Thursday, 25 November 2021

How much does a bedroom in Chichester cost?

Many first-time buyers will start out with a small ‘starter’ home, which is both suited to their needs and matches their modest earnings at the beginning of their careers. But as you get older there’s a tendency for extra possessions to pile up and for extra people to emerge in your life! This made me think; how much does it cost to climb the property ladder in Chichester, with each additional bedroom in the property? 

Let’s start with a one-bedroom property (typically a flat). The average price for one of these in Chichester is £200,000. As many will appreciate, the first step is often the hardest and that’s no exception when it comes to buying a property. The income and deposit you’ll require to afford even the most modest of homes in Chichester is probably the greatest barrier to getting a foot on the first rung of the property ladder.

Once you do though, and you hopefully rise through the ranks in your chosen career whilst growing your nest, the increase in price to afford an extra bedroom becomes a little easier as time goes by.

The average two-bedroom property in Chichester will cost you £300,000 - a premium of £100,000 (50%) compared to a one-bedroom home.

The average three-bedroom property in Chichester will cost you £425,000 - a premium of £125,000 (42%) compared to a two-bedroom home.

The average four-bedroom property in Chichester will cost you £545,000 - a premium of £120,000 (28%) compared to a three-bedroom home.

The average five-bedroom property in Chichester will cost you £650,000 - a premium of £105,000 (19%) compared to a four-bedroom home.

The above shows that whilst the outright cost is relatively similar, with the jump from a two-bedroom to three-bedroom home costing the most in monetary terms, the comparative growth in percentage terms lessens with each step up the property ladder.

Of course, this price increase isn’t just for an extra ‘bedroom’. As the number of bedrooms grow, so should the size of the other rooms throughout the house, as well as the outside space and amenities such as a garden, driveway and garage.

It does however demonstrate that it’s the first few steps that are the toughest on the property ladder, which is why I feel it’s right that government policies and incentives focus primarily on first-time buyers. Having said that, it would be nice if they also considered that the need for an additional bedroom affects the ‘upsizers’ at a time when the financial strain (a new child being the most common) is often at its greatest.

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Monday, 15 November 2021

BUY-TO-LET DEAL OF THE WEEK:  3 bed house in Chichester, £290,000, 4.8% yield

3 bed house in Chichester
Listed for sale on 30/09/21 @ £325,000
Now = £290,000
Rent = £1,150pcm
Yield = 4.8%
Last sold for £59,950 in 1996 (+384% in 25 years)

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

Thursday, 11 November 2021

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!?

A worried landlord forwarded me a news article last week about this recently happening to a man in Luton. He had returned home to find it stripped of all his possessions, having been sold without his knowledge. Unfortunately, this is not an isolated incident, with the Land Registry paying out £3.5m in compensation due to fraudulent transactions last year.

The fraud occurs with the criminal impersonating the owner of a property so they can then sell or mortgage it. Buy-to-let properties without a mortgage are the perfect storm 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 £3 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 with the property in Luton, with the fraudulent tenant selling the property without the landlord even knowing! 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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Monday, 1 November 2021

BUY-TO-LET DEAL OF THE WEEK:  2 bed flat in Chichester, £225,000, 5.1% yield

2 bed flat in Chichester
Listed for sale on 14/09/21 @ £238,000
Now = £225,000
Rent = £950pcm
Yield = 5.7%

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

Thursday, 28 October 2021

Five tips to avoid ‘nightmare tenants’

Most tenants simply want to live in peace in a home that they can treat as their own, whilst happily paying the going rate to do so. A very small percentage, however, will set out to either mistreat the property or purposely not pay the rent. Here are five tips to avoid these so-called ‘nightmare tenants’:

1. Offer tenants a nice home

If you offer a neglected property in poor condition, you are likely to attract less interest and will have to settle for tenants who are perhaps unable to secure a ‘nicer’ home. Meanwhile, if the property is well-presented, it will attract a wider pool of tenants to choose from and they will most likely take pride in keeping it in good condition. 

This applies to ongoing maintenance issues too; afterall, if you don’t care about the property, why should your tenants? Furthermore, tenants will feel aggrieved paying full rent for a property that isn’t fully-functional or being maintained as it should be. 

2. Match the property to the right tenants

It’s hard to say no sometimes, but a property needs to suit its occupants. For example, most blocks of flats won’t accept pets as it is part of the head lease. This isn’t unreasonable if you think about trying to live with a dog in a small second-floor flat with no access to outside space and with neighbours on all sides of you. It might also be unwise to allow two adults and three children to rent a two-bedroom flat; they simply need more space and amenities than that to live comfortably and to be able to keep the property in good order.

