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bexit

Brexit. So what’s next for the UK post EU Referendum?

Brexit. So what’s next for the UK post EU Referendum?Well there is the obvious knee jerk reaction to the voting results with markets being affected.  The Bank of England says it expects some market volatility after the Brexit vote but that the UK economy can handle it. “Inevitably, there will be a period of uncertainty and adjustment following this result.Brexit has caused in a short space of time uncertainty. People worry about what happens next and it makes people feel vulnerable. With uncertainty people generally take a breath. They pause. They put things on hold. Why; because there is a general sense of fear.  Successful investors tend to take control of the fear. Be decisive and listen to those with credibility and knowledge. Not just those who throw statements out without backing it up. We’ve heard enough of these misinformed vocal debates with the political campaigns.Warren buffet arguably the greatest investor of our generation buys or invests in times of uncertainty. If the wealthiest investor is saying this, then when is it a good time to invest? If you don’t know who Warren Buffet is take a look at this link http://bit.ly/therichestinvestorCurrency
The Pound has weakened against the dollar and the Euro. But haven’t we seen this before? What happened? It strengthened again. One industry where the UK is strong in is finance. London is one of the biggest financial centres in the world. History shows that when industries go down they eventually come back up.Property Landlords
Now that Cameron has resigned will the removal of mortgage tax relief still go ahead next year with a new conservative leader to be in place by October? Along with the 3% increase in stamp duty this has got to be the biggest blow to property investors and landlords. A different leader and different approach? If this new tax goes ahead, there will be the inevitable higher rents making it harder for first time buyers.
Interest rates
There is talk that interest rates might have to be increased due the pressure of inflation. Equally there is more speculation that interest rates might have to be lowered if there is a severe shock to the economy. Who actually knows?
House Prices
The IMF have been quoted that there could be a drop in house prices. That is possible. There could be a possible drop but always starts in London. But with the high predictions for growth in property market pre Brexit, we are talking a possible drop on where it WOULD have been in the next few years.  So still up but maybe not as much. The housing shortage is still present. The demand for houses continues to increase.
One thing which is clear that there are changes ahead but is the UK going to fall on its knees as the scaremongering has been quoted? The UK existed before the EU and it will exist post the EU.
Mark Carney the Governor of the Bank of England has stated “There will be no initial change in the way our people can travel, in the way our goods can move or the way our services can be sold. “And it will take some time for the United Kingdom to establish new relationships with Europe and the rest of the world.”
Carney added the Bank expects “some market and economic volatility” as those new relationships are struck. He added: “But we are well prepared for this.  The Treasury and the Bank of England have engaged in extensive contingency planning and the Chancellor and I have been in close contact, including through the night and this morning.  The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.”
A sensible and level headed approach is what’s needed but today is a reflection and an instant reaction to the results of the EU Referendum.  There is no crystal ball. There are no guarantees. There has never been.

best cash isa

What investors need to know

What investors need to know. Now that the media attention has died down, it’s a good time to reflect on some of the 2016 Spring Budget welcome changes introduced for savers and investors.

Increased incentives

Whilst the adult Individual Savings Account (ISA) limit for the current tax year remains at £15,240, savers and investors will be able to choose to invest in cash ISAs, stocks and shares ISAs, or an ISA which operates through peer-to-peer lending platforms, or a mixture of the three, up to the permitted allowance. Barrington Howe will shortly be announcing an ISA offering to maximise your tax allowance with one of the best cash ISA opportunities. A great opportunity for investors looking for the best ISA rates.
From April 2017 the ISA allowance will rise to £20,000; this is clearly good news for savers and investors looking to put more of their money into tax-efficient investments.

Increased personal allowances

The personal allowance, the amount you can earn before paying income tax, is increased to £11,000 in the current tax year and will rise to £11,500 from April 2017. The higher rate tax threshold is increased to £43,000 for this tax year and will rise to £45,000 in the 2017-18 tax year.

