How much are Chichester’s landlords spending on property maintenance?

As another tax year recently came to a close, annual account statements were sent out to all of my landlords who use my fully managed service. It’s something I include (free of charge) as part of my lettings service, but I think it will make my landlords (or their accountants!) lives easier come self-assessment time.

The statement breaks down the total rent they have received in the tax year for each property, along with any deductions that were made i.e. CRJ Lettings’ management fees and any maintenance costs. It’s similar to what they receive each month when the rent comes in, but this time for the whole tax year.

Not only is this a nice overview for the landlord, whilst again demonstrating my complete transparency in regards to fees, but it also ensures all costs are accounted for so that they can claim the maximum tax relief. This is increasingly important when the deduction of mortgage interest has been taken away, having been replaced by a (often lesser) ‘tax credit’.

It also gives me some great figures to analyse, which I wanted to share with you.

The average rent my landlords are achieving is £1,228pcm, which means the bulk of my managed properties are slightly cheaper than the current average rental property available in Chichester (which costs £1,300pcm). More telling is the fact my landlords have received all of the rent due to them. Each year I question whether I will repeat this achievement, such is the economic landscape and frequent tales in the press of non-paying tenants. 

What’s more is that my unique fixed-fee structure is proving to be excellent value for my landlords; demonstrated by an average charge of just 8.5% for an award-winning full management service. One landlord is paying just 5.8% as their property achieves a particularly high rent, meaning my fixed fee proves to be even better value for them.

What is also interesting to see is that my landlords are spending an average of just £361 a year on property maintenance, which is only 2.5% of the total rent they receive. Common lettings advice is to set aside 10% of your annual rent to account for property maintenance, so it seems my landlords are doing far better than this. 

I suspect this is partly because I tend to manage more modern properties, which should inherently have fewer issues, but also because I tend to endorse the attitude of ‘prevention being better than cure’ i.e. spending a little in the short-term to save a lot in the long-term.

I hope it’s also partly down to the carefully selected maintenance contractors I use, who offer reasonable value for money, plus the fact I don’t add a mark-up to maintenance costs or charge additional commission on such works. I’ll also typically run through a few simple steps with tenants when issues do occur, in case we can resolve them without the need for paid help.

Landlords; let me know how much you’re spending on maintenance and where you’re spending it (boiler repairs and faulty toilet flushes made up a good chunk of our maintenance spend this year!). And if you’d like to discuss the ins and outs of how I can make the management of your rental property a little bit easier and perhaps more cost-effective, please get in touch.

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BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Tangmere, £285,000, 5.5% yield

Summary

3 bed house in Tangmere

Listed for sale on 23/01/25 @ £300,000

Now = £285,000

Rent = £1,300pcm

Yield = 5.5%

Last sold for £258,000 in February 2017 (+10% in 8 years)

The property is on the market with Leaders and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/157215737

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Avoid having your house ‘stolen’

Scammers are getting increasingly sophisticated and property is an area they target due to the high transactional values. You may be aware of ‘phishing’ attacks, whereby fraudsters impersonate your solicitor to try and intercept the transfer of funds into their own pockets, but have you heard about the tricksters who attempt to impersonate you so as to steal your property!?

The theft occurs with the criminal impersonating the owner of a property so that they can then sell or re-mortgage it. Buy-to-let properties without a mortgage are a prime target here, as the owner won’t live at the property and there isn’t a mortgage company double-checking things or receiving any of the sale proceeds.

As title deeds are a publicly available document (they cost £7 to download online), it is very easy for anyone to get the name of the owner of a property. The title deed will also show whether there is a ‘charge’ against the property i.e. a mortgage. With this information the fraudster, who often first poses as a tenant, will simply change their name by deed poll to match the property owner’s name. Now living at the property with the same name as the true owner, it becomes very easy to build up identification documents and paperwork that would see that person passed off as the ‘owner’.

That’s exactly what happened to a property in Luton in 2021, with a fraudulent tenant selling the property without the landlord even knowing! Unfortunately, this is not an isolated incident, with the Land Registry paying out millions in compensation each year due to fraudulent transactions. Another case saw a previously unencumbered property in London become subject to a £1.2million bridging loan, which was paid out to a mother and daughter who had changed their name to match the registered owners.

Fortunately, there is a solution to this; which is to enter a restriction on your title deed. This will then state that any application to change the register must be accompanied by a solicitor’s certificate verifying your identity as that of the legal owner. This can cause a slight delay when you actually want to sell or mortgage your own property, but that’s surely better than falling victim to this crime.

Another option is to sign up to the Land Registry’s free property monitoring service. You’ll receive an email if an application is made to change the register; so, whilst it won’t prevent changes being made, at least you’ll know straight away so you can take prompt action.

As ever, prevention is better than cure. So, whilst the above is rare, it pays to be aware of such matters so you can put measures in place to ensure you are protected. Thorough tenant referencing will also put off any chancers with such misdeeds in mind, as they will seek an easier target if asked too many questions. 

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BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Tangmere, £300,000, 4.8% yield

Summary

2 bed house in Tangmere

Listed for sale on 24/02/25 @ £300,000

Rent = £1,200pcm

Yield = 4.8%

Last sold for £255,000 in March 2021 (+18% in 4 years)

The property is on the market with Sims Williams and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/158612201

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How useful is calculating ‘£ per square foot’?

 

I am currently helping a landlord find a suitable rental property to add to his portfolio. I suggested an array of two-bedroom houses in Tangmere, which, amongst other things, I highlighted as offering excellent value when considering their ‘£ per square foot’. The landlord was a little baffled as to what this was and why it was important. 

