Reaction To The Budget And Base Rate Reduction With Ellie Broadhurst

In this episode, I’m joined once again by our expert mortgage broker, Ellie Broadhurst, to discuss Rachel Reeves' recent "doom budget" and what it means for property investors. We’ll talk about the latest budget, its impact on the property market, and what lenders are saying about it.

We’ll also break down the Bank of England’s recent decisions, how rising interest rates are affecting property investment, and what to expect moving forward. 

Plus, we’ll cover changes to stamp duty, new opportunities in commercial property, and offer some advice for property investors.

Topics covered in this episode:

• 03:43 – Lenders' views on the latest budget
• 09:33 – Best opportunities for professional landlords
• 11:54 – Reaction to stamp duty and interest rate changes
• 18:14 – Property market predictions for 2025
• 24:30 – Advice for property investors

Contact Ellie here, if you’re interested in discussing your HMO mortgage and finance needs.

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Transcript

[00:00:00] Andy Graham: Hey, I'm Andy and you're listening to the HMO podcast. Over 10 years ago. I set myself the challenge of building my own property portfolio and what began as a short term investment plan soon became a long term commitment to change the way young people live together. I've now built several successful businesses.

[00:00:20] Andy Graham: I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

[00:00:40] Andy Graham: Today, I'm joined by our expert when it comes to all things HMO mortgages and finance, Ellie Broadhurst. If you are a regular listener of the show, you will also know that Ellie is a regular guest on the show as well. Today, I want to know what Ellie and the lenders think about Rachel Reeves’ doom budget.

[00:00:56] Andy Graham: What does it all mean for the property market? What has the reaction actually been? Plus the Bank of England recently met and they decided in their wisdom in positive news to reduce the base rate from 5% to 4.75%. But why, despite this good news from the Bank of England, does it feel like somebody just threw us a life jacket in the middle of the desert?Let's sit down with Ellie and find out one earth is going on. Please sit back, relax, and enjoy today's episode of the HMO podcast.

[00:01:27] Andy Graham: Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment. But before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one stop shop.

[00:01:43] Andy Graham: Inside the roadmap, you'll find a full 60 lesson course delivered by me, teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer and how to manage your properties and tenants for the future.

[00:01:58] Andy Graham: We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets, and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from.

[00:02:13] Andy Graham: And we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side, and track the key metrics that are most important to you. To find out more, head to thehmoroadmap.co.uk now, and come and join our incredible community of HMO property investors.

[00:02:37] Andy Graham: Hi Ellie, good to have you back on the show.

[00:02:39] Ellie Broadhurst: Hi, Andy.

[00:02:40] Andy Graham: Wow. What a few months it has been. We say this every time we sit down. We do. So much seems to change between our kind of quarterly catch ups, but we've had a budget and the Bank of England, meeting, a new president in the U.S., all sorts of stuff going on that affects our property market here.

[00:02:56] Andy Graham: So I thought what it'd be good to do today is catch up with you, get your thoughts on the doom budget. And what some of the stuff in there means for property investors like us, maybe have a chat about the bank of England's recent meeting and what the implications of that might be hoping positive, but I'm not quite so sure you are going to give us lots of good news today.

[00:03:20] Ellie Broadhurst: We'll see.

[00:03:21] Andy Graham: And maybe start to have a look at what next year could look like for property investors, for HMO investors and the property market in general. So. Shall we start with the budget, the doom budget? I mean, it'd be good to get your general thoughts and feelings on that. You sit on the other side of the fence to us. You speak to the lenders on a daily basis. How has this news gone down?

[00:03:43] Ellie Broadhurst: I think it's been a non event really from the lender's point of view. I think there was an awful lot of talk, wasn't there? And I think it was played out in the media a lot before it actually arrived. And actually when you look at the budget, I don't think, I don't think personally it was quite as bad as we all thought it was going to be.

