Streetwise Property Alert 27th August 2013

Welcome to today’s email of news and views…

BTL Mortgage Update

Teachers Building Society has made changes to the criteria on its buy-to-let products. The rental calculation has been changed to 125 per cent of the mortgage payment at 4.99 per cent. It was previously 125 per cent at 5.74 per cent.

The restriction on the maximum number of mortgaged properties in a landlord’s portfolio has been moved from three to eight.

There is also a reduction to minimum earned income requirements for buy-to-let products to just £15,000 per annum. As always, do talk to a broker first. We can introduce you to brokers if you do not have one at the moment.

Best BTL Locations?

New research by Move with Us and reveals their top 10 BTL locations – based on those locations that deliver the highest gross yields.

B7 (Birmingham), 10.6 per cent

TN28 (Kent), 10.5 per cent

L14 (Merseyside), 9.6 per cent

GU6 (Surrey), 9.5 per cent

TS1 (Middlesbrough), 9.2 per cent

B35 (Birmingham), 9.2 per cent

L4 (Liverpool), 9.1 per cent

RH4 (Surrey), 9.1 per cent

B18 (Birmingham), 8.7 per cent

EN8 (Hertfordshire), 8.7 per cent

Worth mentioning, of course, is that yield is only one criterion for savvy BTL investors. And a generic gross figure can be quite different from a specific net figure. The only yield figure that is is of any relevance is your own. Still, food for thought…

Wind Farm Impact

Had a pizza with my wife in a restaurant last night. At the end, the waiter presented us with two coffees. He then hurried back with a look of alarm on his face. He had forgotten to warn us they were hot drinks which, apparently, he has to do every time he serves ‘anything hot’. (‘That pizza is hot’, the garlic bread is hot…’ etc). Madness.

I thought of that this morning when I read that the government has commissioned a report to assess whether wind farms affect local property prices or not. It’s really stating the obvious – would you buy a property near a wind farm? No? Then there’s the answer – it affects property prices.

Frontier Economics is to examine the impact of a range of technologies, including onshore and offshore wind farms, shale gas, anaerobic digestion plants, overhead power lines, coal, gas, nuclear and biomass power stations and coal mines on local property markets. Clearly, these will all impact although, to be fair, it will be interesting to see by how much in hard cash terms. More to follow.

All for now – see you again soon.

Free Documents And Templates

When you start out in business, you’re often doing lots of things for the first time…creating forms, writing standard letters, producing contracts… that kind of thing. It can take a lot of time and effort. A trip to a site I discovered last week could cut out a lot of the work. is a site featuring thousands of free printable documents and templates.

The site is American based, so not everything will be applicable to the UK, but there’s certainly plenty that are.  Examples of what you’ll find on the site include:

* Business Cards
* Fax Cover Sheets
* Stationery
* Cash Receipts
* Time Sheets
* Invoice Templates
* Business Form Templates
* Fax Cover Sheets
* CV Templates
* Sample Resignation Letters
* Sample Cover Letters
* Thank You Letters
* Letters of Recommendation
* Contract Templates

Definitely worth a look for anyone in business.

Streetwise Property Alert 15th August 2013

Welcome to today’s email…

Risk-Reward Alert

Our friend David Burgess at The Hotel Investment Company makes some interesting comments about risks and rewards. Here’s what he says, ‘Many investors want the biggest possible yield; 15 per cent, 20 per cent or more. Fewer want the 5 per cents and 6 per cents that are often offered in the UK; from buy-to-let, student accommodation and hotels etc. It’s just not enough!’

‘The problem is that, to generate yields of close to 20 per cent or more, the investments – however well they are dressed up and presented as safe and secure – have to have an element of higher-risk about them. Perhaps developers are paying over-the-top for seed capital. Maybe a ‘guarantee’ is added to make the deal even more attractive.’

‘You need to look closely at these higher figures, do your due diligence and take professional advice before investing and accept that, by and large, these are speculative investments where you might lose all of your money. That’s what higher-risk means!’ More to come.

Insurance Cover Reminder

Make certain you have sufficient contents insurance cover – do a room-by-room survey for yourself. According to Sainsbury Home Insurance’s analysis of loss adjusters’ data, the cost of replacing the contents of the average British home, in the event of a fire or other major disaster, is £44,500.

