BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Fishbourne, £259,700, 4.6% yield

Summary:
2 bed house in Fishbourne
Listed for sale on 21/12/20 @ £265,000
Now = £259,700
Rent = £1,000pcm
Yield = 4.6%

When is a house not a house? When it's a coach house! OK, technically it is a house, and a freehold one at that, which is good. But when you think 'house' you think of living areas downstairs and sleeping areas upstairs, along with a garden out back. In my opinion, a coach house is really just a flat above a garage...

This coach house in Fishbourne is nicely presented though, being modern throughout. The kitchen comes with integrated appliances and the bathroom has a shower over the bath. There's also two double bedrooms, gas central heating and double glazing....just no garden. There is a large garage though as mentioned, with parking in front.

As a result, the (rather strange) £259,700 asking price seems fair, although I expect a reduced offer should be accepted based on it clearly having been on the market a while. The reason that is abundantly clear is because of the photos, which features a Christmas tree in the lounge (the agent should have gone back and taken fresh photos once the decorations were packed away). The back data shows the property was first listed just before Christmas last year at £265,000, meaning the recent price drop is not a particularly significant one after four months of not selling, so it may still need a little trimming off to get sold.

I'd expect to achieve £1,000pcm for such a well-presented two bedroom property, even if it were effectively benchmarked against other flats, with the bonus of a garage. That would provide a 4.6% rental return, which is reasonable for a freehold property of this age in Fishbourne.

The property is on the market with Charles Peck and full details can be found on Rightmove via the following link: www.rightmove.co.uk/properties/101286398

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Why landlords could be facing a £30,000 fine

Electrical safety within rental properties had been largely overlooked by specific legislation, instead relying on a landlord’s general duty of care towards tenants to ensure they were safe. Now though, legislation requires the electrics in all rental properties in England to be checked and certified by a qualified and competent person i.e. a registered electrician.

For landlords this means having an EICR (Electrical Installation Condition Report) in place for their property, which remains valid for five years (unless the electrician advises it needs checking again sooner). 

 

Much like gas safety certificates (which are required annually), the certificate must now be provided to tenants before they occupy a property and be kept on file by the landlord. Should the local authority request a copy of the EICR it must be provided to them within seven days, whilst any renewal of the certificate should be issued to the current tenants within 28 days.

 

I’m pleased to say that all the properties managed by CRJ Lettings got these checks and certificates in place before the (1st April 2021) deadline. Despite the ongoing pandemic and lockdown restrictions in place for much of the year prior to the deadline, there has been no extension or grace-period granted by the government. If you’re reading this and have a rental property without a valid EICR, you now risk a fine of £30,000!

 

I was pleasantly surprised how smoothly the majority of our electrical checks went. Such are the increasingly stringent safety requirements for electrics within a home, I had expected every property (bar a brand new one) to receive a certificate raising some ‘observations’. 

 

Whilst technically that’s true (as many of the certificates still contain C3 ‘advisory’ observations), the majority of properties escaped having any of the more serious ‘action-required’ C1 & C2 faults that couldn’t simply be resolved by the electrician at the point of testing. 

 

In fact, one in five properties required no remedial works whatsoever. Three in five fell within the camp of the electrician dealing with matters at the time of testing, with the cost to remedy averaging around £70 per property. The final one in five properties did require a second appointment for more intensive works, the most expensive of which resulted in a £400 bill. 

 

Not unsurprisingly, older properties raised more issues compared to newer homes. Having said that, there were a couple of modern houses that had clearly had some ‘DIY’ electrical work carried out, which fell short of the necessary safety standards. 

 

So, whilst this new legislation is yet another cost landlords’ need to endure before they can rent their property, remember that the inspection and any remedial works will ensure your property is safe! And if that doesn’t convince you to abide by the new requirements, remember there’s a government in need of money who have forewarned landlords of the £30,000 fine for non-compliance.

