15 November 2024

RICS Report A Strengthening Property Market

The latest Royal Institution of Chartered Surveyors (RICS) survey, published this week, backs up the notion of a strengthening property market.

Buyer demand is up for the fourth month in a row, with an increased 12% of surveyors reported an increase in new enquiries over the past month. An additional 16% of surveyors reported a growth in house prices. Only two regions saw a drop in prices – Yorkshire and the Humber, with a fall of 23%, while 4% of surveyors in the South West also reported a fall in property values.

Surveyors in both Scotland and Northern Ireland expect to see strong growth in the coming months, especially in the run up to the Stamp Duty deadlines in April when rates will revert to their previous cut-off points.

Rental market chasm grows

The situation isn’t quite as healthy in the rental market however, where tenant demand still significantly outstrips supply. Around 29% of surveyors reported a drop in new landlord instructions and, at the same time, 19% said they’d seen a rise in tenant demand over the last few months. The result being that one third of surveyors expect rents to rise in the first quarter of 2025.

RICS president Tina Paillet said their data showed renters were feeling the pressure. And it didn’t look like easing any time soon.

“The Autumn Budget’s immediate stamp duty increases for landlords acquiring rental properties may increase opportunities in supply for owner-occupiers, but it will make it more challenging to address the critical shortage of rental homes,” she said.

Landlords continue to sell off properties

This is backed up by a survey published today which shows around 40% of landlords plan to sell rental properties over the next 12 months. The survey, by Pegasus Insight, and commissioned by the National Residential Landlords Association, also showed that 19% had already sold off some of their rental properties over the past year. This contrasted with 8% who had bought properties over the same time frame.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “Tenants the length and breadth of the country know that there are not enough homes to rent.”

He added: “Whilst landlords selling up might benefit a minority of tenants in a position to afford a home of their own, the vast majority will face a growing struggle to access rental homes.”

Jill Stevenson

7 November 2024

Lower Mortgage Interest Rates and More Stock Lead to a Buyers’ Market

As expected, the Bank of England declared a second base rate cut this week, reducing the amount from 5% to 4.75%.

This is due to a lowered inflation figure, which is now sitting at less than 2%. It’s a rate which the Office of Budget Responsibility say could last until 2029, giving homebuyers renewed confidence of stable mortgage interest rates for the foreseeable future. The Bank’s first base rate cut this year was in August when it fell from 5.25% to 5%.

In anticipation of a 0.25% drop, mortgage rates had already begun falling in recent weeks. They are expected to go down even further in the next few days and weeks, giving a welcome injection to the property market. At the moment mortgage rates are the lowest for two years.

Base rate predictions for a longer trajectory

The base rate is expected to continue to fall over time, but this will be at a slower pace than previously predicted, following Labour’s ambitious borrowing and spending plans in the recent Budget.

Not only are there more properties coming on to the market – to the extent it is fast becoming a buyer’s market – but mortgage approvals too are on the up. October was in fact, the fourth month in a row where, with a total of 65,647 mortgages given the green light, figures have surpassed those of the previous month.

House prices at highest rate ever

Meanwhile, house prices reached their highest total ever in October, with the average property now sitting at £293,999. That’s according to the latest Halifax House Price Index. The price has increased 3.9% compared to the same period last year. Regionally, the biggest increase was in the north west of England, where the value of property jumped 5.9% year-on-year to £235,587.

The fall in mortgage interest rates isn’t the only fuel being added to the property market fire, however. The looming stamp duty deadline of April 1 is also accelerating growth. That’s because buyers are looking to secure a housing deal before stamp duty relief rates revert to their previous higher levels. Expect much activity from now and well on into 2025.

Jill Stevenson

17 October 2024

Government Stats Show Summer House Price Increase

Figures released by the Office for National Statistics this week show property prices rose 2.8% from August 2023 to the same month in 2024.

The official statistics – which are reported every quarter – don’t deviate greatly from recent house price indexes and show that the market is indeed ‘on the up.’ House prices were, in fact, around £8000 higher than the previous year, bringing the cost of the average property to £292,924. August was the sixth month in a row in which property prices were higher on a year by year basis.

