Category Archives: Property Investment Strategy

Boris Johnson – Good or Bad for Property Investors?

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Boris Johnson by Inessa2811 via Flickr

With the leadership contest over Boris Johnson, who was the clear favourite throughout, has been installed as Conservative leader and Prime Minister. He has long had strong views on the housing market, but what do these views mean for the private rental sector? Here we examine the good and the bad. Private Rental Sector for Tenants Johnson has strong views on the PRS, from both the landlord’s and the tenant’s perspective. For tenants, while London Mayor, he promised a blue badge ‘kitemark’ for landlords and rental homes introduced the London Rental Standard. The London Rental Standard aimed to promote good standards within the rental market. Open to both landlords and agents, it allowed those who signed up to use the LRS badge, which is recognisable across London as a mark for quality. However, both initiatives were largely voluntary and, as... [Read More]

Interview with Royal Institute of Chartered Surveyors (RICS) Economist

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Interview with RICS Economist

A big thanks to economist Tarrant Parsons from the Royal Institute of Chartered Surveyors (RICS) who kindly took the time to answer some of our questions below. We explored sluggish market growth, regional trends, the impacts of the Brexit delay, advice for property investors, over-inflated estate agency valuations, interest rate rise risks and the future of the buy and build to let sectors… Over the last year or so, the RICS monthly residential reports have consistently shown sluggish growth.  Apart from the obvious political uncertainty, are there any other reasons you would attribute to this somewhat subdued market? Alongside political uncertainty, challenges around affordability have, in many parts of the country, also played a significant role in holding back housing market activity over the past year. Strong price growth over previous years has left measures of affordability more stretched than ever... [Read More]

How to Buy Repossessed Houses

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How to Buy Repossessed Houses

Repossession is essentially when a mortgage lender takes possession of a property after a borrower defaults (i.e. misses payments). In property circles, acquiring repossessed houses is often equated to automatically picking up ‘bargains’. Whilst there may be an element of truth in this, it certainly doesn’t mean that you should overlook the investment credentials and assess the associated risks. Buying Houses Pre-Repossession Acquiring a property prior to the point at which a mortgage lender takes possession is a common strategy adopted by ‘quick house sale’ companies like our own (Property Solvers). Vendors facing the prospect of repossession come to us via our direct marketing efforts in search of a potential solution to what can be a complex predicament. Yet, sadly, there have been a handful of firms in our space that have been known to take advantage of people in such distressed situations.... [Read More]

Modern Property Joint Venturing

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Property Joint Ventures

The notion of entering into a property project with a partner may seem like the ideal way to combine individual skills or balance a funding deficit.  Yet many of the realities and potential pitfalls are frequently understated.  Further to her end of year commentary, experienced investor, developer and mortgage broker founder Lisa Orme of Keys Mortgages kindly took the time out to answer some headline questions for us. We explore how investors and developers these days cannot expect to seek debt funding without inputting capital themselves.  Lisa then runs through the importance of having a track record, crowdfunding’s impact on seeking debt finance, the meaning of ‘gaining a pecuniary advantage by deception’, due diligence.  Further down, some eye-opening case studies are also highlighted… What does ‘skin in the game’ mean in the context taking on debt to fund projects?  This varies... [Read More]

Property Investor’s FactFile – January 2019

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Property Investor's Factfile - January 2019

Happy New Year! Check out the latest property investor factfile ("facts and stats") aimed at buy-to-let investors and traders. We include the latest house price data / price changes, LIBOR / SWAP rate data, private rented sector growth, mortgage approvals and first-time buyer measures / price to earnings ratios. As we move into 2019, if you haven't had the chance to take a look, it's worth reflecting on the various pieces of commentary kindly provided by over 60 property experts, investors and developers.  Of course, making predictions on the future of the property market is often based on sentiment but nonetheless worth observing. Moving into 2019, evidence suggests that most rental property acquisitions will be made through Limited companies (Special Purpose Vehicles).  This comes not only in response to Section 24 but also as part of the wider professionalisation of the sector – which, to a certain degree, should be welcomed.  Indeed, for cash-rich / low-geared portfolio investors, the impending shake-up could be a unique buying opportunity. [Read More]

