Swap Rates

As property investors, you should keep aware with what is happening in the wider economy - particularly with regards to what is happening with interest and swap rates (the borrowing rates between institutions)

http://www.swap-rates.com/UKSwap_extended.html


as these can clearly effect what you will be able to borrow against an investment property that you are looking at buying and/or re-mortgaging.

CHL mortgages responds to base rate decision

It is unsurprising that the MPC has decided to hold Base Rate at 5% this month given the recent Inflation figures and the Bank's own view on Inflation's expected rise over the coming months. The medium to long-term view may be that Inflation will move back towards the Treasury's target of 2% next year, however, shorter-term factors are steering the ship at present. Rising food and energy prices are contributing greatly to the UK's Inflationary pressures while the economic slowdown including house price falls and fewer housing transactions provide a mixed range of issues for the Bank to digest.

In the mortgage market the Base Rate decision continues to mean very little in terms of the pricing of products. For many borrowers not on tracker rates, the Bank Base Rate has seemed irrelevant, given that most lender's own rate setting has not been tied to it.

Those investing in the buy-to-let sector are in the same position with the lack of funding available in the market continuing to impact on their ability to refinance. For those still lending buy-to-let pricing and criteria is much more realistic and responsible than 12 months' ago and those landlords with suitable financing are finding increased demand for their rental properties and increased yields. In this sense, buy-to-let continues to offer an attractive investment opportunity for those willing to take a long-term view.

MPC must not keep interest rates too high, longest serving member of the MPC has today warned that the BOE must be careful not to keep interest rates too high in the battle to fight inflation. The UK would escape a recession as seen in the 80's and 90's, but if interest rates were to rise this was more likely to tip Britain into an economic downturn.

TOMORROW: Berkshire Property Meet & details of the prize draw

We looking forward to seeing you tomorrow night for another great evening of networking at the UKs Leading Property Networking Event, the Berkshire Property Meet! This is your best opportunity to network with up to 200 property investors, property experts and property professionals (250 in May), so it really is a MUST attend event.

Holiday Inn
Manor Lane
Maidenhead, SL6 2RA

Starts 7pm

£10 on the door

We are honoured once again to have a premier speaker - Rob Moore from Progressive Properties - at your meet tomorrow. Rob will start speaking at 8pm.

Who is Rob Moore?



Rob is a self made businessman, Full time Property Investor & Best selling Author of "The 44 Most Closely Guarded Property Secrets" and "Make Cash in a Property Crash".

Rob Moore & his business partner Mark Homer have been regularly buying below-market-value property with great success for themselves and fellow investors. They share what their experiences are of the current market and how they are turning this to their advantage.
Win 20 copies of "The 44 Most Closely Guarded Property Secrets" and "Make Cash in a Property Crash" and an IPOD Nano packed with great audios to help you succeed.
http://www.progressiveproperty.co.uk/landing/property-book-set-video-launch


Some of the regular experts who attend the Berkshire Property Meet:-
Glenn Armstrong - Bought and traded nearly 500 properties
Barry Danser - Finance / Rent Rescue
David Lee - Cash Flow Investor
Richard Sheppard - Property Tutor / Investor
Abdul Malik - Lease Options
Nick Pedrithes - BMV / HMO Expert / Finance
Sonny Walia - Meet the Surveyor
Darren Hunt - Property Sourcer / Investor
Simon Zutshi - Property Investor Network
Jim Haliburton - HMO Daddy
Kevan Keegan - Rent Back Charter Association
Anthony Lyons - Editor, Your Property Network
Plus many many more active investors, experts & professionals



BMV Clinic
There is also the regular BMV clinic run by our good friend and everyone's mentor, Nick Pedrithes. This is very informal and runs from 5pm until 6:45pm ish. Come along with any questions you may have Sylvia and Nick will gladly discuss your options with you.


Just follow the link to enter the DRAW:-
http://www.progressiveproperty.co.uk/landing/property-book-set-video-launch

Will the OFT Probe into 'Sale & Rent Back' Affect Your BMV Business?

Many property investors are aware of the fierce scrutiny that the Sale & Rent Back
(SARB) sector has been facing in the media of late. This has been followed with intense
lobbying from Shelter, Citizens Advice Bureau and the Council of Mortgage lenders.
In turn, this has led to the OFT launching an investigation into the sector with
recommendations due back this autumn (maybe).


