Overseas Property, is it the little things that matter?
What really attracts people to purchase an overseas property, apart from location, price, and dimensional suitability? I would argue that it is normally the LOVE factor. Most people fall in love with the property they want to purchase and will normally go with the one that just feels right when they go to view it, sometimes even in spite of it not being “the best deal.”
The reason for the question is, believe it or not, to do with overseas properties and what developer’s currently use to entice buyers to part with their hard earned cash. We have just experienced something which we feel is a fantastic idea from the developer of our Barbados Property Investment.
As I said, I believe it’s the little things that matter when it comes to a purchase, so what if a developer gives you the chance to fully customise your apartment when you purchase it? On our apartment in Barbados, because we purchased early, we were given the option to change the layout of the apartment by moving non load bearing walls as well as specifying if we wanted air conditioning in extra rooms, fans in extra places, different styled lights, the list is endless!
The reason I write about all of this now is that all purchasers on Weston Resort and Ixora Resort are given their own personal secure area on the developer’s website, which details all correspondence, construction progress, legal documents and now… “Interior styling” the interior styling tab is a new feature and we think it’s just great! We are now given the chance to customise the whole colour scheme of our apartment as well as choose between different finishes in our kitchen from the worktops to the tiles even down to the washing machine.
We think it is vitally important for clients to feel happy right the way through their purchase of an overseas property, this is why we stay in contact with all of our clients, offering advice and updates right up to completion.
Please use the link for more details on our Barbados Property.
Barbados – Things are heating up!
Barbados, probably one of the most revered holiday destinations in the UK and arguably the world. The traditional busy period in Barbados tends to last from around the end of November to the end of January and with this, British Airways are advertising their Barbados winter holiday packages in order to convince some of those tourists to fly with them.
British Airways announced earlier this year that they would be increasing their services between London Gatwick and Barbados as a result of the increased demand currently being shown for the Caribbean island this is great news for anyone that has a vested interest in property in Barbados.
Although Barbados has a strong economy away from tourism it also relies heavily on the industry and all of the money bought into the country and spent in the country by tourists from around the world. This money can be invested into the local economy to promote future growth, which is good for the country as a whole.
All this is good for those investors that have purchased in Barbados or are thinking of purchasing in Barbados in the near future.
We are working (and investing) with a pioneering developer in Barbados that is offering excellent investment opportunities as well as properties ideal for a lifestyle purchase. All of the properties are priced far below any other comparable properties in similar locations. There is a unique system in place to ensure that maintenance costs are kept affordable and the developer has multiple offers from top hotel operators to run the development on completion. This gives purchasers – a low purchasing cost, low ongoing costs and high rental returns! Win, win, win!
Please click the link for more details of our Barbados Property Investment.
Britain to become a nation of renters… but wait!
Having just seen a news article stating that Britain is to become a nation of renters, I felt that it contradicted slightly the other news I heard today which was that a leading mortgage provider are now offering a 100% LTV mortgage! Yes, that’s right, it’s back! Arguably the thing which started the whole credit crunch and recession we are currently experiencing in most westernised countries. I understand that, at the moment the terms to these types of mortgages are very onerous, but I feel it’s only a matter of time before these are widely available on better terms.
Obviously there is A LOT more to the credit crunch and the recession than the 100% mortgage, but I must say, when people are given the chance to purchase a house that they can ill afford, I start to get worried. Then again, maybe it is exactly what the market needs at this point to stop the UK turning into a “nation of renters” From my calculations; in most places it would definitely be cheaper to service a 100% LTV mortgage than rent a property. Crucially though, what would this do to house prices, if there is a massive drop off in the private rented sector? With less competition from renters, the currently healthy rental market may start to take a turn for the worse, landlords having to lower their market rent in order to attract tenants. Would this cause a sell off of some investor properties? Doubtful, as prices are not exactly at all time high levels at the moment. So as people may start to decide to Purchase rather than line the pockets of their landlords will we see a correction in rental yields which are very high at the moment, with property prices rising in accordance?
With the return of a 100% LTV mortgage there will now be the opportunity for people that had very little equity in their current house to upsize, this could free up FTB properties which can now be funded with new mortgages on the market. First time Buyer’s are often called the lifeblood of the market. Without new buyers in the market who will purchase all of the new supply from housebuilders?
What does all of this mean for those wishing to invest in UK property? I am a firm believer in a recent article I read in the Estates Gazette which gave a compelling argument for the fact that we need different methods to measure the UK property market these days, and the old method of an average wage multiplier to the average house price ratio should be overlooked. The reason stated in the estates gazette was the fact that property prices have continued increasing albeit very slowly over the past couple of years, but real income has been dropping, much due to the very high inflation we are currently experiencing. This is why other signals must be taken into account, one of which is always going to be mortgage availability and the cost of credit. Now availability is very high and the cost of credit is at an all time low are we just about to see a large increase in UK house prices?
Time will tell…
Where’s your winter retreat?
With summer coming to a close, where are you going to be jetsetting off to this winter to get away from what is already being named a “brutal” winter??? With snow forecast as early as next month (October) I can see why many of the destinations causing a buzz at the moment are those with high levels of sun every year and minimal rainfall.
One such location which has been causing a stir in the property industry recently is Cape Verde, the most searched for investment location last month. We have been a preacher for investment in Cape Verde for some time now. With its excellent location in relation to Europe and the fact sun is almost guaranteed with 360 days per year! This is just the type of location you need if you are looking to go away for a short break in the depths of winter. The flight is almost directly south from the UK which means there is very little time difference and a day is not lost due to jet lag.
Cape Verde is an archipelago of 11 islands of which we believe the prime island for investment is “Sal” due to its present infrastructure and a successful international airport. In Cape Verde we wouldn’t invest with any other developer than The Resort Group, their performance over the last couple of years in this location has been phenomenal!
