A buy to let property firm made misleading claims about investing as a landlord in a radio ad, according to a ruling by the Advertising Standards Authority.

Aldermartin Baines and Cuthbert (ABC Estates), of Bushey Heath, Hertfordshire, was banned from running the ad again and must broadcast unregulated property investment ads through specialist financial media.

The ASA delivered a verdict on the advert broadcast on local radio in January after three complaints.

The advert said: “The bank may be the safest place for your money, but Aldermartin Baines and Cuthbert estate agents would argue that it’s not the most sensible place.

“If you have cash on deposit in the bank, you may be getting only half a per cent interest on your money and inflation will be working against you by eroding your savings. So, what’s the alternative?

“Here at ABC Estates we’d like to suggest investing in property, good old bricks and mortar. Put your savings in a buy-to-let investment instead and you could generate a five per cent return on your investment, maybe more. Inflation would then actually work for you by eroding the value of your mortgage debt.”

The ASA disagreed and felt the adverts understated the risks involved in buy to let investment.

“We considered the ad misleadingly presented buy-to-let investment as low risk, in that it suggested it was an alternative, or a preferable option, to saving and did not make clear the potential risks associated with such an investment,” said the ASA.

“Ads for investments not regulated or permitted under the Financial Services and Markets Act 2000 (FSMA) may be broadcast on specialised financial channels, stations or programming only. Buy-to-let is not regulated under FSMA but considered the ad, which appeared on a non-specialist channel and emphasised an investment opportunity, promoted an investment. Because the ad promoted an investment not regulated by FSMA, we considered it should not have been broadcast on a non-specialist channel, regardless of whether or not it made clear the potential risks involved in buy-to-let investment.”

Aldermartin Baines & Cuthbert claimed they offered properties yielding between 7% and 12%, but had been advised a 5% yield made a better claim in the advert.

“We do not accept the ad misleadingly presented buy-to-let as a low risk investment. The ad did not mention ‘low risk’ but focused on inflation eroding the value of money, either on deposit or as the debt of a mortgage. This was obvious and would not mislead to anyone. The investments were low risk, because they gave an independent insurance backed rent guarantee,” the ASA was told.

“If a deal was considered risky, banks would not lend on it particularly in the current economic climate.”

Low yields and too few quality homes to buy are the biggest barriers to institutional investors entering buy to let, according to new research.

Fund managers perceive residential buy to let yields are an average 20% less than those offered by commercial property and the business model of low income and capital appreciation reverses the returns they seek.

The seven leading banks and funds approached by property firm Hamptons International also felt that a minimum £500 million investment would be needed to make any residential fund work and doubted the 2,500 or so quality properties required for a portfolio are not available.

The largest recent property deal was a 574 home portfolio that changed hands for £75 million.

The report concludes build-to-let is the likely solution to encourage insitutional investors in to the UK buy to let market.

“Build to Let will allow 100% private rented blocks to be built efficiently and at scale, offering higher net yields as well as the ability to acquire a large number of units in a single transaction,” said the report.

The report also urges the government to promote make the planning process easier for large build to let projects – and to especially look at the demand from local councils for developers to include low-cost social housing in their developments.

Adam Challis, head of research at Hamptons International, said: “This report offers a fascinating insight in to the challenges faced by institutions who are considering investment in the residential property sector, a topic which has long been a focus of the government.

“The results of this report are a clear message to government that if it wants to see institutions invest in the residential market, it needs to make build to let a viable option for investors.  The ability to create modern, efficient and bespoke private rented buildings constructed at scale without the burden of restricted planning policies will have a fundamental and positive impact on institutional investment in residential property.”

The bewildering complexity of self-regulated consumer protection offered to landlords seems to simply comes down to professional jealousy.

Landlords could be forgiven for thinking that the power-that-be at the august Association of Residential Letting Agents (ARLA) extended their concerns about rip off rogue agents beyond a turf war.

The cat was let out of the bag by ARLA president Tim Hyatt who candidly explained that his organisation could not work with rivals SafeAgent because a competitor administrated the scheme.

That competitor is the National Approved Letting Scheme (NALS).

SafeAgent chairman John Midgley immediately grabbed the moral higher ground from ARLA with a conciliatory statement.

“The suggestion that we change the way we are administered could prove very expensive, but would also have the risk that we become just another trade body. That is not our aim,” he said.

“SafeAgent is not about allegiance to any of the existing bodies. We are an independent body and here to inform members of the public. We have no plans to remove NALS. Our view is that it is irrelevant who administers the scheme.”

The Safeagent scheme has mushroomed to several thousand members in a short time. Backers include the government, National Union of Students, Shelter, Citizens Advice and the Residential Landlords Association.

At stake is landlord and tenant money collected and held in trust by letting agents. Client money protection stops landlords shutting up shop and disappearing with cash either through poor business management or dishonesty.

