Yvonne Emery, an experienced Wealth Creation Coach, has just told me that she is launching a new FREE seminar for 2009 and the first one is on Saturday 10th January in Central London: see www.YvonneEmeryCoaching.co.uk/seminars.html 

She asked if I knew anybody who may be interested in attending. Naturally enough, I asked what the seminar is about!

Yvonne replied that creating greater income is 20% knowledge and 80% mindset, something I would personally agree with, adding that without the right mindset you simply reach a level of wealth that you’re comfortable with and get stuck. She told me that her seminar will reveal the secrets to increasing your income in 2009; I thought that you would want to know about it too …especially as it’s completely FREE.

So I asked Yvonne to send me an email with details, and she agreed that I can share it with you. Here’s what she said:

——————————— snip ———————————

If you’re looking for ways to increase your standard of living there are many more opportunities to do this than there used to be.  With just 7 Steps to Your Financial Freedom you can create a unique pattern that works specifically for you.

The seminar is being run by Yvonne Emery who is an experienced Wealth Creation Coach on Saturday 10th January in Central London and you can claim your free place by registering online at: http://www.PropertyInvestmentCoachingExpert.com and entering promotional code AP

If you are willing to take some of the next steps towards:

• Taking faster steps up the career ladder 
• Creating a strategy for passive income generation 
• Boosting your standard of living 
• Gaining confidence in a world of insecurity 
• Getting in the right mindset to make some major achievements

And lots more practical steps to ensure you finish 2009 in a financially better place than you are starting it, then it’s got to be worth attending.

Yvonne built her wealth through property investments which enabled her to give up her corporate career and she now works with investors, business owners and individuals to catapult their journeys to a better standard of living in just 6 months.  She is a regular motivational speaker at events in the UK and regularly runs seminars on financial progression and property investment.

This FREE seminar is not just about investing in property as a way to secure your financial position, but incorporates dozens of creative ideas (including internet and shares) that would work for You personally in your quest for a better life.

Yvonne says “Join me on this unique seminar and spread the word to your friends so that they don’t miss out on an opportunity to create new ways of generating money in 2009 that will work whatever the economic climate is doing.  The steps in this seminar will give you more confidence, ideas and the right mindset to invest in yourself for the long term.”

——————————— snip ———————————

So go to http://www.PropertyInvestmentCoachingExpert.com (promotional code AP, although it’s free anyway) and claim your place right now.

If you are like us, and the vast majority of our clients, then 2008 has been a year of challenges for you. It could always have been worse though: property prices have barely dipped compared with the FTSE 100 which is 30% down, the biggest drop recorded in its 25 year history, and an investment there would really have eaten your capital!

Now is the time to sit back, relax, reflect upon the challenges and the opportunities they bring, decide upon your goals for 2009, write them down, work out your plan to achieve them and then start taking action to follow that plan and achieve your goals.

The property market moves in cycles as you know, and the majority of experts believe that it is now nearing the end of its winter and approaching its spring, i.e. prices will soon bottom out and start to rise again. The basis of their theory is that, unlike America, our island has more demand for properties than we have supply. Simultaneously, the banks are being pushed hard to start lending money again.

If the theories are right, and the government succeeds in making the banks lend money, then many amateur investors will jump back in during 2009: so make sure that you have your goals set, plan in place and start taking action before you miss the greatest opportunity to make money that you will see for the next 15 or more years.

And keep an eye open for a training course that we will be announcing in the next few weeks to help you achieve this too; I promise you that you will want to learn more when you see it.

Finally, if you have young children and they are growing tired of their Christmas presents and looking for something else to do, here’s a colouring book you can download and print off with our compliments to help keep them amused.

This link isn’t on our blog; it’s only for our regular readers:

==> Please check your email.

With best wishes for a Happy and Prosperous New Year.

Following on from my last post about Tax Free Investment using an Individual Savings Account (ISA) we will now look at completing and filing your personal self-assessment tax return online.

Self Assessment Tax has changed. If you haven’t done your Self Assessment Tax Return yet, you must do it online by 31 January.

If you do your Tax Return online, the calculations will be done for you right away and you’ll get any money that HMRC owes you sooner. You can also view your Self Assessment tax and payments and they will let you know straight away online when they have received your Tax Return.

