Chichester Property News

Thursday, 21 March 2019

The bare necessities of a letting agent

Forget about your worries and your strife when it comes to letting your property and instruct a letting agent; but make sure you look for the bare necessities first! These are five things that all letting agents must have in place, which goes some way to safeguard the best interests of their landlords and tenants:

Professional indemnity & public liability insurance

Although no business will set out with the intention of making errors, letting agents are still human (despite what some may believe!). Having the right insurances in place will ensure that landlords and tenants aren’t out of pocket in the rare event of an error, poor advice or even an injury caused by negligence.

Membership to a property redress scheme

All letting agents must be a member of one of two government approved redress schemes: The Property Ombudsman (TPO) or the Property Redress Scheme (PRS). There used to be a third scheme (Ombudsman Services: Property) but this closed down in August 2018. These redress schemes can resolve disputes between letting agents and their customers, meaning both landlords and tenants can complain to the provider. Agents must display which redress scheme they are a member of on their website and in their offices.

CMP (Client Money Protection) insurance

From 1st April 2019 having Client Money Protection insurance will be a requirement for all letting agents. This is a form of insurance that protects the landlord should the letting agent steal or misappropriate their clients’ money. It will also provide compensation for landlords if the letting agent goes bust and they are owed money. To be able to take out the insurance a letting agent must hold client monies in a ring-fenced bank account and abide by the scheme’s rules.

ICO (Information Commissioner’s Office) registration

As letting agents hold large amounts of personal data, they need to register with the ICO and prepare a privacy policy outlining why they are entitled to use this personal information. GDPR rules from 2018 also shored up how this data was saved, shared and stored.

Transparency of fees

Under the Consumer Rights Act 2015 it became a legal requirement for letting agents to publicise details of their fees (both to landlords and tenants) on their websites and in their offices. The intention was for full transparency on fees, which would allow landlords to shop around; although some letting agents still seem to keep quiet on their fees until they get a foot in your door.

The world of lettings can feel like a jungle at times, so make sure you book with the right agent. Of course, CRJ Lettings complies with all of the above, so if we can help you rent out your property please get in touch.

This article was featured in...

If you are looking for an agent that is well established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on clive@crjlettings.co.uk or call 01243 624 599.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 18 March 2019

BUY-TO-LET DEAL OF THE WEEK: 1 bed flat in Chichester, £129,950, 6.0% yield

Summary:
1 bed flat in Chichester
Listed for sale on 17/01/19 @ £135,000
Now = £129,950
Rent = £650pcm
Yield = 6.0%
Last sold for £120,000 in 2015 (+8% in 4 years)

At £129,950, this one-bedroom flat on the Arundel Park estate is the cheapest property for sale on the open market in Chichester right now. For that reason it's worth a closer look, as it may appeal to a landlord looking to purchase a rental property with a limited budget.

Formerly a studio apartment, this well-presented property has been converted to provide a (small but better than not having one at all) bedroom. With neutral décor, double glazing plus a modern bathroom and kitchen, there is nothing that needs doing to market this property to tenants straight away. I'd expect to do so for £650pcm, which would mean a decent 6% rental return based on paying the full asking price.

That asking price is just £10,000 more than when the property last sold in 2015 (meaning an increase of 8% in four years). These flats are notorious for having had little capital growth in recent years, with their values plateauing as they appear less-desirable compared to other apartment blocks in Chichester (and hence have become 'cheap'). That wasn't always the case mind; this property shows the rapid increase these flats saw during the start of the millennium, having sold for £52,000 in 2001 and then £98,000 in 2004 (+88% in just three years!). Perhaps there's life in these yet then and buying something (particularly which is in good condition) with the title of 'cheapest property in Chichester' could be a shrewd move. The fact it has an extended lease also overcomes one of the common downsides with these flats (although be sure to factor ground rent & service charges into your calculations).

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-78664004.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Thursday, 14 March 2019

Are Germany’s tenants better off than the UK’s?

Germany’s housing market, and more specifically their rental market, is often pinned up as “how renting should be”, with indefinite tenancies and rent controls. As 54% of Germans rent their home (in the UK it’s just 20%) many argue we should adopt their model - but would that really be for the best?

The Labour party have made it clear they would like to bring in rent controls similar to the continent. In Germany there are indeed rent controls….in most areas you can’t increase the rent by more than 15-20% in three years! Rents across the UK have increased an average of just 4.5% in the past three years, which is lower than both inflation (+6%) and wages (+7.5%) over the same period.

As for the indefinite tenancies German renters benefit from, well that is true. But then again, the landlord has no responsibility to maintain, repair or improve anything inside the property - all of this resides with the tenant. In fact, the landlord merely provides an empty shell; forget white goods, German tenants have to supply their own kitchen and bathroom/s or pay extra for the privilege! The property does have to be watertight, so at least they get doors and windows, which are actually optional in Romania (where only 2% of the country rent)!.