[00:04:01] Ellie Broadhurst: Although, I mean, we can agree or disagree with exactly what she's done, but I don't think that it was quite as bad as we all thought it was going to be. Obviously stamp duty is the big one, isn't it? Really on there for property investors. It would be interesting to see how that plays out. But yeah, on the whole, I think that the tricky bit has been that the markets haven't liked it.

[00:04:21] Ellie Broadhurst: It's putting pressure on businesses, isn't it? The big thing has been the N. I. increase. And then it's, it's going to be interesting to see how that plays out. I think the thoughts are that that is going to be passed on to employees. That growth perhaps could be stumped because of it, which is inevitable. I mean, it's got to come from somewhere, hasn't it? There isn't any more money. Magic. overnight. So this has got to come from somewhere. So how's that going to look like in terms of growth of businesses and therefore GDP?

[00:04:50] Andy Graham: I agree with you in that I thought I was expecting it to be worse than it was. And I'm not  trying in any ways to suggest that it wasn't that bad. I thought it was pretty terrible, but I just thought it was going to be worse than it was.

[00:05:03] Ellie Broadhurst: Yeah. I think that was the way that it was played though. I think there was all these little bits, wasn't there going being released to the media to kind of judge how people thought about various different policies that they could have brought in. And then the general feeling was that nobody liked any of the ideas that they had. So then they came up with some other things that were as bad, not quite as bad. I don't know.

[00:05:27] Andy Graham: I think just stepping back from that budget announcement and just looking at this government, I think what it really did for me was cement just how left these guys are.

[00:05:38] Andy Graham: And I think that that is a bit concerning. I don't think that through the kind of the election process. It was necessarily as clear. No, I agree with you as it is now, and I think that that is a real concern. I think it's a concern for business owners. I think that that is a concern for investors in property and I think that there will be more challenges ahead as a result of that.

[00:05:57] Andy Graham: It's very clear. I mean, we knew that we were in the Crossheads anyway. We always are. But actually I think that Rachel Reeves is kind of really. Showing actually what this labour government really are about.

[00:06:08] Ellie Broadhurst: Yeah, I agree.

[00:06:09] Andy Graham: And we need to deal with that.

[00:06:11] Ellie Broadhurst: Yeah, it's the way that it's been pushed onto businesses. And I think, and the way that they have said this and it's come up, it's been all over my social media about this term about working people, isn't it? And the implication that particularly small business owners are not working people. And I think that has really got a lot of people's backs up, but I think the markets reacted because of exactly what you've just said.

[00:06:34] Ellie Broadhurst: It is quite anti-business. You could be seen as anti-growth. I know we need to spend more money on NHS and education. I get that. I totally get that. I think it's just the way that it's been. They've said they're not going to raise taxes and then they've done this, which is technically not raising taxes, but it's going to have the same impact. It just seems a little bit not as transparent as perhaps we'd have hoped. Um, but yeah, I think exactly what you said is why the markets have reacted in the way that they have and why swap rates have gone up. 

[00:07:02] Andy Graham: And actually the MPC revised their forecast.

[00:07:07] Ellie Broadhurst: They have. Yeah.

[00:07:08] Andy Graham: And actually. Now expect interest rates to come down slower than we were perhaps anticipating that they would do. I think that I think that Rachel Reeves is a budget will impact inflation as well, which is then going to have that knock on effect on what happens with interest rates. So all quite frustrating stuff and what seems really unusual is that what they're talking about is building more homes and getting back into growth mode and actually what they've done doesn't really seem to, you know,

[00:07:39] Ellie Broadhurst: This is the thing.It doesn't match up, does it? But I think that they sort of backed themselves in a corner by saying that they weren't going to raise taxes when that's what they had to do. And we all knew that they were going to do that because. You can see the issues that we're having in the public sector and we know what labour generally do, but to do it in the way that they've done it, it doesn't sit right. And I think that's where we've had the reaction that we have.

