Welcome to this week's property news. Today we see Sir Richard Branson jumping back into banking after his defeat with Northern Rock. He has just completed his banking application for Virgin Money and I think he'll get it approved by the FSA this time.

It seems Branson's not the only one creating competition. The government's also planning to break up Northern Rock into good bank and bad bank - I'll explain this in the video. What's important is that the more competition being created, the more opportunities there will be for us.

Is being realistic holding us back? If you're not ready to buy right now, make sure you educate yourself by reading lots of articles and start to set your plans in place. Be sure to look ahead and prepare yourself for the future. As the market improves, you'll be presented with lots of opportunities and you'll want to be ready to make some money.

And if you want to try my book "The 3+1 Plan", it is available from Amazon.co.uk or why not download the first 5 chapters free on the 3+1 Plan website.

Lastly, The 3+1 Plan has been nominated in the People's Book Prize. If you've read the book, I'd encourage you to add your vote as I'd really love to get into the finals. Go to People's Book Prize website! (Note you'll need to register).

As always if you have any questions or want to have a chat about current opportunities call the team on 0207 812 1255.

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Brett Alegre-Wood

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Transcript of video 'Branson's no virgin to banking'

Hello and welcome to this week’s Property News Update with Brett Alegre-Wood, your source for everything that’s happening in property in the UK, Australia and around the world.

Hey guys and welcome to Weekly Property News Update. I’m Brett Alegre-Wood and today is Wednesday the 28th of October 2009.

Okay, so what we’re going to cover today is first of all Virgin Money is going to become a bank, well let’s just say they’re applying to become a bank but I think they’ll actually be successful in their application especially given that the government is so focused on getting some competition to break out the banks, getting a lot more new players in there and I think this is one of the reasons why Richard Branson has jumped on the chance. But anyway we’ll talk more about that. Competition, competition, competition – we’ll talk more about the government and about in fact pretty much the whole market wanting to create more competition and that’s really good news because obviously certainty has come back now, now they want competition and with competition for you and I that means there’s lots of opportunity. We’ll look at Northern Rock, splitting Lloyds, RBS splitting up, we’re going to look at first time buyers, are first time buyers coming back into the market? If so, it’s great news. UK still in recession but let’s get prepared for the next cycle.

In terms of my thoughts for the week – look you know my head says “slow” but my gut says “go” and what I mean by that is that if I look at all the economics and the measures they use, things like affordability and that sort of thing the process still have got a way to fall to come back to average means over a long period of time and there’s a number of things – unemployment is still rising, all these sort of things which say “hold on a sec, you know we need to be a bit realistic about this”. But my gut says that actually we’re probably through the worst of it and I think we’re definitely through the worst of it but I think actually we can start rebuilding for the future now. You know without too much worry about what’s going on now or whether there’s another big dip. I don’t think the W is going to happen. Alright? Whilst a lot of people are saying that, I don’t think it is, so that’s good news. And you know all the right things being said for that. So we’ll talk more about it over the next few weeks.

The other thing I’m going to have to cover in a separate presentation is the effect of the market services and the mortgage services review from the FSA and just how that will impact you and in fact how little that will impact you in fact, okay, as a buy-to-let investor. Now yes there are specific cases and you might have to do something but you’ve got plenty of time to do that so we’ll talk more about that in a separate presentation and that will be out probably later this week.

So, Branson – he’s finally done it, he’s put the FSA papers in, the Financial Services Authority papers, sorry, yeah, to get his banking licence. Now there’s two ways to get a bank, the first way is you buy an existing bank with a banking licence. Now he did try and do this with Northern Rock, I don’t know if you remember that he tried to do that, he was unsuccessful, the government stepped in and they bought themselves. Okay? And they got a really good deal. Okay? The other way is to apply for a licence, get all the due diligence, get you know massive capital backing, all these sort of things, and go through that. So he’s gone the direct route now which is fine and I think he will be successful especially given the amount of talk there is about competition and splitting up banks and bringing new players into the market and all this sort of thing.

