Welcome to National Landlord Day Conference and exhibition 6 November 2012

Welcome to National Landlord Day Conference and exhibition 6 November 2012

Welcome toNational Landlord Day

Conference and exhibition6 November 2012

Sponsors:

Welcome and introductions Stephen PeasnallChairman, Scottish Association of Landlords &Louise BatchelorConference guest chair

National Landlord Day 2012

National Landlord Day


Sponsors:

Keynote speech

Margaret Burgess MSP

Minister for Housing and Welfare




Sponsors:

Tenancy Deposit Scheme

Rebecca Johnston & Alison MacDougallSafeDeposits Scotland

Sponsors:

Tenancy Deposit Protection

Rebecca JohnstonOperations ManagerSafeDeposits Scotland

5working daysA not-for profit partnership of landlord, agent and tenant organisations, based in Scotland

From this

To this

Fair wear and tear

Alison MacDougallDepute Head of AdjudicationSafeDeposits Scotland

An adjudicators experience of fair wear and tear

Definitions

reasonable use of the premises by the tenant and the ordinary operation of natural forces

the level of change expected by everyday use of a property throughout the length of the tenancy

Factors to consider

Tenants obligation is generally to return the property in the same/similar condition at the end of a tenancy fair wear and tear excepted

Interpretation of reasonable use is not fixed

Length of tenancyType and number of occupantsLocationQuality

Fair wear and tear and betterment

A landlord is not entitled to charge his tenants the full cost for having any part of his property, or any fixture and fitting,.put back to the condition it was at the start of the tenancy

Not a new for old insurance policy

The most appropriate remedy

What the adjudicator looks for.Evidence of condition (age and quality) at the start of the tenancy;

Evidence of condition at the end of the tenancy;

Length of tenancy;

Number and type of occupants;

Appropriate remedy replacement, cleaning, compensation

ExamplesScuffs on walls;Drawing on walls;Spots on carpets;Shading and fraying to carpets;Wooden floors and stiletto heels;Fading to curtains and upholstery;Unclean shower;Cracks in plaster;Burns or marks on worktops

To help you.

How many schemes will there be?This will depend on how many suitable proposals to run tenancy deposit schemes are submitted to Scottish Ministers. The regulations allow for more than one scheme to be approved, as long as all the conditions in the tenancy deposit regulations are met.Will there be a choice of schemes?If more than one proposal to run a tenancy deposit scheme is approved and becomes operational, you will be able to choose which scheme or schemes you submit deposits to. You may participate in more than one scheme at a time, although an individual deposit can only be submitted to one scheme at a time.

19



Sponsors:

Universal Credit

Graham MowatDepartment forWork and Pensions

Sponsors:

Universal Credit - Budgeting Support

Scottish Association of Landlords

Graham Mowat, UC Programme, DWP #Welfare ReformUniversal Credit is part of a broader Welfare Reform programme I will not be covering other changes today but they are also important and many of them impact before UC e.g.:The Work ProgrammeSector size criteriaLocalised Council TaxHousing Benefit CapMain Benefit CapSocial Fund moving to Local Authority administration#Preparing for Universal CreditWhat is Universal Credit?The Universal Credit serviceSupporting claimantsPiloting, testing, pathfinderUniversal Credit implementation#What is Universal Credit?A policyA benefitA gatewayA platformAn ambitionthat tackles welfare dependency, poverty and worklessness by making work paythat replaces a complex system of working-age benefits and credits with the Universal Credit and a single set of rulesthat together with our employment support programmes, helps people into workthat will help us deliver an internet-age service whilst continuing face-to-face support for those who need ittransforming lives and society through work #25Housing costs under Universal Credit

This is primarily about narrowing the gap between depending on benefits and being self-supporting in work: The Government wants people to manage their own budgets, including paying the rent, in the same way as other households. The introduction of Universal Credit is an opportunity to encourage more people to take control of their own housing costs. The Government believes that the benefit system should not treat people in a way that is materially different from the situation that they would experience whilst working. The greater the difference between the two, the more of a barrier there is to returning to a normal working life. #Universal Credit a 21st century serviceUniversal Credit will be digital by default with most claims made and managed online. Online service will be supported by a network of face-to-face and telephony support:A national service offering with targeted local flexibility from October 2013 but ultimate goal remains a fully integrated Universal Credit service offeringAchieving digital by default by: Designing a compelling and easy to use serviceWorking across government, private & voluntary sector to get more people online, e.g. with digital championsSupporting online channel through telephony, high street access#ClaimantsTime20132017Online Self ServiceTelephony Self ServiceAccess to online Self Service provided by friends/family,High street 3rd Parties or JobcentresSupported Service - Face to Face & TelephonyAssisted Self Service - Telephony support for online transactions High Street access Support for online Claimants of DWP will become increasingly self-sufficient and prepared for the labour market, enabled through delivery of self service on every channelDigital by Default as part of channel strategyClaimants to be supported towards self-sufficiency over timeSelf - service#28We and our delivery partners will provide a High Street environment for claimants to access online We will provide telephony support to claimants completing online transactionsWe will change the role of DWP agents in telephony and JobcentresClaimants will: change how they currently interact with DWPuse the support of friends and family for online accesshave provision to use online capability in 3rd party outlets and Jobcentresself serve through telephonyWe and our delivery partners will give claimants specialist supportWe and our delivery partners will assist self service and support claimants in other channels We and our delivery partners will help claimants self serveSix local authorities & housing associations are now trialling direct payments of Housing Benefit to selected tenants

OxfordDirect Payments Demonstration ProjectsEdinburghWakefieldShropshireSouthwarkTorfaenJun 12Projects startedJul 12First direct payments to selected tenants in LAs in England and WalesJul 12First bi-monthly Learning Report produced summary shared on Learning NetworkAug 12First direct payments to selected tenants in EdinburghJan 13Learning the Lessons report publishedJun 13Project completesSep 13Final Project evaluation report published#2013 focus pilots - Twelve pilots will run from autumn 2012 to September 2013 to explore how local expertise can support residents to claim Universal Credit.

2013 focus pilots will look at:- encouraging claimants to access online support independently; - improving financial independence and managing money;- delivering efficiencies and reducing fraud & error; and- reducing homelessness.

Post 2015 focus pilots on the longer term role for local authorities in supporting Universal Credit claimants.

North DorsetRushcliffeMeltonBath & NESOxfordLewishamWest LindseyCaerphillyNewportBirminghamNorth LanarkshireWest DunbartonLocal Authority-led PilotsOldhamWiganDumfries &GallowayEdinburghWakefieldShropshireSouthwarkTorfaenKey: LA-led pilotsPathfinder preparation projectsDirect Payment Demonstration Projects#30Pathfinder will take place from April 2013.

It will test new payment system with local authorities, employers and claimants in a live environment before national roll-out.

Will target single, unemployed people, with or without rented housing costs, in specified areas in Tameside, Wigan, Oldham and Warrington local authority areas.

