property

Aberdovey

My Short Break in Aberdovey

I recently returned from a three-day break in Aberdovey (Aberdyfi in Welsh). This is a small town on the mid-Wales coast. It was the first time I’d been to Aberdovey, though I’d heard good reports about it from friends.

I stayed in a two-bedroom apartment with a wonderful view across the estuary. I booked through Airbnb. I’ll say a bit more about the apartment below.

I should mention that although I travelled (and stayed) on my own, I met up with an old friend from Birmingham there. David recently lost his wife, for whom he had been caring for several years, so I thought he might appreciate a bit of company on his first solo trip away (I enjoyed his company as well, of course). David stayed at a pub/hotel called the Penhelig Arms. He liked it there, though car parking could be a bit of an issue. It appears their car park has been turned into a beer garden!

Aberdovey is about five miles south of Tywyn and 10 miles north of the university town of Aberystwyth. Here is a map of the area from Google Maps…

Accommodation

As mentioned, I stayed at an Airbnb property in Aberdovey. Under Airbnb’s rules I’m not supposed to reveal exactly where it was, but the location was certainly convenient. It was opposite the main car park, beyond which was the sea. The beach was around two minutes’ walk away, and all the restaurants, cafes and shops were within easy walking distance (not that there are very many – Aberdovey is only a small place).

You can read more about where I stayed on this page of the Airbnb website (you can also read my post about booking a holiday with Airbnb here). The apartment had a good-sized master bedroom with a comfortable double bed, and a smaller second bedroom with twin bunk beds. The latter would have been okay for children but adults might find it a bit of a squeeze.

The apartment had a decent-sized bathroom with (unusually these days in my experience) a bath with a shower over it. The shower worked well and there was plenty of hot water. I did try having a bath on my last night and found the taps very stiff, though. Possibly they don’t get used very much! I reported this to the host as I thought she would want to know, but it was no big deal, obviously.

The living room had a stunning view across the estuary (see photo below). It was quite spacious and had a good quality flat-screen TV (though no DVD player). The kitchen area just off the living room had all the facilities you would need/expect, including a toaster, fridge, sink, cooker, dishwasher, and so forth.

Aberdovey

The apartment had gas central heating. As it was April I definitely appreciated this in the evenings and early mornings. There was a main thermostat in the living room and all the radiators also had thermostatic valves.

The apartment had free wifi which worked perfectly during my stay (not always the case in my experience). Although central, the location was quiet and peaceful, and I slept very well.

Finally I should say that communication from my Airbnb host (Irene) was excellent. She sent me very detailed instructions about how to get there, where to park, local amenities, and so on. One big plus was that residents in the apartment can use a council parking permit which allows them to park in the car park opposite (and various other places in Abverdovey) free of charge at any time. I left my car in the car park opposite, which was perfect for me.

Financials

As Pounds and Sense is primarily a money blog, I should say a few words about this.

I paid a total of £480 for my three-night stay. This was made up as follows:

  • £150 x 3 nights = £450
  • Cleaning fee £30

I was charged an initial deposit of £225, with the balance of £255 taken from my card a fortnight before my visit. The total price worked out to £160 a day. Obviously that’s not cheap but I thought it was reasonable bearing in mind the high standard of the accommodation and the convenience of the location.

Things to Do

As mentioned earlier, on this break I met up with an old friend, David. We spent some of the time together and some separately, which worked out well.

On our first full day we went on the Talyllyn Railway together (see photo below). This is a heritage steam railway that runs inland from the town of Tywyn, a short drive up the coast road from Aberdovey. I last went on the Talyllyn Railway five years ago (as described in this blog post) and was very happy to do so again.

Talyllyn Railway Tywyn Wharf Station

We bought all-day tickets for £25 each and went all the way up the line and back in the morning. We then had lunch (tomato soup and a bread roll, both very good) at the station cafe in Tywyn. After that we travelled part of the way down the line to Dolgoch. Here we disembarked and spent an hour exploring the picturesque woodland with its many streams and waterfalls (see photo below). We then caught the last train back to Tywyn.

Dolgoch

On our second full day we did our own thing. I stayed in Aberdovey, had a good wander round and got to know the place a bit better. I particular recommend the Medina Coffee House (picture below), where I went for both morning coffee and afternoon tea. You can sit inside or out here and enjoy a range of drinks, meals and snacks.

Medina Coffee House

David went to Machynlleth, about 15 minutes drive away. Among other things, he visited the Centre for Alternative Technology (CAT). As a retired builder he was very interested to see some of the innovative building techniques being demonstrated here and said he would like to have stayed longer.

I met up with David each evening for a main meal. On two nights we went to the Penhelig Arms where he was staying. They serve traditional pub food, but none the worse for that. Their prices were very reasonable, and David got a 20 percent discount as a hotel resident, which was a nice touch (they also extended the discount to my meals, which was kind of them).

On the other evening we bought fish, chips and mushy peas from Aberdovey’s only chip ship (photo below). This was a stone’s throw from my apartment. We took it back to the apartment and sat watching the sun set over the sea while enjoying our meals. The food, the view and the company were all excellent!

Chip shop

Final Thoughts

As you may gather, I enjoyed my short break in Aberdovey, and am happy to recommend both the town and the accommodation where I stayed for a short break.

Aberdovey is a lovely place to relax and chill out. With its beautiful beach it could also be a good destination for families with young children. Older children and teenagers might find the lack of other entertainments a bit limiting, however. Although it’s not my thing, there are various water sports you can do there, including sailing, canoeing, sailboarding and paddle-boarding. There are also some lovely walks (and cycle rides) from the town.

