Streetwise Property Alert 26th March 2014

Many of you are interested in buying off-plan property overseas. Here, to end the week, are some words of advice from Peter Esders…

Research the development, the surrounding areas and the town itself.

It’s easy to do some initial desk research towards your due diligence. There is plenty of official and unofficial information out there for you to read from your computer at home. You can Google.com and Yahoo.com for the nearest town to source official and other websites. From these, you can uncover estate agents and letting agents and tourist offices etc. Wherever you are buying, the developer and their agents will usually say something like “prices here are going up by xx per cent a year”. See if local contacts agree; and particularly those who do not have a vested interest in saying so. If you are buying into a development, visit it rather than buying sight unseen. You should not really buy anything without seeing it. Even if the website, brochure and specifications all look good, you need to see the area for yourself. You may find, for example, that there is a huge patch of land between ‘your’ development and the sea. That’s likely to be filled in by the time the development is completed.

Looking for fast profits from capital growth?

Make sure you can sell the property onwards at completion. A developer or agent will often tell you that it is easy to sell the property on or around completion to someone else so that you only ever have to pay out for the deposit. This may be true – but equally, it may not be the case. Your solicitor – always employ a solicitor before signing anything – should check the contract to see that it is assignable as and when you want; and that there are no hidden-away restrictions. You should also research to see that the property will actually be in increasing demand on or around completion. There are always various ifs, buts and maybes than can occur between now and then. There may be many similar units coming to market at the same time. The development may be incomplete. The expected infrastructure may not have been completed. The low-cost airline may have stopped its regular flights. Work through the possible ‘what if?’ scenarios and be sure you can handle the worst case situation.

Do some due diligence on the developer and their agents.

Most are perfectly respectable and honest, although you should always bear in mind that they are trying to sell to you. So you can expect them to highlight the positives. You cannot expect them to showcase any negatives. But you should not have to listen to lies and half-truths. You can start by making various checks to see if they are well-known and established, are registered in the UK (so they are covered by UK legislation) and don’t generate any negative comments when you Google.com and Yahoo.com for them. You should also talk to them and follow through on what they say. Some common comments that often turn out to be incorrect are as follows. “There is no problem getting a non status mortgage” is often stated, but not put in writing, prior to you paying a deposit. Read the small print early on. “A new golf course/marina/other major attraction is to be built close by soon” is a favourite – but the development never gets built and the expected wave of tourists never arrives. Visit the local town hall!

Seeking long-term lettings and capital appreciation?

Be sure you can rent the property out after completion. The developer and their agents will tell you that you can easily rent that property out for most of the year. Few will put that in writing though or make any sort of guarantee. Of course the developer and the agent are selling the property so you need to check what they are saying is correct. If an estate agent in the UK told you you’d let a property easily, you’d check with local letting agents first. You need to do the same in an overseas market. If you are holding on beyond completion, number-crunch your finances as it may take several months to find a tenant. That’s especially likely if the development and infrastructure are incomplete or, vice versa, the development is complete and many similar units are available to rent. With a holiday let, you will do well to get a 60 per cent occupancy rate over the year. Number crunch your finances with three, four and five void months and/or 60, 50 and 40 per cent occupancy. Talk to other investors with comparable properties to see what they achieve.

Always get your own independent, professional advice.

Increasingly, developers offer you a complete package; a mortgage broker, a surveyor, a solicitor, and so on. All you have to do is to pay the deposit! Everything else is done for you and you can sell on completion and recoup your deposit and more besides. If only it were that straightforward and easy! If you bought a property in the UK, you would source your own mortgage via a broker and would have your own survey and valuation done. You would not rely on the seller of the property to provide this information. Nor should you overseas. Similarly, you would not use the seller’s solicitor (especially if they put 100’s of deals via the solicitor and you are only doing the one). You may hear comments such as “No, you don’t need an independent lawyer – everyone uses ours. It’s quicker and easier.” Your own English-speaking solicitor who is close to hand is a must. The developer or agents will tell you, for example, “Of course the property has planning permission”. Your solicitor will check!

More to come on off-plan buying and other ‘hot’ topics such as fractional ownership shortly. Do also let us know what topics most interest you, which countries, and so on.

