The Association of Residential Letting Agents (ARLA) has this week reported an increase in the number of tenants struggling to meet their rental payments. Almost two thirds (65%) of members surveyed reported an increase over the last six months of those having difficulty paying their rent.

In the current economic climate tenants are frequently experiencing cashflow problems. And as a result landlords are now suffering delayed or missed rent.

It is therefore more important than ever for landlords to be fully aware of their options regarding late paying tenants.

But do you know what steps are open to you if your tenant fails to pay on time?

UK average monthly rents are £795 per month. Therefore each weeks delay in taking the appropriate action could cost almost £200.

What are the steps you need to take to recover your rent?

The best time to do your research is before this problem arises. If you do not look into your options until rent arrears have already built up you will be wasting valuable time and allowing arrears to grow further.

To help landlords I am running a seminar to guide you through the legal options available to you.  In just one hour you could be fully prepared and aware of your rights and the legal process involved in dealing with rent arrears.

How would it feel to be taken step by step through the legal options available to you?

My teleseminar does just that………

In this 1 hour seminar you will learn:

• The best option to follow if you want possession of the property
• The best option to follow if you want arrears repaid
• The typical timescale for court proceedings
• The effect of making an error in your court application
• The additional option available if you have an assured shorthold tenancy

This informative free one hour seminar will  give you a step by step guide by legal expert James Picknell of Mundays Solicitors LLP and will ensure that you are fully up to date with your options should you experience late paying tenants.

In just one hour you will get all this information at no cost to you.  Ensure your business is fully prepared for all eventualities by registering for your place today. Click HERE for details.

Rates started to increase initially due to expectations that interest rates will be considerably higher on the future. This followed a rise in the swap rates- the rates which determine the cost of bank funding.

However, fixed rates have continued to increase, even though swap rates have stabilised. . This is because banks are less willing to lend. The shortage of bank funding has seen banks increase rates to control demand. Once one lender starts to increase, all other lenders follow suit, because no lender wants to be the one with the cheapest rate picking up all the business.

The most attractive rates are still reserved for those with large deposits or significant equity in their home. First time buyers continue to struggle to get a decent rate

Since fixed rates have now already priced in considerable rises to the base rate, it becomes a more difficult decision to determine whether a fixed rate or tracker rate is the best option. If rates do not rise as quickly as expected, the fixed rates may end up looking expensive compared to trackers.

Make sure you discuss your priorities and your budget with your mortgage adviser to determine the best option for your circumstances.

Following recent increases in the swap rates The Financial Times has reported that a number of lenders are set to increase their fixed mortgage rates this week. Rates most likely to be increased are on the longer term eg 5 year and 10 year fixed rates.

The majority of rates have not yet been increased. Therefore if your adviser has given you a rate do start the application process ASAP before the rate is withdrawn

What are the chances that in the coming weeks we are we likely to see more mortgage products being made available?

It has recently been reported in The Financial Times that banks are now displaying a renewed appetite for lending”. As a result banks are now beginning to ease criteria, making more products will be available, including to those with smaller deposits. Up until now the only competitive rates were available for those with a 25% deposit. Certainly wouldn’t include a typical first time buyer!

The recent injection of cash from the government has assisted significantly in that more funds have now been made available for lending.  In addition there are now a number of reports that the property market is stabilising. There isn’t talk of price rises; but a numbers of reports now suggest the fall is easing.

Is good news around the corner?

Earlier this week I highlighted the need to have a well considered property investment strategy. If you do, this should ensure your property investment will let well at the rent you expect and give limited voids.

How can you generate wealth from property?

Maybe you want to buy for long term capital growth; maybe you want to achieve monthly cashflow. Dependant on which option you choose the type of property you will be seeking to meet the need will differ.

The following are all different options to consider:

• Buy to let income i.e. generate a monthly income with rents in excess of costs
• Buy to let capital- monthly cashflow is flat, but the investment has the potential for significant capital growth
• Buying a distressed/repossessed house at undervalue
• Back to back trading i.e. Buy and sell within a short time frame to make a profit
• Investing abroad

Have you considered which option is most appropriate for you and your circumstances?  Do let me know your thoughts.

