If you’re reading this post you will almost certainly know what an ISA is.
The term stands for Individual Savings Account. ISAs effectively serve as tax-free wrappers for various types of savings account. The two best-known types are the Cash ISA and the Stocks and Shares ISA.
You get an annual allowance for your ISA investments which currently stands at a generous £20,000 a year. Money saved in an ISA is permanently exempt from taxes such as income tax, dividends tax, capital gains tax, and so on.
So What Is An IFISA?
IFISAs are a lesser-known type of ISA that can be used for peer-to-peer (P2P) lending. They were launched in April 2016. After a slow start, the range available has grown steadily.
You can put any amount into an IFISA up to your annual ISA allowance. In the current 2021/22 tax year, as mentioned, this is £20,000. This can be divided however you choose between a cash ISA, a stocks and shares ISA, a Lifetime ISA (if eligible – you have to be under 40) and an IFISA. So, for example, you could invest £6,000 in a cash ISA, £10,000 in a stocks and shares ISA and £4,000 in an IFISA.
Note that under current rules you are only allowed to invest new money in one of each type of ISA in a tax year. It is though generally possible to transfer money from one type of ISA to another without it affecting your annual entitlement (although there may be platform fees to pay).
IFISAs vary considerably in the returns they offer. Annual rates range from from around 4% to 15%. Obviously, the higher rates reflect the higher levels of risk involved.
Although all IFISAs involve P2P lending, a number of different types are available. They may include lending for all the following purposes:
property development
business loans
personal loans
green energy projects
bonds and debentures
entertainment industry loans
infrastructure projects
What Are The Risks?
All UK IFISA providers have to be authorized by the Financial Conduct Authority (FCA) and HMRC. This doesn’t in itself protect lenders (or investors if you prefer) against the failure of a platform, however. While savers with UK banks and building societies are covered by the government’s Financial Services Compensation Scheme (FSCS), which guarantees to reimburse up to £85,000 of losses, this does not generally apply to IFISA platforms.
All IFISA providers do offer various safeguards, though. These vary, but include provision funds to cover potential losses, insurance policies, and so forth. In many cases loans are made against the security of property or other assets, which in the worst case could be sold to pay off any debts.
Even so, IFISA investors don’t enjoy the same level of protection in the UK as bank savers. This is, of course, a major reason why the returns on offer are significantly higher. It’s therefore important to be aware of the risks and ensure you are comfortable with them before investing this way. It’s also important to lend across a range of platforms and loans, and not make the mistake of putting all your savings eggs into one P2P lending basket.
What Are The Attractions?
So why might you want an IFISA? There are several reasons.
One is that they offer the potential of much higher rates of return that ordinary (bank) savings accounts. Even the best of these are currently paying interest rates of under 1 percent. IFISAs typically pay several times more than that (though obviously at somewhat greater risk).
Another big attraction of an IFISA is that it provides a way of gaining extra diversification for your portfolio. As mentioned earlier, the law currently only allows you to invest in one type of stocks and shares ISA per year. This rather perverse rule actually makes it harder to diversify your investments. But you can have an IFISA as well as a stocks and shares ISA, so long as you don’t exceed your total £20,000 allowance. So having an IFISA gives you a way of diversifying your investments while keeping them all protected within a tax-free ISA wrapper.
And finally, IFISA investments are typically not tied to the performance of stock markets in the way a stocks and shares ISA would be. This is a different type of investment, with different risks and rewards. While an IFISA won’t provide a way of hedging your equity investments directly, it is likely to be less directly affected by short-term fluctuations in the markets.
Two IFISA Examples
Two IFISAs of which I have direct experience are offered by Kuflink and Assetz Exchange. Both of these platforms offer tax-free IFISA options. They are both based around property investing.
Kuflink – which I reviewed in this post – offers an automatically diversified IFISA comprising loans on property. They quote interest rates from 5% to 7%, depending how long you invest for. Your money is automatically diversified across a range of secured loans. The screen capture below from the Kuflink website sets out the main features of their IFISA.
One point to be aware of is that there is no ‘self-select’ option with the Kuflink IFISA. So you have no choice about which projects your money is invested in. But, of course, it does make investing in a Kuflink IFISA very quick and simple.
Assetz Exchange – which I reviewed in this post – has some similarities with Kuflink. But they concentrate on low-risk investments, typically with corporate clients (e.g. charities) on long leases. Here’s an example of the sort of investment I mean…
Assetz Exchange aims to offer net yields to investors of between 5.2 and 7.2% per year. One thing I especially like about them is that you can choose your own IFISA investments (indeed, they don’t currently offer an auto-select option). In addition, you can invest as little as 80 pence per project, making it easy to build a well-diversified portfolio even if you are only investing small amounts.
I am using Assetz Exchange for my 2021/22 IFISA, so here is a screen capture of my current portfolio for your interest. Note that while I have only invested £500 so far, I already have a well-diversified portfolio with 17 different investments!
Summing Up
If you are looking for a home for some of your savings that can offer better interest rates than banks and building societies and won’t incur any tax charges, an IFISA is certainly worth considering.
As well as the higher interest rates, they can add diversity to your investments, helping you ride out peaks and troughs in the financial markets.
Just be aware of the risks involved in P2P lending, diversify as widely as possible, and ensure you invest only as part of a well-balanced portfolio.
As always, if you have any comments or questions about this blog post, please do leave them below.
Disclaimer: 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 speak to a professional financial adviser/planner if in any doubt before proceeding. All investments carry a risk of loss.
This post (and others on Pounds and Sense) includes my referral links. If you click through and make a qualifying transaction, I may receive a commission for introducing you. This will not affect the products or services you receive or any fees you may be charged.
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Another month has passed, so it’s time for another of my Coronavirus Crisis Updates. Regular readers will know I’ve been posting these updates since the first lockdown started in March 2020 (you can read my April 2021 update here if you like).
As ever, I will begin by discussing financial matters and then life more generally over the last few weeks.
Financial
I’ll begin as usual with my Nutmeg stocks and shares ISA, as I know many of you like to hear what is happening with this.
As the screenshot below shows, the value of my main portfolio rose fairly steadily in the first half of April, after which it remained around the same level (apart from a brief dip around the 20th). It is currently valued at £20,430. Last month it stood at £20,078, so overall it has gone up by £352. I am happy enough with that.
Apart from my main portfolio, five months ago I put £1,000 into a second pot to try out Nutmeg’s new Smart Alpha option. This has done pretty well, so in April I added another £1,000 from some money returned to me by RateSetter (as discussed in last month’s update). This pot is now worth £2,067. Here is a screen capture showing performance in April.
I updated my full Nutmeg review in April and you can read the new version here (including a special offer at the end for PAS readers). If you are looking for a home for your new 2021/22 ISA allowance, based on my experience they are certainly worth a look.
I also added £400 (from RateSetter again) to my initial test investment of £100 with Assetz Exchange. As you may recall, Assetz Exchange is a P2P property investment platform that focuses on lower-risk properties (e.g. sheltered housing on long leases). I put £100 into this in mid-February and (as mentioned) another £400 in April. Since then my portfolio has generated £3.05 in revenue received from rental (equivalent to an annual interest rate of about 10% on my original £100 investment). Here’s my current statement in case you’re interested:
As you can see, even though I have only invested £500, I already have a well-diversified portfolio. This is a particular attraction of Assetz Exchange in my view. You can actually invest from as little as 80p per property if you really want to proceed cautiously!
You may also notice that some of the properties in my portfolio have gone up in value and some have gone down. This makes it a bit harder to judge overall performance compared with an equity-based investment like Nutmeg. The property values quoted by Assetz Exchange represent the best price you can sell at currently on the exchange, which is where all investments on AE are bought and sold. But they are only really relevant if you want to buy or sell that day. By contrast, Property Partner (a somewhat similar P2P property investment platform) quote a value for each property based on an independent surveyor’s valuation every 6-12 months. That means the values displayed on Property Partner are more stable, but of course they are only theoretical as there is no guarantee that this valuation would be achieved if the property was put on the market.
In case you’re not aware, everyone has a generous £20,000 tax-free ISA allowance in the current tax year (2021/22). However, for some reason the government only allows you to invest in one of each type of ISA in any particular.tax year. So you can only put new money into one stocks and shares ISA per year, but you can invest in a cash ISA and/or IFISA as well if you wish – just as long as you don’t exceed the £20,000 total limit. In the 2021/22 tax year I am therefore investing in a Nutmeg stocks and shares ISA and an Assetz Exchange IFISA. This gives me additional diversification compared with investing in just one type of ISA.
Moving on, I heard last month that I will not be eligible for any more SEISS income support payments for the self-employed. Along with many other self-employed people, my income took a hit when the pandemic struck and this money from the government came in very useful (though I do thankfully have a personal pension and other investments as well). However, I have become a victim of the rule that says to receive SEISS your average self-employed income must represent at least half of your total income.
For the first three rounds of SEISS that was indeed the case. However, the latest round of payments incorporates another set of tax returns (2019/20) when calculating average income. Because my income was lower in these accounts (partly due to the pandemic) my four-year average is now less than what I draw from my personal pension. So at a stroke I am no longer eligible for any more support. It’s not the end of the world, but I do find it bizarre that a scheme intended to support self-employed people whose livelihoods have been affected by the pandemic can cut off completely when your average income drops. Commiserations to any PAS readers who may have found themselves in a similar situation 🙁
Personal
In April, as I’m sure you know, some of the government’s lockdown restrictions finally began to be lifted.
I was glad to be able to go for a swim for the first time since Christmas, and have been doing so twice a week since it became possible again. I am a member of the David Lloyd Club in Lichfield which has two pools, one inside and one out. Although I’ve heard that you have to book slots at some swimming pools, that has never been the case at DL Lichfield, and in fact in many ways it feels reassuringly normal. Of course, you have to wear a mask as you enter the building, but thankfully not in the changing rooms or the pool 😀
I have just been told that if the pools get very busy, DL staff ask people to wait in the changing rooms until others have left. I haven’t witnessed this myself and don’t think it happens very often, but am happy to place this info on record.
