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About richardhughes

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  1. Yes properties seem to be selling within weeks or even days of going on the market and certainly not at discounted prices. Speaking to conveyancers they are not seeing deals being renegotiated. Of course, many people are still holding their jobs under furlough but in that situation would they realistically be looking to move (they might be lookinging to downsize!) and are lenders lending to people on furlough? There will have been pent up demand. The Stamp duty window is oing to have an effect. I expect demand to drop in April 2021 but will it lead to a big price drop? Demand will have been bought forward in this year, so market activity will be less in 2021, less houses will be on the market and a proportion of those will inevitably be those that need to sell but I suspect for joe bloggs planning a move up the housing ladder, they will get on with it this year. I dont think there is going to be a massive drop, I think there will be stagnation for a couple of years and the choice of properties available will be less. So if there is something you want for your portfolio and it becomes available this year I would go for it. It might not be available for another couple of years!
  2. So on a house purchase of £225,000 you would save the 2% between £125k to £225,000. ie £100,000 @ 2% = £2,000 savings
  3. Hi Trevor, Clearly doing anything in a short time frame is going to be more risky than over the long term but you cant turn back the clock. You need to speak to a couple of financial advisors to see what to do with the prension find you have. Perhaps you can release some of it as cash now? You also need to speak with a mortgage broker. How much are you going to be able to remortgage your own home for if youare currently not working? You'll then have a pot of cash ready to draw down on, obvoiusly dont finalise the mortgage until you need it. And the size of your cash pot will add detail to your strategy. Refurbs and flips will help you build that pot quicker. You could then take that moeny out and put it in a private pension - if you are doing this you perhaps want to buy the houses within a company to take advantage of the tax benefits of a private pension. Or you might, as I have, decide that a portfolio of BTL property will give you a monthly income that will suppliment your pension. If you are working part time you might consider this a your part time job or you can off load it to a manageing agent. Refurbs and flips "might" have the market against them at the moment. You could end up struggling to make a profit if the market drops. BTL's tend to be longer term and more focussed on the yield than the house price so the current market doesnt really matter. Say you had £250,000 cash to invest. With 75% mortgages this could give you a buying power of £1,000,000. If houses and buying expenses total £200,000 per property thats 5 houses. If you get £800 pcm per house that is £ 48,000 per annum. Allowable expenses are probably £1500 pa per property including some maintenance. Net taxable profit 40,500. Taxed at 20% results in £32400 Mortage interest on £750,000 is probably £13,500 per annum but you can claim back tax at 20% so add back £2700 So Annual Income AFTER tax £21,600 per annum or £1800 pcm. Thats for reasonably little work. All you have done is leveridged the capital you have in your house to invest in other houses. (Of course there is some mental workload involved in this process and there are things you need to keep on top of like Gas and electrical safety certificates. Joining the NRLA will be a great help in this respect) Just my thoughts. R
  4. I'm not a mortgage broker so excuse me if I have this wrong. 1) Why a limited company? If you want to pay yourself a wage you are going to pay Corporation tax at 11% and then income tax at your higher rate. If you buy the property in your own name you avoid the corporation tax. Of course a company does offer some tax benefits as well. If you are looking to take little income out and pass on most of the wealth, a company might be best for you. You probably need a tax advisor to make this decision. For me it works best to own the properties personally at the moment. I might change this before I die! 2) I understand that the lenders will look at BTL as funding itself. So long as the "business" is able to pay the load they will agree to it. Of course, your children can be gradually introduced to the company with shares being passed on and them gradually taking on more knowledge and responsibility to give them the experience required by lenders. In short I think your strategy is sound.
  5. Insurers having given 3 months but it is normal for them to limit the time. I am sure in the circumstances they will give an extension. Usually insurers want empty premises checked every 30 days. I think this is a justifiable reason for travel, you have a business premises which you are obliged to check on. It sounds like things might be easing a little now making this easier for you. Insurers should play ball and give an extension.
  6. Does anyone know what the new legislation says. I believe it is watered down and landlords can still give notice but is this 3 months instead of two and does the tenant still have to be 8 weeks in arrears? What does the legislation say?
  7. I think your sentiments are good and might open up a more open discussion of what they can afford and what you can live with. Well done.
  8. I’m not so optormistic. If your job was on the line, would you be looking to move house now? I 7nderstand lenders are prioritising mortgage breaks and asking more questions before lending. I think the market will stagnate at best. Landlords are going to stack up a load of unpaid rent in the next 6-9 months because tenants have been told they won’t get evicted if they don’t pay - so why would they pay. Effectively the government have taken our property out of our control. What’s to stop them compulsory purchasing housing stock? Things are changing. Don’t judge the future by the past .
  9. It makes you wonder why the agent is telling tenants they are free to take the ....
  10. Its all well and good lenders agreeing to a holiday but it is still the landlord that will be liable for the debt. We are good people and we will pay our dues. I fully expect at least one of my tenants to ask for a rent holiday (they ask for everything else under the sun!)I will want to see confirmation that they have been laid off and a copy of their bank statement. Then we can discuss how much they can afford to pay and how and when do they intend to pay me back? Of course I am just going through the motions because I have little power force them to pay rent. Why should they pay rent? Boris has told them we can't start court proceedings to get the house back until all of this is over. And then it will take 2 months to issue a notice. So by that time they will be owing 6 months rent; lets call that £3000 minimum. If they can't afford a months rent now they wont be able to afford 6 months rent in 6 months time. And anyway why should they pay if we've kicked them out! So more legal action and the court will take pity on them and say they can pay us £10 a week for the next 300 weeks. Of course, they will start paying and then stop once the heat is off and we will have to take more action to get the courts to enforce their decision, by which time they will have hit more hardship and the payment will be reduced to £5 a week for 600 weeks! I think we just have to accept, we are now providing free housing until this is over when we can get back our houses and refurbish them to let again.
  11. We are in a similar position and have decided to refinance and buy 4 more BTL's. Initially the cautious plan was to buy one every 6 months over the course of the next two years to spread the risk. Of course once we started looking at houses in January we put in offers and it gave an addictive high! We currently have two nearing exchange of contracts. Of course, the world has changed and a more cautious approach would probablyhave been better. We are watching the market to decide whether to proceed with these purchases. We might just proceed with one at the moment as originally planned!
  12. Blue skies, I am a NLA member, landlord and a Fellow of the Chartered Insurance Institute. I am happy to give you impartial advice and tell you what I do. Richard@abinsurance.co.uk
  13. Some were predicting a “correction “ in the stock market this year. Could this be the global event that causes it? Meanwhile the BBC is saying we have a housing shortage and we have seen a busy January. The “wobble “ might continue a little longer.
  14. Thanks Conrad - yes very clear and thanks for highlighting the risk.
  15. Thanks Conrad, So if I interpret your comments correctly, yes I could supercharge my income in this way and that would be Ok if prices keep going up and lending criteria stay the same BUT we cant rely on the future being the same as the present and as Tuk points out there is a risk....Suddenly if I can't remortgage and if Ive not left enough equity in the property to cover the expences of selling including CGT, I would get into an uncomfortable position. Your strategy seems to be based upon paying down the debt and yet others advocate the advantages of leverage. By keeping leverage as high as safely possible you would maximise your ROI?