I’ve just come across a business called The Rare Beer Club. As the name suggests, the company search out rare beers and then despatch a selection to their subscribers each month. This is a US based business, so something you could think about copying here. Thinking more widely though, ‘The Rare ****** Club has to be a business with many variations and possibilities. What rare items could you supply to customers on a subscription basis?
Welcome to today’s news and views for the UK property market…
According to research by the estate agents Sequence, UK rents rose by 10 per cent year-on-year to end November 2013. The average rent is now £777 in the UK. The agents’ figures indicate that London is, compared to the UK, lagging behind. Rents rose by 6 per cent a year in London. New tenancies were up by 2 per cent compared to 13 per cent across the UK. Note though that the average London rent is £1,463.
‘It is the regions, not the capital, propelling the continued buoyancy of the rental market. It is clear to see that, far from being stifled by a growing sales market, the national rental market operates independently, drawing on a different pool of supply and demand. London’s slowdown is partly due to its unique nature with more variables such as a larger corporate and tourist lettings sector.
London buyers have also witnessed the highest sales price increases and highest levels of buyer registrations, which could also account for the subdued figures.’ Buying into BTL this year? Let us know where as we are preparing city and county reports in Q1.
Good article in the Telegraph which offers a range of top tips on buying at auction. Let’s quote…
Visit an auction without bidding to see if you like the experience;
If you go ahead, order a catalogue for a future auction (available three weeks in advance);
View a property you like – the auctioneer arranges visits for individuals or groups;
Get a survey done, even if one is included in the seller’s ‘legal pack’ – the agent may do this to avoid multiple surveyors from rival bidders;
Sort finances – successful bidders pay 10 per cent immediately, the rest within 28 days;
Instruct a conveyancing solicitor familiar with auction purchases;
Set a personal spending limit including legal, transaction and renovation costs;
Take all legal, mortgage and ID paperwork to the auction;
Once bidding begins, make clear hand signals and verbal bids on your ‘lot’
Avoid being carried away in a bidding war and exceeding your limit.
Good advice from the Telegraph. If you’d like a link to the piece, which features ‘best’ auctioneers too, with links to their sites, just email back.
We pretty much wrapped up the 2014 predictions pre-Christmas but Peter Coles. MD at Romans estate agents, calls it well from what we can see, ‘I’m not predicting a property bubble – allowing for inflation, prices in the South East are still 10 to 20 per cent below where they were in 2007, and because interest rates are so low the key driver, affordability, is still below the long-term average levels, from the last 30 years.’
‘Most people are predicting that house prices will increase throughout 2014 but I anticipate that the most significant increases will be in one and two bedroom properties. This will be due to increased demand from first time buyers, aided by the Help to Buy schemes and Buy to Let investors. This is positive news for ‘second-steppers’ as the demand for their properties will make it easier for them to move up the housing ladder.’
‘Landlords and investors will also see a great return with significant capital growth on top of already strong rental yields “The rest of the market will see increases of anything from nought to 10 per cent with well-presented properties in good locations seeing stronger increases and selling quickly. It’s also worth noting that transaction numbers and prices at the top of the market have been impacted by the punitive increases in Stamp Duty Land Tax in recent years and I foresee this continuing. This is no surprise when you consider that it would cost the equivalent of over £130,000 of salary before tax to pay the Stamp Duty Land Tax bill on a £1.5m purchase price.’
All for now, see you again tomorrow.
I’m sure you already knew this(!) but today is National Dress Up Your Pet Day. As I’ve said here many times before, people are prepared to spend huge sums of money on their pets, and it seems that clothing is no exception. It’s a £35 million a year business and is predicted to grow markedly over the next five years. Dogs seem to be the main market…well their owners, but you know what I mean.
Now I hate to see dogs dressed up (absolutely no dubious jokes were thought better of and discarded at this point in the article) but we’re not here to be arbiters of good taste. If you’re looking for a potentially lucrative niche business, this could be worth investigation.
Welcome to today’s overseas property news and views…
The property portal PropertyFinder has studied what its visitors are looking for – and reveals that ‘Dubai Marina’ is the most popular location in Dubai. Some 18.7 per cent of Dubai searches are for Dubai Marina property to buy with 18.4 per cent looking for Dubai Marina to let.
