UK Property Investment Blog

Speaking to future retirees in a recent survey, price comparison site uSwitch.com discovered that 10% of 55-65 year olds felt they did not have the finances to retire at 65.

Hindered by the increasing reductions in interest rates and pension funds, more than 18% of over 65 year olds revealed that they planned to continue working beyond retirement to help finance them in later life.

A discovery that truly puts into perspective the rising retirement crisis.

Is there an alternative solution?

Whilst many retirees are feeling the necessity to continue working well into retirement; there is a simpler route to achieving a secure future that could even allow you to retire early: property investment.

More than 1.7 million pensioners across the UK are already using property investment to help build up their pension fund by realising the equity growth within their properties. And you can do the same. The only difference will be, you will know where and when to invest.

How can property supplement your pension?

If you were one of those pensioners who had already invested, you may be finding that acquiring extra cash through the sale of your properties is now very difficult.

This obstacle can easily be overcome.

By resisting the desire to sell your properties and waiting for the property market to re-stabilise, you can sit back and watch as your property investments experience capital growth.

Alternatively, you can begin earning an instant positive cash flow of £500+ a month simply by turning your property investments into rental properties.

A task which at Property Mentor we can help you to achieve.

Structure your property investments for long term success

If you DO want to use property to help support your pension, then, choosing now to become a professional landlord could be more affordable than you think.

Private pensions have taken a huge blow in the last 17 months, according to pension consultants Aon.

Following a study into the effect falling share prices is having on private pensions, it was discovered more than 3.7 million people across the UK are experiencing falls of 29% in the value of their pensions. A reduction of over £161 billion.

Which schemes are involved?

Primarily focused on those involved in final-salary schemes, other projects affected by these pension reductions include: individual private pension plans, company DC schemes and additional voluntary contributions (AVC’s).

How will these falls affect those near retirement?

Whilst many homeowners are choosing to for-go making pension contributions until the economy has recovered, this could be a big mistake.

With people on average living longer than they did 15 years ago – men 77.2 years; women 81.5 years – more and more people are entering into retirement without the adequate funding to support them in later life.

So whilst reducing your pension contributions may be helping your current finances, in the long term this – combined with the existing economic climate – could have a damaging affect upon your future.

Is there a safer way to secure your finances?

The simple answer is yes. Whilst paying into a pension scheme may feel risky at the moment, there is alternative route you can take that will allow you to safely build up your pension no matter the financial climate: Property investment.

By investing in buy-to-let properties and leasing them out to tenants, you can offer yourself an additional positive income of £500 every month that can all be done in your spare time.

Don’t miss your chance to start now. We’ve got everything you need to do this. Click here!

The G20 summit may be 2 weeks behind us, but the impact of their £1 trillion economy boost is still on everyone’s mind.

Core to Gordon Brown’s and Barrack Obama’s discussions was the prospect of increasing trade finance and liquidity funds through the injection of £1 trillion into the economy.

A boost that Alistair Darling has stated will take some time before it is felt by the public.

G20 Measures – what are they?

Key to creating this economic boost, Obama and Gordon first plan to look into: increasing trade credits (allowing firms to collect bills at a later date) and extending the resources of the IMF.

The IMF (International Monetary Fund) are an organisation of 185 countries whose sole goal is to increase global monetary co-operation, secure financial stability, encourage international trade, promote employment and help sustain economic growth.

Through their increased involvement in re-stabilising the economy, Gordon hopes to introduce global quantitative easing, that shall increase the worlds money supply and stimulate more lending.

What difference will this make to the economy?

Whilst these are only the beginning of what shall be a wave of strategies designed to boost the economy; the success of the G20 summit has already been globally profound.

Over the last week there has been a flurry of positive actions within the economy:

In the US – the ISM Manufacturing Index climbed to a 4 month high
In China – according to the official Purchasing Managers Index (PMI), manufacturing output has begun to expand once more
In Europe – their PMI for both their manufacturing and services field rose

Yet of all these locations, the UK has easily experienced the most benefits from the success of the G20 summit.