In addition, the proximity of the Talyllyn Railway, Machynlleth and Aberystwyth offers good opportunities for days out. Aberdovey definitely isn’t a place you would go for the nightlife, though – even the fish-and-chip shop closes at 8 pm!

As always, if you have any comments or questions about this post, please do leave them below.

If you enjoyed this post, please link to it on your own blog or social media:
My investments update February 2023

My Investments Update – February 2023

Here is my latest monthly update about my investments. You can read my January 2023 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension), from which I recently started withdrawing again.

As the screenshot below of performance over the last year shows, my main Nutmeg portfolio is currently valued at £20,817. Last month it stood at £19,898 so that is a rise of £919.

Nutmeg main portfolio February 2023

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,175 compared with £3,023 a month ago, a rise of £152.

Here is a screen capture showing performance over the last year. As you can see from the ochre line, I topped up this account in February 2022.

Nutmeg Smart Alpha February 2023

Clearly 2023 has started well, with the total value of my Nutmeg investments increasing by over £1,000. The strong start for equities in general in 2023 is due to various factors, including inflation rates world-wide starting to fall, the ending of most Covid restrictions in China, and a growing belief that any post-pandemic recession may not be as severe as was once thought. Of course, the war in Ukraine is still a major concern, but if that is resolved in the coming year it should give markets a further boost.

2023 is still likely to be an uncertain year for investors, with more ups and downs very much on the cards. Nonetheless, with share prices generally still below where they were a year ago, there are likely to be opportunities for investors to capitalize in the months ahead. I shall definitely be looking to invest more in Nutmeg and other equity-based platforms in the coming year.

Of course, all investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last six years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs) as well.

Moving on, my Assetz Exchange investments continue to generate steady returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a very respectable £96.79 in revenue from rental income. As I said in last month’s update, capital growth has slowed, though, in line with UK property values generally. Even so, it’s not all bad news. At the time of writing 16 of ‘my’ properties are showing gains, 7 are showing losses, and two are breaking even. My portfolio is currently showing a small net increase in value of £13.36, meaning that overall (rental income plus capital gains) I am up by £110.15. That is still a very decent rate of return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

  • To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching almost every day. I currently have around £2,400 invested with them in 18 different projects (I withdrew £200 in December to help pay for Christmas). To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

  • Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January I added to this with another $500 investment in one of their thematic portfolios. I also invested a small amount I had left over in Tesla shares. My original investment of $1,022.26 is today worth $1,118.62, an increase of $96.36 or 9.63%. in these turbulent times I am very happy with that.

My eToro portfolio February 2023

In any event, I’m looking on this as a long-term investment so won’t be judging it yet. You can read my full review of eToro here. You may also like to check out my recent more in-depth look at eToro copy trading. I shall be publishing a post about my latest investment in an eToro thematic portfolio soon.

  • eToro also recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here.

I had two more articles published in January on the always-excellent Mouthy Money website. One is A Three-Step Plan to Help Boost Your Finances in 2023. This article actually came out of an online presentation I did a few months ago to a club for older people. I hope you will find the ideas and advice it contains useful.

My other piece was Switch to Profit – How to Make Money Moving Your Bank Account. With the banks now starting to offer switching bonuses again to attract new customers, there are hundreds of pounds to be made by doing this. The article quotes my sister Annie, who is a serial switcher and shares some top tips based on her experiences. Many thanks, Annie!

That’s all for today. I hope you and your family are coping in these undoubtedly challenging times. Don’t forget to check out the government’s Help for Households website, which sets out various types of financial assistance you may be entitled to and is regularly updated.

As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

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How well do British people understand home insurance?

How Well Do British People Understand Home Insurance?

Today I have a collaborative post with my friends at HSBC Life for you. It’s about home insurance and how well people really understand it.

Let’s start with the most basic question, though…

What Is Home Insurance?

Home insurance provides financial protection in the event of something happening to your property (i.e. home) or your possessions. There are two main types of home insurance, contents and buildings.

Contents insurance covers your belongings for loss or damage caused by fire, theft, flood and other disasters. Buildings insurance covers the structure of the building itself, including the walls, floors, ceilings, roof, etc.

While contents insurance is generally optional (though highly recommended), buildings insurance is likely to be compulsory if buying your home with a mortgage. People who are renting will not normally require buildings insurance as this is the landlord’s responsibility, but they may still wish to take out contents insurance.

You can have separate buildings and contents insurance, but if you need both it will usually work out cheaper to get a combined policy. This may also make life simpler when the time comes to make a claim.

Home insurance clearly isn’t the most exciting of subjects, with most people regarding it as a necessary evil. But of course, if the worst happens, having the appropriate insurance cover may stop a misfortune turning into a catastrophe.

HSBC recently commissioned a study from market research company YouGov about people’s attitudes to home insurance. They polled 2,000 people in the survey, the fieldwork for which took place in May 2022.

Survey Results

The main questions asked in the HSBC survey are set out below, along with the results.

What are the main reasons people do or don’t have home insurance?

  • 30% say it is expensive
  • 18% say it is comforting
  • 41% say it gives them peace of mind
  • 49% say it is necessary
  • 31% say it is reassuring

How much time does the average person spends researching their home insurance?

  • 47% up to 1 hour
  • 17% 1-2 hours
  • 7% 1 day to 1 week

Where they do their research, if at all?

