Buy UK property for less than £1000 per month with guaranteed rental income

 

"Buy-to-let" investment is very popular with property purchasers worldwide. Today, the UK offers excellent potential in this arena while city rental yields provide solid returns on investment. Carefully selected pure investment strategies in the UK can also be a profitable option for quick capital returns and minimum outlay. 

Montpelier in conjunction with Prosperity Property offer a unique regular savings finance scheme which offers clients an affordable way to access the UK market. A selection of developments available are listed below:

London Road Deposits from GBP£8,700

KEY POINTS:

• High Yielding at an average of 8%+ gross
• Mix of one and two bedroom apartments within a courtyard development produced to a high quality specificationCentrally located and within minutes from the city’s main business, shopping and leisure areas
• Prices from under GBP£74, 500
• 18 month deposit terms

St George’s - Deposits from GBP£9,800

KEY POINTS:

• High Yielding at an average of 8%+ gross
• Mix of one and two bedroom luxury apartments within a courtyard development - produced to a high quality specification
• Centrally located and within minutes from the city’s main business, shopping and leisure areas
• Prices from GBP£107,200
• 30 month deposit terms
• 5 year lease back option
• Full property management with a specification account manager, offering an allocated, one point of contact for overseas clients

Life Reversions - Prices from £33,800

Standard UK property with up to 65% discount

These properties provide an opportunity to buy into the asset class with a guaranteed future uplift in value. These investments work well for people who have cash to invest over an average of 7 years who are not looking for a monthly income but a guaranteed lump sum (example property to produce 65%+ return ROI).

Wokingham - Prices from GBP£285,000

KEY POINTS:

• Built in capital equity from point of purchase with pound per sq ft values at 10% below current market prices
• Yielding at an average of 6%+
• Positive cash flow with coverage of a repayment mortgage plus income
• Mix of two to four bedroom houses within a gated courtyard development

Prosperity’s monthly property purchase plan

Example: London Road, 2 Bed, £967.00 per month to invest

• GUARENTEED UPLIFT of £13,000 ADDED TO YOUR 30% DEPOSIT - £967.00 x 18 months, Client’s 30% deposit totals £26,100 in a property worth £100,000 with equity of £39,100 due to the discounted property purchase price = £26,100 to £39,100 in 18 months (33% return ROI)
• LOW VOLATILITY - Consistently stable prices with next to no volatility, with potential for capital appreciation providing further growth (no capital appreciation / price increases from point of purchase have been factored in to this exercise to provide return figures)
• HIGH YIELD - Yields of 8% (Gross) are produced by this exciting new product exclusive to Montpelier.
• REAL DIVERSIFICATION - Bricks and mortar property purchase providing an alternative to equity based products - for real diversification within your portfolio
• INCOME PRODUCING ASSET - Client owns income producing asset after 18 months, making monthly available savings provision available for a second property or traditional equity based savings plan
•  EXCLUSIVE to MONTPELIER - The only regular savings property purchase plan of its kind – only available through Montpelier

“Prosperity currently also have an alternative locations available in Cannes, USA, Goa and Brazil. For further information on these or any of the above please contact me at jhumphreys@montpeliergroup.com ”

Why Bonds will always be attractive

Over the past 25 years the worst sell-off in the fixed interest market index was 6.5% compared to 51% for the equity market index.

Treasury bonds are regarded as one of the safest assets and have been in a bull market since 1982. However, in recent weeks we have seen prominent calls suggesting that the 30-year bull market in fixed income securities is over.

Recent economic data from the US has been largely positive and there are signs that a US recovery is gaining traction. US household debt levels are falling and its housing market is showing signs of recovery.  Consequently, many believe that the positive economic data coupled with the threat on inflation from quantitative easing will push up short-term rates.

Despite this strong economic data from the US, concerns around the global economy continue to linger. The eurozone remains a considerable risk and the threat of a hard landing in China is still a possibility after recent negative figures. Policy makers have expended much effort driving down long-term yields and may yet seek to contain them.      

As well as fixed interest returns from income and capital, there is the added element of currency. On a country basis when bonds do well, the currency normally weakens, and visa versa. All three elements lead to the bond market generally always rising. Managing the term structure of fixed interest is a further tool to increase or diminish risk in this category.

Equities on the other hand are positively correlated to the currency and therefore when the equities sell off, the currency element contributes to further negative returns. Money invested in the equity market in 2000 will not have seen any growth in the past 12 years. If $100 was invested in the bond market in December 1987 it will now be worth $514. If we compare the same time period and $100 was invested in equities it will now be worth $289.

This all serves as a good backdrop for the discussion as to the dearness of the bond markets.

