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.

---

Landlords - what you should check before arranging a viewing

Demand for rental property is 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 £1,422!). 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 affordability criteria set out by referencing agents (typically requiring an annual household income of 30 times the monthly rent). 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).

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.

---

Should landlords take a security deposit?

There is nothing to say that a landlord must take a security deposit, but it is always advisable to do so. Most landlords choose to take a security deposit from their tenants to provide some protection against the risk of non-payment of rent and/or damage caused to their property. It is important, however, to understand the rules about taking a security deposit, which have changed in recent years.

Major legislation was first brought in back in 2007, whereby security deposits needed to be protected in one of the approved government schemes. This was introduced amid claims of unscrupulous landlords simply pocketing the security deposit by default at the end of the tenancy, regardless of the tenant’s conduct. These schemes either hold the money (custodial schemes) or insure against its disappearance (insurance schemes). They also act as arbitrators between landlord and tenant if there is any disagreement in regards to the return of the security deposit at the end of the tenancy.

CRJ Lettings is a member of the DPS (Deposit Protection Service) and their custodial scheme. It’s free to use and it means neither the landlord nor the letting agent is holding the tenant’s security deposit; it’s held in a government-backed ring-fenced account throughout the tenancy.

This seems preferable for both landlords and tenants, compared to letting agents who hold the deposit monies in their own bank accounts (via the insurance schemes). There have been too many stories of fraudulent (or just poorly managed) letting agencies dipping into these funds to cover their own cashflow, or even going bust and losing the deposit monies in the process (which the landlord will have to cough up when the time comes to repay the tenant).

Whichever scheme you opt for though, they bring with them additional paperwork and responsibilities, for which it is absolutely critical you get correct. The deposit needs to be properly protected and the paperwork served to the tenants within 30 days of receiving their money. If this is not done, the landlord cannot serve notice upon the tenant if it becomes necessary and can also be held liable for compensation in the amount of three times the deposit!

In 2019, security deposits were capped to a maximum of five week’s rent (in most cases). This rather curious addition to the Tenant Fees Act has meant it is now far more difficult for tenants without a squeaky-clean credit history and good references to be accepted. Previously, such worries could be bypassed by taking a larger-than-normal security deposit, but the government has made this practice illegal. The same goes for tenants with pets; which is why you now regularly see premiums attached to the rental amount for such individuals instead.

Recently, there have been a plethora of ‘zero deposit’ schemes pitched as an alternative to tenants stumping up the deposit themselves. Personally, I’m not a fan of these schemes in their current form. Most landlords prefer to rent to tenants with some ‘skin in the game’ and most (good) tenants prefer to hand over a security deposit, knowing they’ll get it back at the end of the tenancy, rather than paying an upfront or monthly fee that they won’t see again.

A major criticism of security deposits though is the challenge many tenants face in raising a second one whilst their current security deposit is tied up in their present tenancy. The government are talking about introducing a ‘transferable’ deposit, whereby the same security deposit passes from one tenancy to the next (making it easier for tenants to move home). The problem here is that you never truly know if a tenant’s security deposit will be re-paid in full until they have vacated the property, by which time they’ll have already moved home (for which they’ll need the security deposit for). So, it doesn’t seem altogether workable without some form of insurance product involved, which is likely to cost tenants money one way or another.

If you’re a landlord and all of the above sounds like too much trouble, or you’ve not been taking all the necessary steps (or worse, you’re with a letting agent who hasn’t), please feel free to give me a call to instruct me to take this important burden away from you.

---

This article was featured in...

---

Landlords: is it time to increase the rent?

I should stress that I don’t see it as ‘the norm’ to increase the rent as a matter of course. I particularly dislike tenancy agreements that have onerous automatic rent increase clauses built into them. In fact, I would far rather reward a tenant by not increasing the rent (assuming they have paid on time each month and looked after the property), thus retaining them for a longer period.

Unfortunately, an increase in legislation and the negative impact from changes in taxation towards landlords has altered my view on this in recent years. Adding to that are the significant interest rate increases over the past year (some landlords have seen their buy-to-let mortgage payments triple!) alongside the fact that rents on new tenancies are soaring; all of which makes it hard to justify not increasing the rent at the moment. There are, however, rules about how this is done, as well as the need for compassion to navigate what is a sensitive subject.

