Is The Property Market Crashing? Interest Rates, Valuations & Growth With Ellie Broadhurst

Today, I’ve got Ellie Broadhurst, our specialist mortgage broker back on the show.

With the media shouting about property crashes, falling prices, lenders pulling deals, and down valuations, I wanted to sit down with Ellie to find out what’s really happening. Because on the ground, it feels very different.

In this episode, we dig into the truth behind the headlines: what’s going on with interest rates, how valuations are looking, what lenders actually think about HMOs right now, and whether there’s still room for growth in the market.

If you want some clarity in the middle of all the noise, this conversation is for you.

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. 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. Today, I've got Ellie back on the show.

[00:00:42] Andy Graham: Now our long-term listeners will of course know that Ellie is our expert when it comes to all things mortgages and HMO Finance, and I think we need to chat with Ellie today because let's be honest. The headlines at the minute are wild. There's talk of property crashes, falling prices, lenders pulling the plug down valuations.

[00:00:58] Andy Graham: But is any of this actually happening because on the ground, the picture does feel quite different. Today we are going to unpack what's really happening with interest rates, with valuations, with growth. The general consensus and opinion is on HMOs at the minute with lenders. The press might not be telling us the full story.

[00:01:19] Andy Graham: Let's speak to Ellie and find out exactly what is going on right now. Please sit back, relax, and enjoy today's episode of the HMO Podcast.

[00:01:30] Andy Graham: Hey guys, it's Andy here. We are gonna be getting back to the podcast in just a moment, but I wanted to very quickly tell you that we have got a huge sale on at the HMO roadmap for a very short space of time. You can take advantage of a massive 20% discount off our premium package, and that gives you absolutely everything that we have got.

[00:01:48] Andy Graham: And trust me, there is more than you could possibly imagine. We are by far the largest bowl of training and education and content and resource. The HMO investors anywhere in the world, and it's not just built by me, it's built by you guys, our community. It's unbiased, it's transparent, and it covers absolutely everything, and it is so incredibly rich in detail and value.

[00:02:08] Andy Graham: Just head to theHMOroadmap.co.uk right now. Grab yourself a 20% discount and start scaling your HMO property business today. Let's get back to the show.

[00:02:23] Andy Graham: Hi Ellie. Good to have you back on the show today.

[00:02:25] Ellie Broadhurst: And you, Andy, thanks for having me back.

[00:02:27] Andy Graham: Funny old period. We found ourselves in, again, I feel like we're back in the bit of a bumpy period and the next few months look a little bit uncertain and I know that. You and I have got some of our own thoughts and things that they made.

[00:02:40] Andy Graham: There's a few things that I would love to discuss with you today. It's a lot of chats from the community. I've been posting stuff myself. A lot of it to do with the general direction of travel at the minute. I would say from a political perspective, but more so more specifically for us. Looking at what this means perhaps for rates, for lending, for values, for property investing.

[00:02:58] Andy Graham: More full stop, so to speak. I mean, I just wondered if we could kick off today, Ellie, with with borrowing costs because Yeah, a lot of people are looking at the market right now and are quite confused.

[00:03:09] Ellie Broadhurst: I get it.

[00:03:11] Andy Graham: The Bank of England. Yeah, the base rate has been cut. It's steadily being cut. It looks like it will probably continue to be cut, but that's not washing through to the, it's of the consumer rates right now.

[00:03:26] Ellie Broadhurst: No. no.

[00:03:26] Andy Graham: Tell us what's happening.

[00:03:27] Ellie Broadhurst: So I think we sort of split things in two. So you've got kind of residential and less specialist buy to let the TMWs and those sorts of, of lenders and they generally work off the base rate. It's more sort of.

[00:03:42] Ellie Broadhurst: Traditional lending and their rates generally have come down on the whole, there has been a big reduction, but they have started to come up again. And then you've got the more specialist side of things, which I'll come onto it in a second. So yes, we do rely on the base rate, but I think the base rate is only one part of a much bigger picture when lenders are choosing what their rates are.

[00:04:01] Ellie Broadhurst: And increasingly, lenders are using wholesale markets to borrow money. Wholesale markets use swap rates. So swap rates are the amount of of interest that you need to pay when you're borrowing against other wholesale funding lines, basically. And it's not a now rate, like the base rate is the base rate is the current rate.

[00:04:20] Ellie Broadhurst: The swap rate is a, a prediction of future rates. And I think because of all the uncertainty, and I'll sort of go onto that in a second about what that is, but because there's so much uncertainty in the world, not just in in the uk, those swap rates have gone up and that's why. Interest rates across residential and high street lenders are going up, which is frustrating because I think everyone thinks base rates coming down.

