Tag Archives: property portfolio

Expat couple looking for advice investing in London Latest Articles

First off, great site! As a wannabe investor/landlord for several years, I’ve been a keen follower of this and similar landlord online resources, which have been a great source of inspiration and learning about the landlord business. Many thanks!

My wife and I are now planning to take our first steps into residential property investment in the UK and would be really grateful for any advice and tips to help us in this journey. I have detailed our rough plan and somewhat non-standard situation below and would welcome any advice, thoughts and expert insight from the community.

My wife and I are both British expat who have been living/working overseas (currently Singapore) for close to 4 years now. We are both in our early thirties and are in employment; I do contract consultancy work and my wife has a permanent role with a large multinational.

We are now set on settling back in the UK in the next 1 to 2 years. Living abroad has been a great experience but we would now like to settle down and be closer to family. We plan to continue our careers and, at the same time, build/manage an investment property portfolio.

We are both Londoners and want to invest in London as we feel we know the area and view this as a long-term investment to benefit from capital gains. We are of course aiming for positive cash flow on rental income but do not anticipate huge month-to-month profit given the areas we are considering buying in.

We currently have a sum of £500k to invest and plan to take on BTL mortgages to initially purchase a few 1 to 2 bed flats. From our initial research and calculations, we anticipate that this should allow us to purchase 4 – 5 properties, assuming 75% LTV mortgages, purchase costs etc. We plan to rent these out and have these managed by a letting agent.

We do not currently own property in the UK as we sold our residential home in London before we left. While we do plan to stay abroad in the short/medium-term, we are keen to start investing asap and to start preparing the ground for our permanent move later, including me establishing contacts and looking for work etc.

As such, I am planning on taking an extended trip to London for 2-3 months to start the above process (with the possibility shuttling between London and abroad thereafter). The aim is to better understand the market/our options, start making connections, and scouting/purchasing property if possible. During this period, the wife will remain in her job in Singapore and I will not be formally employed.

A big step for us but one we feel is necessary to make our jump home smoother and to start our property investment plans. It would be great to get your thoughts/advice on this i.e. Does the plan seem sound? How would you go about investing in this situation? What should we look out for?

In particular, we would like to:
– better understand the likelihood of us being able to secure BTL mortgages. I understand that being expats and not currently owning residential property in the UK can make this more complicated.
– get your recommendations on good mortgage brokers/advisors in London (as well as other trusted professional e.g. solicitors, letting/mgt agents) who I could possibly get in contact with.
– get an understanding of the landlord/investment networks, clubs or communities that are around and that I could possibly plug into.

I have purposely put down a lot of detail but do let me know if you have any further questions.

Thanks a bunch!

PaulSingapore Expat


Contra proferentem mortgage conditions Advice, Buy to Let News, Cautionary Tales, Commercial Finance, Financial Advice, Landlord News, Landlords Stories, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies, Property News, UK Property Forum for Buy to Let Landlords

Unless you are a qualified contracts lawyer who has also studied Latin you will probably not have a clue as to how contra proferentem mortgage conditions affect you. I have spent the last two weeks getting my head around it as it was a key point in the barristers opinion for the Bank of Ireland Tracker Mortgage Class Action which has stalled due to all funds raised for that campaign having been exhausted. Therefore, for the benefit of everybody with a tracker mortgage who may be affected by a hike in their tracker mortgage margin at some point, and in particular to those affected by the decisions of West Bromwich Mortgage Company and the Bank of Ireland I offer this laymans interpretation and my thoughts on how we should progress.

Very simply, the contra proferentum law is created to enable judges to decide which conditions apply if contractual conditions are in conflict. In other words, if the contract has two or more conditions and they don’t all say the same thing one of the conditions will apply and the others will not.

The relevance of this is that West Bromwich and Bank of Ireland have conditions in their mortgage documentation and some conditions contradict others.