I explained that £ per square foot is one of the metrics I always use when analysing a potential property purchase (property price divided by total square footage of the property) as it gives an idea of the value for money you are getting.

Obviously, you have to consider the quality of the ‘square foot’ you are calculating i.e. an immaculate property in the best part of town will rightly cost more on a square foot basis than a rundown shack in a less desirable area.

When comparing similar homes in the same neighbourhood though, it can be a good gauge as to how much you should be paying for a particular property. Most estate agents will just talk about the number of bedrooms as an indicator of size, but this is an unfair comparison when a large bedroom has been split in two or a living room has been redesignated as a ‘bedroom’.

It can also become a powerful negotiation tool. Being armed with the knowledge of comparable properties is one thing, but the £ per square foot metric brings a level of objectivity to negotiations (although it does ignore garden size). 

Back to the search at hand…

There are currently four traditional ‘two-up two-down’ houses in Tangmere, all with a garage and within 500 yards of one another. They are priced at £249,500, £259,950, £270,000 and £300,000.

Based on that, it seems pretty obvious which one to plump for right? This is where my trusty £ per square foot calculation comes in handy.

The ‘cheapest’ of the two-bed houses would be a decent buy at £249,500; and with a footprint of 605 square feet means it would cost £412 per square foot.

Spending £10,450 more will get you an additional 50 square feet, bringing the overall cost down to £397 per square foot.

The £270,000 option is the smallest of them all (at 588 square feet). That equates to £459 per square foot, placing it bottom of the pack when considering ‘bricks for your buck’.

The most expensive of the four (priced at £300,000) is also the biggest thanks to the addition of a 90 square foot conservatory. Whilst conservatory space is normally less ‘valuable’ than original house space (traditional conservatories are cheaper to add on than bricks and mortar), this one warrants using its total 745 square feet when calculating a cost of £403 per square foot.

The eagle-eyed amongst you will note the most expensive house is NOT the outright cheapest when it comes to £ per square foot (going against the narrative I was surely spinning). But, when you factor in each property’s condition and the works required to bring all four houses up to an immaculate standard, you soon realise it does in fact warrant the (small) extra expense when using this metric. 

Furthermore, this is where I believe those who are ‘in the know’ could use the traditional headline figures to work for them. Give it a little time and, having been overlooked as ‘expensive’, I suspect a price reduction is likely before it eventually sells. 

Also, do you think it will be easier to negotiate the price of the already ‘cheap’ two-bed houses downwards, or do you think it will be easier to state the fact that, at £300,000, this one seems pretty pricey considering you can get a similar two-bed house round the corner (albeit in need of some work) for £50,000 less? 

By using this knowledge to your advantage, I think you could end up bagging a bit of a bargain by getting the best of the comparable properties on offer for a better price; ultimately meaning that it would become the cheapest on a ‘£ per square foot’ basis.

If you are thinking of buying a rental property and would like me to crunch the numbers on it to ensure you are maximising your investment, please get in touch.

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BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Tangmere, £290,000, 5.2% yield

Summary

3 bed house in Tangmere

Listed for sale on 02/02/25 @ £300,000

Now = £290,000

Rent = £1,250pcm

Yield = 5.2%

Last sold for £256,750 in March 2020 (+13% in 5 years)

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/157674503

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What’s for rent in Chichester?

 

Not much!!! 

Since the onset of the pandemic five years ago, the supply of rental properties in Chichester has been at record lows, whilst demand remains stubbornly strong. This has led to a hugely competitive market for wannabe tenants, whereby you can expect dozens of enquiries within 24 hours of listing a decent and well-priced property to rent. That is despite rents increasing across the board as a result of this supply and demand imbalance.

There are currently just 91 properties for rent (excluding student lets and room shares), which in a city the size of Chichester is wildly low. It is also a slight drop from the already low figure of 96 properties on the rental market a year ago. 

Even more worrying is that demand has continued to outgrow supply; with only 38 properties still available to rent (42%) compared to 53 properties that have been let agreed (58%). Bear in mind that five years ago (just before Covid struck) there were 205 properties on the rental market in Chichester, of which 143 (70%) were still available. 

Clearly then there’s not much choice for those seeking a property to rent, which explains why so many people are enquiring as soon as something comes to the market. Furthermore, it explains why people are willing to pay more as and when something suitable does become available. This has led to an increase in asking rents across the board, such that the current average asking rents in Chichester are:

 

…The average rent for a property in Chichester is currently £1,400pcm, up from £1,300pcm a year ago (an increase of 7.7%!).

The cheapest property available to rent in Chichester is a one-bedroom apartment on Chatsworth Road, which is ‘let agreed’ having been marketed for £795pcm. On the other end of the scale is a five-bedroom detached house on Old Broyle Road, which is available for £3,000pcm.

Why then has there been such a drastic decrease in the number of properties available to rent? Put simply, landlords are continuing to sell up. The stick of taxation and legislation has proven too much for some, with interest rate rises wiping out profits for those with buy-to-let mortgages. 

I’ve written many times about the negative impact taxation and legislation changes are likely to have on the rental market; not only directly for landlords, but ironically for the tenants they are supposedly meant to help. This has now come to fruition as rental supply remains at such low levels that, unsurprisingly, rents are increasing as a result. That perfect storm is making it increasingly difficult for tenants to find a decent home at an affordable price.

To stay abreast of the availability and average prices of rental properties in Chichester, be sure to subscribe to my free fortnightly e-newsletter at www.bit.ly/chipropertynews.

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