Newsletter October 2006Mortgages for Business voted ‘Commercial Mortgage Broker of the Year’ Mortgages for Business, the specialist Buy to Let and commercial property mortgage brokerage, has been voted ‘Best Commercial Mortgage Broker of the Year’ by industry peers at the Pink Home Loan awards held on 28th September at the Birmingham Botanical Gardens. The awards were organised by Pink Home Loans, a subsidiary of the Skipton Building Society, and was hosted by TV personality Adrian Chiles and attended by 310 mortgage industry professionals. Mortgages for Business was voted ‘Best Commercial Mortgage Broker of the Year’ for its unparalleled depth of knowledge in commercial property based mortgage lending and its ability to negotiate mortgage terms in a market where rates are, by in large, individually priced. David Whittaker, Managing Director of Mortgages for Business comments: “We are absolutely thrilled with this award. The award is for the whole team and recognises the contribution and effort made by everyone at Mortgages for Business. A large focus of the award was customer service, and this is recognition of our approach to giving customers individual mortgage consultants and administrators, in order to provide on going mutually beneficial supportive relationships.” Mortgages for Business arranges finance for a diverse range of commercial property as well as many niche markets including hotels and guest houses, health clubs, care homes, pubs and restaurants, schools and agricultural buildings.
A new study published today reveals a dramatic change in commercial and residential land use in East London as a result of London hosting the 2012 Olympic and Paralympic Games.
East meets West as Olympic legacy changes the face of London Gold, Silver or Bronze: Development Prospects in East London, carried out by property consultants GVA Grimley and RICS (Royal Institution of Chartered Surveyors), is a detailed analysis of the Olympic legacy, demonstrating how Stratford and East London will look in 2020 as a result of commercial development and regeneration. It identifies all the residential, retail and leisure, office and industrial developments which are in the pipeline for delivery by 2012, and post Olympics in 2020.
The study demonstrates that by 2020, the pattern of commercial land use will closely resemble the pattern that is evident in present day West London.
Office space in East London currently accounts for around 23% of total commercial floor space stock, and this figure is expected to rise to 38% by 2020, with 2,261,735 sqm of new office in the pipeline. Industrial floor space stock is set to contract by 2020, adding further evidence of East London adopting a character similar to West London.
In one year since the Games were awarded, average house prices have increased by 18%, compared to a London average of 4.1%.
Overall, the study has identified over 100 major commercial developments in the pipeline as a result of London winning the bid to host the London 2012 Olympic Games. These developments have been mapped out across seven areas in East London; Olympic Park/Stratford, Leyton-Wanstead/Isle of Dogs/Royal Dogs-Canning Town, Barking Riverside, Rotherhithe-Greenwich and Woolwich-Thamesmead.
The study highlights the significant stock of new housing in East London, with 90,000 residential units in total planned, 9,000 of which are in the Olympic Park. Also recognised is the continuing rise in housing price in the area, particularly in Stratford and around the Olympic Park, and Royal Docks and Barking Riverside.
In addition to geographical location, the report also breaks down the developments into use of floor space (eg office, retail and leisure, industrial or residential) and the current stage of development (eg under construction, planning permission granted, application on site).
Transport infrastructure is acknowledged as a critical influence in the overall success of the area. It can dramatically increase the demand for commercial and residential space, and lead to increased land values.
Richard Taylor, Chair of RICS World Games Commission, comments on the study: “This study is the strongest indication yet of the positive impact that the 2012 Games is having on what has largely been a derelict and unloved part of the capital. You only have to see what the Olympic Games did for transforming a rundown harbour area of Barcelona into a highly sought after hotspot for commercial and residential developments.”
Distraining for Commercial Arrears: the Proposed New Procedure New legislation has been published by the Department of Constitutional Affairs which, if enacted, will abolish the old rules permitting landlords of commercial premises to distrain for arrears of rent. A new procedure to seize goods is being introduced but is more limited in its scope. It represents the most radical change to the law of distraint for a century. Existing Law
Currently, a landlord of commercial premises can distrain (i.e. enter and seize goods on the premises let to the tenant and sell them) to realise money to cover arrears of rent. Distress may be carried out either by the landlord in person or by an authorised bailiff, acting as agent for the landlord. He may either remove the goods or impound them on the premises until the debt has been paid, known as taking "walking possession". Additionally, a head landlord can distrain in a different way by serving a notice on any subtenant requiring the subtenant to pay his rent directly to the head landlord until the arrears are cleared. The draft Tribunals, Courts, and Enforcement Bill
The draft Bill repeals all existing powers to distrain. Certain aspects of the existing law are preserved albeit with modifications and safeguards for tenants. The result is Commercial Rent Arrears Recovery (CRAR) which allows goods to be seized if a notice of enforcement is first served. The tenant can apply to the Court for an order to set aside the notice or to prevent a further step under CRAR without the Court's permission. Key Features of CRAR:
• Landlords or enforcement agents need to be certified to use the process.
• The process will only be available in relation to tenancies of commercial premises. Even then landlords of "mixed use" premises, where part of the premises can be used as a dwelling (such as a public house or the lease of a shop and a flat above) will not be able to use CRAR.
• CRAR may only be used to recover rent where the amount is both quantifiable and overdue. Additionally, not all sums that are reserved as rent can be recovered using CRAR. Rent is defined as the amount payable under a lease for possession and use of the premises. It does not include other payments such service charges, insurance or ancillary sums, whatever the lease may say to the contrary.
