property

February 16, 2020

Bricklane: My Review of This Property Investment Platform

Nick Investing property, crowdfunding, pensions 23 Comments

Please be aware that this is a historical post. Bricklane is now closed to new investors and is winding down. Please see the comments below for the latest updates about it.

Today I am looking at another property investment platform, Bricklane.

Unlike Kuflink and Ratesetter, both of which I have discussed previously on this blog, Bricklane is not a platform for peer-to-peer loans. Neither does it arrange crowdfunded investments in specific properties like Crowdlords and Property Partner.

Bricklane is structured as a Real Estate Investment Trust, or REIT for short. For those who don’t know, REITs are property funds that use investors’ money to buy (and manage) property and provide returns in the form of rental income plus capital appreciation.

In order to qualify as a REIT in the UK, companies have to meet certain requirements. The most important are as follows:

At least 75% of their profits must come from property rental.
At least 75% of the company’s assets must be involved in the property rental business.
They must pay out 90% of their rental income to investors.

In exchange for operating within these rules – and to encourage investment in UK real estate – REITs are not required to pay corporation or capital gains tax on their property investments. That helps make REITs profitable for the companies running them, and is how they are able to generate attractive returns for investors.

Normally rental income from REITs is treated as taxable income and taxed at your highest marginal rate. However, if you invest through an ISA or SIPP (Self Invested Personal Pension) no tax is due. You therefore get the best of both worlds – your money isn’t subject to taxation while invested in the REIT, and when it comes back to you in the form of income distributions and profits on sales of shares, you don’t have to pay tax on these either.

Types of Investment

You can invest in Bricklane as a stocks and shares ISA or a SIPP, or failing that in a standard investment account, where you will be liable for tax.

To maximize the benefits from investing in a REIT, I highly recommend going down the SIPP or ISA route, if you haven’t already used up this year’s allowance. As a reminder, everyone has a £20,000 annual ISA allowance (for 2019/20) and you are also only allowed to invest in one cash ISA, one stocks and shares ISA and one Innovative Finance ISA (IFISA) in any one tax year. I invested in a stocks and shares ISA with Bricklane myself.

Bricklane has two property portfolios you can invest in. These are Regional Capitals, which includes properties in Birmingham, Manchester and Leeds. and London, with a portfolio of properties in the capital. The Regional Capitals portfolio has generated a return of 19.3% since it was launched in September 2016 and the London portfolio 8.9% since its launch in July 2017 (figures from the Bricklane website).

As a Bricklane investor, you can choose to invest in either or both portfolios, in any proportion you choose. I opted to put all my money into Regional Capitals, as I believe this is where the biggest growth potential lies. In addition, rental income in this portfolio is higher, and I am also concerned about the possible impact of Brexit on London. You might see this differently, of course!

Bricklane Pros and Cons

Based on my experiences so far – and some online research – here is my list of pros and cons for the Bricklane property investment platform.

Pros

1. Fast, easy sign-up.

2. Well-designed, intuitive website.

3. Low minimum investment of £100.

4. Bricklane take care of all the work involved in buying and managing properties. You just choose which portfolio/s to invest in.

5. REIT structure offers significant tax advantages.

6. Tax-free ISA and SIPP options are available.

7. Possibility to access your money at any time (though this does depend on another investor being willing to buy your shares).

8. Customer service (in my experience anyway) is fast, friendly and helpful.

9. Charges are reasonable, comprising an initial 2% fee (though see my comment below on how you may be able to offset this) and 0.85% annual management fee.

10. Potential to profit through both capital appreciation and rental income.

11. Rental income is paid into your account every three months. You can either withdraw it or reinvest it to compound your returns.

12. Up to £1,500 cashback is available for new investors of £5,000 or more via my referral link (see below).

Cons

1. No detailed information provided about the properties your money is invested in.

2. Can’t invest in an ISA if you have already put money into another stocks and shares ISA this year.

3. 20% tax deduction from rental income at source if you don’t invest via a SIPP or ISA (and additional liability if you are a higher rate taxpayer).

4. Minimum £10,000 investment for a SIPP.

5. Returns over the last few months have been disappointing (see below)

6. No absolute guarantee you will be able to sell your shares when the time comes.

My Experiences

I put £5,000 into a Bricklane Stocks and Shares ISA in October 2018. As mentioned above, I chose to invest in the Regional Capitals rather than the London portfolio. The graph below – taken from my member’s page – shows the earnings generated since I opened my account.

As you will see, initially my investment performed pretty well. In the first nine months I made about £150, which equates to an annual interest rate of 4% (tax-free). That’s not spectacular, but it still beats most bank and building society accounts by a considerable margin. It is similar to the top rate currently on offer with P2P platform RateSetter in their Max account, although in their case you have to pay a fee equivalent to 90 days’ interest if you wish to withdraw. There is no withdrawal fee with Bricklane.

Since July/August 2019, however, returns have diminished considerably. My earnings between August 2019 and February 2020 were only just over £7, which is clearly a very low percentage rate. Of course, a large part of this is down to the depressed state of the property market caused by uncertainty over Brexit. I am hoping that now this is definitely happening – for better or for worse – my investment will get back on an upward trajectory again. Although recent results have been disappointing, at least the overall value of my portfolio hasn’t gone down (which has happened with some of my other property-related investments).

One other thing I should mention is that in October 2019 I withdrew £1,000 from my account to help fund a new central heating boiler after the old one packed in. This has therefore also reduced my returns a little. Although even if I still had the full £5,000 invested, earnings over the last few months would still have been nothing to write home about.

I should add that the withdrawal in question proved straightforward, although it wasn’t instant. I received the money in my bank account about a fortnight after putting in my request.

Conclusion

Clearly the performance of my Bricklane portfolio since last August has been disappointing, though overall I am still better off than I would have been if I had kept my money in a bank or building society.

I am hoping that things will start to improve in the property markets now that the Brexit issue has been resolved. There are some signs of this, although it remains to be seen whether the recovery in property prices will be sustained. For the time being, then, I am sticking with what I have in Bricklane, though I am not planning to top up my investment with them currently.

More generally, my experiences with Bricklane have been good. The sign-up process was fast and simple, and my £125 referral bonus (see below) was credited to my account instantly, completely offsetting (with a bit to spare) the initial 2% charge.

I also like the fact that any investment with Bricklane is automatically diversified across a range of properties, thus reducing volatility and risk. By contrast, with many P2P loan and property crowdfunding platforms, you invest in one loan or property at a time.

It’s also reassuring that you can ask to withdraw your money at any time – this can be an issue with property crowdfunding platforms in particular. As mentioned earlier, this does depend on someone else being willing to buy your shares, but Bricklane say that to date there hasn’t been a problem for anyone wanting to sell. As I said above, I had no issues when I wanted to release £1,000 from my own investment with them.

It is important to note that this is an investment rather than a savings account, and it does not therefore enjoy the same level of protection as bank and building society savings, which are covered (up to £85,000) by the Financial Services Compensation Scheme (FSCS).

Clearly, no-one should put all their spare cash into Bricklane (or any other investment platform). Nonetheless, in my view it is worth considering as part of a diversified portfolio. Not only are the rates of return (other than the last few months) higher than those offered by most banks and building societies, they are less affected than shares by ups and downs in the stock market. Property investments aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.