You can stop, save and go back to your return as many times as you like. If you’re not already registered for HMRC’s online services though, registration takes about seven days …so don’t leave it too late! They’ll send you a PIN through the post to make sure it’s secure.

To register for online services with HMRC, go here:

==> https://online.hmrc.gov.uk/login

If you want a better idea of what to expect before you sign up, then you’ll be pleased to know that HMRC has an “online services demonstrator” which will show you how to register for their online services, and help you understand some of the benefits and key features.

HMRC offers a range of online services, all of which (they say) “aim to be efficient and customer friendly.” They are constantly spending our tax revenue developing services, so hopefully things will become quicker, more secure and more convenient.

To see a demo, go here:

==> http://www.hmrc.gov.uk/demo

Finally, and very usefully, if you want to be sure of not forgetting or missing anything in the future, HMRC will create a calendar of your key tax deadlines for the next 12 months that you can either save or print as you wish. You can also sign up to receive regular email alerts as each date approaches. It takes about 5 minutes to complete the process:

==> http://www.businesslink.gov.uk/bdotg/action/keydates

If you still need to submit a self-assessment tax return and fail to do so by 31 January, then you will automatically be fined £100. Further delays will lead to more penalties, so be sure to submit your SA100 form in good time. Apparently, just doing this could save taxpayers £479 million in needless fines every year!

Feel free to forward a link to this post to your friends and colleagues: you may also wish to suggest that they sign up to our Free Newsletter using one of the boxes on this page to receive further free tax tips.

If you wish to leave a comment, please do so below. If there is no comments box below (because you are on the homepage of our blog) then simply click on the post’s title and scroll back down here again to find the comments box.

Following my last post on How To Reduce or Avoid Paying Inheritance Tax (IHT), this post is about Individual Savings Accounts (ISAs), which can be used to reduce the tax bill on your savings (both cash and shares).

History: PEPs & TESSAs

Before we get onto discussing Individual Savings Accounts (ISAs) however, let’s take a quick look at what came before them: TESSAs & PEPs.

TESSAs

A Tax Exempt Special Savings Account (TESSA) was a special bank or building society account that offered tax-free interest provided the account was maintained for a fixed period of five years. So as long as you left your savings in the account throughout that period any interest, dividends or bonus earned would be totally free of tax.

TESSAs have now been replaced by cash ISAs, and under New Labour Gordon Brown made it impossible to open any new TESSA after 5 April 1999. But more on that later.

In total, up to £9,000 could be saved in a TESSA over five years, but there were limits to the amount that could be deposited each year. Up to £3,000 could be deposited in the first year, and no more than £1,800 in each subsequent year. Usefully, each TESSA year began on the anniversary of the date the account was opened.

PEPs

Running concurrently with TESSAs, Personal Equity Plans (PEPs) were available for investment between 1987 and 1999, allowing you to enjoy the profits from stockmarket related investments free of income tax and capital gains tax.

When PEPs were introduced in 1987 by the then Conservative Chancellor, Nigel Lawson, the idea was specifically to encourage people to buy company shares (and in so doing encourage people to demonstrate prudence, save for their own retirement, and invest in the UK economy). The range of possible investments in PEPs was gradually widened to include unit trusts, investment trusts and corporate bonds.

Investment could be made in both General PEPs and Single Company PEPs in the same year, and from 1991/92 through to 1998/99 the limits were £6,000 and £3,000 respectively. Any gains that remained within the PEP were entirely tax free, regardless of the holder’s own tax rate.

New Labour & Gordon Brown

New Labour’s 1997 election manifesto said, “We will introduce a new individual savings account and extend the principles of TESSAs and PEPs to promote long-term saving. We will review the corporate and capital gains tax regimes to see how the tax system can promote greater long-term investment.”

In practice, this meant the abolition of TESSAs and PEPs, two hugely popular and successful tax-efficient ways of saving and investing. They were replaced by Individual Savings Accounts (ISAs): with less attractive tax breaks, and a much lower annual limit on total contributions than the £10,800 that could have been sheltered in TESSAs and PEPs on an ongoing annual basis.

On 6th April 2008 the tax efficient PEP wrappers were automatically converted to ISAs preserving the investments within them. This resulted in a small change to the way interest held within the former PEP is taxed, but ISAs are still free of Capital Gains Tax and Income Tax.

So let’s take a look at what’s available now.