There is no doubt that the flight to quality in the past two years has benefitted this sector tremendously. However the safe haven flight has been limited to the US Treasuries, Japanese bonds and German Bunds. The ten other countries in the basket have not seen their value increase to the same extent. On the contrary, Italy and Spain saw their fixed interest markets sell off sharply.

Economic outlook

Central banks in Europe, UK, Canada, Australia and New Zealand have recently held policy interest rates steady and they should remain low until at least 2014. The central banks are managing different balancing acts as the markets remain fragile despite current cautious optimism. The current rally in risk assets is due to the liquidity provided by central banks. A withdrawal of liquidity or even a slight increase in interest rates could derail the whole scenario.

As governments make progress toward restoring sound fiscal positions and implementing structural reform they will have to move cautiously in order maintain the fragile growth picture and contain the European crisis as well as remaining wary of contagion.

European equity markets have rallied as the euro has weakened and bad news has dried up for the moment; however, these countries will experience a mild recession in 2012. The US on the other hand has delivered good economic data and this has supported its equity markets; the strong US dollar should, however, shave some growth off for the year.

As far as the US is concerned inflation is an important factor, but a broad-based rise in core inflation above 3% seems unlikely until the economy is much closer to full employment. An oil shock could temporarily increase inflation, but this will be a technical increase and will choke off growth well before inflation rises.

Investing in Black Gold


Time to get out of Gold and into Oil?

Trevor Greetham, portfolio manager of Fidelity's multi-asset funds, said gold did best when the dollar was weak and global growth was slowing. "A US-led global upswing could see neither condition hold true," he added.

Gold was also becoming less attractive within the commodity asset class, Mr Greetham added. He said oil was "a much better hedge against geopolitical shocks", particularly when there were tensions in the Middle East.

"The dollar has been strong in recent months as the likelihood of additional Fed QE [quantitative easing] has fallen," the manager said. "Meanwhile, the sovereign debt crisis is hurting the euro and the likes of the Bank of Japan and the Swiss National Bank are implementing policies designed to weaken their currencies."

He concluded: "We do not see a compelling reason to hold 'out-of-benchmark' positions in gold at present. Large retail flows into gold and still bullish survey readings suggest a significant downside risk if others come to the same conclusions."

However, a survey for Thomson Reuters GFMS found that the gold price was expected to rise to $2,000 on surging investments from central banks and buyers of coins and bars.

The consultancy added: "The gold market has been showing increased sensitivity towards inflation fears during early 2012, as it has become ever more attentive to statements, or inferences from statements, of Federal Reserve Board Chairman [Ben] Bernanke.

"What could be seen as significant is that price falls in response to benign inflationary sentiment have been larger than any gains on heightened inflationary fears."

Gold enjoyed a spectacular bull run until last summer, attracting investors worried that paper currencies would lose value as governments printed money in a bid to restart their stalled economies. The fear of economic meltdown during the depths of the eurozone debt crisis prompted many to seek gold as a safe haven, its traditional role in troubled times.

But more recently the euro crisis has eased and signs of recovery have made further QE less likely. The gold price peaked at about $1,900 in August last year, but is currently at about $1,625.

For further info how you can invest in Oil or Gold, please drop me a note.

Are rewarding investment returns passing you by?

If no one is actively managing your investments, fast-changing market conditions could result in under-performance

It is a dilemma that, in truth, may never go away. Is it better to invest your money into a passive fund, with lower costs; or should you pay more to invest into an actively managed fund, in the hope of achieving stronger returns? 

A passive investment fund typically involves your money being invested into one equity market – such as the UK FTSE 100TM Index – and subsequent returns are entirely linked to its performance. In contrast, actively managed funds involve a pro-active fund manager or team implementing and overseeing an investment strategy, which fits within certain risk and reward parameters. 

Unlike a passive fund seeking to track a particular index, many active fund managers invest across the full range of asset classes – including property, cash and fixed interest – to try to boost overall performance.

They also have the flexibility of making quick changes, to make the most of market opportunities they identify and to protect the value of your investment when certain assets under-perform.

As an example within equities, heavy stock market volatility in 2011 prompted global market falls that impacted negatively on investors’ returns. Actively managed fund managers retained the ability to reduce their fund’s exposure to under-performing areas – such as banking and mining – in favour of other sectors – for example, pharmaceuticals – which delivered stronger returns. 

If you held investments in a passive fund, your money could have been left fully exposed to these equity market falls. You might need to decide whether to switch to an alternative fund then switch back later – but by doing so you risk missing out on strong returns from the original fund if the index it is linked to starts to rise again. Meanwhile, an active fund manager can quickly change its holdings back and forth, to benefit from upturns. 

Costs are an increasingly important consideration in this difficult economic climate, and so the cheaper investment option might look more tempting. An active manager will charge approximately 1.5pc per year – with the costs of a multi manager fund typically being higher. Meanwhile, passive funds typically cost around 0.5pc per year. 