Capital Gains Tax

The first £11,100 of gains made in this tax year will be free from Capital Gains Tax (CGT). The Chancellor announced more good news in the form of a rate cut for those liable to CGT in the current tax year. In changes that the government hope will encourage further investment in business, a basic rate taxpayer will see the rate drop from 18% to 10%, and higher rate tax payers will see it fall from 28% to 20%. However, those who own a second property will continue to pay at either 18% or 28% when that property is sold.
The Chancellor decided to leave pension tax relief alone, meaning that the incentives to save remain in place.
Scams are on the rise
The tactics used by scammers to encourage people to part with their hard-earned savings and pension funds are often highly-sophisticated and constantly changing, so it’s very important for you to be fraud aware. One example has been outlined by Action Fraud1, the UK’s national reporting centre for fraud and cyber-crime. It has issued a warning about a new scam that has recently come to their attention targeting people in their 50s and 60s. This involves fraudsters offering investments in property in Cape Verde. Often the cold calling companies are over selling these opportunities and in some cases they are fictitious.
How to avoid Fraudulent companies?
There are a number of ways to avoid such companies if you are looking for an investment.
Meet the companies involved. Often people are stand offish. You get more from a face to face meeting than you do on the phone Gain a bit of knowledge. Try to understand the investment. Anyone with more knowledge on a subject can be more comfortable but more importantly make an informed decision.
Ask for a due diligence pack or further background information. Make your own enquiries. Do an internet search and see what is being written about them.

investment news barrington howe

Investment News Dolphin Trust

Investment News
Germany and German real estate in particular is seeing a sustained growth. Dolphin Trust, one of our investment opportunities is reaping the rewards.

German Private Sector Growth Accelerates
Further investment news shows that growth in Germany’s private sector accelerated in May to hit the highest level so far this year, a survey showed today. This suggests that Europe’s largest economy will extend its surprisingly strong start to the year into the second quarter. Click Here to Read the full story

European Real Estate Continues to Attract Investors
Investor appetite continues to grow in most European commercial markets, with Germany leading the way for the 2nd quarter in a row.  For further details CLICK HERE

German Economy Fared Well in Q1 as Trade Surplus Grows
The trade surplus is a key gauge of an economy’s comparative strength and in recent months has highlighted the robustness of Europe’s biggest economy amid the current global economic uncertainties.  For further details CLICK HERE

Dolphin Trust updates
This is the latest update on some of the current developments benefiting our Dolphin Trust clients.

The Old Cigar Factory, Fabrikweg 12, Horb
The old Cigar Factory in Horb now has a new face! In the words of the project co-ordinator, Jochen Krause of Deutsche Planbau GmbH, thanks to the fast progress of the teams at the Dolphin Trust construction site, the Cigar Factory has now had a facelift.
During refurbishment, Dolphin Trust will create nine new apartments in the old Cigar Factory and will bring new life to the government listed building, built in 1898. Despite its historic age, modern standards of energy efficiency will be achieved and high value materials will be used for all apartments for modern living comforts.

In the last few days the loggia, which is visible from the street, has been finished. The old roof section above the stairway has also been completely renewed and the attic has new flooring.  In just a few more days the ceilings of all floors will be completed.
For full details on this investment opportunity please CLICK HERE

Why do we Invest?

Why do we invest? This question came to mind as I spoke with a friend over the weekend. Unfortunately he is currently out of work. Having worked for the same company for the last 15 years, he was suddenly made redundant. Redundancy is nothing new. I am sure many people reading this have gone through a similar fate. But as I apologised for his situation (although it was no fault of mine), it was his reply that resonated with me. “It’s OK. I’m alright for now until my funds run out”. His only source of income was his job and now that this has gone, he has no further income until he gets another job. His level of financial independence is only a matter of months.

This is just ONE of the reasons why we invest. Creating a passive income allows you to build a system for making money without working for it. If your job is your only support system, what happens when it’s unexpectedly taken from you? There’s still all your outgoings but no income. As one of the greatest investors, Warren Buffet once said, plant a seed today to reap the rewards of tomorrow. So why do we invest? To avoid that feeling of stress and pressure when your money runs out. To prevent that anxious feeling when you are fighting to find your next job. It’s a shame they don’t teach these things at school. Relying on just your job for your income……well it’s like putting all your eggs in one basket. But not the kind you usually associate with investing.

 

5 investment mistakes to avoid

Of the mistakes made by investors, several of them are repeat offenses. The same mistakes being made over and over. After a few alarming prospective client calls recently, it reinforced our opinion that these types of mistakes need to be eradicated by investors.

1 Not listening
Now be honest investors. Have you ever had someone explain something to you but you have already switched off. You’re not listening for whatever reason? Investors are looking for the best investment opportunities but if you don’t listen to the explanation then how can you know from just a headline? Experience has taught me that sometimes you gain more from listening than you do from speaking.

