Saturday, November 26, 2005

New-build flats not the ideal property investment

Property funds lure pension investors - Money - Times OnlineThe Sunday Times September 25, 2005

Firms are touting plans that gamble your retirement pot on the housing market, writes David Budworth

COMPANIES have been cashing in on the growing appetite to put buy-to-let into pensions with the launch of several residential property funds in recent weeks. From April 6 next year - A-Day - investors can purchase buy-to-lets and holiday homes with their personal pensions for the first time. "

But it is a later part of the article that caught my interest...

"However, investors should beware the hard sell by developers. Stephen Ludlow of Ludlow Thompson, an estate agent, said: ?While completed properties in new developments may initially fetch 10% to 15% more than older properties, they can lose their premium within months, rather like a new car as it leaves the forecourt.?

The average price of a new-build flat or maisonette slipped 1.2% in 2004 because of a glut of supply, while all other types of property rose in value by an average of nearly 12%, according to Land Registry figures."

Chris Bell

Link

Wednesday, November 23, 2005

Latest French hotspot for investment property

Assetz News - French Limousin "the new Provence"

22nd November 2005

"The still largely undiscovered French province of Limousin is experiencing an influx of British property buyers and is set to become 'the new Provence', national newspaper Le Monde has predicted.

And despite the invasion of Brits and inevitable interest in the property market, Limousin remains France's cheapest province. Reports in the Sunday Times found that buyers could snap up a beautiful three-bedroom house with a garden for just �80,000 - a fraction of the price of other regions. A farmhouse with some land could also be yours for a mere �135,000 in the southern region.

But all this could be set to change as new access to the region is predicted to bring in thousands more property hunters for the same opportunities. Investors are being advised to snap up the best pick quickly. Already, there are 14 flights a week from Britain to the region, and Ryanair predicts that by 2006, up to 300,000 Brits will be using the route. Furthermore, the airline estimates that up to one in ten of them will be looking to buy property."

Worth checking out if France is on your target list of places where you would like to invest in property.

Chris Bell

Link

Can property investors trust letting agents?

Find a Property - Rental Returns Overestimated
22 Nov 2005

Recent research from Landlord Mortgages accuses some lettings agents of exaggerating rental returns...

The specialist buy-to-let investor used researchers to pose firstly as a prospective tenant and then as a potential property investor for a two bedroom flat in developments across the UK. Would the rental quotes they were given be the same. Apparently not, says Landlord Mortgages. It appears that some agents were quite happy to up their quote when they thought they were dealing with a potential investor.

The worst offenders - for the second consecutive year - were in London and Birmingham where the rents quoted to investors were inflated by 25 per cent and 13 per cent respectively."

The message is not to rely on what letting agents tell you as a property investor - also try posing as a potential tenant. And of course check what is being asked for similar advertised rental properties in the area.

Chris Bell

Link

Monday, November 21, 2005

The SIPP Myth Debunked - House Price Crash forum

The SIPP Myth Debunked - get full article
Bubble Pricker Oct 1 2005, 09:19 PM Post #1

"People keep posting and asking about SIPPs. We have chewed this topic over months ago at HPC, but as always, Joe Public only wakes up to the story belatedly and then rushes to jump on a bandwagon.

So very briefly, to debunk SIPPs once and for all, a very brief (and thus not accurate in all details summary):

1. A SIPP is a self-invested personal pension. These have existed for a long time. They are nothing other than personal pensions, which have also been around for a long time, in which the beneficiary can make his/her own investment decisions, rather than putting the money in (often poorly performing and high charging) unit trusts. There is nothing new about SIPPs. The only thing that is new from April 2006, is that most restrictions about the classes of assets in which SIPPs can invest will be lifted. Right now, SIPPs can only invest in shares, bonds and commercial property. From April 2006, they will be allowed to invest in just about anything, including residential property.

2. A SIPP fund, like any other pension fund, is a fund separate from the personal assets of a person. The SIPP funds are legally owned by a trustee for the benefit of the person whose pension the SIPP will eventually provide. The SIPP fund is therefore not legally owned by the beneficiary; this is very important, as we will see in a moment."

Check out the full article for a really clear explanation of SIPP's, why they are being hyped, and what the reality will be for house prices and the housing market.

Chris Bell

Link

Sunday, November 20, 2005

Find out all about UK property auctions

I just came across this web site - Essential Information Group. It claims to be 'The leading name in UK property auction information.'
http://www.eigroup.co.uk/

It shows properties up for auction by auction houses throughout the UK. If you are seriously interested in buying at auction this would be a very convenient site to use - although to get full details of the property for auction and the auction house concerned you have to join the subscription service.

Chris Bell

Home Information Packs 'to cause spike in property supply' - opportunity for investors

Assetz News - Packs 'to cause spike in property supply'
18th November 2005

The government's decision to bring forward the release of its heralded Home Information Packs could cause a huge disruption in the market during the industry's busiest period next year, according to the Council of Mortgage Lenders (CML).

Lenders had advised that the introduction of the packs be delayed until later next year. But the government yesterday announced that they will become mandatory for the housing market from June 1st, sparking fears that the market would be swamped with properties for sale before the change takes place, which could force house prices down further."

In an earlier post I commented how HIP's could provide an opportunity for property investors to negotiate good deals. But the pre-introduction period, if it does lead to additional houses being put on the market early to avoid the charges, could be another opportunity for canny buyers.

Chris Bell

Link