What I do find bizarre is the rules about buying and consuming refreshments. The club room (aka coffee shop) at DL Lichfield is open for the purchase of drinks and light meals, but you can’t consume them within the building. You are, however, allowed to sit at a table in the club room (no need for a mask) to read and relax or just stare at the four walls. But heaven help you if you try to eat or drink anything.
I was told by a staff member that it was okay to take a drink to the outdoor pool as long as I was going for a swim, but not if I simply wanted to lie on a sunbed. Even though I am fast becoming a connoisseur of strange lockdown rules, this one seems barmy to me and I’d love to know how DL Lichfield plan to enforce it (“Unless you get in that pool in the next five minutes, I’m taking your coffee away.”). I’d like to support the DL club room/coffee shop, but the incomprehensible rules have defeated me. So I’m now taking a flask of tea and a biscuit with me and having that on the poolside or in the changing room after my swim. So far no Covid police have come for me.
I have also been pleased (and relieved) to have my hair cut again, six months after this was last done. Thankfully I didn’t have to queue up, as my hairdresser comes to me and cuts my hair in my conservatory. We have both had Covid jabs and agreed to dispense with masks and just kept the door and window open (thankfully it was quite a warm day). Again, it all felt reassuringly normal.
I haven’t so far taken advantage of the reopening of pub gardens, largely because it has been so cold (and wet) most days. It’s good to see at least some of my local pubs open again, but a shame they still aren’t allowed to open inside as well as out. Last year we had Eat Out to Help Out at a time when there were more Covid cases and deaths then there are now (just one death yesterday, I read). I am looking forward to May 17th when pubs and restaurants can reopen inside as well, but believe this has been delayed too long personally.
I am probably one of the few people who didn’t watch the Line of Duty finale. Indeed, I haven’t watched any of the series, as it didn’t really appeal to me. For one thing it sounded downbeat and depressing, and life has been grim enough recently. But also, it appeared a bit too complicated for my liking. Especially as i grow older, I find following series with large casts and labyrinthine plots increasingly challenging. I can remember laughing (affectionately) at my dad when he expressed confusion at the plot of some TV detective show, but I am obviously going down the same route myself now 😮
I have watched a couple of shows I enjoyed this month, though, so thought I’d share details in case anyone fancies giving them a try.
The first is an Amazon Prime Video series called Upload. This is a dystopian science fiction tale, set in a not-too-distant future when a method has been found for transferring people’s minds at the point of death (or before) to a virtual afterlife. This service is provided by a number of large corporations. They employ minimum-wage ‘angels’ in large warehouse-like offices to monitor these worlds and support the clients who live in them (at least, until their money runs out). It is quite a dark concept, but full of laugh-out-loud moments and some great characters. There is also a mystery in it, and a romance between a female ‘angel’ and one of her (deceased) male clients. It’s well worth a watch if you like something a bit different (and have Amazon Prime Video, of course).
I am also enjoying a US fantasy series called The Librarians (see below). I originally caught a couple of episodes on an obscure Freeview channel and decided I’d like to watch the whole (four) series from the beginning. Doing that proved a bit more challenging than I anticipated, but eventually I managed to track down a DVD box set on eBay.
The Librarians is a tongue-in-cheek fantasy series with a certain retro feel to it. It reminds me a bit of the old Avengers TV show in its heyday (with Diana Rigg as Emma Peel).
The Librarians are a group of misfits who are recruited to work at the mysterious Library, a place where magical artefacts of all kinds are stored. Early in the first series magic is released into the world again, having been suppressed for many centuries. In each episode the Librarians investigate some mysterious incident and try to stop evil individuals deploying magic for nefarious ends, generally using their intelligence rather than violence.
Again, it’s hard to explain in a few words, but you soon get the hang of things. And the characters, while perhaps excessively goofy at times, are all endearing in different ways. The Librarians is really old-fashioned family entertainment (with little if any swearing) and none the worse for that. If you can get hold of it – I’m not sure whether it’s on any streaming services – it offers an enjoyable (and at times hilarious) drop of escapism, something I guess many of us need at the moment.
As always, I hope you are staying safe and sane during these challenging times. If you have any comments or questions, please do post them below.
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I have written about property crowdfunding on various occasions on Pounds and Sense. It’s a way for ordinary individuals to invest in bricks and mortar without requiring huge amounts of capital.
Why Property Crowdfunding?
Property investors get a double benefit – rent from tenants for as long as they own the property, and – in most cases – a profit if and when they sell.
Of course, property doesn’t come cheap. And even if you can stretch to buying a modest house or flat for investment purposes, you are taking the risk of putting all your eggs in one basket. As a result, many people of more modest means have concluded that property investment is not for them.
Property crowdfunding has changed all that, however. A number of platforms now exist that allow ordinary individuals the chance to buy a share (or fraction) in an investment property. Investors then receive a proportion of the rental income generated and also get a share of any profit when the property is sold (or refinanced).
A further attraction of property crowdfunding is that the platform (and its agents) take care of managing the property and tenants on your behalf. Unlike direct property ownership, property crowdfunding (or crowdlending if you prefer) is a genuine hands-free investment.
Brickowner Review
Brickowner is one of a number of property crowdfunding platforms that also includes Property Partner, Assetz Exchange and CrowdProperty. They allow investors to buy a share of individual property investments.
Brickowner focuses on institutional investments. They buy shares in large, high-return property investment deals that were traditionally only offered to institutions or high-net-worth individuals. They then offer smaller shares in these (a minimum of £500) to members wanting to invest in them.
How It Works
Before you can access the Brickowner platform, you will need to register on the site and confirm that you are allowed by law to invest in this type of product. This is a requirement imposed by the Financial Conduct Authority (FCA), which regulates this type of investment. In practical terms it means you will have to confirm that you meet one of the following descriptions:
High Net Worth Individual – This includes individuals who have an annual income of £100,000 or more or net assets of £250,000 or more and have made a declaration acknowledging the consequences of making investments based on financial promotions that have not been approved by an FCA-authorised firm.
Self-certified Sophisticated Investor – This includes individuals who have prior relevant investment experience and have made a declaration acknowledging the consequences of making investments based on financial promotions that have not been approved by an FCA-authorised firm.
Representative of a High Net Worth Body – This includes companies and partnerships with at least £5 million net assets and trusts with assets of £10 million.
Investment Professional – Including corporate investors and SIPP or SSAS professional service providers.
You will also be required to answer some questions to confirm that you understand the nature of the investments that can be made on the platform.
Once you are registered (and not before) you will be able to browse from the range of currently available property investments, such as the example below:
If you see a current project you like, you can invest in it, from £500 up to the maximum available. You can (and probably should) build a diversified portfolio by investing in a number of different properties. You can add funds and increase the size of your portfolio any time you want.
Investments have a fixed term: anything from one to five years. During that time you may receive dividends from any rental income received. These are added to your account and available to withdraw or reinvest. You also receive a share of any profits along with return of your capital at the end of the investment period.
In common with other property crowdfunding platforms, the pandemic has caused delays – in some cases a year or longer – to some projects on Brickowner, As far as I am aware no projects have failed completely, though.
Secondary Market
Brickowner recently introduced a secondary market where investors who need to release funds before the end of an investment term can put their share up for sale to other members. Here is a screen capture showing part of the secondary market currently.
As you may notice, some of the projects on the secondary market have less than £500 available. I asked if this meant you could therefore invest less than £500 in these cases, but was told no. Here is the exact reply I received:
£500 is the minimum investment in both the primary and secondary market. The reason there are smaller amounts on the secondary market is that there is a taxi-rank system, whereby available shares are listed and allocated in order of listing to a queue of buyers. So if I wanted to invest, say, £520 in Tamlaght, and there were no other prospective Tamlaght share buyers ahead of me BUT there were only £120 worth of shares available, I would have to wait until £520 worth of shares were available before my transaction went through. Prospective Tamlaght buyers in the queue would have to wait until my order had been filled before they moved forward in the queue.
In effect, then, you would have to place a bid for at least £500 of the project in question, and would have to wait till additional sellers materialized before getting anything. That is probably not ideal, but I can understand that Brickowner want to avoid the situation where some investors end up with tiny holdings in certain projects.
Charges
Brickowner fees are outlined within the property term sheet for each specific investment. There is no charge for depositing money with Brickowner, and no charge at the end of the investment period when your money and (hopefully) profits are returned to you.
My Thoughts
Brickowner offers an interesting option for people who want to add property to their investment portfolio. As mentioned above, there is a good case for doing this both in terms of dividends and capital growth, and to diversify your overall portfolio.
The Brickowner website is attractive and professional looking. One thing I have noticed is that most of their investment opportunities fill up very quickly. That is good insofar as it indicates that Brickowner is succeeding in attracting investors who believe in the proposition being offered. On the other hand, it does mean that at any particular time there may not be many (or any) projects to invest in. You will therefore need to build your portfolio gradually.
As mentioned above, Brickowner has a minimum investment of £500. This is not as low as some platforms (e.g. Assetz Exchange will let you invest as little as 80p) so it may be less suited to investors on a limited budget. But on the positive side, they are transparent about the fees they charge, and it is good that no fees are imposed for depositing or withdrawing money. It’s also good that a secondary market now exists for investors who wish (or need) to exit early.
As you can see from the screen capture above, the projected returns on investments with Brickowner are at the higher end for property crowdfunding platforms. Of course, this generally means the risks are higher as well. In any event it is important to read the financial information on each project carefully, to ensure that the investment aligns with your own needs and goals. Bear in mind also that some projects offer income as well as the potential for capital appreciation, while others aim for capital growth only.
During the coronavirus pandemic and lockdown, property transactions slowed considerably and many commercial property values in particular fell. However, there is clear evidence that a recovery is now under way. My own view is that there are good opportunities at present for property investors, but obviously in this uncertain time there are never any guarantees. Every investor needs to assess the situation carefully in light of their personal circumstances and tolerance for risk and proceed accordingly.