Streetwise Property Alert 25th March 2014

Welcome to today’s email of news and views…

Latest BTL Scam

‘Scam’ may be too strong a word but, from emails received from members this week, a pattern is emerging. See if this rings any bells. You are offered a BTL unit at an excellent price, no need to do any due diligence, no need to use your own lawyer, no need to even visit (d’uh, d’uh, d’uh) – it’s a perfect armchair investment. All you have to do is pay some money…a reservation fee…some mortgage and legal fees etc, no more than a few thousand, and it’s all yours!

Now, here’s what seems to be happening – a survey is carried out (at your expense) and the report comes back at £10,000 to £20,000 below the stated priced. Oh dear. Well, I never. Can we have our money back – the reservation fee, the mortgage and legal fees etc. A deathly silence…

If you are offered a BTL deal here’s what you do (I feel I need to speak very slowly and loudly here). You read what’s sent to you. You do your own desk research, zoopla, google maps etc. You visit! Go and see it – talk to estate agents and letting agents locally. Take some advice. Do your due diligence. Have a lawyer in place. Everything stack up? Not too good to be true? Then you look at proceeding and not before…

Rents – Onwards & Upwards

Move With Us reports that nine of 11 UK regions are seeing rising rents – the national average advertised rent is now £923 per month, up by more than £20 on February 2013. Advertised rents in Scotland saw the biggest increase of 3.96 per cent on the year, with the average now at £695.

‘2014 is shaping up to be a good year for landlords with rents increasing in most regions. The Council of Mortgage Lenders (CML) recently announced that gross mortgage lending was an estimated £15.5 billion in January 2014, a third higher than the same time last year when it was £11.6 billion. It’s likely that many of these mortgages have been granted to buy to let investors as we have seen a growing trend for people investing in property instead of using low performing savings account.’

‘The best places for investors however, aren’t necessarily where average rents are the highest but rather, the places with the highest rental yields. This means that, for example, the high rents in Greater London may be deceiving from an investment point of view. Rental yields actually tend to be better in places where property prices are lower like the North East, and the Midlands,’ he explained.

‘Any aspiring buy to let landlords looking to invest in property should follow the golden rules of finding a place with a good rental yield that is in a nice area and is close to local amenities and transport links. Landlords should also check that the property can easily be upgraded to meet the legally required energy performance rating that will be introduced in 2016.’ Food for thought but, of course, let’s not forget capital appreciation is as much a factor for many investors as rental yield.

Newcastle, Sunderland & Durham

I’m familiar with the Newcastle, Sunderland, Durham market not least because I looked to buy an apartment there when my daughter, Sophie, went to Durham University in 2011. I’ve kept up my research ever since, visited often, and regularly check what is coming through the system – at present, some expensive units in Durham (close to University), some okay-ish apartments in Newcastle and (in our view) not very good units in Sunderland!

We are, from April, going to do a region-by-region report for would-be buy-to-let investors and I think we will start with this corner of the North-East where there seems to be a lot of supply coming through, some is rather good and much is rather bad from what we can see. If you are looking to buy here, drop us a line for a free report, out around 9 April. You will need to register to receive this.

All for now, see you soon.

Streetwise Property Alert 24th March 2014

Our latest update is in from Peter, a.k.a. Mr Mortgages. Email back to talk to him.

admin@streetwisenews.com

The Budget

Not much of interest for mortgages and property in the Budget except the Help to Buy scheme has been extended from 2017 to 2020. I personally think that once the government started interfering with the property market, they will not be able to withdraw, putting the element of risk on the taxpayer instead of indemnity insurance companies. (You have to ask yourself, “Why would the insurance companies not underwrite the percentage of lending above 75 per cent loan to value of a client’s mortgage”. They used to; clients were charged an insurance premium such as ‘mortgage indemnity guarantee premium’ or ‘high loan to value premium’. Could it be the risk factor do you think? ). The other changes in the budget included an attack on people buying in a company structure. This especially affects offshore purchasers for high value property in London as they will now pay stamp duty land tax at higher rates than before. The general view is that prices in London may dip a bit when this comes in but will recover quite quickly.

I suppose there is a significant benefit on the horizon when people can get at their ‘pension pots’ in 2015. I can see many disenchanted pension investors pulling funds out as soon as they get to 55 and investing in property, which will strengthen the property market at the same time as providing the government with tax revenue and pushing up the money supply in the economy. Additional capital and business incentives were announced and together with the improved economic forecasts suggest that ‘affordability’ will start to rise for the first time in several years, again good for the property sector making rents and mortgage payments more attainable.

