Office to residential conversionx

Office to Residential Conversion made permanent

The Prime Minister announced today that the Permitted Development Rights that enabled office to residential conversion without full planning permission is set to be made permanent. The scheme with initially ran from 2013 to May 2016 will be extended indefinitely.

In other boosts for house building today, the PM is also announcing that a temporary rule introduced in May 2013 allowing people to convert disused offices into homes without applying for planning permission will be made a permanent change – after almost 4,000 conversions were given the go ahead between April 2014 to June this year.

This is great news for potential buyers of homes as well as property developers and all professionals connected to the industry. It will mean an flood of new development sites to the market and an increase in available housing stock. This should start to be realised within 12 to 18 months, the usual length of time required to convert a building.

Office blocks are usually in inner city location or near transport links making them ideal locations for residential units. Perfect for young buyers who rely on these links. Furthermore converted building are typically cheaper than new builds and many often come with a character that new builds just do not.

We at PropVestment are actively looking for office sites to convert into residential units, please email nirav@propvestment.com.

Office to residential conversionx

UK Property Lending now available

Mortgage approvals help property market activity

After a few years of stagnation in the UK property market due to lack of lending  it seems there is some light finally.

UK Property Mortgage LendingOn Thursday 20th June the Guardian reported:

Mortgage lending jumped 21% in May, the sharpest rise since October 2008, suggesting Britain’s housing market once again has a spring in its step.

The Council of Mortgage Lender’s gross lending figures, which reveal the value of loans advanced without taking into account repayments, showed £14.7bn of mortgages were taken out during May, up from £12.2bn in April. The figure was also 17% higher than the £12.6bn seen in May 2012, aided by government schemes to boost lending.

Does this mean the Funding for Lending and Help to Buy schemes are working?

PropVestment’s client have had experiences that surprisingly agree, however there seems to be discrepancies across lenders.

One client of ours had a mortgage approved in principle by Santander. He had good credit, was buying below value and was putting in 30% of the money himself too. After two months waiting for Santander to send a surveyor over to value the property, a job most of us could do using Land Registry and Zoopla data, Santander say they have had a re-think and do not need a surveyors report. Santander pulled the plug.

Fortunately this deal was not part of a chain, and the seller was understanding. However due to poor business practises Santander could cost the industry dearly.

Our client returned to us, we put him in touch with our favoured mortgage broker, who went to the Halifax. Halifax approved, surveyed and letter of offer within 7 days.

We were surprised at the speed of response of Halifax. Previously we have not had such good experiences with the government owned banks since the credit crunch. LloydsTSB part of the HBOS group has usually been responsive with Natwest and the RBS group being the worst. Our client’s experience and a few others we have heard with Santander now put them firmly on the unfavoured list.

Money talks in this industry, if lending is available without unnecessary hassle, any bank will gain a strong reputation and foothold in the market.

We welcome your thoughts on the topic of lending in the property market and inparticular perspectives from other parts of the country. Email info@PropVestment.com

If you are having trouble getting finance for your property, we have a great range of mortgage advisers that can assist you.

 

Barnett Ross Auction

Development projects selling well: Observations from Barnett Ross Auction

Results from Barnett Ross Auction July 2012

On Tuesday 17th July 2012 PropVestment attended the 60th Barnett Ross Auction in London, to find that the UK property market shows mixed feelings, with development projects selling very well.

  • Buyers demand high yields

  • Sellers demand high prices

  • Development projects sell well, buyers willing to take risks for returns

  • Means market is still slow for traditional sales

Barnett Ross AuctionMost of the properties and lots in this auction were of a commercial or development projects nature.With only 2 of the 69 lots as pure residential. It can be seen as a successful auction on the day with 70% lots sold on or prior, however this is comparatively less to the 92% success to their last auction in May.

 

One of our clients showed interest in a standard commercial and another lot with development potential. We were able to get the commercial lot at a very reasonable price, resulting in a rental yield of 9.6%. The winning bid was over guide but the returns and limited risk meant this was a very good deal for our client. We was expecting more competition however as the lot was just outside the hot market that is London there was less interest from inexperienced investors that have a premium and preference for London only property.

For the other lot that was a risky and uncertain proposition for future development. We advised our client of the potential returns once site was cleared and planning obtained. A strategy was put in place to bid up to 150% of the guide. Unfortunately the lot sold at over 400% guide.

