UK Property Market, Where Next?

The UK economy is fundamentally entwined with its financial and property market. Revolving like the proverbial cyclical wheel of fortune, always hitting high peaks of growth and downturns in equal measures.

It wasn't long ago that the UK media houses decided it was time again to revisit the property market. This time, the cheerful news was of visible green shoots. Signs that was indicative of slow but measured economic activity.

And although experts within the property sector urged for guarded caution, there's no doubt that any visible signs of economic activity was good news. Good enough to inject confidence on other sectors of the economic landscape.

But the question that needed to be answered is; who really knows where the market is heading in the next 6 months, or in 1 or 2 years time?

And going with generic market opinion, there will never be one-fits all answer to this conundrum, depending on whom you speak with.

One can however assume a logical conclusion based on analytical and statistical data or applicable trend, to work out possible shifts in the market, subject to availability of funds.

It is no brainer therefore to suggest that the actual weight of supply and demand greatly influences not only the property market, but overall consumer psychology.

Since the recession peaked in 2008, there have been staggering job loses across the country as corporate and small businesses struggled to obtain sustainable credit.

However, in such times of stringent economic activity, opportunities await the discerning investor with unrestricted funds than the average Joe public.

Whenever there is an increased flow of distressed properties into the common market, either through auctions or by private treaty, investors potentially make long-term gains.

For those in possession of the elusive 15-30% deposit amount required by lenders in austere times, the market is ripe for rich pickings.

The reverse however is true for those who desperately want to get onto the property ladder but lack the required funding to soften the steep climb. Their desires unfortunately remain muted on wish lists for periods uncertain.

However, some "property experts" and economics analysts have cast shadows of uncertainty over the validity of the appearance of any green shoots. Hence, dampening the possible circumstantial ripple effect this may have on the overall picture of the property sector and indeed the broader economy as year 2009 leaps into 2010.

Liam Bailey, economics analyst for Knight Frank was quoted in online estate agent today newsletter of October 14, 2009 with comments like, "... it would be wrong to expect a continuation of the current rapid recovery in the housing market. The economy is not in a position to permit this in the short term. Similarly, it would be wrong to expect carnage. Real demand is strong, supply in the wider market and the new-build sector is very low and we are unlikely to see a rapid shift away from a low interest rate environment."

Knight Frank went further to forecast aggregate growth for central London in the five years to 2014 of 38%, compared with 19% for the UK mainstream market, meaning more hikes in property prices.

Equally, Zoopla, the online property-listing portal, which recently published what it called "quarterly survey of housing market sentiment," stated that four out of five homeowners expect property values to rise over the next six months.

The problem with Zoopla's survey is that it was based solely on "sheer sentiment".

Sentiments are feelings, which add no value whatsoever, nor play any tangible role of influencing which direction the property market goes.

In general, the problem with forecast and survey figures are the fact that they are just what they suggest; speculative information based on subjective trend or analysis.

However, in the event that such assumed condition fails, the speculative analysis falls apart like pack of cards.

The fact of the matter is this: Nobody really knows for sure what action the average homeowner is likely to take in a future that is hugely uncertain. Nobody can guarantee what factors may necessarily influence majority of homeowners to seriously consider selling their home.

Historical factors that fuel or stall the property market at any given time goes back to the earlier principle of elasticity of supply and demand.

Since there will be fewer individuals within the general population who are more likely to earn six figure salaries, plus extras in bonuses later this year or early 2010, the chances that they will all invest in properties within a particular location is less plausible.

Moreover, even if by any stroke of chance they all did, the desired effect on the general population would hardly be life changing.

It may also be worthy to note that a slight upward shift in property sales within one location, may not generally affect the overall picture of another location.

The availability of attractive mortgage products and competitiveness amongst the lending sector of the economy is the only practical solution to ignite any major lift-off.

This can only happen when the lending institutions loosen up their tightly held purse strings both on personal and commercial borrowings.

It may just happen before we know it. Let us all sincerely hope it would be sooner rather than later.

6 Ways to Add Value to Your Investment Property

Whether you're looking to sell or upgrade, there are a few sure-fire ways to add value to your investment property with some clever cosmetics. Here are our best tips:

A fresh lick of paint

One of the quickest and easiest ways to give your property a new look and coordinated interior or exterior is a fresh coat of paint. Painting can be relatively inexpensive, whether you decide to do it yourself or hire professionals. Look out for this season's new colour forecast's for the latest trends.

Update your investment property fittings

One of the first things buyers or renters tend to look at are the doors and cupboards, lights, locks, curtains and blinds. Make sure these fittings are all functional, and consider upgrading any old or mismatched fittings.

Kitchen refresh

Redoing an entire kitchen can be expensive but the kitchen is one of the most important rooms in an investment property. Many buyers or renters prefer an open-style kitchen so if you have a traditional closed-room kitchen you may want to consider removing a wall. If you're not looking to make structural changes, you can replace benchtops, sinks or even cupboard fittings as a quick, inexpensive way to spruce up the kitchen.

Buff the bathroom

Everyone likes a sparkling bathroom, so pay close attention to cracked tiles, worn or mouldy seals and leaking taps. Like kitchens, bathrooms should also be stylish, modern and functional. Replacing broken towel racks or dripping shower heads can make a big difference, while new mirrors and lighting can be a great finishing touch to make the bathroom feel more spacious.

Add a bedroom

The three major factors that drive a property's price are the location, land size and number of bedrooms. While you may not be able to change the first two, adding a bedroom can make a significant change in the value of the property. Make sure you speak with an architect for this sort of renovation and don't forget you'll need council approval for your plans.