The law goes on to say that the judges interpretation of what the contract means will be the condition(s) which are in favour of the person to whom the contract was presented. To put it another way, if your mortgage conditions were presented by West Bromwich or Bank of Ireland the judge will rule against them because they wrote the contract and the most favourable of the conditions will be applied to you. 🙂

There are, of course, several more legal arguments our lawyers could throw at the enemy, however, in my opinion the contra preferentem argument is without any shadow of doubt our best shot

Other legal arguments will only suit some of our Class Action Group. For example, there appears to be no legal definitions of a sophisticated landlord but West Bromwich think it is anybody with more than three properties. Let’s say we win that battle and the Court decides it’s six – anybody with seven or more isn’t going be too happy are they? I will be one of them! Also, what good would that do for those affected by Bank of Ireland or by any other lender who tries this on? Remember, Bank of Ireland has a different criteria and is not using the sophisticated borrower argument. Other lenders will no doubt make up their own excuses too. What we need is a win which will affect ALL mortgage lenders.

Many people are arguing that they didn’t receive the Mortgage Conditions from their lenders. Well sorry folks, maybe you did, maybe you didn’t, but I can assure you that you signed a piece of paper before your mortgage completed to say that you did. The Mortgage Deed I signed for my West Bromwich mortgage states “By signing this Mortgage you confirm the terms of the Standard Conditions of Offer, the Special Conditions and the Mortgage Conditions”.

There are many more arguments which I could play devils advocate with which have been raised on our forums. With a bit of thought I reckon I could win most of the arguments and I’m not even a qualified solicitor. I am, however, in the same boat as you so please don’t shoot the messenger. I’m also affected by these increases and I’m doing everything I can to make sure we win this fight. In my case that’s been 18 hour working days for the last three weeks and a lot more time on the Bank of Ireland case since it reared its ugly head earlier this year.

That’s why I would like Justin and the barrister to lead with what I believe is our best shot – contra proferentem mortgage conditions.

If we ask our lawyers to look into every legal argument we have presented on our forums we will run out of money before we get to first base. What I would prefer is that we fight the one universal truth which is that our mortgage terms are contra proferentem. If we lose and we still have some money left there’s nothing to stop us appealing on other grounds as well.

For the above reasons, do you agree that we should ask our legal advisers to focus on contra proferentem mortgage conditions?

There are lots of other things we can do as a group to be a thorn in the side of these lenders in the meantime. For example, I love the PR campaigns and lobbying we are sharing ideas on. We must continue to win the hearts and minds of the media and every centre of influence we can think of. I also applaud the tactics being used to make these lenders lives a misery, for example the Subject Access Requests. Perhaps the most important thing we can do whilst we wait for the legal bods to advise us is to spread the word. We need to get every borrower we can find with a tracker mortgage to sign up. There are also plenty of other landlord groups who can help us to do this and it’s in all of our interests to put as much pressure on them as possible to get involved and spread the word amongst their members.

Contra proferentum mortgage conditions as I see it

I owned a substantial number of buy to let properties at the time of my mortgage application and still do. The chances of me proving that I was not a sophisticated landlord are very slim but I do have an argument to suggest that property investment was not my line of business at the time I took the mortgage. All of my properties were professionally managed in order to allow me to focus on my career as a commercial finance broker. I did not consider myself to be a professional investor at the time I took out this mortgage, the purpose of investing into a property portfolio was to provide for my retirement. I don’t want Justin or the barrister to push that angle though, I think it’s a waste of money as everybody’s situation will be very different.

Neither my mortgage broker nor my solicitor were aware of the rights of West Bromwich Mortgage Company to increase the premium they charge on my tracker mortgage rate. I did read the Mortgage Conditions brochure at the time  and at the time I sincerely believed that section 5 of the Mortgage Conditions was not applicable. Note that I am also a qualified mortgage adviser and IFA. I believed that section 5 of the mortgage conditions booklet was only relevant to mortgages written on the building society’s standard variable rates, which do not track the Bank of England base rate. This was supported by the marketing materials being used by the West Bromwich to promote their tracker mortgages. Also, there was no mention of such a vital clause in either their KFI document or their offer letter. Clearly my solicitor was mislead too. I suspect everybody who was affected by the Bank of Ireland rate hike would also say the same thing.Contra proferentem mortgage conditions

So having established that I read the booklet and I signed to agree to all of their terms, including those in their Mortgage Condition booklet, what makes me believe West Bromwich are still in the wrong?