The latest unprotected firm to crash has debts of more than £410,000 in unpaid rents to landlords. Liquidators have told landlords they are unlikely to see a penny of their cash.

Hyatt is about to give up at the helm of ARLA and has one big regret – that the organisation does not have an elevator pitch to sell their letting agency licensing scheme that simplifies their service for the public.

Buy to let mortgage lending was down 5% in the first quarter of the year to £3.7 billion, according to the latest figures from the Council of Mortgage Lenders (CML).

Despite the bluster talking up the market from parties with a financial interest, buy to let is failing to make as much headway as the pundits suggest.

Confidence surveys from Paragon Mortgages and the Association of Residential Letting Agents suggest landlords want to spend on enlarging their property holdings, but these seem unfulfilled hopes held back by lending restrictions rather than completed deals.

The underlying data shows that despite 32,300 new buy to let mortgages agreed so far in 2012, lending is still more than 60% down on the peak years of 2006-07 with borrowing to buy rental properties 9% down and remortgaging 1% down on the last quarter of 2011.

However, the CML does indicate lending in 2012 is up around 30% in comparison to the first quarter of 2011. Buy-to-let mortgages total just over 1.4 million, with a total value of £159.4 billion.

Banks and building societies are shifting their focus slowly away from owner-occupier mortgages to buy to let. Market share has slowly grown from 12.2% 12 months ago to 12.8% in 2012.

CML director general Paul Smee said: “Even though buy-to-let lending is running at only around a third of its peak levels, the sector is continuing its gradual expansion. It has become an important part of the overall landscape of housing provision in the UK.”

Typical buy to let mortgages were at 75% loan-to-value with 125% rent cover – criteria that have remained unchanged for around three years.

Around 1,700 rental properties were repossessed in the quarter (0.12%), while around 23,500 buy to let mortgages are in arrears of three months or more (1.7%).

European politicians are trying to thrash out an agreement to regulate mortgages have missed another key milestone.

The vote on the progress of the mortgage directive was cancelled for the fourth time today by the European Parliament’s economic and monetary affairs committee (ECON) – and has been pushed back to May 14.

The vote was originally set for December.

The most likely hold-up is horse-trading between the committee members to resolve a final text for the directive.

The directive aims to impose a pan-European mortgage regime to increase consumer protection and tighten up lending criteria.

On of the main issues for the UK is buy to let mortgage regulation.

The directive does not differentiate between standard residential mortgages and investment mortgages and lenders in the UK fear buy to let loans will disappear unless an exemption is introduced in to the new rules.

If the directive comes in to force without the exemption, buy to let loans will face the same underwriting rules as standard home loans – including limiting borrowing within the landlord’s income rather than basing loans on rental income.

Most countries are unaffected by the buy to let issue as they either have no property investment market or offer buy to let as commercial lending.

“I do not know the precise cause of the delay,” said an ECON spokesman. “They usually occur because the groups do not have enough time to establish strong compromises, so they are still working on finalising the changes to the commission’s text.”

The Council of Mortgage Lenders, the UK’s trade body for banks and building societies, has lobbied against the directive for months, claiming the legislation is unnecessary and too expensive to implement in the UK.

The CML has also issued a ‘hands off’ warning over buy to let to the European Parliament.

Commercial property values have plunged in to the deepest decline recorded, according to new research.
Loan-to-values are also balancing at a crucial point as an 80% loan-to-value (LTV) mortgage taken out on a secondary property in 2007 is now 143% LTV borrowing.

Commercial prices were down 0.7% in the first three months of 2012, marking a second successive quarter of falls.

Values are now 31% below 2007 levels, which leaves many property investors in financial uncertainty as those seeking to refinance are now in negative equity, says the Investment Property Databank.

IPD reckons commercial investors have secured £300 billion of debt to their property and £114 billion is in a dead zone for refinancing on current terms and that 40% of all borrowing is at 80% LTV or more.

Analysts at IPD said this downturn is twice as bad as the last in the early 1990s. Then, five years after the initial crash, which is where the UK is in the current cycle, values had recovered to within 15% of pre-crash levels.

The decline is worse for the rest of the UK when London is excluded from the data. Without the capital’s more buoyant market, values have fallen by 1.8% across three quarters in a row.

The gap between prime and secondary property values is similar as have fallen by 6.1% in the past  six consecutive quarters to the widest margin between the two since the early 1990s.

Malcolm Frodsham, IPD research director said “The UK has fallen back into a technical recession largely due to a lack of business demand and a construction slump. As property values continue to decline, investors are unlikely to want to develop, which will lead to further pain.

“Regulators need to avoid any actions that will amplify the cycle further. Increasing bank and insurance company capital requirements at this point in the cycle for example will only further depress prices, which in turn creates adverse outcomes for other institutions holding real estate assets and further contraction in economic activity in the sector.”