The rent cannot be increased on tenancies that are still within their ‘fixed-term’ period (normally 6 or 12 months) without the tenant’s agreement. For those that fall outside this, the rent can be increased by the landlord by using a ‘Section 13’ document with at least one month’s notice (although I typically give 6-8 weeks’ notice to ease the process). The rent cannot then be increased for at least another year (unless the tenant specifically agrees to it).

A rent review will assess what the market rate is for the property by analysing what is currently on the market (just like you would when you initially let a property). You may also consider the tenant’s conduct throughout the tenancy, their payment record and affordability. Showing comparable properties to tenants can soften the blow of a rent increase if they are unaware of the going rate, especially when rents have increased quite a lot. Any increase should be ‘fair and realistic’ and ideally made in agreement with the tenant, otherwise they can refuse the increase and ask a tribunal to set the rental figure.

Tenants should be aware though that these rent tribunals can set the rent at a higher amount than the landlord had originally requested! This is why tenants also need to be realistic when subjected to a rent increase if it is in line (or better than) the market rate for the property. In one such case in May of this year, a landlord had asked to up the rent of their property in Surrey from £1,260pcm to £1,300pcm. The tenant disputed this and took it to the rent tribunal…who set the rent at £1,540pcm!

I typically recommend meeting tenants half-way in regards to the amount of any rent increase i.e. keeping it below market value so they have an incentive to stay in the home they have looked after and paid rent for throughout their tenancy. Ultimately though, this is the landlord’s decision; some will never increase rents (thus not ‘rocking the boat’ so tenants stay longer; aware of the re-let costs and possible need for refurbishment if the current tenant were to leave), some want the maximum rent at all times (likely seeing a higher turnover of tenants / risk of affordability issues or resentment from tenants arising), whilst others take the middle ground. 

The average rent in Chichester is currently £1,300pcm, which is an increase of 8.3% compared to the £1,200pcm average figure from one year ago. This is slightly below the average increase seen across the UK, which has been 10.4% in the last 12 months (with UK rents averaging £1,229pcm overall / £1,027pcm excluding London).

Despite quickly rising prices, rental homes are continuing to let at speed and many landlords are still being met with long queues of prospective tenants wanting to view and rent their property. As market rents have increased greatly, many landlords are taking the opportunity to offset some of the financial impact from increasing legislation, taxation and interest rates by passing on rent increases to current tenants. The sad reality for these tenants is that if they don’t want to pay the increase there are a number of prospective tenants chomping at the bit to move in (who will perhaps pay even more for the property!). 

If you’re a landlord and would like a ‘rent review’ for one of your properties, or if you’re a tenant facing a rent increase and would like an impartial opinion on its validity, please get in touch and I’ll be happy to provide assistance.

---

Landlords - what you should check before arranging a viewing

Demand for rental property is 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 £1,333!). 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 affordability criteria set out by referencing agents (typically requiring an annual household income of 30 times the monthly rent). 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).

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.

---

Should landlords take a security deposit?

There is nothing to say that a landlord must take a security deposit, but it is always advisable to do so. Most landlords choose to take a security deposit from their tenants to provide some protection against the risk of non-payment of rent and/or damage caused to their property. It is important, however, to understand the rules about taking a security deposit, which have changed in recent years.

Major legislation was first brought in back in 2007, whereby security deposits needed to be protected in one of the approved government schemes. This was introduced amid claims of unscrupulous landlords simply pocketing the security deposit by default at the end of the tenancy, regardless of the tenant’s conduct. These schemes either hold the money (custodial schemes) or insure against its disappearance (insurance schemes). They also act as arbitrators between landlord and tenant if there is any disagreement in regards to the return of the security deposit at the end of the tenancy.

CRJ Lettings is a member of the DPS (Deposit Protection Service) and their custodial scheme. It’s free to use and it means neither the landlord nor the letting agent is holding the tenant’s security deposit; it’s held in a government-backed ring-fenced account throughout the tenancy.

This seems preferable for both landlords and tenants, compared to letting agents who hold the deposit monies in their own bank accounts (via the insurance schemes). There have been too many stories of fraudulent (or just poorly managed) letting agencies dipping into these funds to cover their own cashflow, or even going bust and losing the deposit monies in the process (which the landlord will have to cough up when the time comes to repay the tenant).

Whichever scheme you opt for though, they bring with them additional paperwork and responsibilities, for which it is absolutely critical you get correct. The deposit needs to be properly protected and the paperwork served to the tenants within 30 days of receiving their money. If this is not done, the landlord cannot serve notice upon the tenant if it becomes necessary and can also be held liable for compensation in the amount of three times the deposit!