Investor Protection
The returns on offer from Brickowner are significantly better than you would get from a bank savings account at present, but clearly they don’t carry the same level of protection. For example, you are not protected by the Financial Services Compensation Scheme, which will refund up to £85,000 if a bank with which you have an account goes bust.
On the other hand, your money is invested in bricks and mortar, so it’s unlikely you would lose it all. A further level of protection is that – in common with other property crowdfunding platforms – your money is invested via an SPV (Special Purposes Vehicle). This is effectively an independent company with responsibility for the project in question. If Brickowner were to go bust, funds in the SPV would be protected and returned to investors once the property was sold.
Even if Brickowner were to go under before your money was invested, your funds are paid into a separate, ring-fenced client account. If the platform went belly-up the day after you sent the money, your funds would simply be returned to you.
Overall, then, whilst investing in Brickowner is clearly not as safe as leaving your money in the bank, the measures set out above do provide a reasonable level of protection (and reassurance). As with any investment, however, the higher potential returns on offer come with a greater risk of loss. In my view (and I’m not a qualified financial adviser, just an individual who has put thousands of pounds of his own money into property crowdfunding) Brickowner offers a reasonable balance between risk and reward. But clearly, you should invest only as part of a balanced portfolio combined with other, more liquid types of investment. .
If you would like more information about Brickowner and to set up an account, just click through any of the links in this post.
Disclosure: The links in this post are affiliate links. If you click through and set up an account at Brickowner and make an investment with them, I may receive a fee for introducing you. This will not affect the terms or returns you are offered. Please note also that I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. Before making any investment it is important to do your own due diligence, and seek advice from a qualified financial adviser if you are in any doubt how best to proceed. All investment carries a risk of loss.
If you have any comments or questions about Brickowner or property crowdfunding in general, as always, please do post them below.
Note: This is a fully revised and updated repost of my original article about Brickowner.
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Today I’m looking at P2P property investment platform Assetz Exchange (launched in January 2019)..
As I have noted before on Pounds and Sense, I am something of an enthusiast for property investment (and specifically property crowdfunding). Among other things, I like the fact that you can make money from both rental income and capital growth. And investing in property can be a good way of spreading the risk when you have equity-based investments.
Of course, investing in property directly is costly and carries all the risk inherent in putting all your eggs in one basket. A major attraction of P2P property crowdfunding investment is that you can get started with much less money and build a diversified portfolio to help mitigate the risks.
In addition, if you invest this way you don’t have to deal with the day-to-day hassles of being a landlord, from finding tenants to repairing broken boilers. This is taken care of by the platform itself and/or their management company. You just have to sit back and – all being well – wait for the rental income and (hopefully) capital gains to materialize.
That said, there have been a few reversals in the P2P property sector over the last few months (see this recent post, for example). So I am now more concerned than ever to ensure that any investments I make in this category control risk as effectively as possible.
What Is Assetz Exchange?
As mentioned above, Assetz Exchange is a licensed P2P property investment platform. It is owned by well-known P2P lending platform Assetz Capital, but run quite separately from them. If you already have an account with Assetz Capital, you will have to register separately with Assetz Exchange.
Assetz Exchange aims to offer net yields to investors of between 5.2 and 7.2% per year. These are generally paid by institutional tenants through multi-year leases. All properties are unleveraged, providing additional security (and stability) for investors.
Assetz Exchange has some similarities with Property Partner, but they differ in some important ways. For one thing, many of the properties are rented out to charities (e.g. NACRO) or housing associations. These organizations generally sign longer contracts than private individuals. They don’t have voids (periods when the property is untenanted and producing no income). Neither are there any maintenance costs, as the organizations take responsibility for this themselves. And finally, these organizations are directly funded by the government, giving them a secure income stream.
Another area of specialism is show homes. Working with a national housebuilder, Avant Homes, Assetz Exchange purchases fully furnished show homes from multiple sites around the country. These are then leased back to the developer for fixed periods of up to five years to be used to help sell other plots. This eliminates potential void periods and avoids any maintenance costs. At the end of the leases, investors will be able to vote on whether to lease the houses to tenants or sell them to home-buyers on the open market.
Assetz Exchange also offers investors the chance to get involved with a new generation of modular eco-homes. This is already a popular approach to house-building in Europe and the United States. Assetz Exchange fund the acquisition and conversion of land into serviced plots, allowing buyers to then order a house to be built on that plot to their own specification. These modular-built eco-homes are sustainable and low energy. They are also typically quick to complete and have a lower impact on the environment.
Assetz Exchange do also buy and let some standard properties as well, offering investors the chance to further diversify their portfolios.
Signing Up
Before you can invest through Assetz Exchange, you will of course have to sign up on the platform. This is pretty straightforward. You just visit the Assetz Exchange website, read the information there, and click on Register in the top-right-hand corner.
You will then be required to enter your contact details and confirm which of four categories of investor you fall into. The options are as follows:
High Net Worth Investor – This includes individuals who have an annual income of £100,000 or more or net assets of £250,000 or more.
Self-certified Sophisticated Investor – This includes individuals who have made more than one peer-to-peer investment in the last two years or who meet certain other criteria relating to investment experience. This is the category I selected myself.
Investment Professional – Including corporate investors and SIPP or SSAS professional service providers.
Everyday Investor – This category is for investors who don’t fit into any of the categories above. They can still invest via Assetz Exchange but must pledge not to invest more than 10 per cent of their portfolio in P2P loans.
You will also be required to answer some multiple-choice questions to confirm that you understand the nature of investments that can be made on the platform. I found some of these questions quite challenging, and was pleased to get them all right first time. I would therefore recommend reading the information on the Assetz Exchange website (including the Help pages) carefully before proceeding to register. If you do make any mistakes, however, feedback is provided, and you can take the test again until you achieve a 100% correct score.
Once you have done all this, you will be able to fund your account. This must be done by bank transfer, as Assetz Exchange do not allow debit card payments. You will then be able to browse the range of currently available property investments:
Investing
Once you are registered on the platform and signed in, click on Exchange in the menu at the top of the screen and all current projects will be displayed. Here are a couple that are showing at the time of writing…
Clicking on any of these will open a page devoted to the investment concerned. Here you can read all about it, view reports and site plans, and so on. One very important area is the Order Book (see example below).
All buying and selling on the platform is conducted via an exchange (otherwise known as the Order Book) which works similarly to the secondary market on Property Partner.
So if you want to buy shares in a particular project, you can do so by accepting the best price currently available on the exchange. In the example above, there are £4,895 of shares available at zero discount (i.e. the original offer price).
If you want to get your shares at a lower price than this, you can make a bid. In the example, an investor has put in a bid for £75 at a 1.04% discount and another investor (or maybe the same one) has put in a bid for £154 at a 2.08% discount.
Conversely, if you wish to sell some or all of your shares at any time, you can accept the best bid (or bids) on the Order Book currently, or place an offer and wait to see if this is matched.
It does take a little bit of getting your head around at first, but it’s actually a simple and straightforward process. One thing to note is that if there is nothing showing on the right-hand-side of the Order Book (under Offers) you won’t be able to buy shares in that project there and then – though you can of course place a bid if you wish and see if a seller wants to match it.
In any event, if you want to buy, just click on the green Buy button (either on the Exchange page or the details page) and complete the short online form. You will need to indicate how much you want to invest, whether this should be from your General or IFISA account (see below), and whether the amount should include the FCC or not (see What Are The Charges? below).
You will also need to indicate whether you want to buy at the current best price (selected by default) or you want to try for a better price (in which case your bid will be added to the left-hand column in the Order Book).
The IFISA Option
As mentioned above, if you wish you can invest with Assetz Exchange via an IFISA (Innovative Finance ISA). As discussed in this recent post, this type of ISA for P2P investing gives you the same tax advantages as a cash or stocks and shares ISA. You don’t have to pay any tax on the money you make, whether this takes the form of dividends, income or capital gains.
Everyone has a generous annual ISA allowance of £20,000 in the current 2020/21 tax year (and next year as well). This can be divided any way you like among the three types of ISA. So if you open an Assetz Exchange IFISA, you can still have cash and stocks and shares ISAs with other providers as well, so long as you don’t invest more than £20,000 in total. You can also only invest money in one of each type of ISA in any one financial year.
Choosing the IFISA option on Assetz Exchange is very easy. You can do it when first registering on the site or later. The only extra thing you have to do is enter your National Insurance number.
If you have maxed out your ISA allowance – or have already invested in another IFISA in the current tax year – you can still invest via your default ‘Regular’ account. You can invest any amount this way, but of course any profits you make will potentially be taxable.
What Are The Fees?
Assetz Exchange do not charge any monthly fees to investors (this is in contrast to Property Partner, who made the unpopular decision to impose an Assets Under Management charge and monthly fee, greatly impacting small investors on the platform especially). The company does have to make money somehow, of course, and they do this from three sources:
Arrangement fee
When a property is first purchased, Assetz Exchange charge an arrangement fee which is included in the Fixed Costs & Contingency (FCC). When parts of the property are sold on the Exchange, this fee is added to the purchase price of the buyer (see above) and so is recovered by the seller. The size of this fee is included in the loan conditions.
Monitoring fee
Assetz Exchange charge a percentage of the gross rent received for the property. The percentage is stated in the loan conditions of the property.
Property disposal fee
A fee of 2% of the gross sales proceeds is charged if investors vote to sell and the property is physically sold.
What Are The Safeguards?
Like most other property crowdfunding platforms, all investments in any project on Assetz Exchange are held in a Special Purpose Vehicle (SPV) for the project concerned. This gives investors in the project some protection if the main company were to go into administration.
A contingency balance is held within each SPV which acts in a similar manner to a provision fund, covering unexpected short-term cash-flow disruptions. It is topped up from receipts and no distributions are made to investors if it falls below a certain level.
