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

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

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.

And I have to admit this stat shocked me.

Sure because of my involvement in property investment I tend to monitor my mortgage rates quite closely – after all, the smaller my repayments are the more cash flow I will experience. However, it still surprised me that so many people are completely unaware of how damaging such an increase could be to their finances.

Take this scenario for example. You have got a £210,000 mortgage for 25 years at a current rate of 4.49%. Your repayments per month would be £1,166.

However, if you were to increase this mortgage rate by just 1% (to 5.49%); your repayments would increase to £1,288 a month – that is £122 more per month OR to put it bluntly £1,464 extra per year!

Now that is a dramatic increase by anyone’s standard, and considering I was aiming low when I suggested those interest rates, this sum would actually be a lot higher in real life.

But the stats get even worse:

• 54% of homeowners have got no intention of reviewing their mortgage to see if they can get a better deal
• 2 million didn’t know where they would find the cash to cover an increase in their mortgage
• 1 in 7 of homeowners weren’t sure whether they had a fixed, standard variable, tracker or discounted rate mortgage
• 15% didn’t know when their existing mortgage was going to end

Fortunately the Bank of England is planning to keep the base rate at 0.5% for the time being. However, it is obvious that when they do make the decision to increase it a lot of homeowners are going to be in for a surprise.

Wendy xx

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!

Now I suppose if you know exactly what you want from a property this could help to make your decision speedier, but when you take into consideration that the average homeowner also takes 284 minutes to pick a TV and something isn’t right…

For instance, why would you genuinely spend longer picking a TV, when you have potentially got to live in this property for years???

According to ING Direct, the reason is… ‘pressure’.

44% of those surveyed revealed that they felt pressurised to put in an offer in case another homeowner tried to bag it, whilst 26% felt that estate agents talked up interest in the property to make them put in a bid faster.

And I have to admit that I can see this happening…

Sales have been really slow for estate agents over the last couple of years, so pushing homeowners to buy with tales of other potential buyers could make you bid when you haven’t properly thought it through.

Anyways, the clear lesson to take away from this story is to never let yourself be pressured into buying, especially if you want to turn the property into a property let. Invest in the wrong property, and you could make a financial loss.

Wendy xx

Aside from the rumoured change of swapping the 18% Capital Gains Tax charge for 20%, 40% and 50% income tax fees for profits made from selling property, I personally have heard little else.

Luckily whilst I was rooting around, I came across an article which highlighted 5 key areas that the budget may cover:

• Capital Gains Tax: like I mentioned above, the government is proposing swapping the 18% capital gains tax charge for one similar to that used for income tax bands. Should a property investor choose to sell a profit, any profits generated will be taxed under this new scheme.
• Private Residences Relief: in the past this enabled property owners to sell their only or main residence without incurring CGT. However, the government are supposedly tightening this definition to prevent property owners with multiple properties from swaying between which property is their main.
• VAT: if you are interested in renovating or investing in new property developments, these property types could soon be witnessing increased VAT costs.
• Capital Allowances: rumours are afoot that the government may reduce capital allowances to help cut corporation tax. The problem for property investors like me and you is this will reduce the amount we are able to recoup from property costs.
• Inheritance Tax: thankfully the threshold for this shouldn’t be changed from £325,000; however the government are planning to change the rules for nom-doms. They will now be brought under inheritance tax if they have lived in the UK for 7 out of the last 9 years, instead of 17 out of 20 years.

Hopefully, these 5 points have given you an insight into what may be coming in the next few months. We can only hope that they are not all passed…

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

Not only is this increase going to cost property investors at least an extra £10,000 in taxes (on top of the existing £40,000), but the Land Registry is already predicting that this new stamp duty is going to affect 10,000-15,000 more buyers every year.