  • 60% use price comparison websites
  • 16% recommendations
  • 12% customer reviews

What consideration is most important to them if they do select an insurer?

  • 69% say price
  • 71% say quality of cover
  • 38% say reputation

Even for those who have purchased, do they understand what they’re buying?

  • 72% say they understand what they have purchased
  • 10% say they do not understand

Finally, what proportion have made a claim on their home insurance before?

  • 39% of respondents have made a claim before
  • 61% of respondents have not made a claim before

My Thoughts

One thing the HSBC survey results suggest is that many people don’t fully understand home insurance or give it the careful consideration it merits. In these times of rapidly rising living costs, that could be a serious mistake.

I would offer two main pieces of advice. First, think carefully about what home insurance you require. Do you need both buildings and contents insurance, or just one or the other? Think also how much cover you need, based on the value of your belongings (for contents insurance) and of your property (for buildings insurance). In the latter case, you should insure for total rebuilding costs rather than just market value, as this is what you would have to pay if your house was destroyed by fire, flood or some other disaster.

And second, shop around for your home insurance, as prices vary widely. Using a price comparison service such as GoCompare can be a smart strategy, though bear in mind that not all insurers appear on these platforms (Aviva, Zurich and Direct Line are three that don’t).

I also recommend using cashback sites like Top Cashback, as these frequently offer cashback to people taking out home insurance from companies listed with them. They may also offer cashback to anyone purchasing via a price comparison service listed on the cashback site, giving you the best of both worlds.

  • I’d also highly recommend reading my blog post How I Saved £511.08 on my Annual Home Insurance. And yes, I really did save that much. Though as you’ll see I had clearly been paying over the odds for my home insurance for some time. I had separate buildings and contents insurance which, as mentioned above, typically works out more expensive. What’s more, I had lazily allowed both policies to keep rolling over year after year without checking whether better deals were available. Don’t make the same mistakes I did!

Many thanks again to my friends at HSBC Life for sharing their survey results with me and allowing me to reproduce them.

As always, if you have any comments or questions about this post, please do leave them below.

This is a collaborative post.

If you enjoyed this post, please link to it on your own blog or social media:
Investments January 2023

My Investments Update – January 2023

Happy New Year! Here is my latest monthly update about my investments. You can read my December 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension), from which I recently started withdrawing again.

As the screenshot below of performance over the last year shows, my main Nutmeg portfolio is currently valued at £19,898. Last month it stood at £20,391 so that is a fall of £493.

Nutmeg main portfolio Jan 2023

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,023 compared with £3,114 a month ago, a decrease of £91.

Here is a screen capture showing performance over the last year. As you can see from the ochre line, I topped up this account in February 2022.

Nutmeg Smart Alpha Jan 2023

That is a net month-on-month decrease of £584. That is obviously disappointing, but needs to be set against an increase of £785 the month before.

As the charts above clearly illustrate, 2022 was a volatile year for stock market investments generally. The outlook is still uncertain, but according to this article in the Financial Times the majority view is that stock markets overall will remain flat or see a very modest recovery in 2023. But obviously a lot depends on world events. If the war in Ukraine ends and/or China makes a reasonably smooth recovery from the pandemic, things could improve faster. Probably the best strategy, as this article from Forbes puts it, is to hope for the best but be prepared for the worst!

Overall, my Nutmeg investments are down £2,191 or about 8.7% since the start of 2022. To put this in context, though, in 2021 they rose in value by £3,552. And I am still more than £5,600 ahead since I started investing with Nutmeg in 2016. For my main portfolio that represents a return on capital of 39.01% or 57.13% time-weighted. My Smart Alpha portfolio hasn’t been going as long, but it is at least showing a small profit on the total I have put into it 🙂

Of course, the main lesson from all this is that investing is (or should be) a long-term endeavour. Over a period of years stock market investments such as those used by Nutmeg typically produce better returns than cash accounts, often by substantial margins. But there are never any guarantees, and in in the short to medium term at least, losses are always possible.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my overall experience over the last six years, they are certainly worth considering.

Moving on, my Assetz Exchange investments continue to generate good returns. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated a very respectable £91.61 in revenue from rental income. Capital growth has stalled, though, in line with what is happening in housing markets more generally. While some of ‘my’ properties are still showing gains, others are showing losses on capital. Overall my portfolio is currently showing a small net decrease in value of £7.88.

The latter is obviously a little disappointing, although of course capital values are largely academic unless and until you want to sell. The rental income is still coming in steadily without any issues or dramas. As I’ve said before, £91.61 is a decent rate of return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio when equity markets are volatile. And it doesn’t hurt that with Assetz Exchange most projects are socially beneficial as well.

  • To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching almost every day. I currently have around £2,400 invested with them in 18 different projects (I withdrew £200 in December to help pay for Christmas). To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

  • Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

Last year I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest). My investment has been up and down in the last few months, but it is currently $33 (about £27) in profit. In these turbulent times I am quite happy with that.

In any event, I’m looking on this as a long-term investment so won’t be judging it yet. I am also considering a further investment with eToro, probably in one of their themed portfolios. You can read my full review of eToro here. You may also like to check out my recent more in-depth look at eToro copy trading.

  • You might also like to know that eToro recently introduced the eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself recently and was impressed with how quickly and seamlessly it worked. You can read my more in-depth article about eToro Money here.

I had two more articles published in December on the always-excellent Mouthy Money website. One addressed the question of whether you can Save Money by Cancelling Your TV Licence. I looked at what this entails and what TV you are still permitted to watch without a licence. I also set out some ways you may be able to save money on your TV licence if cancelling altogether is a bridge too far for you.