SPVs also benefit from indemnity insurance which covers non-payments from tenants. This in theory also covers disruption to cash-flow, but it does not cover voids (periods where the property does not have a paying tenant). For reasons mentioned above, voids should not be an issue with most of the properties listed on the platform.
In common with most other P2P investment platforms, Assetz Exchange does not fall within the remit of the Financial Services Compensation Scheme (FSCS), which covers customers with UK financial services firms up to £85,000 if the institution in question were to go bust.
3. Low minimum investment (as little as 80p per project!) – this makes building a diversified portfolio straightforward.
4. Assetz Exchange take care of all the work involved in buying and managing properties. You just choose which ones to invest in.
5. Option to access money any time by selling on the secondary market (though this does depend on another investor being willing to buy your shares at a price you find acceptable).
6. Relatively low-risk investment options (though of course there are no guarantees)
7. Customer support (in my experience anyway) is fast, friendly and helpful.
8. Charges are reasonable. There is no charge for selling investments.
9. Potential to make money through both capital appreciation and rental income.
10. Rental income is paid into your account every month. You can either withdraw or reinvest it.
11. No monthly fees and only transaction-based charges to pay.
12. Opportunity to invest in socially beneficial developments such as sheltered housing
13. Tax-free IFISA option to which any investment on the platform can be added
14. Investors can vote for their favoured exit option (e.g. selling up) when the time comes
Cons
1. Can’t invest using a debit card
2. No auto-invest option currently available
3. Not as many opportunities as some P2P platforms (although the number is increasing steadily)
Closing Thoughts
I was impressed enough with Assetz Exchange to invest a small amount (£100) of my own money initially and will report back on PAS about how my portfolio fares. Here is how it’s looking at the time of writing, roughly a month after I opened my account. As you can see, my initial investment has grown by £3.87 from a combination of income received and capital growth. For a month that’s not bad at all – if it carries on growing at that rate I’ll be delighted! – but of course it is much too soon to draw any firm conclusions from this.
I particularly like the fact that with the low minimum investment on Assetz Exchange, even if you’re starting very cautiously (as I am) it’s easy to build a diversified portfolio. I like the relative simplicity of investing on the website and the fact that you can exit an investment any time via the exchange (though that does depend on willing buyers being available at a price that is acceptable to you). It is also good that there are no charges associated with selling on the exchange.
You can, of course, withdraw uninvested funds from your Assetz Exchange account at any time.
Obviously there are risks in any form of investing and it is important to do your own ‘due diligence’ before proceeding. You should also bear in mind that this type of investment is not covered by the Financial Services Compensation Scheme, which covers savers with UK banks and other financial institutions up to £85,000. On the other hand, the potential returns are significantly better than the fractions of a percent typically on offer from savings institutions right now, while the risks appear to be at the lower end of the spectrum, with many of the properties on long-term leases with corporate/institutional tenants.
To be very clear, nobody should put all their spare cash into Assetz Exchange (or any other investment platform for that matter) but in my opinion there is definitely a case for including AE within a diversified portfolio.
As mentioned above, I shall be reporting back on how my Assetz Exchange investments perform on PAS in future. In the mean time, if you have any comments or questions about this post, or Assetz Exchange more generally, please do leave them below as usual.
Disclaimer: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always perform your own ‘due diligence’ before making any investment and speak to a qualified professional adviser if in any doubt how best to proceed. All investments carry a risk of loss.
Please note also that this review uses my affiliate links. If you click through and make an investment or perform some other qualifying transaction, I may receive a commission for introducing you. This will not affect any charges you pay or the product/service you receive.
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FI Money (as I’ll call it for short from now on) is a self-published paperback of 222 pages (it’s also available as a Kindle ebook). It is organized into 28 main chapters plus additional material. I won’t list all the chapters here, but here are the first ten to give you a flavour of the content (and style).
Force yourself to smile
YouTube obsession
Your relationship with money
Overthinker
Understanding our ‘Chimp’ emotions
Goals written down
Crystal clear goals
Stress less
Mental training
How NOT to invest
FI Money is a personal account of one man’s journey towards financial independence (the FI referred to in the title). It is a self-development book, but as Peter says in the Introduction it isn’t the usual success story typically associated with such books. He says, ‘I am a work in progress, similar to a building under construction.’
The chapters are generally quite short. They are well written and broken up with bullet-points, headings, To Do lists, and so on. Peter focuses on different aspects of his quest for financial independence, with a particular emphasis on buy-to-let. As this is not something I have ever got into myself (apart from some investments on property crowdfunding platforms) I was particularly intrigued by this. Peter talks about his experiences with refreshing honesty and is not afraid to disclose some of the mistakes he has made along the way. If you’re thinking of investing in buy-to-let yourself, there are some valuable lessons to be learned here.
The book covers many other subjects as well, including property renovation, tax, investing, keeping records, and more. I particularly enjoyed Chapter 10 ‘How NOT to Invest’ which focuses on some of Peter’s less successful investments. These include Premium Bonds (like me he’s not a fan), Bitcoin and other cryptocurrencies, and a particularly ill-advised buy-to-let project early in his career. There are some salutary lessons to be learned from all this (and a few laughs to be had as well!).
In addition to the practical advice, FI Money has a particular emphasis on the psychological aspects of achieving financial independence – the money mindset, as Peter calls it. He is a firm believer in building your financial knowledge, but also adopting the right emotional and practical disciplines and carefully planning and managing your journey towards FI. There is a lot of food for thought in the book from someone who really has been on this particular journey himself (or at least is well on the way there).
As mentioned earlier, Peter also runs a personal finance blog called Duffmoney. This is well worth a read as well, and will give you a flavour of Peter’s style and his attitude towards investing and money matters generally.
As always, if you have any comments or questions about this review, please do post them below.
Disclosure: In common with many posts on Pounds and Sense, this review includes affiliate links. If you click through and make a purchase, I may receive a fee for introducing you. This will not affect in any way the price you pay or the product or service you receive.
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In brief, Property Partner is a property crowdfunding platform. For the most part they specialize in ‘traditional’ property crowdfunding rather than loan or development finance.
Properties are bought and managed by Property Partner on investors’ behalf. Investors then receive a share of the rental income as dividends, and a share of any profits (plus return of their capital) when the property is sold.
Property Partner launched in January 2015. That date is significant, because after a property has been on the platform for five years, all investors get the chance to exit at a fair market price (determined by an independent surveyor). Due to the pandemic the five-year anniversary process was temporarily put on hold, but it is now proceeding again, albeit with delays as they work through the backlog.
How it operates is that in the run-up to the fifth anniversary of a property, all investors have the opportunity to say if they want to exit their investment at the valuation price or stay on for another five-year term (less than this if they subsequently exit via the resale market, of course).
All investors who have opted to leave will then have their shares pooled and put up for sale on Property Partner at the price stated. New investors are then able to buy these shares.
So long as all shares are sold, the original investors get their money (including any net profits) and the property continues under Property Partner’s management. If all shares don’t sell, however, Property Partner offer the property for sale on the open market. Investors then have to wait until the property is sold before getting their money back. As anyone who has been involved with buying or selling property will know, this is likely to take several months (quite possibly longer in the current circumstances).
The Opportunity
As Property Partner themselves have been pointing out, a number of properties that are coming up to their fifth anniversary are currently trading on the resale market at well below their latest valuation. Here is just one example:
This property in Tower Hill, London (not one I own shares in myself) is due to go through the fifth-anniversary process in April 2021 (or possibly a bit later due to the backlog). At the time of writing shares are available on the secondary market at a price of 91p, which is 28.28% below the latest valuation of £126.88. In theory, then, you could buy shares now and in the next few months sell up for a substantial short-term gain.
Of course, in practice it’s not as simple as that. Here are some reasons:
Nobody knows yet what the final five-year valuation will be. If it is lower than the current valuation (which is perfectly possible in the current economic climate) the net profit will be reduced, perhaps substantially.
There is no guarantee that the shares of all investors who wish to exit will actually sell on the platform. If they don’t, as mentioned, you could have a long wait before the property is sold on the open market. In addition, if this happens there is no guarantee that the property will sell at the valuation price. If it goes for less than this, your returns will be reduced accordingly.
There are platform fees to take into account. In particular, there is a 1% fee for buying on the secondary market and a further 0.5% stamp duty reserve tax charge. Thankfully there are no exit fees, though.
And finally, the number of shares available for any property on the secondary market is limited. Obviously the number you can buy depends on how many shares other investors want to sell at the price in question.
On the plus side, for the length of time you hold the shares you may receive monthly dividends at a rate between 1.5% and 6% per year (though dividend payments on some properties are currently suspended due to Covid). This will offset the fees mentioned above; but if you only intend to hold the shares for a few months it probably won’t cover them completely. Bear in mind that an Assets Under Management (AUM) fee is now deducted from dividends as well.
As an investor with Property Partner since almost the beginning (the cover image shows a property in Torquay I own shares in – I plan to retire there one day 😀 ), I am awaiting the five-year exit for my investments with considerable interest.
My personal circumstances have changed since I started investing with the platform, so I intend to take the opportunity to offload at least some of ‘my’ properties. Indeed, I have already voted to sell my shares in the first property I ever invested in with Property Partner (20 Phillimore Close) and am waiting to see how this pans out. I will update this post in due course once I know.
Nonetheless, I am still considering investing short term on the resale market to take advantage of the opportunity the five-year anniversary presents. In particular, I have already topped up my investments in some of the properties I already hold but am planning to dispose of.
I will, though, be cautious until I have a better idea how the first few five-year anniversaries have passed, so I can see if all shares put up by investors sell on Property Partner, or if they have to sell the properties concerned on the open market. As mentioned earlier, the latter route will clearly take longer and there is no guarantee what price would be achieved.
