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…

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.

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

As many of you will know, Weston in Barbados has been our most successful development to date. After being recommended this development by a client of ours we have successfully transformed this developer’s sales focus to investment as well as holiday home buyers.

At first glance, Weston seemed like a low priced development, one back from the sea front with sea views to many apartments, perfect for holiday makers but with no obvious investment characteristics.

However, after digging further we realised that it’s low prices and fantastic position mean’t room and occupancy rates could be set at a premium and even on a 20 week occupancy would provide yields a lot higher than many other competitors.

Fast forward 6 months and we are now due to launch our 3rd development in Barbados, both Ixora and Weston having sold out in record time.

Weston is due to complete in November/December 2011 and build is progressing nicely.

Above is a picture of the front of phase 2, about where the swimming pool will be, coming along nicely…

Back corner of phase 1 ground floor with sea views possible, 1st and 2nd floor views should be fantastic!

Back corner of phase 2 with the sea viewable, a lot of the apartments in phase 2 will have sea views thanks to the height increase between phase 1 and 2.

This will be the view available from 2ft below where apartment 7-6 will be on phase 2.

As construction progresses we will bring you pictures from the 1st and 2nd floor showing even better views. The sea is just 200 metres from the entrance to Weston meaning the beach is only 5 minutes away.

There are still 3 apartments remaining for sale:

1 bed sea view apartment – £166,050*.
2 bed sea view apartment - £209,100*.
4 bed apartment – £265,680*.
* Subject to exchange rates.

If you  want further details please contact us on info@freshinvest.co.uk or call us freephone on 0800 043 69 56.

With little infrastructure and no direct flights from most European countries, Cape Verde as a holiday location was only for the most hardcore of travellers.

Fast forward a few years and Cape Verde presents a very different image. None more so than Sal.

Being only 5 and a half hours from the UK and now benefiting from a direct flight from many major cities there is little doubt that Cape Verde is the future winter holiday destination for most of Europe.

Through increased interest and build Cape Verde have been able to push more money to the infrastructure of the country, building roads and bringing power and water facilities up to European standards.

Cape Verde is now being talked of in the same breath as the Canary Islands and the Caribbean as a winter holiday destination. This is in no small part due to a handful of developers that have managed to build affordable quality property that offers high yields and low entry costs.

With the Completions of Villa Verde and Tortuga Beach Resort slowly but surely the face of Cape Verde is changing.

Tortuga Beach Resort brings the first of three 5* hotel resorts to the Island, all operated by world class operator Sol Melia, the quality of these properties have to be seen to be believed.

Many overseas developers promise a lot and deliver little, this is certainly not the case with Tortuga Beach, with the development going live to the public next month pictures of the finished product are now available for all to see.

Located right on Cape Verde’s famous Ponta Preta Beach, many apartments and villas have direct sea views and easy access to the beach and beyond.

The emergence of hotel companies managing developments built and sold on to investors is fairly new and as with every walk of life, as time flows these precesses are refined. I say this because there are plenty of developers that build with the intention of bringing a 5* hotel company in to manage but only a handful that actually manage it.

9/10 the hotel company realises the increased cost in terms of added specification of doing this and decided to go it themselves or attract a lesser hotel company to do this for them. Not in this instance! Sol Melia is well known for it’s 5* brand and it’s evident that Tortuga Beach Resort fits into this perfectly!

With a 5* Hotel branding also comes the benefit of increased specification and leisure facilities:

Tortuga’s Features and Benefits include:

With only limited availability left on this stunning development you may look towards this developers next project, Dunas Beach Resort. Ready at the end of next year and with build already underway you can be assured this will be bigger and better than it’s predecessor!

Or if you prefer, wait for Llana Hotel and Spa, the developers third resort which is due to be released next month.

Whichever you choose, Cape Verde as a destination is here to stay and these three developments will become a massive part of it.

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 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.

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.

Take a look at the 2007-2010 reduction in the value of 3 bed single family homes in tourist areas in Florida the loss in value is scary from $250,000 to $75,000 and in many parts the fall in value slope is still downwards or flat.

Rental value for these units hover around the $800 – $900 per month and demand is good and at this level the gross returns are over 13%, that will still net to 10%+ and where can you get that in the UK?

Some reassurance can come from the American mindset “a property owning democracy” land of the free, home of the brave, incentives have been made available to encourage families back into ownership. BUT more forclosure releases are on the horizon and this could keep the slope downwards again.

One interesting point to note is the price of new homes, compared with that of the existing stock and where there are new homes being constructed.  There is a bit of a shortfall of new builds and prices for new builds are well above existing empty stock. When the time does come for a mass buy of US property it will be the “existing stock” that people are buying.

Property wire report Fannie Mae and Freddie Mack the largest mortgage providers in the USA has the view that although sales are subdued this is the bottom and they are predicting a small rise in 2011. Interestingly the amount of property sales to foreign nationals accounted for 7% of sales a massive 66 billion dollars worth………Time to Invest? Take a look at our USA Property Investments.

The Resort Group seem to be transforming the face of the island of Sal in Cape Verde single handed!

As you will remember, Tortuga and Dunas Beach Resort offered guaranteed returns on deposits, fully managed properties in a 5* Hotel Resort.

With Dunas and Tortuga Beach Resorts, investors could choose from purchasing fully in cash, whereby they would benefit from an additional 15% discount, or deposit options of both 35% and 45% with a mortgage on completion to cover the remainder. Investors could even invest with an existing pension through a SIPP.

Many of our clients decided to utilise redundant pensions that were not giving them the returns they had expected, they spoke to our SIPP provider who moved various pension pots into one Self Invested Personal Pension scheme.

Payment plans on the new resort are likely to be just as innovative as before, so we are waiting with baited breath!

As with all Overseas Property Investments it pays to invest early and benefit from the capital growth that this will bring with it, as more and more investors jump on board through the build period, prices will often rise quickly.

For further details on overseas property investment opportunities please contact us!

We at Fresh Invest are happy to be a main agent for The Resort Group and as such, will be offering Llana Beach Hotel and Spa, the moment it becomes available… so register your interest with us ASAP!