Have a look at the following links for further information:-

http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/current/saleandrent

http://news.bbc.co.uk/1/hi/business/7400304.stm

http://www.guardian.co.uk/money/2008/may/14/repossessions.property



Like many other honest and ethical property investors we are concerned by the sharp
practises of a minority of 'rogue' operators that are tarnishing the name of everyone
involved not just in the SARB sector but the BMV sector as a whole.

Following a series of meetings we have joined a number of like minded investors to
support the Rent Back Charter Association (RBCA) in order to get our voices heard and to
demonstrate that the sector can self-regulate in an effective way. RBCA have already
met with the OFT and started to put across the reality of the sector and not the media
hyped sensationalism.

The Rent Back Charter Association has also lauched a web-site ( www.rentbackcharter.com )
and we would urge everyone to register if they are in the BMV or SARB business. This
will allow them to gauge interest. You will not need to pay anything to register.

There is a one year non-refundable membership fee of £295.00. However if you are
are amongst the first 50 to pay you will receive a discount of £100. So take up this offer
now if you are even thinking of taking up membership later.

http://www.rentbackcharter.com/membership.php

The aim of the RBCA is to represent those people in the SARB sector who want to
operate in a highly ethical and professional manner and want to continue to operate
without the threat of heavy and costly legislation in the market. The RBCA will be
accountable to their membership, they will publish best practice guidance and
vigorously defend their Charter Code.


If you require any further information please use the following 'contact us' link:-
http://www.rentbackcharter.com/contact.php


To be taken seriously by the OFT and to counter those that are looking to close down
the SARB sector, support the RBCA, ideally as a full member or at least register your
interest now:-
http://www.rentbackcharter.com/membership.php


This Monday on 14th July, all the founding Directors of the RCBA will be
at the Berkshire Property Meet to answer any questions you may have.

We look forward to seeing you on Monday, Juswant & Sylvia, at what will be another vibrant
meeting of networking and learning. It's the best investment of time you can make
in your property business right now. Our guest speaker will be Rob Moore.

See you there!

Florida or Bust

People have flocked to the 'sunshine state' for years attracted by the climate, the proximity to the coast and numerous theme parks. Most of all by the fact that they could buy a large property with a garden and a swimming pool for half the price of a considerably smaller house in the UK.

And if you bought your retirement house or holiday home back then, it is still doing exactly what you bought it for. Giving you a nice retirement lifestyle or somewhere to take the grandchildren to see Mickey.

The value of your house is irrelevant if you do not need to sell. In the long term, property will always be a sound investment.

"Most people bought as a mid to long term investment, to live in, have as a second home or as a retirement fund", says Lee Weaver, director of the British Homes Group in Kissimmee, "Unless you really have to sell, the advice is 100% to sit tight."

For those who have to sell their homes however, the situation is bleak. The slump caused by the US sub prime crisis has sent repossessions soaring and prices dropping.

For the investor this presents an opportunity.

A 3 bedroom home in Kissimmee that sold for $240,000 a year ago can now be snapped up for $198,000, a 17.5% decrease. And in Miami, where prices were rising by more than 20% annually as recently as 2005, house prices showed a 19.3% decline last year, according to the Case-Shiller home price index.

In parts of southern and central Florida particularly near Orlando, there are many vacant properties available.

So will the Florida market recover?

Eventually yes, because the sun still shines, the beaches await, they have great healthcare and Mickey Mouse is alive and well. It's those good old fundamentals again!

"When the pendulum swings that far to the right, it has to swing that much more to the left to even things out again" according to Kimberley Kirschner, chair of the Realtor Association of Greater Miami and the Beaches, "Prices went much higher than expected and although the drop is significant they're getting back close to normal".

She believes that parts of the Miami housing market are already on the road to recovery, helped by overseas buyers taking advantage of the weak US dollar.


In good times or bad, there's always a property deal to be found somewhere!

How can I make money in a falling market?

In the good times everything is rosy in the garden. Your chosen asset or investment is steadily increasing in value and all is well with the world. Even if you do nothing you will still make money.

