According to ISPreview.co.uk over 75% of homeowners in the UK would choose to not buy their ideal home if it did not come with broadband speeds of at least 1Mbps.

Now maybe I am just old fashioned or maybe it is because I am not so bothered about the internet, but this is possibly one of the strangest reasons I have ever found for not buying a property.

Surely there are much more pressing reasons for not investing, such as wall damp, noisy neighbours or poor bedroom sizes?  But broadband?!

Yet if you are to take ISPreview.co.uk’s study seriously it would appear that having a good broadband service is now an essential part of property investment. Meaning as property investors we too should be conscious of our rental properties broadband speeds.

Continuing in their report, ISPreview.co.uk revealed that whilst 61.7% of homeowners would prefer to have broadband speeds of over 4Mbps:

• 20% felt 4Mbps would be adequate
• 50% stated that they were open to using fixed Wi-Fi services as an alternative to having landline broadband
• 50%+ would pay more for a house which offered faster broadband access

Either way it would appear that as property investors we need to add another property requirement to our list. Especially if broadband can actually impact upon property prices and raise their values.

Wendy xx

P.S. If you are interested in reading this story, follow this link: http://www.cable.co.uk/news/broadband-services-could-impact-on-the-property-world-19449130/

Ummm probably… but before you discount me as being heartless or ‘callous’ in this judgement let me explain…

You see it is a little known fact that repossessed properties sell for at least 5-10% below market values, meaning you can easily invest in these properties for more than 25% below their original 2007 asking prices, if not more which is fantastic news since property prices have begun rising again…

Now for anyone who doesn’t have a clue what I am going on about, I am discussing Credit Action’s recent report which declared that a new property is repossessed every 11 minutes. That is 131 properties every single day!

Yet this is not the worst of it…

According to Credit Action, the average household has now got a debt of at least £9,161 to their name –excluding their mortgage! Throw that into the mix and household debt rises to an astounding £58,340.

At £58,340, it is no wonder that every 3.97 minutes someone is declared bankrupt or insolvent – the finance market is in a very bad way.

Yet despite all this, it is impossible to ignore the fact that these repossessed properties represent an incredible opportunity to get the property market back on its feet.

With the demand for property growing at an escalating rate and the housing shortage becoming ever more dominant, these properties can easily supplement this demand by being transformed into multiple rental accommodations.

Maybe I am wrong about this. Maybe investing in these properties won’t make a difference. But you have got to admit that at an additional 5-10% off their asking prices it just too good a discount to miss.

Wendy xx

Dubbed ‘The Property Authorised Investment Fund’ this scheme is expected to split ‘…between 80% on brick and mortar and 20% on listed securities once the Financial Services Authority and HM Revenue and Customs have given it the go ahead.

Now I am no expert in commercial property – although over the years I have dabbled in it a bit – but I am quite impressed by this move by Clavis Walden.

As they themselves describe it, it is the most tax efficient structure available for investors looking for a credible income, and the fact that they will have the backing of the FSA and HM Revenue and Customs, makes it is impossible to doubt the sincerity of their project. Not when commercial property is slowly making a comeback.

Remember that I posted about commercial property dropping to below 50% their 2007 peak property prices a while back? Well nothing has really changed there aside from the fact that these prices falls are beginning to stabilise. And if that is happening, what you are looking at now is a potentially invaluable asset that has got the likes of Clavis Warden wanting to back it up.

Anyways I couldn’t resist commenting on this story as it is about time something positive was written about the property market.

Come take a look: http://www.bridgingandcommercial.co.uk/newsstory?id=19349878&type=newsfeed&title=clavis_walden_to_set_up_new_property_initiative

Wendy xx

Depending on where you invest and in what property types you could be paying thousands of pounds more than you’d expect.

You see, I was reading the Mail Online the other day, and I came across a story which kind of surprised me in its complexity. If I am honest I had to re-read it twice to get my head around all the contradicting figures.

Property fluctuations

Now you are probably already aware that property prices increased by 1.5% between April and June, but what you probably didn’t know – well I didn’t anyway – is that flats and maisonettes are storming ahead with 67.5% property price increases.

But they weren’t the only property types to experience a boom. Detached properties for example have also risen 33% above average property prices. It’s incredible.

Yet to make this story even more complicated, property locations are also having a detrimental effect on the cost of housing.

Take London for example.

