Posts Tagged ‘property’

There are pros and cons involved in buying any type of property, but in this mini series, we’re going to explore the positives and negatives of three key types of properties – old build homes, new build and off plan properties.  Investors are faced with many dilemmas and opportunities when it comes to investing in property so in this mini series we will detail some key facts to help you make the right investment choices for you.

To start things off, we’re going to begin by looking at the issue of cost, something that’s a major factor in the purchase of properties for many investors.

Old Build

Pros – With old build properties, one of the major attractions is that there’s often more bargaining power available in terms of cost, especially in the current economic climate. In the case of below market value (BMV) properties in particular, it’s possible to pick up some great property investment bargains. Older properties also tend to be bigger in size, so you get better value for money.

Cons – You do have to know where to look to get the best bargains. There will always be some old build homes in desirable locations that hold their value and can’t be bought for a good deal. Some older properties will have suffered a lot of wear and tear, or may need updating. If it takes time, then you could lose valuable time and money before you can get a tenant in.

New Build

Pros – If you’re purchasing a new build property, it’s brand new and you won’t need to spend money on doing it up for rental. Plus, extra incentives are also often available, such as brand new appliances or the chance to choose how the interior is decorated, which can all help with your costs.

Cons – When you buy a brand new property, you’re often paying above the odds for it. Also, if you’re going to use it for rental purposes, you need to be able to make a decent profit from renting it out, especially if you’ve got mortgage payments to cover.

Off Plan Property

Pros – The cost of off plan properties is often a major selling point. As they’re being sold off-plan, as opposed to newly built, the cost can be considerably lower, which attracts some buyers.

Cons – Sadly, the low price can sometimes turn out to be too good to be true. For example, it may be a reflection on the fact that the properties on the development aren’t selling, which could mean that it will take ages for it all to be finished. There’s no fun for anyone, even tenants, to live on a building site.

If you want to invest in property costing under £175,000 and take advantage of the reduced stamp duty fees, then time is running out.

The stamp duty holiday applies to property valued at under £175,000 and means that buyers don’t have to pay any stamp duty on their purchases. This can make a significant difference and save a good chunk of money.

The stamp duty holiday was came into effect on 3rd September 2008, originally running until April 2009, but it was subsequently extended until 31st December 2009. No further extensions have been announced, so it looks likely that it will finally come to a halt at the end of the year.

Assuming it does all end, from 1st Jan 2010, buyers will again be faced with paying 1% fees for stamp duty on all properties with a value of over £125,000.

According to organisations such as the Home Builders Federation, the Building Societies Association and the National Association of Estate Agents, the stamp duty holiday has had a significant effect on the number of property sales this year, which has helped stop the market from becoming too stagnated. They’re concerned that reinstating it could have further detrimental effects and are calling on Chancellor Alistair Darling to extend the scheme until the end of 2010.

For property investors choosing to buy distressed property, they may not be affected by the change, as many properties are available at a greatly reduced price and fall into £125,000 or under price bracket anyway.

But if you’re an investor who likes to have a range of different properties in your portfolio, perhaps by balancing out rental flats or smaller properties with larger homes, and are likely to buy in the higher price range, then you need to get cracking with your purchases now!

First impressions are important, especially when you’re putting your property on the lettings market and want to attract tenants. Research suggests that potential tenants make their mind up about a property within 30 seconds of entering the property. To ensure your property makes a great first impression, here are 10 top tips on preparing your property for viewing.

1. Make sure the area around the front door, or entrance to the property, is clean and tidy, as this is what prospective tenants will see first.

2. Keep any garden area, hedges, shrubs or bushes well maintained. Having the grass cut and the hedges trimmed makes a good first impression.

3. If you’re redecorating your property, opt for neutral colours. Neutral colours are preferable for property lets, as it keeps things simple and streamlined. If tenants want more colour, it can be added easily by using furniture and furnishings.

4. If you’re furnishing or partly furnishing a property, then choose good quality, but affordable, items that will last well, but not be a major disaster if you have to replace them.

