BMV Blog

Repossession Never A Forgone Conclusion!

John Angeletta — Fri, 18 May 2012 12:17:00 +0000

If you are facing financial challenges paying your mortgage, you must make early contact with your lender to see if you can agree arrangements that fit your current circumstances.

The last thing any lender wants to do is repossess your home as, apart from the distress to you and social implication, it is a very expensive and time-consuming process.

If repossession is instructed by the lender, you will usually have to attend a court hearing. When arriving at court for repossession hearing this is what happens. Take a quick look at this link Video: when you arrive for your hearing

But Let’s Step Back A Bit ...

As repossession is the final action of the lender, let’s explore what other options are available to you.

1. Selling Your Property ~ contact one or two local estate agents to see if you can sell your home quickly. If its value is greater than your mortgage loan, you may end up with some cash from its sale after paying the estate agent and legal fees.

Or, if you have value in the property over and above the mortgage loan, you could reduce your asking price for an even quicker sale, settling your mortgage loan. Remember however, there are more properties currently for sale than willing buyers, so pricing your property wisely is crucial to an early completion.

2. Can’t Sell Your Property ~ if you can’t sell your property in time to satisfy the lenders requirements, or you don’t have sufficient value within it to meet the outstanding mortgage loan, you may be able to obtain the lenders consent for someone else to take over your mortgage payment.

There are people out there who, though they have good income to pay for a mortgage, may not be in a position to be granted one.

For example, someone who is recovering from poor credit history due to past financial difficulty or, someone who is working in the UK but, is not a citizen. These people are willing to take over a mortgage commitment to be able to move into a property with a view to buying it later. This is called a ...

3. Purchase Option ~ is where a legal agreement is entered into by a willing property seller (you) and a willing property buyer (tenant).

With the lenders consent, you agree to vacate the property on the condition that the person occupying it pays the mortgage (with the intention of buying the property within a specified term).

The agreement is specific to your needs and the needs of the tenant.

For example, you may agree that the property must be purchased within 5-years or you have the right to take it back. During this time the tenant/buyer agrees to pay ‘rent’ equal to at least your mortgage payments. They also pay the household bills for occupation.

At outset, you agree a purchase price that must be paid within the specified term. This is why the agreement is called a ‘Purchase Option’. The purchase price remains fixed for the option period.

The tenant/buyer may pay the purchase price at any time they choose within the 5-year period but, at the end of that period they must buy the property or return it to you.

How Does This Arrangement Help You/Seller?

Firstly, the pressure is off you to settle your mortgage loan now, or face repossession with all its consequences.

Secondly, you know you have someone willing to buy your property for a pre-agreed price, within a given period.

Thirdly, you have not compromised your own credit rating, following a repossession, for a time when you may wish to reapply for a new mortgage.

How Does This Arrangement Help The Tenant/Buyer?

Firstly, they will move into a property they wish to buy, at an agreed price, within a given time.

Secondly, they know they will have several years to repair their own credit rating, or qualified as a UK resident, to obtain a mortgage loan.

Thirdly, they may benefit from the increase in value of the property over the agreed purchase option period.

What Next?

Call John on 0203 239 4359 now, to see if you may take advantage of a purchase option. The enquiry won’t cost you anything but, might just save you everything.

UK To Return To Growth

John Angeletta — Fri, 18 May 2012 07:10:00 +0000

H2 forecast for UK's recovery ...

The Confederation of British Industry (CBI) has cut growth forecasts for 2012 from 0.9% to 0.6% however, the London Olympics and demand for manufacturing, translating into jobs and investment, will lead UK GDP back into positive territory after July.

Growth in Q2 will be dampened by the Queen's Diamond Jubilee Bank Holiday but growth of 0.7% and 0.5% in the third and fourth quarters respectively, is predicted.

John Cridland, CBI DG said, We have always said the path back to sustainable economic growth will be a long and difficult one, with many bumps along the way. To rebalance our economy towards exports and investment will take time and patience.

In 2013, the CBI forecast the UK economy will grow 2% and inflation will hit the Bank of England's target of 2% that year.

The Office of National Statistics (ONS) revealed preliminary data last week that showed the economy had shrunk by 0.3% in the first quarter.

