say they are still constrained by both a lack of available funding for both new purchases and remortgages (40%), plus the high deposit requirements (37%) that come with buy-to-let products.
Landlords were also more positive about current demand for rental properties, with 47% suggesting it is now better than six months ago up from 43% in the summer.
Bob Young, managing director at CHL Mortgages, said: “We normally only conduct our landlord survey every year.
“However we wanted to gauge whether the growing positivity we had witnessed during the summer had increased just three months later”
So good news, and with the levels of superb investment opportunities not showing any signs of slacking any time soon, and rental demand staying strong locally, it is good to see some positive aspects within the property market.
Here are the latest 2011 headlines...
- The number of tenants sharing a property has increased in the last two years.
- 18 – 21 year olds have seen the largest drop in income over the past year. Incomes for this age group have dropped by 5% in October 2011 when compared to October 2010
- The percentage of 36 - 45 year olds renting after living at home with a relative has risen from 18% in October 2009 to 23% in October 2011
DECEMBER 2011
2011 RENTAL INDEX REGIONAL MAP
DECEMBER 2011
MORTGAGE NEWS: WHAT'S RIGHT FOR YOU?
Fixed rate mortgages
Fixed-rate mortgages are among the most popular on the market. If you're on a tight budget, they're often the ones to choose. A fixed mortgage has a fixed interest rate for a set amount of time, (for example two, three or five years). This means your mortgage payments will be exactly the same each month, until the deal expires.
The fixed rate mortgage option is an excellent choice if your budget is tight and you need to know exactly how much you will be spending each month, for this reason it is very popular amongst first time buyers. Knowing there can be no nasty surprises can also help you sleep more soundly at night. It can also be worth choosing a fixed rate mortgage in times of interest rate volatility: if you believe rates will rise in the near future, fixing your mortgage rate could save you money. Of course, this works the other way round too you could end up paying far more than your neighbours on your mortgage should mortgage rates suddenly plummet.
As always, you need to check all of the features before signing up for any product.
Tracker rate mortgages
Tracker mortgages are directly linked to the Bank of England's base rate, so that you have the comfort of knowing you'll always be charged a reasonable rate.
Whilst the discounted and capped rate mortgages are both linked to the mortgage lender's Standard Variable Rate (SVR), tracker mortgages leave out this middle man and track the Bank of England base rate directly. For example, your tracker mortgage rate may be set at 1% above base rate. The advantage here is that should the base rate be cut, you will benefit immediately as you don't have to wait for your mortgage lender to decrease his SVR. Of course, base rate rises are also reflected in your mortgage rate straight away, but then lenders usually aren't shy about quickly increasing their SVRs!
Like the discounted rate mortgage, you can't predict how much your monthly mortgage payments will be if rates rise, so trackers are not a good choice for those on a tight budget. However, if your finances aren't too stretched, tracker mortgages can be a great way to benefit immediately from any future interest rate cuts.
First-time buyers
It's harder to get on the property ladder today than it's ever been. But there are many ways first-time buyers can get a leg up.
Of course, if this is your first house purchase this is all pretty daunting stuff. It's also extremely expensive, as you have to find an awful lot of money. Luckily, you'll find a bit of help as lenders usually give preferential mortgage rates to First Time Buyers (FTB). What's more, you may even have your legal fees or surveys paid for you too.
However, as always check through any deal you are offered carefully, as you may gain far more through a lower rate than you would from some freebies. What's more, first time buyers FTBs are generally in demand as you're effectively a cash buyer, with no pesky chain to potentially collapse behind you.
Despite an economic slowdown and the initial refusal by many lenders to expose themselves to risk Nationwide have now joined the extensive list of lenders offering mortgages at 90% lending.
A 90% mortgage means you only need to have a 10% deposit to buy a property. A 90% mortgage will however allow first time buyers with limited funds to get on the first rung of the housing ladder.
Current offers are available from Woolwich, Abbey, RBS, Northern Rock, Coventry, Scottish Building Society, Halifax and Skipton (who will also lend up too 95%).
Rates for 90% mortgages in the UK for first time buyers start from 4.49% and go up to 6.99%.
Below is a comparison of a tracker and fixed rate 90% mortgage using an example of £72,000 borrowed on a purchase price of £80,000.
At 4.49%, a tracker rate repayment mortgage would cost £399 per month.
At 5.39% a fixed rate repayment mortgage would cost £437 per month.
The difficulty many first time buyers have is raising the deposit they need. Then on top of that there are the costs involved in buying a property for the first time. Legal fees of between £400 and £800 may also be required depending on the solicitor used. Buying a property for the first time is not something to be considered lightly and all of the costs need to be taken into account.
It is always a good idea to speak to a qualified mortgage adviser who will be able to break-down the cost and provide a total amount needed to buy a property.
One of the big benefits of dealing with HomeLink Financial Services is the fact that, as we belong to the largest network of independent advisors, have access to many exclusive deals which generally are not available elsewhere, including the high street banks. Here are some examples of these great deals.
Christmas has come early…
Last week Nationwide treated us to an early Christmas present with the launch of a range of 90% Loan To Value (LTV) products.
- Rates start from 5.39%
- 3 and 5 year fixed rate products
- Available for First Time Buyers and new customers moving home
- First Time Buyers can take advantage of the £500 product fee discount
- Products with £0 product fee available.
Other Product Launches….
- 5.19% 2 Year Fixed - 90% LTV - FXR798
- 3.59% 2 Year Fixed - 85% LTV - FXR799
- 3.89% 3 Year Fixed - 85% LTV - FXR807
- 4.39% 5 Year Fixed - 85% LTV - FXR808
- 3.39% 2 Year Tracker - 85% LTV - TRK112
- 3.79% 2 Year Tracker - BTL - 60% LTV - FXRB94
- 4.19% 2 Year Fixed - BTL - 75% LTV - FXRB92
- 4.49% 3 Year Fixed - BTL - 75% LTV - FXRB93
- 3.29% 2 Year Tracker - BTL - 60% LTV - TRKB36
- 4.09% 2 Year Tracker - BTL - 75% LTV - TRKB35