North DorsetRushcliffeMeltonBath & NESOxfordLewishamWest LindseyCaerphillyNewportBirminghamNorth LanarkshireWest DunbartonPathfinderOldhamTamesideDumfries &GallowayEdinburghWakefieldShropshireSouthwarkTorfaenWarringtonWiganKey: Pathfinder LA-led pilots Direct Payment Demonstration Projects#Implementing Universal CreditUniversal Credit will go live in the Pathfinder area in Greater Manchester in April 2013. We are planning to begin the introduction of Universal Credit across Britain from October 2013. It will be introduced in stages as is right and appropriate for such a large programme. The transition from the current system of benefits and tax credits is expected to be completed by the end of 2017.

#32PERSONAL BUDGETING STRATEGY

Claimant Preparation Work FocusHousing Costs ChannelsFinancial Single paymentMonthly PaymentClaimants#Why change the way we pay claimants?Simplification

Removal of barriers to work

Tackling the poverty premium

Working towards personal financial responsibility#34The nature of current benefit payments means that many claimants are paid more than one benefit, some of it with different paydays and frequencies, often to different people in the household and for different purposes.

In addition, Housing Benefits is often paid directly to the landlord, creating a service dependency which acts as barrier to accepting work.

Not only is difficult to control the household budget effectively, many claimants end up budgeting and paying hand to mouth, often paying a much higher price as a result e.g. for utilities.

In addition they ordinarily only have access to very expensive credit

Universal Credit aims to put claimants in charge of their full income so they can make informed choices, take advantage of better utility payments options, tariffs and discounts and build a credit rating that would enable access to affordable credit.

Exploring more accessible financial services and accounts

Supporting better budgeting

Differentiation to recognise and respond to varying needs

Financial Products working with financial product providers calling for a range of suppliers to explore feasibility of budgeting accountsSpecific key features to support budgeting Tailored Support working with advice sector to ensure claimants are able to access appropriate budgeting supportExceptions developing an exceptions framework for those not able to manage Universal Credit, even with support

Supporting claimants financial inclusion#35Financial Products working with financial product providers to make services more supportive to low income householdscalling for a range of suppliers to explore feasibility of new financial products to help claimants manage their moneykey features of new accounts could include: regular payments for main bills; budgeting support; open to all claimants; options to build up credit rating Tailored Support working with advice sector to ensure claimants are able to access appropriate budgeting supportExceptions developing an exceptions framework for those not able to manage Universal Credit, even with support

Budgeting Account - Service proposition Our key requirement is to ensure claimants have access to a range of suitable financial products that enable and support them to budget successfully.

Essential features:Ability to receive money from both UC and wagesAvailability to people after they cease to receive UCDirect debit and standing order facilitiesATM access Clear transparent chargeNo penalty charges (within reasonable parameters)No overdraft

#SegmentationAbleMainly ableUnableNot worried

Ready & Able2. Ready & Mainly Able 7. Not Worried & Unable Worried3. Worried but able4. Worried & Mainly Able 8. Worried & Unable Very worried5. Very worried but able6. Very Worried & Mainly Able

9. Very worried & unableIllustrative & draft#Matching support to services & channels

Illustrative & draft#

7. Work & Education2. Agents & Appointees3. Local Support Orgs 8. Financial Orgs 10. Govt.6. Health &Social Care4. Housing5. Local Authority 1. Friends and Family9. Utility CompaniesThird sector organisations such as CAB, CPAG, Gingerbread, MAS Etc Trusted intermediaries - Carers, POA, etcPOBanks & Building SocietiesCredit UnionsEtc DWP, HMRC Jobcentres Work ProgrammeUC Services inc Telephony and F2FGPLocal NHS servicesHealth workersAddiction / support schemes

LandlordsHousing Associations Local RSL services Supported AccomHostels etc. Libraries Debts Advice Services On line schemes General benefit support servicesOne stop shops Tell us OnceFamily Carers Other Claimants Word of mouthEtc GasWaterElectricEtc

SuppliersE/Rs Local Education servicesCareers advice services Etc

#Payment Exceptions - Vulnerability & Risk FactorsHousing Costs for Payment Exceptions are built on the existing LHA guidance used by LA Benefits administration team today

The framework, process and guidance has been developed in partnership with the Local Authorities and Housing Associations from the 6 Direct Payment Demonstration Projects and the Support & Exceptions Working Group, our external advisory group

Private landlords are represented on the SEWG by the Scottish Association of Landlords/RLA partnership and the NLA.#40High3Drug and/ or alcohol problem (not supported/ in treatment)3Learning difficulties (including issues with illiteracy and/or innumeracy).3Has current debt problems (not managed) 3Supported Accommodation3Homeless (PWA, NFA or transient circumstances)3Domestic Violence3Mental Health illness / behavioral disorder3Asylum Seeker/ RefugeeMedium 2Drug and/ or alcohol problem (supported/ in treatment)2Has current Social Fund / Crisis loan debt (up to the max amount)2Currently in rent arrears (below automatic trigger level)2Third party deductions (e.g. fines, utility arrears etc)2Has a registered Carer and/or help from other supporting people2Previous eviction for rent arrears or failed tenancy2Claimant is young (hardship cases) / NEET s Low1No bank account 1History of rent arrears1Previously homeless 1Other disability (e.g. physical disability, sensory impairment etc).1Claimant has just left prison1Claimant has just left hospital1Recently bereaved1Language skills (e.g. English not spoken as the first language).1Ex Service personnel (discharged within 12 months)Enablers- 1Partial HB (i.e. already managing part of rent)- 1Has an active bank account (including POCA)- 2In work or recently in work - 3Has savings (above a set threshold)Triggers - InternalTriggers External

High Level Process1 Claimant 2 Claimant Representative4 Business Knowledge DWP, HMRC, LAs3 Creditor e.g. Landlord or Utility Co.Apply for PEBudgeting Support Risk Scoring -Above Threshold Score? Y/N Decision Making Exception

Yes or No?Implement ExceptionNoyesReview until moving to BSyesNoRefer for PEJoint data gather for assessmentAssessDecideReviewof most interest to landlords#41Financial Support Summary - a differentiated support propositionSegment 1 4CapableSegment 5 - 6Some CapabilitySegment 7 9Less capableFinancial ProductCurrent High street provision likely to be adequate.May benefit from a new UC budgeting account Will benefit from a new UC budgeting account Budgeting SupportAny support needs they have can be met through on-line provision May need one-off support to get new account established

Will need support to get new account established & ongoing Payment ExceptionUnlikely to be neededUnlikely to be neededWill be needed by a sub-group.ChannelMainly on-lineMixed channel Mainly F2F#What this means for private landlordsIn many ways you have already made the change via the Local Housing Allowance (LHA) Housing Costs for Payment Exceptions are built on the existing LHA guidance used by LA Benefits administration team today, based on enhancement agreed as part of the Direct Payment Demonstration Projects Arrangements as to how Landlords will be able to contact UC are yet to be finally determined we are clear there will be a requirement for this e.g. in cases where the arrears trigger is reached