What We Say ~ It is a fact of commerce that opportunity to buy property at significant discount will deminish as the UK/world returns to normality. Now is the time to prudently add as much discounted property to your portfolio as you possibly can. Though there will always be property owners wishing to sell at a discount price, the current 25%-off or better will be much more difficult to achieve! Don't delay!

Call John on 0203 239 4359 to explore your safe discount property options.

STOP PRESS STOP PRESS

If Greece leaves the EU, exports will be affected across Europe. The above UK predictions will probably change.

New BTL Mortgages / Student Demand

John Angeletta — Thu, 17 May 2012 08:22:00 +0000

ITEM 1 of 2. Mortgages4Business Launches Keystone

Aldermore and Mortgages4Business have launched a range of BTL mortgages to fill a gap in the market for professional landlords.

These mortgages are targeted at individuals and limited company investors who already own Buy-to-Let property and want to borrow between £25,000 and £350,000, up to 75%LTV.

According to the Keystone website, the range aims to satisfy professional property investors, holding more than 10-properties, who have been finding it difficult to access medium-sized loans. The product range was jointly launched by BTL broker Mortgages4Business and lender Aldermore.

David Whittaker, MD of Mortgages4Business says, Over the last few years it's been increasingly difficult for professional landlords with decent sized portfolios to secure funds for medium-sized loans. This has not only inhibited their ability to purchase vanilla buy to let property but also means they struggle to find finance for more complex deals such as HMOs or multi-unit properties and to make acquisitions in limited company vehicles ... Given the importance of the private rental sector as a safety net to the housing market this gap in the market needed filling.

To legitimately save money on your discount purchases, call John on 0203 239 4359.

ITEM 2 of 2. Student Accommodation Up 50%

According to the latest research from CBRE, the total investment in student accommodation increased by nearly 50%, to over £1.1 billion in 2011, with over £246million of student housing investments in the UK transacted in the first quarter of this year.

Demand for long-lease products has risen to annual yields of *5.5% in the top regional University towns for student housing.

The Universities and Colleges Admissions Services (UCAS) reveals that degree course applications from non-EU countries rose by an impressive 13.7%, primarily for students from East Asia and in particular, Hong Kong.

For global investors looking for the perfect opportunity, new, high quality, purpose-built, private under-graduate housing developments are an exceptional opportrunity for high-yielding, hands-off, managed accomodation.

*Discount purchase prices effectively raise rental yield to closer to 10%pa with as much as 40% saved against open market value.

To explore your safe student accomodation purchase, call John on 0203 239 4359.

Brit's Will Overpay £448m Inheritance Tax

John Angeletta — Wed, 16 May 2012 09:01:00 +0000

It's not difficult for your property, goods & chattels (estate) to be worth more than £325,000 nowadays (the current IHT Nil Rate Threshold). A house, cars, valuables together with life assurance all make up this capital tax liability following death. And, every penny over a current years Nil Threshold will attract a 40% tax-bill for your family/heirs to pay!

So, how can you reduce you Inheritance Tax-bill that will save thousands (and thousands) of pounds?

Life Assurance Trust!

It is strange how some people react when Life Assurance is mentioned. I guess, becuase it is not legally required (unlike motor insurance), many have a nonchalant attitude towards it. Yet, in the same breath when you ask how they feel about Tax, some become a tad agitated.

Why was life assurance invented?

Romans soldiers are said to have chipped into a kitty just before going into battle so that if they fell, the money would be there to return their remains home for the family to bury.

Today, we are more sophisticated about life assurance solutions and there are now four-reasons to consider taking it out for someone you love or, to perpetuate business (sometimes both). They are ...

1. To provide cash/income to pay everyday bills

2. To pay debt

3. To pay tax, or

4. To leave a legacy

Those sensitive enough to have taken out life assurance may not realise that, unless a parallel process was entered into, the payout will be included within the calculation for Inheritance Tax, thereby aggavating the inheritance tax liability. The reverse of what was probably intended.

Surely, for the sake of a piece of legal paper that usually costs nothing, it is crazy not to take life assurance out of your estate? Yet, we Brit's will apparently pay almost *£448million too much inInheritance Tax in 2012.

If you are one of the those people who feel the Chancellor will have had enough of your money by the time you die, you can do something about it.

