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.

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:

1. 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.
2. 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. 6^th 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.

This election could mean boom or bust to the already fragile property market in the UK.

As we all know, possibly the largest challenge facing the new government will be our economy. The 3 big parties have outlined the steps they will take to try to deal with the £170bn deficit in the UK’s finances.

With it looking increasingly like a hung parliament, what will be the main points of debate from these parties on our property market?

Listed below are some of the key points of each party.

Conservative:

• Scrap home information packs
• Keep the £250,000 stamp duty threshold for the foreseeable future
• Add a new 5% stamp duty threshold for £1m properties from April 2011
• Increase inheritance tax threshold to £1m
• Regards Northern Rock, they have not stated whether they will consider remutualisation
• Include more local initiatives rather than large scale regional building plans
• Will look to split state and part owned banks into 2 parts, retail and investment

Labour:

• Add a new 5% stamp duty threshold for £1m properties from April 2011
• Keep the homebuyer direct scheme for low earners
• Keep Home Information Packs
• The £250,000 stamp duty threshold is due to expire in March 2012
• 10,000 affordable homes to be built a year by 2014
• Northern Rock: Manifesto pledge to consider remutualisation as an option, ‘while ensuring the sale generates maximum value for the taxpayer.’
• Will look to break up large banks but probably not into retail and investment
• Maintain the standard interest rate on the Support for Mortgage Interest Scheme at 6.08 per cent until December 2010.

Liberal Democrats:

• Charge VAT on new homes
• 1% “supertax” on homeowners with properties worth over £2m.
• Create a new “Safe Start” mortgage that keeps buyers from slipping into negative equity
• Propose a green loan for people to invest in home energy efficiency and micro-renewables
• Get rid of home information packs and keep energy performance certificates
• Consider remutualisation regards Northern Rock
• Will split state and part owned banks into retail and investment
• Concentrate on local rather than large regional building plans.

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.

I’ve done it again!

If you remember i blogged in september regarding a lack of supply leading to increased prices, well it seems mortgage solutions agrees……better late than never! See their article here.

I personally i think they missed the biggest point which is the slow down in new build development. But you get the same result.

We still have a few new build developments with discounts available, if you are looking for a property investment click the link!

Another option is to buy a student property, some of our wealthiest investors specialise totally in student accommodation investment. A couple of them have yields close to 20% on massive portfolio’s!

Some investors don’t like the hassle of student property but if you have a management company set up all you need to do is collect the profits!

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.

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?

1. We have just had the highest october high street sales for 7 years.
2. The pound rose to it’s highest level against the dollar.
3. The ftse closed up 92.5 points, at a two week high.
4. 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!

Looks like my predictions were true, as the halifax reported on october 6th – article.

If you remember i wrote an article last month predicting that with most developers only just starting to build again there will be a massive drop in supply of property.

The Halifax states “a combination of increased demand and a shortage of properties on the market had pushed prices up in recent months”.

Now i think we all know that this increase is definitely due to ease, its supported by a lack in supply but against that you need to show an increase in unemployment and a definite lack of competitive mortgage products.

My further prediciton is that we will see a mini blip in prices followed by a mini crash then probably stability for the future.

Wow, what interesting times we live in! Property Prices seem to be on an elaborate rollercoaster depending on the area that you live.

One day prices are rising, the next falling, i think the property investment market needs some stabilisation so investors can find their legs again!

Personally i think this may be right around the corner.

I believe that for once the government may have actually got the result that they wanted, even if they will achieve it in a way i doubt they could have expected!

What do i mean?
It’s quite simply a matter of demand and supply and it’s one which could impact us all so pay attention!

Around 12-15 months ago the vast amount of new build property developers stopped starting new developments and started land banking. No property developer would start a site that they thought would actually lose them money!

This was fine at the time, there were more than enough new build developments going to keep most property investors happy, in fact if we are honest there were probably too many!
It’s easy to say that the UK needs to build x amount of housing to keep up with demand, but if that housing is mostly luxury apartments in city centres, way out of the price range of joe bloggs then it does not really equate!

What we are now seeing is the end of many large property developers redundant stock, most sites are now finished and developers are just about to start building again.
This will dramatically impact on property investors and property investment companies, how? because for the next 12 months + we will see little to no new build developments being offered.

“What of all the off plan deals” i hear you say.

Well if you put your hand in the fire and it gets burnt, you don’t go back for a second go do you?
If developers start offering off plan opportunities that is exactly what they will be doing!
It is a lose lose situation for a developer.

