Archive for August, 2009

Down-valuations affecting your property deals? Not at PIP!

Monday, August 10th, 2009

There has been a lot of recent press about down-valuations and their adverse affect on the property market. A recent article by the BBC Business team highlighted this:

http://news.bbc.co.uk/1/hi/uk/8191007.stm

We all know that valuations are key to any property deal, as they have a direct effect on the loan-to-value and loan amount any mainstream mortgage lender will offer. We speak to hundreds of investors on any given month and we are finding an astounding percentage of investors have had deals fall through with other investment companies due to down-valuations.

We find this surprising as we have had practically a zero percent down-valuation rate in 2009! Why? Several reasons:

1) Our due diligence process is extensive. We know the areas we target inside out and hence only purchase properties we know offer excellent value and stack up rental wise.

2) We are buying in the vast majority of the properties we offer out to investors in order to refurbish them and line tenants up prior to completion. Therefore, our bank values the property prior to us buying and there is a RICS valuation already in place which is less than a few months old. This also decreases the likelihood of a down-valuation a few months along the line.

At Property Investment Portfolio we are so confident that our properties will value to prices stated that we have a promise to our investors. Our promise is that should your property not value by a RICS surveyor (independently instructed by your chosen lender) to the price we have quoted, we will drop your price in line with the down-valuation or refund any fees you have laid out – including valuation fees!

So as always at PIP – we are reinforcing our confidence in our products with our unique guarantee! For more information on our deals and service on offer. please call us on 01159 289 333 or email us info@propertyinvestmentportfolio.com

Posted in Company News, Finance, Industry Discussion, Market News, UK Property Investment, Uncategorized, valuations | No Comments »

Foreign Money Returning to UK Mortgage Market?

Tuesday, August 4th, 2009

We have heard a lot of press in recent weeks about foreign banks entering the UK mortgage market and thought we would post a short blog regarding our thoughts and what we are doing to address the potential opportunities out there!


The times on Sunday recently reported that Chinese, Swedish and Israeli banks are offering the best mortgage rates in the UK property market. We have also been approached by half a dozen newly formed companies claiming that they have access to Middle Eastern money that can be leveraged up to 85% for UK buy-to-lets and at rates as low as 4%.


With traditional UK based BTL lenders such as Mortgage Express & Capital Home Loans effectively shutting their doors to business, and current leading UK based BTL lenders such as BM Solutions & Cheltenham & Gloucester tightening their lending criteria; we have naturally been looking into new lenders that are attempting to break into the market.

So what have we found so far?


The brokers we are working with have made contact with several lenders based overseas as well as syndicates based in the Middle East that are looking to lend to UK buy-to-let investors. The general consensus amongst all of these groups is that ‘YES,’ they are open to business, and at good rates of borrowing. The only hindrance at this stage is getting these groups to commit to concrete criteria such as:


  • Definitive rates of interest – these are not confirmed until close to completion (similar to the way many commercial loans currently work in the UK)
  • Same for Loan to Value (LTV) on offer. Most of these groups are saying up to 85% but are not clear on rental levels and other criteria required to achieve this LTV
  • Definitive client criteria – we are told in most instances that clients will be assessed on a case per case basis. There are often no set criteria for age, employment status, income status and / or savings.
  • Definitive Process and timescales – there seems to be a real lack of defined process and / or timescale involved in the achievement of these loans


So there is a lot of uncertainty involved in obtaining the finance that everyone seems to be talking about these days and there are very few stories out there of investors who are successfully and consistently using these methods.


What are we doing about it?


What we usually do! Putting our money where our mouth is and testing the waters! We have several test cases going through with foreign banks and are going through the stages with some Middle Eastern Consortiums. So far all is on track, albeit the process is a lot slower than working with a UK broker and UK based lender.


The fact that UK based lenders have become increasingly difficult to deal with & rates are seemingly becoming less attractive by the month is clearly apparent. An option to borrow at more attractive rates and at a higher loan-to-value is also always a nice option to have! Is it an option in the current market? We will update you of our progress and findings in the coming weeks so what this space!


The Team at Property Investment Portfolio

Posted in Company News, Finance, Industry Discussion, Market News, Overseas Property Investment, UK Property Investment | No Comments »