#Next StepsScottish Government have recently set up a Scottish equivalent of the SEWG I mentioned previously

This is being administered by the SGs Welfare Reform Division and supported by DWP

Its inaugural meeting was on the 26th of October

We are arranging for SAL to join this group to make sure you are engaged moving forward#Universal Credit - Budgeting Support

Scottish Association of Landlords

Graham Mowat, UC Programme, DWP #


Lunch is served in the Stratosphere areaProgramme resumes 13.30hrs

Please visit our exhibitors stands

Sponsors:



Sponsors:

Review of PRS market

Dan CooksonCitylets

Sponsors:

Today:

Brief summary of independent research Citylets commissioned on PRS Key Findings from our Quarterly Reports Brief summary of Optilet our Web based research and analysis toolA review of Citylets growth

How well has your current rental property been managed by your letting agent / landlord?

79% quite well or very well (Agent managed)86% quite well or very well (Landlord managed)

How fairly do you feel you have been treated as a tenant during your tenure there? 88% quite fairly or very fairly These figures compare very favourably with equivalent surveys of social housing tenants.

Independent Research commissioned by Citylets in 2011(George Street Research Base 1003 PRS tenants in Scotland)

Size of Private and Social Rented SectorsPRS v Council (LA) v HAs

PRS = HA = LAPRS = HA + LAPRS > 2 x (HA + LA)PRS has doubled in scale over the last decade and is now comparable with both Housing Association and Council Sectors

Market keeps management costs down Based on management fee of 10% of rent - Letting Agents are charging on average 806 per annum per propertyHousing Associations management fees are on average 1,024 per annum per property (and HAs have less than a quarter of PRS new lettings volume to deal with)

Source: The Scottish Housing Regulator Registered Social Landlord Annual Performance and Statistical Return 2010-11 and the Accounts Consolidation System 2011PRS is highly competitive which is why rents and management fees have been increasing at less than the rate of inflation.Useful to compare costs with social sector.

Citylets Quarterly ReportBumper Issue 23 is just outDerived entirely from data entered by agents and landlordsEmpirical not sentiment basedContinually evolving (e.g. Volume index) Expanding geographical coverage (e.g. Fife)Recognised as the definitive source of info. on the PRS and regularly covered in Press

Our analysis is making the news..

Im afraid to say our statistics are not quite as dramatic as the headlines would have you believe!

Trends in Average Monthly Rent

672 is indeed a new highAnd so to the latest report. Average mix adjusted rents reached a new high forScotland of 672 in the third quarter of 2012, thoughthis represented an increase of just 1.0% on the sameperiod in 2011

Trends in Volumes of Lettings on Citylets

UPThe 3rd quarter is invariably the busiest of the year and volumes of properties let via Citylets are up

Trends in Scottish House Prices and Volumes

VOLUMES FLATPRICES FLATAverage house prices across Scotland are flat but these national figures conceal the trends for specific property types and specific locations

Trends in House Prices and Volumes

Average Price for flats fell 4.3% in Q3 2012 while overall average house price fell 2.3% (source: Registers of Scotland)

Note that Average Prices for flats have fallen faster than the overall average house price. This is something we will track in forthcoming reports

Trends in Urban House PricesEdinburgh is the most expensive city re Average House PricesAberdeen has seen biggest increase over 10 years

Trends in House Prices and RentsUPFLATThis chart shows that since 2011 rents have climbed steadily while house prices have remained flat

Rent UP 14%CPI and House Prices UP 24%Mind the GapInflation as measured by Consumer Price Index is growing faster than PRS in Scotland so in real terms rents are not going up.

FTSE up by just 3.9% since Jan 2006

Trends in TTLTTL FLATTime to Let is broadly flat

Trends in Aberdeen Rental Market

TTL downDemand is booming as seen by the steadily declining Time to Lets figuresRents for 3 bed properties in Q3 were 1,233, up by 7.5% on the year.2 bed properties are the most popular and experienced annual rent increases of 2.6% over the year to 833

Trends in Edinburgh Rental Market

Edinburgh Rental Map

Glasgow Rental Map

OptiLetSomething Gumtree doesnt offer!!For those that need to know whats going on now we have Optilet.

OptiLet gives you the tools to be the expert on the marketOptilet designed to assist landlords and agents set the right rent using the most comprehensive analysis of the most recent market data. Online reporting engine provides similar analysis to our report but at local level. You are the expertAs of today can be found in the client admin area for agents or landlords Come for a live demo at the Citylets stand

http://www.citylets.co.uk/admin2/compare.aspx

Growth in advertised properties

Our report is based entirely on the properties that are advertised on Citylets and as these volumes have increased we have been able to enhance our report accordingly

Visitor traffic now double 2009 figures & treble 2007 figures (source: Google Analytics)

Growth is accelerating

Over 3 million visitors per year (source: Google Analytics, Nov 11-Oct 12)Growth in site traffic Growth in visits to the site has been exponential

Growth and Brand Development According to Global competitive intelligence agency, Experian Hitwise, we are officially the No.1 dedicated residential lettings site operating in the UK by visitor numbers

Growth and Brand Development

STV reaches 93% of the Scottish adult population

Around 1000 TV adverts aired by Citylets in 2012

(Our growth and brand development has in part been made possible with our tie up with STV in June)(not a bad partner to have!)

Share of visitors to Scottish lettings sites

44%37%19%36%36%29%

Citylets: Market leader in Scotland

Citylets is the No 1 search phraseCitylets used more often than any generic phrase such as flats to rent in Edinburgh(Citylets seems to have caught on as a brand name with the word Citylets by far the most popular search term used by people looking for property to rent in Scotland )(looking at searches made delivering traffic to the Scottish lettings portals, Citylets used more often than any generic phrase such as flats to rent in edinburgh)(Citylets is also recording about 3 times more brand searches than nearest competitors)

Citylets recording almost 3 times more brand searches than nearest direct competitor

2012 has been a very exciting year for Citylets and the sector.We look forward to helping you make 2013 even more successful.Thank you.2012 has been a very interesting year for Citylets and the sectorWe look forward to helping you make 2013 even more successful.Thank you and as ever if any of you have any specific questions please do come and visit us at our stand



Sponsors:

Property Factors Act

Frances MurphyScottish Government

Sponsors:

Property Factors (Scotland) Act 2011Frances MurphySenior Policy OfficerPrivate Housing Services Policy Team

6 November 2012What is the Property Factors Act?Who does it affect?What new obligations does it place on property factors?What new protections does it give homeowners?Current position on implementation of the Act

Content85What is the Property Factors (Scotland) Act 2011?A Members BillRoyal assent April 2011, in force 1 October 2012Aims:Set minimum standards of practiceProtection for homeowners who use servicesMain elements:Register of property factorsCode of Conduct Homeowner Housing Panel.