In addition, the tax treatment of REITs make them a highly tax-efficient investment, especially if you can invest in the form of a SIPP or an ISA.

Welcome Offer

As an existing Bricklane investor, I can offer a special cashback deal for anyone signing up and investing on the platform via my link. If you click through this special invitation link, sign up and invest a minimum of £5,000, you will receive £125 in cashback (and I will get £100). With a £5,000 investment this bonus will cover your initial 2% charge and still leave you £25 in profit 🙂

If you invest more, you will get even more cashback, as follows:

Over £10,000 – £250

Over £20,000 – £500

Over £50,000 – £800

Over £100,000 – £1,500

Not only that, once you are an investor with Bricklane, even if you only start with £100, you will be able to offer the same cashback bonus to your friends and relatives and earn commission yourself as well. There is no limit to the number of people you can introduce through this scheme.

Obviously, this is a generous promotional offer by Bricklane and I assume it won’t be available forever. If you want to take advantage, therefore, don’t wait too long. I will remove this information if/when I hear the offer is no longer valid.

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

Disclosure: this post includes affiliate links. If you click through and make an investment at the website in question, 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.

Note: This is a fully revised and updated version of my original Bricklane review from October 2018

UPDATE 15 March 2020: Having said that my earnings from my Bricklane ISA over the last 6-8 months were disappointing, since the start of February they have shot up by over 100% (see below).

This doesn’t exactly cancel out the recent falls in my equity-based investments due to the coronavirus, but it does demonstrate the value of having a well-diversified portfolio. And I am obviously feeling more positive about Bricklane as an investment platform now 🙂

One other thing to note is that until the end of April 2020 Bricklane are waiving all investment fees for both new and existing investors. Visit the Bricklane website for more information.

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

December 19, 2019

My Best Investments of 2019

Nick Investing retirement, events, property, crowdfunding 5 Comments

One question I get asked fairly frequently as a money blogger is what I think are the best current investment opportunities.

I have to be very careful when responding to this sort of question (and always tell people this). For one thing, I am not a qualified financial adviser, so it would be against the law for me to offer personalized investment advice. And even if I were, I still wouldn’t be allowed to give one-to-one advice without first doing an in-depth fact-find on the person in question.

Of course, this is exactly as it should be. For one thing, everyone’s circumstances are different, and what represents a good investment for me might not be the same for you. It depends on a wide range of factors, including your income and expenditure, your family responsibilities, how much you want to invest, the timescale (and purpose) you are investing for, your age and health, and so forth.

Another important consideration is your attitude to risk. Other things being equal, higher returns come with higher risks. If you’re comfortable with this and willing to accept it in exchange for the chance of better returns, that is of course your decision. On the other hand, if riskier investments would cause you sleepless nights, you are probably better off seeking a safer – if possibly less exciting – home for your money.

In addition, anything I say here is inevitably based on my own experience, and there is no guarantee yours will be the same as mine. I might, for example, have great success with one platform and suffer losses on another. But there is no way of knowing whether your experiences if you invest will be the same as mine. This applies especially if you have to choose specific investments on the platform (as with many P2P/property crowdfunding platforms) rather than putting your money into a pooled fund of some kind.

And, of course – as the financial services ads always say in the small print – past results are no guarantee of future performance…

I don’t want to come across as too negative. I am, after all, a money blogger and investor myself. So what I can – and will – do is talk about my own investing experiences and share information about what has worked well for me this year. It’s then up to you to decide if you want to investigate these opportunities any further. If so, you will need to do your own ‘due diligence’ before deciding how to proceed, perhaps taking professional advice from a qualified financial adviser as well (which I strongly recommend if you are new to investing or at all uncertain).

Although I count myself as a reasonably experienced investor, I do still have an independent financial adviser (Mike from Integrity Wealth Solutions). He oversees about half my investments, while the other half I look after myself. He also advises me on my financial situation more generally and answers any questions I can’t answer satisfactorily myself. i will talk more about this in another post. But I wanted to mention it here to show that I am not at all opposed to using a financial adviser and in general recommend it, particularly when starting out in investing.

My Best Investments of 2019

Below I have listed some of my investments that have performed best this year and/or caused me the least stress and hassle! I have included a few lines about each one, and links to any blog posts I have written about them for further info.

(1) Nutmeg

Nutmeg is a robo-advisory platform. I have used it for my Stocks and Shares ISA investments over the last three years. My investment pot has grown steadily, albeit with a few ups and downs, as is to be expected with equity-based investments. At the time of writing my Nutmeg pot has grown by about 40% since i started investing in April 2016, which is certainly a lot better than I could have achieved with a bank savings account. Of course, you shouldn’t normally invest in any equity-based product with anything less than a five-year timescale.

Nutmeg use exchange-traded funds (ETFs) as their investment vehicle. These are discussed in more detail in my in-depth Nutmeg review, which also includes details of what I invested with them and when. Note that my investment has grown by a further £1,100 since that article was published.

(2) Ratesetter

Ratesetter is a P2P lending platform. They don’t pay the highest rates, currently ranging from 3% for instant access to 4% for their Max account (where you pay a release fee of 90 days’ interest if you wish to withdraw). Though better than most bank savings accounts, those rates are clearly nothing spectacular.

One thing I particularly like about Ratesetter, though, is that they have a provision fund that effectively covers investors against defaults. That means you don’t have to worry about diversifying your investments across a range of loans, as is the case with some other P2P lending platforms. Of course, if the whole platform were to collapse the provision fund wouldn’t necessarily save you, but Ratesetter has been going for ten years now and appears professionally and competently run. It has delivered the promised returns to me with no stress or hassle, and I am happy to recommend it based on my experience.

In addition, if you check out my Ratesetter review you can discover how to get a free £20 bonus if you invest a mere £10 with them.

(3) Buy2Let Cars

I took a long time before deciding whether to invest with Buy2Let Cars, as it is quite an unusual investment. Basically what you are doing is putting up the money to buy a car for someone in a responsible job who can’t afford to buy one outright themselves. You then receive monthly repayments over a three-year period, and a final repayment of capital plus interest at the end of the loan. The minimum investment is £7,000, so this is obviously not going to work for everyone. Personally I bought one new car at a price of £14,000 in March 2018. Since then I have been receiving £250 per month in repayments, with a final payment of £8,429 due in month 37. That will give me a total net profit of £3,429 based on an annual interest rate of 10% (the rates on offer can vary but once you have signed an agreement the rate is fixed for the duration of the contract).

There are – of course – various safeguards and protections in place, fully discussed in my Buy2Let Cars review. Buy2Let Cars say that to date they have a 100% repayment record to investors, which appears to be confirmed by their Trust Pilot reviews. This investment has been working very well for me, with payments turning up in my bank account every month like clockwork. I am currently semi-retired, so it is providing a useful extra monthly income for me, with a large lump sum due in 2021, just a few months before I qualify for the state pension 🙂 If you think it might work for you, I recommend checking out my Buy2Let Cars review and speaking to my contact there, Brett Cheeseman, who helpfully answered all the questions I had at the time I invested.

