Some interesting responses to the No Money Down (NMD) blog I did a week or so ago, including one from Simon Zutshi, whose report on the state of buy-to-let kicked it all off.

I ended my musings by noting that there was, as yet, no sign of his new mortgage strategy. Well now there is, in the form of a video presentation announcing the way forward…

NMD, it seems, is last year’s squeeze. Now everyone is making eyes at NMLI – No Money Left In.

Click pic to open

Say what?

It works like this.

• Buy a property at 25 per cent Below Market Value (BMV). Eg: For £75,000. You buy using usual deposit.
• Use a lender (apparently there is one) who does a ‘further advance’ of up to 75 per cent of a property’s value.
• Do an instant further advance based on the full value of the property and you get your deposit back

The presentation offers various other ways to proceed, and it’s all interesting stuff. But the strategies are based on being certain that you’ve bought at BMV – which is, of course, easy to say but hard to do.

To me it all looks a bit like a nerve shredding, financial high-wire act. But then I’m fairly risk averse. I won’t even have a credit card.

You may be made of sterner stuff.  Check it out and let me know what you think…

What the … eh? … awww ain’t it cute!

The latest offering from achingly trendy design mavericks SuckUK has sparked a bit of a heated debate here in the FAP Editorial Suite.

Well, it did once we’d all stopped laughing like loons at the sight of this slightly indignant looking cat ‘flying’ a WWII plane.

Look, he seems to be saying, I’m a fit, sleek urban prowler with a serious rep to maintain, and you, well, you’re just being silly now asking me to sit in this daft contraption and pretend like I’m having fun …  If it wasn’t for the Whiskas and the free flea treatments …

The designs are meant to be an amusing toy for the feline in your life, but it was on this very subject that the FAP scribes were at odds…

Gareth: Hmm, I think that cat might have been Photshopped into the picture …

Annie: I’m not surprised … no self-respecting cat would want to get into that, and if it did it’d probably get stuck, so no wonder they had to Photoshop it …

Gareth: I think they’re kinda cool. I reckon my cat would really like one … cats like to climb into stuff …

Annie: Mine doesn’t – no way.  And look, it’s £15 for what’s basically a self-assembly cardboard box …

Gareth (sadly): Looks like they’re pretty much sold out until mid Sept …

Annie (clutching head in hands): You’re kidding! People are actually buying this stuff? …I…I… has the world gone mad?

And so it went on …

Me? I don’t have a cat, so I stayed well out of it…

You, on the other hand, may well have a whiskery friend, in which case we’d be interested to hear your views on this matter of profound national significance….

Do you think the cat in the box idea is: A ridiculous piece of over-priced designer tat Really Cool! View Results  Loading ...

One I made earlier? Not quite … still

Lily Allen, the prolific blogger and occasional popstar who always sometimes gives the impression she simply must tell the world about every thought as it enters her head, has created a small yet important ripple in the world of architecture.

Why? She simply let slip, in typical brazen-as-you-like style, that if the world stopped turning and MySpace fell off the radar that maybe she’d return to the books and swot up on architecture.

The interview was with trendy Paper magazine (of course) and the offending line came amid musings about her meandering pop career: “I wake up every day and think I’m actually pretty bad at it. I work hard at getting better. But if this record flops, I’ll probably go back to school. I’ve always liked architecture.”

Now you’d think that the protractor and setsquare brigade might welcome a bit of sass to the mix, even if it is accompanied by a hefty dose of paparazzi-chronicled late night shenanigans of dubious intent.

But the folks over at the Architects Journal seemed none too keen: “If that doesn’t give the Bartlett or the Architectural Association the impetus to make Allen’s next record a hit, then nothing will.”

Can I just point out, before we all start swinging our handbags a little too liberally, that the chances of Lily Allen seriously making it as an architect are about as strong as Johnny Rotten becoming an estate agent. Oh, wait a minute…

This blogging malarkey appears to have triggered an unexpected impulse within my synaptic gap, namely the constant need to reference the deity of property putdowns that is Kevin McCloud.

“I’m not obsessed!” I wailed at my boss on presentation of this latest subject.

“You have a picture of him on your computer,” he replied, in an annoyingly accurate encapsulation of the situation.

And so, not content with namedropping the Big Mac here, here and here, I now bring you the latest in Kevwatch… and it’s not good news.

It would appear that for all his verbal veneration on Grand Designs, our Kev has not found the act of transforming creative vision into liveable reality so easy to accomplish.

I’m not questioning the intentions behind his development company Hab (standing for Happiness Architecture Beauty in that delightfully sparse, punctuation-free way that only a design guru would dare to associate with the inherent griminess of a building site).