Individual Savings Account (ISA)

In April 1999, Individual Savings Accounts (ISAs) were introduced by the then Chancellor of The Exchequer, Gordon Brown, to replace old style TESSAs and PEPs.

An ISA is simply a tax free wrapper into which you can place either cash or shares. If you’ve got any savings, or investments, you should have an ISA because it saves tax and therefore increases your returns. Whether for cash or shares, an ISA should be the first stop for your savings. The way it works will depend on the type of savings you put in.

Cash ISAs

If you use a standard instant access savings account, then as a basic-rate taxpayer you have to give 20% of the interest earned straight to the Government (for higher-rate taxpayers this becomes 40%).

Cash ISAs are simply savings accounts where the interest isn’t taxed, meaning it will almost certainly generate a higher return than any ordinary savings account is able to. For example, for a cash ISA paying 6% to be beaten, a higher-rate taxpayer would need a savings account that paid more than 10% before tax!

Just like normal savings accounts there are a variety of cash ISAs available, such as instant access, fixed rate, and accounts with base rate guarantees (potentially useful now that the Bank Base Rate (BBR) is sitting at just 2%!).

Stocks and Shares ISAs

If you invest in stocks and shares (i.e. equities) then, depending upon which market it is traded on, that investment may also be eligible for inclusion in an ISA. Shares in some companies may be placed inside a self-select ISA.

I say ’some companies’ and ‘may’ because while Gordon was happy enough for us to buy shares in FTSE 100 companies, he didn’t want us to invest in those trading on e.g. the Alternative Investment Market (AIM). AIM is where the shares of smaller and more volatile companies are traded. His claim at the time was that this was to protect investors from potentially large losses, but cynically it could also have been to limit the value of the ISA tax shelter (and thus his tax loss) because AIM is also precisely where the largest gains are to be made!

A common use of the ISA shares allowance is for collective investment vehicles such as unit trusts or investment trusts. Placing these investments inside an ISA wrapper provides two tax advantages. First: any profits made from share price increases aren’t eligible for capital gains tax; and second it enables all the tax on bonds to be reclaimed.

Over the years since their inception, ISAs have gradually become less complex. Each tax year everyone over the age of 16 has an ISA ‘allowance’, which sets the maximum that can be saved within the tax-free wrapper from 6th April to 5th April. The current limit is £7,200, up to £3,600 of which can be in the form of cash, although the whole amount could be used for shares if you wish.

There are three basic scenarios:

• Using the maximum cash allowance. You can put £3,600 into a cash ISA, leaving £3,600 available for shares (though you aren’t obliged to use this).
• Use it all for shares. You are allowed to invest in £7,200 worth of shares (however this leaves no room for tax-free cash savings).
• Mix & Match. Any amount under £3,600 can be saved in cash, then the rest of your £7,200 allowance put in a shares ISA. For example, if you save £2,200 in a cash ISA then you have a remaining allowance of £5,000 left to invest in shares.

Any savings or investments must be made by the end of the tax year, i.e. 5th April; unused allowances don’t rollover, they are lost forever.

Summary

In summary therefore an ISA should always be the first place to put any savings because after the tax year ends, any savings or investments stay within the tax-free ISA wrapper for the future, where they’ll continue to earn interest. You can of course withdraw your savings at any time you wish.

Despite the much lower annual savings limits set by New Labour in 1999 (even now it is just two thirds of what it was when they came to power in 1997 - which seems odd given that we are heading into a pensions crisis and they are telling us to take responsibility for ourselves) it is still possible to have a useful amount invested within ISA wrappers: £7,000 per year from 1999 to 2008, and £7,200 per year after that, plus the gains made in each year.

IFA Promotion (IFAP) reckons that simply by moving money from ordinary savings accounts into ISAs each year, British savers could reduce their tax bill by a staggering £263 million a year!

So that’s my second tip, how to avoid paying tax on the first £7,200 of your savings each year. If you found it helpful then look out for more tips between now and Christmas. In my next post, I’ll be talking about How To File Your Self Assessment Tax Return Online by 31 January.

Feel free to forward a link to this post to your friends and colleagues: you may also wish to suggest that they sign up to our Free Newsletter using one of the boxes on this page to receive further free tax tips.