North West of England shows biggest jump in prices

In terms of regional variation, the biggest prices jumps were in the North West of England. There the average property jumped by 4.5% to £225,248.

The poorest property price rises over that 12-month period to August 2024 were in the South West, where property jumped just 0.8% to £320,774.

Analysts attribute the growth in property prices to increased interest in the market, thanks to lower mortgage interest costs and a settled economy with Labour proving triumphant in the general election. Added to this, interest rates are predicted to fall even further before the end of the year – thanks to an expected Bank of England base rate cut.

Property prices expected to remain stable for remainder of year

The increased interest in the market isn’t expected to wane up any time soon, meaning house prices are expected to remain stable for the foreseeable future.

Marc von Grundherr, Director of capital estate agents’ Benham and Reeves, isn’t expecting the upcoming Autumn Statement to bring any property purchasing incentives.

He added: “The housing market is likely to march on undeterred and we’re set for a very strong end to the year, despite the usual seasonal lull that comes with the Christmas period.”

And, of course, it wasn’t just in England that house prices exceeded their previous peak. Property in Northern Ireland rose by 6.4% year-on-year to £185,025. In Scotland the jump was 5.4% to an average £199,971 and in Wales, bricks and mortar investments rose 3.5% to £222,925.

Jill Stevenson

10 October 2024

Buy to Let Landlords Benefit from Increased Demand

An increase in the sale of second homes is putting up rental demand.

Changes to tax regulations and a possible increase in capital gains tax has seen landlords list their properties – to the extent almost one third of all properties listed last month were second homes. That in itself could signal an increase in existing rents as demand begins once again to far outstrip supply.

Majority of surveyors expect property prices to rise

The findings, from the latest report of The Royal Institution of Chartered Surveyors (RICS) backed up other house index figures released last week from the Nationwide and property portal Zoopla. They pointed to an accelerated UK property market – one in which property prices were expected to rise over the next year, according to more than half of surveyors interviewed.

Analysts refer to reduced mortgage interest rates as the kickstart the market needed. And these rates are expected to fall even further with expectations that the Bank of England will reduce its base rate by a quarter percent in early November. The Bank cut it from 5.25% in August – the first reduction in four and a half years.

Meanwhile Finance Minister Rachel Reeves warns she may increase capital gains tax from 33 per cent to 39 per cent in the budget at the end of this month.

Difficulties for today’s first-time buyers put into perspective

From second home owners to first time buyers, upmarket estate agency Hamptons this week showed just how difficult it is to access the property market today.

Their report showed that the typical mortgage payment for Generation Z (who were born in the late 1990s) is double that paid by previous generations. The typical sum for Generation Z is £1,739 a month. Millennials have had it much easier. Those born in the 1980s pay roughly £863 a month, while Baby Boomers (born in the 1960s) have been enjoying much lower mortgage costs of £775 on average.

Not surprisingly, the costs are down to a mixture of house price increases far outstripping inflation.

Jill Stevenson

25 July 2024

What every landlord needs to know about the perils of underinsurance

Author: Taznin Ahmed

If there’s one thing that can cause consternation and anxiety for both landlords and the specialist brokers that arrange their property insurance, it’s the perils, problems and fallout associated with underinsurance.

When someone needs to submit a claim on their property, the first question is naturally “Am I insured?” and if yes, question number two will invariably be “Am I insured for enough?”. What you don’t want to discover at this point is that you don’t have adequate or correct cover for a full payout, or even a partial payout.

Let’s start with a summary of what underinsurance is, how it occurs, and the problems it causes, before looking at how it affects property and buildings insurance, related costs, plus explore examples that reflect some of the less desirable outcomes. Then we’ll explore why partnering with a specialist let property insurance broker and taking out landlord insurance can provide you with peace of mind and avoid all this trouble in the first place.

The true cost and meaning of underinsurance

Underinsurance occurs when a policy’s cover level equates to less than the total value of a potential claim. For example, you own and rent out a property that’s insured for £200,000 in total. A fire at your building not only destroys the building, but also everything within it that you’ve contributed in terms of contents for those renting. When the post-incident numbers are calculated, the full complete value is creeping up close to £400,000 – creating a big difference of £200,000 or, to look at it another way, 50 per cent underinsurance.