But in a classic case of the spirit is willing but the flesh refuses to pay what the architect wants, Hab has, allegedly, parted ways with award-winning firm Wright & Wright in a dispute over fees.

I won’t bore you with the details, but McCloud was heard muttering about working for free at weekends, something that replacement firm Glenn Howells Architects is apparently willing to do despite the possibility of the project all ending in tears.

A deal has yet to be agreed with Swindon Council over land for the project and it’s back to the drawing board as far as designs are concerned because Wright & Wright have dug their heels in and refused to sell theirs on.

Still, if any one can pull it out of the bag, Kevin, it’s you. I’m still a believer, a sceptical one, but a believer nonetheless…

But judging by the comments, the same can’t be said for some of the architects reading about this over at BD Online.

I read with some interest that Brixton Estates’ Tim Wheeler is quoting Bob Dylan:

“The apocalyptic opening lines of Bob Dylan’s All Along The Watchtower seem to capture the beleaguered mindset of the UK commercial real estate market.”

Tim Wheeler, that name rings a bell – wasn’t he the lead singer of Ash? Anyway, anything you can do, etc. etc. So here is my ha’penny’s worth for more housing-market-related tuneage, (all depending on your outlook):

For the Doom-mongers:
The End, The Doors
Down Down, Status Quo
Ghost Town, The Specials

For the Shiny Happy People:
Things Can Only Get Better, D:ream
The Only Is Way Is Up, Yazz and The Plastic Population
Rise, Public Image Limited

For the Level-headed Pragmatists:
Roll With It, Oasis
Rollercoaster, Red Hot Chilli Peppers

And I’m sure there are more – any suggestions?

News reaches us of harsh happenings over at The Shire. The Hobbits, it seems, are facing an enemy of truly awesome proportions.

Not the demonic Lord Sauron with his Cradle of Filth threads; not the bad ass Black Riders; not even the plug ugly Orcs with their anger issues and gross dental hygiene …

Nah, this is much worse. The Shire has been cast into cold and wintry darkness by … the diabolical workings of the Credit Crunch.

The Shire: A Place of Enchantment is a themed housing development loosely based on the dream of Merrie England that inspired Tolkein’s Hobbit idyll in Lord of the Rings.

But despite the lure of PVC thatch, faux timber framing, hobbit holes, dragon-shaped support beams, and price tags of $650,000-$899,000 buyers have been as elusive as Bilbo Baggins on his eleventy-first birthday.

The Middle Earth fantasy project has, we’re sorry to report, left property developer Ron Meyers close to bankruptcy. He told The Bend Bulletin:

“Some people were turned off by living in ‘Disneyland.’ It’s more of an artists’ community for a certain market segment that wanted something different.

“There’s been enough people that have come through that would say, ‘What a wonderful concept.’ But then the market crashed, and everyone (went) home.”

It will, I fear, take some serious financial wizardry to help Ron and his hobbity associates out of this  particular hole … in the meantime, the development, in all its ersatz glory, can be viewed here: The Shire: A Place of Enchantment.

And while you’re here, suggestions please for property developments based on famous books…

Here’s a little multiple choice question for you.

Buy-to-let will:

A. Contract significantly as landlords cut their losses and sell, sell, sell

B. Hold firm in the short term and expand thereafter as landlords rake in the profits thanks to rising demand

Skandia, the savings and pensions chappies, would definitely put their tick next to ‘A’ – they’ve just published a piece predicting a stampede for the exit.

Why? Because a triple whammy of falling house prices, higher mortgage costs and sluggish rental growth will, they say, soon create the perfect BTL storm.

Abandon hope, all ye who own investment properties, for the day of reckoning cometh. Ask not for whom the bell tolls, etc etc, because, my friends, it tolls for at least two-thirds of the entire market.

Two-thirds (gulp?)  Yep, that’s right. Skandia point out that the market is now worth £120bn but could shrink to just £44bn once a Darwinian cull has done its deadly work.

Blimey! Sounds serious!

But what evidence are we offered in support of this grim scenario? Any juicy stats? Any compelling facts and figures?

Err. Nope, not really. Skandia’s argument is based on the theory of mean reversion – that after an asset booms it will then revert to its average performance.

I can’t claim to have even a passing understanding of the maths behind said theory, but it does beg all sorts of questions about the strength of the rental market and the medium to long-term performance of the housing market.

It also begs the question of Skandia’s motivation. They hope that as landlords start to struggle they’ll indulge in a bit of asset diversification – such as selling up and investing the proceeds with companies like … wait for it … Skandia!!

Ah! Mean reversion … now I understand…

Fuel and food prices are on the up, house prices are on the slide and the papers are full of features telling us all how to atone for our ten-year credit binge and mega splurge down the shops.

