Chichester Property News: appointment

Showing posts with label appointment. Show all posts

Thursday, 29 August 2019

Are you thinking about buy-to-let for the first time?

Having written these weekly articles for over five years now, I hope they have imparted some of my knowledge and insights about the property market on to you. I forget though that sometimes people will be reading them for the first time, particularly if they have only just begun thinking about investing in buy-to-let. If that sounds like you, read on…

You see, whilst most letting agents focus on slick promotional brochures to grab your attention, I choose to do things a little differently. My aim is to keep you informed about the local property market and how different types of properties in different areas are performing, whilst keeping you updated about the latest changes within the lettings market.

I’m also happy to give some impartial advice, particularly if you’re thinking about buy-to-let for the first time and are unsure what to look for amongst the ‘perfect’ buy-to-let properties the estate agents are recommending (that just happen to be in their sales windows at the time). I do occasionally wince when I’m contacted by a landlord who’s just got the keys to their first rental property, knowing that if they had spoken to me before buying it I could have helped them get a more suitable and better-performing property.

I specialise in residential lettings and have bought, sold, let and rented properties myself, so can see things from many different angles. And as I’m not affiliated with any particular estate agency, I won’t be shy to tell you whether a property is really a good buy or a lemon in disguise.

And whilst I can’t offer financial advice, I certainly have a grasp of the numbers and the different options in regards to how to buy the property depending on your circumstances (buying in a company is becoming ever-more popular due to tax changes).

I’m happy to skim through all the properties for sale and suggest a few that might make the most financial sense as an investment, along with an explanation as to how the numbers work. I can even accompany you on viewings to help you understand what to look for, assess whether anything needs doing to get it up to standard and how to cost and implement those remedial works.

You see, here at CRJ Lettings in Chichester, that’s exactly what I love to do. I don’t just advertise for new properties and let them out; I go back a stage or two and look to work with potential landlords at the start of their buy-to-let journey, right through to the letting and on-going management.

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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:

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Thursday, 22 August 2019

What are Right to Rent checks?

Since February 2016 all private landlords in England have had to check their prospective tenants right to live in the UK. The pilot scheme prior to this was responsible for finding 109 individuals living in the UK illegally, as landlords are responsible for reporting such people to the Home Office. A landlord’s failure to undertake these checks is a criminal offence that can lead to five years imprisonment and an unlimited fine (don’t worry landlords of mine - I do the checks for you).

The severity of the punishment for failing in these duties and the complexities around the issue has given rise to claims that the Right to Rent checks have led to discrimination against those without a UK passport. Indeed, a recent High Court ruling has said the Right to Rent checks are discriminatory and breach human right laws and that proposals to roll it out in Scotland, Wales & Northern Ireland would be illegal without further evaluation. Meanwhile English landlords and letting agents are still having to follow the law as is.

I made it known during a consultation before the legislation was formally announced that this was likely to happen. If there are two suitable tenants vying for the same property and one has a UK passport and the other doesn’t (meaning you have to do further detective work regarding their immigration status, which if you get wrong could land you in serious trouble) there's a good chance as to which tenant the landlord will choose to take on.

The checks involve the landlord or letting agent seeing original identification documents from all occupants of their property over the age of 18 and retaining a copy of them. There’s a list of the acceptable documentation on the government’s website, and yes seeing a UK passport is probably the easiest to verify (as you know what one is supposed to look and feel like). Plus, tenants with an expiry date on their right to stay in the country must be checked again and proof taken that this has been extended, when the time comes.

It should only take a bit of ‘googling’ though to determine whether alternative documents are authentic so, whilst I can understand landlords’ frustrations in having to undertake the checks in the first place, I don’t think the additional administration should stop them from renting to the best tenant they (legally) can, regardless of nationality.

Time will tell as to what impact Brexit will have on this process, but seeing as Swiss nationals have an unlimited Right to Rent my guess is this will remain the case with EU/EAA citizens.

If you're still worried about it all though (more than 400 landlords were fined an average of £654 for failing to do the checks in the first two years) you could always hire a decent letting agent to do things for you....

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Thursday, 15 August 2019

Can flipping property still make money?

Remember all the TV shows that used to feature people buying a rundown property, doing it up and selling it on for massive profits? Well that is mostly a thing of the past, as the number of homes in England and Wales that have been sold more than once within a 12 month period (known as flipping) has fallen dramatically since its peak in 2004.

Last year 18,630 homes were flipped in England and Wales, which was some 69% less than the 60,430 homes that were flipped in 2004. And whereas in 2004 this meant 4.8% of homes sold had been flipped, last year this had fallen to just 2.1%. Even so, it means that last year saw £3.9 billion worth of property flipped, with the average seller doing so for £30,150 more than they paid for it (a 22% increase). This however was a much lower gain than the 32% average increase made in 2004.

All of this brings about a couple of important points. Firstly, that house price indexes don’t necessarily compare apples with apples. And secondly, that flipping property has become far less profitable.