In 2019, security deposits were capped to a maximum of five week’s rent (in most cases). This rather curious addition to the Tenant Fees Act has meant it is now far more difficult for tenants without a squeaky-clean credit history and good references to be accepted. Previously, such worries could be bypassed by taking a larger-than-normal security deposit, but the government has made this practice illegal. The same goes for tenants with pets; which is why you now regularly see premiums attached to the rental amount for such individuals instead.

Recently, there have been a plethora of ‘zero deposit’ schemes pitched as an alternative to tenants stumping up the deposit themselves. Personally, I’m not a fan of these schemes in their current form. Most landlords prefer to rent to tenants with some ‘skin in the game’ and most (good) tenants prefer to hand over a security deposit, knowing they’ll get it back at the end of the tenancy, rather than paying an upfront or monthly fee that they won’t see again.

A major criticism of security deposits though is the challenge many tenants face in raising a second one whilst their current security deposit is tied up in their present tenancy. The government are talking about introducing a ‘transferable’ deposit, whereby the same security deposit passes from one tenancy to the next (making it easier for tenants to move home). The problem here is that you never truly know if a tenant’s security deposit will be re-paid in full until they have vacated the property, by which time they’ll have already moved home (for which they’ll need the security deposit for). So, it doesn’t seem altogether workable without some form of insurance product involved, which is likely to cost tenants money one way or another.

If you’re a landlord and all of the above sounds like too much trouble, or you’ve not been taking all the necessary steps (or worse, you’re with a letting agent who hasn’t), please feel free to give me a call to instruct me to take this important burden away from you.

---

This article was featured in...

---

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. 

---

This article was featured in...

---

Should landlords take a security deposit?

There is nothing to say that a landlord must take a security deposit, but it is always advisable to do so. Most landlords choose to take a security deposit from their tenants to provide some protection against the risk of non-payment of rent and/or damage caused to their property. It is important, however, to understand the rules about taking a security deposit, which have changed in recent years.

Major legislation was first brought in back in 2007, whereby security deposits needed to be protected in one of the approved government schemes. This was introduced amid claims of unscrupulous landlords simply pocketing the security deposit by default at the end of the tenancy, regardless of the tenant’s conduct. These schemes either hold the money (custodial schemes) or insure against its disappearance (insurance schemes). They also act as arbitrators between landlord and tenant if there is any disagreement in regards to the return of the security deposit at the end of the tenancy.

CRJ Lettings is a member of the DPS (Deposit Protection Service) and their custodial scheme. It’s free to use and it means neither the landlord nor the letting agent is holding the tenant’s security deposit; it’s held in a government-backed ring-fenced account throughout the tenancy.

This seems preferable for both landlords and tenants, compared to letting agents who hold the deposit monies in their own bank accounts (via the insurance schemes). There have been too many stories of fraudulent (or just poorly managed) letting agencies dipping into these funds to cover their own cashflow, or even going bust and losing the deposit monies in the process (which the landlord will have to cough up when the time comes to repay the tenant).

Whichever scheme you opt for though, they bring with them additional paperwork and responsibilities, for which it is absolutely critical you get correct. The deposit needs to be properly protected and the paperwork served to the tenants within 30 days of receiving their money. If this is not done, the landlord cannot serve notice upon the tenant if it becomes necessary and can also be held liable for compensation in the amount of three times the deposit!

In 2019, security deposits were capped to a maximum of five week’s rent (in most cases). This rather curious addition to the Tenant Fees Act has meant it is now far more difficult for tenants without a squeaky-clean credit history and good references to be accepted. Previously, such worries could be bypassed by taking a larger-than-normal security deposit, but the government has made this practice illegal. The same goes for tenants with pets; which is why you now regularly see premiums attached to the rental amount for such individuals instead.

Recently, there have been a plethora of ‘zero deposit’ schemes pitched as an alternative to tenants stumping up the deposit themselves. Personally, I’m not a fan of these schemes in their current form. Most landlords prefer to rent to tenants with some ‘skin in the game’ and most (good) tenants prefer to hand over a security deposit, knowing they’ll get it back at the end of the tenancy, rather than paying an upfront or monthly fee that they won’t see again.