The Resort Group are the pioneering developer behind projects like Tortuga Beach Resort and Dunas Beach Resort, both sitting on the beautiful west coast of Sal on Ponta Preta beach. Tortuga Beach Resort which was their first development is now a fully operational holiday destination in its own right.
The importance behind The Resort Group’s sterling success on the island of Sal in Cape Verde lies with their new investment proposition in Llana Beach Hotel & Spa.
Llana Beach Hotel & Spa is TRG’s newest project on the island of Sal. Llana is a development of 601 hotel suites that are available for purchase by any investor be it through Cash, mortgage or a Self Invested personal pension.
Here’s how it works:
The Resort Group offer investors the chance to purchase a unit in their development off-plan, (prior to build completion) there are 3 purchasing options with 3 different deposit levels from 45% right up to 85%. By purchasing a unit with only cash they will actually give a 15% deposit, hence the no 100% option!
The Resort Group pay interest at a level of 3% on the first 45% of the property price for a period of 3 years, or until completion.
Upon completion of the suite the purchaser will benefit from being a member of the rental pool operated by a top hotel operator* meaning very high rental returns for years to come. The purchaser is also given 5 weeks free usage per year of their unit in a top 5 star resort in a beautiful location.
Here’s why it works:
The Resort Group have a long and established reputation in Cape Verde and can not only promise to deliver a high end development on time, they can prove that they’ve already done it once this year.
The Resort Group have partnered with the largest resort operator in the industry (Sol Melia) to ensure that rental returns are high and consistent. This has already been proven to be the case, with their first development Tortuga operating successfully and consistently at a level of around 80% occupancy.
The Resort Group have now sold out on both Tortuga and Dunas, which puts them in a very strong position for this, their third development on the island.
When a developer is partnering with companies as large and respectable as Sol Melia, your investment is in safe hands!
For more details of any of our current investment opportunities, please contact us on +44 (0) 1243 527 327 or at info@freshinvest.co.uk
Barbados still holds strong in competitive tourism industry
News released by the Barbados minister of tourism earlier this week, is sure to put a smile on many of our clients faces! Even in tough times economically, Barbados is thriving as a tourism hotspot and still growing in terms of its tourist arrivals.
Any investor that is looking for maximum occupancy rates in their purchased property in Barbados will be happy to hear that Tourism numbers are increasing as it ultimately means there are more people visiting the island and there is more chance of their property being filled and thus a higher rental return.
Figures released this week stated that there was “250 385 stay-over visitors recorded during the period of January 1 to May 30, an increase of 13 724 from last year’s numbers, representing a 5.8 per cent increase in arrivals. Cruise ship passenger arrivals also grew 3.4 per cent for the same period in comparison to 2010.”
The above is great news for property investors however; apart from the increase in the stay-over visitors through this period, could there be an underlying message? To be able to determine this, I would like to see the figures for the traditional busy period of December to January when room rates tend to be higher. If these figures have stayed stagnant, or decreased, it may prove that holidaymakers are still going to Barbados, just at the times when it becomes more affordable, in a bid to save money.
As saving money is on most peoples mind at the moment , the case has to be bought forward for purchasing on one of our developments in Barbados.
Both Weston and Ixora Resort are both located in St James on the West Coast of Barbados. Anyone that has visited the island will know that St James is truly the most luxurious and arguably beautiful part of the island. Property prices in this area of Barbados are traditionally sky high! However “A keenly negotiated land purchase price, innovative construction methods and very well managed build costs are the key elements to this development. The developer is renowned for delivering high quality apartments in premium locations at exceptional value. Their choice not to embark on expensive marketing campaigns and to avoid costly gimmicks often associated with overseas property sale has kept the project lean and helped to deliver high value.”
It seems there are two ways this latest news can be interpreted:
1. People are looking for cheaper alternatives to their yearly holiday in Barbados, which is exactly what Weston and Ixora can provide. We have worked out that even with low room rates and occupancy rates compared to other developments, our purchasers will still have yields in excess of 10%pa
2. Tourism in Barbados is increasing, which is great news for the whole of Barbados, including both of our developments where, even on pessimistic figures by today’s standards you will receive rental yields of 10%
If you would like some further information on any of our property investment opportunities, please contact us.
Llana Beach Hotel and Spa – Cape Verde
Llana Beach Hotel and Spa in Cape Verde is now nearing release as Dunas Beach Resort gets closer to becoming completely sold out and Tortuga Beach Resort strives on as a top class holiday destination in Cape Verde.
Llana Beach Hotel and Spa will be The Resort Group’s third development in Sal, Cape Verde and will provide purchasers with all the security of investment, Capital Growth, Rental Yields and amenities which have come to be expected from a developer of this stature.
With 3 sites fronting the pearly white sands of ponta preta beach on the west coast of Sal. There is no better location or place to purchase for sun seekers of Europe at present. With 360 days of sunshine per year, Cape Verde is ideally located for those sun worshippers that look for a hassle free property with GUARANTEED sun.
Llana Beach Hotel and Spa will again be managed by the largest resort operator in the world, Sol Melia. Sol Melia, have proven themselves time and time again as a world leader in the holiday industry and wherever they base themselves, tourists follow, which is exactly what has happened at Tortuga Beach Resort, which had to be opened early due to the heavy demand from Holidaymakers!
Llana Beach Hotel and Spa will offer the same fantastic rental prospects as Both Tortuga and Dunas Beach Resort. Clients are offered very high rental yields after management costs on these fully managed 5 star Resorts, along with free use every year. The rental yields for investors will be determined by the tourism figures that are achieved by the hotel and the island of Sal in general.
Sal is in an unrivalled position for future growth in the tourism industry, just a short distance from Europe and with regular and increasing flights from most major European cities, tourism is expected to top 1,000,000 visitors pa by 2015. The real pull of this island is the guaranteed sun and beautiful beaches. The fact there is only a 1 hour time difference means that short breaks are entirely possible, without the need for a lost day to jet lag.
We will be releasing full details of Llana Beach Hotel and Spa in the very near future.
Interested? Stay informed.