The great outdoors

Australians love the outdoors, a real attraction for buyers or renters is space where they can entertain, just by simply turning a small balcony area into an outdoor entertaining area with a barbecue and herb garden can add value, there are endless possibilities for your extra outdoor space.

Before you start any investment property renovations, think about your budget. 

Real Estate Investment Tools

Real estate has emerged as one of the most favourable sectors of investment because of its high ROI (Return on Investment). However, investing in real estate is more than finding a home for oneself and requires a clear understanding of possible future trends and expected ROI. To aid in this understanding, many have adopted a scientific approach to real estate investment to go along with evidence-based investment sector tools. The purpose of such tools is to investigate the type and levels of risk and to measure ways to overcome the risks. The following approaches to using real estate investment tools are said to be effective and outcome oriented:

Basic Rental Properties

This tool is said to be as old as the tradition of landownership. The basic rental properties tool includes the commercial process of buying a property and renting it out. With this investment tool, landowners are responsible for paying the mortgages, taxes and any other liability on the property. In order to meet such expenses, a landowner must charge adequate rent to tenants in order to increase the margin for profit and subsequent ROI for their property. Basic rental properties are one of the most famous investment tools of real estate, yet the tool suffers from the limitation of low ROI as adequate time is needed to increase the value of the property.

Investment Groups

Real Estate Investment Groups have gained popularity due to their mechanism of low risks and high return. These groups work as a mutual fund for rental properties and allow investors to get the benefits of real estate investment without the hassle of landownership. This tool enables investment through real estate investment groups, which disseminates the responsibility of buying, building and maintaining the property among the group. Unfortunately, an investor has to pay commissions to the group against the benefits of rental properties provided by the group.

Trading

This is an aggressive tool for extracting benefits from an investment, yet it is quite different from buy-and-rent property. The basic purpose of this tool is to gain as much profit as possible on a property within a short period of time. The time duration for this investment tool usually falls between four to six months. After four to six months, the investors try to sell the estate for maximum profit. This type of trading is also known as filling, which is referring to the commercial process of the buying and selling of popular or undervalued property.

Investors That Fix and Flip Property - Basic Knowledge You Should Have to Flip Houses

When it comes to flipping properties successfully, a little bit of knowledge can go an awfully long way. You want to be able to hedge your bets as well as possible to ensure the greatest return on your initial investment, so you should never go into a transaction without having a good idea about everything that you need to know in relation to the property you are aiming to purchase.

There are many things that you should know before you try flipping for yourself, so here are the basics.

Your Own Budget

It's your money that is going to be invested into the property, so you should know exactly how much you are willing and able to spend before you ever even think about making a purchase. Create a budget plan and stick to it. Too much deviation and you may find that the investment that you thought would reap huge rewards ends up becoming a sinkhole into which you simply throw your cash away.

Where To Look

Estate agents can help you when it comes to flipping properties, particularly if they specialise in locating foreclosed homes. What you are aiming to purchase is a property that has potential and is being sold for less than the market value. As such, you should try speaking with banks to see if they have a list of properties on their database and search out specialised estate agents, rather than ones that will try to sell you properties that don't need any work doing.

The Right Workers

Nobody is an island when it comes to flipping houses and it is practically guaranteed that you won't have all of the skills that you need to do it on your own. As such, you need to gather a team of people below you who can do the jobs that you need doing in a cost-effective manner and to a high level of quality. In some cases this will often be a trial and error procedure, but if you can get good word of mouth from people who have used the workers before then you are off to a good start.

The Location

The location a property is in can make a large difference when it comes time to setting a price for it. A house that may look like a steal on the surface could show its true colours if it is located somewhere that nobody wants to live in. Look up crime statistics and local amenities before making a purchase so you have something beyond the house itself to offer buyers.

The Property

Wherever possible you should never go into a property purchase blind, particularly if you are aiming to fix a home up. Always have a good idea of what needs to be done so that you can budget accordingly and plan the work out properly. Try to have a house inspector look over the property and have them highlight any issues that could hold up the work or lead to you losing money in the investment. There's an initial cost involved in this, but you will be thankful if they reveal issues that leads to a property getting scratched off your list.

Purchasing Investment Property - 10 Things to Consider Before Diving Into Real Estate Investment

When considering including real estate as part of your investment portfolio, there are a lot of factors you will need to consider. It is not just a matter of deciding on a property to invest in, because you will also need to answer a few questions about your investment. Not every real estate investment is the same, and not every investor is the same. Here are ten things to consider before you start investing in real estate.

First, are you ready to invest in real estate? You need to be both mentally ready and financially set. Remember - if your property is between renters, you still have loan payments you need to make and other obligations to uphold. You may wish to consult with your investment advisor about your current portfolio and how much you can afford to carry until you begin to see a real return on investment.

Next, set a plan. It will help map out your strategy and define for you what your goal is in terms of investing. Your plan will help guide you should you want to make changes along the way. Your plan can also help you understand all of the expenses you will incur along the way, including utility bills, fees for your experts, times when no one is renting from you, and maintenance and repair costs.

Then, decide what kind of property you want to invest in. You could invest in rental properties, or you could buy homes with the intent to fix them up and resell them, a process called flipping. Then there are commercial properties you could invest in, like retail buildings or multi-unit residential units.

You will definitely need to have a solid base for financing the properties you choose. If you have the cash to make your initial investment, you can do a lot more with purchasing homes quickly and saving on the mortgage amount every month. Remember that though interest rates are low now, there is no guarantee against future increases, so should you choose to finance, make sure you lock in a low rate with a fixed rate loan.

