Should I Invest in A New Build Flat?

If you are thinking of doing this, be careful because it’s now clear that increasing numbers of properties bought off-plan as buy-to-let investments are being sold at large losses through auction.
Auction houses are reporting a steep rise in the number of new builds going under the hammer.
Many of these are flats bought off-plan two or three years ago with rental guarantees. They were often bought on fixed-rate mortgages which came to an end at the same time as the rental guarantees finished, leaving landlords stuck on much higher borrowing costs, buy wth lower rental income and possibly no tenant.
It gives me no pleasure to say I have been predicting this for 5 years.
The situation is, of course, especially grim for flats where investors have bought in a block of hundreds of other investors who are in the same situation.
New build prices have also gone down each month for the last three months, according to SmartNewHomes, while UCB Homeloans, part of Nationwide is one of the main lenders who has stopped lending to landlords buying new apartments. It's not the only lender to have stopped either.
Knight Frank research show that yields are now at their lowest levels on new build flats.
Chris Town of the Residential Landlords Association is quoted in “The Times” telling of one landlord in Leeds who has recently been forced to reduce his monthly rent from £1200 to £800. My message is to avoid areas where there is an oversupply or can be expected to be an oversupply of the same kind of property in the future- and where there are too many landlords chasing a small pool of tenants. This is the situation in many cities in the north and the midlands of England right now. And it will remain so for some time.
If you need more advice on buying property ot let out or property investment in general, please ask me. I’m David Lawrenson from property investment coaching firm http://www.lettingfocus.com/
I’m the author of the property investment book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on buy to let and a well known property speaker and I contribute to newspapers and a host of property websites, write a property investment blog and run a property mentoring service
My business is now increasingly focused on providing consulting help to banks, building societies, housing associations and web portals to help them with their buy to let and property products and services.
You can read more of my property investment blog and details of my networking, advice, property seminar programme at my website http://www.lettingfocus.com/
My next London property investors networking meeting is on November 14th. Click here for details: Property Investment Seminar
What’s unique about lettingfocus.com is that we offer independent property investment advice because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2007. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.

What do I need to know about tax on buy to let?

Amidst the excitement, worry, legal issues and general administration which go hand in hand with buying and owning property, it is easy, perhaps almost convenient, to ‘forget’ about tax .
But with the right advice, you could save yourself a lot of trouble.
Here are some simple steps to help you.
This guide was written by Susan Mason at Worsley Taxation Services. Their website is at: www.worsleytaxationservices.com
OK, step one is before you actually buy anything, consider how you are to own it. Will it be in your sole name, in joint names with a partner or possibly via a limited company? You should consider the options as the choice will affect the amount of tax due both on the rental income profits and on any gain made when the property is sold.
Step two is record keeping.
Keep a record (preferably a sales receipt, but if lost make a note of it somewhere – be it a grubby paper notepad or a blackberry) of ALL expenses you incur which relate to the cost of purchasing, owning and renting your property. . After all, if you have not kept a note of the expense then neither yourself nor an advisor can say if tax relief is due. Also include costs incurred prior to the date that any letting commenced and those which include some element of private expenditure
Step three is selling.
Any gain made on the sale of the property can be reduced in many ways, including: 1) Indexation Allowance – Intended to remove any element of gain arising as a result of inflation, but now available only to companies 2) Taper Relief – Available for properties owned since April 1998. The amount due depends on the number of years owned and whether the property can be classed as a business asset. Please note that as from April 2008, this relief will be abolished. 3)Private Residence Relief – Any period of time when the property was your main home is exempt from tax, together with the last 3 years of ownership and 4) Residential Lettings Relief – If you have previously rented out your main residence, you are entitled to claim up to £40,000 as an exemption.
Property tax needs careful planning at all stages.
Susan Mason offers a free initial consultation service which can be done via a face to face meeting, over the telephone or via email. Once your particular requirements have been ascertained, the advice will then be tailored to suit your individual situation. You can contact Susan at susanamason@aol.com
If you need more advice on property investment or renting out property please ask me. I’m David Lawrenson from property investment experts www.lettingFocus.com
I’m the author of property investing book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on buy to let and a well known property speaker and I contribute to newspapers and a host of property websites, write a property investment blog and run a property investment and mentoring service
My business is now increasingly focused on providing consulting help to banks, building societies, housing associations and web portals to help them with their buy to let and property products and services.
You can read more of my property investment blog and details of my networking, advice, property seminar programme at my website www.lettingfocus.com.
My next London buy to let networking meeting is on November 14th. Click here for details: Property Investment Seminar
What’s unique about lettingfocus.com is that we offer independent property investment advice because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.
If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.
Copyright: David Lawrenson 2007. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.