Credit Brunch!

You cant get rich renting. You cant get rich renting. You cant get rich renting. If you rent for a lifetime then you will spend hundreds of thousands of pounds and end up exactly where you started, owning nothing. If you buy a house and pay down your mortgage you will eventually own a tangible asset. Unfortunately for us, Houses arent available for £99 down at your local IKEA. Most of us are going to need to take on debt in the form of a mortgage in order to make a house purchase. At the moment, due to the Credit Crunch, many people are seeing renting as a better alternative to taking on a mortgage, and who could blame them? Mortgage rates are the highest they have been for decades, large deposits are required and what for? The house you buy is likely to be worth a lot less this time next year. Remember though that you cant get rich renting! So how do you work your way through the maze and decide how much of a house is enough? Here are the easy rules I would follow:

1.Visit www.rightmove.co.uk

2.Search for properties for sale in your town.

3.In the search filters only look at resale houses with 3 bedrooms and display with lowest prices first.

4.Ignore properties in the worst two areas of town.

5.Write down the first 3 properties you come across which are available with Off Road Parking.

6.View all 3. Offer the same amount of money on all 3 (at least 10% less than list price). Work upwards until the first acceptance.

I recommend offering the same on all three houses because this is not a beauty contest. From the outset I would make my intentions clear to the Estate Agent. I would say something like, I am interested not only in this property you have to offer Mr Estate Agent, but also another two with your competitors. I have no particular favourite, I just want one of them at the cheapest price possible. I guarantee you that as soon as the Estate Agent knows that you are also looking elsewhere they will redouble their negotiation efforts with the vendor. If two agents come back at the same price then pick the one you prefer, thinking long term. I guarantee you that in three quarters of the UK you will find a property available that fits within the above criteria at under £125,000.

Have a look at www.uncommonadvice.co.uk to find out how you can then go on to purchase that property and pay the mortgage off within 10 years.

Throughout history it is amazing to note that many, many millionaires have made their fortunes whilst others are mumping around complaing about their misfortunes and generally whining about the economy. The best example I can think of is Joe Kennedy (the father of John F. Kennedy) who was one of the only men to come out of the Stock Market Crash of 1929 smelling of roses. These men of steel show repetitive traits - they have a plan and they stick to it. They stay calm whilst all around them people are losing their heads. We should adapt these traits to the current UK housing situation. If you are an investor then now is actually the best moment to be in the game for a long time. Look at the current opportunities and fomulate a strategy around them:

1. Repossession rates are going through the roof! All over the UK people are facing rate shock as they come off their fixed rates. The increased monthly payments lead to arrears. Elsewhere, increased costs at the fuel pumps, and higher expenses at the checkout are pushing more and more pressure onto the family purse. For some, this undoubtably leads to breaking point. Repo's are now running at almost the highest rate since records began. Although unfortunate for those concerned, the flood of cheap properties onto the market makes it Christmas Day for the Professional Investor.

2. Less competiton. Two summers ago a competitively priced house coming onto the market in a readily lettable area would have created a furore. Investors would be heading down to the Estate Agents like a flock of geese. Now the same property would hardly raise an eyebrow even with a For Sale board up, an editorial in the local rag, a highlighted position on Rightmove, 500 mailings and 50 call outs. No-one is buying! Therefore, as an Investor you will have your pick of th bunch. I am not overexaggerating here. At this moment in time I can reliably reveal that there are probably 3 or 4 investors still actively buying in Corby, Northants, perhaps 1 in Wellingborough and roughly the same in Rushden. If we assume that this picture is replicated across the country then we can extrapolate and predict that there is (very roughly) about 6000 investors buying at the moment in the UK. 6000 people have their choice of thousands upon thousands upon thousands of bargains. Choice breeds bargains. It is a buyers market.

3. Estate Agents are getting desperate. Imagine if you went back in time to a year ago and called your local Estate Agent to offer £85000 on a property which was on the market for £100000. I can guarantee you that that offer would be immediately placed in "the round file" (dustbin). The agent wouldn't even bother passing the offer on to the vendor. Today it is a completely different story. The agent may be wondering where there next wage cheque is coming from and will therefore do everything they can to make the deal happen. You'd be amazed how much influence an agent has on local house prices at a micro-level. Throw in the offer and then let the agent do their stuff. If the agent poo poos you then move on and find a more pro active firm to deal with.

