News - Rate rises hit property investing

Posted on August 31, 2007
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Higher interest rates have knocked investors’ confidence in putting their money into property, evidence suggests.


The insurance company Standard Life says that the rate rises since last summer have led more people to question the wisdom of property investment.


Its survey suggests that enthusiasm for investing in either one’s own home, or buy-to-let properties, has retreated to the level of January 2006.


However, confidence in ordinary savings accounts has risen.


The research asked a sample of 1,523 people if now was a good time or a bad time to invest in various investment categories.


Bad time to invest?


There was a significant increase in the proportion of respondents believing that now was a bad or very bad time to invest in either their own homes or in buy-to-let properties.


Property experts have claimed that the rising cost of borrowing with a mortgage means that new buy-to-let investors may find the income from their properties does not cover their mortgage repayments.


However, the most recent and authoritative industry figures, from the Council for Mortgage Lenders, show that 330,000 additional buy-to-let mortgages were taken out in 2006.


That was far and away the highest annual figure since the market for this sort of investment started a decade ago, and took the total stock of such mortgages up to 850,000 - 9% of the total mortgage market.


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News - ‘Flood resistant’ house designed

Posted on August 30, 2007
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A house flooded several times has been made almost “flood resistant” by an insurance company and a council.


Norwich Union and Norfolk County Council have pioneered new protection measures against flood damage.


The property in Lowestoft, Suffolk, now has flood gates and one-way valves installed to prevent sewage build-up.


The main kitchen appliances were raised on plinths and MDF kitchen units were replaced with steel alternatives. Tiles have also been used to replace carpets.


The insurer estimates that by putting in flood-proof solutions the cost of repairs could be reduced from about 49,000 to as little as 8,500.


Above floor level


The walls and skirting were replastered up to one metre above floor level - to limit the dampness seeping into the walls.


The time it takes for the house to become habitable again could also be halved, according to the insurer.


The property is one of about 20 in the immediate area that have been flooded a number of times over the past few years.


Wayne Tatlow, housing services director at Cotman Housing Association, which own the property in Aldwick Way, said: “These resilient improvements should help the house dry out more quickly, minimise the damage and let the tenants back in more quickly.


“We will be assessing the effectiveness should there be further flooding and if they are successful we may look to install them in all the other properties we own that are prone to flooding.”


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News - Have your say: Property documents

Posted on August 29, 2007
Filed Under Property insurance | Leave a Comment

Millions of homeowners now have to safeguard important property documents as lenders clear out their stores.

Mortgage providers Cheltenham & Gloucester and Nationwide have begun sending out the material to their customers.

We asked for your comments, a selection of which are below. This debate is now closed.

I was interested to hear your piece on property documents as I have recently re-mortgaged my house.


Imagine my surprise… to find my house deeds in a soggy parcel on the doorstep
Karen Woods

Imagine my surprise on returning home one rainy evening to find my house deeds in a soggy parcel on the doorstep.

The conveyancer had, without warning, despatched them by second class post.

The postman couldn’t fit them through the letter box and left them on the step.

Surely they could have used recorded delivery at the very least?

They were accompanied by an enigmatic letter claiming paper copies of the documents are obsolete. What would have happened had they been stolen?
Karen Woods, Hampshire

I think this is an excellent idea! Why should lenders hold my property documents? I am perfectly capable of storing important papers.

I haven’t lost my passport, driving licence or television licence at any time. Stop supporting the nanny state!
Bob Brown, Leicester

I think the best thing to do is have the lender send a copy to the homeowner and keep the original in the database. You will be covered on both ends.
James Roman, Pennsylvania

This is nothing new. I believe Bristol & West returned title documents several years ago for the same reason.
Simon Higginson, Norwich

I think it is madness to get rid of a paper trail. Evidence on paper as well as in the Land Registry Office is essential.

Putting the details only on a computer leaves the system open to fraud. I have had four computers over a period of time and have to work on them through my job.


There are crooks out there ready to hack into computers who can change details at will
Heather Chivers, Harrow

Only a fool would completely trust putting financial details or property details on a computer hard drive.

Not only do computers crash eventually, but there are crooks out there ready to hack into computers who can change details at will.

