Welcome to News & Views

Well here is the much awaited, revamped newsletter from 'Property for Life'. As always you will still find the same wealth of great industry features, useful information and valuable investment tips that you have enjoyed with previous issues, you'll also find a number of new features inside. The newsletter is now more company focused including such information as current property availability, when and where our next seminar events will be, and what changes are occurring within the company itself. We hope that you will find the new style more appealing and easier to read. If you are reading this in hard copy you will notice major changes from next month.

Property and economic update

Here we are nearing the end of the first quarter of 2004 and already we see that house price confidence is continuing to ride high. Hometrack, the property research company, have reported that house prices across the country increased at 0.9% in February, the biggest increase since October 2002 (1.2%). This is as a result of a substantial increase in buyer demand relative to supply. All 52 county areas reported price rises, the highest increases being in the Isle of White (2.5%), Cumbria (1.7%), Northumberland (1.6%), Derbyshire (1.5%) and Merseyside (1.5%), Wiltshire and South Lincolnshire were the slowest moving counties, both showing rises of 0.2%. House price growth for the year to date now stands at 1.2%, and Hometrack predict annual growth to be 4%. Hometrack data is collected from 3,500 estate agent offices from all 2,200 postcode districts in England and Wales.

Many other highly respected organisations foresee stronger UK house price growth that this, over the coming year. The Royal Institution of Chartered Surveyors (RICS) said the level of property which was up for sale was now at its lowest level since June 2002. RICS predict growth of 6 per cent for 2004. The Nationwide say that although property sales are picking up, turnover remains historically low. They predict growth of 9% for the year as a whole. Miles Shipside, commercial director of Rightmove, comments "I wouldn't predict a return to the boom, but with this kind of early indication, I can't see a significant deterioration in the housing market this year, as some commentators have been saying. My hunch is that annual house price inflation could easily edge into double figures this year."

Andy Gray, head of mortgages at The Woolwich, said: "Consumers clearly believe that 2004 will be a much more stable year for house prices than previous years. The massive fluctuations we have seen are beginning to even out as inflation drops in line with consumer confidence in the economy as a whole".
Halifax, the UK's biggest mortgage lender, predict annual growth of 8%. Only Capital Economics, an independent consultancy, have said they believe prices will fall back by 2 per cent by the end of 2004. All of these figures are of course based on an average for the country as a whole and we are still seeing varying areas of house price growth, with the north continuing to provide pockets of particularly high growth.

With the Office of the Deputy Prime Minister saying that the average value of a house in this country is now £161,365, an average growth of around 6 per cent could mean around a £10,000 increase in the price of such a property during the next 12 months. So things are in general looking pretty good for the property investor this year. Our advice? Keep investing.

What's new?

New offices
We recently moved to new offices in the centre of Farnham, Surrey. The move to these spacious offices will enable Property for Life to continue its current level of expansion in addition to providing a first class location for those clients wishing to visit the company. A fully fitted meeting room provides an ideal area for meeting with clients in a relaxed, informal and friendly environment. With Farnham's main car park a short walk away, access and car parking couldn't be easier.

New recruits
We now have two new members within the team. Antonia Sinclair joins as a property investment consultant having gained extensive experience through a very successful career in Estate Agency. My name is Adam Woolley and I join as Property for Life's marketing and communications manager. I have substantial marketing experience as well as a background in property. We will also be taking on a dedicated mortgage broker to guarantee and improve our levels of service to you. We look forward to meeting you soon.

Updated Website
The 'Property for Life' website is evolving too. It is our aim to make the site easier to use whilst containing much greater information. You will already notice that we have recently added a section for 'frequently asked questions', this should enable you to find the answers to most of your questions as easily as possible. We have also added a number of links to other very useful sites.

Equity release

Have you ever wondered how people manage to build up such a substantial property portfolio? Even people with very little disposable income. Well wonder no more because more often than not this is achieved through equity release.

So how does this work? Well let's look at it in simple terms first. Equity is the difference between your property value and any mortgage you may have on that property, property value less mortgage = equity. So, if you have a house worth £100,000 with a current mortgage of £50,000, you have equity of £50,000. In its current state as equity this is in effect 'dead money', you can't do a lot with it. If you borrow against this however, you can turn this 'dead money' into 'real' money. Many people do just this to fund home improvements, buy a car or fund retirement if they are already retired. The shrewd property investor will use this to fund a new property. For instance, if you used this £50,000 to purchase 5 properties which all increased in value by 10%, this 'dead' money is now working for you. So how do you achieve this? You need to re-mortgage.

The process of re-mortgaging is quite straight forward and takes less time than a normal mortgage application because you are not buying a home. It is vital to calculate that you can meet the increased repayments, even if mortgage interest rates go up. To help you decide, you should visit your financial advisor, or contact us and we can put you in touch with one. You also need to know if there are any penalties for quitting your existing deal, whether you've taken any of the lenders insurance products and how much you currently owe on your mortgage. Following formal application, completion is usually two months after your original approach to the lender.

