Landlord Investor MAY 2016 by Landlord Investor Magazine

MAY 2016

WRITTEN BY INDUSTRY EXPERTS COVERING ALL ASPECTS OF BUY-TO-LET

LANDLORD | PROPERTY | INVESTMENT

A PROPERTY GOLDMINE: BERKSHIRE BUY TO LET ANALYSIS

- Prospect

HOUSING AND PLANNING BILL 2016: ABANDONMENT OF PROPERTY

- Tom Entwistle

WHY ORLANDO IS BOOMING: PROPERTY IN THE SUNSHINE STATE

- British Homes Group

UNEARTHING THE LATEST

PROPERTY GOLDMINES

2016 SHOW LOCATIONS MAY 25TH STEVENAGE HERTFORDSHIRE JUNE 21ST LONDON OLYMPIA JULY 7TH INVESTOR RACE DAY EPSOM DOWNS SEPTEMBER 21ST WEST BROMWICH MIDLANDS SEPTEMBER 28TH NORWICH EAST ANGLIA OCTOBER 13TH OLD TRAFFORD MANCHESTER NOVEMBER 8TH LONDON OLYMPIA Thousands of Landlords & Investors Attending // Hundreds of Exhibitors Expert Local Property Analysis // All Apsects of the Property Sector Covered FOR MORE INFORMATION AND TO GET YOUR COMPLIMENTARY TICKETS VISIT:

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WELCOME TO THE MAY ISSUE OF LANDLORD INVESTOR! It is a gorgeous sunny day at LIS towers and its Friday!

Editorial Editor

Tracey Hanbury editor@landlordinvestmentshow.co.uk Editorial Contributors British Homes Group Caridon Property Charlotte Faint Cornerstone David Humphreys Kevin Wright National Landlords Association Peter Littlewood Prospect Simon Zuthsi Tom Entwistle

In this month’s issue of the magazine we reveal why Berkshire & Surrey have been flagged as a great investment area. In addition if you fancy dipping your toe in overseas investment then British Homes Group have some great offers and information on buying a holiday home in Florida! Whilst the weather is lovely keep an eye on those weeds as Charlotte Faint Director of Longfield Knotweed Solutions explains what knotweed is, & the problems it causes Landlords. We catch up with Daniel Jordan, Manager of Prospect Investors Club, one of the UK’s and certainly Berkshire’s only Investment Club completely run by property professionals, to get the answers to those questions on the lips of all new and veteran property investors.

CONTENTS Industry Update Overseas Investment Industry Spotlight Commercial Green Deal Buy to Let Analysis Auctions Legal Investment

06 12 16 18 20 22 28 32 36

Tom Entwistle our monthly columnist shares some valuable information on New legislation that will help Landlords if a tenant abandons a property + much more... Our events and where we will be in the month of May,

Art Dept. Design Craig Edmonds Advertising Beverley Meliniotis

Contact 0208 656 5075 landlordinvestmentshow.co.uk /LandlordInvestmentShow @LandlordINShow

Tenants History LTD 27 Stafford Road Croydon CR0 4HA Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers. While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. Tenants History Limited and our contributors will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through the promoted links.

We are busy preparing for our Berkshire Show on Wednesday 18th May and we will also be bringing the show to Stevenage on May 25th which have been flagged as great investment areas. To get your complimentary tickets please visit our website: www.landlordinvestmentshow.co.uk June Other dates for your diary: 21st June we are returning to Kensington London Olympia for our biggest event to date, meet over 90 exhibitors and attend up to 40 seminars!!! July 8th July: Investor Race day at Epsom Downs, join us for a great day of connecting with Landlords, Investors and property Professionals followed by a great evening of sponsored races. For your free tickets please visit our website.

Tracey Hanbury | Editor Landlord Investor

Tracey Hanbury

May 2016

LANDLORD INVESTOR

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May 2016

LANDLORD INVESTOR

Investors, welcome to your new homepage! Find everything you need to successfully invest in property â&#x20AC;&#x201C; all under one URL!

Visit us online today to secure your FREE Goldmine Area Report! Unlock the Goldmine Investment Areas across Berkshire & Surrey with this free report! PLUS every person who downloads this report before 1st June will be entered into a prize draw to win 3 months free entry to the Reading pin, one of the UKs biggest property networking events! prospectinvestorsclub.co.uk

INDUSTRY UPDATE

ABANDONMENT OF RENTAL PREMISES Tom Entwistle - LandlordZONE

Included in the Housing and Planning Bill 2016, currently progressing through Parliament, is a measure that will please landlords no end - a provision which will make it easier and safer to recover a property if it is abandoned by the tenant part-way through a tenancy.

ABANDONMENT OF A RENTAL PROPERTY HAS BEEN A THORN IN THE SIDE FOR RESIDENTIAL LANDLORDS OVER DECADES.

That’s a process that can take weeks if not months, but judges have been known to impose fines running into thousands – the difference in the property’s value when it has vacant possession and when it is tenanted has been the guide on this.

Though it’s not a common occurrence, abandonment holds many perils for those landlords affected, thanks to the strictions of the Protection from Eviction Act 1977, which gives tenant’s rights something approaching total sanctity.

One case from 1997 involved a landlady who let her flat when her tenant was in jail for murder. She rightly assumed he would not be returning, but he objected and pursued his legal rights from prison. The judge in the case fined her around £20,000 for her breach of the tenancy laws.

Any landlord caught ending a tenancy prematurely can be heavily fined if they do not go through the proper legal channels, which involves going to court to get a possession order.

In order to remove this long-standing idiocy, the government is seeking to reduce the time it takes for landlords to gain formal legal possession of their property where a tenant has abandoned it.

May 2016

LANDLORD INVESTOR

Landlords and their representatives have lobbied about their concerns; that “eviction” through the courts when a tenancy is abandoned takes far too long. They want the degree of a landlord’s uncertainty as to their rights, if they just take over an abandoned property, reduced – they are seeking a simpler route to legal “eviction” without going to court, for tenants in these circumstances. Part 3 of the Bill deals with recovering abandoned premises in England. Welsh and Scottish laws on tenancies are now dealt with separately in their respective devolved assemblies. The Welsh assembly is currently revising their tenancy laws, the assured shorthold tenancy (AST), along the same lines as before with simplifications, but still retaining the no fault section 21 eviction process. This contrasts with the Scottish approach which is to completely replace the English tenancy laws, bringing in rent controls, indefinite tenancies and abolishing the no-fault eviction process. It’s going to be interesting to see how the contrasting systems pan out in the future. Now we will have distinctly differing systems in all four UK nations, and different again in the Irish Republic – it’s beginning to look like the United States, with different tenancy laws in every State.

It seems sensible enough to me that if a tenant owes sufficient rent, is no longer contactable at the premises or via any other contact information left with the landlord, and does not respond to any written warnings, then the landlord should be in a position to take over the premises. The unpaid rent condition will be met if (a) rent is payable weekly or fortnightly and at least eight consecutive weeks’ rent is unpaid, (b) rent is payable monthly and at least two consecutive months’ rent is unpaid, (c) rent is payable quarterly and at least one quarter’s rent is more than three months in arrears, or (d) rent is payable yearly and at least three months’ rent is more than three months in arrears. The landlord will need to give the tenant warning notices and any named occupier two warning notices, at different times. Each warning notice will need to explain (a) that the landlord believes the premises to have been abandoned, (b) that the tenant or a named occupier must respond in writing before a specified date if the premises have not been abandoned, and (c) that the landlord proposes to bring the tenancy to an end if neither the tenant nor a named occupier responds in writing before that date. The notices must be spaced out under specific time limits and the final one must come after the 8 weeks rent arrears condition.

Under the proposed changes for the recovery of abandoned premises, as set-out in the Housing and Planning Bill, a landlord will be able to serve a notice bringing an AST to an end. Something similar is proposed for quickly removing illegal immigrants under Right to Rent. Although the proposals are still subject to change, as the Bill is passed back and forth to the House of Lords, it is thought this section will survive largely intact.

May 2016

LANDLORD INVESTOR

INDUSTRY UPDATE

A private landlord will be able to give a tenant a notice bringing an AST to an end on the day on which the notice is given if— (a) the tenancy relates to premises in England, (b) an unpaid rent condition is met, and (c) the landlord has given the required two spaced-out warning notices, and (d) neither the tenant nor a named occupier has responded in writing to any of those notices before the date specified in the warning notices.

INDUSTRY UPDATE

There will be contingencies allowing for reinstatement if a tenant applies to the county court for an order reinstating the tenancy, if there was a good reason for having failed to respond to the warning notices, but this cannot take place after 6 months of the landlord taking over.

Shelter claims there are over 4.4 million privately rented households in England, but only 1750 cases of abandonment every year, so the abandonment law is not needed. Fine, so what about the poor 1750 landlords who are the victims of this, do we abandon them too!

Perhaps not surprisingly the housing charity Shelter is vehemently against this development, arguing that “landlords already have powerful rights to take possession of a property”. They can evict tenants through the courts using Section 8 or Section 21 notices and they can use “implied surrender” in the case of abandonment, say Shelter.

The abandonment clause will allow landlords to take possession of a property in a minimum of twelve weeks, where the criteria are met: I would argue that gives any reasonable tenant ample and more than enough time to make their presence felt, and I dare say landlords are hoping this clause survives with the Bill more or less intact.