And let’s say you’ve installed approved fire alarms and other methods designed to protect your property and meet the requirements of insurers, but if the value originally submitted is under, there may be big problems ahead in terms of rebuild and recovery costs.

The insurer, in this case, would only be liable for 50 per cent of the actual claim and would therefore only pay £100,000 to the insured. So, although the difference is 50 per cent, what is received by the insured property owner is just 25 per cent of the total claim value – which financially, is a huge shortfall.

If you’re reading this as a landlord and hoping it never happens to you, it’s worth considering there’s nothing personal nor arbitrary about this. An insurer is not short-changing a claimant for the sake of it – they’re simply upholding the fundamental principles of the insurance industry. And a decent landlord insurance broker will ensure that you’re not in the dark about any of this.

That’s why we’re reiterating why you need to get your rented property insurance in order and work with an insurance specialist who is experienced in getting the numbers right for their clients.

And with 70 per cent of properties overall being underinsured in the UK (so for the 2.5 million landlord properties, that equates to 1.75 million properties underinsured), that’s a whole lot of property people taking a risk.

Understanding the average rule

This the perfect juncture to reiterate the place and meaning of the ‘average rule’ or ‘average clause’ principle in underinsurance. Insurers – especially those dealing in property and buildings policies – use this equation to calculate claims and decide what your final payout will be if it turns out you’re underinsured.

Put simply, when the amount you’re insured by is less than the actual value of the property, an insurer may reduce a payout proportionally. Let’s suppose a property is insured for 50 per cent of its actual value, then, if there is a loss, your insurer may only cover and pay up to 50 per cent of the claim. Therefore the ‘average clause’ when considered, means policyholders must properly insure their property in the first instance, thus avoiding being penalised if there’s a claim.

In some instances, the insurer may be entitled to void the policy altogether if it materialises that the risk was unfairly presented. We’ve used the example of 50 per cent to keep the numbers straightforward, but at that level of underinsurance, the insurer could deem it reckless and possibly deliberate, which gives them the right to completely void the policy under the Insurance Act 2015.

Underinsurance – why it happens

One of the main reasons why people end up with an underinsured property is that they assume the worst will never happen, so why spend money on an unlikely event? As a rationale, this is both weak and naïve – and most experienced landlords know better. In short, if something does happen, insurers have every right to say that this was a failure to accurately declare sums insured.

Other common underinsurance reasons are that a valuation is out of date so inflation and other changes over time haven’t been considered; incorrect calculations were made in the first place; circumstances have changed; and even the increasingly hard market that’s affected all aspects of the insurance sector. And of course, there is plain old forgetfulness… which having read and absorbed this article can be struck off the list!

Also, perhaps there are insufficient limits within the policy, or advice has been sought from an unqualified person or non-specialist insurance broker who fails to make an allowance for the items required to be included within a building’s declared value.

The importance of landlord insurance

Ensuring that you have a specific, watertight, and current insurance policy for each and every one of your rentals is important. Protect My Let offers solutions to mitigate for all of the circumstances that arise when you have a rented property and tenants. Protect My Let is there to make sure you never get caught in the undercurrent of underinsurance. It’s not just the major calamities such as flooding or fire damage that need to be covered. There may be substantial damage to contents and furnishings, defaults on rent payments, or threats to security when keys are passed around. From carpets being ruined, to the white goods you own breaking, adequate landlord insurance removes what could be a substantial cause for worry.

We’d also strongly advise that for any building that you own, you organise a professional and regular reinstatement cost assessment (RCA). This may be included in your insurance policy or as an extra, and it can cost as little as £105 + VAT. Protect My Let work with Barrett Corp & Harrington (BCH) who have extensive experience in rebuild valuations and offer top quality service. They provide hassle-free e-valuations that are designed to establish an accurate rebuild value of your property in a fraction of the time – and, for Protect My Let customers, at a fraction of the cost.

If you’d like to discuss any aspect of rented property underinsurance, or to find out whether your current policy is working for you, talk to the expert team at Protect My Let. Find out whether your insurance policies are as robust as they should be – get in touch with one of our specialist team today on 01206 655 899.