So what is available? There are a huge number of mortgage products on the market, fixed rate, capped and tracker to name a few. However, nearly 15% of the UK working population is currently self-employed and with the increasing number of people working on a contract basis the need for self certification mortgages has never been more apparent. There are several self certification mortgages available to both self-employed and employed people, whose income doesn't fit into the standard pattern. It is quite possible to obtain a mortgage without even having to disclose your earnings and with some careful research it is possible to get a self certification mortgage at up to 90% loan to value. In addition to this there are now flexible mortgages that operate in a similar manner to a bank account. With these, a credit limit is set and it is then possible to make withdrawals against this, although these are limited to a certain number each year.

It is important to check the details of the offer you receive from the new lender to make sure it meets your original objectives. That's all there is to it, now your well on your way to purchasing an investment property and really making that money work for you.

"We are told that talent creates its own opportunities. But it sometimes seems that intense desire creates not only its own opportunities, but its own talents." - Eric Hoffer 1902-1983, Author and Philosopher

"All things are possible until they are proved impossible - and even the impossible may only be so, as of now." - Pearl S. Buck 1892-1973, Novelist

Property or shares?

So which is the better investment? Imagine you have £100,000 to invest. Let's look at the different ways of doing it.

If you took your £100,000 and purchased shares, how many pounds worth of shares would you buy? The answer is £100,000 worth. Or if you were one of those people who were in the position to borrow against the shares, maybe you could buy a little more, maybe you could buy £150 - £160,000 worth of shares. But if you invested the same £100,000 and bought property, how much could you buy? You could buy £100,000 worth, or you could borrow against the property you buy and purchase a property worth £200,000, or even £1,000,000 and the rental from your property would help pay off the mortgage.
When you bought the shares, how much would they be worth? Well they would be worth £100,000 because the share market is efficient so that everybody pays the same price for the same shares. But when you bought the let's say £1,000,000 worth of property with your £100,000, how much would that be worth? It's possible it would only be worth £600,000 because you bought poorly, you didn't know your market and you overpaid. But, it is also possible that the £1,000,000 you spent on property would buy you a property worth £1,200,000 or even £1,500,000 because you bought a bargain since you negotiated well or because you found a highly motivated vendor.

If you were to buy shares with £100,000, what could you personally do to increase the value of your shares? You could pray and hope that the shares went up in value because the share market went in the right direction. Or you could write a little letter to the directors of the company and make some sensible suggestions on how to improve the running of their company. Or maybe you could increase the value of the shares by running out and buying their products, and therefore increasing their profits. In other words, there is very little you can do to influence the value of the price of the shares that you purchased.

On the other hand, if you bought a property, what could you do to increase the value of your property? You could renovate it because an attractive property from the outside will attract tenants and higher rents. Or you could convert the loft into living space or maybe add an extension or conservatory. There are lots of things you could do.

If the price of your shares doubled, to say £200,000, what would you have to do to reap the benefits? The answer of course is sell them. While if a property doubles in price, how could you reap the benefits from that? Well, you could borrow against your increased equity and purchase another property or more. Further more, a 10% increase in the shares would result in a profit of £10,000 but a 10% increase in the property would be £100,000.

So you can see that property is a much more flexible investment than many people give it credit for and in general performs better than shares. When you read in the paper or magazines that shares have increased in value by so much last year and property has increased in value by this much, therefore shares are a better investment; this doesn't take into account the fact that when you purchase property you almost always leverage yourself into the investment getting much more buying power and much more flexibility.

"In all affairs it's a healthy thing now and then to hang a question mark on the things you have long taken for granted." - Bertrand Russell 1872-1970, Author and Mathematician

"If you're proactive, you don't have to wait for circumstances or other people to create perspective expanding experiences. You can consciously create your own." - Stephen R. Covey. Author and Speaker

Step by step guide to purchasing through 'PFL'

Several people have indicated that a guide detailing how property is purchased through 'Property for Life' would be of interest. With this in mind we have decided to demonstrate step by step, the process to purchase, in this months edition of the newsletter. We hope this is helpful.

We have made buying property through Property for Life as straight forward and uncomplicated as possible. Here's how it works:

• We email you the details of our forthcoming investment opportunities with a link to our website where you can download a price list, rental assessments, and other statistics. Alternatively, you could visit us at one of our forthcoming free seminars and obtain the full details.

• If you decide to purchase, you inform us of the plots you want to buy either by phone or email and pay a reservation fee, which we forward to the developer (normally £1,000). The plot is then held for you.

• We will send you all the necessary forms within 7 days. You will then need to pay your introducer fee (normally 2% of the discounted price plus VAT). This ensures that the property is yours (subject to exchange).

• If you are dealing with 'Property for Life' for the first time, we will put you in touch with our financial advisors who will then be able to give you a decision in principle on your mortgage, should you require one.

• Our solicitors will then contact you and guide you through the legal process.

