As you may have noticed 2010 is the year of sales for PAD4U. We have started to take on a more proactive role and have teamed up with move with us (who works with the financial institutions to sell repossessed properties). We are offering many investment and first time buyer properties from move with us.

Pick of the week;

Flat 18, 15 Manor Road Levenshulme Manchester Greater Manchester M19 3RQ
Price: Offers in the Region Of £57,500

You can check out our properties on www.pad4u.com or call any member of our team if you are interested in growing your portfolio.

So ask yourself……….why do I need Insurance?

Buying and renting a property is the biggest investment you will make and protecting your investment should be your main priority.

Insurance can offer buildings cover, protection against fire, floods and lightning events and even the contents within, some insurance covers loss of rent. In some cases where a property has been damaged to the point where it is inhabitable, Landlords insurance would cover the costs to repair the damages as well as compensate the Landlord for loss of rent collected during the repairs but please check with your own insurance cover or the insurance you intend to take out as every cover differs.

Things to think about………..

Alarm Systems – If your property comes with an alarm, make sure it is operational so your tenants can make full use of it or PAD4U can set the alarm during void periods.

Locks – All final exit doors should be fitted with a 5-lever mortice lock or equivelant conforming to BS3621 standards even adding extra sliding bolts can be a bonus as well as having a 5-lever lock.

Window Locks – All ground floor windows should be fitted with a key-operated window lock. Breaking a window is usually a burglers last resort as this will attract unwanted attention.

Padlocks – It is advisable to have a padlock fitted to gates when located at the rear of the property to prevent people from walking into rear yards or gardens, this is why most terrace properties have high walls and sturdy 6ft timber gates.

Donna Weetman

Building & Development Manager

What is a credit search?

A credit search is when a lender/creditor obtains information about you from your credit file via a credit reference agent (CRA).  The CRA’s are called Experian, Equifax and Callcredit. Each lender may use a different CRA, and in some cases they may use multiple sources.  The credit search includes checking your credit history, financial commitments, and general conduct.  Your credit file will also show address history, whether you are on the electoral roll, whom you have financial associations with, record of county court judgements (CCJ), missed payments, defaults, mortgage arrears and details of any repossessions. The information is usually held for 6 years.  A credit file will also include details of any CIFA records, which is a fraud prevention service.

 A CRA will hold a substantial amount of financial data, but does not hold the following:

 Student loans

• Child Support Agency
• Motoring offences
• Criminal records
• Health records
• Savings

 What is a credit score?

 More commonly nowadays a lender will credit score your application.  There is no universal credit score; and depends on the individual lender’s scorecard.  You can check your credit score using a CRA but it does not mean you will score the same with a lender.  The lender will score using information from both application form and credit file.

I have had several cases declined at decision in principle stage recently, after investigating it has come to light that the address details registered at the CRA were incorrect, so the lender was unable to pick up any credit history, and subsequently the case declined.  Once the address format was corrected, the problem was rectified. 

As each lenders score card is different, and they don’t give away their ‘secret’ scoring method, it is sometimes quite frustrating to find out you have failed, more so when you know your credit history is impeccable.  I am going to provide a list of what lenders may take in to consideration when scoring your application, and how you could possibly improve your success rate:

• Get on the electoral roll.  If you apply for a mortgage and you’re not on it, it is more than likely you will not pass the decision in principle stage. 
• Make sure all details on your credit file are correct including spelling of your name, address, previous addresses, credit data etc.  The CRA should be informed of any amendments ASAP.
• Always give your full name including all middle names (to replicate what is registered on your credit file).
• Try not to leave too many footprints on your credit file within a short space of time, as this pulls down your score.  Even applying for car insurance can pull down your score, so can mobile phone purchases, basically anything where you may be entering in to a credit agreement. 
• Check with your broker/lender whether a decision in principle will leave a hard or soft footprint on your credit file.  A soft print will allow you and the creditor to see the record, but other lenders are unable to see, so this is the better of footprints.  At application stage, it is likely that the soft footprint will become a hard footprint, which means all viewers of your credit file will be able to see whom you have applied to for credit.
• Moving house will bring down your credit score, as this breaks stability.
• Moving jobs, or short employment periods will bring down your score.
• Try and avoid a financial association with someone who has bad credit.  For example if you’re on a mortgage or have a joint bank account with someone who has bad credit, you may find you will also encounter difficulty obtaining credit.
• It is important to try and avoid late or missed payments.
• Satisfy any defaults/county court judgements ASAP.
• Employed applicants usually score higher than self employed, but obviously there is nothing you can do to change this.
• Fill in as much of the application as possible, including work and home telephone numbers.  As crazy as it sounds, leaving your home number off a mortgage application can pull down your credit score.
• Cancel any credit facilities that are no longer required.  The lender will assess any available credit as a financial commitment.
• It is important that each and every time you apply for a mortgage, the information you provide to the lender is consistent and accurate.  Lenders use a system called National Hunter to ‘talk’ to one another, so please make sure all details are correct. 
• If you surprisingly fail a decision in principle, you may find this is because nowadays lenders are using their scoring systems to control business volume.  However, don’t always assume this is the case; you or your broker should contact the lender and ask for a reason.  In the event of your failing with one lender, you may pass with another (but please remember the ‘don’t leave too many footprints’ rule).
• Finally, if you don’t have any credit, it may be worthwhile applying for a credit card.  Please remember to repay your balance every month, especially if you are on an extortionate interest rate.  This will build your financial credibility and allows the lenders to assess your attitude to repaying debt.

Experian currently offer a 30 day free trial to check your credit file.  Please remember to cancel the trial before the 30 days expire, as if you don’t they will take payment from the card details given.

Hope this helps!

Before I join the mass panic however, I try to think back to the comedy sketch that I watched during the crisis where a distraught homeowner rants about the dramatic fall in his property’s value and that he doesn’t know what he can possible do about it, his work colleague retorts “why don’t you just live in it?”.  I think of this to remind me that human nature isn’t likely to change very soon, people need to live in houses and there are more people than ever in the UK.  My eye catches another article in The Times concerning immigration, it rose by 20% in 2009 to  196,000.  That’s a lot of people and although the Coalition may have plans to reduce immigration, this in the main originates from the European Union of which the Government can exert little control.  I remember also that we have had a sharp bounce in property prices over the year and it is not surprising that this is now cooling off.  Nor is it surprising that FTBs are struggling to get on the market and that this is due more to the restrictive practices of the banks than any dramatic change in the demand from these individuals to purchase their first home  (although certainly renting is being given far more consideration by individuals than before the crisis).  This doesn’t change the fact the property market needs FTBs, but pressure will continue to be placed on the banks.  As regards re-valuation of 1m-plus properties this is likely to have more to do with bank bonuses being reduced than any set of factors that is likely to affect the rest of us who live in the real world.  As for the fear of the recent drops in the American market being replicated here, I would have thought that UK banks who securitized a great deal of American mortgages would have realised by now that it’s a very different ball game and drawing comparisons isn’t likely to yield useful results.

Once though the mainstream media, I turn to the investment weeklies that have been piling up whilst I’ve been away.  Here I read with more interest that large insurance companies such as Aviva are about to invest in Private Rented Sector (PRS) some 1 billion pounds in fact.  The attractions are clear, residential property is providing handsome yields and is seen as a lower level of risk that many other asset classes.  Interest rates are low and are likely to remain low until 2012 (although they will increase from their current historic low), rents are rising as demand increases as FTBs cannot get on the property market and fewer properties are being built both in the private and public sectors.  Inflation is high and given the Governor of the Bank of England has hinted that if the economy was to weaken more Quantitative Easing (effectively printing money) would be forth coming I think it’s likely that deflation is seen as a bigger threat and Bank is likely to err in favour of inflation, which is historically good for property.

