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.

Think about it. For the last year, we have been treated to a 0.5% base rate which has made investing in property incredibly affordable, as lenders have been made to follow suite.

Yet if you look back over the last 10 years, a 0.5% base rate is far from normal. The reality is, in the past we were lucky to get less than 5%!

It really does get you thinking about the future. For instance, what will property investors and homeowners alike do when their tracker deals change when the base rate rises again? Are they realistically going to be able to afford to pay more on their mortgage?

For many, I am not so sure, especially if the Policy Exchanges prediction is right.

They are currently predicting that interest rates are going to have to rise to 8% in the next 2 years to help keep inflation down, and you don’t have to be a mathematician to realise that this figure will look incredibly steep to those who are only used to 3%+ interest rates.

I suppose the only thing homeowners can do is track the base rate, and when their tracker deal finishes switch to a good fixed rare deal. For property investors it will be a case of determining how interest increases affect their cash flows…

Wendy xx

On the one side this is great news for homeowners as it means that they won’t have to pay at least £500 to create them, but on the other, this pack actually contained some really valuable information for property investors…

Sure Energy Performance Certificates will still be available – despite their terms of issuing being relaxed – but other important documentation will be lost.

Take these for instance:

• Sale statement – contains all your basic property info such as whether your potential property investment is a freehold, leasehold or commonhold and why it is being sold
• Evidence of Title – these are documents from the Land Registry pertaining to who actually owns the property
• Standard property search – planning decisions and road proposals, your properties drainage capabilities and water services etc

Admittedly, many of the optional HIP documents are also incredibly useful when homeowners decide to use them i.e. Home conditions report, legal summary, environmental hazards searches (flooding) etc, but just looking at these 3 alone, it is easy to see that they are not a complete waste of time.

After all, whilst a homeowner may not want to pay for these searches/surveys on their own properties; this doesn’t mean that when they come to buy they wouldn’t mind knowing if the property has got structural problems or is located on a flood plain. The only difference now is, they will have to pay for these searches themselves on every property they are interested in buying – meaning they could end up paying out thousands of pounds before they even buy!

Part of me is still hoping that a compromise will be found by the time the Emergency Budget arrives on the 22^nd June; however I highly doubt it… For instance, if Scottish Home Reports are still considered valuable, why hasn’t the Housing Minister made a move to adapt their system for property investment? Exactly! They have no intention to…

Wendy xx

Judging you on the strengths of your property portfolio; your financial success and your overall personal achievements in the private rental sector; this award is a great opportunity to get yourself recognised as a professional landlord and in turn establish your property portfolio.

Win this award, and you’ll no doubt have no problems finding tenants to fill your property lets!

If you haven’t managed to keep track of this event so far, here is a list of the top 3 finalists (for every region) that the NLA announced last week:

• East of England: Myra McNeil, Karen Murray and Irene Turner
• East Midlands: Tracey Abbiss, Rachel Hutchinson and Tamsin Sapwell
• London: Georgina Bloomfield, Bindar Dosanjh and Coral Humes
• North East: Juliet Ashton-Taylor, Maria Beckwith and Joan Briggs
• North West: Christine Jones, Sylvia Marrs and Tammy Silcock
• Scotland: Mhairi Noble, Nora Rojas-Sinclair and Elaine Stenson
• South East: Anna Bowden, Diane Fry and Hasmita Reardon
• South West: Claire Heale, Anne Jarrett and Fiona Macaskill
• Wales: Jane James, Elizabeth Paterson and Lilly Sharma
• West Midlands: Samantha Collett, Amy Dixon and Glenda Houston
• Yorkshire and The Humber: Shona Davison, Lesley Jackson and Sandra Widdrington

This list definitely goes to show that you don’t have to be a man to be a successful property investor. To my knowledge there were hundreds of entrants for this competition – proof that buy to let is truly for everyone.

But this is not all…

For female property investors who have also managed to remain eco-conscious with their property lets  – despite the recession – the NLA have also announced plans to give a further 2 awards for being environmentally friendly.