My other piece was Why We All Need to Be a Bit More Branson! The title is obviously tongue-in-cheek. But the article sets out my strongly held view that – in these challenging times especially – we can all benefit from being a bit more entrepreneurial. I really enjoyed writing this one, I must admit!

Last month I updated my post about the Warm Home Discount, which this year is being increased from £140 to £150. The eligibility rules are changing somewhat, and I shall probably be one of the people who misses out, which is clearly disappointing. But on the plus side, most people won’t now have to apply for this benefit – if you are eligible, the grant should be applied automatically to your bill by your energy company.

  • The government’s Help for Households website has a helpful summary of all the financial assistance currently available and is regularly updated.

My other posts from December included What Are The Best Video Calling Tools for Older People? and an expert guest post on the subject Why a Passion Investment Could be the Way Forward in Times of Economic Uncertainty. I found the latter quite an eye-opener, as it includes important info about Capital Gains Tax (CGT) I wasn’t previously aware of. The article also sets out some reasons to consider ‘passion investments’ such as fine wines or vintage cars, due to the tax advantages they can confer.

Finally, I published My Top 20 Posts of 2022, which I hope you will check out as well!

That’s all for today. I hope you and your family are coping in these undoubtedly challenging times, and wish you a happy, healthy and prosperous 2023.

As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:
What You Should Know Before Buying a Holiday Home in Spain

What You Should Know About Buying A Holiday Home in Spain

Today I have a guest post for you about something many of us in icebox Britain would no doubt love to do at the moment.

Buying a Spanish holiday home, both for your own enjoyment and as a potential investment, has many attractions. But there are various important matters to consider before signing on that dotted line.

Learn more below 🏖


 

If you and your partner have spent many happy years holidaying in Spain, perhaps you’d like to consider investing in a Spanish holiday home?

Not only would a stunning sun-kissed property provide a wonderful place to enjoy your retirement years, but you could also let it out while you are not there and make some additional income. After all, Spain is a highly popular vacation spot with much to recommend it, so you would certainly never be short of guests.

Whatever you would like to use your Spanish holiday property for, there are a few important things you need to be aware of before you start house-hunting on the Costa Blanca…

Many Stunning Locations To Choose From

As you surely already know if you relish a vacation in Spain, the country has a plethora of gorgeous locations to choose from. While on the one hand this is clearly a good thing, on the other, it could make deciding on a particular location rather tricky.

If you’re struggling to settle on one spot, take some time to think about your requirements for the property. For example, if you’re planning to purchase a home solely for your own use, it makes sense to choose a property in a location you particularly love. Alternatively, if you’re buying a home as an investment, you may prefer to think about the locale that draws the biggest number of visitors and has the highest rental prices.

Insurance Is Important

Insuring your Spanish holiday home is of the utmost importance, even if you won’t initially be spending a great deal of time there. After all, you never know what might go wrong – from fire and theft to flood damage or structural damage caused by extreme weather. If you don’t have cover then you could be liable for some truly hefty repair bills.

Fortunately, finding the right holiday home insurance for Spain should be a breeze, thanks to Quotezone.co.uk’s helpful comparison service. You can compare and contrast quotes from a range of UK providers and potentially save yourself a lot of time and money along the way.

You Will Need An NIE

When you buy a property in Spain as a foreigner, you will be required by law to have an NIE number. The authorities will be able to use this number to work out how much tax (if any) you owe each year.

Your NIE number can be applied for at the Spanish Consulate in your country of residence or in Spain itself. You will need to fill out forms and provide various supporting documents. The process can take anywhere between two weeks and two months.

Factor In All The Costs

Before you take the plunge and commit to buying your Spanish holiday home, it’s a good idea to dedicate some time to running through all the potential costs you are likely to incur.

After all, you won’t just be paying the asking price of the home itself. You will also have to pay various associated fees, not to mention mortgage payments, lawyers’ fees and surveyor charges.

There will also be additional annual costs, as you will have to keep the property maintained to a good standard, particularly if you’re letting it out.

To ensure a Spanish holiday home is the right choice for you and won’t prove to be too big a drain on your retirement savings, take some time to pause and reflect on the various costs involved. This will help ensure you choose the option that works best for you.


 

Thank you to my friends at Quotezone.co.uk for an informative article. If you have ever dreamed of owning a holiday property in Spain, I hope it will give you food for thought.

As always, please feel free to leave any comments or questions below as usual. I would be particularly interested to hear from any readers who have gone ahead and bought a property in Spain or are actively considering it.

This is a collaborative post.

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Ten reasons over-50s may need an independent financial adviser

Ten Reasons Over-50s May Need an Independent Financial Adviser

I’ve mentioned several times on PAS why I believe having an independent financial adviser makes sense, even if – like me – you consider yourself reasonably money-savvy.

So today I thought I would set out some reasons over-50s (in particular) may benefit from having an independent financial adviser (IFA) or at least speaking to one.

This post has been created in association with my colleagues at Unbiased.co.uk, a well-established financial services website that can put you in touch with suitable IFAs in your area.

Reasons for Having an IFA

1. Helping Your Children Through College or University

If you have children, you will naturally want to help them complete their education safely and with a reasonable degree of comfort. Sadly the days of student grants (which I was lucky enough to benefit from in the 1970s) are well behind us now. There are various options for helping finance your children’s college or university education and a financial adviser will be able to explore these with you. They will also explain the pros and cons of the student loans system.

