Frequently Asked Questions
2. What do you do?
3. How long have you been established? What is the history of Property for Life?
4. What are the benefits of registering with Property for Life?
5. How do I find out about the opportunities you are offering?
6. What types of properties do you source?
7. How do I buy property through you?
8. How does Property for Life get paid?
9. Why do I have to pay a mortgage arrangement/finance fee?
10. How are you different to other property finders?
11. Do I buy the properties in my own name?
12. What if I don't have any money to invest?
13. How do I re-mortgage?
14. I only want to buy near to my home so that I can manage the property. Is this wise?
15. Why do developers offer properties at a discount - won't they be losing money?
16. How do I know that the discount and rental incomes are real?
17. Why in some cases do I not have to pay a deposit on the property purchased?
18. What happens to my deposit when I exchange contracts on an off-plan purchase?
19. What about changes in property prices? What happens if the value of my property goes down?
20. What if interest rates go up?
21. Is there growth in the buy-to-let market?
22. Is now a good time to invest?
23. Why don't more people do this?
24. Won't there be difficulties trying to rent properties in new developments all at once?
25. What if I want to buy more than one property? Can I get more discounts?
26. Will I be able to sell my off plan property prior to completion?
27. How will I realise my capital gain if I sell prior to completion?
28. What happens to fees/deposits if I pay them and decide not to go ahead?
29. What is the rental yield on a property?
30. What type of tenants will rent these properties?
31. Should I let my property furnished or unfurnished?
32. Over how long should I be looking to invest?
33. Can I use my own solicitor and/or mortgage broker?
34. Will I have to pay tax on any profits?
35. Can I manage my own properties?
36. Can I invest in property under a company name?
37. Why should I use Property for Life rather than going direct to estate agents?
38. How do I make money in property? Is it through rental income or capital gain?
39. Should an investment property be purchased outright, if possible, or mortgaged?
40. How long does it take on average to let a suitable property?
41. What is the average tenancy period?
42. Who pays Council Tax, service charge and ground rent on these properties?
43. How much can I borrow?
44. Can I have more than one buy to Let mortgage?
45. Can 'non-residents' get buy to let mortgages?
46. What is the level of interest charged on a buy to let mortgage?
47. Interest only or Capital and Interest?
48. Does my personal status matter?
1. Who is Property for Life?
Property for Life is a UK based independent consultancy specialising in helping investors acquire residential property portfolios for investment purposes.
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2. What do you do?
We assist potential property investors in purchasing property at discounts ranging from 10-25% below market value. We do this by negotiating bulk purchase deals for large sales volume (in effect acting as a property wholesaler) from property developers throughout the UK. We can do this because of our large database of over 10,000 potential investors.
We also have our own in house finance brokers – Money for Life - who can help you obtain finance with reputable high street lenders. We also structure transaction arrangements so that you can use the discount in the property as your deposit. This means that you require far less capital to purchase property than through conventional methods.
We act as a one stop shop providing a comprehensive service encompassing research, negotiation, consultation, financial advice, mortgage services and engaging solicitors. We provide consultation to take you through the process from purchase to completion whether you want to sell-on or let your property.
We believe what we can offer the property investor is a safe, easy and capital efficient way of building up a property portfolio that will allow you to build wealth over the long term.
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3. How long have you been established? What is the history of Property for Life?
Property for Life was established in September 2002 by the founding director David Austin who is a qualified accountant and has worked in both the financial services and property industry for many years. Property for Life currently has 35 employees and is based in prestigious offices in Farnham, Surrey.
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4. What are the benefits of registering with Property for Life?
Registering with Property for Life will give you the following benefits;
- Free access to e-mail/text alerts on the latest discounted property opportunities.
- Subscription to our monthly newsletter which is packed with tips, news and views on investing in property.
- Invitations to our free property seminars/property releases held nationally where you can learn the latest techniques and hints on property investment.
- No obligation financial and property consultation advice.
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5. How do I find out about the opportunities you are offering?
Investors need to register with us to be added to our investor database. Once you are on our database we will then e-mail you details of all the property opportunities that we have on offer plus any invitations to seminars that we are holding. These e-mails will have a link to the properties available section of our website where you can download all the details. You can also just visit the properties available section of the website to view the properties that we have available.
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6. What types of properties do you source?
