Buy-to-Let and Stamp Duty Proposals for the Next Government Budget
February 22, 2008
Stamp duty is one of the biggest nightmares for any property developer. The National Association of Estate Agents (NAEA) set out some proposals to deal with stamp duty issues. The NAEA proposals include increasing the one per cent threshold to £200,000 and £300,000 for the two percent threshold, for £2 million-plus properties they’ve proposed a 4.5 percent tax.
The NAEA also wants to cut the capital gains tax (CGT) which benefits primarily buy-to-let investors aiming to make it easier to buy and sell property thus add flexibility to the property market. Commenting on this proposal, Stewart Lilly, the president of the NAEA stated:
we would also like to see a revision of capital gains tax for buy-to-let investors who are fast becoming the backbone of the private rental sector
Let’s hope that the chancellor Alistair Darling take these proposals into consideration for the next budget, just weeks away. Currently, the UK property market is facing many challenges therefore this is the time for all interested parties to bring their ideas to the table.
Popularity: 10%
Can You Afford Your Next Property Development Project?
February 21, 2008
It’s very important to make sure that the property you’re planning to develop is the best investment, before investing any money in it. You need to consider:
- The set up costs involved with acquiring the property (estate agents or legal fees, deposit, the actual property price).
- Any renovation and refurbishment costs (labour, materials, decoration, etc…).
- The everyday running costs (maintenance costs, insurance, mortgage, bills).
- The potential resale value.
Consider all these costs carefully, and then subtract the first 3 from the prospective resale value. The amount left is your potential profit. You will know whether any given property development project is good, or bad!
Sometimes you may even need to cut back on expenditures when developing your property. For example, if you need to find that extra injection of cash to finish a development you could end up having to sell something personal to you, such as your car. It’s common for developers to sell their prized cars to finish a development, in order to make the profit they’re aiming for.
It doesn’t mean you have to be without a car though, as you could take out a car lease in order to get around from one development to the next.
Popularity: 8%
January was a Positive Month for the UK Housing Market According to the NAEA
February 19, 2008
According to the National Association of Estate Agents (NAEA), the UK property market witnessed a positive trend in January.
The NAEA could verify in figures released recently that the property market was gaining momentum in some areas including the amount of houses currently for sale and the number of potential buyers.
Over the month of January, the NAEA verified that housing stock increase by eight per cent and the number of property buyers rose by 11 percent
Popularity: 7%
Top Seven Property Development Success Factors
February 13, 2008
1. Knowledge of government and council policies
Knowing government and council regulations and processes is crucial. Knowledge of tax, legislation and financial implications helps you in all aspects of property development.
2. Build houses that currently sought after
In property, location and style is everything. It’s very important to buy property in the right location and that the architecture is what buyers are looking for. Study the area and potential buyers thoroughly before you buy any property.
3. Top project management skills
This is very important. Project management duties involve liaise with technical workers, dealing with approval processes, raising necessary funds.
4. Prioritise long term contracts
By negotiating longer term contracts property investors can reduce risks.
5. Safeguarding of excellent customer relationships
As a property developer you should establish good relationships with your tenants.
6. Maintaining all facilities in pristine condition
You should monitor the conditions of the property at all times and ensure maintance. Property maintenance services are crucial because soon or later the work has to be done, and if is not the overall property value may be affecyed.
7. Know and understand the property market
The property development learning cycle is one of discovery. To be successful you need to keep up with tax implications, building legislations and processes, financial and borrowing facilities.
Popularity: 100%
Pay Your Mortgage Early for a Better Retirement
February 12, 2008
Typically the mortgage is what determines when you can retire, and will certainly make a difference in your quality of life after retirement.
Keeping the payments up is a great way for borrowers paying off their mortgages early. It may sound hard to do this but is not. If you keep paying the same amount you were paying last year before the interest rates going down.
For example someone who pays £629/month on a £100,000 mortgage at 5.75, could potentially pay less £30 at 5.25. But if that person continues paying the same amount would be able to pay off this mortgage two years earlier.
Paying your mortgage off even a few years early will free up money to spend on other things.
Popularity: 9%
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