‘Dubai Marina, Downtown Dubai, Palm Jumeirah and Jumeirah Lake Towers remain firm favourites with buyers. Dubai Sports City’s reputation as a property hotspot seems to soar. From not figuring in the top 10 list last year, the community zoomed ahead to eighth position this quarter.’
‘Dubai’s property market has clearly rebounded with prices increasing by over 20 per cent in 2013 even as new projects get launched every other week. Real estate demand is only likely to inch higher in the years leading to the Expo 2020 so if you want to put your money into a home or office, these are the communities where owning and renting seem to make sense.’ We have correspondents – professional investors, not agents or developers – out there right now and we can offer a short report in about two weeks.
Email back if you are looking to buy in Dubai in 2014.
We are visiting Spain later this month with four or five HNW investors and will report back for the general membership. There is only one question being asked these days – has Spain hit the bottom? Marc Pritchard, Sales and Marketing Manager of Taylor Wimpey España – yes, I know – offers a view.
‘We are expecting sales levels in 2014 to be in line with (the rising levels in) 2013. However, seeing as we will have additional sales outlets and several new developments in the pipeline across all three regions of Spain in which we operate, coupled with the fact that prices in prime locations across each area have now bottomed out and will not fall any further, we are hoping sales volumes to increase making for an exciting new year.’ More to come.
More and more members have been looking at Australia. Terry Ryde of hotspotting.com.au offers some early pointers. ‘Sydney and Melbourne are experiencing an auction frenzy, which occurs every three or four years, but things will settle down a bit. There will be a 5 to 10 per cent growth in those cities but it will be more evenly spread across the middle and outer-ring suburbs.’
The one to watch/invest in is Brisbane. ‘This is only just starting to gather momentum. Brisbane is behind Sydney and Melbourne after being adversely affected by the devastating floods of 2011 and the job losses experienced by 1,500 public servants after the election of the Newman government in March 2012. Brisbane is only just now starting to take off and I see much stronger growth there – perhaps over 10 per cent.’
‘Stay away from the speculative market and buy in ‘real’ suburbs with real housing where people have jobs and buy houses to live in. Sales momentum in south-east Queensland, for example, is inland – not on the coast.’ More to follow? You tell us – we can extend our coverage if
the interest is there.
All for now, see you soon.
We don’t tend to cover much money saving information here, but January can be a difficult time, so here are four interesting money saving opportunities.
1. When flying, book 59 days in advance and travel on a Tuesday. Research shows this gives the best chance of getting the biggest discount.
2. Energy tariffs are confusing. You can ensure you’re on the best one, and then ensure that it remains the best one for you, at www.cheapenergyclub.co.uk
3. Did you know you can bulk buy on heating fuels with other local people to cut costs? Try www.citizensadvice.org.uk/oilclubs if you have oil fired heating.
4. You can make free phone calls from your mobile to anywhere in the world, via Viber. You just need to be connected to wifi. www.viber.com
We have, for some time, been working on a new UK service – for lease option investors. That starts today. Read on…
An ‘option’ is the legal right to buy something at an agreed price at an agreed period of time. That ‘something’ can be almost anything; most familiarly, options are used in relation to a commodity or a currency, as examples. If an investor feels sterling, the euro or the US dollar may go in a particular direction, up or down, they may take out an option to buy or sell that particular currency at an agreed price at an agreed time. Fingers crossed, they call the market correctly and pocket some profits. This can be very useful when it comes to buying or selling overseas property, for example.
A ‘lease option’ refers to bricks and mortar property. In essence, you, the buyer of the option and the purchaser of the property in due course, go to the property owner, the seller of the option and the seller of the property in due course, and agree a lease option deal. That option gives you, the owner of the option, the right to manage that property for the duration of the option. There may be some profit potential here if the rent exceeds the outgoings; you will, for example, have to pay the property owner’s mortgage for the duration. The option also gives you the right to buy the property at an agreed price at a specific time, usually at the end of the lease period.
From the investor’s viewpoint, the key part of such an option is that it gives you the right, but not the obligation, to buy at the agreed price at the agreed time. You do not have to; there is no obligation. You could, if the market has fallen between now and then, walk away. The option lapses and the property reverts back. However, if prices have risen as expected, you can buy as agreed, sell on and pocket the profits. By and large, you are investing on the basis that prices will rise between now and then.
As and when you get to investing, you will use a solicitor to draw up an agreement that is legally binding and watertight. Meantime, here’s a quick checklist of what’s what…
Buyer (you) and seller (home owner) agree a purchase price and the term of the option.