If you wish to leave a comment, please do so below. If there is no comments box below (because you are on the homepage of our blog) then simply click on the post’s title and scroll back down here again to find the comments box.

I read in a recent report by IFA Promotion (IFAP) that the British waste around £9.3 billion a year by paying too much tax. Now I know that we must all pay tax to support society, but on the basis that Her Majesty’s Revenue and Customs (HMRC) aren’t shy in pursuing us for anything and everything they can get their hands on, I personally see no reason to voluntarily pay more than the law requires.

Between now and Christmas we are therefore going to bring you a number of tax tips to help you stop contributing to this avoidable surplus. Today, we’ll begin with Inheritance Tax

Inheritance Tax (IHT)

One of the worst cons of the lot is surely Inheritance Tax (IHT): you work all your life, paying taxes as you go, but then when you try to hand on the benefit to your family afterwards HMRC takes a huge chunk (potentially almost half!) of that hard work - your children’s rightful inheritance - away from you; in total HMRC takes £1.9 billion from us each year.

I don’t agree with IHT as you can perhaps tell, but it’s there and so it must get paid: however, there is no reason to pay more than the law requires! This post will therefore try to help you reduce the amount that is eventually taken from your estate.

Inheritance Tax has been described by one commentator as “a bill that arrives after you depart” because it is paid by your estate after your death. If you have assets (including but not limited to): your investments and savings; your home and car; your furniture and personal effects; the proceeds of your life insurance (unless it is written in trust) that exceed £312,000 (2008/2009) …then the rate of Inheritance Tax is 40% for everyone (that’s equivalent to the highest current rate for income tax).

The tax is paid by those that inherit, and is deducted from the estate on death, so Inheritance Tax is relevant whether you stand to gain an inheritance or you plan to leave one.

For more advice on avoiding this death duty, you may find this guide helpful:

Inheritance Tax (IHT) Planning & Advice

It covers such topics as:

• What exactly is Inheritance Tax?
• Gaining an inheritance
• Top up your pension with your inheritance
• Invest it for the future
• Writing a will
• Inheritance Tax planning
• How an estate is distributed
• Some questions to ask your IFA about Inheritance Tax (IHT) Planning

NRB Trusts

However, what it won’t tell you about is something called a Nil Rate Band (NRB) Trust; this is something that every property investor should know about.

In simple terms a NRB trust is a method by which you (the Grantor) can gift a portion of your combined estate to your heirs (thereby using your full IHT allowance) but allow your spouse to continue enjoying the benefit of it for the remainder of their life. While the asset technically belongs to the inheritor they must act as trustee for the beneficiary (your spouse) for the remainder of the beneficiary’s natural life.

A NRB Trust is most commonly used in cases where the combined estate is valued at more than the tax-free limit, and it effectively doubles that limit for a couple. Obviously if you have an investment property portfolio with any amount of equity in it, this is a strategy that you should consider.

You will need an accountant, perhaps even a tax consultant, to advise you on the detail and set this up for you but if you consider that 40% of £312,000 (i.e. what you could potentially save at today’s prices) is £124,800 then it’s well worth investing £50 or £100 in the conversation for the sake of your children!

So that’s my first tip, how to save more than £120,000; if you found it helpful then look out for more tips between now and Christmas. Tomorrow, I’ll be talking about Individual Savings Accounts (ISAs).

Feel free to forward a link to this post to your friends and colleagues: you may also wish to suggest that they sign up to our Free Newsletter using one of the boxes on this page to receive further free tax tips.

If you wish to leave a comment, please do so below

The Bank of England’s Monetary Policy Committee (MPC) has yesterday cut the UK Bank Base Rate (BBR) to 2%, matching the lowest level in its 314-year history. This is a further cut of one percentage point.

The MPC has now cut the base rate three times this quarter:

Date                Rate cut (%)

8 October            0.5
6 November        1.5
4 December        1.0

Total                   3.0

As you can see, the base rate has fallen by three percentage points in three months, from 5% down to 2%. The base rate was at 2% for most of the 1930s and 1940s and was last at 2% in 1951, when Sir Winston Churchill was prime minister. Rates are therefore now at their lowest level for more than half a century.

The base rate has not been below 2% since the Bank of England was founded in 1694, during the reign of William and Mary.

Last week, before the cuts, the Bank of England’s Governor Mervyn King told a parliamentary committee: “We will take whatever action we feel is necessary on interest rates to steer the economy back into calmer waters.”