5. Choose flooring with ease of cleaning and durability in mind. Laminate flooring, for example, looks good and is easy to keep clean.

6. The kitchen is regarded as an important room by many tenants and you can never have enough storage, so make sure there are plenty of cupboards.

7. Give careful consideration to what appliances you put in the kitchen. Even if you’re letting it unfurnished, a cooker is a good staple to have.

8. Good lighting is important, especially when tenants are viewing. Pop in some well placed lamps if it’s a dark day.

9. Ensure the property is clean and tidy. When you’re letting it again after a tenancy has ended, don’t forget to get it thoroughly cleaned first.

10. If the property has a garage or shed, make sure these spaces are clear and free from clutter. But if you want to encourage your tenants to cut the lawns, then do leave a lawnmower to hand!

A recent press release from the Council of Mortgage Lenders (CML) on current UK Lending stated that in July there was a +19% increase on residential property loans compared to the previous year which is the first significant increase since early 2007.

The figures from the CML showed that house purchases accounted for 56,000 loans totalling £7.5bn. This was a +24% increase on June 2009 and a +19% improvement on July 2008.

Whilst the majority of lending was focused on home movers and remortgages, there was an +18% increase in loans to first-time buyers in comparison to the previous month, and this was a +22% increase from July 2008.

Paul Samter, a CML economist, said: “ There is certainly concrete evidence that lending for house purchase is increasing, but t he overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet.”

source: www.property-investor-news.com

Fund manager Managing Partners Limited (MPL), which runs the British Property Opportunities Property fund, is looking to increase its exposure to commercial property.

It says that there are some very strong yields to be obtained in the sector and that many commercial properties are currently attractively priced for cash rich funds and investors.

MPL’s British Property Opportunities Fund invests in both residential and commercial property, including distressed portfolios, high yield rental units, development opportunities, leasebacks and reversionary gains schemes.

To date the fund has been solely focused on the residential property market but it is expected to move into the commercial sector this year.

Jeremy Leach, Managing Director, MPL said: “Commercial property values are now down by 41% since their peak in 2007. This means that there are a number of attractive opportunities for us in this market and we feel that current yields, even allowing for a realistic allowance for tenant fallout, will provide a strong real return.

You can get yields of 8% to 9% on commercial property that on their current value can also enjoy some strong capital growth – two very attractive features.

source: http://www.propertywire.com

Residential rental prices in the UK are stabilising as the number of accidental landlords declines due to an improvement in the property market, it is claimed.

The latest figures from the Royal Institution of Chartered Surveyors show that 6% more estate agents reported a rise in new instructions from landlords in the three months to the end of July, compared with 21% in the previous three month period.

The number of rental properties coming on to the market is falling quickly, leading to less choice and potentially higher rents for those priced off the housing ladder, it says in its report.

The main reason for the fall in new landlords is the disappearance over summer of so-called accidental landlords who decided to rent rather than sell their properties in a falling market.

Their numbers increased at the end of last year as property prices reached lows but now evidence of price stability in the housing market has encouraged owners to sell instead.

‘This may be the first indication that the stabilisation in the residential sales market is having an impact on the number of accidental landlords entering the lettings sector,’ said a RICS spokesman.

It now expects rental prices, which had been falling, to start to stabilise.

The balance of surveyors reporting a fall rather than a rise in rents was 29% in the quarter, compared with 55%.

In an optimistic sign for buy-to-let landlords, an increasing number of agents expect rents to rise in the coming months.

The balance expecting a fall rather than a rise improved from 25% to 6%, RICS said.

‘The number of properties coming on to the rental market has slowed as the sales market has begun to stabilise.

This is good news for landlords, who were coming under pressure to reduce rents as a result of oversupply.

The need to respond in this way is easing and, providing the housing market holds firm, the outlook for the rental market should continue to improve,’ the spokesman added.

However, the change in sentiment could put those searching for affordable accommodation at a disadvantage.

Figures from RICS, due next week, are expected to show that housing market activity continued to improve in August.

source: http://www.propertywire.com

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