Buy to let mortgage lenders are shaking up the market as they ready for the forthcoming rules to tighten up the criteria for borrowers.

The Co-Op Bank has confirmed that landlords can still opt for interest-only loans even though the lender has scrapped them for residential borrowers.

Platform – the Co-Op’s buy to let subsidiary – will offer interest only mortgages for buying and refinancing to landlords, said a spokesman, but has pulled all deals for homeowners through the Co-Op, Platform and Britannia.

As an indicator of how banks and building societies are viewing buy to let when the rules change, the Co-Op explained that buy to let is viewed as a business with rents underwriting interest payments and increasing property values in the long-term accepted as a repayment vehicle.

Lloyds Bank has also changed lending policy – interest only loans were withdrawn for residential buyers some weeks ago, but remain in place for landlords.

The latest move is to reduce loan exposure by cutting mortgage lending by 3% – and this could spell problems for property investors as Lloyds is one of the leading buy to let lenders via subsidiary BM Solutions.

The bank says borrowing costs on wholesale money markets are too high, so is reining in fund raising.

Instead, Lloyds wants to raise more cash from savers to underwrite lending – and wants to raise deposits by 3% .

Another big player in the buy to let market, The Mortgage Works (TMW), owned by The Nationwide, has added some new mortgages for landlords.

TMW’s has added three  new two-year fixed rates for mortgages and remortgages:

• 3.39% up to 60% loan to value (LTV)  with a 3.5% arrangement fee

• 4.99% up to 75% LTV with a 1.5% fee

• 4.99% up to 80% LTV with a 3.5% fee.

Interest rates on current two-year buy to let deals are also trimmed by up to 0.25% on loans to 75% LTV.

Tracie Pearce, head of group mortgages at Nationwide, said: “These improved rates are great news for landlords looking for a new purchase or remortgage deal. Our new two-year fixed rates start from just 3.39%, helping to maximise landlords’ monthly income.

“We regularly review our mortgages to ensure their relevance and competitiveness in the market and these changes are a further example of that.”

Mortgage lenders have waded in to the row over flood insurance for homes raging between the government and insurance firms.

Hopes for a quick resolution of the argument are sinking for landlords and lenders as time runs out for insurers and ministers to reach an agreement.

Insurers have threatened to pull the plug on home cover from July 2012 if the government fails to renew a pledge to fund flood defences in at risk areas.

Spending on protection has been cut as part of the government’s austerity measures to save money.

As huge areas of England are swamped with floods from heavy rains in April – the bank and building society trade body the Council of Mortgage Lenders is warning many that millions of homes could become unmortgageable.

The current ‘statement of principles’ between insurers and the government ends in June 2013, but landlords with homes in areas at risk from floods could pay more or lose cover from July, as new policies will cover the date the agreement ends.

“In the absence of a clear direction from the government, it is difficult to ascertain what the flood insurance market will look like, how many households will be affected and to what extent,” said a CML spokesman.

“This week, we have therefore written to the under-secretary of state for the environment, Richard Benyon, emphasising that the continued availability and affordability of insurance is a key factor in ensuring a stable housing market in areas where there is a higher risk of flooding.

“Lenders need to analyse their existing stock of loans and how mortgages may be affected by the unavailability or unaffordability of flooding insurance. If borrowers are unable to get cover, they risk breaching the terms and conditions of their mortgage and may find they are unable to refinance.

“A prospective purchaser of the property may also be unable to obtain finance. Even if insurance is available, high premiums or excesses could compromise the affordability of the mortgage or of repairs to the property.”

A garage in swish Knightsbridge, West London, is on the market for a record price of £525,000 – almost four times the price of an average house.

The freehold double garage, moments away from Harrods on Rysbrack Street, measures 21 feet wide by 16 feet long – a staggering £1,562 per square foot.

Robert Lewis, of W A Ellis, the agents selling the garage, said: “It is rare to get a freehold garage in Knightsbridge, so it is exceptionally valuable.  We anticipate interest from those already living within a two-three minute walk of the garage, for example the large houses on Walton Place, where there is no off-street parking.”

Meanwhile, The Methodist Chapel in Felindre, Knighton, Powys, was the cheapest property in England and Wales selling for just £7,500 in March, according to the Land Registry.

The most expensive home was Southdown House, Amberley, Arundel, West Sussex, which sold for £11.8 million.

The detached house, with three bedrooms, three bathrooms and two receptions, was bought by the current owners in May 2005 for £1 million.

Overall, March Land Registry house price data showed values were down 0.6% from February.

The average price of a home fell to £162,370 – although only detached homes came out as more than this figure at an average £251,112.

