Houses Are Going Up Faster Than Flats

In a recent report, the Royal Institution of Chartered Surveyors said, “Larger and mid range property types have shown disproportionate price gains compared to under performing flats, with the largest variation of performance apparent since 2001.”
Specifically, they noted that Pre-1960 houses with two or three bedrooms were “leading the way with the largest price rises for almost two years”
Meanwhile, the Land Registry confirmed that new flat prices have actually fallen slightly over the past three years.
This has big implications for investors and home owners alike.
I will be talking about this plus giving lots of tips on what successful property investors do at my three talks at London's Excel Centre at the Home Buyers Show from Friday 2nd to Sunday 4th March. Here is the link to find out more...
http://www.homebuyer.co.uk/seminar.asp
Copyright: D Lawrenson. Back to site: www.lettingfocus.com

House Price Statistics Should be Read with Care

It’s easy to think that all places in the UK have seen strong house price growth recently. However, there are big variations even in one city.
Take London for example – here, foreign money has boosted Knightsbridge and, Kensington & Chelsea which saw growth at about 12 per cent last year. Southwark, has done well and so has East London as a result of the Olympics and new tube lines from 2010.
However, growth in other parrts of London was slow with Greenwich and Croydon seeing increases of only 2 or 3 per cent in the last half of 2006. Meanwhile prices have actually fallen in many northern towns in the last 6 months.
So read the stats with care and look at trends in specific areas. www.upmystreet.co.uk is one of many good sites that allow you to drill dwn to street level and chart trends in house prices over time.
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Copyright: D Lawrenson 2007

Ever Wondered Why Your Tenant Does Not Trust You?

You are a nice landlord. You do things by the book but you always feel your tenant does not trust you.
Have you ever had that feeling?
The reason could be that they have suffered at the hands of a bad landlord before.
Now and again I come face to face with amateurish landlords.
Our child minder's landlord is clearly one of these amateurs who clearly thinks that Rachmanist landlord practices are still OK.
This guy told my childminder she had to go this week because he was selling the property.
He had "mentioned" before he was going to do this apparently.
No formal two months notice in writing from this guy!
So, the poor lady is struggling to move out as an emergency yesterday and I'm left holding the baby (literally) as she had to cancel the childminding duty to move.
Sadly, there are still a lot of these idiot bullying landlords about - which is maybe why your tenant is cooler towards you then you would like.
In other words, they have had a bad experience before.
And it's because of the activities of people like this chap, that the government has bought in tenancy deposit schemes (which start 6th April) and why decent landlords have to suffer for the sins of the idiots.
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Buy to Let Investors Are Not In Trouble

Lots of people think the buy to let boom is about to burst as house prices move ever higher.
Maybe there is something in this, maybe not.
The funny thing is it's easy to make an argument one way or the other, especially if like me, all you do is read and write about investing in residential property.
On balance, though, I think that as long as interest rates don't go up too much, buy to let investors will be OK.
For example, here's an interesting statistic from the Council of Mortgage lenders. They say that the number of buy to let mortgages that are more than 3 month in arrears fell from 0.64% at end June 06 to 0.59% at end December.
Oh, and this was lower than the overall mortgage market where the number in arrears was a shade under 0.90%.
Of course, the low BTL arrears statistic could mean that a lot of buy to let property investors are just cross subsidising what in some areas are fairly miserly rental yields with other sources of income (in the hope of long term capital gains)
But these figures hardly show a market in crisis, just as long as those base rates don't go up too high.
And as we are only spending about 17% of our incomes on mortgages it's not too scary - yet.
The Alliance and Leicester has said base rates would need to hit 8.5% before we see the same pain as we did in 1990 when interest rates hit 15% (and we were spending 30% of our incomes meeting mortgage payments.)
I don't think that interest rates will hit those levels soon, so I think buy to let mortgages are safe for now.
In fact, I'm so confident I think I'll go and load up on some shares in a company that's a big buy to let mortgage lender. Bradford & Bingley here I come.
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Copyright: David Lawrenson 2007

A Guide to Tenancy Deposit Schemes - Part Two

How Will the TDS Schemes Work in Detail?
There will be two types of tenancy deposit scheme. First, there will be a “custodial scheme” where a third party will hold the deposit and pay out at the end of the tenancy on the terms agreed between landlord and tenant.
The second type of scheme is called "the insurance scheme" and it's this one that will probably be more attractive to landlords
Under this type of scheme, the landlord gets to keep the deposit.
Then, if at the end of the tenancy there is a dispute, the landlord will have to pay the deposit amount into the insurance scheme. where it is then held until both parties come to an agreement - with the amounts agreed being paid out by the administrator of the scheme.
The scheme will have a dispute resolution procedure which will be free to use but if the landlord and tenants can't agree, then a court could decide how the money should be split, with the administrator having to follow the courts decision.
The insurance kicks in and will pay out if the landlord fails to pay the deposit into the account - in which case the scheme and the insurer would then puruse the landlord for recovery of the money and the landlords' membership of the scheme would be terminated.
More on this later this week.
Copyright David Lawrenson 2007
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