Now as you already know from reading this blog, I am not one to give up easily which is why over the last few weeks I have been researching into various methods to take the edge of this stamp duty fee. And luckily I think I have found a solution…

I was reading an article in the Telegraph, which revealed that many property developers are currently finding legal loopholes to help property owners, such as you and me, to save thousands of pounds on our property investments. And they are pretty nifty loopholes too:

1. Special Purpose Vehicles (SPV) – here property developers are proposing to set up companies or trusts where your potential property development becomes its sole asset. By doing so, when homeowners come to buy – instead of invest traditionally – they will instead be able to buy shares in the company that are only liable to a tax rate of 0.5%.

   NOTE: Not only are the Treasury now looking for methods to close this loophole, but it is important to remember that should your property rise in value after it has been put into a SPV, you will be liable to capital gains tax.

2. Buy land – another clever alternative that property developers are offering to homeowners is the opportunity to buy land and build their own homes. By doing so, you will only have to pay tax on the land, which if it is below the £250,000 threshold will mean you don’t have to pay anything.

   Some property developers are even going as far as to let property owners invest in their land, before entering into a contract with them to build their property. Under this scheme, property owners will still be classed as self-builders and will be taxed as such.

Of course for each of these schemes, you will have to heavily rely on a property developer to help you achieve it. But still, with proper research you can ensure that you work alongside a quality property developer who will help you to take full advantage of these loopholes.

They definitely are inventive! And for those of you who haven’t got an extra £10,000 spare to pay in stamp duties, these loopholes will be a blessing in disguise.

Wendy xx

In this article, property website reallymoving.com noticed a significant difference of up to 174 cubic feet between property owners in the North and the South of the UK, and it got me thinking that perhaps the amount of valuables we own actually affects the types of properties we invest in.

For instance, Londoners are reputed to own 737 cubic feet of possessions, whilst property owners in the North East generally own as much as 911 cubic feet.

Now this may look like nothing, but when you factor in to the equation the fact that 1) Londoners tend to move a lot (due to their jobs) and 2) they can only afford smaller property spaces the closer they move into the city centre, then it is no wonder than Londoners own so little. Property prices and where you live can affect how much you own!

Is this true of the whole UK?

After reading this, I began digging round looking into other regions across the UK to see if the results were similar, and to be truthful they were pretty spot on.

Taking into consideration that 1 large sofa equates to 45 cubic feet, a bed 40 cubic feet and a TV just 3 cubic feet, the results speaks for themselves:

• East of England – 911 cubic feet
• Midlands – 891 cubic feet
• South England – 877 cubic feet
• Wales – 868 cubic feet
• South West England – 856 cubic feet
• North West England – 844 cubic feet
• North East England – 828 cubic feet
• Northern Ireland – 783 cubic feet
• Scotland – 788 cubic feet
• London – 737 cubic feet

As a rule, the more expensive the location (apart from Scotland and Northern Ireland), the fewer possessions these property owners tended to own!

But what really fascinated me was how this knowledge could easily be used to influence which property investments you invest in. For example have the info to recognise that property owners in the Midlands own more possessions than those in Scotland and you can invest proportionately towards your tenants needs and ensure a greater tenancy demand.

It is definitely a crazy idea but definitely worth bearing in mind, the next time you invest.

Wendy xx

Aside from only producing 100,000 of the 400,000 new property developments they promised last year, the government is now also choosing to overlook 500,000 properties which have currently spent the last 6 months lying empty!

In a study by the Guardian, they discovered that across 75% of local authorities in the UK, more than a half a million properties are lying empty. 500,000 properties which could easily cut the growing 1.8 million social housing list by up to 25%.

Yet what shocks me more is the variety of reasons being given for why these properties are being left empty:

Alongside keeping a large proportion of private sector property developments empty to avoid incurring council tax; many local authorities have also been found to be purposefully keeping these properties empty as it guarantees them a decent government grant. Put these properties into use, and local authorities will receive a smaller grant and a less reliable council tax income!

Now I am no genius, but even I can see that these 500,000 empty properties could easily be put into better use by helping to alleviate the escalating property shortage, not just sitting there barren.

Yet in the eyes of the government this need to ‘not lose out on funding’ apparently appears to be a perfectly reasonable explanation for not pressurising local authorities into taking action. It’s ridiculous!

Wendy xx