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

Is the grass greener away from Falkirk?

I was out walking back from the old graveyard at The Trinity Church in Falkirk the other day (I was getting a stunning picture for the Falkirk Property News before your ask!) when I met one of my most experienced landlords.  He was having a bit of a ‘downer’ about the Falkirk property market after all the tax changes by John Swinney and George Osborne as well as the safety stuff that has been brought in, was thinking up for giving up on the Falkirk property market and buying a buy to let property in France, Italy, Spain, Germany or some country like that and asked my views on this.

Now property prices in other countries can be cheaper than the UK so on the face of it, if you believe the marketing hype, they can look like good investments.  However, there are a few things to think about when buying abroad. 

You need to make sure that you get what you think you are buying with all the consents and permissions required.  I know of somebody who bought a property in Spain only to discover sometime later that planning permission had not been obtained properly and the property is now threatened with demolition.

Overseas property markets can be much more volatile than in Falkirk.  We all remember the fantastic falls in property prices in Spain and Ireland during the financial crash of 2007/2008 – they made the property price changes in Falkirk look very small!

Rents levels can be capped thereby making them more like social housing rents rather than free market rents.

Also, each Country has its own laws and regulations about property and in particular renting out property so you would need to get your head around these. 

The tax rules are different in each Country and there are some great examples of spectacular changes with little or notice in the tax rules.  For example, in 2012 the French Government imposed a 15.5% social charge on capital gains from the sale of second homes or rental income – a measure which was estimated to bring in €250 million a year. Tax on rental income rose overnight, from 20% to 35.5%, while capital gains tax on property sales rose from 19% to 34.5%.  These new tax measures hit overseas investors hard and meant that a British couple who bought a French property for €200,000 20 years ago and were selling it for €750,000 would have to pay almost €60,000 in charges, on top of the existing capital gains tax. They received no credit against their UK tax bill for this amount.

“So, buying a property to let abroad has a few issues but surely it is worth it to avoid all the negative stuff that is being introduced here that will affect my  buy to let properties in Falkirk that will make them uneconomical” my landlord said. 

“Well, not really” I said and went on to explain.

The property market in Falkirk in particular and Scotland and the UK as a whole is very good at finding ways to adapt to changes so that they do not have the bad impact that everybody shouts about initially.  There is evidence that this is happening with the recent changes.  The 3% Land & Buildings Transaction Tax (Scottish Stamp Duty) is meaning people are buying smaller, cheaper houses in an attempt to try and offset the 3% increase in the purchase price.  People are buying their buy to let properties in companies to avoid the restrictions on mortgage interest tax relief that are going to be introduced.  And then, of course, there is the most obvious one of all, people are increasing rents to cover the costs – you will have heard me say often that you can’t beat the market but you can join the market so if the market is increasing its price as it is then you can, for sure, join in.

So I politely suggested to my landlord that he keep looking at home in the Falkirk property market for good opportunities – for sure, amend the model to mitigate the adverse changes coming along but do not throw the ‘baby out with the bath water’ and leave the market completely to buy overseas where there are a whole new set of issues and potentially lower returns to deal with.

Go Falkirk!  The grass is not greener away from Falkirk.

If you would like advice on the Falkirk property market in general and ways to help mitigate the changes that are being introduced to the buy to let market then please get in touch.  Pop into the office at 6 Vicar Street, Falkirk, phone me on 01324 469840 or email me on news@thekeyplace.co.uk.

www.thekeyplace.co.uk

A few more interesting articles about the Falkirk property market:

• 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
• Investment properties in Falkirk come in all shapes and sizes http://bit.ly/2caGM6I

Modern 2 bed house buy to let opportunity in Falkirk

Today’s buy to let opportunity from The Falkirk Property Blog is a fairly new, terraced house in Thomson Avenue in Falkirk.... so all mod cons and easy to deal with but at a price!

The house was built in 2014 by Persimmon.  It has a lounge, kitchen dining room and wc on the ground floor and two bedrooms and a bathroom on the upper floor.  The house has gas central heating, double glazing, a garden at the back and a driveway at the front.

Double click here to see more details of this property

It has just come to market with Homes for U with an asking price of offers over £104,995 so let’s say it goes for £115,000.  I would expect this property to achieve rent of in the region of £625 pcm, so when we work out the annual yield you could be looking at a gross return of 6.5% which reflect that the property is new and therefore maintenance costs are likely to be lower.

I hope you find our posts useful.  If you would like some advice with your potential investment, please come and see me in our offices (6 Vicar Street, Falkirk), call me (01324 469840) or email me (news@thekeyplace.co.uk).

www.thekeyplace.co.uk

Falkirk Maisonette Buy to Let Deal

Looking for an investment property to let out in Falkirk? Well this one is certainly one to consider…

It’s a spacious, well maintained two bedroom maisonette.  It’s in a quiet street in Bantaskine near both Bantaskine Primary School and Falkirk High School.  The photographs show it to be in good condition.

Double click here to see more details of this property

It has just come to market with Clyde Properties with an asking price of offers over £57,000 so let’s say it goes for £62,000.  I would expect this property to achieve rent of in the region of £450pcm, so when we work out the annual yield you could be looking at a gross return of 8.7%.

This is a pretty good return for an investment property of this type in Falkirk so I suggest that if you are interested, you better give the estate agent a call… 

I hope you find our posts useful.  If you would like some advice with your potential investment, please come and see me in our offices (6 Vicar Street, Falkirk), call me (01324 469840) or email me (news@thekeyplace.co.uk).

www.thekeyplace.co.uk

Is Let to Rent a good idea for Falkirk owners?

