Thursday, 16 September 2021

Landlords - what you should check before arranging a viewing


Demand for rental property seems to be at record highs, with literally dozens of prospective tenants wanting to view and snap up a property within hours of it being marketed. A recent house I listed had over 50 enquiries within 48 hours; but clearly it can only be let once! Processes therefore need to be put in place to avoid wasting the time of both yourself and some of the interested tenants who either won’t be suitable for the property or will find that the property is not suitable for them.

The first port of call is to understand who will be living at the property, as there may be restrictions on the property’s usage from both a legal and/or practical perspective. For example, I recently had two couples and a friend wanting to share a three-bedroom house. Housing five adults would mean more wear and tear on the property than many of the other potential applicants but, even more importantly, it would mean the landlord having to apply for an HMO license from the council (at a cost of £1,098!). Conversely, I had two friends wanting to rent a two-bedroom apartment; not a problem I said, but are you happy with the second bedroom only being a single? They weren’t, and thus checking this saved me and them the bother of viewing a flat that wasn’t appropriate for their needs. 

You should also speak to the tenants about their financial situation; doing so now will save conducting a viewing with tenants who might fall in love with a property, only to find they can’t pass the referencing. You should ask whether they have any credit issues that might affect their application, along with understanding their income to ensure it passes the typical affordability criteria set out by referencing agents. If an issue is identified, you could consider whether an alternative solution can be found, such as having a guarantor or for them to pay rent upfront.  

Finally, understanding the tenants’ situation is often useful. If the property is vacant and therefore available to rent immediately, it is beneficial to find tenants who can move in as promptly as possible. On the other hand, if the property is not ready to move into for a couple of months, then it’s little good showing it to someone who needs to move within a fortnight! You may also discover that the prospective tenants are only looking to rent for a short period of time, which may not fit with your preference for a long-term tenancy.

All being well, I then send the prospective tenants a video walkthrough of the property, which is recorded from a first-person perspective as if they were viewing the property (including commentary). This shows far more than a description, photographs and floorplan can do alone, and helps to ensure the property is suitable for them. This has greatly cut down the number of viewings whereby the prospective tenants weren’t already chomping at the bit to take the property (saving everyone’s time and helping to keep people safe during the pandemic). 

This all means by the time I’m viewing a property with potential tenants it is highly likely that they will want the property (assuming it matches the video) and that I will want to, and be able to (from a referencing point-of-view) rent it to them. 


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Monday, 6 September 2021

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £299,000, 4.4% yield


Summary:
2 bed house in Chichester
Listed for sale on 24/06/21 @ £310,000
Now = £299,000
Rent = £1,100pcm
Yield = 4.4%
Last sold for £230,000 in 2016 (+30% in 5 years)


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






Thursday, 2 September 2021

Which is Chichester’s cheapest street?



Having featured the most expensive streets in and around Chichester last time out, I will now turn my attention to the cheapest streets in Chichester. 

There are a few reasons as to why identifying the ‘cheapest’ streets is sometimes misrepresentative though. For instance, St. Cyriacs in the heart of Chichester’s city centre makes the top five on account of it being made up nearly exclusively of one-bedroom flats (at an average value of £184,000, which isn’t exactly ‘cheap’!). Mobile homes also create the same affect, particularly when you expand the search to include Selsey and the Witterings, rather than focusing solely on the PO19 postcode area.

Another reason the data can be skewed (and I have to use a little local knowledge to filter through it) is a more recent phenomenon; properties sold under shared ownership. You see, according to Zoopla the cheapest street in Chichester is Silverlock Close, which is a newer part of the Swanfield estate. The £129,000 average value in this row of two and three bedroom houses seem like a steal; until you realise they were sold as 50% shared ownership and thus their true value is actually double this figure.

So, what’s really the cheapest street in Chichester when you filter all this out? Well, in the PO19 postcode area that would be Lennox Road, with an average value of £167,000. The 81 properties in Lennox Road are all flats, most of which are rented out socially or from the council. Their value has increased close to 10% in the past year…so the street’s a little less cheap than it was!

In second place is Douglas Martin Road; another street located on the doorstep of St. Richard’s Hospital, which again is predominantly made up of flats. Each of the 26 homes here have an average value of £170,000. 

Whilst in third place we move across to Parklands, where Bishop Luffa Close’s homes have an average value of £181,000. Considering it is positioned right next to some of the best regarded schools in the area, this makes one of its 65 properties attractive when it comes to their school catchment area. 

When you compare this to last week’s article, when I was writing about a home worth in excess of £5m, it just goes to show what a vast difference in wealth there is in Chichester, despite it being a relatively small city. 

If you’d like to receive more facts and stats about Chichester’s property market straight to your inbox, please visit www.bit.ly/chipropertynews to subscribe to my free weekly Chichester Property News e-newsletter. 


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Monday, 23 August 2021

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £325,000, 4.6% yield




Summary:
3 bed house in Chichester
Listed for sale on 18/08/21 @ £325,000
Rent = £1,250pcm
Last sold for £217,500 in 2011 (+49% in 10 years)
Yield = 4.6%


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






Thursday, 19 August 2021

West Street becomes Chichester’s most expensive street


Not including commercial property or Chichester Cathedral, which is the crowning glory of West Street, the 24 residential properties on West Street have an average value of £1,170,000. That makes it the most expensive street by average value in Chichester (PO19 postcode area) and is nearly three times Chichester’s average property value (£405,348).

