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Cyprus close to resolving long running property title deed fiasco
Home owners in Cyprus who have been affected by the country’s title deed fiasco over many decades are a step closer to the situation being resolved with hopes high of a recovery in the property market. Laws to ensure that title deeds are passed directly to buyers must be in place by the end of this week as demanded by the European Union, the European Central Bank and the International Monetary Fund. Failure to do so would mean that the country will not receive the next instalment of its €500 million euro crisis bailout and it will be welcome news for thousands who still have not received the deeds to their homes that were built years ago. The Council of Ministers has approved a new law which is now on its way through the Cypriot Parliament. Not only will it help those who have never received title deeds it could also be a stimulus to the country’s struggling property market. To help boost real estate investment, the government has unveiled a number of major incentives benefitting buyers and sellers. Anyone buying property in Cyprus from now until the end of 2016 will qualify for a 50% discount on the property Title Deeds transfer fees tax. There will also be no capital gains tax when those who buy in this timescale want to sell in the future, a saving of 20%. Agents are hopeful it will lead to more enquiries from overseas buyers. One, Ideal Homes International, has seen a rise in interest from British buyers. ‘UK buyers are particularly excited about what they can get for their money, given the strength of the pound so far this year,’ said director Chris White. ‘Cyprus' historical relationship with the UK means that there are many aspects of life there that UK buyers feel comfortable with, everything from similar legal systems to driving on the left. Contracts are written in English and everyone speaks English too, which creates a sense of familiarity for UK buyers,’ he explained. He pointed out that people considering retirement in Cyprus are encouraged by the country’s many tax incentives and in particular by the fact that private pensions are taxed at just 5%. The tax environment is also beneficial to those looking to open a business in Cyprus. The property market on the Mediterranean island is improving after years in a downward spiral. According to official figures from the Department of Lands and Surveys, the number of property sales in Cyprus rose by 22% in July when compared with a year earlier. In Paphos, which is very popular with British buyers, the number of sales was 30% higher than in July 2014. But the market does have a lot of recovering to do. The latest Cyprus property index from the Royal Institution of Chartered Surveyors shows that during the second quarter of 2015 the Cyprus economy showed some signs of stability but unemployment remained at a historical high level and given prevailing economic… Continue reading
Houses with multiple tenants are a better option for buy to let investment, it is claimed
Houses in Multiple Occupation (HMOs) are the most stable and profitable form of buy to let investment in the UK, protecting landlords against higher costs caused by an interest rate rise, a new analysis report suggests. HMOs, generally rented to young professionals and key workers, are intrinsically geared towards maximising rental income by letting each room on an individual basis, according to the report from Platinum Property Partners (PPP). Research for PPP has shown that compared to capital gains, rental income for all types of BTL is by far the most dependable and stable source of return on investment. The firm says that HMOs landlords are therefore best positioned to absorb the higher mortgage costs caused by an interest rate rise, an event which the Bank of England has indicated will take place in early 2016. It explains that the profits of a standard buy to let investment can be wiped out by a 3% rise in interest rates, assuming mortgage rates increase by the same amount, as gross rental income is not sufficient to cope with higher mortgage interest repayments. Even although HMO landlords pay for all household bills, the fact that the property generates a much higher gross rental income means that these costs are easily absorbed. The analysis suggests that the maximisation of income from a given size of property by creating extra rooms and renting them to multiple tenants means HMOs can generate rental income that is up to four times higher than the rents achieved in a standard buy to property. Previous analysis carried out by PPP has shown that rental income is a far more stable and dependable source of return than capital gains, dispelling the myth that the success of any buy to let investment is mostly about rising house prices. From 2010 to 2012, investors operating in both the standard BTL and professional HMO market were sustaining capital losses. It was only in 2013 and 2014 that capital gains began to recover but in contrast, rental income consistently increased throughout the same period for both asset classes, albeit at a much higher rate for HMOs, the report says. It also points out that the best way that landlords can ensure their investment can cope with an interest rate rise, and any other unexpected costs, is by planning ahead and having a good understanding of the financial performance of their portfolio. Research carried out by PPP in 2014 showed that a severe lack of research and poor planning is preventing many buy to let investors from maximising their income. A quarter of buy to let investors sought no advice and carried out no research before making their property purchases and a staggering 93% had no five year plan for their investment. Separate research by PPP shows that landlords are also prone to miscalculating their returns. Some… Continue reading
Research finds third of movers underestimate costs
Failing to budget for the cost of moving home is costing British people £1.3 billion a year, according to new research. Almost 13 million have moved house, either to a new rented property or to home they are buying, in the past two years but a third underestimated the cost of moving home and spent significantly more than they originally budgeted. The research from mortgage provider Ocean Finance also found that almost a quarter of those who under estimated costs spent more than £1,000 over their planned budget. On average, home movers spent an extra £630 each. The top reason for over spending was miscalculating the cost of a removal company, with over a quarter falling prey to this. A further 24% had to unexpectedly pay for a skip, a cleaner or to get their post redirected. And 19% were so exhausted from moving that they opted for takeaway dinners. Some 20% of those moving home downsized and had to pay for storage while organising their new home. A further 14% of movers gave up on DIY projects and called tradesmen to install washing machines or repair toilets. ‘When you are thinking about moving house, it’s very important to consider the real cost of moving,’ said Gareth Shilton, a spokesman for Ocean Finance. ‘The best way to cope with the extra cost of moving house is to plan ahead so you know exactly what you’ll have to pay for. Make a detailed list of your expenses and save some extra cash so you can enjoy your first night takeaway guilt free,’ he added. Continue reading
