There is always things we can learn in Property from the experienced
to inexperienced of us. I just came across an article by James Caan in
the Telegraph, his 7 golden rules and wanted to share this with my
property friends.
http://www.telegraph.co.uk/property/3484488/James-Caans-
seven-golden-rules-of-property-investment.html
Slightly old but still interesting article
After a series of five interest rate rises in eleven months buy to let lenders are still insisting that buy to let even today is still a sound bet. Should consumers be viewing this as merely feelgood propaganda in a time of uncertainty and should the realisation of the bandwagon having passed by that it may well be too late, or does the great British love affair with property underpin the whole ideal.
The buy to let positives can be typically drawn from lenders commentaries and confirm that the average total return for a buy to let investor was 13.0 per cent over the past year to June 2007, exclusive of fees and mortgage interest costs. The price of the typical buy to let property in the UK increased by 7.3 per cent over the year to June 2007 and house price growth rose slightly over the past year from 6.0 per cent in June 2006.
UK Buy To Let rental yields have fallen marginally over the past year to 5.5 per cent in June 2007 from 5.7 per cent in June 2006. Nationally, the average rent increased to £651 per month in June 2007, compared with £623 per month in June 2006.
By region, total returns for buy to let investors were highest in Northern Ireland over the year to June 2007, followed by Scotland and the South East. The lowest returns seen in the East Midlands. rental voids (the time a property is empty) have fallen for the last nine months and is at 2.8% confirming strong tenant demand. Voids have remained somewhat stable between 2.6 and 3.0 weeks for the majority of the last four years but have declined over the first half of 2006.
Most Investors though simply want to cover costs as their property investments are seen as long-term. Intimating that an investment into bricks and mortar is the preferred route than into a pension. Accepting that there will always be peaks and troughs and to weather the storm. Landlords who bought ten years ago will no doubt be more comfortable with this scenario than novice landlords. Landlords entering the market today will also be greeted with lender arrangement fees of up to 2.5% of the advance compared with a standard arrangement fee over a year ago of between £300 to £500.
More lenders have also entered the market with relaxed criteria increasing loans to 90% of the property value and reducing rental income cover in some cases to between 100% and 115%. One lender no longer looks at rental income at all and/or earned income, justifying the decision by saying rental income was not a robust test, as many lenders accepted the word of a letting agent on rental achieved.
Tenant deposit protection schemes were launched on Friday 6 April. Under new regulations, all landlords will be required to protect their tenants' deposit using one of three government-authorised schemes alongside two insurance-based schemes which allow landlords to retain the full deposit amount themselves. These schemes require a fee to join, and a premium is payable for each protected deposit. Only any disputed amount is passed to the scheme at the end of the tenancy period. Landlords of properties that house five or more tenants and are at least three storeys high (House of multiple occupancy) from April 6 2006 have to apply for a mandatory license from their local authority and meet a raft of criteria. Including upgrading fire and safety regulations to installing wash basins in every bedroom, this latter criteria was branded as 'daft' by the Council of Mortgage Lenders (CML). The license fee is set by individual councils and will not be uniform. Around 10 per cent of the 2.6m private rented UK households are defined as houses of multiple occupancy.
Reports also suggest that Revenue & Customs are stalking 80,000 landlords over incorrect payment of tax. The buy-to-let market is coming under fire for rendering the housing market even more unattainable for first time buyers. In its annual plan for 2005-06 the OFT identified and prioritised attention to landlords who ignore legislation. The OFT guidance outlines why some standard contract terms used in tenancy agreements are considered to be potentially unfair. While landlords also have a potential green tax to look forward to in 2008.
Many entrepreneurial landlords are now looking further afield to enjoy the previous returns while also securing their own piece of paradise. Current developments in Thailand and The Dominican Republic offer guaranteed rental yields of 8% and ten years of tax incentives and no purchase tax. while the term 'off plan' within the UK property market may well have lost some resonance and compounded by the wettest summer since records began, the incentives along with sharing paradise with 10 people per acre is realising significant demand.
Mortgage-Loan-UK is a premier resource for personal finance information along with an extensive collection of mortgage related calculators.
Article Source: http://EzineArticles.com/?expert=Martyn_Witt
Lease option sales were popular financing instruments in the late 1970s and early 1980s in America and Australia and are now becoming very popular in the UK.
They were primarily used as a way to circumvent alienation clauses in mortgages. Proponents claimed the sale was not really a sale because it was a lease; however, courts argued otherwise.
Today, options to purchase, lease options and lease purchase agreements are three different financing documents. The variances are state specific and not all states have identical laws. Before entering into an agreement with a seller, buyers should obtain the advice of a property lawyer.