Sainsbury Home Insurance advises totting up, on a room-by-room basis, what it would cost to replace belongings. Always consider accidental damage cover and make sure it extends to soft furnishings. Note: not all polices cover damage made by pets – it’s important to check you are covered if relevant.

Flat screen televisions, DVD players, computers and laptops are high-risk items that are easy targets for thieves. Mark them with your name and postcode using an invisible ink pen that shows up under ultra-violet light. Reminder: one of the most common causes of disappointment with insurance is to find that you’re not covered for something you thought was in your policy. Check. Not all policies provide accidental cover for soft furnishings, including carpets, as standard.

Council Tax Tip

This one’s worth an occasional mention given the steady-ish stream of emails received on the topic. Check whether your property is in the correct council tax band – go to (or in Scotland). It’s a little-known fact that some neighbouring properties are often in different bands. It’s worth checking as you could get repayments for as long as you have owned the property.

In 1991, properties were given ‘drive-by’ valuations – i.e. valuers just drove by in a car – and, as such, some properties have ended up in the wrong bands and home-owners may be paying more than they should. (But note, there is a vice versa too – you may be paying less).

You can compare your property’s banding with neighbouring properties via the council tax list at the Valuation Office Agency’s website at or, for Scotland, the Scottish Assessors Association on Just enter your postcode and house number for the banding; then do the same with neighbouring property numbers. See what the properties were worth 1991; go to and use the house price calculator. If relevant, then contact the Valuation Office etc.

All for now, see you tomorrow.

Upcycling Opportunity

I was reading about a business run by Scott Hamlin in Portland Oregon, and wondered how many other people might be able to cash in on something like this.

Hamlin’s company, Looptworks buys up  end-of-line, unwanted fabric from warehouses in Asia which is destined for landfill or the incinerator. It then turns it into shirts, skirts, laptop sleeves and backpacks. The company is very much for profit, but has a strong environmental ethos.

Any enterprise that has a positive environmental impact will be well received by prospective customers and the media. Upcycling (converting waste materials or useless products into new materials or products of better quality) is environmentally friendly and can be highly profitable if done well. Are there upcycling opportunities in your sphere of expertise? Do you know of any waste materials that could form the basis of a new upcycling opportunity?

Streetwise Property Alert 21st June

Have you received our monthly currencies review? It’s essential reading if you are exchanging currencies soon. Email back and we will send it to you. Meantime…

Spain – Lift Off?

Over in the US, the New York Times reports that ‘Large investment firms have spent billions of dollars over the last year buying homes in some of the nation’s most depressed markets. The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out.’ There are many pundits who think – hope – that the same may be about to happen in Spain and that this will be the turnaround trigger.

For example, we note one story – of many – that ‘A planned sale by Sareb, the Spanish state-organised bad bank, of a portfolio of property homes, mostly in the regions of Andalucia and Valencia, has attracted interest from a host of private equity buyers. These are understood to include the US funds Apollo, Lone Star and Blackstone. It seems like the moment when it starts to happen. The flow of deals has been zero so far, but this should be the opening of the doors for a lot of transactions.’ We are familiar with agents and others who whistle loudly in the dark but there is a growing sense that there may be some big sales coming.

London – The Way Ahead

In London, we note that Mayor Boris Johnson sets out that, as the population will reach 10 million by 2030, 400,000 new homes are needed in the next 10 years. Is it going to happen? Hard to see.

Helen Evans, chief executive of the Network Housing Group, one of the largest housing associations in London, calls it well, ‘Affordability in London is no longer just an issue for the unemployed or minimum wage workers, it is a problem for the majority of young professionals and working families who are dealing with house prices rising at 3 to 4 per cent annually but pay packets in London shrinking by 3.9 per cent over the last five years.’

Supply-demand-price – you cannot beat the basic economic principles; over at London Property Alerts we’re looking at the 16 hottest locations over the next five to 10 years. Sign up to London Property Alerts to find out more.