New world heritage site – Barbados
As news surfaces of Bridgetown being named a world heritage site by UNESCO. What does this mean for Property owners in the country and future investors in Barbados Property?
There are many factors which affect property prices in the Caribbean and Barbados in particular. Barbados has a more established economy than many of its Caribbean counterparts, this can be attributed to its history of food production and the fact that many people don’t just come to Barbados for a holiday, they buy property there and many decide to settle upon retirement. The country can therefore be less reliant on tourism; however it is still heavily reliant on tourism which is as always, strong.
The World Heritage news is a good sign for the island and should affect property prices positively. Not only this, but the increased tourism to the island should lead to better occupancy rates for anyone renting their property, which we are particularly happy about. Our property on the West Coast of Barbados, was purchased at a fraction of the price of others in a similar location and for precisely that reason we are confident that rentals achieved by the professional hotel operator will not only pay our mortgage, but provide us with a healthy net income every year.
We have already received projections from various hotel operators on what room rates they believe they could achieve. We took the room rates per night and multiplied it by various occupancy rates and the results were quite frankly, astonishing. At just a 38% occupancy Annual Rental Revenues after management costs were £12-£30k! After mortgage repayments on a 55% LTV mortgage, income would be £8k-£25k, dependent on apartment size. Another point to take into account is the maintenance fees applicable to various properties in Barbados, where fees can easily be US$12,000 per year for just a 1 bed apartment! Both Weston Resort and Ixora Resort will utilise an owner’s cooperative upon completion which will take charge of the maintenance, thus eliminating costly providers taking a large profit. For more information on maintenance figures please contact us.
Barbados is an established market with a stable political system, huge regular tourism fan base and is a great investment or lifestyle property purchase, even better when you purchase through us!
Availability across our 2 fantastic sites on the West Coast of Barbados is as follows:
Weston:
Block 3 apartment 2 – A raised ground floor 4 bed apartment right by the pool and one of the closest apartments to the beach. $432,000
Block 6 apartment 2 – A raised ground floor 1 bed apartment with sea views! This apartment is a large 1 bed with a partial sea view. $270,000
Block 7 apartment 6 – A first floor 2 bed apartment with full sea views. This apartment is an excellent opportunity for a couple or smaller family looking for excellent views of the Caribbean Sea. $340,000
Ixora:
Apt 3 & Apt 4 – Both of these apartments represent a great opportunity for someone looking for a “bolt hole” property in Holetown, Barbados – $215,000
*All prices in US$
Golf Property in Barbados
A = Weston Resort, B = Royal Westmoreland, C = Apes Hill, D = Sandy Lane
Property near to a golf course on the West coast of Barbados can be:
a) Far cheaper than you’d imagine,
b) A stones throw from the beach,
c) A great investment for years to come.
Weston Resort in St James Barbados is not only a great property investment but can provide an excellent getaway for the golfing enthusiast.
With 3 top class golf courses all within 6 kms of the properties, these will be a welcome sight for any holidaymaker looking for reasonably priced accommodation on the West Coast of Barbados, with easy links to the local golf course.
The three courses within close proximity to the properties are Royal Westmoreland (2 km), Apes Hill (6 km) and the Sandy Lane golf course (5 km). There are many more on the island though, for those willing to travel slightly further.
This is great news for us, for the simple reason that we have purchased on Weston Resort ourselves and are looking forward to playing once we get out there! Below I have highlighted a few of the reasons that led to us purchasing on the Weston Resort in St James, Barbados:
- A fantastic location just 100m from the beachfront at Alleynes Bay,
- The developers have achieved a very successful pre sale, leaving the development financially secure,
- Prices that are far below anything comparable on this coast,
- Attractive maintenance fees, far lower than any other developments on island,
- An offer from a top hotel operator in Barbados to manage rentals,
- Attractive payment plans that can be designed to suit the individual.
At present there are just 3 apartments remaining on the development all of which represent a great buy for investment and lifestyle purposes.
- Block 3 apartment 2 – A *raised ground floor 4 bed apartment right by the pool and one of the closest apartments to the beach. $432,000
- Block 6 apartment 2 – A *raised ground floor 1 bed apartment with sea views! This apartment is a large 1 bed with a partial sea view. $270,000
- Block 7 apartment 6 – A first floor 2 bed apartment with full sea views. This apartment is an excellent opportunity for a couple or smaller family looking for excellent views of the Caribbean. $340,000
There is another reason I believe these apartments are a great purchase at the moment and it lies on the investment side.
As I see it, I believe the demographic for holidaymakers in Barbados may begin to see a change soon, with prime beachfront land on the west coast all but developed, I believe large price rises could be on the horizon in areas just in land. I also believe that the rental market may begin to look towards the self contained apartments in search for a lower cost holiday that gives more freedom to travel when on the island.
Completion is set for February 2012 and construction is progressing well see here. With 10%+ yields available at just a 38% occupancy rate and purchasing prices as far as 40% below nearby comparables I am personally excited for the future of this development.
Please click the link for more information on our excellent West Coast Barbados Properties
Student Property Investment – still a great buy
The student property market has been the focus of much debate over the past few weeks in the property industry. Still remaining strong and with more and more purpose built student blocks rising from the ground. But will the increased fees now payable to universities stifle the rental market as less people can actually afford to go? If they can afford to go are more students going to be looking towards the private rented sector and house shares to cut down their monthly overheads?
High Rise Student blocks have started popping up in most university student towns and cities as savvy developers see the potential for a 51 week tenancy agreement and maximising their rack rent by utilising as much of the available space in a building as possible by filling it with bedsits and communal spaces as opposed to self contained apartments.
High rise student blocks are often most popular with the overseas student market that will be coming over to the country and staying for a longer period of time often lets of 43 or 51 weeks, they tend to stay in the UK for the summer, they also normally pay higher fees, sometimes up to £20,000 per year making them a vital fee earner for UK universities.