Mortgage approvals have risen by the biggest margin for three years in February according to the FT. In addition, lending to companies has also grown at its strongest pace in almost a year.

Other good news is also from RICS and Hometrack. The Royal Institute of Chartered Surveyors (RICS) are reporting increased enquiries from new buyers, and property expert Hometrack has reported house prices are declining at a slower pace.

“It adds to the glimmers of hope that the UK is nearing a bottom, or will reach the bottom in the first quarter of this year,” said Colin Ellis, an economist at Daiwa Securities SMBC, whose forecasts for the UK economy are among the least optimistic in the City of London.

Whilst there is still a long way to go until approvals and company lending meet anywhere near their earlier peak levels, it is heart warming to see some good news on the property front.

In the period since the Second World War UK residential property has on average doubled every 9 years. Residential property has therefore shown an unequalled track record of producing high and consistent capital growth.

Although there have been temporary dips in property values, property has subsequently recovered and values have gone on to increase.

For example, the Nationwide house price survey shows the average price of a house in Quarter 2 1989 was £116,674. Prices then started to fall and reached a low of £73,079 in Quarter 4 1995. However, prices then started to rise and by Quarter 1 2002 the average price had climbed to £118,100, a figure just in excess of the previous high. The figures available for quarter 4 2008 shows an average value of £156,828.

So even accounting for the recent falls in property value the average house is still worth more than twice the figure from 13 years ago.

As identified in the previous posting, the Consumer Price Index has risen to 3.2% for the 12 months to February 2009. In order to counter inflation it is possible interest rates will be increased. The result of increasing interest rates is that consumers then have less disposable cash and reduce their spending. Hence, inflation then stabalises.

Whether rates may start to rise again depends on whether the February figures are a one off or if they get repeated in subsequent months. If February figures are a sign of things to come then it is very likely that mortgage rates are now at their lowest and we may not see any further falls.

The FT has advised that brokers recommend fixing mortgage rates now rather than hoping for further rate cuts and to opt for longer-term rather than two-year deals. Five-year deals may be slightly more expensive but customers who fix for two years risk coming out of a deal at a time when interest rates are rising again.

Earlier this week we had 2 different sets of inflation figures announced. The Consumer Price Index (CPI) showed prices had risen by 3.2% in the 12 months to the end of February. This is an increase on the January 12 month figure of 3%.

However, the retail price index (RPI) showed that inflation had fallen to zero.

Where is there such a difference between the figures?

The RPI statistics includes housing costs and so has shown a “zero” figure due to the recent falls in interest rates. However, consumer goods are still rising, particularly food and petrol. This has therefore resulted in the increased rate to 3.2%. This is mainly due to the fall in sterling, the effect of which has been passed on to the consumers by way of higher prices.

A number of economists still expect CPI to fall in the coming months, since retailers are likely to have to reduce prices in light of reduced consumer spending.

If you purchase your property investment using all cash (i.e. without getting a buy to let mortgage), the return you will get is not much different to that which you could achieve with other types of investments.

The reason why property is such a good investment is that with property you usually do not pay using cash- instead you use someone else’s money to buy your property. Banks have always recognised property, and especially residential property, as an excellent security.  As a result they are happy to lend a high percentage of the value of a property. Banks are aware that property values have never permanently fallen over the long term.

The benefit of being able to borrow money to invest is called leverage. You put down a small deposit, typically between 25% - 30%, and the bank finances the rest.

Given the ability to borrow money to purchase a buy to let investment you can therefore have a larger investment than you would normally be able to. If you look at an example of a typical buy to let investment costing £100,000. If you have £100,000 available, (maybe through the equity in your main residence) you can purchase this property without getting a buy to let mortgage. However, with the ability to borrow, if you only need to put down a 25% deposit, instead of buying one property at £100,000 you could buy 4 properties and put down a deposit of £25,000 on each.

This will significantly increase the amount of profit you can make from your property portfolio. To work this out for yourself please sign up to my newsletter at www.marywaring.co.uk. A downloadable buy to let calculator will be sent to you. You can then try a number of different alternatives and see the effect on your return.

Because of its history of security, stable income and proven capital growth, residential property is regarded as a prime security or collateral for loans. This means that banks will often lend you up to 75% of the value of your property.