But landlords would welcome the measures as Sections 8 and 21 are so long winded and expensive legal processes, on top of the landlord’s inevitable loss of rent in an abandonment case. Yes, it is possible to handle an abandonment case satisfactorily arguing “implied surrender”, but most landlords and letting agents are not confident with the correct procedures, there are still risks involved, and in any case a crafty tenant with knowledge of the law, and designs on compensation, can land the landlord in serious trouble.

Landlords, I presume, will still be able to use the “implied surrender” route for immediate possession where conditions allow, but this measure should provide a very useful back-stop, without the need to going to court. ⌂

Under “implied surrender”, argues Shelter, “a landlord may instantly take possession of a property, without court approval, if the actions of the tenant clearly imply they have surrendered the tenancy – for example where a tenant has moved all of their possessions out of the property and left behind their keys”. I would argue, it’s not always so clear-cut.

May 2016

LANDLORD INVESTOR

For more information on Abandonment as it stands now see: www.landlordzone.co.uk/content/ tenant-abandonment See the Housing and Planning Bill 2016 here: www.publications.parliament.uk/pa/bills/ cbill/2015-2016/0075/16075.pdf

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INDUSTRY UPDATE

SUTTON COUNCIL LEADER BRANDED 'CRASS AND IRRESPONSIBLE' AFTER SENDING THOUSANDS OF PEOPLE MOCK EVICTION NOTICES National Landlords Association Last week, Sutton tenants received a mock eviction notice from the Leader of Sutton Council, Ruth Dombey, lobbying them on the Government’s Housing and Planning Bill. Councillor Dombey’s email was condemned by many recipients, some of whom said they feared it was a genuine eviction notice, and prompted calls for the Sutton Liberal Democrat leader to apologise. About 15,000 people received the email sent by Ruth Dombey on behalf of the Liberal Democrats, headed with the words “eviction notice” in red capital letters and “notice to vacate your property.” The emails – sent to promote a petition protesting Conservative reforms – then explained that “thousands of people could be receiving a notice like this as a result of the Government’s Housing and Planning Bill.” The bill aims to increase home ownership by forcing local authorities to sell council houses. Chris Norris, Head of Policy, Public Affairs and Research at the National Landlords Association, said: “This is a shockingly crass and irresponsible email for any elected official to send, let alone a council leader. Tenants will have been given heart palpitations reading the subject line and banner, only to then find it is a party political stunt. Councillor Dombey should publicly apologise for what we believe is a grave lack of judgement from such a senior local figure.” For more information, please visit: landlords.org.uk

May 2016

LANDLORD INVESTOR

The emails are thought to have been sent to everyone on the Sutton Lib Dems mailing list. Rachael Hardwidge, who was among the recipients, wrote on Facebook: "I understand they want people to notice, but I think it’s a very wrong way of going about it." Joy Robinson added: "That could be really scary. I think it will backfire on whoever sent it as many will think it’s genuine. "It could cause someone to have a heart attack." A Lib Dems spokesman said the email had been intended to "deliver a strong message about some of the terrible consequences that could arise from the Housing and Planning Bill" but admitted Councillor Dombey had apologised to those who had complained. He said: "The intention was to highlight an extremely important issue to local people with housing being one of their major concerns. It certainly wasn’t the intention to cause any alarm and she has apologised to anyone who contacted her to say they were worried. "Only a tiny number of people did contact her to question the email whereas around 600 people signed the petition and it received a lot of very positive feedback.” Critics of the Housing and Planning Bill say it would not help tenants and warn first-time buyers would still be priced out of "starter homes" built on brownfield sites and sold at a discount. ⌂

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OVERSEAS INVESTMENT

ORLANDO RECORDS FASTEST GROWING POPULATION IN THE US AS INVESTORS LOOK TO THE SUNSHINE STATE

Orlando is number one destination for population growth, welcoming over 60,400 new residents in 12 months (US Census Bureau)

FOLLOWING IN THE FOOTSTEPS OF ITS MOST FAMOUS RESIDENT, MICKEY MOUSE, THE US CITY OF ORLANDO IS CONTINUING TO ATTRACT A SIGNIFICANT NUMBER OF NEW INHABITANTS. According to the most recent figures released by the US Census Bureau, Orlando is the number one destination for population growth, adding over 60,400 new residents in just 12 months (July 2014 to July 2015). This substantial increase accounted for a 2.6% growth in Orlando’s total population during the 12 month period, making it the fastest growing of the US’s 30 largest regions. Orlando’s rising population ensured that it was also named in Forbes.com’s prestigious list of America’s fastest growing cities.

May 2016

LANDLORD INVESTOR

Compiled by ranking the 100 largest metro areas and their surrounding suburbs, they factor in population growth for 2015 and 2016, year-over-year job growth for 2015, the metro’s economic growth rate, unemployment, and median annual pay for college-educated workers in the area. Currently ranked 7th, with a substantial projected growth rate of 2.03% for 2016, Orlando is definitely a city to watch this year. With a rising population comes growing housing demand, and savvy international investors are increasingly looking to Orlando and the Sunshine State of Florida as a safe and secure destination, with a wealth of opportunities.

OVERSEAS INVESTMENT

IN 2015 ORLANDO GREETED OVER 66 MILLION TOURISTS, A 5.4% GROWTH IN COMPARISON TO 2014 As well as experiencing strong population growth, Orlando has also witnessed a surge of tourism in recent years, adding to its already strong position as a hub of real estate investment. 2015 saw Florida become the first state to ever welcome more than 100 million out-of-state and international tourists, with over 105 million people visiting the Sunshine State throughout the year. Will Seccombe, President and Chief Executive Officer of Visit Florida, the state’s tourism authority, emphasised Orlando’s part in this record breaking achievement, explaining, “Orlando is the most visited destination in the United States. It’s the most visited city, and certainly the home of the theme park capital of the world, right? No place else on earth can compare to that.” The city itself attained a new tourism record in 2015 as ‘The City Beautiful’ welcomed over 66 million tourists. George Aguel, President and Chief Executive Officer of Visit Orlando, the region's tourism arm, recently revealed 2015's 5.4% growth, which comes just a year after Orlando became the first US destination to surpass 60 million visitors.

ORLANDO WAS AMERICA'S NUMBER ONE EMPLOYMENT CENTRE FOR JOB GROWTH IN 2015 (LABOUR MARKET DATA) Orlando’s attractions, including Walt Disney World Resort and Universal Studios Florida, allow for visitors to make repeat trips in order to experience the latest additions to the theme parks. Combining this with its growing number of first time visitors enables Orlando’s tourism industry to remain strong and reliable, an important factor for many prospective real estate investors. Another key factor for prospective real estate investors, especially those exploring the market from outside the US, is the state of the economy. The US economy has definitely gained momentum in recent years and is currently set on a much more positive trajectory. The US dollar has strengthened quite significantly against both the British Pound and the Euro, creating a more consistent environment for potential buyers. The US outlook is currently a healthy one, with the GDP growth rate expected to remain within 2-3%, the ideal range, during 2016. Unemployment is set to continue at a natural rate, between 4.7% and 5.8%, with the US Bureau of Labor Statistics’ most recent figures showing March’s rate at 5.0%. The latest revised labour market data also confirm that Orlando is now America’s number one employment centre for job growth in 2015, further suggesting the city’s future stability.

May 2016

LANDLORD INVESTOR

OVERSEAS INVESTMENT

ORLANDO'S PROPERTY MARKET VALUE GREW BY 19.8% IN FEB 2015 - FEB 2016 - MORE THAN ANY OTHER METRO AREA (FREDDIE MAC) Looking at all these factors collectively, Orlando is definitely creating an attractive environment for prospective property investors. It’s housing market alone is celebrating an encouraging start to the year with Orlando being ranked 4th in HomeVestors and Local Market Monitor’s first quarter 2016 Top 10 markets for real estate investing. The current excitement surrounding the city and its property potential was confirmed by Freddie Mac, The Federal Home Loan Mortgage Corporation, who recently described Orlando’s real estate market as the top performer in the United States. According to their latest Multi-Indicator Market Index (MiMi), from February 2015 to February of this year, Orlando’s property market value grew by 19.88% which was more than any other metro area. Bill Cowie, Director of British Homes Group, specialists in Florida real estate, is confident in the Sunshine State’s investment prospects and believes 2016 is set to be an extremely prosperous year. He explains,

May 2016

LANDLORD INVESTOR

“Florida has always been a popular destination with second home owners, however, recently we have also noticed a surge of interest from overseas investors. Florida can provide a safe and secure environment, and as a city Orlando is not only a hotspot for residents and tourists but also real estate buyers from overseas. We certainly expect to see a rise in those international investors throughout the next 12 months.” British Homes Group, who have been helping international investors in Florida for over 30 years, have launched their latest investment opportunity in collaboration with Virgin Holidays and Contempo Homes. From just $237,000, and no additional second home UK stamp duty to pay, prospective clients can invest in Florida’s most recent Buy-to-Let scheme, with up to $2,500 a month guaranteed for up to 5 years and the option to renew for another 5 years if it suits. With over 20,000 investment homes to choose from, British Homes Group can provide a fully managed leaseback agreement and bonus access to an exclusive rental partnership with Virgin Holidays. The partnership can assist and support investors in finding reliable tenants in order to make the most of the property. For more information please contact British Homes Group today on +1 407 396 9914 or visit http://www.britishhomesgroup.com.

