Frequently Asked Questions
Company Questions Market Questions Purchase & Sale Questions Finance Questions Letting & Management Questions
Company Questions
What is Concept Property?
Concept Property is a Property Investment Company based in Altrincham, Cheshire. We specialise in securing genuine discounts of up to 40% off the market value on off-plan and build-complete residential property for our members.
Why Choose Concept Property?
We specialise in structuring our deals so that the discount can be used as your deposit. Our team of legal and financial experts ensure that every transaction is completed smoothly and on time. We manage your purchase through to completion as effortlessly as possible providing the total solution.
Why should I use Concept Property instead of an estate agent?
Concept Property specialises in purchasing and structuring deals in the most capital efficient manner. Estate agents act on behalf of the developer and are required to achieve the highest sales price possible.
We buy property in bulk and pass on the negotiated discount to our members; this cannot be achieved by approaching an estate agent directly.
Do you provide investment advice?
Concept Property is not qualified nor permitted by law to give advice on investments. We simply inform you of current property opportunities and financing that we believe offer potential future rewards based on our investment experience.
Why are these properties discounted?
Developers offer discounts for many reasons; they often get a lower interest rate and a higher level of funding from the bank if they have a commitment to buy a certain number of properties prior to agreeing the loan terms.
We are able to negotiate these discounts due to our large membership base which enables us to purchase multiple units from the developer within the required timescales.
How do I know the discounts are real?
We instruct an independent surveyor to confirm that the gross price of the property certified by the developer is correct and has not been artificially inflated and look at comparables in the marketplace to back these up.
How do I know the rental assessment is real?
We obtain independent rental assessments to ensure that there is a rental demand for the properties offered.
How do I find out about new properties?
You will automatically be notified of future developments via e-mail once you have registered to become a member. You will be provided with an in-depth prospectus and full details for every new property investment opportunity.
If I am a member do I need to commit to purchasing any properties?
No, you will remain on our database completely free of charge until you ask to be removed. You will be kept informed about any new developments and it is entirely up to you whether you wish to purchase or enquire about any property.
What type of properties do you source?
We specialise in off-plan and build-complete UK residential property as we are able to negotiate greater discounts than those achieved when buying from individual owner-occupiers; this allows you to achieve a greater return with minimal outlay.
We also focus on emerging markets especially purchasing property within 5 star hotels.
What is off-plan property?
If you are purchasing a property off-plan from a developer the building work will either not be complete or has not been started.
Will investing in property take up a lot of my own time?
No, we provide our members with a report containing all the necessary information to help them make an informed decision. We provide legal and financial experts and manage your purchase through to completion to ensure that everything runs smoothly.
What's in it for you?
We charge a flat Arrangement Fee of £3,000 on each UK property and receive commission directly from the developer for overseas property.
Why do I have to pay a fee?
If we do not charge a fee we would not make any money! Some of the main duties carried out by Concept Property when finding an appropriate development are as follows:
- Finding appropriate developments
- Carrying out Due Diligence
- Negotiating discounts with developers
- Arranging solicitors, mortgage brokers & letting agents
- Managing the purchase through until the property is let
How do people get to hear about Concept Property?
Mostly by 'word of mouth'. The majority of our members have joined as a direct result of the personal recommendation of a friend or colleague, most of whom have bought through us on more than one occasion.
How will it affect me if you go out of business?
In the unlikely event of this happening, it will have no impact on you. Concept Property negotiates incentives for our members with reputable house builders. All dealings thereafter are between the developer and yourself with your mortgage broker and solicitor acting on your behalf. Concept Property oversees the process to ensure the process runs smoothly.
Market Questions
Is now the right time to invest in the UK?
The UK property market has enjoyed ongoing capital growth over the last fifty years with property prices doubling every seven to ten years. Property has proven to be a great medium to long-term investment, regardless of short-term market fluctuations.
What if interest rates go up?
Interest rates will always fluctuate within any normal economic cycle. We recommend you take this into consideration, and don't over-extend yourself.
It is possible to use mortgage products where the interest rate is fixed for a number of years; one of our mortgage brokers will be able to advise you on this area.
What happens if my property goes down in value?
Buying property below the market value means that you can make money even in a declining market.
Demand for UK property outstrips supply with a current shortage of 4 million homes in the UK, all these factors should hold up prices for the foreseeable future.
Is the UK buy-to-let market oversaturated?
In some areas of the country there is an oversupply of certain types of rental property pushing down rents. This oversupply is mainly due to the speed in which new developments are being built. As the number of new developments in those areas decrease supply and demand will balance out.
The rental market only makes up roughly 11% of the overall housing market; this number is due to increase for the following reasons:
- First time buyers are being pushed out of the market due to escalating house prices;
- There is an increase in single parent families and divorcees looking to rent;
- There is an increase in the number of students and single people looking to rent;
- There is an increase in immigration creating more demand for short term housing;
- Individuals are spending their disposable income as opposed to investing in a home;
- We have a more mobile workforce creating more demand for short term housing.
What timeframe should I be looking to invest for?
We would advise you to view your property as a medium to long-term investment. As your portfolio develops, we can help you assess your options. Most investors look to hold their property for at least 5 years.
Purchase & Sale Questions
Do I buy the properties in my own name?
