Tag Archives: Below Market Value

New Move to Combat Buy to Let Fraudsters Buy to Let News, Cautionary Tales, Latest Articles, Property Market News

Street with 'To Let' signs outside most houses

"Precautions over buy to let fraud upped"

Buy to let lenders are making deals tougher for property investors who try and purchase off-plan or at below market value.

In the latest move to fight mortgage fraud, banks and building societies want builders to tell them about any price incentives that affect the value of the property.

Builders and developers must supply the information to the lender’s solicitor before conveyancing is completed and the buyer takes over ownership.

The new form is effective from October 1, 2011, and replaces an earlier version requiring less detail. Continue reading New Move to Combat Buy to Let Fraudsters

Review of Buy To Let Investors Workshop by Landlord Action Latest Articles

Mark Alexander, founder of Property118.com

Mark Alexander founder of Property118.com

Yesterday (Friday 2nd September 2011) I attended a buy to let investors workshop at the Holiday Inn Kensington, London which was organised by Paul Shamplina of Landlord Action.

I had been invited as a special guest of Paul Shamplina, the founder of Landlord Action to review the event and provide constructive feedback. Landlord Action is a legal practice specialising in tenant evictions and litigation on behalf of landlords.  Continue reading Review of Buy To Let Investors Workshop by Landlord Action

London’s calling corporate investors in to buy to let Latest Articles, Property Sales & Sourcing

Tower bridge and City Hall, London

"London could become a property investor battleground"

London buy to let landlords may soon have to fight toe-to-toe with institutional investors for prime residential property.

Soaring rents and a shift from owning a home to renting a home for younger adults is triggering fresh interest in residential investment from pension funds and property companies ready to pour millions into housing in the capital.

A key indicator is a rekindling of interest in letting homes from British Land. The firm stepped out of the residential market in 2006, just before the property bubble burst.

Decreasing investment risk by partnering-in building houses with developers and the government, as well as rising rents, is making many institutions look again at putting money into homes.

The residential investment market has reversed from get-rich-quick aspirations based on soaring house prices to a more long-term view based on stable yields. The strategy is buy to rent, not buy to sell.

The residential property business model outside the UK has always favoured corporate rather than personal investors.

Successive governments have tried to spark institutional investment interest with REIT trusts without much response, but the hope is now that a changing market is making residential property investment more attractive for big funds.

The target is residential property within the M25 – the motorway effectively places a ring of confidence around the capital that is encouraging investors.

House price surveys, rental returns and professional opinion from august bodies like the Royal Institution of Chartered Surveyors all indicate a widening gulf between the London property market and that of the rest of the UK.

London & Stamford extended the firm’s residential portfolio to around £150 million with the recent acquisition of more than 100 homes in Islington, North London, for £50 million. The deal is reckoned to return a yield of 5.3% climbing to around 10% over three years on a purchase that was 20% below market value.

Chairman Raymond Mould said: “We can see strong rental growth in the Central London residential market not only due to the constrained development of new build but also because first time buyers continue to be kept out of the market by the need for higher mortgage deposits than was historically the case.”

Auction homes sell for 25% below market value House Prices, Latest Articles, Property Market News

"House prices 25% cheaper at auction"

The average cost of a home bought at auction is 25% below market value, according to new research. The same figures relased in June appeared to be at 32%.

The latest Land Registry average price of a home in England and Wales for June is £161,479, compared with the average cost of a residential auction lot going under the hammer for the same month as £121,394.

Figures collated from all residential property auction sales in England and Wales for the three months ending June 30 by the Essential Information Group disclose 4,587 lots were sold for £556.8 million.

In Scotland, 74 out of 131 lots were sold for £3.67 million.

For the UK, the number of homes going to auction was up year-on-year by 8.7% to 6,507, although the number of lots sold was up 21.3%.

Around 72% of all homes put in to a sale were bought – up 17.6% on the previous year.

“The trend we have seen emerging over the past few months continues with a strong set of figures below,” said David Sandeman of the Essential Information Group

“While reports coming from the private market are that the market is slowing and many properties are remaining unsold, the auction market is bucking the trend with increasing number of lots selling.”

Although homes are selling an average 25% below market value at auction, the market is continuing to grow, as quarterly comparisons show.

“Overall we have seen double digit growth in lots sold, percentage sold and total raised,” said Sandeman. “Broadly similar numbers are coming through in the quarterly comparisons, with the yearly figures seeing a 6% increase in lots sold and a small decline in amount raised.”

Meanwhile, according to the Land Registry, house prices in England and Wales stood still from May to June with an average year-on-year house price drop of 2.5%.

The figures line-up with most other house prices surveys which broadly show the rate of house price falls is still slowly dropping and will bottom out some time over the next few months.

What does 50 percent BMV mean to you? Latest Articles, Property Investment News, Property Investment Strategies, Property Sales & Sourcing

Something is only worth what the highest bidder is prepared to pay.

If you see something in the sales marked up at 50% off, that’s its value.  The fact it was once priced up at twice the amount it is now is irrelevant.  If you buy that item, that’s its value.  If nobody buys it then it’s still not worth the price on the tag.

If I’m offered a property for a price of £50,000 and I’m provided with a valuation or comparables stating it’s worth £100,000 is it really 50% Below Market value? Continue reading What does 50 percent BMV mean to you?

Refurb Mortgages. The Property Investors Dream! Guest Articles, Latest Articles, UK Property Forum for Buy to Let Landlords

Lisa Orme is an experienced property developer, investor and mortgage broker and specialises in property and financial services for new and established property investors.  Lisa’s understanding of The Mortgage Works Refurbish Mortgage facility is highly regarded on Property Forums which is why we have asked her to provide some further insight into the mechanics of the scheme. Continue reading Refurb Mortgages. The Property Investors Dream!

Mark Alexander’s interview with Paul Spriggins – UK Holiday Lets investor/developer Commercial Finance, Guest Articles, Latest Articles, Property Development, Property Sales & Sourcing

Paul Spriggins

In this interview Paul explains how he develops brick and tile UK holiday park homes, sells them for £71,000, returns investors 10% + per annum and provides 10 year, fixed rate, non-status, non-recourse financing subject to a minimum £20,000 cash deposit.  This is a long interview so make yourself a coffee before reading it! Continue reading Mark Alexander’s interview with Paul Spriggins – UK Holiday Lets investor/developer

Questions to ask a Property Sourcer Latest Articles, Property Investment Strategies, Property Sales & Sourcing

Questions pictureTwo of the UK’s largest buy to let mortgage providers have introduced a criteria not to accept mortgage applications for properties purchased through property sourcers.  This has angered many people who don’t have the time to source properties for themselves or the necessary negotition skills. Continue reading Questions to ask a Property Sourcer

The History of Buy to Let Sale and Rent Back Favourite Articles, Latest Articles, Property Investment Strategies, UK Property Forum for Buy to Let Landlords

Mark AlexanderBy Mark Alexander.

I closed my first Sale and Rent Back, “SARB”, deal in 1990. It wasn’t for me personally though and it wasn’t a property deal either. I had just set up a commercial finance brokerage. At that time we worked from my dining room. One of my first clients was a Norfolk based hire company.

Continue reading The History of Buy to Let Sale and Rent Back

Property Forum and News website where UK landlords and letting agents share best practice