Thursday 23 February 2017

8 months after Brexit – how is Falkirk doing?


It was late May 2016, when Mr George Osborne, published an official HM Treasury analysis stating UK house prices would be lower by at least 10% (and up to 18%) by the middle of 2018 compared with what is expected if the UK remained in the European Union. So, eight months on from the Referendum, are we beginning to show signs of that forecast?  The simple answer is yes and no.

A good indicator of the housing market are the share prices of the big UK builders. Much was made of Barratt’s share price dropping by 42.5% in the two weeks after Brexit, along with Taylor Wimpey’s equally eye watering drop in the same two weeks by 37.9%. Looking at the most recent set of data from Zoopla, property values in Falkirk are up 0.53% in the last three months – so is this the time to panic and run for the hills?

Doom and Gloom then? Well, let me consider the other side of the coin.

Well, as I have spoken about many times in my blog, it is dangerous to look at short term. I have mentioned in several recent articles, the heady days of the Falkirk property prices rising quicker than a thermometer in the desert sun between the years 2011 and late 2016 are long gone – and good riddance. Yet it might surprise you during those impressive years of house price growth, the growth was not always smooth and always upward. Falkirk property values dropped at various points during this period and no one battered an eyelid then.

You see, property values in Falkirk are still 7.92% higher than a year ago, meaning the average value of a Falkirk property today is £142,781. Even the shares of those new home builders Barratt have increased by 43.3% since early July and Taylor Wimpey’s have increased by 37.3%. The Office for Budget Responsibility, the Government Spending Watchdog, recently revised down its forecast for house-price growth in the coming years – but only slightly.

The Falkirk housing market has been steadfast partly because, so far at least, the wider economy has performed better than expected since Brexit. There is a robust link between the unemployment rate and property prices, and a flimsier one with wage growth. Unemployment in Falkirk stands at 3,800 people (4.6%) which is considerably better than a few years ago in 2012 when there were 6,800 people unemployed (8.5%) in the same council area.


However, inflation is the only thing that does worry me. Looking at all the pundits, it will get to at least 3% (if not more) in the latter part of 2017 as the drop in Sterling in late 2016 renders our imports with higher prices. If that transpires then the Bank of England, whose target for inflation is 2%, may raise interest rates from 0.25% to 2%+. However, that won’t be so much of an issue as 81.6% of new mortgages in the UK in the last two years have been fixed-rate and who amongst us can remember 1992 with Interest rates of 15%!

Forget Brexit and yes inflation will be a thorn in the side – but the greatest risk to the Falkirk (and British) property market is that there are simply not enough properties being built thus keeping house prices artificially high. Good news for those on the property ladder, but not for those first-time buyers that aren’t! In the coming weeks in my articles on the Falkirk Property Market, I will discuss this matter further!


Wednesday 22 February 2017

Modern renting in Falkirk .... where landlords, letting agents and tenants work in partnership


Old style conflicts between tenants in rented properties and their private sector landlords are largely the stuff of fading legend these days in Falkirk.

In the real world, no-one achieves anything that old fashioned way, the modern approach is more about tenants and landlords cultivating partnerships.  Both have interests to protect and they can both achieve that better by working together. If they can’t, then something is wrong – and mismatches do happen - but good relationships are more the order of today.

The truth is that a rented property may be part of a landlord’s livelihood but it’s also home to the tenant and the ideal situation is for them to work around each other. A professional lettings and management agency, such as The Key Place, will always look after the interests of both parties.

Methods of creating perfect harmony include:
  • Agreeing on periodic visits so the landlord can see how a property is being looked after. That also gives a chance to see if there are any repair jobs or maintenance issues that need attention. And it gives tenants an opportunity to discuss anything that is bothering them.
  • Tenants letting landlords, or their agents, know if they are planning a holiday and the property is going to be empty. Occasional visits can be made to ensure the property and the tenant’s possessions are safe.
  • By mutual agreement neighbours can have the agent’s or landlord’s phone number so they can get in touch if anything seems wrong, e.g. a burglary, fire, flooding, intruders or unusual behaviour.
  • Along with a tenancy agreement The Key Place provides new occupiers and landlords with a comprehensive inventory to record the state of decoration, furnishings and fittings. An honest, upfront, practice like this creates a precise record of contents and condition that is beyond dispute, And that can save a lot of arguments later – especially over returning deposits.
  • Important communications should be done by e-mail or letter - which creates a paper trail of any problem that arises. This gives both tenant and landlord a firm record instead of trying to rely on half-remembered conversations.

Past conflicts in rented properties have swung from the serious to the comic.  According to official statistics, two years ago, the number of housing tenants growing commercial crops of cannabis was sufficiently large to lead the national Crimestoppers charity trust to publish an eight-page leaflet highlighting the issue.  While another recorded case outlined how a tenant caused irreparable damage to a washing machine at his furnished flat because he put in a house brick to “stonewash” his denim jeans.  Whether it’s a laughing matter or an indictable criminal offence, the relationship between a tenant and a landlord is at the heart of today’s private rented sector. Closer relationships obviously work better for both parties and, thankfully, that’s the way things are moving. With over the last 20 years experience and by carefully selecting and managing tenancies we see relatively few cases of conflict or dispute.

The current housing crisis has turned the private rented sector into a major home provider with nearly two million landlords renting to some 10 million tenants and for them, working together means making it work.

If you are one of the hundreds of buy to let investors reading this blog daily and would like advice about what to buy next, where to buy it and what to pay, then call us now on 01324 469840 or pop into our offices on Vicar Street in Falkirk for impartial and friendly advice, and speak to us about how we can keep you appraised of the latest opportunities before the rest of the pack. 



