Whilst to date, changes have been made only to the trial scheme Richard Jones, policy director of the RLA, said the change was significant. He added “Whilst Government promises of automatic direct payments do not yet extend to the national roll-out of Universal Credit later this year, we are eager to ensure that it will apply when this happens.

“At the same time, the RLA will continue lobbying for a shorter time period in which automatic payments can be triggered, and for more details about the direct payments process.

“It is important for landlords to know that if tenants fall into arrears an immediate stop will be placed on further payment of housing costs to the tenant until direct payments to the landlord have been established.”

Read the full article

The post I hate to say ‘I told you so’, but… appeared first on The House Crowd.

When I was young, it was fashionable to be anti-Thatcher. Everyone tends to be more left wing in their youth, but I would have thought those who were misguided in the 1980s into thinking Arthur Scargill was some sort of hero, might by now have realized the error of their ways and acknowledged they should be grateful for her having the guts to stand up to the unions however callous she may have appeared to them at the time.

It is a fact that the vast majority of improvements in our national wealth and standard of living can be directly traced back to Mrs. Thatcher’s policies. But apparently many people remember the rubbish strewn streets and power shortages of the pre-Thatcher years with rose tinted spectacles, judging by the vitriolic comments I have heard in the press and on the internet.

From my point of view, Mrs. Thatcher’s policies were the closest embodiment we have ever seen of Ayn Rand’s objectivist philosophy which, though admittedly somewhat lacking in empathy for any sort of weakness, offers a complete and undeniable demolition of the socialist manifesto.  Mrs T set out to create an environment which encouraged and rewarded the producers in society giving them the freedom to create wealth not just for themselves but for society as a whole. It is, as Ayn Rand points out, the producers in society who take all the risks and create jobs for others. But not only are they rarely thanked for it, they are frequently criticized for being greedy exploiters – especially by the very people who most benefit from the fruits of their work; the ones who are given jobs and a paycheck and those whose rent is paid for by the state. These people seem to think they are entitled to a job and a roof over their heads, without ever stopping to think about what has to be done to create and pay for these things.  Apparently, it’s just the ‘government’s job’ to provide them.

And don’t look to the media for support. Most of the press treat landlords as though we are all versions of Peter Rachman without ever giving us credit for providing much needed housing. In fact a recent TV documentary seems to suggest that Rachman himself was unfairly vilified and turned into a Fagin like character by the press.

It is thanks to Mrs. Thatcher that you have had the opportunity to develop an income from property. It was her support for The Housing Act 1988 which transformed the property investment landscape. It encouraged the de-regulation of rents in the private rental sector and aimed to increase supply of private rented accommodation. It removed the right to an ‘independently assessed fair rent’, reduced protection for tenants and ended rent restrictions in the private sector.  She also helped lift the restrictions on mortgage lending. All these things were hugely influential in creating the buy to let property boom.

For many reasons, I think she was a great woman, though I can understand why she alienated so many who feel she had a negative impact on their lives – I feel the same about Gordon Brown (but don’t get me started on that!)  However as property owners or entrepreneurs we should all be extremely grateful for what she did.

I will leave you with an amusing and affectionate (I think) piece of graffiti I saw via a photo posted on a wesbite:

The Iron Lady – may she rust in peace.

The post The Iron Lady – Patron Saint Of Landlords? appeared first on The House Crowd.

If you think of the property investment cycle as seasons in the year, we have been in winter for the last few years.  But the daffodils are starting to bloom and it looks like we may now be in spring – at least in terms of property investment. It may still be chilly, but it’s definitely getting warmer.

Pent up demand from first time buyers, low interest rates on savings and the banking crisis in Cyprus mean more people are turning to property as a safe haven. And this is particularly true of the British property market.

Britain is one of the most established property markets in the world, especially in terms of property investment financing. It is very different in terms of property supply and demand from other countries such as USA, Cyprus, Bulgaria and Dubai where the property prices were inflated because of demand caused by the perceived profits to be made (greed) and the sudden availability of easier borrowing rather than actual demand for accommodation to live in.

The UK market is very different.  I do not think there is any doubt more housing is required for the UK population. Without boring you with stats, for well over a decade, every survey I’ve seen has reported there is a massive shortfall in the amount of housing required to keep up with demand.  Further, the rate at which new houses are being built falls far, far short of predicted requirements. So the gap is widening every year.

It is interesting to note that every time The House Crowd buys a property – typically for about £50,000 – the rebuild costs for insurance purposes are upwards of £80,000 and often closer to £120,000. What that tells me is that if the cost of building new property is considerably more than existing stock (land values aren’t even taken into account in the example above).  Common sense suggests that few people will buy a new build property, when they can get a similar sized property for half the amount.  It is equally clear that developers aren’t going to build property unless they believe people will buy what they have to sell. And just to reiterate it: there is a shortage of housing which increases demand for available property.