(4) Kuflink

Kuflink offer the opportunity to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage.

Kuflink don’t pay the highest rates in this field – their loans are typically at an interest rate of around 7% – but in my view they offer a fair balance between risks and rewards. One thing I like about them is that interest is paid into your account monthly on all loans. I only have a relatively small amount invested, but so far everything has been going well with just the occasional short delay in repayment of capital.

Kuflink currently have a generous welcome offer, with cashback of up to £4,000 for new investors. Take a look at my Kuflink review for more information about this.

(5) Crowdlords

Crowdlords is a property crowdfunding platform. I have been investing with them almost since their launch and have made a good overall profit. Crowdlords pay competitive interest rates (over 20% in some cases) and offer a choice of equity and debt investments. Equity investments are higher risk than debt ones, but offer the potential for bigger returns if all goes well.

My only reservation about Crowdlords is that I currently have two overdue investments with them. In both cases, though, I have received full and reasonable explanations for the delays, and have been told that the money should be in my account within the next few months. Obviously, if that doesn’t happen, I will let Pounds and Sense readers know.

Crowdlords doesn’t have a welcome offer as such, but they do have a Refer a Friend scheme. If you sign up quoting my code, I will share the commission I receive 50:50 with you. Please see my Crowdlords review for more information about this.

So those are the investments that have given me the best returns and/or least stress during 2019. I do have others as well, including Primestox, ZOPA, Bricklane, The Lending Crowd, The House Crowd and Property Partner. Most of these have still made some money but none has really set the world alight.

Only Primestox actually lost me money. This is (or was) a premium food investment platform. They started promisingly and I made good returns on my early investments, but then they were hit by a series of delays and defaults. This happened with three projects I invested in. In the case of two I have received partial repayments with more promised, but in the third I have probably lost my £500. Primestox are no longer advertising investment opportunities, and I assume are re-evaluating their business model.

Property Partner is an interesting case. I have made modest returns on my portfolio this year, partly due to the fact that the property market in general has been in a slump. That said, there haven’t been any issues with delays or defaults, and dividends have been credited to my account every month as promised. It will be interesting to see what happens in 2020 as properties come up to their five-year anniversary and investors have the opportunity to exit at the current market price. As I noted in this recent blog post, this has the potential to create opportunities for both buyers and sellers.

I haven’t included certain other investments in this article. These include my Bestinvest SIPP, which is now in drawdown and holding up well in value. Neither have I included money invested via my financial adviser. This is mostly in funds from Prudential, which again are doing pretty well.

Lastly, I haven’t included the money I ‘invested’ in Football Index. My portfolio has more than doubled in value over 18 months, so in some ways it is my most successful investment of 2019! I am sure luck has played a significant part in this. Nonetheless, if you want to know more about Football Index – and read how you can get a risk-free £50 when signing up – you might like to check out this recent blog post.

I hope you have enjoyed reading this article, which has run on a bit longer than I expected. I hope also it may have given you a few ideas to investigate further if you are in the fortunate position of having money to invest.

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

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

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

August 24, 2019

Why Property is an Essential Part of the Retirement-Planning Jigsaw

Nick Pensions & Benefits property, sponsored post, pensions 20 Comments

Today I’m sharing some thoughts about the role of property in retirement planning. The post is partly inspired by recent research and insight from retirement planning specialists Just.

In association with Opinium Research, Just surveyed 4,000 adults from all over the UK to discover what they think and feel about property, including their views on owning versus renting, how property affects their attitude to their current and long-term financial plans, whether they thought of their property as a home or an investment, what impact property ownership has across the generations, and more.

When looking at those in their 50s, the research revealed that this age group turned out to be (in some respects anyway) the most pessimistic age group.

Survey Results

The survey threw up some interesting – and in some cases concerning – findings for the 50s age group. Key points arising included the following:

Whilst those in their 50s are building up towards retirement, half (47%) feel unprepared and hit a ‘pessimistic peak’.
Among homeowners who don’t feel prepared – not having enough to retire on (52%) and not having enough to do what they want (45%) is the biggest concern. Ranking these above other concerns such as debt and handing down wealth to their children.
1 in 4 (23%) don’t know how to fund long term goals. And this goes up to almost half of renters (43%), compared to 16% of homeowners
It has become noticeably more difficult to get on the housing ladder – and this affects over a quarter (26%) of people in their 50s, who are still renting.
The impact on retirement is one of the biggest concerns for those now unable to buy, as property remains a core component of household wealth.
Even those on the property ladder are struggling to juggle their priorities and plan for the future.

You can see more information about the survey, and other findings from it, on Just’s My Home My Future website.

My Thoughts

At the age of 63 I am a little older than this age group, but I can definitely relate to these findings, both in respect of my own experiences and those of friends and relatives.

I believe that property should play an important – and arguably essential – role in every person’s retirement plans. And owning your own property puts you in a far stronger financial position than if you are renting.

One obvious reason for this is that your property can be a source of extra money if and when you need it in retirement. This can work in a variety of ways…

If you own your property and have equity in it (i.e. its value its greater than any outstanding mortgage/s) you can release some of this by downsizing. By selling up and moving somewhere smaller and cheaper, you may be able to release a chunk of cash that can be used to fund major purchases and/or invested to provide you with extra income.
If you don’t want to move, you may be able to use equity release to access some of the money tied up in your home. At one time equity release had a slightly dubious reputation due to the risk of going into negative equity, but nearly all lenders now offer a No Negative Equity Guarantee (NNEG) which ensures a borrower can never owe more than the value of their home. Equity release is nowadays a well accepted – and increasingly popular – method for releasing funds tied up in a property. Modern ‘lifetime mortgages’ in particular offer great flexibility for drawing down funds when you need them, with repayment only required when you die or go into long-term care.
Another option for generating income from your home is to rent a room in it. Under the government’s Rent a Room scheme you can charge up to £7,500 a year in rental without having to pay tax on it. This can work well for people in family homes whose children have flown the nest.
Owning a property also presents other opportunities to generate money from it. An example is renting out your driveway or garage, which I discussed a while ago in this blog post.

For more information on using your property for money, check out this page from the Just website.

My Circumstances

I am fortunate in that I own my home outright. The mortgage I took out with my late partner Jayne was paid off around ten years ago with the aid of a modest windfall. I also have various pensions and investments.

No-one can see what the future holds, but knowing that I could potentially release a substantial sum from my home if the need arises is obviously reassuring – especially in case in my old age I have to go into long-term care.

The latter is obviously a major concern for many older people. A recent report from Just revealed that 88% of people who have organised long-term care for a family member said they were shocked at how expensive care is, and 75% were surprised by how little financial support the state provides.

Further Thoughts

One thing that struck me particularly in Just’s My Home, My Future survey was the number of middle-aged (and older) people who are still renting, often through necessity rather than choice. Just found that non-homeowners in their 50s tend to be those who haven’t been able to buy their home (43%) rather than those who haven’t chosen to buy (21%).

This is clearly a concern for those affected, and for society generally. These people will be cut off from an important potential source of income in later life. If they have to go into long-term care, much of the (considerable) cost may have to be borne by their family, who may or may not have the means to do so.

