August lending Update
I took an enquiry for a bridging loan last week from a property investor who was disappointed when I told him he still had to pay stamp duty on his purchase. For the benefit of anyone else who has just returned from a prolonged stay on a desert island, the stamp duty holiday will be in place until 31 March 2021. However, for property investors buying additional residential properties over £40K the tax is still due, but with the threshold raised to £500k so there are savings to be made. Speak to your tax adviser for full details.
Bridging lenders are reporting substantial increases in activity since the lockdown was lifted and with some of the larger lenders either not yet back in the market or limiting their loan to values, others have been more than happy to pick up the slack.
Some bridgers are back to lending 75%, but most seem to be capping at 70% for residential loans. There is still a fair amount of caution on the types of deals some will take on although most of the enquiries we see are for light refurbs and we’re not having any trouble placing these.
If you have the cash to put down a decent deposit and the lender can use an automated valuation model (AVM) or desktop valuation, you should be able to secure a good deal for yourself and get the funds you need quickly.
For those wishing to use bridging for the first time to refurb a property and who need cash for the works, they will have read or heard the phrase, “borrow against the GDV” (gross development value) and wrongly believe they can borrow up to 75% for the purchase and 100% of the works cost and that the lender will advance all the money on day one. Well, sorry to disappoint you guys, that is not going to happen unless you have extra suitable security for the lender to take an additional charge on. The lender may grant a facility to cover the works, but this will be drawn in arrears. If I am not making this clear, ask your broker to explain.
When considering your exit strategy, be that to sell or possibly refinance to a buy to let, you may be able to get out within six months if you use the right lender. If you are looking for a full uplift in value to pull out your cash, make sure you understand how the lender may treat this before you start your journey.
Happy hunting.
Private equity expands Letting Agency growth plans
North East letting agency My Property Box teams up with private equity to fund ambitious growth plans
Specialist letting agent My Property Box has teamed up with a private equity firm as it seeks to expand its operations into West Yorkshire.
The Darlington-headquartered company, which lets homes throughout the North East and North Yorkshire, is currently looking to gain a foothold in the Leeds area.
It is working with investment company Winch & Co, which will fund its expansion through the acquisition of other letting agencies in key target areas.
In a separate move, My Property Box is also in negotiations over the acquisition of a letting agent in North Yorkshire to extend its reach within the county.
Managing director Ben Quaintrell said: “Since founding the business in 2012, My Property Box has expanded rapidly from its original Tees Valley heartland.
“Last year we acquired two letting agents in Thornaby and Darlington and, as a result, we currently manage more than 1,000 homes valued at a total of £50 million.
“We are an innovative company with an ambitious growth strategy and that includes establishing a presence in Leeds, which has a vibrant rental market and is one of the best areas in the UK for property investment.
“I’m seeking to acquire a lettings business in Leeds with the help and support of Winch & Co, which has extensive local expertise as well as acquisition experience.”
In addition to managing properties and sourcing new landlords, My Property Box operates a property lettings function, focused mainly in the North East.
Nathan Winch, partner at Leeds-based Winch & Co, said: “We are pleased to be working with Ben and My Property Box in this exciting venture.
“We focus on professional service businesses, particularly property, so this project couldn’t have come at a better time.”
Winch & Co has been involved in several private equity deals and investments across a variety of sectors. Its focus is on professional services, including finance, legal, and accounting businesses, with a preference for those deriving recurring income from repeatable or ongoing trading activities.
Ben added: “I’m looking forward to implementing our growth plan with the assistance of Winch & Co. We can see the synergies and that will allow us to achieve our goal within a reasonable timeframe.”
winchandco.com
mypropertybox.co.uk
Good books for property investment
FOR THE LOVE OF BOOKS
A regular question asked in the property groups on social media is: What books do people recommend?
Books can teach you new things, change your perception and can even have a dramatic impact on your life.
We have compiled a list of books on property, personal development and business that have been recommended by other people in property that should keep you going for a while. Tick them off when you’ve read them!
I’d like to keep the blue theme of the magazine in the title banner and in general
- Property Magic – Simon Zutshi
- SSAS Pensions – Mark Stokes
- Commercial to Residential Conversions – Mark Stokes
- Hustle Your Way To Property Success – Paul Ribbons
- Get Into Property – David Siegler
- No Money Down Property Investing – Kevin Mcdonnell
- Never Split The Difference – Chris Voss
- The Complete Guide To Property Investing – Rob Dix
- How To Be A Landlord – Rob Dix
- Property Sourcing Compliance – Tina Walsh
- Your Property Jumpstart – Paul McFadden
- Bricks, Mortar And Other People’s Money – Liam Ryan & Paul Taylor
- Start Now. Get Perfect Later – Rob Moore
- Property Investing Secrets – Rob Moore & Mark Homer
- Multiple Streams Of Property Income – Rob Moore
- Money – Rob Moore
- Life Leverage – Rob Moore
- Low Cost High Life – Mark Homer
- SSAS Pensions – Mark Stokes
- Eat That Frog! – Brian Tracy
- The Values Factor – Dr John Demartini
- The Book You Wish Your Parents Had Read – Philippa Perry
- The Science Of Getting Rich – Wallace D Wattles
- Millionaire Success Habits – Dean Graziosi
- Think And Grow Rich – Napolean Hill
- The Compound Effect – Darren Hardy
- The Richest Man In Babylon – George S Clason
- The Midas Method – Stuart Goldsmith
- Rich Dad Poor Dad – Robert Kiyosaki
- Retire Young Retire Rich – Robert Kiyosaki
- Rich Dad’s Cashflow Quadrant – Robert Kiyosaki
- The 12 Week Year – Brian P Moran
- Hustle Harder, Hustle Smarter – Curtis Jackson
- Can’t Hurt Me: Master Your Mind And Defy The Odds – David Goggins
- Awaken The Giant Within – Tony Robbins
- Unshakable: Your Guide To Financial Freedom – Tony Robbins
- The 5 Second Rule – Mel Robbins
- Confidence – Katie Piper
- The Ultimate Book Of Mind Maps – Tony Buzan
- Maxout Your Life – Ed Mylett
- Atomic Habits – James Clear
- Get Off Your Ass – Brad Burton
- The Miracle Morning Series – Hal Elrod
- The 10X Rule – Grant Cardone
- High Performance Habits – Brendan Burchard
- Chimp Paradox – Prof Steve Peters
- Total Recall: My Unbelievably True Life Story – Arnold Schwarzenegger
- Shoe Dog: A Memoir By The Creator Of Nike – Phil Knight
- Slight Edge: Secret To A Successful Life – Jeff Olsen
- Secrets Of The Millionaire Mind – T. Harv Eker
- Law Of Attraction: The Secret Behind ‘The Secret’ – Michael Losier
- She Means Business – Carrie Green
- Principles: Life And work – Ray Dalio
- Winning – Jack Welch
- The Black Swan – Nassim Nicholas Taleb
- What I Learned Losing A Million Dollars – Jim Paul & Brendan Moynihan
- The Millionaire Fastlane – MJ De Marco
- Unscripted – MJ De Marco
- How To Get Rich – Felix Dennis
- How To Be F*cking Awesome – Dan Meredith
- How To Win Friends And Influence People – Dale Carnegie
- Battle Ready – Ollie Ollerton
- The 4-hour Work Week – Timothy Ferriss
- The Ultimate Jim Rohn Library – Jim Rohn & Nightingale Conant
- The One Thing – Gary Keller & Jay Papasan
- The 7 Habits Of Highly Effective People – Stephen R Covey