Below market value property, BMV - One good tip from LettingFocus.com

What is the best way to get a good deal when buying property?
Well there are many ways to get good deals.
However, in today’s blog, I just thought I’d highlight one particular technique that always works well when you are viewing a property and the vendor is showing you around.
As you go around, the key thing of course is not to give much away, whilst also trying to find out in a non pushy way as much as you can about the vendor’s circumstances in order to gauge if they will accept a hard offer. (It is also worth finding out what you can about the seller’s circumstances are in advance from the agent too.)
Then just as you are about to leave, you whip out the estate agents blurb on the property, pause for a few seconds and then just slowly say the price as if you were contemplating the meaning of life. Then allow the silence to hold for a few seconds. If the seller really wants to sell for less, they won’t be able to resist filling the gap by indicating what price they will accept.
It’s a great technique and it works most times. Try it.

FLOOD RISK
Now, a quick word about flood risk.
The property I am in the process of buying is close to a flood risk area.
To find out the extent of flood risk, all you need to do is look at the environment agency maps (at their website) and put in the postcode of the property.
This will bring up a general map of the area showing the extent of the flood risk – but this can actually vary a lot depending exactly where in the road the property is.
To find out the risk for a specific house you then have to click on the spot on the map at exactly where the property is. This will then bring up another more detailed statement which will state if the flood risk is “significant”, “moderate” or “low”. It is this which is the thing you really need.
Also, use Norwich Union too. They have among the most sophisticated flood maps in the UK which use other data which are laid on top of the environment agency maps – so if you are buying in an area that could be at flood risk, always call them for an insurance quote.
If they won’t cover you or charge a very high premium then you need to think about buying that property very carefully.

MORTGAGES
Out in the mortgage market mortgages are being withdrawn almost as soon as they show up and lending by the building societies continues to be restricted to certain areas and types of property. I continue to enjoy your stories about how hopeless the banks and building societies are at mortgage lending.
My friend Andy in Lancashire told me that “Despite being approved for a further £500,000 from the Woolwich in March for refinancing/new purchases, it seems I am not solvent enough for a 4,000k limit on a new capital one Cash Back credit card.”
I have had similar experiences too and I am also finding that the processing of mortgage applications by the lenders is still painfully slow. In my case, after having been approved for a mortgage from a subsidiary of one of our biggest banks I am still waiting after 4 working days to receive the application form. So, no change there then!
The same correspondent also says he accepts tenants on benefits and has noted that the rates for the new Local Housing Allowance were published yesterday by his local council for his area and they are pretty much 15-20% extra to tenants here when compared to the current HB system. The only downside is of course, that the money is usually going to be paid direct to tenants, so we lose the guarantee that we had when it was paid direct. So, we will have to see how this all works out.
If you need more advice on investment property or buy to let investments in general please ask me.
I’m David Lawrenson from property investment mentors http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
Buy the new edition here: http://www.amazon.co.uk/Successful-Property-Letting-Right-Plus/dp/0716030195/ref=sr_1_1?ie=UTF8&s=books&qid=1203933977&sr=1-1
It is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on buying below market value. I’m an expert on the UK property market and a well known property investment blogger and I contribute to newspapers and a host of property websites, write a property investment blog, a number of columns in the press and run a landlords advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.You can read more of my property investment blog and details of my networking, advice, buy to let networking programme at my website http://www.lettingfocus.com/My next London property investors networking meeting is coming soon. Click here for details: Property Investment Advice
I am also speaking at the Property Investor show in Birmingham in April http://www.propertyinvestor.co.uk/birmingham/
What’s unique about lettingfocus.com is that we offer independent property mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.Copyright: David Lawrenson 2008. This blog is updated once a week. Permission must be sought before using the material in the blog.

New Stations and Property Investing by Lawrenson Letting Focus

From Ebbsfleet in North West Kent, Paris is just two hours and a bit away - and it looks on the face of it as though all these areas will surely benefit, inevitably pushing up prices of houses and rents.
Northfleet, Gravesend and surrounding areas near Ebbsfleet have been cheap for quite a while compared to the rest of the South East but I think there is a risk that the abundance of new houses planned for this part of Kent, could lead to an over-supply developing.

New Housing Supply
In fact there will about 30,000 houses built in the area between Dartford and Gravesend which is all part of the Thames Gateway regeneration scheme.
The scale of the development is big, including, in Ebbsfleet Valley next to the station itself, a massive development that will hold shops, offices and over 6,000 of these houses.
The new station is about 36 miles from London, next to the A2 and the village of Swanscombe and only about a mile from Northfleet which is in turn joined up to Gravesend. Dartford town centre is about 6 miles away to the west.
Trains are now running to the continent but it won’t be open for local people to get to London until December 2009 when it will slash the journey time to London by a massive half an hour to just 17 minutes – though as yet no one knows how much this fast service will cost.
Property prices have been edging up surely and steadily.

