Archive | August, 2011

Are You Being Overcharged For Your Mortgage?

25 Aug


Today I opened a letter from Skipton Building Society. It informed me of the following:

“Your mortgage offers a fixed interest rate for a set period. This finishes at the end of the month after which you will be charged our buy to let standard variable rate. This is currently 4.95% pa, including the 0.25% discount for paying by direct debit. This means your new interest rate will be 4.95%.

Like many other conservative buy-to-let investors I took out a 5 year fixed buy to let product – well 5 years ago. And like any astute property investor I checked the small print on the mortgage contract – especially the bit about “Understanding the Risks” Now under the “Are you comfortable with the risks” section I have the following:

“The buy to let standard variable rate is guaranteed not to exceed the Bank Of England’s base rate from time to time by more than a differential of 3% pa”

So I was a little confused when I received this letter which informed me I would be paying 4.95%. According to my mortgage contract, the rate I should be paying is Bank of England base rate (currently 0.5%) plus the differential of 3%. That gives a pay rate of 3.5%. So why then was I being charged 4.95% – a whole 1.45% more?

So I called Skipton.

The nice sounding Yorkshire lass named Lisa at the end of the telephone was most helpful. She diligently brought up the letter they had sent me so that she had it on her screen and she also brought up the mortgage contract which I had signed so that she could see the sections which I was querying.

And so I say to her:

“Lisa I’m very confused by this letter you have sent me which says that I am now going to be paying 4.95% when my mortgage contract guarantees I will never pay more than 3% above base rate”

Lisa responds “Yes, I understand, Miss Collett but you see we changed our Standard Variable Rate and we wrote to you in April 2010 to inform you of this”

I reply: “Lisa, I understand that you have written me a letter a year ago that you have changed your SVR, but given that I have a mortgage contract with Skipton which was for a fixed period and then reverted to a Variable rate which  guarantees that I will never pay more than 3% above base rate then I don’t understand what this letter about you changing your SVR has to do with me”

“Well” she replies “We sent you a letter”

I’m getting a little testy now: “Yes, I understand you sent me a letter – but I’m afraid you sending me a letter does not mean that you can change the contractual terms of my mortgage which I signed 5 years ago”

She starts to wobble now…

So I continue…in my testy manner “Did I sign this letter you sent to me saying that I agreed with any new terms and conditions which you are applying to my mortgage contract. Did I have this witnessed by a solicitor?”

She is now faltering…

“No…but, we have informed you. We sent you a letter”

Well” I retort – mightily testy now –  “I can inform you by letter that I am no longer paying the mortgage but I don’t frankly see how how that changes the contract I have with you and that I still owe you money. I don’t think that you’ll agree with a letter like that will you?”

She whimpers…

“Yes I can understand your point Miss Collett”

“So” I say in my most demanding, authoritative but still being polite manner ” I want you to change the rate you are charging me to the correct contractual rate which we agreed 5 years ago and which is in my legally signed contract as witnessed by a solicitor”

“Ahh…well it’s not that simple…let me just go and speak to my manager”


Lisa returns to the phone breathless and all purry voiced like an abandoned kitten desperate to be adopted “So sorry for the delay Miss Collett, my manager and her supervisor have been looking at your case and they have advised that we can’t do anything”

“Excuse me” I bluster, now I’m angry. No more Miss Polite Authority Woman “What do you mean you can’t do anything?! We have a signed legally binding contract from 5 years ago which states the rate I should be paying. Just because you send me a letter does not mean that you can change a legally binding contract…You are aware this is a legally binding contract aren’t you? You are aware that if the shoe was on the other foot I can’t just send you a letter saying that I am going to pay you less each month because I have sent you a letter and you just have to accept that”

Lisa is losing it…I can hear her trembling down the phone…

I realise I’m getting nowhere fast. And Lisa, bless her is trying her best…but she’s out of her depth