Placing life insurance within a suitable Trust could move 100% of its payout into the hands of those you took it out for. In almost every case, the Trust used to legally avoid Inheritance Tax liability is a free-of-charge service, that the company who sold you the life assurance policy should have told you about when you took it out. If they did not, ask them to do it NOW!

A major Bank was successfully prosecuted, in recent years, by the exceutors of an estate who had to pay IHT on the proceeds of life assurance, for not offering advise about Trusts that could have avoided it!

What Is A Trust?

Putting it simply, if you give away something whilst you are alive through a Trust, your estate might not have to pay tax on it following your death and, as life assurance is taken out for someone elses benefit, it seems daft not to nominate your beneficiaries whilst you are alive, don't you think?

But, says the *Tax Action Report from Unbiased indicates, nearly 9:10 (85%) of Brits have taken absolutely no action in the last year to reduce the amount of inheritance tax their estate could be liable for. In addition, 27% claim they do not know how to go about being more tax efficient.

Remember, for every £10,000 worth of life assurance over the tax-year Nil IHT threshold, your family will pay £4,000 in tax. In fact it's even worse, because they could have an IHT liability on the £4,000 too!

Karen Barrett CEO of Unbiased said, Our 2012 Tax Action Report reveals that huge sums are being paid unnecessarily in inheritance tax every year because of poor tax planning, particularly when it come to looking at life-insurance policies ... People spend their lives providing for their loved ones, yet their ‘lack of action' when it comes to planning their affairs for after they have gone could lead to a hefty inheritance tax bill, not to mention additional stress for the family and potential delay in distributing assets.

Speak with a reputable tax adviser or independent financial adviser NOW! Or, call John on 0203 239 4359 for an introduction.

Maximium Loan-to-Value, Good or Bad?

John Angeletta — Tue, 15 May 2012 10:11:00 +0000

There is a simple truth about buying anything ~ never pay more than you have to.

This is true of property as with anything else. No investor however, should put him/herself in a position where the cards are stacked so high that even the slightest change in market conditions can be disastrous. Poor property investment, especially on-going purchase, can lead even a prudent, generally risk-averse investor into dire straits if s/he doesn’t plan.

The single most expensive part of an investment property is going to be repaying the mortgage upon it. Some advise always obtaining the highest permitted loan-to-value possible but is this always wise?

Maximum LTV ~ Good or Bad?

Borrowing the maximum permitted loan can be healthy or risky depending upon the level of equity you hold within a property. For example...

When buying a discount property at 25%-off, you know you will have this margin on-top-of your deposit as a buffer (equity) should market conditions change adversely.

This means when buying a £75,000 property at £56,000 (25%-off) with an 85% mortgage of £47,600 you will have equity of £27,150 or, a very healthy 36%.

When remorgaging (after 6-mths), you will be using the full open market value for loan purposes, so the original discount margin will no longer apply. A 75% mortgage on £75,000 leaves you with £18,750 equity or, 25% which is still healthy. Raising this to an 85% mortgage however, will only leave you with 15% equity (£11,250). This is quite tight, though it is true that low/no equity is only of concern when a property is being sold but, you don't want to be forced into that position.

When you remortgage a discounted, BTL property using maximum mortgage funding, always know you increase risk in direct proportion to the level of loan-to-value you carry on the remortgage.

How Much Of The Rent Do I Get To Keep?

If you spend all the rent you will go bust! Not really the point of property investment. You should look to enjoy about 25% of the rental income to spend as you will.

This assumes you prudently gear your purchase/remortgage to the following formula ~ allow 33% of the gross rent to pay the mortgage, 10% pays your income tax, 10% to pay your lettings agent, 10% goes into a sinking fund, 6% pays your insurance premiums and, 6% is set aside for routine painting and decorating (i.e. one room a year).

This adds up to 75%, including your tax budget, leaving you with 25% or, £25 per month in every £100 rent received. Most businesses would be very happy with 25% net profit!

If you do not plan something like this, the unexpected may cost you ~ a replacement boiler, a cooker, a fridge/feezer ~ all coming out of your own pocket. Even when sensibly insured, claims may take several weeks to process and the tenant has a legal right to an immediate repair/replacement. A sound property investment means that each will be self-sustaining.