Would I recommend someone who is currently an investor in Property Partner to look into this? Yes, certainly. Whatever your current circumstances, you need to be aware of what is going on with any properties you hold with Property Partner. And if you wish to sell, you should definitely consider taking advantage of the five-year exit mechanic. Equally, if you have money available to invest, you could check out the opportunities buying now on the resale market – though do bear in my mind my cautionary comments above.
If you haven’t joined Property Partner, and you like the idea of investing some of your portfolio in property, the platform is certainly worth a look. As older properties come back on the market for new investors, there will be no shortage of opportunities in the months ahead. And my understanding is that, as the original costs of acquisition have been amortised, there will be less costs to cover from investors, thus boosting the potential returns from the properties in question.
In addition, as these properties have a five-year history already, you will be able to check how they have been performing in terms of dividends generated and capital appreciation. This is no guarantee of how well or badly they will do in the future, of course.
Take a look at my Property Partner review for much more information about the platform and how it works. Also, if you do decide to invest in Property Partner, there is a welcome bonus offer. For convenience I have copied details below from my review.
Welcome Offer
As an existing Property Partner investor, I can offer a special bonus for anyone joining via my link. If you click through this special invitation link, sign up and invest a minimum of £2,000 within 60 days, you will receive an extra bonus as follows (and so will I):
Not only that, once you are an investor with Property Partner, you will be able to offer the same bonus to your friends and relatives and earn commission yourself. There is no limit to the number of people you can introduce through this scheme.
If you have any comments or questions about this post, as always, please do leave them below.
Note: This is a fully updated version of a post published in 2019.
Disclosure: this post includes referral links. If you click through and make an investment, I may receive a commission for introducing you. This has no effect on the terms or benefits you will receive. Please note also that I am not a professional financial adviser. You should do your own ‘due diligence’ before making any investment, and seek professional advice from a qualified financial adviser if in any doubt how best to proceed. Be aware that all investments carry a risk of loss.
If you enjoyed this post, please link to it on your own blog or social media:
Here is my latest Coronavirus Crisis Update. Regular readers will know I have been posting these since the first lockdown started in the spring of 2020 (you can read my January 2021 update here if you like).
I plan to continue these updates until we are clearly over the pandemic and something resembling normal life has resumed. Obviously, I very much hope that will be sooner rather than later.
As ever, I will begin by discussing financial matters and then life more generally over the last few weeks.
Financial
I’ll begin as usual with my Nutmeg stocks and shares ISA, as I know many of you like to hear what is happening with this.
As the screenshot below shows, since last month’s update my main portfolio has been through some ups and downs. It is currently valued at £19,008. Last month it stood at £18,886, so it is at least up a little (£122) overall.
As you may recall, two months ago I put £1,000 into a second Nutmeg pot to try out Nutmeg’s new Smart Alpha option. The value of this pot rose as high as £1,037 in mid-January, though it currently stands at a more modest £1,010. Here is a screen capture showing performance to date, though obviously it is far too early to draw any conclusions from this.
Incidentally, I was recently asked by Nutmeg to contribute an article about my ‘Investing Journey’ for their blog. This was published in early January and you can read it here if you like. In the original version I was more explicit about why I left the charity I used to work for (basically a personality clash with the new Director who saw me as a rival). Nutmeg presumably decided this might ruffle a few feathers – even 25 years on! – so they changed it to something blandly neutral. Anyway, I thought I should let you know, as the opening section reads a little oddly now 🙂
The Nutmeg article brought quite a few new subscribers to this blog – so if that includes you, welcome to Pounds and Sense! I do hope you find my posts interesting.
Moving on, I had an email this week from the peer-to-peer lending platform RateSetter saying that all their lending activity is being transferred to Metro Bank (which now owns RateSetter). All investor accounts are therefore closing at the start of April, with investors’ money being returned to them in full along with all interest due.
I know some RateSetter investors are unhappy about this, but personally in these turbulent times I’m just glad to be getting my money back with interest. I originally invested £1,000 in September 2018 with an eye to claiming the £100 new investor bonus. The latter was duly credited to my account a year later, so by April I expect there to be a total of around £1,180 in my account. That equates to an annual interest rate of around 7%, which I am perfectly happy with.
This last year has undoubtedly been tough for P2P lending companies, with rising default rates and withdrawal requests along with reduced demand for loans. This has caused some platforms to experience cashflow problems and bad publicity. The only other one I have any money left with is ZOPA, which has also had a challenging year. I have only a few hundred pounds left in ZOPA as I switched some time ago from reinvesting repayments to withdrawing them. I’m not sure I can see much of a future for P2P lending in the UK, but of course in these unique times anything is possible. I don’t foresee myself putting any more money into P2P lending for a while, though.
I also heard recently from Property Partner. As you may know, this is a property crowdfunding platform. A few years ago, when I was investing regularly in property crowdfunding, I put around £5,000 into twenty or so properties on this platform.
Anyway, the email revealed that the first property I bought shares in has now reached its fifth anniversary. All investors therefore have the opportunity to sell up at the current independent valuation or else continue for a further five years. I voted to sell my shares, since (as mentioned in this recent post) I am currently trying to reduce the total amount I have invested in property crowdfunding.
The way the five-year anniversary process works is that all shares owned by investors who want to sell are bundled together and put up for sale on the Property Partner site. Assuming they are all bought by other investors, everyone who voted to sell then gets their money back at the current valuation. If that doesn’t happen, Property Partner put the property concerned up for sale. But obviously that is likely to take months and there is no guarantee the valuation price will be achieved. So you might end up getting back less than anticipated (or perhaps more in a best-case scenario).
Obviously I’m hoping this process goes smoothly and I get my money back soon. I would comment, though, that many of the properties that are coming up to their five-year anniversary are on offer on the resale market at well under the current valuation price. So if you are of a speculative persuasion, there is an opportunity to buy shares now at a discount and maybe make a quick-ish profit through selling up via the five-year anniversary process. I must admit I am tempted to try this, but haven’t made a decision yet!
Moving on, my two Buy2LetCars investments are still delivering the promised monthly returns without any fuss. As I am semi-retired but don’t yet qualify for the state pension, the £450 or so I receive from them every month represents a major part of my monthly income currently. I am also looking forward to receiving a substantial lump-sum payment in April when my first investment with them matures.
As I’ve said before, investors with Buy2LetCars put up the money to finance a car for a key worker such as a nurse or police officer. They then receive 36 monthly capital repayments followed by a final balancing payment of interest and capital. If you are looking for an income-producing investment with a substantial lump sum payment after three years – and you like the idea of doing a bit of good with your money too – they are well worth checking out (and likewise if you’re a key worker looking for a lease car yourself). If you’d like to learn more, you can read my review of Buy2LetCars here and my more recent article about the company here. And here is a link to Wheels4Sure, their car-leasing website. Note that you can’t invest with Buy2LetCars through an ISA, so the interest part of the final payment will have some tax deducted. Depending on your circumstances, you may be able to reclaim this.
Finally, several more readers have now signed up with the low-key matched betting opportunity mentioned in some previous updates. New members are still being accepted, but the company has had to reduce their payouts slightly. New members now receive £50 a month for the first six months, reducing to £25 a month thereafter. Considering that this opportunity is cost-free, risk-free and hands-free, that’s still a pretty good deal, though 🙂
As I said above, this opportunity is based on matched betting, a sideline-earning opportunity I have been pursuing for several years myself. I was asked not to divulge too many details about it publicly, for good reasons I will explain privately to anyone who may be interested (and no, it’s not illegal!). As I said above, it doesn’t require any financial outlay, is entirely hands-off, and will provide a passive income of £50 a month for the first six months and £25 a month thereafter.
No knowledge of betting is required, and you don’t have to place any bets yourself (this is all done by the company’s clever software). You just have to set up a separate bank account for bets to go through, but running the account is entirely financed by the company. Please note that this opportunity is only open to honest, trustworthy people who haven’t done matched betting before and have no more than two accounts already with online bookmakers. For more info (and to receive a no-obligation invitation) drop me a line including your email address via my Contact Me page.
Personal
I don’t know about you, but January to me has felt a very long month. It’s been cold, damp and depressing, with the whole country stuck in what seems like a never-ending lockdown.
As you may know, I live on my own since my partner, Jayne, passed away a few years ago. I am lucky to live in a fairly large house with a good-sized garden, so being mostly confined to home hasn’t been as big a challenge for me as I’m sure it has for some. Also, I am well used to working from home, having done this for the last 30 years or so. Even so, being unable to see friends and family has been hard for me, as has the closure of my local swimming pool (which I used to visit twice a week). And I appreciate that in many ways I am one of the lucky ones. I don’t have any major financial worries, and I’m not trying to home-school any children!
I did have a ‘day out’ at the end of January when I had to go to the eye clinic at Burton Hospital for a follow-up appointment. As regular readers will know, in the autumn I was diagnosed with a perforated retina in the left eye. I had laser treatment for this, and my January appointment was to assess how successful it had been.
As it turned out, there was some good news and some bad. The consultant told me that the treatment had been three-quarters successful. In one area it hadn’t ‘taken’, meaning I needed top-up treatment. He administered this then and there. I guess he cranked up the laser a bit, as unlike my first treatment it was somewhat painful and I had a headache for a couple of days afterwards. I have to go back at the start of March for what I very much hope will be a final check-up. Keep your fingers crossed for me!
Because they put drops in my eyes at these appointments, I can’t drive. I therefore took a taxi to the hospital and caught the train back. On previous occasions the trains have been very quiet, but there were noticeably more passengers this time. The roads too seemed pretty busy. I get the impression that people are (understandably) becoming fed up with lockdown now and the government’s Stay At Home message isn’t being as well complied with. Not a criticism, just an observation.
I am still aiming to go out for a walk once a day, though with some of the bad weather in January, I have missed a few. Here is a photo of my front garden about a fortnight ago 😮
On the plus side, I do enjoy watching the snow as long as I don’t have any essential trips to make. And I like to go for a walk in it once it has fallen. It was lovely to see (and hear) the local children getting out their sledges and enjoying some much-needed fun during these difficult times.
