31/08/2007 by Dave.

As students around the country get to grips with their A-Level results, those who’ve already completed their first year in university accommodation will be making the big step into independent housing. Letting to students can generate substantial returns for landlords and the yields are often much higher than those achieved in the standard buy-to-let property market. But renting to students can be very different from the average letting process.

Lettings website, Lettingagent.com, offers the following tips for those considering entering the student property market.

1- Think very carefully about the area: Local knowledge is invaluable as it’s pointless to invest in an area where students wouldn’t want to live or wouldn’t be welcome.

2- Landlords should also be aware that towns and cities may have more than one university, and each may have various campuses around which there are student areas. Be wary of up-and-coming areas as it’s useless to consider buying somewhere you can get more for your money if you aren’t going to be able to attract the student tenants to fill it.

3- Choose a reliable letting agency to manage your property: Not all university towns are equally profitable. Landlords should choose letting agents that are registered with an official organisation such as the Association of Residential Letting Agents (ARLA).

4- Register with the university accommodation service: Being on the university database is an easy way to advertise a property directly to students.

5- Be aware of health and safety regulations: Landlords should pay particular attention to the HMO Licensing and Housing Act legislation to ensure that they comply with the rulings and any recent amendments.

6- Insert a clause in the lease to allow for potential damage: This allows for circumstances where students fail to follow the procedures required, for example where damages are caused.

Students should be given a clear inventory and a flat inspection carried out the first day of tenancy so that breakages or damages can be noted at the end of the term. A list of emergency numbers and useful contacts and dates (e.g. bin-day) can also prove very helpful.

7- If possible, ask for a reference from a previous landlord

8- Don’t fall into the trap of false economies: Though no one would advise buying expensive carpets, curtains or sofas, the furniture provided for students does need to be hardy and able to withstand a bit of wear and tear.

9- Always make sure you have buildings insurance: This rule applies equally to the student market, as it would to the buy-to-let arena generally.

10- Ensure that council tax forms are filled out and sent off: Properties which are occupied only by students are exempt from council tax so tenants should fill out the relevant forms and return them as soon as possible to avoid problems later on.

Posted in Mortgages | Print | No Comments »

30/08/2007 by Dave.

The demand for home information packs (Hips) has been great and the scheme is here to stay, according to one expert.

A spokesman for Simply HIP said this week that customers looking to purchase property, including those with homeowner loans, should be aware that Hips are here to stay.

Ashley King, managing director at the firm, said although August is usually a quiet time for estate agents, the demand for Hips has been strong.

“On the first day we had over 20 instructions and its been 20-30 a day thereafter so we would say that [demand has been] in excess of our initial expectations.”

He assured house buyers and home loans customers that despite differing reports that the scheme would or would not be fully implemented, Hips would not be going away.

“There is a good percentage of agents, in my opinion, that now really realise that Hips are here and they are going to stay and that they’d better get on with it!”

Hips became compulsory for houses on the market with four or more bedrooms on August 1st and will be rolled out to properties with three or more on September 10th.

Posted in Home Info Packs | Print | No Comments »

28/08/2007 by Dave.

The third annual Halifax Rural Housing Review, covering the 132 Local Authorities in Great Britain defined as rural areas, has found that housing is even less affordable than in urban areas - the average property price in rural areas being 7.1 times average annual earnings, compared with a ratio of 6.2 in urban areas.

Carrick in Cornwall is the least affordable rural local authority in Great Britain - the average house price there of £269,241 being 10.3 times local annual average earnings of £26,217.

The next least affordable rural districts are South Hams in Devon (10.2), North Cornwall (10.1) and Restormel in Cornwall, where house prices are 9.5 times average earnings.

Nine of the ten least affordable rural areas in Britain are in the South West. The exception is Rutland in the East Midlands.

Western Isles in Scotland is the most affordable rural local authority - the average house price there coming in at £110,015. Or 4.3 times local average annual earnings of £25,459.

Chiltern in Buckinghamshire is the most expensive rural local authority with an average house price of £474,850. The next most expensive rural areas are Waverley in Surrey (£444,819), South Oxfordshire (£389,004) and Tandridge in Surrey (£382,585).

Rutland is the most expensive rural local authority outside southern England, where prices average £293,558. And Malvern Hills in the West Midlands (£278,208) and Ribble Valley in the North West (£267,096) are the next most expensive rural areas outside the south.

House prices in rural areas have increased, on average, by 72% in the last 5 years, from £143,037 in 2002 to £246,104 in 2007. This is slightly below the 80% rise in urban areas over the same period from £119,255 to £214,998.