2 – Pension Planning

If you are over 50 you will inevitably be thinking about pension options, including when you can retire and how much income you can expect. An IFA will go through your finances with you and look at ways you may be able to boost your pension pot. From 55 onwards you can normally start to draw your pension, but you shouldn’t do this unless a financial adviser has assured you it will last you through retirement.

3. Investing

Hopefully by your fifties you will be earning a decent salary and may also have paid off your mortgage. You may also receive an inheritance or other windfall. Either way, if you find yourself with some spare cash you will want to invest it to get the best possible returns from it. An IFA will have access to all the latest information about a vast range of investment opportunities. They will guide you towards investments that are suitable for you based on your financial goals, your investment timeframe and your appetite for risk.

4. Starting Your Own Business

Especially at this time of upheaval due to Covid, many people are looking to start their own businesses in mid-life. That may be in response to redundancy or unemployment, or simply in search of a better work/life balance. An IFA can help you with the financial aspects of doing this, including raising money for tools, premises, transport and so on, or perhaps buying a franchise.

5. Emigrating or Retiring Abroad

Another way to revitalize your life may be to start afresh somewhere else, with new challenges and opportunities (and perhaps a better climate as well!). Or you may be looking to move to a favourite vacation destination to enjoy your retirement. Either way, an IFA will be happy to discuss the pros and cons with you, point out all the things you will need to take into account, and assist you with the financial arrangements.

6. Divorce

Sadly middle age sees the largest number of divorces. Your first priority here will be appointing a good solicitor to act on your behalf and protect your interests. Beyond that, though, divorce can have major ramifications for your finances. An IFA can help you assess your situation objectively and plan for a financially secure and stable future.

7. Downsizing

As the children grow up and leave home you may want to move to a smaller property – to make life simpler, save time on housework and free up money for more exciting things. An IFA can help you explore the implications of doing this and make the necessary financial arrangements.

8. Equity Release

If you don’t want to move – and are over 55 – equity release is another option for releasing funds. In recent years it has grown a lot in popularity. There are various possibilities, including home reversion plans and flexible lifetime mortgages. Most now come with a no-negative-equity guarantee, ensuring you won’t end up passing on debts to your next of kin. An IFA can go over the options with you and point out the pros and cons before you contact any providers.

9. Estate Planning

This obviously includes writing your will, but depending on your circumstances it can cover a lot of other things as well. Nobody wants to see all their money and assets falling into the hands of the taxman rather than going to their nearest and dearest. Speaking to an IFA who specializes in estate planning can give peace of mind and ensure that your loved ones are well provided for when you are no longer here yourself.

10. Helping Elderly Relatives

If you have elderly parents (or other relatives) you may find they are increasingly reliant on you for help and support. It may be up to you to arrange care for them and/or set up power of attorney so you can manage their affairs if this becomes necessary. They may also need help with estate planning (see above). An IFA can assist with all these things as well.

Getting a Free Financial Check-Up

Independent financial advisers do of course charge for their services. They are by definition unaffiliated and do not receive commission, so any recommendations they make are based solely on their client’s best interests. As I have said before on PAS, I certainly don’t begrudge paying my own financial adviser, Mike, as he has undoubtedly saved (and made) me a lot more money than he has cost me over the years.

Nonetheless, most IFAs will be happy to see you for an initial financial healthcheck free of charge. This can focus on a particular area of concern, so you could request an investments review, a pension review or a mortgage review. Alternatively, if you’re not sure which aspect of your finances needs more attention – or indeed whether you need advice at all – you could simply request a broad financial healthcheck.

Here’s what. Adrian Kidd, a financial planner at Radcliffe & Newlands, says about his approach on the Unbiased website:

‘I’d generally offer one or possibly two free consultations, taking about an hour, and these can be as specific or as broad as required. When someone books a financial healthcheck with me, I ask them to bring along all their documents relating to their finances – savings, investments, mortgages, loans, insurance, pensions, the works – so I can build up a complete picture of their affairs. I then go through these in more detail after the consultation, and follow up with an email that gives a summary of their overall financial situation.’

In these free check-ups: advisers won’t generally talk to you about products at all. The process of choosing the right products comes later, after the adviser has built up an understanding of you as a person and your financial planning needs. Only then will they recommend products, if asked to do so.

If you follow my link to the Unbiased website, you can complete a short, step-by-step questionnaire designed to identify the best type of financial adviser for your needs. You will then be shown a selection of suitable advisers in your area with contact information. They will be happy to answer any queries you may have and arrange an initial meeting without obligation.

As ever, if you have any comments or questions about this post, please do leave them below.

Disclosure: This is a sponsored post on behalf of Unbiased.co.uk. If you click through my link and end up becoming a client of a financial adviser listed on the Unbiased site, I may receive a commission for introducing you. This will not affect the service you receive or any fees you are charged if you decide to proceed further.

  • This is a fully updated version of a post originally published in 2020.

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My Investments Update August 22

My Investments Update – August 2022

Here is my latest monthly update about my investments. You can read my July 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £20,407. Last month it stood at £19,357 so that is a (very welcome) rise of £1,050.

Nutmeg Main Portfolio August 2022

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,108 compared with £2,942 a month ago, a rise of £166

Here is a screen capture showing performance since January 2022. As you may be able to see, I have topped up this account several times this year.

Nutmeg Smart Alpha portfolio August 2022

The rises in July are obviously encouraging. In particular, it is nice that my Smart Alpha portfolio (which I haven’t had as long) is worth more than I put into it once again!