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

Summary:
3 bed house in Fishbourne
Listed for sale on 17/03/21 @ £290,000
Rent = £1,150pcm
Yield = 4.8%
Last sold for £227,000 in 2014 (+28% in 7 years)

This house in Fishbourne is presented in nice condition and benefits from three double bedrooms, off-road parking and a private garden, making it an excellent proposition as a rental property.

It will be popular with a variety of tenants - be they sharers who won't have to argue over having a box room or more traditional tenant types for the area, such as young professionals or young families. Fishbourne is a quiet (but growing) village with a well-regarded primary school, pubs, village centre and good transport links, with easy access to the nearby A27 or Fishbourne's own train station.

Having just been listed at £290,000, a three-bedroom house in the area for that price is a good proposition. It last sold for £227,000 in 2014, so has seen decent growth of 28% in the past seven years. I'd expect it to rent for £1,150pcm given the severe lack of supply at the moment (there are only 4 three-bedroom houses in Chichester currently available to rent). That would equate to a decent 4.8% rental yield on what should be a relatively hassle-free and simple to let property.

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/104235404

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Is it better playing at home or away when it comes to buy-to-let?

 

Opinions are divided over whether you should invest in buy-to-let locally, or venture further afield in an attempt to achieve better returns. The area you invest in should be considered alongside your strategy and goals. If you’re looking to invest in student lets, you’ll obviously want to buy near a large, vibrant and growing University. Meanwhile, investing in a ‘holiday let’ in an area that no one wants to go on holiday to won’t really work! Budget can also play a part, whereby local house prices are simply too high for you to buy an appropriate property. Many Londoners have to buy outside the city because of this, although many have subsequently rued missing out on the spectacular capital growth London property has benefitted from. When I began investing in property, I spent a long time deliberating on where I should buy. I tried to find the next up and coming area to invest in that offered the holy grail of high yields and strong future capital growth. In the property boom years, I researched city centre apartments up North, as well as foreign property in Bulgaria, Cyprus, Florida and Las Vegas. Whilst the glossy brochures promised quick riches, ultimately, I decided that the grass wasn’t actually greener elsewhere. There are in fact many reasons why I believe you should keep it simple and invest close to home.

  
Familiarity is an important factor. You’ll know where the best areas are, which are the decent schools and the good transport links, along with a knowledge of the upcoming developments that will impact the community. I fear for Southerners buying ‘up North’ in areas they haven’t even visited, bamboozled by cheap property prices and promised bumper returns. For many, they will find the returns on paper don’t match the reality…and there is a reason why the property was ‘cheap’ in the first place. If you aren’t familiar with an area you should spend time walking the streets and meeting with local agents. Nothing beats face-to-face contact and building rapport with people who can advise and support you. It is obviously easier to spend more time in an area that is closer to you, so you can work out the facts as opposed to relying on third party information. It is also far more convenient to manage a buy-to-let property close to home. Whether that be overseeing a refurbishment, the on-going maintenance or managing tenants. Having a property nearby saves a lot of time and you’ll typically already have useful contacts that can assist you in this regard, compared to relying on the yellow pages for an area you’re unfamiliar with. Buying locally might mean you decide to self-manage the property and save yourself the letting agent’s management fees (although that tactic can become a false economy for an amateur landlord). Even if you do hand the keys over to an agent, there’s certainly some peace of mind knowing the property is within easy reach should something go wrong or you simply want to keep an eye on things. It is because of these reasons that over 50% of landlords choose to buy within 10 miles of where they live. So, if you’re thinking of investing in buy-to-let and would like some free advice about whether your local area can meet your needs, please feel free to get in touch.

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BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Tangmere, £290,000, 4.6% yield

Summary:
3 bed house in Tangmere
Listed for sale on 25/02/21 @ £290,000
Rent = £1,100pcm
Yield = 4.6%
Last sold for £245,000 in 2017 (+18% in 4 years)

Recently listed for sale is this three-bedroom house in Tangmere that would make a great investment property. It is in good condition throughout (except for that outdated cloakroom suite) and although it isn't on one of the newer estates in Tangmere it is relatively 'future-proof' as it has the aforementioned cloakroom, an en-suite, double glazing and gas central heating i.e. everything you get with a new-build nowadays! It even has a garage - something you don't see as frequently on new-build estates.

