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There have probably never been more factors at play in the UK property market than there are right now. The national market is pausing for breath as it reaches the end of the cycle which started with the credit crunch. 2016 saw stamp duty changes as well as the Brexit vote, and the impact is very much still being felt. The result of the election has added to the uncertainty surrounding the economy.
Now that Brexit negotiations are getting properly underway, it will be interesting to see if there is any direct effect it has on the market. Since the original vote, interest rates were dropped to 0.25 per cent to support the economy. This has resulted in property prices rising nationally by 7.2 per cent - and we expect them to grow by a further 6.6 per cent over the next 12 months.
So why are we so bullish about the market in Astwood Bank? Well the data shows us that in the second half of 2016, sales levels were 47.6 per cent higher than the first half, which is even more impressive when we account for the stamp duty rise in April of that year. Based on market trends, we expect the price of the average home here to reach £382,000 by the end of 2018.
Projecting future price trends is never straightforward. The construction of new homes impacts on this heavily; residential developments will often increase the value of other properties in the area due to the way valuers use 'comparables'. Other important aspects they consider when determining the future value of property are upgrades to travel networks and new businesses opening in the area.
Rising property prices mean some people will decide against hopping on the property ladder, instead choosing to rent. Rents have also seen increases, but usually at slower rates than property prices. Landlords tend to focus on the yields when it comes to renting a property: the current gross yield in the local area is 4.8 per cent.
The future looks bright for the local property market; now is the time to think about getting on it if you're not already, especially while interest rates remain so low. If you would like to sell your property, pop into our office for a friendly chat with one of our local experts. We’d love to help. Alternatively, find us on social media.
Based on market trends, we expect average local prices to reach £382,000 by the end of 2018
Monthly sales rate by main house type
This chart takes a look at how sales levels have evolved over the last eight months in the local area. It should be noted that we're looking at a relatively tight area over short periods of time, which is why there is a lot of volatility in the figures. The patterns however, are very revealing and show how seasonality affects the dynamics of the market.
Local property prices vs region & country
It is hard to gauge actual property price movements without having something to compare them against. The chart shows the price differences in our area compared to the wider region and the rest of England and Wales for the last eight years.
Length of residents' working day
Areas which are home to residents who work long hours tend to have something of a split personality. The people you might see on the street on weekdays are often very different to those at weekends. The crucial benchmark is 49 hours per week. If you're working that many hours or more, remember no one on their death bed ever wished they'd spent more time in the office!
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So you have found your perfect tenant, credit checks have been passed, the correct ID has been authenticated and copied and the referencing hasn’t turned up any skeletons in the closet.
Good to go? Good to move?
Maybe not… Moving a tenant in is so much more that handing over the keys. In the past one could assume that having found the ideal tenant, having taken due diligence in the application process the work is done.
- How are you going to ensure you are compliant?
- How are you going to ensure that you are able to serve a valid Section 21 notice (notice for possession)?
Let’s take a look at some of the legal requirements and procedures that need to be adhered to before the keys are handed over.
So, we know that properties can’t be rented out without a valid EPC but how are you recording the fact that your tenant has seen the EPC? If questioned, how can you show that your tenant has had sight of it? Failure to be able to prove this means that you would not be able to serve a valid Section 21 notice.
Familiar with the Gas Safety (Installation and Use) Regulations 1998? Similar to EPCs, gas certs are an industry must but again, how are you recording the fact your tenant has been given the gas certificate? It’s simply not good enough to arrange the gas certificate, if you are unable to prove your tenant has received the certificate upon check-in, you may not be able to serve a valid section 21.
- Deposit taken?
- Deposit registered?
- Registered in time??
- Prescribed information sent???
Let’s hope so! If not, you could be liable for a compensation payment of between 1 and 3 times the amount of the deposit plus limitations on serving notice.
Unlike gas regulations there is no law to say that you must have a landlord electrical certificate.
So you don’t have to do one?
How are you then going to show that you have taken all reasonable care to ensure that the electrical fittings in your property are safe and conform to the appropriate standard?
The Government is clear: as a landlord you must ensure that the electrical systems are safe… so how have you done this?
How to rent?
So you’ve got the How to Rent Checklist/Prescribed Information ready to give to the tenant but have you got the most up to date form? Has the tenant confirmed that you can serve notices by email? Again, record keeping and validation is a must should you want to serve a valid Section 21 Notice.
C0 Detectors and Smoke alarms
- Smoke alarms on each floor?… Check!
But have you checked both C0 and smoke detectors are working in front of the tenant? How is this recorded? How can you be compliant if keys are collected or passed over at the front door?
Where is the risk of exposure in your property? Has the cold water system got a correctly fitted lid? Has the property been standing empty for some time? Have your tenants been advised of the risk? We move many tenants in that simply are not aware of Legionella and so in turn, how can you ensure your tenants have received the best possible advice?
What’s clear is that alongside industry knowledge, record keeping and documentation are of paramount importance. So how are you recording this vital information? Logs and checklists may be considered old school but in lettings they could just save you from difficulties further on down the line.