Semi detached homes averaged £153,080, terraced homes £122,075 and flats £149,229.

The North-East outperformed the market with prices rising by 5.6% from February. London also showed positive growth – but just 0.7%.

Wales showed the largest annual loss – with prices falling 5.5% – while the monthly price drop was 4.4%

More than 55,000 properties changed hands in England and Wales in March – up 13% on the same period last year.

A landlord’s group is lobbying the government to change the way buy to let is taxed.

The Residential Landlords Association has revived an old report published in November 2011 to support a call to reform landlord tax as a business rather than an investment.

The RLA is calling for:

• Capital gains rollover relief when profits from property are reinvested in buy to let

• Roll-over relief when a buy to let is sold to a first time buyer

• Extending capital allowances to residential letting property to encourage investment in upgrading homes by landlords

• Allowing self-invested pension plans (SiPP) to invest in buy to let homes – giving landlords pension contribution relief on their investments

• Expanding landlord energy saving allowances from the current £1,500 up to £14,500 per property

“These proposals would not lead to a loss of revenue to the Treasury because they would bring many unoccupied properties into use, so generating fresh income and bring forward in time tax allowances which would otherwise be claimed at a later date,” said the RLA.

“They would also enable a greater turn-over of property, boosting stamp duty receipts and boost other taxes. Figures suggest that every £1 invested in the private rental sector provides a return to the economy of £3.50 through expenditure on building work and furniture.

“On average, a sum equivalent to 10% of the purchase price of a property bought for renting is spent on renovations.”

Landlord taxes are based calculated in the same way as a business, but based on managing an investment.

HM Revenue & Customs has vigorously attacked landlords trying to claim business reliefs for buy to let property in a number of high profile cases.

The latest was denying incorporation relief to a landlord who transferred a portfolio of 10 flats in to a company.

A tax tribunal denied the claim on the grounds managing the flats did not amount to running a business.

Buy to let mortgage lenders are united in their defence of interest only mortgages for landlords.

In a survey by trade magazine and web site Mortgage Solutions, three key players in the industry have backed continuing availability of interest only loans to property investors.

However, they support limiting the mortgages to home buyers, citing different financial circumstances mean a different approach for each.

Interest only loans to homebuyers are aimed at keeping payments low during times when mortgage interest rates are high, while buy to let considerations are based on tax incentives as landlords pick up relief on mortgage interest payments but nothing on paying down capital.

“It therefore makes no sense for them to make regular capital repayments and most professional landlords will decide whether to refinance or sell and realise their asset, as their mortgage approaches the end of its term,” said Rob Lankey, managing director of Aldermore Commercial Mortgages.

“To rein in the use of interest-only in the buy-to-let market would pull the rug from under the feet of a large number of landlords and would have a serious and detrimental affect on the future prospects of the sector.”

Prospects are looking up for landlords as more people opt to rent a home, said Nationwide Building Society’s Ian Andrew, managing director of group intermediary sales.

“However, for landlords, where the property itself is largely its own repayment vehicle, access to appropriate interest-only funding remains the primary way true buy-to-let loans can work successfully, delivering good customer outcomes for all,” he added.

John Heron, managing director of Paragon Mortgages, confirmed landlords were not experiencing any reduction in interest only mortgage deals.

“It is in the landlord’s interest to make their capital work as hard as possible and to make the most of the tax breaks available to them on private rented property. It does not make sense for a landlord to pay a mortgage down over time, but rather to maintain their loan at a sustainable level – relative to the rental income and costs,” he said.

Thousands of families are trying to make a little extra cash on the side by running small businesses from their homes – but landlords may want to set up a closed shop for the self-employed because of legal risks.

Just over 4 million people are registered with HM Revenue & Customs as self-employed, and most work from home, according to the latest figures from the Office of National Statistics.

That adds up to 14% of the working population. Many more dabble in a business, like trading on eBay or selling arts and crafts.

Running a business from home is not illegal – but opening one in a rented property should come with consent from the owner.

Although landlords often do not want to interfere with their tenants’ lives and income, running a business from a buy to let can have consequences.

Most buy to lets are rented on assured shorthold tenancy agreements that should include a clause that stops the tenant running a business from their home without permission from the landlord.

Not having the permission can cause the property owner difficulties:

• Trading from the property might require planning permission, which is the responsibility of the owner to obtain, not the tenant
•  If the business is large-scale, the council may consider switching the home from Council Tax to business rates
•  Using the property to store stock, tools or other materials and equipment may void the buildings insurance
•  The mortgage lender may not consent to business use, which could breach the loan contract
• Registering a company at a property could lead to problems with credit reference agencies

On top of all that, if the tenant runs a business from a buy to let, the terms of the lease could negate the tenancy agreement and push any repossession proceedings in to commercial rather than residential property law.

