I had a question concerning this from our reader Dan today, but many Buy to Let investors I talk to are unprepared when looking to purchase a flat about considering what lenders will take as suitable security. Banks often have a surprisingly vast array of criteria that needs to be considered when lending.
I have compiled a list of questions a lender will ask and factors to consider when purchasing a flat. Although fairly in depth, I would not consider this exhaustive as after 15 years I know it is still possible to run across circumstances not seen before. Continue reading Lending Criteria to Consider when Purchasing a Buy to Let Flat
In the West Midlands we are addressing the issue of educating the young to understand their future housing options, financial obligations and choices. I work on behalf of NLA with a consortium called HOMESTAMP (www.homestamp.com) and we are just coming to the end of a major project to get a module into the national curriculum for 14-16 year olds. Under the subject of Financial Management this module will help to break the cycle for many young people to prevent them becoming the 4th generation of their family to base their lifestyle on “benefits will provide”. This will be a reality check for those who may believe that becoming pregnant will ensure them a “nice little flat off the council”. Continue reading Maslow’s Theory Applied to Landlords and Tenants
It’s likely that if you own a leasehold buy to let property that you have been a victim of the great service charge scam.
Much publicity goes to fly-by-night letting agents whose businesses close leaving landlords and tenants out-of-pocket – but few dare to whisper the rip-off perpetrated by managing agents. Continue reading Revealed – the great leasehold service charge rip-off
Property investors with buy to let rentals and holiday homes expect to supplement their pensions with cash from renting or selling, according to a new survey.
Around 73% of over 55s expect to raise extra income or cash in their retirement from property, says the Equity Release Council, the trade body for equity release lenders. Continue reading Property plays a vital role for funding pensions
“When is the Bank of England base rate going up?” is the most frequent question I am asked by property investors. Not this year or next is how I assess the latest figures from the May Bank of England inflation report.
Below are some of the key factors affecting the UK and Euro-zone along with a full copy of the Bank of England report. Continue reading Bank of England Inflation Report and Economic Roundup
Calls to boost buy to let by upgrading pensions to include residential property are gathering momentum in Parliament.
An influential select committee of MPs is urging the government to streamline pension and tax laws for landlords to stimulate investment in private rented housing. Continue reading MPs urge ministers to open pensions to buy to let
Using Finance to Increase your Returns
After recently attending local property networking events it still amazes me that investors think it’s a good idea to buy properties for cash. Firstly, the financial returns are less when a property is purchased for cash. Secondly, it means a large amount of cash is tied up for six months as no remortgaging can take place until a period of six months has elapsed. This means if a bargain property opportunity comes along within that six month period you will miss out, unless you have more cash to hand. So start as you mean to go on i.e. gear the property on purchase with a mortgage, ideally 75% to 80% loan to value mortgage. Continue reading Get into High Gear with Gearing
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
-By Guest Columnist John Paul- Part 1 of an 8 part series
Welcome to the first in a series of eight articles giving you top tips for renting your property to tenants in receipt of Local Housing Allowance (LHA).
I have personally built a successful portfolio by letting to LHA Tenants and the profits and cash flow exceed those I could have achieved with working tenants. In some areas rents are as much as 30% higher than market rents in the private rented sector. I think you’ll agree that’s a premium that makes some additional administration worth the effort. Continue reading Introducing The LHA Expert for Landlords – @TheLHAexpert
… an unencumbered one.
Should finances allow, I commonly suggest that investors obtain or keep an unencumbered property (no loan of mortgage secured on it) as quickly as possible as it’s an incredibly powerful tool to have at your disposal and here’s why.
Firstly it’s always there to fall back on; no matter how low lenders reduce LTVs you’ll nearly always be able to raise cash on it in an emergency. You never know when you may need some quick cash and if your portfolio is geared up and lenders move the goal posts you may find yourself unable to lay your hands on some urgently needed cash. This may be for the deal of a lifetime, it may be to help a friend or relative or it may be for an unexpected bill! Continue reading The Most Powerful Property an Investor Can Own Is…