The Falkirk Property Blog - Festive Greetings To All Our Readers

Well investors 2016 is drawing to a close and the property world is beginning to go into Christmas hibernation, so I wanted to take this opportunity to thank all the followers of the blog for your support during 2016.

Your support has been much appreciated and I have enjoyed the debate the blog has generated with you all, the majority of whom have become good friends, as well as valued customers. It has been an interesting year for investors in the Falkirk property market, with increases in average prices combined with tax changes and more new legislation to be taken on board, to name but a few.

Those of you who follow the blog know my views moving into the New Year and those of you with existing profitable portfolios in place have different challenges, to those just starting out in their property investment careers. As ever, I will endeavour to continue to post articles covering all investment opportunities in the property market in Falkirk, when I return to the blog the week commencing 9th January.

In finishing I would like to wish all my readers a very Merry Christmas and a happy and prosperous New Year.

If you would like to explore how I can help you with your property investments, or should you require any advice about investing in the Falkirk property market, wish to enquire about our Investment Analysis Reports, Property Sourcing, Residential Lettings or Property Management services, please do not hesitate to call me on 01324 469840 or email me on news@thekeyplace.co.uk.

Alternatively, please feel free to pop in and see us at our offices at 6 Vicar Street for a chat, the coffee is always on.

Don't forget to visit www.thefalkirkpropertyblog.co.uk to view back dated articles and deals from The Falkirk Property Blog. 

                                                                    www.thekeyplace.co.uk

Greater Falkirk’s population set to rise to 140,000 by 2036

Falkirk faces a predicament - the population is growing and the provision of new housing isn’t keeping up. With the average age of a Falkirk person being 41.0 years (compared to the national average of 40.4 years of age), the population of Falkirk is growing at an alarming rate. This is due to an amalgamation of longer life expectancy, a fairly high birth rate (compared to previous decades) and net immigration, all of which contribute to housing shortages and burgeoning house prices.

And the population is going to continue to increase.  Using data provided by the National Records of Scotland, I forecast that the Falkirk population will grow as follows:

2016 population           130,663

2021 population           133,308

2026 population           136,102

2031 population           138,552

2036 population           140,326

The normal ratio of people to property is 2 to 1 in the UK, which therefore means that we need just over 9,600 additional new properties to be built in Falkirk over the next 20 years.

Whilst focusing on population growth does not tackle the housing crisis in the short term in Falkirk, it has a fundamental role to play in long-term housing development and strategy in the town. The rise of Falkirk property values over the last eight years since the credit crunch is primarily a result of a lack of properties coming onto the market, a lack of new properties being built in the town and rising demand (especially from landlords looking to buy property to rent them out to the growing number of people wanting to live in Falkirk but can’t buy or rent from the Council).

Although many are talking about the need to improve supply (ie the building of new properties), the issue of accumulative demand from population growth is often overlooked. Nationally, the proportion of 25-34 year olds who own their own home has dropped dramatically from 66.7% in 1987 to 43.8% in 2014, whilst 78.2% of over 65’s own their own home. Longer life expectancies mean houses remain in the same hands for longer.

In the short to medium term, demand for a roof over one’s head will continue to grow in Falkirk (and Scotland as a whole). In the short term, that demand can only be met from the private rental sector (which is good news for homeowners and landlords alike as that keeps house prices higher).

In the long term though, local and national Government and the UK population as a whole, need to realise these additional people over the next 20 years need to live somewhere. Only once this issue starts to get addressed, in terms of extra properties being built in a sustainable and environmentally friendly way, can we all help create a socially ecological prosperous future for everyone.

If you want to discuss any property matters, come and see me for a chat - my office is at 6 Vicar Street, Falkirk.  Alternatively, you can me on news@thekeyplace.co.uk or call me on 01324 469840.

www.thekeyplace.co.uk

Are you a typical Falkirk landlord?

“So tell me, am I your typical landlord?” was the question once of my multiple property landlords asked me earlier this week.  Well how do you answer that one? 

I tactfully said that landlords come in all different shapes and sizes ..... metaphorically speaking ..... and then went on to share a few common landlord traits.

