BMV Blog

CYPRUS VILLAS, As Going Concern or To Sell Individually

John Angeletta — Mon, 08 Mar 2010 13:41:00 +0000

PRE-LAUNCH ENQUIRIES INVITED / CYPRUS VILLAS

Provisional interest is invited for up to five, modern, traditionally styled, stone built villas with private pools to be offered as on-going business concern or as individual purchase.

Set in an exclusive area in the beautiful, south west corner of Cyprus and on the border of the Nature Reserve, these villas are an established, web-based holiday letting company in a premier location.

Valuations are being prepared but the expected purchase price is believed to be c. 30% or better below market value.

Good-will is also being assessed and full details with photographs will be provided to serious interest soonest.

These villas are key-ready and the offer to include five dwellings with content, client database, business administration documents with accounts and the website domain.

Viewing ~ Airport transfers and 2-night Villa accommodation provided by arrangement, free of charge, for up to 6-persons: additional stay subject to availability at own expense. Flights may be refunded as part of completion.

In the first instance, please indicate serious interest by emailing your details to John Grant.

A Non-Disclosure Agreement will be required prior to vendor introduction.

Landlords 'Green Paper' on Energy

John Angeletta — Thu, 04 Mar 2010 10:58:00 +0000

Landlords Welcome Government 'Green Loan' Proposals

Private renters and landlords should benefit greatly from the latest Government plans to encourage householders to make their homes warmer and cheaper, according to the National Landlords Association (NLA), the leading representative body for private-residential landlords in the UK.

Chris Norris, Policy Manager, NLA, commenting on the announcement, said: "It is reassuring that these proposals will be available across all types of tenure. However, privately rented property tends to be older and harder to make more energy efficient. It is hoped these measures will remove some of the barriers to making all accommodation less damaging to the environment."

For more information or further comment, see www.landlords.org.uk or call Steven Hilton on 020 7840 8906.

Why Buy Below Market Value Property?

John Angeletta — Fri, 26 Feb 2010 16:12:00 +0000

Why Buy Below Market Value Property?

Whether you are buying-to-let or buying-to-live, the BMV opportunity is a singularly spectacular way of acquiring property for usually no more than the cost of professional fees. No other investment will typically allow favourable gearing of 20:1 using someone else's money plus attract tax relief on the interest!

Unlike High Street Estate Agents ~ who deal in current market value property, or Auction Houses ~ who deal in cash only purchases, the BMV Marketplace has the double-advantage of allowing low-cost investment at below market value prices already agreed with the vendor.

The very purpose of a BMV purchase makes it win/win. The seller acquires a rapid sale and the buyer enjoys an investment that is immediately one-third more valuable than paid for it.

Typical purchase prices illustrated on our website are three-quarters of current market value. This figure to be varified by a member of the Royal Institute of Chartered Surveyors who is instructed by the mortgage lender.

What About Down Valuations?

Whilst RICS members are professionally qualified, valuing a property is not a precise science and some variance may occur. Where a RICS estimate down-values a property greater than 5% of the original desktop price, the listing agent will attempt to renegotiate the purchase price or withdrew the property from the listings. If the latter, initial costs to you should be fully refundable.

Where a RICS valuation is within 5% of original desktop price, the investor is expected to continue as intended or declare they have withdrawn their interest from that particular property opportunity allowing it to be immediately relisted to the open market. Initial costs, in this case, are not normally refundable.

Trading within BMV property by necessity requires a prompt transaction. It does not allow the luxury of time for heavy re-negotiation with a vendor.

In a Nutshell ~ Most of our listed BMV properties are key-ready for occupancy: some even come with a tenant. If you have to invest in repairs, you should still enjoy a typical saving of 25% below market value with the condition of the property taken into account.

Why UK First Time Buyers Are Choosing France

John Angeletta — Tue, 23 Feb 2010 16:55:00 +0000

Why UK First Time Buyers Are Choosing France

Britains FTB's, fed up with the attitude of lenders and the scarcity of affordble UK property, are looking across the river to France to take their first step on the property ladder.