Nonetheless, this month’s rises still don’t quite cancel out the falls of last month. And the total value of my Nutmeg portfoiio is still around 8% less than it was at the start of 2022.

As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And this year there has been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

Even so, since I started investing with Nutmeg in 2016 – and despite everything that has happened this year – I have still made a total net return on capital of 42.56% (or 61.15% time-weighted) on my main portfolio.

I should say as well that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there may well be a case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

I talked about the performance of my Assetz Exchange investment in my July update and also in this recent blog post about ethical investment options. I don’t therefore intend to provide an in-depth report about it on this occasion. I will just say that AE continues to provide steady returns for me, with a lot less ‘excitement’ than my equity-based investments. And as mentioned in my recent post, I like the fact that my money is being used ethically as well (e.g. to provide accommodation for people with learning difficulties or physical disabilities). You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching almost every day. I currently have around £2,200 invested with them in 14 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule, though two are showing as ‘pending status update’, which may translate to a delay in repayment.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

  • Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

My investment in European crowdlending platform Nibble continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has  gone to plan so far, but I will obviously continue to report on this in the months ahead.

As mentioned last time, I recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. My investment initially dipped, but as the screen capture below (of the app page on my mobile phone) shows, I am now about $16 in profit. That’s an increase of over 3% in just over a month. Obviously if it continues to do as well as this, I shall be delighted 🙂

eToro portfolio August 2022

In any event I am looking on this as a long-term investment so won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios. You can read my full in-depth review of eToro here if you like.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Is Car Leasing Right For You? I found this very interesting to research and it gave me food for thought about what I may do when the time comes to bid goodbye to my current vehicle.

Turning to non-financial matters. I hope you are enjoying the (mostly) fine summer weather and making the most of our greater freedoms as we (hopefully) leave the pandemic behind. I recently enjoyed a day out with my friend Jeff at the National Trust’s Snowshill Manor and Gardens in Gloucestershire (pictured in the cover photo).

It was my first visit and I found it a fascinating place. The manor was owned by Charles Wade, an eccentric ex-Army officer. He used it to house his extensive collection of objects of all kinds, from musical instruments to children’s toys, bicycles to Samurai armour (see my photo below). I will try to find time to write a proper review of my trip to Snowshill soon.

Samurai armour

And on the subject of summer, can I also remind you about the collaborative Summer Giveaway I am sponsoring in association with other UK bloggers. It’s free to enter, and the lucky winner will receive not only an MSpa hot tub worth almost £1,000 but a range of other great prizes as well. The contest closes on 14 August 2022. Here’s a link to my blog post with details of how to enter.

That’s enough for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

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My Investments Update July 2022

My Investments Update – July 2022

Here is my latest monthly update about my investments. You can read my June 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £19,357. Last month it stood at £20,512 so, after another challenging month, that is a fall of £1,155.

Nutmeg main portfolio July 2022

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £2,942 compared with £3,119 last month, a fall of £177

Here is a screen capture showing performance over the last month.

Nutmeg Smart Alpha portfolio July 2022

There is no denying these are disappointing results. Though as I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And over the last few months there’s been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

  • It is, however, worth noting that since I started investing with Nutmeg in 2016, and despite everything that has happened this year, I have still made a total net return on capital of 28.79% (or 52.94% time-weighted).

While performance this year has clearly been disappointing, I have no doubt there will be an uptick at some stage, and am considering topping up now while asset values are low. I definitely don’t plan to sell up, as that would only crystallize my losses this year and leave me unable to take advantage when – as I fully expect – things turn around again.

I should also mention that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there is certainly a good case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

I talked about the performance of my Kuflink and Assetz Exchange investments in my June update and also in this recent blog post. I don’t therefore plan to provide in-depth reports about them on this occasion. I will just say that both are continuing to provide steady returns for me, with a lot less ‘excitement’ than my equity-based investments!

As I said a few weeks ago, in these turbulent times I believe P2P/crowdlending platforms such as the two mentioned are well worth considering. Not only are the rates of return higher than those on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.

  • To be clear, nobody should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform, but in my view (and experience) they are certainly worth considering as part of a diversified portfolio. 

My investment in European crowdlending platform Nibble (as mentioned last time) continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has  gone to plan so far, but I will obviously continue to report on this in the months ahead.

Also as mentioned last time, I also recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. As of today my investment has fallen to $473, which I guess in the current circumstances isn’t too bad. In any event I am looking on this as a long-term investment so obviously won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Starting Your Own Business With a Franchise. If you harbour an ambition to be your own boss, a franchise can be a great way of achieving this. My article sets out some hints and tips for choosing the right opportunity and making the most of it.

Finally, I enjoyed a short break in Criccieth, North Wales, at the end of June. I won’t go into detail about this here, as I plan to write a separate blog post about it soon [now published}. But I will say it was a very enjoyable, relaxing holiday, and I definitely hope to return there before too long. I stayed in a lovely sea-front apartment about five minutes’ walk from Criccieth Castle. Here is a photo taken from the castle showing the main beach…

Criccieth

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

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How to Get a Self Employed Mortgage

How to Get a Self-Employed Mortgage

As of April 2022 there were 4.21 million self-employed people in the UK (source: Statista). Being your own boss clearly has many attractions, but it can have drawbacks as well. And one of these is the potential for complications when the time comes to apply for a mortgage.

So today I am sharing some tips for freelancers and other self-employed people to make this process as painless as possible. I am indebted to my friends from Suffolk Building Society for their assistance with this.