Number of properties owned

The vast majority – 95% + – of landlords only own 1 or 2 rental properties with only 1% of landlords owning 25 or more properties. 

How properties are financed

Over 50% of rental properties are bought with the help of a mortgage either by the landlord taking out a buy to let mortgage (38%) or by the remortgaging their own home (14%).  A further 28% of rented properties are owned by landlords outright. 

The proportion of landlords owning their properties outright has increased considerably since the financial crisis of 2007/08 as mortgages became more difficult to come by.  I would expect this trend to continue given the recent tax changes to mortgage interest relief.

How many landlords use a letting agent?

About two thirds of landlords use a letting agent either to fully manage their properties (28%) or to find tenants for their properties (34%).  The remaining landlords manage their properties themselves. 

Over time, the propotion of landlords using letting agents has increased as the regulatory enviroment has increased.  I would expect this to accelerate as more and more regulation is introduced especially as the property ‘police’ are given more powers and money to ensure this regulations.

How good are landlords at doing essential safety checks?

Simple answer is ‘Could do better .... much better in some instances’!

More than 90% of landlords say that they do essential gas safety checks but less than 70% say that they do essential electrical safety checks .... the ‘true’ results are likely to be far less appealing! 

Interestingly though, the safety checks that have needed to be done for longest (gas) as the ones that most people say they so, over time, lets hope the other check catch up!

Most common problems with rented properties

Basically mould, damp and poor insulation/excessive cold with these three reasons being the most common by a ‘country mile’. 

Interesting to note is that gas issues are far less common than electrical issues which may well be explained by the higher level of gas safety check that are being carried out.

Age of landlords

Basically landlords are between 40 and 70 years old – landlords in this age bracket make up 86% of landlords. 

Also, the majority of landlords are male.

Occupations of landlords

This is fascinating.  25% of landlords are property investors, a further 24% are business owners and further 18% are pensioners.  So that means that more than two thirds of landlords are in these three categories of occupation.  

Outside these three occupations, landlords are fairly evenly split with no other occupation having more than 5% of landlords.

So, was my landlord a typical Falkirk landlord?

Well, broadly yes.  He was a mid 50%’s male business owner who had two buy to let properties partly funded by buy to let mortgages.  The one area he bucked the trend on was the safety stuff because, as he used The Key Place as a letting agent, he was completely on top of all this stuff.

Are you a typical Falkirk landlord?

Let me know by popping in for a chat over coffee – our offices are at 6 Vicar Street, Falkirk – or email me on news@thekeyplace.co.uk or call me on 01324 469840.

www.thekeyplace.co.uk

Falkirk property investors – do you have a game plan?

Last weekend I was on holiday with family and friends.  We were staying in Port Appin on the West coast of Scotland.  It’s the sort of place you need to provide your own entertainment and we played many, many board and card games!  One of the board games we played was Monopoly (the original one, not the fancy new ones you get with card readers) and I had actually forgotten how much fun it was and secretly how competitive I am. Yes it’s just a game but I had a game plan (buy everything I land on except the Stations and the Utilities!). 

Having a game plan is key when investing your money in a Falkirk property.

All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.

For a low risk investment, you could buy property in the Gartcows area, the High Station area and the Lionhorn area which are perceived as being more desirable, where you may be able to achieve an annual yield of around 4-6%.

If you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 6-8%. This level of risk can be typically taken with properties in New Carron Village and the Ewing Drive area, I am happy to discuss and outline specific streets in these areas.

If you are after annual yields of 8% and over, you could take more of a risk with properties in other part of Falkirk, for example certain streets in Camelon and Tamforhill, which are more likely to attract tenants that are relying solely or mainly on benefits.  Many landlords shy away from these sort of properties because they ‘can’t be bothered with the hassle’.  However, they are worth considering.  Sure you can get bad tenants that are on benefits but you can get bad tenants that are not on benefits ..... and, as I have mentioned in a previous blog, 46% of tenants are on housing benefit so there are probably far more people on benefits that you may think.  Do not get me wrong, there are specific risks with tenants who rely solely or mainly on benefits – mainly around getting paid! – but I have proven strategies to reduce these risks that I would be happy to share with you.