One way of checking out business use of a buy to let is searching the address in Google.

If a landlord or letting agent comes across a tenant running a business from a rented home, the action should be treated as a breach of the tenancy agreement, so serve a warning notice asking them to stop immediately.

Should the warning fail, give notice to quit and inspect the property thoroughly to make sure the business use has not led to costly damage or changes.

Soaring rents in London are leading to some fundamental changes in tenancies, according to the latest rental report from specialist landlord insurer Homelet.

Average rents in London hit £1,156 a month in March – while tenant incomes dropped around 3.5%.

To cope, says Homelet, more tenants are laying off the cost of renting by sharing, while tenants claiming housing benefits are starting to move away from the most expensive areas as the government cuts the money they receive.

Overall, UK rents rose by 2.6% to £764 a month as tenant incomes fell by 1.2% outside the capital.

“Tenant incomes appear to be rising at a much lower rate than they were 12 months ago. As economic uncertainly continues it’s likely that incomes could remain flat for many tenants in 2012, especially those with public sector jobs,” said managing director Ian Fraser.

“With inflation remaining high and average tenant incomes not growing at a proportional rate to rents, tenants budgets will continue to be stretched.

“Traditionally rents rise in the run up to September, when more high yield student properties go on to the market.

“The level of affordability for rental property varies for each region of the UK. While sharing property, particularly in the capital, helps to ease the financial pressures that tenants are facing, it’s important to remember that tenants across the country are getting varying sizes and standards of property for their money.

“To ensure long term growth after the economy has recovered, the private rented sector has to offer value for money, and while demand is high, it’s important that the quality of rental stock does not deteriorate.”

Regionally, rents dropped a little in the North East, North West and Wales, but continued to rise elsewhere.

London rents were up 6.1% on the month, while the south east also climbed 5.1%. The best returns elsewhere were 3.5% in the South West.

The UK is tipped as the number one destination for foreign students looking for a degree from an internationally respected university, according to the British Council.

The influx of overseas students in the UK is expected to outstrip any other country over the next few years – and could supply an extra 30,000 potential tenants for student landlords – 10% on current numbers.

Although the next academic year does not start until October, the British Council – the body responsible for British international cultural relations – says students are looking for accommodation already.

The problem for many landlords is where to invest for the best returns with 200 plus higher education institutions all over the country.

To help, property portal Zoopla has compiled a top 10 list of the best places to invest based on yields for landlords:

• Birmingham is the number one destination, with an average yield of 7% in a city with three universities, more than 57,000 students and rents that have surged by 15% in two years. Good transport links and plenty of well-priced property feeds the market.
• Nottingham produces student letting yields of 6.4% from two universities
• London also clocks up yields of 6.4% in a tougher market shared with corporate halls, but the highest number of universities and a massive supply of property leaves plenty of room for smaller landlords
• Coventry is a surprise interloper – an unfashionable city also with yields of 6.4%. Demand is high from two universities with around 35,000 students – and nearby Warwick University to swell numbers.
• Glasgow is the winner in Scotland, lagging the leaders with a 6.2% yield
• York, Oxford and Reading all offer a yield of 6.1%. Each city has two universities – but Oxford is developing a major landlord-unfriendly reputation with strict house in multiple occupation planning controls
• Manchester and Leicester both return an annual yield of 5.8%, and like the rest of the top 10, have two or more universities.

The UK is tipped as the number one destination for foreign students looking for a degree from an internationally respected university, according to the British Council.

The influx of overseas students in the UK is expected to outstrip any other country over the next few years – and could supply an extra 30,000 potential tenants for student landlords – 10% on current numbers.

Although the next academic year does not start until October, the British Council – the body responsible for British international cultural relations – says students are looking for accommodation already.

The problem for many landlords is where to invest for the best returns with 200 plus higher education institutions all over the country.

To help, property portal Zoopla has compiled a top 10 list of the best places to invest based on yields for landlords:

• Birmingham is the number one destination, with an average yield of 7% in a city with three universities, more than 57,000 students and rents that have surged by 15% in two years. Good transport links and plenty of well-priced property feeds the market.
• Nottingham produces student letting yields of 6.4% from two universities
• London also clocks up yields of 6.4% in a tougher market shared with corporate halls, but the highest number of universities and a massive supply of property leaves plenty of room for smaller landlords
• Coventry is a surprise interloper – an unfashionable city also with yields of 6.4%. Demand is high from two universities with around 35,000 students – and nearby Warwick University to swell numbers.
• Glasgow is the winner in Scotland, lagging the leaders with a 6.2% yield
• York, Oxford and Reading all offer a yield of 6.1%. Each city has two universities – but Oxford is developing a major landlord-unfriendly reputation with strict house in multiple occupation planning controls
• Manchester and Leicester both return an annual yield of 5.8%, and like the rest of the top 10, have two or more universities.