Consider the current vacancy rates in the area where you want to buy your investment property. A lot of vacancies near the house you choose do not bode well for you to be the successful one to find renters.

Sixth, decide who will do the property management. If you intend to live on-site, you can certainly take on this task yourself. But, if you are not going to live on-site, or you don't feel confident in doing the property management piece yourself, by all means hire a professional property manager or sign a contract with a PM company.

When you are ready to buy, it can be a help to find a real estate agent who specializes in investment properties. They will be more knowledgeable about finding you properties that will suit your unique needs.

Ensure that before you buy you get a complete home inspection done so any minor repairs can be taken care of and any major repairs can be steered clear of. Solving minor repairs may mean that you can add value to the rent.

Remember that being a real estate investor, particularly if you go the landlord route, is a business. You will need to keep financial records, comply with regulations, and file legal documents. Having a team around you who can help you with these tasks will be necessary.

Lastly, what is your exit plan? Though you might be in real estate for the long run, eventually you need to sell the property. If the economy drops again, you won't be able to sell it easily or if you do, it may even be for a loss. Having a plan for what you will do for each property will help ease the stress of a softening of the economy.

Who Is A "Rogue or Dubious" Estate or Lettings Agent?

Each association hold to the claim that their primary objectives are usually to support and streamline members' professional competence through an associated code of conduct, newsletters and training opportunities.

This principle is laudable. But if the mantra behind one association and another is more or less similar, then there would be cohesion to deliver the best service for its membership. There wouldn't be the need for splinter groups. Would there?

Let's now explore a little further what the words "rogue", "dubious" really mean.

Common English definition describes "rogue" as a dishonest or unprincipled person. This accommodates any act construed as insincere, unethical and not playing within set rules of engagement by any person or group.

Dubious, on the other hand is a qualifying adjective for any act that would cause doubt; of doubtful quality or propriety; questionable!

Simply put, both words suggest dodgy, deceitful behavioural act either by commission or intent.

With a broad definition as this, who then is a rouge or dubious agent? And what qualifies a safe agent?

There is none more suitable candidate to provide such unbiased appraisal than the last client who actually used the service on offer.

Every client deserves a reasonable level of good service. But since there is no such thing as a definitive perfect service, someone somewhere would always have a rant and a moan, even if it's only for the heck of it. That's human behaviour!

Then again, there are very bad services around. So to try and convince a client who strongly believes that they have been poorly served by an agent would be like asking the proverbial mountain to move to the left.

Justified or prejudiced, each client reserves the right to have an opinion of the service they received, as long as it is fair and does not cross the mudslinging slander/libel line. However, mere perception is not proof enough. Why? Unless you have used a service, your opinion could only be based on third party information, not your personal experience.

Service in this context is reminiscent to having agreed with applicable terms and conditions of that service, the subsequent signing of a binding contract and accepting keys for possession at check-in. To phone an agent for the purpose of comparing service charges would therefore not count as a fulfilled service. It's only a conduit for information gathering.

If then you have never used a particular agent's service, how would you determine whether they're the best or rubbish in what they do? Are all service levels the same across estate/letting agencies? Absolutely not!

Same goes for every other commercial business model, whether it's a Doctors' surgery, or a fish mongers. You can only make like-for-like comparisons in order to obtain a fair conclusion.

Anyone with some sort of reasoning and intent could presently set up an estate or letting agency and consequently make success of the business. Similarly, any one could set up a used car lot. They don't have to gain any 'superior' qualification to make a success of that business model either.

Reasoning, in this context is the ability to interpret the right thing, as opposed to that which is not right. Intent is the ideal to make a profit, possibly provide employment and potentially enjoy the eventual benefits which success brings.

So why do property agents have so much head battering in the public domain as 'rogues with dubious intent,' while the very important role they play is genuinely to strive to bridge and more often than not, hasten the process of providing essential accommodation in a professional manner for those who need it, and for a service fee?

There is currently no legislation determining minimum entry level qualification as base requirement to be identified as a scrupulous estate/letting agent, or to set one up. There is none for the motor trade either. Should there be one? Most agents who have been through any committed level of study and written examination would drum its benefits. Reason being that such dedicated study affords invaluable depth of knowledge that is essential to stay at par with the ever changing regulations covering the UK housing act. Currently it looks like a mine-field.

The onus therefore rests with the industry's Mr Bigs to initiate a collective framework necessary to formulate and implement industry accepted minimum entry levels.

Currently, associations like the RICS (Royal institution of chartered surveyors,) National Association of Estate Agents (NAEA), Association of Residential Letting Agents (ARLA - wrapped up under the banner of National Federation of Property Professionals - NFOPP), UK Association of Letting Agents (UKALA), The Guild of Property Professionals (TGP), National Approved Letting Scheme (NALS), Association of British Property Professionals (ABPP), provide some sort of leadership initiatives on matters concerning the industry.

Membership is not cheap though. What really is being paid for in disguise is this 'great opportunity' to use affiliation branded stickers as identification marks of participation on shop-fronts, printed materials or websites. What is being missed but equally important is the fact that registration with the property ombudsman (TPO) and adhering to its code of conduct is even a better option. Where there's a dispute, a contesting client tends to feel more confident bringing matters to a head with an independent redress scheme than to a member only association.

The fact that some associations appear to be tougher in executing the principles of their applicable code of conduct, bottom-line is - most are in it to make a profit. Unfortunately, profits are not ploughed back necessarily to support the general membership.

Die hard members would affirm, even swear to the beneficial sentiment what joining one association or another has brought to their balance sheet. Others may tell of significant increase in their portfolio or landlord/vendor clients. However, based only on the simple matter of joining a pressure group? It would be difficult to prove.