As always, if you would like to send any deals you have seen online over to me or you would like to pop in and have a chat, then you can either email me news@thekeyplace.co.uk or call me on 01324 469840. Our address is 6 Vicar Street, Falkirk (just down from the High Street). The kettle is always on and we will even pull out the posh biscuits!

                                                     www.thekeyplace.co.uk

Will Falkirk party poopers bag a property bargain in December?

I was out with a landlord from Larbert last week viewing one of the properties featured on The Falkirk Property Blog that he was thinking about buying to rent out.  When we were chatting, he said that he was going to stop looking for buy to let properties until the New Year as December is not a good month to buy given that everybody was more interested in shopping and parties than properties in December. 

Well, that got me thinking. 

True, December is one of the quietest months of the year for house sales with only around 6% of Falkirk house sales being agreed in December compared to 10% plus in the peak Spring and Summer months.

However, this can be an opportunity to get a good deal.

Your bids look better

When other potential buyers are taking a break from property hunting to shop and party, a keen seller will be really happy to see you and a lack of other bids will make your ‘competitive’ bid seem more appealing.  This year it is a particularly good idea to carry on looking for properties while other potential buyers are distracted as, at the moment, property demand is outstripping supply so by hunting for properties when it is quieter and you stand a better chance of snapping up good property at a competitive price.

You might get a better mortgage

Another reason to property hunt in December is that with many people distracted by Christmas you are also likely to find mortgage lenders aren’t quite as busy as normal either. This means your application may be dealt with quicker and you could even get a better deal.

Lenders have certainly been competing harder in the buy to let market recently and many fixed rates and fees have been cut as a result.

In my experience, towards the end of the year many lenders are either eager to get business on the books before the end of the year so they can hit their bonus targets or to start building a pipeline of business to go towards next year’s bonus target.

Getting ahead

Finally, sticking with your search through the busy Christmas month can also put you a step ahead of the numerous new buyers who come to the market in the New Year.  Early January is a very busy time of year for the property market. After the Christmas lull, thoughts turn to plans and resolutions for the year ahead or have to deal with the consequences of break ups over Christmas, which in turn triggers more people looking for properties.

I looked on the property sales websites this morning and spotted that there are around 184 properties in Falkirk for sale at the moment ranging from 1 bedroom flats costing £40,000 to 7 bedroomed palaces costing over £775,000 and some of these properties having been on the market for over a year. 

I am not wanting to be seen as a party pooper but December can be a good month to bag a buy to let bargain and I am sure that you can multi-task and look for a property bargain in Falkirk as well as shop and party in December!

We would be delighted to be dragged away from our shopping and partying to have a chat with you and advise you about the Falkirk property market in general or specific properties that you are looking at. We don't charge for that advice.  If you want some advice, phone me on 01324 469840, come and see me in our office (6 Vicar Street, Falkirk) or email me (news@thekeyplace.co.uk).

                                                       www.thekeyplace.co.uk

Winter is Here – Top Tips for Protecting Your Falkirk Property

Well the clocks have gone back and it’s getting dark well before 4:30pm in Falkirk.  The daily chore of de-icing your car has started.  Winter can be a tough time for everyone – but none more so than landlords.

These colder months present potential risks to your rental properties, which could lead to costly problems.  However, taking some time now to check your properties can help with un-expected costs and help ease you through a disaster free winter.

Void Periods

Void periods are a major threat during the cold months. If you know that your property is likely to be empty over the winter, you need to make extra plans to ensure its upkeep. Make sure that you visit regularly to open windows and check on the heating.  If you can’t do this yourself, make sure that you arrange for someone else to visit.

If your property is likely to be unoccupied over the Christmas period, either while your tenants are taking a long holiday or students are returning home, ensure that you take the following precautions as expensive items on display are an easy target for thieves.