But life isn't like that all the time and the value of most investments, as we are constantly reminded in the small print, can go down as well as up.

For the long-term investor, it is the long-term performance that counts. You will sit tight, secure in the knowledge that eventually your capital gain will appear (a capital gain that is taxed these days at just 18% with a tax free element of £9600).

In the short term though, how do you make money in a falling market?

The first way is that falling markets produce motivated sellers.

There are always reasons for people to move, some good some bad; relocation due to promotion or new jobs, growing families requiring more space, splitting families and mortgage difficulties. Some sellers have to move and need to move quickly.

They need to sell and you can offer to buy - at a discount of course.

Boo you say, taking advantage of others' misfortune!

Well first of all let us remind ourselves that we are in the property business to make money. That's a cold hard fact and you may have to harden your heart a little along the way. But second, let's remember that they want to sell at the best deal for them and you want to buy at the best deal for you. It cuts both ways. They would drop your offer in an instant if a better one came along.

Your finance is in place, there is no chain or complications and you can complete quickly. You are exactly the sort of buyer they were hoping for. Your appearance on the scene will save them time and the money involved in aborted transactions. Yes, you will offer a lower price because you have these advantages.

The other way to make money in a falling market is to buy at the bottom. Really? You would have to be a genius to call the bottom of a market but the good news is you don't have to be that precise, it's fine to buy just before or just after that point.

Let's call it a zone of opportunity.

How to spot that? - research, research, research, good estate agency contacts and knowing if the area you are considering is, in the mid to long term, always going to be a good bet. In other words, that the fundamentals are still in place.

Are the factors that made the investment a good one in the first place, still relevant and more importantly, still there?

BBC Money Box

BBC Moneybox – Saturday 17th May 2008 – Sale & Rent-back

LEWIS: We reported last week that the number of people facing difficulty with their mortgage payments was growing and repossessions rose sharply in the first quarter of this year. But some desperate homeowners are avoiding repossession by turning to firms which offer to buy their property for cash at below market value and then rent it back to them. We reported in February that there were concerns about this sale and rent back business and calls for it to be regulated, and as more people face difficulties these concerns are growing. Peter Tutton is Social Policy Officer with Citizens Advice.

TUTTON: They may have sold their house for a significant discount, below its market value. In return, they may have got very little security. In some cases, they’ve been poorly advised as to things like you’ll be able to get housing benefit when they couldn’t. And in other cases, even after entering one of these things, perhaps the rent then has shot up; they’ve been in difficulties with rent arrears. Or even that the person that sold them the sale and rent back agreement has then failed to pay their mortgage or gone into insolvency, so they’re still losing their house anyway. So we’ve got a whole basket of concerns about these things.

LEWIS: This week, the Office of Fair Trading launched what it calls a “market study” into sale and rent back. That would be step one if the Government does decide to regulate the sector. Heather Clayton is the director in charge of the study. I asked her if sale and rent back was right for anyone in mortgage difficulties.

CLAYTON: Without doubt, these products might be suitable for some consumers and they might be helpful for some consumers. The concerns raised are really whether consumers understand the arrangements and understand the other options open to them and what the arrangements really mean for them.

LEWIS: And what about the price paid because we’ve certainly heard on Money Box in the past complaints that people are being offered sometimes as little as 50% of the value of their home?

CLAYTON: We’ve heard that too. There’s not very much information around at the moment at all, which is one of the jobs of the market study actually - is to get better information on the scale of the problem, including the prices paid.

LEWIS: This market’s been around for a couple of years now and the concerns have been expressed you know certainly for the last 12 or 18 months. Isn’t there a danger that just as people are finding growing difficulties paying their mortgages, that these deals are completely unsupervised and by the time anything changes it will be too late, the horse will have bolted?

CLAYTON: This market study has to first of all establish a base line of just how serious the problem is. There’s plenty of anecdotal evidence around, but few hard facts. Ideally we’d like to talk to some of the consumers who have experience of buying these products. They’re unlikely to be easy to find in fact. And although we can’t resolve individual complaints, we would be very keen if these consumers would contact the Office of Fair Trading. The details are available on our website.

