Norman Bartholomew’s Property, Business And Life Blog

Time… Where does it go!

Have you ever wondered why Time seems to accelerate the older you get? I remember as a kid how a single day sometimes felt like a lifetime, especially if it was Christmas Eve. Yet now as I fast approach the end of my fifth decade a week seems like a day. Surely time is speeding up!

Welcome to my first post on life, it’s well overdue but like the heading suggests I just struggle to find the time to get things done. Here’s where I’ll be musing about other aspects of life with a focus on personal development, which is my passion. I have been interested in personal and spiritual development since my earliest memories and although my reading is varied my particular interest is in the “Ancient Mysteries” and how I can apply these lessons and principals to daily life, relationships and business.

About 10 years ago I published a personal development course called the “Vortex System” the first edition sold successfully but I soon wanted to upgrade it and it was inevitably put on the back-burner as other business interests took over. So I come back to the time issue, 10 years has passed and I can’t believe it’s been so long, in a few months I’ll be 50 and when many of us are thinking of retiring I’m worried I’m not going to get done all the things I feel so passionate about.

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“Let To Buy” Might be worth considering

I was having a thought for people struggling to sell their main residence and something I’ve been considering for my own circumstances is “Let to Buy”, not that I need to sell, it’s just that we bought our present home 18 months ago and it was a probate sale in a sorry state with an overgrown garden. I have to knock down the double garage extension but it will make way for a superb luxury detached home, whilst the existing house will remain a 4-bed cottage. In a “Buyers Market” you definitely don’t want to be selling so I think I might build and rent the two properties and provided the rents stack up, I get two more high end properties for my portfolio, which are local and easy to manage. Perfect!

And if I can use the “BMV” strategy to secure my new home without the need for a deposit then even better.

Let to Buy first became popular in the early 1990’s after the last crash, and it stands to reason it will come back into vogue during this property cycle, if you can get the rents to stack then it could be worth considering.

Is it Ethical to buy Below Market Value?

2008 is going to be a very interesting year for Property Investing. There are going to be winners and losers and different avenues have already started to open up that help investors continue to profit from property in the current climate, following the Credit Crunch and in the run-up to what could well turn into a recession.

In the last few months there’s been a lot of media coverage about companies that buy property from people in financial trouble before allowing them to rent it back. This has been explored on various TV shows, ranging in opinion from The Money Programme’s positive account of how people are saved from repossession and able to rent back their home at a fair price, even with the option to buy back in the future, to the more negative Tonight with Trevor McDonald report on unscrupulous companies that firstly advise people that they can rent back their former home indefinitely but then kick them out of the property some 12 months later. No doubt there are companies that exist by taking advantage of people’s dire situations, but this isn’t always the case.We’ve also seen some amateur investors come to the fore who are excited by the thought of buying discount property with No Money Down but who don’t understand how to deal with motivated sellers.

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Media Scare

Unfortunately, TV programs seem to like predicting doom and gloom for homebuyers more than they like to focus on potential gains for property investors. House prices are finally falling, which is good news for those struggling to get on the property ladder, but not for those trying to sell their house as property has recently flooded onto the market because of panic about the recent downturn in prices.What these programs neglect to mention is that one reason why rental rates and demand always increase when house prices fall is because people would rather rent rather than buy something which will shortly decrease in value. This is of course great news for all of us who own rental property!

These programmes don’t discuss this side of the property market because they are pitched at the mass audience. Most people are not property investors and so the message is understandably from the home-owners’ point of view and it’s important that we recognise this. It’s not likely that we’ll be put off investing by the content of these TV shows, but it can be a different matter if friends and family see property investing in a negative light and try to persuade us otherwise. It’s easy to get sucked in by everything they hear about in the media, but without having personal experience in this field it is easy for them to become swayed by someone else’s prejudices without being able to analyse the situation for themselves.

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Mortgage Lenders Face Bleak Times

As I mentioned in my last blog, 2007 saw record highs for mortgage lenders, but nothing lasts forever and the new year has brought with it a complete turnaround, with levels having now fallen to their lowest in two years. I was reading in The Times today that this is looking likely to continue as figures by the Council of Mortgage Lenders have been published showing that the total value of home loans granted in December was down 25 per cent on the previous month - the last time we saw figures this low was in May 2005. Estate Agents are also beginning to feel the pinch, with Humberts recently announcing its second profit warning in less than two months, forecasting a loss for the first half of the year. On top of this LSL, one of the country’s largest estate agencies, revealed hundreds of job cuts as it closed 12 branches across its surveying and estate agency businesses.

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New Heights for Mortgage Lending in 2007

The amount of home loans taken out soared to record levels last year, but ironically this was happening at the exact time as the property market was slowing thanks to insecurities brought on by the credit crunch. Although this has brought about a change in the market, the recent drop in the base rate has helped encourage nervous buyers to reconsider and this could be boosted by the any further base rate and house price reductions during the year.

Michael Coogan, Director General of the Council of Mortgage Lenders recently spoke about how the credit crisis has continued to put a strain on the cost and availability of funds to lenders, which will impact on the cost and number of mortgage solutions available. However, if you’re classed as a ‘low risk’ borrower, you should still be able to find a good deal from mortgage lenders, so a great property investment could still be yours. This is especially likely if you consider that the market slowdown can help you drive a hard bargain with sellers and negotiate a true Below Market Value property deal.

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