86Who does the Act affect?Property FactorsDefined in section 2Private sector, housing associations, local authoritiesWho manage common parts, owned by more than 1 person, used for residential purposes.HomeownersDefined in section 10Would include owner-occupiers, private and social residential landlordsNot tenantsProperty Factor RegisterWhat is it?Compulsory - operating unregistered is a criminal offenceBusiness details, Responsible/Relevant Persons details, houses/flats/land factored to be specified Publicly availableFit and Proper Person test to be passedApplication fees - 370 for larger factors, 100 for small for 3 yearsRegistration expires every 3 years.Property Factor RegisterCurrent ProgressOnline system accessed through SG website250+ organisations made initial application by 1 OctoberHelping some to fully completeChecking and approval process well advancedAbout 85 now approved and on public registerRemainder to be approved in batches asap

Code of ConductRequirements and ProgressRequirements in the Act:Minimum standards of practice that all property factors must comply withMinisters must prepare a draft Code and publicly consult on itFinal version to be brought into force by approval of ParliamentProgressFinal version published 13 July 2012 (unchanged from April 2012 version)Effective from 1 October 2012

Code of ConductWhats in it?Written Statement of ServicesCommunication and ConsultationFinancial ObligationsDebt RecoveryInsuranceCarrying out Repairs and MaintenanceComplaints ResolutionHomeowner Housing PanelWhat is it?New dispute resolution systemBased on an expansion of the existing Private Rented Housing Panel (PRHP)Able to consider complaints from homeownersFree to homeownersCan issue property factor enforcement orders non-compliance a criminal offence.

Homeowner Housing PanelHow do I access it?Two grounds:Failure to comply with CodeFailure to carry out property factors dutiesNotify the property factor in writingAllow property factor reasonable opportunity to resolve issue complaints procedureUseful info on HoHP website application forms, guidance for applicants etc

Links & Contact DetailsLegislation - Property Factors (Scotland) Act 2011 and associated secondary legislationhttp://www.legislation.gov.uk/asp/2011/8/contents

Scottish Government website Property Factors Act pages - Links to:Code of ConductProperty Factor RegisterHomeowner Housing Panel (HoHP)http://www.scotland.gov.uk/Topics/Built-Environment/Housing/privateowners/propertyfactors/2011Act

Frances MurphySenior Policy OfficerPrivate Housing Services Policy Team0141 271 [email protected]



Sponsors:

Yield: protection by it, retirement on it

Stuart Law, Assetz

Sponsors:

Presented by Stuart Law, CEO of Assetz plcYield - how to retire on it and how it protected us all during the credit crunch98AgendaBasic Principles of Sound Property Investment Plan Ahead Two Types of Investment Property Income and GrowthGenerators (purchased for income) Accelerators (purchased for growth)A Balanced PortfolioPortfolio Stability How to build a safe, high-income property portfolio99Basic Principles of Sound Property InvestmentKeep to an income-centric, long-term and realistic strategyHave an end goal in mind Ensure your investments are underpinned by rental yield and demandTreat property as a long-term investment in order to reduce risk and maximise potential returnsInvestments should be cash flow positive wherever possibleBuy with your head, not just your heartHow to build a safe, high-income property portfolio100Plan AheadDesign a plan to meet your specific goals - Adopt a thought-through, well-directed strategy from the outsetWith careful planning, you can retire in a reasonable timeframe with a reliable, rental income-indexed incomeA plan saves time in the long run and reduces the chances of an unproductive investmentEach property purchase can be evaluated for what value it brings to the plan and for its level of riskBe realistic start with a relatively modest level of income in mindPlan can then be modified in line with any windfallsHow to build a safe, high-income property portfolio101Two Types of Investment Property Income and Growth Property primarily purchased to generate long-term reliable income or yield (that we call Generators). If the rental income is based upon robust tenant demand then it can be highly predictable and can be classed as a true income-producing investment.

Property primarily purchased for capital growth to potentially accelerate a retirement date (that we call Accelerators). As growth cannot be guaranteed, particularly in the short term, these are essentially speculative purchases.How to build a safe, high-income property portfolio102Generators (purchased for income) Capital value directly related to rental incomeTend to be bought to provide a secure, hassle-free retirement incomeA reliable NET yield & minimal hands-on involvement are keyExamples can include purpose-built student accommodation, hotel suites, commercial and industrial units, etc.Must generate strong enough net yield to service mortgage, pay other costs and tax, and repay the debt on the property in reasonable timeframeHow to build a safe, high-income property portfolio103Generator with repayment mortgageHow to build a safe, high-income property portfolio

104AcceleratorsTypically offer higher growth rates but lower rental yieldsUsually require more involvement from investor / landlordExcellent return on capital invested over long termRental income covers mortgage payments and on-going management and maintenance costsWith todays reduced prices and booming rents, high yields can also be achieved but potential for medium- to long-term capital growth remainsUK residential properties - especially when bought at discounted prices in places with high demandProperty trading or refurbishment profitsHow to build a safe, high-income property portfolio105Accelerator with interest only mortgageHow to build a safe, high-income property portfolio

106A Balanced PortfolioBuild a balanced portfolio that reflects your risk profile and investment timescaleYounger investors may take more risk through bias towards Accelerators Those with less time and greater need for certainty should bias towards good-quality Income GeneratorsCarefully blend the two for a portfolio that performs well in growth years and provides good returns and safe income in periods of capital growth stagnation or fallsHow to build a safe, high-income property portfolio107A Balanced PortfolioHow to build a safe, high-income property portfolio

108A Balanced PortfolioHow to build a safe, high-income property portfolio1520109A Balanced PortfolioKey to reliable, index-linked income for retirement is a core of hands-off, high-income and relatively inflation-proof Income GeneratorsAccelerators are intended to be sold off in future capital used to repay remaining debt on generators earlyAny excess capital raised represents an additional lump sumInvestor is left with a completely debt-free, income-generating portfolioHow to build a safe, high-income property portfolio110Portfolio StabilityOver-reliance on capital growth and Accelerators can produce little return and indeed losses in periods where property prices stagnate or fall potentially disastrousPortfolio biased towards income-generating properties can sail through periods of property price weaknessOwners of this type of property need not concern themselves with day-to-day property prices No intention to sellA good mix will produce optimal results in minimal timeframeA 15-year timeframe, for example, will almost certainly produce some capital growth in order to repay the Generator debt earlyHow to build a safe, high-income property portfolio111Thank you

www.portfolio.assetz.co.uk112


Refreshments are served in the Stratosphere areaProgramme resumes 15.15hrs

Please visit our exhibitors stands

Sponsors:

Energy efficiency in private rented homes

Ewan FisherEnergy Saving Trust

Sponsors:

Green Deal and ECO in Scotland

Ewan FisherEnergy Saving ScotlandGreen Deal Advisor 6th November 2012R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Scottish wider policy contextSustainable economic growthClimate Change (Scotland) Act 2009 Energy Efficiency Action PlanFuel poverty 2016Sustainable Housing StrategyNational Retrofit PlanEnergy efficiency standard for social housing

116R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth is the Scottish Governments central Purpose A major driver across all new policy development in Scotland is the CCA which received wide cross-party support in the Scottish Parliament and sets a statutory target of an 80% reduction in emissions by 2050In 2010 Scottish Govt published EEAP which sets out what needs to be done to reduce Scotlands energy consumption by 12% by 2020Scottish Government target to reduce fuel poverty as much as reasonably practicable by 2016The Scottish Government has just consulted on its vision for warm, high quality, affordable, low carbon homes and a housing sector that helps to establish a successful low carbon economy across Scotland, which includes:A national retrofit programme to tackle fuel poverty, make sure the climate change milestones set for housing are reached and to enable Scottish households and businesses to get maximum benefit from energy company and other investment (including ECO and Green Deal).In parallel, the Government is consulting on the proposed Energy Efficiency Standard for Social Housing (EESSH) to further improve the energy efficiency of social housing in Scotland

116Green Deal and ECOFramework set by Energy Act 2011 UK Government policiesOperational Autumn 2012Working closely with DECC to ensure Scottish circumstances taken into accountDECC consultation response published 11 June

117R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Energy Act sets out the framework for the Green Deal and ECOThe Scottish Government has been working closely with DECC on ECO development and Green Deal. The Green Deal & ECO were consulted on at the end of last year, beginning of this year and the UK Governments response was published in June. 117Green Deal in Scotland

R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183118Green DealUKs commitment to encourage energy efficiency improvements paid for by savings from energy billsProgramme to encourage installation of energy efficiency technology in the homeLaunch of Green Deal in October 2012

Agreement to package of measures that pays for itself over time Golden Rule119R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183this is a new way to finance energy efficiency improvements to homes and businesses and as a policy driven and delivered by the market, companies and consumers will decide whether or not to participate.DECC have said that everyone will be able to apply for Green Deal finance

119How will Green Deal work in Scotland?Available across Great Britain, including in ScotlandAnyone can applyThe Green Deal customer journey will remain the same

120R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183No major differences in the mechanism of how it is delivered in Scotland 120The customer journey121Remote Advice is provided by the ESSac networkRemote AdviceFree impartial advice for consumersAssessmentUp front survey and adviceFinanceNo upfront costInstallationAccreditation standardsRepayments Through energy bill savingsGreen DealEnergy Company ObligationR 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183This shows a simplified model of the Green Deal customer journey.

Highlight that there is a source of free & impartial advice for consumers on (amongst other things) Green Deal & ECO and that EST / the ESSACs will be delivering that service in Scotland.

Give a brief outline of how ECO fits in here: remote advice service will provide advice and help vulnerable people access support through ECO; plus there is an ECO element of support to longer-payback measures such as solid wall insulation under Green Deal which will be explained later

121The customer journey remote advice122Remote Advice is provided by the ESSac networkRemote AdviceFree impartial advice for consumersAssessmentUp front survey and adviceFinanceNo upfront costInstallationAccreditation standardsRepayments Through energy bill savingsGreen DealEnergy Company ObligationR 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Independent and impartial advice via telephone and internet.Signposting service to other parts of the Green Deal e.g. advice, installation etc. Remote advice can be utilised at any point in the customer journey for advice and assistance with any of the stages.

In Scotland the ESSac network provides impartial and independent advice to consumers on Green Deal and ECO as well as on Scottish Government Programmes such as the Energy Assistance Package.

We also provide signposting and referral to local schemes, such as the local authority free insulation schemes.

The ESSacs are the one-stop portal for consumers and provide consumers with advice on all the programmes and schemes they could benefit from as well as providing energy advice directly, for example on changing behaviour to reduce energy costs. So for example, someone calling about Green Deal may get advice on other programmes too, such as free cavity wall insulation available through the local authority scheme.

The ESSacs advise consumers on measures appropriate to their home and the benefits of these.

The ESSacs will provide assistance to consumers at any stage of the Green Deal process and are p122The customer journey - example123Customer interestAssessmentQuoteAccept quoteInstallation & afterCan happen at the same visitimpartial assessors work out what households needCustomers choose what work they want done

Quotes are personal and include subsidies

Installers

Costs charged to electricity bill

Stays with home if move

R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183123The customer journey installation and after124Customer interestAssessmentQuoteAccept quoteInstallation & afterCan happen at the same visitInstallation Accredited installers carry out work to clear standard. Sign off work once complete and inform GD Provider that repayments can begin.

Repayments and follow up Payments collected through energy bills with Green Deal charge a separate line on the bill Continuing support from the Green Deal Provider throughout Customer is free to switch energy supplierR 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183124

Approval and the Green Deal Quality MarkDECCOversight BodyBSI PAS Installer Standard / Advisor StandardGreen Deal Code of PracticeUKAS Accrediting standards(Accredited) Certification BodiesApproved (Certified) Advisors & InstallersIssues Quality Mark

R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183125

What fails the Golden Rule...

Under-heating households (who are poor or vulnerable)

Hard to treat properties

R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183ECO will allow activity in these areas126Energy Company Obligation

R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183127Energy Company Obligation (ECO)UK Government places obligations on energy suppliers to meet targetsECO replaces CERT & CESPCould be worth around 120m to Scotland each yearSplit into 3 separate targets

128R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183ECO is available to the domestic sector only It is not a pool of money that Govt uses to deliver measures. DECC expect overall spend by suppliers on meeting their targets to be approx 1.3bn a year.If suppliers spend all of this and if they spend 9% in Scotland this would equate to around 120m in Scotland per yearThe 3 targets is actually a revision following the consultation which Ill explain in more detail now.

128Energy Company Obligation (ECO)Target 1: Affordable WarmthHeating & insulation for poor & vulnerable

Target 2: Carbon Saving CommunitiesLoft, cavity & other insulation measures for poorest areasIncludes social housing

Target 3: Carbon Saving Solid wall & hard to treat cavities, plus packages

129R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Target 2 Most deprived areas.Bottom 15% Lower Super Output Areas from the Scottish Index of Multiple Deprivation (with flexibility of up to 20% in adjacent areas)And, suppliers will be obliged to deliver 15% of this target to rural, low income households in settlements with a population size of under 10,000.The level of Carbon Saving Communities overall will be about 20% of the carbon saving target, representing around 190m per year, GB-wide.