As far as evening entertainment is concerned, I finished my box-set of the tongue-in-cheek detective series Agatha Raisin and am happy to recommend that. On a similar note, I am enjoying the new (second) series of The Mallorca Files, which is currently on BBC iPlayer. It is just a shame that because of the pandemic they were only able to record six episodes.
Also, inspired by this post by my fellow blogger Caz, I have been investigating what is on offer on Amazon Prime Video. I have Amazon Prime mainly for the fast, free deliveries. But of course members do get access to a range of free films and TV series as well.
Anyway, I found a couple of series I really enjoyed. Being a Star Trek fan, I had to check out Lower Decks, a cartoon series focusing on the junior ranks on board one of the Federation’s least illustrious starships, the USS Cerritos. This has some great laugh-out-loud moments but some good stories as well. There are plenty of allusions to familiar Star Trek tropes that will keep any fan of the franchise amused. Watch out also for an appearance by an evil incarnation of Microsoft’s infamous ‘Office Assistant’ Clippy!
Of course, if you’re a Star Trek fan and haven’t yet seen Star Trek: Picard featuring the great Patrick Stewart as the eponymous hero, you should definitely watch this on Amazon Prime Video as well 🙂
The other series I enjoyed is Undone. Indeed, this is one of the best things I’ve seen on TV for quite a while. It’s almost impossible to describe, but it’s an animation that combines elements of mystery, comedy, romance, science fiction/fantasy, and more. And all with stunning, almost psychedelic, imagery, and strong acting and characterization. Here’s a screen capture that will give you some idea of the style. If you watch nothing else on Amazon Prime Video, give this a try..
Going back to the pandemic, there has at least been some good news this month. The vaccine roll-out has been going well – I’ve just heard that 10 million people have now had their first injection – and the number of new cases has been falling rapidly. As a 65-year-old I have not yet been called for vaccination but assume this is likely to happen fairly soon.
I do hope these developments will allow lockdown and other restrictions to be eased in the coming weeks, as in my view they are causing grave harm to people’s physical and mental well-being. In particular, I would like to see schools reopen, along with swimming pools and gyms. I would also like to see pubs, restaurants and hotels allowed to reopen before many have to close their doors for good. In the (slightly) longer term I would like to see all restrictions lifted so that normal life can resume. I am not a fan of mandatory masks and would like to see them made optional for those who believe they offer some useful protection from the virus (personally I have never been convinced of this).
As always, I hope you are staying safe and sane during these challenging times. If you have any comments or questions, please do post them below.
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This isn’t an easy post to write, but I like to be honest with readers about my investing failures as well as successes. So here’s the sad story of one failed investment…
How It Happened
About a week before Christmas 2020 I got a cryptic email from the property crowdfunding platform Crowdlords directing me to their website for information about one of my investments. The email didn’t give anything away, but I had a premonition it wasn’t going to be good news.
Anyway, I followed the link to the Crowdlords site and logged in. The update concerned a property development I had invested £3,000 in back in 2016. Originally this was referred to as Seven Eco-Apartments (CL Number Four), but latterly it has been described simply as Kennington Road.
There was a long, involved explanation of what had been going on with the development. But the bottom line was that it had failed completely and investors were going to lose not just some but all of their money.
At first I wasn’t entirely sure I had read this correctly, so I emailed Crowdlords for confirmation. I received a quick reply from Richard Bush, co-founder of Crowdlords. Among other things, he said:
‘Kennington Road is one of two investments (from 72 we’ve completed to date) which have suffered from a very unusual combination of factors – delays, cost overruns, lost sales due to Covid and then further delays getting back to the market only to find the values have dropped. The perfect storm, almost.’
So there it was. At a stroke I had lost £3,000. As you may imagine, I felt pretty sick about this. I have subsequently heard from other people who lost much larger (five-figure) sums on the projects concerned (I’m not sure what the other project was). But that was no consolation, of course. About the only positive thing I can say is that I have had other Crowdlords investments which did deliver the promised returns. But even so, I am well down on my investments via the platform overall.
While it’s tempting to blame Crowdlords for the losses, I accept they are not directly responsible. Clearly they – along with many other businesses – have been the victims of unique and challenging circumstances in 2020. I do, though, think their communications with investors could have been a lot better, especially when it was becoming clear that problems were mounting. While they were quick enough to notify investors about successes – and new projects requiring investment – I couldn’t help feeling that failing projects were being swept quietly under the carpet. To be fair, Crowdlords aren’t the only investment platform I have noticed this with.
I do think it would be a nice gesture if Crowdlords were to offer modest ex-gratia compensation payments from their own profits to investors who have lost all their money. Even a book token would be nice. But realistically, I will be surprised if this happens now.
Lessons Learned
So what lessons have I learned from this experience? I’ll try to sum them up below.
Be a Sceptical Investor
Perhaps I’m stating the obvious here. But when I started investing in property crowdfunding it was pretty new and I found the concept intriguing and exciting. At that point, of course, there hadn’t been any failures to take the shine off. Plus I had recently come into some money through an inheritance and was looking for interesting and profitable ways to invest it.
Looking back now, I can see that I was a bit too ready to buy into the property crowdfunding idea, and put too much faith (and money) in it. I am not saying property crowdfunding can’t work (many of my investments did pay off). Nowadays, however, I am a lot more sceptical when assessing such projects and the claims made about them by their promoters.
It’s important to remember that property crowdfunding platforms are all in business to make a profit. To put it bluntly, they make their money by persuading potential investors to part with theirs.
There is nothing automatically wrong about that – all businesses do it – but it’s essential to examine any potential investment carefully and objectively before opening your wallet. That includes ensuring you understand exactly what the project entails and what the risks for investors are. Which brings me neatly to my second lesson…
Know What You are Getting Into
Property crowdfunding investment opportunities take many different forms.
In ‘traditional’ property crowdfunding a group of investors jointly purchase a property. They then receive rental income pro rata to their investment and a share of any profits when the property concerned is sold. With this type of investment, your money is effectively secured by bricks and mortar, so you are unlikely to lose your shirt. On the other hand, problems (from bad tenants to fire or flood) can arise leading to lower rental income than anticipated and/or delays in selling up. And obviously, if the value of the property doesn’t rise, you may not get all your capital back, let alone any profit on sale.
Development projects, which may launch with no more than a set of architect’s plans, are even riskier. If you invest in a development project (such as Kennington Road), while you may ultimately make a bigger profit, there is a real risk of the project failing completely for any number of reasons. In this case (as I discovered) you risk losing your entire investment sum.
Finally, there are platforms such as Kuflink that allow people to invest in loans secured against property (including bridging loans). If such loans are not repaid, the property can be sold to pay off the debt, so again you shouldn’t lose your entire investment. But even so, the legal processes involved can be time-consuming and expensive; and again you may end up losing some of your capital after all costs are paid off. And even if it doesn’t go that far, there are quite often delays in repaying loans (especially at the moment) meaning you don’t get your money back when you expect it.
So my second lesson is to be very clear what type of property crowdfunding you are investing in and what the risks are. And be especially cautious about investing in development projects, which are by nature more speculative and carry a greater risk of losing all your money.
Spread the Risk
This is of course an important principle in all investing but one that applies especially to property crowdfunding.
If you invest £3,000 in one project (as I did with Kennington Road) unless you’re Bill Gates that’s putting a lot of eggs in one basket. When I started in property crowdfunding I put as much as £5,000 into a single project. That is definitely not something I would do any more.
I am not investing as much in property crowdfunding as I did originally, but where I am still doing it I generally put no more than £100 into a single project. If I lose that money in a worst-case scenario, obviously that is not going to hit my finances nearly as hard. My approach nowadays is to have larger numbers of small investments spread across multiple platforms. This spreads the risk while still giving me control over what I invest in.
It’s interesting to note that most of the remaining property crowdfunding platforms (some have gone to the wall or are no longer serving private investors) also now offer some form of shared investment with automatic diversification. An example mentioned earlier is Kuflink, who offer an ‘Auto-Invest’ account paying up to 7% interest per year. Investments are automatically spread across a wide range of projects on the platform. If you want an easy way to diversify your property crowdfunding investments, this approach has some merit. Personally I prefer to build a diversified portfolio myself (which you can also do with Kuflink), but the automated approach is worth considering if you don’t have the time or inclination for that.
If you want to make use of your ISA allowance with Kuflink, you will need to open an Auto-Invest IFISA with them. You can’t create an ISA and choose your own investments, for reasons I’m not clear about.
Remember the Big Picture
Finally, it’s important always to remember that property crowdfunding is just one way of investing your money. It is also – as I have indicated – a relatively high-risk one.
So if you are going to include property crowdfunding investments in your overall portfolio, it should only comprise a fairly small part of it – I suggest no more than 10 percent. The rest of your money can then be spread across a variety of other investment types to provide good diversification. And as I have noted before, you should also have at least three months’ of income in easily accessible form in case of sudden, unexpected emergencies.
When I first started in property crowdfunding I made the mistake of putting about a third of my money into this type of investment. I am down to around 20% now, which is still (in my view) too much, but some money is tied up in long-term projects where an exit currently looks some way off. But at least hopefully there won’t be any more complete write-offs now.
Closing Thoughts
So that is the story of my failed £3,000 property crowdfunding investment and the lessons I have learned from it.
I am trying to be philosophical and remember that many of my other property crowdfunding investments have made money for me. Nonetheless, in retrospect I wish I had taken a more cautious approach initially. If I had simply put all the money into my Nutmeg stocks and shares ISA, for example, I don’t doubt that financially I would be better off overall.
Nonetheless, I do still believe in the property crowdfunding concept and am happy to have some money still in it. As I’ve said before in Pounds and Sense, property is relatively less affected by ups and downs in the economy than stocks and shares. Property investments don’t provide a method for hedging your equity investments directly, but they do offer an extra element of diversification and spreading of your financial risks. And alright, I will admit that a part of me does rather enjoy (for example) having a small amount invested in student accommodation in Leicester, my old university city 🙂
As always, if you have any comments or questions about this post, please do leave them below.