[00:04:43] Ellie Broadhurst: This is brilliant news. Yeah. And hopefully rates are coming down, but actually they're not. Inflation is still. Sticking and I think that's causing some uncertainty. There's a couple of other things going on as well. We've got guilt prices that are, that they're up. There's a number I was reading last night about all the reasons why they're up, and I think some of these are beyond my GCSE economics, but I think there are lots of things that have gone into the mix as to why these guilt prices have gone up.

[00:05:10] Ellie Broadhurst: Some of it is uncertainty around the government lending and to the amount that we've borrowed, but there are some bigger picture things in terms of pension funds, which is a global issue. And that's causing it to go up as well.

[00:05:21] Andy Graham: Tariffs, yeah. There's still a bit of uncertainty there. 

[00:05:23] Ellie Broadhurst: Tariffs, yes. That's the other thing I was gonna go to. Yeah,

[00:05:25] Andy Graham: Globally, there's just more going on outside, you know, non domestically that is having an impact, isn't it? Absolutely. That's probably wasn't through to inflation, but 

[00:05:32] Ellie Broadhurst: and the thing is that, yeah, markets don't like uncertainty and unfortunately Trump and his tariffs are literally the definition of uncertainty, aren't they?

[00:05:39] Ellie Broadhurst: He says he's gonna do something, he may follow it through, he may not. He changes his mind. So whilst you've got all of that uncertainty around it. The swap rates have got to work off are worse case scenario because that's what they're lending on. So it will always be quite a lot higher. Yeah. Having said all of that though, the likes of your Shawbrooks, and in that world, the rates are far more stable.

[00:06:02] Ellie Broadhurst: We haven't seen any change. And actually the conversation I had with our contact at Shawbrook last week was that they are looking to reduce their rates across the board. So it is a very different market in that world. So if you are looking at investment values on HMOs and commercials, semi-commercial blocks of flats, all those kind of more specialist products.

[00:06:22] Ellie Broadhurst: There isn't any change actually. Castle Trust have reduced their rates for existing clients on some products. They're in the kind of low sort of, you know, medium to high fives now, which is a really competitive rate. So yeah, it's a real mixed bag.

[00:06:35] Andy Graham: It's interesting because. Like you say, it is a mixed bag. There is a degree of uncertainty. I mean, the other big one that we'll certainly touch on today is the autumn budget now, which we're Yeah. Starting to see and hear an awful lot about, but as an investor, as someone in the property space, knowing what information to pay attention to and what's to disregard.

[00:06:55] Andy Graham: it is quite difficult. I mean, along the same vein, let's talk about. Valuations. Then. There's been a lot of chatter about this in the community. I would say often off the back of some of the more politically charged conversations that we've seen and have been having recently, which I have been certainly involved in in many cases.

[00:07:11] Andy Graham: Like sort of brought to the table. Yeah. But I think there are some important issues at the minute, but I think more importantly is the question of what does this mean? What could this mean? And it might just be that we need to just think and prepare. Just on values. Ellie, you'll have seen it.

[00:07:27] Andy Graham: There's a lot of noise about

[00:07:29] Ellie Broadhurst: Oh a lot of noise.

[00:07:31] Andy Graham: About a big crash. A huge crash. Yeah, it's coming. And of course, this is not the first time we've seen it even in the last few years. No, but what do you think? 

[00:07:36] Ellie Broadhurst: No, but apparently it's next year. So apparently there's this guy, I was reading about him the other week and I cannot remember his name now.

[00:07:41] Ellie Broadhurst: I won't give him any air time anyway, but he was saying that apparently there is a crash every 17 years and next year is the year. And I was reading into it and there's absolutely no basis. For what he's saying. Only that we had the previous crash in, and it must be 19 years or 18 years into in 2007, 2008.

[00:07:59] Ellie Broadhurst: But that was caused by an entirely different issue, which has got nothing to do with what's going on now. So anyway, that was garbage. But yeah, there is a lot of noise about it and the people saying, well, it's not sustainable. Like these values aren't sustainable. Well, do you know what? 10 years ago we were saying?

[00:08:15] Ellie Broadhurst: Exactly that. And probably 20 years ago people were saying exactly that, but where we have had a crash previously, it has been a significant thing that has happened. It's not just come out of nowhere. You know, the financial crisis was caused by a number of things which don't exist now. You know, the regulation that we have in place stops all of those things from happening.

