Drugs Gang Rent Property from Police Chief!

Drugs Gang Rent Property from Police Chief!

Following on from yesterday’s post about rental properties used as drugs production centres, a police chief has become a victim of a drugs gang who were renting a house the very purpose.

Rod Jarman, a deputy assistant commissioner at Scotland Yard chose to rent property through a letting agency but even though the usual tenant checks were done, they didn’t highlight any cause for alarm.  

The gang used Mr Jarman’s four bedroomed rental property in Essex, worth £400,000, to grow large amounts of skunk plants and in the process caused £50,000 of damage and used £20,000 of electricity to run the lighting system.

Neighbours were concerned about strange noises in the house and contacted Mr Jarman.  He visited the property and found the evidence of his green-fingered tenants who had since disappeared.  There was also signs of a break-in most likely from a rival gang.

He said that despite “31 years’ experience of policing” he didn’t see it coming.

Each year, police find approximately 20 cannabis factories each day in England and Wales, some of which are housed in property lettings just like Mr Jarman’s.  That amounts to 1.3 million plants worth £150 million seized altogether.  

Cannabis production is now such big business in Britain (aided by the recession causing many empty properties such as cinemas, offices, houses, shops and pubs) that gangs export the surplus to Europe.

Look out for blacked-out windows, condensation, hot walls or strange smells and noises.

New incentives to tackle the blight of empty homes

Communities Minister Andrew Stunell has set out how local people can bring back into use empty homes that attract anti-social behaviour and cause misery for neighbours.

The Government is offering powerful new incentives for councils to get empty homes lived in again, matching the council tax raised for every empty property brought back into use - which can be spent as they wish. Mr Stunell urged local communities to work with their council to identify where empty homes are blighting the neighbourhood, and start benefiting from extra cash that can be used to improve the local area.

There are around 300,000 long term empty properties across England. They can easily fall into disrepair, attracting squatters, vandalism and anti-social behaviour, bringing down the neighbourhood. So Mr Stunell is calling on residents to come forward and point out these properties to their local council so action can be taken to tackle the problem.

Under plans recently consulted on, the Government will match through the New Homes Bonus any council tax raised from a property that previously stood empty. The extra funding can be spent to benefit the local community - whether on council tax discounts, boosting local services, renovating more empty properties or improving local facilities.

The funding is part of a two pronged attack to get to grips with the issue of empty homes, and will supplement the £100 million already announced as part of the Spending Review for Housing Associations to bring empty properties back into use.

Communities Minister Andrew Stunell said:

“Long-term empty properties easily fall into disrepair, and attract the squatters, vandalism and anti-social behaviour that bring down our local neighbourhoods. With as many as 300,000 long-term empty properties across the UK this precious resource is being squandered.

“Empty properties should instead be treated as an asset and brought back into use for those families that need somewhere to live.

“That’s why we’re giving local councils powerful new incentives to tackle the problem. The Coalition government is pledging to match the council tax raised for every property brought back into use to help these properties become homes for thousands of families in need.

“It’s vital that local communities, councils and owners of empty properties work together to bring properties back into use and begin to tackle this problem that is blighting our local communities.”

House prices down by 1.6% in 2010

House prices fell by 1.3% in December, contributing to a 1.6% decline over the whole of last year, according to figures released by the Halifax this morning.

However, the lender pointed out that the quarterly price change (lenders’ preferred measure because it smoothes out monthly volatility) from October to December dropped just 0.9% compared to the previous quarter. Martin Ellis, housing economist for the Halifax, said the quarterly rate of decline was “significantly less than the quarterly falls of 5%-6% during the second half of 2008″.

The slow rate of decline mirrors what housing minister Grant Shapps said was necessary to allow struggling first-time buyers to find homes they could afford.

However, Ellis said that while continued low interest rates would help make mortgages more affordable for first-time buyers, with new borrowers having to use 29% of their average disposable earnings to meet typical monthly mortgage payments in the last quarter of last year, compared to 48% in mid-2007, it has made it easier for existing homeowners to resist putting their homes on the market.

“Interest rate rates are likely to remain very low for some time. This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell.

“Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings and higher taxes could put some downward pressure on demand”

Howard Archer, chief UK economist for IHS Global Insight, was more gloomy about mortgage rates, believing inflation could force the Bank of England into an early rise.

He added that the 0.9% fall in the last quarter of 2010 was consistent with his predictions for house prices in 2011: “If our forecast of a 10% correction proves to be right, average house prices on the Halifax measure will drop to £152,536 in 2011 – a decline of £10,899 from the December 2010 level of £163,435. This means house prices will fall around 7% in 2011.”