Australia – Hotspotting

We cover down under locations; Australia is very popular. Peter Koulizos, property lecturer and author, aka, makes some interesting points about hotspotting. Let’s quote. ‘I have sourced data from the ABS to help determine how each of the capital city markets has performed in the five years from March 2008 to March 2013. Sydney – 15.1 per cent. Melbourne – 16.1 per cent. Brisbane – 0.0 per cent. Adelaide – 5.3 per cent. Perth – 6.4 per cent. Hobart – 3.2 per cent. Canberra – 15.0 per cent. Darwin – 40.7 per cent.’

‘However, this doesn’t mean that every suburb within these capital cities have performed poorly. I have used data from RP Data to compile the list below which highlights just a few suburbs from each of the five major capital cities which have performed relatively well over this five year period. Sydney (15.1 per cent). Arncliffe – 35.3 per cent. Campsie – 34.8 per cent. Ashfield – 31.4 per cent. Marrickville – 31.0 per cent. Can you see a common theme in these outperforming suburbs? It’s their location. All of the suburbs above are relatively close to facilities (CBD) or near water (beach or river). Suburbs in these types of locations (especially those close to the CBD) tend to do well in almost any market as this is where the demand for property, relative to supply, is the greatest.’ Good advice.

All for now. See you over the weekend with the latest property introductions.

Currencies Update


Pound falls on retail sales, BoE pessimism

Poor old pound! Sterling endured fresh losses against the euro and US dollar this week, taking the pound to its lowest point against the greenback since last June. This is down to falling retail sales and the Bank of England’s (BoE) bleak assessment of the UK economic outlook.

To start with, retail sales fell –0.6 per cent in January according to the Office for National Statistics, far worse than forecasts for +0.5 per cent growth. Insofar as the UK economy is driven by domestic spending, this cuts the odds for strong growth in early 2013. The data therefore sent the pound lower.

Secondly, Bank of England governor Mervyn King painted a bleak picture of the UK’s economic outlook last week, when he spoke at the bank’s Quarterly Inflation Report. King told journalists that UK inflation would continue above the BoE’s 2.0 per cent target, reaching as high as 3.0 per cent in the summer from 2.7 per cent now. He also played down the prospects for economic growth, predicting that UK output would only return to its pre-financial crisis peak in 2015. This means the recovery will have taken seven full years. Insofar as neither forecast suggests a thriving UK economy, King’s testimony sent the pound lower last week too.

What’s set to happen to the pound next? Looking ahead, I think sterling will continue to lose out against both the euro and US dollar. In part, this is because Mervyn King’s testimony last week was a forward-looking indicator. This means it told us what’s going to happen to the UK economy in the future. And, if the Bank of England governor is right, that’s nothing too upbeat. Second, there’s little denying the feeling that luck is against sterling at the moment. For instance, if you type ‘UK pound’ into Google Finance, you’ll find a range of articles talking about how the pound is a currency to sell, it has strong downward momentum, and so on. As such sentiments can be self-perpetuating, the pound will continue to fall. It’d take either a sudden turnaround in the UK economy, or a relapse of the Eurozone debt crisis, to change that.


Euro on pause as Eurozone shrinks –0.6 per cent in Q4

Elsewhere, the euro was all-but unchanged against the US dollar this week, as the Eurozone’s recession deepened at the end of last year. The Eurozone shrank –0.6 per cent in the last three months of 2012, the deepest contraction since the recession started in Q2. In particular, it’s notable that Germany, the Eurozone’s powerhouse, shrank –0.6 per cent last quarter too. This suggests it’s no longer immune to the continent-wide slowdown.

What’s going to happen to the euro next? I think the euro’s next move will be higher against both the pound and US dollar. In short, this is because the common currency didn’t really lose out against the pound or greenback last week, in spite of the deepening recession. I mean, if the UK entered a triple-dip recession, you can be sure it would spark widespread sterling losses. Yet just as sentiment is against the pound this year, so it seems to be with the euro. And if a deepening recession isn’t enough to send the euro lower, well, it need only take a little bit of good news to send it higher.

US Dollar

Talk of ‘currency wars’ could cause US dollar strength

Last of all, I think there’s potential for the US dollar to gain in the short term against the pound if not the euro. This is because the failure of the G20 to stem talk of ‘currency wars’ over the weekend will add to global uncertainty. This favours the greenback.

Meeting in Moscow over the weekend, the leaders of the globe’s twenty largest economies were supposed to allay fears of worldwide ‘currency wars’. In case you don’t know, this is where individual countries fight to lower their exchange rate, and so gain a competitive advantage over each other.

