Monthly Archives: November 2009

Buy to let landlords come in from the cold

There were many who cried buy to let cannot survive when we were reeling in the darkest days of the credit crunch. Well the truth is that buy to let landlords were more resilient than many economists and ever more optimistic property professionals had thought.
Even though buy to let landlords have had a real battle to obtain suitable funding for the expansion of their property portfolios, they have battled on and many are now reaping the rewards. They may not have great cause for celebration but they are looking forward to improving rents and capital values. So why has the world of buy to let not withered and died?
The reason as with most economic markets, is that most robust of economic laws ?simple supply and demand?, whatever is happening in the property world, people often forget that buy to let properties are just that properties. There is without a doubt a shortage of properties in the private rented sector so with a ready market it should not prove difficult for any landlord who bought sensibly to turn a coin even in the recent challenging times.

How to find a property development

The number of people wishing to become a property developer has grown greatly over the past ten years. With experts like Sarah Benny and other giving away trade secrets, many feel they are armed with the knowledge they need to reach their goal of a huge income from a short working week.

So how do you find that first property development that will give you the seed capital to be able to expand into larger and more profitable developments? It is estimated that as many as five million private homes fail to provide a ?decent ?level of accommodation and in theory there for require ?property development?. One of the large banks has estimated the cost of bringing these properties to the desired standard could be as high as 50billion pounds.

So the properties are out there, the potential buyers are out there although currently it is true to say that they may be somewhat short of mortgage lending. Now all you need to do is pop down to your local estate agent and announce that there is a ?new guy in town?. Unfortunately the reality is that this is about as far as most new developers get. It is an achievement to even get this far most people do not even take the trouble do visit the local agents.

Now all you need to do is sit back and wait for your friendly local estate agent to deliver you your first dream property development deal. Most estate agents will work hard on your behalf and I must say I think they are often given a hard time in the press and by the general public which I feel is not deserved. You must remember as you announce yourself as ?the new guy in town? or ?a property developer?, they will add you to the list of the three people who arrived and also announced their new careers. I know what many of you are thinking ?property auctions!? that must be the place to go, well with programs on the television like ?houses under the hammer? many of the bargains have gone from the auction rooms.

We all know that there are idea property deals coming to the market, so where do they go? The answer is to the usual suspects, they are the people who the estate agents are confident will deliver their end of the deal. That consists of looking at property at short notice never being late for an appointment and not minding if the agent is late, having a few ?100,000 in cash laid about to close a deal at short notice but most importantly having a previous track record of always delivering their side of the bargain. The estate agent has a responsibility to their clients, and if their clients have asked the agent for a quick cash sale, who will he first pass the deal to? The answer is the group of existing developers he knows are successful and will pay a fare market price for a property in their area in any condition.

So the question is not ?how do I find a property development?, the question is ?how do I become respected as a good local property developer?. The answer is to put in the hard work, know your area, know the value of a property and know just how much any works will cost to bring the property to a saleable condition. Then go and look at as many properties as you can, attend all the local property auctions and work on assembling your team of trade people and builders.

Once you have done that, the next step is to find the funding you need to make the deal happen at short notice. So when you have built some great relationships with local estate agents, assembled a great reliable team of local trades people and have a couple of ?100,000 laid about in reserve. You are now ready to start the hard work, property development budgets, managing the refurbishment, preparing the property for sale, selling the property, and finally with some luck and judgment banking a small profit.

I wish you all the best of luck!

If you would like further hints and tips, you can continue to read this blog or leave a comment and we would be pleased to answer your questions.

British Bankers Association report Mortgage lending increases

The British Banking Association has reported a monthly increase in gross mortgage lending of 1% this figure is also higher that the average over the last six months.
Interestingly the value of mortgage approvals has also increased and again is higher than the previous six months average. Many banks are still reporting mortgage lending increases of around 4% a year and these figures do point to householders feeling more comfortable with borrowing but unsure about taking on unsecured loans. Within the banking industry many believe that many consumers are looking to build up the larger deposits now required for both lending criteria and many consumers peace of mind.
Many businesses are looking to secure private funding several local midlands developers are looking to use private funding to carry out developments. With interest rates for many savers at such historic lows many investors are pleased to have the opportunity to achieve a greater investment return and are looking to various development and commercial property schemes to achieve superior returns.