As you build a significant property portfolio your mind needs to switch into business-mode. Many investment property companies don’t proffer advice about becoming a discriminating investor. Their focus is to motivate and it is all too easy to become emotionally caught-up in marketing hype with the enthusiasm that less scrupulous agents seek to generate.

Inspirational stories might raise plenty of hope, but this should not impair personal judgement on projections and planning, especially for the newer landlord/investor who needs to understandable that it is natural but unwise to become emotionally attached to investment property. It is after all a business and about the math.

4-Tips When Buying

1. Feelings ~ Leave them at home! Don’t let your feelings about the look of a property undermine your business assessment. If your research proves the property has demand for a certain rent, don’t dismiss it because you would not want to live in that neighbourhood, or because it needs a lick of paint, or the garden is unkempt, or the kitchen/bathroom is dated. Cosmetics can be fixed quickly and cost effectively provided you are buying it at the right price.

2. Crystal Ball ~ As with the stock market, any pundit can make predictions about future trends. But there is no certaintee in life, apart from death and taxes. If you literally are relying on the market to make certain turns to allow you to operate on a very tight budget, you could easily end up in a financial mess.

3. Repairs ~ Your Tenancy Agreement should require the tenant to attend to minor chores including changing a lightbulb, unblocking a sink or cutting the lawn but, don't assume they will do it. The better lettings agent will have a list of local tradespeople to call-in and it is worth giving your written permission for him to spend up to £100 to fix simple things without reference to you, or you could find yourself being telephoned at 3-in-the-morning. For more serious maintenance issues, most certified and competent tradespeople are going to charge maybe £50 per hour for their labour hence, the need for a sinking fund. And remember, whilst insurance may payout out, you still have to meet compulsory excesses and any future increase in premium.

4. Tax ~ As mentioned, each prudently purchased BTL property should return at least 25% profit every month over and above operating costs. The Chancellor will receive his share in tax from the 10% you set aside in a deposit account. You may not need it all in tax so might give yourself a bonus twice a year following your tax payment. Speak with a reputable book-keeper about deductible business expences.

Planning for a sound financial future in property is all about the math and you need to know how to do this. Operating a Buy-to-Let business is fun and not rocket science. Unfortunately, there are too many firms all too willing to motivate you without fully advising about the routine of owning investment property. Finally, we are constantly asked ...

Does No-Money-Down Property Purchase Really Exist?

Well, Yes & No!

If you legitimately purchase a property using a mortgage application based on its purchase price, you may remortgage that property after 6-months and release your original capital to do it again. This method of rolling original capital over into subsequent purchases is acceptable to lenders and quite lawful.

If however, you declare the property open market value on the mortgage application form, when you paid less, or you make arrangements with the vendor to receive cash-back following the purchase and without the lenders consent (double-dealing), you commit mortgage fraud that can land you with a heavy fine, up to 10-years in pirson and a confiscated property portfolio.

If you would like to know more about any of these issues, or to explore your safe discount property options, call John on 0203 239 4359

STOP PRESS STOP PRESS

Governor of the Bank of England, Sir Mervyn King, signalled that interest rates will remain around their record low until the end of next year at the earliest, the Daily Telegraph reports.

Beware Cheap Homes in Detroit

John Angeletta — Mon, 14 May 2012 07:35:00 +0000

Benjamin Britten once composed the famous little ditty, A Policeman's Lot Is Not A Happy One!

Well, there is many an estate agent that can claim their life is not a happy one, either! Not when property prices in the USA have plummeted on the back of the worst international economic crisis since the Great Depression of the 1930’s. Not when the homes they are currently marketing are worth a fraction of peak values 5-years ago.

That is what has happened in Detroit USA, as home prices in the region crash. But, is this climate an amazing opportunity for property investors to cash-in? Not necessarily! Is this an ethical investment that more Brits should consider? Maybe not!

A number of UK agents offer cheap, renovation properties across the US including Detroit, and claim they will be fixed up thanks to an alliance with Home Depot. Promises of swift occupation by low-income residents are turning into disappointment leaving investors stranded on this side of the pond.

Detroit News reported at least a dozen overseas investors who have been left with empty, unrepaired houses in Detroit. And, trying to convince local law enforcement agencies to take action has, to-date, produced absolutely nothing.