LEWIS: Heather Clayton of the OFT. Meanwhile, there are moves to regulate the industry. There are now two competing codes of practice - one by some sale and rent back companies called PROBAS, which we talked about a few weeks ago; another to be launched very soon by the National Landlords’ Association, as its spokesman Steve Hilton told me.

HILTON: Our code of practice, which is going to be published in the next few weeks, is indeed going to commit those sale and rent back providers who sign up to the code, will commit them to not evicting their tenants unless the tenants break the terms of the tenancy agreement. In other words, you know the landlord would not be able to evict the tenants just to make a capital profit on any property.

LEWIS: But surely if you’re giving them an assured shorthold tenancy, the only tenure they have is the 6 or 12 months of that tenancy agreement?

HILTON: That at the moment is the case. We are in discussions with the Council of Mortgage Lenders and some of the key buy-to-let mortgage providers and we are hoping to find a resolution.

LEWIS: So there could be a situation from your point of view where landlords who signed up to your code had to give people assured tenancies; that, as you say, they couldn’t be evicted unless they broke the terms like not paying the rent or something like that?

HILTON: We’re certainly hoping that we will be able to persuade lenders in due course to offer further and longer assured shorthold tenancies. I think the key issue here is that no matter how long the length of the tenancy or the type of the tenancy that’s guaranteed, that in our code of practice the landlord would not be permitted to just simply evict the tenant unless the tenant had broken the terms of the tenancy agreement.

LEWIS: But that would be a code of practice. That’s not legally binding, is it, and legally a landlord can evict an assured shorthold tenant at the end of the agreement, which is normally 6 months?

HILTON: Agreed, this is a type of self-regulation. The code of practice wouldn’t be legally binding, but there would be independent redress for the tenant if the landlord decided to evict for no other reason apart from capital growth. So unless the tenant breaks the terms of the tenancy agreement, it would be contrary to the spirit and indeed the letter of the code of practice and the impartial redress system would kick in.

LEWIS: And what about the value that’s offered for the home because one of the criticisms we’ve heard before on Money Box is that people are being offered as little as half the market value of their property?

HILTON: We certainly think that 50% is obviously massively too low. This is an issue we are already in discussions with the Office of Fair Trading on. The slight problem with this issue is that it could be that if we specify in the code of practice a minimum value, a minimum percentage for the transaction, it could fall foul of anti-competition laws, which is obviously again in the OFT’s remit, so we’re trying to be very careful about how we word this piece in the code of practice. Out of interest, the research that we’ve conducted, around 600 of the sale and rent back providers that we’ve researched, 96% of those offer in excess of 80% of the value of the property, which gives some indication that for the vast bulk of sale and rent back providers in the market, they are offering a fairly decent proposition to owner occupiers who are looking to sell their homes quickly and to remain in residence. The purpose of the code of practice will be to root out these rogue operators who want to operate under the radar and, I’m afraid to say, will of course continue to operate under the radar.

LEWIS: Steve Hilton from National Landlords Association. ….Well that’s it for today. You can find out more from the BBC Action Line - 0800 044 044 - and of course our website, bbc.co.uk/moneybox. Lots of information and of course our podcast there. Vincent Duggleby’s back on Monday at three with Money Box Live, taking your questions on ethical investing. Email now or call on Monday. And also on Monday, a special programme on Radio 4. The BBC’s Business Editor Robert Peston presents ‘Power Failure at the Central Bank’, examining the huge changes affecting the international banking system. Monday evening at eight. Join me again next weekend with Money Box. Today the reporter was Bob Howard, the producer Chris A’Court, and I’m Paul Lewis.

Berkshire Property Meet's 1st Speaker by Popular Demand is...

We are very pleased to announce BPMs first speaker. We have listened
to our members and gone for the best!

Our speaker will be GLENN ARMSTRONG.

Who is Glenn?

Glenn Armstrong started buying houses in June 2004. He bought 6 and
then ran out of money...

Faced with a dilemma that most of us have, he would have given up
a long time ago - however Glenn decided to continue on with a new
strategy. He implemented a way to buy lots of properties without ever
running out of money, and has gone on to achieve incredible success.

Since then he has bought OVER 100 properties (no. 100 and no. 101
were purchased on 11th and 12th of January 2007).