Typically, you’ll want to agree a price that’s at or below current market value.
Usually, the term is for three to five years; but everything is negotiable.
You may make a payment for the option; non-refundable, normally.
During the term, you lease the property from the seller; typically you might live in it yourself (first-time buyer) or sub-let it (investor).
During the term, as an investor, you effectively run it as a buy-to-let.
No-one else can buy the property during the term.
You can sell the option on during the term.
It is up to you to decide if you want to take up the option to buy.
You have the right but not the obligation to buy.
The seller has the obligation to sell; as per the agreement’s terms and conditions.
If you do not take up the option, it expires and the property etc reverts to the seller.
It’s worth stressing that most of these points can be topped with the word ‘Usually’ and tailed with the phrase, ‘subject to negotiation’. Nothing is ‘set in stone’ and it’s really up to you to negotiate, as advised by your accountant and solicitor etc.
2 bed terrace house.
Option to buy within 15 years for £72,000.
Monthly payment £299.
Potential rent approx £450 per month.
2 bedrooms, terrace house, could perhaps be split into two 1 bedroom flats.
We will have more at a rate of one a week from now on…
Email back for full details if you are a serious investor. If you are new to this, please note we will have a fuller, free report for you later this month along with more deals at a rate of three to four a month
There’s more interest in food than ever, and the market in the developed world is becoming increasingly selective and discerning. Many companies now offer consumers a wider choice than ever, and some even allow customers to create their own bespoke products. For example, The Grand Old Duke Of Pork now offers customers the opportunity to mix their favourite ingredients into the perfect sausage. The company offer a range of around 50 ingredients including apple cider, marmite, goat’s cheese, lime, and sprouts. The price of customer-made sausages depends on the ingredients, but is typically around £4.50 for a pack of three.
So I suppose the question is this – what other food product would lend itself to a similar treatment?
Welcome to today’s news and views…
I’ve been sent a clipping which suggests that property broker Donpiso indicates in can sell your home in Spain within 60 days. That’s an impressive statement given that, off the top of my head, the current official selling time is some six months – and a heck of a lot longer going by anecdotal feedback.
To be fair, Juan Luis Nolasco at Donpiso does flag up one or two provisos to this statement. ‘A lot of sellers are still living in the land of Peter Pan (when it comes to pricing). The biggest problem is lack of access to financing for buyers.’
As you’d expect, I talk regularly, wearing my Spain Property Alerts hat, to both sellers and buyers in Spain. It’s amazing how people view the market depending on which direction they are coming from. Sellers seem to feel that property prices have dropped for everyone except for them and their properties. Buyers seem to think that every property they are looking at deserves an offer of no more than 50 per cent of the asking price. More to come.
Knight Frank’s most recent property index reveals that the property market in Turkey has been the best in Europe; property prices in Turkey rose 12.5 per cent in 2013. Spot Blue’s Julian Walker suggests there’s more to come.
‘Istanbul has led Turkey’s property market in 2013 and I believe will continue to do so in 2014. International investors like it not only for its capital gain prospects and buy to let opportunities, but also because it operates in multiple currencies, including US dollars, euros, Sterling and the local Turkish lira. Furthermore, this year the Turkish lira has lost value against most major currencies, making it a cheaper currency in which to buy for foreigners.’
‘Istanbul in particular has attracted interest from Gulf and Russian investors this past year. There are buy to let opportunities springing up in the booming suburbs in areas such as Halkali, Beylikduzu, Bahcesehir and Erenkoy, and the availability of chic second homes in more central fashionable districts on either side of the Bosphorus.’
‘Also, if they’re buying for lifestyle purposes, then Bodrum on the Mediterranean Coast and other marina resorts on the Bodrum peninsula are also popular spots, thanks to the selection of smart, private villas on offer there.’ Let us know if you are looking here for 2014.
Catching up on my reading, I note that economists at the Florida Realtors’ 2014 Real Estate and Economic Summit suggest that the market will continue growing in 2014. John Tuccillo, Florida Realtors’ Chief Economist says,
‘The real estate market is going to grow, and we’ll probably see about a 10 per cent increase in residential sales. Home values will rise at roughly about five per cent a year, which is in line with historical trends.’
‘The median time on the market for a Florida home is down to about a month and a half. We’re seeing that in every single price point class. Clearly the market has improved substantially…the amount of vacant housing oversupply (nationally) is the least in 10 years.’ We have a group of correspondents visiting later this month; a report will follow for those who are looking to invest in this market.