In the UK there’s been 30 years of increased and improved legislation to ensure properties are kept up to standard for tenants. In some cases these haven’t gone far enough, as is shown regularly in the media, although I believe a lot of this is down to a lack of enforcement of the existing legislation. So, whilst UK landlords don’t have rent controls to abide by and can offer shorter tenancies, in return for this property standards have been, and continue to be, massively cracked down upon.

In Germany, sure there’s greater security of tenancies alongside rent controls (in the loosest possible terms) but all repairs, maintenance and improvements are down to the tenant (much like many commercial tenancies here in the UK).

So, what do we want? It’s not fair or realistic to cherry pick the best parts of both systems. Should we make landlords spend more on improving standards and increased legislation? Or should we lower their cost base and responsibilities, pass these savings to tenants by limiting rent increases and put the onus on the tenants to create a home for themselves, whereby they’ll only be asked to leave if they stop paying the rent or breach their agreement?

It might be worth bearing in mind that home ownership in Germany is stifled by banks requiring 20% deposits, estate agents charging fees to buyers of (typically) 7%, as well as stamp duty of up to 6.5%. And yet Germany hasn’t been immune from exploding house prices and rents getting pushed to the limits of the so called ‘rent controls’, which has recently led to social disgruntlement and protests in the street.

This article was featured in...

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 11 March 2019

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £285,000, 4.8% yield

Summary:
3 bed house in Chichester
Listed for sale on 15/09/18 @ £285,000
Now = £260,000
Rent = £1,050pcm
Yield = 4.8%
Last sold for £285,000 in 2016 (-9% in 3 years)

I spotted this three-bedroom house on the Arundel Park estate in Chichester six months ago when it was first listed. At £285,000 for a three-bedroom house with a garage and driveway in a pleasant part of Chichester and seemingly in decent condition (just in need of a little decoration in places) it seemed a good proposition.

However, I didn't bring it to your attention then as it has a major problem - the bedroom sizes. Put simply, with bedroom two and bedroom three both being small singles (under 60 square feet each) I thought it was likely to struggle to sell and therefore would soon slip in price. How right I was, as it's dropped £25,000 (nearly 10%) since then to now sit at an asking price of £260,000. That makes it cheap for a three-bedroom house in Chichester and even if you were to consider the upstairs is only as big as many houses on the same estate with just two bedrooms (albeit both doubles), the price becomes realistic.

Other than the small bedrooms, the rest of the house is great - with a large driveway and garage and a good downstairs space, with a kitchen/diner, the addition of a conservatory and good-sized private rear garden.

Whilst I'd be a little hesitant to breach the £1,000pcm mark (based solely on those bedroom sizes - the fact it's been slow to sell also means it could be slow to rent), I think £1,050pcm is a fair price for this house. That would make it cheaper than other three-bedroom houses on Arundel Park (one is currently on for £1,125pcm but is a little bigger throughout). At that price it would generate a very decent 4.8% yield from a freehold property that needs little work and can be bought for £25,000 (9%) LESS than it was sold for three years ago.

The property is on the market with Bell & Blake and Sims Williams and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-75640919.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Thursday, 7 March 2019

Where will all the new homes in Chichester go?

Chichester has faced a target of delivering 435 new homes a year, which has been exceeded in the past three years; in 2015/16 553 were built, in 2016/17 440 were built and in 2017/18 648 were built. This isn’t enough for the powers that be however, as the local plan (due to be released in 2020) is likely to set out an annual target of building 550-650 new homes. So, where are all these new homes going to go?

It may surprise you to hear that only 8.8% of England is actually built on, with the majority (72.9%) being used as farmland, 3.8% being designated as ‘green urban’ (that’s parks, gardens and recreational space) and the other 14.5% remaining natural. So, all the houses, roads, shops, businesses, airports and other buildings take up less than 10% of the nation - which is quite amazing when you think about it.

Here in Chichester we’re less than half as densely urbanised than most of England, as we benefit from just 4% of the District being built upon. A further 2% of land is green urban, 69% farmland and, not surprisingly for an area that includes the South Downs, a higher-than-average 25% of our land remains natural.

I fear this abundancy of open space is why central government sees Chichester as an easy target to take on more housing. The higher end of the revised target (650 homes a year) would equate to more than 7,000 additional homes being built by 2030, which is a significant increase on the 50,000 or so existing properties in the Chichester District today.

So where are we going to build these new homes? It’s all well and good for central government to push for these schemes, but the knock-on effect is the strain upon local infrastructure i.e. the roads, public transport, schools, hospitals and other public services that need to be enhanced and added to.