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LANDLORD | PROPERTY | INVESTMENT

INDUSTRY

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FEBRUARY 2016

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Y MARKET: TRENDS IN THE PROPOFERT LET ? BUY TOEntw istle - Tom WHAT IS THE FUTURE E: LIK U YO WIGGLE AS MUCH AS STAMP DUTY

- Peter Littlewoo

SHOULD WHY LANDLORDS LO BUY IN EAST NDON

- LandlordNews

OF WHAT IS THE FUTURE

BUY TO LET?

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INDUSTRY SPOTLIGHT

SELLING A PROPERTY WITH JAPANESE KNOTWEED. Charlotte Faint - Longfield Knotweed Solutions Ltd

FIRSTLY DON'T WORRY, BUT DO OBTAIN PROFESSIONAL ADVICE IF YOU ARE THINKING ABOUT SELLING IN THE NEXT FEW YEARS. The plant is not harmful to people’s health (I’ve heard the dead stems are great pea shooters!), but if left ignored the plant can and naturally will quickly take over an area and find weaknesses in concrete or tarmac and simply grow through. This is where it can be a real problem. The speed in which it grows means that if Japanese Knotweed is found in or near a property (as in many cases in London), mortgage companies may be concerned, or in some cases refuse to lend money unless a management plan is in place. It often is brought to owners attention when a surveyor on behalf of the potential purchaser visits.

May 2016

LANDLORD INVESTOR

SO WHAT IS THE SOLUTION? Finding a company such as Longfield Knotweed Solutions Ltd (www.longfieldknotweed.com) who are members of the Property Care Association (www. property-care.org) is the first step. This means that as a contractor we must adher to their strict membership requirements ensuring that the work carried out meets professional standards. In effect this includes meeting the Royal Institute of Chartered Surveyors (RICS) expectations as laid out in guidance document which (importantly) many mortgage companies look at. Once you have found a company you need to discuss with them what you require. Generally an identification report and a management plan needs to be provided to the mortgage company before a mortgage will be agreed. These maybe one or two documents, it doesn’t matter, what matters is the contents.

YEAR ONE

YEAR TWO WHAT IS AN IDENTIFICATION REPORT? This is a document that professionally identifies the presence of Japanese Knotweed. It provides details of the location of the Japanese Knotweed infestation, site plan, risk assessment the options available to deal with the concern.

WHAT IS A MANAGEMENT PLAN? This follows from an identification report (or an identification report may be within the management plan) and provides a method for controlling and eradicating the infestation. Currently the main method of controlling Japanese Knotweed in most properties is through using chemicals. An alternative is excavation to up to a depth of 3 meters and 7 meters around the crown in cases of mature infestations. For small patches of Japanese Knotweed close to a property its not generally a practical or cost effective solution compared with chemical (herbicide) application.

WHY DO MORTGAGE COMPANIES REQUEST FIVE OR TEN YEAR MANAGEMENT PLANS? Itâ&#x20AC;&#x2122;s not possible to guarantee eradication or control in one year. Therefore specialists are requested to provide a plan of how they intend to treat and monitor the infestation. An example would be -

Any regrowth seen is treated as necessary.

YEAR THREE Sometimes there is regrowth in this year, often not. For small infestations year three is simply to inspect and confirm eradication.

YEAR FOUR AND FIVE This is the repeat of year three, with a completion certificate and report detailing treatment, and findings over the time. Once two complete seasons of no Japanese Knotweed sightings have been observed if you have requested one the Insurance Backed Guarantee (IBG) will be issued, (up to this point a confirmation certificate will have been issued to the owner of the property).

YEARS FIVE-TEN These are simply when the professional will monitor to confirm no regrowth has been seen. If it is then treatment will occur. Choosing a company such as Longfield Knotweed Solutions Ltd gives you peace of mind that any potential purchaser will not have their mortgage refused on the basis you have employed a contractor who is not a PCA member. â&#x152;&#x201A;

For more information and to get in touch, please visit www.longfieldknotweed.com

May 2016

LANDLORD INVESTOR

INDUSTRY SPOTLIGHT

Herbicide treatment has varying degrees of success in year one. If the infestation is small then it is generally killed in year one. However it does depend upon time year the treatment commences and how long the infestation has been present as well as other factors.

COMMERCIAL

CARIDON PROPERTY SCOOPS TOP PRIZE AT ESTAS AWARDS Caridon Property

ONE OF THE FASTEST GROWING PROPERTY COMPANIES IN LONDON HAS BEEN VOTED THE BEST LETTING AGENCY IN THE UK AFTER ITS CUSTOMERS TURNED OUT IN DROVES TO COMMEND IT. Caridon Property Services triumphed at the industry equivalent of the Oscars; the ESTAs. The business won the prestigious title of Best Letting Agent in the UK in a category voted for by tenants. Directors and staff from the company were awarded the accolade at a glittering Zoopla sponsored event in London’s Grosvenor House Hotel which was hosted by Location Location Location presenter Phil Spencer and was attended by over 800 people from the property industry.

May 2016

LANDLORD INVESTOR

Caridon Property, part of the Caridon Group adding to their success over the last few years also won the award for best letting agent in the South East region. Over 150 of Caridon Property Services’ tenants voted in the run up to the awards, rating the company on factors such as customer service, communication and quality of accommodation. The ESTA accolades come less than a month after Caridon Property Services won another prestigious award. In March the Croydon-based business won the Making a Difference title at the London Landlord Accreditation Scheme annual awards. The event honours reputable, accredited landlords in the Capital and is run in conjunction with the Mayor of London’s Rental Standard campaign, which aims to promote good standards in the property rental sector.

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Caridon Property Managing Director Akeel Alidina comments: “Last year we were named the second best in the country and although this was a great achievement it has been bugging me all year coming second! We’ve been working hard day in day out to make this right and it feels great that our efforts have been rewarded. We pride ourselves in the service we offer and strive to be the best in the industry offering quality housing for people at all levels. It’s becoming increasingly difficult for people to find good quality affordable housing in the south east and these awards show that we are doing something positive to change that. There is no better testimonial that a vote from the tenants we service.” ⌂ For more information please visit: www.caridonproperty.co.uk or call 0203 307 0555.

i ta l • a c co m

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The company was established in 2009 by entrepreneur and CEO Mario Carrozzo and was one of the first to offer landlords the concept of guaranteed rent. Caridon who rent in the private market as well as being one of the few companies specialising in LHA tenancies have since grown to become a multi-faceted property group which also builds housing developments. Last year it attracted a £50 million investment fund and now builds and manages property across the South East.

Last year the company were awarded Gold for London but just missed out on the national award at the ESTAs, attaining Silver for the UK.

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May 2016

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COMMERCIAL

Caridon Property Services was awarded the LLAS prize by a panel of judges who were impressed by the company’s commitment to helping people in the South East. In one notable case Caridon Property Services helped find a permanent home for a man who had been homeless and sleeping rough in a park for six months. In another case the company helped find a home for a person who had been sleeping in a hospital A&E waiting room in order to keep out of the cold. This follows on from Caridon winning the Commitment to the community accolade at the Croydon Business Excellence Awards at the end of 2015 where they were commended for their contributions to helping local residences.

GREEN DEAL

ENERGY EFFICIENCY IN THE PRIVATE RENTED SECTOR Cornerstone Insulation and Renewables

MAKE YOUR PROPERTY MORE VALUABLE, PRESENTABLE AND ATTRACTIVE TO TENANTS Energy efficiency has been a hot topic in 2016. At a national level, the government is under pressure to reduce the UKâ&#x20AC;&#x2122;s carbon emissions, some 25% of which are generated by housing. On an individual level, owner occupiers and tenants are keen to reduce soaring energy bills through the installation of energy efficiency measures and behaviour change. For private landlords, improving the energy efficiency of your portfolio can have multiple benefits, not least of which is the enhancement of each propertyâ&#x20AC;&#x2122;s energy performance rating. With energy bills forming a significant proportion of a household budget, potential tenants will be attracted to properties that demonstrate lower energy costs. Furthermore, recent government legislation means that it will be illegal to rent a property with an EPC rating below E from April 2018, where there are measures that can be installed using available finance and funding options.

May 2016

LANDLORD INVESTOR

The range of subsidised measures available to private landlords is extensive and offers additional benefits including an enhanced external or internal aesthetic and improved property value. Funding for these measures is currently available from larger energy companies through the Energy Company Obligation (ECO). An outline of measures that currently attract this funding is provided as follows.

ROOM IN ROOF INSULATION

This measure involves the fixing of insulation to the inside of external walls. Internal wall insulation is ideal for solid wall properties that are not eligible for external wall insulation due to planning constraints, or for multi-dwelling blocks. The newly plastered finish improves the internal aesthetic, and with one room able to be treated at a time, disruption is minimal. Energy bill savings of up to £455 a year* can be achieved with this measure. ECO funding is available to part fund this measure.