And for those under 30, there is also the chance to win the NLA’s Young Property Woman Awards.

I personally can’t wait to hear the results. Every one of these women deserves the chance to win, so it is destined to be a tough competition.

Wendy xx

Essentially, all first time buyers will now be exempt from paying stamp duty fees on property investments valued above £250,000 – which is fantastic news for anyone who has previously struggled to climb onto the property ladder.

However what concerns me most about this new stamp duty holiday is the government’s definition of a first time buyer, and similarly, how they are going to ensure that only first time buyers take advantage.

Currently you are exempt from taking advantage of this tax relief if:

• You have inherited a property – even if you don’t buy this property, should you wish to invest in property at a later date you won’t be classed as a first time buyer
• You are a young buy to let investor – can only take advantage if the property is your first and only main home
• You are a divorcee -  even if you are investing independently for the first time you will be disqualified from this relief
• You own a static caravan -  by law you legally own the land beneath your temporary holiday home and are therefore exempt

Yet, despite these clear distinctions from the government on whom they class to be a ‘first time buyer’, there are in fact few methods available to help regulate this scheme.

Take this for instance…

Say you invest in a property. It is your solicitor’s responsibility to tick the box which defines whether or not you are a first time buyer. MEANING they could easily help you to bypass this rule and harness this tax relief.

Next, take in the fact that previous property owners can no longer be held on the land registry. For the government to be able to check and identify whether or not you have previously owned a property, they will have to do a lot of delving, which means a lot of research and a lot of hard work!

With such easy loopholes, it does make you wonder why the government doesn’t just open up this stamp duty holiday to all property owners. It would definitely save them a lot of hassle whilst benefiting the property market as a whole. Hopefully they will see sense.

Wendy xx

Each of these 3 lenders have FINALLY reduced their deposit sizes/interest rates which is fantastic news for property investors like you and me as it will give us more cash to invest elsewhere!

Here the best ones that I have found to date – there are even a few 90% LTV’s in there:

London & Country:

• 3 year fixed rate 80% LTV Loan of 6.49% -  there is a £995 arrangement fee though so be careful to add this to your calculations

Nottingham Building Society

• 3 year fixed rate 70%  LTV loan of 5.59% – this is 0.3% cheaper a month than it used to be despite having a 70% LTV

NatWest

• 2 year tracker 70% LTV loan of 4.99%
• 2 year fixed rate 70% LTV loan now available for only 3.55%
• 2 year fixed rate 70% LTV loan now available for 3.65%
• 2 year fixed rate 90% LTV loan now available for 5.69%
• 3 year fixed rate 70% LTV loan now available for 5.89%

NOTE: all of NatWest’s tracker deals have an arrangement fee of £1,999, whilst their fixed rate deals have traditionally got an arrangement fee of £999.

Hopefully these drops in deposit sizes will prompt other mortgage lenders to act more competitively, so there is more choice in terms of mortgages. We will have to wait and see…

Wendy xx

P.S. If you spot any better buy to let deals out there please let me know and post them here. Thanks x

That is why it is with great happiness that I reveal that leading lenders Santanders are increasing the maximum loan sizes of their mortgages.

Admittedly this news would have been better if these increases were applicable to everyone, but the point to take away from this particular story is the fact that competition is increasing amongst lenders. More importantly, the property market is becoming increasingly accessible to first time buyers again.

To sum up what has happened, Santanders have revealed plans to:

• Change the limit for first time buyers investing in new apartments from 70% LTV to 80% LTV
• Change the limit for investing in property from 80% LTV to 90% LTV

Whilst Santanders also divulged in their report that newly built property developments will remain at 70% LTV for apartments and 80% LTV for houses (for non-first time buyers), it is impossible to see the down side of this news. Especially as I imagine that it won’t be long before other leading lenders change their criteria to include existing property investors too.

All we can do is hope that the competition gets so hot that everyone benefits from deposit reductions and that buy to let mortgages get cut a break.