Due to confidentiality we cannot reveal these details but here are some highlights of the auction:

Developments Projects Selling Well

  • Lot 2: Reserve Below £100k, Sold at £170k – Freehold vacant corner property in Ilford
  • Lot 3: Reserve Below £150k, Sold at £700k – Total derelict shop unit with potential for 3 story development in Kings Cross.
  • Lot 61: Reserve Below £175k, Sold at £257k, Vacant office and first floor flat in NW2, potential for 2x one bedroom flats.
  • Lot 67: Reserve Below £7k, Sold at £34k, vacant land and potential for more adjacent as unregistered, potential for house or flats. in SE25

Bargains

  • Lot 23 Sold at £725k, Rental £93k with 2 vacant units – 13% yield with rise possible – Industrial in Tottenham
  • Lot 25 – Sold £215k, Rental £29k – 13.5% yield. – 2 shops in Cheshire.

Sellers Keeping Reserves too high?

Over 22 lots where the reserve was not met, a fair few where the difference was only a few thousand, possibly 1% of the asking price. Some will have sold after but this shows why the market is so slow, sellers holding out at higher prices and buyers and demanding higher yields and so will not pay too high a price.

Please have a read of our analysis of other auctions recently: Brendons, Allsops, Savills and where we feel the roles of auctions have changed 

If you require any assistance or property advice: call us today 07960 344399 for a FREE consultation

info based on observation from the Barnett Ross Auction, data correct as to what was observed.

 

 

How to get a first time buyer mortgage

Taking out a mortgage for the first time buyer has become increasingly harder since the credit crunch. With the slowdown of the economy, the rules have become more stringent and lenders too have become more particular regarding whom to lend to. There are a few new schemes available too.

First time buyer: Taking out a mortgage

First time buyer mortgage

First time buyer mortgage

The things that you would require to take out first time buyer mortgage are:

  • Good affordability – In order to take out a mortgage even if it is a first time buyer mortgage, it is important for you to have high affordability. This will mean that if you have high affordability, you will also be able to manage to make the timely mortgage payments. Lenders prefer people who have at least more than average or high affordability.
  • Good credit score – It is important for you to have a high credit score so that you can get a mortgage with low interest rate. Without a high credit score, you may not be able to get low interest mortgages.
  • Clean credit report – In addition to high credit score, you should also have a clean credit report with no missed payments. When you apply for a mortgage, lenders pull your credit reports. If you have missed payments, lenders tend to believe that you are not a responsible borrower. Thus, your loan application may get rejected. Check your reports at Experian, Equifax and Call Credit
  • Low debt to earnings ratio – In order to take out a mortgage, you are also required to have a low debt to earnings ratio. This is checked by lenders to decide if you are a responsible borrower.


Other than having these, in order to obtain a mortgage, you will be required to:

  1. Check out different offers – In order to take out a mortgage, it is important for you to check out the different offers by various lenders. You will have to compare and then decide which the best offer is for you.
  2. Use a mortgage calculator – In order to decide on the cost of a mortgage, you can use a mortgage calculator. This can help you in determining which mortgage you can afford to take out.
  3. Get pre-approved – It is good for you to get pre-approved for a mortgage as this can help you to obtain a loan easily enough. Use an a recommended advisor

So, these are the things that you will be required to do in order to take out a mortgage to buy a home for the first time. Look into new schemes like NewBuy and Helpful Start that have recently been launched

For impartial and honest advice and a FREE consultation get in touch with us info@PropVestment.com

 

How to be wary of ROGUE Brokers

PropVestment

Over the last few weeks some of you may have noticed the Sub Prime page disappeared from the site, as with every unusual occurrence there is an interesting story explaining it.

The story begins in early 2010 when I was trying to expand my business and needed some finance. I approached a broker (who now I can not name for legal reasons) who got one of my associates a very good deal and unsecured finance many times more, than the menial sum I was trying to raise using the  EFG, Enterprise Finance Guarantee Scheme.

So we went through all the usual protocols and credit checks and as promised I received a principle letter of offer, and I sent the broker his fees. The deal was a go.
If only business was this easy, and as I have been told many times, if it seems too good to be true, it probably is. When it came down to the nitty gritty and actually receiving the funds to complete my deal, the broker disappeared.  Numerous ways of contact failed, emails, calls to an office line, mobile, text messages and I even got my solicitor to write.
A few weeks of this and the vendor of the business I was trying to buy from understandably got frustrated, kept my deposit and sold to another prospective buyer.

Now I was in a real situation, No Deal, No Finance, No Broker.
I instructed my solicitor to proceed with legal action against the broker, after a few letters were sent and the broker emailed, with apologies and saying he will send my fees back once he’s back from holiday. That day never came, and soon I was advised by my solicitor not to proceed further as my legal costs were building up to similar levels of the fees.