Off Plan Caution

Are you considering buying new build apartments as ‘contracts off plan’ where they should be completed in a year or two’s time? Selling agents are promoting many new developments with nice glossy brochures and detailed models and even a demonstration suite kitted out on site. Most agents offer a professional attentive service where you are cocooned within a pleasant suite of offices to discuss your purchase. However, remember, they work for the developer, not you, and do not be afraid to haggle.

Also be aware that once a new build has been sold, it tends to lose value (the new build premium goes when completed as the property is now classed as secondhand, a bit like buying a new car). This can be offset by buying ‘off plan’ where the deal is a genuine discount on today’s prices with the hope that, over the time it takes to complete the build, there will be an increase in value. However, you need to be careful here, If a large percentage of the new build is being sold off plan then, when they all complete, those contract purchase prices will be registered at Land Registry and that would be the open market value at completion as far as surveyors are concerned.

On the mortgage front, there are still some lenders that will allow 5 per cent grifted deposit from the developer on new builds, so this could be incorporated in the pricing structure to enable mortgage percentage to fit price. In short, completion finance would most likely be available (subject to changes in interest rates and product criteria ) Think the potential investment through and do your research of comparable values in the site post code and within ¼, ½ and mile radius, easy to take a look at Zoopla and Rightmove. Then assess the risk, do your homework. If, for some reason, suitable mortgage finance is not available to you at the time of completion (e.g. your circumstances change or no mortgage products fit) you could lose not only your deposit and reservation fee but the developer could sue you for breach of contract for the balance of price (very stressful, unless you can get a clause in the contract for sale that says, ‘subject to suitable finance being available’ to you – which is unlikely the vendor will allow. In addition, make sure there is a ‘long stop’ clause in the contract, this basically says that if the developer fails to complete the development within (say) six months of the target date, they will be in breach of contract and must pay you back you deposit and reservation fees with interest. (Again. many developers try to avoid having this in the contract).

Developers often offer cashbacks and other incentives (such as white goods, stamp duty and legal fees gifted deposits etc.) However all lenders now require a CML declaration form (provided by the Council of Mortgage Lenders) of all incentives and may deduct the aggregate value of these incentives from the price when calculating their maximum lending (loan to value). Some lenders will allow white goods, legal fees and stamp duty paid by the developer, but not all.

Generally, investors for new build, especially apartments, aim to get at least 15 to 25 per cent off the listed price, especially if they are registering to buy more than one apartment. It would be wise to instruct a major professional RICS surveyor firm to do a ‘desk top’ valuation on the basis of ‘if the apartment completed today, what would be the open market value?’ This will cost you a valuation fee, but you would then have a clear idea of value verses price before you commit and could save you thousands or confirm you have a good prospect.

Don’t get me wrong, I am not trashing new build apartments and the buying off plan process, there can be some good deals in a rising market, but there is much to consider and more risk involved than buying built property. When our existing clients are looking to buy, new or built properties, we carry out initial research for them and provide our ‘view’ at no cost (This is not indemnified professional advice under our indemnity insurance protection policy, but simply, from years of experience, our opinion. Some of our clients are re-mortgaging to release funds for their deposit on an off plan contract, having done their research of course. Next week, by the way, I will be looking at the buying at auction process.’

Want to talk to Peter? Email back and we will put you in touch.

admin@streetwisenews.com

Biggest…Fastest…Anythingest!

The Scoville Scale is what determines the spiciness of a pepper. A Jalapeño starts at 3,500 Scovilles and a Habanero starts at 100,000 Scovilles. I just read about a vodka that rates 100,000 Scovilles on the tasting scale which must be almost undrinkable. It’s easy to see why they made it though.

People are intrigued by extremes. They want to experience the biggest roller coaster, the fastest car, the hottest curry, the tallest building and yes….even the spiciest Vodka. It might not be a great experience but it’s something to tick off the list.

So here’s a question for you – is there anything in what you offer that you could attach an extreme label to like this? Or could you create an extreme version of what you do? I’ll leave you to think about it, while I do some work on the worlds most expensive book!

Streetwise Property Alert 13th March 2014

Welcome to today’s email…

Turkey- Who, What, Where?

We keep being asked the same question about Turkey – where are Brits buying? Recent figures from the Statistical Institute reveal the know-how. There were 1.1million property purchases in 2013 and about 1 per cent of these were by foreigners. Antalya saw the most overseas sales in 2013 at 5,548. Istanbul came next with 2,447 sales followed by Aydin at 1,112, Mulga at 1,053 and Mersin at 545.

