London house prices: is slump coming to an end?

Welcome to the Richard Butler Creagh blog. Richard Butler Creagh helps clients find the right financial packages for their needs. Richard Butler Creagh and his team bring a consultative approach that quickly solves financial challenges. In today’s post, we talk about the slowing price growth of UK property making it harder for speculators to turn a profit.

The number of homes in England and Wales that were bought and sold twice within a year came to 17,120 in 2018 — down 11 percent from the latest peak two years earlier, and 70 percent below the high point of “flipping” in 2004, according to the estate agents.

Speculative homebuying in London almost halved in the past four years, with 1,107 homes flipped last year, as the housing market in the capital — which had led the post-crisis surge in prices — weakened. Of £3.9bn of homes flipped in the UK past year, £600m were in London. Price growth has slowed, and this combined with tax changes has meant that generally, it’s harder for flippers to make as much of a return as before.

The annual rate of house price growth across the UK in 2018 was at its slowest in five years and the slowing trend has continued since, with prices across the UK up 1.4 per cent in the year to April, while in London prices dropped 1.2 per cent.

In 2018, flippers sold homes for an average £30,150 more than they paid — although this figure does not take account of stamp duty, estate agent fees or any renovation costs. According to an online estate agent, buying and selling a home worth about £200,000 can cost as much as £20,000 in total, meaning flippers must choose carefully to ensure a profit.

The latest peak for flipping was in 2016, when some 19,180 homes in England and Wales worth £4.2bn changed hands twice in a year. National house price growth began to slow that year, after coming in at 8.3 per cent in the year to March. But that paled in comparison with the boom of the early 2000s, when 56,560 homes, worth a total of £8.2bn, were flipped as house prices shot up by 20 per cent in 2004.

The capital of rapid buying and selling for the past three years has been Burnley in Lancashire, where more than one in 10 homes that changed hands were flipped in 2018. Burnley has some of the lowest house prices in England. This allows flippers to buy properties worth more than £125,000 that do not incur basic stamp duty, although they may still be liable for the 3 per cent surcharge applied to second and additional homes.

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Richard Butler Creagh is the founder of Henley Finance. With decades of experience and deep knowledge of the financial sector, Richard can help clients find the right financial packages for their needs. See what Richard Butler Creagh can do for you here. Check out Richard Butler Creagh ‘s Pinterest page here for more information you need to succeed financially. Whether debt, mezzanine financing or equity, the Richard Butler Creagh has the resources to help you to keep your business moving forward.

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What is Bridging Finance

Richard Butler Creagh Shares about Bridging Loans

 

Welcome to the Richard Butler Creagh blog. Richard Butler Creagh founded Henley Finance in 2013. a short-term bridging finance company that specializes in loans between three months to a year, of £100,000 to £1,000,000 for experts in property development.  Here we explain the basics of bridging finance loans. Read on to find out more.

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People who take out mortgage loans know the concept of bridging loan or bridging insurance, It is used to secure a liability to the bank or another secured creditor until the mortgage is established on the property. A mortgage loan for a mortgage of a house or flat, or even land. However, before the borrower formally registers a mortgage with the bank in the land registry he secures his interests through bridging insurance. A short term facility securing interest in the property

A bridging loan granted to entrepreneurs has a slightly different dimension. Namely, it is granted in the form of assistance in the implementation of the investment. Its aim is to secure investment and develop the property before it is ready to re-mortgage. Further, in Europe bridging finance is often used to secure European Union subsidies for projects.

The basic purpose of the bridging loan is to enable or facilitate the implementation of investments From the moment the beneficiary incurs the first expenses related to the project implementation until the moment the refund is received, he may use the own funds or just from the bank’s funds as part of the bridge loan. The loan may be granted on a one-off basis or in tranches, up to the amount of the subsidy granted. It helps in maintaining financial liquidity before the project is due and receiving a refund.

How to get a bridge loan? Depending on the lender that offers the bridging loan, other conditions may apply. The loan is usually granted on simplified terms and it is easier to obtain it then, for example, receiving a positive decision from the bank on your investment loan application for the company. As a rule of thumb, the only security for the bridging loan is the assignment of rights under the co-financing agreement with the attached blank promissory note of the borrower and the security vested in form of a mortgage.