For £290,000 that's a lot of property for the money and you shouldn't need to spend much more to get it in a fit state for letting. Due to its decent size and good condition and amenities, I'd expect it to rent pretty quickly for £1,100pcm (including the garage), which would provide a decent 4.6% rental return from a freehold property.

The current owner purchased the house in 2017, paying £245,000. That means they've seen a solid 18% growth in four years based on the full asking price. Each of its previous owners have made money on it, having sold for £185,000 in 2008, £170,000 in 2004 and £79,995 in 1999 (the first ownership change since such records began).

I expect the next owner to be able to say the same thing, as well as earning a decent rental return from a property that shouldn't be left behind as more and more new-builds are constructed in Tangmere. 

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/78304740

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Chichester house prices rise £617 per week

The average property in Chichester has risen in value by £32,072 over the past year, equating to an increase of £617 per week!

 

That is far greater than England’s average property value increase (up £188 per week) and is in fact the strongest performer in West Sussex (which has increased by £138 per week on average). Most towns in West Sussex have seen an increase in value, although a few have actually fallen - most notably, East Grinstead, Horsham and Shoreham-by-sea. 

 

Worryingly for Chichester’s residents is the fact the local average salary (listed as £32,609 by adzuna, a job listings website) is barely enough to keep up with the rise in property values (and doesn’t when you consider income tax). This suggests getting on to the property ladder, or moving up it, has become even more difficult for many in the city.

 

Interestingly though it was the most expensive houses (the detached ones) in Chichester that increased the most in both percentage terms (+9.7%) and in outright monetary value (+£47,925 / £922 per week). This greatly skewed the overall picture.

 

Some comfort can therefore be taken that lower down the food chain, semi-detached houses increased by just 0.9% (£58 per week) and terraced houses increased by 2.4% on average (£171 per week). 

 

Flat owners in Chichester have actually seen values drop by 1.7% in the past 12 months (costing them £87 per week), as people seek the solace of more space and privacy in light of the pandemic and the amount of time we’re now spending at home.

 

It will be interesting to see what the ‘new normal’ becomes in this regard, especially in regards to the location of our workplaces. If working from home becomes a more permanent fixture for many, I suspect houses will continue their upward march over flats. 

 

To stay abreast of the changes in Chichester’s property market, including the latest house prices and rents in the city, please visit www.bit.ly/ChiPropertyNews to sign-up to the free Chichester Property News e-newsletter.

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BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £280,000, 4.2% yield

Summary:

2 bed house in Chichester

Listed for sale on 03/02/21 @ £280,000

Rent = £975pcm

Yield = 4.2%

Last sold for £225,000 in 2017 (+24% in 4 years)

It seemed sensible to highlight a two-bedroom house in Chichester as this week's buy-to-let pick, seeing as my most recent article focused upon the severe lack of two-bedroom houses that are available to rent in Chichester, which has led to a jump in their rental asking prices. The problem is, the same can be said for the number of two-bed houses available to buy in Chichester.  

Of the 40 available, this is the cheapest two-bedroom house available to buy in Chichester. But at £280,000 I can't say it's a bargain, based on having sold for £225,000 just four years ago (a 24% increase since versus an average 10% rise across Chichester in that time) and a 4.2% rental return, which is decent if unspectacular for the area. But, that's the point (which I've been making about two-bed houses for years!) - supply is so lacking that prices are going up. I see no why reason why that won't continue to be the case for the next owner of this particular two-bed room house.

It is in a nice part of Chichester, just to the South of the A27, close to the canal and within walking distance of the city centre (and the Southern Gateway development, which should further improve this part of the city in the next 10-20 years). It has two double bedrooms, which makes it suitable for a wider variety of tenants compared to those with one double and one single bedroom. It seems to be in nice condition throughout, with double glazing and gas central heating, so it should be ready to rent straight away rather than requiring extensive refurbishment works first.

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/properties/102439622

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