Monday, 11 January 2021

BUY-TO-LET DEAL OF THE WEEK: 4 bed house in Chichester, £265,000, 5.0% yield



Summary:
4 bed house in Chichester
Listed for sale on 18/11/20 @ £280,000
Now = £265,000
Rent = £1,100pcm
Yield = 5.0%
Last sold for £64,950 in 1999 (+308% in 22 years)


This is the cheapest four-bedroom house currently available to buy in Chichester, at a very reasonable-looking £265,000. That's a slight misrepresentation of the property's original form though, as what was a three-bed house has been reconfigured to provide four (rather small) bedrooms. Even so, the square footage you get from this freehold house in Chichester, which appears to be in very good condition, is decent for the price tag (which has been reduced from its original £280,000 asking price).

I assume the house was formerly let to students, based on the configuration and the matching bedroom furniture and single beds. It could be re-instated as one and produce a very decent return. But, like this landlord and many others, student lets are seemingly falling out of favour - both due to a supply and demand imbalance and, now, because of the coronavirus. It could therefore be time to re-configure it back to it's three-bedroom layout and rent it to young professionals or a family. Its proximity to St Richard's Hospital should ensure a steady supply of tenants and I'd expect it to rent for around £1,100pcm, which would provide a decent 5% rental return based on the current asking price. It's layout could also give rise to converting it to several bedsits or studio apartments, which could again provide a way of squeezing more rental income out of the property, if that's what you were looking for.

The current owner purchased the property just before the turn of the millennium. In that time it has quadrupled in value, from £64,950 in 1999 to £265,000 today.

The property is on the market with Cubitt & West and full details can be found on Rightmove via the following link: 



Thursday, 7 January 2021

What’s in store for Chichester’s landlords in 2021?



Whilst attention was largely focused on tackling the coronavirus pandemic in 2020, new laws were still implemented that affected the lettings industry. Indeed, the pandemic seems to have provided the excuse to fast-forward into law a few matters that were previously only ‘on the horizon’ and, as such, 2021 looks set to be another busy year for landlords.


Letting agents must have Client Money Protection - confirmed
The deadline for this mandatory requirement has been pushed back twice in the past few years, but a firm date of 1st April 2021 now exists. From that date, all letting agents must have Client Money Protection, which covers the misappropriation of their landlords’ and tenants’ money. So, check your letting agent has it in place!



Electrical safety checks - confirmed

Since 1st July 2020, an Electrical Installation Condition Report (EICR) must have been carried out (and a copy provided to the tenants) when starting a new tenancy. From 1st April 2021, EICR’s will become mandatory for all tenancies.

 

Changes to stamp duty - confirmed
In July 2020 the stamp duty exemption rate was increased from £125,000 to £500,000. Although landlords are still subject to the 3% additional property surcharge, it has meant big savings have been on offer on property purchases (of upto £15,000). This is set to end on 31st March, although it’s quite possible that this period will be extended. What is confirmed though is that, from 1st April, all non-UK residents will be liable for an additional 2% stamp duty surcharge.

 

Changes to Section 21 - highly likely
Emergency legislation in light of Covid-19 currently means landlords must provide tenants with six months’ notice (compared to the normal two months). This is set to end on the 31st March, but it’s likely that political pressure will see this period extended. Worryingly for landlords, this ‘temporary’ measure could set the way for the full abandonment of the current ‘no fault’ Section 21 notice system. This has been lobbied for by pro-tenant groups and discussed for years, and would result in all evictions needing to go through the courts (which are already stretched beyond capacity…).


Increase in tax - highly likely

Nothing has been confirmed in this regard, but Rishi Sunak did say that tax increases in 2021 were “inescapable” after the vast sums of money spent dealing with the coronavirus pandemic. One likely candidate is Capital Gains Tax, whereby the rates are increased to match those of the income tax bands (for which many landlords are now in higher brackets, due to the full ramifications of the ‘Section 24’ mortgage interest relief changes being felt).


Changes to Right to Rent - likely

Since February 2016, landlords in England have had to check their prospective tenants’ immigration status to ensure they had the right to live in the UK. Brexit has brought in a new points-based system, but landlords have been told to continue with the existing checks until 30th June. Guidance for what to do after then is due to be released in the Spring.

 

No more ‘no pets allowed’ - likely

A bill has been put forward that would allow tenants to have a pet without requiring their landlord’s approval. Whilst I am typically pet-friendly as a letting agent / landlord, some people and types of property simply aren’t suited to having a certain type, or number, of pets. Many landlords also simply do not like being dictated to, as further control about their property gets taken away from them.