When the bridging loan feasible? Bridging finance is one of the more expensive form of financing the project and at the same time, it is the most popular amongst new developers who might struggle with big lenders due to lack of investment history. The concept from the perspective of bridging company is to secure the loan with equity.  If the finance is 70% of the loan amount it should be feasible. However, one thing worth considering is that the interest is paid monthly and often one or two months of none payment will trigger default interest which will eat the equity very quickly. Therefore, it is worth considering the value of the project and rolling up the interest for a period of time. This has to be carefully planned as not only it will increase the initial debt but interest payments thereafter.

Richard Butler Creagh, founder of the Henley Finance offers fast, flexible solutions to your bridging requirements. The Henley Finance team has decades of entrepreneurial experience in the financial and real estate sectors. Read more about Richard Butler Creagh online here. Like  Richard Butler Creagh on our official Twitter page and keep up to date with the latest finance news. Join Richard Butler Creagh professional network on Linked here.

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Buying the Right Investment Property

Richard Butler Creagh is a financial consultant who founded Henley Finance since 2013 which provides short-term bridging finance to the property development sector. Here is Richard Butler Creagh’s advice on your next property investment.

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You’ve made a windfall and you’re looking to buy an investment property you can turn into a steady source of cash flow in the form of rental income. If you’re ready to become a property owner-cum-landlord, here are three things to remember before you buy your first rental home.

Stick with a budget. Whether you’re looking to invest your personal funds or taking out a property loan, have a budget and stick with it. Success in real estate investment takes time and patience, so don’t rush into a buying spree. Instead, learn more about the trade and make informed decisions.

Research rentals in the neighborhood. You may have decided upon a location simply because someone recommended it or a real estate agent is pushing you to buy there. Tread with caution—your entire business plan could go for a toss if you fall for inflated rental figures. Do your own research, find out the going rentals in the area, and factor in the associated costs of acquiring a property, advertising it to potential tenants, maintaining it until a good tenant comes along, and government taxes and agent fees, if any.

Buy through a reputed local real estate company contact a seasoned and well-established.  house buying company and let them know you’re looking to invest in a home or commercial property that will fetch you good rent and will also see considerable appreciation in the coming years. By partnering with a local real estate business, you’ll benefit from their resources and expertise in scouting your preferred location for a good deal.

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Brexit: An Opportunity Or A Threat?

A survey has revealed that investors are much more likely to see Brexit as an opportunity rather than a threat, in spite of factors like rising inflation.

Half of those surveyed said they considered the changing relationship between the UK and Europe to be an opportunity. Some shared the surprise and concern that dominated in the UK; in France, the feeling was largely one of incredulity that the UK was ruining the European dream. For Germany, it was seen as an opportunity to promote Frankfurt as a commercial market, while many Asian buyers and investors saw a decline in sterling as an opportunity.

In over three decades in property, UK undergoes crises and economic upheaval, but markets, particularly London, soon recovered – and often thrived.

It was on the late 1980s, when institutional investment in UK real estate came of age, when the big commercial businesses experienced some of their fastest growth and overseas investment from the likes of Japan, Sweden, and the Middle East began.

In the early 1990s, George Soros ‘broke the Bank of England’. It was also a time of chronic overbuilding and, early in the decade, sky-high interest rates – a challenge for overextended property firms. Yet by the mid-1990s, investors, particularly German firms such as Deka and Commerzbank, were piling into London property.

Finally, In 2008 and into 2009, the commercial property market was on its knees.

Whether, when and how we leave the EU may have significant, long-term implications for the economy, but the impact on commercial property is likely to be short-lived. Despite the uncertainty, the macroeconomic fundamentals remain strong. The economy is still growing, with 0.4% GDP growth in the latest quarter and employment at its highest since records began.

The property market is healthy. A no-deal Brexit could disrupt the market and affect yields, but over a period of months, not years. The market will bounce back, just as it always has done. For those with the right perspective, that’s not a disaster; it’s a buying opportunity. Learn about bridging finance and how it can benefit you by reading about Richard Butler Creagh online here. Like the official Richard Butler Creagh on Facebook to keep up to date with the latest news in property and finance market.  Show your support online by following Richard Butler Creagh on Twitter here.