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While it is tempting to dive straight into Rightmove looking for your next home, savvy home hunters line up their ducks before they even start looking - and there are many benefits to this strategy…
Most practically, there's no point in looking for a home that's too far north of your budget. (and there are many good arguments for not looking for a home that's under your budget too - more on this another day, however).
Getting a solid understanding of how much mortgage funding you can invest in your next home - and not to mention knowing how much this funding will translate into a monthly outgoing - enables you to have a laser-type focus on the type of property and area you should be looking in.
This approach will not only save you buckets of time spent looking in the wrong area or price bracket, but it also has another, not so obvious, benefit...
IT MAKES YOU AN ABSOLUTE GOD-SEND IN THE EYES OF AN ESTATE AGENT. A GEM. THE CREME DE LA CREME.
You see, our ultimate client is the seller - this is the person who instructs us to take loving care of the sale of their most precious and valuable asset - their home.
And it's our job to find them the best buyer - and this doesn't just boil down to money - many factors come into play, not least finding a buyer who has done their research, is committed to their type of property and has their finances sorted.
In short, a buyer who has their ducks in a row.
Furthermore, if there are multiple offers in on a property at the same time (quite common in today's market) - who do you think the seller would prefer? The buyer who has their finance in place and their other ducks all lined up nicely - or the unknown quantity?
After all, there's not point in agreeing to sell a home to someone who will need to change their mind whether it's due to financing, timescales or the wrong choice of area (tip: when deciding your search criteria, factor in early on your preferred schooling choices and commuting routes).
This wastes everyone's time, money, and not to mention their emotional resources!
How to line up your ducks...
- If you need to sell your existing property, get it valued by a good, established, and local estate agent (hint, hint) - they will know best how much your property is worth.
- Armed with this knowledge, get financial advice from a financial advisor who can deal with a variety of different lenders (another hint) - they can find the best lender for you and your needs.
- Get an 'Agreement in Principle' from your chosen lender - in a nut shell, this puts you top of the list when it comes to an estate agent's favourite kind of buyer.
- Set search criteria within your budget. Consider schooling, how you will get to work, will your home or car insurance be more/less expensive - could this affect your budget?
- Pop in and see your local estate agent, tell them how your ducks are lined up and don't be surprised when they're calling you first, inviting you to view the very best of their new instructions!
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We are looking for a part-time Lettings Advisor to join our highly successful Lettings Team in Studley.
You will be responsible for the arranging of maintenance, contractor liaison, invoice processing, management visits and working in line with current legislation. The ability to work on your own initiative as well as be part of a team is paramount.
Alongside administrative duties, you will be required to assist in viewings. A full driving licence will be essential.
Previous lettings experience or knowledge of current legislation will be an advantage and Saturday working patters are a requisite.
How to Apply
Alternatively, you can post to: Louise Barratt, Lamberts Residential Lettings, 4a High Street, Studley, Warwickshire B80 7HJ
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Property has always been and will continue to be a great investment. Not only can you make a profit on it monthly, you can get great capital returns and unlike many other investments – it’s tangible. Big and made from bricks and mortar. Literally.
Remember: Buying a property for investment is different to buying a property to live in.
Many first-time investors fall into this trap by basing their purchase decisions on their own wants, needs and tastes – rather than making a practical decision.
Without further ado, here are three tips on choosing a great investment property (they will work in any market)
The quiet cul-de-sac on the village outskirts may not be the best choice for investment – look at urban locations with great transport links to town centres and major employers.
If your tenants can get to work easily and have good access to amenities such as shops, schools, and night-life – you’re looking at a great pool of potential tenants.
For heathy, long-term capital growth avoid the swankiest part of town - instead look at upcoming neighbouring districts. You can spot these by looking at a council’s long term development plan and see what districts they are investing in. Keeping track of planning applications by commercial developers is a good tactic too.
If all of this seems a tad too much – look where Costa Coffee are opening their next outlet. Start here.
Look for properties that are easy and cost efficient to maintain. Smaller gardens are better than larger ones. Parking is a big plus.
Look for a property that you can acquire to cost-effectively best prepare a property for rental. e.g.
- Go for a neutral finish, magnolia to the walls, Oatmeal carpets – these will be easiest to freshen up between tenancies
- Get a good, basic B&Qesq kitchen in. Choose from a popular range to make replacing doors, handles, etc in the future easier
- Ditto for the Bathroom
If buying a flat don’t forget about the service charge – typically, this will not be your Tenant’s responsibility. You will also want to see what the Service Charge covers – is there a sinking fund for big budget expenses such as a new roof? If not, you may find an unexpected bill full of zeros land on your doorstep in a few years!
If the property you're buying is Leasehold (almost always if you’re buying a flat or mainsonette) you will also want to pay attention to ground rent and the unexpired term of the lease.
Be aware of leases when they start to approach 60 years unexpired – financing can be an issue since they become more and more expensive to extend beyond this point. So think ahead – what may be ok today could be a remortgage issue in 5 years time – if possible, negotiate to have the lease extended to 125+ years when you purchase the property.
Follow these simple tips and you’re well on your way to acquiring a great investment property.