129ECOScored in terms of carbon or bill savings over the lifetime of the measures installedNo interim targetHard to treat cavitiesAffordable warmth measuresDistrict heatingRole of OfgemR 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183As well as the three targets Ive just mentioned some of the key points about ECO are:Scores will be calculated based on property specific information rather than deemed scores so will reflect the benefits over the expected lifetime of the measures installedThere will be no interim target, as the initial obligation period runs for 30 months.As a result of lobbying by SG, DECC have agreed to include non-standard cavity measures within the carbon saving element of the ECO which is a major change from their initial solid wall only original position. Now any measure that reduces the notional cost of heating a property will be eligible for support under the AW element of ECO, including boiler repairs.District heating will in some circumstances be supported by both the carbon saving and affordable warmth elements of ECO.Consultation on in-use factors in late summerOfgem will be the initial ECO administrator from 1 October 2012 to 31 March 2015 when this will be reviewed.

A lot of lobbying by Scottish Government to get to this point i.e. a stronger focus on fuel poverty, including hard to treat cavities as well as solid wall treatments, area based lofts & cavities, regional element of the assessment (climate included in rdSAP).

ECO subsidy for low income communities and fuel poor households providing heating and insulation measuresECO carbon subsidy and Green Deal will deliver measures to hard to treat housingGreen Deal supports the measures that meet the golden rule- further loft insulation- cavity wall insulationGREEN DEAL ECO Green Deal and ECO InteractionR 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183131Green Deal in private rented sector46 per cent of landlords say they are aware of the Green Deal and 56 per cent of those landlords aware of it, are considering taking advantage of the energy initiative.Research carried out by the Scottish Association of Landlords September 2012 132R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183132John Blackwood, Policy and Parliamentary affairs director of the Scottish Association of Landlords, says:'Whilst our research shows that many landlords are keen to take advantage of the Green Deal, a third of landlords are not yet aware of the initiative. We encourage landlords to become familiar with the Green Deal as the private-rented sector has a key role to play in ensuring Britain meets its energy targets'Furthermore, it is imperative that landlords future-proof their properties and their investments. The Green Deal is their opportunity to improve the quality of their properties and demonstrate their ability to engage with government initiatives without the burden of further regulation.133R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183133Green Deal in private rented sector63 per cent of landlords say they are aware of the Green Deal and 56 per cent of landlords are considering taking advantage of the energy initiative.

***RESEARCH BY SAL*** 134R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183134John Blackwood, policy and parliamentary affairs director of the Scottish Association of Landlords says:

135R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183135Where do I start?Contact us at the Energy Saving advice centre on 0800 512012R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183Highlight:impartial advice, consumer protectionmeasures and benefits,Green Deal and ECO in ScotlandQuestions?

137R 0 G 169B 224R 79G 45 B 127R 207 G 0B 114R 199G 172B 150R 237G 41 B 57R 194 G 172B 190R 41G 153 B 38R 254 G 209B 0R 225G 216B 183137



Sponsors:

Letting law update

Andrew CowanTC Young solicitors

Sponsors:

HOUSING LAW UPDATEAndrew CowanTC Young LLPNotices of Repossession (s34)No requirement to serve a Form AT6 when repossessing a property under section 33 of the Housing (Scotland) Act 1988(the compulsory repossession route)

Previously was a grey area

Yet to come!AdvertisingDisqualification OrdersOvercrowding Rights of accessTenant Information PackPremiums AdvertisingMust include landlord registration number on an advert to let property or state landlord registration pendingDoes not apply to a To Let board at or near the house concerned Disqualification OrdersWhere a landlord is convicted of letting a property while unregistered or attempts to let while unregistered Court may impose a Disqualification Order Prohibits the landlord from being registered by any Local AuthorityPeriod of up to 5 yearsRight of appealOvercrowding LA can serve an Overcrowding Notice on landlord Notice specifies steps required to be taken by the landlord to resolve overcrowding and a time period in which to do soMust be reasonable and proportionateNo definition of overcrowding LA looks at adverse effects on health or wellbeing of any person or on the amenity of the house or its locality Rights of AccessApplication by a landlord to the Private Rented Housing Panel (PRHP) for assistance in gaining access to a propertyPart 9 of Housing (Scotland) Act 2006Access to enter the house to view its state and condition or to comply with a Repairing Standard Enforcement Order Still need a warrant to enter which is applied for by the PRHP quicker and easier than current court routeTenant Information PackConsultation held in May 2012Landlords duty to provide to tenant no later than the start date of the tenancyTick list of items to be provided to the tenant and signed by both tenant and landlord Guidance notes also to be provided (to be found on the Scottish Government website)Failure to comply will be a criminal offence with a penalty of up to 500 finePremiums Changes come into effect on 30 November 2012Consultation was held in MayCurrent definition of a premium under Section 90 of the Rent (Scotland) Act 1984Any fine or other sum and any other pecuniary consideration in addition to rent Section 32 of the 2011 Act amends the definition to clarify that a premium meansAny fine, sum or pecuniary consideration, other than rent, and includes any service or administration fee or chargeHOHPCOMPULSORY REGISTRATIONCODE OF CONDUCTWRITTEN STATEMENT OF SERVICESHOHP DISPUTE RESOLUTIONAny Questions?Closing remarks

Stephen PeasnallChairman, Scottish Association of Landlords &Louise BatchelorConference guest chair



Thank you for comingSee you next year

Sponsors:

Chart33536000350417.60346245.47360340999.85684960334591.3229371860326924.4327221790317897.3646781920307401.5230654110295321.1230838050281532.7516882040265904.9026718960248297.4845467620228561.299664950206537.4929394910182056.9684286790154939.7719513620124994.437797121092017.2974863801055791.7484205235016087.4801406510077378.9286508204081634.7697266155086124.6820615794090861.5395749662095858.92425158940101131.1650854270106693.3791651250112561.5150192070118752.3983452640125283.7802542530132174.3881682370139443.979517490147113.398390952

MortgageRetirement Income On Generator AloneYearMortgage Balance/ IncomeMortgage Balance and Rental Income Over Time

