Tag Archives: Liquidity

Financing Property Refurbishment Projects Commercial Finance, Landlord News, Latest Articles, Property Development, Property Investment Strategies, Property News

We receive hundreds of readers emails and telephone calls every month, the vast majority require contacts to arrange funding, hence this article which explores six very different strategies of financing property refurbishment projects. Continue reading Financing Property Refurbishment Projects


Property Refurbishment – A guide for newbies Buy to Let News, Landlord News, Latest Articles, Property Development, Property Investment Strategies, Property News, Property Sales & Sourcing, Property Sourcing

I spent most of yesterday with a lovely couple from Luton who emailed me asking for some guidance. After exchanging several emails we decided to meet and they came over to Norfolk. They have six buy to let properties at the moment, a decent liquidity fund and plenty of equity in properties. They wanted advice on how to get into property refurbishment.

The day started with a trip to my accountants in Norwich where we discussed the difference between property investment and property trading. It is important to have a very good idea of whether you intend to sell for a profit or to hold as an investment before you do any deal as investment and trade are taxed and financed very differently. Continue reading Property Refurbishment – A guide for newbies


The Bank of England increase stimulus for the economy Landlord News, Latest Articles, Property News

In today’s Monetary Policy Committee meeting The Bank of England have decided to increase the stimulus into the economy on top of recently announced plans.

The Bank Base Rate will remain at 0.5% where it has been for the last three years and the Bank of England will try to pump more liquidity into the system increasing Quantitative Easing by £50bn with the total now standing at £375bn since the start of the recession. Continue reading The Bank of England increase stimulus for the economy


My first intentional property investment – part 1 How I got started, Landlord News, Landlords Stories, Latest Articles, Property News

The story began in 1989 when I purchased a property which I soon realised I couldn’t afford to live in. I suppose that was my first property investment and many landlords get started that way. I rented that property out when interest rates shot up and property values crashed leaving me in negative equity. I muddled through and I still have that property now. With that baptism of fire into property investment I’d probably have been forgiven for never wanting to buy another one but that’s not how life worked out. Mark Alexander

If only I had waited a few years I thought, I could have purchased the same property for 40% less than I paid for it. Then it dawned on me, properties would go back up in value at some point, that was one of the reasons I didn’t want to sell. I wished I could have purchased some more property at that time but I had no money so there was only one choice.

Step one – saving up the deposit

I had to work smart and save hard so that I could buy another property before they started going up in value again. I remember watching my bank balance grow, my target was to save £10,000. It seemed like a fortune at the time, when I set the goal I could barely make ends meet, never mind save any money. Nevertheless, I took an hour out every Saturday morning to document my goals and my progress. In April 1996 I had the magic £10,000. Having saved all that money I can tell you it still took a lot of courage to take it out of the safe hands of the building society and invest it into a property, despite the fact that’s exactly what I’d been planning for several years. Remember, properties didn’t really start to recover from the late 80’s / early 90’s crash until the middle of 1996. I only had a gut feeling at the time that they would go back up in value, I just didn’t know when and to be honest I didn’t really know why either. I just thought it was likely that history would repeat itself.

Step two – overcoming my fears

My biggest worry was that, in the short term, interest rates could go back up again and property values could go down even further. There was no way that I could afford to pay two big mortgages if everything went wrong. It wasn’t just interest rates that were worrying me either, what if I couldn’t rent the property, what if my tenants didn’t pay, what if I got an unexpected maintenance bill? I realised that I just couldn’t take the risk of investing 100% of my savings, I needed to keep some money aside for the unexpected, but how much?

Step three – what to buy and how to stay safe

The cheapest properties at the time were around £15,000 in my area. They were in grotty locations though and the letting agents I spoke to said they would be hard to let and even if I did I wouldn’t be dealing with a particularly friendly demographic of people. I realised that I couldn’t really afford a house, not a modern one anyway, and not being much of a handyman the thought on ongoing maintenance of an old terraced property was very off-putting. Therefore, flat’s were my target. Would I go for an upstairs flat or a downstairs flat though? There were advantages to both. Old people would be more likely to rent a downstairs flat, so too would people with babies. Flat’s with lifts were not common place back in 1996 and any that had them were way outside my budget. However, when I started looking at ground floor flats and talking to other landlords I realised that damp was often an issue, so was security. The reason for this was that people don’t leave windows open in ground floor flats. Therefore, I decided to go for a first floor flat.

Step four – location and price

Having decided to go for a first floor flat I realised that I was probably targeting a young working couple as my tenants. I’d also worked out that my budget was around £20,000 based on the fact that I needed a 25% deposit (£5,000) and could borrow the other 75% (£15,000). That left me with £5,000 of which I budgeted £1,500 to decorate and to pay all the fees associated with buying. I knew that I needed to buy on a decent bus route into the city and the industrial estates and having visited every estate agent in town (there was no Rightmove to check in those days) I narrowed it down to three properties. All of them were above my budget but only by a few thousand. I put in an offer on all three for £19,000 and they were all refused. I was gutted and resigned myself to search again in a few months time when hopefully I’d saved a bit more. I could have gone ahead and left myself with a smaller liquidity fund but I didn’t dare. Then, after a few days one of the estate agents called me back. Their vendors had had a re-think, they would accept an offer of £19,500. I was so tempted but I stuck to my guns and I’m glad I did. I was a property investor, no chain, I could move as quickly or as slowly as they wanted. I got lucky, they accepted, I was in business! I was well on my way to owning my first intentional property investment.