Devastated and angry I felt that the business world had failed me, I even thought of reporting him to the FSA, but then found out they would be of no help as they do not regulate commercial brokers.
That’s when I was in the developing stages of this site, I thought wouldn’t it be great to advise all of you PropVestors, fellow Landlords and Investors about the best and worst people in the market from our experiences. This led me to set up “The Prime” and “The Sub Prime” section on the site.
Naturally I listed this broker in the Sub-Prime section. We do not want people like this in the industry.
Over time the Google spiders came crawling and found this broker’s details on the site and ranked PropVestment.com accordingly in their search rankings.

I received an email from this Broker about a month ago threatening the owner of the Site with legal action, at this point he did not know the owner was me. I spoke to my solicitor once more and he advised me to remove the content before this matter escalates and I’m forced to shut down the whole site.
Being the stubborn PropVestor I am, I decided instead to fight my cause and emailed the Broker saying that I would remove all specified contact as soon as I received my fees owed to me. After some deliberation and claims that PropVestment had caused him to lose deals in excess of ten times the initial fees and a Google search of number 4 when you searched his company. All searchers were being exposed to my claims of his dishonesty.  If I delisted the page he agreed to send the fees back.
Even at this stage it took his bank two weeks to send me the fees, I mean what bank in the UK when you are in the financial industry takes two weeks to send a small online transfer. This may be why his business is slow. So the unprofessionalism continued, but in the end I did get my fees back.

Pointers to take away:

  • PropVestors are not well safe guarded by the UK legal system against rogue brokers,
  • the power of the Internet is such that any individual can have a big impact.
  • So beware of who you upset and for those fellow PropVestors use the tools we have to make a stand.

PropVestment recommends Ash Shah of Crystal Financial Solutions, here’s what he advises:

“It is always beneficial to use an Independent Financial Adviser (IFA) and Independent Mortgage Broker. Not only will they obtain the best deal from you on the market based on your circumstances, they can also take away a lot of the hassle and headaches involved in transactions. Being professionals they know niches and can save you money.

Personal recommendations for advisers and brokers from friends and families go a long way….And if you do use one who has helped you, spread the word…We need more decent  IFA’s and Mortgage Brokers in the market.

 

Nirav Shah

Sites like www.ubiased.co.uk can help find the right professional.”

The Sub Prime section will be back soon, just awaiting legal advice to protect PropVestment, any help on this is welcome, email info@PropVestment.com and also send us your Prime and Sub Prime candidates.

A new rental concept: SpareRoom+eBay= airbnb

the eBay of rentals

Airbnb is a fresh concept at the rental market, an innovative service that brings the industry in line with the world of Facebook, eBay and YouTube.  What does this kind of service mean for the real property investor and how does is change the industry? Is it applicable to a major portfolio or just limited to the vocational landlord with a spare room under the room? In this article I’d like to introduce this innovative service and discuss the implications for landlords and how best to make use of such a service and adapt it to your investments and property portfolio.

apps are the new way

Airbnb was founded in August 2008 and based in San Francisco, California. Airbnb is a trusted community marketplace for people to list, discover, and book unique spaces around the world online or from an iPhone device.  In April 2009 it received $600k from Angel investors and has now raised $7.8m through venture capital.

It brings the Ebay concept of how to monetise items in your house, airbnb aims to help people monetise space in their property. Whether the available space is a castle for a night, a sailboat for a week, or an apartment for a month, Airbnb is the easiest way for people to showcase these distinctive spaces to an audience of millions. By facilitating bookings and financial transactions, Airbnb makes the process of listing or booking a space effortless and efficient. With 50,000 unique listings available in more than 8,000 cities and 167 countries, Airbnb offers the widest variety of unique spaces for everyone, at any price point around the globe. One founder Mr Chesky has no permanent home, instead is a client of his own business, moving from property to property.

Airbnb requires compulsory reviews, this ensures people respect the system and builds a profile; one bad review can damage your reputation so one must have trust and respect and be honest. It helps create a social network style environment.

The procedure

The procedure

  1. Sign up, create a profile and list
  2. Get booking
  3. Airbnb takes credit card payment in advance and releases to hosts a day after client checks in, to ensure quality assurance and make sure client is happy with the condition. Airbnb charges a 6-12% commission.
  4. Compulsory review

The more reviews the better your profile and more prospective business.

It is clearly a promising option, nearly 100 hosts made $50k last year, so it is a viable alternative. A couple in California rents out their tree house, and made $29k in one year. They never got a good response from traditional listings to fill their property.

Listings for host and clients are getting even easier with the launch of mobile phone apps for the site.

But now back to the serious property investor, is this a viable approach and alternative?