2 Unreasonable expectations
Looking for the highest rate of return as the main reason for investing is maybe not the best starting point. What is your reason for selecting an investment after all? Understanding the structure or business model? Looking at what conditions could affect the investment? Prefer something offering a lower risk or a form of security in the event that something could go wrong to give you more comfort? Having a reasonable outlook may help you when looking for something that suits you. This leads me to point 3!

3 Understanding your own profile
Do you know how much you can afford to invest? Are you a speculative investor or do you prefer a low risk investment? Understanding yourself is a good point to start when you plan to invest. If you know what you are looking for it’s harder for someone to sway you in a different direction. A very wise man always said if you don’t know what you’re doing then why are you doing it? Invest in yourself first as it’s the most important investment decision you could make.

4 Making emotional rather than informed decisions
Knowledge is power someone once told me and I tend to agree with this. I was always taught to learn from people that know more than me. Take their knowledge and feed my own. So if someone understands an investment product, has been trained or has relevant information not on the brochure, it’s more likely to benefit an investor to take in this information so that an informed decision can be made rather than emotional one.

5 Taking responsibility
It’s your investment choice so be responsible. It’s your own capital so before you invest it, make sure you understand what is being presented to you. If you don’t understand then ask the question. Maybe you want to meet up with company. Is a telephone call enough for you? Everyone is different but taking responsibility could eradicate some of the common mistakes in investing. Investors who recognise and eradicate these common mistakes give themselves a greater chance of meeting their investment goals and being profitable and successful. Isn’t that the reason you invest?

Investment News

Investment News and Updates December 2015

Barrington Howe brings you that latest Investment News and Updates

Dolphin Trust
“Germany Second best in Europe for Residential Market “

As Dolphin Trust continues to go from strength to strength as an investment, Europe’s residential markets have become its strongest over the last decade, and the only sector to avoid negative overall performance. Germany’s total return for residential investments for 2013 stood at 8.3%, the second best in Europe, only trailing closely behind the UK. Data also shows that over the last 15 years, the German residential market has remained stable in comparison to other countries.

See the full report HERE

 

ILS Car Finance Investment
The new Buy to Let £45 billion industry

The progress of ILS Car Finance Investment progressed beyond expectations for 2015.  The number of cars under HP agreements has increased month on month as the company goes from strength to strength. The backbone to the investment is the ability to manage defaults which have risen from 2 to only 4 cars. In percentage terms that’s a mere 0.6% and all four vehicles were quickly recovered and resold giving further credence to the business model.

In order to be in a position to effectively handle the extra work from ILS planned expansion programme they have recently taken home in new, slightly larger, offices as the team expands to handle the increased business. There is also huge confidence in the continued growth of the used car market (£45.1 billion) as a whole which has been underlined further by the latest BCA report which can be found HERE
We all need cars and that’s unlikely to change for a long time.

 

UK Housing Market
New Changes and it’s affects

The Chancellor recently went on to announce the biggest boost to housebuilding since the 1970s by promising to build 400,000 new homes in England by 2020, with 200,000 of those earmarked ‘starter homes’. House builders and developers will be offered grants to facilitate this initiative and to encourage them to regenerate brownfield sites for such use.

In addition, 135,000 homes will be made available on a shared ownership basis – for those households earning less than £90,000 in London and less than £80,000 outside the capital. London residents will get their own version of Help to Buy, where for those able to submit a 5% deposit on a property, the Government will offer a loan of 40% of the value of the home, effectively giving them a 55% loan-to-value mortgage. All these initiatives will see the overall housing budget rise to more than £2bn. The big question is how will this affect the UK housing market? Builders and developers look certain to benefit from this move.

With recent changes in the stamp duty increases for a second home, there has been a bit of a panic in the buy to let market. An additional 3% increase in stamp duty for a second property. For the experienced investor, it’s merely another change in policy of which a professional investor will simply adapt to. Experience teaches you to adapt to changing conditions with alternative solutions. Overall the property market is predicted to continue to grow.

 

Manchester Property Investments: Beech Property
Increased Investment into the “Northern Powerhouse”

The first

Manchester City Centre Investment in Princess Street was completed at the start of last summer and has been tenanted for several months. After such a successful template, this is being used going forward on other city centre projects. The second development, Cross Street is due for completion early 2016. Once the building work has been completed, it will have given an iconic city centre Manchester building a much needed facelift and importantly significant longevity. At this stage, refinance will be put in place and the loan note monies passed back to the trustees enabling Beech to then use the funding for the next project.

