Investment House Fidelity raises Funds for Real Estate

admin    Uncategorized     agents

Commercial Property Investment Europe:

The Fidelity and its investors in the Eurozone Select Real Estate Fund demonstrate confidence in the commercial property markets of continental of Europe, as it has raised more than €150m (£132m) from European investors thus far in 2017 and is looking to raise more later this year.

Interest is coming from European institutional investors looking for income opportunities, and Fidelity have so far committed to five assets totalling €129m: two DIY retail stores in Germany, and a logistics asset in Greater Paris and in Germany.

The purchase initial yields have been in the range of 6% to 7%, reflecting the fund’s current preference for assets in the secondary non-prime markets of Germany, France and Benelux countries.

Neil Cable, head of real estate at Fidelity International told Property Week:

“Fidelity’s focus on high quality income from institutional grade real estate in the core Eurozone markets has resonated with investors seeking alternatives sources of investment grade income. Appetite has primarily come from France, Ireland,” he said.

The post Investment House Fidelity raises Funds for Real Estate appeared first on LandlordZONE.

View Full Article: Investment House Fidelity raises Funds for Real Estate

UK House Price Index (HPI) for May 2017

admin    Uncategorized     agents

House Prices:

HM Land Registry Published:18 July 2017.The UK House Price Index shows house price changes for England, Scotland, Wales and Northern Ireland.

The May data shows:

• an annual price increase of 4.7% which takes the average property value in the UK to £220,713
• the monthly house prices have risen by 0.5% since April 2017
• the monthly index figure for the UK was 115.8

The data shows:

• in England, an annual price increase of 5% which takes the average property value to £237,662. Monthly house prices have risen by 0.5% since April 2017
• in Wales, an annual price increase of 3.8% which takes the average property value to £149,817. Monthly house prices have risen by 0.6% since April 2017
• in London, an annual price increase of 3% which takes the average property value to £481,345. Monthly house prices have fallen by 0.3% since April 2017

The regional data indicates that:

• the East of England experienced the greatest increase in average property price over the last 12 months, with a movement of 7.5%
• the North East experienced both the greatest monthly price growth with an increase of 1.8% and the lowest annual price growth with a movement of 1.6%
• London and the South East saw the most significant monthly price falls of 0.3% each

The UK Property Transaction statistics showed that in May 2017 the number of seasonally adjusted property transactions completed in the UK with a value of £40,000 or above increased by 13.4% compared to May 2016. The unusually low level of transactions in May 2016 was associated with the introduction of the higher tax rates on additional properties introduced from 1 April 2016. Comparing May 2017 to April 2017, property transactions fell by 3.3%. See the economic statement.

Sales during March 2017, the most up-to-date HM Land Registry figures available, show that:

• the number of completed house sales in England fell by 44.3% to 62,342 compared with 111,901 in March 2016
• the number of completed house sales in Wales fell by 35.5% to 3,451 compared with 5,354 in March 2016
• the number of completed house sales in London fell by 57.5% to 6,941 compared with 16,322 in March 2016
• there were 743 repossession sales in England in March 2017
• there were 76 repossession sales in Wales in March 2017
• the lowest number of repossession sales in England and Wales in March 2017 was in the East of England

See the full report here

The post UK House Price Index (HPI) for May 2017 appeared first on LandlordZONE.

View Full Article: UK House Price Index (HPI) for May 2017

What Confusion in Westminster Means for Leaseholders…

admin    Uncategorized     agents

Long Leasehold:

The UK has had some form of election or referendum every year since 2014. There was the Scottish independence referendum, followed by the general election in 2015, followed the referendum on the European Union, followed by the snap election this June. What’s more, there’s the strong possibility of yet another election before this year is over.

To say that “Westminster is in chaos” is a clichéd and overused expression, but to say that “Westminster is confused” is about right. When Cameron won his majority back in 2015, nobody would have predicted that Theresa May would be leading a minority government with the DUP to negotiate a Brexit deal just two years later.

While all this confusion is going on, an issue which all parties were once passionate about dealing with has taken a backseat: the leasehold trap. In what has been described as “the PPI scandal of the housing market”, many first-time homeowners have found themselves buying leasehold properties with some nasty surprises hidden in the fine print.

What Is The Leasehold Trap?

To understand what the United Kingdom’s “leasehold trap” is and how so many first-time homeowners have been caught up in it, it’s important to understand how the UK’s leaseholds should work. When people buy detached, semi-detached, or terraced houses, they tend to own the freehold. This means that they own the property, as well as the land the property is on, and so they can do what they want with the building — providing the council approves, of course.

