Thursday, 17 April 2014

How Will Scottish Independence Impact the Housing Market?


There has been a lot of uncertainty recently about whether or not Scotland will remain part of the United Kingdom following the Referendum on the 18th of September this year. Many people are wondering what kind of impact this decision will have on the residential housing market. The Independence Debate is becoming quite a concern for some home buyers and sellers.

One of the main concerns is that as the property market in Scotland recovers from the economic downturn that has plagued it recently, this will cause a certain level of uncertainty – which has the potential to stall the market again. Also, although the vote will be held on the 18th of September, Scotland will not become independent until the 24th of March 2016 – which will mean 18 months of doubt and debates about the economic health of Scotland.

The Impact of the Property Market

The residential property market already has a great significance in the Scottish economy – equalling approximately £13 billion worth of transactions. According to Savills Research, the value of housing at the end of last year was nearly £300 billion.

It is thought that if Scotland becomes independent, this will have a potential impact on mortgages. If Scotland retains the Pound Sterling as their currency upon becoming independent – they will have a monetary policy that is under the control of the Bank of England. This means that the Bank of England will be able to set the interest rates that the mortgage rates are based upon.

Since Scotland will be a new country, they will probably have a lower credit rating and will incur higher credit risk. Because the Scottish banking sector will be more vulnerable, this will result in high funding costs which will be passed on to their consumers.

In this scenario, Scotland would incur higher mortgage rates – which would put a lot of pressure on the finances of the average household and would drive down the value of the housing. This could potentially bring about the stall of the housing market again – because sellers would be unwilling to accept lower prices.

If Scotland Adopts Its Own Currency

So what happens if Scotland becomes independent and adopts its own currency? The newly created currency would add complications in the form of exchange rates. If the Scottish currency is strong, this would be a deterrent for international property buyers who are looking for a good investment. However, if the currency is relatively weak, then Scotland would be a desirable destination for good value property investment.

Also, there would be a number of other factors that would have their own effect on the property market – such as the taxation level, welfare spending, fiscal freedom and much more. These are just a few of the many factors that play into this complex issue. The verdict that is determined in September will be a major one that could potentially have a major impact on buyers and sellers of Scottish residential property.


If you are looking to invest north of the border, then remember to get a great rate on your insurance with Discount Landlord

Thursday, 10 April 2014

How Government Property Schemes Have Helped People onto the Property Ladder


These days it can be difficult for young people to get on the property ladder, with the rising cost of house prices in the UK. However, due to a number of government schemes, the process of getting on the property ladder is becoming a lot easier.

Over 100,000 households in the UK have been helped to buy their first property, according to a recent announcement.


Home Buyers on the Increase

Latest figures suggest, there are many different people becoming home owners – whether they are tenants buying their first home through Right to Buy, shared ownership schemes or people who are buying a new build property through the Help to Buy program. These people are becoming homeowners thanks to these government assistance schemes, when they would have otherwise not been able to afford to buy a home.

The First Time Buyer Tracker is a well-respected index from LSL Property Services. This index showed that the amount of first time buyers in November 2013 had climbed to 27,800. This is 28% higher than it was the year before.

Government ministers have been in support of this, saying that these schemes have gotten the country building again. More than 400,000 homes have been built since 2010 and in 2013 the number of new homes that began construction was up 23% from the previous year. This is a dramatic change from the property market in 2010, when buyers couldn’t afford homes and builders were not able to build them. These days, homes are being built all over the UK and buyers are returning to the market.

Improving the housing market will give a much-needed boost to the economy of the UK. Also, the Right to Buy program will recycle all cash from additional sales back into developing new affordable homes for rent. More than 2,000 homes are already in the pipeline for the future.


The Power of the Right to Buy and Help to Buy Schemes

The Right to Buy scheme is one of the government initiatives which has been bringing the housing market back to life in the UK. According to the Housing Minister Kris Hopkins, by reinvigorating this scheme it has made tenants believe that they can buy their property. There are further plans for the discounts offered by the project to rise with inflation – as well as for the maximum discount for houses to increase. Even more social tenants should be able to take advantage of the Right to Buy scheme in 2014.

The Help to Buy scheme has also played a very important part in stimulating the market for mortgages. It helps buyers who have a small deposit still make their way onto the housing ladder and it has significantly increased demand for properties.

