The bonds pay a coupon of 5% and have a maturity period of 8.5 years, with the invested money being repaid in full on November 21st 2020. During this bond period the 5% income is paid every 6 months (assuming you still hold the bonds) and then at the end you get back your initial investment. There is a minimum investment value of £2,000 and thereafter you are able to purchase bonds in increments of £100. This may indeed be attractive for many, but for those with slightly larger amounts of money to invest is it really the best option? Does it really give you the best returns? Or does the marketing hype make it look attractive?

Let’s look closer

5% yield certainly does look attractive in the current climate, but you need to remember this income of £2.50 per £100 invested, twice-yearly, will never vary, it stays fixed at that for the life of the bond and if you keep it for the life of the bond you will only actually get back the money you put it. Perhaps initially that guarantee sounds good too…but what about inflation?

Of course if you choose to sell your bond on the Stock Market, before maturity you can benefit from selling at a higher price, but you also can be hit with loses if the bond value drops. Bond values just like shares are influences by outside forces, in their case interest rates and inflation.

So is it really as attractive as it look?

If you have a small amount of money to invest, and don’t feel comfortable making investing decisions I would say ‘yes’ it’s certainly an option to consider, because the income return is set and you are guaranteed to get exactly the money you put in out – at the end of the bond period. However if you have a larger sum to invest you could definitely do better!

Where?

Investing in property is one such route which offers better returns and of course can be held for a longer period than the bond period. Even given the current drop in house prices if we were to look at a historic 8 year period the average house price (adjusted for inflation) in Quarter 1 2002 was £95,356, however by Quarter 1 2010 that house had risen in value to £162,887 a 71% increase. (www.housepricecrash.co.uk). With the 5% Corporate bond you could risk receiving no capital growth on your initial investment and actually if you held it till maturity you will actually lose money. As during this same period 2002 – 2010 the real value of money was eroded by 30% due to inflation. (http://www.thisismoney.co.uk) So if history was to repeat itself from 2012 – 2020 an investment of £2,000 would actually only give you buying power of £1,400 at maturity.

I have compared these facts to the yields I have achieved over the last 3 houses I have purchased for investors via my hands-free property investment business www.altonpropertypartners.co.ukThe results are interesting and are shown in the table at the bottom of this page.

I have shown two ‘Net Rental Returns’ – Year 1 and Year 2, because in the first year there are property investment costs such as Refurbishment, Valuations, Solicitors which are ‘one off’ costs. By Year 2 I believe you are getting a true reflection of the Net Rental Return long term.

As you can see clearly in each case Property Investment out performs the 5% bond. Add to this the Instant Return on the money you invested, when you buy a property Below Market Value and you can see that property investment is an extremely attractive and wise solution to those with a little more money to invest.

So while the masses flock to the Tesco 5% Corporate Bond, the wise individuals who want to secure the best income with their money quietly go around purchasing property and building their asset base.

So my focus at Venus Property Mentoring is simple – I educate individuals on a personal level so they can invest in property for themselves, and make informed and beneficial investments with their money. That way they too can stand outside the masses and match the same greater returns beeing achieved below.

A Commons communities Select Committee Report said 230,000 households were forming every year, but in 2011 only 110,000 new homes were built.   This shortfall in houses being built is not however just a result of the recent recession, as the report found that demand had outstripped supply ‘for decades’.

Supporting Self-Build schemes is just one of the proposals on the table to address this shortfall.

In the meantime for any of you who have studied any form of Economics – you will recognise that one of the most fundamental and basic principles is understanding the relationship between supply and demand.    When supply outstrips demand prices fall as there is a glut of commodities / items (in this case housing stock) available.   This pushes prices down as people have more choice and sellers have to reduce their prices to attract a sale.

The opposite occurs however when demand outstrips supply.  With more households chasing fewer houses sellers can afford to keep their prices high, after all we can all remember the years of ‘gazumping’.

Now of course over the last couple of years this economic relationship between supply and demand has been played out in the world of finance.   With banks significantly changing the criteria under which they will loan money to homeowners. This in turn has been one of the elements which has impacted the housing market.