  1. Their website said, and to this day still continues to say “Tracker mortgages give you the certainty of knowing that the rate you pay will move in line with Bank Base Rates.”
  2. My offer letters states “After 30th June 2010 your loan reverts to a variable rate which is the same as the Bank of England Base Rate, currently 5%, with a premium of 1.99%, until the term end”

Logic tells me the above are in conflict with Section 5 of the Mortgage Conditions booklet which I signed and received. On the basis that West Bromwich produced the booklet, their website, and the Mortgage Deed I believe there is a clear case of conflicting conditions and ambiguity, hence the conditions they are relying upon are contra proferentem. On that basis, a judge MUST rule against West Bromwich as they are the originators of the documentation. It’s not like we are asking for the mortgages to be written off, all we want is the terms and conditions we believed we had signed up for.

We MUST win a Court Case before even more lenders follow suit.


Financial Advice – how do you pick an adviser? Buy to Let News, Financial Advice, Landlord News, Landlords Insurance, Latest Articles, Property Investment News, Property Investment Strategies, Property News, Tax & Accountancy, Tax and Accountancy

All landlords require financial advice from time to time, I’ve listed some of the many reasons below. My question to readers of Property118 is how do you select an adviser? Do you want to be able to meet them or do your prefer to communicate by phone or internet? Do you prefer to work with people who are landlords themselves? Is age, sex, cultural background a deciding factor? Continue reading Financial Advice – how do you pick an adviser?


Reluctant landlords begin slow exit from private rented sector Latest Articles, Letting, Lettings & Management, UK Property Forum for Buy to Let Landlords

Latest ARLA research also shows regional variation in tenant demand.

The number of reluctant landlords in the private rented sector (PRS) is falling*, according to research from the Association of Residential Letting Agents (ARLA).

Over the past three months, ARLA member offices have reported a decrease from 26% to 21% in the proportion of rental property coming onto the market because it cannot be sold. This also represents a sharp drop of 21% on the figure of 42% recorded last year.

As these reluctant landlords stop entering the sector, tenants are still faced with strong competition for rental homes. 52% of ARLA members said there were more tenants than properties available. While this represents an incremental fall on tenant-property ratio from the 54% recorded in the previous quarter, this statistic shows that PRS accommodation remains in high demand.

The South East (excluding London) has the highest proportion of members reporting more tenants than properties (67%), whereas London, surprisingly, has the lowest, with just 17% experiencing this trend.

Despite this competition among tenants for properties, there has been an overall fall in the number struggling to meet rental payments. The current figure of 35% remains high, but represents a fall of 5% from the figure of 40% recorded at the same time in 2012.

Ian Potter of ARLAIan Potter, Managing Director, ARLA, said: “Much has been written recently about the recovery of the residential sales market, and it would appear that these effects are now being felt in the private rented sector. While the departure of ‘accidental landlords’ from the sector will be a good thing for the individuals concerned, there is a real and ongoing worry about the level of rental properly supply across the country.

“With competition for the best properties remaining fierce, landlords and tenants alike can benefit hugely from seeking the advice of an ARLA agent. All ARLA licensed agents must adhere to a strict code of conduct, as well as offering client money protection and redress schemes, which protect all parties if things go wrong.”  

It may not be practical or desirable to manage your own properties for the reasons listed below if ….

  • you are new to being a landlord and fearful of getting things wrong
  • your time is more valuable to you
  • your properties are located inconveniently for you to arrange viewings and meet with tenants as required
  • you prefer to distance yourself from the management of your property portfolio and relationships with tenants.

If any of the above apply to you then a fully managed service might be better suited to your needs. See the letting section of this website or complete the form below for more details of the ARLA agent recommended by Property118. Property Management is available for a little as £14.99 per month + VAT.

How to save money and stay protected

Please complete this form if you would like further information
  • Please enter a number from 1 to 999.


The Mortgage Works Return of Property Latest Articles, UK Property Forum for Buy to Let Landlords

Has any landlord out there had or has a multi property portfolio on one mortgage with The Mortgage Works?

