What Is A Secured Loan

What is a secured loan? A secured loan requires you to pledge an asset, such as your home, as collateral for the secured loan. In the event of missing a payment or defaulting on the loan, your bank or lender can then collect the collateral and repossess the property as a matter of last resort . This type of loan generally has a lower interest rate because the bank has less risk since it can easily collect the collateral if you default on payments. On the positive side, a secured loan can be a good way to build credit if you go through a reputable lender like a mainstream high street bank. Types of Secured Loans Mortgages are secured because your home acts as collateral for the loan. If you miss payments, you can go into forfeiture and lose your home. Car loans are also secured loans. Similar to a mortgage, the car itself is asset for the loan. If you default on payments, the car can then be repossessed. Secured credit cards are another type of secured loan. The bank will usually require you to make a deposit against the card’s limit, which guarantees the loan. Banks will do this for customers who are trying to build their credit history, or for those trying to improve bad credit. The Good: Benefits of Secured Loans Generally, secured loans are meant for those who have been denied unsecured loans. When used correctly, they can help build your credit score and credit history so that you can approach high street lenders again. Banks also like them because there is less risk involved. Lower interest rates are another advantage of choosing a secured loan. When choosing a secured loan, you should carefully consider what you will use as collateral. In addition, you should ensure

Weak Pound Fuels Property Investment In The UK

Weak Pound Fuels Property Investment The continued weakening of the Sterling Pound is creating massive buying opportunities but most of these are from overseas property investors mainly based in Asia. Right after the Brexit vote, the value of the pound significantly plummeted and most overseas investors snatched this opportunity to secure properties in Britain to make significant investment savings. Since 2018, as much as 57 percent of homes located in the prime central London area were bought by foreign investors according to the data provided by Hamptons International. Similarly, EU investors were among the largest group of foreign buyers investing in the said area. EU investors bought as much as 19 percent of properties in the second half of 2018, up from 10 percent during the same period in 2017. Overseas investors now own as much as 36 percent of properties in the Greater London area. In the past year alone, foreign investors from India rose by 3 percent while international buyers from Hong Kong and Russia increased by one percent. This increase in the number of overseas investors was also due to a significant drop in buy-to-let investors. The weak value of the pound has made it much more affordable for overseas investors to purchase UK properties as a form of investment. A property which used to cost an EU investor approximately £1 million would be cheaper by at least £124,000 or more in the years to come as pound value continue to depreciate. Prior to the 2016 referendum, a Sterling pound was worth US$1.50. It has depreciated to as low as US$1.24. After the no-deal Brexit announcement, it dipped 14% more to as low as US$1.10. Hong Kong investors believe Brexit and the weak pound is a buying opportunity. This is following a drop in London property prices

Weak Pound Fuels Rich Foreign Investors’ Rush To Buy Student Flats

Weak Pound Fuels Rich Foreign Investors’ Rush To Buy Student Flats Student numbers may be declining but foreign investors are lining up to buy Plymouth’s student flats with one block already being snapped up by a Middle Eastern consortium in a multi-million pound deal. The Coombestone House block, in Hastings Street, was bought by Qatari investors, according to industry insiders, earlier this year and other investors from the oil-rich nation are investigating opportunities in the city. Meanwhile a company from Singapore paid £180million for five huge Plymouth student apartment blocks which were offloaded by Unite. And two other blocks are said to have been gobbled up for “more than £1million” according to industry sources. Other properties are owned by businesses from Malaysia and South Africa, among others, and delegations from Kuwait, Israel, Spain and China are sniffing around the city. Nationally wealth funds and investors are snaffling property left, right and centre, despite Brexit uncertainty and global trade wars. But the reason for this activity is likely to be Brexit related – a huge decline in asset prices since the referendum vote. Sterling devaluation has made properties throughout the UK, including Plymouth, an attractive proposition. Henry Hutchins, chief executive of Clever Student Lets, the South West’s biggest student lettings firm, said properties are now changing hands at a 20% discount on a few years ago. Qatar is leading the way, having invested £3billion in the UK, and plans to splash another £2billion. Mr Hutchins said the Qataris nabbed Coombestone, a four-storey, 60-bedroom block, for “a few million”. Plymouth-based Clever Student Lets, the largest single office student accommodation firm in the UK, advises investors looking to put cash into bricks and mortar, whether new builds or older converted properties, and is involved in brokering deals. “We are seeing hardly any investment

