Property Investment - September 18 report
Dear Share Crazy Friend,
I know many members are interested in prime central London and what’s happening there. As such, you’ll be pleased to hear of the latest Knight Frank statistics. Sales have risen by 90 per cent, albeit from a low base, from the start of the year. And, since March, prices of prime residential property in central London have risen by 6.4 per cent. In their September London Residential Review, Knight Frank analysts stress that recovery is coming up from a very low base, that supply remains limited and that demand exceeds supply. The availability of finance remains the key issue and divides the market in two – those who have cash and can buy and those who do not and are struggling to finance purchases. At present, the supply-demand mix suggests prices will keep rising – ‘there is no indication that there will be a near-term rush of new property coming to the market’.
If you’re thinking of moving your mortgage, especially if it’s with a lesser-known lender, it might be worth asking what they’d accept in full and final settlement – you may find you don’t have to pay the full amount.
Rooftop Mortgages has this week become the latest sub-prime lender to offer discounts to borrowers to encourage them to remortgage elsewhere. Golden goodbyes of up to 15 per cent off the total have been offered.
They’re not the first and they won’t be the last – Edeus, Advantage and GMAC-RFC have all made similar offers. I doubt this will work with a bigger lender, but it’s certainly worth asking with smaller lenders.
I’ve been asked to offer members some idea of best-buy BTL deals with the highest LTVs. These are what I’ve been sent by our researchers, Liam and Rachel…
Chorley & District BS, term tracker, 4.95 per cent, 2 per cent fee, 75 per cent LTV.
NatWest, two-year tracker, 4.99 per cent, £1,999 fee, 75 per cent LTV.
Chorley & District BS, one-year fixed, 4.99 per cent, 2 per cent fee, 75 per cent LTV.
C&G, three- year tracker, 4.99 per cent, 2.5 per cent fee, 75 per cent fee.
BM Solutions, two-year fixed, 5.40 per cent, 2.5 per cent fee, 75 per cent LTV.
Post Office, five-year fixed, 6.29 per cent, £599 fee, 75 per cent.
Just a reminder to look beyond the headline rates when it comes to choosing a BTL mortgage (assuming you are in the position to have a choice). Look at BM Solutions’ website and you can compare a two year fixed at 5.65 per cent and a 2.5 per cent fee with a two year fixed at 5.95 per cent and a 1.5 per cent fee. The higher headline rate is cheaper, albeit not by much, but is a good example. Note: there may be other reasons for taking the lower rate, of course, like matching the rental cover.
If you want to know where fellow property investors are buying overseas, you’ll be interested in a new hotspots chart that’s out this week. Conti, the overseas mortgage company, has compiled a hotspots chart based on the number of enquiries received by them for each country so far this year. ‘Same old, same old’ is a quick summary. France topped the chart with 31 per cent of all enquiries followed by Spain at 22 per cent and Turkey at 13 per cent. We then move down to 7 per cent for the likes of Portugal and Italy with not an emerging market in sight!
We can now offer, via a currency exchange provider we are about to recommend, a daily or weekly report on currencies, as preferred. As an example, you’ll receive updates such as this on each of the leading currencies. ‘The Pound…The appalling week for the pound is continuing today with sterling losing over a cent against the Euro and 2 cents against the USD. Retail sales came in weaker than expected last month, showing no increase from the level in July, as worries consumers continued to cut back on spending. This data added more poor sentiment for our currency after the initial sell off when Mervyn King discussed the possibility of reducing the deposit rate further provided to banks. In addition to this, we have also seen unemployment in the UK hit a 14 year high as badly-hit businesses continue to shed staff. Today sees the release of public sector borrowing expected at a 17.7B, any higher number here is bound to hurt sterling further, highlighting the severity of our government spending.’
With Best Wishes
Iain
Iain Maitland
Editor, www.ukpropertyalerts.co.uk and www.internationalpropertyalerts.co.uk
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