Invest in theft deterrents such as alarms (visible from the exterior of the property) and motion sensors.  Ensure that the locking mechanisms meet the insurance policy requirements (usually 5 lever mortise locks but this may vary from policy to policy).

It’s also worth checking if there are any neighbourhood watch groups operating in the area and advise them of any void periods over the festive season.

Prevention

Even before you get to winter, get things checked out well in advance.  If you are not covered by a guarantee or warranty it will probably cost more to get stuff fixed at Christmas time (and even if you do have a warranty it will take longer).  So, if the boiler is making a wheezing noise or the washing machine is clanking, have it checked out now. 

Keep Tenants Informed

Well-informed tenants are the best protection against winter property damage.  Don’t assume that your tenants know how to deal with the cold weather; many won’t.  Similarly, you should remember that it is your responsibility as a landlord to make sure they have the information they need.

Consider putting together an information pack, including things like the location of stopcocks, basic boiler operation, and so on. Remind tenants to periodically turn the heating on (using the timer system if one is available) if they go away over Christmas, in order to ensure that pipes don’t freeze. Another great way to warm up your property is to bleed the radiators. This releases any trapped air, allowing hot water to fill every part of your radiator and warm the property more efficiently. It may be worth dropping off some radiator keys to your properties and showing your tenants how to use them.

Make sure they know where the fuse box is and that they know how to turn off the gas.  Tell them to keep a note of the number 0800 111 999 – they should call this if they smell gas.

Ask friends for names and phone numbers of good plumbers, heating engineers and other trades people.  Have some portable electric fan heaters you can use to give your tenants to keep them warm if the heating conks out and no one can come out and fix it promptly.

Getting the Work Done

Only use properly qualified tradesmen who are member of a national body of association.  Check what membership of the body gives you and check they really are members by asking for ID.  For example, all gas engineers should be listed on http://www.gassaferegister.co.uk/ (the new name for Corgi).

Decent plumbers and some heating engineers should be in http://www.ciphe.org.uk/ (which also has a list of plumber and heating engineers who are available over the Christmas period) or the Association of Plumbing and Heating Engineers.  Some white good suppliers are closed for only one day at Christmas.

If you are a landlord who may have a void property over winter, then feel free to get in touch and let us at The Key Place provide you with a fully reference checked and credit checked tenant in your property before the weather gets even colder, to ensure your asset is protected.

Email me on news@thekeyplace.co.uk or call on 01324 469840. If you are in the area, feel free to pop into the office – we are at 6 Vicar Street, Falkirk, FK1 1JL.  The kettle is always on.

www.thekeyplace.co.uk

Trump and the UK Housing Market

Whilst I don't like the man – the American people have spoken ....

.... but this isn't the end of the world for the UK or its property market!

Cancel the Nuclear Shelter off Amazon and just take a deep breath for a second.

There are questions about the level of competence of Mr Trump but before you all go and panic .... don't forget that Reagan was also regarded as grossly incompetent — by the world's media and the High Brow Washington establishment .... but not by Republican voters in 1980 (and re-elected in 1984) ....

The upper-class Washington types depicted Reagan as some sort of B-rated cowboy film star who was all 'yeaa-haw' and a loose cannon, who might be just tolerable as the Governor of California, but who was definitely not sophisticated enough to comprehend, let alone conduct, foreign policy of the US Presidency.  If memory serves me well – on most things (not all) – he did a pretty good job.

There are plenty of other factors, closer to home, that we need to be concerned about than the President of the US and the effect of the UK Housing Market

.... just my opinion ............

Modern buy to let opportunity in Falkirk

Today’s buy to let opportunity is a modern, low maintenance 2 bed flat.

The property is a second floor, 2 bed flat in a fairly modern block in Victoria Road in Falkirk.  Victoria Road is between the back of the Retail Park and Victoria Park.  It is in good and looks like it could rented out in its current state subject to checking safety stuff etc.

Double click here to get more details about this property

The property is on the market with New Neighbours for offers over £59,000.  It has been on the market since 21 September.  Let’s say it goes for £62,500.  The property will rent easily and you could expect to get £450-475 per month in rent which gets you to a yield of 8.6% to 9.1%.