London in particular is an area where student development is taking off and with figures recently released showing demand over the next few years and the supply that is currently in the pipeline, it could be only the overseas students that will be in a position to front the rising costs. The predicted shortfall of beds is 47,000 by 2016! In the new Nido scheme at Spitalfields students will be expected to pay up to £350 per week per person!
Even with the caps on overseas students that the government has proposed we feel the student property investment market is going to remain strong for a few years yet. As top universities start to charge higher fees in London maybe more students will start to look at smaller university towns and other large respectable locations may continue to grow.
To see our latest UK student property investment opportunities please click the link.
Barbados Property – Weston Resort update
Weston Resort, a development of 45 apartments on the west coast of Barbados, at prices far below anything seen in this location in recent years, is still progressing well and the exterior shell of the building is coming up very quickly.
After a small set back due to an unforeseeable amount of rain in the past few months, Weston is still taking shape quickly. We have been constantly updating our construction progress page with more and more pictures of the site as it begins to take shape and form one of the best investment opportunities in Barbados we have ever seen.
Weston offers investors the chance to purchase on the West Coast of Barbados at prices which are completely unheard of in this location. The development was first marketed at the beginning of 2010 and since then 95% of apartments have been sold, couple this with the fact that clients have exchanged contracts on their apartments and the build security is phenomenal. Apartments have sold so quickly on this development for a variety of reasons, mainly:
- An excellent location,
- Prices far below any local comparables,
- Desirable payment plans,
- A UK based developer with a long track record,
- No restrictions on usage for owners,
- Low maintenance fees, through the use of an owners’ cooperative,
- Strong rental returns, with an offer from an excellent hotel operator
It has been a struggle for a long time to find something on the West coast of Barbados, which will not only provide the Capital Growth that has come to be expected in such a desired location, but with this, a return that could pay the mortgage on a leveraged property and hopefully provide a return on top as well. When you can leverage your property safe in the knowledge repayments will be met with no money directly from your own pocket each month, you’re on to a winner. This also opens the investment opportunity up to a wider audience, leading on to a better price and further capital growth realised on resale as the deposit needed to buy the property and have a long secure income is reduced. We are sure that even when leveraged to the maximum LTV mortgage for Foreign nationals (70%LTV) these properties will show a strong net yield!
For more details on Weston Resort, please either use the “request information” tab on the web page or give us a call (freephone) on 0800 043 69 56
Barbados property investors will see the benefit
As news keeps flooding in regarding the increase of flights to Barbados we thought we should share our opinion on how we feel it will be a positive impact for Barbados property investors… that includes us!
Barbados remains a strong location for investment at the moment and with news that British Airways are putting on even more flights to cope with demand, we feel strongly that now is as good a time as any to invest, particularly in one of our excellent developments on the famed West Coast.
Unlike many overseas property investment destinations, Barbados’ property prices are not solely determined by a commercial factor, in occupancy rates and tourist arrivals, don’t get me wrong, it has an effect, but is not the only factor to take into account… What I mean by this is, many people purchasing in Barbados are not just doing it for a rental yield and Capital Growth, they purchase because 1. It has a stable economy and 2. It is somewhere they genuinely want to live in the future. Many of the purchaser’s on Weston Resort and Ixora Resort in Barbados invested for exactly that reason; they want to retire in Barbados in the future. Because of all of this, property prices in Barbados are stable i.e. a small drop off in tourist arrivals will not saturate the market with underperforming properties. However an increase in tourist arrivals and occupancy rates will still benefit owners on our developments handsomely.
Weston and Ixora Resort offer investors the chance to purchase in Barbados at an attractive price, with brilliant payment plans and most importantly in an excellent location. The most important factor with regards to Weston and Ixora Resort is the fact that the property prices are kept low enough to enable investors to take a mortgage if necessary and have that mortgage paid by rental income, with a net profit as well! Actually, through research of rental prices on the west coast of Barbados we envisage that a 55% LTV mortgage on these properties could be paid with just 6 weeks rental occupancy! Couple all of this with the fact that, the developer has an offer from a top hotel operator and you have a very strong property investment indeed.
For more details on any of our property investments in Barbados please contact us.
Holetown, Barbados – The Limegrove effect
Property in Holetown did not really need any further boost to its desirability, with its excellent location, right on the west coast, comparatively cheaper property prices to many other West Coast Barbados towns and it’s excellent character. But Holetown has definitely received a boost. The new Limegrove shopping and lifestyle centre which is now complete and operating successfully is sure to have a positive effect on property in Holetown.
Barbados has long attracted many of the wealthiest celebrities from around the world. The reason for this could be down to a couple of things.
1. Money attracts money – Many of the original celebrities purchased in Barbados because it was the closest Caribbean island to Europe, was not in the hurricane belt and had a stable economy and political system from its long British rule. Because of this, other celebrities soon followed.
2. Property prices have been very robust because of the calibre of individuals that have purchased here and the fact that purchasers that were looking in less established locations went for security through the recession, which is exactly what Barbados can offer.
Holetown has proved a very desirable part of Barbados this can be partly attributed to the Sandy Lane Hotel, which has been a long time favourite of many wealthy individuals. The new Limegrove shopping and lifestyle centre is sure to attract even more interest and wealth. With names like “Cartier, Breitling, Armani, Dior, Ralph Lauren etc” taking positions in the new shopping centre, footfall and property interest in Holetown is sure to be kept high.
We predict Holetown is soon to be the “go to place” for many holidaymakers and Bajans alike. The Limegrove will, when under full occupation, offer shops, restaurants, bars, a night club and even a cinema, all within 400m of the stunning beaches of St James.
It is with this we would like to present Ixora Resort in Holetown. Ixora Resort is a development of 10 x 1 bed apartments and 1 x 2 bed apartment right in the centre of Holetown, with 1 bed apartments from $198,000… a price far below any local comparables, whilst also offering excellent rental returns. Ixroa Resort is no more than 200m away from the new Limegrove shopping centre and 500m from the beaches of St James and interest has already been very high with 5 apartments already sold. Apartments were actually selling before full planning was even achieved! Such is the reliability and trustworthiness of this developer from a UK background.