All for now, see you again soon.
I go out running from time to time and I hate it. I doubt there is anything that would make it anything other than a chore, but an Austrian team behind app, Runtatstic are giving it a go. They have created Story Running, a series of exercise length short stories designed to help joggers keep going.
In each of the current titles, the runner is the main character in the story. In one, for example, the runner is escaping from Alcatraz, Each audiobook was created with professional actors and sound technicians and includes music timed to motivate runners. The stories begin slowly before becoming more exciting at the peak of the run.
More and more people are attempting to exercise these days, but we all know it isn’t easy to get motivated and stay focussed. It seems that people are prepared to spend money on personal trainers and other aids to help motivate them. It’s worth giving thought to what you could do to help exercisers to overcome the natural desire to give up.
* I just noticed these stories are 40 minutes long. I’d be showered, changed and sat down with a cup of tea before I got to hear the end of them!
Welcome to today’s news and views…
A recent report into the UK property market by the Smith Institute reveals the first big ‘must do’ of 2014 – always look beyond the averages. All the stories in today’s media seem to tell us that property prices are rising on average. The report looks at average property prices in 179 regions of England and Wales over the six years to the end of 2013. The average growth covers a wide range of performances. Prices are up 43 per cent in parts of London but go to Hartlepool in the North-East and Blaenau Gwent in Wales and prices are down by similar amounts.
‘What we have witnessed over the past six years is the growth of two distinct and divergent housing markets: a London-centric property market where house prices have recovered and in some cases soared; and the rest of England and Wales where prices are flat and transactions are low. This is symptomatic of deep-rooted and persistent uneven economic development, with jobs and growth concentrated in London and the south-east. Perhaps just as worryingly, if investment in new homes follows demand for housing it will result in more economic activity and growth in these places, thus further unbalancing the economy.’
‘An unbalanced housing market undermines national productivity and competitiveness by making it extremely difficult and expensive for people to move for work from low-cost housing areas to high-cost housing areas. A widening housing price divide also exacerbates income and wealth inequalities between places and constrains local and national efforts to rebalance the economy. Investors are wary of investing in places where house values are flat or falling. Overseas investment in particular is attracted to the high-value market in London, raising the risk of a speculative housing bubble – which would be damaging to the economy.’
The recent Student Accommodation Index from CBRE reveals that student accommodation has seen total returns of 9.95 per cent in the 12 months to end Q3 2013. I think most investors would be very happy with that. Where next? CBRE offers a nudge as to a key criterion for investors.
‘International students spent over £10 billion on tuition and living expenses in 2011/2012. We expect the number of international students in the UK will grow by 15 to 20 per cent over the next five years, as the demand for English taught degrees continues to lure students from across the globe. The result of this popularity is reliably high occupancy rates in student residences and stable income streams, making the sector an attractive prospect for small and large investors alike.’
Of course, with the new FCA rules now in place, most members who read this can no longer invest in many of the student accommodation deals on offer. In saying that, developers and agents seem to be sending out offers regardless of the new laws! I’m – like some of you – what would be termed a high net worth and sophisticated investor; income in excess of £100,000, net assets exceeding £250,000. If you’re not, be wary of these offers. You’re not supposed to receive most of them. We’ll tell you more at the 1 February event.
We have a range of get-togethers soon that may interest you…
Saturday 11 January, Brazil social housing meet-up, Brentwood, Essex – this is now full but we will have notes for members next week, on request.
Sunday 19 January, The Convent armchair investment, Woodchester, Gloucestershire – please let me know if you’d like to join me – and Dave and Jeannie – here.
Saturday 1 February, Investing In 2014 seminar, Central London – please let us know (if you have not been in touch already) if you’d like to come along; and asap please.
Email back for fuller details of these events please.
One of the biggest trends of 2014 will be that more and more local authorities will expect to licence more and more landlords. We note that the 12 English local authorities which currently have selective licensing regimes have prosecuted some 250 or so landlords so far; either for failing to obtain a licence or for HMO and hazard offences.
Stephen Battersby, chair of National Private Tenants Organisation, says, ‘The survey seemed to indicate that selective licensing was an effective tool to improve conditions in the private rented sector and reduce anti-social behaviour.’ Best idea? Check with your local authority before investing in a BTL property of any kind.
All for today, see you again tomorrow.