[00:08:05] Andy Graham: I think what it has done now is really underlined for me, just how little support we can expect as business owners and property investors. We're not going to get any handouts. They're not going to make this easy. And actually nobody's coming to help us and I think more so than ever in the last decade, we're going to have to work harder to get the same results.

[00:08:27] Ellie Broadhurst: Yeah, but to be fair, I mean, it's not just this government that have done that. You look at the Section 24 changes that the Conservatives brought in. You look at the way that Boris handled the COVID response to small business owners.

[00:08:43] Ellie Broadhurst: I mean, it was when Rishi was chancellor, wasn't he then? But the help that small business owners received during that time was very little. There's been so many things, and this is, I suppose, where it's I don't really understand who do the government think are going to build houses? Who do the government think are going to bring derelict houses, unrentable houses, unlivable houses back into circulation and back into being lived in if it's not small property investors?

[00:09:09] Ellie Broadhurst: That's who's going to do that. But yet you're not supporting, you're not putting, I think what the issue perhaps is that they don't put those people or property investors within the bracket of small business owners perhaps. I don't know whether that's just not something that they see it as. But there's no support there, and I don't think there has been for a long time, and yet it's going to have to be property investors that are building these crazy numbers of houses that Labour want them to build.

[00:09:33] Andy Graham: I think that the one positive that I see from all of this at the minute is that actually the gap continues to widen between the accidental landlord and the professional landlord now. 

[00:09:43] Ellie Broadhurst:Absolutely, 100 percent agree. 

[00:09:52] Andy Graham:  And I think that that is where People like us and our listeners really should be focusing. And I think there are some decisions that we can make to try and professionalize our business. I think some of that needs to be around scale. So volume.

[00:10:02] Ellie Broadhurst: Yeah.

[00:10:02] Andy Graham: But I think that inevitably some landlords will continue to exit the market. I think inevitably that squeeze will continue on the private rental sector. And I think inevitably the big institutions that are starting to enter, like the bank buying buy to let property, they're not going to be able to cater for all of this. And actually, I don't think that they're going to be able to do a particularly good job at the customer service end of things. So I do still think there's a very good opportunity for us, but I think we have to very much think like, like bigger business owners now.

[00:10:32] Ellie Broadhurst: I completely, completely agree. There are so many people that don't look after property that have somebody called them a dinner party landlord in a conversation I had a little while ago, and I said that, you know, that's So true people that have a couple of properties because it's the thing to do supplement their pension, just have something on the side, but it's not a business for them.

[00:10:51] Ellie Broadhurst: And they're the types of people that will have probably bought it in their personal name, probably bought it somewhere close to them. So it might not be an ideal location from a yield point of view. They want it somewhere as local and easily accessible. And they're the sorts of people that over time will let those properties go because it doesn't really make them that much money. It's a hassle. And when the property comes to needing a refurb or if it's a flat and the lease needs extending or anything, those things, they will exit the market. And there's a lot of historic HMO landlords as well that don't look after property in poor condition.

[00:11:25] Ellie Broadhurst: A lot of student HMOs, that sort of type of property, aren't they? And I think over time, people will exit the market with that when standards are increased when EPC ratings, the standards are increased. It's all coming. And you've got a lot of properties, particularly in that Victorian terraces, which is majority of HMOs that will need some money spending on them. And they don't have the time or the money or the inclination to do that. So I think that's where HMO investors particularly need to be focusing.

[00:11:54] Andy Graham: And this is before we even mentioned the renters rights bill and all the changes. I don't want to go there today. Let's talk about stamp duty briefly. That was the one thing I think for property investors that was in the budget that was, that was disappointing.

[00:12:09] Ellie Broadhurst: Yeah.

[00:12:10] Andy Graham: What's your take on this Ellie?