However, even taking this into consideration if you have read my FREE Report ‘Why invest in Property’ (www.whyinvestinproperty.co.uk)   you will know I believe strongly in a balanced portfolio of investment – of which property forms an important part of your pension provision.   This balancing is all the more important since we know that the Stock Market has seen considerable volatility over the last few years, and pension funds managers are under considerable pressure to invest pension money into sectors which are performing and considered stable and safe.

So it is with interest that the BBC report states that in supporting homebuilding, the Labour MP Clive Betts who is the Chair of the Commons Committee said:

‘Obviously homes for rent are a possibility, and we look at various ways in which funds could be made available through pension funds in particular – they need long term  investments and housing is a good long term investment – a stable one……’

So when you are considering if property investment is the way forward for you – remember:

• The demand for housing is far outweighing the supply.  Even if house-building becomes easier there are decades of ‘catch up’ to play.   Which means under the simply law of supply and demand over time the value of your property will be impacted.
• If pension funds are looking for ‘stable long term investments’ and they have identified ‘property investment’ as a route to achieving this, is it not proof indeed that investing in property is a wise strategy?

So why not secure a bit of your own future and not leave it to a Fund Manager.

After all you too can then make reality,  the statement – ‘as safe as houses’

Unfortunately at the moment night terrors are a frequent occurrence in our house, and they are very unpleasant to watch. As a mother I feel strongly that my role is to protect and nurture my children, teach them the ways of the world and help them to grow into adults who embrace life to the full and are considerate to others.

So sitting at the side of a bed watching my child struggling and being helpless is a situation that goes against every motherly instinct. The desire to take the suffering and pain away is immense.

Thankfully, as adults we don’t tend to suffer from ‘night terrors’!  But I would hazard a guess that we have all had sleepless or restless nights at some point. The cause of which are often worries and stresses from the day we have not resolved and are simply compounded and exaggerated at night-time.

Many times these worries can be money related.

A report from the Scottish Provident Financial Safety Net in 2011 revealed that 18 million Britons are stressed due to financial insecurity. Are you one of them?

And a Mintel Report 2010 revealed that money worries are the single biggest cause of stress for 40% of us.

Through my ‘Hands-Free’ Property Investment business Alton Property Partners http://www.altonpropertypartners.co.uk I have helped another busy working professional invest in property this week. They have recognised that wise property investment is a route to removing their financial worries, by increasing the income into their household. In their case however they are too busy in their career to be able to find the time to establish the building blocks to success (so they have leveraged my skills and knowledge).

The Building Blocks to success being: Education, due diligence, relationships and Action!

Having the property investing done for you, is not everyone’s desire.  So for those of you who would like to invest in property yourselves the opportunity to purchase property which is Below Market Value (BMV) with high Gross Rental Yields and impressive ‘net returns on investment’ (i.e. real money in your pocket) has never been better.  I know it sounds lame and like some marketing hype, but it’s true….

’Now really is the time to get yourself educated, so you can make informed, sound property investing decisions’.

After-all if you want to invest for your family, you need to learn how to invest wisely so you put real money into your family’s pocket. Then you can break free from the 18 million who are financially stressed. Property Investment is a proven vehicle to achieve financial security and freedom,  and working with a Property Mentor allows you to work  at an accelerated rate, 1 on 1 to achieve your own individual requirements.

So thankfully you don’t have to act like a child, or a parent who is watching helplessly as your financial life is shaped around you.

You can wake up,
See reality,
Take action,
And banish any financial nightmares.

Then you can enjoy the restful sleep you deserve!.

As a Mentor my role is to share my knowledge, experience and guide my mentees on their path and to hold them accountable for their actions. Sometimes this can seem like I am being tough.

So here is my take on the 3 mistakes and how to avoid them:

1. Forgetting Your Goal

Every Venus Property Mentoring mentee has goals of what they want to achieve.  These goals are individual to each person and they range in size and value, but each can be achieved through property investment.    At a high level here are some of the goals I have heard to date:

• Being able to have money to support my extended family

• Giving up my job

• Being able to make the most of the current market place and grow my asset base , for equity growth

• Being able to pay for schooling fees

• Being able to have the option not to have to go back to my profession after the end of my maternity period.