Zac (Blue Bricks)

18 July 2024

Property Deal Completion: A Realistic Look At Timelines And Stages

Author: Nigel Bowers

In my last article, I introduced the way to approach pitching your property deal to lenders. So, in this issue, we’ll look at how long a typical property deal should take, from inception to completion. Obviously, this will vary greatly, but hopefully this will give you some food for thought.

How Long Should a Deal Take to Complete?

The entire process from inception to completion, can typically take 6– 12 weeks, for a standard property deal. However, various factors can significantly impact the actual timeframe. For instance, the complexity of the project, such as a large-scale development or extensive renovations, may prolong certain stages and extend the overall timeline. Additionally, unforeseen issues like delays in obtaining the necessary approvals, unexpected findings during the valuation process or complications during the legal stage, can further extend the timeline.

2. What to Prepare in Order to Speed up the Process

Preparation is crucial in the pre-approval stage, as gathering and submitting comprehensive information (financial documents, property details, plans, costings, etc.,) can expedite the pre-approval process, which may take 1–5 business days. Conversely, incomplete or inaccurate information can lead to delays and a longer pre-approval stage.

3. What to Expect from a Decision in Principle

The decision in principle stage, where the lender provides preliminary approval subject to further checks, usually takes 1–2 business days. During this stage, the lender reviews the information provided in the pre-approval stage and makes an initial assessment of your eligibility for the loan amount requested. This preliminary approval is subject to additional verification and checks, but it provides an indication of the lender’s willingness to proceed with the loan process.

4. Property Valuations: What Are You Marked On?

The property valuation, conducted by the lender’s chosen valuer, is a critical step that can take 2–3 weeks. The scope of the valuation depends on the nature of the project, such as a refurbishment, new development or investment property. The valuer will assess various factors, including the property’s location, market conditions, potential income (if applicable) and the overall viability of the project. The valuation report is crucial for the lender to determine the property value and the associated risks, which will inform their final lending decision.

5. Loan Processing: Almost At the Final Hurdle

Loan processing, which involves reviewing and verifying the valuation report, requesting any other required reports, such as structural surveys or environmental assessments, depending on the findings or the complexity of the project and can take up to a week or longer. This process ensures that the lender has a comprehensive understanding of the property and any potential risks, before proceeding with the loan approval.

6. Underwriting: The Final Stage Before You Receive Your Offer

The underwriting stage, where the formal loan offer is issued after a thorough review, typically takes 1–3 days. At this point, an underwriter within the lender’s organisation conducts a final, in-depth review of the entire loan application, including all supporting documentation, valuation reports and any additional assessments. If the underwriter is satisfied that all criteria are met, they will issue a formal loan offer, outlining the terms and conditions of the proposed financing.

7. How Having the Right Team Can Speed Up the Process

The legal process, involving both parties engaging legal representatives, to review and facilitate the transfer of ownership, mortgages and other legal documentation, is a crucial but time-consuming stage. Selecting a solicitor with experience in the relevant property type (e.g., commercial, residential or development projects) can ensure a smoother and more efficient legal process, minimising potential delays or complications. This stage can reasonably take around four weeks.

8. Final Approval and Closing

After the legal process is finalised and all necessary documentation is signed, the lender will conduct a final review and issue their final approval. Once approved, the lender will release the funds, allowing the property transaction to be completed and ownership to be transferred. This should only take 1–2 days.

Of key importance is engaging a knowledgeable and proactive broker early in the process. They can be invaluable in pushing for completion as quickly as possible, by coordinating the various stages, ensuring timely submission of documents and addressing any issues that may arise, especially in urgent situations like auction purchases, ultimately helping to streamline the overall process and meet critical deadlines.

Ask Oxygen

If you need a hand with any current or upcoming property deal, or you just want more information on how lenders and finance work, then get in touch using the details below. I’m always happy to grab a coffee with any reader of Blue Bricks Magazine to offer any help and support I can.