Investors are looking at Istanbul. Julian Walker at Spot Blue, quoted in OPP Connect, says, ‘Buyers from the Gulf Co-operation Countries and the Middle East are purchasing in Istanbul. Everybody is buying property for an investment point of view. Thirty to forty years ago, people were not so conscious of this and the market has not grown as aggressively to make money. But today people are buying for a lifestyle purpose with an eye on investment.’ More to come? A show of hands please.

Upcoming New Service

I had a meeting with a financial whizz in London on Tuesday and it may be of interest to you if you are buying into the UK from overseas and want to know the best way to structure your purchase to minimise tax etc. Are you? Do you? Drop me a line and we will see if we can put you in touch with each other.

Weekly Currencies Review

The latest currencies review – sterling/euro – is due in from Peter Lavelle at Pure FX later today. If you’d like to receive it, and this is surely a must-read if you are exchanging currencies soon, please email back. We will send it on as soon as we receive it.

admin@streetwisenews.com

US – More Positives

Getting better – but a way to go yet! The latest report from Zillow offers more good news for the US property market; there are now 19.4 per cent of home owners in negative equity there; i.e. their mortgage is higher than the value of the property. That percentage has now fallen for seven quarters in succession. It was, at one point, close to 30 per cent.

‘We’ve reached an important milestone as negative equity has fallen below 20 per cent nationwide which has helped free up marginally more inventory and contribute to further stabilisation of the market. But a number of headwinds will prevent negative equity from falling at the kind of sustained, rapid pace we need before the market can completely return to normal, and it remains roughly four times what it is in a healthier market. High negative equity is just another sign of how distorted the market continues to be, and how far we still have to go on the road back to normal.’

All for now, see you on Friday.

Streetwise Property Alert 5th March 2014

Most of what we do here property-wise is done behind-the-scenes. Opportunities, small get-togethers, visits to sites etc – all are done without the free members knowing about it. That’s because we want to deliver the savviest members exactly what they want!

Take the recent example of a UK JV which was introduced to just 24 members. Here are the key facts…

A small development site of just 11 units.

£50,000 in.

12 to 15 month build-time.

50-50 profit share.

Estimated returns of some 28 per cent.

First refusal on investing in next project.

Of course, there’s lots more to it than that. Fact is, I’ve never seen so much clear and transparent documentation from a team that is as open and as detailed as I have ever met. In less than two weeks, nine members – each putting in £50,000 – have been taking up their places and we expect all of them to be through the system in the next week.

We will soon be repeating the process…

But we don’t want everyone to know about it!

You do, and here’s your chance…

If you might be interested in investing in the next UK JV, and have – this is very important – £50,000 to invest, drop me a line. We’ll then have a brief exchange of emails and hopefully add you to the waiting list for next time. It will then go quiet for a little while and we will – just as soon as we have another deal that’s not far off as promising as the first one (which really looks quite exceptional) – we’ll be in touch.

Reply now. Don’t miss out. As one of my colleagues said when one of the original 24 told us he did not have the funds to invest in this first JV, ‘A shame….this has been so popular…he’ll live to regret that.’ Make sure you don’t. Email today. Once we have the names of 24 serious investors with £50,000 each, we will close the list…

admin@streetwisenews.com

Streetwise Property Alert 4th March 2014

Welcome to today’s news and views …

Spain – ‘Stunning Villa’

Last week’s property introduction ‘Just in from Nic and straight out so at least one member will be happy…’ was taken within 24 hours; no more replies for that please!

Florida – The Reality

Wayne Levy, a registered real estate broker, is quoted in the media about the state of play in Florida. There are still bargains to be had although, across the board, prices are up. ‘If you’re looking to be on the water, in brand-new construction, for under $100,000 or $200,000, you’ll be happy you read this today because I just saved you $500 on a plane ticket!’

‘Last year we told people, ‘We’re starting to see increases in prices,’ and it has happened. Miami is almost back to where it was before the crash. Orlando is still very affordable, we sell a lot of condo/hotels there – they are great because for a client who wants to put their foot in the door, who is not ready to retire yet but wants to use it. Orlando condo/hotels work this way. An owner can leave the unit empty, use it themselves, or put it into the hotel management programme – let them rent it out for you and you get a cheque every month.’ Interested?