“Lisa, I think the best thing for me to do is to lodge this as an official complaint. This can then be dealt with in an appropriate manner. The correct rate as detailed on my legally binding mortgage contract can then be applied and this can all be sorted. Obviously, if the correct rate is not applied then I will be forced to take legal action and involve the Financial Ombudsman”

“I’m very sorry I can’t help you Miss Collett and I do understand all that you have said and I am sorry”

“It’s OK Lisa” I say “But just answer me this – given you are not charging me the correct rate on my mortgage am I right in thinking that now we are in dispute, can I stop paying it until all of this is resolved. Shall I send you a letter to that effect?”

“Oh no Miss Collett, you can’t stop paying your mortgage that would be a breach of the terms and conditions of your mortgage”

To which I replied “Oh you mean like changing the contractual rate which I am meant to be paying…isn’t that a breach of the terms and conditions of my mortgage?”

To Be Continued….



LandlordSOS – Are You Coming?

19 Aug


Today I have put my event organiser hat on! So what’s the idea? Well for the past couple of years I have been running ad hoc property meets where I get a bunch of landlords and property investors together – normally down the pub and I get a speaker who can teach us a thing or two about property.I don’t charge for the events and I don’t have a sales pitch. It literally is a bunch of like-minded property people who want to make the most of the business they’re in.  I love chatting, meeting new people and hearing new ideas. For me, these meetings are about opportunities – being a landlord can be a lonely business – and it’s great to have the chance to chat with others in similar situations – you never know what can come of a conversation!

LandlordSOS started as a germ of an idea a few months ago and now we seem to be steam rolling! So our little property meet which used to be a group of 30 odd people down the pub has now grown to a “proper” event. We’ve got a “proper” schedule with “proper” speakers from the NLA, the council and LloydsTSB covering key topics such as housing benefit, HMOs and raising finance.  We’ve got a “proper” place to meet – a stately home. And now – we’ve even got our own bar!

On top of this we’ve also got a selection of property related businesses on hand to offer advice and assistance. From solicitors to damp experts, accountants, grant advice, empty homes opportunities, landlord referencing services, letting agents, landlord associations, cleaners, insurance people and builders – we’ve got a good range!

And I like to think we have got something for everyone – be they a novice or professional in property.  With the high calibre of speakers and the businesses on hand I’d be gutted if people didn’t go away learning something new.

So now is the time when I need to start sending out my invites – to tell people about our property event.

So here it is:

I would like to cordially invite you to our FREE LandlordSOS event.

September 29th at Keele Hall from 6pm

Anybody and everybody with an interest in property is welcome.

I would love to see you there – seriously the more the merrier!

For more info:




Fancy A Place By The Sea? How About Your Own Beach!

16 Aug

You know I love unusual auction lots – but this latest offering which is going to auction is the perfect summer lot – like drinking Pimms at a summer BBQ – there is nothing like the idea of a private beach. Of owning your own beach.

And that is what we have up for offer – yes a private beach. And we’re not talking in the middle of nowhere, we’re not talking about some remote Outer Hebrides island or down some dirt track in the wilderness of Scotland – no we’re talking South Coast and we’re talking Weymouth. Host location of the 2012 Olympics sailing events and benefactor of public funds. And the guide is just £75k!

And I agree with the auctioneers that “This is a truly exciting opportunity”.

So what’s up for sale? It’s a sandy beach just over a mile from Weymouth Town centre. With stunning panoramic views over Portland Harbour.  The beach has a timber refreshment kiosk on site which has been successfully run in the past and has permission to continue to do so until November 2015. The beach has the benefit of three planning permissions which allow for the erection of an eco toilet and wooden store, retrospective consent for the erection of a refreshment kiosk and the erection of 8 beach chalets. The beach which forms part of the World Heritage Jurassic Coastline is also close to the Sandsfoot Castle remains and the Castle Cove Sailing Club, providing excellent tourist and recreational facilities.