So having got your Goal in mind why then is it easy to lose sight of it once you are on the ‘property investing treadmill’?

Maybe because investing in property successfully takes time, effort and dedication.   At times those initial goals can seem insurmountable and out of reach.   There is always the temptation to take ‘short cuts’ and be attracted by the ‘get rich quick schemes’,  however remember in property investing there is no such thing, and if you attempt to follow this route all you will do is flit around and not achieve any of your goals!

You simply need to keep reminding yourself what you are investing for.   ‘Yes’ sure goals evolve, but generally speaking core goals are driven by your Values – and your Values never change.

So if your goal requires ‘Cash-flow’ understand how each and every decision you make will affect your cash-flow.    For example everyone always talks about ‘churning their money out of a house and into another one’, but it may be that remortgaging all the money out of a property to purchase another, is infact going against your cash-flow goal.  And 2 – 4 low geared cash-flowing houses will allow you to achieve your personal goals quicker than 10 highly geared houses.

2. Know Your Investing Criteria and Commit to It

It is important that you know exactly your ‘investing criteria’.

Do you want a certain number of bedrooms?  Are you only looking at Freehold properties, or will you also consider Leasehold?   And importantly, what is the minimum Return on Investment / Cash-flow that you require each property to produce.

Analyse you area, know it inside out – but don’t fall foul of ‘analysis paralysis.     I recently had a tough conversation with a Mentee who was guilty of falling into this trap.

Put yourself into the shoes of the Estate Agent, if  they are showing you loads of houses and you aren’t putting offers in ask youself– do you need to educate them as to what your actual investing criteria is, or you are just not committing.    Likewise if you are putting loads of offers in, but have not ability to carry through on them (so keep pulling out) ‘sell ‘ your concept of investment to someone who will JV with you and allow you to honour your offers.

In my view:  Too many viewings – no offers, or Too many offers – no Sales   …………both only go to damage your reputation with the Estate Agent.

So stop! Determine you investing criteria and find a way of committing to it!

3. Leverage

Investing in property is not about being a ‘super-hero’.   It’s about identifying what you are good at, what you enjoy and finding solutions to address those areas where you have gaps.  There is most distinctively a property investment pipeline….work out where in the pipeline you have cracks?

With my Mentees we take time to understand the process and also look at areas where it is possible to leverage the time and experience of others to their advantage.

For example as a new investor it is tempting to want to do any ‘refurbishment work’ yourself.   Yes this is a good way to keep the costs down, potentially!    But consider the lost cost of opportunity – hiring a professional may seem to cost more, but it means that you can continue to work on the relationships at the front end of the investing pipeline and build value long term.

You should always be looking for ways to ‘leverage time and money’ to the benefit of everyone.

So make this week the week that you look at your investing plans, reassess your Goals for 2012, after-all we are now a quarter of the way through the year.    How are you doing?  Are you still on plan for what you want to achieve or have you gone off on a tangent?  If you have re-align yourself!

If you haven’t already done so, take time to document your investing criteria and stick to it.  And look at your investing pipeline – are there any areas where you can leverage yourself out of to achieve maximum impact for all?

When it comes to the race itself the sheer number of horses running and the sizes of the jumps ensure there is a tremendous amount of luck involved in getting round the course unscathed and more importantly in winning.  – luck that your horse is not  tripped up by another, luck that your horse gets the best line on the race course, and luck that your horse clears the fences safely avoiding all the other horses. (As we know sadly 2 didn’t this year).

Then there is a race for the final line – and for those of you who watched this year you will know that the race was won by a nostril!

However, win or lose in the Grand National you can be assured of one thing – each and every horse will have spent hours and hours in training, being mentored by their Trainer to bring out the very best in them.    If you read the press you will see that many Owners struggle to know whether to let their horse run in the Grand National, because of the danger involved in it, but you know one thing for sure an Owner would never, ever consider letting their horse run in a such a race without the right skills and experience.   Their horse needs to be race fit, and also skilled in jumping.  The prize money many be attractive but the Owners are firmly focussed on shifting the risk / reward balance in their favour. After all 20 horses have died during the race since 2001.