Email to find out more.

admin@streetwisenews.com

Winter Olympics – The Effects

Our friends at OPP Connect have an article out suggesting that France is the winner of ‘Property Gold’ following the Winter Olympics. They quote MGM agent Richard Deans – and yes, noted, an agent, who praises France ‘Lettings in our leaseback properties are at exceptionally high levels this season and inevitably there are a number of skiing families who want to stay in a place of their own next year, rather than pay rent. The sustained improvement in the exchange rate, with more than €1.2 to the pound, has combined with the UK’s brighter economic outlook to give would-be buyers the confidence to act now.’ We are at work on an article covering ski properties, leasebacks and leading ski resorts; email if you are looking to buy into these sectors.

Visit! Visit! Visit!

We’d always urge anyone buying property overseas to visit before parting with a single euro. Fact is, so many of these properties on offer in Spain are pitched cleverly to offer huge discounts (based on off-plan valuations from 2007), amidst lovely surroundings (based on a PDF full of artists’ impressions) and great services (based on what was expected back when the development was planned six years ago).

I’ve been sent a copy of (the key points of) the most recent census in Spain which suggests some 3.4m homes, about 15 per cent of all properties, I’d estimate – are empty and a further 500,000 are half-built and left as they are. Chatting to an agent in Spain this week, he estimated some ‘very popular’ resorts have on average about one-third of their units half-built or empty. Some resorts, from where we are sitting, have higher percentages. Those of you of a certain vintage will recall 1970’s movies, Carry On, Are You Being Served etc, where the characters visited the ‘Costa del Plonka’ (typically) and everything was half built, half staffed and half-cocked. It’s not that different these days on some of these resorts.

Property Databases

We now have access to two databases in Spain with what appear to be some excellent BMV deals. I am looking at a couple myself in Calpe. Are you looking to buy in Spain? Send us your main requirements and we will see what we can source for you.

Timing Is Key

I’ve been sent a copy and paste article by Laura Parsons at Torfx.com (if I should have acknowledged anyone else please email me and I will add a correction from you next time out). Some interesting points are made when it comes to transferring money to buy that property in France. Let’s quote, ‘While banks are able to transfer funds overseas, they usually add on transfer fees and commission whereas currency brokers will carry out the same transaction at no cost to you. Banks also rarely secure clients the best exchange rate available, and this can lead to them losing out on thousands of pounds.’

‘For example, when buying a property priced in euros the exchange rate you are able to secure can make a huge difference to how far your pounds will stretch. After the eurozone returned to growth in the second quarter of 2013, the euro strengthened considerably, resulting in a difference of seven pence per euro between its highest and lowest points across the year. While seven pence might not seem like much, when you’re transferring the kind of sum involved in a typical property purchase the right exchange rate can have a huge impact on your wallet. If your dream home costs €250,000 it would set you back £202,500 if you moved your money across at a rate of 81p/euro. However, if you made your transfer when the exchange rate was at 88p/euro that same house would cost you £220,000. That’s £17,500 more!’ Email for more details and how-to commentary.

All for now, as ever, feel free to email back.

admin@streetwisenews.com

Streetwise Property Alert 3rd March 2014

Welcome to the latest round-up of news and views…

BTL – Calculating The ROI

We’ve been talking to various BTL investors lately – they are testing a new service for us behind-the-scenes (more soon) – and it is interesting how investors seem to use different calculations to assess their ROI, return on investment. The basic measure that is quoted most widely is income divided by the investment multiplied by 100. So, if you have a basic BTL and the rent is £5,250 and the cost was £100,000, the yield is 5.25 per cent.

Of course, would-be investors will then talk about gross profits, net profits, mortgage borrowings, cash put in, extra costs incurred, void periods and so on. Personally, I’ve always taken the net profit at the end of each year and compared that to the cash that I put in in the first place; some of you, if I left it there, would then chide me for not mentioning that the property price, and therefore the equity in the investment, may have gone up or even down over the past year and that I should really compare the net profit against the cash/equity that is still in the investment; if I put in, say, 20 per cent cash at the outset, the net profit in relation to that may be quite good. But if I effectively have 40 per cent cash/equity in there, it may be less impressive and I could maybe do better elsewhere. An endless debate! More to come; we are just taking soundings from different correspondents – lots of different opinions – and will have an article soon for newcomers.