The latest acquisition, Outram House on Great Ancoats Street, is to the north of the city centre and is in a fantastic location overlooking one of the many canals that make up Manchester’s heritage. Work on this property will commence in 2016 and we anticipate that it will be completed before the end of the year. There are several properties in city centre Manchester that have been secured for future development. On the subject of Manchester, the city’s economic future looks very healthy indeed. At the time of writing, the Bank of England has just announced their intention to keep the bank base rate at its current low until well into 2017. This spells another year of low returns for bank deposits and savings.

 

New 1 Year Secured Fixed Rate Bond
“Returns under written by the US Government”

Colonial Capital has recently announced an addition to their bond in the form of a shorter term model with a lower entry point of only £5000. This gives an opportunity to those looking for a shorter exit without having their funds tied up beyond 12 months. The same model and principle applies taking repossessed (foreclosure) properties under market value and refurbishing them to a high standard and rented to families under a US Government initiative in which they underwrite the rent. In short your returns are underwritten by the US government. The bond has gone from strength to strength and looks set to continue with a 12 month agreement. This product seems ideal for ISA investors completely outperforming them irrespective of ISAs being tax free.

 

 

pensioners_investing

Pensioners Investing

Barrington Howe has seen an increase in pensioners investing over the age of 55 in the last 2 years showing that pensioners are being forced to invest their funds. There could be a number of reasons as to why the over 55s feel the need for extra income. With the new pension rules since April, people are able to draw down lump sums of their pensions or utilise pension release rather than take out an annuity. Maybe increase knowledge and awareness of other investment opportunities have acted as a catalyst to look beyond the traditional pensions which have not performed particularly well.

Why are more pensioners investing?

“We have noticed that when we sit down with clients and explain the opportunity, they clearly understand the investments”. Barrington Howe Managing Director Peter Evans states “with the feedback we receive from clients, it’s evident that they have not been given a clear explanation of investments and as such their understanding has not been what it should be”. Peter goes on to say “our role is to explain rather than hard sales. This then allows a client to make an informed decision going forward. The investment opportunities we have speak for themselves in terms of their clear business model for profit, performance and track records. We try to keep things simple and don’t use unnecessary jargon.

Due to underperforming pensions, the over 55s are using pension release to then go on to invest rather than spend so that they can increase their levels of income. Barrington Howe’s Managing Director states “We’ve noticed a trend towards clients wanting a combination of something secure, double digit returns and short term agreements. Pensioners are not looking for high risks and require the flexibility of a short term agreement should their circumstances change. Peter goes on to say “I think it’s a very sensible attitude to adapt. A pensioner does not have the luxury of being able to earn high salaries through employment so it’s vital that they are sensible in their attitudes to investing. One of our clients is an elderly couple in their 70s who invested to enjoy the returns with extended holidays. Some just for additional income for the long term”. But the trend is evident that previous financial markets have not performed well resulting in pension pots lower than expected. The over 55s have spoken and have now taken action.

 

Worldwide Investment

What’s new in the world of investment?

The Bank of England is releasing trails of information into the media to suggest an interest rate rise possibly by the end of the year. Experts believe with the Chinese Black Monday, lowering oil prices and the turmoil in the global markets that bank interest rates will not increase until February of 2016. The Chinese stock market nosedived by a whopping 8.5% recently sending investors into panic. Even to the point that the Chinese reduced their bank interest rate in attempt to soften the blow.

Oil prices have hit an all-time low this year on the back of the Chinese market with many employees within the industry being laid off. Economists are predicting that US Federal Reserve will suspend their September interest rate increase and Bank of England’s forecast to be put back after the early 2016 forecast. Analysts have stated that the weakness in emerging markets is now spreading to developed markets. That in turn doesn’t make a base rate increase viable in the US or UK in the coming months ahead.

How has this effected worldwide investment? Whilst the unpredictability of the stock market has kicked in, the fixed rate returns of asset back investments that Barrington Howe specialise in continue to thrive. With the business models strong enough to stand a drop in the market, these secured assets continue to raise millions in private funding giving above average returns in the form of fixed rate bonds and property loan notes. With interest rates still at an all-time low, bank savings are still receiving an extremely low return and have done so for over 5 years. The decision on where is the best place to invest always poses a conundrum. However, fixed rate asset backed alternative investment is still thriving.