House Prices Now
A standard 2 bed terrace house in an ordinary part of Gravesend last year was about £135,000 a year ago but a quick look at Rightmove shows they are now around the £185,000 mark.
Rent in Gravesend give a good guide to the area – a standard 2 bed terrace goes for about £550 per month and a 4 bedroom property would be anywhere from £800 per month upward.
Average prices for all properties in Gravesend were about £145K in 2003 and are about £215K now (source: upmystreet.co.uk) a rise of about 48%, and not far off the London rate of increase.
Amongst the new developments coming into Dartford are Barratts and Crest Nicholson who are building apartments and homes priced from £210,000, £240,000.

House Prices and Rents
But will the international link and its position do the trick for house prices and rents in the area?
Obviously, other new transport links in London have driven forward new frontier areas such as Canary Wharf - and East and South London have already felt the benefits of the Docklands Light Railway and the extension to the Jubilee Line - and the soon to be extended East London line is already pushing up prices in places on the new line especially in areas like Forest Hill, Brockley and Hackney.
Of course, there is a risk that people hoping to get in on the back of the transport and other developments at Ebbsfleet could fall victims to developers over-hyping and over-supplying a location and setting prices above what an area can really sustain with adverse consequences for home owners and investors.
This phenomenon was well illustrated in the “Truth about Property” TV programme screened on 25th October where investors in flats in some areas of the north 3 years ago are now facing big losses.

Too Many Houses
It could be worth investors taking a look, however a local agent I know says the area is stuffed full of landlords chasing a small supply of tenants, so watch out - this could be a buy to let ghetto in the making.
Another factor to watch out for in some of these areas that are near the Thames and other low lying areas is that of floods and flooding. For more on that see this article: http://www.lettingfocus.com/pages/myarticles_Flooding.html


ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
We are LettingFocus.com - the landlord experts and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
What’s unique about LettingFocus is that I offer independent unbiased
seminars for property investors and one to one advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unreguated buy to let and property “advice” business I am not linked to a property company, developer, estate agency or bridging loan provider.
I can advise where to buy (which areas), what type of property to buy, when to buy, how to buy property at a low price, how to eliminate the risk of getting a bad tenant and more. I have been a landlord and property investor myself for over 25 years.

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Copyright: David Lawrenson 2007. This blog is updated once a week.

Flood Risk Area? Flood Risk and Property Investment -What you need to Know: Part Two by LettingFocus.com

If you are thinking of buying a property in an area that may be at risk of flooding, check the Environment Agency website. On the right of the home page, there is a place where you can enter in the post code for the property you are buying or for anywhere in the UK.
This will show you a map which will highlight if you are in a flood risk area.
The site also lists local developments where the Environment Agency has objected because it feels there is a high risk of flooding.
Bear in mind the local authority is the final decision-maker in planning proposals, so it can choose not to follow the Environment Agency advice if it feels other considerations outweigh flooding implications.
Of course, if you are worried, you can of course walk away and buy a property elsewhere.
In terms of insurance cover, we are actually very lucky in the UK to have flood cover at all because flood insurance cover is very patchy outside the UK. Overseas insurers often don’t provide cover against flood as standard, or even under any circumstances in some cases.
So keep this in mind when you “jet to let” and buy property abroad.

CHECK OUT OUR SITE LETTINGFOCUS.COM:

THE HOME PAGE OF THIS BLOG click here: Blog
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MORE ABOUT US

LettingFocus.com are experts on landlord issues.
Hello, I’m David Lawrenson. I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.
We help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk.

At LettingFocus we pride ourselves on giving independent unbiased buy to let advice for property buyers and landlords both on a one to one mentoring and coaching basis as well as through occasional group seminars.
Property syndicates and property advice in the UK is still largely unregulated and what counts as “advice” is too often more about making the promoter money than giving useful information to the investor.

With no link to property firms, developers or bridging loan providers, at LettingFocus, we can advise on where and what type of property to buy for investment, when to buy and how to buy property at a low price. We also show you how to manage tenants properly and in ways that take up as little of your time as possible.
We also do consultancy and write for companies such as banks, local authorities, property websites and social housing providers – helping them with their landlord or buy to let product strategies.

SELLING STUFF TO LANDLORDS – YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME. PLEASE GET IN TOUCH!

TO VIEW RELATED POSTS select a “Category” at the bottom of this page.

Have you seen this related article from our Articles pages: Flood Risk and Floods - the Risks for Property Buyers

Am I in a Flood Risk Area? Property Investment and Flooding -What You need to Know: Part One

So, we are being flooded one again.
And yet it was not so long ago - in the autumn of 2000 in fact – that no less than 10,000 properties were flooded by storm and river flooding.
Incredibly, there are more than 2 million homes at risk from coastal or inland flooding, that’s around 10 per cent of all homes in the UK.
Around 400,000 of these homes are at a “very high risk of flooding” - that means people living there have greater than 1.3 per cent chance per annum or an annual probability of 1-in-75 of waking up to water.
In the long term, the number of houses at risk could worsen. Climate change is expected to increase winter rainfall, the frequency of heavy storm bursts and sea level and storm surge heights.
If there were no change in Government policies or spending, the Association of British Insurers (ABI) - whose members account for about 85 per cent of all household policies – has estimated that climate change could increase the number of UK properties at risk of flooding to 3.5 million.
In addition, continued pressure on land could mean even more new developments being situated in floodplains like the Thames Corridor.