• The existing right to require a subtenant to pay his rent to a head landlord is preserved and if the subtenant fails to pay the amount claimed in the notice, the landlord is entitled to exercise CRAR against the subtenant.
• Regulations will be published flushing out in detail matters such as the minimum sum for which CRAR can be used and the form of notice of enforcement.
Comments have been invited on the draft Bill before it is presented to Parliament. The closing date for comment is 22 September. For those wishing to do so, please visit the DCA website.
Mortgage lending hits new heights, says CML Gross mortgage lending hit a new record in August, reaching £32.7 billion, according to the latest data from the Council of Mortgage Lenders (CML). This is 7.2% higher than the £30 billion of lending in July, and 21% higher than the £26.9 billion lent in the same month last year. It also beats the previous record set in June, of £32.4 billion.
Commenting on today's data, CML Director General Michael Coogan said:
"Record lending in August reflects the rise in mortgage approvals during the early summer combined with increasing house prices. The strength of the London market is also a factor - with property values and mortgage sizes substantially higher than in other parts of the country.
"In the coming months we expect to see a very similar picture, as demand remains strong and house prices continue to rise. But with financial markets still expecting an increase in interest rates sometime between now and the middle of next year, we forecast that house price growth and strength of demand will moderate, as consumers anticipate higher rates.
"Despite today's figure being the tenth monthly lending record of the past year, this level of lending is sustainable and illustrates the market is in fundamentally robust shape"
Buy to Let 10 years old – now a major industry At the tenth anniversary of its launch by ARLA, the Association of Residential Letting Agents, Buy to Let has proved to be a force for good in the housing market and a major industry in its own right. This assessment was presented at No. One Birdcage Walk, Westminster, today (Sept 26), in a specially commissioned report, “Buy to Let, The Revolution – 10 Years On.”
Today over a million households live in Buy to Let properties. These property assets are worth well over £120 billion and the Buy to Let sector contributes over £30 billion to the economy each year. This contribution is worth more than that made by all the pubs, hotels and restaurants in the country and is over four times more than the contribution from the motor industry.
Presenting his report for ARLA to an audience from Government, The City and the property industry, Michael Ball, Professor of Urban and Property Economics at the University of Reading Business School, forecast an average growth in numbers of Buy to Let tenancies of 20-30,000 a year over the next ten years. He pointed out that while demand for Buy to Let mortgages will grow faster as the sector is still relatively under-mortgaged.
The report shows that Buy to Let has spread the reach of the private rented sector into areas that had little or no private renting before. This has had the knock-on effect of reviving housing markets and assisting in inner city regeneration.
In the mid-1990s less than half the PRS was owned by individuals, now they own two- thirds of the sector. This is due not only to individual desire to invest in property but also because corporate organisations have been running down their property assets.
This private ownership has occurred without the vast majority of Buy to Let investors becoming financially stretched. Investor landlords have substantial cushions of their own wealth, including equity in owner-occupation, employment and other non-rental income.
Without Buy to Let, the ARLA 10 year report asserts, the Private Rented Sector would be a lot smaller.
A shrunken Private Rented Sector would have provided for less choice in housing and standards would have suffered. Competition between landlords in the provision of rented property has brought considerable gains to households in rented accommodation. This is one of the reasons why more people rent.
The benefits of renting appeal particularly to young mobile people. Changing lifestyles, affluence, employment patterns and financial circumstances have combined to encourage more younger people to rent rather than own their homes, as they may have done in previous decades. However, most tenants will build up savings, maybe have children, and so – the report suggests - succumb to the benefits of home ownership.
But today, many young people are moving to home ownership at least a decade later in life than they did before.
Commenting on the report, ARLA Chief Executive Adrian Turner said, “ARLA went out on a limb to launch the modern concept of Buy to Let in September 1996, backed by a far-seeing panel of mortgage lenders. Our aim was to bring more and better quality property to the Private Rented Sector. Ten years on we are the first to admit that we could never have foreseen the success this was to be for investor landlords, their tenants and the Private Rented Sector.”
ARLA, the lead professional body for the Private Rented Sector, was backed in the then breakthrough concept by the ARLA Panel of Mortgage Lenders. The original panel of Birmingham Midshires (then known as Halifax Mortgage Services), Mortgage Express and Paragon Mortgages was quickly joined by NatWest followed by GMAC RFC and The Mortgage Business.
Website for landlords by landlords A new free website has been developed by landlords for landlords with the primary aim to make work life simpler and more flexible for landlords. The Property Hawk website provides easy access to useful industry information and products as well as relevant links to service websites who can provide comprehensive advice with regards to the Buy to Let property market. The service links include Mortgage Brokers, Insurance brokers, Landlord law advice firms and taxation advice websites and many more. Property Hawk is the brainchild of Chris Horne, a fellow landlord who juggled both property management alongside a full time job for many years and so understands the day to day realities for landlords. Chris therefore made it his aim to make the site and software both quick to use and easy to access. He has utilised his knowledge and expertise to make Property Hawk the complete hompage for landlords, allowing you to access all your records wherever you are. The website is adaptable to a landlords needs and can be used as a digital rentbook, to manage and create tenancy agreements or as a full property management software that calculates all your tax liabilities to enable the site to save landlords time and money, whatever the level of use. All the products and services displayed on the website have been recommended by landlords to Property Hawk. This is a truly unbiased forum that allows landlords to recommend products and services, share experiences and give advice to the Property Hawk Community. To access this site please visit www.propertyhawk.co.uk
|