We focus on residential new build properties direct from developers because we are able to achieve much greater discounts than buying from individual owner occupiers. Typical properties that we offer are 1 & 2 bedroom apartments and houses in city centres or outer-lying regional areas. These types of properties are often the most suitable for rental purposes because they are new and have low maintenance. The typical tenant would be a young professional who is not yet on the housing ladder. Some of the developments that we source will be off plan (i.e not yet built) as we can obtain discounts by buying early in the development cycle. Other properties will already be built.
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7. How do I buy property through you?
The process of buying property from Property for Life is a relatively simple one. It is best explained in a step by step fashion;
- We email you all the outline details of each property opportunity once an agreement has been reached with a developer, we have done our due diligence and put together an investment package. These e-mails will have a link to the properties available section of our website where you can download all the details of the properties.
- Prospective purchasers will need to speak with one of our Investment Consultants at this point to check the availability of a particular plot if they wish to proceed and pay a £1,000 reservation fee. We also require you to fax back a signed copy of our terms & conditions to confirm payment and to confirm the details of your plot.
- We will put those plot(s) on hold for you for a period of 48 hours - a cooling off period, during which time you can speak to mortgage advisors, research the area or speak to local estate and letting agents. If you decide to pull out within this 48 hour period we will refund your £1,000 reservation fee without question.
- If you still want to proceed after this 48 hour period you will need to pay the remainder of the non refundable reservation fee by cheque or card. This ensures that the property is reserved for you (subject to exchange). If you do not pay the remaining sum within the 48 hour period you will lose your £1,000 reservation fee.
- If you are dealing with Property for Life for the first time, we will put you in touch with our in house mortgage brokers – Money for Life - who will then be able to give you a decision in principle on your mortgage, should you require one. Please note that it is a condition of purchasing a property through us that you use our in house mortgage brokers.
- We will also put you in touch with our solicitors, who will guide you through the legal process. Please note that it is a condition of purchasing a property through us that you use our nominated solicitors. The solicitors will require a payment from you to open a file on your behalf. The developer's solicitors will draw up the contracts to exchange/complete between yourselves and the developer. You will need to sign the contracts and any extra paperwork required and return these to the solicitor promptly.
- 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. Our in house mortgage brokers – Money for Life - will assist you to obtain a mortgage offer. Money for Life charges a fee of 1% of the loan amount. If however the development is more than 6 months away from completion then you could exchange contracts with a decision in principle from our mortgage brokers and obtain a mortgage offer later.
- Upon or prior to completion our recommended letting/selling agents can sell/let the property for you.
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8. How does Property for Life get paid?
We charge a fee of 2.5% of the property value or £3,000, whichever is the greater. Money for Life charge a 1% finance brokerage fee.
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9. Why do I have to pay a mortgage arrangement/finance fee?
As the mortgages we arrange are specialist mortgages which are not often available through high street branches of the major banks the fees reflect the extra services being offered.
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10. How are you different to other property finders?
We differ from other property finders in that we do not charge a membership fee to be involved with us. We do not require you to attend any property seminars either.
Often with the property opportunities, speed of completion is very important, which means that having in house brokers can be a real advantage. Most investment clubs/associations do not have their own in house mortgage consultants. Also obtaining finance without having to put down a deposit is an important feature of the service we offer.
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11. Do I buy the properties in my own name?
In most cases we recommend that you purchase the properties in your own name. The high level of gearing required to purchase properties using our methods is usually only allowed by lenders who will require you to purchase the properties in your own name. While it is possible to purchase properties in a company name there are very few lenders who will allow lending up to 85% of the value. We do not partner with you on the properties.
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12. What if I don't have any money to invest?
Do you own a house with any equity? By releasing the equity in your property by re-mortgaging you could use these funds to purchase additional properties. Our mortgage brokers can help you with this.
We even have some property opportunities where you do not require any funds to invest and you can earn cash back on completion of the property.
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13. How do I re-mortgage?
Our in house mortgage brokers can help with re-financing/ re-mortgaging any existing property you own to release equity at highly competitive rates.
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14. I only want to buy near to my home so that I can manage the property. Is this wise?
We encourage clients to broaden their outlook in terms of the locations they buy investment property, especially to achieve higher capital growth. A diverse portfolio of properties also lessens the risk. Property prices can rise in some areas while not in others.
We also select established letting agents with local knowledge and a proven track record in property management. We often negotiate discounts off their normal fees so all you need to do is sit back and collect the rents. Therefore managing the properties even when you live far away may not be as difficult as you think.
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15. Why do developers offer properties at a discount - won't they be losing money?
Developers are much more likely to offer discounts as they are in business to build and sell property. Unlike an owner occupier who may be emotionally attached to selling his property for the highest possible price and who may be in a chain situation, developers need to sell property to stay in business.
