Set-back for buy-to-let pension plans

Investors' plans to purchase buy-to-let property or holiday homes with their pensions were dashed last week by the announcement that residential property and other exotic investments such as fine wine or classic cars will not attract the tax perks of pensions.

The financial services industry had been predicting strong demand for residential property from pension investors following the introduction of new "A-day" rule changes in April that would have given pension investors much greater freedom to diversify their pension savings.

But in a briefing paper accompanying the pre-budget statement the Treasury said self-invested personal pensions (Sipps) – vehicles that already enjoy significant investment freedoms – "will be prohibited from obtaining tax advantages when investing in residential property and certain other assets such as fine wines".

The clampdown extends to all alternative assets including art, antiques, stamps and racehorses. Pensions experts said the turnround would leave thousands of investors out of pocket.

Financial advisers and Sipp providers have reported that growing numbers of investors have set up Sipps or paid deposits on flats in property developments with the aim of completing the transaction after the rule changes in April.

Richard Meek, principal of Punter Southall, financial advisers, said: "To leave it this late before introducing legislation – after explaining on a number of occasions how it was going to work – is extraordinary. Most people were led to think this was definitely going to happen. Many people will have started to make financial plans and will have incurred costs setting up a Sipp for no reason."

Others predicted the change would damp public excitement over pensions. Richard Proctor, tax partner at Grant Thornton, said: "Because people were turned off by the stock market it was a way of getting them back into pensions. This U-turn could nip a potential revival in pensions in the bud."

But some lobby groups were happy about the climbdown. Jenny Harris, policy leader at the National Housing Federation, the trade body for housing associations, said the previous proposals would have led to house price inflation.

Industry was also concerned that the unregulated investments would have led to another pensions mis-selling scandal. Sipps will not come under the Financial Services Authority until 2007 at the earliest.

Under the rule changes unveiled yesterday, pension investors will still maintain valuable pension tax perks if they invest in residential property via "genuinely diverse commercial vehicles", such as the soon-to-be-introduced Real Estate Investment Trusts.

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The secret of managing cash flow

Christmas is the time of year when people normally spend more money than usual. With this in mind, I thought it may be a good time to talk about cash flow management.

If you asked 100 people whether savings and investment for the future is important to them, 99 of them would say yes. So why is it that so few people can manage their cash flow well enough to have money left for savings and investment?

We tend to spend money in one of 2 ways. We either act on impulse or through consideration. With an impulse purchase we really don't put a lot of thought into the decision and attach very little guilt at that moment the money is spent. The purchase results in instant gratification but as a result we often spend more than we can afford.

When spending money based on consideration we decide to spend the money because the advantages outweigh the disadvantages. We take the time to weigh up the advantages and disadvantages and make a carefully considered decision based on this.

The problem is that most money is spent on impulse and not on consideration and as a result we tend to run out of money very quickly. What we need is a simple system in place to manage our spending.

Let's say if you're one of the 99% of people who believe that savings and investment are important. To ensure that its importance gets realised regardless of the circumstances and how you might spend your money, you would probably need a system to put away a certain percentage or certain amount of your income each month; almost like you didn't receive it in the first place.

For example, if you have £100 coming in, before you even put any money towards your food and basic needs you would put away, say, £10 into your savings and investment account. You could technically put away money in a similar fashion for anything major such as a holiday, Christmas or a wedding. The actual percentage or amount is not as important as the habit itself, you may start from as little as a few pounds.

You may ask why I even bother talking about something so basic? Well put simply we are just not doing it. We may think we understand it, but if we are not doing it, we don't really know its power. In fact, automatically putting money away for some kind of purpose is one of the hardest things to do.

First of all, we often don't believe that we have extra money to put away as we're already short as it is, but we forget the fact that we have always found money for things that are absolutely important to us. Why not make savings and investment top of the list since they'll eventually give us more money to spend on other things?

Secondly, we seldom realise the importance of following a system. We all want our freedom to do things but there is no such thing as freedom without control. You never get a one-sided coin.

You may wonder why we are suddenly talking about cash flow management when we normally focus on the importance of capital growth as a wealth generating investment tool. Well over the last few years we have seen many people become involved in residential property investment because of the tremendous growth in the value of their homes. Some people become property investors thinking it's an easy way to make more money. What we have noticed is that in general only the people who have already developed a good habit of managing their money on a daily basis have done really well.