Where Will The Base Rate Go Next?

Some commentators believe that the base rate will fall to zero, that’s 0%, next year.

Willem Buiter, a former member of the Bank’s policy-making committee, believes this will happen because the recession will be “deep” and “prolonged.”

Agreeing with him, Stuart Law, Chief Executive of Assetz Plc said: “Even the MPC’s own members are rebelling by admitting they failed to act in time to protect the economy from the worst of the downturn. I will not be surprised if base rates end up at zero per cent in spring 2009.”

Will It Help?

Peter Bolton King, Chief Executive of the National Association of Estate Agents, said, “This cut, in reality, won’t do enough unless the banks play fair and pass the cut on to the homeowner. Government and lenders must do more to encourage first time buyers on to the property ladder in order to reverse the current downturn in the market.”

Given the insecure state of UK banks, several may attempt to boost their profits by only passing on a proportion of the cut. In particular, Barclays and HSBC, which have both avoided state bailouts, failed to pass on November’s 1.5% cut in full.

However, with the government as a major shareholder, the part-nationalised and fully-nationalised banks (Bradford & Bingley, HBOS/Lloyds TSB, Northern Rock, Royal Bank of Scotland) will perhaps pass on the rate cut in full.

If you are an investor with multiple buy-to-let properties financed by Mortgage Express (part of Bradford & Bingley), this may well be very good news for you. Certainly we received last month’s rate cuts from Mortgage Express on the properties we have mortgaged with them on tracker rates, so despite the tough economic times and credit crunch, these properties are currently more cash-flow positive than ever before!

Repossessions

Following an announcement from The Council of Mortgage Lenders (CML) which reported that repossessions could rise from 45,000 this year, to 75,000 next year (very close to the record of 75,540 set in 1991), a new scheme aims to help reduce the fear of repossession and reduce the number of homes being repossessed.

Homeowners who are struggling to pay their mortgages could get access to a Government rescue plan, the Homeowner Mortgage Support Scheme, which could give them a two year mortgage interest payment holiday. Under the planned scheme, people who experience a significant temporary loss in their income will be able to defer a proportion of the interest payments on their home loan for up to two years. The deferred payments will be added to their outstanding mortgage debt, which the borrower will pay off when their finances improve.

The National Landlords Association (NLA) is even trying to persuade the government to extend the above scheme to struggling buy-to-let landlords, who either failed to understand the fundamentals and invested unwisely (e.g. withdrew too much equity and left themselves over-geared), or where the tenant fails to pay the rent (e.g. through redundancy) leaving the landlord unable to afford the mortgage. The NLA’s logic here is that if the investor’s property is repossessed, the tenant will be made homeless thereby creating further problems.

You can learn more about this attempt by the NLA to help landlords in an interview on the BBC’s website:

==> http://news.bbc.co.uk/today/hi/today/newsid_7766000/7766597.stm

Halifax House Price Index: Prices Still Falling

Meanwhile property prices continue to fall: Halifax reported that its House Price Index fell a further 2.6% in November, making it 16.1% down in the past twelve months.

Conclusion

Repossessions are heading towards an all-time high.

Owner/vendor confidence is at an all-time low.

Mortgage rates have fallen massively, and may yet fall further.

Now is an excellent time to invest in property. As an investor, it will be a long time before an opportunity like this lands in your lap again!

A couple of days ago in Credit Crunch: London Scottish Bank, The Collapsing Pound & Investing to Make Money In The Recession I promised you a review of some property investment courses that we have recently had access to, and this is the first one. It is called The Sophisticated Investor and is presented largely by Mark Tolley, with support from Chris Wright. You may already know Mark as the author of the hot-seller NMD Finance Exposed report that you can find on our website.

The full Sophisticated Investor course describes the business that Mark & Chris run together, shows how they earn a living from it, how they built their multi-million pound property portfolio, and - perhaps most importantly - how you can follow in their footsteps. Their aim is not just to educate you, but to give you a full business model (they refer to it as a “business in a box”) that you can follow. In this respect their course differs substantially from many others that are available.