Have you ever sold one of those properties and had a difficulty with their ‘return of property’ process in which they tell you how much of the mortgage capital you have to repay to get them to agree to discharge the security on the sold property?

I am in dispute with them because I think the process is unfair and because they did not follow a specific request.

I don’t want at this stage to go into great detail as the matter is with the Financial Ombudsman and I may wish to take it to court. The Mortgage Works

Regards

Mike


The history of buy to let interest rates Latest Articles, UK Property Forum for Buy to Let Landlords

I’m trying to build my property portfolio in London and I’m slightly cautious as to the level of gearing I should aim towards. Buy to let interest rates

Generally rental yields in London are fairly modest and I’m mindful of the potential long term upward trends in interest rates.

I was searching online to get the historic average BTL interest rate and its relationship to the base rate at that point in time in order to project the future BTL rates post economic recovery. Does anyone know where I can I find such information?

Kind Regards

James


Growing my small BTL business Latest Articles, UK Property Forum for Buy to Let Landlords

Great site! I’m a “small-time” landlord that owns a total of 3 properties – 2 rental flats and my own home – and I’m currently looking to grow my business further. Growing my small BTL business

I have one small problem: access to capital!

I currently have about 30k sitting in my own home, 10k sitting in one flat and 22k sitting in the other flat – total property portfolio is worth around £350k.

I’ve tried to remortgage to release equity but due to the market in Scotland being slow to improve, the numbers aren’t adding up and no equity can be released at this present time.

The question: is there a way of borrowing capital (with the sole intention to buy more properties) but using my current assets (equity & property) as a guarantee?

I see it as this: “Hi, I have 60k worth of equity and 350k worth of property, I’d like to borrow some money against what I’ve got to buy more BTL over the next 5-10 years, is this feasible?”

Any help, pointers and advice is more than welcome!

Thanks,

Fred


The practicalities of a deeds of trust and using a Ltd company in England Latest Articles, UK Property Forum for Buy to Let Landlords

I am a higher rate tax payer and I want to expand my property portfolio further. I want to shelter the rental income from my income tax bracket as I wish to re-invest the money into buying more property. I do not need to draw money from the business. The practicalities of a deeds of trust and using a Ltd company in England

I have read extensively and considering my long term goals, using a Ltd company seems to be the best fit. However, in the current climate, lenders seem to have very low LTV products e.g. deposits required equal 35-45%, which is counter productive to growing a portfolio.

I have read that you can buy the properties as personal BTL mortgages with deposits of 25% and then create a deed of trust to the Ltd Company and benefit from corporate rates on income. However, it’s very hard to be sure this is in reality a workable option as I have many questions where the answers are not very forthcoming.

If anybody actually has any real life experience with this approach, I would really appreciate your help on these questions below:

  • Do you have to tell the mortgage company you are going to put the property into deed of trust to a Ltd company when applying for the mortgage?
  • Do mortgage companies accept this method to managing your portfolio?
  • If you do the deed of trust at the same time as you purchase the property, does this avoid any CGT issues since there would be no gain from when you personally bought the property (no change in Market Value price)
  • Does the deposit you put into the property become a ‘directors loan’ too?
  • How easy is it to re-mortgage the property when you need to re-finance the property?
  • Is there anything specifically that needs to be included in the deed of trust to ensure the income is regarded as that of the business?

Any other comments?

I really would like the advice of somebody who has actually done it or is doing it now as I don’t think everybody really understands the value of a limited company to some investors, especially when they are exposed to super high tax rates above the 40% bracket.

Many thanks

Terry


Are freehold ground rents a good investment? Latest Articles, UK Property Forum for Buy to Let Landlords

I have just started investing in property.Are Freehold Ground Rent Investments a good investment?

Living overseas, I have been unable to get a U.K. mortgage so I have had to pay cash for my first property.

I have a good rental yield of 10.1%, but obviously no leverage for now. I am arranging more business commitments in U.K. to eventually remedy the mortgage problem.

My question is this: Continue reading Are freehold ground rents a good investment?