A major criticism of security deposits though is the challenge many tenants face in raising a second one whilst their current security deposit is tied up in their present tenancy. The government are talking about introducing a ‘transferable’ deposit, whereby the same security deposit passes from one tenancy to the next (making it easier for tenants to move home). The problem here is that you never truly know if a tenant’s security deposit will be re-paid in full until they have vacated the property, by which time they’ll have already moved home (for which they’ll need the security deposit for). So, it doesn’t seem altogether workable without some form of insurance product involved, which is likely to cost tenants money one way or another.

If you’re a landlord and all of the above sounds like too much trouble, or you’ve not been taking all the necessary steps (or worse, you’re with a letting agent who hasn’t), please feel free to give me a call to instruct me to take this important burden away from you.

---

This article was featured in...

---

Are Germany’s tenants better off than the UK’s?

Germany’s housing market, and more specifically their rental market, is often pinned up as “how renting should be”, with indefinite tenancies and rent controls. As 54% of Germans rent their home (in the UK it’s just 20%) many argue we should adopt their model - but would that really be for the best?

The Labour party have made it clear they would like to bring in rent controls similar to the continent. In Germany there are indeed rent controls….in most areas you can’t increase the rent by more than 15-20% in three years! Rents across the UK have increased an average of just 4.5% in the past three years, which is lower than both inflation (+6%) and wages (+7.5%) over the same period.

As for the indefinite tenancies German renters benefit from, well that is true. But then again, the landlord has no responsibility to maintain, repair or improve anything inside the property - all of this resides with the tenant. In fact, the landlord merely provides an empty shell; forget white goods, German tenants have to supply their own kitchen and bathroom/s or pay extra for the privilege! The property does have to be watertight, so at least they get doors and windows, which are actually optional in Romania (where only 2% of the country rent)!.

In the UK there’s been 30 years of increased and improved legislation to ensure properties are kept up to standard for tenants. In some cases these haven’t gone far enough, as is shown regularly in the media, although I believe a lot of this is down to a lack of enforcement of the existing legislation. So, whilst UK landlords don’t have rent controls to abide by and can offer shorter tenancies, in return for this property standards have been, and continue to be, massively cracked down upon.

In Germany, sure there’s greater security of tenancies alongside rent controls (in the loosest possible terms) but all repairs, maintenance and improvements are down to the tenant (much like many commercial tenancies here in the UK). 

       

So, what do we want? It’s not fair or realistic to cherry pick the best parts of both systems. Should we make landlords spend more on improving standards and increased legislation? Or should we lower their cost base and responsibilities, pass these savings to tenants by limiting rent increases and put the onus on the tenants to create a home for themselves, whereby they’ll only be asked to leave if they stop paying the rent or breach their agreement? 

It might be worth bearing in mind that home ownership in Germany is stifled by banks requiring 20% deposits, estate agents charging fees to buyers of (typically) 7%, as well as stamp duty of up to 6.5%. And yet Germany hasn’t been immune from exploding house prices and rents getting pushed to the limits of the so called ‘rent controls’, which has recently led to social disgruntlement and protests in the street.

---

This article was featured in...

---

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:

• Follow The Buy-To-Let Property Investment Market in Chichester
• Chichester Property Market LinkedIn Page for Clive Janes
• CRJ Letting Agents Chichester Facebook Page
• CRJ Letting Agents Chichester Twitter Page
• Chichester Investment Property Management Specialist CRJ Letting Agents Website

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

---

Where will all the new homes in Chichester go?

Chichester has faced a target of delivering 435 new homes a year, which has been exceeded in the past three years; in 2015/16 553 were built, in 2016/17 440 were built and in 2017/18 648 were built. This isn’t enough for the powers that be however, as the local plan (due to be released in 2020) is likely to set out an annual target of building 550-650 new homes. So, where are all these new homes going to go?

It may surprise you to hear that only 8.8% of England is actually built on, with the majority (72.9%) being used as farmland, 3.8% being designated as ‘green urban’ (that’s parks, gardens and recreational space) and the other 14.5% remaining natural. So, all the houses, roads, shops, businesses, airports and other buildings take up less than 10% of the nation - which is quite amazing when you think about it.

Here in Chichester we’re less than half as densely urbanised than most of England, as we benefit from just 4% of the District being built upon. A further 2% of land is green urban, 69% farmland and, not surprisingly for an area that includes the South Downs, a higher-than-average 25% of our land remains natural.

I fear this abundancy of open space is why central government sees Chichester as an easy target to take on more housing. The higher end of the revised target (650 homes a year) would equate to more than 7,000 additional homes being built by 2030, which is a significant increase on the 50,000 or so existing properties in the Chichester District today.

