Utilitarian Undies

I’m not sure whether Canadian Danieal Cormier is on to something and I’m out of touch with the way people live, but his business idea is interesting in any event. Danieal is hoping to revolutionise the men’s underwear market with a design that incorporates pockets for phones and other gadgets. Now I don’t know about you, but I rarely find myself in a situation where I’m wandering around in my Boxers and feel the need for pockets. I tend to wear trousers if I’m going to be doing stuff requiring pockets. But maybe I’m old fashioned.

Anyway, the business is a timely reminder to give some thought to how the clothing market might be given a boost. If people are so tied to their phones that they need a pocket in their pants, maybe they need one in their socks as well. Maybe women would like storage space in their bra’s? Secret agents and aspiring bombers have been known to hide stuff in their shoes, so why not ordinary folk? Time to get your thinking cap on…now there’s a thought…hats!

Streetwise Property Alert 24th June 2014

Welcome to your Tuesday email. Missed the UKPA and/or IPA PDF newsletters for June? Email back. Meantime, Peter Faulkner, our ‘Mr Mortgages’ offers his latest thoughts…

Sharply rising UK house prices and Mark Carny’s (Bank of England Governor) comments have fuelled speculation that the BoE will use its new macro-prudential powers for the first time in the near future to manage associated risks and prevent excessive growth in household debt. These powers are themselves set to be strengthened, subject to consultation, following Chancellor George Osborne’s recent speeches.

However, it is not about limiting mortgages further; the market, especially in London, is being influenced not by credit buyers but by cash buyers. More than one third of houses (36 per cent) were bought entirely in cash during Q1 2014, compared with less than a quarter (24 per cent) seven years earlier. The percentage of total housing demand that is financed by cash reached an estimated all-time high of 61 per cent in Q1 2014.

The residential mortgage market remains very subdued, with mortgage debt still shrinking in real terms and on aggregate, households putting over £10 billion of equity into their homes every quarter since mid-2010. However, BTL represents a much larger proportion of total lending.

Average residintial mortgage loan to value ratios have been exceptionally depressed since the financial crisis and – despite the gradual rising trend since 2009 – median first time buyer LTVs remain lower than at any point prior to 2007. While the Bank of England has flagged concerns about rising loan to income ratios, the affordability rule changes arising from the Mortgage Market Review (MMR) mean that new owner-occupiers seeking a mortgage will only be granted a loan that is manageable at considerably higher interest rates (stress testing) and at lower loan to values (larger deposits) and pay more as house prices continue to rise.

UK averages paint a picture of a housing market where the use of cash has become a key driver. There are broader questions for government about the implications of this, though in part it has been driven by a shortage of mortgages: a situation that is being corrected. But for the FPC, whose remit is to maintain financial stability, it suggests that additional intervention into the mortgage market is not warranted.

Affordability criteria for older clients have become a real issue under new MMR rules. Mainstream lenders are just not able to help on most cases due to their affordability formulae with automated rule driven systems. The best chances of success if a client is over 55 years of age are the smaller building societies that still hold mandates and can take a view of cases presented properly. Best in the market at the time of writing for older clients are Buckingham and Market Harborough building societies using a specialist club for packaging.

Auction finance? Last week I mentioned a new product coming out. It has arrived. A client can get auction finance or quick finance for a quick purchase and then convert to BTL after only three months. Most other BTL lenders require minimum of six months or one year. Thank you Peter. More from Peter next week. Email back though if you’d like to chat with Peter.

Finally, we’ve got a flat to introduce in Docklands. In short, it’s a one bedroom flat next to Crossharbour DLR station and just 10 minutes’ walk from Canary Wharf. It also has a reserved underground parking space. It has been consistently let for the past 20 years and is currently let at £1,235 pcm. We are going to introduce it at £350k but can offer it to a serious member who can get going with it this week for £340k; a saving of £10,000. Email back.

admin@streetwisenews.com



There’s Money In Muck

Composting may be the right thing to do for the environment, but it can be hard to get around the smell and the mess, particularly for town dwellers with small gardens.  Compost Cab is a new service about to launch in Washington, DC, that removes some of the unpleasant aspects of the job.