House prices, stocks, mortgage approvals… March has turned into a productive month for the UK, bringing with it:

A 0.9% increase in house prices*
A rise in mortgage approvals of 38,000
The FTSE being 15% higher at 4,000

*Reported by Nationwide

And with the Bank of England declaring that lenders will be increasing credit availability over the coming months, homeowners have got a lot to look forward to when choosing to sell their homes.

Perhaps it’s time you get a piece of the pie?

Many commentators are beginning to agree with me that property prices as an average across the UK cannot drop much further due to the all important affordability measure.

As highlighted last week mortgage approvals shot up in February and I expect this trend to continue now for the next 6 months.

Many potential buyers are now seeing interest rates at excellent levels, even at fixed rates which means it can now be cheaper for them to buy then to rent – which will not have been seen for a long time.

The level of discount we are seeing at the most competitive end of the market ie the under £100,000 end is almost unprecedented. This end of the market had seen strong capital growth over the last 5 years – almost anywhere in the UK where prices were say £40,000 5 years ago, values would have been up to around £70,000 by the start of 2008 – because of demand from buy to let investors and owner occupiers. Due to this demand and ease of getting 85% LTV mortgages very few big discounts needed to be offered by vendors.

With mortgages now starting at 75% LTV for investors and first time buyers having to find 10-15% deposits, anyone desperate to sell has had to offer a larger discount to be confident they will sell. However the dramatic easing of interest rates has meant many buy to let investors or owner occupiers who were in financial trouble are now in far stronger positions and their monthly cashflows have dramatically improved – anyone on tracker mortgages will have seen their repayments drop by 60-70%!

Therefore quite simply less people are in as much trouble and are as desperate to sell!

With mortgage availability improving these discounted deals are getting more and more competitive and I feel the days of getting the 25% levels of discount that we can see just now with the right contacts may well not be here in the next few months.

Undoubtedly this end of the market – ie the sub £100,000 houses which we have always recommended should be the backbone of any UK investor’s property portfolio – is as competitive as ever with every week new “Distresssed funds” being started up, and quite rightly the big institutions looking for strong yields being attracted. I have had several calls from large investors looking for large amounts of this very type of deal – not easy for us to supply, as we struggle to supply all our own investors!

I do think that any investor just starting out this year has timed this absolutely brilliantly – as buying 3-10 houses this year, with the right team around them means they will be able to look back in 2-3 years time and know they have done so well with the level of discount or equity that can be realised right now.

To be able to buy properties and get £20,000 of equity for as little as £5000 is an incredible opportunity not previously available!

Achieving Your Goals

I love seeing investors setting themselves clear goals for the year and hitting them and even surpassing them – and we have many investors like this.

Naturally we also have seen many investors who almost don’t realise just what an opportunity this is or are still perhaps putting excuses in the way of achieving their goals. We know in life the majority of people don’t set clear concise goals, never mind writing them down, which is so important if you are going to achieve your goals – and even when people do set goals they often lose the desire very quickly.

Have you set your goals?

Are you on track?

If not, why not? What do you need to do to get back on track?

It is important, whether in business, personal development or fitness that you set clear tangible goals, don’t make excuses and keep on track!

Do you know less than 20% of people with a gym membership go more than once a week?

Anyone that goes regularly to a gym will often see the same 10-20 people there – and no surprise they are the people that get the best results – as opposed to the people who “are too busy” to go!

Sure there’s risks with exercising just as there is with investing – when you exercise you know is a risk you may get an injury but overall you know the opportunity to get fitter and healthier makes it worth this. With investing you know is a risk you may lose money but overall the opportunities are there to make a very good return on your money.