For more details of Ixora Resort, or any other property in Barbados, please contact us.
Property market 2011 – Fresh Views
Where does UK property and interest rates go from here? Economy shrinking, Inflation rising and rental values apparently falling…
Let’s start off here. If an economy is contracting this typically means that unemployment is rising, the reason for this is that, the size of an economy is measured on GDP (Gross Domestic Product) this is the total amount in pounds of everything circulating through the economy in a given year.
The formula for GDP is C + I + G + (X-M) = GDP
Where C = Consumer expenditure, I = Investment, G = Government expenditure and X – M = exports minus imports i.e. the total value added to products in this country.
If people are spending less, people are making less profit. If inflation is present it should be easier for GDP to increase as prices are rising, but the figure given as -0.5% is “real terms GDP” this is the total increase having taken into account inflation. Now, inflation can do two things it can lead to further spending or it can stop spending and send an economy into negative growth (much like it, seemingly has here) the reason it can do two things are:
1. Inflation can lead on to further inflation as people decide to purchase goods early before prices rise further. Resulting in further rises.
2. Inflation can lead to negative growth as people begin to slow their spending habits as prices hit certain levels i.e. a £9.99 CD becoming a £10.19 CD, the psychological effect of this small rise can damage sales, but the shop has no choice but to raise prices as prices of other goods and services are rising.
However I don’t feel that the negative growth can be solely attributed to increasing prices etc. What must be taken into account is the good old weather of the UK! Because of the poor weather conditions we suffered in December much of the country was unable to get to work and even unable to go out and spend.
But there are two significant ways for a government to battle inflation at the scary 3.7% it currently is and that is… raise VAT, or raise interest rates.
VAT has been raised from the beginning of 2011 and I feel we are yet to see the full effect of this in the figure of 3.7% inflation which was given at the beginning of the year. But now there are lots of rumours of an interest rate hike on the back of this as well, which should of course slow down inflation, but could quite easily send us back into negative growth and further stagflation where growth is stagnant and inflation is still present.
Now if interest rates were to rise I feel there will be lots of unhappy landlords on Tracker Mortgages, especially when rental values are apparently falling (this is taken from a generalised figure, which we try not to rely on too much in this industry) but this will normally mean less in the landlords pocket and in some cases, more out of their pocket!
Further to this we have the savers. Savers have had a particularly hard time throughout the recession, low interest rates and constant inflation means that at no point have they really been “better off” apart from possibly sheltering from losses in certain markets.
We still firmly believe that purchasing property through us on one of our developments is your best way to 1. Build up a portfolio for your retirement or 2. Make a “hands-off” profit, for years to come… or 3. Both!
We have some excellent investment opportunities at the moment; both UK Property and Overseas Property please contact us for more details. In times like these it really pays to think Fresh 
The Fresh UK Property outlook 2011
After reading a few different articles regarding the state of the UK property market and realising we have not done a UK property article in a while, I thought I would share my view on the outlook for the UK property market for 2011.
The end of 2010 was an interesting time for the property market, with not a lot of people looking to move just before Christmas and the extreme weather conditions putting a further dampener on house sales. However, mortgage approvals and sales are still holding up and I would expect as we go into spring, house sales will increase and prices will follow suit.
With news today that the Consumer Price Index has risen to 3.7% the BOE may well decide to increase interest rates in the coming months to try and curb this. However, the recent Consumer Price Index will not be taking into account the increase in Vat which has just come into play. I feel that consumers will have purchased their products earlier due to the Vat increase and this would of course bolster the CPI albeit temporarily.
It seems that in the face of fiscal restriction increasing the interest rate to try and slow inflation could be a dangerous move by the BOE however is it something they have to do? I am unsure as to the strength of the economy coming out of this recession and feel that an increase in interest rates too early could cause another fall in house prices. But then again, does the economy need this in the long run? What we need to remember when looking at the property market is that, unless we have new consumers entering the market, then it could fall into stagnation and at the moment, it is still hard for a first time buyer to get on that first rung of the ladder.
First time buyers are the lifeline of the market they need to be buying to keep the market moving. But then again, say first time buyers have to turn to renting does this mean that the market will be bolstered by Investors for the time being until there are some more attractive lending options available for the first time buyer?
What do you think?
I know one thing’s for certain, by buying one of our UK property investments with built in equity and reliable tenants in good locations you will be either weathering a storm or riding a wave of success.
X factor’s over and Simon Cowell’s off to Barbados!
Do you blame him? As we wind down into the Christmas period I can’t help but think, this time next year we will be able to hop on a plane and go and stay in our brand new apartment on the West Coast of Barbados… actually, at only 100m to the beach, I could be wrong but, I think it’s closer to the sea than Cowell’s place although his may be a bit more extravagant!
Now people may think to own a holiday home in Barbados, you need to be extremely wealthy, but I would beg to differ. There are developers out there that can deliver reasonably priced apartments, to an excellent specification, but you need to check their track record and you need to know that you will get what you pay for.
The developer we are working with is Candelisa Resort’s a UK based company that originally sprang from a successful architectural practice. After completing many developments in the UK they ventured overseas and began developing in Austria, where they have delivered numerous developments at excellent prices on ski resorts.
Seeking warmer temperatures, Candelisa then purchased their first plot of land in Barbados. A prime piece of land on the West Coast of the island, often called the platinum coast, due to the prices and the people that frequent the area. That piece of land is currently in the process of being turned into The Weston Resort, a development of 45 apartments of which, at this moment in time, all are currently sold! The reason I say currently, is that, during the times we are currently living in, it is impossible to say that not one person’s circumstances will change throughout the build process, meaning they need to either re-sell or pull out entirely.
This development sold so quickly because of the fantastic prices offered in comparison to all other developments available on this coast and the excellent and verifiable track record that the developer has achieved over the past few years.