Compost Cab provides customers with a bin equipped with a  compostable bag liner. Each day clients will fill the bin with their organic material, and once a week Compost Cab will pick up the bag, leaving behind only a clean bin with a new liner. The cost is simply $8 per week per bin.

Clients who have been with Compost Cab for nine months or longer can claim some finished soil in return. For every fifty pounds of  waste the company collects from them, they can receive five pounds of fresh compost and one pound of worm castings in exchange.

Apparently the average American family produces more than 500 pounds of leftover organic material every year. There’s no reason why a British family would produce any less.  Composting not only keeps that waste out of  landfills, but it also produces nutrient-rich, fertile, natural soil.  In addition, it keeps organic waste out of other bins, thereby freeing space for other materials.

It’s early days , but this could well prove to be a big success in these eco-friendly times. And if it works in the United States, why not here?

Streetwise Property Alert 23rd June 2014

We are looking to overhaul ‘Property Alerts’ from September; new websites, beefed-up weekly services etc. We are also going to limit memberships for the weekly, fuller services (London, France, Spain, America, Lifestyle, Investment, Hotel Property Alerts) and will only be taking on about another 100 or so members for (each of) Spain, America and France Property Alerts in particular. Time to sign up? Read on…

Spain – The Edge Of Recovery

James Daniel, head of the IMF’s Spain mission, has authored a new report on Spain suggesting is it on the brink of recovery. ‘After six consecutive years of house price declines, especially intense in certain periods, everything points towards the end of this scenario drawing to a close, giving way, at the least, to price stability.’

‘Prices show signs of improvement after years of accelerating declines. Average national house prices rose 0.84 per cent quarter on quarter and are down just 1.7 per cent over 12 months. This is a big improvement on the double digit annualised declines last year. This is the first time in eight years that sales and prices have improved together. The market hasn’t seen this since the first quarter of 2006.’

‘However, the lack of new housing starts in recent years means the only new homes are those built during the boom and still for sale. A large share of them are in the hands of the financial institutions, being sold actively with price reductions. As this stock reduces, the relative weight of new home sales will decline to ever smaller quotas.’ At SPA, we have some buying checklists coming plus inspection trip visits to Marbella and Murcia and some more BMV deals.

US- Slowing Growth Update

According to the latest report from real estate data provider Clear Capital, we are seeing ‘slowing growth’ in the property market. In a clear reminder of our oft-repeated statement, ‘beware averages’, the report indicates that the annual price rise across the 50 major metro markets is 22.3 per cent but ‘there is some considerable variation depending on location…varied from a fall of 37 per cent to growth of 45 per cent.’ You need to look at micro-markets. In Cleveland, the best-performing zip code area is up 42.4 per cent, the worst is down 23.3 per cent.

More generally, ‘It’s no surprise that the spring buying season isn’t moving the needle this year. The rising price floor in the low tier sector of the market has squeezed investor returns, thereby removing a key demand segment. We don’t expect to see a large pop in prices through the summer buying season. It’s likely we’ll keep chugging along at our current pace, somewhere around one per cent quarterly gains for the rest of the year.’

‘Considering the number of key housing fundamentals that remain stressed, like millions of borrowers still underwater, high levels of student debt, potential borrowers with less than perfect credit, and a job market that is still recovering, we don’t expect a market with waning investor demand to withstand any eye-popping rates of growth. Although it’s not a quick fix to the larger housing problem, home price moderation is really a healthy move for the market overall.’

‘While some might be discouraged by a weak spring buying season, we are encouraged that price trends are finally calibrating back to pre-bubble norms. Despite other headwinds, moderating home prices will serve as the foundation to a more balanced market moving forward. Remember, we’re still in recovery mode which means deals exist. Market participants just need to look deeper. As softer gains continue to unfold, broad stroke investment approaches will prove less and less fruitful. As such, market participants who pinpoint investments will be better positioned for success.’ Interested in America? We may be testing a separate Florida service shortly. Let us know if this
interests you.