A serious discussion needs to take place about how social care in Britain is funded, and specifically the balance between what is paid by the state and by the individual. Government policy in this area has been mired in confusion for years – and with the current political turmoil over Brexit it’s hard to see the situation improving any time soon.

In the meantime, it’s clearly desirable for everyone to get on the property ladder as early as they possibly can, so they are able to build up equity in their home and access the additional cash and income property can provide in later life. Whilst it remains unclear how much any of us will need to contribute to the cost of our own care, having a source of money to fund this if needed is all the more vital.

As always, if you have any comments or questions about this post, please do leave them below. I would especially like to hear your thoughts if you are 50 or over on how you plan to fund your retirement and the role you see for property in this. Check out also the #MyHomeMyFuture hashtag for more about this subject on social media.

For further advice on planning for retirement, I recommend checking out the government’s Pension Wise website, which includes detailed information about pension saving. If you are over 50 you can also book a free telephone or face-to-face appointment with an adviser who will go through the options with you.

Disclosure: This is a sponsored post on behalf of Just Group plc.

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

August 10, 2019

Is It Worth Getting Batteries for Your Solar Panels?

Nick Saving Money property 2 Comments

A couple of weeks ago I got home from a short break to find a letter and glossy leaflet on my doormat extolling the benefits of batteries for solar panel owners.

The letter said the company had purchased a list of names of local solar panel owners including my details. That put my back up a bit, as I’m not keen on having my personal information bought and sold. But I guess it’s publicly available info, so there isn’t really anything I can do about it.

Anyway, while I didn’t reply to the sales letter, it did inspire me to do a bit of research into solar energy storage batteries and whether they are worthwhile. That turns out to be quite a difficult question to answer. It doesn’t help that much of the information online comes from solar battery suppliers and installers, who are not exactly unbiased.

So here are my thoughts, based on what I have been able to find out in conjunction with my own experiences as a solar panel owner.

The Idea

The idea behind solar batteries is simple and appealing.

Solar (photovoltaic) panels generate most power when the sun shines, but this is probably not when you need it the most. If they are generating electricity in the day when you are out at work, some of that power is likely to be going to waste. (Yes, you might be able to sell some back to the grid, but most home-owners are paid a – low – ‘deemed’ tariff for this based on the total amount of power their panels generate. It makes no difference to this how much of the electricity generated you use yourself.)

If you have batteries, though, these can be charged by your panels when they are making more electricity than you need, and then used to provide power at other times (e.g. in the evening) when you need it. This should reduce the amount of electricity you have to buy, thus cutting your bills. It may also give you a backup in the event of power cuts (although don’t bank on this – see below).

The Reality

That all sounds great in theory, but the reality is a lot more complicated.

First of all, solar storage batteries are still new and, to a degree, untested technology. They are also expensive. To have batteries supplied and fitted to an existing solar panel installation is likely to cost anywhere from £5,000 to £10,000.

Solar batteries also have limited lifespans. Because the technology is so new, nobody is really sure how long they will last, but I have seen figures of 5 to 15 years quoted. That means you are likely to need to replace your batteries at least once during the 20- to 25-year working life of your solar panels.

It’s also worth bearing in mind that all batteries become less efficient over time, reducing the amount of electricity they are able to store.

My Calculation

I thought I would look at my own solar panels as an example, to see if the sums added up. First of all, here is a chart showing the total amount of electricity generated by my panels since they were installed in 2011.

As you can see, the maximum my panels have generated is just under 3,000 kWh in 2015 (after that the output declined somewhat, for reasons discussed in this blog post). For the sake of my calculation, though, let’s use a figure of 3,000 kWh for the amount of power my panels generate annually.

Now, to work out how much power could be saved by installing batteries, we need to know what proportion of power generated is surplus to my requirements and currently ‘wasted’. Because I work from home and am here in the day most days, I can’t believe this is any more than 30 percent. In reality it is probably less, but I’ll use 30% for my calculation.

Let’s now assume that batteries would allow me to save the whole of that 30% (in reality that’s highly unlikely for reasons I’ll discuss shortly). That means I would be saving 3,000 kWh x 30% = 900 kWh. The electricity companies in my area currently charge in the region of 20p per kWh (including VAT), so the saving on my bill would theoretically be worth 900 x 20p = £180 a year. Assuming the cost of buying solar batteries and having them installed was an optimistic £5,000, that means it would take 5000/180 = 28 years for the cost to be recouped – well above the expected lifespan of the battery (or the panels, for that matter).

Even if I was out a lot in the day, to the point where I could save 60% of the power generated by my panels if I had batteries, the breakeven period would be 14 years. And remember, this is also assuming the highest possible output from my panels every year and 100% battery efficiency, neither of which will be the case in reality.

Complications

There is one thing you may have noticed that I didn’t account for in my calculation, and that is the fact that electricity prices go up every year. That will, of course, have the effect of increasing the potential savings from batteries and reducing the time it takes to break even. If electricity prices go up dramatically, that will certainly make solar storage batteries more attractive.

On the other hand, there are some negative factors to take into account as well. Here are just some of them.

1. Batteries are not 100% efficient. Some energy is lost charging the battery and then releasing energy from it. The technical term for this is round trip efficiency. Typically this figure is around 80%, meaning that for every 5 kWh going in to your battery, you will only get 4 kWh of useful electricity out.

2. You can only charge a battery to its maximum (100%). If on a sunny day the batteries become fully charged, any surplus energy generated after that will simply go back to the grid.

3. If you discharge a battery fully this can significantly reduce its life expectancy. Technically this is known as Depth of Discharge, or DoD for short. Most manufacturers specify a maximum DoD for optimal performance. For example, if a 10 kWh battery has a (typical) DoD of 90 percent, you shouldn’t use more than 9 kWh of the battery before recharging it. In practice, an electronic charge controller prevents over-discharging (and over-charging) from happening. The effect of this is, of course, to reduce the amount of useful energy a battery can store.

4. Batteries become less efficient over time. This varies according to the type and make of battery, but typically over 10 years efficiency will reduce by 30%. Again, this reduces the amount of electricity batteries can store and the potential savings to be made. If you are unlucky and your battery fails completely just as the warranty expires, you could be looking at a large overall loss.

5. If you use batteries to store power, this may involve sacrificing the payments you would otherwise receive for exporting power back to the grid. This may not matter if you are getting a ‘deemed’ payment based on electricity generated (as is the case for many owners currently). But with the new generation of smart meters which can measure how much electricity you are actually returning to the grid, you will certainly end up making less money this way if you divert excess electricity to batteries instead.

6. As well as the cost of buying and installing solar batteries, there is also VAT to take into account. At the time of writing this is 5%, but it is going up to 20% in October 2019. This would add £1,000 to the price of a £5,000 battery installation.

7. Finally, although solar batteries may give you a backup power source in the event of power cuts, it appears this cannot be relied on. A survey of solar battery owners by The Consumer Association found that several people reported that in the event of a power cut, their batteries stopped working as well. That is despite promises made by sales people that this wouldn’t be the case.

My Conclusions

As I said earlier, this is a complicated field and I make no claim to any special expertise on it. However, based on my own data and research, here are the conclusions I have reached.