[00:08:37] Ellie Broadhurst: And previously it was a, a tax issue, tax change that caused the crash, you know, back in the, in the early nineties. It doesn't come out of nowhere. And I think that's a really important thing to say. It is sustainable for it to grow as long as everything catches up. And there are periods of time where you have some adjustments in property prices and, and we'll all, always we'll all have seen that over the last 20 years or so, that you have periods where it's higher.

[00:08:59] Ellie Broadhurst: You have periods where it's lower and that's just normal and that's just life. But I think it's really important that we don't. Put too much emphasis on, you know, this is going to happen because you can talk yourself into these things. If everybody suddenly thought that there was going to be a crash next year, and so everyone stopped buying properties, that would in itself cause the crash

[00:09:16] Andy Graham: as an investor as well. It's very easy to talk yourself out, out of everything, every deal, talk, of course, every opportunity. Yeah. And that's a very dangerous place to be. I mean, I've actually brought a little bit of data today. From House Price Station. Of course there are lots of different sources, but have you heard any nestings from lenders, from Valuers about price drops, about adjustments to anything? Ellie, are you, no. Is this just sort of anecdotal stuff we're hearing and seeing on Instagram and Facebook?

[00:09:39] Ellie Broadhurst: Yeah, absolutely. Anecdotal. I think with every valuation report that we have or the bigger reports, not the sort of standard residential ones, but the bigger reports, there'll always be a SWOT analysis on there.

[00:09:49] Ellie Broadhurst: There'll always be some market commentary. And at the moment I'm not seeing anything during periods of time like COVID and, and other periods, Brexit and things like that. There are sort of standard caveats that go into about the market uncertainty and how it could be a problem. Mm-hmm. But there's nothing in there at the moment suggesting that it could be.

[00:10:06] Ellie Broadhurst: The thing is, it's when value was a value in property, they have certain criteria that they have to stick to and they have parameters that they have to work to, that the lenders have given them direction, um, about. I think there's a lot of misconceptions, particularly from investors, and I see it from the other point of view.

[00:10:24] Ellie Broadhurst: You're emotionally invested in this property. You think it's worth a lot of money. Yes. If you sold it and it was brand new and it's beautiful, you are going to get a higher than market value figure. Absolutely you are. But on a refinance valuation, that's not what the valuer is asking, is being asked to produce.

[00:10:40] Ellie Broadhurst: They're not being asked for, what's the best case scenario of if you sold this property today? That's not what they've been asked for. It's a longer term. Play. Um, and it's based on so comparable data. So you are very much reliant on what's actually sold. If there's not a huge amount that's sold, or the properties that have sold are worth less, they're very stuck because they can't say, well, you know, warehouse sold down the road for 200,000.

[00:11:04] Ellie Broadhurst: I think yours is worth 300,000. They're not allowed to do that. So I think. Yeah, valuers , don't get me wrong, they frustrate me a lot a lot of the time, but I think sometimes they do get a bit of a bad rep because they're only being asked to do what they're being asked to do, aren't they? I have seen a bit of a change.

[00:11:22] Andy Graham: I think that that's comforting, certainly to hear you at that side of the deal. Say that you're not seeing any material issues, you're not seeing reports coming back that look fundamentally sort of down valued because of

[00:11:34] Ellie Broadhurst: no

[00:11:35] Andy Graham: sort of market conditions. I mean, a bit of the data that I looked at, and again, I think that this is comforting for our listeners today, pick and choose where you wanna get your reports from.

[00:11:42] Andy Graham: But I mean, Halifax, August data, they reported sort of a 0.3% month for month, month annual. Growth 2.2% of average over the last 12 months. Uh, so yeah, not a million miles off, off flat there. Nationwide 0.1%, month on month, annual 2.1, very similar. Now, let's call it more or less flat. Certainly if you factor in inflation, RightMove, they reckon asking prices are down 1.3%, month on month.

[00:12:07] Andy Graham: Obviously that doesn't quite correlate with sales data, so sometimes. Right. Moveup data is a little bit ahead of the curve, but also that probably aligns with expectations that are still perhaps a little bit too high.

[00:12:19] Ellie Broadhurst: Absolutely. And we had the stamp duty change. We did back in April. So I think that up until April house prices would've been slightly higher because I think people would've been thinking, I mean, it wasn't a huge saving, was it in reality, but I think people's assumption would be if they paid a little bit more to try and get it through April and then afterwards.

[00:12:36] Ellie Broadhurst: They have dropped slightly and, and that's what you'll always see. The market was definitely flatter between April and June, July. 