A landlord of mine from Larbert phoned me up the other day to ask my advice on whether he should ‘Let to Rent’.  Now, I thought that I was fairly up on all these different terms (eg build to rent, buy to let) but this was a new one on me.  My landlord explained that basically he was looking to move to Abu Dhabi to work for a couple of years and was wondering if he should sell or rent out his house in Falkirk. 

Once he said that I understood him perfectly as this concept is not new in fact it has been around forever.  There are many reasons why people do this:

• Schooling often features heavily.  Families who want to live in a specific catchment area of a particular school let out the home the own and rent another one close to the school.  
• Also, working abroad or in another part of the country for a limited time or even taking a sabbatical is another reason to ‘let to rent’ as is the case with my landlord. 
• Finally, having to move but not being able to sell your existing home could be another reason.  This is known as being an ‘accidental landlord’.  This was far more popular after the financial crash of 2007/8 but, thankfully, is becoming less popular as the economy has recovered.

There are huge benefits to let to rent. Selling and buying is a big step both emotionally and financially so if you know that the move is short term or if there's any doubt that it's the correct long term decision, letting to rent makes a lot of sense.

However, before you do then you need to think about a few things:

·        Emotions.  It is not often that I talk about emotion in this blog other than to say “keep emotion out of buy to let investing”.  Well in this case, this advice is still correct but it is harder to take because, quite literally, it is your home!  You need to get over the emotional hurdle of somebody else living in your home and all that that entails.

• Emotions.  It is not often that I talk about emotion in this blog other than to say “keep emotion out of buy to let investing”.  Well in this case, this advice is still correct but it is harder to take because, quite literally, it is your home!  You need to get over the emotional hurdle of somebody else living in your home and all that that entails.
• When you want the property back.  You may not be able to get the property back when you want it depending on the terms of the lease.  Financial.  Like any other buy to let investment, you will be taxed on any net income you receive from the property.  Also, depending on the property, you may not get the sort of yield you could achieve in a purpose bought buy to let investment.  This was particularly the case with my landlord who had a lovely big house in Valleyfield.
• Costs.  As with any first time rented buy to let property, there are a bunch of costs involved eg making the property itself ready for renting, landlord registration, EPC, gas safety, EICR, PAT etc.
• Boring .... but important .... things like consents.  If you have a mortgage on your house, you will need to get the mortgage companies consent to change the ‘use’ of the property from residential home to buy to let investment to be able to rent it out.

So whether to ‘let to rent’ is a personal choice.  In this particular case, I  advised my landlord to ‘go for it’ mainly because he loved his house, he was sure that he would be coming back to Falkirk long term in a couple of years time.

If you would like advice on ‘let to rent’, ‘buy to let’, ‘build to rent’ or any other these property matter, get in touch.  Pop into the office at 6 Vicar Street, Falkirk, phone me on 01324 469840 or email me on news@thekeyplace.co.uk.

www.thekeyplace.co.uk

A few more interesting articles about the Falkirk property market:

• 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
• Investment properties in Falkirk come in all shapes and sizes http://bit.ly/2caGM6I
• A 0.95% Return with The Post Office or a 12.37% Return with Falkirk Buy to Let Property? http://bit.ly/2bH0IzW

14.5% yielding Falkirk BTL property that is definitely worth a look!

Today buy to let opportunity from The Falkirk Property Blog is risky and will not be for everybody .... but the rewards all the greater as a result of this!

The property is a 4 bed upper villa in Hayfield in Falkirk.  Hayfield is just the other side of the canal off Bankside.

The property has a large lounge/dining room, an old style fitted kitchen, 4 good sized bedrooms and a bathroom with a shower over the bath.  It has double glazing and gas central heating.  There is an enclosed rear garden and on street parking.

Based on the pictures, the property needed a bit of sprucing up but, gut feel, no more than £10,000 worth of work.

Double click here to get more details about this property

Turning to the financials.

The asking price for this property, which is on the market with Your Move, is offers over £45,000.  The property has been on the market since June and the price was dropped from offers over £50,000 to offers over £45,000 at the beginning of September so it  looks like the seller is desperate to sell.  Given this, let’s say it goes for £48,000.  Adding in for now the gut feel spend needed on the property of £10,000 gets you to total spend of £58,000.

This property is likely to be rented to Housing Benefit tenants – the 4 bed rate is £787.50 pcm.

So that gets you to a whopping yield of 16.3%.

That looks too good to be true I hear you say.  Well, probably not too good to be true for the right buyer but certainly you need to go into this one with your eyes open as:

• The property is being ‘Sold as seen’ which means any issues with property are for the buyer to deal with.  Given this, you need to do more due diligence, and you need to take more serious legal advice, before you buy. 
• The property is effectively a ‘double upper’ (ie first and second floors) with 2 of the bedrooms being in the attic.  This will reduce the number of tenants wanting the property given that it is the sort of property that would suit a large family.
• The property does need work doing to it.  If you are up for this then you would need to access this carefully to work out what needs doing and how much it would cost.  My £10,000 gut feel is just that a gut feel!
• To get this level of rent you are likely to need to take Housing Benefit tenants and you need to be comfortable with this as a landlord.

·        However, at a yield of 16.3%, it is worth a look!

We hope you find our posts useful.  If you would like some advice with your potential investment, pop into my office at 6 Vicar Street, Falkirk for a chat – the kettle is always – or call me on 01323 469840 or email me on news@thekeyplace.co.uk.

www.thekeyplace.co.uk