On the other hand, there are people who have not put savings and investment as their high priority, they still keep their old spending pattern and never put a cash flow management system in place. Many of them end up spending most of their capital growth and rental income from their properties, in other words, they have not really moved ahead, some of them have even gone backwards, not due to bad performance of their properties, but their own habit of mismanaging their money.

So for those who have not developed a system for managing their cash flow, maybe this Christmas is a good time to start, come up with a simple budget and see if you can have some fun with it.

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"Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time." - Thomas Edison 1847-1931, Inventor and Entrepreneur

"The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it." - Michelangelo Buonarroti 1474-1564, Italian Renaissance Painter and Sculptor

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Virtual property market booming

For all you gamers out there, it would appear that there is a way to indulge both your gaming and investment passion to make some substantial money. Take a look at this rather light hearted article.

A gamer who spent £13,700 on an island that exists only in a computer game has recouped his investment, according to the game developers. The 23-year-old gamer known as Deathifier made the money back in under a year.

The virtual Treasure Island he bought existed within the online role-playing game Project Entropia. He made money by selling land to build virtual homes as well as taxing other gamers to hunt or mine on the island. Project Entropia offers gamers the chance to buy and sell virtual items using real cash, a trend which is gaining popularity as the boundaries between the virtual and real worlds continue to blur.

There are fortunes to be made in the burgeoning world of MMORPGs (massive multiplayer online role playing gaming). "The money made to date is only a taste of what can be achieved with my virtual island purchase," said Deathifier. "We've really only just begun with the estate sales and land management, there is still more room for growth and revenue with the untapped resources surrounding the land." Last month, another of Entropia's virtual properties - a virtual space station - sold at auction for £57,000.

While the real housing market may be somewhat static, the one in the virtual world is booming, said the space station auction winner, gamer Jon Jacobs, AKA Neverdie.

He said the virtual real estate market was "on fire" as gamers increasingly realised that virtual worlds could start to compete with real worlds at an economic level. Neverdie plans to use his space station to establish an in-game "night club" through which the entertainment industry can sell music and videos to gamers. The Entropia economy works by allowing gamers to exchange real currency for PED (Project Entropia Dollars) and back again into real money. Ten PEDs are the equivalent to one US dollar and gamers can earn cash by accumulating PEDs via the acquisition of goods, buildings and land.

Project Entropia was launched in 2003 and now has 300,000 registered accounts.


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"It doesn't matter which side of the fence you get off on sometimes. What matters most is getting off. You cannot make progress without making decisions." - Jim Rohn, Author and Speaker

"The indispensable first step to getting the things you want out of life is this: Decide what you want." - Ben Stein, Professor and Writer

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Property investment is not perfect

Are you looking for the perfect deal? Well, I've got news for you - you won't find it. The perfect deal simply doesn't exist. Let me explain.

So many first time investors search for the 'perfect' deal. This is seriously self limiting and can only lead to frustration and disappointment because they will never find it. By wasting time looking for it many great deals will pass them by without even being noticed and getting started becomes increasingly difficult and daunting.

But it gets worse, because in addition to finding the perfect deal, our budding investor now feels compelled to find the perfect finance, the perfect location, the perfect solicitor, the perfect tenant, the perfect investment consultant and the perfect consultancy. Everything has to be perfect…

The single biggest thing our fledgling investor needs to learn is that there is no such thing as the perfect deal, perfection simply doesn't exist, but this is not to say that there aren't great deals out there; and lots of them.

Seasoned investors consistently make money from property. They have substantial property portfolios and despite the fact that every property in the portfolio is imperfect in some way, they still make great profits. These investors don't wait for the perfect property, they research and as a result understand the market. They are ready when the right - not the perfect - deal appears and they buy it. No procrastination, no rushing, just realistic and ready to act.

When looking at an investment property ask yourself, does the property tick all the right boxes? No, well of course it won't but does it tick all the important boxes? Simple! Now you're on your way to making money through property investment. Just make sure you know what the important boxes are. This is where some hard work will pay off. Research, research and research. Forget what you would like the property to have, what does it actually need to make it the right investment property for you? Only you can answer this but we can certainly help to educate you and guide you in the right direction.