So if you’re thinking of a place by the sea – or getting started in holiday lettings – you can’t get closer than this…and with your very own beach you’ll be the star of your summer BBQs!

The Drugs Raid, Police And The Edwardian Door

9 Aug

Today I got rather a rude awakening.  Keen to get on with some work I switched my phone to silent for a couple of hours so I could concentrate.

2 hours later and I see I have a multitude of missed calls from the office and a panicked message left on my voicemail

“Sam, call me as soon as you get this message. The police have been in and they want the keys to your property”

Suddenly I am caught up in the moment – the police want keys to my large property which I converted to 4 flats 3 years ago.

I call her straight back and she gives me the telephone number and details of the police officers involved.

I call them immediately, worried as to why they want access.

The officer cannot give me full details, but can tell me they need access to perform a search at one of the flats and they have a warrant. They were planning to do a raid this morning, but having arrived at the property and seeing the beautiful antique oak Edwardian stained glass door they opted to call and ask for keys rather then the usual ram raiding approach.

Relieved that they have decided not to force their way into the property and cause thousand’s of pounds worth of damage, I was then worried if the suspect had seen them arrive this morning and then change their mind due to the damage they may cause…did that mean he may have hidden what they were searching for?? Had my old door stood in the way of the criminal justice system?!


They come back later on to collect the keys…

I hear nothing more.

So now it’s today (Tuesday) and the police call me at 10am to tell me they are about to do a drugs raid and can I confirm the location of the flat in the building. So I dutifully tell them the location.

Two hours later they call me. The tenant had actually barricaded himself in the flat, locking the flat door and leaving his keys in the door so they have had to force entry and ram down the door. They have retrieved “a large quantity of very interesting items”. They now need me to secure the door as they cannot leave it like that. Rather than calling in their contractors the police wanted to give me the option to use my own – but he needed to get there that minute.

My usual tradesman is currently on hols, so I call another tradesman who I also trust and who is able to do the job. He is halfway up a ladder and has just turned off the electricity at the property he is working on…I tell him they will have to cope without electricity – the police are waiting! He races over to the property and the police wait while he secures the property.

The police then call again to tell me they have arrested the tenant and are taking him into custody – they will keep me updated with regards how the events unfold.

But there is a twist which makes this story even trickier….

So here’s the back story:

Four months ago the electric shower at the flat stopped working. A tradesman attended and the issue was fixed. Or so we thought. The next thing we knew environmental health wrote us an official letter claiming works were required and that we had failed to complete them. This was news to me!

And so I contacted environmental health informed them of the previous repairs to the shower and that we had not been contacted again by the tenant and were unaware that the problem was still persisting.  I organised that the shower would be looked at again…and so we tried. 15 missed appointments by the tenant later and we could not get in to get the shower fixed….but he was continuing to blame me for not fixing the shower and reporting me to environmental health. Environmental health decided we were bad landlords for not fixing the problem – although we had all the proof that we had tried to gain entry to fix this but the tenant had refused us without him being there…and then when he was meant to be there he then would not be there!

And so the environmental health department got a power of entry from the court so that we could gain access to the flat to carry out these repairs. The tenant was meant to meet the official, the trademan and myself so that we could fix the shower…but he didn’t turn up. As the official had the court order he was able to enter the flat. But I refused to go in as the court order did not have my name on the papers – I was not getting done by this tenant who I suspected knew the law inside out. And so after much huffing and puffing the official takes the keys from me and opens the flat door. As he does so a tiny piece of paper flutters down.  The tradesman saw it. It was a piece of paper which had been balanced on the top of the door and which you would hardly notice – but it would then give the tenant evidence that we had been in the flat while he had not been there.  The official freaked when he understood what the tenant had done…he seemed to realise the sort of character he was dealing with!

Anyway, the official then makes a few official phone calls and we do not go into the flat and put the piece of paper back on the door.