Association membership has its place in the wider scheme of things. It serves a purpose for people wishing to belong to a group. It may also be a good place for networking and passage of industry news, encourage structured training opportunities and maybe more.

What it doesn't do is; stop the agent with dishonest intent to defraud, regardless of how many membership stickers they display on shop windows. It all comes down primarily to that simple matter of honesty, fair play and decency. All things being equal, (they never usually are) nobody really needs the whip of a certain code of conduct hanging over them to do the right thing. If you ever find yourself at the point where you must, it would be worth reappraising your intentions.

The question that bothers me though is this; if the common goal is geared toward the benefit of their members, especially for the small independents, why are there so many property associations? And how is it that over the last twenty-five years or more, none of them have been able to come together as a strong force to combat the rip-off advertising portals? Surely this is what most agents would want. Why have agents continually paid high prices to keep property portals afloat? Agents keep portals in business. Without agents feeding portals, portals have no business. That's fact. With the money wasted by those running NFOPP, shame Property live didn't work for its members.

Regardless of spurious claims of influencing government policies on industry specific matters, the property sector with its numerous pressure groups, time and again have failed to make any significant gains either by standing up against the monopolistic pride of portals or influence any policy changes to legislation that may allow those who operate within the private rental sector boot out defaulting tenants without costing the landlord a fortune in lost revenue while the lengthy judicial process slowly grinds to obtain possession.

Why is it that all the associations covering lettings have failed to stem the tide where recalcitrant tenants are being encouraged in certain quarters to remain in properties, rack-up rental arrears and in some cases cause damages, until the day the bailiff turns up at the door.

The real losers are not the associations, nor the portals, but the long suffering landlord client and the distressed agent.

All said, how then do you then define a rouge agent?

Is he the one who levies a potential tenant a necessary administration fee to process their application, which generally involves obtaining the tenant client to complete a tenancy questionnaire, send out for references, check IDs and proof of addresses just to make sure people are who they claim to be? Agents should be highly commended for this sort of due diligence. The point remains, it is a payable service.
Is it the one who charges for services rendered to cover his ever rising operation cost?

How about the agent who slips a note wherever there's a notice, indicative of an empty property available for sale or for let, and tries to steal custom from another agent? Would this deplorable agent fall into the rogue agent classification? Think about it. Some agents are worse at this than others!

Is it the one who trawls the internet seeking out recently advertised stock from the competition, then rings up pretending to be an interested party just to obtain the property's address, and then deceitfully tries to plunder the lead?

Oh, how about the agent who liberally offers over inflated property appraisal in order to obtain an instruction? If he does not achieve the quoted price, does he qualify as a rogue agent or will he just walk away with a dishonest badge?

Now, as a customer, you probably wouldn't have given this a serious thought. You probably have followed the trend and scorned off on the usual suspects. But with a little insight to the daily duties of an estate/letting agent, I am sure you may have a different opinion as to who a rogue agent might really be, or do you?

Who's a safe agent? More like asking who is a safe goal-keeper. There's no such thing. Good agents know their craft and always eager to support their clients with knowledgeable advice to help. No bull-crap, just plain raw honesty based on fact. Funny thing is; most clients still prefer the bull-crap with a smile than be told what they'd prefer not to hear - the truth. But that's life!

Is Mortgage Prepayment a Good Idea?

There are various strategies which you can use for managing your mortgage. Many people choose to repay their home loan early. This option can save you a lot of money, but this is just one side of the coin. Find out more about prepayment and its specifics to decide whether it will be the right strategy for you.

Benefits

When you pay off your mortgage early, you save on interest. This is because interest will be charged for a shorter period of time. You can calculate how much you will save exactly by multiplying the monthly interest amount by the number of months during which you will not have to make such a payment. In most cases, the savings are considerable.

With prepayment, you will have peace of mind that even if bad things happen to you in the future, your house will not be at risk. Additionally, you will own the house fully and this will give you a large equity amount, which you can use to get cheap financing. You can get a home equity loan to finance pretty much anything from improvements to the house to the college education of your children.

Restrictions and Penalties

Many lenders actually make mortgage prepayment more challenging and costlier for the borrower. This is because when they initiated the home loan, they planned a set profit. If this profit is lower, they lose money. As a result, many lenders set restrictions to how much extra money you can add to your installment every month.

Some lenders charge prepayment penalty fee as well. This fee is typically a percentage of the loan's principal amount. Often, the percentage is lowered as the term of the loan advances. There are also lenders who set a very high penalty fee if the loan is prepaid before a certain period of time passes. This period is usually five years.

In general, if you consider using a strategy for paying off your home loan early, you have to check the prepayment terms and conditions in the mortgage agreement very carefully before signing it. If these will prevent you from implementing it or from deriving the expected benefits, there will be no point in using it.

Individual Factors

Even if you will save considerably with mortgage prepayment, you have to be certain that you will be able to pull it off and that it does not interfere with your other financial plans. If you need to save money for covering future expenses which will come well before the expected date of early repayment, then this option may not be right for you. Similarly, if you have to put up with great budget restrictions in order to pay off the loan early, you may not get very far.

The Alternative

You should definitely consider the main alternative to this option which is refinancing. Refinancing can be the better solution. If you are able to secure a lower interest rate on the new loan, you will not only save money but enjoy lower monthly payments. This will leave more cash in your pocket. At the same time, the cost of refinancing can be fairly high and this may reduce the potential savings.

The best way to decide whether mortgage repayment is a good idea is to analyze the numbers.