1. They offer the property off plan and the prices continue to rise – Result – they have lost out on potential profit.
2. They offer property off plan and prices drop – Result- what seemed a smart bet turns into disaster as property investors decide not to complete as the promised 25% discount has been eradicated by price decreases!

Summary – Developers can’t win!

So we are faced with developer not offering discount on their property until they have completed the site and explored every other selling option!
This has to be at least 12 months from now for even the quickest builders!

So what would i do?

Buy now!! Were on the way to a mini price rise where property investment demand suddenly rockets past supply!

If you can get it right you can grab the last of the good discounts now and sell or remortgage in 12 months time when prices have risen.

Anyone remember the speculation that was around only a couple of months ago with regards to the property price increases? “Yes they are increasing, but there are no new homes coming on to the market which means it cannot be sustainable”.

Well the average estate agent had 64 properties on their books during the traditionally slow month of August, up from 59 in July and the first rise since April, said the National Association of Estate Agents.

Well of course they did. Those people that were looking during the first quarter of this year were also very likely to have homes of their own, ready to go up for sale once they had tested the buyer’s market.

Now I know what you’re going to say… “Yes but these are second, even third-time buyers. We need first-time buyers back in the market before we can see a prolonged recovery.” Ok  how about this “The number of first-time buyers who were actively looking in the market also rose during August, with this group accounting for 36% of all agreed sales, up from 22% in July.” With the availability of credit easing with more and more mortgage products coming onto the market, there are definitely a lot more opportunities for first-time buyers to jump on that first rung of the ladder.

Then of course we have the property Investors who have been coming back to the market recently, giving further uplift in demand. Obviously investors have been seeing hard times but investing in this climate can be highly lucrative you just need to research your investment opportunities properly (or let us do itJ). One market which has actually benefited from the recession is the Student buy to let market, with uni applications rising dramatically throughout the recession. For more information on the student property market please click here.

However if you are not looking for investment opportunities in the UK then you need to be looking towards emerging markets such as the Cape Verde islands or Brazil. Or if you’re not looking for property in particular then you should be looking towards carbon offsets (set to be one of the biggest commodity markets in the world) or If you would like to be more defensive take a look at our farm and forestry funds or vineyard opportunity with guaranteed returns.

Things are definitely starting to look up!

Many investors have read the news recently about the increase in property values.

Suddenly property investment is the new hot topic.

If you have any disposable income the chances are it’s in the bank or in shares.

In Shares? Well you’ve probably lost between 15%-40% on them over the last 18 months and can see no end in sight. Even if the market recovers it’s unlikely your shares will return to their previous levels for a few years yet.

In the Bank? Thats even worse, your probably getting a measely 3% interest per annum of which the bank is using your money to invest in various property funds returning 6%-8%.

Many investors do so for the long term, property investors are the same.

That’s not to say that purchasing and re-selling in a short space of time is wrong, in my mind that is a long term investment as you will more than likely use the profits to invest in further property.

If a stock market investor purchases some shares then sells a few weeks later after making a profit, we do not accuse him of investing for the short term. So why is flipping property sometimes frowned upon?
It’s “a means to an end” the “means” is to accrue as much capital as possible, the “end” is a target of a high yielding property portfolio.

Don’t get me wrong, this is not without it’s risks but smart investing in low density developments with proven values can be profitable.

Essentially it’s the same as developing, when you refurb a house you do so as quickly as possible. Why?
Because you want to sell your property in the same market conditions you bought it in.

Let me explain, you buy a 2 bed house that needs work and you have faith that at the time you bought it for a good price and that you can sell for more after some work.

The only way to make sure of that is to sell in the same market, if you wait too long and the market drops, thats eating away at your profit.

This is the same when purchasing property to flip, you want to know that the “bargain” that you bought last week you can sell straight away for a profit.

There’s one problem, have you seen it?

Why would a developer sell you a propeerty for less than he can sell it himself?

It seems unrealistic but it does happen.

The simple truth is that by marketing ALL of their properties at discounted prices they lose the option of returning to their previous prices if the market picks up.

I normally wait until it’s the developers year or half year end, if you can complete quickly and they have stock lying around you will normally get a good deal.

Then after their year end is passed they can carry on selling at market value safe in the knowledge that their units were not marketed at a discount.

This is the reason for the Fresh Invest client login, it allows developers to market certain properties that they do not want advertised to the public.

For further information on developers year ends and investing in property please contact us.