The opportunities in investing in UK property right now are so great that you can make 4-5 times greater a return instantly than you would have made a year ago, or would make in another year’s time! Imagine knowing that for doing the same amount of work you did in the gym last year you are going to see 4-5 times better results this year! What should you do? Go as much as you can to make the most of this chance just as anyone keen on investing in buy to let property should be snapping up as many of the opportunities out there as they can!

I seriously think if you are thinking of buying investment property just now, but don’t then you probably never will. This is simply because you will never get a better opportunity so if are making excuses now, it will be even easier to make excuses next year!

So in conclusion:

This is one of the best opportunities to buy investment property in the UK – certainly in the last 5 years

Most people in life, don’t set goals and so definitely don’t hit them!

Many people who set goals have had distractions get in the way within 6 weeks of setting them and go off track

If you don’t buy investment property in the UK this year with the level of discount available and the strong yield available, you probably never will

So if not set your goals yet for the year, or are off track, I’d urge you to get back on track!

Considered to be the new alternative to bankruptcy, anyone owing under £15,000 in debt – whilst living on a minimal surplus income – could now classify for a Debt Relief Order. A scheme that has been greatly welcomed by the Citizens Advice Bureau.

Under this new scheme, lenders and creditors must wait a period of 30 days before trying to collect these debts, to give homeowners the time they need to find the assistance they need.

What has inspired this new scheme?

According to a report released by Citizens Advice Bureau (CAB), most homeowners looking for help to pay off their debt will never be able to do so during their own lifetime.

On average, a typical homeowner would need 93 years to pay off a £16,971 loan – a timeframe that unfortunately cannot be shortened for some due to low incomes, illness, disabilities or job loss.

In a survey taken amongst 1,407 people in England and Wales during July 2008, the CAB found of this number:

The average CAB client owed two-thirds more than 7 years ago
50% had debts consisting of mortgage repayments, rent, fuel bills or council tax
10% had more than 10 credit debts i.e. credit cards, overdrafts and personal loans

Offer your finances increased security

If you would like to protect your finances from entering this kind of situation or would generally like to improve your monthly cash flow, at Property Mentor we can help.

Using little, if any, of your own money we can teach you how to invest in buy-to-let properties and begin earning a positive cashflow of £500 per property, per month.

More than 33% of council house tenants in Stirling (Scotland) have lost the right to buy their properties a recent report has revealed.

Previously offered the opportunity to invest in their council houses at a discount price. This deal has now been temporarily removed to help accommodate the growing social housing shortage.

Instead these properties shall remain available to those who are on a lower income, thus ensuring that there is always social housing for those who need it.

However, Stirling are not the first local authority to implement these kind of changes.

They are one of twelve local authorities who have taken this deliberate step towards suspending ‘right to buy’ schemes in order to increase their social rental stock.

Why the sudden change of heart?

Since the ‘right to buy’ scheme was first introduced to council house tenants, more than 4,734 homes have been bought and taken off the market – a loss of 63% of their original rental stock.

In light of this revelation, the Scottish Government have suspended this offer across 35 letting areas, which they have deemed as being ‘pressurised’.

Areas facing these changes include:

Rural areas to the west and north of the M9/A9
Dunblane, Bridge of Allan and Causewayhead/Logie
Stirling, Riverside, Broombridge, Braehead and Newhouse/lower St Ninians area
Bannockburn, Whins and Hillpark/Firs

By relieving these areas, the government strongly believe they will be able to boost the economy and in turn the property market.

How does the suspension work?

The rulings surrounding this suspension are simple – only those who have entered into tenancy agreements after 30th September 2002 will have to wait 5 years (from the moment they sign the agreement) before they can invest in their properties.

Essentially affecting 245 tenancies with immediate affect, and over 1,349 tenancies during the next 5 years.

According to a recent survey, tens of thousands of London homeowners are turning to home improvements in order to protect their properties against the recession.

Aware of property predictions that suggest property prices are going to fall by up to 30%, many homeowners are choosing to renovate their properties instead of sell.

