Offset mortgages growing in popularity

Land regeneration for the 21st century

A crisis in affordable housing?

Parents are fuelling buy-to-let market

Does insurance cover your vacant property?

Offset mortgages growing in popularity

According to the Council of Mortgage Lenders (CML), the number of people opting for an offset mortgage has grown.

During 2006, 170,000 offset mortgages were taken out worth £29.3bn, equivalent to 7% of all new lending. And the year-on-year growth of offset mortgages between April 2006 and March this year was 49% (by value) compared to 15% for non-offset lending. Offset mortgages combine a mortgage and savings in one account, and can offer borrowers a number of advantages including the option to make on over-payment or an under-payment on the mortgage.

Phoebe Zhang, author of the research and CML statistician, said: “Today's research reflects the dynamic nature of the UK mortgage market. Mortgage lenders are constantly developing new products to meet the needs of borrowers and the fact there are now 250 offset products available in the market illustrates this. 

Land regeneration for the 21st century

A programme billed as ‘land regeneration for the 21 st century’ will see a total investment of over £59mn, said the Northwest Regional Development Agency (NWDA).

The NWDA and the Forestry Commission (FC) announced an additional £36m spend for the Newlands (New Economic Environments through Woodlands) programme, which was launched with an investment of more than £23m in 2003. It is working to regenerate more than 900 hectares of brownfield land across the Northwest region to create new opportunities for leisure and recreation.

To date, Newlands has delivered regeneration on sites across the Mersey Belt, and this additional funding will allow the programme to expand to cover the entire North West region.

A crisis in affordable housing?

The Chartered Institute of Housing (CIH) claims that tax relief for buy-to-let landlords is damaging first-time buyers' chances of getting on the property ladder.

It believes the government should rein in the buy-to-let market to ease a growing crisis in affordable housing.

The institute's president, Paul Diggory, said the phenomenal growth in the sector had pushed prices out of reach for many first-time buyers and also resulted in flats in new developments remaining empty.

Tax laws allow landlords to offset the costs of running a rental property against the tax payable on rental income and they can offset mortgage interest, letting agent fees, replacement furniture and repairs.

At the institute's annual conference, Diggory claimed: “Buy-to-let owners have a financial advantage over those trying to buy their first home, as well as pushing house prices ever higher. Investors can make enough money from rising house prices without having to let the flats to tenants - and they are buying whole floors.”

Parents are fuelling buy-to-let market

According to building society group Birmingham Midshires, parents are one of the biggest factors fuelling the buy-to-let boom.

Parents represent nearly a quarter of those planning to invest in buy-to-lets over the next six months, encouraged by strong property prices and annual government tax relief of around £2bn for property investors.

According to the report 31% of over-55s said they were intending to try their hand at property development. However, stringent fire and safety rules, mandatory licenses for houses in multiple occupancy and a new scheme to place deposits with a third party are pushing up the cost of being a private landlord.

Lisa Taylor of financial advice website moneyfacts.co.uk said: “The buy-to-let sector has only been established as an industry for 10 years and in recent months there has been an increasing drive to impose greater regulation.

“Most of these regulatory changes will cost landlords, so it is important parents are aware before they decide to take the plunge.”

Does insurance cover your vacant property?

Buy-to-let investors in the student sector have been urged by Insurer Leaseguard to ensure that their insurance covers vacant buildings as the summer holidays draw closer.

Landlords taking the chance to refurbish or redevelop their properties while they are vacant must make sure they are covered for potential accidents.

Maryanne McGee, insurance manager at Leaseguard, said: “Check your policy wording as the period of unoccupancy can vary from 30 or more days to in excess of 90 days before notification to the insurer is required.

“Some insurers impose terms, reduce the cover on the policy, or increase the premium for the period of unoccupancy and some do all three.”

According to The Daily Telegraph, around 40% of students in higher education now live in private landlord accommodation.