• The developer's solicitors draw up the contracts to exchange between yourselves and the developer.

• The contracts are then sent to you, after which you will have 14-28 days (depending on the developer and region) to sign and return those contracts to our solicitors with your deposit (normally 5%) to the solicitor. You will also pay in the region of £700 in solicitor's fees for all searches and dispersements.

• If the development is less than 6 months away from completion then you will need to obtain a mortgage offer from a lender prior to exchange. If however the development is more than 6 months away from completion then you could exchange contracts with a decision in principle from a mortgage broker and obtain a mortgage offer later.

• 'Property for Life' offer a Finance Package for a 1% fee. This will cover all costs associated with acquiring a mortgage and also any finance that we gift to you.

• Upon completion our recommended letting/selling agents will let/sell the property for you. We usually negotiate a discounted letting fee of between 7 and 9%. Following completion the developers will refund your 5% deposit subject to valuation.

• We can offer you a furniture package if you wish to furnish your property.

We will be producing a more detailed guide over the coming weeks.

Meet a fellow 'Property for Life' investor

Readers of the 'Hot Property Alert' will have read an article in February's edition on Damian Qualter. Damian is new to property investment having purchased his first investment property just 2 years ago. In his first year he purchased 17 properties mainly in Manchester of which 8 were off plan, and amassed a paper profit of £400k on a portfolio worth £1.5m. In his second year he completed on another 9 and set the ball rolling on 11 off plan properties. This has increased his portfolio to £5m with equity in excess of £1m. Damian is now purchasing in areas outside Manchester and continuing to amass a small fortune. This just goes to show you what can be achieved through careful property investment and buying off-plan.

As of next month we will feature a fellow 'Property for Life' investor, so you can see how other people have invested and what they have achieved. If you would like to be featured in this section please send me an e-mail: Adam Woolley

What's available

We currently have the following investment opportunities available:
The Odyssey apartments, London. Discounts on these apartments in the range of £40 - £60K.
Please visit www.propertyforlife.com for full details.

Completion update

Woolpack Lane (The Habitat), Nottingham.
For those of you who have invested in the development at Woolpack Lane, Nottingham, you will be interested to know that the development is progressing well and is on target for completion August/November 2004. The development now also has a name 'The Habitat'. Melvyn Clifford of Lacemarket properties has been appointed customer support manager for this site and is available to answer any questions you may have on the construction and completion of the build phase. Site visits are not currently allowed but as the building nears completion it will be possible to make an appointment to view your particular apartment/s. Melvyn can be reached on 0115 983 8080 or you can contact us and we can help with your questions.

Recent events

We recently held several very successful events. The first was a seminar held in Leicester in association with CBF (Commercial Business Funding). Two developments were on offer, Duke Street and Oxford Street and the day involved a bus trip to both of these sites. The success of this event was incredible as 230 people attended and both developments were sold out on the day.

We also held a Spanish property seminar at Cobham in association with Alchemy Estates. This was a great day and everyone learned a great deal about investing in Spain. A development on the Costa del Sol was on offer and 10 of these were reserved on the day.

Last weekend we were exhibiting at the Homebuyer show in London. This was a very successful event for us and we would like to say thank-you to those of you who dropped by to say hello.

Upcoming events

Over the next few months we will be holding a number of free educational seminars on the benefits of property investment and buying off plan. Depending on availability we will also feature a number of off plan investment opportunities which investors can purchase at these seminars.

These seminars provide a fantastic opportunity for you to learn how to make the best use of your capital in property. For those of you who haven't met us you can discuss your plans with us. We can also get you approved for finance so that you know what potential you have to purchase more property through our service. It is also a great opportunity to network and speak with like minded investors.

The date and location for these will be as follows;
April 3rd London and within M25
April 10th London and within M25
May 1st Midlands
May 8th Manchester
May 15th Manchester

Precise locations will be finalised over the next few weeks and details e-mailed to all subscribers. If you would like to register an interest in attendance at these seminars please e-mail Adam Woolley

New registrations

We would like to say a special thank you to all of those people who have recently registered with us. We have received an unbelievable response to recent advertising especially from the 'Hot Property Alert'. Unfortunately, we have not managed to contact all of you by phone yet, but we will be in touch shortly so that we can discuss your requirements further.

Referral programme

'Property for Life' offers a generous referral programme to any individual or company that refers an individual or company to us which leads to a successful property purchase.

The payments are made on an increasing percentage scale based on the number of purchases.
These percentages are as follows:
1-5 properties purchased = 0.25%
6-10 properties purchased = 0.5%
11-15 properties purchased = 0.75%
16 or more properties purchased = 1%

Full details can be found on our website where you will also find a property referral form.

Then start earning cash rewards for recruiting new customers!

Next edition

The next edition of 'News & Views' will be delivered right to your computer next month.

Back issues

Please take a look at the back issues of our newsletter where you will find some really interesting articles and information. All back issues are available on our website www.propertyforlife.com