Brazil – 20 March Seminar

Some of you, who have already invested in Brazil, have asked if you can come along to the 20 March event. Yes, please do! It is a good chance to meet Adam and the team, get an update, compare notes with fellow investors – we always encourage new investors to chat to old investors – and have a drink with me before or after. Email for details.

admin@streetwisenews.com

Weekly Currencies Review

The latest currencies review – sterling/euro/US dollar – is in from Peter Lavelle at Pure FX. If you’d like to receive it, and this is surely a must-read if you are exchanging currencies soon, please email back. We will send it on.

admin@streetwisenews.com

Latest Introductions

Two for members today…

Tottenham – freehold house currently arranged as two flats and fully let. Estimated market value £530,000 – 10 per cent discount for quick sale – cash buyer preferred.

Yorkshire – freehold block of 10 modern apartments. Individual break-up value of circa £650k from RICS report. Fully let. Quick sale required at £550k.

2 per cent finder’s fees required on both. Email for details. Please, no daydreamers.

admin@streetwisenews.com

London 500k Reminder

If you are replying to the 70-30 JV opportunities introduction in London, please do make sure that you have £500k. This key criterion seems to be causing some confusion with some members as we have had a stream of replies this week beginning along the lines of ‘I don’t have £500k or anything like it but would like to get involved.’ Apologies -you can’t.

London – PCL Overveiw

Strutt & Parker’s quarterly report covering PCL, Chelsea, Kensington, Fulham, Notting Hill, Knightsbridge and Belgravia, shows sales and rentals are rising. ‘We have seen Chelsea, South Kensington and Fulham assemble the most diverse spectrum of international buyers, while Knightsbridge is highly attractive to those from the Middle East. Kensington & Notting Hill has changed from being a more domestic market to an overseas hotspot. South Kensington and Fulham also saw an increase in transactions values compared to 2012 (14.5 per cent) which is likely due to selling the largest quantity of flats since the peak in 2006.’

‘The lettings market has proved equally buoyant. There were 13,752 property lets agreed in PCL during 2013, representing an 11.6 per cent increase on 2012 and surpassing the peak of 2009 by 8.2 per cent. The largest change was seen in the Knightsbridge & Belgravia submarket where house lettings increased by nearly 32 per cent compared to 2012.Lateral apartments and small family houses continue to be the properties of choice.’ More to come. We have a 12-page report coming for those serious investors looking to buy here; email for it.

All for now, as ever, feel free to email back.

admin@streetwisenews.com

 

Streetwise Property Alert 28th February 2014

Welcome to the latest round-up of news and views – and don’t forget to read those IPA and UKPA PDF newsletters over to the right…

Florida – A View

Agent Jerry Barker, talking to A Place In The Sun, says that confidence is returning to Florida. ‘There hasn’t been any significant building or real investment in the holiday property market since 2006 and this has supported a steady rental income for the owners of second homes around Disney and the theme parks. However, the developers returned to Orlando in 2013 and they are building new style resorts which are going to change the long-term vacation rental market.’

‘These new style plans include multi-million dollar water parks, bigger club houses, more leisure facilities and on site attractions all of which will be highly attractive to the 50 million plus holidaymakers who make the annual pilgrimage to Orlando. When it comes to the holiday home market you have to move with the times’

‘The new developments are in the same catchment area as the current villas but they have the trump card of more facilities and new furnishings. They are going to be tough competition for existing rental owners. They will draw business away and drive rental prices down in older properties as owners compete.’ Looking to invest in these units? Email back – a sufficient show of hands will secure a long article-short report and, possibly, a heavily subsidised visit.  admin@streetwisenews.com

Spain – Time To Buy?

Richard Way, Editor at The Overseas Guides Company, offers a heads up for would-be buyers in Spain, ‘It’s the turn of the British buyer to return to the overseas market in force – especially as the pound is expected to maintain and possibly gain value in coming months against the euro. Average property prices are expected to bottom out in Spain this year, but don’t expect growth to necessarily follow, as Spain’s depressed economy and oversupply of housing stock will hinder any upward pressure.’

‘That said, in the most sought-after areas of the Costa del Sol, Costa Blanca, Murcia, Costa Brava and Mallorca, prices have already stopped falling and in some cases are rising year-on-year. Buyers should have realistic expectations and recognise that market conditions have been built into many prices, so there is little point expecting to have an offer that is, for example, 30 per cent below the asking price accepted on a prime property.’ Well said!