[00:12:11] Ellie Broadhurst: Do you know, it's really interesting because I haven't had any conversations with clients around that being something that is, is a consideration to them. And I know it's only been not even 10 days, but it's not really something that's cropped up. Perhaps people haven't really clocked it yet.

[00:12:28] Ellie Broadhurst: I do think it's been a little bit quieter over the last couple of weeks, but then it has been half term and there's been a lot of upheaval, hasn't there? And then we're, we're only a few weeks away from Christmas, really. Yeah. So I think things will generally start to slow down, but if you're looking at deals, you've got your deal analyser, however you do that, and you put in your costs and you work out your profit.

[00:12:48] Ellie Broadhurst: And that's really what you've got to do, isn't it? And I think what will happen is that it will come off somewhere else, probably the purchase price.

[00:12:57] Andy Graham: Yeah, I completely agree. You know what? I think actually this was another tax on working people. I think this is a tax on people who sell properties, not necessarily a tax on people that are buying properties.

[00:13:09] Andy Graham: Cause at the end of the day,smart investors. Like us, they're just going to add the numbers up and say, okay, well now I've got an extra amount to pay in stamp duty. I'm just going to take that off the asking price. So who's paid the price? Well, it's actually whoever is selling that property.

[00:13:23] Ellie Broadhurst: Yeah. Which is generally not a property investor on the whole.

[00:13:26] Andy Graham: Yeah. Especially when we know that a lot of our community members are buying existing residential properties that they can convert into HMOs under permitted development. So.

[00:13:35] Ellie Broadhurst: Yeah.

[00:13:36] Andy Graham: Another swipe at the property market at landlords, I would say, but I agree with you entirely. It's certainly not something to get heads up on and look, if your deal doesn't work after you maybe got to spend a few more quid on stamp duty or something like that, how good a deal was it in the first place?

[00:13:49] Andy Graham: I think we've got to be doing better deals than that. So I think that's where we're at. Let's move on then and talk about the bank of England's recent Meeting.

[00:14:00] Andy Graham: Their decision to actually reduce the base rate by 25 basis points. So we're now at 4.75. So I think the second reduction about four years,

[00:14:08] Ellie Broadhurst: Second reduction and the lowest rate since June, 2023.

[00:14:12] Ellie Broadhurst: So, mm-Hmm. Yeah, it is significant. It starts with the four, not to five, which I think makes everyone a little bit happier. So if we can kind of go back a little bit back to the budget just for a moment when the budget was announced. You've mentioned that the Monetary Policy Committee have revised a lot of those figures.

[00:14:29] Ellie Broadhurst: The OBR have revised figures as well. So off the back of that, a lot of lenders removed fixed rates, particularly five year fixed rates. Swaps went up by 0.13, I think, on average. So we were seeing a lot of uncertainty last week. There was a lot of rates being pulled at short notice. There was a lot of lenders that only had two years and variables rather than five years.

[00:14:51] Ellie Broadhurst: And I think that all comes down to. We don't know how to price it, basically. We don't know what to say. What we'd rather do is just take them all away and rethink about it and then come back to it all. Last week, they must have known that the base rate was coming down by a quarter of a percent. So all the new rates that have now come out this week have had that factored in.

[00:15:10] Ellie Broadhurst: Is it going to make a difference? I don't think so. Some rates have changed and gone up. What I've seen is like the really cheap products. We had a few like low EPC rating products that were in the fours and they've pretty much all gone. So yeah, some, they haven't necessarily gone up, but the cheaper ones have gone.That makes sense

[00:15:29] Andy Graham: So what you're saying really is that Whilst the base rate has come down a little bit and on the surface of it should sound like quite positive news to us or should have resulted in quite a positive or a more positive outcome in terms of consumer rates for us, the reality is that hasn't happened because of market uncertainty and actually revised forecast based on the doom and gloom from the budget.