Sheet1Growth in Rent5.50%Management15%Growth in Value5.00%Voids0weeksMortgage rate6.00%service0Starting Value416,000Tax rate40%Yield7.50%Deposit15%Inflation2%GeneratorsYear01234567891011121314151617181920212223242526272829303132Mortgage353600350,418346,245341,000334,591326,924317,897307,402295,321281,533265,905248,297228,561206,537182,057154,940124,99492,01755,79216,0870.00.00.00.00.00.00.00.00.00.00.00.00.0Interest21216210252077520460200751961519074184441771916892159541489813714123921092392967500552133489650000000000000Yield31,20032,91634,72636,63638,65140,77743,02045,38647,88250,51653,29456,22559,31862,58066,02269,65373,48477,52681,79086,28891,03496,041101,323106,896112,775118,978125,522132,425139,709147,393155,499164,052173,075Service0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.0Net yield26,52027,97929,51731,14132,85434,66136,56738,57840,70042,93845,30047,79150,42053,19356,11959,20562,46265,89769,52173,34577,37981,63586,12590,86295,859101,131106,693112,562118,752125,284132,174139,444147,113Net profit5,3046,9548,74310,68112,77815,04517,49320,13422,98126,04629,34632,89436,70640,80145,19549,90954,96260,37666,17472,38077,37981,63586,12590,86295,859101,131106,693112,562118,752125,284132,174139,444147,113After tax profit3,1824,1725,2466,4097,6679,02710,49612,08013,78815,62817,60719,73622,02424,48127,11729,94532,97736,22639,70443,42846,42748,98151,67554,51757,51560,67964,01667,53771,25175,17079,30583,66688,268Retirement Income On Generator Alone0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.077,37981,63586,12590,86295,859101,131106,693112,562118,752125,284132,174139,444147,113Value416,000436,800458,640481,572505,651530,933557,480585,354614,621645,353677,620711,501747,076784,430823,652864,834908,076953,4801,001,1541,051,2111,103,7721,158,9601,216,9081,277,7541,341,6421,408,7241,479,1601,553,1181,630,7741,712,3121,797,9281,887,8241,982,216Value100000Acc Mort Rate5%service400Deposit15%Gross Yield5.50%voids4management12%AcceleratorYear01234567891011121314151617181920212223242526272829303132Mortgage8500085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,000Interest425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250Yield5,5005,8036,1226,4586,8147,1887,5848,0018,4418,9059,3959,91210,45711,03211,63912,27912,95413,66614,41815,21116,04816,93017,86118,84419,88020,97422,12723,34424,62825,98327,41228,91930,510Service400408416424433442450459469478488497507517528538549560571583594606618631643656669683696710725739754Net yield4,0684,3054,5564,8225,1025,3975,7106,0406,3886,7567,1447,5547,9878,4448,9269,4369,97310,54111,14111,77312,44113,14613,89114,67615,50616,38117,30518,28019,30920,39621,54222,75224,030Net profit-182553065728521,1471,4601,7902,1382,5062,8943,3043,7374,1944,6765,1865,7236,2916,8917,5238,1918,8969,64110,42611,25612,13113,05514,03015,05916,14617,29218,50219,780After tax profit-109331843435116888761,0741,2831,5031,7361,9822,2422,5162,8063,1113,4343,7754,1344,5144,9155,3385,7846,2566,7537,2787,8338,4189,0369,68710,37511,10111,868Value100,000105,000110,250115,763121,551127,628134,010140,710147,746155,133162,889171,034179,586188,565197,993207,893218,287229,202240,662252,695265,330278,596292,526307,152322,510338,635355,567373,346392,013411,614432,194453,804476,494Equity15,00020,00025,25030,76336,55142,62849,01055,71062,74670,13377,88986,03494,586103,565112,993122,893133,287144,202155,662167,695180,330193,596207,526222,152237,510253,635270,567288,346307,013326,614347,194368,804391,494Equity after tax on Accelerators15000188002279026980313783599740847459405128756901627966898675485823098947596999104898113193121903131048140651150733161320172436184108196363209231222743236930251826267468283891301136Retirement Income using Accelerator-182553065728521147146017902138250628943304373741944676518657236037666174723807737981635861259086295859101131106693112562118752125284132174139444147113Equiv annuity on Accelerator75094011401349156918002042229725642845314034493774411544744850524556606095655270337537806686229205981810462111371184612591133731419515057

Sheet1000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

MortgageRetirement Income On Generator AloneEquity after tax on AcceleratorsRetirement Income using AcceleratorYearMortgage Balance/ IncomeMortgage Balance and Rental Income Over Time

Sheet2000000010000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

YearInterestYieldServiceNet yieldNet profitAfter tax profit#REF!Retirement Income On Generator Alone

Sheet3000000000000000000000000000000000000000000000000000000000000000000

Stuart Law:needs taper relief doing properlyEquity after tax on AcceleratorsYearEquity ...Equity After Tax On Accelerators Over Time000000000000000000000000000000000000000000000000000000000000000000MortgageRetirement Income On Generator AloneYearMortgage Balance/ IncomeMortgage Balance and Rental Income Over Time

Commercial Syndicate Trading CalculatorOffice Building - Buy off plan, then tenant and hold - no refinancing assumed70%Mortgage Sought624,750Mortgage amount54,579Repayment Mortgage pa approx6.20%Mortgage Rate20Number of years mortgage originally planned for (see below for reduced term possible with higher repayments)5250sq ft$170.00Purchase Cost per sq ft$14.50Rent per sq ft to be achieved8.53%Gross prospective yield76,125Total Rental income target892,500Building Purchase Price31,238Syndicate Costs3.5%35,700Stamp Duty4.0%6,248Mortgage Fee1.0%11,419Letting Fee15.0%of first years rent84,604Total Purchase Costs9.48%977,104Total Purchase Price352,354Total Cash required as deposit and costs53,723One years mortgage costs and rates recommended as spare cash available406,077Total Cash needed from Investors45%16.2Approx number of years for mortgage to be paid off assuming no rent rises or further voids after initial tenancyThis assumes a40%tax rate on the investors (0% if all investors are in a pension)139%The rent is this much more than the mortgage cost per month (safety margin and allows mortgage paid off faster)Allowing for void/ rent free period after completion :35,816Cost of Void/ rent free period8Void/ Rent free months17,908This cash will be returned to (be required from if negative) investors and the excess cashflow from the rent will beused as a cash cushion/ pay off the mortgage over less than the original number of years planned388,169New net cash invested into syndicate$0.20Cash Return for investors per invested in todays money assuming no rent rises above inflationFor each$10,000invested the member may receive around1,961in approx todays money pa once the mortgage is paid off.In addition each investor owns a share in the building. For each$10,000invested originally the building would be worth50,731assuming an annual capital gain of5%once the mortgage is paid off in16.22yearsThis level of return means that the investor has made a compound growth on their original invested funds in capital value terms of10.5%per year on their original investment3228Mortgage Interest Cost per month952Rates Cost per month estimate298Insurance per month4477Total Void Costs per monthAll costs and returns are estimates.E&O.E.Property prices and rents may go down as well as up.Any rental voids and rent free periods in future leases will lead to a loss of income in future years

Chart215000188002279026979.531378.47535997.3987540847.268687545939.63212187551286.613727968856900.944414367262795.991635085668985.791216839875485.080777681882309.33481656689474.801557394396998.541635264104898.468717027113193.392152879121903.061760522131048.214848549140650.625590976150733.156870525161319.814714051172435.805449754184107.595722241196362.975508353209231.124283771222742.68049796236929.814522858251826.305249001267467.620511451283891.001537023301135.551613874

Equity after tax on AcceleratorsYearEquity ...Equity After Tax On Accelerators Over Time