[00:12:43] Andy Graham: I mean Zoopla forecasts 1.5 to 2% growth over sort of the 2025. Yeah, I mean that data that you, that is broadly. Flat, modest growth, if anything. And certainly not indicative of a crash. I mean, that is what that data says. If you look at that. 

[00:12:59] Ellie Broadhurst: No, that's stable. That's boring really, isn't it?

[00:13:01] Andy Graham: Boring is good though.

[00:13:03] Ellie Broadhurst: Well, boring is good, but we don't like boring. We have to create crazy titles in in newspapers in order to get people to read articles, don't we? You know, boring doesn't sell particularly, but I think that standard growth across the economy is sitting at a very little, isn't it? So to expect a growing house price with not a growing economy, I think is probably asking a little bit too much.

[00:13:25] Andy Graham: Yeah, asking a bit too much,

[00:13:26] Ellie Broadhurst: isn't it?

[00:13:27] Andy Graham: And there is one thing I wanna ask you about. I heard along the grapevine that Shaw Brook and some other lenders were perhaps starting to look at their sort of C3 valuations. C4 Valuations a little bit differently. Maybe they were doing additional checks on the values. Is this, is there truth in this Ellie? Do you know much about this?

[00:13:49] Ellie Broadhurst: Yes, there is truth in this. It is something that we've seen. It's an interesting one. I was talking to the head of risk at ShawBrook a couple of months ago, um, and we were talking about valuations and HMOs and investment values, and basically what he was saying was that it's almost when you're valuing these properties, then you lend 75% against an investment value, which can be significantly higher than the bricks and mortar.

[00:14:11] Ellie Broadhurst: You're effectively valuing about a hundred percent of a bricks and mortar figure, which really means that you are investing in the business and you are lending to the business as a going concern rather than value lending to the property as, as such as we've seen more traditionally with this sort of lending.

[00:14:29] Ellie Broadhurst: So the risk therefore, is higher. And you'll see that with the interest rates with people like ShawBrook. But it's an interesting one that I think they are looking at carefully because on the whole, on those sorts of properties, arrears rates are really low. Um, and actually we've seen across the board, the arrears rates on buy-to-let mortgages is actually lower than non residential, which is quite unusual.

[00:14:49] Ellie Broadhurst: But it does go to show that it, on the whole, it is a good investment. Nothing generally goes wrong, and generally they're happy with that situation. They're aware of it and they're happy with it. But when it does go wrong, it is a catastrophe because generally you've got an investor that's got quite a number of properties.

[00:15:04] Ellie Broadhurst: They're generally in quite a condensed area because that's how property work investors work. And then you've got somebody who's then trying to offload a number of properties. Mm-hmm. And trying to get above. Bricks and mortar price for those properties, which is tricky. That's not something that's easy to do.

[00:15:22] Ellie Broadhurst: So yeah, so when it does go wrong, it is quite difficult. So what you need to do is kind of look at that balance and what they're trying to work out is where we are lending on or where ShawBrook are lending on in investment value. Have you got enough evidence sitting in the background to show that HMOs will sell?

[00:15:37] Ellie Broadhurst: For that investment figure. So there's like an established market in that location for those higher values as a bit of a backup, in case it all does go wrong, if you are in somewhere where, I dunno, some village location or a small town where generally HMOs aren't a big thing, don't really sell, you are gonna struggle to then sell particularly multiple properties.

[00:15:57] Ellie Broadhurst: So they are doing what's called a C3 check and they are looking at comparable data for the HMOs. So they're asking for sold comparable data on HMOs, and then they're also asking for a C3 check, which is, if it was a bricks and mortar sale, how much would, would that be? That's not to say they're using that figure to lend.

[00:16:15] Ellie Broadhurst: I have had a few recently. Doncaster is a really good example of a really big disparity between bricks and mortar and investment. Um, and we've had a couple where the bricks and mortar figure is, it was like, like a hundred. One was 150, one was 130 something, and the um, investment value was at 187 and 230.

[00:16:37] Ellie Broadhurst: So it was like nearly double. You know, it's, it's a big difference. So you are borrowing 75% of that investment value. If you then sold that for a bricks and mortar price, you're losing money on that, aren't you? You're not, you're not gonna pay off your mortgage. So they'll still lend off the higher figure that 230, that's no problem.

[00:16:52] Ellie Broadhurst: But they just want the evidence in front of them to be able to have a look at it, and they want to know that there is. A market for the investment values and that they, that could be something that's sold. Which goes on to actually talking about Article four because I think a lot of investors are put off by Article four.