[00:15:53] Ellie Broadhurst: Absolutely. All of those things. Yeah. I mean, when we go back to the even worse budget that we had from this trust a couple of years ago. Obviously rates went bonkers didn't they? But it took about four weeks for that to settle down and there was about a reduction of I think on average 0.85 or something, I was reading an article about it the other day, from the date that the budget came out or shortly afterwards to a month after that. So what I think will happen is that gradually over the next few weeks things will start to settle and things will start to come down. Lenders are on the whole really busy.

[00:16:29] Ellie Broadhurst: So the incentive to bring those rates back down more quickly isn't there. Fleets, my sort of example, they're kind of our go to for sort of what we would call a simple buy to let, which I appreciate is not everyone else is simple buy to let, but we don't really do much simple things. So they're our, our kind of gauge on where the high street's at.

[00:16:47] Ellie Broadhurst: And there are SLAs are like six days. So they're busy. Normally they come back to you within a day or two and they're up to six days. So the incentive for the lenders to bring those rates down to pull the business back in isn't there. What will happen in January potentially could be a very different picture.

[00:17:03] Ellie Broadhurst: I think things will slow down now. We'll have people that are reassessing how much they're spending on property because although yes, stamp duty has gone up and as we've discussed, it shouldn't really be a major problem if things are already in the system. If you've already made an offer based on the previous figures, you might then want to go back and just adjust those figures slightly.

[00:17:22] Ellie Broadhurst: So things will sort of slow down. And again, where you've got that sort of move in what investors are willing to purchase properties for, vendors aren't necessarily on the same page. And we see this quite often where things shift. is that people will still be putting property on the market for what they were expecting prior to this, whereas what people are willing to pay is not quite there.

[00:17:44] Ellie Broadhurst: So, that then takes a little bit of time for expectations to be adjusted. So, I think things will slow down and if they do slow down, hopefully by the time we get to January, lenders will be wanting more business. Things will settle, swaps will come down again and we'll see some lower rates for January.

[00:18:00] Andy Graham: So, I suppose what you're saying is, there is going to be a bit of a lag to all of this that is going to take a bit of time to wash through. That might mean that actually sales slow down a little bit. There's normally a bit of a slowdown towards the end of the year anyway. 

[00:18:13] Ellie Broadhurst: Yeah, there is.

[00:18:14] Andy Graham: Okay. And what does this mean looking ahead? Where are lenders anticipating things are likely to go over the next three, six, maybe even 12 months, Ellie? I guess I'm asking the question because a lot of our listeners will be, sitting down to review their performance and what they've been able to achieve over the last 12 months and making plans for next year.

[00:18:35] Andy Graham: Very soon, we're now into kind of mid November. So it's almost that time of the year when we want to start planning for next year. Do we have any idea or do you have any thoughts on what early next year looks like and then into the rest of the year? I guess both from a rates perspective and maybe even a wider market.

[00:18:52] Ellie Broadhurst: Well, if you look at the predictions that have come out recently, the predictions is that property prices are going to go up quite considerably next year. I'm not entirely sure where that's come from and why, because if you look at the wider picture, it doesn't really look like that, does it? So it's an interesting one.

[00:19:10] Ellie Broadhurst: What I think next year will look like, it's really difficult because I think everyone was kind of thinking that this year would be a year of higher interest rates. On average, next year would be a year of much lower rates. When I spoke to the Bank of England earlier on this year, it was in March this year, their prediction was that rates would come down by between one and a half and two percent by the end of 2025.

[00:19:34] Ellie Broadhurst: Now, I think everything that's happened in the midst of that has probably shifted things a little bit further along. So, as you say, things are going to be a bit slower, rates will come down a bit slower, more gradually. So, will we be at that 3.75 point by the end of 2025? Not sure. Possibly. I mean, we give three more rate reductions, that brings us down to 4%, doesn't it?

[00:19:56] Ellie Broadhurst: So, I think that's, it's possible. I don't think that's beyond the realms of possibility. So, I think that property investors have got to think, these are the rules that I have today. What am I going to do with the rules that I have? And yes, we've got the renters reform bill that's come in on there. Yes, we've got a stamp duty increase.