It’s a complex relationship and there are differing viewpoints on how it works, but I believe that fairly soon builders will start building again in earnest. Once they start doing so, the price of old stock will be pulled up by the price of new builds as sellers realize they can achieve higher selling prices whilst still pricing their property competitively against new builds.

There are tentative signs that the property market is already beginning to warm up – you may well have seen the news headlines about average property prices now increasing at £25 a day. One factor for this is new investors putting their money into property as they are tired of the woeful returns provided by the banks and pension companies. We have noticed buy to let lending is becoming more readily accessible in the last 6 months.

But that is nothing compared to what will happen next year when the new government incentives kick in, giving buyers the ability to get on the housing ladder without raising a 20% deposit.

One thing I have learned throughout my time in property is not so much the price of a property but the affordability factor that is the biggest influence.  People’s income, the deposit required, the ratio income to borrowing permitted and interest rates all play a much bigger role than the actual price tag.

The government incentives coupled with low interest rates will have a massive affect and greatly increase the demand for property pushing prices higher (although salary levels will keep the increase in check to a degree)

That may be good bad or dangerous depending on your point of view. Some argue that it will create another bubble – and they may well be right. But in terms of achieving capital growth over a relatively short space of time (say the next 5 years), I believe 2013 will prove to be the ideal time to invest into property.  So get your sun cream and your sunglasses out.  A bright hot summer for property investment is on its way… Shame we can’t say the same for the British weather.

The post Is It Spring Time For Property Investment? appeared first on The House Crowd.

Miles Shipside, Rightmove director, said:

“Even those who truly believe that the market has turned a corner may be unable to do anything about it due to lenders’ cautious risk profiling, a significant factor limiting the speed and strength of the recovery.

“However, with new sellers asking more than ever before as we enter the traditionally busy spring market, and an expectation among home-movers of price stability or growth, there is now a bedrock upon which confidence and momentum appear to be building.”

Rightmove also said that the average time on the market has fallen from 90 days last year to 80.

 Shipside added: “Whilst it is too early in the year to make estimates about full year transaction volumes, agents are reporting more properties being sold subject to contract.

 However, these prospective buyers still have to complete the potentially treacherous journey through to successful completion. 

More limited inventory for sale by agents means less choice for buyers and is usually a forerunner of increased property prices.

  Shipside said that there are currently “blindingly” good returns on the right buy-to-let investment, and that investors are “piling” into the market as a result. Property investors can get a much better deal than putting money into a bank.”

The post Buy To Let investors ‘are piling into the market’ appeared first on The House Crowd.

We’re even more impressed by the distance he is going to be cycling!We asked Bob to tell us all about his mammoth undertaking, and we hope some of you will join us in sponsoring him.

I moved to Walsall in 2012 after starting a job as a maths teacher at the nearby South Staffordshire College. I thought that taking up cycling would be a good way to get fit again, get to know my new surroundings and to meet some new people. Two things then happened: I got the cycling bug and I saw first-hand the great work that the college did in providing educational and developmental opportunities for people with a wide range of disabilities. I saw the chance to combine my new-found interest in cycling with raising much-needed funds for a charity that in its own words is about “changing society for the better, so that disabled people and their families can have the same opportunities as everyone else.” This is what lead me to choose the charity, SCOPE.

The aim is to ride the 285 miles from London to Paris in under 24 hours. We depart London at midday on Saturday 6th July and cycle the 90 miles to Dover where we will board the ferry to Calais. When we disembark, we put on our lights and our hi-vis gear and cycle through the night and hopefully arrive in Paris by midday UK time on the Sunday. This is a tough physical challenge and I am training hard to maximise my chances of succeeding. Once the end of March snow lifts, I expect to get back to riding 100-150 miles per week.

I wanted to do something big to mark my 50th year and I think that to go from no bike to London-Paris in 24 hours counts as something big. I am grateful for all the support I can get and if anyone reading would like to pledge their financial support, you can contribute online via my fundraising page at http://www.justgiving.com/teacherbob   Thanks to the team at The House Crowd who have agreed to sponsor me and thanks also to everyone else who decides that they would like to support the good work that SCOPE does.

Robert Steele (also known as Teacher Bob)

The post House Crowd investor Robert Steele gets on his bike for charity appeared first on The House Crowd.

The guarantee will provide up to £130bn of lending between 2014 and 2017 in order to encourage lenders to provide high loan-to-value mortgages. It could continue to run beyond this with the Bank of England’s agreement.