However, some critics of the scheme say that these government programs are pushing up house prices artificially and they could cause the next housing bubble. The mortgage market is expected to continue growing in 2014, due to the rising demand for properties and the limited housing stock.


If you are looking to purchase your first property, then get a great rate on your home insurance with Discount Landlord

Thursday, 27 March 2014

Landlords – keep an eye out for hidden Letting Agents fees



Landlords are currently being warned to keep an eye out for lettings agents who are adding numerous hidden fees to their maintenance invoices, without outlining exactly what they are doing. At the moment, many agents are increasing their bills by charging a commission on maintenance work that they book with their property management service.

Essentially, this means that letting agents are charging clients a fee for maintaining the property, as well as taking commission from the maintenance companies they use. This means that the client could end up paying a lot more than they should.

It is required for agents to mention such “extra fees” in their Terms of Business. However, many letting agents will hide the information away in confusing terms in the very small print, so most landlords are completely unaware. Also, many agents have been increasing the amount of commission that they charge.

Other Extra Hidden Fees

Many other letting agents have added on a range of extra fees, including for deposit protection, gas safety checks and tenant referencing. According to a recent mystery shopping investigation, some agents were charging landlords up to six times the cost price for these basic services.

Landlords often expect to find an agent who has their best interests in mind. However, some agents are not concerned about quality and they are only concerned with signing up the contractor who will pay the very best commission. The fact that the agents are not notifying the landlords about these commissions and fees is considered to be fraudulent, as they should have a duty to act in the best interests of landlords.

How to Avoid This?

If you are a landlord and you are worried about being hit with hidden fees, there are a few things that you can do to avoid this happening to you. First of all, when you are employing an agent you should ask for a full list of fees and a detailed explanation of what each fee covers. Also, you should ask about whether or not the agent takes any fees or commissions from contractors.


You can also ask to see the original invoice from the contractor after any repair or maintenance work is done. Make sure that they provide you with a breakdown of the total cost. Asking questions is totally acceptable and necessary – you need to know what you are being charged for! 

Thursday, 20 March 2014

Lack of housing pushing up UK house prices


In the last three months of 2013 up to January 2014, house prices in the UK were 1.9% higher than in the previous three months – according to figures recently released by Halifax. Experts believe that this increase in house prices is because of the lack of supply currently coming onto the market. It is thought that having fewer homes on the market will add upward pressures on the prices.

The house prices increased by a total of 1.1% in January, while prices over the three months to January measured 7.3% higher than they were the year before.

Since the supply of properties in the UK has been slow to respond to the upward market conditions, there is a stronger demand for homes. This has resulted in house prices continuing to slowly rise. 

As well as the increase in demand, there has also been low interest rates and much higher consumer confidence, which is a sign that the economy is recovering and unemployment is going down. Also, schemes such as Help to Buy have boosted the demand for housing in the UK by making it possible for more home buyers to afford their first property.

George Osbourne Predicts Rising Prices

According to Chancellor George Osbourne, the demand for homes in the UK will push house prices higher over the next decade. Also, he has stated that it will be years before there are enough houses built in the UK to satisfy the demand. This is despite the reforms that have been made to the planning system. Osbourne predicts that it will be 2020 before the house prices return to their pre-recession peak.

Over the next several years, the government will be scrambling to build more homes in order to cover the demand. According to Business Secretary Vince Cable, the government’s mortgage scheme should be curbed. He says that there is a housing boom that could get out of control in London and the South East, unless there were to be a rise in interest rates.


Will house prices continue to rise? It’s hard to predict the future when it comes to the way that house prices in the UK will behave. However, the way that earnings are currently failing to keep pace with consumer price inflation is predicted to be a major factor that constrains the growth of house prices. 







Thursday, 13 March 2014

Why is Commercial Property Insurance so important?


If you are a commercial property investor you can have the potential to earn a great long term income over the years, especially if you have a robust tenant who is commercially successful. However, it is very important to protect your commercial investment – not just for your buildings and contents but also for your public liability insurance because people will be coming and going from the property.

There are many different options out there when it comes to buying commercial property insurance. Some companies even allow you to buy the building cover as part of an overall business insurance policy, which will be more convenient for you and save you money.

If you are a commercial landlord then it is imperative that you have specialist insurance to protect your investment and rental income.