Identity theft is something that is on the increase and here we are with building societies getting rid of deeds which are extremely important if those deeds are destroyed at the Land Registry or Companies House.

We need the double evidence of these important papers in the building societies as well as the Land Registry.

Knowing computers the way I do there should be back-up discs, but even these can get corrupted and won’t work.

Then there is the march of progress and the old discs won’t work on the new computer operating systems. Data will be lost.
Heather Chivers, Harrow

Once you have paid off your mortgage you have to keep the deeds anyway, and this tends to be both insecure and a nuisance.

I would like to see the Land Registry store all deeds’ contents electronically. This way no inconveniences could arise on sale.

Also there is no reason why the property owner should not have an electronic copy on a CD or DVD.

It’s about time the process of house buying and selling came into the 21st Century.
Derek, Craven Arms

I’ve had my deeds held by Halifax Deedstore for many years which gives me peace of mind.
Barry Gorman, Preston

I paid off my mortgage several years ago, received the deeds and gave them to my solicitor, who is storing them in his huge 1930s safe for free.


My solicitor… is storing them in his huge 1930s safe for free
Alastair Scott, London

I don’t know if free storage is the norm but, even if I had to pay, I would much prefer doing it this way rather than entrusting them to an anonymous company.

The thought of wrangling with a call centre if they got lost appals me!
Alastair Scott, London

Many other major lenders have also stopped keeping them, and in a recent remortgage that I went through the new lender’s solicitors didn’t even want to see the deeds, even through the lender hasn’t yet gone down this path.

Clearly the Land Registry information is enough.

The only “new” thing here is that they’re actually sending them back having stored them for a while.


You wouldn’t expect to give your car registration document to the company that provides you with a loan
Paul

It’s essential that home owners keep their own deeds for when they sell the property, but not for proof of ownership, only for the odd query that might arise during the transaction.

Even then, Title Insurance seems to cover most eventualities today at relatively low cost.

As for who is responsible for keeping title deeds, you wouldn’t expect to give your car registration document to the company that provides you with a loan to buy a car, or to have to pay to store it with a solicitor or bank deposit box, and I can’t see any reason for doing so with title deeds.

Mine are in my kitchen drawer.
Paul, Norwich

Very clearly this is going to be a “dogs breakfast” of a system with some purchasers getting important relevant information and others not.

The parcel of documents can be immense.

I see problems with boundary ownership for example, where one person has the information and his neighbour does not.

It seems that the government, for it is it which has brought about these changes, is altering a system that has worked for years to one which will have created immense confusion. And, the only beneficiaries will be the legal profession.
John, Leeds


I for one will be moving my mortgage away from my lender as soon as possible in protest
David

This is clearly another example of the banks and building societies jumping on any opportunity to cut costs and increase their already massive profits.

I for one will be moving my mortgage away from my lender as soon as possible in protest.
David, Bristol

I bought my house just over a year ago through the Woolwich and was amazed to receive the deeds when the sale was complete.

They go back to the early 20th Century. It was fascinating to read through them.

I have always resented the fact that I never got to really study the deeds on previous houses and I’m thrilled to have them now.

Currently they are in a box file on a shelf.
Sally, Milton Keynes

I echo the advice that borrowers should keep safe any papers returned by their mortgage lender.


We do not charge for storing papers as I would much rather know where to find them when my clients want to sell
Matthew Stubbs, solicitor

I am a property solicitor and when we are dealing with a lender who no longer holds the deeds, we often waste a lot of time at the beginning tracking down missing papers which causes an unhelpful delay.

Clients then have to spend extra money paying for copies of missing planning permissions, guarantees and so on.

We do not charge for storing papers as I would much rather know where to find them when my clients want to sell their property!

Sadly this is another example of mortgage lenders cutting costs at the expense of good customer service, especially when some still insist on charging a “deeds administration fee” - for what?!
Matthew Stubbs, London

This is a win-win situation for the banks. They reduce their storage costs by returning these documents, and then they will receive more profits when people become nervous about where to safely store them and pay money to the banks - or solicitors - to do it for them.

This move does not appear to be in the best interest of customers. I am surprised.

