Brazil property… positioned for growth?
When you are looking for an overseas property investment, what are the key points that need addressing before you commit to a viewing, reservation or a purchase?
Capital growth, secure economy, stunning scenery, fantastic prices, rising tourism figures, beautiful climate… How about oil reserves and major sporting events? …Ok those last two may not be as appealing, but trust me they are going to drastically effect the value of your investment property.
An example of a major sporting event’s implications on local property values would be South Africa which is due to host the 2010 World Cup. In 2005 property values in South Africa rose by a staggering 35%, with news of the country’s successful bid from 2004. It isn’t only South Africa seeing their property prices increasing either. Cape Verde just off the coast is seeing similar price increases; this would probably be pinned down to it being a great stop off for anyone travelling to world cup games from western countries. Click for our Cape Verde property.
Belo Horizonte, Brasília, Cuiabá, Curitiba, Fortaleza, Manaus, Natal, Porto Alegre, Recife, Rio de Janeiro, Salvador, São Paulo. These are all “host cities” therefore these are going to be the cities that see the most direct benefit that this prestigious event will bring with it. But it will definitely not stop there, I am sure that all of Brazil is going to see the benefits of the 9.8 billion reias the government has set aside for tourism development of which 63.3% is allocated to infrastructure upgrades.
Brazil’s huge newly discovered oil reserves are sure to act as a magnet for Foreign Direct Investments. With oil reserves around the world dwindling and demand not letting up we are seeing another rise in prices at present. Brazil has positioned itself in a position where it is not overly reliable on oil; therefore it is now in a fantastic position to exploit its reserves.
So you can see where the growth of your investment property is going to come from. Other points I think you have to take into consideration though are: The fact that Brazil is only a 7 hour flight from Europe, it has increasing employment and a massive shortage of first-time homes somewhere between 8-10 million!
Oh Wait! Don’t forget that Brazil is also due to host the Olympic Games in 2016!
Check out our Brazil property
As lending relaxes property investment increases!
It’s what most of us have been waiting for, the small time frame between lenders relaxing their criteria and property prices increasing.
We all knew that lenders were going to need to increase their loan to value rates, and that when they did it would make a massive difference to the property investment market.
Over the past few months half decent rates had been reserved for investors with 40% deposits. Now i do not condone most no money down deals, i think they lead to more problems than they alleviate.
However! the case for the investor with a healthy 20% deposit should be heard, they have a large amount of equity in their property and should now be relatively safe from negative equity.
It seems the lenders now agree.
What are the new rates like?
Since the BOE base rate reached 0.5% products requiring a 15% deposit have risen from 169 to 231. And the number of products requiring just 10% upfront has gone up from 89 to 105 in the last month alone.
This is certainly a massive difference to a year or even 6 months ago.
Nationwide has already announced a new influx of deals, including some at 85% loan to value and they have also released some of their best rates at 70% ltv, from their previous at 60%.
They have even released a special 90% ltv rate for investors that hold one of their flexaccounts. These start at 4.63% for a 2 year tracker.
The Woolwich have also released details of their new 75% ltv rates, this is the first time the lender has made it to 75% for at least a year. The new mortgages include a lifetime tracker on 2.94% and 2 year fixed on 3.99%.
Abbey also have a new range out, these are exclusively for their current account customers. One of their best is a 90% ltv 3 year fixed rate at 5.99%, their cheapest mortgages are now available at 70% from 60%.
So why the sudden change?
It seems that lenders now believe that the worst is behind us, in short if they are offering 90% ltv mortgage they believe that property prices will not drop more than 10%, in fact they believe that prices will increase in the future, as now being reported in most news channels.
Just last month hsbc pledged to lend an extra £500m at 90% ltv by the end of this year!
Add this to the political pressure being put on lenders by the government, this was summed up by the governments own lending house northern rock as they released some of the best ltv rates seen for over a year!
So should i buy now?