[00:17:11] Ellie Broadhurst: It is an additional barrier to entry, isn't it? You need to sort out planning, but I think that what we'll see. Moving forward is that actually there is a big benefit of being in an Article four area because generally you will see those HMO sales, like there will be that track record there. The lenders can rely on that evidence and also, and there's more chance of you actually selling it.

[00:17:31] Ellie Broadhurst: If you want to sell it, you could sell it for that. If you are in some, I dunno, whatever town, local town with no HMO market. In reality, you're not gonna sell it for that. I know your, your plans aren't to sell it generally, but if you did, you're not gonna get those figures. So I think there'll be a bit more of a shift.

[00:17:49] Ellie Broadhurst: There needs to be probably a bit of a shift towards moving into those Article four areas. It's a benefit to them.

[00:17:54] Andy Graham: Quick one, I think that you'd agree that finding and doing deals is the most important part of property, but it's everything around the deal that can slow you down. Keeping track of rental income and refurb costs, paying contractors and bookkeeping, that's the stuff that needs time and energy that you should be putting into your deals.

[00:18:10] Andy Graham: That's why I'm glad Tide are sponsoring today's episode. Tide is more than just an online bank. It's your all in one toolkit for running a property business. You can open a free business account in a day, send invoices, accept payments and track expenses automatically, and even give contractors or your team members their own cards with limits properties complex, but your finances don't have to be.

[00:18:28] Andy Graham: You can sign up to Tide today with my link in the show notes and get 50 pound cash back when you spend a hundred pounds on your new card. Let's get back to the show.

I've for a long time, talked about this on the show. I think the Article four. Yet as you said. It certainly is a barrier to entry. It pushes prices up, there's a premium.

[00:18:44] Andy Graham: Mm-hmm. But once you're locked into that market, it's a fantastic place to be. Yeah. It's like the analogy I would use, it's like opening an ice cream shop on the sea front, and then the councils sort of saying, look, we let you do it, but we're not gonna let anyone else do it. Oh, we're not gonna let Absolutely many other people do it.

[00:18:58] Andy Graham: That's great to hear. As a business owner, you've got that control of the supply and demand. Yeah. And actually just fundamentally speaking, talking about these sorts of problems. If the local market from a tenant perspective started to dry up or things changed, you would be grateful to be in a market where there were some restrictions where totally Joe Blogs couldn't just come along and pop up another HMO and do it.

[00:19:18] Andy Graham: So there is, you know, there is a huge amount of value in actually being within an article forward direction. I appreciate that. At the earliest stages of the investment careers, people starting to build their portfolios, that's difficult. They need to take a bit more risk. They need to be able to try and get more outta the deals, which means buying in at lower value, trying to pull more.

[00:19:36] Andy Graham: Yeah, I totally get it. But there is a point at which it really does make sense to try and, you know, have that rental confidence and, and article Four Direction certainly does give an element of that. So let's talk about the elephant in the room at the minute, which I think has to be the economics and the politics surrounding pretty much everything at the minute and right now.

[00:19:54] Andy Graham: Everything seems to be focused on the alter budget. Yeah. Now, you and I have discussed this quite a bit and I discussed this on the show recently. A number of things that I am frustrated with at the minute boil back down to a lack of pro growth ideas. I fully appreciate that we've got some big tax bills to pay as, as a nation that you know that's clear and there's no, there's no getting around that we are going to, there are gonna be some tax changes, but it's the lack of.

[00:20:18] Andy Graham: Incentives for business owners. And I think business owners, small businesses are the backbone of, of the British economy. Absolutely. And house building is such a key part of the, some of the problems we have at the minute and there just seems to be so little there. And of course that is causing frustration amongst our community and investors and business owners in general.

[00:20:35] Andy Graham: That's what I'm hearing, but I know that you've got false and opinions on that and I think some of them are absolutely correct, Ellie, that. All this noise itself, the noise could be the problem, right?

[00:20:46] Ellie Broadhurst: Absolutely. And we've seen this before. We've absolutely seen it. I mean, I was working at Northern Rock when the crash happened in 2007, and knowing like what I knew then in terms of how it was, the reaction from, and I get the reaction, I'm not, I'm not defending anything.

[00:21:02] Ellie Broadhurst: I get the reaction. People were, were terrified, um, of losing their money. But it was the reaction of consumers that caused the longer term problem. And it's, it's the same in anything. You can talk yourself into a growth and you know. We say about if there's a crash next year, like if everyone stopped buying property now, that would cause a crash in itself.