1. If you and/or other family members are typically at home in the day, it is doubtful whether you will save enough money by installing batteries to cover the cost, let alone make any profit. The same may apply if you use electricity in the day for other purposes when nobody is there in person, e.g. washing laundry, heating water, running a dishwasher, etc.

2. If nobody is in your home for most of the day and you aren’t using any significant amount of electricity during daylight hours then the savings from batteries may be more worthwhile. But bear in mind that you are still likely to be around (and using electricity) at weekends, early mornings, evenings, holidays, sick days, and so on. And some household appliances such as fridges and freezers go on using electricity all of the time.

3. If the price of energy rises sharply, solar batteries may become a more attractive proposition. However, they are expensive to buy and install, and have various limitations (discussed above) which may reduce the benefit you get from them. They will probably also have a shorter lifespan than your panels, meaning they will need replacing at least once over the lifetime of your panels. And they will in any event decline in efficiency over time.

4. Likewise, if battery prices fall – and the technology improves – that will increase the attractiveness of solar batteries in future. But of course, if you are considering whether to get batteries now, you can only base your decision on what is currently available.

5. If you are buying a new home and/or new solar panels, buying batteries at the same time is likely to be more cost-efficient (and involve less hassle) than retro-fitting them. In this article I am mainly addressing existing solar panel owners.

6. I am also looking at this primarily from a financial standpoint. There is a case to be made for installing batteries to help contribute to the fight against global warming and climate change, although there are obviously also environmental costs involved in battery manufacture. In any event, it is for each individual to decide how important this is to them and whether the environmental benefits of having batteries with their solar panels really do stack up.

7. Some companies are currently making a big push to promote solar batteries, and it does appear to me that some of the claims made on their behalf are exaggerated to say the least. If you are thinking of getting solar batteries, be sure to do your own ‘due diligence’ and don’t believe everything you read on company websites or are told by pushy salespeople. In particular, be very sceptical about pie-in-the-sky estimates over how much money batteries may be able to save you. I found one website claiming that 75% of the power generated by solar panels is typically wasted, which is frankly laughable.

8. Don’t, either, be swayed by arguments that you need to order now before VAT rises to 20% in October. This is (unfortunately) true, but it doesn’t make the case for installing batteries any stronger.

In summary, for most existing solar panel owners, I don’t believe that installing batteries is likely to make economic sense at present. I don’t, therefore, intend to do so myself. If prices come down and the technology improves, however, the equation may change (and reducing or scrapping the VAT would help too). This is something I will continue to monitor, and if I change my mind in future I will of course let Pounds and Sense readers know!

So those are my thoughts, but what do YOU think? I’d love to hear from you, especially if you have solar batteries yourself or are actively considering them. Please feel free to post any comments or questions below.

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

June 18, 2019

My Weekend at Hewenden Mill Cottages

Nick Everything Else travel, reviews, property 0 Comments

I have just returned after a three-day break at Hewenden Mill Cottages in Yorkshire.

I was there to visit my sister Liz and her family, who live in Wilsden, near Bradford. They don’t really have room for me to stay with them, so I did an internet search and discovered Hewenden Mill Cottages, which was just a mile and a half from them.

At first I assumed that, as these were self-catering cottages, they wouldn’t be suitable for a solo visitor who was only coming for a long weekend. Turns out I was wrong, though. They were very happy to accommodate me for three nights, and the cost was, if anything, cheaper than staying at a hotel (see Financials, below).

Hewenden Mill Cottages is in a secluded location between the villages of Wilsden and Cullingworth. I have embedded a map of the area below (courtesy of Google Maps.

The Accommodation

Hewenden Mill Cottages and Apartments (to give their full title) is based around not one but two old mills which have been converted into holiday cottages.

The main Hewenden Mill complex (which includes the reception, shown in the cover photo above) is easy to access from the B6144 (also called Lane Side). I was staying at Bent’s Mill, however, which is a short distance from Hewenden Mill. It’s a seven-minute walk from one to the other through some picturesque woodland, but unfortunately it’s not possible to drive through this. I have posted a photo of Bent’s Mill below.

When I arrived I was met at reception by the charming Susan, who told me she was the owners’ daughter. She asked me to follow her in my car as she drove to Bent’s Mill. I was glad to have her as my guide, as the journey involved going on narrow, twisting country lanes, and for my first visit it was reassuring to have her car in front and know I was going the right way. It also came in useful when we turned a corner and met another car coming the opposite way. As there were two of us and only one of them, they had no option but to back up!

I was staying in the Wheel Pit House at one end of Bent’s Mill. As you may gather, this is where the water wheel once stood. It’s no longer there, but you can see the chamber where it was through a window in the entrance hall (or from the outside). You can read more about the Wheel Pit House on this page of the excellent Hewenden Mill Cottages website. Here is my own photo of the exterior.

My accommodation was on three levels. On the ground floor was the front door and entrance hall. Upstairs on the first floor was a double bedroom and bathroom. On the top floor were the kitchen and lounge, from which you could enjoy lovely views of the woodland and mill pond (see photo below).

I have to say I was very impressed by my cottage. It was spacious and comfortable, with everything you would need for a short stay (or a longer one).

The kitchen included an electric cooker with ceramic hob, fridge, freezer, dishwasher and washing machine – all very clean and modern, and considerably nicer than I have at home!

The cottages have free wifi, and all costs such as electricity and VAT are included in the price. There would have been plenty of room for a couple, and a young child or baby as well. To me as a solo visitor it felt palatial, especially after the compact ‘Forest Retreat’ I stayed in a few weeks ago at Aberdunant Hall. As a matter of interest, I worked out that at Hewenden my accommodation was over six times larger!

A nice touch is that the owners provide a complimentary ‘welcome pack’ of groceries on arrival. This included bread, milk, butter, preserves, orange juice, biscuits, and so on. A selection of breakfast cereals in individual boxes and sachets was also provided, along with coffee and Yorkshire Tea (see below!).

Hewenden Mill and (especially) Bent’s Mill are a bit off the beaten track and there aren’t any shops close by (though there is a Co-op in Cullingworth about a mile away). As I was mostly eating with my sister and her family that wasn’t an issue for me, but if I’d had to buy some provisions it wouldn’t have been a problem. There are also several takeaways, cafes and restaurants within a mile or two.

Financials

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

I paid £327 (including VAT) for my three-night stay in the Wheel Pit House at Hewenden Mill Cottages, which I thought was very reasonable. I paid an initial £50 deposit when I booked, with the rest due on arrival.

Costs obviously vary according to the accommodation you want, when you want it, and for how long. I did though notice that the longer your stay the cheaper (per day) it works out. While you can book for one or two nights, it becomes much more economical if you are staying for three nights or longer.

The price I paid worked out to £109 a night, which – as I said above – struck me as very reasonable (and cheaper than most of the hotels I have stayed at recently). Of course, unlike most hotels, you don’t get a cooked breakfast, and neither is a daily housekeeping visit included. On the positive side, though, you do get far more space, a fully equipped kitchen, a separate lounge and bedroom, and complete privacy during your stay.