3. Reference thoroughly

This is probably the most critical step in ensuring you avoid ‘nightmare tenants’. Helpfully, referencing is something that prospective tenants with something to hide will try to avoid. Do not take shortcuts because a tenant wants to let the property quickly, can offer monies upfront or because a ‘friend of a friend’ says they’re “good for the rent”. Genuine tenants won’t quibble about you undertaking credit checks and asking for documentation, such as payslips and bank statements, so as to give you a full picture of their financial standing and rental history.

Furthermore, (and similar to point 2) you aren’t doing someone any favours in allowing them to commit to a rental property that is simply too expensive for them in the first place.

4. Ensure all the paperwork is in place

Tenancy agreements should contain clauses relating to sub-letting, noise, pets and other common do’s and don’ts, which will help avoid conflicts later on (and can become grounds for eviction if they are ignored). A detailed inventory, including photos, not only serves as a record if there is a dispute over the deposit at the end of the tenancy, but acts as a deterrent in the first place (as the recording is so detailed) and a guide for tenants at the end of tenancy (so they can check how the property should be left so as to receive their deposit back).

Ensuring all the paperwork is completed and provided to the tenants in the correct manner will also avoid problems later on. For example, if not served correctly, you open yourself up to fines, compensation claims and difficulty in progressing eviction notices if necessary; all of which a ‘nightmare tenant’ could use against you.

5. Keep in touch

Maintaining an open dialogue with tenants and responding to tenancy-related and maintenance queries promptly will encourage a good relationship. Visiting the property regularly will allow you to spot problems early, as well as checking all is ok with the tenants so as to maintain and prolong their tenancy. It also shows you are pro-active and haven’t just ‘left them to it’; tenants are more likely to take liberties with absent landlords. 

How to avoid bad tenant problems

There are many other ways to minimise the risk of letting your property to problematic tenants, some of which are quite subtle and come via experience. Ultimately there is no fool proof way to avoid a ‘nightmare tenant’, although these five tips will go a long way to avoid those who seek to enter a tenancy agreement with bad intentions from the outset.

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Monday, 18 October 2021

BUY-TO-LET DEAL OF THE WEEK:  2 bed house in Chichester, £230,000, 5.7% yield

2 bed house in Chichester
Listed for sale on 04/10/21 @ £230,000*
Rent = £1,100pcm
Yield = 5.7%

*It will sell for more than this, as it goes to 'best and final offers'

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

Thursday, 14 October 2021

Buy-to-let mortgage rates drop below 1%

Homeowners have enjoyed sub 1% mortgages since April (since dropping to as low as 0.81%), but now landlords can get in on the action as buy-to-let mortgage rates drop below 1% for the first time. Whilst the headline figure is certainly attractive, read on to understand why it might not be the cheapest option overall.

Other lenders are sure to follow, but it is The Mortgage Works that have become the first lender to offer landlords an interest rate below 1%, having introduced a two-year fixed rate product with an interest rate of 0.99%. A deposit of at least 35% is required, but the real sting in the tail is that it comes with a 2% product fee of the loan amount. Factor that in to the equation and you’ll pay more in fees over the two-year period than you will interest! 

Weighing up the interest rate versus product fee will largely depend on the size of mortgage you are taking out. It is also why a mortgage broker can be invaluable in guiding you towards the right product. As an example though, a £300,000 property with a 35% deposit (£105,000) will mean taking out a mortgage of £195,000. 

Over the two-year term of The Mortgage Work’s headline grabbing product, you would pay £3,861 interest alongside a £3,900 fee. There is also a £340 arrangement fee and £20 banking fee to be paid, equating to a cost of £8,121 over two years.

Instead of this, consider that Platform’s two-year fixed-rate mortgage may have an interest rate of 1.65%, but it comes with no fees. That means all you’ll pay over the same two-year period is £6,435 in interest; a saving of £1,686!

Personally, I prefer taking out five-year fixed-rate mortgages. Using the same example £195,000 mortgage as above, the cheapest five-year buy-to-let mortgage comes via Virgin Money. Their 1.67% interest rate and £895 product fee means paying £6,871 by the time the previous products’ two-year fixed rates will have ended. For me, that isn’t much of a premium to pay to provide the assurance of what my monthly payment will be for a five-year period, along with not having to deal with the admin of re-mortgaging again.

And whilst rates could of course fall further, meaning taking a further mortgage in two-years’ time could see you even better off in years three, four and five, bear in mind the time and energy this takes, as well as potentially the cost of instructing mortgage brokers and solicitors again. 

As ever though, you need to consider your own circumstances when dealing with such matters. For instance, if you’re thinking of selling or wanting to re-finance sooner, you wouldn’t want to tie yourself in for a long period (which normally comes with exit penalties). Different lenders have different criteria too, so you’ll need to navigate this to match the best overall package for you. 

All of the above is why it’s typically a good idea to consult with the professionals for independent financial advice, as a headline grabbing figure isn’t always as good as it first sounds.

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