Expert Property Market Forecasts (2019)

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Property Expert Market Forecasts 2019

The following collection of property expert commentary delves into a range of topics moving into 2019. Rolled out for the second year (see the 2018 version), perhaps unsurprisingly, Brexit’s impact on the market remains a common theme.  Yet, while gauging the exact effects is anyone’s guess, the underlying mantra of ‘keeping calm and carrying on’ prevails across this year’s contributions. This is not to understate the risks.  Potential interest rate hikes, negligible capital growth (at best), affordability constraints, and the wind coming out the sails of London’s global hub status are a handful of factors that could spell danger for the over-exposed.  For landlords, the tightening screws resulting from Section 24 and ever-higher barriers to entry continue to shake-up the industry for the worse.  2019 is also likely to be a testing year for emerging operators in the build-to-rent, property... [Read More]

Selling A Buy-to-Let Property

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Whether it’s due to Section 24 of the Finance (No. 2) Act 2015, Prudential Regulation Authority (PRA) borrowing restrictions or the spate of other regulatory measures, buy-to-let’s attractiveness as an asset class has certainly waned in recent years. The New Buy-to-Let Paradigm Nonetheless, although some 4,000 rental properties are being sold every month, talk of a ‘mass exodus’ of landlords is arguably exaggerated. Section 24, in reality, will affect about a third of those operating in the sector.  Those that can comfortably remain in the lower tax threshold should not face too much extra liability.  Similarly, those that are lowly-geared or own their assets in Limited company structures should be able to weather the storm (assuming there are no other changes on the horizon). Since the 2015 announcement, landlords have also been exploring whether it’s possible to legally mitigate the... [Read More]

Property Refurbishment 101

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Property Refurbishment 101

Given the unpredictable nature of carrying out property refurbishment works, the entire process can often be a minefield.  This is even the case with ‘vanilla’ and simple redecoration/cosmetic update projects. Most landlords, property traders and homeowners simply want to know that they can get projects done to a decent standard without being ripped off. Fortunately, although banishing rogue traders is perhaps too much to ask, the process is slowly but surely becoming more transparent – even if you’re handling the process remotely. This extended post starts with some general tips for refurbishing a property from beginning to end.  We then outline a handful of useful tools you can use to find decent tradesmen anywhere in the UK.  Finally, we run through the main bodies and organisations with whom you can crosscheck credentials (covering general refurbishment, electrical, plumbing, gas safety, windows,... [Read More]

Birmingham Midshires on Current Buy-to-Let Lending

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Birmingham Midshires on Buy-to-Let Lending

As a lender that’s held a firm position in the buy-to-let sector across various market cycles, we really appreciated the head of sales at Birmingham Midshires (BMS), Phil Rickards taking the time out to answer a series of topical questions. Phil elucidated on the impacts of the Prudential Regulation Authority (PRA) lending restrictions, how highly-geared landlords can address their borrowing issues and handle other risks in what is constantly evolving environment. He also gave some thoughts ongoing challenges faced by the buy-to-let market, some pointers on a making a successful mortgage application, how Section 24 has impacted BMS’s own underwriting processes as well as opinions on the Greater London and South East rental markets. And, of course, no contemporary interview is complete without asking a question about Brexit (although we left this till the end in our defence!) It would be interesting... [Read More]

Property Investor’s Factfile – October 2018 Commentary

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October 2018 Property Investor´s Factfile The Property Investor’s Factfile presents a range of relevant data for buy-to-let investors, traders and developers. Below are some noteworthy observations over the last month: Property Market Trends Bearing in mind the 2-month time lag, the latest Gov.UK House Price Index reported annual price rises of 3.1% – making average property values stand at £231,422.  North-west England saw the greatest monthly price rise (by 3.4%); the East Midlands saw a 0.2% drop in prices and house prices in London decreased by 0.7% in the year up to July 2018; The Royal Insitute of Chartered Surveyors (RICS) reported ‘robust’ price growth across Scotland and Northern Ireland; new instructions ‘edging further into negative territory’ and ‘sales expectations suggest activity is likely to remain stronger away from the south of England’ (see the links to historical reports here).  Chief... [Read More]