This was largely due to the £2.525m sale of a refurbished seven-bedroom, six-bathroom, five-reception room, 5,569 square feet behemoth of a home that was sold in West Street in September of last year.

After four years at the top, North Pallant has been knocked off its perch as the most expensive street in Chichester. With an average value of £1,155,000, it is now the third most expensive street in Chichester, having been pipped to second place by Brandy Hole Lane, with each of its 42 homes having an average value of £1,160,000. 



There are six other streets in the PO19 postcode area that have broken through the £1million mark, after an astonishing average increase in values across the city of 14.6% in the past year!

A special mention should be made for the runner-up (Brandy Hole Lane) though. As there are 42 homes in Brandy Hole Lane, compared to 24 in West Street and 20 in North Pallant, its total value of £48.7m overshadows West Street’s £28.1m and North Pallant’s £23.1m.

Moving outside of the PO19 postcode area and looking at the Chichester district as a whole brings a host of new players into the running. With renowned sailing and blue flag beaches on their doorstep, it’s not surprising that many of the most expensive streets in the area are in Bosham, Itchenor and West Wittering. In fact, West Street doesn’t even make the top 40 now(!), finding itself some way off the overall winner, which is Spinney Lane in Itchenor. The 31 homes of Spinney Lane have an average value of £2,930,000, meaning the street as a whole is worth a cool £90.8m!

In recent years there have been single house sales in Spinney Lane of £4m & £2.39m in 2020, £3.85m in 2017, £4.825m in 2016 and £2.25m in 2015. Back in 2012, a five-bedroom house designed by local award-winning architect Neil Holland overlooking the harbour sold for £3.825m. This house is now recorded as being the most expensive property in Spinney Lane, with an estimated value of £5.6m. 

To keep up to date with the ever-changing landscape and house prices of Chichester’s property market, please visit www.bit.ly/chipropertynews to subscribe to the free weekly Chichester Property News e-newsletter.


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Monday, 9 August 2021

Thursday, 5 August 2021

Where have the buy-to-let deals gone?



As part of my Chichester Property News mail-out (sign-up for free at www.bit.ly/chipropertynews) I provide a ‘buy-to-let deal of the week’. It used to be relatively easy to scour the property portals and find a property in or around Chichester (Fishbourne & Tangmere often proving to be good hunting grounds) that offered good rental demand and a decent price tag, alongside sound fundamentals. Now though, it is increasingly challenging to find anything I can truly label as a ‘deal’.
 
This is for a couple of reasons - pricing and supply. I have written about both of these topics quite frequently, with property prices in Chichester up, whilst the supply of properties for sale is down. These two factors have seen sellers’ expectations increase, making it more difficult to negotiate a ‘deal’.
 
I have recently had a couple of people come to me with a budget of £250,000 looking for a buy-to-let property. Not long ago you could get a good two-bedroom house in or around Chichester with that budget (and on occasions a decent three-bed would pop up for that price!) but those days seem numbered. 
 
Whilst the stamp duty relief has added fuel to the fire, I believe this all comes down to interest rates. For those with money in the bank earning a pitiful level of interest (the best ‘easy access’ savings account offers 0.6%) the old adage of property being as safe as houses steers people towards to buy-to-let, despite the rising legislation, taxation and house prices lowering returns. 
 
Meanwhile, first-time buyers reliant on a mortgage now need just a 5% deposit to benefit from a (five-year fixed-rate) mortgage with a rate of 2.99%. Paying an extra £20,000 on the purchase price will actually cost just £90 a month extra, which seems a small price to pay if it means getting on to the housing ladder.
 
This has all led to a rise in rents, as well as property prices (primarily for houses). The two-bedroom house you used to buy for £250,000 and rent for £950pcm (a 4.6% rental return) will now cost £280,000. But, it could rent for £1,050pcm nowadays….a 4.5% rental return. Seeing as mortgage rates have also dropped in this time, only those buying with cash are actually losing out when it comes to the gross return on buy-to-let investments.
 
Psychologically though, it’s hard not to anchor prices at their previous level. A certain type of person has missed many a ‘deal’ based on the thinking of “I could have bought it for £200,000 last year and now it’s £220,000”. Only for it to then continue creeping up in price, firstly through the £250,000 price tag and now on to £280,000. 
 
And that is now the dilemma. I am still of the mindset that paying £280,000 is ‘wrong’ when the same property could have been bought for less not long ago. For those who wait; prices may indeed ease up as the stamp duty relief / furlough / Brexit concerns (insert any other number of plausible sounding ‘reasons’ here) come into play, but than again I may be searching for a buy-to-let deal in 1-2 years’ time with the cheapest two-bedroom house in Chichester being priced in excess of £300,000 (there are just three currently for sale below this figure!). 
 
So, despite all the above, whilst there may not be the ‘deals’ there once was, if I were seeking a buy-to-let now, I’d still choose to pay the extra and stick to hunting for a house rather than fishing for a flat.


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