Rents Weren’T Really Keeping Pace, and I Wasn’T Accumulating Properties As Rapidly As a Lot of Other It Became More Problematic
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1 2 WELCOME TO THE FEBRUARY Ant Lyons REAPING PROPERTY REWARDS EDITION 5 Director and Co-Founder OVER THE LONG TERM [email protected] How three sets of investors have adapted OF YPN! their plans over the years as their lives and circumstances have evolved After last month’s focus on goals and Mike Kyte planning to get yourself going in 2018, Director and Co-Founder RANT this month we’re looking at the longer 21 [email protected] term. What do you want to get out of your YOUR PROPERTY PROJECT! property investments by the time you’re 23 ready to hang up your hard hat? And how Going back to brick to create a high-end Jayne Owen will you exit those investments or pass HMO – how one investor created a Editor MASSIVE uplift in value and cash flow them on at that point? Even if you are only [email protected] starting out right now, it’s worth giving LESSONS LEARNED THE these questions a little bit of thought 29 just to make sure that you’re on the right HARD WAY George Haines track with your shorter term goals, and Irrepressible investor Neil Larkin reveals IT Manager to get the best out of every £ you put into his new approach to property after [email protected] property. recovering from disaster One goal might be to systemise or improve KEY QUESTIONS TO ASK Simon Clements the efficiency of your portfolio or business. 33 YOUR ARCHITECT Creative Manager Something that we are hearing more and Regular contributor Andrew Featherstone [email protected] more about these days is PropTech, and is back with his Key Questions series this is reflected in the pages of YPN as people discover the huge advantages you FIRE COMPARTMENTATION can achieve in your TIME and also in your 36 Heather Messenger BOTTOM LINE by adopting some of the Mark Doyle discusses the structural Customer Care Manager new technologies that can make property implications of fire cells in restricting the [email protected] life easier. This month, regular writer spread of fire, smoke and gases Richard Brown offers his perspective BUY PROPERTY NEAR Heidi Moment following research he’s done on the subject 49 in recent months. Look out for more NEW RAIL ROUTES Writer PropTech articles in future issues to help David Lawrenson outlines the benefits of [email protected] you stay ahead of the competition in keeping an eye out for investment in rail your sector. infrastructures Danni Fisk Until next month, MONITORING YOUR Advertising & Events Manager 51 ENERGY LEVELS [email protected] Jayne Owen Graham Kinnear issues a timely reminder of what you need to do ahead of the new EDITOR minimum energy standards coming into Angharad Owen effect on 1st April Freelance Writer [email protected] Have you checked out YPN BITESIZE yet? 57 #PROPTECH – IMPROVE This series of training modules on specific PROFIT AND PRODUCTIVITY strategies is FREE to all subscribers – so FROM EMERGING TRENDS IN log in to the subscriber website now to PROPERTY TECHNOLOGY You can contact the YPN team using the email addresses above or on boost your property knowledge! Richard Brown shares how you can benefit from new, improved technologies in the property sector 07807 236725 RAJ BERI’S BOOK REVIEW 67 Tune in to Raj’s monthly review of hot property (and other useful) books your attitude to risk, legislation updates, your regular favourites … and much more! www.yourpropertynetwork.co.uk3 PRS Private Rented Sector THE YPN JARGON BUSTER R2R Rent-to-rent REIT Real Estate Investment Trust A list of the abbreviations and tech-talk used in this month’s YPN – RGI Rent guarantee insurance RLA Residential Landlords Association ACV Asset of community value HB Housing benefit ROI Return on Investment ADR Alternative Dispute Resolution HHSRS Housing Health and Safety RP Registered Proprietor, refer ring to the APHC Association of Plumbing and Rating System name on the title of a property Land Heating Contractors HMO House of Multiple Occupation Registry ARLA Association of Residential HNWI High Net Worth Individual RSJ Rolled-steel joist – steel beam Letting Agents a certified high net worth investor is RTO Rent to Own Article 4 An Article 4 Direction removes an individual who has signed a statement RX1 Form used to register an application to permitted development rights within confirming that he/she has a minimum the Land Registry to place a restriction a specified area designated by the income of £100,000, or net assets of on the legal title of a property to protect local authority. In many cities with £250,000 excluding primary residence (or money raised through the interests of a third party. The areas at risk of ‘studentification’, there loan a secured on that property) and restriction will prevent certain types of are restrictions on creating HMOs so certain other benefits. Signing the transaction being registered against the you will have to apply for planing statement enables receipt of property (eg, sale, transfer of ownership permission. Check with your local promotional