Price falls are likely to vary in size around the country depending on the impact of public spending cuts, according to the Halifax. James Scott-Lee, chairman of the Chancellors Group of estate agents, agreed, saying the headline Halifax figure could not summarise regional variations within the market.

“The Halifax house prices figure will doubtless trigger more doom and gloom,” he said. “However, while there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities – not least the capital – the right type of property is still commanding the right sort of price.

“Poor quality properties in areas of oversupply are under real pressure but sought-after properties in areas of high demand are still performing well.”

 He added: “Come the end of 2011 we expect prices in London and the south-east to be higher than they are at present, while towns and cities in the north could suffer further price falls.”

Portals reveal property enquiry surge

Zoopla has revealed a 251% surge in property enquiry levels compared with this time last year. 

The portal, which earlier this week announced its acquisition of houseprices.com for an undisclosed sum, also reveals that vendor appraisal leads have rocketed by 258% in the same period, which means that over 10 leads per minute, 24 hours per day, are currently being sent to its UK agent and developer members.

House hunters undertook over one million property searches during the first four days of the New Year, which is a 102% increase on the number recorded this time last year, and at an average rate of over 180 unique searches per minute.

On Jan 3 alone, Zoopla experienced over 2.9 million page impressions, which excedes its previous record of 2.1 million revealed in September.

Alex Chesterman, founder and chief executive officer of Zoopla, says: “Increased search and enquiry activity via property portals is a good early indicator of market interest and, whilst still very early, the signs so far for 2011 look encouraging.”

Zoopla’s search results are being echoed by Rightmove, which yesterday revealed that its iPhone app has hit one million downloads since launching in August.

Landlords say rents to rise in 2011

This is on the back of strong levels of tenant demand, research from The Paragon Group has revealed.

The buy-to-let mortgage specialist’s data showed 55 per cent of landlords plan to keep rents at 2010 levels and four per cent landlords will reduce the rent they charge.

Nearly a third of landlords plan to increase rents by up to four per cent of the current value, with ten per cent aiming to increase the rent they charge tenants by between four and eight per cent.

Landlords’ expectations for rental inflation are mirrored by their view of tenant demand over the next 12 months. Some 45 per cent of landlords believe tenant demand will continue to grow during the year, with 44 per cent forecasting that it will stabilise.

Nigel Terrington, chief executive at Paragon, claimed landlords are in a strong position. He said: “Tenant demand has risen faster than supply during 2010 and that is expected to continue well into 2011. ‘This is reflected in landlords‘ expectations of future levels of tenant demand and also the rent they are planning to charge for their properties.‘

‘There continues to be a lack of finance available in the UK mortgage market, meaning that many potential buyers are opting to rent instead.‘

‘Meanwhile, many of the factors that have driven tenant demand in recent years, such as positive net migration, high student numbers and people preferring to buy later in life, are continuing‘

If you would like to know more about our services and how we can help you why not register your interest?

implications of spending review for the private rented sector

Whilst there have been acres of newsprint and hours of media devoted to last weeks Spending Review there appears to be little that actually directly concerns residential letting. Dig beneath the surface however and it is a very different story.

The Government is intent on reducing the welfare state and have drawn up plans for a 60% reduction in social housing costs. The headline is the cap on Local Housing Allowance to £400 per week. This will clearly hit city centres and the south east in particular. It could mean that many people on housing benefit are forced to move.

What is unsure is whether those in work will take up these properties should people on LHA be forced to move to find affordable housing.

The Government is predicting that their measures will result in nearly 500,000 lost public sector jobs and the Opposition are claiming that the real losses will be double that. Whatever the actual figures it seems clear that many tenants will find themselves seeking Local Housing Allowance, especially in those areas with a high percentage of public sector workers.

Many landlords run the risk of tenants defaulting on their rent because their tenants have lost their jobs. The impact on the individual landlord could be huge, especially if the landlord has high mortgage payments and no protection in place to cover their rents.

The lack of affordable homes for first time buyers because of the downturn in building and mortgage lending means that more and more people are facing renting rather than buying.

Nationally there has been an increased demand for rented accommodation over recent months. It is clear that many landlords would like to increase their portfolios to meet that increase in demand. However, the unwillingness of the banks to lend, and more especially their unwillingness to compete for business, means that for many landlords buying more property appears out of the question.

Therefore, it is unlikely that the private rented sector will be able to greatly increase the number of available properties to rent in the short to medium term.

This bottleneck will not be eased in the short term by the announcement that the Government seeks to encourage building of 150,000 affordable homes. Even during boom times Governments of all colours have failed to hit the new build housing targets, it seems doubtful that will change as we scramble out of recession.

Therefore, pressure on the private rented sector seems likely to increase rather than decrease.