[00:20:14] Ellie Broadhurst: But if you look at where interest rates have been over the last year or two, next year, they will be lower. But they have to be lower than where they are this year. Is that going to make a big difference in the specialist market? I don't think it probably will. We've seen some big reductions, particularly with Shawbrooke this year.

[00:20:31] Ellie Broadhurst: I mean, we were at rates of nearly 7 percent and now we're just over 6%. So, it is a huge reduction that they've made this year. And I think that is them thinking, how am I going, how are they going to build their pipeline for next year? They've had a really successful year, like financial year this year, but are they going to then pull that into the 25, 26 financial year?

[00:20:53] Ellie Broadhurst: So, they're thinking ahead already, I think. with the rates that they've got. Castle Trust have reacted with some lower rates. Lambover have reacted with some lower rates. So I think we're in a better position going into 2025 than I think we were going into 2024 in terms of interest rates. And you know the rules now, you know, we're going into this year thinking we've got an election this year.

[00:21:17] Ellie Broadhurst: All those things were going to happen, weren't they? They've happened now. The renters reform bill, we weren't really sure how that was going to be. And we know far more about that now than we did at the beginning of the year. So I think the rules are more set in stone now.

[00:21:30] Andy Graham: I think I largely agree with you. Can I see rates, can I see us sort of ending up next year with rates on the 4%? I think it's. At the minute looking unlikely, I think, especially when you consider that Trump's just got in and some of the things that he's been talking about, support for Ukraine and where we might be with the Middle East. And I just think there are other things out there that could continue to kind of impact us from an inflationary point of view.

[00:21:57] Ellie Broadhurst: Yeah, they could do. But then equally, I think that the markets have reacted really well to him coming in. I mean, taking out my opinions of Trump entirely from this conversation.

[00:22:07] Ellie Broadhurst: But the markets have reacted well to him coming in. And I think the thought process behind that is that hopefully he will be more decisive and perhaps deal with the Ukraine situation, which this is not my opinion of the political situation, but if there is a resolution to that, that will help oil prices. It will help energy prices, which is going to help us all. This talk of tariffs isn't there, which could have a big impact on inflation here and there.

[00:22:36] Andy Graham: I think the approach that I'm taking at the minute, looking at rates and planning for the next couple of years, I'm looking more personally at five year fixes. I think some of those rates next to two year fixes and the larger fees actually look much better at the minute. I still don't think that this is the part of the cycle where we're going to be making a lot of cash hand over fist. I still think we're going to be spending a lot to run and operate our businesses relative to actually what we're bringing in and because of interest rates, largely in the cost of lending. But I do think that there will be some good opportunities to continue buying and add genuine value.

[00:23:16] Ellie Broadhurst: Yeah, I think that's where the profit margins are. It's about buying really well and adding value at that point, because you're not going to, as you say, get the cash flow monthly to build your business.

[00:23:30] Andy Graham: I think it's just going to take a little bit longer to see the real fruits of what we're trying to achieve. And so for me personally, I'm delaying some of the cashflow targets a little bit. It'd be great to have it and there's got to be some, but I just don't see it being as strong as we want over the next couple of years, but I think we can make some good capital gains on acquisition, on planning, um, on development and at some point over the next five years, I am pretty confident that we will with this, like you said, This greater degree of certainty now that we seem to have a government that are in now, whether we like them or not, we have got on top of inflation largely, unless something else comes from the left field.

[00:24:13] Andy Graham: I think for the first time in quite a while, it looks like there might be a bit more certainty over the next few years. Yeah. I think if that is the case, then we will see an increase in values and that would be a really good thing for us.

[00:24:26] Ellie Broadhurst: Yeah.