The video below gives a brief outline
Tenant excuses to landlord's
"I can't pay my rent as my BMW is in the shop, and I cannot affordto pay for both."
"I can't pay my rent because the checks come out of Japan and theplane crashed."
"If I move, my friends won't know where to find me." "Well, you see, I cannot pay the rent because my daughter ate my husband's paycheck."
"I deposited my paycheck in the bank teller machine and it gotcaught in the rollers. It took six days to tear apart the machine."
"I had my choice of paying the rent or buying a car. I bought a car. I knew you would understand."
"I am sure I paid you -- YOU must have lost it."
"You towed my car away that was illegally parked and I refuse to pay my rent until you get my car out of impound."
"It's your fault. You deposited my check too late. My automaticwithdrawals went through the bank before the rent check."
"There is nowhere else to go. The place I applied to will not take me because you are evicting me."
Finally, courtesy of Randy Chapman, office manager for the ApartmentAssociation of Seattle & King County, this reason for not paying therent: "The house is haunted."
There are considerable risks posed by third party liabilities that landlord’s should be concerned with. In the litigious society in which we live, anyone operating a business, and a landlord is certainly doing that, can easily find themselves on the wrong side of a lawsuit which can seriously damage your wealth - and probably your health as well!
You only need to watch day-time TV for a brief spell to see how many law firms are touting for the business of anyone who has the slightest inkling of an accident claim.
Make sure your policy includes Property Owners Liability up to something like £5 million of cover. It is vital that you are covered in this way against death, injury or damage to individuals on or near your property, for example: tenants, visitors and guests, meter readers, postmen etc. Local authorities and Universities will normally specify a minimum amount of cover needed when you house housing benefit tenants or students.
Ironically, it's this third party liability, the greatest risk to the landlord, which is often overlooked!
Advice from the Landlord Zone
It is extremely important to have a good credit score when you are looking to purchase property
Credit scoring is closely regulated by the Financial Services Authority.
It is very difficult for a consumer to know in advance if they have a high enough credit score to be accepted for credit with a particular lender. This is due to the complexity and structure of credit scoring, which differs from one lender to another.
Also, lenders do not have to reveal their credit scoring methods, nor do they have to reveal the minimum credit score required for the applicant to be accepted. Simply due to this lack of information to the consumer, it is impossible for him or her to know in advance if they will pass a lender's credit scoring requirements.
If the applicant is declined for credit, the lender is also not obliged to reveal the exact reason why.
Personally I feel it is always best to be informed and stay ahead in business so I try to attend as many property events as I can. The following is a list of just a few
South London Property event
Property Investors Network
Property Network Club
Property Mastermind
http://www.berkshirepropertymeet.com/
Every 3rd Monday of the month
With these property events if nothing else you get to network with like minded people, exchange ideas and maybe even joint venture . If you know of anymore events then please let us know by commenting and we can add them here.
A 'section 8 notice to quit', also known as a 'section 8 possession notice', is so called because it operates under section 8 of the Housing Act 1988. A section 8 notice is different from the more common section 21 notice to quit in that is served on the tenant by a landlord wishing to regain possession of a property during the fixed term of an Assured Shorthold Tenancy (AST). A section 21 notice can only be used for regaining possession at the end of a tenancy agreement.
A section 8 notice can only be issued to a tenant who has breached the terms laid out in the tenancy agreement and if certain conditions have been met, the most common being one involving rent arrears. The Housing Act 1988 provides 17 grounds on which a landlord may seek possession before the fixed term of tenancy has finished.
The landlord cannot evict the tenant without first obtaining an order for possession from a court. Before applying to the court for such an order, the landlord must serve a Section 8 notice to quit on the tenant. The notice states that the landlord intends to seek possession of the property and states the ground or grounds on which possession is sought.
The notice must be laid out in a prescribed format and must specify which grounds the landlord intends to use to gain possession and the landlord's reasons for relying on those particular grounds. Any error made when issuing the section 8 notice is likely to delay the landlord gaining possession.
Grounds for issuing a Section 8 notice to quit
Under section 8 of the Housing Act 1988 there are 17 separate grounds on which a landlord can seek possession of a property.
For ground 2 the landlord must give two months' notice. For grounds 8, 10, 11, 12, 13, 14, 14A, 15 and 17 they can give just two weeks' notice.
Notice must be given in the prescribed manner in a section 8 notice. This is important because any errors the landlord makes when serving the section 8 notice is likely to lead to serious delays.
Grounds involving rent arrears
The most common reason for issuing a section 8 notice to quit is rent arrears and this is covered in grounds 8, 10 and 11.
