- 1. The DIGITAL properTy mAGAzIneesmartpropertyISSUE 16 Mortgage
Payment 2010 Protection Insurance housing Taking steps to protect
yourself against losing your home Property prices market
Predictions for thecontinue to riseLatest figures show gains over
next 12 months the sixth consecutive month Remortgaging Lenders
offering better ratesResidentialPositive rental rental market
sentiment Opportunities for new andSurveyors expect to see rent
existing investors in 2010 rises during the New Year
2. 050616 10 Planning your remortgage. In this issue 05
Pre-Budget ReportFundamental reform still needed,10 Positive rental
sentiment Surveyors expect to see rent rises21 Mortgage Payment
ProtectionInsuranceIsnt it time you talked to us another missed
opportunity!11 during the New YearTaking steps to protect yourself
againstlosing your home 05Property prices continue toStamp duty
about saving money?riseLatest figures show gains over thesixth
consecutive month Holiday helped approximately 240,000 homeowners22
Independent deposit schemesCost-cutting measures could
undermineprocess07 The key factors during 2009A huge financial
burden lifted from13 Confident buyers returning Acute shortage of
homes for sale is bolstering the market 22 Residential rental
marketOpportunities for new and existing Were passionate about
making sure youll obtain millions of home owners investors in
2010the best mortgage deal available. 07 Holiday homesTax changes
on the horizon13 Energy efficient homes Sustainable
consumer-friendly green rating23 Property ownershipBuying a
leasehold Contact us to discuss your current situation, and well
help you find the best deal that's right for you. 07 Seasonally
adjusted two-year highHouse prices rose at their fastest pace15
Buying a home The legal aspects of becoming the owner of your
property 24 Having problems paying yourmortgage?Seeking help sooner
rather than later isin three yearsthe key 08 Rural
resilienceImbalance between supply and17 Remortgaging Lenders
offering better rates 26 Buy-to-letInvesting in the private rented
sectordemand pushing prices upwards19 Landlords air their
grievances 28 A to Z property and mortgage09 2010 housing
marketPredictions for the next 12 months Survey reports dislike
over adverse burdensome legislationtermsAssisting you to buy
property, sellproperty and finance your mortgage09 Homeowners
breathe a sighof reliefHome across the nation increased in19 New
plans for borrowers Stricter scrutiny of mortgage applications30
Strong interest from buyersDemand is still outstripping
supply2009Your property may be repossessed if you do not keep up
repayments on your mortgage.03 3. 14 News Pre-Budget Property
pricescontinue to rise In this Report Latest figures show gains
overthe sixth consecutive monthissue Fundamental reform still
needed, another missed opportunity!House prices rose again during
November last year,taking the average house price in the UK to
almostthe same level as they were a year ago. Prices gained Welcome
to the first edition of our0.9 per cent according to the latest
government property and mortgage magazine forFollowing the
Pre-Budget Report in December, the Council offigures, which is the
sixth consecutive month that0922 the new decade. Inside youll find
a mixMortgage Lenders (CML) welcomed the announcement by theLand
Registry figures have reported an increase. of news articles and
features including Chancellor, Alistair Darling that help with
mortgage payments for predictions for the UK property market Other
house price indices have been showing rises over the next 12
months. working-age borrowers on income support will be maintained
atfor longer than that, but the Land Registry measure is current
levels for the next six months.regarded as being the last to
reflect changes in prices House prices rose again during Novemberas
it is based on sale completions. last year, taking the average
house price Payments of income support are helpingCommenting on the
Pre-Budget Report, the in the UK to almost the same level as around
100,000 households stay in their CML's director general Michael
Coogan said:The November rise of 0.9 per cent was higher than they
were a year ago. On page 05 find homes, and a further 113,000 older
the 0.6 per cent rise in October, and the same as the out more
about the latest governmenthome-owners are receiving help with
their "Lenders are determined that possessionfigure for September.
figures, the sixth consecutive month that mortgage through pension
credits. is a last resort. With earlier and better Land Registry
figures have reported ancommunication between lenders, consumers
The average house price in england and Wales is now increase. The
CML were disappointed that theand debt advisers, arrears are being
managed 161,554, according to the Land Registry. stamp duty
"holiday" ceased at the endthrough the recession and possession
action 19 Many homeowners may be in their of December and commented
that it was minimised, wherever possible.The rise means that,
averaged across the UK, house13 strongest position to remortgage in
moreanother missed opportunity and that more prices now stand just
0.3 per cent lower than they did than two years thanks to a
recovery infundamental reform of this tax, which "However, a state
safety net is also a vital a year ago. property prices. There's
been a recoverycontinues to distort the housing market,part of the
picture, and so we welcome the in property prices since April last
yearis still needed. With a lower number of Pre-Budget Report
announcement of no Prices have recovered most strongly in London,
which has left homeowners in a stronger housing transactions
expected this year, it change to the rate of support for mortgage
where property is now 3.5 per cent more valuable position. On page
16 find out why now would have been possible for the Treasury
interest at 6.08 per cent. In a low-interest ratethan a year ago
following a 2 per cent rise in may be the best time to remortgage
in to consider the introduction of revenue-environment, and with so
much progress November. more than two years.neutral reform that
would have removedbeing made by lenders and borrowers market
distortion.together, it is no surprise that the back-stop There
were also inconsistencies in the types of With 2009 a distant
memory, British government schemes have not been widelyproperties
that are selling for higher prices. The homeowners can breathe a
sigh ofThe CML also notes the government's used. This situation may
change if pressures biggest increases have been for detached family
relief as home values across the nation intention to explore ways
of encouragingbuild, as interest rates rise in the future. So we
homes, which are in the greatest demand. Prices of increased by
39.1 billion. Whilst themore sustainable, transparent and are
committed to continuing to work with these properties were 1.6 per
cent higher last month increase is modest, it is a massive
standardised markets for UK mortgage- the government to ensure the
best possible than in November last year. improvement over 2008
when Britishbacked securities, and looks forward to outcomes for
borrowers going through property values fell 811.3 billion. Turn
toseeing more details.short-term financial difficulties."However,
semi-detached houses fell in value by 0.1per07 page 9 to read more.