 

 

Uk House Prices Make Surprise 5.9% Rise In February

House prices rose by 5.9% in February – confounded many commentators, as it appears to contradict the widely held view that the UK’s property market remains in the grip of a slowdown.

Despite an escalation in Brexit confusion, property prices rose 3% percent last January, the latest Halifax index showed.

The Halifax said the 5.9% increase seen in February was thought to be the biggest it had ever recorded. It lifted the average property price to £236,800 – up from £223,629 at the end of January. That translates into a £470-a-day increase in value.

The big monthly rise lifted the annual rate of price growth to 2.8%, which the Halifax said was “fairly subdued” compared with 2015-16 when it was more than 8%. But with other surveys and official data mostly showing housing market, Halifax cautioned against reading too much into the strength of a single month’s figures.

Richard Butler-Creagh is the founder of Henley Finance. Learn more about how you can get the most out of a bridge financing by reading about Richard Butler Creagh online here. Read the recent news article about Richard Butler Creagh to their website. Show your support online by following Richard Butler Creagh on Twitter here. Watch this video about Henly Finance and what they can offer you:

How long does it take to get a Bridging Loan?

Bridging loans can be arranged within a matter of hours with funds released within 72 hours although usually this takes a bit longer and can take a couple of weeks. While a bridging loan may be arranged much quicker than could be achieved through a traditional bank, most bridging finance companies still apply sensible and relatively conservative lending criteria. Usually, such lenders are smaller nimble operations and specialise in doing all of the usual checks that a bank will do but without the encumbrance of bank bureaucracy.

Every bridging loan that’s arranged has an exit strategy agreed with the lender – the means by which you’re going to repay it. You might be planning to sell the property after renovations are complete, arrange a long-term mortgage on it or sell another property to pay off the loan.

Interest rates are quoted per month. After the first month minimum, interest is calculated daily. For example, you take out a £100,000 bridging loan on 1st August at 0.75% monthly. If you repay it on 6th October you pay one month’s interest (£750) plus 6 days’ interest (£148) = £898 in interest. (Plus the loan set-up fees.)

Fees include the usual search fees and land registration fees, the lender’s valuation fee (which you need to pay) and both your legal fees and the lender’s (which you may be able to minimize by using the lender’s solicitor to do your own legal work as well). Then there’s the lender’s arrangement or facility fee of around 2% and your broker’s fee (which will be least of all the professional fees).

This is a very useful form of finance for the property.

If you’re looking for short term finance and are a property owner, a bridging loan could help. Contact Richard Butler Creagh to discover your options here. Connect with Richard Butler Creagh on Crunchbase and join our network. Follow Richard Butler Creagh on our official Twitter page for more advice on bridging loans.

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The Ultimate Guide to Bridging Loans

A bridging loan is a type of short-term finance that typically lasts for 12 months or less. It provides fast and flexible funding for all kinds of purposes and is used by individuals, investors, businesses and property developers

What are bridging loans used for? Bridging finance was traditionally used to ‘bridge’ gaps in property chains, but today it is more widely used. Homebuyers, property developers, landlords, investors, and self-build enthusiasts all use it to complete projects, including initial purchases.

How is a bridging loan different from a regular loan? For example, you can take a bridging loan out in multiple stages so that you only pay interest on the money that has been released to you, and if you prefer not to make monthly interest payments, there is also the option to retain your interest (and not just your fees) from.

A building, Refurbishment and Extension Projects. Bridging finance can also be used to fund building, refurbishment and extension projects.  For example on your property development, you can turn an existing commercial building into flats with the assistance of permitted development rights. For self-builds, you can create your ideal home or even a grand design. Lastly with extensions, with planning permission available you could create that perfect living space.

Financing Projects. Investors, businesses and entrepreneurs also take advantage of bridging loans to invest in projects overseas, purchase assets, increase business cash flow and make tax payments, such as income, capital gains, corporation, VAT and PAYE.

Richard Butler Creagh is the founder of bridging finance company Henley Finance, dedicated to helping property developer with fast loans. To find out more visit the Richard Butler Creagh website here. Learn more about the work of Richard Butler Creagh on the Sports Timing Solutions. Join Richard Butler Creagh professional network by on Linkedin page here.