You can check current prices and availability on the Hewenden Mill Cottages website.

Things To Do

Obviously I was visiting family, so I won’t go into detail about everything I did while I was there. However, for the benefit of anyone who may be considering visiting the area, I will mention a few of the local attractions.

First of all, Hewenden Mill is just a few miles from Haworth, the home of the Bronte sisters, Charlotte, Anne and Emily (indeed, the area is sometimes called Bronte Country). If you haven’t visited before, I would say this is a must-see. You can go around the parsonage where the sisters were brought up and wrote their famous novels such as Jane Eyre and Wuthering Heights. The parsonage has been preserved (or restored) largely as it was in their day. I found it quite an emotional experience seeing the family home where the sisters lived, wrote, and tragically all died at an early age

The village with its cobbled high street is also well worth seeing, and there are numerous (enticing) tea and cake shops.

And finally, Haworth has a station on the Keighley and Worth Valley Railway, a heritage steam railway which runs between Keighley and Oxenhope. The line and its stations has been used in numerous period film and television productions, including the film The Railway Children. More information and timetables are available via the KWVR website. You can get a 10% discount on a Day Rover ticket if you buy your ticket more than seven days in advance.

Also nearby is Saltaire, the Victorian model village built by textile magnate and philanthropist Sir Titus Salt to house the workers at his mill. The mill itself is still there, and large parts are open free of charge to the public. Inside is a bookshop, and you can still see some of the old heavy machinery there that was used in the mill. There is also a bustling coffee shop and restaurant, along with displays and exhibitions. The River Aire runs alongside the town (hence the name, of course), and the Leeds and Liverpool Canal too (great for a brisk walk along the towpath!).

And, of course, the whole of the area is incredibly scenic, with lots of scope for country walks, runs or cycle rides, as you prefer. From Hewenden Mill Cottages there are various walks you can take, from a five-minute stroll to Goit Stock Waterfalls (see photo below) to much further afield.

Final Thoughts

As you may gather, I very much enjoyed my stay at Hewenden Mill Cottages and thoroughly recommend them. Obviously, the fact that they are only a short drive from my sister’s home was a big attraction for me. Even if that wasn’t the case, though, I would definitely consider going back for a short break.

There is plenty of choice of accommodation, though at weekends especially it does get popular, so it’s definitely advisable to book a few weeks in advance.

If you want complete peace and seclusion, I can highly recommend staying at Bent’s Mill, where the only noise to be heard is birdsong. My one slight reservation is that, as mentioned earlier, getting there by car involves a somewhat nerve-racking drive along narrow, twisting lanes, where you really hope you don’t meet someone coming in the other direction! it’s perfectly do-able, of course, but if you don’t fancy this particular challenge then staying at the main Hewenden Mill might be a better choice for you.

As always, if you have any comments or questions about Hewenden Mill Cottages, please do post them below.

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

June 11, 2019

Have You Tried Nextdoor?

Nick Everything Else reviews, property 0 Comments

Excuse the slightly tongue-in-cheek title. Nextdoor is actually a free social network for local communities.

I’ve been a member for about a year now. In the last few months I have seen the number of people who have signed up in my neighbourhood grow considerably. So I thought today I’d share my thoughts about it.

What Is Nextdoor?

I’ll start by quoting from the Nextdoor website:

Nextdoor is the private social network for you, your neighbours and your community. It’s the easiest way for you and your neighbours to talk online and make all of your lives better in the real world. And it’s free.

People are using Nextdoor to:

Borrow a ladder

Organise a Neighbourhood Watch Group

Track down a trustworthy babysitter

Find out who does the best paint job in town

Ask for help keeping an eye out for a lost dog

Find a new home for an outgrown bike

Finally call that nice man down the street by his first name

Nextdoor’s mission is to provide a trusted platform where neighbours work together to build stronger, safer, happier communities, all over the world.

That’s a reasonable summary, I think. It corresponds with the types of uses people in my local area are putting it to, as the screen capture below illustrates.

Here are my personal thoughts and experiences of Nextdoor as a member…

How I Use Nextdoor

As well as keeping an eye on what is going on in my neighbourhood, I have also used Nextdoor as a way of finding reliable tradesmen. This has worked pretty well, although I do find that when you ask for recommendations from your neighbours, what you actually tend to get is a stream of replies from the tradesmen themselves angling for your custom. Of course, it’s quite understandable that tradespeople are cottoning on to the fact that this can be a good way of getting work.

I have also found Nextdoor good for finding local people willing to do smaller jobs that the average tradesman might not be interested in. Here’s an example message I posted recently…

Man (or Woman) with a Ladder Needed

I recently had some scaffolding up at the back of my house. When the scaffolders took it away, they left a couple of short metal tubes near the edge of the roof. Despite several requests they haven’t come back for them and I’m concerned they may cause damage if they fall down. So I just wondered if someone with a ladder might be willing to pop over and remove them for me? Should only be a five-minute job and I’m happy to pay a tenner or donate the money to your favourite charity. Will also give you a review on any relevant website if you’re a tradesperson.

I got a reply on Nextdoor within an hour from the wife of a local roofer. She said her husband would be happy to come and do this for me. We exchanged private messages, and the roofer (Clive Byrne of CMB Roofing – many thanks!) came over that afternoon and removed the offending items for me. As per my message, I paid him £10 and put a review on Google for him. This solved a niggling problem for me with the minimum of hassle, and is a good example of the sort of thing Nextdoor can work well for.

Any Drawbacks?

As with any social network there can be differences of opinion, and worse…

I have seen a few instances where people have been criticised for things they have said or shared on the platform. Sometimes (in my opinion) this may have been justified, but other times I think those concerned have been, shall we say, rather thin-skinned.

One issue that has arisen a few times has been when someone reports suspicious activity and others then criticise them for stereotyping or being too quick to make judgements. I do accept that this can be a difficult issue, but personally I think that if someone observes suspicious, possibly criminal, behaviour, it’s not unreasonable to alert their neighbours about it. But like it or not, if you do this, you can expect to be criciticised by some people.

Unsurprisingly, politics (national and local) is another contentious area. For example, where I live the local council is currently considering a planning application for a KFC drive-through. Some people expressed their disapproval about this quite forcibly, while others argued (equally forcibly) that it would be beneficial for the area. Of course, there’s nothing wrong with a bit of robust argument, but some of the comments became unpleasant and borderline abusive. Some people get hot under the collar when they discover that their neighbours don’t share their views, and it can rather spoil the friendly, community vibe that Nextdoor is trying to promote. Of course, the same thing happens on Facebook and other social networks, but if you join Nextdoor you need to be prepared for this.

Nextdoor is monitored and supervised by what the network calls ‘Local Leads’. These are – as I understand it – ordinary members who have additional powers, e.g. to delete posts that breach the community’s guidelines. I now know who my Local Lead is, but only because I researched this carefully. I haven’t ever seen any posts by them on the platform, much less any evidence of constructive interventions. Maybe all this goes on behind the scenes – I don’t know. I do think Nextdoor could be more up front about who the Local Leads are and how they are chosen.