Huge Cost of Flooding
The cost to the insurance industry of the autumn 2000 event was over £1 billion and led to the ABI “working” with the Government to agree terms through which the industry would continue to provide cover for “the vast majority of households” in the country.
Notice I said “vast majority” because the insurance industry has not guaranteed it would cover every risk. And of course, if you buy property in a flood risk area you can always expect to pay a higher insurance premium for the privilege. (Insurers never lose money for long as a quick look at their share prices will attest!)
After the storms of 2000, what probably happened behind the scenes was that the ABI - representing the insurers - and the government had something of a row because as the insurers see it, the government had for a long time not been spending enough on flood defences.
To put it bluntly, the insurers made it clear to the government that flood insurance would remain widely available only where the flood defences were being adequately managed (by the state).

The Government Is Worried
The government were suitably worried and there followed an overhaul of flood management in the UK. The result was better planning guidance and a more accountable funding arrangement down to local level.
But properties that are in flood risk areas are still being built and the insurers at the ABI recently pointed out that an astonishing one in four planning applications where the Environment Agency has objected because of flood risk still go ahead.
Also the Environment Agency is still not a “statutory consultee” for applications in flood risk areas.
So the insurers are still not entirely happy and relations between the government and the insurers are probably still a bit cool when it comes to flooding.
And all the while too, the mainly Victorian drainage system gets ever older and the risk of urban flooding from flash storms rises by the day. As I said before, the insurers will still cover the “vast majority” albeit at a price!
The ABI has said, that for properties at very high risk of flooding –that is higher than a 1.3 per cent risk per annum, but where flood defences will be improved to at least this standard in the near future, insurers who are members of the ABI will continue to provide cover to existing policyholders.

No Guarantee of Insurance Cover
Also, if an owner of such a property wants to sell then their current insurer will continue to provide cover, subject to satisfactory information about the new homeowners.
However, in areas where no improvements in defences are planned, the insurers have said that they cannot guarantee to provide cover in every case.
Here, the best that they can do in these cases is to use their “best efforts to work with policyholders to establish on a case-by-case basis, what action they, the Environment Agency and the Local Authority can take to enable cover to be continued.”
This sounds rather like, “You are on your own mate unless the government can somehow help you!”
In tomorrow's blog, I'll look at how you can check the flood risk for your property.

AT OUR WEBSITE LETTINGFOCUS.COM:

THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
THE HOME PAGE OF THIS BLOG click here: Blog
ONE TO ONE PRIVATE CONSULTANCY click here: Property Mentoring
NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors:
Next Property Investment Seminar and Networking Event
We have OFFERS on a range of services and products for landlords too; click here including landlords insurance, tenant referencing, tenancy agreements and more: Services and Products for Landlords
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting

TO READ CLIENT TESTIMONIALS – both commercial and private click here: Testimonials
BUY “SUCCESSFUL PROPERTY LETTING” click here: Buy the Book at Amazon plus anything else you fancy at Amazon.co.uk

To JOIN our Free QUARTERLY NEWSLETTER simply send an email to [email protected] - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A SITE WHY NOT LINK TO THIS BLOG OR OUR WEBSITE?

ABOUT US

At LettingFocus.com we are experts on landlord issues.
Hello, I’m David Lawrenson.
I have been a landlord and property investor myself for over 25 years and am author of “Successful Property Letting” – which has been the UK’s top selling property and buy to let book for the last 3 years.

We help landlords and property investors make money in property by coaching them in ways that work, which are ethical and which involve minimal risk to the investor.

At LettingFocus we pride ourselves on giving independent unbiased buy to let advice for property buyers and landlords both on a one to one mentoring and coaching basis as well as through occasional group seminars.

Property syndicates and property advice in the UK is still largely unregulated and what counts as “advice” is too often more about making the promoter money than giving useful information to the investor.

With no link to property firms, developers or bridging loan providers, at LettingFocus, we can advise you on where and what type of property to buy for investment, when to buy and how to buy property at a low price. We also show you how to manage tenants properly and in ways that take up as little of your time as possible.

We also do consultancy and write for companies such as banks, local authorities, property websites and social housing providers – helping them with their landlord facing or buy to let product strategies.

SELLING STUFF TO LANDLORDS – YOU COULD BE A PARTNER ON OUR AFFILIATE PROGRAMME. PLEASE GET IN TOUCH!

See our Twitter page: http://twitter.com/LettingFocus

WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
Over on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
If you have a website & are thinking of reproducing material here, that’s fine but we DO require a link to the blog to be included, including also all the links in this section. (The full article including all links must be available to ALL VIEWERS of your site and not restricted.)

TO VIEW RELATED POSTS select a “Category” at the bottom of this page.

Have you seen this related article: Flooding Risk