I should start by clarifying that in this article I am not only addressing freelancers operating as sole traders but also people trading in partnerships or as limited companies. Mortgage lenders tend to group everyone in these categories together under a ‘self-employed’ banner.

Suffolk Building Society’s Head of Mortgages, Charlotte Grimshaw, says: “Nowadays, many more mortgage providers are inclined to lend to freelancers than perhaps they once were. Some providers offer specific self-employed mortgages, while others offer freelancers access to standard mortgage products, as long as they meet certain criteria. So if you don’t see any ‘freelance’ mortgage products it doesn’t necessarily mean the provider won’t lend to you.”

Suffolk Building Society has collated a list of useful points to help freelancers be better informed, should they need to apply for a mortgage.

Considerations For All Freelancers

  • Many people, but especially freelancers, gravitate to their bank to obtain a mortgage in the belief that their bank will understand their finances and will be more likely to lend. This is not necessarily the case, especially for freelancers whose finances may be more complex than an average mortgage applicant’s. Finding a specialist mortgage lender who can understand your business gives a much higher chance of a successful application.
  • Lenders will understand that different industries make payments in different ways i.e. a videographer may be paid at the end of a project, whereas a marketing consultant may invoice once a month. As long as the freelancer is being paid in what is considered a ‘normal’ way for that industry, lenders tend to take a favourable view.
  • There is generally no minimum age for freelancers to apply for a residential mortgage, whereas buy-to-let mortgages often have a minimum age of 21, 25, or even 30. If someone has a proven history and deposit, their age should not hold their application back.
  • Similarly, there is no legal maximum age limit for freelancers to apply for a mortgage, but lenders will set their own criteria.
  • If freelancing is a side hustle (as opposed to an individual’s main source of income) most lenders’ standard position is to use 50% of their freelancing work in affordability calculations and the individual should be prepared to provide tax returns as evidence that this income is sustainable.

For Freelancers Running a Limited Company

  • Two years of company accounts are usually required for freelancers running their own business – some lenders may consider less.
  • Make sure company accounts are filed on time – late filing could ring alarm bells with the lender.
  • Different lenders will have different affordability criteria and may base their mortgage offer on salary and dividend, net profit or retained profit. It is worth speaking to an accountant to properly understand the relevant figures before applying for a mortgage.
  • If a freelancer has switched their business model from sole trader to limited company but doesn’t have two years’ worth of accounts, the lender may take a favourable view if the individual is in a similar industry or sector.
  • Some lenders will take the average of two years’ accounts, others will base their lending decision on the worst year – whether that be year one or two. Freelancers who have had a particularly poor year (e.g. due to the impact of the Covid pandemic) but can explain why will still be considered for a mortgage.
  • Freelancers who are concerned about having a poor year before applying for a mortgage can ask their accountant for an estimated projections letter to support their case.

For Freelancers Operating as a Sole Trader

  • Two years of operating as a sole trader is usually the minimum required to apply for a mortgage. Some lenders will prefer more and some will accept less but two years is a good rule of thumb.
  • Keep all paperwork related to freelance work – from contracts, to bank statements, invoices and remittance notes, as a lender may ask to see it.
  • It can be helpful, but not always essential, to have a separate bank account to keep track of business expenses and income away from personal finances. If not, be ready and able to clearly demonstrate the difference in personal and business funds.
  • Lenders may use a day rate calculation such as five times the value of daily contracts, multiplied by 46 or 48 weeks (to allow for some downtime/holiday etc). The S302 form will be used as a way to calculate previous earnings based on submission to HMRC, so this needs to be available.
  • If the applicant’s freelance work is in the same sector as their previous employed job, then an application can sometimes be supported by evidence of PAYE income in the form of P60 forms.

For Freelancers Operating Under an Umbrella Company

  • There are mortgage providers who will lend to freelancers who use an umbrella company but it is usually best to engage the services of a specialist mortgage broker for advice on this front, as the application can be more complex. Much of the guidance above still applies in terms of demonstrating clarity of earnings and stability of contracts.

Final Thoughts

Charlotte Grimshaw from Suffolk Building Society concludes: “Having been made redundant during the pandemic, many people turned to freelancing and in most cases, they haven’t looked back as they embrace the autonomy and freedom of being their own boss – but some may be a little concerned if they need to apply for a mortgage for the first time or remortgage their existing property. However, the barriers that freelancers once faced in getting a mortgage are coming down, as lenders embrace different, and often multiple, sources of income.

“There are plenty of mortgage products for freelancers out there but start by researching ‘self employed mortgages’ rather than ‘mortgages for freelancers’. Don’t get too bogged down in worrying about whether your business structure will be suitable for a specific lender as most are adept at understanding the different ways freelancers are paid – just make sure your finances are organised, comprehensive and up to date.”

Many thanks again to Charlotte and her colleagues at Suffolk Building Society for their help with this article. If you are self-employed and considering applying for a mortgage, I hope you will find it helpful. Naturally, SBS offer self-employed mortgages themselves. You can find out more on this page of their website if you wish.

As always, if you have any comments or questions about this post, please do leave them below.

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Is It Time for Investors to Look Again at P2P?Crowdlending Platforms?

Is It Time for Investors to Look Again at P2P/Crowdlending Platforms?

There isn’t much doubt this year has been a challenging one for stock market investors.

The war in Ukraine, rising inflation, and lingering fallout from the pandemic have all conspired to damage investor confidence. As a result, what we’re seeing now is a bear market, with share values falling across the board. How long this will continue I don’t know, though one thing I can say for certain is that there will be an upswing sooner or later. 