Les Young, 53, a disabled British military veteran, bought two homes for $90,000 in July 2010 that were in foreclosure, told the press it ruined my life. He has spent an additional $12,000, evicting a tenant.

These were the investments meant to allow me to live a basic life. Now, I can't even afford all my medicine.

If email bulletins, media and property reports are to be believed, there certainly are property bargains to be had almost anywhere in the world nowadays and the US economic recovery is looking faster than even Europe. But, when buying property oveseas, it is vital to know who you are dealing with.

Follow these simple ... Tips

1. Ensure you are dealing with a reputable selling agency. Request references and check them out thoroughly, even through a local law firm, or two, if necessary.

2. Check out claimed tanant demand and rental incomes in the area, often achievable through GOOGLE.

3. Check out claimed valuations are accurate with reputable Banks or Surveyors.

4. Do not part with significant sums of money direct to the vendor/developer or estate agent. Insist on transfering funds only through a reputable Solicitor/Attorney/Notaire or walk away.

5. Get the proposal in writing and study it closely, especially if refurbishment is required. Demand digitally dated pictures of work to be done and at least the front and rear aspect, garden, kitchen, bathroom, sitting room and main bedroom.

6. Remember, you may be several thousand miles away from your investment so, sorting out irregularities after you have purhased, can be very costly!

To explore your safe discount property options, call John on 0203 239 4359.

STOP PRESS STOP PRESS

UK lending to property investors rose 32% year-on-year, but remains at just a third of pre-credit crunch levels in 2007.

Can You Afford To Retire?

John Angeletta — Fri, 11 May 2012 08:59:00 +0000

A recent report produced by PriceWaterhouseCoopers (PWC) revealed that the standard projections used by pension and investment companies are too high and should fall from 7% a year to between 5.25% and 6.5%.

Even though the bank of England claimed the effect on pensions has been *exaggerated, the report by PWC shows that investors are wise to explore direct investment in property that can generate a better return over the medium to long-term, as well as producing immediate income stream from rents ~ something a pension will never do.

Most standard deposit accounts pay out less than 1% in interest! A £100,000 pension fund will pay out just £5,236 a year (5.236%).

Compare this to a modest buy-to-let property where you have put in a mortgage deposit of £14,000 as it typically returns £5,400 gross rent (38.5%).

So, it is little wonder that property offers such an attractive alternative. £100,000 prudently invested in property could yield annual income in excess of £38,000, more than 7-times greater than a typical money-purchase pension scheme.

The old maxim, if you buy right, you will sell right, is true of any investment inclusive of property. Paying full market value for an investment property when you can typically save 25%, just doesn't make sence!

But buying your discounted property through a reputable source is essential to staying the prudent side of the legal-line.

Too many agents still come up with exotic funding that lenders just would not accept if they knew the whole truth behind the purchase. And, mortgage fraud is a criminal offence carrying financial panelties and a prison term of up to 10-years. Property may also be siezed.

Where there is a healthy saving of 25% against full market value, there is a large margin should property continue to fall a while longer however, most pundits believe the UK property slump has about bottomed out.

Picking up a £75,000 for £56,000 with a 75% mortgage means you will only have to find a £14,000 deposit plus your professional fees.

Remortgaging after 6-months, releases your original deposit to do it again. Every year you could be adding two such properties to your portfolio each producing net monthly income after mortgage, expences and tax. In 5-years you could have 10-properties. Imagine how an extra £12,000 spendable income each year could top up your income?

Genuinely, ask yourself what your existing pension arrangements will do for you in retirement in 1, 5, 10, 15 or 20-years time and be the judge of your future financial security.

The best thing about direct investment in property, is that when you compare it to traditional pensions and insured schemes, the investor is in control rather than relying on an anonymous fund manager to make the right decisions for you. You decide when to change direction and when it is time to sell any asset to release cash lump sums or, just keep it to enjoy excess rental incomes.

Remember too, it can be sensible for Inheritance tax planning to leave tax-efficient debt within your estate. And, mortgages qualify as such a debt.

Call John on 0203 239 4359 to explore any aspect of your property acquisition.

*April Telegraph

STOP PRESS STOP PRESS

The Bank of England's Monetary Policy Committee has held interest rates at 0.5% and resisted calls for further quantitative easing after leaving its programme of stimulus unchanged.