To enable your loft to be used as a living space, room in roof insulation can be installed between the rafters rather than on the loft floor, with a plaster finish then applied. This measure will generate similar energy bill savings to loft insulation, while creating an additional room that will add value to your property. ECO funding is currently available to part fund room in roof insulation, although please note that the space must already have stair access and windows to qualify.

EXTERNAL WALL INSULATION

GAS AND ELECTRIC HEATING

External wall insulation involves the fitting of insulation boards covered with render to a property’s external walls, with finishes ranging from smooth or textured render to pebble dash and brick slips. In addition to protecting the property’s walls, it provides weatherproofing and enhanced sound insulation. The external walls also looks refreshed and can have a significant impact on property value. The works cause no internal disruption and can also generate energy bill savings of up to £455 a year*. ECO funding is available to part fund this measure.

The replacement of a gas boiler or upgrade of electric heating can reduce maintenance requirements as well as significantly improving the attractiveness of a property to potential tenants. With the majority of our energy bills spent on heating and hot water, a modern and efficient system is a major selling point. ECO funding is currently available to part fund heating systems for properties where the tenant is in receipt of qualifying benefits.

CAVITY WALL INSULATION This measure involves the blowing of insulating material into the gap between your internal and external walls. If your property was built after 1920, it is likely to be of cavity wall construction and there suitable for this measure. Completed from outside the property, cavity wall insulation is very quick and clean to install. It will keep the property significantly warmer, generating energy bill savings of up to £275 per year*. ECO funding is currently available to fully fund cavity wall insulation in most cases.

LOFT INSULATION Loft insulation involves the installation of rolls of mineral wool insulation to an optimum depth of 270mm. This is a quick and clean installation that will last for around 40 years. Installing this measure in an uninsulated loft will generate energy bill savings of up to £240 per year*. ECO funding is currently available to part fund loft insulation.

Cornerstone is a funder and installer of each of the above measures. We have been established in the industry for 12 years and delivered 10,000 energy efficiency improvements in domestic properties to date. We are able to complete EPCs for landlords and provide advice and support in determining the best measure(s) for your property to enhance its value and ensure you comply with impending legislation. We are also able to secure ECO funding on your behalf to minimise any cost to you. All our installations are delivered by qualified and experienced inhouse engineers. For more information on any of the measures outlined above and the funding available, please contact us now on landlords@cornerstonelimited.co.uk or call 01379 853613. Please note that we are urgently seeking private landlords with properties in Cambridgeshire, as additional funding of up to £5,000 per property for energy efficiency improvements is available for a limited time only. This funding, which Cornerstone is deploying on behalf of the county council, must be allocated by the end of June 2016. ⌂ *Energy Saving Trust

May 2016

LANDLORD INVESTOR

GREEN DEAL

INTERNAL WALL INSULATION

BUY TO LET ANALYSIS

Prospect Investors Club The Secret to creating wealth through property

With all the recent changes in legislation, tax increases and talk of Brexit, let’s drill down into the details and find out ‘is property investment still worth it?’ Let’s catch up with Daniel Jordan, Manager of Prospect Investors Club, one of the UK’s and certainly Berkshire’s only Investment Club completely run by property professionals, to get the answers to those questions on the lips of all new and veteran property investors. Who and what are Prospect Investors Club? Prospect Investors Club has been running for over 12 years, specialising in helping new and existing investors further their property ambitions. Whether you’re looking to buy one property or build a portfolio of multiple properties, we are perfectly equipped to help assist you every step of the way. This typically includes the sourcing of the investment, negotiations, offering project management for any works required, arranging the rental and finally, property management throughout the tenancy. So you cover all angles then! You mentioned you help new and existing investors… What would you say the hardest challenge new investors are coming up against at the moment? There can be a number of challenges when investing in property! Currently, we are in a market where there isn’t enough stock available suitable for investment. With a number of buyers looking for properties, it can be difficult to find the right property with the right figures. Due to lack of supply and high demand, prices are being pushed up and this can then make it difficult to get the numbers to work. You talk about getting the numbers to work, apart from purchase price what else should we be looking out for at the moment? You have to look at your acquisition cost, because whether we like it or not, they’ve gone up! Stamp duty for Investments is now an additional 3%, higher purchase prices, higher conversion costs and not to mention the changes in tax, including CIL tax and the reduction in tax relief, have all made an impact. That’s a lot to think about… It can seem daunting but it’s really not too bad – as

long as you get the right advice! I think it’s so important for investors to attend a regular networking meets and keep researching the market. Things can change quickly, so it’s important you stay on top of what’s happening local to where you’re investing and be a step ahead of the market. That’s why we host the ‘Reading pin’ on the first Tuesday of every month. We provide detailed updates on not just the finance market, but also property prices, areas with high demand and the best yields available at the moment, so everyone who joins us knows where (and what!) to start looking for their next purchase. There’s always lots of key information online too, you don’t always have to go out to get what you need. Our website (prospectinvestorsclub.co.uk) is packed full of information to help you along your investment journey. I always encourage people to subscribe to a property magazine like YPN too. Almost every investor I know subscribes to this for the great articles, top tips and interviews with successful investors. It really helps every level of investor keep up to date with successful strategies and legislation. You mentioned earlier about the lack of supply and high demand, do you have any tricks of the trade which can help investors still purchase property without such fierce completion? Work with a team, whether it’s ourselves at Prospect Investors Club, Suzanna Cole in Bristol, PPN in Peterborough, or any of the other established mentors or Property Clubs, as it’s crucial you have a great Power Team around you. We can all offer advice based on years of experience! Our advice is also based on our own errors and hardships. Property isn’t a vehicle for a quick buck, it can take years! So use resource which can offer years of experience. Great, so property is still worth it then! Why did you originally get into nto property investing? I was lucky enough to secure a job at Prospect Estate Agency when n I first got into property. They’ve been running ng for over 25 years and I’ve seen great marketss and terrible markets in my time here. But, by being eing here it taught me that as long as you carry out ut due diligence, adopt the right strategy and work hard to find the best deals, then you can create a reliable iable income which can easily replace your pension. on. I read that the average

Overall remain confident, work with the right people, carry out your due diligence and keep buying! Daniel Jordan Manager of Prospect Investors Club

pension is £500 in the UK, now this barley covers utilities, food and other essential outgoings. So for me, property was an obvious answer to a problem I could face when I was older. That makes sense, what strategies are you adopting at the moment? Unfortunately they’re not making buy to let easy! Some lenders are now asking for the rent to be 145% of the monthly mortgage payment and due to high purchase prices, additional stamp duty and the market, being a buy to let investor isn’t as easy as it has been! Due to this, I’m personally focusing on development, which includes title splits and conversion work. The resale values for flats are so high that if you can purchase at the right value, secure the right finance and negotiate a low level of section 106, then it’s a ‘no brainer’. Due to capital gains tax (CGT), on many occasions we’re also retaining some units, to let and then refinance, to release the equity. You speak about the Government and the changes they’ve implicated, a big talking point is Brexit, are you in or out and how will this affect the market? I have my views and will vote, although I’m not sure it’s fair for me to disclose which way. In my opinion, we’ve rebuilt the economy and are in a relatively stable position. Property has been a big contributor to the recovery and to make a major change that could jeopardise this, perhaps it’s a risk not worth taking? If it’s not broken don’t fix it. I feel a lot of the decision is fuelled by immigration. With the overseas contingent making up for a lot of tenants and buyers within the country, we should be wary of the impact this may have on demand. It will also ultimately have an effect on interest rates, which in turn will immediately push up mortgage interest rates. The low rates have been a major contributor to consumer confidence and demand. So it’d be interesting to see what effect higher rates may have.

You talk about right area, where would you recommend investing and how would you determine where the right area is? We operate predominantly in Berkshire and Surrey, but also source nationally, depending on where we can find the right deal. Due to more and more people being attracted toward the development side of investing, the requirement to be open minded on location has never been so great. Although, as mentioned, it’s vital that you work with the right people and carry out the right due-diligence. Areas which are strong for resale may not be the best places to let and vice versa. A general rule of thumb would be to strongly consider employment, capital growth, local amenities (including hospitals, universities and business parks) average rents, supply and demand and of course, future development plans within the area. Finally, we appreciate you don’t have a crystal ball but what can you see happening for the remaining 6 months of the year? I wish I had a crystal ball! I think we’ll continue to see a lack of stock available until after the referendum, as there are many people holding off m due the uncertainty Brexit has h caused. Once this time passes, I think we’ll see se more stock come available, which should result resu in a few more options for us investors. I can’t ca see a significant reduction in prices until interest rates go up, but inte do expect them to plateau over o the coming months, as they have done post p the additional stamp duty hike. As for buyer activity, lenders continue to offer low rates and incentives, especially to first time buyers especi and residential buyers, so I expect this area of demand to remain strong. However, with the H changes we’ve already discussed in the discu investment market, I expect to see fewer amateur and one off investors. Of cou course, we’ll still have a great level of portfolio landlords and professional landl investors continue buying. Overall remain confident, work with the right w people, carry out your due diligence and keep d buying! Well it’s clear after speakin speaking with Daniel that Property Investment is still a sure fire way of becoming wealthy, if it’s done do the right way! If you want to know more a about how to adapt to survive, the local markets and a what the most successful strategies currently being used are, curre call Daniel today on 0118 95 955 9714 or visit www.prospectinvestorsclub.co.uk www.prospectinvestorsclu

By Hanna Forrest

Monthly pin Meetings

Due Diligence

24 Hour Hotline

Property Sourcing

Viewings

Lettings

Solicitors

Surveying

Accountants

Property Management

£?