Landlords need to review their existing arrangements and ensure that if tenants default they are not at risk. Products like Rent & Legal Protection and Rent on Time are more vital than ever to ensure that if a tenant defaults then the Landlord is able to continue to pay their Buy to Let mortgage.

Landlords need to take every precaution possible to rent to those most likely to pay their rent. At the same time Landlords need to ensure that they set up and manage their tenancies correctly to cover themselves should they need to take legal action to remove a tenant.

With over 70 pieces of legislation affecting the private rented sector it is crucial that the correct paperwork, referencing, deposit handling and certificates are in place or Landlords could easily find they are unable to take action against their tenant.

Landlords with mortgages need to ensure that they have the most competitive loans possible. Those Landlords with substantial equity or cash in the bank may well find that now is the time to buy more properties. Review your lending options to ensure that you are maximising your income.

The most certain prediction is that the future will be unpredictable.

Landlords set to cash in as demand soars

The rental market is expanding as demand increases but a shortage of homes is pushing rents to record highs.

Nearly a third of landlords are looking to increase the number of properties they have as demand for rented accommodation soars, research indicated this week. Around 28 per cent of buy-to-let investors are planning to buy more properties during the coming 12 months, while 43 per cent think they will maintain their portfolios at their current size, according to LSL Property services, the UK’s largest letting agent network.

Landlords’ confidence is being driven by growing demand for rental property, with 50 per cent of landlords seeing an increase in the number of people who want to let a home during the three months to the end of October, while 69 per cent expect demand to continue to grow during the coming year. The increase in demand, combined with a shortage of rental homes, pushed rents up to a record high of £689 a month in September, following eight consecutive months of rises.

Landlords are also increasingly confident that their properties will not be empty for long periods in between tenants. Just under half of landlords said they thought it was a good time to invest in property, while only 1 per cent said they thought it was a good time to reduce the number of properties they have.

David Newnes, estate agency managing director at LSL, said: “Optimism is growing amongst landlords underpinned by very strong tenant demand, which has pushed rents up to new heights. “With mortgage lending conditions so tight and uncertainty over the direction of house prices, many would-be buyers are choosing to stay in the private rented sector for the time being. “The majority of landlords anticipate that tenant demand will increase further in the next year.”

He said the Government’s announcement in the Comprehensive Spending Review that new social housing tenants could be charged rents equivalent to 80 per cent of what they would be charged to rent privately was likely to further boost demand, as people opted to rent privately rather than face long waiting times for social housing.
He said: “An increase in the supply of rental accommodation will be necessary to meet this demand – and many landlords recognise this as an opportunity for investment.”

But landlords who want to buy more properties are continuing to face problems as a result of the ongoing shortage of buy-to-let mortgages.
Around 71 per cent of landlords who recently tried to get a mortgage said they thought it was now more difficult to borrow money than it was a year ago, with only 5 per cent saying it was easier.

But there is some evidence that the situation may be beginning to ease, with a number of new buy-to-let products launched by lenders in recent weeks.

Multiple Occupancy Landlords Beware HMRC’s New Position on Communal Areas

HM Revenue & Customs latest Business Brief treats some communal areas as dwellings. HMRC’s Business Brief 45/10 has set out their position regarding kitchens and other communal areas for multiple occupancy dwellings such as student accommodation. This update has been awaited for some time. In summary, areas such as kitchens and lounges will now be treated as dwellings alongside tenants’ private rooms. This may have implications for VAT, and for expenditure otherwise eligible for Capital Allowances, incurred on or after 22 October 2010. Common areas such as stairs, lifts and lobbies will not be treated as comprising part of the “dwellings”.

Comprehensive Spending Review: the full cuts revealed

The Chancellor, George Osborne stood up in the House Commons to detail the largest series of public spending cuts seen in decades.

Mr Osborne told MPs that the reductions in expenditure, totalling almost £83 billion, were needed to draw Britain “back from the brink”.

The comprehensive spending review, which has been the most important in generations, would eliminate the UK’s structural deficit by 2014/15 and would see national debt falling significantly over the same period.

Current debt interest payments total £43 billion a year. Debt interest payments will be lower by £1 billion in 2012, £1.8 billion in 2013 and £3 billion in 2014, a total of £5 billion over the course of the review, the Chancellor said.

Capital spending will be £51 billion next year, then £49 billion, then £46 billion and £47 billion in 2014-15, roughly £2 billion a year higher than set out in the Budget.

Total public expenditure, which includes debt interest payments, will be £702 billion next year, then £713 billion, £724 billion and £740 billion, bringing real terms public spending to the same level as 2008.

The coalition government’s plans would set the both public services and the welfare system on what Mr Osborne described as a sustainable footing. The cost will be the loss, as predicted by the Office for Budgetary Responsibility, of some 490,000 public sector jobs by 2015.