4 Ways to Come Up With a Deposit for Your Mortgage

The conventional mortgage loans available from commercial banks and smaller lenders require a deposit. This is the share of the home sales price that you have to pay out of your pocket. The rest will be covered by the loan. Typically, lenders require a deposit of 20% of the price of the property. Even if you find a programme with a smaller deposit, you will still have to find a way to pay it. Take a closer look at some of the most effective strategies for doing this.

Saving Money

This is the most effective and cost-efficient option for producing a mortgage loan deposit. The problem is that it is quite challenging for a modern household to save given the high prices and rental rates. That is why it is important for you to have a plan and to follow it strictly. You should calculate a fixed amount of money that you can set aside every month. You can increase this amount as time passes and you start feeling more comfortable about saving. It pays off to put work bonuses, money gifts and tax refunds into your savings account. Saving may take a bit longer, but it is totally worth it.

Government Help

There are two types of programmes which you should consider. You can consider a government backed mortgage loan with a lower deposit. The deposit is typically below 10% of the home sales price. It can be lower as well. This option is highly beneficial, but you will still have to come up with the money. Besides, you have to watch out for higher costs associated with the smaller deposit. There are also saving programmes which you can take advantage of. If you are saving for retirement, you may be able to withdraw a portion of your savings to use for paying the deposit.

Family Help

You can ask your family and more specifically your parents to help you financially either by providing a money gift or by lending the money to you. Even if you can get a small amount of money from them, this will still be beneficial. Every bit helps.

Borrowing from the Seller

This is a strategy which can work if you offer an attractive sales price in a buyer's market. The seller will be more than willing to help you come up with the mortgage loan deposit. You can readily borrow the money at a reasonable rate. Just make sure that you will be able to repay it. Another thing to keep in mind is that such programmes typically have an upper limit on the amount that you can borrow.

Decide on the right strategy for you to come up with a mortgage loan deposit.

5 Important Questions to Ask When Interviewing a Mortgage Broker

You have decided to use the service of a mortgage broker, but you do not know how to find the right professional for you. You should look for a service provider with a licence, considerable experience, excellent achievement record and solid reputation. In order to ensure that the professional is as good in real life as on paper, you should conduct an interview. The broker should be more than happy to answer your questions. You just need to ensure that you will ask the right ones.

1. Which type of home loan is the best?

A good mortgage broker will never give you a straightforward answer to this question. They will explain the current trends and ask you more about your current financial situation and future plans in order to suggest a particular type of product. If the professional is really committed to working with you, they may give you an overview of the different types of loans and their pros and cons.

2. How should I prepare for borrowing?

The good broker is a financial advisor as well. The professional should ask you about your savings, income and future plans to suggest a strategy. The more questions the specialist asks you the better. They should give you some general advice as well.

3. What are my chances of getting approved?

Again, the mortgage broker should obtain some information about your income, spending, current debt and credit history to come up with an answer. If you have any specific issues such as bad credit, you should ask directly how the specialist will be able to help you out. It is best if the professional has solid contacts in the industry and works with specialised lenders as well. You would want them to negotiate on your behalf if you cannot qualify directly for a conventional loan.

4. How will lender and third party fees work out?

The specialist should be able to explain what fees you will owe. They should explain how they will secure competitive fees for you as well. It is best if the broker can guarantee that the fees which you initially agree on will remain the same at closing.

5. Could you explain the process and how we will go through it?

The broker should not use too much jargon which may be confusing for you. They should explain things simply and ensure that you understand everything. They should be able to answer any questions for clarification. A good professional will explain how you will communicate as well. The more updates you will get the better.

Evaluate the mortgage broker carefully based on their answers.

How Does Rent to Buy Property Work for Me?

Rent to Buy is simply a way to buy or sell something, except that the transaction does not take place immediately. The buyer and seller basically agree to the possibility of a sale sometime in the future, usually in a few years' time, and draw up a contract agreement. In the meantime, the Rent to Buyer lives in the property, and pays rent to the Rent to Seller, which also contributes to reducing their house deposit when they go to purchase the home in the future.

This agreement drawn up for a Rent to Buy property through Homes with Options has positives for both the Buyer and Seller, and the flexibility of each individual contract means it can cater to both sets of needs.

Buyers

For Rent to Buyers, one of the main benefits is the ability to live in your ideal property sooner than you thought. This allows you to begin any desired work or home improvements to the house, and begin creating your ultimate home before you've technically purchased it. It means you don't have to wait and rent somewhere else while you're saving up for a deposit, and if you have found your dream house you can secure it already, even before you can fully afford to.

Rent to Buy also means that you aren't throwing away your rent money into a property that you have no investment or future potential in. When you are contributing rent in this scheme, you are contributing towards your future home and your deposit, making it far more of an investment.

It works for you when you aren't fully able to afford a mortgage or house deposit immediately, but also when your credit score is bad or in need of improvement. Rent to Buy offers you a few years to improve your credit score, allowing you to wait until you are completely financially ready before purchasing the home.

Another benefit is that you have the ability to lock in a purchase price at the time of the contract being drawn up, in case home prices rise over the next few years. This means that both Buyer and Seller know what the ultimate price of the property will be, and that price doesn't change at any time throughout the contract.

You can opt out of the contract and finally purchasing the Rent to Buy property at any time, although bear in mind that you would have to compromise whatever money you have already contributed to the home. However, ultimately, the benefits and positives of Rent to Buy from the Buyer's perspective greatly outweigh any potential negatives.