Monthly Meetings

Creative Finance Experts

Negotiation and Offers

EZ Maintenance Team

Get expert advice, regular meetings and personalised strategy planning by joining Prospect Investors Club for free today! Duncan did and he’s never looked back… “Useful is understatement of the century, it is no exaggeration to say that the meeting was life changing. Within the first 15 minutes they had identified a very simple way of being able to take an additional £35,000 of cash out of my existing property - I only wish that I had met with them a month ago. I learnt more about property investment in one hour than I had in a lifetime. It was great to have the opportunity to be able to talk through my ideas and to receive such honest, open and clear advice. They accurately and immediately identified what I was hoping to achieve and were able to provide me with the best route to reaching my investment goal. They highlighted and discussed with me the wrong moves that I had made so far and provided me with a way of correcting these mistakes and re-starting in the right direction... All of this was free of charge! I cannot recommend them highly enough. My meeting with them was brought forward 2 hours because someone else had cancelled their meeting - I can only hope that whoever it was that cancelled has now made another appointment - if I had cancelled my meeting it would have been a very expensive mistake.” [SIC] D Kent

Be as successful as Duncan and book your free one 2 one meeting with Prospect Investors Club today.

t: 0118 955 9714 w:prospectinvestorsclub.co.uk e: djordan@prospectinvestorsclub.co.uk

BUY TO LET ANALYSIS

People are talking about a down turn in the market place and prices potentially coming down. You’re on the front line, is this true? Whilst land registry reported a monthly reduction in prices of 0.4%, annual growth has still remained very positive with our local goldmine areas reporting up to 19% growth. It’s also important to realise that due to the stampede of investment buyers looking to secure something before the 31st March the demand led to prices being pushed up so significantly they were always destined to come down shortly after this period. Regardless of this, I’ve always been taught two key lessons and that’s you make your money when you buy and the money is in the deal. In other words, buy the right property, in the right area, at the right price and it removes the need to worry about market conditions!

BUY TO LET ANALYSIS

GOLDMINE AREAS FOR INVESTMENT

RIGHT AREAS RIGHT PROPERTIES Why Berkshire & Surrey are Goldmines Always improve your odds and make risk as minimal as possible. Cash flow should always be at the forefront of an investors mind alongside capital appreciation and the long term gain. Both are vital in getting the most out of your investments and the great news is, we have opportunities across Berkshire and Surrey!

Market Value £350,000 Acquisition Cost £101,400 Rental Value £2,700 pcm Cash flow £932.19 Yield 9.3% Net ROI 11% Figures based on 25 year interest only mortgage at 4.99% with 25% deposit

Prospect Investors Club explains, understands and unlocks the Goldmines for you! • Access to Heathrow and Gatwick • Blue Chip Companies • Development • Access into and out of London • 60,000 more jobs coming • Consistently performing sales and lettings investment goldmines • Successfully voted over and over again a safe place to invest in property • Increasing rental yields • High level of demand continues for all types of property rentals • Redevelopment of key areas • Access to over 200,000 properties • Proven success in opportunities and outstanding cash-flow

£329,950 Market Value Acquisition Cost £127,700 £3,030 pcm Rental Value £1287.50 Cash flow Yield Net ROI

10.4% 12.1%

Figures based on 25 year interest only mortgage at 4.99% with 25% deposit

• Opportunities at our finger tips We have 26 years’ experience in the marketplace, many partnerships, canvassing campaigns and 9 successful offices providing many investment opportunities on a daily basis. We have the resources to invest heavily in sourcing the best properties and the right properties for all of our Investors. We are experts in each area and understand the markets, trends and what is possible and will always have the most up-to-date news, reviews, market research and opportunities to ensure you can unlock the goldmines and maximise your investments.

Market Value £350,000 Acquisition Cost £112,150 Rental Value £3,000 pcm Cash flow £1287.19 Yield 10.3% Net ROI 12.2% Figures based on 25 year interest only mortgage at 4.99% with 25% deposit

To find out more about the goldmine areas or to register your interest in our Investment Club, contact one of our Investment Specialists today on 0118 955 9712.

GOLDMINE AREAS FOR INVESTMENT

MAIDENHEAD

Professional HMO’s In Maidenhead there is a growing market for high standard professional HMOs due to the town’s access to London via

Maidenhead house prices are well above the national average, making Maidenhead a desirable and positive place to invest your money. The average house price now £457,234, this has

the M4 and the neighbouring Slough Trading Estate housing many major international corporations. This has resulted in an average room rental of £539, with high demand against supply.

priced a lot of buyers out of the market and has led to 30% of people living in the Royal borough renting through the private sector.

Buy to Let

Refurbishment Projects

A national newspaper has named Maidenhead as one of the top buy-to-let hotspots in the country, as property investors enter this increasingly lucrative market. Maidenhead has also been named second on the Daily Telegraph’s list of best places to

In the last two years, property prices on average have increased by 17% due to the natural capital growth. In addition to this, by adding value using refurbishment, we have seen considerable profits made by Investors carrying out refurbishment projects.

invest in the UK*. *Source – http://www.telegraph.co.uk/finance/property/news/11090265/ Property-investment-20-best-places-to-make-money-outside-London. html?frame=3035412

HMO Investment example in Maidenhead

31 HARROW LANE PURHCASE PRICE RENT PCM YIELD CASH FLOW

£360,000 £2300PCM 10.0% £758PCM

BUY TO LET ANALYSIS

INVESTMENT TYPES IN MAIDENHEAD

BUY TO LET ANALYSIS

26 GOLDMINE AREAS FOR INVESTMENT

MAIDENHEAD

Maidenhead is recognised as a commuters dream location and attracts new buyers, investors and tenants with its excellent transport links. The demand from commuters is set to increase further in the coming years when Crossrail is introduced to the town. The town already boasts a thriving pharmaceutical and telecommunications industry, with companies such as 3, Glaxo SmithKline and Adobeâ&#x20AC;&#x2122;s HQ located in the town, as well as neighbouring the largest industrial estate in Europe, the Slough Trading Estate. Maidenhead is located within close proximity to London, located off junction 9 of the M4. It is classed as an affluent and upmarket place to live, with rental prices reflecting this. The significant increase in demand and limited supply of rented accommodation, has led to a sharp rise in rental prices and Investors experiencing little to no void periods. As part of the Maidenhead town regeneration, a number of projects are taking place that will increase desirability of property in the town. One major project is The Waterways, which will create 240 executive apartments, 3,000sqm of offices space, boutique shops and restaurants in colonnaded walkways, plus an open air amphitheatre next to the library. Another project due to be completed in 2019/20, is The Landing. Plans include 5,000sqm of shops, 36,000sqm of offices in two headquarters office buildings and 200 homes in four highclass apartment blocks around a central meeting space with cafes and restaurants.

TRANSPORT LINKS May 2016

LANDLORD INVESTOR

M4, M40, Maidenhead Train Station (Crossrail)

GOLDMINE AREAS FOR INVESTMENT

MAIDENHEAD27

JANUARY 2015 ROOM £650 1 BED £812

FEBRUARY 2015 ROOM £562 1 BED £864

MARCH 2015 ROOM £499 1 BED £796

APRIL 2015 ROOM £490 1 BED £828

2 BED 3 BED 4 BED

£1,123 £1,549 £2,107

£1,136 £1,424 £2,209

£1,203 £1,446 £2,431

£1,177 £1,490 £2,257

MAY 2015 ROOM £488

JUNE 2015 ROOM 498

JULY 2015 ROOM £543

AUGUST 2015 ROOM £458

1 BED 2 BED 3 BED 4 BED

£833 £1,178 £1,410 £2,135

£847 £1,136 £1,499 £2,309

£865 £1,157 £1,484 £2,218

£862 £1,176 £1,446 £2,071

SEPTEMBER 2015 ROOM £537

OCTOBER 2015 ROOM £586

NOVEMBER 2015 ROOM £565

DECEMBER 2015 ROOM £625

1 BED 2 BED 3 BED 4 BED

£821 £1,122 £1,443 £1,903

£842 £1,156 £1,484 £1,838

£862 £1,180 £1,428 £1,864

£818 £1,090 £1,508 £2,280

AVERAGE HOUSE SELLING PRICES 2015 PCM JANUARY 2015 1 BED £225,707 2 BED £321,823 3 BED £442,188 4 BED £692,495

FEBRUARY 2015 1 BED £194,077 2 BED £331,988 3 BED £411,913 4 BED

£590,473

MAY 2015 1 BED £193,743 2 BED £325,839 3 BED £457,131

JUNE 2015 1 BED 2 BED 3 BED 4 BED

£213,181 £353,691 £493,084 £651,493

4 BED

£611,029

MARCH 2015 1 BED £208,241 2 BED £330,439 3 BED £419,157 4 BED £581,686

APRIL 2015 1 BED £191,726 2 BED £310,615

JULY 2015 1 BED £233,237 2 BED £342,624 3 BED £429,346

AUGUST 2015 1 BED £228,390

4 BED

£606,868

3 BED 4 BED

2 BED 3 BED 4 BED

£428,615 £598,966

£371,695 £450,247 £565,701

SEPTEMBER 2015 1 BED £239,438 2 BED £362,392

OCTOBER 2015 1 BED £211,914 2 BED £357,473

NOVEMBER 2015 1 BED £232,500 2 BED £371,827

DECEMBER 2015 1 BED £191,187 2 BED £392,826

3 BED 4 BED

£466,348 £598,409

£457,848 £600,129

£487,861 £591,014

£468,770 £625,921

ALL DATA COLLECTED FROM RIGHTMOVE.CO.UK N/A means no data was available, this is because none of this property type was sold/let during this time.