 

 

Dolphin Capital GMBH

German Real Estate increases with Euro rate drop

Investor and resident demand continues to increase in the Berlin housing market as reported by the CBRA Berlin Housing Market Report. The main reasons for this are improved economic performance and purchasing power in addition to growth in both population and numbers of households. Investors’ extreme interest in residential property is based on prices, which are still moderate by international comparison, the positive opportunities for the city, low interest rates, and the shortage of alternative investments.

Due to the noticeable decrease of the euro exchange rate, Property in Germany has become even more appealing to investors from other currency areas such as the UK with sterling holding strong. Even with the Euro rate dropping, it’s had a positive impact on German real estate. Berlin is seeing the highest increase in investment at over €1.3 billion in Q1 2015 compared to €617 million in the same period last year. This is great news for our Dolphin Trust formerly Dolphin Capital investors as the Euro was seen by some investors as a big area of concern.

Participants in a recent Berlin Hyp survey established that Germany remains highly appealing for investment in 2015 and that investors have immense confidence in the country’s constant economic development. German real estate is still in demand as an investment opportunity with decent yield prospects and a high percentage (around 84%) of survey participants feel that the real estate market will continue to strengthen and take advantage from conflicts around the world. Furthermore, German consumers’ disposition to buy property improved even more in May. This was encouraged by an all-time low in unemployment and low interest rates.

Barrington Howe celebrates this month a third year anniversary of working with Dolphin Trust. The latest Dolphin Trust (Windorferstrasse 43, Leipzig )project started restoration works on this 19th century three-storey building in April 2015. The demolition work has been completed successfully and the walls and floors are now being put in place, with scaffolding erected around the building. All of the apartments will be appointed with bath tubs and a balcony or terrace.

Another Dolphin Trust project is Heeperstrasse 70, Leopoldshöhe. This building which was previously a furniture factory but Dolphin Trust has plans to refurbish parts which used to serve as store areas. The remaining areas will most likely be demolished and replaced with new buildings. Heeperstrasse is located in a popular university town in Detmold. The increase in demand for housing in Detmold has caused the new build sector to see a rise of more than 9.5% annually for the last four years.

 

 

Luxury London Barrington Howe

Central London property prices set to rise 18% in next five years

Central London property prices set to rise 18% in next five years and rents by 19.5% as market moves forward after the UK’s general election, it is claimed.

The latest analysis says that unprecedented uncertainty surrounding last month’s election saw a stifling of house price growth across London, with the rate of house price growth at less than 4%, compared to the 9.6% increase seen in 2014.

The majority win by the conservatives has eased the fear of mansion taxes and potential capped rents. London is not to bear the brunt of these negative tax changes. However both issues have now subsided, following the surprise majority win by the Conservatives, according to international real estate consultants Cluttons.

Pre election worries saw domestic and international buyers’ confidence reflected in a sharp tailing off in demand during the first quarter of 2015. Behavioral trends saw vendors withdrawing properties and buyers adopting a wait and see approach. However, this is not the case with the exit strategy of our London Property Bond which has sold 3 off plan luxury penthouse apartments in fashionable St Johns Wood. As such it provides an excellent example of a strong niche market breaking the barriers in central London property.

‘There is no doubt that the results of the general election have helped to re-inject confidence into the market that had receded early on this year,’ said Cluttons’ international research and business development manager, Faisal Durrani.

‘The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity,’ he added.

The report also says that despite the Mortgage Market Review (MMR) contributing to a 16% year on year dip in home purchase loans in greater London to March 2015, affordability appears to be improving slightly, with the average loan size dipping to 3.86 times annual income in the first quarter of 2015.

Cluttons forecasts modest central London house price growth in 2015 of between 2% and 3%, before accelerating to nearly 5% in 2016 and stabilising at around 4% per annum between 2017 and 2019. Cluttons expect this level of growth to deliver cumulative capital value appreciation of almost 18% over the next five years.

The prospects for the prime central London rental market are stable, with average growth of 4% per annum forecast for the next five years. ‘The key driver of course for this behaviour is the desire to purchase.

For investors seeking a strong market to invest into, our London Property Bond represents a sensible option with strong forecasts for the years ahead. A 5 year bond with a fixed return of 8% per annum paid every 6 months.