Yes. You purchase directly from the developer in your own names. We are not joint signatories with you on the properties.
Can I invest under a company name?
Usually, yes, although we would always advise you to consult with a mortgage broker, solicitor and tax experts as to the benefits and limitations that might apply.
Can I use my own solicitor and mortgage broker?
We advise you to use our recommended solicitor and mortgage broker as the incentives offered to our members are conditional on meeting a specific completion date. Our team specialises in the purchase of investment property and are used to working within tight time constraints.
The appointed solicitor and mortgage broker will act solely on your behalf and are totally independent of Concept Property.
Why do I have to pay a mortgage broker fee?
Apart from the extra quality of service explained above, our mortgage brokers have access to exclusive mortgage products that are not available elsewhere, enabling us to structure deals in the most capital efficient way.
What if I have no money to invest?
If you have equity in your home or other buy-to-let property, you may be able to access this by re-mortgaging.
Can I purchase property without a deposit?
Yes. By buying a discounted property, the difference between the market valuation and the purchase price becomes instant equity. Our innovative finance techniques can allow you to lend against the valuation rather than the purchase price, thereby releasing the equity as a deposit.
This means that you can build up a property portfolio with much less capital than conventional methods at a far greater rate.
What happens to my deposit when I exchange contracts on an off-plan purchase?
Your deposit is held in a client account by the solicitor acting for you, until exchange of contracts. At this point your deposit is paid over to the developers’ solicitor to be held until legal completion.
If I decide not to go ahead, what happens to the fees I've paid?
All fees are non refundable if you change your mind. If the purchase is unable to proceed due to the developer we will refund our Arrangement Fee.
Once you have exchanged contracts, which is usually after twenty eight days you are committed to purchasing the property.
Can I sell my off-plan property prior to completion?
Most of our contracts allow for this but it would depend on you finding a willing buyer prior to completion.
Will I have to pay tax on any profits?
Unfortunately, yes - where there's profit, there's tax. It is possible to withdraw profits from the properties by refinancing and then deferring any tax liability until the property is sold. We can put you in touch with property tax experts who may be able to help you minimise your liabilities.
What is the 'rental yield' on a property?
This is the annual rent divided by the purchase price of the property.
Finance Questions
Is it better to purchase an investment property outright or use a mortgage?
Most investors use a mortgage even if they have the funds available to purchase the property outright. Although interest rates have increased recently a mortgage is still a very cheap way of borrowing money.
The same amount of money can be used to purchase an increased number of properties enabling you to achieve a substantially greater return on your investment.
Should I be worried about borrowing large amounts of money and getting into debt?
It is important to understand the difference between good debt (borrowing to buy appreciating assets) and bad debt (borrowing to buy cars, holidays, consumer items). When you borrow money to buy a property you are investing in an asset that will produce a much greater return than the cost of borrowing.
It is, therefore, a very sensible thing to do and in fact is exactly how most successful property investors operate – they use the power of leverage (the banks’ money) to make themselves wealthy.
Does my personal financial status matter?
In theory, since buy-to-let loans are secured on the income and capital value of a property, the income and credit status of the landlord is irrelevant.
Generally, anyone over the age of twenty one can get a buy-to-let loan, but the higher the risk, the higher the interest rate. To get the best possible finance, you need to present the best possible case to the lender. Factors such as poor credit history can affect your ability to get a loan
How much can I borrow?
Typically, a lender will allow you to borrow up to 70% of the value of the property as a buy-to-let mortgage. If the rent the property is likely to achieve is not high enough they will lend you a smaller amount.
Which mortgage should I go for interest-only or repayment?
Typically, a buy-to-let mortgage is taken out on an interest-only basis as the interest rate is lower. It is not essential to fully pay off the mortgage as you may remortgage the property to release any profit or sell the property to fully enjoy your gains.
Can I take out more than one buy-to-let mortgage?
Yes, you can take out multiple mortgages with different lenders, however most lenders will have a maximum number of mortgages you can have with them.
Can non-UK residents get buy-to-let mortgages?
Yes, non-UK residents - for example, foreign investors or non-UK nationals posted to the UK - can purchase property using the buy-to-let loan scheme.
How do I re-mortgage?
Our mortgage brokers who specialise in investment property will be able to advise you.
Letting & Management Questions
How do I find a tenant?
Concept Property will assist you with this process and liaise with local letting agents to negotiate on your behalf the best possible fee for letting and managing your property.
It is often easier too use a letting agent to rent and manage your investment property as most investors are to busy to deal with this. They usually charge between 10% and 12% of the monthly rental income for doing so.
Who are the tenants that will rent these properties?
Most developments we target are in or near city centres. The majority of tenants are young professionals between the ages of twenty five and thirty five who want a city living lifestyle but do not want the responsibility of a mortgage.
Should I let my property furnished or unfurnished?
A furnished property offers a stronger rental return but each option has its merits. Some areas such as city centres require the property to be furnished due to your target rental market.
If you do opt for furnished, Concept Property can help with all your furniture needs.
Who pays the service charge and ground rent on these properties?
The landlord is responsible for these expenses.
Who pays the council tax, electricity and water bills on these properties?
Your tenants are responsible for these expenses.