In some cases owners are spending as much as £45,000 on their properties to give their families the space they so crave.

During 2008 more than 40,000 planning applications for loft, ground and basement extensions were submitted in London alone.
What has inspired this surge in property developments?

For many homeowners this sudden desire to improve their properties is rooted in their need for more space.

With mortgages becoming more inaccessible and only 8% of new builds being dedicated to families, more and more homeowners are recognising the potential of upgrading their current properties.

On top of generating additional space to help cope with their growing family, these property alterations can prove invaluable in increasing their properties net worth. As a result the number of families moving house over the last year has fallen to 25% – a drop of 50% from their peak 2 years ago.

Are you aware of the current stamp duty thresholds?

Up to £125,000 = Nil

£125,001 – £250,000 = 1%

£250,001 – £500,000 = 3%

More than £500,000 = 4%

You should know that the sale of shares held within a limited company would (as the law
currently stands) attract only 0.5% stamp duty.

So it can make sense to buy a high value property that you intend to sell soon after within a
limited company and then sell the shares to the end buyer instead of selling the property
itself.

A “rent back” is simply where you buy a property and rent it back to the person you just purchased it from.

Common questions about this strategy are:

1) How do you ensure that the tenant looks after the property?

2) Do they insure just their contents or the building as well?

3) Presumably you charge per month for maintenance?

4) What margin do you put into the rent?

5) Do you use an emergency service for plumbing etc?

The answers are:

Rent backs can be tailor made which means that pretty much anything goes as long as you are
acting within the law and both you and the tenant agree.

1) Offer your tenant an incentive like having the option to buy back the property when he/she is
more financially stable

2) I tend to only insure only building for all my
properties

3) Maintenance is the tenants responsibility.

4) Margin on the rent is up to you but be realistic

5) Tenant does all Maintenance at his cost up to value £500. Anything more than that I cover which in turn would be paid for by the insurers for most things like the roof for example

House swapping is becoming the latest market craze according to leading home-swapping websites HomeSwapper4-Sale.co.uk and EasyHouseExchange.

With mortgage loans becoming harder to attain and house prices expected to fall a further 10% by the end of 2009, thousands of homeowners have turned to house swapping as a solution.

As the name suggests ‘house-swapping’ involves homeowners cutting out the middle man, and exchanging properties directly with other owners.

The only difference being, instead of exchanging homes for a 2 week get-away, homeowners are choosing to swap for good.

Yet it seems this scheme could be doing homeowners a favour, saving them on legal fees and costs.

One instant saving that has got homeowners buzzing is estate agent fees. Traditionally based on 3% of the properties selling price – when sold as part of a chain – homeowners with a property worth £100,000 can now make an immediate profit of £3,000 simply by swapping their properties.

However many estate agents are surprisingly behind this new method, as they can still recieve a commission from those who require an estate agent to organise their negotiations and HIPs.

And it is a scheme that could help alleviate the slump in the housing market.

The only factor homeowners still need to be aware of is all the extra hidden costs:

1. Cost to join ‘home-swap’ website – on average £19.95 for 3 months
2. Taxes, legal fees and due digilience – to make the house swap legal (and permanent), a solicitor still needs to be involved
3. Property Survey – recommended to prevent any future unseen costs
4. Market Values – must check the market values of the properties involved. Any differences should be met with a cash payment
5. Mortgage – if a mortgage is involved, make sure there is enough funds to pay it off

Accumulated together, these fees can mount up.

Then there is the further complication of matching these properties accordingly to the right person.

When most people wish to sell they do so based on the hope of either up-grading, downsizing or moving closer to their jobs/family. It a move fuelled on choice, making finding a property that is exactly suitable for both parties a slim, if not impossible, task.

For real choice and flexibility, buy-to-let is still the only reliable route left. Especially for individuals seeking to move without facing the complications of buying and selling.

Interested in learning more about how property investment can offer homeowners an easier route to moving home?