5. Rents are creeping up. Ok, please imagine two situations. In the first instance you are a FTB couple who would have possibly bought a house together last year but now can't due to the Credit Crunch restrictions. In the second instance you are a family who are beginning to struggle due to rate shock and are looking to get off the ladder. Now, there are two sides to every story. What goes up must come down. If there are losers like the two examples then there must consequently be winners too. The winners are landlords because all the people who are in the situations referred to above will end up in rental sector. With the reduced supply of rental houses (due to the near disappearance of BTL mortgages) properties that means that a sellers (or Landlords more correctly) market is being created. Rents will naturally rise as market condtions prevail.

Read this article and understand - now is the time to buy.

The stupidest thing I hear people say at the moment is "I'm waiting until the property market bottom outs until I buy!". Who do you think you are - Donald Trump? The reason this is such a crazy thing to come out with is because:

1. There is no such thing as a UK property market. Even within a single street house prices move as amazingly different paces. Take the example of a street I know well. On this street I've seen 3 bed terraces sell for £100,000 then £90,000 then £80,000 over the last 6 months - but try telling this to Mr. Hard Nosed Vendor at no.42 who is sticking to his guns with an asking price of £129,950! If we can't get a single message across within the space of 200 yards, what chance across the whole nation?

2. Who knows when the market has hit rock bottom? I jokingly said at the start that you'd have to have the business acumen of Donald Trump to time the market but perhaps this analogy is not too far from the truth. How many people do you know who purposefully timed the 80s property boom correctly? How many got in and got out of the Dot Com boom in the black? How many made a killing when gold tripled between 2006 and 2008? How many bought Vodafone stock the week before they got a 3G licence? I'm going to guess that the answer to all these questions is none or not many. So why, oh why, do we listen to the pub know it alls when it comes to property?

3. Just because you wait for the market to bottom out doesn't mean that everyone else will. There is an old saying that the deal of a lifetime comes along every week - and this is as true in property as it is in other investments realms. Whilst you are waiting for the perfect deal others will have bought crackers. Don't get paralysis by analysis. By all means do your research and due dilligence but make sure that when a deal fits you don't let it pass by - just in case the market hasn't quite reached rock bottom.

In summary realise that there is no such thing as the UK housing market no matter what the Daily Hate may like to tell you. If you find a property that is a good deal then don't rest on your laurels. Buy when the sale is on!

A recent survey has shown that the number of mortgages approved for house purchase dived by 23% during June to hit a new record low in the UK. Only 21,118 loans were approved for purchasers, 66.9% fewer than in June last year and the lowest figure since the British Bankers' Association began collecting the data in 1997. The key driver behind this fall in mortgage approvals is undoubtedly the disappearance of Buy to let investors from the market. Since March, when BTL criteria really tightened up, it has always been necessary for an investor to put in at least a 15% deposit into a BTL purchase. Before this point, professional investors could get away with putting in a 10% deposit or even a "No Money Down" deal under the right circumstances. Keeping the deals as highly leveraged as this meant that the ambitious could build huge portfolios in a relatively short period of time. Look at the example of a purchase of a £100,000 property which achieves £500 per month rent. Last year it would have been possible to purchase this property with a 10% deposit at a rate of c. 5.79%. Today it would be necessary to put in a deposit of c £25,000 and the best available rate would be somewhere around 6.09%. Looking at it from the investor's point of view, would you put your money into an investment which could be worth considerably less in a few years time? Now, as the investors are not currently there to buy houses at the <£125,000 level, these homeowners are not present to buy onwards at the higher price level, and so on. In the meantime, as there is now a shortage of cheap rental properties coming onto the market, demand in the rental sector is growing quickly. This is leading to rents growing across most of the UK. First Time Buyers are therefore getting squeezed in every direction. House prices may be coming down but the shortage of mortgages and an increase in rents mean that FTBs are actually in a worse situation than ever! In "Mortgages, Money and Magic", I reveal an easy to follow method that shows how a First Time Buyer can get a property without a deposit and go on to own the property outright within a decade without actually doing anything out of the ordinary! This plan is bang up to date and fully Credit Crunch tested.