Landlords could face a red light on essential repairs if they refuse to go green, claims the Tory MP heading the energy select committee.

Tim Yeo spoke out against government proposals to force home owners – including landlords – to carry out energy efficiency work when making minor repairs or improvements to properties.

The Communities and Local Government Department (CLG) has admitted new rules are in draft that will compel all property owners to improve energy efficiency.

One idea is to log repairs and improvements, like boiler repairs, with local councils who will then require other work like loft insulation, double-glazing or draught-proofing in return for permission to go ahead.

Yeo, chair of the influential committee of MPs, agreed making homes greener was important – but energy saving should be voluntary.

He told BBC Radio 4: “The problem, as I see it at the moment, is the public are not really much engaged by this, they are not enthused by this prospect.

“It means having builders into your home, doing things, making a mess – all rather aggravating for a saving which is some way off in the future.

“You’ve got to find ways of making the public more enthusiastic and I think compelling people who have applied for planning consent to make some alteration to their home isn’t necessarily going to help.”

The CLG argues landlords will only have to carry out ‘economically viable’ improvements and can borrow up to £10,000 for the work under the government’s Green Deal scheme that starts in October.

The proposal calls for council building inspectors to police green repairs, but Yeo and others doubt whether councils have enough staff and can react quick enough to let essential heating and hot water repairs proceed without unduly affecting tenants.

Yeo is also worried that landlords may not have the cash for extensive works and may be forced to turn to cowboy traders who put tenants at risk.

Buy to let was buoyant last year as landlords rented out 692,766 homes – up 12% on the previous 12 months.

The number of properties up for rent increased every quarter – with June to September surging by a massive 14.46%.

Well-documented problems in selling homes and raising mortgages contributed to a drop in the number of properties marketed for sale – the total was down 12,000 to 769,077 properties.

The research, by credit rating giant Experian, was based on property statistics partly derived from trials and historic data from the firm’s new tenant referencing service for landlords.

Besides crunching numbers, the data also revealed:

Unsurprisingly December and especially Christmas is the least favourite time to market a home for sale or rent, while summer was the most popular.

May was the busiest month for homeowners instructing estate agents and August was busiest for buy to let.

The firm reckons the summer rush to rent is partly due to students looking for new homes after receiving their exam results and confirming their university courses.

The most active buy to let regions were Wales and the West Midlands, which both reported a growth in rentals of 20%. The West Midlands also topped the charts for the most homes for sale – bucking the downward trend with an increase of 12%.

Buy to let is more dominant than home sales in London, with 20% of all rental activity but only 10% of house sales.

Jonathan Westley, managing director of consumer information services at Experian, said: “This insight shows that homeowners may be using renting as a back-up plan if they are unable to sell or alternatively some may still consider property a long-term investment.

“Being able to paint a picture of movers and get a unique insight into habits and trends is a valuable tool for companies from financial services to utilities.

“Moving house can be a catalyst for a consumer to switch to ensure they are getting the best deal from their suppliers.”

Chancellor George Osborne is shocked that some landlords can slash their tax bills by exploiting legal loopholes.

HM Revenue & Customs showed him copies of 20 anonymous tax returns filed by some of the country’s wealthiest people – and he was staggered they paid £145 million less tax by organising their financial affairs in line with the law.

Tax avoidance is legal, and enshrined in British law by the famous case of Ayrshire Pullman Motor Services, in which a judge stated: “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or his property so as to enable the Inland revenue to put the largest possible shovel in to his stores.”

Some of the tax saving measures adopted by the wealthy are available to landlords – and are completely legal.

However, the Chancellor has promised to look in to them because he feels property people should pay more tax – even if the law says they don’t have to.

The landlord tax strategies involved:

• Setting off trading losses against profits in future years – This allows landlords to invest in their properties and then see a return on their investment by cutting tax due on later rental profits.
• Claiming loan interest as a property business expense – A tax strategy that lets landlords extract cash input to bank roll a property a business up to the level of their investment. The business can take out a loan or overdraft and set off the interest charges against profits while paying the money to a landlord

“I was shocked to see that some of the wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right,” said the Chancellor.

“The general principle is that people should pay income tax and that includes people with the highest incomes.”

Chancellor George Osborne is shocked that some landlords can slash their tax bills by exploiting legal loopholes.

HM Revenue & Customs showed him copies of 20 anonymous tax returns filed by some of the country’s wealthiest people – and he was staggered they paid £145 million less tax by organising their financial affairs in line with the law.

Tax avoidance is legal, and enshrined in British law by the famous case of Ayrshire Pullman Motor Services, in which a judge stated: “No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or his property so as to enable the Inland revenue to put the largest possible shovel in to his stores.”

Some of the tax saving measures adopted by the wealthy are available to landlords – and are completely legal.

