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.

Clear signs of a recovery in Britain’s buy to let sector was reported last week by Residential Landlords Association (RLA) news

Rents have fallen during the past 12 months. However RLA news reported rents had stabilised in May to an average of £795. The extent of the fall in rents is seen by the fact that average monthly rent last year was £895.

Buy to let landlords are no longer adding to their portfolios due to the problems in securing appropriate mortgage funding. In addition, a number of landlords have reduced their portfolio, adding to the reduction in supply. The rise in rents is therefore due to reduction in rental properties coming onto the market.

All positive news on the buy to let sector is to be welcomed. However, I think it’s inappropriate to talk of recovery based on 1 month’s figures. Rental figures and capital values are likely to be rather erratic over the coming months as the housing market looks for stability.  But the fact that rents may have stopped falling (even if only temporarily) is a good sign amidst all the bad news the sector has had in the past year.

There has been an increase in positive data coming relating to the housing market over the past few days:

• Hometrack, recorded that house prices remained unchanged in May. This is the first time in 20 months that the survey has not shown a fall.
• Data from UK Land Registry showed that although house prices in England and Wales fell in April, the drop was the smallest monthly drop in nearly a year.
• The latest house price survey from Nationwide showed an increase of 1.2% in May. This has been the single highest monthly improvement since late 2006. It is also the second average rise in the past 3 months.
• During April there was an 8 per cent rise in the number of mortgages approved for house purchases. This was the third consecutive monthly rise.
• The decline in the construction sector eased in May to its slowest level in more than a year.

No one would suggest that the housing market problems are over. However, it does make a change to see that some positive data is available. Having seen monthly falls for so long it does raise my spirits.

House prices often move erratically up or down rather than show steady monthly movements in a single direction. I suspect that any increase in actual house purchases is likely to be gradual and rather fitful for some time to come.

In most geographical areas the fall in the property market has severely reduced the number of properties available for sale. Another contributing factor is the pitifully low interest a vendor would earn with the funds if they did sell. As a result unless you are in the position of having to sell most are holding off until the market improves.

But the reverse side of the coin is that because of the lower prices and historically low interest rates the number of enquiries has risen. This has ensured house prices in many areas have remained reasonably stable and in some instances has led buyers to pay more than the asking price in the face of such a shortage of possibilities for anyone who is determined to move.

When we add to this the issue that new build supply had significantly reduced since last year the gap can only get bigger.

But based on the above, the law of supply and demand suggests prices will therefore rise. What do you think?

How do you get started, once you’ve decided it’s the right time to get involved in property investment?

If you’re keen to just jump straight in you’re likely to want to go and view a number of the properties available for sale in the area you are inetrsted in. To see how good your negotiating skills are you may just put in a number of low offers and see if any get accepted.

Is this a sensible approach?

The short answer is “No”. This si likely to lead to a lot of wasted hours. Whilst it’s very exciting to go straight out and start “doing” it is much more sensible to sit down and consider what your investment strategy is. .e. do you want to buy for long term capital growth: do you want to achieve monthly cashflow.

Dependant on which option you choose this will determine the type of property you need to invest in to fulfil this need.

The following are all different options to consider:

• 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 Buy to let income i.e. generate a monthly income with rents in excess of costs
• 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?

Rightmove, the property website has been reported in The Financial Times as having a significant increase in house hunters to its website. For the first time in April 2009 traffic to the website has increased relative to the same month in 2008. Interest on the website is now running at a similar level to that shown before the downturn.

In addition, it has been reported that there has been a significant decline in the rate at which estate agents are leaving the industry. No estate agents have left the industry in 2009.

Rightmove’s board of directors said that the outlook for the UK property market was now “cautiously positive” and that 2009 pre-tax profits should be ahead of its previous expectations.

A glimmer of light at last?

The Chancellor will produce his second budget next Wednesday 22nd March. What impact will it have for landlords and homeowners?

Stamp Duty

The stamp duty threshold at which you start to pay stamp duty was increased last year from £125,000 to £175,000. At the time it was introduced as a temporary measure and is scheduled to end later this year on 2 September..

During the period that the increased threshold has been in place house sale volumes have been very poor. The relief has therefore had limited impact.  In order to be of benefit to property investors and homeowners we would need to see the increased threshold remain for longer or at least a new threshold of say £150,000.

The Financial Times reports that based on figures from The Land Registry the average house price is less than £175,000 in all parts of England & Wales - apart from the South East (£190,000) and London itself (£298,000).

Therefore if the increased threshold is extended for a longer period for anyone buying a property valued up to £175,000 there is a saving of £1,750- a not inconsiderable sum.

Let’s hope the Chancellor does bring in some measures to assist the property market.

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.

If you have decided that it’s the right time to get involved in property investment, then how on earth do you get started?

Do you just wander through the high street talking to estate agents and letting agents? And if so, what do you ask them?

Over the next few days I will talk you through the steps you need to follow and the research you need to do to get you started with your first buy to let. It’s not simply a case of looking at a few properties up for sale, making an offer and then instructing a letting agent.

A good property investment will let well with limited voids at the rent you expect. If you do not do adequate research you may end up with a property that you are struggling to let, with increasing void periods. This will therefore end up being a huge cost and drain on your resources rather than the good investment you were expecting.

To get the advice you need………….watch this space…………

The FT has reported that ARLA, the Association of Residential Letting Agents has reported signs of improvement in the buy to let sector. For the first time in 2 years, landlords are now buying more properties than they are selling.

The biggest bargains have been noted to be in new build developments coming up to completion. Sales prices which were agreed maybe 2 years ago, now look too high. Consequently some investors are choosing to lose their deposit and walk away from the transaction.  Developers have therefore been agreeing significant reduction in price to shift their stock.

It’s been reported that some property agents are selling blocks of new-build flats to private investors at discounts of up to 40 or 45 per cent of the peak market price. Some developments are now providing gross rental yields of up to 10 per cent.