The development at Whitehouse Farm is set to be the biggest in Chichester’s history, with 1,600 new homes planned. And farmland is also under threat in Shopwhyke, Westhampnett and Tangmere. But surely all these new residents will need to eat, so continuously building on farmland isn’t sustainable in the long-run. Unless housing is to be more densely built (think taller but smaller new-build units, with a lack of outdoor space) it seems the quarter of our District’s land that remains ‘natural’ could be under threat.

(This article was featured in the Chichester Observer's property section on March 7, 2019)

Clive Janes, CRJ Lettings

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 4 March 2019

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £285,000, 4.1% yield

Summary:
2 bed house in Chichester
Listed for sale on 08/02/19 @ £300,000
Now = £285,000
Rent = £975pcm
Yield = 4.1%

I've let and managed an identical two-bedroom house in the same street as this for the past three and a half years to the same (lovely) tenants. It's location close to Chichester's city centre, but in a quiet close, is particularly popular with young professionals. And, as I've written before many times, two bedroom houses work particularly well with this demographic too, being well-suited as a long-term home for a young couple who initially use the second bedroom as a spare room or office, but can also adapt it should they expand their family (which is exactly what my tenants have done).

They are also modern-built houses so don't suffer with the same issues as some period properties in the city centre do. This one has a modern kitchen and bathroom (although the old bathroom tiles let it down a little) and two good sized bedrooms. The bonus of having a garage is also great, although the parking is permitted, which can put some off (although it's to be expected this close to the centre of Chichester).

Having been listed just a few weeks ago for £300,000 and already having been reduced 5% to £285,000 brings it to a fair price compared to what other houses in the close have sold for previously. I'd expect it to rent for £975pcm, which would provide a modest, but still decent, 4.1% rental return from this freehold property.

Sometimes an agents folly can create an opportunity and I'd say using a picture of the bedroom as the main photo, followed by two identical exterior shots and later four of the same garden shot and two identical shots of the garage (meaning 5 of the 14 photos are duplicates) creates a confused advert that could help a canny buyer snag a good property at a fair price as we approach the dreaded 29th of March!

The property is on the market with Cubitt & West and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-79273814.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Friday, 1 March 2019

Community Focus: Litter Ladies of Chichester

Have you heard of the Litter Ladies?

Just look around you and unfortunately, there doesn’t to be a single road, lane, park or any other area that appears to be litter free these days. So, with that in mind and having been inspired by #2minutebeachclean, Mandy Hine founded the Litter Ladies by litter picking whilst walking her dog, Twiggy.

Then, in April last year when four of Mandy’s friends went to her house for supper, Mandy arranged to pick her friends up but told them they had to wear old clothes as they’d be doing an “activity” before supper. One of the ladies thought they were going mud sliding, but in fact they were about to do their first litter pick at Fishbourne Creek! “We all enjoyed it so much that one of the Litter Ladies, Elizabeth Sawday, suggested we do it on a regular basis … and that’s how the Litter Ladies was formed!” Since then the Litter Ladies has grown in numbers and has its own Facebook Page, meeting up once a month (normally in the evening) to pick litter.

Mandy Hine said “We have a wonderful group of volunteers who give up their time to clear areas that are particularly covered in litter. We are not just ladies we have men too! We walk, talk, laugh and enjoy helping the community and hopefully it makes a better visual appearance of the beautiful city we live in”.

Mandy continued “sadly, litter is a constant issue in our towns, cities, beaches and rural areas. We need to educate people not to drop it, it’s not only irresponsible but it’s also a huge danger to our wildlife and sea life. The litter often ends up in rivers and washes into the sea. Some of the consequences of dropping litter is birds ingesting the plastic, sea life getting caught in plastic bottle rings or swallowing plastic thinking it’s food, ultimately causing death.”

One of the main items of litter found by the Litter Ladies are single use plastic bottles. Did you know it takes 450 years for a plastic bottle to break down? Mandy asks; “Please encourage everyone to have a reusable, refillable bottle, which will save yourselves huge amounts of money whilst doing something great for the planet!”

For more information or to help the Litter Ladies, contact Mandy on:

Facebook: Litter Ladies

Email: mandy@message-on-a-bottle.co.uk

Call: Mandy on 07788410233

Welcome to the original blog about Chichester's property market.

Bringing you the latest news, information and analysis that relates specifically to the property market in Chichester.

Each week I'll feature the article I write for the Chichester Observer as well as my 'buy-to-let deal of the week': a property hand-selected by me that I feel could offer good investment potential.

I'm Clive Janes from CRJ Lettings in Chichester. I'm a landlord who continues to invest in local property as well as manage my own rental portfolio. In 2013 I setup CRJ Lettings not only to manage other landlords properties as if they were my own, but also to give some tips as to how to best go about investing in property.

If you'd like to chat about the local property market or see a potential deal and would like a second opinion, please get in touch:

01243 624 599

clive@crjlettings.co.uk