So where are we going to build these new homes? It’s all well and good for central government to push for these schemes, but the knock-on effect is the strain upon local infrastructure i.e. the roads, public transport, schools, hospitals and other public services that need to be enhanced and added to.

The development at Whitehouse Farm is set to be the biggest in Chichester’s history, with 1,600 new homes planned. And farmland is also under threat in Shopwhyke, Westhampnett and Tangmere. But surely all these new residents will need to eat, so continuously building on farmland isn’t sustainable in the long-run. Unless housing is to be more densely built (think taller but smaller new-build units, with a lack of outdoor space) it seems the quarter of our District’s land that remains ‘natural’ could be under threat.

---

(This article was featured in the Chichester Observer's property section on March 7, 2019) Clive Janes, CRJ Lettings

---

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:

• Follow The Buy-To-Let Property Investment Market in Chichester
• Chichester Property Market LinkedIn Page for Clive Janes
• CRJ Letting Agents Chichester Facebook Page
• CRJ Letting Agents Chichester Twitter Page
• Chichester Investment Property Management Specialist CRJ Letting Agents Website

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

---

Ten years on from Chichester’s property price low

Not that anyone knew it at the time, but ten years ago marked the ‘credit crunch’ induced market low for property prices in Chichester, having faced 17 months of falling prices.

Property prices peaked in Chichester at £291,021 in October 2007, just weeks after Northern Rock had faced queues of people outside its doors seeking to withdraw their money; an event which, in hindsight, marked the beginning of the financial crisis.

In the following 17 months, property prices in Chichester fell 21% to sit at £228,594 in March 2009, before rebounding 17% in the following year and 70% overall in the decade since, to sit at today’s average sale price of £388,261.

Whilst prices in Chichester fell every month between October 2007 and February 2008, it at first appeared the market had stabilised as prices increased again, getting close to the previous peak in August 2008 with prices rising back to £289,147. September 2008 - March 2009 was rough though, with the average home in Chichester losing over £60,000 in those short six months - that’s £332 per day!

It’s interesting to compare Chichester’s property price movements during this time compared to the UK as a whole. Whilst UK house prices peaked at a similar time (September 2007), fell a similar amount from peak to trough (19%) and bottomed out at the same time (March 2009), they have ‘only’ increased by 49% since, which is much less than in Chichester. And whilst Chichester broke through its October 2007 peak by September 2012, the UK only caught itself up again in August 2014.

I would therefore argue that Chichester has proven to be more resilient through the bad times than the UK as a whole. This aligns itself with the fact that property prices in Chichester have historically increased more than the UK average; which is why I often say property in Chichester is likely to bring with it stronger capital growth in the future.

This may in part be due to fewer ‘distressed sellers’ in Chichester i.e. those who need to sell, as 41% own the home they live in without a mortgage, compared to the UK average of 31%. And with the Brexit deadline just a few weeks away and prices having fallen for the past few months both in Chichester and the UK, it may be that resilience will be the name of the game in the coming months too.

If you’d like to follow the progress of Chichester’s property market going forward, please subscribe to my weekly e-newsletter at www.tinyurl.com/ChiPropertyNews

---

(This article was featured in the Chichester Observer's property section on February 28, 2019) Clive Janes, CRJ Lettings

---

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:

• Follow The Buy-To-Let Property Investment Market in Chichester
• Chichester Property Market LinkedIn Page for Clive Janes
• CRJ Letting Agents Chichester Facebook Page
• CRJ Letting Agents Chichester Twitter Page
• Chichester Investment Property Management Specialist CRJ Letting Agents Website

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

---

To renew, or not to renew: that is the question

Most tenancy agreements last for a fixed period of six or twelve months. That means the tenants are obligated to pay rent and remain in the property for that length of time, whilst the landlord can’t increase the rent or ask the tenants to leave (without applying to a court). Many take it as read that as the end date of the contract approaches they’ll need to renew it, but that isn’t actually the case.

You see, many tenancy agreements will make provisions for the contract to continue on a contractual periodic basis. And even if they don’t, by law it will continue on a statutory periodic tenancy. In layman’s terms, these are both monthly rolling contracts, whereby the tenant is required to give one month’s notice to vacate the property, whilst the landlord may give two months’ notice to end the tenancy and regain possession of the property.