France – Prime Market Update

Knight Frank reports that buyers returning to the prime property sector in France. ‘Against the backdrop of the global recession, the Eurozone debt crisis and President Hollande’s austerity measures, France’s prime property market has faced considerable challenges in recent years. Nonetheless, a villa on the Côte d’Azur or a ski chalet in the Alps remain amongst the most popular investments for international second home buyers.’

‘With deflationary risks increasing in Europe, the European Central Bank is considering following the lead of the UK and the US by injecting a round of quantitative easing (QE) into the European economy. This will have the effect of driving down the euro and increasing the appetite for French property from non-Euro buyers.’

‘Where property is priced accurately interest is generated, viewings are arranged and sales are agreed. However, there are still far too many properties that are unrealistically priced and languish on the market due to a lack of realism on the part of some vendors and a lack of transparency in the marketplace. We are cautiously optimistic about the market.’ We have a visit to Paris coming up this weekend – feedback next week – and are about to introduce a new ‘Centre Parcs’ type deal near Paris. All at FPA!

All for now, other than to say email back telling us which services interest you and we will sign you up for free. See you again tomorrow.

admin@streetwisenews.com

The Bulletproof Clipboard

Have you ever felt the need for a bulletproof clipboard? No me neither but The Ballistic Clipboard from Impact Armor Technologies in the United States has been designed in response to requests from law enforcement agencies. It’s issued to traffic officers doing routine traffic stops and is both bullet and stab proof.

I tell the story for two reasons – firstly as a warning that there are probably better career moves than becoming a traffic cop in the United States!  But secondly, perhaps there’s an opportunity here. The tragic case of a Leeds school teacher who was stabbed in her classroom a few weeks ago, highlighted the dangers faced by people in seemingly ‘safe’ professions. In addition to teachers, I’m know  that social workers, health professionals and civil servants often risk assault by members of the public in the course of their work. Could there be an opportunity to create a range of items (like the clipboard) that double up as either a weapon or shield in the event of the worst happening?

Streetwise Property Alert 20th June 2014

Here we are again at the end of the week with some overseas property news and views….

Worldwide Update

Had a read through the Knight Frank Global House Price Index last night to check what’s happening where. Headline points? ‘Dubai topped the annual rankings, but prices rose by only 3.4 per cent in the first quarter. Croatia, Cyprus and Greece were the weakest-performing housing markets in the 12 months to March 2014. The US, Australia and Iceland now sit alongside several emerging markets in the top ten rankings for annual price growth. Fourteen countries recorded a decline in house prices year-on-year, 12 of these were in Europe.

‘For the first time since 2008 no single country tracked by the Global House Price Index has recorded an annual price fall in excess of 10 per cent. The bottom ten rankings reads like a geographical tour of Eastern and Southern Europe. House prices here, while still in decline, are now falling at a slower rate, even in the weakest housing markets such as Croatia, Cyprus and Greece. Singapore and Japan are the only non-European countries in the bottom 14 rankings. Cooling measures and tighter mortgage lending conditions have halted price growth in Singapore, whilst in Japan abenomics has yet to push house price growth into positive territory.’

‘We expect to see the index’s performance strengthen again in the second quarter. All eyes will remain on central banks, in particular the Federal Reserve, the Bank of England and the European Central Bank. The issue is not when interest rates rise but the speed and extent to which they do.

China’s Property Prices

We are at work on a BRIC report – Brazil, Russia, India and China – and note that a new study by Standard & Poor’s suggests that prices in China in 2013 rose some 11.5 per cent with some ‘top tier cities rising over 20 per cent in price last year’. However, the market seeks to have turned with year-on-year residential property sales to end Q1 2014 down 10 per cent compared to growth of 26.6 per cent over the same period last year. Even so, S&P states, ‘Property sales volume will rise 10 per cent in 2014 with stronger sales growth in the second half of the year due to price cuts from developers seeking to meet sales targets. Compressed margins will become a structural trend as tougher operating conditions prove most difficult for smaller developers.’ More to follow.