Pendle in the North West is the rural district that has recorded the highest house price growth in the last 5 years - average prices there having risen by 162%, from an average of £53,247 to £139,747. Carmarthenshire (159%) and East Ayrshire (151%) have experienced the next highest house price growth.

Posted in Mortgages | Print | No Comments »

27/08/2007 by Dave.

Consumers across the UK could be finding themselves financially free with debt consolidation, according to one expert.

A financial adviser said many people are discovering that debts incurred from secured loans, credit cards and other personal finance can be controlled by debt consolidation, according to ukpersonalloanstore.co.uk.

The site reports that Adrian Kidd of Mint Financial Services claims consumers finding it difficult to cope with high interest debts could also save themselves money by switching to one monthly payment.

He suggests that this can bring easier financial management as well as creating more disposable income.

Earlier this month it was reported by moneynews.co.uk that Mr Kidd had advised customers who had acquired debt consolidation loans to cut up their credit cards.

“I think the biggest concern, or mistake, is that people will tell themselves that they’ll chop their cards up, but in two or three years’ time they could well be in the same scenario,” he said.

Posted in Secured Loans | Print | No Comments »

26/08/2007 by Dave.

In June this year, a record number of of first-time buyers took their first steps onto the housing ladder using an interest-only mortgage. According to the latest figures from the Council of Mortgage Lenders (CML), 29% of first-timers opted for this type of repayment plan but only 8% of these borrowers showed lenders they had a repayment vehicle in place.

While it is understandable that first-timers will try to cut costs wherever they can, if they have no strategy to repay the capital of the loan, they could be storing up some serious trouble for the future. Buyers who have not organised a repayment plan will be faced with two options at the end of the repayment term; take a further mortgage for which you may or may not qualify by then, or sell your home to repay the lender the capital.

You may have some equity but as this means house prices have gone up, it won’t be sufficient to buy another home. And if house prices have gone down, and your property is worth less than you are required to pay up, you could lose your home and owe money as well! Not a nice position to find yourself in when you reach your mature years.

Posted in Mortgages | Print | No Comments »

23/08/2007 by Dave.

Research by Abbey Mortgages has found that millions of homeowners plan to exploit a loophole to avoid purchasing the Home Information Packs (HIPs) that are now mandatory for anyone selling a home with four bedrooms or more from September 10th.

In order to avoid shelling out for a HIP, 4.5 million homeowners with four bedrooms said they would be prepared to market their home as a three bedroom home - and describe their fourth bedroom as something else.

The most popular way to remarket a fourth bedroom, according to 82%, is as a study. Indeed, the word ’study’ could well become a code-name for a fourth bedroom on a property’s particulars.

Other names that people would use to describe their extra bedroom include: playroom (21%), games room (15%), walk in wardrobe (12%), TV room (6%), library (4%) and computer room (3%).

Despite this, the mortgage bank is warning homeowners against marketing their property as having a reduced number of bedrooms. Doing so may make your home appear overpriced and damage your chances of selling, which outweighs the relatively low cost of HIPs.

Furthermore, with 89% of Britons now using the Internet to search for properties, and 73% using the number of bedrooms as a way of filtering out irrelevant properties from a search, you may also run the risk of being missed by potential buyers.

Posted in Home Info Packs | Print | No Comments »

22/08/2007 by Dave.

Shopping around online for personal loans or debt consolidation could be the best way of ensuring you get the best deal, according to one expert.

A spokesman for financial education company Credit Action said there are pros and cons to online banking and that shopping for loans on your own bank’s website can limit your choices.

Deputy director of Credit Action, Chris Tapp, said although online banking gives access to personal finance information quickly and conveniently, customers wanting to take out a loan should look elsewhere.

“If you’re interested in comparing loans … going to your bank’s website isn’t going to give you a good comparison of different loans, it’s just going to give you the loans that your own bank wants to sell you,” he said.

Research by the the British Bankers’ Association this year found that the number of bank customers who had chosen to manage their bank transactions such as direct debits and loan payments using online facilities had grown.

The survey found that customers who had registered to access bank accounts on the internet in the UK had risen from 24,307 in 2005 to 28,177 in 2006.

Posted in Secured Loans | Print | No Comments »

20/08/2007 by Dave.

Customers are happier than ever at the advice they are receiving on loans and financial matters, it has emerged.