Whilst some tenants like the certainty of a fixed contract, many actually prefer the flexibility of not being ‘locked in’ to a long-term rental contract in case their circumstances change. As a landlord and letting agent I have always operated like this i.e. not re-signing contracts, finding it to be the best and easiest way to continue a tenancy, both administratively and in providing flexibility to both the tenants and landlord.

For me and my landlords, there’s also the added security that should the tenants conduct change or they start to fail in their obligations e.g. they stop paying the rent, we can regain possession with two months’ notice rather than having to wait until the end of the new fixed term (or having to take them to court, which is time-consuming, expensive and uncertain).

And whilst a landlord can, if they wish, increase the rent with two months’ notice during a periodic tenancy, you may have read in a previous article that I prefer to promote long-term tenancies by avoiding this where possible; only increasing the rent when it is significantly out of kilter from the ‘going rate’.

So why then do most letting agents insist on renewals? Well, whilst some may argue there’s more stability for their landlords that way, I think the only stability many of them are interested in is receiving their fees i.e. locking in a prolonged management fee and charging a renewal fee to both the landlord and tenant.

It will be interesting to see once the tenant fees ban takes hold whether letting agents change their tune in this regard, when they can no longer charge the tenant a renewal fee. Or perhaps they’ll end up charging the landlord double to make up for this?

Are you a landlord or a tenant and, if so, do you prefer to renew contracts each year or let them amicably turn into a periodic tenancy? Please do get in touch and let me know.

---

(This article was featured in the Chichester Observer's property section on February 21, 2019) Clive Janes, CRJ Lettings

---

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:

• Follow The Buy-To-Let Property Investment Market in Chichester
• Chichester Property Market LinkedIn Page for Clive Janes
• CRJ Letting Agents Chichester Facebook Page
• CRJ Letting Agents Chichester Twitter Page
• Chichester Investment Property Management Specialist CRJ Letting Agents Website

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

---

Where have all the Sold signs gone in Chichester?

There are currently 159 properties in Chichester showing as sold (subject to contract), which is the lowest figure in the five years that I’ve been tracking the market on a weekly basis. A year ago there were 181 properties sold, which means we’ve seen a drop of 12% in 12 months. In fact, there has been a reasonably steady decline since a record high of 292 properties were showing as sold in June 2017.

And yet at £369,000 the average asking price of the properties for sale is up around 10% since last year (when the average asking price was £335,000). So, it appears that sellers are continuing to raise the asking price of their property even though fewer people are actually buying. Would the market be slowing down anyway (with the uncertainty of Brexit being a staple answer as to why) or is it the rising prices that are stopping people from buying?

Based on there being 462 properties on the market in Chichester, we can calculate that 34% are showing as sold. A year ago not only were there more properties sold (181) but there were a greater number of properties on the market (490). Even so, this suggests there was still a higher proportion of properties that were sold (37%) than there is now. For reference, at its recent peak in June 2017 there were 632 properties on the market, with a whopping 46% sold.

As ever with statistics like these though, they don’t mean a great deal unless you compare them against something. So, let’s look at a few areas nearby to see which area has the highest proportion of sold properties compared to the overall market:

Chichester - 462 total - 159 sold (34%)
Bognor Regis - 1,019 total - 380 sold (37%)
Midhurst - 120 total - 27 sold (23%)
Petersfield - 214 total - 75 sold (35%)
Petworth - 74 total - 27 sold (36%)
Portsmouth - 2,479 total - 1,103 sold (44%)
Waterlooville - 977 total - 388 sold (40%)
Worthing - 1,981 total - 877 sold (44%)

It seems that the largest locations with a higher proportion of ‘cheaper’ properties also happen to have the largest proportion of sold property on the market. It might be that Chichester’s sellers, who are used to the higher prices, may need to re-evaluate their asking price to be able to sell their property in what is looking like a more challenging market.

To follow how many properties are for sale, sold, to let and let agreed on a weekly basis, sign up to the weekly Chichester Property News e-mail by visiting www.tinyurl.com/chipropertynews

---

(This article was featured in the Chichester Observer's property section on February 15, 2019) Clive Janes, CRJ Lettings

---

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:

• Follow The Buy-To-Let Property Investment Market in Chichester
• Chichester Property Market LinkedIn Page for Clive Janes
• CRJ Letting Agents Chichester Facebook Page
• CRJ Letting Agents Chichester Twitter Page
• Chichester Investment Property Management Specialist CRJ Letting Agents Website

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

---