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.

BBC news reported last week that homeowners have been paying off record amounts of their mortgages over the course of the past year. In total UK homeowners paid off £22.3bn last year! We believe this is great news for the housing market and therefore the property investment market.

The reason for this is simple:

When the banks dropped their interest rates, UK home owners on a tracker or variable rate mortgage had 2 choices:

-          Spend their increased discretionary income as they wish living a better lifestyle with luxury goods or,
-          Invest their increased discretionary income back into their property.

Now this piece of news shows that the majority of UK homeowners have chosen to do the latter…

Well done UK! The reason this is so good for us as a nation is that we, and therefore the banks, are now not so heavily leveraged on our properties and when the Bank of England inevitably raises the interest rates, we will still be able to afford the repayments on our now smaller borrowings.

This piece of reassuring news can put your mind at rest that the UK house prices should remain buoyant and we will not see the “dead cat bounce”

Others will argue that the idea of lowering interest rates is to get the UK homeowners to spend their increased discretionary income in the consumer markets, However, I don’t agree.

As interest rates dropped UK homeowners continued to keep the consumer markets ticking over as they paid off their mortgages. It would seem we have got through the hard stage and now we are in a good position to continue spending in the consumer markets, whilst maintaining our now lower mortgage repayments… Either way we see this as good news!

Finally a sensible policy for the purchase of multiple properties has been mentioned by the government, which should give the buy to let market a boost.

Rather than buy to let investors paying stamp duty for an entire bulk purchase, the government is looking at charging bulk buyers per individual property. Because of this, bulk purchasers of property are more likely to stay below thresholds for higher stamp duty rates.

Current stamp duty rates are as follows:

£125,000 – £250,000 = 1%

£250,000 – £500,000 = 3%

£500,000+ = 4%

See below for some figures on how this new policy would help you if you are looking to purchase multiple properties.

The current figures:

10 properties @ £150,000 = £1,500,000

Current stamp duty bill = £60,000

Anticipated figures:

10 properties @ £150,000 = £1,500,000

Anticipated stamp duty bill = £15,000

As you can see, on this particular transaction you would be saving 75% from your stamp duty tax bill!

Another new policy from the government could lead to barriers for Real Estate Investment Trust’s being lifted, this would allow REIT’s to invest in residential property and owners would hold shares in actual bricks and mortar rather than the REIT itself.

For a list of our bulk investment opportunities see here

See the article in The Times here

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!

Property Investment….over the last 18 months probably the furthest thing from your mind!

So why start investing now?

1. Mortgage rates are relatively low.

Ok so the ltv rate isn’t great but the actual rates are pretty good and with our economy suffering i believe there is little chance of the boe base rate increasing.

An average 65% ltv mortgage on a new build flat is around 5% with second hand property mortgages available from 75% at 5% rate.

In historical terms the rate is a lot lower than it has been for a long while.

As ever, if you are building a property investment portfolio you need the mortgage rates to remain fairly low to allow you to repay the mortgage loan, another up shot is that when buy to let mortgages recover the ltv rates will increase, allowing you to remortgage.

2. Property supply is at an all time low!

With most new build developers choosing to stop building last year we now face the fact that it will take these housebuilders a year to get new schemes out of the ground.

This will mean that for around a year from now new properties will be some what of a rarity. New build property accounted for a massive part of the property bought last year, without this supply and with increasing demand prices are sure to increase.

UK Property Investment has always relied to a large part on developers willing to discount their property for either bulk sales or quick completions but if they have no stock….

3.  It’s cheaper to buy than rent.

Recent research has shown that for the first time in ages it is actually cheaper to buy than rent, well outside of London anyway!

Abbey found the average rent of £434pm compares to a mortgage payment of £382pm (with a 25% deposit). That’s a saving of £52pm. People in Wales and the north west would save on average £90pm. We can also overpay or save whilst interest rates are low.

So for those looking to start in property investment now looks like an ideal time.

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.

A blog about Carbon Credits as: An investment, A growing market and a possible lifesaver.

Did you hear about San Francisco Airport being the first airport to install carbon offset kiosks in their terminals? HOW EXCITING IS THAT?!

As far as I am concerned this is a fantastic idea. The easier it is for people to offset their carbon emissions the better! The carbon offset kiosk is about 5ft tall and fully automated so doesn’t need anyone to run it on a day to day basis. Now bear in mind that around 18 million flights are made per year carrying around 1 billion passengers… How’s that for a target market? 1 billion bored passengers waiting for inevitably delayed flights. Nothing else to do but think about how the flight they are just about to embark upon is going to damage the planet that little bit more.

