Monthly Archives: November 2019

An Overview of Property Loan Note Investments

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Property Loan Note Investments

An alternative method of raising finance, more and more individuals are turning to loan notes, both as an alternative means to secure finance or as an alternative means to grow their money. But what is a loan note investment, and why are so many people turning to this alternative financial instrument? What is a Loan Note? A loan note, a form of debt investment, is a means of raising finance for a company, with the money being raised by an investor. The investor issues a loan to a company in exchange for an agreement to pay it back at a fixed date in the future plus interest. Loans can include multiple lenders and often have additional repayment terms such as exit clauses. Why Do Developers Use Loan Notes? In the property sector, we have seen a tightening on lending since... [Read More]

Property Investor’s FactFile – November 2019

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Property Investor's Factfile - November 2019

- According to the latest UK House Price Index, average house prices saw an annual price rise of 1.3% (to August 2019); - The latest Hometrack UK Cities House Price Index reported that Leicester saw the greatest year-on-year house price growth at 4.5%.  This was followed by Manchester (4.4%), Liverpool (4.3%), Belfast (3.7%), Edinburgh (3.7%), Cardiff (3.6%), Birmingham (3.6%); - The most recent Royal Institute of Chartered Surveyors (RICS) report stated that new estate agency instructions slipped to their weakest point in three years; buyer enquiries fell back into negative territory and, nonetheless, prices are still expected to rise at the national level over the coming twelve months. [Read More]

Why Must Buy-to-Let Landlords Choose the Correct Business Structure

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Why Must BTL Landlords Choose The Correct Business Structure

Buy-to-let properties are back in fashion… This is because rental yield is becoming higher due to the increased rental demand. Moreover, mortgages are now available in abundance. However, like any other business, buy-to-let properties do come with their risks. One of the best ways to avoid this risk is to choose the correct business structure for your buy-to-let property. There are several options available to a buy-to-let landlord that can be availed, and each has its own pitfalls. Most of the BTL landlords either own the property personally or follow and investment company structure. Tax Relief on Mortgage Interest In the past, owning a buy-to-let personally used to be the most profitable option. However, this has changed since the announcement of new tax rules for buy-to-let properties. Back in the day’s landlord could offset mortgage interest payments against rental income. However, in... [Read More]

5 Home Renovation Ideas Worth Investing In

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5 Home Renovation Ideas Worth Investing In

As a homeowner, you have the responsibility of proper home maintenance but also adjusting your personal environment so that it feels truly comfortable. Not to mention that your intent might be to sell your current home and get a good deal out of it, which is another reason why you should definitely look into the options you have when it comes to home renovation ideas worth investing in. Of course, if you’re aware of a certain aspect of your home that requires urgent repairs and upgrades, make sure to go with that first. On the other hand, you might be interested to learn more about the generally favourite renovation projects among homeowners nowadays. Light Up Your Home Properly Regardless of whether you’re planning to sell your current place or want to enjoy it yourself for years to come, it’s crucial... [Read More]

Private Landlord Tax vs. That of A Private Hotelier

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Private Landlord Tax vs. That of A Private Hotelier

This case study illustrates just how unfair the UK tax legislation will become for private landlords as of April 2020. Perhaps more importantly, it provides insight into what can be done to “level the playing field”. Let’s assume that both businesses own assets worth £2,000,000 and have 75% LTV mortgages secured on them at an interest rate of 5%. In other words, their annual finance cost bill is £75,000. Now let’s assume that both businesses make profits after finance costs and all other expenses of £50,000. The hotelier will pay £7,500 of income tax. This is broken down as follows; £nil on his first £12,500 of net profit and 20% tax on the next £37,500. However, the private landlord cannot treat his finance costs as a legitimate cost of business in the same way as the hotelier. Accordingly, his tax bill is... [Read More]