Disclaimer: Please be aware that I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.
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In the past buy-to-let seemed a relatively easy way to make money.
So long as you had the capital – or were able to borrow it – you could buy a house, put tenants in it, and collect a steady income from rental payments, along with potentially a lump-sum profit if you sold up at a higher price later on.
In recent years, though, tax and regulatory changes have made buy to let less appealing – to a point where many wonder if there is still money to be made this way. So in my post today I want to address this question.
Let’s start, though, by looking at the upside…
The Attractions of Buy to Let
As stated above, property investors get a double benefit. They enjoy rental income from tenants for as long as they own the property, and also have the potential to make a substantial lump sum profit when the time comes to sell.
A further attraction of buy to let is that your tenants effectively pay off your mortgage for you. So if, for example, you are buying a £400,000 property, you might ‘only’ need to find a deposit of £100,000. As long as your tenants’ rental payments cover your mortgage repayments (with a bit to spare), after 25 years or so the mortgage will be paid off. You will then fully own a second property, having originally paid only a quarter of the full property price. And that doesn’t even allow for the prospect of capital growth. If your property eventually sells for £600,000, you’ll have made an additional £200,000 capital gain.
Of course, you don’t have to borrow to fund your buy-to-let. If you already have the capital you need, investing in a buy-to-let property will provide you with a steady income while the capital value of your property (hopefully) appreciates over time.
Buy to let can also be a good way of diversifying your investment portfolio. Rental income is relatively stable, especially if you have a number of properties and tenants. And property values aren’t directly related to the state of the stock market. So while property doesn’t provide a method for hedging your stock market investments directly, it can certainly help spread the risk.
Of course, property prices took a knock in the 2008 credit crunch and subsequent recession, and more recently were affected by the pandemic (though prices generally are on an upward trajectory again now). In the longer term, though, prices have been on a strongly upward trend since the 1970s. On average, house prices have grown faster in the UK than they have in any other European country.
There’s every indication that prices will go on rising in the coming years as well. The UK currently has a serious shortage of housing, caused by various factors. To start with, the UK population is growing rapidly. This inevitably means demand for housing will go on rising, thereby driving up the price of property. According to the Office of National Statistics there will be an annual shortfall of housing in the UK of over 100,000 properties each year for the next decade. This could mean a shortfall of one million properties by 2025 if current trends continue.
Various factors have combined to boost rental demand, including immigration, more people living alone, people moving around the country for work reasons, and rising house prices stopping first-time buyers getting onto the housing ladder. The latter is obviously challenging for young people, but it’s great news for landlords whose buy-to-let properties are being let extremely quickly, while their rental income keeps increasing. All of the above means that residential property can represent a profitable and attractive investment option.
What Are The Drawbacks?
One obvious drawback for anyone wanting to invest directly in property is that it’s expensive! And if you can only afford a single property, you are taking the risk of putting all your eggs in one basket. To mention just a few things…
There may be periods when you don’t have tenants (voids, to use estate agent jargon). At these times your property will be costing you money rather than making it for you.
Bad tenants are all too real and can be a nightmare for landlords. If they don’t pay their rent, it will take time and money to evict them. And that’s not to mention the costly damage to your property a malicious – or just careless – tenant can cause.
There will be maintenance and repair bills to pay. If something expensive goes wrong – the roof or the central heating boiler, say – the cost of the necessary work may wipe out several months of profits for you.
In general, being a landlord – at least, a responsible one – is a hands-on role. While you can outsource some aspects of managing your property to an agency (for a fee) you will still have to keep a watchful eye on your property and tenants to ensure that your investment is protected.
A further drawback is that property isn’t a liquid asset. Yes, putting your money in bricks and mortar gives you a degree of security – but if you need to access your capital urgently this may be difficult or impossible. Even if you’re able to find a buyer quickly, if the timing is bad you could end up selling at the bottom of the market and making only a small net profit or even a loss.
And there’s more bad news for buy-to-let investors. As I said earlier, legal changes over the last couple of years have made the whole buy-to-let process more costly and burdensome. For one thing, from April 2016 anyone buying a residential buy-to-let property (or second home) has had to pay an extra 3% in Stamp Duty. In some quarters this has been dubbed the Landlord Tax.
Another major legal change has affected landlords who use mortgage loans to purchase buy-to-let properties. Before April 2017 landlords were allowed to deduct all of the interest they paid on buy-to-let mortgages from their taxable income. In effect, that meant they paid tax on their net profit from rentals rather than their turnover. The government decided to change the rules, however, arguing they gave buy-to-let landlords an unfair advantage over ordinary homeowners. So from April 2017 landlords were only allowed to claim relief on 75% of their mortgage interest. From April 2018 that dropped to 50%, and it kept falling by 25% a year until it reached 0% in 2020. It was then replaced by a less attractive tax credit equivalent to 20% of mortgage interest (which was particularly disadvantageous to higher rate taxpayers). All of this has meant that borrowing money to fund a buy-to-let has undoubtedly become less attractive (and profitable) than it used to be..
Other changes affecting landlords have come in too. For example, from April 2018 all new tenancies and renewals have had to be rated ‘E’ or better on their Energy Performance Certificates, with fines of up to £5,000 for landlords who don’t comply. Most recently built homes should qualify for this rating, but landlords of older, less energy-efficient properties may have to spend large sums bringing them up to scratch. And, of course, this all adds to the administrative burden for landlords, even if it is ultimately helping to save the planet!
One effect of all this has been that some smaller landlords have decided that buy-to-let is no longer worth the effort for them, and they are selling up and moving out of the sector.
So Is There Still Money to be Made?
My answer to this is a qualified yes.
There is definitely still money in buy to let, but it is no longer the ‘one-way bet’ it might once have appeared. You should therefore research opportunities carefully and adopt a highly professional and businesslike approach to the whole process.
A key consideration here is ‘yield’. This is the net amount (rental minus costs) you can expect to make from a buy-to-let property per year, as a percentage of the purchase price. Yield can be compared with the interest rate paid on a savings account. By this means you can assess how profitable a buy-to-let opportunity is and whether it makes sense as an investment vehicle. Clearly, if the yield is less than you could get by leaving your money in the bank, there is not much point in investing this way.
The website Totally Money recently analysed data from nearly half a million properties across England, Scotland and Wales, to calculate the buy-to-let yield for each postcode. The results were eye-opening to say the least. They found that buy-to-lets in the top 25 postcode areas were still delivering excellent returns. At the top was Liverpool, where landlords can enjoy 10% yields. Falkirk (9.51%) and Glasgow (8.71%), both in Scotland, came second and third respectively. Even postcodes at the lower end of the top 25, such as Lancaster and Aberdeen, were returning respectable yields of over 7%. All of these are clearly far better rates of return than you could get from a savings account, and you will have an asset that is hopefully increasing in value as well (see below).
Location is therefore a key consideration for any potential buy-to-let investment and must be researched thoroughly. In addition, the best area for your investment will depend on whether you intend to put your money into flats for professionals, student accommodation, family homes, etc. At the risk of stating the obvious, there needs to be solid demand in the area from would-be tenants for the type of rental property you intend to buy.
Of course, while it’s very important, yield/income potential isn’t the only consideration for property investors. In the longer term you will likely be hoping for capital growth as well – so ideally you should be looking to invest in properties in up-and-coming areas rather than those in long-term decline.
Getting Started
Having weighed up the pros and cons, if you do decide that buy-to-let is right for you, here are some top tips to get you started…
Speak to a professional independent financial adviser to discuss your plans. They will help you decide how much to invest and the level of return you should realistically be aiming for.
You should also speak to a mortgage broker to find out what deals are available and ideally get approval in principle for a mortgage. This means you will be well placed to make an offer as soon as you find a suitable property.
If there is a particular area you are considering, visit several times to get a feel for the place. That applies especially if it’s a location you’re not already familiar with. Check out the housing stock, public transport, car parking, shopping and schools, hospitals, and so on. Try to speak to other landlords in the area and local letting agents to get an idea of the size and nature of the rental market and the sorts of rentals that may be achievable. Always remember that the bottom line for any buy-to-let investor is return on capital or yield.
Once you find a potential property (with or without existing tenants) research it carefully as well. Obviously before buying you will need to do all the usual searches and a structural survey. As with all property sales, you can expect this process to take several months to complete.
Arrange insurance for your buy-to-let. Along with the usual buildings insurance, you should almost certainly have landlord insurance to protect you from financial losses associated with renting out a property. This will typically cover such things as fixtures and fittings, public and landlord’s liability, subsidence, replacement of windows, locks and keys, and so forth. It will also normally cover malicious damage caused by tenants, along with rent arrears and legal expenses (though the last two may not necessarily be included as standard). You can compare landlord insurance here.
To find tenants you can either go through an agency or do this yourself. Obviously going through an agency will add to your costs but can save you a lot of hassle, especially if you haven’t the time (or inclination) to be too hands-on.
Even if you pick your own tenants – and perhaps already know them personally – draw up a legally-binding contract. That means everyone knows where they stand from the start and can help to avoid potential unpleasantness later on.
Review your buy-to-let mortgage arrangements regularly and be prepared to switch to a better deal when your current one expires.
Ensure that your rental income is declared in a tax-efficient way and set against any allowable expenses. A good accountant will be able to help with this.
Your accountant will also be able to advise you about the pros and cons of running your buy-to-let through a limited company. This comes with additional costs (and paperwork) but for landlords of multiple properties in particular the tax benefits can be significant – not least because you can claim all the interest paid on your buy-to-let mortgage/s against income rather than just 20%.
And finally, once your first buy-to-let is up and running successfully, consider adding more. Multiple properties will give you a bigger income and will also reduce the risk inherent in putting all your eggs in one basket (as discussed earlier).