This will undoubtedly give a boost to property prices especially in the areas The House Crowd are buying – these are the poorer areas where people are least able to raise a 20% deposit. That’s good news in that it will give us better capital gains and make it easier to sell properties. Conversely, it will also make it harder to buy property after 2013 that will achieve double digit yields.

It is therefore our intention to capitalize on this announcement and buy as many properties as we possibly can in the next 12 months. If you want to maximize your returns, then the next few months presents the best opportunity for you to do so.

The post The Chancellor’s announcement and how it affects property investors… appeared first on The House Crowd.

CEO of Brofn Afon Housing, Duncan Forbes said, “That was a group of people who had a good track record of payment and pretty low level of arrears, thrust into a position where they are now in significant arrears. At the same time we’ve increased our staff levels by about double what we would normally put into income recovery. We’ve been very successful up to now in getting the number of evictions right down, but we can see that inevitably steadily rising. The difficulty for us is that if there’s no long-term solution to paying that rent we can’t sustain business as a landlord.”

Despite the obvious disaster Universal Credit will be for both tenants and landlords, the Welfare reform minister Lord Freud (I thought the Freuds were known for being intelligent!) is still supporting Universal Credit and said: “Millions of people will be better off on the new benefit.”  To which we have to agree – yes millions of benefit claimants who keep the money and don’t pay Landlords their rent will certainly be better off.

Should we as landlords of DSS tenants be worried? Well it is a concern. But, taking into account the possibility that the government will not come to its senses in time and cancel the whole misguided notion before the Autumn, we have a plan in place to ensure we still get paid.  Many landlords will not have a plan and will either suffer financially or simply stop renting to DSS tenants.

The post Universal Credit Trial – unmitigated disaster appeared first on The House Crowd.

As part of the plans, providers of affordable housing in the UK will be able to bid for a share of up to £225 million, subject to meeting the bidding criteria.

The new initiative is based on the existing Affordable Homes Programme and will operate alongside the Government’s Affordable Housing Guarantee, which provides a pledge to underwrite debt for lenders on eligible housing projects.

The House Crowd hopes the new initiative will unlock private finance and help to get spades in the ground and workers on site. However, once again, we must question why the huge numbers of empty homes across the UK are being overlooked in favour of a new build solution?

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.thehousecrowd.com/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.thehousecrowd.com/about/our-manifesto/). If you’ve read enough and want to invest now, visit www.thehousecrowd.com/invest-in-property/).

The post Mark Prisk announces new affordable housing fund appeared first on The House Crowd.

Rates for buy-to-let and some residential customers  who are currently paying 2.25% will rise to BBR plus 4.49% in May. Many regard this as showing a blatant disregard for their customers.

According to a letter sent to the banks customers, the loan agreement has a special condition (no doubt hidden in the small print no one reads) which allows them to change the tracker differential for a number of valid reasons.

Many mortgage agreements also (unbeknownst to many borrowers) have clauses allowing the bank to call in the loan at any time subject to certain conditions.

It’s for reasons like this that we at The House Crowd wanted to create a different wholly transparent business model for property investment enabling both us and our investors to profit without being at the mercy of banks.

The post The Trouble With Banks appeared first on The House Crowd.

Whilst we consider this ‘study’ a rather sensationalist promotional tool, biased by the fact that survey recipients were home hunters quizzed by a housing company, it is perhaps worth considering what changes might be taking place in public perceptions as well-documented struggles for home ownership continue without an end in sight.

You only want what you can’t have, is a phrase that we believe can be applied to the aforementioned eye-catching statistic from the study. Demand for homeownership has risen perceptibly in young people over the last couple of years, as it has become more of a luxury than the attainable milestone it used to be. A decade ago it took 25 months on average to save a deposit for a new home, whereas it now takes a staggering 64 months , resulting in first time buyer numbers plummeting by 64% in 10 years.

The UK’s economic situation remains challenging and the principles of supply and demand matter now just as much as they ever have. Buying a first home is fast becoming a privilege attained only by a minority, and with this, public perceptions of owning a home may well be transforming and taking on a greater importance.

The House Crowd offers an alternative solution for first-time buyers struggling to raise a deposit for their first home. For as little as £1000, our crowdfunding property investment model provides a minimum annual return of 6%, in addition to a share of house sale profits – ideal for growing your deposit in order to take your first step onto the property ladder.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.thehousecrowd.com/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.thehousecrowd.com/about/our-manifesto/). If you’ve read enough and want to invest now, visit www.thehousecrowd.com/invest-in-property/).

The post Home ownership, marriage or children? appeared first on The House Crowd.