If you are looking at getitng into property investment there has never been a better time to invest, there are still seller under pressure but now there is also the promise of some competitive rates. This means that not only can you buy cheap, you can also borrow cheaply!
We don’t expect this to remain the case for long so why not add or start your portfolio with some discounted property now!
Also check out our UK Buying Guide for handy hints and tips.
With stability grows confidence!
Shopping at the weekend I was amazed at how busy all the shops were, now I know it’s christmas and all that but perhaps this could be the final piece of the puzzle that will lead to us climbing out of recession.
It does seem for the first time in months that the public are not as worried as they were about the economy.
According to the times, people are more optimistic about the economy than at any time over the last 18 months.
What are the reasons for this?
- We have just had the highest october high street sales for 7 years.
- The pound rose to it’s highest level against the dollar.
- The ftse closed up 92.5 points, at a two week high.
- Alistair Darling is looking at cutting business taxes to encourage people to have faith in labour.
What do people think about these facts?
Is this a result of the “quantitive easing” which we (the public) are going to be penalised for after the elections?
or
Is this the start of Britain pulling itself out of recession?
Could the points above be the catalyst that leads to us out of our economic quagmire?
What does this mean for the property investment market?
In my opinion it means that the worst is now firmly behind us, the increased confidence on the high street coupled with the low supply of new build property coming on the market means robust values.
Investors can now take advantage of a unique position in the property investment market. There are still a small amount of reposessed property and good discounted new build units available which if bought now are sure to increase in value over the next year.
Investors purchasing these can then re-mortgage on much better loan to value rates.
The property investment market is ripe at the moment, will investors choose to invest or wait until the moment has passed and lament on a missed opportunity?
As always, we will probably see both.
If you want details of some of our UK Buy to Let Opportunities at the moment please let us know, they are selling fast!
Property Investment – Why you actually have no choice!
I have noticed many of our investors are holding off investing in buy to let property, instead choosing to make doubly sure that the market is on its way to a recovery before jumping in.
Not a bad idea, it certainly mitigates your risk in the property investment market.
But! are you not missing out on the very time when developers are looking to do discounted deals?
Developers are no different from us, they want to make as much profit as possible which means getting the very best price they can.
If you want to sell your car, your only going to discount it if you really need to.
If suddenly all other cars dissapeared and yours was one of the only ones available you would think you were on to a winner and charge top whack!
This is what will happen with new build property soon. The property investment market is recovering and new build property supply is decreasing!
Soon 20% discounts on new build property will only be available in the very worst developments or the largest bulk opportunities.
When this happens it will be no use complaining you have missed the boat, it will have sailed and you will face the choice of not investing at all or paying top prices for buy to let property.
If you have £20,000 spare at the moment you have 3 choices as far as i can see.
1. Leave it in a savings account.
You will probably achieve 3% on your money but it is relatively safe.
2. Invest it in shares.
But what shares? most people have probably seen their share portfolio’s decrease by at least 30% over the last year so do you want to risk it again? even if you do only the very highest risk shares wiull give you the kind of returns that you can expect from a buy to let property.
3. Buy to Let Property Investment.
Just this week we have sold 15 units in 2 different developments, one in Gravesend in Kent, £21,000 into a mortgage gets you a return of 8% and clear profit of £300 per month. One in Salford costs £20,000 into a mortgage and a return of nearly 9% with profit of £330 per month.
Most of these units are already let, one of our bulk purchasers rented 5 apartments in Gravesend in one day. We only offer property in areas where we know there is high demand.
We are seeing more investors buy now than for many years, all of those that are not have to ask themselves why not? Are you perhaps missing out when others are taking advantage of this unique situation?
We know 2 things for definite.
1. The property market will recover at some point.
2. The yields you can achieve today are some of the highest we have ever seen.
These 2 points make it impossible not to at least consider property as an investment strategy.
Quite simply, if you want a good return on your money with little risk and the prospect of high capital growth do you really have a choice?