However, the Chancellor has promised to look in to them because he feels property people should pay more tax – even if the law says they don’t have to.

The landlord tax strategies involved:

• Setting off trading losses against profits in future years – This allows landlords to invest in their properties and then see a return on their investment by cutting tax due on later rental profits.
• Claiming loan interest as a property business expense – A tax strategy that lets landlords extract cash input to bank roll a property a business up to the level of their investment. The business can take out a loan or overdraft and set off the interest charges against profits while paying the money to a landlord

“I was shocked to see that some of the wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right,” said the Chancellor.

“The general principle is that people should pay income tax and that includes people with the highest incomes.”

Building society lenders are reporting for every £1 borrowed by a home buyer, buy to let landlords are taking out £1.11 in property investment loans – but many property people just where these sales are taking place.

At last the details are revealed – the phone sales hot spot is a small triangle in the West Midlands comprising old Black Country industrial and coal mining towns.

Far from unfashionable Bilston, near Wolverhampton, saw house sales surge by 30% last year – the highest rise in the UK.

Near neighbour  Rugeley, Staffordshire, (30.6%) came a close second and even closer neighbour Wednesbury (19.4%) took fifth place.

Bootle, Merseyside (21%) was third and Thetford, Norfolk, (18.5%), the only southern town in the top 10.

The figures come from Lloyds Bank, which tracks property sales in 500 towns and cities across England and Wales – and has revealed that last year, 300 registered a fall in the number of home sales.

Sales dropped to their lowest level in three years and do not look set to improve, says the bank.

Home sales were at their lowest level since 2008, when every town and city recorded a fall.

Home sales numbered 630,389 in England and Wales last year, 4% down on 2010 and 48% lower than the peak of the housing market in 2007, when 1,223,826 homes changed hands.

Tower Hamlets, East London, had the largest sales decline (-22%), followed by Potters Bar, Hertfordshire (-20%) and Penzance, Cornwall (-19%).

Suren Thiru, Lloyds TSB Housing Economist, said: “Housing market activity across England and Wales weakened over the past year, reflecting the concerns over the outlook for the economy. Consumers are experiencing difficulties in raising the necessary deposit, which is preventing many potential home buyers from entering the market.

“While a number of towns in the North have seen a significant rise in home sales, these increases have been from a historically low base. Generally, property prices in the North continue to be weaker than in the South.”

Two major legal shake ups affect landlord relationships with tenants from April 6, 2012.

Tenancy deposit protection legal loopholes close as the Localism Act comes in to force with stricter rules for looking after money handed over for safekeeping by tenants.

From April 6, landlords have 30 days to protect a deposit and must give the tenant a certificate proving the money is lodged with a government approved scheme and a leaflet about how the scheme works within the timescale.

If a landlord fails to protect the deposit on time, a tenant has six years to claim a penalty of up to three times the value of the deposit, even if they have left the property.

The offence of failing to protect a deposit becomes absolute – the extended 30 day limit stops a defence of administrative problems preventing protection, while the loophole that lets landlords lodge a deposit after a tenant has left is plugged.

Deposits already protected before April 6 remain inside the new rules, but unprotected deposits must be lodged with an approved scheme by May 5 to prevent a penalty.

Meanwhile, letting agents are in the sights of trading standards officers as improved energy performance certificate laws in on April 6 as well.

Besides a revision of information and a redesign, landlords and letting agents must have an EPC within seven days of marketing a property and give a copy to a prospective renter before any tenancy agreement is signed.

Trading standards have improved powers to demand an EPC.

Breaking the rules will cost landlords and letting agents a £200 fine.

Homes already on the market with an old-style EPC do not have to upgrade to the new certificate.

The rules apply to residential and commercial property – and also to marketing a property for sale as  well as rent.

The number of buy to let tenants with serious rent arrears is expected to tip 100,000 soon, according to rent receivers.

Almost 95,000 tenants were two months or more behind with rents at the end of March, with the number growing at the rate of 10.2% from the last three months of 2011 and 20% from the same time last year.

The courts are also granting more eviction orders for landlords, with a rise of 9% in a year, says Templeton LPA, part of LSL Property Services, the UK’s largest letting agents managing brands like Your Move and Reeds Rains.

Director Paul Jardine said: “While the general tenant population has absorbed the rising cost of renting in the last two years, a minority of tenants are facing severe financial difficulties –a minority that is growing.

“These tenants have been pushed into deeper and deeper arrears by a combination of rising living costs, high rents and a weak labour market, and are now months behind with the rent cheque.

The firm also blames court closures and a backlog in cases for making finances worse fopr tenants and landlords.

“In turn these severe rental arrears figures have been inflated by the ongoing impact of county court closures. The closures have prolonged arrears cases, with landlords less able to gain court dates to quickly remove non-paying tenants.