Okay, this is more along the financial services… mortgage services market thing. Should I consolidate my credit card debt by adding it to my mortgage? Do you know if you had have said that to me before I would have said: Look, pay it separately, don’t bother re-mortgaging because of the costs and things like that but it appears now that most banks are looking at credit cards as being bad debt. You know? And you know it always is bad debt if it’s consumer debt but they’re looking at it as really bad debt to the point where they will decline mortgages based on the fact that you’ve got credit cards. And we had a client the other day who literally got declined because he had a £500 balance on the thing which to be fair he didn’t put on the mortgage application, but he got declined, they wouldn’t accept it. Okay? So the attitude to debt is one of the things that’s going to be attacked a bit more and I’ll look at that in that presentation I’m doing.

EU to approve Northern Rock’s split paving way for sale. So what they’re looking at and what they’re talking about and I love the vocabulary here. One business is to be known as the “good bank” will carry out new lending and hold low-risk mortgages while the remaining “bad bank” set up to house unsecured debts and other mortgages will remain in state hands. It’s amazing good bank/bad bank – realistically I actually think that the government has got a really good bargain there. I think they’re going to do quite well out of that in the long term when the market recovers. Okay? Because actually think Northern Rock’s business model was sound so you know that’s the first one.

Then there’s... What they’re talking about here is: Three new banks are to be set up in the biggest financial shake-up in decades. So what they’re talking about is Lloyds, TSB, changing High Street, new banks will replace TSB branches, they are also talking about you know cutting off hundreds of branches in Royal Branch of Scotland and selling them off somewhere.

What they’re saying here is: Official planning cut off hundreds of branches of Lloyds and RBS receive £37 billion in state aid. But look, what they’re saying effectively is they want more competition in the market and that’s good news for us because right now there’s very few players, so we’ve got very little choice – we get what we’re given. When there’s more competition it’s far better for everyone. So bring this on, encourage it, tell everyone to sing from the rooftops that it is a good thing.

Government to break up banks. Lloyds, RBS – we’ve just covered that effectively but it’s all over the news and it’s good news, you know and it’s finally it’s what we’ve been talking about for a while.

The other thing that has started to come out and this… Look forget what they’re actually saying because who knows where the first time buyers are back, the important thing here is the very fact that they’re now starting to bring these news articles out because what you generally find is if there’s no news articles people aren’t thinking about that. But the news articles will start to introduce and that's the good thing here, is this is the you know the first articles that we’ve seen where people are actually coming out, you know.

How quickly will first-time buyers return to the market? And they’re talking about first time buyers coming back in. That hasn’t happened before so that’s good news and really good signs of recovery happening.

So just to finish off: After a fight for survival UK plc prepares (or is preparing) for the future. And I think really the lesson here is that you guys out there, we’ve had a couple of years of actually in recession, you know we’re still in recession, things aren’t you know perfect yet but you need to start looking to the future, and that’s the important bit. If you want to be a successful investor it’s not about what’s happening now, it's about what’s happening in the future. You've got to be constantly looking out there and that’s what you need to be doing now – putting your plans in place. You know it’s amazing just how many more leads we’re getting from you know, from doing no extra marketing because people are coming back to the market. And you want to be at the forefront of that even… Look, even if you’re not buying property now if you can get involved now and prepare yourself, educate yourself as much as possible then actually you’re going to get some really good bargains which you’ll see will increase. And you know make you lots of money and that’s the important bit now, is yes we want you buying property and all that sort of stuff because at the end of the day that’s how we make money, but actually you want to be preparing for that. So even if you’re not prepared to by now you should still be reading lots of articles, you know keeping abreast of the news and relay getting involved. Or if you really want to go to Amazon.com and buy my book or what you can do is you can actually download the first five chapters for free. So Amazon – the book has being doing really well, it's been in sort of the Top 10 you know down to about the Top 20 – it sort of floats up and down but it sort of seems to be staying higher now which is great.

So look guys that’s it from me this week. Ah also that was one of the other things I was going to say just as an add-on. The book’s been nominated for the People’s Book Prize so if you have read it please I encourage you to vote for it on that – I’d really love to get in the finals of that. So the People’s Book Prize – it’s peoplesbook prize.co.uk (I think it is) but we’ll be sending out an email just to announce that it’s been nominated, in September it was so basically you can still vote for it until the end of October.

Alright guys thank you very much and we’ll see you next week!

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