Spain’s Changing Market

An interesting article in OPP Connect draws our attention to the changing face of resorts in Spain. Let’s quote a little, ‘Costa Blanca estate agent Tony Barnes says that last year it sold more properties to non-European Union buyers, including those from China and Russia, than Spanish nationals and European expats. Wealthy Chinese and Russian buyers snapped up properties under the Spanish government’s ‘Golden Visa’ scheme offering residence with property worth more than €500,000.

‘While it is good to see movement in the property market, I have been concerned about the changing face of the popular resorts on the coast. For example, the Chinese have bought several properties on an urbanisation located just outside the town of Javea, and although they are typically purchased by an older person with a business-like aspect, within no time many occupants arrive. In some circumstances, it appears as though dozens of Chinese are sharing a property with only two or three bedrooms. Rubbish accumulates in the gardens, and there appears to be nobody taking responsibility for the upkeep of the properties, which lowers the tone of the urbanisation.’ Um, I think I will restrict my comments here to simply saying that buyers looking for a ‘home from home’ when buying overseas should do some careful research before progressing any purchase to ensure that the locality matches their personality and expectations.

All for now, see you soon!

Streetwise Property Alert 19th June 2014

Welcome to today’s email. We currently have a new service being tested for PCL (Prime Central London) investors – drop us a line if you are one – which includes Wednesday visits to key locations in London. These will run through to August, when I am away, and will resume for September at least until the weather turns. Meantime…

London Postcodes Analysis

London Central Portfolio (LCP), the specialist property fund and asset managers, have analysed transactional data in PCL’s 51 postcode sectors to reveal some interesting facts and figures. Let’s quote, ‘With pockets of non-prime properties located next to traditionally affluent areas and council estates running side by side charming stucco terraces, neighbouring postcodes have distinctly different appeal. LCP’s analysis has enabled them to pinpoint the postcode sectors which offer the best investment record, on the basis of best value for money combined with best growth history.’

‘Capital appreciation is the most important investment consideration in PCL as it is the largest contributor to total returns for residential investments. Indeed, a recent survey from Sotheby’s International Realty said that whilst location is the key focus for 36 per cent of affluent buyers, an almost equal number (34 per cent) are driven by investment returns.’

‘LCP have found that all but one of the top investment postcodes is located in Westminster. These postcodes are concentrated towards the east of Hyde Park in the Marylebone, Fitzrovia and Covent Garden postcode sectors. These are all areas which have gone through a significant gentrification process over the last 20 years. They benefit from Central London’s iconic traditional architecture and the growing desire to be right “in the action” and close to transport links. Although every property needs to be scrutinised on its merits individually; Fitzrovia, Marylebone and Bayswater have been top of our ‘buy’ list for some time.’ Those of you joining me in London next Wednesday will receive fuller details.

Crowdfunding – The Deadline

When we invited members to become shareholders in the Cheltenham JV, the introduction was substantially oversubscribed and we had to turn investors away, some at a late stage. One or two took that well, others less so. To avoid this happening again with the crowdfunding offer, can
I stress that funds need to be in by 30 June. If you are coming in on this 10 per cent per annum offer, paid monthly, with weekly updates, regular visits and the chance to invest as a shareholder in JV2, please ‘get a move on.’ (If I were 17, I’d insert a smiley face or similar here).

BTL – Some Advice

Catching up on my press reading, I note that a Cathy Colston, a successful HMO investor, has been interviewed in the Telegraph. Quoting, ‘HMOs are more complex and involve more input and time. I don’t think they are for part-time buy-to-let investors or beginners. But they do offer the best returns. Younger people are looking for quality accommodation, and it’s in short supply. These people are happy to share with their peers, but the property has to be right. I obtain a yield of 15 per cent across nine HMOs, which are in Bath, Cardiff and Bristol. I need to sleep at night. I’m mindful of the fact that interest rates will rise. I need a yield north of 10 per cent on everything I buy.’