A survey conducted by independent financial advisor (IFA) locator website unbiased.co.uk found that 86 per cent of people receiving help from IFAs on matters such as secured loans and debt consolidation were satisfied.

The research looked at customers who had used the website to help them locate IFAs to assist with issues such as improving bad credit or home improvement loans.

David Elms, chief executive of unbiased.co.uk, said that the figures displayed record numbers for consumer satisfaction in the independent financial advice market.

“These figures clearly highlight that independent financial advice remains a crucial element in consumers’ financial planning,” he said.

Earlier this month a survey found that there was a north-south split on holiday spending that could be covered with a secured or homeowner loan.

The survey by Marks & Spencer revealed that Scottish travellers were the most extravagant taking an average of £287 in foreign currency on holiday, while Londoners exchanged just £253

Posted in Secured Loans | Print | No Comments »

17/08/2007 by Dave.

APACS, the UK payments association, has published a consumer advice guide - ‘Protect your PIN’ - to remind cardholders of the need to keep their PIN safe and secure at all times.

Chip and PIN has made our cards much less likely to be used fraudulently in shops and stores in the UK. However, fraudsters continue to try and copy our cards’ magnetic stripe details to create fake cards that can be used overseas, in countries that don’t have chip and PIN.

If the fraudster has also obtained the card’s PIN they may be able to make fraudulent cash machine withdrawals in non-chip and PIN countries. Raising consumer awareness about the importance of keeping PINs safe and secure can play an important part in tackling this type of fraud.

Research from APACS reveals that not all cardholders are taking the appropriate steps to protect themselves fully from fraudsters. Indeed, the 2006 Attitudes to Card Fraud survey showed that 20% of cardholders rarely or never shield their PIN when entering it at a cash machine. Similarly, 27% of people admitted to using the same PIN for all their cards.

‘Protect your PIN’ is an easy-to-read guide aimed to help improve consumer understanding of these issues and shows how to better protect cards from fraud.

Available to download from www.apacs.org.uk and www.cardwatch.org.uk, the two-page guide outlines useful facts, statistics and tips, plus advice on how to remember PINs and protect them whenever they are used.

Posted in Finance | Print | No Comments »

15/08/2007 by Dave.

People are increasingly buying property outside their own countries. And while Brits and others are purchasing in Bulgaria, Turkey and Morocco, hoping to repeat the small fortunes they’ve built at home on rising property prices, there’s a thorn in the flesh, according to a new report from Global Property Guide.

That thorn happens to be the high costs associated with buying and selling residential property abroad (or so-called transaction costs). Indeed, in some OECD countries, such as South Korea, Belgium and Italy, these transaction costs are unnecessarily high.

A curiosity is also highlighted - the fact that French legal origin countries, on average, have significantly higher transaction costs (14.2% of property value) than countries with German legal systems (11.5%), or Socialist (7.4%), English (6.5%), or Scandinavian (5.2%) legal origins.

In OECD countries, roundtrip transaction costs are generally below 10%. This is a reasonable amount to pay in taxes and expenses in the buying and selling process, though it should be noted that in some countries, the total is only 3%.

However there are some countries with transaction costs which are unnecessarily high - South Korea having the highest housing transaction cost in the OECD, at 22% of the property’s value in Seoul, according to the report.

Meanwhile, transaction costs in Belgium, Italy, France, Luxembourg and Greece exceed 15% of the property’s value.

On the other hand, total costs for purchasing a house in Slovakia, Iceland and Denmark are around 3% or less.

Transaction costs are typically between 5% and 7% in the UK, Norway, New Zealand, Switzerland, Australia, Japan, Sweden, Poland, Ireland, and Canada.

To make the calculations comparable, the Global Property Guide assumed the property purchased is a condominium worth either 250,000 euros for European countries or $250,000 for other countries, and located in the financial or administrative capital. This allows a typical transaction cost figure to be calculated, though in practice transaction costs are a range, depending on many factors.

Transaction cost figures reflect the purchase of old properties, not new (therefore in most cases Value-Added Tax (VAT) is not included). The costs also reflect foreigners’ costs, not locals (often very different). Where foreigners must purchase property through companies, the cost of forming and maintaining a company is not included.

Costs included in the term transaction costs are: Registration costs, Legal fees, Real estate agents fees and Transfer taxes.

Property and capital gains taxes are not included, although they must typically be paid before the property is registered. Fees in acquiring the prerequisites for property purchase such as residency permits and company formation are also not included.

Moral of the story? Think before you make that financial leap.

Posted in Mortgages | Print | No Comments »