"Peter
Jones’ writing is always an inspiration. I’m an avid reader of his titles
and a great fan, even a disciple. He’s a tremendously diligent author with a
great intellect, a razor-sharp mind and a remarkable wit. Highly recommended. 5 Star."
Peter Parfait, Editor of Property
Auction News and Hot Property Alerts
"Having
read your strategy workshop I felt compelled to write and
compliment you on this excellent work. Thank you, it was
most enjoyable and informative".
G
Christie
Six Years Ago I Was Too Busy Working
For A Living... Now I Own £3.136m Of Property, starting from scratch
with virtually nothing!
Unlike
the unsuccessful majority, successful property investors do not just happen to stumble into deals.
They know their strategy, they have a plan, and
they take actions that are consistent with their plan. It’s not down to
luck that they are successful. These people have planned for success.
In this web
site you'll find the resources that will allow you to achieve property
success
From: Peter
Jones B.Sc FRICS Surveyor, Author and Property Investor
Monday 08:39am
Video length 1min 30 secs
Dear Friend and
Fellow Property Investor,
My name is
Peter Jones. I am a Chartered Surveyor, author and property investor. I
regularly contribute to Property Auction News, Property Investor News and
Hot Property Alert.
Six years ago I had limited savings and was working part time, just about
scraping a living doing consultancy work. Realising that things needed to
change, I started to put into practice the principles of property investing
that I had learnt whilst advising others in my professional role as a
surveyor. Starting with virtually nothing, and using little of my own money,
in a relatively short time period I have managed to build a substantial
property portfolio with significant equity and a positive cash flow.
The last few years have been an exciting adventure. However, the principles
I have used are not "rocket science" and I have been happy to share how I
went from owning nothing to being a successful property investor, with
thousands of other investors and aspiring investors, through my books and
magazine articles.
This site is a resource for anyone who wants start in property but doesn't
know how, or who has started but who wants to do it better.
Here's to successful investing.
Buy To Let News
RENTS REMAIN
STABLE AS LANDLORDS CONTINUE TO BUY
According to Paragon Mortgages the national
average yield stands at 6.03%
For full details and to
download a copy of the Buy To Let Index please on the link
below.
The Council of Mortgage
Lenders produce two leaflets for people who are thinking of buying a
property to rent - a general guide and a checklist of questions to
answer before becoming a landlord. These are especially useful for
those who may have little or no experience of investing in the
private rented sector.
Marking the ten years of
buy to let, Mortgage Express, a founder member of the
ARLA panel of mortgage lenders for the initial launch of
the whole Buy to Let concept, has rejoined the panel.
This now consists of Birmingham Midshires, GMAC
Residential Funding, Mortgage Express, NatWest, Paragon
Mortgages and The Mortgage Business.
ARLA, together with its
supporting panel of forward-looking mortgage lenders,
first introduced the concept of Buy to Let to the
private rental market and to the nation in 1996, ten
years ago this coming autumn.
Ten years on, the ARLA
panel is still responsible for well over 50% of all
outstanding buy to let loans in the most dynamic sector
of the housing market.
Welcoming the return of
Mortgage Express, Adrian Turner, Chief Executive of ARLA,
said, "It is very fitting that Mortgage Express should
be a part of the panel representing the most focussed
group of Buy to Let lenders involved in the private
rented sector."
THE
RESIDENTIAL PROPERTY INVESTOR: BEHAVIOUR, DEMOGRAPHICS AND MOTIVATION
An in-depth survey conducted on behalf of
specialist buy-to-let lenders Paragon Mortgages and Mortgage Trust
has revealed the dynamics behind today’s typical buy-to-let
investor. The survey provides a fresh insight into landlord
behaviour, demographics and motivation, and confirms the financially
astute nature and professional approach of those investing in rental
property.
• The average investor has been a residential landlord for 10 years,
is 49 years old and expects to remain in the buy-to-let sector for
at least another 10 years.
• Property investment is the primary source of income for 28% of
landlords, and for 71% it is the secondary source.
• Landlords are employed in a diverse range of business sectors, the
largest being public administration, education & health (19.4%),
construction (14.7%), and banking, finance & insurance (12.3%).
39.2% are self-employed.
• Landlords mostly invest for a combination of rental income and
capital growth, and to contribute to their pensions.
• The average landlord has 10.6 properties, 76% of which are
mortgaged, with an average LTV of 50%. Mortgages are spread between
an average of 2.4 lenders.
• Tenant demand has strengthened over the past six months and is
expected to continue to do so, leading landlords to grow their
portfolios
Age
A third of landlords (33.5%) are aged between 36-45 years. A further
31.2% are in the 46-55 age cohort and 25.6% are over 55 years. Only
8.9% are less than 35, and almost none were under 25. The average
age is 49 years.
Involvement in residential property investment
On average landlords have been involved in buy-to-let for 10 years.