Sellers

One of the most important benefits for the Seller is that you have a greater opportunity to sell your property. If you are finding difficulty in gaining interest for your house or losing any potential sales, then Rent to Sell could be for you. If your property has been empty for a while and you are having trouble paying for the mortgage, then we can set you up with a Buyer who can live in your home and cover your mortgage payments for this property.

Another benefit is that you would have peace of mind that the Buyer tenants were taking care of the home, and it would be a different situation to having regular renters. You wouldn't have to act as a landlord to deal with them or the property, as all of the home improvements would be down to the Rent to Buyer, as part of the agreed terms to eventually purchasing the house.

If you were to Rent to Sell your home, you could also be certain of a fixed price for the property, and wouldn't have to settle for less than you believe the house is worth. At the beginning of the contract, a price would be decided and that wouldn't change. Even if the house price drops over the next few years, you would still have the top fixed price that had been decided at the start.

Another benefit for Renting to Sell is that you can opt out at any point throughout the contract. However, bear in mind that you would potentially lose your right to keep any of the money the Renter has put towards the property deposit.

Preventing Damp and Mould in 5 Steps

When you want to prevent dampness and mould growth from occurring in your property, a good place to start is to understand condensation. This is when moisture becomes trapped in the air, then hits a cold surface such a window and becomes water again. Believe it or not, we can create over a litre of water per day just by our breathing as a result of condensation.

Some other causes of condensation is the excess moisture caused by leaking pipes, rain seeping through the roof or getting in through window sills. Common household occurrences like the moisture created from cooking, taking hot showers, doing the laundry can all build up and create a breeding ground for mould.

When there is mould in your property, you have potential health risks that can be quite serious. It can cause problems for those with respiratory problems creating infections and it is especially hazardous for the elderly, babies, and pregnant women.

Let's take a look at the five steps to free your property of dampness and mould, and learn what to do to prevent it from being a problem in the future.

1. Get rid of existing mould in the property

In order to kill and get rid of mould, you need to thoroughly clean all the walls, ceilings, hard floors and window frames with a fungicidal wash. Then you can paint the walls with a fungicidal paint. A nice natural cleaner is undiluted white vinegar that will also kill the bacteria that forms the mould. Remember, to carefully dry the washed areas. Try to dry clean carpets rather than a wet shampoo method.

2. Eliminate excess moisture

The most common household areas that cause excess air moisture are the bathrooms and kitchen. Inform your tenants to turn on the bathroom fan when taking a shower, close the door and open the window for a bit after they've finished. In the kitchen, cover pots that have boiling liquids. Again, have them turn on the fans and open the window or door a bit. When weather permits, dry clothes outdoors if they can, or put them in the bathroom with the door closed and window open. If there is a dryer available, be sure it is vented to the outside.

3. Have proper insulation

Another very effective way of preventing condensation is having your walls properly insulated. This is a problem of many of the older properties. The areas you want to consider are cavity insulation, draught proofing windows, external doors, and insulating the loft or cellar. Also, do some research to discover government grants that may cover your costs for things like secondary glazing and insulation work.

4. Increase ventilation

Ventilation is the best way to remove excess moisture from your property, so work with your tenants to ventilate at all times. Open the windows in the kitchen and bathroom and close the doors to limit moisture from spreading to other parts of the house. Ventilate cupboards and wardrobes, and ensure your chimneys are not blocked. During the cold months, it can be tough to let in the cold air for a bit, but know that you are also removing the moist air.

5. Heat your property

During the cold weather, another way to ward off condensation is to keep the property comfortably warm, especially when no one is home. Remember, condensation is caused by cold surfaces so even just a bit of heat that runs regularly is effective along with the other warming methods of insulation and draught proofing.

Avoiding damp and mould in your property is really about having a balanced combination of proper heating, insulation and ventilation. Once you have this managed, condensation should not be a problem to you.

What Is Kerb Appeal and How Can I Achieve It?

Kerb appeal is quite simply a measure of how appealing your property is from the outside. People say you shouldn't judge a book by its cover, but that's exactly what potential home buyers do each time they look into an estate agent's window, pick up a property sales brochure or go to view a house for sale. Kerb appeal can be crucial when trying to sell your home; get it right and you will probably attract more viewings, but if you get it wrong then many potential buyers will simply drive by and decide not to view inside.

On average potential house buyers need no more than eight seconds to decide whether or not they like a property. In some cases it can take even less time than that; the over-grown jungle of a front garden, peeling paintwork and an assortment of litter piled against a shabby front door with a cracked window are all examples of defects that will send buyers running for the hills before even stepping inside your property.

Improving the kerb appeal of a house is unlikely to add much to its value, but it can help to get buyers through the door to help you sell it at the right price.
Before viewing inside buyers will want to feel that the house has been well maintained. Any indication that they will need to spend time or money on immediate home improvements will put them in a negative frame of mind before they've stepped over the threshold. This could set them thinking about reducing any offer or, at worst, put them off all together.

Here are a few tricks of the trade that will help to improve your property's kerb appeal:

1. Clean and paint your front door. It may sound rather obvious, but this is something buyers are going to study closely while they are waiting to be let in to view. Additionally ensure your door furniture is clean and functional and the door knocker or bell works properly. The house number or name should be clearly visible and securely fastened.

2. The approach to your front door - whether it is a path, driveway or lawn - should be kept free from litter, rubbish, clutter, children's toys and vast collections of ornaments or gnomes. If possible conceal your rubbish bin, place it behind a fence or at the rear of your property; or put it in the garage during viewings if you have one. If you must have bins on show, make sure they are clean and the lids are on.

3. You should re-lay any uneven paving slabs or flagstones and regularly mow the lawn and remove weeds from paths, driveways and borders. Consider using a pressure washer to remove any grime from pavers and replace any patches of missing gravel.