Attracting Investment For Property

Attracting Investment For Property Oliver du Sautoy, head of research at LSH, believes what we have seen this year will be a tough act to follow, but is optimistic for future growth. “Healthy levels of active demand and an analysis of forthcoming lease events point to another year of above-trend activity and take-up across the region in 2018,” he said. “Investors and developers must therefore take heed of the rapidly changing dynamics within the Northern Powerhouse office markets if we are to continue to support home-grown businesses and attract greater inward investment. “Solid asset management strategies and refurbishment of poorer quality stock will be key to securing the best occupiers and boosting returns in the coming 12-18 months.” There is a lack of supply in the regions – total availability has shrunk by 12% since the start of this year – and this has encouraged “steep increases in rental levels for existing space in some markets”, according to the LSH report. This could result in more opportunities for developers looking to bridge the supply and demand gap, as well as higher yields for investors. There are almost four million British people live abroad according to the latest figures from the Office for National Statistics. Despite choosing to settle in another country, many expatriates wish to retain a link to home in the form of investment property in case they return or even for investment purposes. But getting a mortgage in these circumstances can be more challenging than expected compared to being based in the UK. Tougher identity checks, a comparatively small number of available lenders and restrictions on certain countries can all prove a significant stumbling block for expatriates based overseas. The number of expats looking to buy property in the UK is growing, according to Gerard Ward, of  Premier Expat Mortgages based

Property’s Reputation As A Diversifier Is As Strong As Ever

Property’s Reputation As A Diversifier Is As Strong As Ever Property’s reputation as a diversifier is as strong as ever whilst using expat mortgages to support property investments. We were reminded of this late last year. We asked 500 investors why they were drawn to property investment – and the benefit of this asset class as a safety net was one of the most popular reasons cited. The responses revealed how property is seen as a go-to diversifier; investors are looking for options that are above the fray of other asset classes and indices – to bring an added level of security to their portfolios. There is, of course, much more to property than simply a second canopy in case your stocks and bonds go into free-fall. Whether your aims are long-term capital growth, or income generation (or a combination of the two), the right property investments can certainly add real value. But specifically when it comes to risk-balancing, evidence certainly suggests that property deserves its reputation as a lynch-pin of any investment portfolio. Here, we’ll unpick the reasons for this – and explain how to invest with effective portfolio diversification in mind. WHY DIVERSIFICATION STILL MATTERS As investors, we are all at the mercy of ‘events’: whether good or bad, foreseeable or completely out of the blue. Those events could affect specific markets, indices, industry sectors, entire geographic regions or individual companies. Diversification is a tried and tested risk-mitigation strategy that tries to address this. The aim is simple: to invest in a wide range of assets and asset classes to ensure that if (and when) events unfold and their associated risks arise, not all investments within the portfolio are affected the same way. It might be a familiar strategy – but is it still relevant? For one thing,

Housing: Stamp Duty, Supply And More

Housing: Stamp Duty, Supply And More Central to this is housing, which the Government has seen as essential to both its political and policy agenda. While housing has played a key role in the Budget formulation, this has predominantly been focused on the domestic market, looking for new ways in which to boost home ownership, particularly amongst young people, rather than focusing on overseas investors in UK property. The most eye catching announcement was the cut in stamp duty for first time buyers. Philip Hammond said he would abolish stamp duty on homes priced up to GBP300,000. This is very much restricted to first-time owner-occupiers who reside in the UK, which, although seen as a positive move to aid younger people getting on to the first rung on the property ladder, is also seen as a potential catalyst for rises in prices by some analysts. In full, the key announcements by the Chancellor consisted of a GBP44 billion package of measures to deliver 300,000 homes a year by the middle of the next decade – an increase from the 217,350 homes supplied in 2016-2017. The money will be spent on a range of measures including financial guarantees to support private house-building and purpose-built private rental homes, government working with private developers on new towns, and regeneration schemes and loans to support small and medium-sized building companies. WHAT CHANGES WILL THE RECENT BUDGET HAVE ON FOREIGN INVESTMENT? This year, the Budget’s focus was most definitely on the domestic scene, meaning not much has changed for foreign investors. For residential property, investors were actually given a small level of relief – in a single measure. For investors seeking to divest assets, a delay of one year in the plans to make investors pay capital gains tax within 30 days of selling a property

Is the global property bubble ready to burst?

Is the global property bubble ready to burst? Residential global property has arguably been the most exciting investment of the past eight or nine years, but lately the fun has been draining away for expat mortgage holders. House and apartment prices have been driven sky high by rock bottom interest rates and there are growing signs that they cannot go any higher. Affordability has been stretched as far as it can go. Buyers are reluctant to part with their money at these levels. The days of double-digit annual house price increases appear to be over. The question now is whether the market is merely slowing, or whether it could go sharply into reverse. Is this a bubble, and if so, could it burst? Nothing lasts forever. London was the world’s No 1 property hot spot, but lately the luxury end of the market has slipped. Completed sales of newly-built flats in prime central London areas fell 41.4 per cent across 2016, according to figures from London Central Portfolio, while average prices for new builds also fell 8.7 per cent to £1.9 million (Dh9m). The very top end, for houses worth £5m or more, was worst affected with a 57 per cent fall in new build sales. However, prices across prime central London still rose 3.7 per cent, once sales of existing stock were also taken into account. The pattern of slowdown can be seen around the world in Knight Frank’s latest Prime Global Cities Index, which tracks the performance of luxury residential prices across key global cities for the period of March 2016 to March 2017. Its survey for the first quarter of this year showed that global property hot spots remain, with luxury prices in major Chinese cities Beijing, Shanghai and Guangzhou up on average 26.3 per cent, while