And then the tenant decides he’s not going to pay his rent any more as the shower has not been fixed!

So things go from bad to worse. The tenant no longer communicates in any way, shape or form. He does not respond to letters, phonecalls, texts, emails. We have no way of getting into the property to carry out the repairs…BUT environmental health are claiming “they should throw the book at me” for what I am unsure. I lose my rag. I am f****ing furious. And I tell them this. I tell them all the proof I have of all I have tried to do. I am not ignoring the problem – I have tried to do everything and more.   What am I to do when a tenant continually ignores all methods of communication and refuses to open the door to contractors.

So we agree that we’ll get another power of entry to get the repairs done.

In the meantime I serve a section 21 on the tenant. I could have served a section 8 – but I know the tenant has money and I know he’ll give me the run around when it gets to court.

So the notice expires the end of this week. Having inspected the property it would appear the tenant is not looking to leave any time soon. And so I am ready with my court forms to get the court order to get my property back if he hasn’t left…but how is he going to leave now he is in custody??

Time will tell how long he is kept in…in the meantime I will just have to wait 🙁



Buying a Flat? Beware the Service Charge Rip Off

5 Aug

Anybody who owns a flat as a leaseholder pays a service charge. Fine. The service charge is charged for the upkeep and maintenance of the building.  The management company collects the service charge on behalf of the freeholder and the monies are spent on the building to ensure it is maintained and looking good. This is all fine. In theory…

But in reality – what control do we really have over the management companies and over the spending of our hard earned money?

Yes, we get the accounts of the service charges – usually a year later after they have spent the money, and they provide a future estimate as to what the service charges will be and any works which are planned.

They send out various notices of what they are thinking or planning of doing. They send section 20s because they are planning some major works…and we get our chance to reply…but do they really have to listen?

This issue has come to the fore where a flat I own in a block in London owned by Peabody has been subject to a major works notice. Now earlier in the year they decided they would upgrade the intercom entry systems. I didn’t really think they needed upgrading – but Peabody disagreed. It was happening and I had to pay my share – which was some £300. It sounded quite steep to me – but there was little room for argument so I paid it.

The latest major works is now out of this world. They have decided that to meet current fire regulations the communal hallway of our block of 12 flats has to be painted in fire resistant paint. In principle, I agree with this.

What I don’t agree with is the price.  For painting the communal hallway for our block of 12 flats it is going to cost over £33,000. Yes that is £33,000.  And my share is £2800.

So when I saw the letter, I thought they must have made a mistake. How can it have cost me just £300 for my share of a new intercom system and yet to paint the communal hallway it is going to cost 10 times more? This is paint we’re talking about. And it is just a hallway for 12 flats. And it is a very narrow hallway. And I have no idea how it can possibly cost this much.

And so having not bought fire resistant paint before and wondering why it cost more than liquid gold I decided to do some research. I have found that I can buy fire resistant paint to the standard they need at £10 per litre. Whichever and whatever why I look at this I cannot see how it is going to cost over £33,000 to paint our hallway.

So I have tried to call Peabody who invited “observations” and I observed that given the cost of the paint and the time that it would take that the quote was ludicrous.  I was informed that they use one main contractor, that was the price, I should put my observations in writing and they would “observe” them. That’s it. That’s all they do. When they invite leaseholders to make observations they’re not going to listen. They don’t give a damn if the quote is too high – why would they – they’re not paying the bill – and anyway they get to charge their 20% “management fee” on the works so the higher the quote the more money they make.

So now I am off on a mission to see if there is anything at all I can do to make them listen. I have started rallying the neighbours for support. From talking to other people who have been in this situation before, it sounds like I am wasting time. But, I have to try.

So next time you are thinking about buying a flat beware the service charges, beware the works which are planned and beware that the management company have no incentive to get the best price.  You may own your flat and you may have a lease – but in reality you have very little rights and even less control.