Wendy xx

I personally would love to retire even earlier than that, and with my extensive range of property lets I am fairly confident that I will be able to achieve this before I am 35. However property investment isn’t for everyone, so the real question is: what other routes are available to you?

Looking at the Co-operative Bank Mortgages figures they revealed that:

• 31% planned to achieve this goal by overpaying on their mortgage every month and reducing the term of their mortgage. And this is a great idea considering the current economic climate and how low mortgage rates are. There is plenty of opportunity to overpay
• 21% planned to achieve this goal by taking advantage of low interest rate deals. Now this one is only good if your current mortgage term is coming to an end. To swap part way through can result in penalties and a lot of paperwork which can get messy if you don’t know what you are doing
• 13% planned to achieve this goal by utilising more of their disposable income. Similar to the one above, this technique is only useful if you are on a tracker deal or are coming to the end of your current mortgage deal, as you need to be on a lower mortgage rate in order to increase your disposable income.

Now out of these 3, I would have to say that the first one is definitely the most viable route. For instance, most banks will allow you to pay an additional 10% on your mortgage over the year without incurring a penalty. However that being said many leading lenders are now considering launching a range of mortgages which will enable you to make additional repayment of up to 50% of your entire mortgage.

Is there another route?

Like I mentioned above, property investment isn’t for everyone, but working solely on my own personal experience, buy to let property investment has enabled me to pay off huge chunks of my own mortgage – fast – whilst leaving my other salary free to offer me the luxuries of reduced working hours.

Take my scenario for example:

Each of my 11 property investments currently produces positive cash flows of between £350 and £980 a month, giving me an additional income of £6,018 (aside from my existing job).

Now aside from the fact that my tenants are essentially paying the entire costs of my property investments – bills, mortgage payments, council tax etc – they are also supplying me with the cash flow to pay off an extra 10% off my mortgage every single month.

See what I mean?! There truly is a diversity of ways to enable yourself to retire when you want to and at an age that fits your lifestyle. So give it a try and see if you too can retire when you want to…

Wendy xx

Like homeowners the last thing they want to do is live next to someone who harasses them – they want to live in peace. But the thing is… unlike homeowners who have to sell in order to get away from such neighbours; all your tenant actually has to do is end their tenancy agreement with you.

And let me tell you, this is the last thing you want to happen…

Can Nuisance Neighbours Affect My Profitability?

Surprisingly so… It is easy as a property investor to forget to check out the quality of your neighbours because you are not living in the property yourself.

Yet thinking on this subject I can see how this could quickly impact on your profitability. All you need is one tenant to say to another: ‘I wouldn’t live there the neighbours are horrible’ and it won’t matter how strong the tenancy demand is or how good the rental yields are, if you cannot get tenants to stay, it will be you who is footing the bills.

So what do you do?

You make sure you know exactly who are investing next to before you put down a bid:

1. Visit the property more than once – the average buyer views a property once maybe twice before putting down a bid and usually at the same time of day. To gain an accurate perception of whether your potential property let is actually a local hot spot for vandals and drunks, or if your neighbours are noisy, I suggest trying to view the property at least 5 times and at various times of the day. This will allow you to see exactly what conditions your tenants will be living under.
2. Introduce yourself to your neighbours – meeting someone face to face can tell you a lot about a person. Before you put down a bid, make sure to introduce yourself to your new neighbours. You’ll soon discover if you are going to have difficulties with them over noise or a shared driveway.
3. Know your covenants – if you have already invested in the property and have got tenants living there, make sure to check the covenants of the property to see if your neighbours for example are prohibited from being a nuisance i.e. playing music at certain times of the day, lighting all day bonfires etc…
4. Talk to a solicitor – this should always be a last resort, but should you find that your tenant makes a complaint; you speak/write to the neighbour and they still persist in their actions, then you may wish to speak to a solicitor. They will be able to issue a letter to your neighbour highlighting the properties covenants and the possibility of legal action.