I have witnessed this with my own equity investments and it hasn’t been pretty. My Nutmeg Stocks and Shares ISA has fallen by 11% in value since January 2022. My Bestinvest SIPP (personal pension) has fallen by a roughly similar amount (I’ve suspended withdrawals from it as a result, to avert the risk of pound-cost ravaging). I’m not panicking about this, as all equity investments have their ups and downs. And since I started both of these investments, I am still well up overall.

There is indeed an argument that now could be a good time to invest, while asset values are depressed. Nonetheless, I do of course understand why many people are wary of investing in stocks and shares at the moment, as markets may well have further to fall.

So today I thought I’d talk about an alternative approach that has fallen out of favour in the last year or two, but still has the potential to generate good returns for your money even when stock markets are in turmoil.

P2P/Crowdlending

I am, of course, talking about P2P/crowdlending. A few years ago these platforms were being touted as an exciting new alternative to banks, allowing individuals the opportunity to club together to buy property or lend to people/businesses. Investors could then benefit from interest paid, rentals received and/or capital gains made.

While initially everything went well, Covid in particular put a big spoke in the P2P sector’s wheel. More borrowers went into default, and platforms struggled to stay afloat as a result. Some (e.g. The House Crowd and Lendy) went bust. Others (e.g. Zopa and Ratesetter) decided to withdraw from P2P lending. Still others (e.g. Bricklane and Crowdlords) continue to operate but have closed to new investors and begun a process of winding down. 

While that might sound depressingly negative, it’s not all doom and gloom. A number of P2P/crowdlending platforms are still running and indeed thriving. Three I have investments with myself are Kuflink, Assetz Exchange and Property Partner. 

Interestingly, these are all property investment platforms. Kuflink offers secured loans to property developers, while the other two are more ‘conventional’ property crowdfunding platforms where investors jointly purchase a property and share pro rata in rental received and any capital gains on sales. P2P platforms that lend directly to individuals and businesses without the security of property are a lot scarcer nowadays than they used to be.

Regular PAS readers will know I have money in all three platforms mentioned above and am still actively investing in two of them (I am gradually winding down my Property Partner portfolio, though I do still recommend them). One big attraction of property platforms is that investment outcomes are not directly linked to the performance of stock markets. Yes, where the economy is rocky, this might ultimately impact on some commercial properties. Overall, though, these platforms are much less affected by market fluctuations than equity-based investments. That means they can offer an attractive alternative at times (like now) of high volatility.

In this article I’d like to highlight my two current favourite P2P/crowdlending platforms, Kuflink and Assetz Exchange. I will say a word about each and explain why I am still enthusiastic about them and continue to invest with them.

Kuflink

Kuflink offers opportunities to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage. They offer three types of investment, as follows:

  • Select-Invest (individual loans)
  • Auto-Invest
  • Tax-free IFISA (Innovative Finance ISA)

Auto Invest and IFISAs both automatically invest your money across a number of loans and pay a fixed interest rate, typically between 5 and 7%. You can choose a 1-year, 3-year or 5-year term, and interest is paid annually. The Auto-Invest product is basically the same as the IFISA, but without the tax-free wrapper. Self-Invest loans can also be put in an IFISA, with most (not all) loans on the platform being eligible.

I have been investing with Kuflink for nearly five years now. My experiences have been entirely positive and my investments have been generating the promised returns. I started cautiously with them, but have gradually built up the amount I have invested. Although – like all property P2P platforms – they were adversely affected by the pandemic, they appear to have come through it strongly, with new loans now being added almost daily.

There have been no defaults so far on any of my loans, and Kuflink say on their website that to date nobody has lost a penny on their platform. I have experienced short delays with loans being repaid, but in such cases you continue to earn interest, of course.

Although Kuflink don’t pay the highest rates in P2P lending, I think the returns on offer are realistic and sustainable. The steady expansion of the platform seems to testify to this, as does the fact that they have received several industry awards. .

Kuflink are also highly rated on the independent TrustPilot website, with an average 4.7 out of 5 (‘Excellent’). At the time of writing 80% of reviewers award them the maximum five-star rating, which is among the highest figures I have seen for a financial services platform.

As with all P2P lending, your money doesn’t enjoy the same level of protection as bank and building society accounts, which are covered (up to £85,000) by the Financial Services Compensation Scheme. Nonetheless, the rates of return on offer are significantly better than those from most financial institutions. And the fact that all loans are secured against bricks and mortar – and Kuflink themselves have cash invested in them – clearly offers some reassurance.

From my experience, Self-Select loans tend to fill up quickly. On the positive side, this shows investors have confidence in Kuflink and want to invest through the platform. On the minus side, it means there are typically no more than two or three new loans open for investment at any time.

You can read my full review of Kuflink in this blog post, or sign up directly here if you wish [affiliate link].

Assetz Exchange

Assetz Exchange is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £59.49 in revenue from rental and £60.93 in net capital growth, a total of £120.42. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 23 different projects and all are performing as expected, generating rental income and – in all but three cases – showing a profit on capital. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as I am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Final Thoughts

Clearly, no-one should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform. Nonetheless, in my view it’s certainly worth considering as part of a diversified portfolio. Not only are the rates of return higher than those currently on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they definitely do help spread the risk.

If you have any comments or questions about this post, as always, please do leave them below.

Disclosure: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investing carries a risk of loss.

This post (and others on PAS) includes affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or any fees you may pay.

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