For example developers will often offer discounts for off-plan sales to generate capital to fund a future development. For a developer to obtain finance for a project the developer may have to sell a number of units off-plan to secure the funding. The best way to secure sales off plan is through offering discounts. They may also want to cover the costs of marketing up-front. The developer will often discount the first few properties at this stage simply to 'prime the pump'.
It is often easier, quicker and safer for developers to sell property before completion. They also don't have to deal with estate agents who are notoriously slow at selling property, or set up expensive sales and marketing offices which rely on clients coming to them. This way, they have a ready market.
Sometimes developers who are nearing completion on a site and want to get rid of the last remaining units will offer various incentives such as discounts to sell them quickly. When the majority of the units have been sold, the developer has realised most of their profit from the development, and they want to wind-up the marketing and get onto the next site.
When a developer is approaching their financial year end and they need to increase their sales figures they may also sometimes offer discounts. There is no set year end for developers so the time that they may offer discounts will vary from company to company. For limited companies this information should be available through Companies House, whilst most publicly quoted companies will send you a copy of their accounts on request.
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16. How do I know that the discount and rental incomes are real?
We supply detailed research on prices and rents on comparable properties with every property we offer. We will get 2 independent RICS registered valuers to carry out a valuations on the price and rental of properties before we market them to ensure that we will not have problems with funding down the line. These valuations can be used for lending purposes.
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17. Why in some cases do I not have to pay a deposit on the property purchased?
Some banks will lend against the valuation of the property, not the purchase price. For example if a property is valued at £100,000 the maximum the banks will lend against the value of the property is 85% of valuation i.e £85,000. If we have achieved a discount of at least 15% or £15,000 then the investor can use this discount to form his deposit i.e the property is sold at £100,000 made up of a mortgage at 85,000 and a gifted deposit/discount of £15,000. This means that the property has been entirely funded by a mortgage while the investor has not put in any of his own funds. This method means that you can build your portfolio with much less capital than conventional means.
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18. What happens to my deposit when I exchange contracts on an off-plan purchase?
Your deposit is held in a client account by the solicitor acting for you, until exchange of contracts. At this point your deposit is paid over to the developer's solicitor to be held as stakeholder until legal completion.
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19. What about changes in property prices? What happens if the value of my property goes down?
Until an asset is sold any increase or decrease in value is "paper" or unrealised. So as long as you still pay the mortgage on the property you won't realise any loss if the value of the property has gone down.
As the majority of the properties we purchase are discounted by at least 15%, this means that prices would have to decrease by at least 15% before starting to have a significant impact.
Property prices are governed by supply & demand for each particular type of property in its own area. In general there is an undersupply of housing in the UK at the moment. The recently published Barker report commissioned by the Treasury, indicates that we need to be building 300,000 new dwellings each year for the next 10 years in an effort to reduce the huge gap between demand and supply and therefore curb house price inflation. The Royal Institution of Chartered Surveyors, along with others suggests 250,000 new properties should be built each year simply to stand still. At the moment because of backlogs in planning and the time taken to get projects approved the house-building industry is only building approximately 200,000 dwellings each year. This undersupply will hold up prices for the foreseeable future.
Most investments in property have to be undertaken with a medium to long term view. Whilst prices can fluctuate from year to year, historically, over the medium term, any value that has been lost in a fall has been regained in subsequent years. It is often said that unlike the stock market, where the entire value of a stock can be wiped out, property is a 'forgiving' investment.
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20. What if interest rates go up?
We recommend that people do not overextend themselves and keep back reserves to cover any unforeseen costs such as increases in interest rates. However increases in rates tend to push more people into the rental market anyway which then puts up rental values.
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21. Is there growth in the buy-to-let market?
The long term statistics show that the average age of the first time buyer in 1988 was 21 years but in 2003 it is 32 years. Most young people these days cannot afford to buy property and are being forced to rent.
We are becoming a society of single occupier households, due to numerous reasons varying from increased life expectancy to economic migration and divorce.
The rental market only makes up roughly 5-6% of the overall housing market and stories of 'saturation' are generally far from the truth.
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22. Is now a good time to invest?
TThere is an old proverb that says "the best time to invest was twenty years ago. The second best time is now". At whatever time you invest along the time cycle, residential property investment is still considered to provide an attractive return when compared with other asset classes. The key to a successful investment strategy is not to overpay for the property in the first place and to optimise the relationship between borrowing, rental yield and capital growth.
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23. Why don't more people do this?