4. Clean your windows and make sure the frames are in good condition - remember peeling or dirty paintwork indicates a lack of maintenance. Rotten window frames are to be avoided at all costs so repair and/or replace where necessary. If you are installing new ones ensure that they comply with any restrictions (such as planning permission or covenants) and that they are in keeping with the design of the rest of the house. Finally, it's a good idea to check that all blinds and curtain positions match when seen from outside.

5. Ensure your guttering is in good working order. Clear any blockages and check for leaks. Similarly you should address any issues with the roof, soffits or fascia boards.

6. A little greenery, no matter how small the space, will inject personality and colour into the property to create a welcoming feel. If you don't have a garden then try a hanging basket or window box filled with draping ivy, or place planters or topiary balls either side of the front door.

7. Freshen up a tired facade by re-pointing anywhere the brickwork needs it. If your house is rendered or the brickwork painted then it's always worth considering a re-paint. Paint colours should be in keeping with the period of the house and neighbourhood. If you live in a listed or conservation area check with your council if there are any restrictions on the colours you can use. Finally, if there is no restriction, then go for a neutral colour rather than choosing a crazy colour that most buyers would want to change.

8. An exterior light at the front is practical and can create a welcoming atmosphere - especially during the dark winter months. Additional garden lighting will enable you to show off your outside space during evening viewings.

9. If the unkempt garden next door is putting off buyers, rather than suffer in silence, why not simply offer to clear away any rubbish yourself. Next time you're mowing your lawn offer to mow theirs as well. Half an hour spent on a few gardening chores at the neighbour's house could make all the difference when the next buyer arrives to view your home.

Creating great kerb appeal doesn't necessarily have to cost a fortune, it's just a simple case of sending out positive signals that put the buyer in the right frame of mind before they've even entered your home. A house where the front garden is well-tended, the windows sparkling, the frames in good condition and the front door clean and tidy with polished door furniture will always make your property appear more inviting to a buyer.

How Important Is a Good Property Sales Brochure?

When selling a house, the printed property sales brochure should be fundamental to your property marketing strategy. Alas, all too often many vendors do not think of the brochure as a 'pro-active sales tool' and they simply regard it as nothing more than a point of reference for prospective buyers, giving them room dimensions and an idea of what the property looks like along with the estate agent's details on should they wish to make an offer. Many vendors do not realise how, with just a little effort, their humble printed property details can become a highly effective promotional aid that actively entices buyers.

Many people selling houses in the UK go down the traditional route of simply listing their property with a local estate agent. They then leave all of the marketing and promotion in the hands of the professionals - after all that's the agent's job isn't it? However the quality of sales particulars produced by estate agents varies widely, so it is in the vendor's interests to ensure that the printed details given to prospective buyers are as effective as possible.

In most cases the estate agent's fee will probably include some local advertising, listings on property websites or a photograph and summary details of your property in their shop window. Most estate agents will also produce a printed description of your property to give out to prospective purchasers. This will very often be in a pre-formatted standard template design.

A typical house buyer may cast their eye over hundreds of properties when searching for their next home, it is therefore important that your house stands out from the crowd. To have any chance of being noticed among the dozens of other similar properties for sale in your area or buyer's price range, it is imperative that your property looks as appealing as possible when prospective buyers first see it on-line or in the estate agents window.

Capture the imagination:

Estate agents in the UK are of course legally bound by certain rules regarding the descriptive content within a property sales brochure, but it is the photographic content that usually lets the side down. You only have one chance to make a first impression, so ensure the photographs of your property are the best they can be. If your leading photograph is an exterior shot of the whole house then simple things like ensuring the frontage is tidy will make a world of difference to the overall impression, also try to take the photograph on a sunny day. If your house has a driveway or garage then leave the car off the parking space while the photograph is being taken, this will draw the buyer's attention to the fact there is parking available rather than to what kind of car you drive. Additionally buyers will not be attracted by interior shots of kitchens with washing-up on show or scruffy laundry-strewn bathrooms - remember you're selling a lifestyle - and they will not be enticed by photographs of houses taken at night with only pitch darkness visible through the windows.

To avoid such mistakes ensure your house is clean, tidy and well lit before the photographer arrives. If your estate agent visits at night time to list your property, ask him to come back during the day to take the photographs. You wouldn't expect your estate agent to bring along 'David Bailey' to take photographs of your home, but if you feel your agent isn't a good photographer and hasn't captured the best possible image of your house, then find someone who is proficient and supply the photographs yourself.

One of the most common photographic errors is not keeping the printed details up-to-date; for example still using a photograph taken in winter with snow on the ground to sell a house in the middle of the summer. Perhaps the worst offence is an out-of-date photograph that shows flags in neighbouring windows taken during major sporting events - especially if the football word cup finished over a year ago! These kind of errors effectively 'date' your house and you could be giving buyers the impression that there must be something wrong with it to have been on the market for such a long time.

Retain the interest:

Once your beautifully presented property sales brochure has caught the buyer's eye, it should then entice them to come and view your property. Apart from containing an accurate description (fixtures and fittings, room sizes, floorplan, tenure etc), your sales brochure gives you an ideal opportunity to tell prospective buyers all about your property's unique benefits over other houses they may have viewed. You do not need to write a lengthy essay, but a few carefully chosen points in an opening paragraph that outlines your property's attributes can quickly give the buyer a 'feel' for how your house could become their next dream home.

A small section on local amenities, highlighting local schools, shops and entertainment facilities can also go a long way to enticing a buyer to view your house.