Further impact from coronavirus & Brexit - who knows!!

Whilst no one knows what the future holds, we can at least prepare ourselves for what might happen. Those who are able to adapt to the frequently changing world of lettings should be well-placed to cater for the growing number of tenants, at a time when the number of landlords and available properties is decreasing.



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Monday, 14 December 2020

BUY-TO-LET DEAL OF THE WEEK: 4 bed house in Chichester, £300,000, 5.2% yield


Summary:
4 bed house in Chichester
Listed for sale on 19/06/20 @ £375,000
Now = £300,000
Rent = £1,300pcm
Yield = 5.2%


This four-bedroom townhouse close to St Richard's Hospital in Chichester has been on sale since June. In that time it has been reduced in price several times, to now stand at £300,000, which is £75,000 (or 20%!) cheaper than when it was first listed.

It is a similar house to one I highlighted in October as a buy-to-let deal of the week (http://chichesterproperty.blogspot.com/2020/10/Chichester-house-rental-buytolet9.html). It is therefore a similar proposition too; a large, modern, freehold house available in Chichester for a reasonable price, which should be popular amongst tenants and result in a decent yield of 5.2%.

A few things stand out to me from the advert - the fact the headline price is £300,000 and yet the description says "offers in excess of £325,000" is one. Not only is this inconsistent, but I suspect a hangover from the previous asking price of "offers in excess of £325,000"...which proved to be false as it got reduced in price once more (and shows "offers in excess of" is a largely meaningless marketing tool). Secondly, one of the big pluses of the house is it's size...and yet there is no floorplan!? The nine photos don't really do the property and its size justice either, nor show the parking and garage that comes with the property (a big bonus in this street, which suffers from tough parking restrictions).

All in all then, this property could make a great Christmas purchase - be it for homeownership or buy-to-let purposes.

The property is on the market with King and Chasemore and full details can be found on Rightmove via the following link: 



Thursday, 10 December 2020

CRJ Lettings named ‘Best Letting Agent in Chichester’ four years in a row

I’m pleased to say that for the fourth year in a row, CRJ Lettings has been named ‘Best Letting Agent in Chichester’ by allAgents; a respected name in the property industry.

When I set-up CRJ Lettings I did so because I felt I could do a better job of serving Chichester’s landlords and tenants. I didn’t aim to be the biggest letting agent, stretching myself as I moved from one property to the next. Instead, I wanted to be the best letting agent, focusing solely on Chichester’s rental market. I aimed for quality over quantity; working with discerning landlords who appreciate a more personal level of service (and yet at a fair and transparent price).

This meant from day one I have always been most interested in the feedback I receive from my landlords and tenants. After all, whilst lettings may be seen as a ‘property’ business it’s really more about people and personality; because who would you trust to look after your best interests - someone in it purely for the money, or someone prepared to dedicate the time and effort to build a relationship with you such that trust, confidence, and ultimately a smooth transaction will naturally follow?

As a small independent letting agent I don’t have targets for how many valuations I should get, nor do I calculate my conversion rate for signing landlords up to my service. I’ve even told people I’m not right for them if I believe that to be the case (student lets, for instance, is something I don’t normally take on). Providing a quality service gives me far more personal satisfaction than simply focussing on the bottom line of the balance sheet.

It’s nice to pat yourself on the back sometimes, but it’s even nicer when my landlords and tenants do so (how many letting agents actively seek reviews from their tenants I wonder?) I’ve now clocked up 54 Google reviews from my landlords and tenants and 53 reviews on allAgents - all of them a resounding 5-star!

It’s also great that the majority of my newest landlords are coming to me via word of mouth. A personal recommendation is always the best way for you to choose a reputable business. Second to that should be a company’s reviews and testimonials in my opinion - but only if they can be trusted! That’s why receiving this accolade from allAgents means something, what with them being the UK’s largest customer review website for the property industry.

So, whilst I don’t normally use this space as self-promotion, I’m a little chuffed about being named Best Letting Agent in Chichester (again!). Thanks to my great customers, tradespeople and service providers who helped make it possible. 

   


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Monday, 30 November 2020

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £260,000, 4.6% yield

Summary:
3 bed house in Chichester
Listed for sale on 21/07/20 @ £280,000
Now = £260,000
Rent = £1,000pcm
Yield = 4.6%


This three-bedroom terraced house is a rock-solid 'vanilla' buy-to-let property. It's close to Chichester's St Richard's Hospital and has good-sized accommodation, including two double bedrooms and a large single.  