Racehorses of this calibre are ‘assets’ to their Owners.   Up to this race Neptune Collonges total career earnings had tipped £3/4 million – and he was known for ‘exuberant jumping and attacking style from the front’. However, Neptune Collonges hasn’t always had it easy, with an injury at the peak of his career which saw him take 20 months off the track.

The credit for his superb recovery and great success since needs to be given to his Trainer Paul Nicholls.  His experience and knowledge has allowed him to bring the very best out in Neptune Collonges.   He has known when and how to race him, to bring him back from injury and create the Grand National winner that he now is.

I am no horse Trainer, but there is no doubting that Paul Nicholls works with each of his horses individually, understanding their personal nuances and focussing on emphasising their strengths and diminishing their weaknesses.   There is no ‘one size fits all’ in training a horse.  Yes they may train on the gallops together, but don’t be fooled into thinking each doesn’t have its own personalised plan for success.  There is no room for ‘group success’ in Horse racing.

From Paul Nicholls Wikipedia page you can see his success as a Trainer is no doubt down to the fact that he himself was a National Hunt Jockey  winning an impressive 133 times.  He trains from experience; he knows what it is like to race.  So now as a National Hunt Trainer he has had over 2000 winners!  And the statement on his website ‘our reputation for discovering and nurturing the best young equine talent into Champion Racehorses speaks for itself’ certainly holds true.

So ask yourself do you want to be a Grand National winner? Investing in one or two properties will change your future, so don’t you want to make those houses the best they can be?  And if you have made poor mistakes in the past, does that mean you can’t come back from that injury and be a champion investor?

‘Yes’ go to Property Meetings and soak up the information,  network with like minded people and bounce off them. But when it comes to your own personal training, your own chance to change your future, to go out and become a champion for your family, do you really want to only ‘have a punt’ on your future? Or do you want to stack the property investing cards in your favour, and be the one singled out for ‘1 to 1 nurturing.

Don’t you deserve to be more than a number in a large property investing machine and know that when the ‘going gets tough’ your Property Mentor will be there for you?

Because trust me just like Horse Racing, Property Investing has days when the running seems tough, and the fences seem insurmountable.  It’s then when the value of a ‘Property Mentor’ who is ‘doing the do’, investing and working just with you - comes to its full benefit.   Believe me with the correct nurturing; you will be a champion just like Neptune Collonges!

However, perhaps it takes a Headline such as that on the Daily Express, (which caught my eye as I filled the car up with fuel in Cornwall) for people to take it seriously.

‘Millions Miss Out On Decent Pensions’
‘Panic as workers face poverty in retirement’

‘Figures show a 35 year old on the average annual wage of £26,200 and in a final salary pension scheme needs to pay in just 5.1% or £1,336 – a year during their career to retire on an index linked income of £13,000. But the same worker in a Defined Contribution scheme would pay in 55% of their wages – or £14,000 a year – for the same £13,000 income, according to figures from insurance specialist Pension Corporation’

This means the average amount contributed over 30 years from someone in a Defined Benefit scheme would be £40,080, compared to £420,000 for someone in a Defined Contribution scheme.

And

One guarantees the outcome – the other doesn’t!

Now ask yourself are people right to panic, because who can afford to put away 55% of their wages for retirement? Can you?

Having written this entry sat looking over Falmouth Bay; it seems to me that currently the pension crisis is rather like the huge Cargo Ships on the sea. Except this time the ship is fully laden and aimed directly at the land…and at the moment, no one is at the helm!

Perhaps then it is little wonder that the Government is under such pressure to come up with ‘a plan’. As they can see the full size and magnitude of the impending disaster. And the rest of us should take as a warning signal the other news shared in the Press this weekend, stating that thousands of homeowners who have endowment policies supporting their mortgages that mature this year, will have a shortfall.

Stop! Think! Where is their endowment money invested?
The same place as their pension money!

Infact, Aviva one of the UK’s largest insurers has 71,000 endowment policies maturing in 2012 (and where once the policy holders would have almost certainly been guaranteed to have enough money paid out to them to cover not only the outstanding mortgage, but also leave them with a handsome lump sum to spend / save) Aviva estimates 70,290 of the 71,000 will fail to cover even the policy holder’s mortgage. Appalling odds!”

So now the Government is talking about introducing a new Pension Scheme – ‘The Defined Ambition Plan’.

Put simply this new scheme is planned to share the burden of risk between the Employer and the Employee. Whereas currently the Defined Benefit scheme, puts all the burden of risk at the feet of the Employer, and the Defined Contribution scheme puts the burden of risk all on the Employee.

Sounds like a fair plan! Perhaps?

However, as with all things I am sure the debate will go on for many years…and there will of course be a ‘pay off’ to be made by the employee to qualify for the ‘Defined Ambition Plan’. So far I have seen mentions of such things as ‘bigger contributions and working till you are 70 years old…or longer!’ So yes though this definitely seems to be a step in the right direction, I would still question ‘why wait’, ‘why leave your future in someone else’s destiny’….after all we teach our children not to speak to strangers and get into strangers cars, but as adults we seem to be quite happy to simply step right into a dangerous position and be driven reckless forward.

Why let someone else ‘Define Your Ambition’. ‘Ambition’ is Personal…it is your ‘desire to achieve a particular end’ that’s important to you!

If you have the ambition to enjoy your retirement you should be looking at your own solutions, of which there is no doubting that investment property can be one. And there really is no better time to be investing in property.

So I would recommend you work your own personal ‘Ambition Plan’…….let the Government’s ambition simply be the cherry on the cake you have already baked.

You can imagine my shock when I heard that it was not popularity, or cheap prices which were forming the queues, but that everyone was panic buying! The risk of the Petrol Tanker strike was causing everyone to fill up.  No-one wanted to be the one left exposed with the empty tank, when the petrol ran out.  So everyone panicked.  Did you?

I confess I topped up – simply because much as I love Peterborough,   I really didn’t want to get stuck there at the end of my course! But while I sat in the queue at 7.10am the following morning, behind 6 other cars it made me think.

• Firstly, that until I knew the facts I saw this same event from a completely different perspective.   For a few short hours I thought ‘wow’.  Then I learnt the truth.
• Secondly, given the choice, no-one wants to have their life affected by circumstances beyond their control.  After all if no-one had cared less whether their petrol tanks were full or empty the threat of a strike would have been lost, and I would not have been sharing the petrol station forecourt with 50 or 60 other cars simultaneously at some ridiculous hour.
• Thirdly,  the panic buying was caused because people feared they were losing control.  Control of what they like to do in life.  Control of their ability to carry out their livelihood and bring money into the household.

Interesting then that people will panic buy over the fuel for their car, but will happily allow the fuel of their life (money) to be siphoned off and disappear by lack of action on their behalf and circumstances they let control them.  In fact I would go so far as to say some people don’t even go as far as visiting the forecourt of life, it’s too much effort.   They expect the tanker to come to them!

So ask yourself – would you drive a car until you run out of petrol?  Would you pay no attention to the fuel gauge and the warning lights?    And if you had a friend who did just that I imagine you would question their judgement and say ‘it’s their own fault that they damaged their car by sucking up all the dirt and silt from the bottom of the tank into their engine. They were silly to ignore the warnings’

So how is abdicating control of your finances to a 3rd party any different?  Whether that 3rd Party is your Employer, the Government or the Stock Market. After-all money is the fuel of your household.

Maybe you’re reading this thinking ‘but my house is an asset, I have a pension for when I retire’ –  but ask yourself, does the home you live in actually give you an income?  I would suggest it actually does the opposite and takes money out of your pocket!   And is your pension guaranteed to support you in your retirement?

I believe you need to be your own Tanker Driver, with your own Fuel Depot. But in your depot the fuel is not petrol, but ‘Cash-flow’.  You need to establish you own cash-flow supply to fuel your family – now!  Don’t simply rely on your Employer, or the Government.