Email: nigel@oxygenfinance.co.uk

Website: askoxygen.co.uk

Tel: 01943 243159

Zac (Blue Bricks)

15 May 2024

Nailing Your Pitch: How to Wow Lenders for Property Loans

Ever wondered what lenders are really looking for when you’re pitching for a property loan? It’s not just about numbers and spreadsheets – it’s about presenting a compelling story that gives them confidence in you and your project. After years in the lending world, I’ve boiled it down to a simple mnemonic: PARSR. Get these five elements right, and you’re well on your way to that coveted, “Yes!”

At Oxygen Business Finance, we support developers of varying experience, including readers and past features of Blue Bricks Magazine. From straightforward buy-to-lets to large, complex ‘mega-deals’, we’ve seen it all. So, regardless of the size of your portfolio, experience in the industry or the purchase price of your deal, all of the following rules still apply.

Person

You’re the star of the show, so make a great first impression. Lenders want to back people they can trust and believe in. Highlight your relevant experience and if there are gaps, explain how your kick-ass team fills them. Honesty is key – if there are skeletons in your closet (like a less-than-perfect credit report) put them out there early. Lenders hate surprises and being upfront shows integrity. Most issues can be addressed if you’re transparent.

Amount

Be specific about how much you need and why. Lenders like to ‘follow their money’, so give them a clear breakdown of costs. If it’s a refurb or development project, provide a detailed cost schedule – lenders are seasoned pros and will spot any fuzzy maths. Always include a contingency (at least 10%, but more for complex projects) – it’s better to come in under budget than go cap-in-hand for more funds.

Repayment Ability

This is the biggie – how will the lender get their money back and when? Lay out a clear exit strategy, like selling the property (back it up with solid comparables and realistic timelines) or refinancing (allow ample time and show evidence that it’s viable). And, have a ‘Plan B’ if your primary exit falls through – reducing the price, refinancing elsewhere, etc., Lenders want to see you’ve thought through all scenarios.

Security

While not the top priority (that’s you!) lenders still need to know their investment is properly secured. Use their preferred valuer to avoid delays and factor in legal fees (plus VAT and disbursements) for both parties. If you’re borrowing through a company, most lenders will want personal guarantees from directors or major shareholders – take this seriously, as you’re on the hook if things go south. Personal guarantee insurance can mitigate this risk.

Remuneration

Lenders are businesses too, so show you understand their need for a solid return on investment (ROI). The higher the perceived risk, the higher their charges – it’s just economics. Look at the whole package: interest (fixed or variable, simple or compound); fees (arrangement, admin, exit, etc.,) and any project-specific costs, like monitoring surveyor fees, drawdown fees, revaluations and non-utilisation fees. Getting this right, upfront, avoids nasty surprises later.
With a pitch that nails the PARSR elements, you’ll have lenders excited to back your next property venture. If you need help prepping, lean on your broker – they’ve got your back and can ensure you put your best foot forward. Now go get that money!

Seeing From Both Sides

We understand both a lender’s and an investor’s perspectives, which puts us in the perfect position to help you secure better finance products for your deals.
If you have an opportunity in the pipeline that you’d like an experienced set of eyes to look at, or if you want to chat with me or my team in advance of a deal, to see how we can help you, then get in touch using the details below:

Email: nigel@askoxygen.co.uk
Website: https://askoxygen.co.uk/
Tel: 01943 243159

Zac (Blue Bricks)

General, Market Pulse

7 December 2023

Effects of Autumn Budget Statement 2023 on UK Property Investors

It’s been a tough year for the property sector. Thankfully there were certain measures in the Autumn Budget Statement, announced recently, to swell the heart of property investors. But there were many omissions to moan about too.

One of the biggest boosts to developers was the consultation into permitted development rights which could make it possible to divide one house into two flats. The only stipulation being that the exterior of the property doesn’t change. This could mean big profits for those investors prepared to get their hands dirty and do the development work themselves.

Private rental sector still hugely relevant

The huge demand for private rental properties will continue too, thanks to the chancellor doing nothing to cut Stamp Duty. This fact and the current high mortgage rates make it impossible for many couples to buy their own home.

Jonathan Stinton, Head of Intermediary Relationships at the Coventry Building Society, pointed out that failing to do anything about Stamp Duty changes could result in homebuyers having to fork out an additional £2,500 on an average priced home by March 2025.