May 2016

LANDLORD INVESTOR

BUY TO LET ANALYSIS

AVERAGE HOUSE RENTAL PRICES 2015 PCM

AUCTIONS

THE HIDDEN COSTS TO SNARE NOVICE & AMATEUR BUYERS AT AUCTION David Humphreys Buying Auction Property

IT USED TO BE THE CASE, MANY YEARS AGO... ...that when you bought something at auction all the costs associated with selling the item, goods & chattels, fine art, fine wines, classic cars & property were paid by the seller. Today that is no longer the case particularly with property auctions which seem to be slowly, steadily & insidiously transferring the often substantial liability for all the “selling” costs to the successful buyer, burying the liability often deep inside the associated paperwork to the degree that the unwary or unsuspecting buyer could easily be caught out only finding out when the “Completion Statement” is prepared, by which time it is too late to object bearing in mind the exhortations included in the catalogue, printed & online, to carry out thorough Due Diligence on all aspects of auction property. I say “burying deep” because these costs are seldom visible to a buyer when first looking at the lot in the catalogue. The catalogue lot entry details seldom include any costs other than the Guide Price, though in some cases the Catalogue Entry may include an Auctioneers Note which may include reference to additional costs payable by the buyer.

May 2016

LANDLORD INVESTOR

Note my underlining of the word “may” because lack of an Auctioneers Note doesn’t mean that there should be one and lack of any reference to additional costs doesn’t mean that there aren’t any.

SO WHERE DO YOU FIND THESE ADDITIONAL COSTS? Please note that from this point on I am talking about conventional auctions where exchange of contract takes place on the fall of the hammer with completion generally 28 days later and where there is no reference to “Conditional & Unconditional Lots” or a “Sell for Free” offer to vendors. First of all you start with the Auctioneers Terms Of Business, and they are always included in the Catalogue and on the Auctioneers Website, and sometimes called their Auction Buyer’s Guide.

What you are looking for is what the auctioneer is going to charge you the buyer if you are successful in the bidding war or even if you buy pre-or post-auction.

This fee is payable on the fall of the hammer when you pay the “10% of bid” deposit so, for cash flow purposes, this fee will come out of your bank the day after the auction. To move on to the other costs which you may be liable for as the dare I say “happy” bidder, these are generally buried in the Legal Pack in one of possibly 3 different documents. 1, The Contract. 2, Special Conditions. 3, Important Notices and all the costs can be in one of these documents or spread across all three. What are you looking for and I will start with the oldest costs historically which sellers look to recover from buyers which are the Search Fees which the seller has obtained for the benefit of the buyer and are included in the Legal Pack. These fees can be the actual amount spent or a sum on account of, generally the latter and generally a £200/£500. Next on the list are the Sellers Disbursements which, to my annoyance, are generally not quantified and can include everything from Money Transfer Charges to Office Photocopying, maybe even the Sellers coffee! Anyway, if they are not quantified you need to allow £100-£200 if you are working to a tight budget. Next on the list, and this is where we start to stack up serious amounts of money, are the Seller’s Legal Fees which, most often, are quoted as a fixed fee but with VAT to be added. For your budget £1,000? Seldom less and by the time you’ve added the VAT almost always more than. Now I started by saying that I’m not talking about Auctioneers offering a “Sell for Free” service and yet next on the list are the Auctioneer’s Lot Listing Fees.

AUCTIONS

This cost is variously described are referred to as a Premium or Administration fee and is generally a fixed fee, as against a percentage of your successful bid, of generally between £500 & £1,000 and always plus VAT. When a Seller instructs an Auctioneer the Seller pays the Auctioneer a fee for catalogue listing & marketing regardless of whether the property is subsequently sold under the hammer. This fee can range from a few hundred pounds to between £1,000 & £2,000 plus to which again is added the VAT. Often when this fee is described a note is added to the effect that it should not be confused with the Buyer’s Premium/Administrative Fee. For budget purposes allow £1,500. Next on the list, and remember we are talking about auctioneers not promoting a “Sell for Free” service are the Seller’s costs if they are successful and you buy. Now these costs/fees can either be a fixed sum £1,000-£2,500 on account of, or a percentage of the successful bid which may be subject to a minimum fixed sum to which again, don’t forget, you have to add the VAT. Yes, if everything in this list applies to any of the Lots you’re interested in then you are going to pay all the Seller’s costs associated with that sale in an auction that does not promote its services as “Free to Seller”. With auctions it has always been a case of caveat emptor, buyer beware, but the practice now being adopted by some sellers of recovering all their disposal costs, possibly even including a small margin, make it very difficult for a buyer to be certain that they have accurately totted up their liability. Novice/amateur/first-time buyers at auction are in a much more invidious position because they don’t know what they’re looking for and don’t know if anything is missing from the Legal Pack. You may be looking for a Contract and find one but not note that there aren’t any Special Conditions, sorry about all negatives.

May 2016

LANDLORD INVESTOR

AUCTIONS

BUYERS ALSO NEED TO UNDERSTAND HOW THESE COSTS AFFECT THEIR CASH FLOW & CASH REQUIREMENT. You read the Contract in the Legal Pack 7 days ago and there was no mention of any Seller’s costs or maybe just one or two, then 48 hours before the auction Special Conditions are added and they include 1,000’s of Auctioneer’s Fees that you will now be liable for if you win the bidding war, some prize! In one case in Bigwood’s May auction the Seller Costs were over £7,000, 11% of the final hammer price with a regular £5,254 being added on other lots 48 hours out! Problem is that the Legal Packs can be updated right up to the day of the auction when any amendments will be added to the auctioneers Amendment Sheet given to you when you arrive at the auction. It has to be said that the Auctioneers, whose deal is with the Seller, hate it when the Seller passes on all these costs to the Buyer and this is evident by the degree to which responsible Auctioneers warn and exhort potential Buyers, both in the catalogue and from the rostrum on the day, to check & double-check the Legal Packs for just these charges & costs as any lack of awareness by a successful bidder can only lead to problems post-auction. Buyers also need to be aware that Auctioneers have no knowledge of the content of the Legal Pack, there is no duty of care on their part to look at the Legal Pack, it’s a matter between the Seller & Conveyancer. Legal Packs can be stuffed with information or be as light as a feather including only a brief Contract & possibly EPC Certificate. Legal Packs can be available from the day the catalogue is released, about 21 days before the auction, or produced at the auction venue on the day or even not at all. Unfortunately the practice of recovering all these costs from the Seller is becoming more prevalent making it much more difficult for the Buyer to accurately calculate a maximum bid when these costs should reduce the maximum bid. Also adding these costs into the equation have no affect on the “value” of the property but do affect the cash requirement of the Buyer. May 2016

LANDLORD INVESTOR

For example, property hammer price £50,000, Seller paying costs. Cash requirement £15,000 with 70% LTV Bridging. Same property, Buyer paying £5,000 Seller costs needs £20,000 cash (£15,000 + £5,000) with 70% Bridging. Reduce £50,000 price by £5,000 to £45,000 needs £13,500 Bridging Deposit plus the £5,000 costs totalling £18,500 as against the 1st option of £15,000 cash, effectively a penalty of £3,500 that can’t be recovered until the property is sold. I wonder whether the Seller/Trader, and they seem to be Traders, understand these financial dynamics as I can’t see the benefit of laying off the costs of disposal onto the Buyer unless the Trader hopes they will not be noticed which, to a degree, is borne out by CPL Bigwood’s May 5th auction when at around 4 PM on May 3, less than 48 hours before the Auction started, the Legal Packs of a number of Lots from a single Trader were each updated to include Seller Costs of £5,254 with Guides maxing at £34,000 & hammer prices at around £80,000, a 6.5% uplift. There doesn’t seem to be any maximum to these costs so you can’t simply include a PC sum or percentage of £X if there is no Contract Special Conditions in the Legal Pack. Again at Bigwood’s auction, a Lot sold for £64,000 with £7,065 of Seller costs to pay, an 11% uplift and another 7K (£6949) was added to a 107K hammer price. I have spoken to Bigwood’s who, like most responsible Auctioneers hate the practice but, other than turning away the business, are powerless to do anything about it. What can you do, very little other than try make sure that you don’t get caught by a late addition/Amendment to the Legal Pack. If Bigwood’s experience is anything to go by these multi-thousand Seller costs are being recovered/added by Traders, note their names and ask the Auctioneers for written confirmation, before the auction, of the Maximum Sellers Costs Lia-