Whilst the FTB may plan to sit on a property for a while and then sell it to raise a deposit from the profit to buy in the UK other, more established property investors might just like to add to their growing portfolio of properties.

With a huge selection of property across France and with the French housing market beginning to move upwards, every shrewd investor should keep an eye on the market as an opportunity for the future.

And with low French mortgage rates and 80% loan-to-value being the norm' a traditional, ready to move in, 2-bed property would require about 200 Euros (£175) per month to buy. Even FTB's can afford to service this payment without a tenant but are quids-in with someone else paying the mortgage.

Or, for less than £80,000 (90,000 euro at the time of writing, you can buy a traditional, 4-bed, terrace, townhouse inclusive of three other plots of land and a Carp Lake ( see BMV Property Deal in LAbsie, France ).

Less than a hour by air, Brittany, the land of a thousand legends and France's most westerly region is full of little cottages built of stone and slate. The gray granite walls enhanced by the golden splash of gorse (a dense evergreen shrub with fragrant golden-yellow flowers), or the cloudy blue of a mop-headed hydrangea.

But it's not just the architecture that suggests Brittany (Bretagne) is a land apart. A peninsula thrusting into the Atlantic like the head of some bizarre sea monster is where France seems to fade out and the bewitching Celtic world takes over.

No place is more than an 60-minutes drive from the ocean. Stunning rock formations, secret bays and little harbour towns that in a former times were feared as pirate strongholds. Huge expanses of sandy beaches, inland lakes, forests, moors and meandering lanes leading to secluded villages and hamlets take you back to a less hurried, more gentle time.

In this time-lagged land you will feel the easy, carefree pace of your childhood, enjoy the warmth of the local people and partake of Kouign Aman (a sweet sticky traditional Breton cake) with strong French coffee, lay back, stretch and breath in lungfuls of fresh, clean Ozone.

No wonder UK FTB's are the new money in France. But remember the bigger picture: any Euro-member can buy in France!

Criminal Gangs Target Landlords

John Angeletta — Wed, 10 Feb 2010 19:00:00 +0000

Criminal Gangs Target Landlords

Landlords’ properties are being targeted by criminal gangs as a cover for illegal activity, according to the National Landlords Association (NLA), the leading representative body for private-residential landlords in the UK.

Privately-rented property across the UK is being used as ‘factories’ to produce illegal substances or house prostitution. Criminals are attracted to rented properties, often in quiet residential areas, as a base to operate with minimal fear of being disturbed.

Unfortunately, when these kind of crimes take place, it’s the landlord who ends up footing the bill as most insurance policies do not pay out when criminal activity causes damage, which could run into thousands of pounds.

One NLA member lost £20,000 when two of his properties were used to grow cannabis. The gang involved removing internal walls, wiring the property directly to the electrical mains. Landlords who know of criminal activity in their properties and fail to report it can face prosecution too.

Five Golden Rules:

1. Always check the identity of the tenant by seeing passports or driving licenses with photos.

2. Always obtain detailed references to include a credit check, employer and prior landlords references.

3. Be suspicious of anyone wanting to pay many months rent in advance. Do not give in to temptation and take more than the required two months rent up front.

4. Have your property visited, following adequate notice, at least quarterly. More often if you have concerns.

5. Always report serious suspicions to the Police and never confront any alleged criminal activity first hand. Get to know the neighbours, as they can provide an early alert of any suspicious activity.

David Salusbury, Chairman, NLA, said:

“It is vital landlords are aware of the threat these criminals pose. Criminal activity not only has an impact on the landlord’s property, but on the community as whole. The production of some drugs involves highly flammable material, which poses a dangerous fire risk. More worryingly, criminals use the proceeds of their crime to fund other, more serious crimes such as people trafficking.

“You may think ‘it will never happen to me’, but these incidents are on the increase. The checks you make before a tenant moves in are a key way to prevent becoming a victim of these crimes.”