In particular, Japan has been accused of currency aggression in recent weeks, as it promises to print unlimited quantities of yen. However, given the differences that divide the G20, it proved impossible to agree on anything more than generalities in Moscow. A promise among member countries that ‘we will not target our exchange rates for competitive purposes’ amounts to very little. Hence, talk of global currency wars is likely to continue. That then will favour the greenback, as the biggest winner in times of global uncertainty.

Find Out More

So, sentiment is against sterling and with the euro, while talk of currency war will lead to more volatile exchange rates. To find out how all this will impact your foreign exchange transactions, feel free to visit us at foreign exchange specialists Pure FX, email or call +44 (0) 1494 671800. We’d be delighted to give you an in-depth response to your query.

Latest Currencies Review

Welcome to the Pure FX account of the latest changes in the foreign exchange rates. This is intended as a brief guide to movements in the exchange rates this week to help put you in the best position for when you exchange currencies.

UK Pound

Pound slides as UK contracts –0.3 per cent in Q4

Poor old sterling! The UK pound shed another two cents against the euro last week, taking it to its lowest point against the common currency since December 9th 2011, as the UK economy contracts in Q4.

The UK shrank –0.3 per cent between October and December last year, more than forecasts for –0.1 per cent, chiefly as North Sea oil production fell. Planned maintenance on ‘Buzzard’, the North Sea’s biggest oil field, overran by two months, knocking –0.2 per cent from GDP according to the Office for National Statistics (ONS). However, even without this, the UK would still have shrunk –0.1 per cent in Q4.

What’s going to happen next?

This now raises the possibility that the UK will re-enter recession, if the economy also shrinks between January and March this year (a recession is officially defined as two consecutive quarters of contraction).


Euro rises as banks repay LTRO loans early

Elsewhere, the euro jumped against not just sterling but the US dollar this week as the Eurozone’s banks pay back an unexpectedly large chunk of their loans.

This month, 278 Eurozone banks will pay back €137.2bn lent to them by the European Central Bank in December 2011, as part of the ECB’s Long Term Refinancing Operation (LTRO). This beats out forecasts that the banks will repay just €84.0bn in January, and so signals the Eurozone’s financial system is in far better shape than expected.

What’s going to happen next?

Though this news is upbeat, it’s strictly related to the financial system, and so has little bearing on the real economy. In this respect, the Eurozone is still in deep recession, which will limit the euro’s gains going ahead.

US Dollar

Greenback shaped by events elsewhere but green shoots lift US

Last but not least, the greenback gained against the pound but lost against the euro last week as we’d expect from events in the UK and Eurozone. This means the markets all but ignored the brightening economic outlook in the US.

For instance, last month the number of new construction projects hit a 54-month high in the US, of 954 thousand year on year. This means there are 37.0 per cent more construction projects underway now than in December 2011. Meanwhile, Markit’s US manufacturing PMI hit 56.1 in December. This is miles above the 50.0 point that signals growth and so signals a sector enjoying rapid expansion.

What’s going to happen next?

Looking ahead, this good news could cause US dollar weakness, as it contributes to an upbeat global mood and hence risk appetite. (As the global reserve currency, the greenback benefits most when the mood is downbeat, and investors want a safe haven).

Coming Up

Here’s our calendar of the big economic releases that could affect the exchange rates this week.

Wed 30th 13.30 – US GDP (Q4)

Wed 30th 19.15 – US Federal Reserve interest rate decision

Fri 1st 08.58 – Eurozone manufacturing PMI (Jan)

Fri 1st 09.28 – UK manufacturing PMI (Jan)

Fri 1st 10.00 – Eurozone unemployment rate (Dec)

Fri 1st 13.30 – US non-farm payrolls (Jan)

Fri 1st 13.58 – US manufacturing PMI (Jan)

Find out more

With the UK economy flat-lining, and confidence in the Eurozone rising, the pound could yet fall further. To find out how this will impact your foreign exchange transactions, feel free to visit us at foreign exchange specialists Pure FX, email or call +44 (0) 1494 671800. We’d be delighted to give you an in-depth response to your query.