However, if you buy a flat from a block of flats, you won’t be given the freehold to the flat. This is because your flat is in a shared building with common areas — such as stairs, hallways, receptions, and lifts — that need to be maintained by someone. As a result, flat owners in the United Kingdom are given a leasehold to their property, rather than a freehold. Jersey is slightly different in that shared buildings are owned by flying freehold or through a company’s structure.

Leaseholds don’t last forever, so you can’t pass your flat onto someone else when you die. However, most leaseholds tend to be over 80 years, so it’s not a serious problem. What’s more, most landlords have no issue with extending a lease. Leaseholds also come with ground rents which need to be paid to cover the maintenance of the rest of the building, and these don’t tend to cost much money.

All of this was how things used to work. However, as the UK housing market has become more and more lucrative, as homes have become more and more scarce, some landlords have been using leaseholds to trap first-time buyers into paying for ever-increasing ground rents on properties which are impossible to sell because the leaseholds are often less than 80 years.

Unaware of these risks, first-time buyers purchase these onerous leaseholds and are then essentially trapped in a flat which they can’t sell but where they also can’t afford to pay the increasing ground rent.

But things can get even worse. Some landlords are even selling new-build houses as leaseholds, rather than freeholds. The longheld assumption is that a house is always freehold property. However, the leasehold trap has meant many first-time buyers are  purchasing houses which they had assumed would be freehold but which are leasehold instead.

How Have People Reacted, and What Can Be Done?

When the story first broke, there was a cross party consensus that something needed to be done about the UK’s leasehold trap. An all-party group made up of 43 MPs and Lords from the Conservatives, Labour, and other parties met up to discuss the issue. A popular solution — backed by MP Justin Madders — is a change in law: ban the sales of houses as leasehold properties.

Yet, without a majority government and with Brexit negotiations taking up all of the column inches in the UK’s newspapers, it will be hard for any single party to push any kind of reform act on leaseholds through Parliament. While leaseholders can take some solace in the cross-party consensus on this issue, as well as Theresa May’s hubris when she expressed interest in working with other parties, the issue remains unresolved, and there is nothing to suggest that this will change anytime soon.

There is some hope, though. The Leasehold Reform Act of 1967 gives leaseholders the legal right to force the freeholder to negotiate a fair deal. The problem with this act is that it leaves far too much wiggle room with its wording. A new or updated reform act will be needed, but at least homeowners have something to work with in the meantime.

Knowing your rights in the Leasehold Reform Act of 1967 while negotiating is one way of ensuring a fair deal after you’ve bought your property. However, to avoid the problem altogether, leasehold conveyancing can go a long way to ensuring that the leaseholds people buy are not complete scams.

In the case of new-build houses, landlords shouldn’t be selling leaseholds at all. In the case of flats, leasehold conveyancing can help people to understand the terms of their leasehold in plain English so as to avoid any nefarious traps.

Yet more good news comes from the Nationwide Building Society. In an altruistic move, the bank is refusing to give landlords mortgages on properties where the ground rent is more than 0.1% of the value of the property. If other banks adopt a similar move, landlords will be forced to reduce the ground rents on their leaseholds or revert back to selling them as freeholds in the case of new-builds.

Then there is Taylor Wimpey, the housebuilders who have been pressured into compensating its homeowners with £130 million after it conceded that leasehold new-builds were so unfair that people deserved their money back. There was no legal reason for Taylor Wimpey to give out that money, but public anger can sometimes be just as powerful a force as the law for making businesses act.

The Leasehold Trap is a Lesson for Landlords, Too

There’s nothing illegal about selling British houses as leaseholds, and there is nothing illegal about putting onerous terms or sky-high ground rents on leasehold flats. However, the public perception of landlords and homebuilders as a result of this scandal is not good. To further abuse the public’s trust by attempting to profit from leasehold traps will make you public enemy number one.

What’s more, if Westminster ever does manage to get its act together, you might soon wind up on the wrong side of the law. Parliament may be in a miserable state at the moment, but there is a cross-party consensus on this issue. When the inevitable reform bill does emerge, it will be the land

Author: Carl Parslow, Solicitor

The post What Confusion in Westminster Means for Leaseholders… appeared first on LandlordZONE.

View Full Article: What Confusion in Westminster Means for Leaseholders…

Why should I check potential tenants?

admin    Uncategorized     agents

Tenant Checks:

More and more landlords are realising the importance of doing thorough tenant checks. Relying on “gut feel” and trusting in your own judgement is outdated and quite frankly in this modern age, with fraud and serial bad tenants around, quite risky.