The buy to let market is relatively young and many people are simply not aware of this fairly new phenomenon. However, the market is growing as more and more people become educated and are discovering that property is arguably the best investment vehicle in the long run.
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24. Won't there be difficulties trying to rent properties in new developments all at once?
Developments are normally phased so all the properties will not come on the market for rental at once.
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25. What if I want to buy more than one property? Can I get more discounts?
As a rule of thumb we do not offer discounts off our fees for purchasing more than one property.
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26. Will I be able to sell my off plan property prior to completion?
This varies for each development, please check at time of purchase.
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27. How will I realise my capital gain if I sell prior to completion?
If you sell prior to completion, you will normally receive your deposit from the new purchaser, and any capital gain that you may have achieved will be passed on to you on completion.
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28. What happens to fees/deposits if I pay them and decide not to go ahead?
Apart from the 48 hour cooling off period reservation fees are not refundable once received, for any reason.
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29. What is the rental yield on a property?
This is the annual rent divided by the purchase price of the property.
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30. What type of tenants will rent these properties?
Most developments we target are in or near city centres and aimed at an affluent market. We expect the majority of the tenants to be young professionals between the ages of 25 35 who want a city living lifestyle Young professionals especially want the 'action' that city centre locations can provide, but do not want the 'hassle of a mortgage'.
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31. Should I let my property furnished or unfurnished?
Properties can be let unfurnished or furnished. If you let furnished you could expect a better rental figure than unfurnished. We can assist with furniture packages to suit your needs.
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32. Over how long should I be looking to invest?
Generally, we would advise that property investment should be a medium to long term investment. However, sometimes we receive excellent property trading opportunities. Whether you choose to trade property, or hold on to it for longer term capital growth, is completely at your discretion.
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33. Can I use my own solicitor and/or mortgage broker?
We request that you use our specialist conveyancers and mortgage brokers who are experienced in arranging these types of transactions.
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34. Will I have to pay tax on any profits?
Unfortunately taxes will have to paid on any profits - there is no avoiding that!
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35. Can I manage my own properties?
Absolutely. You are not in any way obliged to use Property for Life or letting agents to manage your property.
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36. Can I invest in property under a company name?
The answer to this is nearly always yes. However, since every individual circumstance is different, we would always advise you to consult with mortgage brokers, solicitors and tax experts as to the benefits and limitations that this approach would bring.
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37. Why should I use Property for Life rather than going direct to estate agents?
An estate agent has a duty to the vendor to achieve the highest price possible on a sale. We act for the investor by achieving the best price and yield for our investors. Therefore the very basis of our investment approach is in complete contradiction with that of an estate agent.
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38. How do I make money in property? Is it through rental income or capital gain?
The big money is made in capital growth not rental income. Property investment should be viewed as a long term strategy.
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39. Should an investment property be purchased outright, if possible, or mortgaged?
Your return on investment will be greater by gearing your funds than if you purchase outright. Therefore we recommend using borrowed funds as much as possible to maximise your return on investment.
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40. How long does it take on average to let a suitable property?
This is dependent on the development and the number of units sold to investors.
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41. What is the average tenancy period?
For single tenancies 6 or 12 Months.
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42. Who pays Council Tax, service charge and ground rent on these properties?
The tenant is responsible for Council Tax on each property. The landlord must pay for the service charge and ground rent.
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43. How much can I borrow?
Typically, a lender will allow you to borrow up to 85% of the value of the property on a buy to let mortgage.
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44. Can I have more than one buy to Let mortgage?
Yes - you can take out multiple mortgages with different lenders - but in most cases, it is only possible to have one loan per property. This is because the loan is secured on the title of each property. You can borrow in individual names or jointly.
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45. Can 'non-residents' get buy to let mortgages?
Yes - Non UK residents (eg. foreign investors or non UK nationals posted to the UK) can purchase property using the buy to let loan scheme (subject to lenders maximum LTV).
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46. What is the level of interest charged on a buy to let mortgage?
Interest rates tend to be up to 1% above the Bank of England base rate - although competition is reducing this differential.
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47. Interest only or Capital and Interest?
Typically a buy to let loan is taken out on an interest only basis.
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48. Does my personal status matter?
In theory a buy to let loan is 'secured' on the income and capital value of the property. Therefore the income of the landlord is not relevant. The landlords credit history however but credit history is. Generally, any one can get a buy to let loan - but at a cost! The higher the risk, the higher the interest rate. In other words, to get the best possible finance, you should put forward the best possible case for the lender.
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