[00:24:26] Andy Graham: But I mean, I wouldn't bet my house on it, but that's just how I'm looking at things at the minute.

[00:24:30] Ellie Broadhurst: Yeah. If you're buying property that is at the bottom end of wherever, whatever market you're looking at, lower value. property in poorer condition and then you are refurbishing that within a, say, six months timescale and property values go up within that six months, you'll benefit from that on the refinance as well as the value that you've added from refurbing the property as well.

[00:24:53] Ellie Broadhurst: So, and we've seen that in markets previously. I think now when it was, must've been pre COVID, there was a period where people were making huge increases from purchase to refinance, you know, on, on bridging. And it's just because the market was, was increasing over that period of time. So if the figures are to be believed, I'm feeling a little bit cynical about them just because of all the other moving parts, but if they are to be believed, then this is a great time to buy property.

[00:25:20] Ellie Broadhurst: And actually, if you can go in and negotiate and remove that additional stamp duty cost on your purchase price, then you're in the same position than you were before. Anyway, the balance is how long does it take to get the vendor to be on your page and agree that, or do you just take the hit, spend a little bit more and hope for the best?

[00:25:40] Andy Graham: And look for the benefit of all of our listeners, I think it's just worth reminding everybody that take everything with a pinch of salt because I remember going into the new year last year and looking at a lot of the forecasts and predictions from the likes of Savills and nationwide. I mean, I think Savills were two or three points down on the year and that was their prediction for house price growth.

[00:25:59] Andy Graham: And actually at some point they revised that up to about 4%. Hmm. In the black, which is a difference of about six or seven percent. It's huge, isn't it? It's huge. I mean, it makes a bit of a joke of the idea of trying to predict values, but I think had you have sat out of the market waiting for that big crash or had you sat out of the market waiting for, you know, these big gains to be visible, I think you'd have probably lost out. I think the sensible thing was to just keep calm.

[00:26:23] Ellie Broadhurst: But yeah, keep calm and carry on, just make sure that your numbers stack up. And I think that the really big, big part in any situation, and I think, but it becomes more and more important where you have got more moving parts is that you're not basing your deal stacker on the best case scenario in every which way.

[00:26:41] Ellie Broadhurst: And I see so many clients come to me in that scenario and the deal only works on those best case scenario figures, which is not a good deal is not a good deal. And you can't guarantee that all those things are going to happen. So you've got to use realistic figures. And I understand you want to be positive and all the rest of it, but you've got to make it work. Or more realistic figures.

[00:27:03] Andy Graham: You've got to have a contingency, build your appraisals on realistic numbers, stress test them to see what worst case outcomes look like. And ask yourself, honestly, could we tolerate that outcome? Could we deal with that?

[00:27:16] Andy Graham: Could we physically get out of the deal? Could we physically find a solution to pay a private investor back or whatever it might be? And if you can't, that is definitely a deal that should not be done.

[00:27:25] Ellie Broadhurst: No, there's no doubt about it. There are plenty out there. I'm seeing good deals every single day. They are there. So if the one that you've got doesn't work, move on. It's not an emotional decision. It's a calculation based on numbers. If it doesn't work, move on.

[00:27:40] Andy Graham: I think that's a great piece of advice. Well, to be honest, Ellie, I think we've had a good on that about the budget. You've given us a good update on the bank of England and rates and shared your thoughts on where we might be next year. I suspect as always, we'll sit down in January.

[00:27:55] Ellie Broadhurst: It'd be all wrong.

[00:27:57] Andy Graham: Something will have come from the left field and we'll be having a different conversation again, but I am this time going to cross my fingers and hope that we don't experience any of those shocks or anything different. And actually the markets can settle a little bit and things start to become a little bit more predictable. And what I will do towards the end of the year is I will share my predictions on rates on house values, but I need a bit of time to do it.

