Before venturing into the property market you need to fully understand your financial situation!

If you don’t fully asses your finances before taking ‘the plunge’ in to the property market, you could stumble at the first hurdle which may knock your confidence or even your ability to try again in the future.

This website provides you with ‘straight talking’ information within this specific subject so that you are fully informed of the facts and are able to financially prepare yourself before venturing into the exciting world of the Property Market!

So what happened to the uk property market?

Over the past 15 years, the residential property market within the UK has been an exciting place especially if you were an investor looking to get a good return on your money. During this time the property scene has had it’s fair share of highs and lows which has had a substantial impact on today’s market.

Lets quickly go over the history of the past several years:
From the late 90’s, up until 2008, house prices from all areas of the country, had been increasing at a rapid rate. During this time interest rates were steadily becoming lower and banks were starting to loan money to the ‘sub-prime’ market. In essence they were lending money to people who were unlikely to be bale to pay it back! This was fuelling the artificial rise in property prices.

During 2007, several experts within the industry started to warn us that that the current property boom was unsustainable and that the country was heading for a housing crash. During 2008 house prices started to tumble and home-owners started to find themselves within negative equity. The UK housing bubble had burst and the country entered a credit crunch. It seemed however that some areas within the UK were unaffected by the impact of this crisis and the value of property within London and some surrounding areas of the South-East just kept gently going upwards.

It’s now 2015 and prices in London have finally started to plateau and in some areas have even started to decline. This is good news for South-East and the country as a whole. If house prices had kept rising in London then it would have widened the economic barrier even further with little or no hope of ever retracting it.

So what does this mean for anyone now who wishes to enter into the property market?
The credit crunch has certainly had an impact on a borrowers ability to secure finance however it’s not all doom and gloom. For instance, if you are were thinking of buying a property but your financial circumstances are not up to scratch, then you are likely to find it much easier to become a tenant instead.

If you are fortunate enough to have a good deposit and an excellent credit rating then you may be looking to become a professional landlord and put your investment into property. One of the best forms of rental property currently is student accommodation. The South Coast is currently one of the hottest locations within the UK at the moment that offer some great opportunities for a student Landlords. With Universities such as Brighton, Bournemouth and Portsmouth that offer the student an excellent education along with a vibrant lifestyle, these towns are becoming increasingly popular with Landlords.

This website aims to provide you with the information you need in order to financially prepare yourself for entering the property market. Remember, it’s not as easy as it was a few years ago but with the right preparation and planning you will be able to secure your perfect property!

Good Luck!

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Understanding the Finances when Purchasing Property


Posted on 14th April 2017 by FotoBlogger

A man who has just moved into his newly purchased homeBuying property is a huge undertaking, whether you are a first time home buyer or an old hand. Getting the advice of an estate agent is paramount when you’re looking at any property purchase.

I personally moved house several months ago and it was all very daunting. I was fortunate to find an agent who was able to provide me with great help and advice. If you happen to live in the North Buckinghamshire area then I would personally recommend this company as they are an extremely good estate agents in Buckingham. The service I received was second to none! In addition to the physical and legal aspects of finding the right property and making it yours, there are multiple financial considerations. This is especially true of first time property buyers who may not be savvy to all the financial aspects that need to be considered in order to successfully complete the transaction. Below I’ll go into common steps in some detail. As with all things, the more prepared you are going into a property purchase, the fewer complications will arise.

Before You Go out Looking

Before even taking a step out the door, there’s a couple of things that should be done. Take a good look at your finances. Determine what you think you can afford based on existing capitol, existing expenses, savings and income. There are up front costs to buying a home; legal fees, deposits, and, possibly, improvements that need to be completed after the purchase of the property. Determine for yourself how much you think you can afford. If you’ve never had a loan or a credit card and don’t have a credit history, then it’s a good idea to get a credit card and start using it some time before you plan to get a mortgage. This will build up a good credit history, assuming you make all your payments on time, which will be important in the next step.

After you have an idea of what you think you can afford, visit a mortgage expert and get what is called a mortgage in principle. Basically, this is a preapproved mortgage amount that you can definitely afford. The mortgage expert will go through a similar process as you have done personally, investigating how much you can afford. They will look at your expenses, any outstanding debts and weigh those against savings, assets and income allowing for a percentage of that income for day to day expenses. They will also look at your credit history to determine your risk level. Typically a lower credit score will result in the lender willing to lend a smaller amount for the mortgage. No credit score can be even more devastating, since it means that you’re an unknown quantity. The credit score is basically a showing of financial trust and the higher the better. Using this model, the affordability test, the expert can get you a mortgage in principle telling exactly how much you can afford.

When You’ve Found your Property

The hunt for the perfect property is yours and doesn’t have any expenses tied to it, except perhaps gas money to get to viewings and coffee money to mull over options. An agent can help you find what you want but the next set of financial considerations don’t start until after you’ve found your property. You will need a deposit of at least 5% of the value of the property in order to purchase it. In most cases this needs to be actual money and not borrowed funds. Your lender will cover the 95% cost of purchasing the property with the understanding that you will be paying the mortgage back over the predetermined time span. A larger deposit is better, if it can be managed, as it works directly against the principle value of the mortgage and lowers the amount owed. This results in the mortgage having a shorter lifespan and less interest accrued. The deposit can be made pending the completion of several conditions, two of which should be an inspection and a valuation.

An inspection will let you know before hand of any problems the property may have, these problems can usually be used as leverage to offer a lower price. If the problems are unacceptable, then the deal can be dropped. At any rate, it is best to know what work needs to be done before the property is purchased instead of afterwards. A valuation ensures that the price listed is a fair market price and that you are not paying too much for the property in question. Both of these can be extra costs that should be budgeted for.

If everything is in order and you are going ahead with the purchase, there is a tangle of legal work that must be completed. You can try to navigate these legal necessities yourself, or you can hire a solicitor to complete this work for you. The cost of this will vary, but usually be between £200 and £1000. Also UK residents will have to pay stamp duty, a tax levied against property transfers (among other things) Stamp tax was recently waived for first time buyers purchasing property under £250,000 to make entry into the housing market more bearable. Other buys can expect to pay between 1 and 5% depending on the value of the property. Property survey and land registry fees also come into play and can cost anywhere from a few hundred pounds to into the thousands of pounds. It’s good to be prepared for these expenses and not be blindsided. Finally, mortgage lenders may charge a processing fee for finalizing the mortgage, although at times these fees are waived. They can cost up to £2000.

After you’ve Purchased your Property

When you’ve found the perfect property, finalized all the finances and legalities, then you might expect the costs to slow up a bit. They do, the main expenses are the fees and deposit, but there is more to consider. You will want to purchase insurance for your property to protect your investment against disaster. A life insurance policy or critical illness policy (or both!) is also a good idea to make sure that, should something terrible incapacitate the main income earner, that those left are not burdened with the property. Since property is a significant investment, a will is also a good idea. Land tax, utility payments and any maintenance that needs done will become regular costs that need to be accounted for. If the property is a home or business and professional movers are required, then that is an additional expense as well.

There is nothing minor about owning property but, as with all investments, if done intelligently and correctly, owning property can pay off in spades.


Financial Considerations When Selling Property

Posted on 14th April 2017 by FotoBlogger


A modern house that is for-sale within a nice neighbourhood
The conveyance of property is often viewed as an arduous, complex process full of stress and expense. However, conducting some initial research into the financial implications of selling a property may just save time and money in the long run.

Making the property attractive

Firstly, a seller should decide just how much they can afford to spend on sprucing up their home for potential buyers. Looking at a property through a buyer’s eyes does take a certain amount of objectivity. The house should be clean, fresh and clutter free. Any vibrant, overpowering colours should be switched to pale, neutral tones. Most property experts agree that buyers appreciate a blank canvas when viewing a property, so less is definitely more.

Appointing an Estate Agent

When looking to employ the services of an estate agent, it is important to compare and contrast what is on offer. Quotes should be obtained from several agents and the search should not be limited to the high street. There are several cheaper alternatives available for the seller who has more time to invest. As an example, using a house sale website could cost as little as £50. This would buy a basic advertisement which remains on the site until the property is sold. This could be the best option for those who are able to write a property description, take photographs, handle enquiries, viewings and negotiations. For the time strapped seller, many popular online estate agents will provide many of these tasks. They typically charge between £400 and £1000 and will offer many of the same services as the high street agents. Some estate agents also provide cost calculators online which can identify any additional costs involved in the process.
Before signing up with any estate agent it is vital that the seller fully understands the contract and should never be afraid to seek clarification or to negotiate a better deal. Opting to employ only one agent (sole agency) to sell a property will typically cost between 1% and 2% of the selling price. Using more than one agency will cost from 1.5% to 2.5%. To avoid any unpleasant surprises ensure that any agency fees quoted do contain VAT.

Conveyancing

The same guidelines should be followed when searching for a solicitor to conduct the administrative and legal aspects of the sale. Research numerous firms and clarify what their fees will actually cover. As always, remember that it often pays to try and negotiate a better deal with the chosen firm.

At some point in the process a seller will need to contact their mortgage provider in order to obtain a redemption statement. This is required when paying a mortgage off in full or when re-mortgaging to another provider. Remember to clarify how long the statement remains valid from the date of issue.

Moving out

Although moving day could be some distance in the future, it would be useful to obtain some quotes from several local removal firms. A seller should compare the costs and services on offer with the cost of hiring a van to carry out the move independently. Ensure that any chosen firm is a member of the National Guild of Removers and Storers and that the contract clearly stipulates the service to be provided.

Finally, all household bills should be settled and utility companies notified in good time. As with the examples already mentioned, forward planning and research will help to avoid any unnecessary costs, stress or delay when selling property.


Property Financing for Tenants

Posted on 14th April 2017 by FotoBlogger

Tenants moving in to their rented accomodationWith home ownership in the UK hitting the lowest levels in a quarter of a century, renting a property is becoming an increasing popular – and necessary – alternative to stepping onto the housing ladder. As young people find it harder to commit to the financial demands of purchasing their first home, renting a property privately offers a more affordable option. However, for those considering becoming tenants, it is important to understand that renting a home is an important responsibility; weighing up the associated costs and planning finances in advance will help to ensure that tenants stay on the right track and avoid becoming embroiled in debt.

Tenancy Deposit Scheme

Paying your landlord or letting agency a deposit is standard to help you to secure a property and offers the landlord security in the event that there are any outstanding costs at the end of the tenancy agreement. The deposit can vary from a week’s to a couple of months’ rent and usually must be paid before moving into your new home. Disputes may arise at the end of a tenancy between the tenant and the landlord over whether the deposit is to be returned in full, so it is worth enquiring with a prospective landlord if your deposit will be protected through the Tenancy Deposit Scheme (TDS). This Government-backed scheme requires all shorthold tenancy deposits in England and Wales to be protected so that, in the event of a dispute at the end of the tenancy, an independent adjudicator can determine whether the landlord is legitimately withholding all or part of the deposit. The TDS also gives the tenant the reassurance that their money is being deposited securely during the tenancy and may not be used for other purposes.

Lease Terms

Your landlord should provide you with an Assured Shorthold Tenancy Agreement (AST). This should clearly state information such as the length of the tenancy, the cost of the rent, your and your landlord’s responsibilities (for example, repairs), notice periods and what happens at the end of the tenancy. Read this thoroughly and make sure that you question any aspects which seem unfair or unclear. There should also be an inventory for the property which will record any areas of wear or damage to furniture or fittings; check these in minute detail when you move in and sign your agreement, so that you are not unfairly charged for damage which was already current when you started the tenancy.

Credit Checks

If you are renting via a letting agent it is very likely you will be asked to undergo a credit check to assess your financial status and to predict any likely problems in being able to pay your rent. A negative report will, of course, hinder your application for a particular property; in this situation, enquire with the agent whether they would accept a guarantor. This is a named individual (who will also be credit checked), such as a family member, who can agree to pay the rent in the event that you get into financial difficulty. The guarantor will need to sign their commitment, so obtaining their consent first is essential!

Paying the Rent

Whether you pay your rent on a weekly or monthly basis, you may be required to send the money to your landlord or letting agent by standing order. This offers a degree of protection for the landlord as your bank will automatically send the payment on a designated date, while you can retain a degree of control by stipulating the amount of the payment (as opposed to a direct debit where the payments can be varied by the payee). If you are considering making cash payments or direct transfers instead, consider whether you will always remember to send the money on time. A standing order requires no regular action, other than to make sure the money is in your bank account!

Managing Living Costs

Paying the rent is only one part of your living costs, though it is probably the largest. Before entering into a tenancy, estimate the other bills which will be your responsibility, such as utilities, council tax and telephone and broadband; if these look unaffordable (bearing in mind your other living expenses such as food and transport), seriously consider whether the property is a realistic option.

As a tenant, you retain the rights to change your electricity, gas and broadband providers, so shop around for the best prices and ensure that the meters are read at the start of the tenancy so you avoid inheriting the previous tenant’s bills. Inform the council of your moving in date and remember that you can pay your council tax over ten months a year to make the payments more affordable. Missing utility or council tax payments will rapidly get you into financial trouble, so always talk to the companies in the event of difficulty, to negotiate a manageable solution.

Moving in – and out!

Finally, do bear in mind that moving furniture and possessions can be costly, both in money and time. If you have furniture to transport, obtain quotes from reputable removal firms or, if you can move under your own steam, prices for van rental. If possible, avoid Fridays as removal firms tend to be busier and may charge a premium. If you need to take time off work to move, decide whether you can take this as holiday so you don’t lose out on your pay.

Moving into a new home is an exciting time but the financial aspects must be carefully managed to help you to enjoy a memorable experience instead of becoming laboured with money problems that will haunt you on a daily basis.


Property Financing for Landlords


Posted on 14th April 2017 by FotoBlogger

Landlords keys board for multiple properties

Successful property letting involves more than simply finding the right property and tenant. If you’re thinking of becoming a landlord, you’ll have several important financial factors to take into account. Below are the most important things to consider before letting your property.

Choosing the Right Property

When it comes to finding the right property, location is key. The ideal property for you will depend on a number of important factors. Most importantly, you want to choose a property that appeals to potential tenants. Before investing in a property, consider the following:

  • Are you looking for steady rental income or long-term capital growth?
  • Do you have the financial resources to renovate the property before letting it, or would you prefer to invest in a property that can be made available right away?
  • How easy will it be to find suitable tenants? Are there any plans for new developments in the area that may create demand for this type of property?

Whether you’re purchasing a new property or letting a property you already own, you’ll need to make sure the property is kept well maintained. Work out the costs of repairs and renovations before purchasing a property. Tenants can afford to be picky, and if you have a lot of competition, your investment may end up being more of a liability than an asset.

Tenancy Deposit Scheme

If you’re letting a property on an assured shorthold tenancy beginning after April 6, 2007, you must put your tenants’ deposit into a tenancy deposit protection (TDP) scheme. A TDP is a government-insured plan to ensure your tenants’ deposit is returned to them if they:

  • Leave the property free of damage
  • Pay the rent on time
  • Adhere to the conditions of your tenant agreement

You are required to use a TDP scheme even if the tenants’ deposit is paid by someone else, i.e. the tenants’ parents or a rent deposit scheme. You must place the tenants’ deposits into the TDP scheme no later than 30 days after receiving it. If you receive a valuable item in lieu of a cash deposit (i.e. a car or an expensive piece of jewelry), you don’t need to put it in a TDP.

The deposit must be returned to the tenant within 10 days following the end of a tenancy. If your tenant disputes the amount to be repaid, the deposit remains held within the TDP until the situation is resolved.

Setting Your Rental Price

Conduct research on the rental market in the are you wish to purchase a property to ensure you’re not setting your rent too high. A few factors to consider during this step are:

  • Location of the property
  • Market demand and supply for your property type
  • Recently advertised rents for similar buildings

Insurance

You should have an insurance policy in place to cover the building in the event of damage to the structure, fixtures and fittings. Tenants are responsible for insuring their own possessions, but are not required to do so. You may wish to consider an additional contents insurance for any removable items you’ve provided for the property.

Ongoing Operating Costs

Carefully consider any ongoing costs, such as: property acquisition costs; furniture and appliances; ongoing repair and maintenance; renovations; and reserve funds to repair damage caused by tenants. You’ll also want to make sure you have a reserve of cash to cover any taxation liabilities.

Before becoming a landlord, be sure to get proper financial advice from a qualified professional. A good financial adviser can help you understand you tax responsibilities and offer strategies to offset the cost of ongoing maintenance. By understanding your rights and responsibilities, you’ll avoid the common pitfalls that put many landlords out of business.


Financial Tips For Buy-To-Let Property Investors


Posted on December 11, 2015 by Williams

The buy-to-let market is looking more attractive than ever, with an increasing number of people looking to raise their income by becoming a landlord. The lettings market is becoming more buoyant at the moment, and there is a huge need for more rental properties, with monthly rents on the rise. It’s small wonder that buying a house or flat to rent out looks like an appealing investment opportunity, but if you’re thinking of taking a step towards becoming a landlord, or even if you are wondering how you could make larger profits on a property you already own, you’ll need some helpful tips and advice to increase your chances of success in the housing market.

Do Your Research
It sounds obvious, but don’t leap into investing in a property before you’re certain that it’s the right choice for you. Inform yourself about potential risks, such as the possibility of your property reducing in value over time. If you are taking out a mortgage, as many buy-to-let investors are, you will continue having to pay your mortgage whatever state the housing market is in. You may be better off with a high rate savings account or an income based investment fund.

Where Do You Want To Buy?
Choosing the right area is key to your investment success. You need to choose a location that is desirable, where people want to live. Look for a place that has a specific appeal, perhaps to families because of excellent schools, or commuters because of good transport links. Buying a buy-to-let property near your home is a good way to be sure of knowing the local market and keeping a close eye on your investment, however looking for a property further afield might be a good way to increase your revenue. Alternatively, look for a property that needs work in order to get a low price and maximise your profits.

Investing in Property: The UK Private Rented Sector from Knight Frank on Vimeo.

Know your Market
Before investing in any property, it is important that you identify your target market. For example many investors may choose to target students as their primary tenants. By first identifying your target tenant category, this will often, in turn, focus your geographical market. In the case of the student market, for example, as an investor you may benefit from focussing your search on suitable student properties in Bournemouth or HMO properties for Nurses in Manchester. These types of investing will often generate an exceptional yield and are therefore a good option for experienced investors.

Work Out Your Figures
Before rushing into anything, do the maths. Work out the price of houses in areas you are interested in buying and the amount of monthly rent you’re likely to receive. As a rule, you will need to receive a high enough rental amount to cover your entire mortgage payment and then an additional 25% of the total to ensure your costs are covered, such as maintenance and unexpected voids.

Go Mortgage Shopping
Talk to an independent mortgage broker who knows the buy-to-let market and can advise you on the right loan for your needs. There are also plenty of useful comparison websites that will help you do your own research.

Who Lives In A House Like This?
What does your target tenant look like? What are they looking for in a home? Think of who you are aiming your property at, as students will have very different requirements to a young professional couple. Consider allowing your tenants to redecorate or offer the property unfurnished to encourage longer tenancies.

Don’t Be Afraid To Bargain
Because you aren’t part of a chain, you are free to negotiate a better price from the seller. If the local housing market is especially sluggish you are more likely to be able to get yourself a better deal.

Don’t Forget To Take Voids Into Account
Be aware that your property may not always be occupied. It’s wise to factor in at least two out of every twelve months for your property to be vacant to make sure that your costs are properly covered. Remember to think about maintenance on your property too; things can and will break down so you need to be prepared for that.

Will You Manage Your Property Yourself?
How involved do you want to be with your property management? Some landlords want to be very hands-on, but that can be very time consuming and a lot of hassle. On the upside, you’ll save money over using a lettings agent. If you do choose to use a lettings agent, shop around and find out exactly what you are getting for your money.


How to raise the rent on your property


Posted on December 09, 2015 by Samantha

As a landlord, it can be tricky to know how best to go about raising the rent on your rental property. The cost of living is rising across the board, and in order to make a profit it may be necessary to increase rents. You may feel that your property is worth more than the amount that you are receiving every month, however you don’t want to risk putting tenants off. So what do you do about setting a new rental rate for your properties?

Before indiscriminately increasing monthly rents, you first need to be sure that there is a definite case for asking for more money. You need to be certain that rental rates are actually on the rise in your area, so for example, if you lived near to Oxford, you should check other similar properties listed with Oxford estate agents to ensure that your property is genuinely valued incorrectly.

house propped up with money isolated on a white backgroundIf you find that your property is indeed being offered at too low a price, you must initially write to any existing tenant informing them of the impending change. If they are on a fixed-term contract, you must wait until the end of the rental period before making any increase. Make contact at least two months before renewal is due informing them of the rate increase as this gives them enough time to look for alternative accommodation should they wish to do so.

If your existing tenant has a break clause in their contract, you can contact them at this point to inform them of the rental increase, however you are not permitted to do this within the first six months of tenancy.

Tenants who have a contract that rolls on periodically on a weekly or monthly basis can have their rent raised at any time with just one month’s notice given, however you should be aware that an increase is only permitted once during every 12 month period without the express agreement of your tenant.

If your tenant does not agree to the increase in rent and chooses to terminate the contract, you must then consider whether it is worth your while to persist with a rental increase when weighed up against the difficulty and time consuming nature of finding another suitable tenant who is willing to pay a higher rate, not to mention the added expense of further marketing and estate agent fees. You may be better off forgetting the rent-hike and sticking with your existing tenants.

One tried and tested way of increasing rental amounts is to introduce a nominal increase at every renewal period as this is more likely to be found acceptable than one large increase every few years. Demonstrating that the rent that you are asking for is in line with other local properties and being willing to negotiate is the best way to obtain the rental increase you desire. More on this can be found here.


The boyfriend (or girlfriend) rules when in a Flatshare!


Posted on December 02, 2015 by Barry

It might be great fun to live with your friend, but what happens when she invites her boyfriend to come and live with you? It’s fantastic to share the costs of living with someone else, but how will you manage when he takes your food out of the fridge? If you’re sharing a flat or a house with others, you might end up rubbing each other up the wrong way unless you establish some simple rules.

Set Some Guidelines
Talking is the key to living comfortably as part of a flatshare. Laying down some ground rules for everyone as soon as you move in avoids conflict later and gives you a clear basis to work from.

Safety And Security
Make sure there are clear rules about keeping your home secure. All flatmates must agree to close and lock all windows and doors during the night and when the property is empty.

The Fridge
Every housemate should have their own cupboard, fridge and freezer compartment and should show respect for the food and drink of others. If a product is labelled it should be out of bounds to the others.

Keeping It Clean
Everyone should agree to clean up their own mess and to take turns at cleaning public areas like bathrooms and the kitchen.

Noise
Agree on a time after which there should be a no noise rule. This will eliminate the problem of one housemate playing loud music until the early hours.

Privacy
Each flatmate has a right to their own private space, and this should be agreed upon in advance and designated areas given to each person which should be respected. Other spaces should be designated as public areas, however due consideration should be given to other housemates when using them.

Partners
Decide how many nights each housemate’s partner is allowed to stay and adhere to the rules. This will avoid the issue of one person’s boyfriend moving in permanently.