It always struck me as odd when I used to watch Property Ladder that a property bought for £100,000 that was later sold for £150,000 had meant its price had increased by 50% according to the Land Registry data. Of course, that didn’t take into account the £30,000 spent on a refurbishment, which actually meant the property had increased by ‘only’ 15% (incidentally that’s about the annual rate of house price growth in the UK between 2000-2007). Maybe at least some of the house price growth we often refer to is simply down to the money being spent upgrading tired houses?

It’s said that flippers play an important role in the housing market by improving existing stock and bringing empty homes back into use. Consider also that it takes less money for a first-time buyer to buy a done-up home for £150,000, rather than buying the shell of a property for £100,000 and spending a further £30,000 on the improvement works (because mortgages are based on the purchase price, rather than having to use their own money on the refurbishment costs).

In the past year in Chichester there are only three properties that have been sold within 12 months of having previously done so. Only one of them is likely to have made a ‘profit’ when you factor in all the costs. When you consider the buying costs - solicitors fees, legal costs and stamp duty (including the 3% surcharge for additional homes) and selling costs - solicitors fees & estate agents fees, you’re likely to need a price increase of around 10% before any changes are made just to break even.

I recently highlighted the case of the three-bedroom house in Charles Avenue that was purchased at auction for a cracking £208,000. Problem is, with buying costs that’s likely to have been closer to £220,000 before getting the keys. That’s still a good price if it was held for the long-term, but it’s had a quick tart up and is now (after several price drops) sitting on the market unsold for £239,000 (with another £4,000 ready to spend on selling costs). That doesn’t leave much profit after the refurbishment costs to declare to the taxman!

Flippers tend to operate when house prices are rising to really maximise their profits, which is why the period between 2000-2007 was so fruitful. But with house prices stagnating and various tax changes, property is very much a long-term game in my opinion, rather than a way to make a quick buck.

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Thursday, 8 August 2019

Is a ground floor flat a good buy?

What floor a flat is on is an important factor when deciding what to buy (or rent). Some are ardent in their opinion that an upper-floor flat is the only way to go, whilst others can see plenty of benefits of keeping your feet on the ground. Typically, top floor flats have achieved a premium price over their ground floor counterparts, but is this justified?

Many will say it is and that flats on the ground floor represent both a privacy and security risk. In theory that is true; people walking past will be able to see into a ground floor flat rather than one higher up. And it’s easier to hop through an open window or break the glass of one on the ground floor than if you’d need a ladder to do so. But the same could be said for any house that isn’t built on stilts, so that logic doesn’t really cut the mustard in my opinion.

Certainly the view can be better in a flat on a higher floor and they tend to be brighter too. Plus, heat rises, so they are often easier and cheaper to heat in the Winter. I think there’s still something of a ‘status’ about being higher up in the sky though (think top floor penthouses), which largely clouds people’s opinions on the matter. Having said that, there’s definitely something to be said for only having neighbours below you, compared to ground floor flats, which in a poorly insulated building can mean hearing ‘footsteps on the ceiling’.

Ground floor flats though make perfect sense for those wishing to avoid the stairs. Whilst many immediately think of the elderly in this regard, the benefit is also there for young families with pushchairs and people with mobility issues. They’re also easier to evacuate for the safety conscious and you won’t have to worry about leaking roofs (although they’re the first ones to feel the impact of rising damp or drainage problems).

But the real bonus of having a ground floor flat is that many come with their own private garden or direct access to communal grounds. Apart from the obvious benefit this provides, it can also make ground floor flats suitable for pet owners compared to the more closed-in upper floor flats (although you’ll need to check the lease to ensure they’re allowed).

I often argue that houses are more popular than flats with both owner-occupiers and tenants. This is because they come with their own entrance, private outdoor space and, normally, better parking. But in the past two weeks I’ve visited ground floor flats in Bosham and in Tangmere, both of which had these benefits compared to their upper-floor counterparts that did not.

So for me, a ground floor flat, particularly one that provides access onto its own outdoor space, could be a winner; particularly with an aging population that values their own private space. In this instance they offer the benefits of a house, but with a lower price tag.

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Thursday, 1 August 2019

What’s popular with Chichester’s tenants?

I get enquiries from prospective tenants on a daily basis looking for a property to rent in or around Chichester. Whilst this in itself gives me an insight as to what types of property are popular amongst Chichester’s tenants, a far easier way to gauge this is by looking on the property portals and comparing how many properties are available vs the number let agreed:

It is clear to see that two-bedroom houses are by far in the shortest supply, but as a percentage of the available stock they are in the greatest demand! That’s why I’ve been banging on these past few years to prospective landlords that they should buy two-bedroom houses in Chichester, as it’s always been clear that they will rent well.

But whilst I’ve found two-bedroom houses to be as popular as this all year round, it should be said that some property types are more seasonal than others. For instance, right now we’re in the school holidays, which affects the demand for family homes (three & four bedroom houses) far more than it does those properties aimed at individuals or couples (one and two bedroom homes) as families are focusing on childcare and their summer holidays, rather than moving house.