Experienced landlords know that you cannot rely on trust anymore, a sceptical approach to any new tenant, unfortunately, is vital if you are to avoid trouble. Most tenants of course are reliable, they pay their rent on time and look after your property, but if you like to gamble with the one in 20 or so that are real trouble for their landlords, then go ahead and had over the keys without a proper screening process – you will almost certainly regret it.

Knowing the trouble, headaches, stress and worry, not to mention the finical loss a bad tenant can bring, it’s well worth taking a bit of extra time and trouble to properly screen, verify and select your tenants.

When you next let your property and consider a potential tenant for your property, you should know exactly who you are dealing with, their identity, their track-record on payments, their behaviour in a previous tenancy if there is one, and their ability to properly manage their finances – a good credit score is essential. Without doing careful checks you will never find out if they are a serial bad tenant with a list of County Court Judgements (CCJs) as long as your arm.

Without the confidence a good screening process gives you, you are gambling with your most prized asset, the rental property you are about to let. Too late when you’ve handed over the keys, the tenancy is in place and it will take you up to a year to take re-possession if it all goes wrong.

Only by doing a thorough assessment can you make an informed decision and know with a high degree of confidence that the tenant is going to pay the rent on time and keep your property in good condition.

Renting out a property will always carry some risk, no matter how many checks you do, 20,000 claims for possession by landlords last year can attest to that, but a thorough referencing process will reduce that risk to a minimum, saving you time, trouble and money later.

TenantVERIFY® has produced a “20 Point Checklist”, a very thorough process you should go through to check out your prospective tenant – you will need to register first, but the document is free to download here: www.tenantverify.co.uk/useful-documents.html

Here is a very brief guide on what you should be checking on:

Before you attempt to let your property, make sure you are aware of the letting regulations (read the appropriate articles here on the LandlordZONE® website) make sure the property meets the necessary safety requirements and that it is fully insured with a landlords’ policy.

Don’t be in too much of a hurry to sign up the first prospect that comes along, there is plenty of demand for rentals but you also need to be aware of the equality and discrimination laws.

Don’t be too squeamish about asking for personal information such as income and national insurance numbers etc., you are doing no more than a bank would do if they were lending money, which in effect is what you are doing when you transfer a legal right in your property to a tenant.

Using a professional tenant referencing company such as www.tenantverify.co.uk that does Right to Rent checks, credit checks, and landlord and employer referencing as part of the process is the only way to do this properly,

What you need to establish right from the start is that the tenant has a genuine reason for renting from you and has the wherewithal to pay the rent – does this prospect have the financial means and resources to pay the rent on time every single month? Is this a trustworthy enough prospect to be entrusted with your valuable investment?

Here are a few key checks that landlords should make:

• Proof of identity – you need to have sight of (original documents) a driving license or passport, including photo and address details, and take a copy for the right-to-rent check. The copies should be kept for 12 months after the tenancy ends. Make sure every adult occupant is checked in this way. Since February 2016 all landlords are required by law to conduct ‘Right to Rent’ checks to ensure tenants have a legal right to be living in the UK.
• Credit reference checks – A credit score from a reputable reference agency will cover a multitude of background financial data and will show-up any false or undeclared addresses, debt repayment arrangements or County Court Judgements.
• Proof of address – you need to see letters which show where the prospective tenant has been living, usually a utility bill, gas, electric or water, HMRC letter, Social Services correspondence etc.
• National insurance number – you need to take a national insurance number which proves that the prospective tenant is legitimately living and working in the UK.
• Employer’s reference – contact the employer (check out the firm on the internet first) by telephone (never a mobile phone) and get verbal and written references from a named and responsible person.
• Previous landlord’s reference – if there is a previous landlord or a letting agent who can verify the prospect’s behaviour in a previous tenancy this is very worthwhile, so use the same process as the employer’s reference. Ownership of the previous landlord’s property can be confirmed with an online Land Registry check.
• Bank statements – you can get a very good idea of the prospects’ ability to budget their spending and their income and financial commitments by asking to see the previous three months’ bank statements.
• Guarantor referencing – if you deem it necessary to have a guarantor in place, for those with a borderline affordability issue (rent should not normally be higher than one-third of the prospect’s income) or letting to a young person or student, the guarantor should be referenced in the same way as a tenant, checking home ownership with the Land Registry.
• Your own assessment – always interview your prospects, asking some pertinent and searching questions, answers to which should be matched to other information you have gathered and also matched for consistency. Question any anomalies and drill down further if necessary.

Finally, if you have any doubts at all, unless these can be satisfied later, don’t go ahead, you will almost certainly regret it.

If you are new to letting property, read this: www.tenantverify.co.uk/20_steps_to_successful_landlording.html

The post Why should I check potential tenants? appeared first on LandlordZONE.

View Full Article: Why should I check potential tenants?