‘My buy-to-let tips? Be clear on your strategy – are you investing to replace an income, for capital growth? Research which buy-to-let model will work best for you. Get educated, and invest time in learning. What funds do you have available and what borrowing can you get? The lending market is a very different place from 10 years ago. What time do you have? Are you looking for hands-off investments or will you be running your own business? Get a good team to work with: mortgage brokers, builders, solicitors and so on. Property can be a very lonely game and is increasingly regulated. Mistakes can be costly.’

‘Research your investment location: know your market, your customers (tenants) and any planning and licensing requirements. Pressure-test your investments against higher interest rates. Would you still have a positive cash flow? Identify opportunities to add value to all your investments. Benefits can be realised when and if you refinance. Most importantly, have a plan. What are you going to do, where, how, and what is your key driver? How will you finance your purchases and refurbishments, and what is your exit strategy?’ Food for thought.

PCL Lettings

Chesterton’s has a new report out on the prime lettings market in London. Key points? ‘One of the main issues the market is facing is the decline in stock availability of 22.5 per cent compared to Q1 last year, which is predominantly caused by the increase in numbers of landlords selling their properties to benefit from the high capital values at present. As a result, tenants no longer have the same degree of choice nor able to negotiate the rental prices.’

The Chestertons Prime London Rental Values Index recorded a fall of 1 per cent in the year to end-March 2014 although certain submarkets show significant variations such as Camden (-6.6 per cent) and Kensington (+4.3 per cent). The average weekly rent for the Index stood at £907 at the end of March. The highest average weekly rental values were achieved in St John’s Wood (£1,872), Knightsbridge/Belgravia (£1,806) and Mayfair (£1,677).’

‘Once the balance between supply and demand has reached healthier grounds, rents are expected to stabilise/increase across the board, with Chestertons forecasting a rental growth of 2 per cent for prime London. In terms of prime locations – Tower Hamlets is forecast to see the strongest growth in household numbers of +29,548 over the next five years.’

All for now, see you again soon – by the by, we have a free ‘impact investing’ report coming shortly for all members.

 

Special Spectacles

Most people who wear spectacles either end up wearing the same pair all the time or  spend a fortune on several different pairs. Japanese design group, Nendo, has come up with a third alternative. The companies spectacles design does away with screws, and uses magnets instead to hold the arms in place. The upshot of this is that arms become interchangeable, enabling owners to change the look, colour and style without buying a new pair of glasses.

I haven’t seen anything  like this in the UK yet, so maybe that could be something to look into. Thinking more broadly, are there other items which are typically worn, and which could be given a modular makeover like this? I’ve seen modular flip-flops in the past. Anything else?

www.nendo.jp

More Ethnic Specific Products

A little while ago, I wrote here about shaving products tailored specifically for black skin. That triggered an email from reader Kevin Sheeran. Here’s what he said…

“Interesting item in today’s newsletter about the shaving kit specifically for black guys. A few years ago I read about a woman who could not find a birthday card for her young son that had any black children’s faces on it, (like his) so she launched her own range to some success.

This chimed with me and I had the idea of ‘Band Aid’ style sticking plasters for the cuts and scrapes of people of black and Asian origin. After all, the traditional ‘pink’ one would stand out a mile on their skin.

Many folks laughed at me, so I took a look into the possibilities – only to discover some sharp cookie had literally just launched such a range and was getting all kinds of positive press.

There goes another fortune, I thought at the time. Ahh well, back to the day job.”

With regard to the ethnic sticking plasters, you can find out more here:

http://sticky-skin.weebly.com/about.html

And read more about what the Guardian said about them here:

http://www.theguardian.com/theguardian/2010/sep/26/plaster-matches brown-skin

Also, here’s the website about the ethnic minority greetings cards:

http://www.personalise.colorblindcards.com

So what other products might lend themselves to a version aimed at the non-white population.  The key of course is that a generic product doesn’t work optimally for the target market. It’s easy to see how this is the case for the products we’ve already talked about. But what else is there?  In addition, might there be opportunities to produce similarly tailored products for the Asian or Chinese market?