Another reason for the success of this development is something we have spoken about in previous posts and that is the hotel operator effect. Candelisa have an offer from a very reputable hotel operator on Barbados to take over the running of their properties once complete. This benefits purchasers in two very important ways: 1. A hotel operator will only offer to run a development that they are sure is going to be finished to their (very high) standards! 2. Hotel operators (this one in particular) have a very good international presence in the travel industry, which makes sure your property is rented as often as possible, which ultimately means maximum returns for purchasers!
If you would like to view details of the Weston Resort please click the link.
If you would like details on the next development by Candelisa of apartments in Holetown; With 1 bed’s available from $198,000 please click the link.
No snow for me next year! – Barbados Property
As I sat at home yesterday unable to get to the office, I could not help but let my mind drift to warmer climates, particularly that of Barbados, where my siblings and I have recently purchased our latest overseas property investment
Now, Weston Resort is not just a great place for us to holiday but we have done some conservative figures for rental returns and the results are absolutely staggering!
Barbados is a great country for investment, but it is imperative that you find the right development in the right location! Weston Resort is a breath of fresh air on the normally, very expensive west coast of the island. As many reading this will know, there are two things you really want to achieve with a property investment and they are: Yield and Capital Growth.
Capital Growth has, for a long time not been a hard thing to achieve in Barbados, It has always remained popular with sun seekers and particularly English sun seekers; however, yield is a different matter. Where prices in Barbados have traditionally been high it is hard to achieve a rental income that will. 1. Service the mortgage repayments and 2. Provide you with an income on top.
This is where Weston separates itself from other developments in Barbados. Because of prudent cost management, the developer’s long background in construction and their knowledge of planning systems, they are able to offer apartments in their development at around 40% below the market value of similar properties in the local area. This alone gives you the upper hand when it comes to renting your apartment out as you will receive a larger return in comparison to your purchase price.
Because of the low purchase price, we are able to take just a small mortgage, which means that repayments are also low. On just a 38% rental occupancy and room rates that undercut the competition we have worked out that we should receive a rental yield of over 10% and a net return after mortgage repayments of over £10,000!
Rather than battling the snow next year, come and join us on the beach at the brilliant Weston, Barbados Property Investment.
The developer is currently working on another Property Investment in Holetown click the link for more details.
Cape Verde voted 4th best place to visit in 2011
This week the islands of Cape Verde were voted number 4 on a list of the top 10 places to see in 2011 by Lonely Planet. Now, anyone who has travelled to an overseas country should know the importance of “Lonely Planet” in the travel industry. They hold a massive share in the travel guides market and with this they have a strong influence over travel decisions for many intrepid travelers.
The news that Lonely Planet put Cape Verde at number 4 in their list did not completely surprise me, the reason for this is: The islands have long been a relatively undiscovered location, an Archipelago of 15 islands and the largest and fastest emerging of all of these islands does not have one full, European standard, 5 star resort. The islands boast truly stunning beaches, seas and a global position that gives some 360 days of sunshine every year and for these reasons it was only a matter of time before they started to appeal to the flocks of Europeans looking for guaranteed sun in the winter.
These islands are really stirring up a storm in the tourism industry recently. They are located just off of the West Coast of Africa and because of this location; they are only 2 hours behind GMT and are only a 5 hour flight away from the UK. This accessibility to Europe has lead to a real surge of tourism interest and further, development and inward investment.
The secret to capitalizing on this exponential growth is to be positioned in the correct market and our investment in Cape Verde is ideal for just that.
Our investment offers purchasers the chance to own an apartment in a 5* Resort on the Island of Sal in Cape Verde. The Resort will be managed by Sol Melia who are the largest resort operators in the world. Sal is the fastest growing of all islands with an average occupancy in hotels of 80% and in 4* resorts 95%. We have worked out that using the same rates and occupancy figures as a 4* resort our resort will return a massive 18%+ to our investors.
Flights to Cape Verde are priced fairly low at the moment but with the growth in demand from tourists, more and more flights are being put on every week and as a result prices are coming down.
So we have a country in an unbeatable location, with high praise from a global travel company, politically stable, with rising tourism figures and an investment perfectly positioned to capitalise on this growing market.
For more information on our Cape Verde Property Investments click here.
Barbados property news
British Airways last week announced that, as of summer 2011 they will be putting on more flights to Barbados.
Barbados, as a holiday destination has traditionally been a favourite for the British public. These extra flights from BA can only mean one thing. The demand from the UK to holiday in Barbados is increasing and hasn’t wavered throughout the recession.
Barbados is an inspiring holiday destination. The East coast offers rugged shores fronting the Atlantic Ocean, where keen surfers can enjoy themselves on some very highly regarded breaks. As a contrast to this however the West Coast which fronts the Caribbean Sea is regarded as one of the most tranquil and beautiful coastlines in this part of the world and as such, prices are at a premium and have been steadily rising year on year for a very long time.
The west coast is our primary area of interest today. We have carefully sourced an investment opportunity on this prestigious coastline in the Caribbean and we are ecstatic about it.
The opportunity is to purchase an off-plan apartment on a site which is due for build completion in November 2011. The apartment, on completion, will be run by a top class hotel operator and on this basis, investors can expect rental returns of 10%+ on just a 38% occupancy. The apartments start from prices of just £183,000. These prices are unheard of in this location and through lots of market research we feel they represent a discount of around 40% from other local comparables. Not only this, but we have devised some very attractive payment plans which means you can purchase on this resort for as little as £83,250!
Another unique and exciting option with this investment opportunity is that when clients purchase a unit, they are given a login to a website which will allow them to customize the design of their apartment throughout the build period; this can be from the colour schemes right through to the inner walls of the property.
With this latest news and an increasing amount of demand for Barbados holidays, rental returns on this development could be at a level of around 20%. When we put together our expected returns for investors on this resort we worked to just a 38% occupancy achieved by the hotel operator, the average for Barbados is 80% and with this latest news we think this will be easily within reach for this resort.