The banks are not helping themselves in the PR stakes, especially in the light of the recent irresponsible lending news stories.
Vanessa Jacznik, Leeds

I’m surprised at this article because over a year ago my lender sent me all this through the post, in an unsealed envelope and with very little apology for the potential loss of enclosures.


I don’t mind looking after them. In fact it was interesting reading
Doug M

I don’t mind looking after them. In fact it was interesting reading. But please ensure they’re not mishandled on dispatch, or intercepted.

Plus there was not even a covering letter explaining why all these (what I thought were important) documents had arrived on my doorstep.

I was also told none of them were important, which appears not to be the case when you consider various guarantees and so on are enclosed. Poor show!
Doug M, Luton

Certainly it costs the lenders to keep them. However, it must be more efficient to have a few safe storage locations.

I’m sure that many people would pay a modest fee to have the documents kept by the building society.

This ought to be a lot less than the charge for a bank safety deposit box, of which there seems to be a shortage.
Tony Corless, Leeds

The return of the title deed documents to customers is a good idea if it will help the customers.


Is this another attempt by mortgage lenders to maximise their earnings through cost-saving?

Bernard

Would the mortgage lenders reduce the cost of the mortgages on their customers since there will be cost-saving on storage?

Or is this another attempt by mortgage lenders to maximise their earnings through cost-saving?
Bernard, London

Interesting. At the same time, Abbey wrote to all its customers - received on 3rd May - stating that from 11 May they will be charging 225 for “looking after your mortgage” and “closing it down”.

So no choice there then.

Christine Stewart Munro, London

Sounds like a good money-spinner, especially for the big banks. Now they don’t store them they can’t charge me a 100 to look at them, but they’ll make the money back by charging us for deposit boxes to keep them safe!

I’m not sure I’m all that happy only having electronic records. One typo and the people next door own your house.
Bob Connell, Wales

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.


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News - Property scam company is wound up

Posted on August 28, 2007
Filed Under Property insurance | Leave a Comment


A company which took in more than 100m by selling derelict houses in an elaborate investment scam has been wound up following a DTI probe.

Practical Property Portfolio (PPP) used a sales pitch to get investors to spend upwards of 18,000 a time.

Investors were asked to buy properties which the company would refurbish and let to ’social housing’ tenants.

But much of the work was never done and the promise of tenants lining up to fill properties failed.

Property prices

PPP and its associated companies promised investors an income from renting out properties in the north-east of England. The rents would come from housing benefit claims, backed up by a team of its own rent collectors.

Investors with the company, based on the Team Valley trading estate in Gateshead, were promised returns of up to 15% a year.

PPP said the investors’ money would be used to build up a portfolio of properties that would be remortgaged following renovation.

PPP publicity material claimed clients could take advantage of increasing divorce rates, a transient workforce and rising property prices - all factors making it harder for people to buy their own homes.

Concerned investors complained to the Department of Trade and Industry (DTI) after discovering they had bought boarded-up properties in derelict streets in the North East, which were worth far less than they had paid for.

The DTI’s petitions were not contested when heard in the High Court in Leeds on Monday.

Official receiver

The court heard the operation and the main directors, John Potts and Eric Armstrong, used unsatisfactory business practices, attracting substantial investment for services they largely failed to provide.

The directors were also responsible for misrepresentations about the value of properties, failing to maintain or disclose accounting records and were in breach of contracts to provide the refurbishment, insurance and maintenance services.

At the time of the winding-up petitions in March 2003, PPP and its associated companies had sold about 4,000 properties to more than 1,000 investors.

But about half of the properties were neither tenanted nor refurbished. Many were uninhabitable.

The winding up orders involved Practical Property Portfolio Ltd, PPP Ltd, Napeer (Holdings) Ltd, PPP (International) Ltd, Napeer Housing Ltd, Bluebell Housing Ltd, Bluebell (Maintenance) Ltd, Let Protect Ltd, Aaron de Vere Ltd, Gold Medal Construction Ltd and Janspeed Consultancy Ltd.

A DTI spokesman said: “The petitions follow investigations under Section 447 of the Companies Act 1985.

“At the same time the Official Receiver was appointed provisional liquidator and he discontinued the trading shortly after his appointment.”


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Posted on August 28, 2007
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