Meet The Landlords TV programme – fair representation? Landlord News, Latest Articles, Property Investment News, UK Property Forum for Buy to Let Landlords

Last night I finally got around to watching a TV programme I recorded on BBC a few weeks ago called “Meet The Landlords“.

I was asked to appear on the programme when it was first considered but when I told the reporter what managing my portfolio entailed he wasn’t really that interested. Who could blame him? My tenants stay with me for years, I outsource most things and for that reason I doubt I spend more than a couple of hours every week looking after my property portfolio. It makes me enough to live on, my tenants are all very happy and neither me nor my tenants are ever very likely to make good viewing on the Jeremy Kyle show.

The appearances from landlords and tenants featured on “Meet the Landlords” though was a proper rogues gallery. It wouldn’t surprise me at all if the programming team had stood out the Jeremy Kyle recording studio’s a picked the worst of the worst people. Perhaps they offered them a free Maccie D’s in return for them and their landlords to make another appearence on the telly? LOL

The programme featured:-

  • Two amateur landlords whose tenants had not been paying rent for months,
  • a landlord calling himself the HMO Daddy who runs what I can only describe as “doss houses” for the dreggs of society,
  • and a woman from a North Eastern letting agency who let a property for a private landlord to rent to a drunken ASBO tenant who couldn’t even be bothered to turn up sober and then broke down into tears when presented with a property which he clearly realised he didn’t deserved to live in

If the BBC wanted to make a documentary revealing broken Britian this was a success. If they wanted to portray the Private Rented Sector then sorry, in my opinion it was a massive #FAIL

If the two amateur landlords had employed a decent letting agent or spent some time reading forums such as this one they wouldn’t have found themselves thousands of pounds down in rent arrears. One of the landlords was quite clearly on the verge of a mental breakdown but the hypocrisy of her story was that whilst her tenants were not paying the rent due to her, she was falling into arrears with her own landlord and prioritising subsidising her own mortgage! No wonder Paul Shamplina for Landlord Action has such a thriving Tenant Eviction business. He was one of the few people on the programme who came across as being decent.

I’ve heard about the HMO Daddy selling coaching and mentoring and I had always wondered why a landlord who claimed to be successful would do that. In my mind, you mentor people either to grow your own business (i.e. employees) or you do it when you’ve made enough money to become truly altruistic and because you thrive on helping other to achieve or solve problems which you’ve previously encountered. Having watched this programme I think I may have worked it out. Perhaps “landlord Jim” needs to sell a blueprint of his “secret recipe”, or a positive spin on what he would really like it to be like, in order to subsidise the appalling behaviour of his appalling tenants living in his appalling properties, all of which were exposed on National TV?

I’ve read some very positive views elsewhere on the web about the lady who worked for the letting agency and dealt with the ASBO tenant. Yes she was grounded, caring and very patient. What I can’t get my head around is how it can possible be in the interests of any landlord to put a drunken lout like that tenant into what seemed to be a relatively decent property. Fair enough, it was explained that the rent was guaranteed to be paid directly by the Council due to this chaps “issues” shall we say but come on! Anybody with half a brain can see this chap was on the road to nowhere but prison. If that house isn’t completely trashed within a year then I will eat my words but I’d happily lay a bet that the damage he causes to the property and the distress he causes to the poor people living in close proximity to him will not come close to the rental income. What man in his right mind would think his wife and children would feel safe living to a sexist drunk like him? The guy believed he was God’s gift to women and obviously has no respect for society or the law either. The chap needed to be institutionalised in my opinion, for his own safety and for others, but I suppose that’s the result of what was badged “Care in the Community”.

The real shocker for me was the prostitute tenant who gave up possession of her property without going to Court in return for a tenner. Yes she signed some papers but it was pretty obvious to me that she did that under duress and whilst under the influence of drugs, alcohol or both.

Maybe I’m lucky, perhaps I will be labelled as a snob for writing this review, but the “Meet the Landlords” TV programme was nothing like the Britain I know and love and certainly not representative of what I have witnessed as a result of being a landlord for the last 24 years!

What were your thoughts?Meet The Landlords


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