Mortgage guarantee scheme extension

First time buyers and current home owners though were thrown a lifeline in the form of an 18-month extension to the Mortgage Guarantee Scheme. This allows them to buy property worth £600,000 with just a five per cent mortgage. And that property doesn’t have to be a New Build.

Having said that, not all mortgage companies were impressed.

Rachael Sinclair, Director of Mortgages and Financial Wellbeing at Nationwide Building Society said she was disappointed that the scheme continues to restrict qualifying loans to 4.5 times income. “Research shows that most homes remain unaffordable through the scheme,” she added.

A plus for property investors is they can now feel more reassured when renting to individuals and couples in receipt of Local Housing Allowance (LHA). That’s because, in the Budget, the Chancellor announced a £1 billion investment into the sector, designed to cover market rents for the bottom 30 per cent.

Cut in self-employed landlord NI

Self-employed landlords – along with much of the population – will benefit from the abolishment of class 2 national insurance. That’s to the tune of £192 per year. Class 4 national insurance is to be cut from nine per cent to eight per cent on profits between £12,570 and £50,270, resulting in a saving of around £350 a year.

One of the big omissions in the budget according to Maria Harris, Chair of the Open Property Data Association (OPDA), was Jeremy Hunt’s failure to implement any real measures to speed up the way homes are bought and sold in the UK today. He ordered just £3 million for pilots to look at proptech development and digitising local council property stats – which compared unfavourably to the £500 million for developing Artificial Intelligence.

Harris added: “The Chancellor stated that the UK’s tech sector has grown to become the third largest in the world, this needs to filter through urgently into the tech and digitisation of the home buying and selling process where all key data is held centrally and can be accessed easily and quickly by every relevant party.”

It currently takes an average of 19 weeks to buy and sell in the UK – that’s 77 per cent longer than back in 2007 according to data from The Landmark Information Group.

Get in touch

Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).

Jill Stevenson

21 November 2023

Cashflow Leasing: The Secret Way to Cut Upfront Costs on High-Cashflow Deals

Cashflow leasing introduces an innovative approach for property investors to reduce upfront costs on property purchases. This method is particularly relevant for investment strategies with strong cashflow, like houses in multiple occupation (HMO) or Serviced Accommodation (SA) properties.

In this article, I’ll explain cashflow leasing and how you can use it in your own business to save money on taxes, increase rental income and spread your capital across multiple property deals.

What is Cashflow Leasing?

Cashflow leasing works similarly to a conventional lease arrangement. Instead of an upfront lump sum, expenses are distributed across several months, typically spanning up to three years. However, the distinction lies in its application – rather than financing a car or a new watch, it serves as a funding mechanism for furniture acquisition.

Furniture comes with a substantial price tag; a single sofa alone can range from £1,500 to £2,000. When combined with dining tables, beds, wardrobes, and other household essentials, the investment required to get a property photoshoot ready can easily exceed £10,000.

These costs rise even further when furnishing high-end holiday homes or an HMO with a large number of rooms. For many investors, venturing into Rent2SA (R2SA) or Rent2HMO (R2HMO) scenarios, limited capital poses a challenge. This means that the idea of investing in furniture has the potential to break what initially seemed like a lucrative deal.

What Are the Benefits of Cashflow Leasing for Your Property Business?

It is no secret that both the HMO and SA strategies have become increasingly competitive. It seems that many more people are investing in this strategy every month, which makes it harder for established properties to stand out against the crowd and attract more guests or tenants.

One of the main ways to distinguish yourself, is to provide an experience rather than a property that looks like it’s been furnished on a budget. Higher-end furniture attracts higher-class tenants and guests. If you’re investing in HMOs, then a nicely refurbished room means you can demand more rent and lower your void periods. If the SA strategy is more your thing, then you can charge more for your property per night and long-term guests will be more attracted to staying with you.

But the problem with this is that it can be expensive. Nice furniture rarely comes cheap, unless it’s second-hand. Cashflow leasing allows you to buy the furniture your heart desires and split the cost over three years, meaning there is no upfront, blow to your bank balance and you can pay the finance off through the profits of your rental/nightly income.

An additional benefit to this strategy is that all payments are tax-deductible, offering further savings for your business.

Saving your capital also means that you can spread your money across multiple projects, rather than having one deal sap most of your savings.