The Sophisticated Investor course itself comprises 4x DVDs of footage from their recent workshop, another CD with some deal-calculator software on it, a substantial and professionally bound manual of 239 pages, one hour on the phone with Mark Tolley, and 30 days of email support from him. The name “The Sophisticated Investor” is apt because this course covers far more than the average ‘How To Buy No Money Down’ course even attempts to: it introduces you to a whole new mindset, and ways to make money from property at just 10% BMV. 

==> http://www.summitfinance.co.uk/likes/tsi-intro

And yes, I do already have a copy of the whole course!

What I’m going to talk about here though is simply the ‘introductory trial’ DVD that Mark will sell you for just £13. In essence it’s DVD 1 from the set of four, with a few testimonials from the workshop delegates, and some extracts from DVDs 2, 3 & 4 thrown in. It is also, in my opinion, unquestionably worth the price regardless of whether you intend to buy the full course or not.

When it ran in October the £697 Sophisticated Investor Workshop day was split into four sessions, and this DVD includes all the film footage from the first session (together with some tasters from the others as I said) - and all for the price of a cheap movie.

Unlike the cheap movie however this DVD will teach you a surprising amount about property investment, almost regardless of your current level (there were many people at the workshop with substantial portfolios) and I can practically guarantee that after watching it you will be saying to yourself “I can do that, why didn’t I think of that before?”

The intro DVD will give you a remarkable insight into just how Mark Tolley & Chris Wright have built their business from scratch, and it really is no holds barred with no attempt made to conceal any important information or secrets from you. It will also introduce you to an entire extra category of people you can market to, that you most likely won’t have considered before, and then explain in considerable detail how you can do so (and even the legislation surrounding that marketing).

==> http://www.summitfinance.co.uk/likes/tsi-intro

My only criticism - and it is a minor one - is with the quality of a very small amount of the filming itself. Most of the time the camera shows the big screen at the front of the room, the entirety of the PowerPoint slide that Mark is talking about, and of course Mark himself so you can see what’s he’s pointing at. However, for reasons best and only known to himself, the cameraman occasionally decided that it would be more interesting for the audience to see Mark’s head and shoulders filling the entire screen. Personally I’d rather have been able to see the whole slide though!

I put this point to Mark, who is a friend of mine, and he has assured me that all the PowerPoint slides are available to anybody who buys the course. That may not help you with this introductory DVD, but to put it in perspective it only affects 3 or 4 slides (and you can always pause your DVD player before the camera zooms in if you really want to read them – personally I just listened to Mark) so it’s not such a serious issue as the previous paragraph may imply. I’m just very picky!

My strong recommendation to you therefore is that you visit Chris & Mark’s website, spend £13, and buy yourself a copy of the introductory DVD. In return you will get a physical product through the post, that you will afterwards be very glad you sat down to watch. There is no obligation on you to buy the full course afterwards, although I can’t guarantee that you won’t want to!

Anyway, here’s the link to the Sophisticated Investor introductory DVD:

==> http://www.summitfinance.co.uk/likes/tsi-intro

And when you have watched it, why not leave a comment below this post to tell others what you thought of it?

This post starts by discussing the credit crunch, both in terms of the collapse of London Scottish Bank and the further fall of the pound sterling yesterday, both of which are of course affecting the property market.

At the end of the post you will learn the conclusions that I have drawn from this news, and my suggestions as to how you can profit from it.

London Scottish Bank

If you missed the news yesterday you may not be aware that London Scottish Bank, with deposits of just £273 million, has effectively collapsed. The FSA stopped London Scottish taking any more deposits because it didn’t have sufficient capital to continue, and have forced the bank into administration.

The unusual thing here though is that the Chancellor, Alistair Darling, has stepped in and stated that no retail savers will lose any money, i.e. that all savings are guaranteed beyond the official limit of £50,000 per saver.

The reason of course is clear enough because if he hadn’t done this then there would undoubtedly have been a run on all small banks and building societies (there are still around 40 building societies with deposits of less than £1 billion).

Pound Sterling Falls

Yesterday the pound fell again against the dollar. Despite previous collapses last month, this was the biggest fall in percentage terms since 1992.

This would of course be bad enough under normal circumstances, but this happened against an already weakened US economy. Seemingly it was because economic data pointed towards a prolonged recession and further interest rate cuts.

Sharp falls in the FTSE 100 index, which also fell 5.2% yesterday, undoubtedly helped to undermine Sterling. It is therefore looking likely that the Bank of England will cut interest rates yet again on Thursday.

Investing To Make Money In A Recession

The recession we are entering clearly isn’t about to end any time soon, and this can be good or bad depending largely upon your mindset. Whatever government gets in next will have to make some tough decisions because they will have an awful mess to clear up, but that isn’t really the point here.

History teaches us that recessions are the times when fortunes are both made and lost, and you obviously want to ensure that you are the one making the fortune rather than losing it.

At present both general public, and amateur investor, confidence in the property market is pretty much at an all-time low. What this means of course is that right now it is very much a buyers’ market, so as a professional investor it’s an excellent time for you to buy.

But what happens if prices fall further? The short answer is that it doesn’t really matter providing you correctly understand the fundamentals of the property you are investing in (and you are investing in a specific property, not the entire UK property market!) and invest for the right reasons.

So what is the right reason to invest? In simple terms it is for a guaranteed positive cashflow, and by guaranteed I mean where the annual net rental income (i.e. after deduction of any letting agent’s fees, allowance for voids etc.) genuinely exceeds the full annual operating costs of the property (i.e. mortgage payments after the current discounted rates have gone, annual maintenance, gas certificate, insurance etc.). The wrong reason to invest, ever (and it has now been proven beyond doubt), is because you are speculating on short-term capital appreciation!

If you want help with your investment strategy, and to better position yourself to take full advantage of the numerous opportunities that now exist, then you may wish to consider going on one of the property investment courses that are available. Which course is best for you will of course depend upon your current skill level, and to this end we will shortly be reviewing two of them…

- Mark Tolley, The Sophisticated Investor Course

- Glenn Armstrong, The Glenn Armstrong Property Course

…to give you our opinion on what you may expert to learn if you do spend your money on them. The first review will be with you later this week, the second early next week. We have enjoyed writing the reviews and hope that you will enjoy reading them.

Meanwhile, if you run a property investment course and would like us to review it for the consideration of our readers, please let us know.

The next Surrey PWNE Group meeting is tonight (Wednesday) evening. As usual, the hosts are Chris Bignell and Christopher Doran.

As usual it will be a bar-based networking session with no speaker, also no entry charge. This will be the last meeting of 2008.

It starts at 7pm in the usual venue: Bookham Grange Hotel, Leatherhead, Surrey, KT23 3HS.

The club’s website is http://www.pwne.co.uk

Update, 15th December 2008:
This product has now been withdrawn by the lender.

Original Post, 20th November 2008:
Are you struggling to get a BTL mortgage with a high LTV?

If so, you will be interested to learn that we have managed to secure a commercial lender for a tranche of funds for 85% LTV, interest only mortgages, on residential investment properties. Here’s the specifics:

• 85% LTV will available
• Lender’s Base Rate + 2.75%
• Rental cover at 125%
• Interest only available
• 2% completion fee
• No ERC on tracker

There are certain restrictions depending on the investor’s property portfolio in the background, i.e. if you already have a portfolio of 11 or more properties then you will be limited to 75% LTV.

With regards to immediate refinance: there are no hard and fast rules for this because this is a commercial lender, so every application is considered on a case by case basis. The general feel we got from them however is that a purchase at 85% is fine, or where an investor has bought a property for cash through an auction or on bridging finance would be acceptable as a refinance application… however the lender may not allow capital raising, especially in the case of a distressed seller, but they will advise once they have assessed the application.

As ever, there are a few important things to note:

• A product is not secured until an offer is produced 
• Full information will need to be supplied before any agreement or offer is issued 
• No HMOs or multi-let properties will be accepted

The information required to support an application is as follows:

• Asset and Liability statement will be required 
• 6 months personal bank statements (business as well if applicable) 
• Most recent 3yrs financial accounts for any existing businesses 
• Property schedule 
• Copies of all details connected with the initial sale of the property, i.e. sales particulars or auction guide 

If you want to learn more about this product, please complete our Mortgage Application form and we’ll call you back.

As noted above, the lender may not allow day-one remortgage, so you may need to run a bridge for 2-3 months until they will refinance (every application is considered on a case by case basis). We can of course organise bridging for you, so providing the figures stack this could be a method to invest No Money Down (NMD). For more details, please complete our Bridging Application form and we’ll call you back.

==> http://www.summitfinance.co.uk/applynow