The UK?s prime retail commercial property sector show the number of empty shops falling

The number of vacant commercial property in the prime retail sector has fallen for the first time in a year. The decline in the availability of prime retail property has been quite staggering in the three months up to November falling by over 2%. This will of course in turn lead to a upward pressure on commercial rents, those with rent reviews may now be looking for the services of their friendly local commercial surveyor to negotiated not only dilapidation reports but also break clauses and rent reviews.
It is not surprising to learn that central London has one of the lowest availability levels, with the availability of prime commercial retail property below 9%. With some areas in the south reporting vacancy levels of as low as 6.5%. Some in the UK?s property and construction sector are starting to fear the availability of commercial building and refurbishment contractors. They are also voicing their concerns regarding the levels suitable commercial and retail properties once the full force of the UK?s economic recovery is felt.
So why is the commercial property market recovering so well, the slowdown in retail administrations has without a doubt been a great help, with the sad days of great household names like Woolworths suddenly leaving unsightly vacant retail properties in the many small high streets, seemingly now just becoming a painful memory for many towns.
Interestingly the recovery in the small towns such as Stoke town center in Stoke on Trent can soon have a very positive effect on regional figures. These recent events also do assist those slightly battered commercial surveyors who have found there fee structures in less demand in recent times.

UK tenants brace themselves for rises in rents

This month is the seventh consecutive rise in rents for the UK residential lettings market and many believe it is safe to assume that rental returns will soon be back to the levels of 2008. There are also some data that suggests the volume of available rental property has dropped by over 3% this month and a staggering 10percent last month.
With a back drop of both optimistic economic recovery and an impressive rise in both house prices and rental returns, can the UK property market out run unemployment and challenging lending criteria?

Council of Mortgage Lenders data show landlords are returning to the property market

The Council of Mortgage Lenders has revealed data that buy-to-let lending has increased by 10% in the three months leading to September, this was compared to the previous three months figures. The buy-to-let landlords and professional property investors have suffered from the recent lending and mortgage drought.
Many professional investors and buy to let investors believe that the house price recovery has now started in earnest and are returning to their home ground after two years lost in the property wilderness.

5% increase in gross mortgage lending

These figures from the council of mortgage lending are in line with their forecasts; they have previously estimated a figure of around ?141 billion for the whole of 2009.
The council of mortgage lenders also commented that much of the mortgage activity has come from house purchase. There is often little or no great incentive for many home owners to consider remortgaging as rates remain at such historic lows. There is also the constrains on deposits with many home owners simple unable to raise the necessary funds to remortgage as their equity in their properties has been reduced by the house price falls in previous years.

Starting a business in the midlands ? Is now the best time?

One advantage of starting a business now is the availability of a wide variety of commercial property there are some great deals to be had on Industrial, office and retail business premises in many of the midlands towns and cities. There are landlords right along the A50 corridor of Nottingham, Derby and through to Stoke on Trent who all have some fantastic value leases available.
There is a certain amount of urgency for many potential tenants as commercial property Landlords see a brighter future, in the medium term and although there are some great deals around, they often have a limited self life, as landlords gather confidence that letting conditions are improving.

Buy to let set for a slow and steady come back ?

The first signs of the professional landlord returning to the market are now evident; none doubt that this particular area of financial investment has been one of the worst affected by the recent financial challenges. The main problem for buy to let investors has been the ability to obtain suitable finance; the sector has faced almost unbelievable figures of 93% of the once available mortgage financing disappearing from the market place.
There is now much speculation that this could be beginning to improve with the number of available mortgage products climbing from their historic lows of less than 180 to figures climbing up towards the 240 mark. The next six months is set to be a challenging time for the professional property investor but many believe those who can work within the current constraints will benefit from their efforts.

Economists and surveyors agree price will rise in the New Year

Many property experts now agree that the next three months will mark the end of the UK house prices aggressive rally which has lead to prices being higher over the last 12 months.
There are also many predictions that this temporary falter in the UK house price recovery will be short-lived with the New Year ear marked by many as a restarting point. So by spring when the UK housing market traditionally starts to wake from its winter slumbers and the skips start to arrive on peoples drives to mark a change in owner or a new project we will find out for real what the sentiment is telling us now.