Why not enroll for our highly regarded property investment academy. Click here to visit the academy page on our website and to find out when the next session is available. Knowledge and research are key to successful property investing. We can give you the knowledge but only you can conduct the right research.

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Need mortgage advice?

Maybe you're thinking of buying an investment property, or you need to release funds tied up as equity in your house. Perhaps you just want to find the best mortgage rate for your own individual circumstances and cut your mortgage payments. Why not call our mortgage department today? Our resident mortgage advisers will give you the best possible advice to suit your requirements. Call them today on 0870 1670996.
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Meet a fellow Property for Life investor

Meet Jonty Reason. Jonty is an award winning actor with an impressive list of credits such as Paradise Club, El Dorado and a whole host of feature films including The Krays and Russia House to his name. In a career spanning nearly 20 years Jonty has played everything from a thug to a detective inspector. The chances are if you watch TV or go the cinema you've seen him.

As much as Jonty loves his work he realises that the consistency of acting jobs is a problem. Even the greatest actors can spend periods of time without work and who knows when it will end for good? So Jonty needed to create some financial security and after some extensive research he decided that property investment was the best route.

Jonty purchased a number of buy-to-let properties in the UK and very soon managed to build up some substantial equity. Realising that this was a great way to build wealth, Jonty used the equity to purchase more investment property and his portfolio started to take shape.

In March 2004 Jonty discovered Property for Life and since then he has not looked back. Over the next 18 months he purchased seven properties from us bringing his portfolio to a very respectable seventeen properties in total.

"Property for Life is such a friendly and easy company to work with" says Jonty. "I have a very busy life and spend much of my time overseas; it's very reassuring to know that Property for Life is competently dealing with all aspects of my property purchases. They have really taken the time to understand my requirements and I very much look forward to a continued relationship with them".

Jonty has wisely taken the plunge into the world of property investment and is now starting to reap the benefits. We wish him the very best of luck with his investment portfolio and his acting career.

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What's available?

We currently have the following investment opportunities.


Equity Chambers, Bradford
Marco Island, Nottingham
Caicos Beach Club, Caribbean
Mill Hill Gardens, Budapest, Hungary
Sun Palace, Budapest, Hungary
The Verandah Resort, Antigua

Please go to www.propertyforlife.com/property/ for full details and look out for more great opportunities coming soon!

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Upcoming events

Over the coming months we will be attending several exhibitions in addition to our ongoing Property Academy programme. If you would like to attend a property academy session please call Laura on our 01252 737575 or email laura@propertyforlife.com stating which session you would like to attend and how many places you require.

January 14th 2006 – Antigua Property Presentation, Maldon, Essex.

February 3rd - 5th 2006 – The Dublin Property Expo - RDS centre, Dublin.

February 18th 2006 – PFL Property Investment Academy – The Coppid Beech Hotel, Bracknell.

March 17th-19th 2006 – The Homebuyer Show – Excel Exhibition Centre, London

For further information regarding the Property Investor Academy Programme please follow the link www.propertyforlife.com/whyinvest/education.html

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New service - Snagging

We have now introduced a new service in an effort to further increase the already substantial benefits of purchasing property through Property for Life. With immediate effect, each and every property purchased through us will receive a completely free snagging report.

The report – compiled by Inspector Homes – will cover all aspects of the property requiring attention from the developer. Covering everything from potential electrical and plumbing issues to general levels of finish, this service will provide an extra level of confidence to our clients when purchasing through us. Each report has a value of at least £300 but all purchasers will receive this with our compliments.

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Do you fancy a spending spree at one of the UK's leading department stores?

The new look Property for Life referral programme can offer you just that.

All you need to do is tell an interested friend about Property for Life and you could soon have a minimum of £250 in gift vouchers to spend in any John Lewis or Waitrose store.

Quite simply, for each person introduced by you who then purchases a property through us you will receive a cool £250 in John Lewis gift vouchers. If they purchase more than one property you will receive £250 in gift vouchers for each property they purchase. You could soon be well on your way to that spending spree.

Remember, the more people you introduce the more chance you have of grabbing at least £250. So why not tell your friends and family about Property for Life? Make sure they register on-line at www.propertyforlife.com/register/ and select the recommendation option at the end of the form and include your name in the 'other' box.

Please note that the referral programme is on a per property not a per person basis.

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