[00:28:22] Ellie Broadhurst: It's very early days, isn't it? I feel like it's been, we've literally had a week from a budget to a US election and a base rate meeting, you know, it's an awful lot that has happened and yeah, we're only a few weeks away from Christmas. So yeah

[00:28:35] Andy Graham: Ellie, you've been helping a lot of our community members in the last few weeks with a lot of interesting stuff. Anything in particular on the shelves at the minute that is worth making our listeners aware of from a product point of view?

[00:28:46] Ellie Broadhurst: Product point of view, I think the big thing really is around commercial actually, interestingly. I am a big fan of diversifying your portfolio. I think it's important that clients have like a mixture of different types of properties. Obviously HMO is in that mix and you can combine that with commercial, but we've seen a big relax in criteria. So we can get 75 percent on quite a lot of like pure commercial properties, which we haven't seen since before COVID.

[00:29:13] Ellie Broadhurst: So that's really good news. Things like offices, uh, light industrial. Right. What else can we do? Like nurseries, retail units, things like that. So that's really positive. Minimum loan sizes have come down because we've seen quite big minimum loan sizes previously. And we can do first time investors for semi commercial property as well.

[00:29:32] Andy Graham: I wonder whether that is a shift in sort of sentiment towards commercial property and the use of actually, you know, office space and commercial space over the last few years has not been the strongest. So that's quite interesting to hear actually.

[00:29:45] Ellie Broadhurst: It hasn't. Yeah. I think high streets are changing, aren't they? And we are seeing sort of different types of commercial units being used on high streets, which we just wouldn't have seen before COVID, you know, it was generally shops and then cafes and restaurants and things, wasn't it? Whereas we're seeing like more gyms. Workout spaces that loads of different quirky things that, which is good. The market's evolving and high streets are becoming busier, which is, there's a really good thing.

[00:30:11] Andy Graham: Well, Ellie, thank you for catching up again, as always, it's been a real pleasure. It's always great to get your insights and see what's happening on the other side of the deals. For anyone listening today that wants to speak with Ellie, perhaps you've got.

[00:30:22] Andy Graham: A deal that you're thinking about buying something that you've got offer agreed on. Ellie is of course our expert broker that can help you get the right finance solution in place. Ellie's got those relationships with the specialist lenders that very few brokers actually have. And she does have access to some special deals as well, because of her special relationship with just head over to the HMO roadmap.co.uk and find our service page. And there's a page there for HMO mortgages and finance, and you can get in touch with Ellie and she can help you through that process. But Ellie, thank you again. And I look forward to sitting down in a few months time to seeing where the world and finance and lending is at.

[00:30:59] Ellie Broadhurst: Absolutely. Thank you, Andy.

[00:31:01] Andy Graham: Thanks, Ellie.

[00:31:08] Andy Graham: That's it for today's episode, guys. Thank you for tuning in. Don't forget that if you want to catch up with either Ellie or I, ask any questions about anything that we've discussed in today's episode or air any concerns that you've got about lending, about rates, about mortgages, about the property market, then heading over to the HMO community.

[00:31:25] Andy Graham: That's our free group in Facebook. We've got over 10,000 members now, and it's just a great place to get guidance and support. And like I said, Ellie and I, as well as some of our other experts in the community are hanging out over there as well. If you want to level things up, if you're building a HMO property business, but want to take it to that next level, maybe you want to start raising private finance, maybe you want to do more deals, maybe you want to know how to make your deals more profitable or spend less to get better results, head on over to thehmoroadmap.co.uk

[00:31:50] Andy Graham: That is where you will find everything. everything over 70 community case studies. You'll find dozens and dozens of downloadable resources. It'll save you time and thousands of pounds creating them yourselves. You'll find all of my masterclasses and expert videos. You'll find masterclasses from Ellie, from our architects, from planning consultants, from a lot of other experts in our community as well, all there to walk you through the process of building your HMO property business.

[00:32:15] Andy Graham: That's it guys. Thank you again for tuning in and don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO podcast.