I wasn’t surprised to see a high number of three-bedroom houses available, but what was a little more unexpected was the higher number of four-bedroom houses than normal. A lot of this can be explained by the seeming oversupply of student houses that are still sat on the market. I’ve been contacted by quite a few landlords who would ordinarily have their student properties rented months ago, but have struggled to do so at all this year.

Another interesting point to make is whether having a rarer property type to let is a good thing or not. You may have noticed I’ve ignored studio apartments, three bed flats and five+ bedroom houses because there aren’t many of them to rent (in all cases 33% are let agreed). Sometimes there aren’t many of a certain property in a particular location because they aren’t wanted. Then again, when one does come along it can mean anyone looking for that particular property type will be quick to snap it up as they have limited chances to do so.

So, whilst it’s debateable whether following the crowd is the best route to fulfilling tenant demand, I think it’s safe to say that if you have a two-bedroom house in Chichester that’s well-presented and reasonably priced you should find yourself very popular with prospective tenants!

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Thursday, 25 July 2019

Have property prices in Chichester fallen because of Brexit?

Cast your minds back to the 23rd June 2016 when Britain voted to leave the EU and the long-running saga that is ‘Brexit’ began. In the lead up to the referendum the then Chancellor, George Osborne, warned that voting to leave would see property prices drop by 18%. So, a few years on has that proven to be the case?

Whilst he didn’t set a time scale for such a fall, the simple answer is no, property prices both in the UK and in Chichester have never fallen below where they were in June 2016, according to Land Registry data. In fact, prices in the UK bounced 1.1% in the month after the vote and in Chichester by an even stronger 2.6%. Since then prices in the UK have risen by 7.8% and in Chichester by 8.7%.

But before the vote property prices were rising by about 6% a year, so perhaps Brexit has slowed down the rate of growth compared to the trajectory they were on, even if it didn’t actually cause them to fall. Of course, unlike the movie Sliding Doors we can’t play out two different outcomes in real time, so who knows what might have happened had we voted to remain.

But, is it as simple as that? You see, we may buy property and pay our mortgages using money with the Queen’s face on it but from a worldwide perspective it could be argued that property prices both in the UK and Chichester have indeed fallen, due to a weaker pound. As the Summer holidays approach this is getting mentioned more and more in the media; as we jet off to foreign lands us Brits are suddenly finding our pounds and pence don’t go as far as they used to.

So let’s focus on the US dollar, as it is the most widely traded currency in the world - what do our property prices look like then? Well, when the vote happened the average property price in Chichester was £351,758 and you could get 1.479 US dollars to the pound. That meant the average property in Chichester sold for $520,250. And now, even though prices have increased in sterling terms to £382,233, because one pound will now only buy you 1.248 dollars that means property prices have actually fallen 8.3% to $477,027. The interesting thing is they actually fell by 8.2% in dollar terms the month after the vote as sterling dropped 10.5% practically overnight; so in effect house prices have been flat for three years.

So, if we simply stay on our own island then it appears house prices are holding up just fine. But from a global perspective they have been hit reasonably hard. Is that because of Brexit? Well it’s impossible to say, but based on the fact Sterling dropped so quickly as a result of the vote it’s likely that property prices have indeed ‘fallen’ because of Brexit.

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Thursday, 18 July 2019

The most frustrating thing about letting a property

I was chatting with a fellow letting agent recently when we got on to our pet peeves with the job. We both agreed on what the most frustrating thing about letting a property is - attending a viewing only for the prospective tenant not to show up; especially when you only arranged it the day before! Unfortunately, this is a part of the course when letting properties, but is there a way that landlords and letting agents can prevent it from happening?

Some insist on confirming the appointment an hour before the viewing. Personally, I don’t like this approach as it can cause even more confusion if you can’t get hold of the prospective tenant i.e. should you then go to the viewing or not? More importantly though, if you were to remind everyone they have a viewing, you might let your property to someone who would have otherwise forgotten. And if they would have forgotten about a viewing I can only imagine they might also be the type of person to forget about paying the rent each month too.

One tip is to conduct ‘block’ viewings if possible. This means doing multiple viewings at the same time, but staggering people in to 15-20 minute slots. This gives time for each applicant to take a look around the property and ask any questions, and it ensures if one appointment is a no-show then you have another one to look forward to.

Block viewings also give the benefit of ‘social proof’, as prospective tenants can see they’re not the only ones interested in the property (one person arrives as another leaves). If other people are interested in something then psychologically it becomes more appealing to us, which should in this case prompt those who like what they see to move quickly and decisively.

Some agents and landlords take this a step further by offering open houses; whereby everyone views the property at the same time. Personally I don’t think this provides a very good service to the prospective tenants, nor does it give either party an opportunity to ‘suss one another out’ and see if committing to a tenancy together is the right thing to do.

Beyond that, the only other way to protect yourself against future no shows is to create a list of those people who committed this sin so that they aren’t afforded your time again in the future or, even worse, be entrusted with the keys to your property.

So landlords, contact me and let off some steam - what’s your biggest frustration when letting your property? Is it the niggling maintenance issues that always seem to happen at the most inopportune time, problematic tenants or, dare I say it, letting agents that are causing you the most grief?

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