Whilst detached properties have risen in value across the rest of the UK, in London they have dropped by more than £30,000 between April and June, whilst flats have risen by £8,000.

Isn’t this meant to happen?

Okay, okay… I know that a properties location can have a detrimental influence upon its valuation, but what surprised me most about these figures was the extremity of the differences.

Yes, you may be able to spot a huge difference between properties sold in the South of the UK to those sold in the North. But to witness such a difference between towns/cities that sit side by side is shocking. You have to wonder what is happening.

I suppose in many ways what these statistics prove is the importance of choosing your property investments carefully, calculating their profitability and looking at their tenancy demand first before you invest.

With such property fluctuations you need to be careful, otherwise you could be setting yourself up for a financial loss.

Wendy xx

With bidding wars escalating for property, estate agents are reporting that many homes are now reaching their asking price – if not more – because so many people want to invest.

Take this statistic for example.

During July 2009, there were 292 house hunters to every estate agent who had 59 properties for sale. You only have to take one look at this figure to recognise that the property market is hotting up. It is electric.

Yet I have to admit that I am not sure whether to be impressed or concerned.

On the one hand this recommendation by housing experts for homebuyers to wait – unless they can get family to help them – is great news for investors like you and me. If they can’t buy, then they can easily rent, which means an increased tenancy looking for rental properties.

But with terrace properties selling for more than they fetched 2 years ago this is a dramatic increase considering average property prices have dropped 20% in the last year.

The problem is the growing housing shortage. Even with many first time buyers refraining from making property viewings because they know they have not got the cash to invest, there are still hundreds of homeowners to every property – creating even more competition for investors like you and me to invest.

According to the Council of Mortgage Lenders, the average first time buyer is 37 years old, whilst those who receive help from their parents are averaging at 31.

Either way, these ages indicate how hard mortgage lenders are making it for homebuyers to get onto the property ladder. Without outside aid, they simply cannot afford the 25% deposits to invest.

Wendy xx

Handed out by the Financial services Authority, in the last 5 months they have handed out fines totalling £302,445 and have already banned 9 individuals/brokers from the mortgage industry.

How’s it possible?

The most common cause for this kind of fraud is when an applicants income is inflated – with or without their consent.

By exaggerating their income through the invention of bonuses, an extra job or forged payslips, applicants are able to receive a bigger mortgage, and brokers… a bigger commission.

Why is it getting worse?

With the lending market taking a big hit since the onset of the recession, the number of applicants who are actually successful in acquiring (and affording) a mortgage has dramatically reduced, and as a result more and more individuals are resorting to this kind of fraud.

Take the last couple of years: 2007 only 5 bans were handed out; 2008 29 bans with fines of £289,500 and 2009… fines are already exceeding £302,445. It is not a pretty picture.

Another growing phenomenon is false valuations on new build flats.

With developers and builders offering homeowners incentives of instant cash-backs, fitted kitchens and paid-for legal fees… if these are not reported it could result in properties being sold for more than they are worth whilst being paid for with over inflated mortgages.

Wendy xx

You may remember – like me – the nationalisation of Northern Rock. It was a big scandal at the time that resulted in a lot of speculation over whether or not peoples mortgages would remain safe. Well, the core reason they had to be bailed out was due to their reputation for offering mortgages of up to 125% of the properties value. Once in place too many homeowners were unable to afford the monthly repayments, resulting in the bank being nationalised.

Now I personally have nothing against the bank. After all, don’t we all as investors strive to invest in properties using no money down deals? It is the dream deal for a property investor, and not one we would shun if we could get it. But the thing with Northern Rock was that they were reckless in their lending, and by the sounds of the National Audit Offices report they still haven’t learnt their lesson.

6 months on, Northern Rock have been found to still be lending this 125% LTV mortgage.

Yes, the terms of this loan have been restricted but this loan accounts for 50% of their arrears and 75% of their repossessions. So here is my question – is this a mistake by Northern Rock? For a first time buyer struggling to get on the property ladder, this is the perfect deal as it frees them from the obligation of having to find a deposit. But on the other hand, if they are not thorough enough in their credit checks to make sure that homeowners are able to afford these loans for the long term, then it could be damaging for the bank.

I don’t mean for this to sound like a rant, but consider this for the moment. Are not banks restricting the number of mortgage loans they will offer due to people not being able afford their monthly repayments?