Now, it seems, is the time to make do and mend, to grow yer own, to reduce, reuse, and recycle.

But if Phil & Kirstie were the cheery faces of the property boom, who will advise us on how to live with the downturn?

(Pic ©  Press & Publicity, Durham County Council.)

Step forward – or, if you prefer, trot into the limelight astride your rather lovely mule - Chris Jones and Louisa Gidney, Principal Peasant and Associate Peasant at … Rent A Peasant: Living History With Livestock.

These, I feel sure, are the people to teach us the skills we will need to survive in a credit crunched, eco degraded world.

Stuff like how to look good in a smock, how to play the hurdy gurdy, how to eat a turnip, and how to sing a song with the words hey nonny nonny in the chorus.

Ah but won’t life be grand when we’ve all had a peasant makeover … thatch and cob, flagons o’ cider, rosy cheeked lassies a-rollin in the ryegrass, “All Around My Hat” as the new national anthem …

If you’re a producer out there in TV la, la land you’d better move quick if you want to snap ‘em up (the mule, Frances, is clearly a star in the making).

I’ve even thought of a title for the programme … Rotation, Rotation, Rotation.

“Rudimentary illimitable sewerage? malformation, backstop carolyn.
Clog document millionaire? last, last lucy”

No I haven’t been channelling TS Eliot again. (Last time I tried that, I kept seeing women coming and going, talking about Michaelangelo – all rather weird.)

Instead, this deathless verse is but a fragment from one of the occasional spam emails we get here at FAP Towers; their random words apparently side-stepping our Baysian filters (and no, I don’t know what they are, I just read it somewhere).

Anyway one enterprising chap has turned all this auto-generated gibberish into something rather amazing.

Ladies and Gentlemen I give you the Spam Architecture of Alex Dragulescu:

From his Spam Architecture Website:

“The images from the Spam Architecture series are generated by a computer program that accepts as input, junk email. Various patterns, keywords and rhythms found in the text are translated into three-dimensional modeling gestures.”

So there you go. It seems that spam has its uses after all – it can be transformed into 3-D architectural gestures.

However to take this to its logical, if surreal, conclusion Mr Dragulescu should now build his aforementioned models … out of real Spam.

So to get him started, here’s one I made earlier. I call it ‘SpamHaus’:

Pssst! Fancy a real bargain? A property at well below its genuine market value? And how about nabbing it without using any of your own money?

Ok. Now find a few more cut-price lovelies, repeat the process, and you, me old mucka, will be well on your way to becoming a champagne sipping, Ferrari driving, villa-in-the-south-of-France-owning  … PROPERTY MILLIONAIRE!!!

If you’ve attended property investment shows in recent years you’ll know that what I describe above has been a much touted way of making mega bucks from bricks and mortar.

Two acronyms became buzz words in the trade: BMV and NMD – Below Market Value and No Money Down.

The cunning plan involved finding desperate sellers, buying at, say, 20 per cent below the market value, and then using a bridging loan to pay for the property.

You then remortgage the next day for the real market value and you have, in effect, generated instant equity. And bought a property using none of your own dosh. Nice!

In the boom times this made some people – mostly full-time professional investors - very rich indeed, but when Mortgage Express – the main lender providing the remortgaging service – pulled the plug, it was, many thought, RIP for NMD.

Or was it? Last week I received an email from Simon Zutshi, the man behind The Property Investment Network. It included a link to a report he’s written called, ominously, The Death Of Property Investing.

Zutshi is a bit of a guru – he’s written a best-selling book called Property Magic: How to Buy Property Using Other People’s Time, Money and Experience, is a regular at property investment events and runs seminars for would-be investors.

He’s long been a big advocate of the BMV/NMD route to riches and his report remains ferociously upbeat - the BMV/NMD folks sometimes sound like they’re recruiting you into a mysterious cult!

I’ve read the report and I can’t find much to quibble with in his argument that if you can get your hands on financing, now could be a very good time to buy. Bargains are available, rental demand is high and yields are on the up.

Absolutely right.

But what about the financing? Zutshi has less to say about this, though he does tantalise with the promise that he’ll soon be unveiling a crafty new way of making NMD remortgaging work - “My latest strategy leverages clever loopholes to overcome problems in the mortgage market..”

Hmmm. Haven’t seen any sign of that yet, and I do wonder if it’s really possible in the current credit-crunched climate - if any of you out there are buying using NMD, I’d be interested to hear how you’re doing it.

In the meantime, if you want to read a carefully sceptical assessment of NMD and BMV, I’d recommend David Lawrenson’s recent blogs on the subject – they’re sensible, down-to-earth and they highlight many of the potential pitfalls.