“Despite the recent surge in severe arrears cases, overall tenant arrears have performed remarkably well given the challenging economic environment.

“As we often see at this point in the year, more financially robust households are now paying down post-Christmas debt and putting their finances in order, which is helping to reduce the overall level of tenant arrears.”

Buy to let mortgage lenders appoint rent receivers to manage rental properties when a landlord has mortgage arrears or the home is repossessed.

House prices are down 1% over the past 12 months and may fall further as the first time buyer stamp duty holiday ends, warns the Nationwide.

Prices are at their lowest for six months, dropping an average £137 a month for the past 12 months, research by the lender for March disclosed.

The average UK home is valued at £163,327.

The Nationwide’s chief economist Robert Gardner said: “A slowdown was to be expected, given the imminent expiry of the stamp duty holiday, which had provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year.

“This dampening effect on housing market activity and prices may fade over the course of the summer, especially if the wider economic outlook begins to improve and other policy measures, such as the government’s NewBuy scheme are successful in supporting buyer demand.

“Our view is the challenging economic backdrop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next year.”

The stamp duty tax break has exempted homes valued from £125,000 to £250,000 from 1% stamp duty for first time buyers since March 2011.

“Around 180,000 first time buyers benefited but assessing how the policy affected the housing market is difficult as no figures suggest how many sales would have taken place anyway,” said Gardner.

“We estimate that around 100,000 first time buyers will pay stamp duty on properties valued at up to £250,000 in the next year, adding an average of around £1,800 to purchase costs compared to last year.”

The worry for many sellers is that £1,800 may kill the market when added to the average 25% deposit of £40,000 a first time buyer already has to find when applying for a mortgage.

Consumer champions have branded an ‘instant equity’ claim from a property sourcing firm selling to buy to let landlords as misleading, unsubstantiated and exaggerated.

Property Secrets, from Nottingham, boasted investors could make £25,999 instant equity on buying an apartment – but the Advertising Standards Authority disagreed.

After investigating a complaint, the ASA banned an email making the claims as in breach of the advertising code. Property Secrets has agreed not to repeat the term in future marketing.

The ruling could have far-reaching repercussions among property sourcing firms – a Google search of other firms offering ‘instant equity’ below market value property deals returns pages of results.

Property Secrets made the claim in an email at Christmas stating: “I wanted to highlight a fantastic opportunity we have secured … Having managed to negotiate a substantial discount of 20% per unit offering up to £25,999 instant equity, in one of the UK’s most prosperous cities, it is no surprise we have just 3 left now! … Key Points: 20% OFF Developers [sic] Marked Price … Instant Equity up to £25,999 …”

The firm offered the ASA documents showing the amount of discount and sale prices of nearby similar apartments and explained that the property industry used ‘instant equity’ to describe the discount offered on a developer’s list price and/or actual sale prices for properties on the same development.

“We considered that consumers were likely to interpret the term ‘equity’ in this context to mean the amount of money they would be left with if they sold the property, once any outstanding mortgage charges had been paid off,” said the ASA.

“We considered that sold prices or independent valuations were not necessarily accurate indicators of how much equity a property owner had in a property and that equity was a nebulous concept which could not be quantified easily.

“Because we had not seen robust substantiation to support the claim “Instant Equity up to £25,999″, we concluded that the claim had not been substantiated and was misleading.”

Read the full ruling

Buy to let rents are set to rise by 20% in the next five years as the number of renters grows and continues to exceed demand, according to new research.

Around 4.8 million buy to let homes earn £48 billion of rental income a year which will surge to £70 billion by 2016, predicts a report jointly authored by property consultants Savills and online portal Rightmove.

The research also forecasts a huge shortfall in homes unless institutional investors like pension funds take up the slack, regardless of government efforts like freeing up planning laws and helping buyers with mortgages.

The UK needs an estimated £200 billion investment in new homes over the next five years to house a growing population, with buy to let landlords only likely to afford £50 billion of the money needed.

The report cites low yields and high prices for the lack of institutional investment, as fund managers can find better returns elsewhere.

Mortgage lenders have also tightened a financial noose around the property market by demanding higher deposits from buyers.

“Low yields have been the biggest barrier to much-needed long-term investment,” said Lucian Cook, director of Savills research. “As yields move out, there are early signs of changing investor behavior.”

“We expect a 23% increase in the number of private rented households, which is about 1.1 million extra homes. That’s an idea of the scale of opportunity for institutional investment.”

The report suggests developers build for investors rather than individual buyers with attractive deals  offering higher yields to investment funds, which probably means prices need to come down around 25% for bulk buyers.

Researchers compared UK and US institutional investment  – funds own 5.5 million apartments across the US, while hardly any in the UK because the returns are so unattractive.