communications exempt or mortgage) planning authority. from the restriction on promotion on S24 or Section 24 of the Finance Act (No. 2) AST Assured Shorthold Tenancy non-mainstream pooled investments. Section Act 2015 – restriction of relief for AT Assured tenancy (Source: FCA) 24 finance costs on residential properties BCIS Building Cost Information Service – HP Hire Purchase to the basic rate of Income Tax, being a part of RICS, providing cost and price HSE Health and Safety Executive introduced gradually from 6 April 2017. information for the UK construction ICR Interest Cover Ratio Also referred to as the Tenant Tax’. industry. IHT Inheritance tax SA Serviced Accommodation BCO British Council for Offices JCT Joint Contracts Tribunal – produce SAP Standard assessment procedure BIM Building information modelling (contract) standard forms of construction contract, (assessment) BMV Below market value guidance notes and other standard forms SARB Sale and Rent Back BTL Buy-to-let of documentation for use by the SDLT Stamp Duty Land Tax BTR Build-to-rent construction industry (Source: JCT) SI Sophisticated Investor (Source: FCA) BTS Buy-to-sell JV Joint venture Certified: individual who has a written CCA Consumer Credit Act JVA Joint venture agreement certificate from a “firm” (as defined by CDM Construction Design and KPIs Key Performance Indicators the FCA) confirming he/she is Management L8 ACOP Approved Code of Practice L8 – sufficiently knowledgeable to CIL Community Infrastructure Levy - Legionella Control and Guidance understand the risks associated with The Community Infrastructure Levy is a LACORS Local Authorities Coordinators of planning charge, introduced by the Regulatory Services engaging in investment activity. Planning Act 2008 as a tool for local LHA Local Housing Authority Self-certified: individual who has authorities in England and Wales to help Libor London Inter-Bank Offered Rate signed a statement confirming that he/ deliver infrastructure to support the LLP Limited Liability Partnership she can receive promotional development of their area. It came LTV Loan To Value communications from an FCA- into force on 6 April 2010 through MCD Mortgage Credit Directive authorised person, relating to non- the Community Infrastructure Levy (European framework of rules of mainstream pooled investments, Regulations 2010. conduct for mortgage firms) and understand the risks of such (Source: planningportal.co.uk) MVP Minimum viable product investments. One of the following must CGT Capital gains tax NALS National Approved Letting Scheme also apply: CML Council for Mortgage Lenders NICEIC National Inspection Council for (a) Member of a syndicate of CPD Continuing Professional business angels for at least six months; Electrical Installation Contracting Development (b) More than one investment in NLA National Landlords Association CPT Contractual periodic tenancy an unlisted company within the OIEO Offers in excess of CTA Call to Action previous two years; OMV Open market value DCLG Department for Communities and (c) Working in professional capacity in PBSA Purpose-built student accommodation Local Government private equity sector or provision of PD Permitted Development / Permitted finance for SMEs; DoT Deed or Declaration of Trust Development rights – (d) Director of a company with annual EHO Environmental Health Officer you can perform certain types of work turnover of at least £1m within the EIS Enterprise Investment Scheme on a building without needing to apply previous two years. EPC Energy performance certificate for planning permission. Certain areas SIP(s) Structural integrated panels FCA Financial Conduct Authority (such as Conservation Areas, National SME Small and Medium-sized FLEEA Insurance cover for Fire, Lightening, Parks, etc) have greater restrictions. Enterprises cover Explosion, Earthquake and Aircraft Check with your local planning authority. SPT Statutory periodic tenancy impact, but no other perils. Some PI Professional Indemnity insurance SPV Special Purpose Vehicle – a structure, times issued for a property that has insurance usually a limited company, used when been empty for some time PLO Purchase lease option more than one person invests in a FPC Financial Policy Committee PM Project manager property. The legal status of the SPV FRA Fire risk assessment PRA Prudential Regulation Authority – protects the interests of each investor. FSCS Financial Services Compensation created as a part of the Bank of SSTC Sold Subject To Contract Scheme England by the Financial Services TPO The Property Ombudsman FTB First time buyer Act (2012), responsible for the UKALA The UK Association of Letting Agents GCH Gas central heating prudential regulation and supervision USP Unique selling point GDPR General Data Protection Regulation of around 1,500 banks, building societies, credit unions, insurers GDV Gross Development Value and major investment firms. (Source: Bank of England) 4 That means taking a very close look at tax and succession planning, which involves plenty of discussions with the family and Reaping Property our advisors.