We have been operating in the overseas property market for a long time and feel that these are an excellent opportunity to own property on this very sought after coast, for a fraction of the cost and with the added benefit of seeing a great rental return when you’re not using the apartment.
Please click here for more information on our Barbados property investment.
Florida: paradise lost… or found?
Anybody else see this show? On ITV last night a TV program about British families that have moved to the USA in search of a better quality of life and standard of living, with beautiful weather and what they thought were endless opportunities all looked rosy! The program highlighted a couple of contrasting scenarios one, a family that had moved there and taken on a home cinema business and another, a property developer (with the most annoying wife in the world I might add) who had gone there to take advantage of how far his money could stretch.
The home cinema business did not work in the slightest and profits were on a consistent downward spiral and the property developer had actually done really well… which may contradict what I’m going to say later on in this article.
All of the increased demand from overseas and the ease of credit in the US had increased house prices substantially, which wasn’t a problem as long as inflation was present, banks were still lending and credit was still flowing. However once the flow of credit stopped the US began to see some problems. House prices dropped and businesses began to struggle. One of the problems with this in the eyes of the UK family living in the US is to do with the visa they need to live there. A couple of the stipulations are that they need to own a business in the US which is employing US citizens and that business needs to be profitable. Now that second one can be a bit of a problem in a recession and if they cannot reach it, then the family will be told they have to go back to the UK.
So now you have UK citizens being forced back home leaving their houses and businesses, businesses failing, credit drying up and house prices falling, of course this lead to many defaults on home loans and not only from the UK citizens also the US citizens and inevitably the bailout from the taxpayer to save the banks and get them lending again.
After all of this, US citizens were obviously struggling to get a mortgage and those that did have a mortgage may well have lost their jobs anyway. Property prices tumbled and many have seen it as a better bet to rent as opposed to try and fail to get another mortgage.
Now we come to our US properties. You can now purchase properties in Florida that are priced far below the building cost, which have a steady professional tenant in place and are yielding around 15%. The majority of these properties were built by developers and then given to the bank when the developer went into liquidation. The properties we are offering have been purchased from the bank and modernised (they were built recently but never lived in so needed a little tlc) then tenants have been heavily vetted and placed in the properties.
Click here for details of our properties for sale in Florida
A good time to invest in property
I was just reading an article by BBC news about how taking investment advice from your bank is a bad idea. I’m sure many people reading this article will have been asked to speak to one of the financial advisors available at their local bank, who will tell them that investing their money in one of the banks medium/high risk funds is a good bet and it will return x% and increase in capital by x%.
One of the ladies in the BBC news article had invested £100,000 into a “Cautious fund” and she quickly lost £40,000… unbelievable! Not only this, but the lady’s money was also decreasing at a faster rate because of the fact it was shrinking against the rate of inflation.
At a time of inflation coupled with low interest rates, ideally you would like to be in a position where you have an asset which is making you money and your borrowings on that asset are also, in real terms, shrinking while inflation is present. Your asset will be making you an increased amount of money with inflation and in comparison to your borrowings against it; the time at which you will have no outstanding finance will approach quickly. I am, of course talking about property.
It is no surprise that property investment has, for a long time, served as the main entry route to the forbes 100 rich list. The process of buying property in the right location at the right time and making sure the rent is going to cover the repayments you have on any borrowings, is just the start of it. The distance you can make your money stretch in property is insurmountable, by refinancing and keeping the cash flow on each property positive every month.
I have seen an article today from a top economic forecaster predicting that interest rates will remain at 0.5% until 2014; you may have also seen that the UK economy grew faster than expected last month inflation is at a rate of around 3% this typically means that the price of most goods and services are increasing at that rate and, ideally, your wage at work, as opposed to your borrowings on your property, which will be shrinking in comparison. Ideally I would be looking to invest in property now, take advantage of very little new build stock, the low interest rates available and use some of the positive cash flow generated every month to reduce my borrowings, so when interest rates do finally rise I am less susceptible to increased repayments.
See some of our UK investment opportunities here
More strong news for Cape Verde Property Investment
The International Monetary Fund (IMF) have conducted their eighth and final review of the Cape Verde Islands and yet again it is fantastic news for anyone invested or interested in investing in Cape Verde Property.
The IMF have stated that they believe Cape Verde’s growth will continue through 2010 with inflation remaining low. This is good news for the islands that are already showing very strong growth indicators and are becoming a real investment hotspot.
The IMF have shown that they believe that “Real GDP” will be increasing at a rate of around 6-7% pa over the next 5 years (“Real GDP” is the size of an economy with allowances for inflation) meaning that the value of all goods and services produced or passing through the country will be increasing by 6-7% and therefore the size of the economy will be growing and people, on average, will be able to benefit from a better standard of living and companies can begin to grow, allowing more money to go back into the development of infrastructure.
Lots of the growth for these islands comes from increased Tourism and an increased level of investment in property and then infrastructure. Property prices on the island have been rising on average by around 15% per year. The islands have remained a relatively undiscovered gem in comparison to the Caribbean and its northern counterpart, the Canary Islands, where property prices can be as much as 40% higher. They are only a 5 hour flight from the UK, have a time difference of only GMT – 2hours and benefit from 360 days of sunshine per year. Tourism figures have been increasing year on year and the island of Sal has seen increases of around 27.5% per year, as the only island with a truly international airport.
All of this information leads to a great location for investment in property serving the tourist industry. The investment we are presenting at Fresh Invest takes full advantage of the increasing tourism figures and can realistically provide investors with a net rental income of £12,133 per year for an investment as low as £32,294. All of this in a beachfront, 5* resort that gives purchasers 5 weeks free use per year.
To find out more about our investment in Cape Verde click here.
For the report by the IMF click here.
