Do you have a retirement plan? I asked myself this question twenty years ago, and back then the answer was NO. When you’re in your twenties this is the last thing you think about, you justify it by say “I’m young, I have enough time to think about my retirement”.
Haven’t you notice that as we get older, time seems to be getting shorter, then the next thing you know your in your forties fast approaching your fifties and there it is, you start to think about retirement. WOW!! how age has caught up with you. Now you panic all those questions you should have thought more deeply about in your twenties has just come full circle “what is my plan for retirement? How much do I need to live on? Will I be able to afford my bills when I retire?
When I made the decision in my twenties to use property as my vehicle to fund my pension the first thing that I did was research and educate myself, I dug deep into my research and went back to the start of property investment in the UK.
To really understand the Buy-to-Let phenomenon we need to go back to the peek in 1996- when mortgage lenders loosen the requirements on borrowing allowing people to buy properties without living in them.
This allowed individuals with surplus cash to start investing in property and renting them out, which we know today as the “Buy-to-let market” and generated an income from doing so from the profits after all property expenses were all paid. Although mortgage prices where not as favourable then as they are today this did not discourage the would-be investor as social housing was in high demand much like it is today, so -supply and demand of the private rental market was needed.
Let’s be honest here if you think getting into property investment is going to be a walk in the park think again, its hard work, you need a cashflow to start and you have to a strong resilience for all the up-and downs, but if you can hang on in there the rewards are great.
Over the years there has be a plethora for landlords in the UK some are genuine and adhere to a standard and guidelines set out by government and keep their properties in great standing, however what has also come out of this is the rogue landlords who are just in it to make a fast buck.
This has forced the Government to hit back and over the years they have tighten the rules on the Buy-to-let investor. The truth is the Government has no respect for this type of landlord they keep their properties substandard and are amateur. According to the Economist 2017 “six out of ten landlords own one property” which in fact is more hindrance than helping the economy grow. So many changes start to come into force to try and push these types of landlords out of property investment market.
2015 -Section 24-finance bill abolishment of mortgage tax relief for landlords
2016 -Stamp duty raised by 3% for those who already own a property
HMRC announced the wear and tear allowance is abolished from 6th April
2017 Tougher lending criteria on Buy-to-let mortgages
April 2017, mortgage interest will no longer be deductible when calculating your rental profits.
2018 HMO licensing will be any property occupied by five or more people, forming two or more separate households.
Local authorities have introduced the local licence scheme for landlords
The traditional landlord with a portfolio of older properties and with all the different tax changes, they may be feeling the pinch in their profits margins but will still invest. Some advanced property investors are now Building to rent (BTR) going into the space of commercial investment where they see higher returns, also to accommodate the shortfall of social housing, making this quite profitable.
Riding the storm
Demand for privately rented properties is on the increase being a savvy investor is the key to weathering the storms that comes with property investing. Three key pieces of advice is to;
- Budget carefully
- Be hands on
- Do your research.
According to letting agent Knight Frank “The private rental properties will actually grow to one in four households renting privately by 2021”. According to their figures that’s 579 million properties would be required to meet the demand.
Even though there have been great shifts in property investment since 1996 it still remains to be the best asset class you can start when considering a healthy retirement fund.
THE TRIALS AND TRIBULATIONS OF TRADERS TRADING FROM HOME
Steve Haworth, CEO of TeleWare Group
Banks had hoped to keep their London trading floors open amid the worsening coronavirus pandemic, insisting traders were “key workers”. But trading floors were quickly cleared and employees sent to work from home in isolation.
Firms needed to quickly adapt to remote working. This meant recreating the carefully monitored environment of the trading floor at thousands of sites.
With major disruption across the entire sector, it seems the Financial Conduct Authority felt no other choice but to relax regulations on recording calls. But does this measure introduce more problems than it solves?
Why call recordings are regulated
Whilst regulations differ globally, authorities in the UK, US and Hong Kong have long required trading floor phone calls to be recorded for certain activities.
In the UK, the FCA demands financial institutions keep records of all trades and transactions related to certain types of business for at least six months. Recording calls and reporting trades are essential to the regulators’ ability to monitor the markets for abuse, such as insider trading. Requirements to record calls apply to companies that receive and execute client orders to buy or sell in the financial markets.
Each trading floor in a financial firm also has its own set of policies which staff must abide by. For instance, the trading floor manager must ensure that all trade-based calls are recorded and monitored. An often-used policy that still exists is to ban all mobile phones on the trading floor. To enforce this, mobile phones are often stored in lockers and traders are required to use turrets to host calls.
Beyond call recording, most traders and salespeople need to sit together on a monitored trading floor in order to meet regulatory rules. A range of compliance complexities under GDPR, MiFID II and Dodd Frank have meant working from home has simply not been an option for many traders.
The rush to relax regulations
Traders are now required to work from home – if they can. The FCA has said it accepts that some scenarios may emerge where recording calls may not be possible. Adding that it expects companies to “consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice recordings.” If financial services companies are unable to record calls they are then expected to “come up with a plan to fix the problem”.
Yet, trading firms have enough problems to solve without having to decipher call recording requirements. Why should traders spend extra time updating the FCA and coming up with an alternative solution when one already exists?
A smart alternative
Smart solutions – such as mobile call recording which meet global regulations – have perhaps been overlooked as a way to maintain business continuity.
Mobile voice recording technology (MVR) is not new. It has existed since 2011 and includes secure and reliable voice and SMS recording, easy to use conferencing and robust, accessible voicemail. It has matured over the years and proven itself to be flexible and highly reliable.
Technology can keep traders trading from wherever they are. Ensuring they can operate effectively at home while remaining compliant.
STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19
By Alex Balcombe, Partner at Harris Balcombe
The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.
While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike. For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.
In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.
The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.
How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.
Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.
That said – don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it – though those with this cover are unlikely to realise it.
How Could I Be Covered?
Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.
To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.
Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.
However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.
Denial of Access Extension (non-damage)
Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.
If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.
It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.
People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.
These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.
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