Ground 8
Rent is unpaid when the notice seeking possession is served, and at the time of the hearing for a Possession Order:
Rent is paid weekly or fortnightly and at least eight weeks' rent is owed.
Rent is paid monthly and at least two months' rent is owed.
Rent is paid quarterly and at least one quarter's rent is more than three months overdue.
Rent is paid yearly and at least three months' rent is more than three months overdue.
Ground 10
Rent which is lawfully due to the landlord has not been paid by the time the possession proceedings are started and was owed at the time the Notice seeking possession was served.
If a landlord has been offered money for rent by the tenant but has refused to take it, the tenant will have a defence in the possession proceedings.
Ground 11
The tenant has failed repeatedly to pay rent on time. There don't have to be rent arrears at the time possession proceedings started.
If the landlord is issuing the section 8 notice on the grounds of rent arrears, if possible he should include ground 8 in the grounds he relies upon, as this is the only ground covering rent arrears that is mandatory. This means that if the landlord can prove that this ground applies, the court will grant a possession order
Nevertheless it is recommended that landlords make use of all the grounds that apply, as they will all help the court in making their decision on whether to grant a possession order.
Grounds for issuing a Section 8 notice other than rent arrears
If any of the following grounds apply a landlord can apply to a court for possession after issuing a section 8 notice to quit upon the tenant.
Ground 2
The property is subject to a mortgage which pre-dates the tenancy and the mortgagees are repossessing the property to enforce the charge. Written notice should be given before or at the time the tenancy begins that possession may be required under this ground.
Ground 12
The Tenant has breached any term of the tenancy agreement (other than the ones relating to the payment of rent).
Ground 13
The property has deteriorated due to neglect by the tenant or by someone living with the tenant and the tenant has failed to remove that person.
Ground 14
The tenant or someone living with or visiting the tenant is causing or is likely to cause a nuisance to neighbours or visitors to the area, or has been convicted of using the property for immoral or illegal purposes, or has been convicted of an offence in the local area.
Ground 14A
Note that this ground is only open to registered social landlords or charitable housing trusts and can not be used by private landlords.
The property is occupied by a couple, one of them being a tenant and one of them has left due to violence or threats of violence from the other partner or from a member of that partner's family who is also living in the property.
Ground 15
Furniture at the property has deteriorated because the tenant or someone living with has neglected the furniture and the tenant has failed to remove that person.
Ground 17
The tenant, one of the tenants, or a person acting on behalf of the tenant has given false information to the landlord which resulted in the landlord granting the tenant the tenancy.
When issuing a section 8 notice to quit on a tenant it is advisable to make use of all grounds that apply. This is because not only are certain grounds considered only at the court's discretion, but also certain grounds are often hard to substantiate.
Does a Section 8 notice to quit guarantee a possession order?
Issuing a section 8 notice to quit on a tenant does not guarantee that the court will grant a possession order. It depends largely on which grounds are relied upon as well as the strength of the the landlord’s argument.
Grounds 2 and 8 of a section 8 notice are mandatory, meaning that if a landlord relies on one of these grounds and can prove to the court that one of them applies, then the court will have no choice but to issue the landlord with a possession order.
Grounds 8, 10, 11, 12, 13, 14, 14A, 15 and 17 are discretionary, meaning that the court will not necessarily rule in the landlord's favour even if he can prove that one of the grounds applies. In these cases it is at the court's discretion whether to grant a landlord a possession order. They will weigh up the facts and make a decision based on what they see as fair and reasonable.
If a court is satisfied that a landlord is entitled to possession on one of the grounds, then the court will grant a possession order to take effect within 14 days. It is possible that this will be extended to six weeks if it will cause the tenant to experience exceptional hardship.
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Compiled from Tenancy Agreement Service
I found this very useful link that lets you know how much local authorities will pay per tenant and letting type . Just type in your postcode
https://lha-direct.therentservice.gov.uk
A 'Section 21 Notice to Quit', so called because it operates under section 21 of the Housing Act 1988, is the notice a landlord can give to a tenant to regain possession of a property at the end of an Assured Shorthold Tenancy (AST). The landlord is able to issue the tenant with a section 21 notice without giving any reason for ending the tenancy agreement. A landlord has the legal right to retain possession at the end of a tenancy but must follow the correct legal procedure, which includes serving a section 21 notice. The Housing Act 1996 amended the section 21 of the 1988 Act by requiring this notice to be given in writing. Section 21 of the Housing Act 1988 is divided into subsections with different procedures to be followed depending on whether the Section 21 notice is served before the fixed term has come to an end or after, when the tenancy has become a periodic tenancy. When can a Section 21 notice to quit be issued?