Finally, it would be wrong not to mention that joining Nextdoor has privacy implications. As a member, you can see the names of people in your local area and (in most cases) their street and house number. And they, of course, will be able to see yours. This information is only available to people in your immediate area and pseudonyms are not allowed. I can understand the reasons for this, but if you are uncomfortable with it, Nextdoor may not be for you. In any event, be careful about sharing personal information in your profile, especially anything you might not want your neighbours to know!

How to Join

If you do decide to give Nextdoor a try, you can sign up for free at https://www.nextdoor.co.uk. Fill in the short form on the front page (see screen capture below) including your postcode, then click on Find Your Neighbourhood. You will then be able to see recent posts by your neighbours, with other information (e.g. a map of your area) available via the left-hand menu.

You can also access Nextdoor via a mobile phone app. Versions are available for Apple (via the iTunes App Store) and Android (via Google Play).

Final Thoughts

Although (as stated above) I do have certain reservations about Nextdoor, overall I feel I have benefited from it, and it has certainly increased my awareness of events going on in my neighbourhood. I have also, as mentioned above, found it a useful resource for finding tradespeople and getting recommendations.

I’d love to hear your views about Nextdoor, and also your experiences (good or bad) if you’re already a member. Please do leave any comments below as usual.

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

May 18, 2019

Infographic: Transferring Property Ownership After Death

Nick Everything Else property, infographic 0 Comments

Today I’m bringing you an infographic created by I Will, a firm of solicitors who specialize in will writing. I published their previous infographic, An Essential Guide to Writing Your Will, back in 2017.

The infographic below is all about what happens with a property when the owner dies. As the graphic says, when the house is in joint ownership (as is typically the case with a married couple) and the surviving partner wants to go on living there, it is usually just a matter of notifying the Land Registry and (if relevant) the mortgage-holder.

If the house was in sole ownership, though – e.g. after the second partner dies – as the graphic says, the situation is more complicated, and there are various important things the executor will need to take into account.

It’s quite a long graphic, so please take a little time to scroll down it, and I’ll see you at the other end!

Thanks again to I Will Solicitors (not an affiliate link) for permission to use their graphic.

The company specializes in Islamic wills, but offers numerous legal services to people of all faiths and none, including Probate, Lasting Power of Attorney, Deputyships, and more. They say, ‘The writing of Sharia-compliant Islamic Wills is our specialty, but we are by no means a “Muslim-only” legal services provider.’

As I have said before on Pounds and Sense, where wills are concerned I strongly recommend using a properly qualified solicitor (and even more so where property is involved). I have had several experiences within my own family where failing to do this has caused serious delays and problems. In my view it really isn’t worth trying to save a few pounds by using a cut-price ‘will-writing service’ or attempting to do it yourself, not to mention all the hassle this can entail.

If you have any comments or questions, as ever, please do post them below.

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

May 9, 2019

How to Save Money When Buying a Garden Building

Nick Saving Money property 0 Comments

A garden shed or cabin is a serious purchase. Erecting a building in your garden doesn’t come cheap after all, even if it is made of wood.

As it’s such an expensive buy, you’re going to want to make sure that the shed is going to be fit to serve you for many years to come. The ultimate way to waste money when buying a garden shed is to have to replace the thing after a year or two!

Some shed manufacturers make sheds that look just like their higher-end peers, only they have been built using every shortcut in the book. Some might feature inferior wood varieties, construction methods, glass, or delivery options. Spending a bit more up front and going with a quality supplier will ultimately save you the most money, since it will need minimal maintenance work or repairs over its lifespan. Remember, you’re buying something for years here, not simply a few months!

Unfortunately, there’s not really any getting around the fact that your new shed or cabin is going to cost a reasonable amount. Whilst there are loads of manufacturers that are happy to sell you a building for less than the average asking price, these are often shoddily constructed, and the likely result is an angry customer needing to replace their shed much sooner than they expected.

One possible way to relieve some of the sting from your wallet when buying from a quality manufacturer is to use a discount voucher. This will allow your money to go that little bit further and, ultimately, you’ll end up with a much more rugged and durable building. Remember the mantra: buy cheap, buy twice.

There are loads of different manufacturers around that all run different promotions throughout the year. You’ll find two such special offers– one for Waltons discounts here and one for Shed Store discounts here. Both of these companies offer exceptionally high-quality garden buildings and these promotions make their products a little easier on the pocket.

Save Money by Getting it Right First Time

As is often the case, the best way to save money on a new garden building is to spend a little more up front and go for the highest quality possible. Although it is perhaps counter-intuitive, higher quality sheds pay for themselves in a couple of ways. Firstly, a superior garden building is much more likely to protect whatever you store in it from the elements as well as would-be intruders. If you end up having your lawnmower nicked because you bought a cheap summer house or shed with a rubbish lock, did you really save any money?

Secondly, a higher quality shed will need much less spent on it in terms of either maintenance, repairs, or even replacement. The cost of a new shed is certainly going to be more than whatever you saved by buying the cheap one in the first place. Again, remember the mantra, buy cheap, buy twice.

With that in mind, here are some things to look out for to make sure you get the best shed possible first-time round:

Building materials – Is the wood used suitable for outdoor construction? Look for slow growing varieties and beware of manufacturers not displaying the type they use.
Treatment – Does the product come with a treatment included? Sheds coated in a protective treatment last MUCH longer.
Building techniques – How are components joined together? Look for tongue and groove here over square cut joints or shiplap cladding.
Door hangings – Are doors hung externally or rebated? Rebated doors are much more secure and offer far greater draft exclusion. Are hinges recessed?
Windows – Is the glass thick enough to offer protection? Is it even glass? Are they rebated?
Roof – Does the roof come with an adequate covering? Felting protects sheds from succumbing to the elements and isn’t always included in the asking price.
Delivery – Is delivery included or do the company charge extra for it? How are pieces delivered? Avoid companies unloading components to bigger sheds by hand.

Shop Around Before You Spend

It’s a really good idea to shop around, visit review websites, and read a load of customer reviews about different products. This will give you a good feel for what’s out there. It will also help you to determine if the shed you’re considering is priced highly versus the rest of the market or seems more in keeping with it. Check the different manufacturers’ specifications with the above bullet points in mind. Pay close attention to dimensions of components used. This is a common place for manufacturers to save a bit of money by offering something that isn’t really fit for purpose.

You can even pay a visit to most manufacturers’ showrooms. This allows you to see prospective sheds in action, so to speak. You can look at and touch the products themselves to determine whether the sheds on display have wobbly floors, ill-fitting doors, or other design imperfections.

It’s likely that the shed you were thinking of buying won’t be on display when you visit a particular showroom. Don’t let that put you off, though. You can still learn a lot about the manufacturer by looking at the other products they make. If the rest of their stuff seems exceptional, it would be very bad luck for you to pick the one rotten apple, after all.

By combining your own visits with internet research, you’ll be able to make a reasoned decision about your eventual purchase. It won’t feel quite so much like a stab in the dark and you’re much more likely to end up with a garden building that will last for years with minimal maintenance. Even if it costs an extra £200 up front, if it remains useful for five or more years longer than the cheaper alternative, you’re quids in really!

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

This is a collaborative post with WhatShed.co.uk.