It’s an endless cycle. You could argue that the public needs these kind of mortgages, but then you could say that due to the number of people who take out these loans yet cannot pay them, they have contributed to the restricting of mortgages?

Okay, okay I know this is a broad assumption but I think you get my point. So I am putting the question out to you – were Northern Rock wrong to keep on offering these 125% LTV mortgages in the current financial climate?

I would really appreciate your opinion on this.

Speak soon.

Wendy xx

I personally have always preferred to invest in the UK, but the TimesOnlines recent story about global property price falls has given me a new perspective on the prospective profits that can be earned from these types of properties.

I know, I know… every country has got their own property laws detailing what is necessary to invest. But… if you were to take the time to gain a firm grasp of these laws, the instant earnings you could generate from these locations could really be worth your time.

Take these following figures supplied by the Timesonline. Here they have examined at least 7 locations, all of which can offer you instant earnings due to their affordability:

France: In Normandy, Brittany, the Dordogne and Cote d’Azur all their properties have fallen in value by 7.5%. But as a country as a whole properties in France are down 25%.
Spain: Properties across the board are now 20% cheaper than they were in 2007.
Italy: Look in Tuscany and properties which originally cost 700,000 euros are now 400,000 euros. Overall though, investors can expect to see savings of 20% in their investments.
Manhatten: Properties across the State have fallen by a minimum of 20% in value with some falling as high as 30%.
Florida: Some of their properties have experienced discounts of over 50% making them an ideal second home location.
South Africa: Prices average out at 10-20% below their peak value in 2007
Dubai: Following their 6 year property boom, you can now invest in Dubai at 75% of the properties value.

I know these figures shouldn’t be that surprising. After all we are in a global recession, but the similarity in price falls between there and in the UK, makes any one of these above locations an appetising investment opportunity.

The only thing you have to be careful with here is their laws. Once you know that and are confident you can find an all year round tenancy, then there is the potential to invest. A property that for example is only in demand for 4 months of the year isn’t worth the time. To truly make it work you need a tenant to fill the property for the whole 12 months.

Anyways this information does provide an interesting twist for anyone looking to broaden their horizons in property investment. It is certainly something to consider.

Wendy xx

PS. If you are interested as I am in this story, here is its link: http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article5858851.ece. Enjoy

Hope you all had a great xmas! Now I don’t know about the rest of you, but I have always found Christmas to be a quiet period for property investment. We all seem to drop off the radar, but I’ve started to think that this is a big mistake.

I was browsing on BBC News the other day (I admit it I was trying to avoid having to cook Chirstmas dinner) and I came across an article about falling house prices. Now I know this is old news – we all know that property prices are fallings – but even I was surprised at the extent property prices are falling at.

Commercial properties down 50%
Residential properties predicted to fall a further 15% – bringing it down to an impressive 30%!

The Halifax have even predicted that some properties are falling in price by £1,000 per week! I know, incredible.

So here is the thing – why is the market so quiet? Looking at these figures, the bargains appear to be getting better and better, so in truth what can top your New Year off more than investing in properties at just 70% of the price?

Now I know one reason is because banks are supposedly getting set new targets to achieve in January, and so will be offering more mortgage options, but I can honestly not see the point in waiting.

Can someone help me with this one? Is there really any specific time when it is advisable to wait and not invest?

Anyways happy New year everyone!!

Wendyxx

Drive around the area, up and down the street -
do people look after their property?
People that invest money in their property will help sell your property, buyers or renters will not want to rent on a street that doesn’t look inviting.

have they made alterations?
If the properties on the street have had work done to them that means that any work that you would like to do which you would need planning permissions or building regulations for are more likely to be acceptable to the council.

is the street full of home owners or renters?
Knowing who predominantly resides on the street is important, if you are after a family home to renovate and sell on and the street is full of students who rent then you are on the wrong street.

You know how much the property is on the market for, you know what you want to achieve from renovations but how much can you afford to pay for the property including your renovation costs, fees etc.

There is a website called Mouse Price that can help you with this all you need is the address.  You can use this website to look at general house prices on the street, what properties have actually sold for on the street, and local information including crime stats, amenities and demographic data.  The main thing I use the site for is looking at property prices on the street, it will tell you exactly how much someone paid for the property and when.  Make a note of the house number and drive past and take a look.  This will give you a good indication of what is achievable on the street.

Then you can answer the question is this going to be a cheap property investment with a great margin.