Don’t misunderstand me, I don’t think everything is rosy for the property market, but neither do I buy into the doom and gloom either.  Landlords with a long term investment horizon (at least 10 years), should not flinch if properties do dip, yield is still the most important aspect of property investment and currently there are opportunities within the market not seen for sometime which will provide good yields (on that note we have recently teamed up with movewithus and have a number of repossessed properties for sale – please discus if you are considering increasing your portfolio).  For many of us however, we may not be able to take advantage due to the lack of available finance.  Rest assured however that your money (via your pension) is likely to be invested in the PRS sector over the coming years… one of few investments I’m happy for my pension company to make.

Attendees also included many of our local business, local residents, our business partners, landlords and contractors. Who all celebrated this special occasion with sparkling wine, nibbles and a PAD4U cake.

Our free Ipod raffle was also enjoyed!

This week HSBC has recorded a near doubling of it’s profits for the year, Northern Rock has also reported profits (on the loan book now owned by the Government), Barclays results are also likely to be impressive, whilst RBS should also return to profit.  So why is this?  The first reason is that “bad debts” on properties have not worsened due to lax monetary policy, but I also suspect at lot of it comes from ‘Improved Margins’.  ‘Improved Margins’ roughly translates to the banks ripping us off; mortgage rates hover around four to six percent (taking into account ludicrous fees added on to the mortgage), whilst Bank of England base rates remain at the historically low level of just half a percent.  I therefore can’t say I’m surprised that the banks have bounced back.  And I won’t discuss what’s happening with overdrafts and premium account charges.

It  is difficult not to be cynical regarding bank profits (and the return of bonuses for their staff) which have come either through Government subsidy or through lax monetary policy combined with “Improved Margins’ from all of us.  But the fact of the matter is it had to happen, it was predictable and sadly necessary.  Without strong banks making good profits, rating agencies and the market would likely take a dim view of UK Ltd., and this could have had and adverse effect on all of us.  So although I will not be toasting to the “success” of the banks I will be breathing a sigh of relief as the worse maybe behind us.

However, this is only true, and the dual refinancing of the banks both by us tax payers and us mortgagees, justified, if the banks begin to lend money back into the UK economy for small businesses and by increasing the availability of mortgage finance to those without huge deposits.  If the banks fail to do this UK Ltd., is likely to suffer.  Thus it is imperative that the coalition Government push the banks on our behalf to do this, whilst they maintain sensible financial prudence.  The banks are still ‘flapping’ and ‘panicking’ and have not demonstrated that they have changed their spots as of yet.  Instead they continue to advocate form filling as the answer (but with different numbers now) in the hope that they have found a better formula.   Whereas the correct formula is to train staff, have sensible pay structures based on long term success and take account that they are lending to people not forms.  Only when this happens will we see successful banks profiting from their abilities rather than our pockets.

Inefficient boilers can cost you or your tenants a fortune in heating bills especially in Winter, you could save upto £275 per household per year according to the Energy Saving Trust. www. energysavingtrust.org.uk

If you replace your boiler now rather than waiting until it breaks down, you could avoid the hassle of finding someone to fit a new one at short notice and being without heat or hot water for weeks.

We have been currently fitting new ‘Ideal’ boilers as part of our property refurbishments and for those properties requiring replacement boilers,. For an extra £99 + Vat you can upgrade the warranty with Ideal enabling the guarantee to be extended upto 5 years giving you piece of mind for your future tenancies. Ideal boiler is just one of the many boilers we have installed but we feel this is a boiler that is cost effective, has a compact design with a tidy drop down panel to shower the user controls and even our tenants have said how easy they are to operate.

Please Note

The above cost shown is based on a like-for- like swap

Does not include making good where disturbed or where back boilers may have been removed

Does not include replacing any radiators or TRV’S (Thermostatic radiator valves)

Does not include a separate room thermostat

Does not include powerflush of system

You’ll find lots of local organic produce and daily specials prepared fresh at the POD.  I tried the POD BLT – the bacon was crisp, the cheese melted and all served on a chiabatta.  It was superb (and the little details like warmed bread) and fresh ingredients make the difference.