[00:21:22] Ellie Broadhurst: So I think it's really important that I, I understand what you're saying. I totally get it. Yes. It would be lovely if we could have some, some carrots and, you know, thrown out to, to encourage people to grow, to encourage people to employ more people. Um, I, I think it's really important. Growth is like hanging on by a thread and we could so easily slip into that recession.

[00:21:41] Ellie Broadhurst: We've got to keep spending, we've got to keep spending and earning and spending. Otherwise it's a problem. And I think that if people are worried about there being a recession or worried about tax rises in the budget, worried about, there's been loads of things thrown out to the press. And they did the same in the spring, didn't they?

[00:21:58] Ellie Broadhurst: They threw all this stuff out and then actually what came out was better than what they'd thrown out to the press. So I think it was a. Maybe it was a whole media plan and everyone thinks, well, it was not that bad. It's okay. You'd feel better about it because it could have been so much worse. Maybe that's their whole tactic, but I think it does worry people. And then when people are worried they don't spend,

[00:22:17] Andy Graham: yeah.

[00:22:18] Ellie Broadhurst: And when you don't spend, you have a problem. Yeah.

[00:22:20] Andy Graham: There is definitely a press narrative at the minute. Um, it's this extreme boot extreme boom. Mob boss. You know, we're really sort of picking holes in, in every political decision and everything that sort of comes out and gets leaked into the press.

[00:22:33] Andy Graham: But the reality is on the ground, as we've already established today, things are pretty flat, pretty steady. A bit boring. If anything. Yes, we've got a low growth challenge. That is clear. And I think that that's the bit, you know that I think that is

[00:22:45] Ellie Broadhurst: that's the challenge. Yeah.

[00:22:46] Andy Graham: Yeah. But inflation is easing the economy.

[00:22:49] Andy Graham: Yes. It's gently cooling. It's certainly not spiraling at the minute. And I think from an investor's perspective at least it's a slow book, steady market. It's not exciting, but it doesn't look especially dangerous at the minute. I mean, that's kind of my take on everything right now.

[00:23:03] Ellie Broadhurst: I think so, and I think when you've got this market that's not exciting, that's where you can go in and actually get a good price on a purchase.

[00:23:12] Ellie Broadhurst: If growth is looking relatively flat in terms of house prices, then someone's not gonna be bothered, particularly about trying to sell their house for a little bit less Now they won't wanna hold up out for another buy necessarily because they've got plans. They want to do whatever they do with, you know, the sale and they'll be happy to negotiate.

[00:23:28] Ellie Broadhurst: I think it becomes more of a buyer's market when you've got something like this. Yeah, because. We've had a few months since stamp duties changed. Hopefully people's expectations have sort of settled on that. I think there's potential, there's always potential, isn't there?

[00:23:42] Andy Graham: I think it's also worth remembering that a lot of the noise about things like property crashes tend to come from a particular direction.

[00:23:49] Andy Graham: Absolutely. Especially if you are an Instagram user and you have an interest in property and the algorithms is, it kind of understands that. Yeah. Somebody that a lot of our listeners, I'm sure will be aware of. Runs big proper training education company. They, they, they like to wear very stripy shirts and I must have heard this guy talking about the great crash every couple of years for the last 10, 15 years. And honestly, I couldn't hold Pat from coming on his post the other day to say. You've literally said this every couple of years

[00:24:20] Ellie Broadhurst: and it's not happened.

[00:24:21] Andy Graham: Yeah. And he came back with something. I was like, yeah, yeah, of course. Yeah. Of course. There's going to be a recession at some point. The clock is right. Twice a day, isn't it? They, and that's, that's kind of my point. Yeah.

[00:24:30] Ellie Broadhurst: Yeah.

[00:24:30] Andy Graham: But just to our listeners, just be aware that. It is often in the interest of certain people to shout very loudly about this sort of stuff because it is quite controversial. It's concerning, it drives attention, and often there'll be something to buy at the end of, of whatever funnel that might be.

[00:24:45] Ellie Broadhurst: Absolutely. I think we, we mentioned this before we started the podcast, didn't we? But in terms of how social media works now, and I was talking to somebody the other day and, and she was saying that regular posts around regular things, particularly in the mortgage world. It's not particularly interesting when I go on chat on my social media about, I dunno, valuations or what's happening with the base rate.

[00:25:04] Ellie Broadhurst: And, and that in itself in isolation is not particularly interesting. Whereas if anybody comes up with something quite controversial, you will immediately get people agreeing with you and disagreeing with you, and it's always. The people with the more extreme views on either side of the spectrum, that the ones that shout loudest.

