Tuesday, 27 October 2009 17:01 Written by Tweets Team

For landlords, life may seem as if it's finally getting easier; interest rates are down, and according to a recent RICS survey rents are on the up. But it's not all green shoots; some tenants are still facing financial pressures, which are leading to increased rental arrears.

Research conducted by the National Landlords Association (NLA), the UK's leading representative body for private-residential landlords, reveals nearly three quarters of landlords have experienced rental arrears. Worryingly, 43% of these occurred in the last 12 months.

NLA Rent Guarantee Insurance offers a way for landlords to minimise the risk from loss of rent. Should problems arise during the tenancy, the cover also provides legal expenses and a dedicated 24-hour advisory service. Available to all residential property landlords, NLA Rent Guarantee Insurance offers much needed piece of mind.

David Salusbury, Chairman, NLA, commenting on the launch of NLA Rent Guarantee Insurance said: "Landlords may not realise they can protect themselves against rental arrears, but our research clearly shows there is a need to safeguard your rental income. Unfortunately we aren't out the woods with the economy just yet, and thanks to redundancy and unemployment some tenants are struggling to pay their rent."

"While it is wise to take out insurance, landlords should not forget the importance of also taking full references and making checks at the outset of a tenancy. Keep in touch with your tenants too. If they feel they can come to you if they are facing difficulties, you may be able to come to an arrangement before rental arrears become more serious."

Source: http://www.landlords.org.uk

Tuesday, 27 October 2009 16:50 Written by Administrator

Numbers of loans approved for house purchase are back to levels last seen at the end of 2007 and that increased activity is feeding through to increased mortgage lending, according to figures from the British Bankers' Association (BBA).

Other mortgage approvals remain subdued and households are generally cautious, continuing to reduce their borrowing and build up deposits.

Gross lending of £26.1bn in the third quarter of 2009 was 7% higher than in the second quarter, but was still 32% lower than in the same quarter of 2008. Gross lending is understandably lower now, because of significantly reduced remortgaging activity. The annual growth rate of 4.6% in the banks' mortgage lending substantially exceeds growth of just 0.8% across the whole market.

The number of house purchase approvals has risen steadily in the last eight months with an average value some 7% higher than a year earlier. Remortgaging is less likely in the current environment, where reverting to standard variable rates may be more attractive than alternative deals. Approvals for equity withdrawal ticked up slightly in September.

BBA statistics director, David Dooks, said: "Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market. Apart from property decisions, further symptoms of subdued consumer confidence are a reduced appetite for unsecured borrowing and more saving."

Source: http://www.bba.org.uk

Tuesday, 27 October 2009 16:40 Written by Tweets Team

The Financial Services Authority (FSA) today sets out proposals for the major reforms required in the UK mortgage market to ensure that it works better for consumers and is sustainable for all market participants.

The proposals, published in the mortgage market review discussion paper, reflect the FSA's changed approach to a more intrusive and interventionist style of regulation.

The review's key features are:
* Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay;
* Banning 'self-cert' mortgages through required verification of borrowers' income;
* Banning the sale of products which contain certain 'toxic combinations' of characteristics that put borrowers at risk;
* Banning arrears charges when a borrower is already repaying and ensuring firms do not profit from people in arrears;
* Requiring all mortgage advisers to be personally accountable to the FSA;
* Calling for the FSA's scope to cover buy-to-let and all lending secured on a home.

Jon Pain, FSA managing director of supervision, said: "The mortgage market has seen extraordinary upheaval over the last 18 months and whilst it has worked well for the vast majority of borrowers, some have suffered great financial distress. We recognise that we need to bring about a step change in regulation and we need to act now to address the issues we have identified.

"The paper sets out the main findings of the FSA's comprehensive analysis of the mortgage market. It clearly shows a rapid explosion in mortgage products; the emergence of high risk lending strategies which typically focused on higher risk borrowers; relaxed credit standards; and a mutual assumption by too many borrowers and lenders that the good times could not end.

"The FSA needs to ensure that firms only lend to people who can afford to pay the money back. The reforms that we have announced today will ensure that the mortgage market works better for consumers and that it is sustainable for firms."

The review has also identified that the irresponsible lending practices seen in the market until recently will be curtailed by the FSA's existing work on capital and liquidity.

The proposals are designed to tackle the problems identified while maintaining a vibrant and sustainable market. But the FSA has not ruled out further change if the initial proposals do not have sufficient effect, including caps on loan-to-value, loan-to-income or debt-to-income.

The discussion paper is out for discussion until 30 January 2010 and the FSA will be actively seeking views from consumer groups and industry. A feedback statement will be published in March. Implementation will be phased, with the focus on speed for areas of high detriment, such as arrears.

Monday, 18 May 2009 09:42 Written by Tweets Team

The Council of Mortgage Lenders (CML) has reported that the number of homes repossessed in the UK increased to 12,800 in the first three months of 2009.

These statistics show a rise in repossessions of 23% from the 10,400 in the previous three months and 50% up on the 8,500 in the same period last year.

As the recession continues and the housing market remains relatively stagnant, the CML anticipates that 75,000 homes will be repossessed in 2009, which is almost double the 40,000 figure of 2008.

Although this prediction seems to spell further doom and gloom for the UK housing market, the CML has described its view as "pessimistic", and has suggested that it could change its outlook in the summer.

One positive which has emerged are newly-published figures from the Ministry of Justice which show a considerable drop in the number of lenders obtaining court permission for the early stages of repossession.

To read the full report, visit the BBC News site via this link.

Friday, 15 May 2009 13:04 Written by Tweets Team

According to online property giant, Primelocation, "the prime London lettings market remains a tenants' market thanks to an excess of supply over demand."

For the first time in almost 10 years, London letting agents and property management services are reporting that, in some cases, rental properties are remaining on the market for in excess of a month. This is quite a contrast to the situation at the height of the property boom, where apartments in the capital were regularly snapped up by tenants within a couple of hours of appearing on the market.

For current tenants and potential tenants alike, the time is certainly ripe for getting rental bargains. With increased competition, landlords are reporting that they are under greater pressure to secure income from a tenant to the extent that rental rates are often open to negotiation.

The story isn't all doom and gloom for landlords and agents though. Well located and well presented properties still don't hang around for long. So, whilst it may be the case that landlords have to spend a little more time and money improving the appearance of their properties, this effort will not be in vain. Equally, this heightened competition and need for an increase in input from landlords is likely to squeeze less scrupulous landlords out of the market, making it a better place for both tenants and honest landlords alike.