And if the Tanker Drivers do strike after Easter and you curse the queues at the Petrol Station, and the inconvenience you have suffered, think of it as a test drive for life.

After all you would rather be in the driving seat – wouldn’t you?

So welcome to another year of challenges!!

As with all Budget announcements we can rely on the media to sensationalise a story. This year it’s the ‘Granny Tax’ which has hit the headlines, as the Chancellor has made changes to the State Pension.

So what are these changes and how will it affect you?

Well the poorer pensioners, those earning less than the amended personal allowances (£10,500 – £10,650 dependent on age) will not be affected (‘Great News’ but you would rather avoid falling into this group altogether). Nor will the ‘rich pensioners’ be affected, who already lose the allowance if they earn more than £24,000 – £29,000. It’s those in the middle who are going to suffer and take the financial hit –obviously this is the lion’s share of pensioners. In fact it’s projected these changes in allowance will make 4.41m people worse off, who are due to turn 65 after 5th April 2013!

So are you heading towards the middle band?

Will your pension income be more than £10,650, but less than £24,000 per annum? If you thinking ‘that’s likely to be me’, how will we cope?’ I don’t mean to be the bearer of even more bad news, but The National Institute of Economics & Social Research have identified that adults who are in their 20’s today will be the first generation who will be worse off than their parents, as they shoulder the burden of repaying the vast national debt we have built up as a country over recent years.

In fact they have calculated that a 20 year old will have to pay £157,000 more taxes to fund the shortfall in the public finances, while a person aged 65 is in fact, in credit to the tune of £223,000.

I have always believed that investing in property (for cash-flow) represents a true ‘get out of jail card’ for those heading towards retirement with inadequate provision. However, it is this same vast group who are equity rich, and cash poor who are likely to be the parents of the children in the 20’s. So now more than ever I understand the value of investing in property, over other forms of investment. And I recognise my responsibility as an active property investor to share my knowledge, experience and skills as a Property Mentor, so others can embrace the opportunity to find a solution in sensible property investment.

A solution which will not only provide for them in their own retirement, but also allow their children to inherit a cash-flowing income – at a time when they themselves will most need it. After-all what more could a parent want, than to know, that the actions they took to secure their own future will not die with them, but leave a legacy to provide for their children!

So if can see yourself falling into this middle group and would like to understand more about how to purchase property for all important ‘cash-flow’, please contact me on Tel 07783 506649, or email me at gill@venuspropertymentoring.co.uk

‘Like Minded’ in:

• Their belief that property investment can deliver financial security and freedom!
• The fact that they want to constantly extend their property knowledge
• Making all feel welcome, both new and seasoned visitors.
• Understanding personal backgrounds are irrelevant, no one is judgemental
• Understanding in the property world ‘one size does not fit all’. There is a multitude of ways to skin the financial cat
• And importantly believing CASH-FLOW is King!

So you can imagine my delight when I received a call from Sylvia and she invited me to speak at their 5th Anniversary Special – ‘Property Cash-flow Event’ on 21st / 22nd April. It’s a weekend packed full of information and focussed on generating and boosting your property cash-flow!

As for the focus of my presentation, well that will be on helping people understand how to make that move from Corporate Life to the world of Property Investor. It’s a route that I have taken and one which has not been devoid of some eventful and challenging moments. However, I know it is a route that many wish to embark on, with ‘sack the boss’ being a frequent war cry at property meetings!

Though many will know me as an outgoing person, I’m actually a very cautious person when it comes to making decisions of such massive magnitude as ‘leaving a job’, I don’t fall into the ‘jump first, and think later’ camp. I believe there are too many people whom have had that decision made for them via redundancy, to simply flitter away a job irresponsibly on a whim.

So the aim of my presentation is to share some realistic, practical advice and tools to smooth your path, should you wish to follow the same route. The whole focus of the weekend is ‘Cash-flow’ and I know first hand how important cash-flow becomes when the income from your salary is no longer there. So as a starting point, you may want to ask yourself do you know exactly how much money you need to cover your ‘day to day living’ ( forgetting the luxuries!)?