Please leave me a comment below if you’ve enjoyed reading this.

OTHERS ARTICLES IN THIS SERIES

YOU ARE HERE >>> Part one – My first intentional buy to let property investment

Part two – Tips on becoming a buy to let property investor

Part three – Lessons learned whilst building my buy to let portfolio

Part four – My first property management checklist

Part five – Buy to Let Maintenance Budgets

Part six – Do landlords have to provide lawnmowers?

Part seven – Landlord, Tenants, Dogs, Pets

Part eight – Vintage 2003

BONUS ARTICLE >>> My relationship with Leathes Prior Solicitors and Property118

Part nine – Perfect tenant of 6 years turns heroin addicted prostitute – EVICTED! 

Part ten – Online Letting Agents Review


Development Finance is still supported in the current market Commercial Finance, Landlord News, Latest Articles, Property News

We are witnessing a significant rise in the incidence of some banks refusal to offer new or extended terms to development loan facilities. In extreme cases, some banks are demanding early loan redemption. This often leaves the borrower with a major headache in a market where commercial lending is restricted and competitive alternatives are not immediately apparent.

There is no doubt that some banks are ‘shoring up’ their liquidity positions by not lending as broadly as they have done in the past, but there are still a good number lenders very much in the market. Continue reading Development Finance is still supported in the current market


Don’t bash the banks Commercial Finance, Financial Advice, Latest Articles, Property Development, Property Investment Strategies

Is Property Finance Available? This is the first of a series of articles looking at the availability of finance and how to access it in today’s market by Malcolm Jones and Cliff Verrill of Brooklands Commercial Finance.

Lenders have come in for a lot of criticism, some of it deservedly so. However, in realigning their strategies so that they don’t repeat earlier mistakes, they are undergoing a difficult balancing act. On the one hand they have learnt lessons in respect of riskier lending propositions and have rightly curbed activities in these areas and some have pulled out of them altogether. On the other hand, the regulators have imposed stricter controls on bank activities. While the government is saying that banks must lend more, the Basel III accord requires banks to hold more capital to support their lending activities. It also introduced new regulatory requirements on bank liquidity and bank leverage. As a consequence, there are fewer funds to lend as the banks manage their balance sheets to conform to the new regulation. Continue reading Don’t bash the banks


Property Values vs Interest Rates Buy to Let News, Cautionary Tales, Fun Stuff, Latest Articles, Property118 News, Question of the Week, UK Property Forum for Buy to Let Landlords

A question that came up in conversation this evening whilst in the car on the way back from my fiancée’s offices was “which will rise first, interest rates or property values?” Have you ever asked yourself this question?

I know what you are probably thinking, “haven’t you got anything better to talk to your fiancée about”, right? Well I guess that’s what happens when you mix an accountant with a Masters Degree in international business finance and economics with a landlord, economist and former finance broker LOL !!! Seriously though, give it a go at the pub or over dinner, ask the question, it’s an interesting debate for anybody with any interest in property, whether they are landlords or not. Continue reading Property Values vs Interest Rates


Banks not renewing commercial loans Commercial Finance, Financial Advice, Latest Articles, Property Investment News, Property Investment Strategies

We are witnessing a significant rise in the incidence of some banks refusal to offer new or extended terms to commercial loan facilities. In extreme cases, some banks are demanding early loan redemption. This often leaves the borrower with a major headache in a market where commercial lending is restricted and competitive alternatives are not immediately apparent.

There is no doubt that some banks are ‘shoring up’ their liquidity positions by not lending as broadly as they have done in the past. However, some lenders are very much in the market and the skill is to source those lenders who have an appetite to lend. It is key to present a proposition in a robust manner and, importantly, directing the proposal to the underwriters making the decisions, rather than the local manager who probably has no discretion in these matters. Continue reading Banks not renewing commercial loans


What to do if you can’t make your mortgage payment landlord's log

Hopefully none of my regular readers will ever find themselves in this position as they will have built up a liquidity reserve, enjoy positive cashflow and will have paid off expensive forms of debt before they ever think of committing themselves to making repayments on their cheap interest only buy to let mortgages which also attract tax relief.

However, there will always be a few people who have not done this, will have mortgaged themselves to the hilt with no cash reserves and got themselves into all sorts of debts and financial difficulties. Continue reading What to do if you can’t make your mortgage payment


Property Management Advice Latest Articles, UK Property Forum for Buy to Let Landlords

Property Management adviceShould I do my own Property Management or contract it out?

This is a question that every buy to let property investor or accidental landlord has asked themselves at some point.

There is no right or wrong answer to this question as it depends on a variety of circumstances.

I’ve been investing into property since 1989 and have a portfolio that stretches North to South, East to West of England.  Whilst I’ve managed my properties myself, I’ve also used agents.  Now that my brother has set up a Lettings Agency to manage our family portfolio he looks after most of them but we do still contract managing agents occasionally.

So what are the deciding factors on whether to manage your own portfolio or to contract the work out? Continue reading Property Management Advice


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