cent, while terraced homes were 0.3 per cent cheaper.At the time of
publishing, the propertyNEEd MoRE Property transactions also picked
up, with sales and mortgage market and economic events are changing
very rapidly andINfoRMATIoN?more than 5,000 higher per month
between Juneand September than in the same period a year some
further changes are likely to havePLeASe CONTACT uS ago. But
transactions are historically still at a low occurred by the time
you read this WITH YOuR eNQuIRY.level. Price drops in many regions
of the UK and in edition. A full content listing appears on
particular London and the South east are easing, and pages 3. in
some parts of London even increasing as demandovertakes supply -
particularly in the premium,higher end of the market. The most
promising part of the report is the numberof homes being sold,
which although still up tohalf their pre-credit crunch levels, are
beginning toincrease again.Content of the articles featured in this
publication is for your general information and use only and is not
intended toaddress your particular requirements or constitute a
full and authoritative statement of the law. They should not be
reliedupon in their entirety and shall not be deemed to be, or
constitute advice. Although endeavours have been made toTo dISCUSS
YoUR provide accurate and timely information, there can be no
guarantee that such information is accurate as of the date it
isREqUIREMENTS oR received or that it will continue to be accurate
in the future. No individual or company should act upon such
informationwithout receiving appropriate professional advice after
a thorough examination of their particular situation. We cannotTo
oBTAIN fURTHER accept responsibility for any loss as a result of
acts or omissions taken in respect of any articles. The Financial
ServicesINfoRMATIoN Authority (FSA) does not regulate most
Buy-to-Let or Commercial Mortgages.PLeASe CONTACT uS.YOUR PROPeRTY
MAY Be RePOSSeSSeD IF YOU DO NOT KeeP UP RePAYMeNTS ON YOUR
MORTgAge. 0405 4. News Holiday homes Tax changes on the horizon
Families who rent out a holiday home in the UK will no longer be
able to offset the costs against their tax bill.Rules to be
introduced in April this year will stop second home owners from
being able to write-off their mortgage interest and other running
and maintenance expenses as a business loss. They also will not
qualify for capital gains tax relief, stopping people from buying
holiday homes with the proceeds of previous sales.The key factors
The old rules not only allowed those who owned holiday lets to pay
no tax if the rental income did not cover their costs, they could
also use their losses to reduce the amount they pay the government
on theduring 2009 rest of their income.From April this year, second
homes will be treated as property businesses, such as buy-to-lets
run by professional landlords. This means they will be subject to a
different tax regime, though they will qualify for benefits A huge
financial burden lifted fromsuch as energy savings allowances and a
10 per cent deduction for wear and tear on furnishings. millions of
home ownersHowever, because of european rules introduced earlier
this year those with holiday homes overseas will be able toFor
close observers of the uK's property market, 2009 wasclaim the old
tax breaks. a big surprise. Contrary to almost everyone's
expectations,prices started rising in the spring and kept on going
prettymuch every month. According to HM Revenue & Customs(HMRC)
completed sales rose steadily too,would otherwise have fallen
behind withtheir mortgage payments and then beenSeasonally
adjustedfrom the rock-bottom level of just 41,000 threatened with
repossession.in January to 90,000 in October 2009.ed Stansfield of
Capital economics two-year highThe sudden change in direction
broughthighlights other factors.an end to the sharp downturn of
theprevious 18 months, in which the banking"The big influence was
the relativecrisis led to a slump of about 20 per cent in
resilience of labour markets, employmentthe value of the average UK
home. has been slow to fall, so there has been noHouse prices rose
at theirSimon Rubinsohn, chief economist at thedrip-feed of forced
sellers," he says. fastest pace in three yearsRoyal Institution of
Chartered SurveyorsA year ago the Council of Mortgage House prices
in england and Wales rose at their fastest(RICS), has been equally
surprised by thislenders (CML) decided not to make a pace in three
years in November 2009, but there are signsabout-turn. public
forecast of house prices for 2009. that activity may be levelling
off just as new instructions toIts spokesman Bernard Clarke thinks
sell hit a two-year high, according to a survey by the Royal"Prices
could have fallen further, butthat decision, repeated this year, is
fully Institution of Chartered Surveyors (RICS).government policy
has been successful,justified.combined with low interest rates," he
says. Seasonally adjusted net balance of surveyors reported"It's a
vindication of our decision not to rising prices was 35 per cent
last during November,"The rise in unemployment has been only
forecast in such a volatile market," he said. up from 34 percent in
October and the highest sincehalf the level seen in the recession
of the November 2006.early 1990s, which has stopped some "No-one
forecast the rise this year anddistressed stock coming on the
market." it is difficult with such a thin volume of House prices
have started rising again in annual terms intransaction to do
something that is reliable." recent months, having slumped around
20 per cent fromThe key factor was probably the Bank of their peak
during the financial crisis. However, prices haveengland's decision
to take its base rate all largely been supported by a lack of
supply.the way down to 0.5 per cent by March 2009,in an attempt to
stave off the recession andNEEd MoREkeep the banking system afloat.
INfoRMATIoN? The RICS survey showed that, for now, demand continued
to outpace supply, with the sales-to-stock ratio rising to 31PLeASe
CONTACT uSfrom 30 in October, a two-year high.This lifted a huge
financial burden fromWITH YOuR eNQuIRY.millions of home owners,
some of whom06 07 5. NewsNewsHomeownersbreathe asigh of reliefHome
values across thenation increased in 20092010 housing marketWith
2009 a distant memory, British homeowners canbreathe a sigh of
relief compared to the same period lastyear as home values across
the nation increased by 39.1billion last year. Whilst the increase
is modest, it is a massivePredictions for the next 12
monthsimprovement over 2008 when British property values fell811.3
billion, according to property website Zoopla.The National
Association of estate Agentsis a mistake and this has the potential
to(NAeA) has provided their predictionsreverberate around the
market. n Average British home value up 1,517 in 2009, afterfor the
UK property market over the nextdropping 31,355 in 200812 months,
predicting a market hugelyWe also have an increase in VAT and ann
Average property value up 4 per day in 2009, afterdependent on how
much lending will beimminent general election. This meanslosing 86
per day in 2008made available.that some people will adopt a wait
and n england & Scotland property values rise but Wales see
attitude to housing as they studycontinues decline in 2009According
to NAeA house prices could what tax changes will mean for them andn
Biggest rebound in gloucestershire, up 3.8 per cent thisremain
flat, or, in some markets possiblyhow the election is likely to
play out.year after 14.1 per cent drop in 2008 Rural resiliencedrop
slightly, for the first six monthsof 2010, before picking up again
and In recent months the market has However, with the total value
of the British residentialremaining stable in the second half of
witnessed a slight increase in housing housing stock now standing
at 5.3 trillion, up marginallythe year. Supply will remain stable
in prices, driven largely by the fact that, inon one year ago, it
still remains over three quarters of athe run up to the general
election, aftersome markets, demand is outstripping trillion pounds
below its peak of 6.1 trillion in late 2007.which there are likely
to be more houses supply. If more property comes onto theThe
average home in Britain is now worth 205,591, upavailable for sale,
particularly if Home market the house price rise will flatten or,
1,517 (0.7 per cent) from one year ago, a daily gain of
4Information Packs are scrapped.in some cases might fall slightly
over the for the average property. This is in stark contrast to
2008 Imbalance between supply and demand pushing prices
upwardsfirst six months of the year.when property values fell by
31,355 (13.3 per cent) onThe general election would cause a lull
inaverage, equivalent to a daily loss of 86 per home.activity as
people adopt a wait and seeDuring 2009 there was a pick up in For
the first time since autumn Property prices in the Homecontinue and
will prices fall again in Results released by 2007 every UK region
covered by Counties have shown particular 2010. Currently, there
are few signsapproach.demand as many took advantage of Property
prices in england have climbed 0.9 per cent over lower prices and
interest rates. Thisthe past 12 months, having fallen 13.9 per cent
in 2008. the Knight Frankthe index reported a quarterlyresilience,
ending 2009 1.4 per cent that stock levels of the best houses
clearly indicates that the British publicScottish values have also
risen in 2009 by 0.6 per cent to Prime Country price increase. The
Home Counties higher. The north of england and will increase
markedly this year and During 2009 there still believes that
investing in bricks andan average of 156,905 up from 155,597 at the
end of continue to lead the country houseScotland are recovering
more slowlythe forthcoming general election House Index
duringmarket with Q4 growth of 3.1 perwith prices down 11 per cent
on an could exacerbate the situation was a pick up inmortar is the
right thing to do. last year. However, the property market in Wales
is yet torebound and has seen average values drop a further 2.5%
December showed cent and annual growth of annual basis, but up 0.5
per cent in further. Coupled with the growing demand as many
tookThere have been encouraging levels of (3,866) in 2009 on top of
the 13.2 per cent decline in 2008. 1.4 per cent. A significant
imbalance the last three months of the year. number of frustrated
buyers looking that house prices between supply and demand is for
houses, this should help toadvantage of lower pricesfirst time
buyers throughout 2009 and I would hope this continues into 2010.