Gaining control of your own destiny is fabulous and certainly the best thing I have ever done. But just like purchasing property there are many ways you can achieve financial security.  Whiehever way you choose you just need to be prepared to take action, accept the challenges and the constant economic changes.

However, don’t forget I’m not the only Speaker, there are 6 other amazing individuals who are all going to share ‘Cash-flowing’ strategies with you. So if you are serious about investing in property, to provide you security in these difficult economic times, and in your future, then you really can’t afford to miss the weekend.

I know from Sylvia and Juswant we will be sitting around circular tables, so when they say ‘spaces are limited’ they actually mean it….it’s not simply a marketing ploy! Also the cost of the tickets include your food, and a great celebration dinner in the evening, so the chance to relax, learn and network will never be better.

Luckily, as one of the Speakers I am able to offer over 50% discount to a very limited number of places. I’ve deliberately highlighted the ‘limited number of spaces’ as the 50% is to reward the ‘movers and shakers’ amongst you, of which I am sure you are one. To qualify for the reduced price simply make sure you enter the code ‘gill5‘ on the order form, the discount will then be applied.

Remember, this is an all inclusive weekend – all you need to do is turn up and be ready to learn, network and enjoy the celebration!
Click Here to book your ticket ==> http://www.berkshirepropertymeet.com
(And REMEMBER to use code gill5 for your exclusive discount)

The article then went on to take the approach that this is ‘bad news’ for First Time Buyers, whom are feeling more and more pressure and are unable to get onto the housing ladder. And it is true the average age of a First Time Buyer, who has no help from the ‘Bank of Mum and Dad’ is 38 years old.

However, like all statistics, when you peel back the layers and look at the facts from a different perspective, a different story can also be told. So please find below an alternative way of reading the same data:

One: With regard to house prices themselves, we know they have dropped over the last couple of years, so opening up the ability for First Time Buyers to come back into the marketplace. The reason they haven’t been able to is because the Loan to Value (LTV) is no longer at 95%, or even 100%. Now people need to actually ‘save’ a deposit – which of course takes time, discipline and spare money. This is difficult when the younger first time buyers today have grown up only knowing the ‘boom times’, where spending more than you earned was (and still is) an everyday occurrence and the norm. The average household debt in the UK (excluding Mortgages) stood at £7,975 in January 2012. (source www.creditaction.org.uk). Add to this that 860,000 people were unemployed for over a year between October 2011 and December 2011 and there is little wonder that landlords are purchasing while private buyers lack the funds or confidence to purchase (particularly First Time Buyers).

Two: The decision to invest in a Buy To Let property is completely different to the decision to buy a residential home. The clue is in the phrase ‘invest in’. Buy To Let properties give you the ability to bring money into your household – and can be an extremely beneficial cash-flowing Asset. Our homes, on the other hand may give us physical security but they do nothing for giving us financial security. In fact, they are distinct liability costing money to maintain.

Three: Yes, from the above chart it is clear to see Buy To Let has over taken residential purchases but, the overall number of each has dropped dramatically. So is the data a true representation of the future, or is it just an odd couple of months, only time will tell.

And although the First Time Buyers are struggling there are many of the middle and older generation heading towards retirement, with a pension pot which has been decimated and is insufficient to provide for them. So is it wrong that they are stepping up and finding alternative ways to secure their futures?

The very fact that within the article Britain’s biggest lender, the Lloyds Banking Group confirmed that their net lending to landlords currently exceeds net lending to homeowners, tells the story that many of these landlords are indeed ‘new’ or ‘fairly new’ to property investing. Since the Lloyds Group has a restriction of only three Buy To Let Properties within a portfolio. This would suggest that these are ‘every day’ people who have sat up and realised investment in property can provide for their today and future. They have realised these could be no better time than ‘now’ to invest and they are taking action!

So as you can see the statistics may be the same, but the message behind the data can be interpreted differently. Which way would you interpret the article?

And finally, let us not forget the Buy To Let investment properties we are talking about are providing an extremely valuable service – they are providing a home, for the very families and individuals the article focuses on.