HIPS (Home Information Packs) Are Getting Slimmer By the Day

It seems that another bit of the Home Information Pack - the property search documents from the local authority - probably won't be mandatory when HIPs start on June the first.
People selling property will instead only need show that searches have been requested.
The Home Condition Report - a key part of HIPS - was made optional ages ago.
So, it seems HIPs are slimming down by the day.
Apart from the Energy Performance Certificates the only key things you need are the evidence of title and the sale statement.
The Royal Institution of Chartered Surveyors has called for the launch date to be pulled and so have other worthy bodies - but the Government is ploughing on.
But don't forget though - if you sell privately to someone you know and don't market the property, plus if you sell property with the tenants in it - i.e. not with vacant possession - you wont need to provide a HIP. Back to main site: www.lettingfocus.com
Copyright: David Lawrenson 2007

You Can Still Put Buy to Let Property In a SIPP

You Can Still Put Residential Buy to Let Property in a SIPP
If you put your money in a “syndicate” which holds residential property not owned for personal use you can still get the tax free SIPP benefit.
In order to qualify for tax breaks within the pension fund rules the syndicates must contain at least three properties and be worth at least £1m and be owned by at least 11 investors (because you are not allowed to have over 10% of the holding).
This spreads the pensions risk more widely over a number of properties and is therefore thought acceptable for retirement funding. Also, this type of vehicle appears to not be subject to any borrowing restroctions so a number of property synicates are being set up with loan to value ratios of 75% meaning a £50,000 investment gains exposure to £200,000 of property assets.
There are lots of rules about how these investments must be structured including one saying that the 11 investors must be “unconnected” - so no business partners or members of an extended family can be in the same syndicate.
Plus you have to think carefully about what happens when an individual in the sydicate wants to sell as you have to watch that no single persons holding exceeds 10%.
Look at the fees too. The providers that run the schemes charge about £1,000 for set up and ongoing annual fees are likely to exceed £500.
Syndicated SIPPs are worth looking at but talk to a good tax accountant who understands all the rules before you dive in.
Back to main site: www.lettingfocus.com
Copyright: David Lawrenson 2007

The USA Shudders As Sub Prime Mortgages Come Home to Roost

Right now we are hearing quite a bit from across the pond about sub prime lending and the perilous state of the US housing market. Indeed, part of the reason for recent volatility in the world stock markets is due to some of this possibly risky (some would say reckless) mortgage lending in America.
It seems that some lenders have pushed the boat out a bit too far and have lent to people who are struggling financially. (The lenders hope was that rising property prices would in a few years make the loans look a bit less shaky.)
In the UK too, lending to sub prime borrowers has become more common. Mortgage credit, including loans on buy to let investments are being increasingly extended to people who also have some kind of adverse credit history.
If you are a “sub prime” borrower with some kind of adverse history of paying back your debts, the options available have increased.
It’s still good for lenders – they just charge for to reflect the risk – though the USA’s experience my have caused them a shudder.
For borrowers, I’d advise them to try to sort out their own finances before worrying about buying a buy to let.
Back to main site: www.lettingfocus.com
Copyright: David Lawrenson 2007

Houses Are Going Up Faster Than Flats - You Heard It Here First

It’s nice to see that my argument at the Home Buyers Show that prices of terrace properties are going up faster than flats in many areas has been confirmed by none other than the Halifax in a press release that was widely picked up by the newspapers and TV. Here is the link to the Guardian article on the story.
http://money.guardian.co.uk/news_/story/0,,2030291,00.html
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Watch Out for the Risks in Overseas Buy to Let

I was quoted in the “Sunday Times” yesterday in connection with overseas buy to let. The article is worth a read – see link below.
There are some good points too made by John Howells, who has been around a bit and whom I saw a few years ago doing an impressive talk on tax implications of overseas buy to let.
http://property.timesonline.co.uk/tol/life_and_style/property/investment/article1487529.ece
Back to main site: www.lettingfocus.com
Copyright: David Lawrenson 2007