[00:25:19] Ellie Broadhurst: So if you can sort of tap into that, that's where you will get more followings, you'll get more interactions. And like you say, if there's something to buy at the end of it, the more people that you bring in, the more clicks you've got through to your payment page, haven't you? So, yeah, I think it's, you've got to really think about where someone's intention.

[00:25:38] Ellie Broadhurst: Has come from, and I also think with the likes of chat GPT, there's less people using Google. I think somebody was saying to me the other day that it's really difficult for like local news companies now, local papers to get enough interest to read onto their website in order to get the clicks through to generate enough income.

[00:25:56] Ellie Broadhurst: It is the whole way that people consume. News is changing. So I think that we will see naturally those more extreme views of surface to the top because they get more views and they, they rise up and, and that's what we see. And, and it's filling our algorithms, isn't it, on our social media feeds through with that.

[00:26:16] Ellie Broadhurst: So we've really got to think about it. And I think, I mean, what I do a lot is if I see a news article, I will go on and Google it and try and find an alternative view so that I can see it from two different viewpoints and try and figure out what the actual truth is sitting behind it. 'cause saw something came through, I mean, I get an email every day from the introducer, which is like the mortgage press, and it was like, it was so extreme in the way that it was talking about the potential increase in NI for mortgage.

[00:26:45] Ellie Broadhurst: What am I trying to say? For rental income? Yeah. But it was so extreme in its view and I think, well actually, let's sit down and let's actually think about what that actually means to Joe Blogs. You know, what, for your regular investor, what does that actually mean? And I'm not saying that it's not gonna impact on people and potentially yes, that could impact through on, on rental increases, but that amount of money is still relatively small in the grand scheme of things.

[00:27:08] Ellie Broadhurst: You know, we've had section 24 tax increases. That is huge. That is a huge problem. This is. Tiny in comparison to that problem, but yet. I feel like the news that we see now is so much more extreme on that example than I ever remember anybody saying about the tax changes that happened. But then that was like 10 years ago and that wasn't never when that all started.

[00:27:29] Andy Graham: I'm sure you're right. Different consumption. You're right. The way that we engage, the place that where we get our news from is very, very different now and. It's very easy to make an awful lot of noise and it wasn't quite the same as that sort of 10, 20 years ago. So I guess Ellie as always, but you've been a great sort of source of, of wisdom and useful insight and I think reassurance today.

[00:27:50] Andy Graham: 'cause I know a lot of our listeners are getting increasingly frustrated with all of the bad news and the negative press and. Genuinely start to get a little bit concerned. I had messages about whether or not the, the investment landscape has fundamentally changed. Yeah. Whether or not it's still the right thing to do, whether or not it's HMOs or something else.

[00:28:07] Andy Graham: And I get those concerns. But I think it's really useful to have these sorts of conversations with yourself. Absolutely. Because you're sitting with the lenders and you, you are seeing what's coming back.

[00:28:15] Ellie Broadhurst: Yeah. But it's the broader thing. I mean, somebody messaged me and asked me, you know, do you think that the change in NI will have an impact on valuations?

[00:28:23] Ellie Broadhurst: And I thought that's such an interesting thing that somebody would pick up on. And you think if you step back from that, the valuer doesn't know the profitability of your business. They don't know how you own your property. They don't know your tax position. They don't know how big your mortgage is going to be.

[00:28:37] Ellie Broadhurst: They don't know any of those things. They don't really know what your bills are. They can make a judgment on that, but it's not for them. To judge how much profit you are making on your property or how that will impact, that's not gonna impact the price of the property. All they're looking at is the market value.

[00:28:52] Ellie Broadhurst: If we sold this property on how much would we sell it for? That's all they are concerned about. But I think it's really interesting and I think that's probably because of the way that it's been. Said in the news, isn't it? It's this panic stations. Oh my God, it's the worst thing that's ever gonna happen.

[00:29:07] Ellie Broadhurst: And that then makes people panic. So if you've got people that are genuinely thinking that's gonna have an impact on valuations, then of course that will will think, make them think, do I want to buy another property? Do I want to keep the properties that I have? It triggers those questions, doesn't it?

[00:29:21] Ellie Broadhurst: Which I don't think is, not that it's not helpful, but I think you need to be able to see the bigger picture and when you've got these extreme headlines and click bait. There's no bigger picture piece in there. That's not what they're interested in.

[00:29:34] Andy Graham: Well, I guess time will tell. I think we are agreed on the fact that there is a degree of uncertainty at the minute we could be in for a bumpy few months.