AUCTIONS

bility, including Disbursements, that you will have to pay if you are the successful bidder. Obviously if any are expressed as a percentage of the hammer price use your maximum bid as the variable and I would underline the word “Disbursements”. Last but not least, make sure that you have ideally free, unlimited access to the Legal Pack. Alternatively to enjoy BMV and the other benefits of buying at auction whilst staying safe and recognising both the lemons in the catalogue and the other sharp practices of some of the Sellers come to my Property Auction Expert Masterclass, www.propertyauctionexpert.com, starting June 13 in the West Birmingham and running through to July 11. My Auction Masterclass is based on and around Bigwood’s July 7 auction which should have well over 100 Lots to play with and test your skills on. Full details online. This is real-life training in a real-time auction with Bigwood’s, the largest & busiest auction house in the West Midlands and a regular “The Negotiator” Award Winner. ⌂

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May 2016

LANDLORD INVESTOR

LEGAL

ENGLISH JUSTICE AT ITS BEST Peter Littlewood Southern Landlords Association

ON THURSDAY MAY 6TH I ATTENDED A HEARING AT THE HIGHEST COURT IN THE LAND, THE SUPREME COURT. I have been to court before, including the High Court, but this is a different process again, where 2 sides debate a matter in front of a panel of law lords, who then retire to consider their views of the debate. It is all very gentlemanly and I urge everyone to see the process in action, as all courts are open to all – as was demonstrated by several people dropping by the visitors’ gallery, before they decided it was extremely boring! The reason I was there was to see first-hand the latest, and hopefully last, chapter in the Kumarasamy V Edwards case.

May 2016

LANDLORD INVESTOR

For those of you who are not aware this case is thus:

•

Mr Kumarasamy is the owner and landlord of a leasehold second floor flat. Mr Edwards was the tenant ; The tenant tripped on a loose paving slab in the path on a visit to the bin’s located outside; In March 2013 tenant sued landlord for his injuries, and was awarded £3,750 on the basis that the pathway formed part of the “structure and exterior of the dwelling-house” to which the landlord was obliged to keep in repair under Section 11 (1) of the 1985 Landlord and Tenant Act;

•

January 2015 the case went to the Court of Appeal. Where the argument was whether this problem fell within the meaning of Section 11 (1A) of the Act, which states the landlord has:

- to keep in repair the structure and exterior of any part of the building in which the lessor has an estate or interest…

The case revolved around whether the path was the exterior of the hall of the building, whether the landlord had an estate or interest in the hall of the building and whether notice of disrepair was required. Eventually the Court of Appeal ruled that the path was part of the exterior of the hall because it was an essential means of access to the hall, the landlord had a right of way over the hall and paved area, which he was entitled at common law to repair and notice of disrepair was only required within the demised premises (ie the flat). Complicated, I know, and I am sorry. But the upshot of that was that as the ruling stood all owners/landlords of leasehold properties could be found liable for repairs to their communal areas, even if they had not received notice of a problem. Mr Kumarasamy bravely took the decision to take this to the Supreme Court, and the SLA felt that as such an important principle was at state we would support him as much as we could. To this end we launched an appeal and were help with some small part of his costs. Hence why I was at the court.

LEGAL

The case went to appeal in the County Court in September 2013, and it was accepted by both sides that the trial judge had applied the wrong subsection of section 11 of the 1985 Act (section 11(1) relates to houses and section 11(1A) relates to flats). The decision was reversed on the basis that the paved area outside the front door was not part of the structure and exterior of the common parts and on the basis that the common parts were like the interior of the flat in that the landlord required notice from the tenant of disrepair (it was agreed that no such notice had been given), and the landlord had no right to carry out repairs in the common parts that belonged to the freeholder;

HOW DID IT GO? Well at this moment no-one knows, as the 5 Supreme Court judges listened to the arguments on both sides, and have retired to consider. It is anticipated that they will make their decision known between the end of May and the end of July - but the timing is up to them. The barristers for Mr Kumarasamy (Philip Rainey QC, Julian Gun Cuninghame and Daniel Brayley) argued three main points:

1. INTEREST: A.

“estate or interest” is referring to legal estate or equitable interest and not to an interest in land, such as an easement. If A above is wrong, as an AST gives the tenant exclusive right of way over the common parts, the landlord has not retained any interest (as referred to in section 11(1A) of the common parts); In fact, Mr Kumarasamy in his AST to Mr Edwards had specifically demised (terminated to you and me) his rights to the easement (the right to pass over) the path.

The landlord’s right to use the common parts during the AST to collect rent or inspect the flat is not an easement under the long lease, which he has given up to this tenant, but an implied licence that anyone has to walk up to a front door and knock on it;

May 2016

LANDLORD INVESTOR

LEGAL

a long lessee only has a “last resort” right to repair the common parts if the freeholder or management company fails to carry out r pairs and the common law rule that the owner of a right of way has a right to repair the way is a rule of necessity because normally a landowner subject to a right of way has no obligation to repair the way, but in a landlord and tenant context this rule of necessity has no application.

2. EXTERIOR: A.

Mr Kumarasamy’s barristers argued that the path could not be the exterior of the hall, as had been decided by the Court of Appeal and not covered by the Act because it stretched the meaning of exterior too far and this was an issue of law and not an issue of fact and degree, as the Court of Appeal decided;

3. NOTICE: As a matter of existing law, notice of disrepair in the common parts was required to be given by the AST tenant to the AST landlord because the landlord had no possession or control of the common parts. If this is not the law (there is no case on this point), the Supreme Court should find that this is the law as it is impractical for a landlord to know about faults in the common areas, whereas the tenant uses the common parts on a daily basis, and is more likely to know than the landlord of any disrepair, and should thus have to give notice of any problems.

May 2016

LANDLORD INVESTOR

Further, section 11(1B) only requires a landlord to carry out works if the disrepair affects the tenant’s enjoyment of the flat and only the tenant knows whether his enjoyment of the flat is being affected. Further, section 11(3A) gives the landlord a defence to any claim by the tenant that he used all reasonable endeavours to obtain, but was unable to obtain, a right to carry out repairs in the common parts and this defence is predicated on the landlord being given notice by the tenant of disrepair. The tenant’s barrister basically relied on the reasoning of the Court of Appeal, that the path was a an essential means of access to the common parts and was the exterior of the hall, Mr Kumrasamy shared the easement over the common parts with his tenant and the requirement of notice of disrepair only applied to disrepair of the flat, not the common parts, and the common law allowed Mr Kumarasamy to make the repairs because he had an easement over the common parts . I can tell you I was right confused at the end. However, I was very impressed with the lead judge, Lord Neuberger – he had a complete understanding of the case, and had obviously read all the case notes. I offer this resume for those of you who have recognised the importance of this case, and have been following it. It is not intended as a lesson in law!! Finally, thank you to the many landlords who contributed. To those still wishing to contribute, to help Mr Kumarasamy with his large legal bill, they can by ringing the SLA on 01732 56 56 03. ⌂

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INVESTMENT

GIVING BACK TO THE COMMUNITY Kevin Wright - Ninja Investor Programme Being a property investor means that most of the time you’re focused on the next deal and how to grow your portfolio successfully. Few people in the property business stop to think about those people who not only can’t get on the property ladder, but can’t even afford to rent a home of their own and are classified as homeless.

St Basil’s in Birmingham received £320 and they told us: “We work with some of the most vulnerable 1625 year olds in the West Midlands, and want to break the cycle of homelessness for good. St Basils helps 4000 young people every year and your donation would mean some of these young people will never end up homeless again.”

During April I ran four property networking events around the UK – Leeds, Birmingham, London and Bristol – the Ninja Networking Blitz. Having talked to charities in each area I decided to donate ALL the proceeds to help people who don’t have a home to call their own. No time of the year is good to be on the streets – and we had a chilly April.

In London and Bristol we supported the local branches of St Mungo’s. We raised £735 at the London event and £605 in Bristol: “£1,000 could provide 40 homeless men and women with a welcome pack with clean clothes, shoes and even a toothbrush. These simple items make a huge difference to someone who may have just moved in from the streets.

I talked to my property connections and got two generous sponsors on board to cover the basic meeting costs. Property Investor News was one of them and Converse Law in Cheltenham was the other – and they both ‘got’ the concept.

I hope you share my belief that homelessness has no place in a civilised society. Yet every night in the towns and cities of the UK, people are sleeping rough, in all weathers and the authorities seem unable to solve this shameful reality.

With a relatively short lead time I was delighted with the response. I had people buying tickets for the event – even though they knew they could not get there. They just wanted to contribute and the charities were so pleased with the donations.

The events themselves also went really well – I ran VIP sessions during the afternoon where up to 10 property investors got an open Q&A session with me for two hours, then we had an hour’s networking in the evening followed by a 90-minute session where I showed people the model I use to help people buy property like a cash buyer – without a huge bank account.

In Leeds we raised £420 for Simon on the Streets. They sent a representative to the event and said: “Because of the complexity of the work we do, it costs just over £2000 per year for each of our clients to be supported by our highly trained outreach workers. Your donation will ensure positive outcomes and help the people who it need it the most.”

May 2016

LANDLORD INVESTOR

If you’d like to know more about this email inspire@recycleyourcash.co.uk for more information.