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

April 3, 2019

How I Saved £179.43 on my Home Emergency Cover

Nick Saving Money property, insurance 0 Comments

Stop me if you’ve heard this before, but I just realised that I have been paying well over the odds for another of my home insurance policies. This time it is my Home Emergency Cover.

To put you in the picture, soon after I moved into my current home with my now-deceased partner Jayne in March 1995, we decided to take out emergency plumbing and drainage insurance with a company called Homeserve.

We were strongly influenced at the time by a promotional leaflet enclosed with the water bill which indicated that if there was a problem with the water supply pipe from the mains, the water company wouldn’t be responsible and we could face a large bill to have it fixed.

Homeserve were offering a policy that would cover us in these circumstances and for other plumbing-related emergencies. Rightly or wrongly, we felt at the time it made sense to pay for this, especially as the company seemed to be endorsed by our water supply company (South Staffs Water).

We paid for the policy by quarterly direct debit and each year it rolled over, generally with a small increase. I looked after our household finances but never really thought much about this. The sums involved weren’t huge, and I assumed it was worth paying them for the peace of mind. As far as I can remember, we never actually made a claim on the policy.

Fast forward to 2019, and after taking stock of my buildings and contents insurance (and saving over £500 on it), I decided the time had come to put my home emergency cover under the microscope as well and see if there were any savings I could make. And again, there certainly were!

Doing the Sums

In December 2018 Homeserve said my insurance would be going up from £198 to £222 per year, working out as £55.50 per quarter (to be fair to Homeserve there was no extra charge for payment by instalments).

So I went online to see what alternatives there were for plumbing and drainage insurance. I did a search for home emergency cover providers on Top Cashback (a website that provides money back to people buying via merchants listed on the site – see this post for more details).

I could immediately see a few possibilities for saving money. Even allowing for the cashback on offer with TCB, though, the best deal I found was with another company called Home Emergency Assist. HEA offer a wide range of policies, some of which also include gas and electrics, pest removal, boiler servicing, and so on.

Obviously you have to be sure you are comparing like with like. With Homeserve I was on their Plumbing and Drainage Plus policy, which covered me for emergencies with the internal plumbing and external water supply pipes. There was a maximum limit of £4,000 per claim.

With HEA I could have bought water supply pipe and stop cock cover only, for a price (according to their website) from £1.49 a month or just under £18.00 a year. For a policy similar to Homeserve’s which also covered me for internal plumbing problems, I was quoted £42.57 a year. This is obviously a lot less than Homeserve’s price, and there was also a higher maximum limit of £5,000 per claim.

Admittedly Homeserve’s policy included zero excess, whereas the HEA quote mentioned had a £95 excess per claim. I was happy to accept that, but for the purposes of a fair comparison I checked their price for a policy with zero excess as well and this was £87.89 a year – still £134.11 cheaper than Homeserve quoted (and with a larger maximum claim limit).

So I cancelled my Homeserve policy, and (after a few more checks including reading their Trust Pilot reviews) have signed up with Home Emergency Assist instead. As I accepted the £95 excess, I shall be paying £42.57 a year, which as stated above is £179.43 less than I would have been charged by Homeserve.

I have, incidentally, nothing against Homeserve, but for me anyway their offer no longer represented value for money. Neither am I especially endorsing Home Emergency Assist. Although they offered the best price I could find for my needs, you might of course do even better by shopping around.

In any event, the real moral of this story (as I’ve said before) is not to let laziness and inertia ever stop you looking for better deals. Even with something as mundane and relatively cheap as home insurance, you may be as surprised as I was by how much money you can save.

You can search on Top Cashback for home insurance providers (all offering cashback) by clicking on this link (affiliate). If you aren’t already a member you will need to register to get cashback, but this is free and only takes a few moments.

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

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

December 3, 2018

Boost Your Income by Renting Out a Room

Nick Making Money property 2 Comments

Today I’m featuring an ‘old school’ money-making method that nonetheless can be lucrative if it suits your personal circumstances.

There is nothing complicated about this opportunity – it simply involves renting out a room (or more) in your home, either long-term or short-term.

There’s a long-running government scheme to encourage home-owners to do this. It’s called the Rent a Room Scheme. Until April 2016 you were allowed to earn up to £4,250 a year doing this. But in that year’s budget this limit was unexpectedly raised to an even more generous £7,500, which still applies now.

The Rent a Room Scheme

Anyone with space in their own home is allowed to use the scheme. You can let a single room or an entire floor.

You don’t even have to be the home-owner yourself. If you’re a tenant, you can sub-let a room, as long as your own lease allows you to do this.

There are some restrictions to the scheme, though. Most importantly, the accommodation must be furnished and it must be within your main residence. And you can’t claim under the scheme for self-contained flats even if they are in your own home.

If your gross rental income is under the £7,500 annual limit you don’t have to take any other action and can keep all of the money tax-free. You don’t even have to tell the taxman unless you fill in a self-assessment form already (in that case you’ll need to enter the rental income on your return but won’t have to pay any tax on it).

One important thing to note is that the £7,500 a year tax-free allowance is for total rental income. You aren’t allowed to deduct any expenses from this, e.g. repairs or redecoration.

If you earn over £7,500 a year from renting you have two choices. One is that you can keep the first £7,500 tax tree under the Rent a Room scheme and pay tax at your highest marginal rate on the balance above this (that’s 20% for standard rate taxpayers). This will probably be the best option for most people letting rooms at home.

Alternatively, you can opt out of the scheme altogether. In that case you will be treated like any other small business. You will be taxed on your entire rental income, but allowed to deduct all reasonable expenses before tax is charged on what is left. This will be advantageous if you have major expenses to cover. You can choose which option will be best for you each year, so it’s important to keep detailed financial records. More information can be found at https://www.gov.uk/rent-room-in-your-home.

Short Term Letting

If you don’t want a permanent – or semi-permanent – lodger, another option that has become hugely popular in recent years is short-term letting to budget travellers and people who prefer a more personal alternative to hotels.

At the forefront of this trend has been Airbnb. This site lets you offer anything from a sofa in your living room to your whole house. You can set your own rent, and decide which would-be guests you want to accept.

Airbnb charges you 3% of whatever you charge your guests (they also charge guests a fee of between 6% and 12% of whatever you charge). You get paid via Airbnb approximately 24 hours after your guest checks in.

Income from Airbnb rentals can also be claimed under the Rent a Room scheme, so long as you meet the general requirements mentioned above. This applies even if you rent out your whole house for a short period, as long as it clearly remains your main residence.

Short-term letting can obviously work well in holiday areas, but it can be done elsewhere too. For example, my sister Annie lives near Oxford and sometimes offers accommodation in her home through Airbnb to visiting academics and people coming to business meetings and conferences in the city.

There are other, similar options to Airbnb you may like to check out as well. They include HomeAway, VRBO, Couchsurfing, and more. They all operate a bit differently and offer a different range of accommodation and services (e.g. HomeAway is specifically for holiday rentals). This article on the Huffington Post site lists ten alternatives to Airbnb with basic descriptions of each one.

If you have any comments or questions on this post – or any experiences of your own to share – please do post them below.

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

«< 3 4 5 6 7 >