The changes to the welfare system were perhaps the most marked of all the planned reductions in spending, with some £7 billion more of funding to be withdrawn over the next four years.

The squeeze on welfare budgets meant that the Chancellor was able to inform the House that, as an average, departmental cuts across Whitehall amounted to 19 per cent, one per cent lower than the estimate put forward by the previous Labour administration in their own plans for combating the deficit.

Mr Osborne insisted that the deep financial retrenchment was based on reform, fairness and growth, the road ahead hard but leading to a better future.

The health budget will rise by 0.4 per cent annually in real terms over the next four years, its annual spend hitting £114.4 billion by 2015.

The education budget is also to enjoy an increase in funding each year, and a £2.5 billion pupil premium pot will be set aside to support the education of poor and disadvantaged children.

Inevitably, there were cuts elsewhere, with most departments set significantly stringent spending targets for the duration of the current Parliament.

The Home Office is to lose 6 per cent a year. Police budgets are to face a 16 per cent cut over the next four years.

The MOD must deal with cuts of 8 per cent; the Foreign Office 24 per cent; and the Cabinet Office 35 per cent.

Although the Department of Business is to lose 25 per cent of its funding over the course of the next four years, the science budget is to remain at £4.6 billion a year, so protecting the teaching of and research into STEM subjects such as technology, maths and engineering.

The government also committed itself to increase spending on adult apprenticeships by £250 million a year, creating an extra 75,000 apprenticeship places.

We will all be working longer. The state retirement age for men and women is to be equalised at 65 by November 2018, and the retirement age for both men and women will then rise to 66 by April 2020, some four years ahead of previous plans. The acceleration of the changes will hit women the hardest.

Town halls are to encounter a 7.1 per cent fall per year in their funding over the next four years, with ringfenced grants facing abolition.

The Department of Energy escaped with a relatively inoffensive 5 per cent annual cut, and the Chancellor committed the government to setting up a Green Investment Bank aimed at encouraging investment in green businesses.

On tax, HM Revenue and Customs is going to have to handle a cut of 15 per cent in real terms, and has been briefed to make the savings through a reduction in admin costs and a more effective targeting of customer services.

HMRC will also be conducting the next stage of the consultation on improving the PAYE system, examining how best to manage a real time information process.

Despite the cuts, the tax authority has been given an extra £900 million over the next four years to tackle the issue of tax avoidance. The plan is that the additional resources will enable HMRC to recover some £7 billion a year in underpaid or unpaid tax by 2014/15.

The government has set its path for the next four years. Whether it leads to sustained recovery, as the coalition believes it will, or to a double-dip recession, as its opponents fear, time will tell.

UK recovery slowing

The economy showed signs of slowing in the third quarter of the year, according to a new study.

The latest quarterly survey from the British Chambers of Commerce (BCC), which takes in almost 5,000 firms from across the country, found that the economy was still growing but at a slower rate than that recorded in the second quarter of the year.

While the manufacturing sector stuttered, it nevertheless produced some positive aspects, the BCC said.

But the services sector turned in a weaker performance than manufacturing.

In manufacturing, the turnover confidence balance rose seven points to +49 per cent, the strongest result since the third quarter of 2007. However, manufacturers’ expectations on the profits likely to be delivered by that turnover fell by three points to +23 per cent.

In the service sector, the domestic orders balance fell nine points to -4 per cent, dropping into negative territory after being positive in the second quarter.

The BCC went on to point out that the service domestic balances, though much weaker than those for manufacturing, were still better than during the recession.

David Frost, the BCC’s director general, commented: “Overall, these results are disappointing, particularly for the service sector – although they did show that manufacturing was significantly stronger in the third quarter.

“Businesses accept the government’s austerity measures. But now it’s time to shift the national debate from cuts to what needs to be done to grow the UK economy. The private sector will do the heavy lifting – but the government must play its part by supporting capital investment in crucial infrastructure projects.”

David Kern, chief economist at the BCC, added that the dismal performance of the service sector is particularly disturbing, since it has happened even before VAT is due to rise to 20 per cent, and before the full impact of the tough deficit-cutting measures take effect.

Mr Kern, though, counseled against overstating the gloom: “Growth remains in positive territory, and a new recession can be avoided. But the UK will face huge challenges over the year ahead. Risks of a setback are likely to remain serious for a considerable time, which is why it is essential for interest rates to be kept at very low levels for an extended period.

“But this is not enough. The MPC should seriously consider increasing the quantitative easing programme to £250 billion before the end of 2010, to enhance the economy’s ability to cope. Reducing threats of a double-dip recession must be the main policy priority.”