Homeowners in gloucestershire have had the biggest rose on average
byhelping to push prices upwards. There are a number of reasons
forensure prices do not fall back. The and interest rates.Again,
the situation with lending will cause for celebration in 2009 as
average property values this upturn in property prices, butmost
likely scenario is a levelling off have an impact. The NAeA
believes that have risen 3.8 per cent over the past year to a
current almost 2.3 per cent According to Knight Frank the price the
overriding factor is an imbalancesometime in mid 2010. responsible
lending to responsible peopleaverage home value of 229,945. of
prime country properties in nowbetween supply and demand. A number
of buyers may continue to take in the fourth quarter increasing
across the country asPotential purchasers are moreadvantage of
lower interest rates and is crucial to any recovery.Commenting
Zoopla said, 2008 was undoubtedly of the year and are the recovery
that started in London confident because they feel prices lower
priced property.the annus horribilis for homeowners. But, property
during spring 2009 continues to have reached the bottom and are no
now just 2.6 per cent spread further into the regions.longer
worried about buying into a The continued presence of First
Timeprices stabilised during 2009, rising gradually since lower
than at the falling market. The cost of borrowing NEEd MoREBuyers
will be critical to market success.April after a fairly weak first
quarter and the housingbeginning of 2009.Overall, prices rose by
2.3 per centremains low and credit availability isINfoRMATIoN?
Peter Bolton King, chief executive of the NEEd MoRE market did not
worsen in 2009 as some had fearedand recovery signs are starting to
take hold. With the in the final quarter of the yeargradually
improving.PLeASe CONTACT NAeA, said: The beginning of 2010 sees
INfoRMATIoN?biggest share of the UK's household wealth, 39 per and,
on average, are just 2.6 perseveral things happen. The stamp duty
uS WITH YOuR PLeASe CONTACT uS cent in property, it is far better
news for homeowners cent lower than they were at theThe question
everybody is nowholiday ending, despite warnings from beginning of
2009.asking is how long the recovery can eNQuIRY. much of the
property industry that this WITH YOuR eNQuIRY.than at the start of
last year."0809 6. RentingStamp dutyStamp dutyHoliday helped
approximately 240,000 homeownersThe controversial stampThe system
has reverted to duty of proved such a good earner forn In 1991,
during the last housing 1 per cent being paid on homes soldthe
government that it was never recession, the Conservativeduty
holiday brought infor more than 125,000. Higher rates
repealed.government temporarilyduring 2008 for homesapply above
250,000.n The tax was extended to property suspended stamp duty for
ninesales in 1808. months on all properties worthcosting up to
175,000 The scheme was been widely n In 1765, the attempted less
than 250,000 in an effort toended at the end ofcriticised for
failing to assist enforcement of stamp duty in boost sales.
first-time buyers. The holiday was english colonies in America ledn
During the housing boom ofDecember last year. This initially meant
to run for a year from to protestors demands of nothe late 1990s
early 2000s, whenwas confirmed during the September 2008 but was
extendedtaxation without representation many more houses became in
the full 2009 Budget last year to and ultimately to the Boston
liable for stamp duty, gordonPre-Budget Report when remain in place
until 31 December. Tea Party and the outbreak of theBrown came
under increasingthe Chancellor, AlistairAmerican War of
Independence.pressure to adjust the thresholds Campaigners such as
the Counciln In 1797, William Pitt the Youngeraccordingly. In
2000/01, the InlandDarling announced that of Mortgage Lenders (CML)
want described stamp duty as "easilyRevenue received 2.145
billionthe holiday had helped further reform to the
controversialraised, pressing little on any from residential stamp
duty; in tax. The CML says that stamp dutyparticular class,
especially the 2002/03, it received 3.59 billion.approximately
240,000unfairly constrains first-time buyers, lower orders of
society, and n In his 2005 Budget, Brown finallyhomeowners.places a
greater burden on the south producing a revenue safely and
increased the zero rate stamp of england and encourages price
expeditiously collected at small duty threshold from 60,000 to
bunching just below the thresholds. expense." He virtually doubled
the 120,000, and increased it slightly It favours a graduated
structure thattax that year. again in 2006 to 125,000. only charges
higher rates of duty on n In 1984 the Tory Chancellor the
proportion of the property value Nigel Lawson eased the above the
threshold. pressure on homebuyersDid you know?by increasing the
thresholdfor stamp duty on propertyNEEd MoREINfoRMATIoN?Positive
rental sentimentfrom 25,000 to 30,000 and n Stamp duty was first
levied in the UK in 1694 to pay for the warreduced the highest rate
of PLeASe CONTACT with France. Although initiallystamp duty from 2
per cent to uS WITH YOuR1 per cent. eNQuIRY. only planned for four
years, it Surveyors expect to see rent rises during the New Year
Results from the Royal The recent pick up in the housing when the
housing market was still strong with 22 per cent moremarket seems
to have led to a suffering from falling prices and surveyors
reporting rising rather Institution of Chartered drop off in the
number of rentalmany would-be sellers were turningthan falling
numbers of people Surveyors (RICS) residential properties,
particularly houses,to the lettings market when their looking to
rent. Tenant demand wasbeing made available and as a houses failed
to sell.strongest in London, but increased in lettings survey for
Octoberresult surveyor optimism hasmost other parts of the country
bar (3rd quarter) 2009, show increased for the first time
sinceCurrently the reading for past rents, the east.July 2008. 22
per cent more although still negative, is the least that surveyors
expect to see surveyors expect rents to rise rather so since July
2008 with only 4 per rent rises during this New than fall in the
next three months. cent of Chartered Surveyors stillreporting
falling rather than rising Year as the number of rental The drop
off in supply is the rents, indicating that the downward properties
coming onto the main driver for the more positive pressure on rents
is already startingsentiment, with new instructionsto ease.
Significantly London and the market fell for the first time
reaching their lowest levels in the North are already seeing the
majority since January 2008.surveys history (1998). A net balance
of surveyors reporting price risesof 11 per cent of surveyors,
haveseen the number of new instructionsover the past three months.
NEEd MoREcoming onto the market fallingDemand for rental property
isINfoRMATIoN?rather than rising. still rising as 16 per cent more
PLeASe CONTACTsurveyors saw activity over the past uS WITH YOuRThis
is in stark contrast to levels three months pick up; in
particulareNQuIRY.seen during the latter part of 2008 demand for
houses was particularly 10 11 7. NewsEnergyefficient
homesSustainable consumer-friendlygreen ratingConfident Assessing
your buyers returningThe Communities & Local government Housing
andPlanning Minister John Healey launched in Decemberproposals for
a more consumer-friendly green rating fornew homes that will help
green-proof properties and mortgage options.reduce future utility
bills by up to nearly 1500 a year in themost energy efficient
homes. Acute shortage of homes for sale is The Code for Sustainable
Homes was introduced in Aprilbolstering the market 2007 as a
standard to improve the overall sustainability ofnew homes. 'The
Code' scores against a star rating system,using one to six stars
depending on how the propertyAre you looking for the bestThe market
experienced a dramatic performs against categories such as energy
use, waste,Green shoots, reasons to beimprovement in fortunes
during 2009. Thematerials and water.cheerful during 2010most
impressive bounce back has beenseen on the Nationwide index, which
now Mr Healey has pledged to improve the Code so that mortgage
solution?n Confident buyers are returning to thehas prices up by
2.7 per cent annually. it's easier for consumers, whether they are
developersmarket and have pushed propertyor individuals simply
wanting to grade and track theprices up by 2.7 per cent annually,
saysThe market seems to have been at itssustainability of their
properties.Nationwide.most buoyant during last summer andn An acute
shortage of homes for sale isearly autumn, with asking prices
andThe Code is rated from one to six, one being the entrybolstering
the market, says the Royalleaping at that point. The big question
level, above the level of the standard, mandatory
BuildingInstitution of Chartered Surveyors. Itsnow is can this
momentum continue.Regulations and six as highest, reflecting
exemplarsurveyors say prices will continue rising If youre unsure
about how to navigate the mortgage The Bank of england'sthis
year.sustainable development. In the first two years, over300,000
have been registered to build to Code standards,n Nationwide has
recorded seven market during these challenging economic times, let
usquantitative easingconsecutive monthly increases toand nearly
2,000 homes have completed Code certificates.help you dont leave it
to chance. programme, pumping in the November.n Libor, the rate at
which banks lendThe improved star rating system will also take into
accountregion of 200bn of printed to each other, has fallen to
within athe tougher new rules for energy efficiency in the
buildingregulations, coming into force from 2010 and the
longermoney into the economy, normal range of the base rate Contact
us to discuss your requirements, and well may also have created- it
stood at 0.6075 per cent on7 December 2009.term proposals for
energy efficiency standards in zerocarbon homes. The Code will
reflect these mandatory help you make a well informed
decision.demand. n Quantitative easing has pumped anrequirements
giving people the opportunity to build totomorrow's standards today
and save more on bills.extra 200bn into the economy, whichshould
increase lending, keep Libor lowPrices were up for the seventh
month in John Healey, said: "Our homes account for a quarter of
UKand add inflationary pressure, whicha row in November 2009,
according tocarbon emissions, so it's clear they are a vital part
of ourmay eventually drive up house prices.Nationwide. efforts to
tackle climate change. The talks in Copenhagenhave underlined the
need for us to act now, so we need toThe Bank of england's
quantitative easing ensure that people who want to greenproof their
homesprogramme, pumping in the regionget a helping hand, not red
tape. The Code has proved itsof 200bn of printed money into
theeconomy, may also have created demand. NEEd MoREworth but now is
the time to make it a more user-friendlystandard for consumers. In
the future, this will help driveIf prices manage to sustain their
run in INfoRMATIoN? uptake so people will save more money on bills
andpopular areas, we could soon be back atPLeASe CONTACT uSreduce
the carbon footprint of new homes."unaffordable levels. WITH YOuR
eNQuIRY. 13 8. Conveyancing ConveyancingBuying a homeThe legal
aspects of becoming the owner of your propertyConveyancing is the
legal process that must be followed to transfer the
ownershipOtherwise, there is a risk you might be legally committed
to buy butof the property from the seller to you. The legal aspects
of buying a home can not have access to the money yoube
complicated. Most home-buyers appoint a solicitor or a licensed
conveyancer need to do so. If you complete your purchase before
your sale then youto do the legal work involved in buying a
property. That person, known as thewill face a shortfall and may
need aconveyancer, will be your legal adviser and will act for
you."bridging loan". You need to appoint a solicitorn Make sure the
seller has all planning a property, but it may be useful if You
become the legal owner ofor licensed conveyancer as soonpermission
and completion problems are identified during thethe property on an
agreed dateas possible after your offer iscertificates for any
alterations or conveyancing process. (known as the "completion"
date)accepted so that:extensions to the property. after exchange of
contracts. This is n Check that there are no local If your
conveyancer is also actingwhen the price you are paying forn You
can give your lender the developments (for example,for your lender,
your lender maythe property is transferred fromsolicitors or
conveyancers road-widening schemes)instruct the conveyancer to your
mortgage lender to the seller.details. planned which might affect
theprepare the mortgage deed. This The conveyancer is responsiblen
Your conveyancer can makevalue of the property.is the legal
contract between you for checking that the funds havecontact with
the seller'sn Check that the street, pavement and the lender. Your
conveyancerbeen received before allowing theconveyancer and begin
work onand main drains are public andwill explain the terms of the
keys to be released to the newdrafting the contract that
willmaintained by the local authority.mortgage deed to you, and
thenowner. Often, in practice, it will beform the basis of the
selling/ n Negotiate and agree (with the have them signed by you
and the seller or the estate agent whobuying agreement.sellers
conveyancer) the draft the lender. hands over the keys.n The
solicitor or conveyancer can of the contract setting out thecheck
over any valuation reports terms on which you are buying.Once the
conveyancing work hasand offers of advance. n Register or record
the change been completed, you and the of title to the property,
and seller need to sign the contractA lot of legal work involved in
buying the mortgage deed (loan your conveyancers have agreeda home
doesnt need to involve you agreement) in favour of the that sets
out the terms of thedirectly, but it is useful to understand
lender, with the Land Registry. sale. The conveyancers will
thenwhat needs to be done in case youexchange contracts and at
thisneed to check up on progress.Obtaining all the necessary point
both you and the seller are information can be time-legally
committed to the deal. AtYour conveyancer will do the consuming.
Your conveyancer willthis point, you will need to payfollowing:
request "searches" of information a deposit of about 10 per cent
that could affect your property of the purchase price. Also, youn
Obtain the title deeds from the relevant local authority become
responsible for putting(documents giving evidence and sometimes
other agencies. right any loss of or damage toof ownership) of the
propertyfrom the sellers conveyancer Sometimes these can be
obtained quickly and electronically, but the property (unless the
contract says otherwise). Your conveyancerNEEd MoREand examine them
to make suresometimes they can be slower andwill advise on how and
when this INfoRMATIoN?there are no problems. this may cause delay.
should be arranged and be putPlease email or contact usn Make sure
that you will getIt may be possible to use title insurance into
effect. with your enquiry. If youproper ownership of (title to) as
a way to streamline some of thewould like us to email athe
property.conveyancing. Title insurance can If you are depending on
the salen Make sure that there are sometimes be used to complement
of an existing property to buy thecopy of our digital propertyno
planning conditions oror replace some elements of the legal new
one, you need to make sure magazine to someone youparticularly
harsh conditionswork by insuring against the risk ofthat you
exchange contracts forknow, please email us withof ownership (for
example an problems arising in the future. It is both properties at
the same time,their details and well sendintrusive right of way)
affectingmore commonly used on remortgageand agree the same
completionthem a copy.the property.cases than on mortgages to
buydate for both properties. 1415 9.
RemortgagingRemortgagingThere's been a recovery in property prices
since April last year which has left homeowners in a stronger
position. Many may be in the best position to remortgage in more
than two years, especially as lenders offer better rates to people
with more equity. Remortgaging Lenders offering better ratesMany
homeowners may be in their strongest position to remortgage in more
than two years thanks to a recovery in property prices. There's
been a recovery in property priceson your credit history and if
there are, correctstill likely to have built up a significant
amount since April last year which has left homeowners them as soon
as possible. ensure all your debts of equity in their homes. in a
stronger position. Many may be in theare registered to your current
address and that best position to remortgage in more than twoyou
are on the electoral register for that address. As for homeowners
who bought recently, years, especially as lenders offer better
rates toand who have seen any equity they had in people with more
equity.Also, cut up and cancel any credit or store cards their
properties eroded by falling prices, it is that you are not using.
important not to panic. If a current mortgage Data from the Council
of Mortgage Lenders Make sure you make the minimum payments ondeal
is about to expire, the mortgage will (CML) shows that remortgaging
accounted existing cards and try to avoid applying for tooprobably
revert to the lender's standard for less than a third of all
mortgage lending inmany new cards if you are likely to be
rejected.variable rate (SVR). October 2009, the lowest it has been
since the CML started recording data in 2002. Although poor credit
histories account for aWith interest rates so low, a borrower may
significant number of failed applications, they actually find that
their lender's SVR is cheaper Remortgaging is where a home ownerare
not the only reason why borrowers are than the rate they are
currently on. renegotiates the terms of an existing mortgage. being
turned down. A recent change of job can To make sure you maximise
your chances of be a problem, and some lenders will require a
securing a remortgage, it is more important The process simply
involves redeeming anprobationary period of at least six months to
havethan ever to have the correct documentation. existing deal and
switching to a differentbeen served before considering an
applicant.That means ensuring that you can provide lender that is
offering a more competitive rate six months worth of original bank
statements or better terms.Also, some lenders are rejecting
applicants and wage slips, and your latest P60 tax form. based on a
change in personal circumstances The key is to be prepared and to
expect your If you want to remortgage you will find thatthat is
perceived as putting extra strain on theirfinances to be
scrutinised. lenders are being extremely picky about which income.
For example, some lenders will look at borrowers they will lend to.
Credit histories are the impact on affordability of a new addition
If it is possible to secure a competitive fixed- now, more than
ever, a crucial part of the lenders' to the family.rate deal then
it may make sense to take future decision-making processes, and
poor credit scores likely interest rate rises out of the equation
and are the biggest cause of rejected applications. If a borrower
is currently on an interest-onlyto fix now, before it is too late.
mortgage, many lenders when assessing even borrowers in a strong
financial position,affordability will apply their criteria using a
Remember though, that there are generally with large deposits or a
lot of equity in their capital and interest repayment basis. Where
costs associated with remortgaging and these properties, are
falling at the first hurdle.this occurs, it may mean that the
borrowershould be factored into the equation. will have to increase
the term of the mortgage If you have recently missed your credit
cardto ensure affordability. Also, lenders are now payments, paid
bills late, or made repeated failed applications for credit cards
or unsecured much stricter on interest-only borrowers demonstrating
they have a suitable repaymentNEEd MoRE personal loans, then this
will have left aplan in place. INfoRMATIoN? footprint on your
credit history, which will bePlease email or contact us with your
picked up by lenders. How much equity you have within your enquiry.
If you would like us to email a property is crucial. There are
plenty of copy of our digital property magazine to It is important
to check your credit score and if homeowners who have owned their
propertiessomeone you know, please email us with it is poor then
you need to start taking steps to for a number of years, and
therefore despite improve it. Firstly, make sure there are no
errorsthe price drops in the past 12-18 months, aretheir details
and well send them a copy.16 17 10. News Buy-to-let.News New plans
for borrowers We offer professional investorLandlords air Stricter
scrutiny of mortgage applicationsadvice, essential when choosing
their grievances All borrowers will face stricter scrutiny of their
mortgage applications under new plans published by the Financial
Services Authority (FSA). At the heart ofthe right mortgage deal.
these proposals is a ban on self-certified mortgages, which do not
require borrowers to prove their income. Survey reports dislike
over adverse The FSA's chief executive, Hector Sants said:
burdensome legislationSome of those who had been given home loans
at the Providing investors with professional advice to make an
Landlords have been airing theirproportion reaches 13 per cent when
it height of the housing boom would not have been able to obtain
them if these proposals had been in force. informed choice is what
we do best. grievances over burdensome legislation and according to
BDRCs latest quarterly comes to landlords with one property. The
financial crisis has had a dizzying effect on the survey, Stamp
Duty Land Tax and energyHowever, ePCs are equally unpopular with
all UK economy, including the 1.23 trillion residential Performance
Certificates (ePCs) are front private landlords; an ePC costs
around 100 Whether youre a new or experienced investor, contact
runners. The research agency found almost and can be valid for 10
years, although every mortgage market. Some borrowers have been
able to ride out the crisis, but others have faced severe one in
four landlords adverse to SDLT, andtime a property is put on the
market, a new us to discuss your buy-to-let requirements. one in
five to ePCs.certificate is required. difficulty making mortgage
repayments. The situation could have been even worse if interest
rates were not at a historic low. BDRC director, Mark Long,
commentingMr Long concludes: Stamp Duty and ePCs during December:
It may not be a surpriselack of popularity come from their ubiquity
This raised questions as to whether people borrowed that Stamp Duty
is so unpopular, its likelyand their thinly veiled revenue-raising
by HM much more than they could ever afford, and whether to become
even more disliked when the Revenue and Customs. lenders were
irresponsible in granting those loans. holiday for properties under
175k comes to an end in January 2010.NEEd MoRE"We believe that
irresponsible borrowing has been just Looking in more detail at the
responses, INfoRMATIoN? as much a part of the problem in the
mortgage market as irresponsible behaviour by firms. the study
found significant differences in Please email or contact us with
least popular legislation depending on a your enquiry. If you would
The FSA review said: landlords portfolio size.like us to email a
copy of our Stamp duty is less of an issue for professionaldigital
property magazine to "Most consumers, of course, have acted
responsibly, landlords (those with 20 or more properties) someone
you know, please but a significant minority have made decisions
whichemail us with their details andwere imprudent and which they
should have been in a and while 7 per cent of all private
landlordswell send them a copy.position to recognise as such in
advance." would like to see the tax removed, the 19 11.
ProtectionProtection Mortgage Payment Protection Insurance Taking
steps to protect yourself against losing your home If you fall
behind with yourSo it makes sense to try to keeppart of a mortgage
"package", itIf so, you may decide to "top up" mortgage repayments
and enough money in savings tois up to you whether you take the
your existing cover (perhaps by cannot catch up again, you
couldcover two months worth of MPPI offered with the mortgagetaking
out the unemployment- eventually lose your home. Butmortgage
payments, even ifor to buy it from elsewhere. If only element of
MPPI), or you you can take steps to protect you have MPPI. There
are some you already have a mortgage,may decide that you do not
yourself against this risk by circumstances when MPPI willyou may
be able to buy MPPI wish to take out MPPI at all. But taking out
Mortgage Payment not cover you, for example, from your lender, or
through an be very careful that you are not Protection Insurance
(MPPI).unemployment caused byinsurance broker, or direct frombeing
over-optimistic about your misconduct, or that you knewan insurance
company. MPPI is ability to meet your mortgage Your questions
answered was impending at the time usually cheaper (and the
termsand other commitments if you you took out the insurance, ormay
be more generous) if youdecide not to take out MPPI. Q: What is
MPPI?sickness claims caused by certain take it out at the time you
start A: Mortgage Payment Protectionpre-existing medical
conditions.your mortgage, rather thanIf you decide not to take out
Insurance (MPPI) pays yourleaving it until you have had yourMPPI
cover, your lender or monthly mo rtgage paymentsQ: How does it work
if I have a mortgage running for a while. intermediary may ask you
to sign for a specified period if you joint mortgage with someone
your confirmation that this is the suffer accident, sickness, or
else? Q: What happens if I need todecision you have reached, after
unemployment. Lenders and A: The MPPI can be set up so that
claim?considering all the circumstances. insurers have agreed to
adopt it covers both of you, usually by A: Your policy document
willSigning this confirmation will certain minimum standards for
allocating a proportion of thetell you how to claim. Usually, not
affect the willingness of MPPI, so you can be confident MPPI to
each person (e.g. 50/50 you need to obtain a claim form,your lender
to try to help you if that the level of cover you will be or
60/40). If one person needscomplete it and send it to your you do
not take out MPPI and offered meets or exceeds these. to claim,
then the amount ofinsurer, together with some subsequently fall
into arrears the benefit payment will be the evidence (such as a
redundancywith your mortgage repayments Q: How does MPPI
work?proportion of the MPPI allocatednotice) to support your claim.
If at a later date. However, if you A: You pay a premium each month
to that person. It is also possible you take a temporary job,
thenhave MPPI or some other form while the mortgage is running.to
allocate the MPPI on a 100/100 provided you let your insurer of
protection, both you and your If you become unemployed, orbasis, so
that 100 per cent of theknow beforehand, you canlender will have
greater scope for unable to work due to accident or MPPI is paid,
even if only one of interrupt a claim without havingdealing with
payment difficulties. sickness, the policy starts to paythe joint
borrowers loses their to pass the 60 day excess period out (usually
direct to your lender) income. This type of arrangementagain when
your temporary Source: Prepared by the CML to pay your mortgage.
will generally require higher employment ends. and the Association
of British premiums. Insurers, in consultation with the To keep the
cost of the insurance Topping up government. down, there are some
periodsQ: What if I am self-employed where you will not be covered
or on a contract? Most people should consider (you should check the
individualA: You will generally be able totaking out full MPPI,
covering policy for exact details). The main take out MPPI even if
you are the full amount of the mortgage ones are an "exclusion
period" of self-employed or on a contract. But payments following
accident, up to 60 days when you first take make sure you check the
details ofsickness or unemployment, and out your policy, during
which the circumstances in which you canthis is what you will
generally be any claim for unemploymentmake an unemployment claim.
offered in the first instance. But if would not be met (althoughyou
already have other cover, such claims for accident or sickness Q:
How do I buy MPPI? as accident or sickness cover from would be
paid). In addition, thereA: If you are taking out a newyour
employer, Income Protection NEEd MoRE is an "excess" or "waiting"
period of up to 60 days for each claim, mortgage, you will probably
be offered MPPI by your lender or or Critical Illness insurance, or
substantial levels of savings, youINfoRMATIoN? during which no
payments will the intermediary arranging your may decide that you
do not needPLeASe CONTACT uS be made.mortgage. Unless the MPPI
isthe full level of MPPI insurance.WITH YOuR eNQuIRY.2021 12. Legal
matters News Independent deposit schemes Cost-cutting measures
could undermine processProperty ownershipBuying a leaseholdThere
are three types of ownership of propertyis the legal document which
sets out the rightsn Who is responsible for maintaining the-
freehold, leasehold and commonhold: and duties of both you (the
leaseholder) and the shared areas of the building and
whetherlandlord of the building (the freeholder). The that
responsibility is shared in a fair way.n Houses are usually (but
not always) lease will specify the number of years you arefreehold.
This means that you own both theentitled to own the property. In
most cases, a n If there is likely to be any major workproperty,
and the land on which it is built,lease would start off lasting for
99 or 125 years, which you may have to pay towards, Landlords and
tenants who rely onfor an unlimited period of time.but its length
and value will decrease over time.for example re-roofing or
painting the independent deposit schemes for the quick outside of
the building. and fair settlement of disputes at the end of an
Flats and maisonettes are usually (but notYou may have trouble
getting a mortgage on a tenancy fear the process is being
underminedalways) leasehold. This means that you ownproperty where
the lease has less than 60 yearsn If you are a leaseholder of a
flat in a block, because of cost-cutting measures.the property for
a fixed period of time, andleft to run. However, you may be able to
buy a you and the other leaseholders in the blockyou do not own the
land on which it is built. new lease which adds more years to the
timecan buy the freehold of the building if you The schemes were
set up in April 2007 toleft running on the existing lease.meet
certain conditions. This is known as provide an independent forum.
It meansn Commonhold is a brand new system ofthe right to
"enfranchise" and leaseholders that all private landlords and
lettingownership for flats, but at the moment it Your conveyancer
will check the details of the have this right even if the
freeholder does agents are legally obliged to protecthas not yet
become established and you arelease on the property including: not
want to sell. tenants' deposits through one of threeunlikely to
come across it. It is designed to recognised schemes.provide
ownership of flats for an unlimited n The length of time the lease
has left to run.period of time, and to make provisions for If
landlords want to retain any part of the deposit at the end of a
tenancy, for examplethe collective maintenance of the commonn The
ground rent you will have to payNEEd MoRE to replace lost or
damaged items, theyparts of a shared building. the landlord or
freeholder, and any INfoRMATIoN? Residentialmanagement fee or
service charge (to cover must show appropriate evidence.
DisputesYour conveyancer needs to do extra legal work repairs and
maintenance of shared parts)PLeASe CONTACT uS are decided by
impartial adjudicators.if you are buying a leasehold property. The
lease you will have to pay. WITH YOuR eNQuIRY. But the biggest of
the schemes, Therental market Tenancy Deposit Scheme (TDS), has
slashed its team of adjudicators from 70 to 12. And the cuts come
at a time when demand for rented accommodation is rising.The
National Landlords Association (NLA), the trade body representing
18,000 private Opportunities for new and existing investors in 2010
landlords, says the TDS is struggling under the workload and fears
the quality ofAccording to the Association of Residential
opportunities for new and existing investors decision-making could
suffer.Letting Agents (ARLA), 2010 will provideand driving
standards up.opportunities in the private rented sector The TDS
receives 350 dispute cases each(PRS), in particular as availability
of lending ARLA also predicts that throughout 2010 month. The two
other schemes, Thebegins to increase while house prices are still
standards will become an even greater Deposit Protection Service
(DPS) and historically low, enabling timely investors toissue, as
homeowners and landlords alike mydeposits both receive about 200
casespurchase properties for the buy-to-let market.are encouraged
to make their homes energy a month. efficient. Yet without
incentives like tax relief, itThe residential rental market will
continue towill be difficult for an already struggling sector
Tenants also have concerns about stabilise in 2010, with property
oversupply to make the necessary improvements. adjudication
standards, particularly as it isdecreasing due to reluctant
landlords leaving their cash at stake at the end of a tenancy. the
market. evidence of increasing sales in The Pre-Budget Report was a
missed As the typical deposit on a private rented certain areas
seems to indicate this trend. opportunity for the government to
show its property is between one and two months commitment to the
PRS the boiler scrappage rent, tenants say it is important to
knowAs demand rises, in particular due to a lack scheme, for
example, should include rental their cash is protected and they
will get a fair of social housing, there will also be
mountingproperties and be part of Landlords energy hearing if a
dispute arises with their landlord. pressure on the sector to
provide good qualitySaving Allowance (LeSA), says the ARLA.rental
properties, says the ARLA.NEEd MoREThere has been little commitment
from theNEEd MoRE INfoRMATIoN? government thus far on economic
measures INfoRMATIoN?to help the wider industry meet property
PLeASe CONTACT uS PLeASe CONTACT uSdemand, but increasing demand
should WITH YOuR eNQuIRY. have a positive effect on the PRS,
creating WITH YOuR eNQuIRY. 2223 13. Consumer matters Having
problems paying your mortgage? Seeking help sooner rather than
later is the key Are you having problems payingsickness. You may
have taken If your lender intends to an arrangement youve made,
your mortgage (or home purchase it out when you got your repossess
your home you may find that it is easier for plan), or do you
expect to have mortgage.the lender to repossess your these problems
soon? Is your lender n Work out your budget n Speak to your lender
as soonproperty. So if youre unsure trying to repossess your home?
Its Be realistic, you may have to cutas possible attend the court
hearing. best to act sooner rather than later. back on some other
spending. If youve not tried to discussn Continue to talk to your
lender This way, you may be more likely to n Check if State
benefits can help possible repayment options with and still pay as
much as you can keep your home. If youre on a low income or out
them, do so now. It may meanBy continuing to pay back some of work
you may be able to get you can avoid going to court. money, you may
be able to If you can't meet your mortgage some help with your
mortgage n Make sure youve worked out reduce your arrears.
repayments, or you're worried repayments.your budget before you go
you might fall behind, contactn Pay what you can to courtThings to
avoid your lender as soon as possible.Only agree to pay back whatA
judge will want to see hown Taking out a loan to pay your
Alternatively, you may be able to you can afford. By continuingmuch
you can afford to repay. debts, these loans can be very receive
help with your mortgage to pay back some money,n Go to court
expensive and are often secured from new government schemes.you may
be able to reduceYou should attend so you can puton your home, so
putting it at your arrears.your case to the judge. You are greater
risk. If you can't pay your n Check what government help more
likely to keep your home ifn Handing back the keys, youll still
mortgage or think you'llis available you go to a court hearing.
Thesebe responsible for the mortgage have problems Find out whether
youre eligible for are normally held privately in therepayments
before your home is a government-backed mortgage judges office, not
in open court.sold, and possibly the outstanding n Speak to your
lenderassistance scheme (it may allown Ask to see a duty officer at
thebalance if the money raised by as soon as possible you to stay
in your home). court before your case starts,selling your home isnt
enough to They should talk through othern Sell your home if you
dont have an adviser or pay off your debt. possible repayment
options with If you think your situationsolicitor to represent youn
Selling your home without having you. Make sure you understand wont
change in the long term, A duty officer can help you witha place to
live, your local council the different options so youthink about
selling your homeyour case and may be able tomay not help you find
a place make the right choice for you.yourself and renting or
moving represent you. Their service is to live if they think you've
made n Check if you have to a cheaper property. Ask free. yourself
intentionally homeless. insurance cover your lender if you can stay
in n Make sure you understand Mortgage Payment Protection your
property until you sell the consequences of any Insurance (MPPI) or
Accident, it and make sure you have aarrangements your lender
offersNEEd MoRE Sickness and Unemployment insurance (ASU) can help
with place to live before you move out. If this isnt possible, as
ayou outside the court roomOnly agree to an arrangement
INfoRMATIoN? your mortgage repayments if last resort you could sell
yourwhich you can reasonably keep PLeASe CONTACT uS your income has
fallen becausehome to a company and rent itto over the rest of the
term of theWITH YOuR eNQuIRY. of redundancy, accident orback from
them.mortgage. If you cannot keep to 242425 14. Property
investorProperty investor Buy-to-let Investing in the private
rented sector This guide is for people who are finding your
tenantsyou will need to decide who will with would-be tenants. You
mayrise, depending on the type of thinking of buying a property to
rentYou will also want to think about manage it for you. find that
your property is in need ofmortgage you have. with a buy-to-let
mortgage and the type of tenant you are aimingan overhaul after a
tenancy finishes. who may have little or no previous to attract.
Are you hoping to attract If you manage it yourself, you
willNaturally, you will have to finance thisWhat will your costs
be? experience of investing in the private single people, or
families, as they be responsible for:yourself. What is more, your
propertyAs well as your mortgage rented sector. will have different
requirements.is likely to be empty and you will notpayments, you
will need to pay for:It is important to remember yourn Finding
tenants. receive a rental income, while your It is not intended as
a detailed guide,property should have features thatn Checking
tenants references.property is being improved.n Buildings
insurance. if you are thinking of purchasing aare attractive to
would-be tenants, n Collecting the rent andn Consider contents
cover, if your buy-to-let property you should seekrather than
would-be purchasers.maintaining the property.Using a managing
agentproperty is furnished. expert advice on legal, tax, financial
n Dealing with problems. given the number of differentn Maintenance
costs. and property management matters. Choosing your location
responsibilities you face as an Periods when you are receivingYou
should also look at how close the Your legal
responsibilitieslandlord and the limitations onno rental income
because the Buy-to-let is a form of residentialproperty is to local
amenities such You will also need to be aware your own time, you
may wish toproperty is empty or the tenants investment where you
buy a as shops, transport and schools, andof your legal
responsibilities as ause a managing agent to look afterhave fallen
behind with their property, usually with the aid of aare these the
type of amenities thatlandlord such as:your property for you. This
will bepayments. mortgage, and rent it out. The 1988are important
to your tenants? So, ifcalculated based on a percentage ofn
Mortgage repayment increases Housing Act made investment in you are
aiming to let your property ton Carrying out repairs.your monthly
rental income.because of interest rate rises, residential property
more attractive say a family with school-age children,n ensuring
the safety of gas andwhich you may not be able to to landlords when
it introduced ahow close the nearest schools are, will electrical
appliances. Choosing a mortgagerecover immediately from rent new
type of tenancy giving landlords be an important influence on
wheren ensuring that the furniture andPaying for your
propertyincreases. more control over their properties.they choose
to rent.furnishings meet fire safety Obviously, when you choose a
The increased availability of loans at requirements.property, you
will need to askYour tax liability attractive rates of interest for
buy-to- Choosing your propertys yourself how much you can
affordBefore you can calculate what let purchasers has also
increased thesize and conditionYou should also consider to pay, and
how you will pay foryour income from your property appeal of owning
rental property.equally, you should think carefully familiarising
yourself with landlord it? If you take out a mortgage, youwill be
after taking into accountabout buying a property whose and tenant
law, to understand your should work out what percentage ofall
necessary expenditure, you When you buy a property to let size is
attractive to householdsresponsibilities as a landlord, andthe
value of the property you needshould recognise that the profits
out, you are becoming a landlord.looking for rented
accommodationthe rights your tenants enjoy. This is to borrow. The
size of the loan isfrom renting property are taxable. And owning
investment property in that location. As well as the size,an area
you may wish to take legal usually linked to the expected
rentalHowever, you will be able to offset is not like owning your
own home.type and location of your property, advice about.income.
As a guide, your lender maysome of the costs you incur as a Instead
you are effectively runningwhat about its condition? Have you
expect your monthly rental incomelandlord against tax. a small
business.assessed whether the property willWhen your property is
emptyto be between 25 per cent to 50require expensive
maintenance.You should remember there may be per cent greater than
your monthlyYou will have to pay the following Before you choose a
property and generally speaking, older homes periods when you are
unable to findmortgage payments.taxes: arrange the finance to
purchaserequire more attention. tenants for your property and it
will be it, there are a number of factorsempty, with no rental
income comingYour choice of mortgagen Income tax. you should look
into, which areChoosing a property you in. Obviously you will still
be expected When you choose a mortgage, yourn Stamp Duty when you
buy described below. can afford. to continue repaying your mortgage
choice will be between a repaymentyour property on values
aboveObviously, the size of mortgage so you will need to think
aboutmortgage or an interest-only loan.125,000. Choosing a
propertyyou can afford will have a majorhow you will meet your
mortgageWith an interest only mortgage, somen Capital gains Tax
when you sell it. Researching your marketinfluence on the size and
locationrepayments in these circumstances. lenders may require you
to have a You should carefully research theof your property.
Choosing aThis could particularly apply if you suitable investment
product. If you market where you want to buy yourmortgage is
described in more choose a property in an area where have a
repayment mortgage, some property. You can either do this detail in
the section below. Andthe supply of rental property exceedslenders
may also advise you to arrange yourself or employ a specialist
lettingfinally, in considering how muchdemand from tenants. life
insurance alongside your loan. agent to help you find the area
andto spend on a property you You may be able to choose between
property you are looking for. If you should bear in mind that as
well as Maintaining your propertyfixed rate and variable rate
mortgages. research the market yourself, youincreasing in value,
your propertyAs well as managing your property, Fixed rate loans
will give you some will need to gather informationcan also fall in
value. you will be responsible forcertainty about your mortgage
NEEd MoRE from estate agents, local papers,maintaining it. Besides
repairs andrepayments whilst variable rate loans INfoRMATIoN? local
employers and even the local Managing your propertyregular
maintenance, properties cancould move up or down. You should
authority, about the demand for andYour responsibilities benefit
from routine improvementsalso remember that your mortgage PLeASe
CONTACT uS supply of, rented housing. When you have chosen a
property,which maintain their attractivenesspayments could rise if
interest rates WITH YOuR eNQuIRY.2624 27 15. Glossary Glossary A to
Z property and mortgage terms Assisting you to buy property, sell
property and finance your mortgage The terms in this glossary are
disbursements Interest often used in the house buying orThe fees,
such as stamp duty andThe money you are charged forRetention
mortgage process.Land Registry fees, which you pay borrowing. When
the lender holds back someto the conveyancer.of the mortgage money
until AdvanceLand Registry feecertain repairs have been done, the
The mortgage loan. Early redemption fee/ early A fee paid to the
Land Registry to amount held back is known as arepayment
chargeregister ownership of a property.'retention'. Bridging
loanThe charge some lenders make if a A short-term loan to bridge
themortgage is paid off early. LeaseSecurity period between you
buying a newA legal contract which gives The property the mortgage
is property and selling your previous Equitythe ownership of a
leasehold being used to buy is the lender's home.The total value of
your property, property to the buyer for a fixed'security' for the
loan. This meansless the amount of the mortgage.period of time.that
the lender has rights over Building survey the property. If the
mortgage An extensive survey, carried out Exchange of contracts
Leaseholderrepayments are not kept up to by a qualified surveyor,
to identify The point where the property sale Someone who owns a
property, date, the lender can repossess the faults and potential
problems in becomes legally binding.but not the land it stands on,
for a property and sell it to recover the the property you are
buying. fixed period of time.debt.freeholder CapitalSomeone who
owns a property Mortgage Stamp duty The amount you have borrowed
and the land it stands on.A loan to buy a property. TheA government
tax on buying on the mortgage, and on whichproperty acts as
security for theproperties costing more than interest is charged.
Ground rent loan and so can be repossessed 125,000.A yearly fee
leaseholders have to and sold if the mortgage Completion pay to the
freeholder or landlord repayments are not made. Subject to survey
and contract When you become the legal ownerwho owns the land the
leaseholdWording included in any of the property. property is on.
Mortgage application feesagreement before the exchange ofThese are
fees charged by thecontracts. This wording allows the Contract High
lending fees lender to organise the mortgageseller or buyer to
withdraw from The legal document which transfers Not all lenders
charge these, but iffor you. These are not usually the property
sale. the ownership of the property from you borrow a high
percentage of refunded if you then do not go the seller to the
buyer. the price of the property, you mayahead with the mortgage.
SomeTerm assurancehave to pay this type of fee. This is lenders
will only charge such fees Life insurance to pay off a
Conveyancerbecause the mortgage represents for specific mortgage
deals. mortgage if the borrower dies. A solicitor or licensed
conveyancera higher risk to the lender if you who does the legal
work involved do not keep up your repayments. Mortgage deedTitle
deeds in selling and buying property.Lenders sometimes buy
insurance The legal agreement whichThe legal documents which set
out(called mortgage indemnity) togives the lender a legal right
tothe ownership of a property. Conveyancing protect themselves.
This insuranceproperty. The legal work involved in selling does not
protect you and you Valuation and buying property. would still be
responsible for your Mortgage termThe lender's inspection of
thedebt, even if the lender claimed on The length of time over
which theproperty to assess whether it is Credit reference
agencyits insurance.mortgage will be repaid. suitable for a
mortgage. An organisation that keeps details of individuals and
their Home-buyer's report offer of advance credit histories.
Lenders will A surveyor's report on a property.The formal offer of
a mortgageNEEd MoRE check with a credit referenceThis type of
survey is less from a lender.INfoRMATIoN? agency to see if someone
extensive than a full buildingPLeASe CONTACT uS applying for a
mortgage has anysurvey but more extensive thanRedemption known
credit problems. the lender's valuation. The paying off of a
mortgage loan.WITH YOuR eNQuIRY. 282429 16. Market view Strong
interest from buyers Demand is still outstripping supply A modest
increase in the number of properties coming up for sale is having
little effect on the housing market, as prices continue to rise,
says the Royal Institution of Chartered Surveyors (RICS) uK Housing
Market survey.A modest increase in the number of properties
Chartered Surveyors agreed that prices wereremaining strong against
subdued levels of coming up for sale is having little effect on the
rising, up from 34 per cent in October last year.instructions and
as such, prices are rising housing market, as prices continue to
rise, saysTransaction levels remained broadly constant most
rapidly. the Royal Institution of Chartered Surveyorswith sales per
surveying firm hovering around (RICS) UK Housing Market survey.19
over the past three months. But with theThe survey points towards
prices rising, even inventory of property on the market falling,
the though the general state of the economy For the sixth
consecutive month, more closely watched sales to stock ratio, a
measure of would suggest that the housing market should Chartered
Surveyors are reporting that themarket slack and a lead indicator
of future prices,not be faring as well as it is. Despite modest
number of new instructions is increasinghas climbed a little
further. It has now risen for increases in the number of properties
coming rather than falling. However, demand is still the past 12
months and stands at 31 per cent.on to the market, it is clear that
this is not outstripping supply with 28 per cent moresignificant
enough to keep pace with the levels surveyors stating that
enquiries from potential Although the latest survey provides
furtherof demand. Buyer enquiries are continuing to purchasers are
rising rather than falling. This evidence that key indicators
continue to improve,grow and 2010 should see a further wave of
figure is slightly down on previous months, but the pace of these
improvements does appear tointerest in the market. still indicates
strong interest from buyers.be slowing. 28 per cent of Chartered
Surveyors believe that prices will continue to rise rather than The
supply demand imbalance has been thefall over the next three
months; this is slightlyNEEd MoRE main factor influencing prices
and, unsurprisingly, for the fourth month in a row the majority of
down form 31 per cent on the previous survey.INfoRMATIoN? surveyors
are again reporting rising rather thanLondon and the South east
continue to be the PLeASe CONTACT uS falling prices. A net balance
of 35 per cent of most buoyant regions with buyer enquiriesWITH
YOuR eNQuIRY. YoUR PRoPERTY MAY BE REPoSSESSEd If YoU do NoT kEEP
UP REPAYMENTS oN YoUR MoRTGAGE. Content of the articles featured in
this publication is for your general information and use only and
is not intended to address your particular requirements or
constitute a full and authoritative statement of the law. They
should not be relied upon in their entirety and shall not be deemed
to be, or constitute advice. Although endeavours have been made to
provide accurate and timely information, there can be no guarantee
that such information is accurate as of the date it is received or
that it will continue to be accurate in the future. No individual
or company should act upon such information without receiving
appropriate professional advice after a thorough examination of
their particular situation. We cannot accept responsibility for any
loss as a result of acts or omissions taken in respect of any
articles. The FSA does not regulate commercial lending and some
forms of buy to let mortgages. Your property may be repossessed if
you do not keep up repayments on your mortgage.Articles are
copyright protected by goldmine Media Limited 2010. Terms and
conditions apply. Unauthorised duplication or distribution is
strictly forbidden.