Other menu options such as the meat-eaters breakfast, and brie with green apple and mango chutney wrap are on my hit list!  I’ll certainly be visiting again.

It’s a long time since our shop has had a face lift (see photos above!).  Peter Anthony Estates (or PAD4U) have serviced Levenshulme for over 20 years now and have always aimed to have a positive presence in the area.
The area around our shop has undergone major improvements in the last 12 months, with a new Mosque recently erected and the Church (opposite our offices) being refurbished. The Church has been refurbished by Inspire (through lottery funding) and has been split into units that will provide community services and apartments. There will also be a glass fronted café on the ground floor.

Our shop refurbishment has taken years of planning, and we are very happy that the refurbishment works took place quickly with minimal disturbance to the business.
We are now officially re launching our business as PAD4U.

Our Mission
• To provide a high-quality management service to landlords
• To provide good-quality housing for our tenants
• We serve the community by accepting only tenants that pass our strict criteria and ensuring our property is of a good standard
• Assist landlords in building wealth by allowing them the time to concentrate on property acquisitions, whilst we concentrate on management, maintenance, finance and all other aspects of property management
• Share knowledge of the property market, finance, legislation, and opportunities

Our Grand Opening will take place on Monday 19th July at 4.30 pm.

We can confirm that a member of our local council, Councillor Keith Whitmore has accepted our invitation of cutting the ribbon. We will also be including:
One Day Only special Offer! 1/2 price Finder’s Fee for your next tenant if you instruct us on a new property (full management only)
One Day Only special Offer! Introduce another landlord to PAD4U and you both receive ½ price Finders Fess for your next tenants (full management only)
Face painting for children
Drinks
Canapés
Pad4u Cake
Free prize draw to win a Ipod
Guests include Manchester’s Landlords, Local shop owners, Local contractors and local residents.

In my post before the budget I urged landlords not to panic at the talk of 40% Capital Gains Tax (CGT) and a reduction in the tax free buffer from £10,000 to £2,000.  I expected that the propaganda before the budget would try to paint the worst case scenario for CGT, so that come the day all of us would breath a sigh of relief when the news wasn’t so bad.  Which is pretty much what happened.

CGT was raised for higher rate tax payers from 18% to 28%, (remember even if you are a lower rate tax payer, the capital gain will be added to your income to determine whether you will pay the higher rate CGT).  This is not a small rise and as I pointed out in my previous post it is in practice a retrospective tax as any gains you have already made will be taxed at the new rate should you dispose of an asset.  The £10,000 free tax band has remained thankfully, taking the some of the pain away from the 10% increase.

I fundamentally disagree with any increase in capital gains tax, because I believe that all Governments have let us down with protecting our pensions forcing each individual to look after their own pension provision and many have rightly chosen to do that through property, as it is an asset class they understand rather than derivatives or bonds or the like.

The Liberals argue that income tax and CGT have become disconnected allowing rich individuals to pay less tax than those on the lower  income tax band.  However, what hasn’t been discussed is the discrepancy in tax between the various type of pensionable asset classes.  There are many tax efficient vehicles for people to invest for their pensions such as ISA or SIPPs.  These vehicles allow investors to avoid any CGT on whatever assets they hold within those vehicles.   However, whilst you may hold all sorts of assets from shares, bonds, fine wine, fine art, stamps, commercial property, etc.,  it is not possible to hold residential property in either an ISA or a SIPP. 

If it is the Governments policy to create parity in the tax of income and capital gains tax then they must allow residential property to be place into SIPPs, so that Buy-to-Let investors are not singled out as the only group of investors who for the provision of their pension arrangements will be paying full CGT, whilst all other investors will not pay any CGT whatsoever.

The rest of the Budget was pretty much inconsequential for Buy-to-Let investors. The removal of HIPs was good for the industry, but little else has changed.  Housing benefit restrictions are not likely to affect local Landlords and as PAD4U landlords we wait until Housing Benefit rents are paid directly to the landlord before recommending more readily.