Yet when it comes to the latter, there are other considerations aside from the costs. You may want to manage your investments yourself, which will take up more of your time. If the fund you are invested into under-performs, it will be up to you to determine if it is better to switch your money to a different fund. If you feel you do not have the expertise and confidence to consistently make such decisions, the lower cost of a passive fund may not be suited to your needs.

What are Structured Notes

No one will easily forget the turbulent times that 2008 and the early part of 2009 brought with them. Bubble after bubble burst; house prices hit rock-bottom; formerly ‘stable’ companies crumbled into insolvency by the ‘bucket-load’. The markets truly suffered a crisis that has been seared into the minds of financial professionals.

How can, then, individuals and institutions alike, now invest confidently into financial products?

How can they make asset allocation decisions beyond simply saying: ‘100% of my portfolio into Cash’ while still keeping the peace of mind that their initial capital will be preserved?

Simple.

Structured Products.

A Structured Product or Note is an investment vehicle that can be written or ‘structured’ in many ways, according to investors specifications; all range of asset classes, maturity dates, risk / return levels, liquidity, and even prices can be accommodated for!

Benefits:

-       Capital Protection

o   They can be written to guarantee to return 100% of your initial investment

-       Auto-Call Potential

o   They can be written so that, once certain criteria have been met, the note is redeemed and the growth is realised

As a reference, an example is described below. It is a note that significantly reduces the risk by giving up some potential return. It invests into 4 soft commodities; Corn, Sugar, Cotton and Soybeans.

-       100% capital protection, potential annual return of 10% per annum

o   Regardless of the performance, you will receive 100% of your initial investment, but you can ‘only’ receive 10% per year

-       3 years maturity

o   The note will ‘mature’ or finish in 3 years, in which case you will either receive your initial investment, or the growth up to 10% / annum, whichever is higher

This is a great example of how investors can invest safely into an ‘interesting’ asset class, with only a medium term commitment for tying up their money!

New notes are being written weekly, so for an updated list or for more information, just contact the Portfolio Team at Montpelier.  

Silver - Price could double by the end of the year

Were you cursing at your computer screen when silver nearly tripled during the short 9 months from September 2010 to May 2011? Silver at $20 seemed like an insurmountable threshold for quite some time. This caused many silver investors to give up, completely missing the ensuing ride. I believe silver is about to offer a similar ride. While it is unlikely to match the 180% advance mentioned above, look for silver to make new highs in the coming months, with the potential to double to $65 by year end.

Following the record gains in silver during late 2010 and early 2011, the metal has since crashed towards $25 and sentiment has crashed along with it. The threat of euro nations defaulting, banks announcing they are, well, bankrupt, and a series of other factors have scared away many of the Johnny-come-lately silver bulls. I think too many investors are underestimating the power of the central banks. While I agree they are running out of options, it seems that their ability to kick the can down the road has yet to expire. Given that the United States is heading into election season and President Obama is in full campaign mode, I expect the administration to pull out all stops in order to continue the illusion of economic prosperity a while longer. Every economic fire of consequence is being extinguished with fresh liquidity, more funny money or new legislation. In case you missed it, QE3 has been in full force for quite some time, albeit executed is a somewhat stealth manner.

The implications for silver (and gold to a lesser degree) are going to be incredibly bullish. Absent a deflationary sovereign default that spirals out of control and takes down major banks with it, stocks will continue to creep higher in volatile trade throughout the year. Once fear begins to subside, look for precious metals to come roaring back to new highs by mid-year. Whenever the next financial crisis finally hits, we are likely to witness a new injection of quantitative easing that is many magnitudes stronger than that of 2008.

Will a major debt default pull down gold, silver and mining stocks with it? Absolutely.

Will it last? Not likely.

Investors are a predictable bunch. They always overshoot on emotions in one direction or another. A rush for liquidity and the perceived “safety” of government bonds or U.S. dollars will be incredibly short-lived and viewed in retrospect as immensely short-sighted. Everyone that rushed for the door by dumping real assets will soon regret their folly. When the fear subsides and some semblance of rational thought returns, the realization of the worthlessness of government paper will be widespread and cause a mass exodus of fiat money.

So while it is prudent to hold a decent amount of cash in the short term, hoping to buy the irrational dip, the medium to long-term investor might consider buying silver aggressively at this juncture. In my view, commodity prices are either going to continue grinding higher throughout the remainder of the year, or there will be a short and steep dip, following by a resumption to new highs. Either way, the silver price has a long way to go before reaching previous inlfation-adjusted higher. It would need to climb to $150 to reach its 1980 high using officially-suppressed inflation statistics and closer to $300 using honest inflation statistics. Seeing as you can buy silver at $32 today, the upside potential remains absolutely huge.