If you like the look of this one, get in touch for a chat (6 Vicar Street, Falkirk; 01324 469840; news@thekeyplace.co.uk).  If you want to have a chat about another property you have seen, get in touch as well and I will give you my impartial advice about the property.

www.thekeyplace.co.uk

Who is to Blame for Crisis in the Falkirk Property Market?

‘A Scotsman’s Home is his Castle’ is (almost!) the phrase that was coined in Victorian times as the UK has a reputation for being a country of home owners  ... but the truth could be further from the point, because in a league of the top 46 economic nations of the world, where owning your property is permissible, the UK is only ranked no.37.

As I mentioned a few weeks ago, at the end of the First World War, 77% of people rented their home (the vast majority renting from a private landlord as Council Housing was still very much in its infancy). Homeownership rose very slowly in the 1920’s and started to grow as the economy grew after the Great Depression. However, after the Luftwaffe had flattened huge swathes of housing in the early 40’s, the priority was to get people into clean and decent accommodation ... so Local Authority’s (Councils) took up the baton and they built large council estates in the 1950’s and 1960’s.

As the UK economy got back on its feet in the middle part of the 20th Century and wages rose, people decided they wanted to own their own home instead of renting. Throughout the post war decades, it became easier to secure a mortgage. Interestingly, by 1977, 61.6% of 30 to 34 year olds were owner occupiers with a mortgage compared to 8.7% of 30 to 34 year olds being in private rented accommodation (the remaining either being in council housing or living with friends or family). Ten years later, in 1987, we saw some significant growth in homeownership, as 68.2% of 30 to 34 year olds had a mortgage and only 4.6% of people privately rented. A decade later and there wasn’t much change as, in 1997, the homeownership figure was 68.3% but private renting had jumped to 12.1% in the same 30 to 34 year old age group.

Move on another ten years to the 2007 figures, and this showed a slight drop in homeownership to 65.8% but renting had continued to increase to 18.7% (in the 30 to 34 year old age group). The latest set of figures is for 2014, and only 47.2% of 30 to 34 year olds had a mortgage and an eye watering 33.4% of 30 to 34 year olds privately rent.

When we look at the Falkirk figures of homeownership, the 2011 census showed home ownership in Falkirk was 64.7% and private rented was 7.3%. Private renting will increase not because property has become more expensive but because 30 somethings haven’t got a council house to move into (because they were all sold off) – so they have to rent privately. The selling of council housing in the 1980’s (a subject I have talked about in a previous article in the Falkirk Property Blog) artificially grew homeownership in the 1980’s, but as these people have got older, the younger generation didn’t have the same opportunity to buy their council house in the 1990’s, 2000’s or 2010’s. That is why, unless the council start building council houses by the acre, and hundreds of acres at that, private renting will continue to grow in Falkirk.

So if you want blame anyone ... blame the Grocer’s daughter from Grantham – Mrs T …. but before you do – do remember in the 1970s, the UK was called the "sick man of Europe" by critics of the UK government, because of industrial strife and poor economic performance compared to other European countries culminating with the Winter of Discontent of 1978/9 and if it hadn’t been for her we wouldn’t be where we are today.

If you would like any advice on the Falkirk property market, feel free to pop into our office at 6 Vicar Street, Falkirk for a chat, give us a call 01324 469840 or email us on news@thekeyplace.co.uk.

www.thekeyplace.co.uk

A few more interesting articles about the Falkirk property market:

• Is the grass greener away from Falkirk? http://bit.ly/2eC5ctb
• Is Let to Rent a good idea for Falkirk owners? http://bit.ly/2ddNus4
• 0.25% interest rate cut – what will it do for the Falkirk Property Market? http://bit.ly/2dyUVuL
• Is boiler insurance worth the cost for Falkirk landlords? http://bit.ly/2cTwXZM
• Where are the Twenty Somethings going to live in Falkirk? http://bit.ly/2cDGIio
• My Concerns About The Falkirk Property Market http://bit.ly/2bTnrov