The new era of overseas property investment
In the past investing in property overseas was an arduous process, finding a suitable property was not the problem, it has always been the due diligence involved in an overseas purchase. Are you buying in the right location for Capital Growth? Will you be able to let your apartment or villa for long enough to cover your repayments on any finance used? What is happening to the local property market at present? Is there a long and complicated buying process? Will your apartment or villa be up to the standard promised by the developer? The questions can continue forever.
Investors are of course and rightly so, more tentative about investing overseas because of the reputation that some overseas developers have given the market when they, ran out of money or built a development that was subpar and then scarpered before the investor could so much as ask for their money back. But the thing that attracted investors to the overseas market in the first place is that chance of finding the property in a location that will provide you with capital growth and a large positive cash flow to line your pockets every month, with the added benefit of a free holiday.
Now we carry out a full due diligence test on all of our developments and our due diligence test on overseas property is second to none. However without any request from ourselves or our investors, we have just received one of the best partners for our due diligence tests that money could buy. The hotel operator!
When you purchase an investment property in an overseas development that is due to be run by a hotel operator, as soon as the agreement is made the developer is not now building to the standard of the investor, they are now building to the very high standard of a hotel operator and if they don’t, they risk losing the operator. Not only will the standard of your property be of the upmost quality but you now have somebody with a large web presence to promote your apartment for you, meaning that your apartment or villa is tenanted as often as possible and you are therefore provided with a handsome return. The hotel operators will of course also carry out very strict due diligence on the location to make sure that it is in a location where occupancy can be maximised and therefore your return can be maximised which will, in turn, add value to your investment.
We have 2 overseas developments that fit this bill exactly at present:
The developer of Dunas Beach Resort has recruited “Sol Melia” to run the resort upon completion. Sol Melia are the largest resort operator in the world and are constantly winning awards for their dominance in the market and the quality of their resorts. The build cost of this resort in relation to any others on island is double and they have already completed one resort on the island and the results speak for themselves.
The developer of our properties on the West Coast of Barbados has recruited Mango Bay Resorts to carry out the hotel operations on site. Mango Bay constantly receive fantastic reviews for their operations on Barbados and their average occupancy is 80% which, in our resort, would give investors a return of up to 23% per year! The developer also offers purchasers the chance to help with the design of their apartment on line throughout the construction period.
Ladies and Gentlemen this is the future of overseas property investment!
Capital Gains Tax Increase – Fresh views
With news that the new Con/Lib coalition are to raise the tax due on Capital Gains for anyone selling a second property Fresh Invest shares it’s views on how this may affect the property investment market.
Firstly let’s decide why the government has decided to impose this new tax there are 2 main reasons:
- The previous government has run up an astronomical budget deficit – hence the note recently left by the outgoing treasury minister Liam Byrne, to the new chief secretary David Laws which stated “Dear chief secretary, I’m afraid there is no money. Kind regards and good luck! Liam.” For this reason it is imperative that the new government make a lot of cuts, to bring the level of this deficit to an acceptable level they need to recoup money from the tax payers and this new capital gains tax will do just that.
- The second reason is that because of the slack lending criteria over the past decade many people have bought up a large amount of property in small holiday towns throughout the south of England, through this they artificially increased the prices of all the houses around these areas and they are now financially out of reach of the average worker in those towns.
The government is therefore going to impose an increased Capital Gains Tax on all second home sales as a way of raising cash for themselves and a way of stopping people becoming too greedy and putting house prices out of reach for first time buyers in holiday locations throughout the UK.
Now what could happen as a result of an increase in Capital Gains Tax?
The big sell off – This first scenario would really depend on when the government decides to impose this new tax, if they decided to impose the tax from the new tax year i.e. 6th of April 2011 then I would suspect a big sell off of second homes in desirable locations, creating a very large influx of supply into the property market and without the demand to match, probable falls in prices.
The buy and hold – The other scenario, I believe would also depend on the time the new tax is imposed. I would suspect that if it was to be imposed straight away then second home owners and investors alike may decide not to sell their properties as the gains are no longer high enough. Hopefully this will not cause any form of stagnation in the already fragile property market.
One thing is for sure. This will slow down the purchasing of property just for the capital gains that come with it, as the risks may begin to outweigh the possible rewards .An advantage of this however will mean that investors do not inflate property prices further and therefore eliminate first-time buyers from the market. Hopefully this will lead to longer, sustained growth.
Maybe it’s time to look to the overseas property market for your significant capital growth?
What are your views?
Fresh Invest is a property investment company with the aim of maximising our investor’s funds whilst minimising their risk. For more information see www.freshinvest.co.uk or phone 0800 043 69 56.
Spring market bounce defies political fears
The traditional slowdown in the property market coming up to the election, was not enough to eradicate the increase in housing sales, enquiries and prices that come with the spring season every year.
As the election comes around people traditionally slow their searches for new properties, in a hope to not overexposing themselves to possible new policies, which could leave them struggling once the new government has been decided. One such new policy could be an agreement to hold the interest rates at a current low level, this will of course be beneficial to anyone looking to trade up in the housing market and possibly leverage themselves further against the value of their property, if interest rates were due to increase this could be a problem for would be house buyers as they may struggle to match the repayments.
On the other hand it is normal in Britain for the property market to have somewhat of an upsurge in interest during spring, this can be attributed, partly to the sun making house hunting a more pleasant experience and also, to the budget which is often announced late in March and provides more certainty to market conditions.
It is good to see this news, as now the new government has been decided and are getting to work, we would expect the current trend in new house buyers and a slow increase in house prices to continue, as people are given more certainty in the position they will be in, come the next few months. There are a few interesting policies being taken into government, it will be interesting to see what the Lib-Dems have in store with the new “safe start” mortgage, designed to stop new buyers slipping into negative equity.
News of the increase in prices and sales came from RICS this month, as they published their latest monthly survey of some 245 members of the RICS who work as estate agents.
Fresh Invest is a property investment company with the aim of maximising our investor’s funds whilst minimising their risk. For more information see www.freshinvest.co.uk or phone 0800 043 69 56.