So why is commercial property insurance so important? Here are some of the reasons why it is essential to have this type of insurance:

• Your property will be protected from fire, flood and other disasters that can cause damage to the building.
• You can also insure the contents of your building against destruction, damage, theft or loss. This policy will cover the cost of repair or replacement if the possessions of your business are damaged.
• It is also important to protect your fixtures and fittings, such as your kitchen units, shelving, flooring, counters, etc. You can purchase fixtures and fittings cover for these parts of your business.
• It is crucial to buy commercial insurance, not just for your building but also for the public liability cover. If many members of the public will be coming and going from your property, you will need to be covered in the event of an accident.

Sometimes if you work from home, your home insurance will not cover you for a home-based business office – which means that you would have to buy two separate policies. However, sometimes you can find a policy that would cover both your home and your home business contents.

When you are insuring your commercial property, it really helps to have a good local commercial property surveyor who is an expert in the type of property you are buying. They will be very valuable when it comes to helping you understand a complex landlord and tenant agreement and help you choose the right kind of insurance for your particular commercial property.

Get a great rate on commercial landlord insurance from Discount Landlord today!

Thursday, 6 March 2014

What to expect for Buy-to-Let Landlords in 2014


2014 is expected to be a good year for landlords in the UK. Over 50% of landlords expect tenant demand to increase and 40% have reported growth in the last 6 months.

Currently, landlords are in a good position to benefit from the strong yields on property. Anyone who is aspiring to be a buy to let investor can be encouraged by the climbing demand in tenants, which will not only signify long term investment opportunity but will also demonstrate a growing demand for rental homes.

Because it has been so difficult for home buyers to obtain a mortgage and afford a home in the last few years, many people who would have bought a home were forced to rent instead. 

The number of lettings, new viewing and applicants are all rising, which means that there is a very strong possibility for prosperity in the rental sector. This is great news for Buy to Let investors and it will open up many profitable opportunities.

Invest for the Long Term

So what does 2014 have in store for the buy to let investment market? Although there has been an increase in demand for rental housing recently, the advice is for investors not to see Buy to Let as a “Get Rich Quickly” scheme. Instead, it is important to think about the long term and make smart investment choices, rather than simply trying to make quick money. For example, the focus should be on looking after tenants and making sure that they are happy, rather than increasing rental rates.

Property Prices on the Rise in 2014

If you are looking to buy a new Buy to Let property and expand your portfolio, this might not be the best opportunity to get a bargain – because property prices will be rising this year. However, there are still possibilities out there to get a property that the average buyer might overlook, in an area where the property values have only just started to recover.


Also, when securing a mortgage is difficult for home buyers, it is also difficult for landlords – so this is another important factor that you will need to consider. This can be a serious financial challenge that you will need to keep in mind if you are purchasing a buy to let property this year.



Thursday, 27 February 2014

What landlords should know about tenants running a business from their property


People working from home is becoming more and more common these days, with advances in technology and the abundance of jobs in the online sector. The current estimate is that one in four people carry out at least some of their regular work from home. Most of these people in the UK work from their personal computer in their own residence, or run their own business from their home. 

However, what does this mean for landlords who rent out their property to tenants who use it for their business as well as residential use?


What is the difference between residential and commercial tenancy?

A commercial residency and a residential tenancy are very different in law, so if you have a tenant who is carrying out business from your property they will not be covered by your general residential tenancy agreement. It is important to know that there are legal and financial implications associated with using a residential premise as the base for a business.
It is not a criminal offence to run a business from a rental property, so you don’t have to worry about being prosecuted or receiving a fine. However, there are a few important things that landlords should keep in mind about tenants that have a commercial business.

For example, because the laws that govern business tenancies are different to the laws applying to residential tenancies, you could find yourself subject to changes in the law. For example, you could lose the right to recover your possessions, or be unable to get rid of your tenants.

Also, it is important to be aware that renting your property to tenants that run a business could probably be in breach of your mortgage. You should also check your insurance policy, as it might invalidate your insurance. In some cases, you might even be in breach of planning regulations.

Of course it is important to distinguish between a tenant who has a hobby that earns them a little bit of cash and someone who has a full time business that brings in most of their income. Also, if your tenant is a freelance writer who works from a spare bedroom they aren’t bringing increased traffic or clients in, so it shouldn’t be too much of a problem. 

However, a freelance hairdresser or massage therapist who sees clients in the home might cause a few more issues such as parking problems and traffic. 

For more advice and for a quick quote on your landlord insurance visit: www.discountlandlord.co.uk/