Example Costs

Let’s say that you want to buy a brand-new sofa. You’re going high-end and the one you have your eye on costs £6,000. You’ve already paid a fortune in purchasing fees, renovation costs and bridging finance repayments. Spending another £6,000, that could instead be invested into another deal, just isn’t feasible.

If you were to lease this sofa, then the costs could look something like the below. However, it is worth noting that this price can vary and homeowners tend to get better rates than those who don’t own a property.

Value: £6,000 – Lease Value £5,000

Repayment Terms: 3 years

Monthly Premium: £201.02

Overall Cost: £7,236.90

Interest Paid: £2,236.90

Corporation Tax Relief: £1,375.01

Nett Cost of Finance: £861.89

Cost Per Year: £287.30

Supplier Gets Paid: £6,000 (£5000 + VAT)

Financing Refurbishments

As an added bonus that lies outside of furniture, you can lease materials for your refurbishments. This is another great way of lowering upfront costs and can also be used to protect large blows to your capital, if an unexpected problem arises when you commence work. The leased payments can then be paid off through your rental income or, can be paid off in one lump sum after sale or refinance.

Here to Help You Scale Your Portfolio, On a Budget

I hope that you have found this article useful and that it has opened your eyes to other finance options available to you, when you’re faced with the daunting cost of furniture. I hope that, by lowering the barrier to entry, more people can begin to invest in property and create beautiful places for people to live, work and raise families.

If you want to explore how cashflow leasing can help you to grow your property portfolio, without needing to invest tens of thousands of pounds in furniture, then get in touch using the information below.

Website: https://cashflowleasing.co.uk/other-partners/

Email: sales@cashflowleasing.co.uk

Sam Cooke

Blog, General, Market Pulse

27 September 2023

Scotland Fares Best in Unsettled Property Market

When it comes to the three nations, Scotland’s property market is faring far better than south of the border.

Homes aren’t only selling quicker in Scotland – twice as fast as London, in fact – but the country also has the highest year-on-year growth.

Scottish owners receive highest financial boost

The news, from Rightmove’s latest survey is in contrast with much of the rest of the UK. To the extent house prices fell by 0.4 per cent last month across Scotland, England and Wales together. Taken individually though, property owners in Scotland enjoyed a 2.6 per cent increase in the value of their homes compared to the same month in 2022. Property was selling in 32 days on average. This compared favourably to 63 days in London and 64 days in Wales.

Second fastest-selling market is the North East where property is taking 49 days to sell, followed by the South West with 54 days.

In terms of prices, property went up in only four other areas overall – by 2.6 per cent in the North East, 1.2 per cent in Yorkshire and the Humber, 1 per cent in the North West and 0.7 per cent in London. The biggest drop in prices was in Wales where property was worth 1.5 per cent less. Next was the East of England where sellers received 1.4 per cent less and the South West, with a fall of 1.3 per cent.

Mortgage interest rate rises together the increases in the cost of living, have slowed down the market as many would-be buyers began to re-assess their moving options.

Property transactions down by one fifth

Certainly, according to HMRC figures, the number of properties changing hands in July this year, fell by more than one fifth (22 per cent) compared to the same period in 2022.

And, with many more fixed rate deals coming to an end over the following months, together with no indication of mortgage rate drops, the status quo is expected to remain for some time yet. Especially when you consider that the average two-year fixed rate mortgage has gone from 2.3 per cent to 6.56 per cent over the past two years. This is due to the Bank of England increasing its base rate on 14 occasions since the end of 2021.

Fewer properties for first-time buyers

In terms of available housing, there are 10 per cent less properties than four years ago. And this figure doesn’t look like improving any time soon – certainly in terms of New Builds. That’s because planning approval for new housing in England is the lowest it’s been for 15 years. The Home Builders Federation revealed the number of new homes approved for building in England, in the second quarter this year is 54,200. The total for the past four quarters is 265,223. This is despite the government’s promise to build 300,000 new properties a year by the middle of the decade.

Developers are less inclined to build since the mortgage interest rises, as well as the withdrawal of the government’s scheme to help first-time buyers get on the property market.

Jill Stevenson

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