Wednesday 15 February 2017

Falkirk landlords/investors – does your letting agent go THIS far?


Good Morning, Falkirk Property Blog Readers!

Thank you for following my The
Falkirk Property Blog.  Below are links to all the recent articles. We also provide a monthly newsletter about the Falkirk property market, The Falkirk Property News – if you email me your name and address or your email address I will arrange for the newsletter to be delivered directly to you once a month.
 
Landlords/Investors – does your letting agent go THIS far?

Anyone can set themselves up as a letting agent these days, they can offer cut-throat discounts to their fees, take out a full page ad in the local paper, but is that really good value to you as a landlord?

What about an agent who keeps you informed of how the local market is performing, often comparing several areas and explaining why yields and rentals are as they are, and how you can look at getting the best value from your property? Now that sounds interesting.

What about when you start to think about your next investment property, wouldn’t it be great to talk things through with an agent so that you don’t buy the wrong property in the wrong area that the market does not want? Sounds like a great idea!

So what about when you get the germ of an idea, you want to invest in a buy to let property, but you don’t even know how or where to start? Suppose you COULD visit an agent, and you could look at a number of options with regards to funding, and you could throw ideas around as to what you want to buy and ask for a professional opinion on your thoughts, perhaps they could even go on site visits with you to help you understand what to look for, give you advice on how a property should be presented and how to cost any remedial works or, even better, maybe they already had a list of properties that were already suitable and they had worked out the maths for you, showing how and why any given property would make financial sense as an investment? Now that’s got your attention!

Or how about this – having gone through all of the above, you still want more support, and just want to hand over the keys to the agent and ask them to project manage, source and co-ordinate the tradesmen required, arrange for all legal compliances to be met and even for the whole property (including the oven and windows) to be cleaned before the tenant moves in? Convinced yet?

You see, here at The Key Place in Falkirk, we don’t just take on new properties and let them out, we go back a stage or two and look to work with potential investors at the start of their journey and stay with them right through to letting and managing their new property, and that is where all of the above comes into play.

The cost for all this? Precisely £0, nada, nothing. The value to you though – immeasurable.

If you would like to chat, pop into our office at 6 Vicar Street, Falkirk for a chat, give me a call on 01324 469840 or email me on news@thekeyplace.co.uk.



A few more interesting articles about the Falkirk property market:

Wednesday 8 February 2017

Falkirk property – is it cheaper to buy or rent?



One of the points I will be discussing at the property seminar we are running in Falkirk in later this year will be the affordability of property in Falkirk.

Property values in Falkirk have by increased 5.3% in the last year, in the past five years prices are up by 17.7%.

At the same time interest rates have plummeted, so whilst renting used to be on a par in terms of cost compared to owning your own home, now it has become incredibly cheap to finance a property purchase. 


Recently a two-bedroom flat on Teviot Street was on the market for a fixed price of £55,000; a perfect first-time buyer starter home.

As the price is fixed, the flat will sell for £55,000.  Our first-time buyer would require a £2,750 deposit, nothing for Land & Buildings Transaction Tax plus money for the legal fees. Their £52,250 95% mortgage with a five year fixed rate of 2.39% would cost £231 per month (which, importantly, includes paying down the debt).

That same house was in fact sold to a buy-to-let investor and is now up for rent…..at £425pcm!

So, if it’s so much cheaper to buy why doesn’t everyone do so?

Well there’s certainly some who choose to rent rather than buy for social and job mobility reasons. Some don’t want to be tied down to a particular property or area and in today’s more nimble economy this can be a sensible practice for many.

But affordability issues remain a major factor in people’s minds; they think that they will have difficulties in raising the deposit as well as getting the banks to lend enough money in the first place.

A couple with a joint income of £25,000 will be able to get a mortgage for the flat I mentioned above and, if they made is a priority, I would have thought they could have saved the £3,250 needed for a deposit and legal fees – that works out as being £180/month over 18 months.

This suggests that affordability issues are more on the mind of renters rather than being a reality. 

Alternatively, people are choosing to rent nicer properties in nicer areas where they would struggle to afford to buy (they could afford to buy a property in a less nice area, but they choose to rent in a nicer area).

As I mentioned at the start of this post, the Falkirk Property Blog is hosting a property seminar in Falkirk later this year – watch out for more details.

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

Wednesday 1 February 2017

Falkirk landlords remember your “Consents to Let”!


For many Falkirk homeowners, letting provides an obvious investment opportunity as an alternative to selling. With the right expert help from your letting agent, the matter should be quite straightforward, although there are certain consents that should be obtained if you are to avoid some potentially costly problems.  

As with far to many things in life, the devil is in the detail so make sure that you take into account the small print.


You will certainly need the consent of your mortgage provider. They are unlikely to object, but you could be in breach of your mortgage terms if you have not obtained their consent before letting your property. They may also charge an “administration” fee. One important thing to check is that there is no clause that increases the interest rate on your loan should the property be used as a “commercial venture”.

Your title deeds are something else you should check to see whether they impose any restrictive covenants of which the tenant should be aware. For example, there may be a restriction preventing anyone keeping a caravan on the forecourt, or storing building materials for more than a few days.

Importantly, once consent has been obtained, you must ensure that your tenant is aware of, and complies with, any obligations that you yourself would observe as owner in residence.

Finally, insurance. You should obtain permission from both your buildings and contents insurer. There is likely to be a change in cover as the property is being let out and this may increase your premiums, although there are insurers who specialise in this. As a minimum you should ensure that you are covered for any third party liability in respect of injuries to your tenant whilst at your property and I would do further and recommend you get malicious damage and loss of rent cover.

Please let us know if you would like advise what consents are required in your specific case to ensure your peace of mind for a successful let.