For further information please contact

Steven Hilton at steven.hilton@landlords.org.uk

Tenancy Deposit Protection Is Working

John Angeletta — Thu, 04 Feb 2010 14:00:00 +0000

Tenancy Deposit Protection Is Working

Tenancy Deposit Protection legislation is working despite current concerns about price increases, according to the National Landlords Association (NLA), the leading representative body for private-residential landlords in the UK.

David Salisbury, Chairman, NLA, said, “The NLA believes we need to be careful not to let the current discussions about TDS [tenancy deposit scheme] price increases detract from the principle purpose of tenancy deposit protection: offering legal protection for tenants where, in the small number of cases, landlords wrongly withhold all or part of their deposit.

“The NLA welcomes recent comments from the Government that it is happy with the performance and high standards demonstrated by the approved tenancy deposit protection schemes. All-in-all, tenancy deposit protection legislation has proven to be a success and current issues must not alter this message.

“Today, I have written to TDS seeking clarification about the likely impact of their price increases on landlords and the NLA will communicate their response in due course. It is quite clear that landlords should not be expected to foot the bill of these price increases and we will be monitoring the situation carefully. For the NLA the interests of landlords must be safeguarded.”

For further information please contact:

Steven Hilton

Media Relations Manager, NLA

T: 020 7840 8906

M: 07508 031 084

E: steven.hilton@landlords.org.uk

Capital Gains Tax, A Window of Opportunity

John Angeletta — Thu, 28 Jan 2010 10:10:00 +0000

If Your Are Thinking Of Selling BTL Property, Do It Before The General Election

Following the General Election the incoming Government must redress the £180bn for the current financial year and is going to have to look at ways of increasing revenue and decreasing expenditure.

As property transactions and values are starting to creep up again, most investment (BTL) property sales will be showing capital gains.

The current rate of Capital Gains Tax (CGT) at 18% is very low and looks increasingly out of line with a new top marginal rate of income tax of 50% and will probably be brought back into line by the newly elected Government.

If you are considering disposing of property, either through a gift or transfer to successors, or by sale to reduce borrowings in the expectation of increasing interest rates, you would be wise to do it before the General Election taking advantage of the current tax rate.

The current, low, rate of CGT means that even if property prices recover more quickly over the next two or three years the net proceeds are likely to be eroded to a greater extent by an increase in CGT.

Where a transfer to the next generation is being considered, action now will almost certainly result in a lower tax bill than after the next Government Budget.

What We Say ~ it won't do you any harm to take qualified tax advice now. At least you will know your options!

Buy-to-let Landlords Enjoy Healthy Return In 2009

John Angeletta — Fri, 15 Jan 2010 11:46:00 +0000

Buy-to-let Landlords Enjoy Healthy Return In 2009

Landlords enjoyed 7.6% annual return on their investments by the end of 2009 says, LSL Property Services. In 2008, by contrast, landlords would have typically lost 8.8% even after allowing for rental income.

David Brown, Commercial Director, said: "Despite the worst recession in living memory and despite house prices continuing to fall for the first few months of 2009, investment returns in buy to let were very respectable.

"The £12,700 the average landlord made on a rented property during the year recouped most of the losses in the housing crash of 2008. Brave landlords who added to their portfolios will be celebrating an excellent year."

The trend in prices continues to be favourable with property rising in value 0.4% in December last year with rents up too (+0.2%).

Yields remain well above the 4.2% low point during the peak of the housing market at the end of 2007, when interest rates were far higher than today.

If house prices continue to rise at the current rate of 0.4% per month, equivalent to 4.9% for the full year (see last Blog & News 'Property Growth or Property Collapse 2010?'), a landlord will typically make a total return of £16,000 in 2010, equivalent to 9.8% yield.

Brown concludes: "This year is likely to be an interesting one for the buy-to-let market. The proposed introduction of regulation should help filter out unscrupulous mortgage advisers which will be positive for the sector, particularly for inexperienced landlords.