So try to take these on board the next time you invest in property. £500 positive cas flows and a high tenancy demand are all well and good, but get a bad neighbour for your tenants and they may affect your long term profitability.

Wendy xx

In his story, he revealed that after securing 90% LTV loans from his bank in 2007, he decided to invest in 2 off-plan properties (1 worth £415,000, the other worth £375,000). However, after Berkeley’s property prices fell by 40% in 2008, banks would no longer loan him this sum offering him a maximum 75% LTV. Faced with either having to fulfil the shortfall himself or abandon his deposit, Dowd tried to default on his deposit only to be confronted with court action from the property developers.

It is a sad reality when a man has to pay over £100,000 in damages, because the economy has turned against him.

But the thing is he is not alone… A further 300 legal claims – in London alone – have been taken against homeowners wishing to default on their off-plan properties.

Who is in the right?

Now on the one hand I can understand that as homeowners have signed a contract on these properties they are legally obligated to complete the deal. BUT when statistics state that property prices in London have fallen by only 14%, not 40% like on these property developments it really begs the question of: what has happened?

The truth is, back in 2007 property developers were seriously overestimating the value of their properties – by a lot. As a result they are now experiencing greater property price drops of an extra 26%.

And it is this 26% that is really biting homeowners such as Dowd…

I imagine, many homeowners may have easily been able to work around property price drops of 14%, but 40% is ridiculous! Who has got an extra £100,000+ spare to cover such a shortfall? Not many and that is my point… It is not completely homeowners fault. Property developers have got equal responsibility for creating this situation after valuing their properties too high in the first place.

It is undeniable that some sort of comprise has got to be met before this situation escalates any further. In London alone, Berkeley signed over 3,300 contracts in 2007 with homeowners, 85% of which were off-plan.

Fortunately many homeowners are forming collectives to help find alternative routes for resolving this issue, and so far they have come up with 13 options. However, with many having signed contracts on these prospective properties, it is going to be a long road ahead before this situation is completely resolved.

Wendy xx

Be Prepared To Walk Away

We have all been in a position where we have bid on an item in an online auction and our desperation to secure the item means we end up paying more for it than we wanted to.  If you let that happen in property, you won’t be successful.  When negotiating prices, be prepared to walk away if a deal doesn’t make you the amount of money that you want.  It takes self-discipline and a hard negotiating strategy but I have backed out of many an agreement as whilst it may be a great deal for someone, it is not a great deal for me.

Manage Your Money

It sounds obvious, but I have met property investors who don’t seem to have a tight grasp on their financial position.  Manage your income from rents, keep a close eye on your finance costs, make realistic budgets for void periods, repairs and maintenance and don’t overestimate potential future capital values.

Your property portfolio should be considered a business.  If you run your own business you keep a close eye on the finances and so it should be the same with your property holdings.

Have A Plan

Most investors buy one or two properties as they have some surplus cash to invest and like the idea of property as an investment.  That’s fine – I started in the same way.  Once you start to build a portfolio, however, it is vital that you have a business plan so as to avoid investing for investing’s sake.

What’s your ultimate intention – capital growth, income, or both? What’s the money for – your retirement, your children’s education or their eventual inheritance?  When do you plan to dispose of the properties?

Having a plan and an exit strategy is crucial.

Research and Homework

Investing in property is, for many, a full time occupation and their one main income source.  In the same way as lawyers or accountants undertake ‘continued professional development’ to further their knowledge, you should do the same.  Property is my business and so I spend considerable time learning about the subject.  Improving my knowledge of property through a property investment course, seminar or reading books on property has helped me enormously in my career.

Learn From Your Mistakes And From Others

I knew a little bit about investing in property when I bought my first house.  Since then, I have made errors along the way and have learned about the mistakes of others at the numerous property investment courses and events I have attended.

If I hadn’t learned from my mistakes I’d still be a small, novice property investor.  As it is, I have changed my practices, tactics and business plans through experience and knowledge and I am now a successful property professional.  It is worth remembering the old adage “Winners don’t do different things, they just do things differently.”