The treasury have announced plans to forward a tax break to buy to let mortgages. This has caused many groups to become outspoken about the perils of this proposed action.

According to the objectors the sharp rise in buy to let to mortgages during the last boom was responsible for inflating prices and making it impossible for first time buyers to get into the market. the council for mortgage lenders has reported a sharp drop in the number of first time buyers since the credit crunch and the Priced Oy lobby group have been quick to put out that they believe tax breaks for buy to let will make the situation worse.

It has got to be a conundrum for the government though because as we all know they are facing a major housing shortage and with the banks not loosening the purse strings for fist time buyers there is no guarantee that sector will be able to get finance to do anything about it.

Many agree that private landlords may be the best hope for avoiding a crisis. Priced out clearly have their own barrow to push and as with most lobby groups they do not always consider the consequences on the rest of the economy. A balanced approach is surely best. It will be interesting to see which way the government jumps. 

Upad.co.uk have arrived at the conclusion that most landlords are fairly upbeat about their future. Even more so, apparently, in March than in February, 61% of UK landlords told the company in their recent survey that they feel confident that things are improving in the rental sector and that they will continue to improve.

Some of the comments left on the site are even more illuminating than the raw figures. A lot of people feel that things are looking rosy because there has been a bit of a loosening from the lending sector, the biggest hurdle that has face the buy to let landlord in a long time.

On the downside other do express concern about the future of interest rates. Which clearly is a worry for all property owners.

James Davis, CEO of Upad, commented: “For the fourth consecutive month since we launched the Index, landlords have highlighted their growing confidence in the market.

In the months to come, it will be interesting to monitor the lending capacity of the UK’s banks, and the impact this will have on the sector. Overall though, I feel that this month’s survey indicates the market is continuing to go from strength-to-strength.”

From strength tho strength sounds good to me I hope that it continues in that fashion for some time to come.

This story should not shock anyone with lots of experience with loaning to fund buy to let.

According to a report released this week by LSL Property Services the majority of buy to let landlords are in favour of the stronger regulation of mortgages and advice. Most of the landlords surveyed expressed the belief and the fervent hope that the regulation changes will offer landlords additional protection in what can be a fairly cut throat market.

60% are in favour for the reason of protection and and 59% say they believe it will help to rid the industry of unscrupulous introducers and intermediaries. David Brown, Commercial Director of LSL Property Services plc says

“It may be surprising that many landlords advocate further regulation – but this does reflect a general desire for additional investor protection, and if it leads to a greater professionalisation of the sector, it should be applauded.”

There are very few among us who would disagree with that statement or with the warning he issues about one size fits all solutions.

“Increased regulation would potentially help less experienced landlords, but it needs to be simple and proportionate. The FSA and the Treasury should avoid using a sledge-hammer to crack a nut. Landlords have different levels of experience, and different requirements.

“With a one size fits all approach to regulation, any benefit for inexperienced investors could potentially be outweighed by the damage to the sector if it ended up making it less attractive for larger scale landlords to invest.”

Very sensible words.

According to rental site Upad.co.uk, tenants should make an effort to check every leasehold bill they receive from their landlord to make sure that all the charges are legitimate.

They state that is not unheard of for landlord’s or even the letting agents representing them to slip unfair service charges onto the bill.  Just like a bill in a restaurant tenants need to check each one over and make sure they agree with all the charges that are included. If they believe they are being charged for something they should not be they need raise the issue with the landlord straight away.

James Davis, chief executive officer of the site says,

“A lot of property holders know that people just pay it and don’t look at it. You should ask for supplementary evidence to support it

To say a lot seems to be a little unfair on the vast majority of us who would not even consider using this under hand practice but the point is taken. as in any business there is always going to be the odd few that try to get one over on the customer and it is as well that people protect themselves against this.

Tony Essien, chief executive of the Leasehold Advisory Service, stated that charges must be “reasonably incurred”.

If you think some of yours are not then by all means you should raise the issue with your landlord. And perhaps landlords may want to take this opportunity to make sure everything is above board, especially if you use a third party. 

In a further development in the great push for all of Britain’s rental properties to go green Gordon Brown is going to lend property owners the cash needed to make ecologically sound improvements. This is direct at residential property landlords unlike some of the other schemes we have talked about lately.

The idea is to allow the owners of these properties to make the required changes then pay the money back over a period of time, hopefully easing the financial burden. Those that have come up with the scheme believe that often the savings bought about by the improvements will be enough to cover the cost of the repayments. Interestingly the loan will actually be tied to the property and not the owners so in reality when you sell the house the loan goes with it.

The name being given to this is the Pay as You Save Scheme and the clear goal is to reduce the upfront costs associated with going green. The government are not doing this out of the goodness of their heart, of course, they are hoping to reach their ambitious reduction in carbon emissions goals over the next ten years.

It does sound good for the owners of residential properties in all fairness. Replacing your insulation can save you up to three hundred and eighty pounds and with the government offering to foot the bill while you pay it back you have literally got nothing to lose. 

One of the leading landlord websites in the UK has put out a warning this week that the onus is on landlord’s to make sure that they read properly through any contracts with real estate agents and know exactly what they are signing up to.

Tom Entwhistle of LandlordZONE was reacting to a recent ruling by the Office of Fair Trading (OFT) against Foxtons estate agents. OFT found that the agents renewal commission terms were not fair and transparent. They further added that the ruling should serve as a warning to other agents to get their clauses in order.

Mr Entwhistle welcomes the ruling as a welcome development as “It is patently unfair to hide onerous conditions and charges in the small print of contracts,”. He also cautions landlords that they should make sure that they read that small print in an effort to protect themselves.

Going one step further David Salusbury, chairman of the National Landlords Association, has come out after the ruling and called for the letting agent renewal fees to be scrapped altogether.

That is certainly food for thought I suppose. In the long term if more letting agents are caught in this kind of activity then I would hazard a guess that is exactly what will happen. In the meantime we need to make sure we are looking after ourselves.

Another voice has waded into the great private rent vs the government debate and i think a lot of what he says needs listening too. It is a pity that the housing minister John Healey shows no signs of doing so.

LetAssured UK managing director, David Plaister, has been upfront and blunt about Mr Healey’s plans for the private rented sector, saying, “I do not believe for one second that providing tenants with a feedback website where they can post comments, which may or may not be true, about their landlords will improve the quality of rented accommodation in the UK.”

He is, of course, referring to the much discussed site and hotline that the government has set up to allow tenants to ‘rate’ their landlords. I actually fully agree with him. I did not put it quite so bluntly in my blog last week but he is right. I too doubt that much real good will come of the move.

Mr Plaister goes on to say that he would be happy to support any proposal that facilitates the great work done by the majority of fair, hard working and reputable landlords in the UK. Once again, I applaud this statement. The government seems to have an odd idea of how to support an industry that is helping them out of what could be a major housing crisis. 

Cash shares or bonds would not have netted you the return on your capital that residential property would have over the past decade, despite the fact that we experienced a pretty major hiccup towards the end there. This is according to figures released recently by the Halifax bank.

They ascertain that buy to let landlord’s could have made a 187%  return on their investment over the last ten years. This includes a 3% deduction from gross rents to cover costs.

There were things that did actually perform better over the same period but they are things that do not immediately jump to mind. There was, for example, a 242 % return on investment over the last ten years on precious metals.

Martin Ellis, group economist at Halifax, said: “Property has still delivered good long-term gains despite recent turbulence.” But the poor performance of UK shares, which registered one of their worst decades ever, would “make people think harder whether they want to invest in equities”, he said.

In fact the stock market was not a good bet at all, on balance with it only being up on a total returns basis including dividends. With inflation totaling 30% investors failed to make any real return.

It is nice to know that even in times of crisis bricks and mortar are still a decent investment that will see a return. 

One of the leading retail websites has released some interesting figures this week and made some even more interesting comments. According to the figures for website lettingaproperty.com there site refers tenants that fall into these categories. 77% are in full-time employment, 4% are part-time employed, 4% self-employed, 1% students and 14% are unemployed.

The interesting comments regarding this data were made by Jonathan Daines, founder of the website when he said

 “I am pleased that the site generates quality leads for Landlords and Agents from employed tenants; however I am concerned that landlords may be missing an opportunity if they do not at least consider tenants claiming income support or LHA.The most common reason given by landlords is due to a poor experience that they have had in the past with their local councils and rent payments.”

He goes on to add that in his opinion that particular landscape has changed dramatically recently. He says that local councils are now more aware than ever that they need to get proactive when it comes to these issues.

Most councils now will entertain the idea of requests for rent to be paid directly to the landlord, despite recent changes in the LHA that allowed for it to go to the tenant. This is very good news indeed for those of us that would like to take the opportunity of renting to those that are on LHA so long as we can rely on being paid.

People have grabbed the government offer of £400 pounds towards the replacement of their old boiler with both hands. A total of 44% of the available vouchers have already been issued, but there is still an opportunity for some 70,000 residential property owners to claim theirs if they are eligible.

According to Gordon Brown the boiler scrap-age scheme should lower the bills of the home owners as well as helping the government towards its targets of reducing carbon emissions. On top of that it has the added bonus of creating work in a time where it is really needed.

The offer is open to those residential landlords that qualify and many have taken the opportunity up. Some, though,  think it ought to be extended further to include social landlords and I lend my support to that. I see no reason why they should be excluded.

Others are pointing out that the vouchers are working but that actually more could be done. Given that 3.5 million homes are believed to have inefficient boilers the 70 000 vouchers on offer are unlikely to address the whole problem.

One thing to note though if you are in the market for a new voucher is that some companies have offered to match the governments £400 offer. that may well be worth looking into of you have a large portfolio.