"The downturn has already pushed many of the short-term speculators out of the market too. Buy-to-let is an essential part of our housing market - we need well capitalised, experienced, professional landlords. With returns rising, they can once again look forward to investing more in the sector to meet our housing needs."

Source Mortgage Solutions

What We Say ~ Brown's comments is another example of confidence in a rising market for 2010.

We have always recommended three properties are acquired by a new landlord in their portfolio as soon as possible. This dramatically reduces the risk of a void period of tenancy with the landlord having to find the mortgage payments on a single property. It is unlikely three properties will be void simultaneously. Once the cornerstone of a portfolio has been laid, adding suitable property at a steady rate should establish a good level of excess rental income above that needed to service loans, settle agent fees and maintain each property.

For example a £100,000, 3-bed, house puchased 25% *BMV for £75,000 would produce £200+pcm excess rent over costs. Five such properties would produce £1,000pm; ten properties, £2,000pm.

Without mortgages however, five properties produce £2,500pm before running costs and income tax; ten properties, £5,000pm: quite useful money in retirement. PLUS of course, assuming 5%pa growth, your original purchase investment would double in value every 9-years!

As a tactic, we recommend every landlord aims for at least 10 good properties in their portfolio. This allows the option of selling earlier acquisitions to settle the total mortgage debt at a time when you want to enjoy unencimbered rental incomes, retirement for example.

Do call us to discuss this in more detail if you wish.

*Remember, our typical cash investment to you is between £5-9,000.

Property Growth or Property Collapse in 2010?

John Angeletta — Thu, 14 Jan 2010 10:45:00 +0000

Property Growth or Property Collapse in 2010?

The main UK event this year will be the General Election (which must be called before June). After the election the main effort of incoming Government will be balancing reductions in public expenditure with the recovery in the economy by keeping interest rates low, wage demands low and slowing the rate of unemployment.

Dominic Farrell, Director of Distressed Assets says, “The UK property market will not collapse in 2010. The same pundits who predicted a collapse in 2009 are predicting a collapse of 20% this year.

"They got it wrong last year and they will be wrong again this year.

"Given low interest rates, a shortage of supply, economic recovery (albeit weak) and growing confidence amongst business owners, industrialists and bankers, I personally predict a rise in property prices in the UK of up to 5%.

“The two key factors supporting property markets are the availability and cost of finance as well as general consumer confidence. In both cases there have been substantial improvements since this time last year.”

Farrell's views are supported by a recent report by property website Zoopla: “Around 81% of people expect house prices to rise during the coming six months, predicting average increases of 5.4%. The figure is a significant turnaround from a year ago, when only one in five people expected property values to increase during the first half of 2009.”

What We Say ~ we share the view that UK property (even global property), will continue to recover during 2010 and beyond though we hopefully we will see a more steady, sustainable property growth rate than the years before 2007.

This is good news to property investors who will see their asset steadily increase in value. The flipside of course, is that each additional property is going to be more expensive to buy. Using Farrell's prediction for next year for example, a £100,000 property today will cost £105,000 at the end of the year i.e. 5% more.

Our recent Blog & News "BMV Changes 2010" offered current consideration for BMV purchases in the light of changes in the marketplace and we recommend another read to you.

Our message remains constant. If you intend adding to your property portfolio and want the best prices, remain active for suitable deals on a weekly if not daily basis. Call us to discuss your particular needs and remember, we will give you advanced warning via SMS TXT in addition to our normal Property Alert emails if you ask us to.

Technical Fault

John Angeletta — Tue, 12 Jan 2010 12:03:00 +0000

Though the salutation was correct we apologies to those of you who received an apparent 'blank' Property Alert recently.

This was due to a technical issue, which was beyond our immediate control.

Should this happen again, use our normal link on the foot of the pager to access the whole site.

The latest property will be at the top of the listings and you can peruse/reserve in the usual way.

We apologies for the technical error once more.