Property Investing

Only a quick post this week guys. I just wanted to make you aware of a news story I spotted earlier this week which revealed that 20% of tenants consider bunking on their rent, especially their final payment… [...]

I was reading a news story the other day, which made a really valid point about how we view the UK’s existing base rate…

To sum up the story, property advisors are supposedly getting concerned that as a nation we are getting too used to the base rate being low and are forgetting that it is traditionally around 5%. And I have to agree that the author of this story is right. [...]

This is hilarious – the Olympics haven’t even happened yet, but bids are already being accepted from property investors/companies to buy the London Olympic Stadium once the 2012 games have finished. [...]

Second holiday homeowners appear to be having a rough time of it at the moment. Not only are they being pressurised by their friends/family to let them stay in their holiday lets for free or at a discounted rate; they are now facing tax relief losses.

According to new reports, the government is now planning to make tax reliefs harder to access to help reduce the country’s deficit. So whereas in the past, this property investment niche offered property investors the attractive prospect of being able to offset their mortgage costs against their personal income, they will now no longer be able to do this.

And you don’t have to be a genius to see that this is going to be a harsh blow for property investors…

Nearly 25% of the 65,000 property owners currently letting their holiday homes will no longer be eligible for this relief from 2011. That is unless they ensure that their properties meet the following requirements.

For instance, their property must be available for let for a total of 210 days of the year. That is 70 days more than it is now and nearly two-thirds of the whole year!

But this is not all…

The property must actually be let for at least 105 days a year – up from 70 days – and any losses incurred from mortgage interest and repairs can no longer be offset against other investment incomes i.e. shares or savings.

Now I can partly understand why the government is being so strict. After all the country is in a bit of a mess; but this is a really harsh blow by the government to both property investors and the property market alike.

Many second holiday homeowners got into the business to keep their second homes occupied whilst they were away, and make a bit of a profit on the side. But with these new rules, they are going to have to go the extra mile to make these second properties a worthy investment…

I personally think the government needs to rethink their strategy, especially in terms of their attitude to the buy to let market.

At the moment they appear to be penalising the one niche which has made up for their own shortfalls in providing new property developments and housing for the country. And with the social housing list expected to hit the 0.5 million mark, they are only working to make the situation worse…

Something definitely needs to change. It is just a question of when will the government come to their senses.

Wendy xx

I have experimented with owning holiday homes over the years, but have never gone pro. Yet even I am conscious of the pressure many property investors are under to give family ‘special’ deals… [...]

It is always nice to celebrate another property investor’s successes, so I am happy to announce entrepreneurs Brett Alegre-Wood’s recent success at the People’s Book Prize Award.

More well known for his involvement as a property investor, blogger and Chairman of ‘Your Property Club’, Alegre-Wood earlier this week won first prize for his non-fiction book: ‘The 3+1 Plan: The Insider’s Way to Achieve Financial Freedom with Just 4 Properties.’

And it is a great read!

I have personally read this book, and it is certainly useful if you are struggling to finance your retirement, as Alegre-Wood has used his own personal experiences to create this guide…

He proves how with just 4 properties, homeowners can change their financial position and ensure that their retirement is financially secure!

Yet I suppose what I really love about him winning this award, is the fact that property investment is for once receiving positive attention. The fact that so many people have rated this book highly is proof that interest in the buy to let market is growing and it is about time too.

I know my financial situation would have been vastly different if I hadn’t got into property investment when I did, so to think that others feel the same way too is very cheering.

Anyways, check this book out if you are interested. It is a good starting point before attending a property course…

Wendy xx

I was reading an article earlier this week about how clueless homeowners are about their mortgage, and the statistics were quite shocking…

According to Consumer Financial Education Body (CFEB), more than 75% of homeowners do not realise the full impact a 1% increase to their mortgage rate could have on their repayments. [...]

I know as property investors, we generally take longer to pick property investments than most homeowners do – after all they are not trying to make a profit from the houses they live in – but even I was shocked by the survey done by ING Direct.

In their survey, they revealed that when it comes to buying a property, homeowners only take 21 minutes to decide – that is less than the average TV episode! [...]

If you are looking for proof as to why now is the perfect time to invest in property, examining current rental values can give you the helping hand you are looking for…

In the last quarter alone, rents on average have risen by 2.3% to an impressive £839 per month – £19 higher than they were during the first quarter of this year.

But, what about supplies?

Now I have to admit that property sales have fallen considerably since property investors flooded onto the property market trying to sell their properties before the Emergency Budget. But the fact still remains that rents have continued to rise despite these new supplies – proof that property owners prefer to rent.

Across the whole of the UK property market, rents have risen year on year by 1.9% whilst specific regions such as Yorkshire and Humberside, and London have risen by a minimum of 2.6%.

Take London for instance. Average rents now rest at £1,729 a month – £44 more per month than at the beginning of this year, and will probably continue to rise unless mortgage lenders make their deals more accessible and affordable.

So far, lenders only appear to be offering longer loans i.e. 7 years+, but what are really needed are smaller deposits.

But until then, I say lets take advantage of this demand – what do you think?

Wendy xx

I personally have never been against the idea of allowing tenants to have pets, especially if they have got a disability; however I can understand why some landlords are sceptical about allowing them. [...]