I think it comes down to the type of property and location. It is very appropriate for spare rooms and extensions to existing owner occupied properties where the landlord can host and provide the hospitality. Also the higher premium for the short term lets is a great option for exclusive spots, say in city areas, or areas where there is a short-term explosion in demand. It is clearly not worth it for your suburban apartment; one must remember the type of client searching on this site and the other options available to them. To be successful the property has to offer something different, a unique experience that another hotel or bed and breakfast does not.  Competing on price alone will not be sufficient especially as it is a new way and will be perceived riskier.

Some research and data that can be collected over time as this service becomes more prominent, and then we will be able to analyse with empirical evidence.

For the time being watch the space www.airbnb.com . It is going to have some impact on the industry and may just spring a new range of innovative services and companies that take the market into a new dimension, for the traditional market I do not feel it is a threat yet.

 

PropVestment Guide: Top Tips for Property Listings

Top Tips for Property Listings

With so much online and offline marketing now available through traditional estate agent, and corner shop window listings, through to listing online or Zoopla, Right Move, Gumtree, Findaproperty etc…It is vital your listings catch the attention of viewers and then that attention must be converted into interest. Here is a basic guide of some of the essentials you must get right whether listing to sell or rent, offline or online to get maximum impact.

  • Be Simple & Truthful
  • Lots of Photos & Map
  • Eye catching Title
  • Appropriate contact information
  • Content
  • Technology, Video & Social Media Read more

Today: New Laws for Landlords, All Tenancy agreements upto £100k become ASTs

Landlords and tenants should be aware of significant new changes around tenancy agreements as of October 1, according to The Deposit Protection Service (The DPS).

From Today, shorthold tenancies where the annual rental amount is above £25,000, but not more than £100,000 a year, will become Assured Shorthold Tenancies and this will apply retrospectively.

However, tenancy deposit protection should not apply retrospectively and, therefore, only new deposits and renewals taken on or after October 1 will definitely need to be protected. The advice from The DPS is to protect all deposits now as it is better to be safe than sorry.

Going forward, this closes a loophole that previously left many of the most vulnerable tenants with no protection. Higher rate tenancies were not originally included under tenancy deposit legislation, which only covered ASTs up to £25,000. Tenancies valued higher than this were seen as contractual tenancies and deposits did not need to be protected.

But this situation, according to The DPS, left some groups such as students or large house-shares vulnerable.

The Deposit Protection Service (The DPS) is calling for all landlords, and tenants, to be aware of this change and also to protect themselves until there has been clarity in this policy area.

This does mean extra paper work for Landlords but it is better to be safe than sorry, the procedure of registering and updating details on the DPS website is very easy and straight forward, http://www.depositprotection.com/

Your tenants can also check if they are covered and overall gives a Landlord a much more professional impression. Make sure you are registered and upto date with all the latest legislation. Do not hesitate to email us: info@PropVestment.com if require any advice, its free!

Protect Your Property and Finances: Landlord Insurance

PropVestment: Cover yourself for the rainy day

Are you covered? Do you know your BSI for each property?

Many Landlords, me included, have not always got the right insurance in place for their properties and portfolios. One of the main reasons for this is the lack of information available in the everyday press, news and media. It is not like normal insurance which is shoved down your throat at every bank, supermarket or post office you visit. It is more specialised and can be tailored very much to your needs and you’ll be surprised at how many companies do provide it, and the reason it has come to my attention is I drove past a Direct Line Landlord insurance bill board yesterday.

There are many different types of Landlord. From the individual who is renting out their second home to the ambitious property tycoon with an ever-increasing portfolio of trendy dockside apartments. The common theme for all landlords is the need to purchase landlords insurance to protect their investment.

As a landlord, you are effectively using your property as an extra source of income – and this needs to be protected. A normal home insurance policy is not valid when you are taking an income from the property. A residential landlord policy is what is required.

With the correct landlords insurance policy in place, you can relax knowing that should any damage be caused to the property you are protected against the financial consequences. With this peace of mind in place, you can worry about running your property and nothing else. Read more

HMO: Huge Money Opportunity?

Although Multiple Occupancy can achieve huge rewards in the form of rents, in particular student lets, Landlords must take the required legal procedures to ensure it is all above board. In our experience it is easy to gain over 50% premium on rental income under HMO. There are now professional agents that can take care of the managements and legalities but here are some basics you must know. Licenses are only £335, so get them and don’t risk fines or prosecution when the outlay is so small.

The returns can significant, raising the ROI above any other residential investment, letting are very easy through university listing or sites such as www.spareroom.com.  Please get the relevant advice and don’t take short cuts in the pursuit of profits.

After reading this nitty gritty we offer a fantastic investment opportunity at the bottom of the article.

Here is the Basics

What is an HMO?

HMO stands for House in Multiple Occupation and generally refers to one of the following:

  • A house split into bedsits
  • A house or flat share where each tenant has their own tenancy agreement
  • Students living in shared accommodation Read more