[00:29:42] Andy Graham: I think that that absolutely, that probably is likely to be the case, but I also think that we're sort of unanimously agreed on the fact that things look fairly stable at the minute. Nothing exciting, nothing too dramatic. And my advice to our listeners today would be, look, just proceed as. We have said many times on the show over the last few years as the, there've been ups and downs with Liz trs and COVID and all sorts of stuff.

[00:30:03] Ellie Broadhurst: Of course, yeah.

[00:30:04] Andy Graham: Just do your numbers and don't overstretch.

[00:30:07] Ellie Broadhurst: Absolutely. Yeah. 

[00:30:08] Andy Graham: Manage your expectations. Keep calm and carry on. And I think, you know the minute, that's probably the best course of action.

[00:30:14] Ellie Broadhurst: Absolutely. But I think, I mean, that goes for any scenario, doesn't it? But I think probably now more than ever.

[00:30:19] Ellie Broadhurst: But yeah, just be sensible. Be sensible with your timescales. Be sensible when you are. Stress testing your deals. Don't go in thinking, oh yeah, I'll be able to do that at 5% by the time I come to refinance in six months time. Probably won't be any different to where it is now. I imagine, and I have these conversations with people all the time, and I'm very not cautious, but I, as you know, I don't want to say that I can do something and then not be able to deliver on it.

[00:30:43] Ellie Broadhurst: That is my worst nightmare. So I would rather say to someone, do you know what? Stress it at six or six and a half, and hopefully it'll be less than that, but. I want my clients to stress it as slightly higher than where we're at so that we've got a bit of wiggle room in there. But I get some people that come to me and say, well, you know, I stressed at five thinking not far off, five on some residential rates.

[00:31:06] Ellie Broadhurst: No, nevermind for you. 15 bedroom, HMO. See yeah, be sensible. Stress it sensibly. Be realistic with your timescales 'cause you don't wanna end up spending too much money and eating away at your profits. But also, as always. Negotiate on your purchase price. That is where you make your profit. So negotiate hard, don't make emotional decisions.

[00:31:27] Andy Graham: Yeah, and of course for anyone listening today who has some lending that they need over an hour in the near future, make sure you chat to Ellie about it. Ellie's, especially, she is talking to the specialist lenders. If you are investing in HMOs, then you probably need a specialist lender. Absolutely. And Ellie can help you figure out what the best lender, what the best.

[00:31:45] Andy Graham: Product for you and your circumstances, and we talked about this so many times on the show, haven't. Everybody's circumstances and their objectives are different, and there just isn't totally a one size fits all. So no, Ellie is there, tell you just head to thehmoroadmap.co.uk find our Services tab. There's a page for financing and mortgages and Ellie's on there, and you can drop an inquiry.

[00:32:05] Andy Graham: With now. Ellie, it's been an absolute pleasure as always. Thank you for coming back on the show. Thank you. Thank you for bit of reassurance and I look forward to having you back on the show probably just in time for the Autumn budget. Maybe we can do some predictions before.

[00:32:18] Ellie Broadhurst: Oh yeah, that's a good idea.

[00:32:19] Ellie Broadhurst: Let's do that.

[00:32:20] Andy Graham: Thanks, Ellie.

[00:32:21] Ellie Broadhurst: Thank you.

[00:32:28] Andy Graham: That is it for today's episode guys. Thank you for tuning in. Hope you enjoyed that conversation with myself and Ellie. Hope you found some value in there. I think we all needed that little dose of reality, a bit of a sense check, didn't we? If you are investing in HMOs, if you are trying to scale up your.

[00:32:42] Andy Graham: Business. Then make sure you head to thehmoroadmap.co.uk right now because we have got a whopping 20% off sale. You can get your hands on everything inside our premium package right now from massive 20% off all my tools, all my resources, all my downloadable templates. It's all there waiting for you to access and use instantly.

[00:33:02] Andy Graham: Plus over 70 case studies from community members with all of the details of exactly how our members are doing incredible projects that you could be doing right now. The video lessons and masterclasses from experts, including several from Ellie on commercial valuations and all sorts of things, is all there waiting for you.

[00:33:20] Andy Graham: Trust me, if you are building HMO property business and you do wanna get results, and you wanna save time and make more money, go and check it out. It is the tool, it is the resource that I wish existed when I was just getting started. I've said it many times before, and I'll say it again. If it did, I'd have achieved 10 times the amount in a 10th.

[00:33:39] Andy Graham: Of the time. Just head to thehmoroadmap.co uk right now and go and get your hands on that huge discount. That is 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.