Now I know what the worry in this process will be. “So I pay around £10 for this credit, in the understanding that someone, somewhere has stopped 1 tonne of co2 entering the atmosphere.”

I will explain why this works in terms of a forestry project.

When you give money to the offset company they will:

1. Use the money to purchase forestry which has sequestered CO2.
2. Pay indigenous or local people to look after this forestry thereby stopping it from being cut down for monetary gain.
3. By preventing the logging of this forest you will stop trapped CO2 from entering the atmosphere.

The opportunity:

This is where we come in.

As you can see the carbon credit market is growing and this latest piece of news alone could bring a further £10 billion per year of income to the market. Obviously this is a massive claim and it would mean that every airport would have to install many of these kiosks and every passenger would have to purchase around one credit for each flight, even though, the chances are, they are using more than this.

Now we are offering an opportunity, in this market where you could make returns of 100% pa for 47 years!

How can we do this?

One of our partners has started a company which purchases land out in the Brazilian rainforest. The trees on this land have a massive amount of carbon stored in them and if he wasn’t preserving these trees they would be illegally logged and then the carbon which is currently stored would be released, furthering the damage to our atmosphere.

For our partners fantastic efforts he is rewarded with 1 carbon credit by the voluntary carbon standard for every tonne of CO2 which he prevents from entering the atmosphere. These credits currently trade at around £11 each in the market.

This is where you come in.

• We will offer you the chance to buy these credits from our partner at a price of 50 pence per credit!
• The minimum investment is £25,000 and for this you will receive 50,000 credits at 1,000 credits per year for 50 years.
• For the first 3 years the project manager will guarantee you a return of 12%.
• From years 3 to 50 you will sell directly to the end user through our partner who is also a carbon broker.
• The price for these credits is currently hovering around the £11 mark this would lead to a return of 44% pa on your invested money. Not bad hey!

There are 2 types of carbon credit: CER’s (certified emission reductions) and VER’s (verified emission reductions).

CER’s can trade at anything up to around £30 per credit.

VER’s can trade at anything up to around £15 per credit.

By purchasing from our forestry offset you will be purchasing VER’s

How could you make returns of 100% pa?

For the last few years there has been a lot of controversy over what category forestry offsets should be traded as. At the Copenhagen climate change summit in December this year, it is highly likely that forestry will be named as a “clean development mechanism” or CDM therefore producing CER’s. The reason for this is that current clean development mechanisms such as wind farms or solar farms actually create carbon when they are built as I’m sure you can appreciate. However forestry does not emit any carbon to put in place, the trees are already there, all we are doing is making sure they are not forested for monetary gain.

If forestry offsets become CER’s the project managers or investors can sell the credits at a higher price. This money can then filter through to the local people looking after the forests. Furthering the need to sustain rainforests rather than deplete them. Basically “the forest will be worth more alive than dead”

p.s. It’s already started. The UNFCCC have already named 3 forestry projects as clean development mechanisms.

If you would like more details on our fantastic forestry opportunity Click here

Further reading

This is the website for the Copenhagen climate change summit and articles relating the forestry. http://en.cop15.dk/Frontpage/Search+result?query=forestry

Sound familiar?

As a race we have become too dependent on “the next person” This is why we are now in the mess we are, in terms of climate change. Everybody thinks that it is not their problem and I personally think that many people are relying on necessity being the mother of invention.

People think that somehow we are going to invent some carbon sequestering machine which will suck up all the carbon in the atmosphere and save the world. But I, like many others am beginning to become worried I think that we are starting to come to the point of no return.

If deforestation continues at the same rate as it currently is (13 MILLION HECTARES PER YEAR!) we are going to have no trees left. Let’s not forget that trees give us the most basic element for survival in Oxygen. They release moisture into the air which provides us with the cool climate in which we live and grow crops.

As Carbon levels in the atmosphere increase as does the temperature of the world. Now when I say that a 1 degree increase in world temperatures is imminent you may think “great I hate the British summer anyway!” Well what if I then said that a further 1 degree increase in temperature would start a dominoes effect in terms of climate change, and could lead to the end of life as we know it?

Now the first degree is unavoidable, because of the way we have lived our post industrialization lives we have to live with that. We became too dependent on life’s luxuries. We, in the West imported as much as we could, without thinking about the implications of how much carbon the transport was producing. When we aren’t importing, our large scale mechanization leads to further carbon emissions, even for the simplest of jobs.