Investment Property Is Not Rocket Science!

John Angeletta — Thu, 10 May 2012 07:47:00 +0000

The process of buying discount property is very straightforward however, the market is highly competitive with many websites and every auction house vying for your business.

With so much choice out there, choosing who to do business with can be a daunting prospect, especially for those looking to step-on to the property investment ladder for the first time.

It is regrettable that some company’s charge no small amount of money as deposits or for attending their course or series of events that will teach, all-you-need-to-know about investing in property.

So, is buying property so difficult that you need to part with money that could otherwise be used to buy a property? We say, not!

Self-professed property guru’s, property investment clubs and joint-venturists are not going to tell you anything that isn't common sense however, if you insist on paying several thousand pounds to find out how to do it, we've a bridge in London we can sell you!

So, what do you need to know?

Ask Yourself

1. Do I need/want to get into property?

2. How would I benefit/lose from owning investment property?

3. How much money am I prepared to risk?

4. Am I in this for a short-term fling or, the longer-term prospects?

5. How much time can I divert to property?

Answers to ...

Q1 It is no mere whim that every wealthy individual owns investment property! It is not a coincidence that every insurance company invests in property funds! Property is a fascinating and fun business, but it is a business. With it come responsibilities to the Taxman, to the tenants and to the mortgage lender (if you borrowed money).

If you are comfortable with these responsibilities ... read on:

Q2 Traditional investments such as stocks and shares or insured schemes such as pension funds provide for capital growth OR income. The point of property is it generates capital growth over the medium to long-term whilst also providing excess rental income above the costs of owning/operating the property (or properties). In short, it provides capital growth AND income!

But, what happens if loan interest rates increase? What happens if a tenant trashes your property? Before you think of paying yourself, buying that posh car or travelling the world, your rental income needs to cover the following typical operating costs:

Mortgage Payment ~ 33% of the rent
Lettings Agent Fees ~ 10% of the rent
Insurance Premium ~ 6% of the rent
Routine Maintenance ~ 6% of the rent (to redecorate one room each year)
Emergency Fund ~ 10% of the rent
Tax ~ 10% of the rent, then ...
Pay yourself ~ 25% of the rent

With the exception of tax and paying yourself, all of the above add up to 65% of the rental income but, these are all deductable expenses to off-set against your tax calculation. This is why you probably will only need to budget 10% for tax (and you may even get change out of that)!

So, for every £100 rent you receive each month, you will probably enjoy net income of about £25, assuming the above estimates remain fairly constant.

If you are comfortable with these costs/profit ... read on:

Q3 Anyone may buy a property worth £75,000 for as little as £14,000! How? By purchasing property with 25%-off its open market value (£56,000) with a 75% loan-to-value mortgage (£42,000), leaving you with a required deposit of 25% of the purchase price (£14,000).

It is not rocket science that the key to maximizing your rental income is to buy the property for the lowest possible purchase price and that means buying through a reputable discount website/agent or buying at auction (under the hammer).

In addition to the purchase price of the property, you need to add-on between *£50-£5,000 fees (*depends on where the property has been sourced), payable to the selling agent, plus your buying solicitor and mortgage fees (If applicable), between £1,000-1,500 for property costing up to£100,000.

So, for a modest investment property producing a reasonable rental income you will need about £20,000 cash inclusive of fees.

If you have this amount of cash ... read-on:

Q4 It is possible, in the short-term, to buy-and-sell-on property quickly (flip), but it relies on having your buyer waiting in the wings, before you buy from someone else. This method is not for the faint-hearted and rarely for the new property investor with limited funds, so we shall not dwell on it within this blog.

Most investment property should be viewed as a medium (5-15yrs) to long-term (over 15yrs) holding. We mentioned that purchased wisely, investment property offers capital growth AND income (rents). In today’s supressed market however, most investors favour purchasing property for income.

Ask yourself: where could I achieve a gross return on investment (ROI) of 30%+pa, that’s £5,400 each year (not including capital growth) based on an investment of £14,000? Deposit accounts won’t offer this rate of return, nor will pension funds, and stocks and shares are highly volatile compared with immovable property!