Under section 21 of the Housing Act 1988 as amended by the Housing Act 1996, a landlord has a legal right to get his property back at the end of an assured shorthold tenancy. In order to invoke this right, he is required to follow the correct legal procedure which involves serving a section 21 notice to quit on the tenant or tenants. A section 21 notice can be issued at any time during the fixed tenancy or during the periodic tenancy.A Section 21 notice to quit can only be used to regain possession of a property at the end of an assured shorthold tenancy. If a landlord wishes to regain possession before the end of the agreed term, this may be possible if he can show certain conditions have been met. In order to do this he must first issue the tenant with a valid section 8 notice to quit.
Section 21 notices served during the fixed term of the tenancy
Section 21 of the Housing Act 1988 as amended by the Housing Act 1996 requires that the landlord provides tenants of an Assured Shorthold Tenancy (AST) with a minimum of two months' notice in writing, stating that possession of the property is sought. The two months starts when the tenant receives the notice not when the notice was written/posted. A Section 21 notice must be served before possession order will be issued by a court. Possession under this section of the Housing Act 1988 cannot take place during the fixed term of the tenancy, but the notice can be served at any time during the fixed term provided the tenant is given a minimum of two months' notice. The tenant is not required to give up possession of a property until a minimum of two months after the Section 21 notice to quit was served. This includes Section 21 notices served up until the last day of the fixed term. The provisions in section 21(1)(b) applying to fixed term tenancies state:
"Without prejudice to any right of the landlord under an assured shorthold tenancy to recover possession of the dwelling-house let on the tenancy in accordance with Chapter I above, on or after the coming to an end of an assured shorthold tenancy which was a fixed-term tenancy, a court shall make an order for possession of the dwelling-house if it is satisfied-a) that the assured shorthold tenancy has come to an end and no further assured tenancy (whether shorthold or not) is for the time being in existence, other than a statutory periodic tenancy: andb) the landlord, or in the case of joint landlords, at least one of them has given to the tenant not less than two months' notice stating that he requires possession of the dwelling-house."
A notice can be issued more than two months before the end of a tenancy but it should not be dated to expire on or before the last day of the tenancy. For example, if a Section 21 notice was issued four months before the tenancy was due to end, the notice would have to be dated after the last day of the fixed term. If a section 21 notice is issued during the initial fixed term of a tenancy to regain possession at the end of the fixed term tenancy, then should the landlord decide to grant another fixed term, a new section 21 notice would be required to regain possession.
Section 21 notices served during a periodic tenancy
Once the fixed term of the tenancy ends, unless a new fixed term is agreed upon a tenancy automatically becomes what is called a statutory periodic tenancy which rolls from week to week or month to month depending on how often rent is paid.The procedure for serving notice under section 21 of the Housing Act 1988 is slightly different in the case of statutory periodic tenancies.Section 21(4)(a) of the Housing Act 1988 applies to assured shorthold tenancies that have become periodic and states:
"Without prejudice to any such right as is referred to in subsection (1) above, a court shall make an order for possession of a dwelling house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied-(a) that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and(b) that the date specified in the notice under paragraph (a) above is not earlier than the earliest day on which, ........, the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above "
A Section 21 notice complying with the above section should only be given to a tenant whose tenancy has become a periodic tenancy as a result of the fixed term ending. In these cases, a minimum of two months' notice is required and the day on which the notice expires must be the last day of a period of the tenancy. The period of a tenancy depends on how often the rent is paid. If rent is paid monthly the period of the tenancy is one month, if the rent is paid weekly the period of tenancy is one week and so forth. The periodic tenancy begins immediately after the fixed term expires, so if the fixed term expires on the 10th then the period of the tenancy begins on the 11th, so provided rent was paid monthly the last day of each period of tenancy would be the10th of each month. Therefore the Section 21 notice would have to expire on the 10th of a month and be served a minimum of two months before the tenth of that month. If the tenant does not leave by the expiry date on the notice the landlord will need to apply to the court for a possession order. Provided the correct procedure has been followed by the landlord issuing the Section 21 notice, the court will have no choice but to grant the possession order. After the court has issued the tenant with the notice to leave, if they have still not left within the required period, then a landlord can ask county court bailiffs to evict the tenant.
Ask a lawyerIf you need legal advice for a specific or complex question that is not answered on this website, you might like to contact our partners at JustAnswer.com, who will put you in touch with an experienced qualified lawyer at a fraction of the high street rates.
Compiled from Tenancy Agreement Service
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