Sheet1Growth in Rent5.50%Management15%Growth in Value5.00%Voids0weeksMortgage rate6.00%service0Starting Value208,000Tax rate40%Yield7.50%Deposit15%Inflation2%GeneratorsYear01234567891011121314151617181920212223242526272829303132Mortgage176800175,209173,123170,500167,296163,462158,949153,701147,661140,766132,952124,149114,281103,26991,02877,47062,49746,00927,8968,0440.00.00.00.00.00.00.00.00.00.00.00.00.0Interest1060810513103871023010038980895379222886084467977744968576196546246483750276116744830000000000000Yield15,60016,45817,36318,31819,32620,38921,51022,69323,94125,25826,64728,11329,65931,29033,01134,82736,74238,76340,89543,14445,51748,02050,66253,44856,38859,48962,76166,21369,85473,69677,75082,02686,537Service0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.0Net yield13,26013,98914,75915,57016,42717,33018,28319,28920,35021,46922,65023,89625,21026,59728,05929,60331,23132,94834,76136,67238,68940,81743,06245,43147,92950,56653,34756,28159,37662,64266,08769,72273,557Net profit2,6523,4774,3715,3406,3897,5238,74710,06711,49013,02314,67316,44718,35320,40022,59824,95427,48130,18833,08736,19038,68940,81743,06245,43147,92950,56653,34756,28159,37662,64266,08769,72273,557After tax profit1,5912,0862,6233,2043,8334,5145,2486,0406,8947,8148,8049,86811,01212,24013,55914,97316,48918,11319,85221,71423,21424,49025,83727,25828,75830,33932,00833,76835,62637,58539,65241,83344,134Retirement Income On Generator Alone0.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.00.038,68940,81743,06245,43147,92950,56653,34756,28159,37662,64266,08769,72273,557Value208,000218,400229,320240,786252,825265,467278,740292,677307,311322,676338,810355,751373,538392,215411,826432,417454,038476,740500,577525,606551,886579,480608,454638,877670,821704,362739,580776,559815,387856,156898,964943,912991,108Value100000Acc Mort Rate5%service400Deposit15%Gross Yield5.50%voids4management12%AcceleratorYear01234567891011121314151617181920212223242526272829303132Mortgage8500085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,00085,000Interest425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250425042504250Yield5,5005,8036,1226,4586,8147,1887,5848,0018,4418,9059,3959,91210,45711,03211,63912,27912,95413,66614,41815,21116,04816,93017,86118,84419,88020,97422,12723,34424,62825,98327,41228,91930,510Service400408416424433442450459469478488497507517528538549560571583594606618631643656669683696710725739754Net yield4,0684,3054,5564,8225,1025,3975,7106,0406,3886,7567,1447,5547,9878,4448,9269,4369,97310,54111,14111,77312,44113,14613,89114,67615,50616,38117,30518,28019,30920,39621,54222,75224,030Net profit-182553065728521,1471,4601,7902,1382,5062,8943,3043,7374,1944,6765,1865,7236,2916,8917,5238,1918,8969,64110,42611,25612,13113,05514,03015,05916,14617,29218,50219,780After tax profit-109331843435116888761,0741,2831,5031,7361,9822,2422,5162,8063,1113,4343,7754,1344,5144,9155,3385,7846,2566,7537,2787,8338,4189,0369,68710,37511,10111,868Value100,000105,000110,250115,763121,551127,628134,010140,710147,746155,133162,889171,034179,586188,565197,993207,893218,287229,202240,662252,695265,330278,596292,526307,152322,510338,635355,567373,346392,013411,614432,194453,804476,494Equity15,00020,00025,25030,76336,55142,62849,01055,71062,74670,13377,88986,03494,586103,565112,993122,893133,287144,202155,662167,695180,330193,596207,526222,152237,510253,635270,567288,346307,013326,614347,194368,804391,494Equity after tax on Accelerators15000188002279026980313783599740847459405128756901627966898675485823098947596999104898113193121903131048140651150733161320172436184108196363209231222743236930251826267468283891301136Retirement Income using Accelerator-182553065728521147146017902138250628943304373741944676249542748130188330873619038689408174306245431479295056653347562815937662642660876972273557Equiv annuity on Accelerator75094011401349156918002042229725642845314034493774411544744850524556606095655270337537806686229205981810462111371184612591133731419515057

Sheet1000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

MortgageRetirement Income On Generator AloneEquity after tax on AcceleratorsRetirement Income using AcceleratorYearMortgage Balance/ IncomeMortgage Balance and Rental Income Over Time

Sheet2000000010000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

YearInterestYieldServiceNet yieldNet profitAfter tax profit#REF!Retirement Income On Generator Alone

Sheet3000000000000000000000000000000000000000000000000000000000000000000

Stuart Law:needs taper relief doing properlyEquity after tax on AcceleratorsYearEquity ...Equity After Tax On Accelerators Over Time000000000000000000000000000000000000000000000000000000000000000000MortgageRetirement Income On Generator AloneYearMortgage Balance/ IncomeMortgage Balance and Rental Income Over Time

Commercial Syndicate Trading CalculatorOffice Building - Buy off plan, then tenant and hold - no refinancing assumed70%Mortgage Sought624,750Mortgage amount54,579Repayment Mortgage pa approx6.20%Mortgage Rate20Number of years mortgage originally planned for (see below for reduced term possible with higher repayments)5250sq ft$170.00Purchase Cost per sq ft$14.50Rent per sq ft to be achieved8.53%Gross prospective yield76,125Total Rental income target892,500Building Purchase Price31,238Syndicate Costs3.5%35,700Stamp Duty4.0%6,248Mortgage Fee1.0%11,419Letting Fee15.0%of first years rent84,604Total Purchase Costs9.48%977,104Total Purchase Price352,354Total Cash required as deposit and costs53,723One years mortgage costs and rates recommended as spare cash available406,077Total Cash needed from Investors45%16.2Approx number of years for mortgage to be paid off assuming no rent rises or further voids after initial tenancyThis assumes a40%tax rate on the investors (0% if all investors are in a pension)139%The rent is this much more than the mortgage cost per month (safety margin and allows mortgage paid off faster)Allowing for void/ rent free period after completion :35,816Cost of Void/ rent free period8Void/ Rent free months17,908This cash will be returned to (be required from if negative) investors and the excess cashflow from the rent will beused as a cash cushion/ pay off the mortgage over less than the original number of years planned388,169New net cash invested into syndicate$0.20Cash Return for investors per invested in todays money assuming no rent rises above inflationFor each$10,000invested the member may receive around1,961in approx todays money pa once the mortgage is paid off.In addition each investor owns a share in the building. For each$10,000invested originally the building would be worth50,731assuming an annual capital gain of5%once the mortgage is paid off in16.22yearsThis level of return means that the investor has made a compound growth on their original invested funds in capital value terms of10.5%per year on their original investment3228Mortgage Interest Cost per month952Rates Cost per month estimate298Insurance per month4477Total Void Costs per monthAll costs and returns are estimates.E&O.E.Property prices and rents may go down as well as up.Any rental voids and rent free periods in future leases will lead to a loss of income in future years

Documents

Welcome to National Landlord Day Conference and exhibition 6 November 2012