In summary then, a well-designed sales brochure should firstly promote your property and attract the right buyers to view your house by capturing their imagination. Secondly it should be a tangible piece of informative literature that retains the buyers' interest by answering many of their questions; highlighting the unique benefits of the property to make it stand out against the competition. Finally it should be kept up-to-date and underpin your whole marketing and sales campaign and complement any other marketing activities (such as advertisements or websites promoting your house for sale) by carrying the same sales message and clear, quality images.

Points to Consider When Buying a Repossessed Property

Repossessed properties usually offer good value for money; they normally require a certain amount of refurbishment (which can reduce the asking price) and most lenders in repossession will want to achieve a quick sale. However, there are a few issues buyers need to be aware of when delving into the repossession market.

The main issue when buying a repossessed home is lack of information about the property. Remember, you will not be dealing with the owner/occupier; instead the sale will have been forced by an organisation where the homeowner has used the property as collateral and defaulted on a loan or mortgage secured on it. The seller (or lender in possession) will usually be a bank or building society. They will want to dispose of the property as quickly and as cheaply as possible, but they will also have a duty to the repossessed homeowner to achieve the best sale price and mitigate their losses.

These circumstances can create a few difficulties for the buyer:

• As the seller will not have occupied the property they will have no personal knowledge of it, in some cases they may not even have the original deeds. Consequentially the seller's solicitor will be unable to answer many enquiries that are normally raised during a house purchase. You will therefore need to make your own enquiries to satisfy yourself (and your mortgage provider) that there are no legal problems with the property.


• It is highly likely that a strict and short deadline for completion will be imposed - sometimes as little as 14 days - so you will need to ensure your finances are in place.


• The seller will want to keep their legal costs to a minimum and limit their liability after completion of the sale. The seller may not have any paperwork relating to legal issues such as planning permissions, building control or NHBC certificates, therefore you will need to be prepared to do most of the legwork to obtain copies and cover any associated costs yourself. You can buy indemnity insurance to cover certain things (such as lack of planning permission), but these policies very often require answers to questions that only the homeowner would know. In that case you would need to obtain a bespoke policy which would be more expensive.


• You will need to rely on your own investigations for many other things, especially information about any issues with the neighbours, such as access or boundary disputes.

Firstly you should thoroughly inspect the condition of the property yourself and then get a structural survey. Repossessed properties are 'sold as seen' and the onus is on the buyer to ensure everything is in working order. The seller will usually state that it has no knowledge about the condition of fixtures, fittings or appliances, so it is very important for you to establish they are in good working order before you commit to an exchange of contracts; otherwise you'll need to factor the cost of replacements into your renovation budget.

If you are buying a repossessed house with a mortgage it is imperative that you do all you can to minimise delays by securing an 'in principal' offer from your mortgage lender before you make an offer on the property.

Once your offer on a repossessed property is accepted, the seller will impose a deadline requiring exchange of contracts to take place within a certain time frame - this is typically 28 days if buying with a mortgage, or 14 days if buying with cash.

The seller's estate agent will advertise the offer they have received in the form of a public notice, advising if anyone wants to make a higher offer then they should do so before exchange of contracts. Contracts cannot usually be exchanged until at least 7 days after the notice is first published.

The possibility of being gazumped at the last minute is a very real risk when buying from a lender in possession. One of the pitfalls of buying a repossessed property in the UK is that someone else could make a higher offer at any time before the exchange of contracts. The seller is obliged to get the best price and must therefore consider any offers received right up to the day of exchange. If a new offer is accepted by the seller, your purchase could fall through, but you would still be liable for any legal and professional fees incurred at that stage.

If your purchase proceeds to an exchange of contracts, then the seller will require a deposit payment from you (usually 10%). Provided you complete within their time frame (usually 10 days) the property will become yours. If however, you cannot complete on time, it is highly likely that the seller will withdraw from the sale, the property will be re-marketed and you will lose your deposit.

You will become responsible for the property between exchange and completion, so you will need to purchase house buildings and contents insurance immediately after exchange of contracts. It is therefore always wise to insist that exchange and completion takes place simultaneously; otherwise you will be insuring a property that you cannot access immediately.

The seller is responsible for any arrears of service charges and ground rent which are outstanding at the time of completion. In the case of where the amounts are unknown, it is usual for the seller's solicitor to retain a portion of the sale proceeds to cover this liability. This is called a 'retention'. A lender in repossession however, will not hold a retention because it will want to finalise and close the mortgage account as soon as the sale has completed. The contract will usually be drawn so as to indemnify the lender in possession against any arrears that they were not aware of at the time of completion; so it is vital to get your solicitor to check the position before completion, and to pass any arrears details onto the seller's solicitors.

In a normal house sale the seller would repay all mortgages on the property and their solicitor would transfer the property using form TR1. A lender in possession however will use form TR2 (transfer under power of sale). This operates jointly as a transfer and as a discharge document. This means that any subsequent charges or bankruptcy restrictions registered after the lender's charge will be removed from the title by the Land Registry when the transfer is registered, otherwise this would have to be done using separate discharge documents.

You should always seek legal advice when buying a repossessed property as, if there is more than one charge on the property (and you fail to obtain a discharge document for an interest which is not covered by the TR2), you may be bound by it which can be extremely expensive. The lenders in possession do not generally provide the transfer on completion but usually send it on within 10 days of completion.

There are many things to consider when buying a repossessed property, compared to a normal house purchase. However, if you are able to get your finances in place quickly, are willing to keep chasing solicitors to keep things moving, can work within the seller's strict timescales and do lots of research yourself, then you may be able to bag yourself a property bargain.