Nova Financial Group advises thousands of property investors looking to build their portfolios across the UK. Nova sets itself apart in an industry which is typically equities focused by giving its clients control and flexibility of property and buy to let investments.
Strategy
“If you don’t know where you are and where you want to go then you are less likely to make progress,” said Paul Mahoney, managing director and founder, who presented at April’s UK Investor Magazine conference. Nova’s mission is to figure out a blueprint for people who want to invest money they’ve saved over a long period, but who may not have the expertise to do so. The company’s vast wealth of experience ensures its clients will avoid common mistakes and make savvy property investments.
Nova helps its clients to source specific properties, taking care of the research and due diligence that goes into the process. In addition, the firm has an in-house mortgage broker to it advises on and arranges the finances for the sale of properties across the UK. Finally, the company helps its clients to review their portfolios and re-invest as time goes on. The company does not sell its own stock of properties which allows it to better guarantee impartial advice, ensuring a “focus on the financial outcome for its clients”, said Mahoney.
Leveraged Property Investing
Nova makes the case that when it comes to property, it can be preferable to gain debt. “Some debt is good debt. It can help you utilise your funds and can make them go further,” Mahoney said. Nova only looks at properties that provide a net yield on funds applied of 5-10%. In addition, clients with Nova are able to grow the value of their portfolios through capital growth. Mahoney made the case that Nova can generate 20% growth on funds invested per annum as the value of a property rises. This means that clients could stand to earn a yearly return of between 25-30% when the yield and capital growth on funds invested is combined. Nova is able to achieve these returns consistently and with a low level of risk, Mahoney stated.
Market Trends
Nova will assist its clients in identifying market trends to allow them to make secure long-term investments. Young professionals, Mahoney says, are more focused on lifestyle as opposed to family. Therefore, they are more focused on living in the areas in which they are working rather than commuting i.e. city centres. Mahoney does not feel the trend of people moving away from city centres, as often reported by the media during the pandemic, is going to be permanent as things return to normal.
Low to middle income earners, generally young professionals, are also increasingly finding it difficult to live in London. “20 years ago London wages were relatively higher and the cost of living was much lower than it is now,” said Mahoney. “Wages haven’t grown a lot, especially for low to middle income earners,” he added. This is resulting in that demographic either staying in – or moving to – other major UK cities, including Liverpool, Bristol and Manchester.
Other major changes over the past five years in the buy-to-let market include a greater focus on yield, mortgage serviceability and stamp duty premiums. Lower value, high-yield properties are becoming more sought after, in-line with a transition way from London and the South East.