In Conclusion
If you’re considering buy to let, I hope this article will have helped you make up your mind. There is undoubtedly still money to be made this way, but you do need to choose your location and property carefully, and approach the whole process in a professional and businesslike way. That applies from the initial planning stage right through to the day-to-day – and year-by-year – management of your property.
As ever, if you have any comments or questions about this post, please do leave them below. I would also be very interested to hear from any readers who have invested in buy-to-let themselves, along with any tips (or warnings!) they would like to share.
Disclosure: this is a sponsored post.
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December is here, so it’s time for another of my monthly coronavirus crisis updates. Regular readers will know I have been posting these updates since the first lockdown started (you can read my November update here if you like).
As ever, I will start by discussing financial matters and then life more generally over the last few weeks.
Financial
I’ll begin as usual with my Nutmeg stocks and shares ISA, as I know many of you like to follow this.
As the screenshot below shows, since last month’s update my portfolio has been on a generally upward trajectory and is currently valued at £18,008. Last month it stood at £16,955, so it has gone up over £1,000 in value since then. Considering national and world events at the moment, I am more than happy with this.
As you may recall, I recently put £1,000 into a second Nutmeg pot to try out Nutmeg’s new Smart Alpha option. It is too early to comment on this yet, but I will include an update about it next time.
The news hasn’t been so good with my Bricklane Property ISA, which I talked about last time. As stated in in my blog review, Bricklane – not be confused with Brickowner – is a REIT (Real Estate Investment Trust). Investors’ money is pooled to purchase properties. Rental income is then distributed to investors, who also stand to benefit if the value of the REIT goes up. Last month I was down by about £80 on my £5,000 investment, but this month – as you can see from the screen capture below – the figure is over £600.
This is obviously disappointing, though not unexpected. As I said last time, the pandemic has hit property investors hard, especially investors in large commercial properties (as are most in the Bricklane portfolios). But, in addition, the current price factors in the liability of Bricklane and its investors to assess and where necessary replace exterior cladding in some buildings in light of the Grenfell Tower tragedy. I understand that almost half of the properties in the Bricklane Regional Capitals fund (in which I invested) fall into this category.
About the only good thing to be said is that right now Bricklane’s price reflects its liabilities in the worst case scenario. In particular, it has been argued that lease-owners should not bear sole responsibility for paying for this work, as the rules were only changed after Grenfell and it isn’t the owners’ fault that some properties were built to different specifications which were regarded as perfectly safe (and legal) at the time. If the government accepts that argument, in whole or in part, then Bricklane will not have to set aside large sums of money for remedial work, and the share price will rise accordingly. I have written to my MP about this, of course 🙂
As I said last time, if I was braver and had a longer investment horizon, I might look at Bricklane as a value opportunity just now. As it is, I am leaving my money where it is but won’t be investing any more with them for the foreseeable future. I am not planning to sell up as I don’t currently need the money and that would only crystallize my losses. i just hope there will be some better news on this front soon.
I also wanted to say a word about Kuflink this month. This property loan investment platform is still performing well and returning the promised monthly dividends. A couple of loan terms have been extended due to the pandemic but interest continues to be paid and I am not unduly concerned about this. I also had a couple of investments repaid after the loans in question were paid off. So I decided to reinvest in a new six-month loan to help finance the construction of a children’s day nursery in Chorley. Some details of this project from my Kuflink dashboard are shown below…
As you can see, the interest rate being paid is 6.80%. When I invested yesterday the offer had only just launched, so it’s interesting to see it is already up to almost 42% funded now. Although the loan hasn’t gone live yet, as is Kuflink’s normal practice I will received cashback equivalent to the interest on offer until it does, so I am already making money from this loan 🙂
Incidentally, I am not saying this project has any special merit compared with others on the Kuflink platform. But I decided to invest on the basis that it looks reasonably secure with a loan-to-gross-development-value ratio of 36%. And from a more personal perspective, wherever possible I like to invest in projects that will have a socially beneficial outcome, and a new children’s day nursery certainly ticks that box.
i did want to mention as well that I recently updated my full Kuflink review. You can read it here if you like. I’d particularly like to draw your attention to their new and more generous cashback offer for new investors. They are now paying cashback on new investments from as little as £500 (it used to be £1,000). And if you are looking to invest larger amounts, you can actually earn up to a maximum of £4,000 in cashback. That is one of the best cashback offers I have seen anywhere (though admittedly you will need to invest £100,000 or more to receive this!).
My two Buy2LetCars investments are still delivering the promised monthly returns without any issues. As you will remember, investors with Buy2LetCars put up the money to finance a car for a key worker such as a nurse or police officer. They then receive 36 monthly capital repayments followed by a final balancing payment of interest and capital. If you are looking for an income-producing investment with a substantial lump sum payment after three years – and you like the idea of doing a bit of good with your money too – they are well worth checking out (and likewise if you’re a key worker looking for a lease car yourself). If you’d like to learn more, you can read my review of Buy2LetCars here and my more recent article about the company here. And here is a link to Wheels4Sure, their car-leasing website.
Otherwise, there is nothing especially notable to report on the financial front this month, so let’s move on to the more personal stuff…
Personal
Since my last monthly update England has been mostly in lockdown, so I haven’t been doing anything especially exciting 🙁
I went for my latest checkup at the eye clinic at Burton Hospital in the first few days of the new lockdown. As you may remember, I was diagnosed with a perforated retina after a routine eye test at my optician’s.
I wasn’t allowed to drive, as they put drops in your eyes which blur your vision for a few hours. The trip to Burton involved a bus ride, two train journeys and a one-mile walk, so it took up a whole day. The train journeys in particular felt odd and at times almost post-apocalyptic. I was literally the only person on Lichfield Station waiting for a train to Birmingham, and had the whole carriage (and possibly train) to myself. The train to Burton was a little busier, but you do start to wonder how long the railway network can go on with such minuscule passenger numbers.
It was very quiet at the hospital too, so I was seen straight away. The doctor seemed happy with what he could see, though it’s not easy to tell when he – and everyone else – was wearing a mask. I was told I will have to go back again in January, and if everything is still okay then, they will discharge me. So I guess that’s good news, although they did say that last time as well…
During the lockdown month I aimed to go for a walk every day, and apart from a couple of days of foul weather I achieved that. I have been wearing my new music hat – described in this recent post and pictured below – and enjoying listening to my choice of music. My preferred genre is prog rock (classic and current) but I enjoy jazz and blues as well. I do just find I have to be a bit careful when walking on the narrow country lanes where I live, as with my music playing I don’t always hear cars coming up behind me. Still, I haven’t had any really close calls yet!
I was pleased to be able to go for a swim again this week at my local David Lloyd leisure centre. It was very quiet, and all the staff, including those at reception, are now wearing masks. I suppose some people would find that reassuring. I just find it rather sad and dispiriting. Still, I really enjoyed my swim, and it was great to see a couple of members I know and exchange a few words with them. Even small social interactions like that offer a welcome morsel of normal life in these strange times.
Afterwards I ordered my usual hot drink from the centre’s coffee shop, but because I’m in a Tier 3 area I was told I couldn’t sit down to drink it. I was afraid I might be forced to take it to the freezing cold car park to consume, but was informed there was no objection to me drinking it while standing up in the centre, so long as I didn’t stay in one place for too long. You might think this is barking mad – I couldn’t possibly comment.
There has of course been some good news on the virus front in the last few weeks. As I said last time, new cases (in England anyway) are on a clear downward path. The government are of course trying to spin this as a success for lockdown, but I am sceptical about that. As I said in my November update, cases were already starting to decline pre-lockdown, so what we are seeing now is simply a continuation of that welcome trend.
It’s also interesting that the – admittedly shorter – Welsh lockdown appears to have failed totally, with cases there on the rise again. So they are now imposing even harsher restrictions, including a total ban on pubs and restaurants serving alcohol. I would therefore like to extend my sincere commiserations to Welsh readers (and especially those working in tourism or hospitality) at this time. It is a shame that the four nations of the UK couldn’t have come up with a more coherent, co-ordinated policy to combat the virus – although in my view lockdowns shouldn’t ever be a part of this due to all the collateral damage they cause.
There has been good news about vaccines this week, with the first one from Pfizer/BioNTech receiving regulatory approval in the UK and due to start rolling out next week. I am not an anti-vaxxer and will (probably) accept the vaccine when it is offered. There are, though, some reasons to be sceptical about some of the claims being made for vaccines, nicely summed up in this cautionary blog post by my old friend John ‘Platinum’ Goss. In particular, we still don’t know about any possible long-term side-effects of the vaccines. And with case numbers dropping dramatically in England, you have to wonder how much Covid will still be around in a few months’ time anyway…
In my view, this pandemic will only end when some sort of herd immunity has been achieved. That will be partly through growing numbers of people achieving immunity through contracting the virus, and in addition (hopefully) people acquiring immunity through vaccination. If that is the case, the virus will have nobody left to infect and will ultimately die out (though maybe returning occasionally in milder variants, as happens with other cold and flu viruses). That’s the best-case scenario, anyhow, and I hope it plays out that way.
Before leaving this topic, I would just like to include a quick shout-out for the excellent Lockdown Sceptics website. This site is updated daily and is the first thing I look at when I switch on my computer in the morning. It includes articles from a wide range of academics and other commentators, and offers a sceptical slant on official policies and announcements that is often missing in the mainstream media. Even if you don’t agree with all the views expressed, it’s well worth a read.
As for Christmas, I am expecting to have an even quieter one than usual. I don’t normally socialize a lot at this time anyway. My only remaining close family consists of my three sisters, but they are all in different parts of the country and have their own families and social circles. I have put up my lights and decorations, though, and am looking forward to receiving plenty of cards and letters. I shall also ensure I have a good stock of box-sets to watch!
Well, I guess that’s it for now. I do hope you and your loved ones are staying safe and well and looking forward to the festive season. As always, if you have any comments or questions about this post, please do leave them below.
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