The typical portfolio comprises 10.6 properties, and the average
value of the portfolio is £1.69 million.
Motivation
Asked about their principal motivations for investing in property,
the most commonly cited reason was, quite simply, that landlords
prefer property over any other form of investment; this was closely
followed by: a contribution to their pension planning; and for the
returns it generates.
Most do not regard being a landlord as being either a ‘full time’ or
a ‘part time’ job: rather more than half say that it is something
they do in their spare time, generating 31.6% of their total income.
Indeed, residential property investment is the main business
activity for only 28.2% of respondents, with 71.3% saying that it is
a secondary activity.
John Heron, Paragon’s director of mortgages, says: “This in-depth
survey provides a unique insight into our landlords and their
motivations. They typically have a decade of experience, a long term
investment horizon and own a portfolio of 10.6 properties. Landlords
invest in property in order to generate a combination of capital
appreciation and rental income, and certainly share none of the
characteristics of the short term speculator who may seek to
purchase properties and sell them quickly, making a quick ‘turn’ in
a rising market.
“The landlord takes a professional approach, although property
investment is most likely not his sole or even his main business activity.”
Landlords’ other business interests and social status
For landlords for whom residential property investment is not their
main source of income, their principal work covers a number of
business areas. The most common are public administration, education
and health (19.4%), construction (14.7%) and banking, finance &
insurance (12.3%). Others include manufacturing (5.9%) and transport
& communication (4.8%), with the remaining 43% spanning a wide range
of different sectors. Almost four out of 10, or 39%, of landlords
for whom property investment is not their main business are self
employed.
Landlords are also represent a wide range of socio-economic groups,
with the largest number (37.7%) comprising Group B (middle managers,
management/owners of small businesses), and substantial but smaller
proportions in Groups A (19.3%) and C1 (26.4%).
“Landlords come from many walks of life. Some may have a
financial or building background, which is obviously useful to the
successful day-to-day running of a buy-tolet business, but many
bring skills and talents from other business areas. They may be
salaried or self-employed. One consistent feature, however, is that
they display a much stronger socio-economic profile than the
population as a whole.” says John Heron.
Financing
Landlords report that when buying an additional buy-to-let property,
the deposit is most likely to be sourced from savings (45.3%) or by
raising funds against their existing property portfolio (44.1%).
They are much less likely to remortgage their own home (14.9%) or
use the proceeds of a house sale (14.9%).
To complement the deposit, in the vast majority of cases (75%),
landlords raise a mortgage to purchase the property and report that
the average number of lenders with which they have mortgages is 2.4.
The average loan to value ratio on buy-to-let portfolios is around
50%. Over 60% of investors have LTVs of between 26% and 75%, and
only a very small percentage of 1.1% report LTVs of 86% or more.
In terms of servicing the debt, 62% of respondents receive rent
covering more than 115% of their monthly mortgage payment, and the
average proportion of mortgage payments covered by rent is 130%.
John Heron says: “Financially, landlords are cautious. They
typically mortgage only half of the value of their property
portfolio, and tend to use the equity in the portfolio to raise the
deposit for new property acquisitions or otherwise draw this from
savings. On average, they have a comfortable cushion in their
ongoing finances, with rental income exceeding mortgage payments by
30% on average.”
Current and future prospects
Finally, landlords were asked about tenant demand and their future
investment intentions.
Over 90% reported that rental demand is the same or stronger than it
was six months ago, and less than 10% were less positive than six
months ago. Looking at the next six months, over one third (34.2%)
expect tenant demand for rental property to increase, while only
7.7% are forecasting a decline.
Not surprisingly, with such a surge in tenant demand, approaching
half of landlords (44.6%) said they planned to grow their portfolios
over the coming 12 months, with only 7.5% planning to reduce their
involvement. A very small minority (1.9%) indicated that they
planned to leave the market. The reasons given for this were varied,
but the most common ones were retirement (11.0%) or to release
capital (9.2%).
Landlords are most encouraged to invest by stable/low interest rates
(46.4%), steady/rising property prices (42.1%) and very good rental
yields (35.8%).
With such a bullish outlook, the vast majority of landlords are
committed to residential property investment for the long term.
Almost two thirds (64.0%) plan to remain in the sector for more than
10 years, and a further 22.6% for between six and 10 years.
John Heron concludes: “Tenant demand, the key driver of the
buy-to-let sector, is on the up. It has strengthened over the past
six months, and landlords expect this to continue over the next six
months. With stable, low interest rates, steadily rising property
prices and good rental yields, almost 45% of landlords plan to grow
their portfolios over the next year. They take a long term view of
the market, and almost two thirds of them expect to stay in the
market for more than ten years.”
For anyone who wants to make property
profits in buy to let, property investing, property developing and
all round investment property through nothing down and below market
value