BMV Holiday Homes

Isn’t it time you bagged a BMV bargain in Spain? Read on…

3 x NEW Spanish properties have just become available for purchase on a unique NO deposit, NO credit check, NO mortgage payment plans.

How It Works

We have included the below bullet points to give more information and an overview of how this process works, the costs etc.

How do these deals work? Much like a lease agreement you would get from a garage on a new or used car, you would first agree a price and term. You would then pay the agreed monthly payment over the agreed term and at the end of the term you own the car. It’s almost identical. The main benefits are you don’t need to put a deposit down and don’t need to pass a credit check.

What are the main benefits? – Apart form NO credit check and NO deposit, you agree and secure a price at the front end. This means that you will benefit from all capital appreciation over the term. Not only will you be paying the agreed loan off, but unlike a car, the asset is actually an appreciating one! The market appears to be at or towards the bottom and is on the rise again in some places!

What if I do not keep up repayments? The current owner keep the property in his/her name and the contract becomes void and you lose all monthly payments made to that date.

What are the fees? The fees vary dependent on the deal, but generally are circa £5,000 – £7,500 per deal.

What other fees are there to pay? The only other fees to pay are the legal fees to the solicitor who is drawing up the legal agreement between the owner and you. These are circa £700 per deal and we will always use a solicitor based in the country the property is in (for obvious reasons)

Mar De Crystal, Ribera Beach

Anyone can buy

No mortgage needed

All you pay are fees and legals

Monthly mortgage payments £422/507 euros

7 year mortgage / term

2 bedrooms

Fully furnished apartment

Communal pool

Located in Mar de Cristal on the Mar Menor Sea. The apartment comprises two, good-sized bedrooms with built-in wardrobes, one bathroom, fully equipped kitchen with separate utility area and a spacious lounge/diner. The kitchen is equipped with all modern appliances which include ceramic hob, oven, fridge/freezer, microwave and washing machine. The apartment also has air conditioning and a good size balcony. The complex has a good sized communal pool with children’s pool and is just a short walk to the blue flag beaches of the Mar Menor.

Beach: beautiful fine sandy beaches.

Promenade: long palm tree lined beach front.

Town centre: small and very Spanish with narrow streets.

Market: large Wednesday morning.

Boat Trip: B&F Ferry operates all year round across to the La Manga Strip.

Almeria, Spain

4 bedrooms, 4 bathrooms

No mortgage required

Anyone can buy

Furnished

15 year payment plan

250,000 euros over 10 years

1388 Euros per month

This huge villa was built by the owner with the concept that all the rooms would be of extremely large proportions and the bedrooms would all lead to/from the dining room (6 metres x 6metres) and that all the bedrooms would be of roughly equal size (4 metres x 4 metres) and all have en-suites. The kitchen also leads of the dining room and is fully fitted with pine doors to the units The lounge is on the first floor and is the same size as the dining room. The dinng room and master bedroom have double doors that lead into the roofed porch which in turn leads to a tiled patio. Views down the valley to the pueblo of Albanchez are exceptional. Stands in 8,000 square metres.

Villanueva de San Juan

5 bedrooms (3 en-suite)

4 bathrooms

Swimming pool and garden

£180,000 spread over 10 years

£1,500 per month

Anyone can buy

No mortgage needed

Many uses, why not set up a B+B?

Great location

300 days of sunshine

Large living room with wood burning stove, large kitchen/ dining with original beams. Five bedrooms (three en-suite) with original beams, large bathroom. Gorgeous garden with swimming pool and stable block. This beautiful townhouse is situated in the lovely village of Villanueva de San Juan (pop. 1400) in the Sierra Sur – one of the most beautiful areas in Spain and already attracting walkers, nature lovers etc. It is also centrally situated on the Malaga/Seville/Cadiz borders with easy access to the cities of Seville, Malaga, Cadiz, Granada, Cordoba, Osuna, Moron de la Frontera, Olvera, Antequera and magnificent Ronda – most roughly within one hour drive The house itself sits in a small attractive square 100 yards from the centre of the village. It is an ideal family house, 200 years old and has been beautifully restored.