If you are happy to consider property investment as at least a 5-15yr opportunity ... read-on:

Q5 High Street estate agents just don't offer significant discounts on property purchase, as they are legally bound to the seller to obtain the highest sale price possible.

This leaves two principle opportunities of investing in discount property:

buying at auction; and,
buying through a reputable discount property website.

When buying at auction, most properties require moderate to heavy refurbishment, which is why they are being sold at auction!

It is important when deciding what your maximum bid will be, to deduct the costs of fixing up the property from the typical neighbourhood open market value of similar property, before applying a 25% purchase discount.

For example, if a key-ready house in the same neighbourhood is worth £75,000 in good condition and the property at auction has estimated refurbishment costs of £10,000, you would be unwise to bid more than £48,750 (i.e. £75,000 - £10,000 x 75% = £48,750), if you want to enjoy a genuine 25% discount from open market value.

When buying through a reputable discount website, this process has been calculated for you, with the best sites clearly laying-out the math within the illustration, together with photographs of front and rear aspect, garden, kitchen, bathroom, sitting-room and main bedroom.

If buying at auction does not equal what you would save through a reputable discount website, don’t buy at auction!

One more thing to consider! Rent is lost for every week a property is without a tenant. If rental income for a property is £450pcm, every week that passes-by, without a tenant, costs £112.50 (25%) on top of refurbishment costs! When you add up the time to view several properties to be auctioned, attend each auction house, organise and manage the work-team, the proposition for buying discount property through a reputable website is increasingly attractive.

Thank you for reading this far. We intend to write other articles however, if you have continued interest in finding out more about what type of property offers the best return and where they are located, call John on 0203 239 4359 or email john@propertyangels.eu.com

Mortgages Best Since 2008

John Angeletta — Wed, 09 May 2012 07:18:00 +0000

A new *study claims Q1/2012 was the strongest for mortgages since 2008, as residential property valuations increased 34% against the same period in 2011 and were 10% higher than in the previous quarter.

The ending of the Stamp Duty Land Tax holiday (April) may have had something to do with this rise on the market, coupled with a desire for Londoners wanting to move before the summer disruption of the Olympics and others before the Jubilee celebrations.

The remainder of the year will measure more of the current UK property market, as the real effect of normal Stamp Duty Land Tax is felt, especially with the introduction of the new 7% tax rate for property of £2m plus, announced in the recent budget.

The BTL/remortgage market has also grown with 37% more valuations in Q1 year-on-year.

Mortgage Brokers seem to be experiencing a busier first quarter too, as wannabe buyers who have been standing on the sidelines for the past 5-years, seem to be fed-up with waiting any longer.

Where deposit funds have been short, or incomes not enough, many first-time buyers have been borrowing from the Bank of Mum & Dad or enrolling parents as sponsor with lenders.

Remember, you don't have to pay full market value when anyone can typically save 25% through our website.

Call John on 0203 239 4359 to explore your property purchase options.

*Connell's

Landlords: Electrical Safety

John Angeletta — Tue, 08 May 2012 07:32:00 +0000

A large number of landlords, who carried out Portable Appliance Test (PAT) when first letting their properties, have never renewed it!

Out of almost 500 landlords contacted over a four week period by INEX, more than 50% have since signed up for a re-test.

Whilst Gas Safety Regulations places a legal burden upon landlords (see Blog 04/05/12, Landlord Receives Community Service), there is no equivalent to check out electrical items, yet!

Appliances offered as part of the tenancy places a duty of care upon a Landlord and include fridge, freezer, microwave, washing-machine, vacuum cleaner, even plug-in lamps as any of these appliances could develop a fault causing shock or fire.

It is worth remembering, that an insurance company may reject a claim for damage/loss/injury/death caused by faulty appliances outside its certified period.

Renewal of tenancy agreement is an opportunity to carry out inspection of property and electrical appliances however, they should be checked at least annually to place the landlord in a strong position to argue duty of care was maintained.

As the UK rental market continues to outgrow home-ownership, it is increasingly important that all landlords, new and experienced, are reminded to treat tenancy as a business. Costs for undertaking regular and certified safety checks are a deductable business expence for tax purposes.

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To discuss this article or any aspect of safely establishing/expanding your property portfolio, call John on 0203 239 4359.