Capital Growth Hotspots

New research from The Bank of Scotland reveals which cities outside of London have seen the biggest price rises, 2002 to 2012. Do you have investments in these hotspots?

Aberdeen 94 per cent

Inverness, 81 per cent

Bradford, 77 per cent

Dundee, 73 per cent

Perth, 70 per cent

Hull, 68 per cent

Carlisle, 65 per cent

Durham, 65 per cent

Swansea, 58 per cent

Stoke on Trent, 58 per cent

Clearly, if you are a BTL investor you do need to have at least one eye on capital growth – if you had, for example, a BTL investment in Belfast from 202 to 2012 you’d have seen growth of just 3 per cent over that time.

BTL Mortgage News

Cambridge Building Society has reduced the rates across its buy-to-let range by up to 0.80 per cent. Quoting the press release, the five-year fixed rate at 5.49 per cent is being cut by 0.80 per cent to 4.69 per cent and the application fee drops 0.5 per cent from 1.5 per cent to 1 per cent, plus £199.

The two-year fixed rate of 4.49 per cent is being cut by 0.50 per cent down to 3.99 per cent. The product comes with a £1,499 application fee where £199 is payable at the time of application.

The two-year discounted rate of 4.39 per cent is being cut by 0.54 per cent, to 3.84 per cent. There is a 1 per cent application fee with £199 payable at the time of application. All three are available at 75 per cent LTV, both direct and through intermediaries in the wider East Anglia area. Talk to your broker.

Currencies Update

UK Pound

Sterling lost almost half a cent to the euro this week, putting an end to three straight weeks of gains, as Bank of England governor Sir Mervyn King used his Quarterly Inflation Report to seriously play down the UK’s growth prospects. (However, the pound was steady against the greenback.)

Speaking to journalists last week, Mr. King said that the UK faced “a long and winding road to recovery” (channelling the spirit of The Beatles) and said “growth is likely to fall back sharply in the fourth quarter.” Though he didn’t go further, this of course raises the strong possibility of a triple-dip recession in 2013.

In line with his comments, UK retail sales fell –0.8 per cent in October (a sharp drop) while inflation jumped to 2.7 per cent, raising the possibility of a continued squeeze on household finances. However, while all that looks bleak, it’s worth keeping in mind that Mr King wants a weak pound to help boost UK exports. He’s hence likely to play down the UK economy any way he can!


What will it take to see the euro fall again? The common currency claimed half a cent not just from the pound last week but the US dollar too, as foreign exchange investors seemingly ignored the fact that the Eurozone re-entered recession, while Greece is still a heartbeat from reviving the drachma.

The Eurozone contracted –0.1 per cent between July and September, putting it in the official recession everyone’s seen coming for months. Holland endured the biggest quarterly fall, shrinking -1.1 per cent, while the headline figure would have been much worse if not for the fact that Germany and France both expanded +0.2 per cent. Of course, with more austerity on the way, any recovery looks a long ways off.

Furthermore, Greece continues to face bankruptcy as Eurozone finance ministers put off the release of a €31.5bn bailout tranche. The FinMins are now meeting  to decide if Greece at last warrants the cash. However, as I mention, the euro has gained in spite of all this dithering, as investors put seemingly endless faith in a solution to the crisis. 

US Dollar

Last but not least, the greenback has endured small loses this week, as negotiations regarding the ‘fiscal cliff’ get off to a good start. This is $600bn in automatic tax raises and spending cuts due to be imposed unless US politicians can agree a sustainable fiscal path for the country and pay down the annual $1tn deficit.

Last Friday, Republican Speaker of the House John Boehner said initial talks had been “very constructive,” adding “I believe we can do this and avert the fiscal cliff that is right in front of us today.” US Treasury Secretary Timothy Geithner (a Democrat) meanwhile described the talk as “a good meeting, and the tone was very good. I think this is doable within several weeks”

This raised global optimism, leading the dollar to fall slightly. However, though initial talks may have gone well, there are still significant hurdles to overcome, and this is a process that will take weeks! Given that, there’s lots of potential between now and the 31 December deadline for the greenback to strengthen up again.

I do hope you’ve enjoyed reading this update. To find out how the latest changes in the foreign exchange rate will affect your money transfers, visit foreign exchange specialist Pure FX You can also call on +44 (0) 1494 671800 or email