a family affair by xiangpeng


									                                          ways to get a little extra
                                          from the taxman Page 6

                                          the house doctor is in     Page 9

                                          winter uPkeeP basics     Page 11

a family affair
how the lines-clarke clan aim to double
their £3 million ProPerty Portfolio
                                                         Pa P a
                                                       – e ib
                                                           g ro
                                                      P it sh

                                                    o ll o
                                                  Pt te a t
                                                   sa in

Winter 2006
                                                         Leading	the	way	to	
                             T   his year has been
                                 an amazing year
                             for buy-to-let with
                             record levels of lending.
                                                         eConomiC	growth
                             However, when the           Landlords buying rental properties were the
                             year began we were          biggest contributors to economic growth over
                             looking forward to a        the past 15 years, according to new
                             range of new initiatives    figures from the Office of National
      including SIPPs, HIPs and the Tenancy              Statistics. Income from letting
      Deposit Scheme. The landlord's world was           private homes more than doubled to
      never going to be the same. But, as we near        £45bn between 1992 and 2004.
      the new year, much of what we'd thought               This comes as a simultaneous
      was going to happen just… didn't. On page 4        study shows that borrowing by
      of this issue of B2L, we look at what              buy-to-let landlords hit an all-time
      went wrong and the developments that               high of £17.5bn in the first half of
      actually came to pass.                             this year. Figures from the Council
         Christmas could come early for some of          for Mortgage Lenders show that there were
      you – you've just got to take full advantage       152,500 house loans advanced – an increase
      of your tax rights. The Inland Revenue hasn't      of 17% by volume and 20% by value over
      exactly been forthcoming about some of             the previous record totals.
      these, but we unwrap them on page 6.                  Commenting on the figures, CML Director
         Our cover stars are the Lines-Clarke family,    General Michael Coogan said: "Investors
      who have built up a property portfolio worth       have shown that they are quick to adjust to
      £3 million and are aiming to nearly double         changing market conditions, so the view that
      the number of properties they hold. Why            interest rates are now more firmly on an upward
      have they done it? All for the kids, of course.    trend is likely to cause the rapid growth of buy-   continue to offer investors earnings potential well
      Read more on page 7.                               to-let investment to slow in the coming months.     into the future. A report by independent property
         We're all used to hearing things from the       Fundamentally, however, the rental market remains   research and database company Hometrack
      landlord's point of view, so let's pass the        sound and looks set to continue to offer good       indicates that demand for private rented housing
      soapbox to some tenants. On page 8, four           long-term prospects for astute investors."          will rise by at least 600,000 households by 2021,
      ladies take us on a journey as they try to find       A third study has shown that buy-to-let will     needing new investment of over £100bn.
      their dream house. And on page 9, House
      Doctor Ann Maurice offers her simple tips
      for making your properties more attractive to

                                                            portfoLio	team	expands	
      your dream tenants.
         Finally, don't forget to enter our
      competition to win a Toshiba Satellite Pro
      laptop. See the back cover for details.
         I hope you enjoy this issue.
                                                            to	support	LandLords
                                                            Once again we have expanded our                  Martin Duggan and Colin Graveling, who
                                                            Portfolio Relationship Management                all have specialist knowledge of the market
                                                            Team to provide extra support for our            and who have increased the team to eight
                                                            customers as their portfolios continue           people. The Portfolio Relationship
                                                            to grow in the buoyant                           Management Team is dedicated to helping
      Gus Park, Editor
      • The views expressed in this magazine are
                                                            buy-to-let market.                                 those customers with six properties
        those of independent people unless stated             The new faces are                                    or more whose needs are becoming
        otherwise. Mortgage Express will not accept         John Pickering,                                        more complex as a result.
        liability for reliance upon these views.                                                                      They provide a one-stop shop for
        You should always take independent advice
        on any matter before proceeding.                                                                          everything from help with your existing
                                                                                                                 mortgages to advice on mortgage
                                                                                                                  applications and arranging drawdowns.
    Contents                                                                                                       You can contact the team on on 0800
    	 	 News:  Buy-to-let latest                                                                                 591193 to discuss your requirements.
    	 4	 That was the year that… wasn't                                                                       Rex Kirk, Head of Commercial
    	 6	 Presents from the taxman                                                                               Development, says: “We know that things
    	 7	 Family ties                                                                                             get more complicated for our customers
    	 8	 Lets and the City                                                                                       as their portfolios grow. That's why we
      9	 The House Doctor's tips                                                                                   have created this team of specialists to
    	 0	 Landlords' View & Brokers' Briefs
                                                                                                                   help them. The team has been
                                                                                                                     expanding rapidly as customers have
    	 1	 Frozen assets
                                                                                                                       become more successful in the
    1	 Buy-to-let survey
                                                                                                                             current market."
    16	 Win a sleek laptop

       B2L Winter 2006
  nLa	rings	the	Changes	
  with	new	deposit	sCheme
  The Housing Act 2004 requires the                           scheme, for each deposit protected
  government to introduce mandatory,                             and for annual renewal of
  universal tenancy deposit protection                            membership. No fees will be
  for all deposits taken on assured                                 payable until the first deposit
  short-hold tenancies (AST)                                         is protected after 6 April 2007.
  in England and Wales after                                          As many deposits can be
  6 April 2007. Any landlord taking                                   protected as members wish,
  a deposit will be required to join                                  for as long as tenancies last.
  a tenancy deposit protection                                           Landlords can register their
  scheme. The National Landlords                                     interest in the NLA Scheme
  Association (NLA), in partnership                                  now, in which case they will
  with Hamilton Fraser Insurance,                                    qualify for a discounted
                                                                                                                         Mortgage Express was presented with
  has been awarded a government                                      registration fee which will not                     the ‘Buy-to-Let Lender of the Decade’
  contract to run an insurance-                                      be payable until they protect                       award by Your Mortgage magazine.
  backed tenancy deposit scheme.                                     their first deposit after 6 April
     The new NLA scheme will                                         2007. Landlords registering

                                                                                                                   switCh	to	us	
  be the only one specifically                                       early will also enjoy the peace
  designed to enable individual                                      of mind of knowing that they
  landlords to hold deposits                                         are ready to comply with the
  throughout tenancies.                                             new legal requirements.                        and	CoLLeCt	
     There will be fees (tax deductible
  against letting income) for
  registering as a member of the
                                                                         To register for the scheme, visit
                                                                                                                   a	free	ipod
                                                                                                                   If you have mortgages with Mortgage Express
                                                                                                                   and more with other lenders, we'd like to
                                                                                                                   discuss options for reducing the cost of your
  disabiLity	aCt	expLained                                                                                         borrowing. And as a small thank you, if you
                                                                                                                   remortgage four or more properties with us,
  The Disability Discrimination Act 2005 comes          Typetalk service when communicating with                   we'll give you a state-of-the-art 30gb iPod.
  into force in December and with it comes a            a deaf person, put correspondence in large                    Simply contact our dedicated portfolio
  stark message to landlords to make sure they          print for the visually impaired, or allow a                management team on 0800 591193 to
  understand their responsibilities.                    disabled tenant to use her balcony to dry                  discuss our highly
     Under the new Act, landlords must make             clothes where she cannot access the drying                 competitive
  reasonable adjustments for disabled people.           area of her block of flats. Landlords only have            mortgage products.
  For example, they may need to use the                 to make ‘reasonable’ adjustments, and will                 And the cost of
                                                        not have to remove or alter physical features              switching could
                                                        of the premises. For example, a landlord                   be lower than you
                                                        would not be required to replace a door if the             think. We have a
                                                        tenant had difficulty opening it, but it might             range of deals for
                                                        be reasonable to replace the door handle to                keeping the cost
                                                        something the tenant could use.                            down such as our
                                                                                                                   innovative deals free
                                                              For more information on the DDA, visit               of valuation and
                                                                                                                   legal fees.

                                                                                                                        To discuss your remortgaging options, call our
                                                                                                                         portfolio management team on 0800 591193

               David Salusbury                  David Lawrenson                   Faith Glasgow                    Cheryl Chapman                     Laura Fountain
               is Chairman of                   is a landlord who                 is a freelance                   is a journalist                    (former editor
               the National                     has written on                    journalist                       who has edited                     of British Builder
               Landlords                        property for The                  specialising in                  and written                        & Developer
               Association                      Independent and                   property and                     for a wide                         magazine)
(NLA), the organisation that     the Daily Mail. He is also the     personal finance and is a         range of business publications     writes on small businesses
represents its members to the    author of the book Successful      contributor to the Financial      aimed at audiences as varied       and property, as well as
Government, local authorities    Property Letting – How to make     Times, Independent and            as UK nationals living overseas    for the journal of the Royal
and to the media.                money in buy-to-Let.               The Daily Express.                and small businesses.              Society of Arts.

    ThaT was The ye
    As the yeAr drAws to its end, lAndlords Across the country will heAve A sigh of relief in whAt hAs
    ended up being one of the most confusing yeArs for decAdes, reports cheryl chApmAn

      W      ith the introduction of many new
             regulations under the Housing Act 2004,
      2006 looked like it was going to be a big year
                                                          this decision was made at such a late hour
                                                          and without any consultation."
                                                                                                              the Department for Communities and Local
                                                                                                              Government said that it was delaying its
                                                                                                              introduction until next April, but admitted that
      for landlords. All manner of new rules were due     HIP replacement                                     the reason for the delay was the huge concern
      to transform private letting.                       Another change of heart, which was welcomed         that it was causing among landlords.
         In the end, however, several of the much-        by some landlords, came in July. This time it was      Letting agent David Kernaghan from Spaces
      heralded new schemes were either abandoned          on the controversial Home Information Packs         and Places says: “Yet again the Government is
      or delayed. There have been some important          (HIPs) that were set to add another £1,000 to       punishing the majority of good landlords for the
      changes, but it all seems a bit of an anticlimax.   the cost of selling homes. The packs, designed      acts of a few bad ones. Tenants tend to want
                                                          to force sellers to provide more information to     their deposits back immediately when moving
      Like SIPPs in the night                             purchasers and speed up the buying process,         on, but how can this happen when another
      An inkling of the industry’s ‘annus horribilis’     were to contain a Home Condition Report (HCR).      party is holding the money?”
      came on 5 December 2005 when the Chancellor,           But following wide criticism and in light of        But the largest concern among landlords
      Gordon Brown, announced the first in a series       concerns about the readiness of the industry,       is that the scheme would not stop tenants
      of U-turns. At issue were new rules for Self        the Government announced that the HCRs              from withholding their final month’s rent and
      Invested Personal Pensions (SIPPs), which from      would no longer be a mandatory part of the          abandoning their property if they suspected that
      6 April 2006 would have allowed private             HIP when it was introduced next June. Instead,      they would not get their deposit back. About
      investors to obtain 40% tax relief on buy-to-let    a phased roll-out of the scheme will take place,    20% of tenants currently do this.
      properties by sheltering them inside a SIPP.        with initially only the searches and energy
         The plan was panned for being a tax break        efficiency components compulsory.
      for the wealthy that would push up prices              Estate agent Andrew Milsom is sceptical
      for first-time buyers and be open to abuse. In
      the end the Chancellor announced a dramatic
                                                          about the entire legislation. “The problem with
                                                          the HIP for us is that 25% of our sales come
                                                                                                                 sTOP Press!
      turnaround, saying that he would prohibit           from speculative vendors. If these people are          At the time of going to press, the following
      residential property from SIPPs because of          now told that it will cost them up to £1,000 to        initiatives were due to happen:
      growing concern about "misuse".                     get a pack together, we are going to reduce the
                                                                                                                 • Six areas of the country were chosen
         It is believed thousands of investors had        supply of available property, which in turn will
                                                                                                                   to test the Home Information Packs,
      already committed to buying new-build               put the prices up all round.”
                                                                                                                   including full Home Condition Reports.
      apartments and flats off-plan, in anticipation of
                                                                                                                   The trials were due to take place in
      a 40% discount, using their pension.                On deposit
                                                                                                                   November 2006.
         Financial institutions that had expected to      Just days after the HCR announcement, the
      earn as much as £200 million in fees from           Government changed direction again, this time          • The implementation date for the
      advising and managing SIPPs were stunned, not       over the Tenancy Deposit Scheme, under which             Disability Discrimination Act is
      least because thousands of hours of professional    property owners would have had to hand over              4 December. From this point landlords
      time had been completely wasted.                    deposits to a government-appointed private               will be required to make reasonable
         Tony Moore, who is pensions development          company from October this year.                          adjustments for disabled people.
      manager at Axa, says: "We were amazed that            Given the task of implementing the scheme,

     B2L Winter 2006
ear ThaT... wasn’T

             sO whaT
             did haPPen?
             Despite all the hoo-ha, the Housing Act
             2004 did come into effect in April, bringing
             with it several reforms, including:
             • The Housing Health and Safety Rating
               System, designed to provide greater
               protection for tenants against hazards
               in properties.
             • Mandatory licensing of larger shared
               houses in multiple occupation (HMOs)
               to enable greater protection for tenants
               living in higher-risk properties. It has
               been estimated that up to 75% of
               landlords with an HMO are not licensed
               and are now breaking the law.
             • Long-term empty homes can be brought
               back into use and badly managed
               homes targeted under new management
               powers for local authorities.

    LandLord david Lawrenson Looks at some LittLe-known goodies
    from the inLand revenue that can make it feeL just Like christmas

    Presents from
    the taxman
                                                                                                                        “             Subject to
                                                                                                                                 certain rules, you
                                                                                                                                 can offset against
                                                                                                                                 other income
                                                                                                                                 quite a lot of the
                                                                                                                                 capital costs of
                                                                                                                                 converting space
                                                                                                                                 above shops back
                                                                                                                                 into residential use

                                                                                                                                 David Lawrenson

                                                                                                                    tax relief
                                                                                                                    on further
                                                                                                                    Some readers felt that our explanation
                                                                                                                    of the tax relief that can be claimed on
                                                                                                                    additional borrowing in the last issue was
                                                                                                                    a little unclear. Although the answer was
                                                                                                                    given by the National Landlords Association,
                                                                                                                    information was provided by Mortgage

    D    own in the deepest vaults of the Revenue’s
         website there are some great tax savings for
    landlords and property investors. The trouble is
                                                              In the 2005 budget, this was extended to
                                                           include solid-wall insulation and, from this year,
                                                           to include draught proofing and the insulation
                                                                                                                    Express. It therefore falls to us to shine
                                                                                                                    a little more light on the subject.
                                                                                                                       To obtain full tax relief, the total
    that HM Revenue & Customs doesn’t go out of its        of hot water systems as well.                            borrowing must not exceed the original
    way to tell anyone about them.                            On capital gains, too, there are lots of neat         value of the investment property when
       One of the less well-known ones is the Flat         exemptions. Few people know that the principal           first brought into the letting business and
    Conversion Allowance. The government is keen to        private residence exemption can be extended              the relief can be offset only against rental
    breathe life back into town centres. As a result,      to cover any period where the let property was           income from that property.
    subject to certain rules, you can offset               also your main residence plus the last three
    quite a lot of the capital costs of converting         years of their ownership.                                Example
    space above shops back into residential use               So, suppose you bought the property in year           Mr A owns a flat that originally cost
    against your other income.                             zero and sold it in year seven, and you lived in it      £125,000, purchased with a mortgage of
       There are a fair few conditions. For example, the   from year zero to four as your main residence and        £80,000. He moves and decides to let the
    space above the shop or office must have been          let it out thereafter. The first four years wouldn’t     flat, which is now worth £375,000. The
    either empty, or used only for storage, for at least   count as it was your main residence and neither          opening balance sheet looks like this:
    the past year. Also, when the conversion is            would the last three – meaning there would be no
    complete you must let the flats out to tenants.        capital gains tax (CGT) to pay.                          Mortgage: £80,000
    You should seek detailed advice on whether                If you then let it out for longer – say, up to year   Property value: £375,000
    or not you could qualify for this relief if you are    10, there may still be no CGT to pay. The reason is      Capital account: £295,000
    contemplating carrying out a conversion.               that another relief, called Private Letting Relief
       Another little-known allowance is the Landlords     (PLR), comes into play.                                  The mortgage is then renegotiated and
    Energy Saving Allowance, which is currently                                                                     a further £125,000 is borrowed, bringing
    available for residential property.                                                                             the total mortgage value to £205,000.
       Since April 2004 this has allowed landlords             Call 0870 024 0542                                   The further amount borrowed does not
    who are paying income tax to get relief at their             For advice on tax matters, our advisory            make the capital account overdrawn and
                                                                service, developed in conjunction with Irwin
    highest marginal rate of tax for up to £1,500 for        Mitchell, can help. Contact Irwin Mitchell on          therefore the interest on the £205,000
    loft and cavity-wall insulation per property – not     the number above or email mortgageexpress@               qualifies for full tax relief.
                                                           irwinmitchell.com. The HM Revenue & Customs
    per dwelling within a property.                        website is at www.hmrc.gov.uk

       B2L Winter 2006
family ties
the Lines-cLarke cLan have a singLe-minded vision: to provide for their financiaL future. they speak
to andrew strange about their masterpLan, which incLudes buying nearLy 20 more properties

F   inancial adviser Rebecca Lines-Clarke bought
    her first home when she was just 23. She
decided to keep the property and rent it out
                                                      people often think they have money at their
                                                      fingertips. They are not currently making a big
                                                      profit from rents, but they're aiming for good
when she moved into a bigger place five years         capital growth in the long term. For example,        ProPerty tiPs
later. Together with her husband Richard, she         they bought one property for £152,500 in
now owns 23 houses and flats worth in the             January 2005 and identical properties in the         ●	 Work out the yield before you buy
region of £3 million and has a plan to increase       same street are now on the market for £190,000.         and aim for 6%
the portfolio to 40 properties.                       They acquired another for £112,000 in 2002 and
   The motivation behind the couple's                 spent £8,000 on improvements. It is now worth        ●	 Don't buy leasehold properties
investments has been the desire to secure the         in the region of £185,000.                              because maintenance and other
financial future of their children, Herbie, one,         Rebecca says: "I think for the right person          expenses make it too difficult to
and four-year-old Imogen. The children will need      property is a great investment, but you should          control your costs
help with everything from paying for university       be in it for the long term. We try to keep a house
places to buying a home as they get older,            for at least five years, although we are aiming to   ●	 Buy at least four because if one
and Rebecca and Richard are determined                sell one every year now to take advantage of our        becomes empty the others will help
to be there to help them.                             capital gains tax allowance. I think you should         to cover the mortgage
   The couple, from Hurstpierpoint in West            try to buy at least four properties as quickly as
Sussex, also see the investments as the means         possible. That way, if one is empty, the profit      ●	 Be courteous and professional,
to a secure early retirement. Their properties        from the others should cover the costs until            whether it is with agents or
now stretch across the towns of Eastbourne,           you find another tenant."                               tenants. Take advantage of your
Littlehampton and Brighton, and the financing            The family's growing property portfolio has          capital gains tax entitlement.
for these includes seven mortgages from               also led to a career change for former postman          Rebecca and Richard aim to sell one
Mortgage Express. They are now aiming to              Richard, who now runs his own property                  house a year to do this
increase the portfolio to 40 and sell half in their   development company.
early 50s so that they can pay off the mortgages                                                           ●	 Make sure you use a good
                                                           Call 0870 240 8844
on the remainder and live off the rental income.            For more information about your mortgage          mortgage broker
   Of course, one difficulty they find is that            options, call the number above

    Lets and
    the City...
    Young professional females seek large, attractive propertY with nice features for good
    times and short-term commitment. laura fountain on the search for a match made in heaven

    Y    oung professionals are a landlord’s dream
         tenants – with plenty of disposable income,
    they’re willing to pay a premium for the right
                                                            We wanted to live in a lively area close to bars
                                                          and restaurants and, with friends living in South
                                                          London, we focused on Clapham and Battersea.
                                                                                                               taking it above our budget. We decided not to
                                                                                                               put in an offer and were a bit annoyed that the
                                                                                                               agent had wasted our time.
    property in the right location.
       Amie, an advertising account manager; Helen,       Property 1                                           Property 3
    a journalist; Trisha, an accountant; and myself are   Rudloe Road, SW12, £600 per week                     Battersea Park Road, SW8, £420 per week
    four such tenants. We’re looking for a property       One bedroom was downstairs next to the lounge,       This two-storey maisonette had three large
    that ticks all our boxes and has plenty of space      which screamed ’student digs’. None of us were       bedrooms and one smaller bedroom with a
    for shoes and other essentials.                       prepared to sleep next to the lounge and have        balcony. The property was above a Turkish
       There’s a lot of pressure for young people today   to put up with the noise from the TV. On the         restaurant, which turned us off as we thought it
    to get on the property ladder but for my three        plus side, it was close to the tube and on a quiet   would be noisy at night and would possibly smell.
    housemates and me, renting is perfect for our         residential street. Although it was decorated
    lifestyle at the moment. We may choose                nicely, it was a bit rough around the edges and      Property 4
    to change jobs, live in a different country or        overall we thought it was overpriced.                Victoria Rise, SW4, £508 per week
    go travelling over the next couple of years                                                                With four double bedrooms all upstairs, a
    and renting means we’re not tied down                 Property 2                                           bathroom, separate shower room and a garden,
    to a particular place.                                Briarwood Road, SW4, £550 per week                   this maisonette in the heart of Clapham was our
       For those of us who are more comfortable           This was a nice large property, but there was        dream home. The current tenants were a little
    with a pair of Prada pumps than a pair of pliers,     little storage space. Although the property was      untidy but the neutral décor helped us look past
    renting also provides the safety net of having a      marketed at £550 per week, we were advised           their mess and see the property’s potential. We’ll
    landlord to call when things go wrong.                by the agent that it was likely to go for higher,    be moving in in time for Christmas!

        B2L Winter 2006
                              ...and how to make it
                              appeaLing – tips from
                              the house doCtor
                              ann maurice isn't shY when it comes to saYing what she thinks
                              – she's got plentY of advice for landlords as well as vendors
What we owe.re
looking f r.. bedrooms        N     o landlord wants their property to be left on

O Fourbathrle ms
 ✓       doub
                                    the shelf – having their pick of tenants is a
                              dream situation for most. But in order to get the
                                                                                       ann’s top tips
Ò Two to good tube links
 ✓                            offers of tenancy flooding in, your property must        ●	 Be realistic – write a plan that can
 O Closecentral London
                              appeal to as many viewers as possible.
                                  As Channel Five’s House Doctor, Ann Maurice
                                                                                          easily be achieved within your time
                                                                                          frame and budget
 ✓ Furnished                  first introduced the UK to the concept of ‘staging’
 O Nicelidedecace ted
  ✓       y   ora             properties 11 years ago. Since then she has helped       ●	 Use neutral colours – don’t choose

 O Outs sp lively area
  ✓                           hundreds of people to make their homes appealing
                              to prospective buyers and get the best sale price.
                                                                                          white (which is too stark) or
                                                                                          magnolia (which is too bland)
  O Safe but
  ✓                               Ann’s tips for staging a property for sale can
                              easily be applied to the rental sector. “The rules       ●	 Buy an extra set of cushions when
  Where we looke
                              for decorating a property are the same, whether             buying sofas so that you can replace
                              it's for rental or sale,” says Ann. “You want to            them at a later date
  Ò Online
   ✓                          make sure it’s relatively neutral so it appeals to
   Ò Loot tered with agents
   ✓                          everybody. This doesn’t mean you have to use             ●	 It's impossible to have too much

   Ò Regis
   ✓                          bland colours, just nothing that will blind you.”
                                  According to Ann, the choice of furniture can
                                                                                          storage space

                              make or break a letting. “When renting a property        ●	 Choose items that can be easily

                                                                                          cleaned - avoid light carpets or
                                    Tenants will be harder                                soft furnishings

                                 on fixtures and fittings
                                                                                     time frame and budget for making a property
                                   than you are in your                              presentable is key to its success, whether
                                     own home, so it’s worth                         you’re renovating a new purchase for letting or

                                                                                     maintaining a home between tenancies.
                                     spending a bit more                                 “One of the biggest mistakes people make when
                                                                                     staging a property is being overly ambitious in
                                       as furnished you have to remember             terms of budget and time,” says Ann.
                                       that prospective tenants are going to             “They might have installed a kitchen that looks
                                      be looking at the furniture and asking         great but, when it’s finished, they discover they
                                     themselves whether it is sufficient for their   haven’t any budget left for the other rooms or for
                                    personal needs. Furniture doesn’t need to        plants and accessories.”
                                    be new, but it should look new.                      No matter how presentable you make a property
                                      “Tenants will be a lot harder on fixtures      look, if you're showing it to prospective tenants
                                        and fittings than you are in your own        before current tenants have moved out, a certain
                                             home, so it’s often worth paying        amount of its appearance is out of your control.
                                               a little more for higher-quality          “You cannot force a tenant to pack up their
                                                 items. A cheap blind isn’t that     clothes or make their bed but you can incentivise
                                                  cheap if it has to be replaced     them. You might give them 10-15% off their last
                                                   every six months.”                month’s rent if they keep it in good order while
                                                      Being realistic about the      it’s being shown,” she adds.

                                   Ann Maurice has personally trained a network of professional Home Staging
                                  Consultants. Certified House Doctor Consultants can transform your property quickly
                                to get you the best price possible. To find a consultant in your area, visit
                                www.housedoctor.co.uk or phone 020 8408 0122

     BRokeRs’                                         DaviD SaluSbury, Chairman of the national lanDlorDS aSSoCiation,
                                                      anSwerS Some CuStomer queStionS

                                                      ReadeR Questions
     “         It has been another year of growth
     in the buy-to-let market if all the statistics
     are to be believed. The figures continue
     to confirm that rental yields remain steady
     or have grown over the year as property
     prices have levelled.
        We are seeing more first-time landlords
     entering the market than ever before which,
     while encouraging, does give some concern
     as to whether they are undertaking proper
     research and getting the best advice.
        I would encourage the first timers to talk
     to a good intermediary, not only for initial
     guidance but also to point them towards
     further information from accountants
     and tax advisers. Long-term investors
     should seriously think about a capital and
     interest repayment mortgage.
        Care also needs to be taken with HMOs
     (houses in multiple occupation) as we are
     seeing differing interpretations of the rules
     by some local authorities. In addition, some
     lenders seem to have 'cold feet' over HMOs
     although a good adviser should have no
     problem in sourcing a lender.                    Q. Now the Government has changed the                     Q. If I want to sub-let to a local authority,
        As bricks and mortar are seen as a safe       Home Information Pack (HIP) proposals, what               is there anything special I need to do?
     long-term investment and we continue             impact will they have on landlords?                       A. You should notify your mortgage lender
     to see more demand than available                A. The Government has decided that Home                   and insurance company to ensure that they
     property, 2007 should see further growth         Information Packs will come into force from June          are content for you to sub-let or lease your
     even if interest rates rise.                     2007, but without the Home Condition Report               property to a local authority. You should also
        Hopefully, lenders will continue to offer     that would have been the survey element of                check the terms of any existing lease on the
     products that will adapt and change , and        the pack. Although this is a major turnaround             property to ensure that you are not contravening
     many more lenders will allow portfolio           in the Government’s plans, it does not mean               it. Under the terms of the lease you may need to
     landlords to use 'across the board' loan to      that HIPs have gone away.                                 notify or request permission from a freeholder or
     value figures to fund further purchases.            From June 2007 anyone selling property will            superior landlord before sub-letting the property.
        Next year should see more Limited             have to have a Home Information Pack prepared.                The local authority might require some
     Company buy-to-let purchases as                  The pack will continue to include information on          specific work to be undertaken on the property
     experienced landlords become more tax            local searches and other key documents, enabling          to ensure that it is at a standard that they
     efficient and it would be good to see more       potential buyers to make informed decisions on            require for their tenants.
     competition in this area. Investors wishing      whether or not to make an offer on the property.
     to go down this route should talk to a tax       The pack will also have to include an Energy
     adviser or accountant and talk to an
     intermediary about the products available.
        Finally, bearing in mind the news about
                                                      Performance Certificate, indicating the energy-
                                                      efficiency rating of the property. Sellers will be able
                                                      to commission a Home Condition Report to include
                                                                                                                     “                If a property
                                                                                                                                 is being sold with
                                                                                                                                 a sitting tenant
                                                                                                                                 or if it is a private
     climate change, how about landlords              as part of the pack but will not have to do so.                            sale... there is no
     ensuring that their properties are energy           This will affect most landlords buying or selling                       requirement for a
                                                                                                                                 Home Information
     efficient? This will not only help prevent

                                                      property. However, there are a few exceptions                              Pack.
     global warming but should attract tenants        to this rule. If a property is being sold with a
     and be a step ahead of any                       sitting tenant or if it is a private sale, not publicly                    David Salusbury

     proposed legislation.                            advertised, there is no requirement for a Home
                                                       Information Pack (although the property will still
     Raj Bhandari                                       need an Energy Performance Certificate). The
                                                                                                                     Call 020 7828 2445
     Blue Mortgages Ltd                                 other exception is for a portfolio of property               For further information about the NLA,
                                                        being sold together. However, if an individual           write to National Landlords Association,
                                                                                                                22-26 Albert Embankment, London SE1 7TJ.
                                                       property from that portfolio is sold separately a        Alternatively, email info@landlords.org.uk or visit
                                                      HIP will be needed for that property.                     www.landlords.org.uk

10        B2L Winter 2006
fRozen assets
faith GlaSGow takeS a teeth-ChatterinG look at wayS to enSure your property SurviveS
unSCatheD throuGh the braCinG weather thiS winter

O    nce again, it’s frozen pipes time – the
     season when landlords need to take extra
precautions if they want to avoid a similarly
chilly reception from their tenants. Wind,
rain, freezing temperatures and inefficient
central heating systems can all cause misery
and inconvenience to tenants and damage to
property – so it makes a lot of sense to take a
few simple precautions during the winter.
   For a start, check your insurance policies are
sufficient and up to date, so that the cost of
repairs will be covered if your property should
be damaged by severe weather. Then it’s time
for a spot of basic maintenance.
   Particularly if you own an entire house
rather than a flat (where the management
committee should take care of such
matters), clean out the gutters and get rid
of any autumn leaves to prevent rainwater
overflowing down the walls during heavy
storms. And make sure that any loose roof
tiles are replaced too.

     It's common sense
– getting through the winter
months is a matter of thinking
                                                       "If there’s a short period when it’s
what you'd do to protect

                                                    unoccupied, it’s a good idea to leave the boiler
your own home                                       on tickover," he says. "Not only does a low level
                                                    of heating guard against freezing pipes, but it
                                                    makes the property more welcoming if you’re
   It’s also a good idea to have the boiler         showing it to prospective tenants." For longer       If you don’t have time or inclination for
serviced once a year. "Landlords are legally        void periods, Grahame suggests draining down         the hassle of managing your own property,
obliged to have an annual gas safety                the hot and cold systems altogether.                 why not let Mortgage Express take the
inspection, and it makes sense to subscribe            He also recommends that someone                   strain? Provided in partnership with
to a boiler maintenance programme and have          – whether a landlord or an agent – visits the        Countrywide Corporate Services, Landlord
the boiler checked over at the same time,"          property at least once a week, just to check all     Services offers a full range of management
comments Grahame Pritchard, operations              is well and there are no leaks, drips or other       services, depending on whether you simply
director of Countrywide Corporate Services          weather-based damage.                                want help in finding a tenant or collecting
(which works in association with Mortgage              "It’s basically just common sense," he says.      rent, or require all-inclusive management.
Express to provide Mortgage Express’                "Getting through the winter months is a              The full management package costs a
comprehensive Landlord Services).                   matter of thinking about what you’d do to            one-off fee of £365, plus 6.75% of your
   If any wintry problems do occur, it’s the        protect your own home, and then taking the           monthly rental income.
tenant’s job to report them to the landlord or      same precautions with your rental property."            In addition, Landlord Services can
the managing agent promptly, so they can be                                                              help in sourcing, buying, furnishing
sorted out. That works fine when the property                                                            and maintaining your rental property,
is occupied and leaks or other problems can               Call 0845 850 0919                             providing expert advice and access to
actually be spotted. But as Grahame observes,             If you don’t have the time to manage your      a selection of quality-checked, price-
                                                       property yourself, why not let Mortgage Express
vacant properties need extra attention.             Landlord Services do it for you?                     controlled suppliers.

                                                                                                                       www.mortgage-express.co.uk      11
     LandLords shed new
     Light on the market
     “Clearly our customers' views                                     F   irst of all, another big thank you to all our
                                                                           B2L readers who returned questionnaires.
                                                                       Your responses make this one of the largest

      reflect the buoyant buy-to-                                      and most comprehensive regular surveys of
                                                                       landlord opinion in the country.
                                                                          The survey covers the third quarter of 2006

      let market. In our survey, 55%                                   and was conducted against a continuing
                                                                       background of strength in the buy-to-let market

      stated that they were planning
                                                                       – and as we shall see, this is reflected in the
                                                                       responses we received. According to the Council
                                                                       of Mortgage Lenders, the first half of 2006 saw

      to increase their portfolios in                                  record buy-to-let lending of £17.5bn and this
                                                                       pattern appears to have continued. Figures from
                                                                       the Association of Residential Letting Agents

      the next six months
                                                                       (ARLA) and the Royal Institution of Chartered
                                                                       Surveyors (RICS) show tenant demand remaining
                                                                       strong, fuelled by social factors such as inward
                                                                       migration and growing student numbers. This
                                                                       has led to buoyant rent levels and, with house
                                                                       prices continuing to rise, the overall outlook for
                                                                       landlords is positive. Certainly, recent concerns
                                                                       about the impact of regulation – for example,
                                                                       the licensing requirements for Houses in Multiple
                                                                       Occupation (HMOs) – do not seem to have had a
                                                                       negative impact on buy-to-let.

                       1 What are your plans for your UK portfolio
                         over the next six months?                    2   Over the past six months have you
                                                                          experienced any void periods?

                       2000                                           2500





                                                      3%       2%                                                  4%
                           0                                            0


                                                                                                ena s



                                                                                              pro to
                                                                                            le t Ye


                                                                                         ain ed

                                                               t st

                                                                                                                  t st

                                                                                     int ang
                                          y th


                                                                                 ma e-arr



12   B2L Winter 2006
What are landlords saying about the market?         Landlords and their portfolios
Clearly our customers’ views reflect the buoyant    The general pattern of property holding remains
buy-to-let market. In our survey, 55% stated        broadly unchanged since the beginning of the
that they were planning to increase their           year. Marginally more customers reported holding
portfolios in the next six months (see graph 1)     only one property (23% v 18%), with 30% holding
– a substantial increase on the 44% recorded        between three and five properties and 17%
earlier this year. Additionally, 40% are planning   holding more than 10 (see graph 3). The vast
to maintain their portfolios and only 3% are        majority of customers (81%) reported holding
looking to decrease them. This positive outlook     mortgages on all of their properties.

is supported by an improving picture of void           The survey found that 41% of landlords let their
periods (see graph 2). The results showed           property on an unfurnished basis, while 32% let
that 60% (up from 52% earlier this year) of         as fully furnished and 17% as part furnished (see
respondents experienced no voids, while an          graph 4). We know from previous surveys that
additional 10% of customers planned void            the majority of our customers 'self-manage' their
periods to facilitate refurbishment work. Of        properties, although use of letting agents appears
those customers who did experience voids,           to be on the increase, with customers using them
a majority (56%) had voids of less than four        selectively. For example, while 33% of respondents
weeks, while a further 26% had voids of             do not use agents, 26% use them to find tenants,

                                                                                                            experienced no
between five and eight weeks.                       7% to collect rent and a further 27% to provide
   We also found that 22% of customers              a full management service (see graph 5). Of

                                                                                                            voids during the
reported tenants experiencing arrears in the past   those using an agent, 17% did so for geographic
12 months – up slightly on the 19% figure from      reasons, 27% for time reasons and 38% out of

                                                                                                            past six months
our survey earlier this year, but lower than the    a preference for having a professional to
26% recorded 12 months ago.                         manage their property.

3      How many buy-to-let properties do you
       have in your UK property portfolio?                                                                4   Is your property...?


1200                                                                                                      1200

1000                               30%
800           23%

600                                                                                                        600
                                                              7%                                                                 17%
200                                                 6%
   0                                                                               1%                        0









                                                                                                                                                        t st
                                                                                   t st



         Number of properties in portfolio

                                                                                                                              www.mortgage-express.co.uk          13
                                                              When buying a property, price is the most         Who are our landlords?

                                                          quoted consideration. Thereafter, landlords focus     Our landlords are generally aged between 35
                                                          on the property's condition and the possibility of    and 55 (64%) with 19% of respondents aged
                                                          adding value through development or because it        over 55 (see graph 6). The results showed that
                                                          is in an ‘up and coming’ area. Transport links and    43% of respondents were employed, with 31%
                                                          location – particularly in terms of proximity to      self-employed (down from 40%) and 7% retired.
                                                          colleges or large employers – are also important.     A reduction in the number of self-employed
                                                                                                                respondents (see graph 7) is explained by the
                                                          Why landlords invest                                  fact that we asked customers how many of them
                                                          As with previous surveys, the vast majority of        worked as ‘professional’ landlords. We found

     The number
                                                          landlords started investing in property as an         that 14% of customers are operating either
                                                          alternative means of pension provision (38%) with     as self-employed full-time landlords (8%) or

     of respondents
                                                          a further 36% stating capital growth generally        employed part-time landlords (6%).
                                                          as their rationale. Only 8% viewed it initially          One of the great strengths of the UK's

     who have more
                                                          as a means to supplement their income. This is        buy-to-let market is that – generally – landlords
                                                          supported by the views of our retired customers,      are growing in experience and recognise that

     than five years
                                                          50% of whom started investing before retirement       property is a longer-term investment and not a
                                                          as a means to support themselves in retirement.       means of making a 'quick buck'. This is reflected

     of buy-to-let
                                                             In addition to residential buy-to-let property     by the fact that 52% have more than five years’
                                                          in the UK, 12% of respondents also hold               experience and only 16% have been in the

                                                          some commercial property and a sizeable 20%           market for less than two years (see graph 8).
                                                          have property overseas.                                  The survey also revealed that employed

     5   Do you use a letting agent?                                             6    How old are you?


                                                                                 1200                            35%

     1200                                           33%                                                                    29%

     1000                                                                          900
                     26%                  27%
                                                                                   600                                               16%
                                 7%                        7%
                                                                                                                                                3%        2%
        0                                                                            0          1%


                                         ma and
                                        lec nts






                                           t re

                                     col tena

                                                                                                                                                          t st
                                                          t st
                                    and ts

                                 nt nan


                            t re te
                        lec find
                               , to


                         , to

14          B2L Autumn 2006
 Reassuringly, some
                                                          landlords claimed mainly to be from                  5 key points

                                                          professional senior management (26%) or
                                                                                                                        55% of respondents said that they
 10 respondents stated                                    middle management (24%), with only
                                                          9% employed in a manual role.                                 were planning to increase their
 they were members                                           In terms of the sectors in which our                       portfolios in the next six months

                                                          customers operate, they are scattered across
 of the clergy, showing                                   a wide range of areas. The most notable are                   60% had experienced no void periods
 perhaps that even                                        finance (12%), the public sector (11%) and
                                                          11% from the general 'service sector'
                                                                                                                        during the past six months and a
                                                                                                                        further 10% had planned voids
 higher authorities than                                  (plumbers, electricians etc).