Changes to Stamp Duty

Changes to Stamp Duty On December 4th 2014 stamp duty on property purchases was reformed by the Government. At the time the Chancellor George Osborne stated around 98% of purchasers in England and Wales would pay less after stamp duty reform. Changes to stamp duty meant people who buy homes for under £937,000 would pay less in tax when compared to the old system. From April 2016 a 3% Stamp Duty Land Tax surcharge has applied to purchases of buy to let property and second homes. In Scotland a similar LBTT 3% surcharge applies to additional property transactions from April 2016. Old Stamp Duty System With the old system before December 2014, stamp duty was considered to be a “slab tax” where higher rates were incremented and applied to the whole property purchase price. The old system meant there were sudden increases in stamp duty liability as the purchase price rose above the next threshold. This had a negative impact for both purchasers and vendors with costs increasing or values artificially diminishing around each threshold. New Stamp Duty System Since December 2014 the tax system has become “progressive” and rate increases are applied between stamp duty thresholds only.This means stamp duty rate increases are no longer applied to the whole purchase price. Because of this progressive nature, the new system has been compared to income tax. The updated stamp duty thresholds range from £125,000 to £1.5 million. Changes to Stamp Duty in Scotland Following on from changes to Stamp Duty in England Wales and N.Ireland, stamp duty in Scotland was reformed on April 1st 2015. Stamp duty in Scotland has been replaced by Land and Buildings Transaction Tax (LBTT). LBTT in Scotland works in a very similar way to Stamp Duty in the rest of the UK. LBTT is a

Consultation On Property Wear And Tear Allowance

Consultation On Property Wear And Tear Allowance In the Summer Budget 2015 the Government confirmed its intention to introduce measures to improve how landlord’s businesses are taxed. The new measures which are detailed in the full Consultation Document are designed to provide consistency and fairness in the taxation of rented properties. However, you still have until 9 October to submit your comments and responses to the consultation. An outline of the new measures is given below and we’ve also produced a handy fact sheet which you can print out: The changes The current 10% Wear and Tear Allowance which allows landlords to reduce the tax they pay, regardless of whether they replace the furnishings in their property, will be replaced. From April 2016 landlords will only be allowed to deduct the costs they actually incur for replacing furnishings in their rental properties. Eligibility All landlords will be eligible for the relief respective of whether they let their properties on an unfurnished, part furnished or fully furnished basis. However, Furnished Holiday Lets and commercial premises are excluded. NOTE: The relief will only cover replacing existing furnishings – landlords cannot claim for the initial purchase of furnishings (i.e. when they buy a new property and furnish it for the first time). How it will work Landlords will be able to claim for the capital cost of replacing furniture, furnishings, appliances and kitchenware provided for the tenant’s use; such as beds, wardrobes, tables, sofas, fridges, washing machines, carpets, curtains, cutlery and crockery. However, if the landlord sells the item being replaced, the sale price of that item must be deducted from the purchase price of the replacement and the tax relief can only be claimed on the remainder. Further, landlords cannot claim for ‘improvements’. If the replacement item is an improvement on what was there before (i.e. a

Capital Gains Tax changes for expatriates and overseas buyers brings the UK in line with other global property markets

Capital Gains Tax changes for expatriates and overseas buyers brings the UK in line with other global property markets The UK government published draft legislation that detailed changes to Capital Gains Tax (CGT) on the sale of properties for overseas and expatriate investors. This brings changes for the UK in line with other property markets and aligns overseas and expatriate property investors the same as UK resident home-owners. From 6 April 2015, non-resident UK property investors will be charged on gains made from the sale of their property of between 18% and 28%, this is the same rate as resident home-owners in the UK. The UK government has deemed any UK property owner who spends less than 90 nights in their property to be a non-resident investor and CGT will also be charged on off-plan properties. Other key points arising from the draft legislation are provided below. The changes mean that non-resident UK property owners will need to consider obtaining a valuation of their property. We work with a number of valuers to assist you in obtaining a recent valuation should you need one. If you need to clarify any points relating to the changes to the CGT legislation, we advise property investors using expat mortgages to seek tax advice from a UK tax specialist with knowledge in this area. Who will be affected by this new legislation? From 6 April 2015, CGT will be imposed on disposals of residential UK property by non-resident individuals, trustees, estates and close companies. Off-plan properties will also be treated as fully completed residential properties, so if a non-resident individual re-sells a property before the completion of a project then they will be liable to CGT on any gains arising after 6 April 2015. The government has not extended the CGT charge to non-resident