Email for details and/or to ‘go on the list’ for future introductions. admin@streetwisenews.com

France – FNAIM Review

France’s national association of estate agents has issued its annual review of the property market there and reports that sales and prices fell through 2013; prices outside of Paris, for example, fell by some 3 per cent. The biggest falls in prices were seen in Franche-Comté (-6 per cent), Brittany (-5.7 per cent) and Languedoc-Roussillon (-5.3 per cent). Price risers? Look at Aquitaine (+0.2 per cent) and Nord Pas-de-Calais (+0.1 per cent). In summary? ‘Neither buyers nor seller had an appetite to enter the market, with a weakness in both the number of properties being offered for sale and in the level of demand.’

France’s Brit – Friendly Hotspots

A recent report by the notaires reveals the most popular areas with international buyers. The department with the highest proportion of non-resident buyers is the Alpes-Maritimes (12 per cent), followed by the Creuse (11 per cent) and Dordogne (10 per cent). Some 70 per cent of foreign buyers already live in France and more than 30 per cent of non-resident buyers are French expatriates. Overall, for 2009-2013, non-resident foreigners accounted for some 2 per cent of buyers. Food for thought.

All for now, other than to remind you that we have a free seminar – Investing In Brazil – in London on the evening of 20 March. Do email back for more information!

admin@streetwisenews.com

Streetwise Property Alert 27th February 2014

Welcome to today’s email of news and views. It’s a brief one as I’ve just got back from visiting a student accommodation site with some of you – details still available for the general membership – and am about to set off to visit the JV site, 50-50 profit share, 28 per cent plus profits! I think I’d better say no more replies for that please. Meantime…

Well Done Members!

We ran an introduction for Croydon units to the general membership before Christmas and these were all taken – well done to those who bought in! According to the local paper there, ‘Estate agents have said property prices in Croydon are “spiralling out of control” in the London property boom. ‘

Why? ‘Interest in buying a property in Croydon is high especially with the impending arrival of Westfield and Hammerson to the town centre as part of a £1bn redevelopment. According to statistics from property website Rightmove, an average house price in Croydon is £344,715 compared to £294,058 this time last year.’

Can we source more stock here? Yes, but we are not going to introduce it to the general membership as we get swamped with replies from those who, for one reason or another, are never going to progress to purchase. If you are seriously interested in Croydon – and you have funding in place now – do drop us a line and we can discuss requirements.

Property Market Update

The latest figures from the Office of National Statistics show that year-on-year, property prices have increased across-the-board – 5.7 per cent in England, 4.8 per cent in Wales, 0.5 per cent in Scotland and 4.8 per cent in Northern Ireland. Also highlighted as seeing strong growth are the East of England, up 4.6 per cent, and the West Midlands,
up 4.3 per cent.

‘There’s certainly an infectious confidence bubbling around the marketplace, with many more aspiring buyers coming into the market. With solid growth in employment, record low mortgage rates and easing credit conditions, the property market is going from strength to strength. First time buyers have been spurred to action by cheaper rates, a boost in the available higher loan to value mortgages and government support in the form of the Help to Buy scheme. However, ultimately, a durable, successful property market requires the government to focus more on new house building in order to increase supply levels and keep up with rising demand.’

London – More News

Of course, as we always say here, an ‘average’ can mask a range of performances. Peter Rollings, chief executive officer of Marsh & Parsons, the agents in London, picks up on the Office of National Statistics figures and draws attention to London, ‘Like chinks of sunlight, house price growth is breaking out across the whole country; however the picture remains gloomier in Scotland and Wales where property prices are yet to surpass the pre-financial crisis peak of January 2008.’

‘The London property market is burning the brightest, with a 12.3 per cent annual house price increase in the capital hugely eclipsing the rate of growth witnessed elsewhere in the UK. In Prime London, the growth is even higher. We saw the average value of two bedroom properties rise by nearly £100,000 during 2013, following a 17 per cent annual growth. Across the capital, the ratio of supply and demand remains out of kilter, which is helping to push prices upwards.’

New BTL Bank

Working from a press release, we note, ‘A new challenger bank has launched with a promise to provide ‘straightforward and competitive’ savings and loans. Paragon Bank, part of the FTSE 250 Paragon Group – a buy-to-let mortgage specialist – has been granted a banking licence by the Prudential Regulation Authority.’ The bank will be headed by Richard Doe, who was at ING Direct UK. He says, ‘Paragon Bank will bring choice and customer focus to the UK banking market, by providing consumers with straightforward, competitive products that are transparent, easy to understand and manage. Our aim is to establish it as a trusted banking partner for our customers and business partners.’ More to come as we get it.

All for now, see you again soon.