                                                             Reassuringly, some 10 respondents
 economists see a positive                                stated they were members of the clergy,
                                                                                                                        20% of respondents also hold

                                                                                                                        property overseas and 11% own
 future for the market                                    showing perhaps that even higher
                                                          authorities than economists see a positive
                                                                                                                        some commercial property

                                                          future for the market!
                                                                                                                        64% of landlords were aged between
                                                                                                                        35 and 55 with 19% of respondents
                                                                                                                        over the age of 55

                                                                                                                        The vast majority of customers (81%)
                                                                                                                        said that they held mortgages on
                                                                                                                        all their properties

7   Are you…?
                                                                              8   How long have you been investing in property?

50%                                                                           1200
45%                                                                                                 31%
          43%                                                                 1000

35%                                                                                                            24%
30%                                             31%
25%                                                                            600        16%
20%                                                                                                                      14%
15%                                                                            400
                                   8%                      7%                  200                                                               5%
5%                      6%                                           5%
0%                                                                                                                                                        1%

                  pro and a part d
                              nal t-tim e





                                 lan e
                                 lan e


                               par -tim



                              nal tim







                                                                     t st


                          sio ull-

                                                                                                                                                          t st
                        plo Emp






                      fes a f


                  pro ed as


                                                                                                                                   www.mortgage-express.co.uk     15
                                                                                                                                                   a toshiba
                                                                                                                                                   Pro laPtoP

          useFul ContaCts
          From mortgage

              Further Lending (quote B2LWIN)
                                                                                        T   hese days, you can do anything on the
                                                                                            internet – shop, socialise, play games and
                                                                                         conduct business from continent to continent.
                                                                                                                                                                           Laptop features
                                                                                                                                                                           • 60 GB hard drive with 512MB memory,
              0870 240 8844
              Monday to Friday 8.30am-6pm                                                That’s why we’re giving B2L readers the chance
                                                                                                                                                                               which you can expand up to 4,096MB

              New Business                                                               to win this sleek Toshiba laptop. It’s a Satellite                                • Spill-resistant keyboard and
              0500 111 130                                                               Pro A120SE CoreSolo with a 60gb hard drive,                                           strengthened casing
              Monday to Friday 9am-6pm                                                   plus CD rewriter and DVD-Rom.
              Landlord Services (quote B2LWIN)                                              It has a 15.4" screen and comes with Windows                                   • Large 15.4" screen
              0845 850 0919                                                              XP Home operating system plus Microsoft Office
              Monday to Friday 8.30am-8.30pm,                                                                                                                              • Lithium-ion battery holds up to four
                                                                                         Small Business software. It’s ideal for either
              Sat 9am-5pm, Sun 10am-5pm
                                                                                         family or small business use – or both – as it’s                                      hours of run-time
              Will Writing Service (quote B2LWIN)                                        internet ready and has wireless capability.                                       • Plays DVDs and writes CDs
              0870 902 5312                                                                 And it could soon be yours! Simply tell us
              Monday to Friday 9am-5pm
                                                                                         how many properties are currently in the Lines-                                   • Wi-Fi ready
              Tax Advisory Service (quote B2LWIN)                                        Clarke family’s portfolio. Fill in your answer on
              0870 024 0542                                                              the coupon opposite with a brief explanation of                                   • 24-bit stereo speakers
              Monday to Friday 9am-5pm
              mortgageexpress@irwinmitchell.com                                          why you want to win the laptop. Then send it to                                   • Weighs just 2.8kg
                                                                                         the address on the back no later than Friday 19
                                                                                         January 2007. Good luck!                                                          • 1.86GHz CPU Intel Core Solo processor

     Mortgage Express “B2L Magazine (Winter 2006)” Terms & Conditions
     The promoter of the Mortgage Express “B2L Magazine” prize draw is Mortgage Express. Entry is open to UK residents aged over 18. Employees of Bradford & Bingley Plc and its Group Companies and their relatives, and any other individual
     involved in the creation of this offer are excluded. No purchase is necessary to enter the competition. Entries are limited to one per person. Entrants must submit their answers to the qualifying question and the tie-breaker question by
     Friday 19 January 2007. Entries must be sent to B2L Winter Competition, Mortgage Express, Endeavour House, 1 Lyonsdown Road, New Barnet EN5 1HU. No responsibility can be accepted for any incomplete, lost, damaged or delayed entries, or
     any entries which do not comply with these rules or which Mortgage Express deems to be invalid at its sole discretion. Any suggestions that are in any way considered offensive will not be accepted. The winner will receive a Toshiba Satellite
     Pro A120SE CoreSolo laptop in accordance with the terms and conditions of the prize above. The winner will be selected by an independent judge from all completed entries received prior to the closing date that have (1) correctly answered
     the question and (2) have completed the tie-breaker question in the most apt and original way. The test of aptness and originality required in the tie-breaker shall be determined by the independent judge at his sole discretion. The adjudication
     of all correct answers and their tie-breaker question will be made on Friday 2 February 2007 by an independent person, their decision is final and no correspondence will be entered into. We reserve the right to replace the prize in event of
     non-availability to the same or similar value. Notwithstanding that the winners have been declared, if Mortgage Express discovers before delivery of the prize that for any reason under these rules, the winner should have been ineligible to enter
     the competition, or if the entry should have been declared invalid, Mortgage Express reserves the right to determine they are disqualified. Reasonable efforts will be made to trace the winner, following which Mortgage Express will be entitled
     to dispose of the prize as it thinks fit without any liability to the winner for having done so. The winner may be required for promotional purposes and we would like them to be available if possible. The winners will be notified by Friday 19
     February 2007. The winner’s name and postal town will be available from this date on our website www.mortgage-express.co.uk.

     Mortgage Express, Registered office: Endeavour House, 1 Lyonsdown Road, New Barnet, Hertfordshire EN5 1HU. Registered England and Wales No. 2405490.

16           B2L Winter 2005

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