It was first marketed for £280,000 in July, has subsequently been reduced in price twice and now stands at £260,000 - which makes it the cheapest three-bedroom property currently for sale in Chichester.

It could do with redecoration and new flooring, but would then be a neutral 'box' of a house ready for a young family to move into. It already has a modern kitchen and bathroom, as well as a downstairs cloakroom and the addition of a (small) conservatory. It also has the more expensive upgrades already sorted, with double glazing and gas central heating in place.

It should very quickly get snapped up for £1,000pcm, which would equate to a decent 4.6% rental yield from a freehold house in Chichester. It's not the most imaginative property from the outside, but it's decent stock available at a good price so is definitely worth a look.


The property is on the market with Purplebricks and full details can be found on Rightmove via the following link: 
https://www.rightmove.co.uk/properties/82481647 



Thursday, 26 November 2020

Preparing your property for Winter

 

The following tips can be applied all year round but they’re particularly relevant at this time of year as it gets colder, darker and wetter outside.


 Familiarise yourself with your property

Ensure you know where the fusebox, gas safety valve and water stop valve are and how they operate, in case of an emergency (I provide a house guide to my tenants with this information and also show them when they move in).


 Keep on top of basic maintenance

Check roofs and gutters for slipped or damaged tiles and for any leaks. Check overflows and pipework for any leaks as well as damp smells or flaking paint, which may indicate a hidden problem.

Bleed the radiators and check the pressure of the boiler to see if it needs topping up.


Avoid condensation

Build-up of condensation can be more prevalent in winter as more heating is used, clothes are dried inside and there is a tendency to want all the windows shut.

All this moisture in the property needs to go somewhere and will invariably attach itself to cold surfaces (exterior walls/window surrounds) and create unsightly condensation/mould patches.

Keep windows open throughout the property, particularly in bathrooms and kitchens and especially during and after showering/bathing and cooking. Use extractor fans where fitted and wipe down any wet surfaces after using the shower/bath.


Don’t turn the heating off completely

This is very important to prevent the freezing of the water system and expensive burst pipes. It’ll also help in the fight against condensation, which thrives on a changing temperature.

The easiest solution if you are planning to be away from the property is to leave the boiler on and set the thermostat to a low temperature i.e. 12 degrees.


Fire safety

Do not overload electrical sockets with appliances and Christmas lights as this can cause a fire hazard. Avoid using candles, particularly near Christmas trees, decorations and curtains.

Test all smoke and carbon monoxide alarms to ensure they are working correctly.


I believe prevention is better than cure, which is why I pre-arm my tenants with a 'winter maintenance guide' at the beginning of their tenancy and re-issue it as winter approaches. You can download this short guide, free of charge, from www.crjlettings.co.uk/winter-advice



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Monday, 16 November 2020

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Tangmere, £260,000, 4.6% yield

Summary:
2 bed house in Tangmere
Listed for sale on 06/11/20 @ £260,000
Rent = £1,000pcm
Yield = 4.6%
Last sold for £249,950 in 2016 (+4% in 4 years)

My last buy-to-let deal was also a two-bedroom house in Tangmere. This one, however, is on a new(ish) estate in Tangmere, having been built in 2016. That means it is in great condition throughout with modern fittings and amenities you don't get with all of the older properties (such as a downstairs cloakroom and en-suite shower room). This makes it more desirable than the older properties and yet it is priced only £10,000 more than it's older counterpart.

What's interesting to note is that I used to say the older-built properties were often better value. If you look back to 2016, when this property was built, it sold for £249,950. It is now available for £260,000; which is a mere 4% increase in four years. Yet the older two-bedroom house in Tangmere I highlighted last time (currently available for £250,000) also sold in 2016...for £209,950. That means there was around a 20% premium on the new-builds just four years ago, whereas now the premium is a mere 4%...it seems I was quite right to suggest buying the older stock back then!

Now though, that argument is reversed (at least at current asking prices). When it doesn't cost much more to buy a nearly new property than it does one that is 30+ years old, it seems clear to me where you should put your money. Tenants will typically feel the same too, opting for the newer property and justifiably paying a (small) premium to do so. I believe with the current strong demand and low supply that £1,000pcm is attainable for this property, which would produce a solid 4.6% from a new(ish) freehold property in a continuingly attractive and growing village (Tangmere).

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link: