Story 1: Another ‘property investment company’ under investigation for fraud
Anthony Armstrong Emery, a British property developer who raised funds from international investors for a flagship Brazilian government low-cost social housing initiative, Minha Casa, Minha Vida (My House, My Life), is under investigation for alleged fraud and other offences relating to the housing scheme. His company, EcoHouse Group, doesn’t appear on the official government list of construction companies participating in the scheme, despite claims to the contrary on its website, nor is it recognised by the two state banks leading the scheme.
Funds amounting to R$150m that the group has handled over five years are being investigated on suspicion of money-laundering, tax evasion, tax-related crime and criminal conspiracy. Mr Armstrong Emery’s activities also extended to building work in northern and southern states.
EcoHouse suspended activities earlier this month, after a similar warning had been flagged up by the Monetary Authority of Singapore that the company was not recognised by the city-state’s authorities. EcoHouse mounted a spirited defence against “malicious, inaccurate and fanciful allegations”, but Mr Armstrong Emery has since been unavailable for comment. For more information, read FT.
Kate’s thoughts: Please, please, please do not hand over your hard earned cash to unregulated property investment companies without doing extensive research first. We are happy to take a look at any deals you see – so please, don’t waste your cash, checkout any property ‘deals’ carefully and never invest in something you don’t see.
Read my - Making Money from Property Checklist
Story 2: Chancellor needs to act now for clarity, confidence and certainty for construction
The Royal Institution of Chartered Surveyors (RICS), in the wake of the largest-ever consultation of UK chartered surveyors, has stated unequivocally that this Autumn statement is the Chancellor’s last chance to give the property and construction markets an immediate boost, and keep momentum going, through to the general election.
RICS offers six recommendations that, it says, will introduce short-term clarity and also boost long-term confidence. In the short term, the Chancellor should increase investment to deliver a nationwide programme of Housing Zones, which will give industry the confidence to plan, invest and deliver. He should also organise UK government guarantee schemes to support SME builders. He should also kick-start new-build commercial property and compensate for the effects of PDR.
In the longer term, RICS calls for action on infrastructure planning and delivery, forward guidance on property tax, and construction procurement reform in the UK, since it’s the most expensive procurement process in Europe. To read more, go to RICS.
Kate’s thoughts: RICs has an incredible understanding of the property and it would be wise for any current and future government to listen to their suggestions. All of the issues in housing now relate back to the fact that successive governments haven’t delivered enough roofs over voters heads – and housing needs to remain one of the top 3 issues the next election is fought on.
Story 3: Are landlords too optimistic about the life expectancy of their properties’ contents?
The AIIC (Association of Independent Inventory Clerks) has established in a recent survey that letting agents, landlords, and even tenants tend to miscalculate the longevity of a property’s contents. The most practical approach is to calculate the realistic ‘shelf-life’ of everything in the property so that, should things go wrong, working out compensation is relatively straightforward.
However, it’s often more complicated and landlords can’t simply have ‘new for old’ when a tenant damages a carpet. The AIIC offers specific calculations involving the original cost of the item, divided by its life expectancy, that give a realistic compensation value for the landlord that s/he can claim against the tenant. Compensation issues continue to be the principal cause of landlord/tenant tiffs and it’s usually worth the landlord’s while to visit the tenant at the property to discuss the problem and establish whether a tenant’s claim of ‘reasonable wear and tear’ is correct. For more see Property Reporter.
Kate’s thoughts – one of the biggest problems tenants complain about is the lack of repairs and maintenance our landlords carry out. Some are very good, but some, especially those who haven’t been able to increase their rents for the last 5+ years try to ‘avoid’ spending any money – it’s not wise! So take a look at the AIIC information so you know what needs replacing and when.
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Story 4: Remortgage fix from Santander is their lowest ever
Santander is launching its lowest-ever two-year fix for its remortgage customers, set at 1.84% and up to 60% LTV.
They carry a booking fee of £995 and include: a two-year fix at 2.29% (reduced by 0.20%), available up to 80% LTV for homebuyers and remortgagers; a five-year fix at 3.44% (reduced by 0.15%), available up to 80% LTV for homebuyers and remortgagers; and a two-year tracker at 2.04% (reduced by 0.30%) available up to 80% LTV for homebuyers and remortgagers.
All come with a free valuation and £250 cashback for those buying a new home, and a free valuation and free legals, or £250 cashback, for those remortgaging. Miguel Sard, Head of Santander Mortgages, Santander, commented: “We are delighted to end the year by offering some of the lowest rates available in the market”. For more information, look up Santander
Kate’s thoughts – if you haven’t already, get your mortgage’s checked, the deals around just now are some of the lowest ever seen, and changing mortgage can save you thousands of pounds. Chat to a broker so you know what’s the right mortgage for your personal circumstances.
Read my - Choosing a perfect home checklist
Story 5: Commercial properties may bring home more bacon than residential
UK commercial property saw returns nudge 21% in the year to October, and global equities were at a record monthly high, providing returns of 12.8% in 2014. The average annual return for the nine key asset classes decreased from 4.6% in October 2013 to 3.9% in the same month in 2014.
UK residential properties showed strong growth at 11.3%. Ashish Misra, Head of Investment Policy at Lloyds Bank Private Banking, said, "In the year to October, UK Commercial Property has been the best performing asset class. Whilst demand in London has driven returns for much of the period, recovery in the regions appears to be coming through more strongly now as well."
UK Bonds delivered a total return of 6.7% in the year to October 2014, over 1% higher than the return from international bonds (5.5%). Gold's twelve-year run ended in 2013 when the price plummeted by 27% in both November and December 2013. Coffee was the top commodity over the year, with a price rise of 76.1%. To read more, go to Property Reporter.
Kate’s thoughts – we tend to focus a little too much on residential property and it’s often far more important to remember that when investing in property, what you want is to make money. This doesn’t always mean that residential investment is best. Make sure you consult a financial advisor and check your property is earning you the money you hope.
Read my - Making Money from Property Checklist