Now there is a way we can avoid the 2^nd degree in temperature rise and this is to decrease our carbon emissions by over 60% in the next 10 years, yes it’s a lot but it is vital! Reforestation/Afforestation is a start, invest in a reforestation/afforestation project which will make sure that the trees in a monitored patch of land are not illegally cut down and are, therefore sequestering carbon. The companies that run these schemes concentrate on educating the local people and showing them that the forest is actually worth more alive than dead. This is because the company is able to trade their excess carbon credits earned, from the profit they can pay the local people that are looking after the forest.

Because of this, here at Fresh Invest we have been working hard on expanding our alternative investments section we are now offering investments in 2 different types of carbon reducing project.

One is our Carbon Credit Investment. This is an opportunity for our investor to purchase carbon credits at a massively reduced price, from a company whose aim is to protect rainforests and then trade the excess carbon credits from it.

The second is an opportunity for our investor to invest in British farmland planted with a renewable biomass. This crop is then sold to a renewable power plant to be co-burnt with coal giving you a small but consistent yield. The main advantage of investing in UK farmland, apart from the obvious reduction in UK carbon emissions is, Security! It has shown consistent growth and is in ever increasing demand.

At the end of the day if people don’t start investing in projects like this it really could mean the end of the world!

For more info on any of our opportunities email or freephone 0800 043 69 56

Farmland as an alternative investment is a relatively “untapped” market at present.

Why is this? Well investing in farmland often means that you will have to be of a high net worth so unless you can scrape together a few million pounds it is… I’m afraid to say out of most individuals reach.

This is because farmland is currently selling at around £5,000 per acre. This doesn’t sound too bad but farms are normally sold in massive lot sizes.

Why would you want to invest in farmland?

Firstly let’s look at what the prices of agricultural farmland are governed by:

• Increasing demand from house builders as the population of the world increases.
• Increasing demand from farmers that need to provide food for this growing population.
• Increasing demand from power stations that need to decrease their non renewable resource consumption to help the UK stay in Line with the Kyoto Protocol.
• Decreasing resources as more and more planning permission is granted for new homes, renewable power stations and renewable energy projects such as wind farms. The supply of bare agricultural land is running out and one thing is for sure we cannot create more!

The cumulative result of this has been values increasing by 15% year upon year.

Farmland is something which every human being needs to live. In its purest form it provides us with a means to grow food and rear cattle therefore providing the means to eat for the whole population.

A quote from H.R.H Prince Charles recently in the Richard Dimbleby lecture read “That which sustains us must itself, also be sustained” This means that the whole ecosystem of this world needs to be restored at the same or at a faster rate than it is diminished. The Amazonian rainforest alone releases 50 billion tonnes of water vapour into the atmosphere every day! This makes our climate cool and makes this planet inhabitable. Deforestation is currently operating at a rate of; the size of a football pitch every 4 seconds! One of the great problems with deforestation is the rate at which it impacts on our environment. Not only does all of the CO2 sunk by the trees get released into the atmosphere when they are burnt. But there are now less natural CO2 sinkers in the environment and when trees are not sinking CO2, they are not producing oxygen, the very air we breathe.

Our reliance upon nature’s non-renewable resources is 25% greater than nature can self sustain. Fossil fuels such as coal, petroleum and natural gas are being used at too fast a rate. The sustainability of these fossil fuels is something which is being tackled by the Kyoto Protocol.

The Kyoto Protocol is an obligation made by all countries to cut their use of non renewable resources by 80% by 2050. Here is where we can come back to farmland and the growing market that is renewable crops and the land underpinning it. As Power stations throughout the UK start to follow the trend and invest heavily in harnessing the power of renewable resources, this may well drive up the prices of green energy crops such as Miscanthus grass which is a co-burner to be used with coal in the production of electricity. Now this may well increase your annual yield through higher revenues, but with this, the land itself should increase in value as it is now worth more to the investor.

So let’s recap

- The price of farmland is steadily increasing as demand increases and supply decreases.

- Farmland value has increased on average by 15% year on year.

- It is a diminishing resource that needs to be sustained.

- It will help the UK contribute to their Kyoto protocol obligations.

- More and more people are starting to see the benefits of being “Armchair Farmers”.

- There is around £11 billion of borrowing secured on assets worth over £170 billion, excluding stocks and growing crops.

- It is the foundation of the built environment!

Remember the secret to success is to balance your portfolio. Where better than UK farmland?