During his journey he found that people started asking for his
advice including questions on how to find reliable support such as
solicitors, accountants and mortgage brokers, and just how to find
properties that could be bought at such huge discounts to enable
them to be purchased for no money down, while still generating
positive cashflow.

To date, Glenn has an unrivalled reputation for being the key
property investor who continues to walk the talk, while others
simply talk the talk.

Make a COMMITMENT in your diary for this one, now!
Monday 17th September 2007 - doors open at 7pm.

There are limited spaces, so please arrive prompt at 7pm to secure
your seat. There will be a charge of £10 on the door to cover our
costs for the new venue.

Thank You & Pictures of Berkshire Property Meet

We just want to THANK everyone that made it tonight for another
buzzing & informative evening at the Berkshire Property Meet.

We look forward to seeing everyone at the next meet which will be
Monday 17th September. We will also annouce shortly who our first
speaker will be.

To see the pictures please go to:

http://picasaweb.google.com/mrandmrsrai/BerkshirePropertyMeetSeptember2007

For all those people that asked about the FREE Chis Howard Tickets
you can go here to sign up: www.mrandmrsrai.com/chrishoward.htm

See you at the Berkshire Property Meet tomorrow

The very successful and vibrant Berkshire Property Meet is on again
tomorrow. We look forward to seeing you there for another great
evening of lively discussion with people who are passionate about
making a success out of property investing.

The meeting starts at 7pm and goes on until the venue switches off the
lights and pushes us out the door!



Please forward this onto anyone else you know is interested in
getting started in property investing or is already active.

We look forward to seeing you there.

The EPC is Closing In On Landlords

With yet another new piece of legislation looming and so many special offers the EPC (Energy Performance Certificate) is closing in on landlords. From October 1st 2008 all serious prospective tenants must be given a copy of the EPC either prior to or at the viewing of the property.

As a student landlord the logistics of handing out this piece of paper to any student who wants to view or is viewing a property could be potentially challenging.

Once properties are released around January 1st each year in our neck of the woods, students charge through available properties seeking the best accommodation in the area. Nearly all viewings by students are unaccompanied. The whole process from telephoning the landlord, contacting the existing tenants and viewing the property is pretty quick, often involving only a few hours or, in one case this year, a few minutes.

Student property details are published by letting agents and on County Council accreditation lists, so many students are now cold calling and missing out the contact with agent or private landlord. What if a student cold calls, without the landlord's knowledge and they didn't get an EPC?

The Government has not thought through very carefully the practicalities of this legislation. A better solution would be if an EPC were available for viewing only at the property by prospective tenants. They cannot take away a copy of the Landlord's Gas Certificate, Student Accreditation Certificate, PAT Certificate, 5 Year Electrical Certificate, Insurance Certificate etc, so why the need to take away an EPC?

When new tenants view their tenancy agreement and before signing, it is at this point that the EPC could be attached to the tenancy agreement. If the detail of the EPC, when viewed again, is a major priority for the student then it is not too late to back out before signing the contract.

Do you remember when school reports became more sophisticated? No longer just a grade C, but a long explanation on targets, ways to improve and progress. Despite this improvement to the report the parent usually looks at the grade first, not the comment. The EPC will go the same way. A much simpler solution would be to include an EPC rating in all written tenancy contracts. No written contract? Then provide a copy of the EPC before the tenancy begins.

EPC ratings are appearing in adverts - not yet compulsory. It's difficult to understand why a landlord would want to advertise that their property has an EPC rating of F, however a recent advert voluntarily displayed this information to all prospective tenants!

My solution is to leave a pile of certificates in the property and to ask the existing tenants to offer serious prospective tenants a copy of the EPC at the time of viewing. Scanning the certificate, as an email attachment to prospective tenants is another way to be explored. Any other ideas out there?

Are landlords rushing out to upgrade their old gas boiler to improve their EPC rating? The EPC could potentially discourage landlords from making upgrades to their property. The certificate lasts for 10 years, however landlords will need a new certificate and further expense, every time they make a significant energy improvement.

The location of the property - nearness to shops, pubs, nightlife, bus stops and quality of furnishings and furniture will probably feature more highly in the student's list of priorities, rather than an EPC, for a long time to come.