The Centre for Economics and Business Research (CEBR) has declared that the house price crash is now over, as reported in the Telegraph.

CEBR has predicted that although there will be further falls of 3% throughout the remainder of 2009, property values will then grow by 2% during next year. It has also suggested the rise may infact be greater due to the collapse in new homebuilding.

Based on these predictions, at the end of 2009 prices will be 24% below their peak in the 3rd quarter of 2007.

This prediction follows the recent positive news reports regarding the housing market:

• Halifax, Nationwide and the Land registry all reported house price rises in July.
• The Royal Institution of Chartered Surveyors, which predicted at the start of the year that prices could fall by 5%, has now said it predicts home values could actually increase in 2009.

However, is it too early to call the bottom of the market?

In my view prices are increasing mow, not necessarily because of greater confidence in the market but because of the lack of supply. Prices bounced up and down for several years during the 1990s slump before recovering on a long term basis.

Mortgage approvals have risen recently but they are still extremely low compared to the levels that have been experience in the past during rising markets. Until mortgage lenders show a greater appetite for lending, particularly to first time buyers with lower deposits my view is any long term recovery is still some time off.

But in order to avoid being too negative even those of us who think this is not the end of the price slump still welcome all positive news in relation to market conditions. News has been negative for a long time, so any change to that sentiment in a great boost.

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In a move to help homeowners who are unable to move house because of negative equity, Nationwide have announced that existing borrowers will be able to obtain a mortgage of up to 125%.

Customers can obtain a new loan based on 95% LTV. They can also carry over up to 25% of the loss on their existing property. The 95% loan will be on a fixed rate with a higher interest rate attached to the negative equity balance carried over.

It is considered other lenders are considering something similar.

This is a very surprising move in the current environment when mortgage lenders have become extremely cautious and are mainly targeting those with high deposits.

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.

The Nationwide House Price survey showed an increase in house price in June of 0.9%. This follows an increase of 1.3% in May and now brings the house price reduction to 9.3% for the past year.

It is the first time since December 2007 that the 3 month change figure has been positive.

Although house prices have fallen nearly 10% in the last year this is the first time in 3 years that the annual rate of decline has been in single figures for almost a year.

All this is very welcome news. However restricted mortgage lending, fear of unemployment and the weak economy will prevent any significant improvement in the property market.

Until lenders become more willing to lend to those with less than a 25% deposit I cannot see how the market can have any sustained recovery.  Until first time buyers can get onto the property ladder the whole house buying process is at stalemate.

At the beginning of the year auction prices were at a 40% discount to the conventional market price. However, last week the FT reported that in May that figure had reduced to an 11% discount. The discount is at its lowest level for 15 months.

Despite the positive news though, all is not rosy. The article went on to report that futures markets are still pricing in modest falls in prices in the coming year - about 7 per cent.

When house prices are rising steadily, homes often sell at auction for more than the value implied by general house price inflation, because those bidding know they will not have to wait many months for a sale to be completed.

When house prices are falling, the sales at auctions can be expected to have lower prices than in the conventional market because bidders expect prices to continue to fall.

The reduction in the discount is consistent with a number of other housing data recently available showing the rate of decline in prices has definitely slowed.

However, mortgage finance is still very limited particularly for first time buyers without a large deposit. This will prevent any significant rebound in the housing market.

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.

On 6^th April 2009 changes were introduced for when you are selling your property regarding Home Information Packs (HIPS).

Prior to that date it was acceptable to market your property provided a HIP had been instructed. However, this exemption has now been removed and it is unlawful to market a property unless the HIP is actually available.

The housing market is currently struggling and there has been much criticism that the new rules are deterring potential vendors from putting their property on the market.  HIPS cost circa £300. This cost therefore has to be incurred by a potential vendor just to “test the water” and see how much demand there may be for their property.

The Telegraph has recently quoted that one in 10 estate agents thinks the number of people selling their home would be double its current level if the need for the packs was withdrawn. In addition they state a further fifth of agents thought the supply of property would increase by between 20 to 25 per cent if sellers no longer needed to have a HIP in place prior to marketing their property.

The housing market has recently shown some signs of improvement. However, this can only continue if more properties for sale become available on the market to meet the demand.

In my view the government should very quickly consider scrapping the need for HIPs at least as a temporary measure until the market has recovered. The property market has potentially shown some signs of improvement. The government should be doing all it can to build on this.

Let me know your thoughts.

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.

Yesterday, the Rudd report suggested that private landlords sign up to a national register. This is in an attempt to prevent bad practice by unscrupulous landlords.

A landlord can be struck off the register and banned from renting out property, if they do not adequately look after the interest of their tenants, with regard to for example repairs, keeping deposits etc

One additional piece of security for tenants was the suggestion that tenants would be given at least two months to leave if a landlord’s property is repossessed. This is of course particularly relevant in the current environment where some landlords are having difficulty in paying their mortgage.

The report has also raised concern about the fact that estate agents and letting agents need no professional qualification. The government has suggested an independent regulator to oversee their practise.

What do you think? Good idea to clean up the industry or is the government trying to be “Big Brother” without and associated benefit to the sector?

European Law is now dictating that the UK tax rules for UK holiday lets needs to be brought into line.

This is bad news for those with a UK holiday let.

The UK has for many years had generous tax rules regarding UK holiday homes.

If you taxes allowable costs of running the property (eg maintenance, letting fees, mortgage interest costs, cleaning etc) are in excess of the income, it is currently possible to offset the loss against earned income. For example, if your income from letting the property was £10K, but costs were £15K you would be able to get tax relief for the £5K against tax already paid on your earned income. For a higher rate tax payer that would mean a refund of £5K @ 40% i.e. £2K.

If you made a profit on selling there were also generous reliefs available to reduce the capital gains tax bill, via taper relief. However, European Law has deemed this unfair and both reliefs will be withdrawn at the end of the current tax year 2009/2010.

So this is bad news for anyone with a UK holiday let.

However, it also means that if you have an overseas holiday let there is a window of opportunity until 5^th April 2010 to take advantage of the rules that have been in place for a UK holiday let.

If you have made an operating loss with your expenses in excess of income, and if you have sold at a profit and paid capital gains tax you are able to review your tax calculations. A significant refund may be due to you.

I am happy to recommend a tax adviser if you need help.