Property Mastery : Recycle Your Cash

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The Ninja Investor Programme will reveal: The Fast Funding Formula™ Discover how to buy property like a cash buyer – without a 6 figure bank account The Negotiation Transformer™ Find out how to make ridiculously low offers – and get accepted The JV Profit Retainer™ Make sure you don’t give away any of your profits that you don’t need to The Rapid Cash Recycler™ Learn how to predict post-refurb value accurately, before purchase And Ninja Investor Strategies™ Transform your mind-set to enable you to transform your property investment.

DOUBLE GUARANTEE • If you’re not happy with the course and tell us by lunchtime on day 1 - you’ll get a FULL REFUND; no quibbles. • When you bring your first deal to our bridging brokerage; - you’ll get the FULL COST OF YOUR COURSE REFUNDED at completion.

NEW for 2016 - 2 day format with even more hot tips and smart strategies. Join a Ninja Investor Programme in: London 16/17 January Bristol 6/7 February 20162016 London 16/17 April 2016 London 16/17 April 2016 Bristol MayMarch 2016 Leeds 27/28 February 2016 Birmingham 19/20 Birmingham 18/19 June14/15 2016 Leeds (new) 27/28 February 2016 Birmingham 19/20 March 2016 Birmingham 18/19 June 2016 Leeds 2/3 July 2016 London 16/17 April 2016 Bristol 14/15 May 2016 Leeds 9/10 July 2016 London 30/31 July 2016 Find out more – and book your place

07889 526979 • www.ninjainvestorprogramme.co.uk

INVESTMENT

SUCCESS LEAVES CLUES! Simon Zutshi property investors network If you want to be a successful investor you need to watch and learn from the latest inspirational case studies on this webpage: http://bit.ly/MM19Top6 It features the latest 6 case studies of investors just like you, who have replaced their income (and more) in less than 12 months as part of the Property Mastermind Programme.

IN THIS ARTICLE, I AM GOING TO HIGHLIGHT SOME OF THE SUCCESS CLUES WHICH THEY MENTIONED IN THEIR CASE STUDIES, TO HELP YOU EMULATE THEIR LIFE CHANGING SUCCESS. We are not the biggest property education company in the UK, but we have more successful students than any other training company because of the truly unique way we support our delegates through their property journey. Having been teaching people how to successfully invest since 2003 and running the Property Mastermind Programme since April 2007, we have experienced all property market conditions.

May 2016

LANDLORD INVESTOR

This means we know exactly what you need to do, right now, to achieve all of your property goals. But just knowing what to do is not enough! I meet people all the time who have done some property training and know what to do, and yet fail to take action for a number of reasons. The two main reasons are often a lack of support and a lack of belief of what is possible and what they could personally achieve.

That can be difficult and feel very lonely. By getting the same group of dedicated delegates together for a day each month, over a 12-month period, the delegates get to implement their knowledge and then come back the next month to collectively share their learnings and experience. This results in an exponential growth in confidence, knowledge and results. This also creates a huge amount of trust in each group such that they support each other through the 12 months and beyond. By seeing other people around them, just like them, achieving incredible results in a short space of time people think “well if they can do it, so can I”. This and the willingness of everyone in the group to share their learnings and support each other is what creates the abundant environment that exists in the Property Mastermind Programme Here are some of the success clues I hope you noticed when watching the inspirational case study videos:

KEEPING IT SIMPLE This is a BIG success clue. Investing in property is not easy but it can be very straight forward. There are hundreds of thousands of people who have done it successfully before you so rather than try to reinvent the wheel on your own, find other people who have done what you want and model them. All too often people make life hard for themselves, over analyse and complicate things. Whereas what you actually need to do sometimes is go back to basics, keep things simple and just take action. That might be easier said than done if you are doing it on your own, but when you have a like minded supportive group around you it is far easier to keep on track.

SURROUND YOURSELF WITH LIKE MINDED POSITIVE PEOPLE For you to be successful in anything you need to surround yourself with like minded positive people who will support you in your journey. Unfortunately, many people are surrounded by family and friends who are not always supportive and who don’t understand what you are trying to do, or even believe that it is possible. You need to get into a support environment where everyone wants you to succeed, where people will spend time helping and supporting you. Network meetings can be a good start but many people who attend network meetings are not really committed to their own success and so you need to find a group where people have made a real commitment to their success.

DON'T BE AFRAID TO ASK FOR HELP When investing in property you are going to have some challenges and face some situations where you don’t know what to do. It is at these times when you need to get help, otherwise you may lose momentum and your investing journey could quickly come to a halt. When we first created the Property Mastermind, we recognised that instead of having just one person to call if you have a question, it is far more valuable and powerful to be able to tap into the collective knowledge and experience of hundreds of other investors, which is why we created the Mastermind forum, which is a safe environment in which to ask for help, share ideas & resources, and generally support each other. This private forum, which provides 24/7 support, has become an invaluable resource for the Property Mastermind delegates and graduates. With over 100,000 posts and search functionality, any question you have about property has probably already been answered and if not, you get the benefit from hundreds of successful past graduates helping you and giving you advice, as they were helped when they were on their12-month programme. There is a pay it forward culture whereby once you are on the Property Mastermind programme you are part of the family and people will help you.

May 2016

LANDLORD INVESTOR

INVESTMENT

This is one of the reasons that the Property Mastermind is so powerful. We fill the critical gap left by most training. Don’t get me wrong. There is some great training out there but the reality is, that after most training seminars, people are left to get on with it by themselves with no support.

INVESTMENT

LEVERAGE YOUR RESOURCES The strategy you use to reach your property goals will vary depending on your personal resources of time, money, and experience. There will be a point where you exhaust at least one of these resources doing it on your own, which is why the concept of working with others in joint ventures is so powerful. However, you need to be very careful when choosing who you work with. You must always do your due diligence and make sure you really get to know the other people. It is not just as simple as finding someone who has complementary resources. You need to find people who resonate with you and have aligned values and aspirations. Trust is incredibly important and comes more quickly when you get to know people when sharing similar experiences.

GET SOME ACCOUNTABILITY This is another big success clue. All successful people have coaches and mentors because they recognise the importance of having people who can stretch their thinking, push them to achieve more and hold them to account. Most people use excuses why they have not achieved what they want to achieve, but usually it comes down to not doing what they know they should do. This is why accountability is so important. Most people are busy and have to much to do and not enough time, so a coach can help you prioritise your actions, keep you on track & motivated, and kick your butt when needed. This is why all of the Property Mastermind delegates have their own personal 1 to 1 coach who can have a massive positive impact on their success and the speed at which they achieve it.

IN SUMMARY THE SUCCESS CLUES ARE: Keep it simple. Surround yourself with like minded, positive people. Ask for help and get other people to help you. Leverage your resources and work with other people. Get some accountability. Whilst this is all common sense, it is amazing how many people donâ&#x20AC;&#x2122;t follow this proven success model. Only a very few people are successful on their own. The real secret to success is by working with the right people to collectively achieve your goals much quicker than you would on your own.

May 2016

LANDLORD INVESTOR

ARE YOU READY TO STEP UP YOUR INVESTING SUCCESS? The April Property Mastermind Programme (MM21) is now sold out and there is already a list of investors registered for the next one (MM22) which starts in October. However, you may not have to wait until then to start benefiting from being part of the Property Mastermind Community. The Property Mastermind is evolving and I am delighted to announce that we have just launched a brand new initiative called Mastermind Local or MM local for short. This is a new way of delivering all of the content, knowledge and strategies from the Property Mastermind, but in your local investing area, in smaller focused groups of between 8 to 11 delegates. You still benefit from Monthly Mastermind workshops, 1 to 1 private coaching, and access to the 24/7 support of the Mastermind Forum over a 12-month period, but without the need to travel to Birmingham each month and for a lower investment than joining the main Property Mastermind. We are running a number of these MM Local groups around the UK starting over the next few months, however the number of delegates are limited in each group, to maximise the learning experience and so it is a first come first served basis. If this sounds of interest to you, then I recommend you register now to join me this month on a live 60 minute, online training session in which I will explain exactly how this works and how this time next year you could be one of the inspirational case studies, sharing how you have replaced your income in less than 12 months. â&#x152;&#x201A; Register for this live webinar here now: www.pinWebinar.co.uk/MMLocal

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May 2016

LANDLORD INVESTOR

THURSDAY 7TH JULY 2016

Due to the massive success of our Landlord Investor Race Evening (July 2015) at Epsom Downs Racecourse, we are delighted to announce its return... Thursday 7th July 2016 - 2pm - 9pm - FREE ENTRY! This time it’s going to be bigger and better with an exhibition in the Duchess Stand (Doors open at 2pm) which will Include many exhibitors within buy-to-let and seminars delivered by “Industry Experts” which will cover Landlord Tax Advice, Tenancy Deposits, Landlord Insurance, Investment Opportunities plus much more. (More information on Exhibitors/Speakers to be announced shortly). Come 5pm the venue will be transformed for the exciting racing event will be staged at the picturesque Racecourse itself in Surrey. Located only 35 minutes from central London. What better way to spend a summer evening combining business with pleasure, than at Epsom’s Landlord Investor Race Evening. Come see us on 7th July, tickets are totally complimentary to attend the Exhibtion and the Landlord Investor Race Evening.

For more information and to book your COMPLIMENTARY tickets for the day, simply visit:

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