Another acquisition for the fast expanding Falkirk based The Key Place

The Key Place, the "go to letting agency" across Edinburgh and the Lothians, Central Scotland and the Scottish Borders, specialising in property management and buy to let investment, is delighted to announce that it has taken on PH Young’s letting business based in Bo’ness.

Robert Young, The Key Place’s Chief Executive, commented “We are delighted to have taken on PH Young Lets as, on top of it being an excellent, well run business, it enables us to consolidate our strength in property lettings across Central Scotland.  I can see this being the first of many acquisitions that we make over the next couple of years and, with the regulation coming into the sector next year, I expect that a fair number of property letting agencies will be looking to exit the market rather than go through the hassle of becoming regulated.” 

Are ‘would be’ Falkirk homeowners warming to the idea of renting?

I was reading a report the other day produced by the Halifax, about the UK property market and why more and more of the younger generation seem to be renting rather than buying. I find it fascinating that over the last 10 - 15 years, the British obsession of buying a house almost as soon as you left school, and the fact that if you rented you were seen as a second class citizen, has turned on its head to a point where the hopes and dreams to own a nice home will be replaced by the ambition simply to live in one.

In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property, constantly upgrading until eventually they carried you out in a box. However, the perceived shame and stigma of renting is no longer the case, as it seems that the British are now beginning to accept a lifetime of renting. This is a very important consideration for both Falkirk homeowners and Falkirk landlords as it will transform the way the Falkirk property ladder looks in the future and I might ask whether or not it will exist at all for some people? The make up of households is one important factor, especially in the Falkirk property market. The normal stereotypical married couple, two kids and dog of the 1970’s and 80’s has changed. More and more we have the need for larger houses where two families come together after divorces (+ kids) and need a property to house everyone through to an increase in the number of one person households.

Looking at the data for Falkirk, of the 4,644 private rental properties in the Falkirk Locality, 27.6% of those rented properties are one person households (1,282 properties). However, when we compare the number of one person Falkirk households who have bought their own property with a mortgage (i.e. therefore they are still in work), of the 23,816 owner occupied households with a mortgage in the area, only 1,796 of those properties are a one person household (i.e. 7.5%). Compared to a decade ago, this explosion in demand for decent high quality rental properties that one person households require has not been met with an increase in supply of such properties.  More and more I believe Falkirk landlords need to consider this change in the make up of Falkirk households, as I believe this could be an opportunity.

It is true that the Government’s introduction in 2013 of the Help to Buy scheme, where first time buyers only needed a 5% deposit, changed the perception of peoples’ ability to buy without having to save ten’s of thousands of pounds for a deposit. However, it might surprise you, 95% mortgages were re-introduced within six months of the Credit Crunch in late 2009, so again it comes down to people’s own perception. Many youngsters think they won’t get a mortgage, so don’t even bother trying.

Coming back to the deposit, it’s still a fact that once you start renting it becomes that much harder to save for a deposit, regardless of the size. Interestingly, 7 out of 8 renters polled by the Halifax (86% to be exact) refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit.  This is the crux and the real reason why people aren’t buying but renting... and why demand for renting will continue to grow in the future (i.e. good news for landlords). Falkirk tenants can upgrade the quality and size of the property they live in for a minimal rent increase. The average rent of a one bed property in Falkirk is £395pm, but a two bed is only £90pm more at £485pm, whilst the average three bed rent is £640pm. If you had to make that jump when buying, the monthly mortgage payments would be stratospherically more than that! Without any social pressure and better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation, as the UK is becoming more like Europe, where renting is ‘the norm’.

Who is going to supply all these properties to rent? Landlords! Whether you are an existing landlord looking to grow your portfolio or looking to become a ‘first time landlord’, my thoughts are take advice from as many people as possible. However, as the majority of landlords buy their buy to let properties in the same town they live, you will need specific advice about Falkirk itself.

One place for such quality advice and opinion is the Falkirk Property Blog www.thefalkirkpropertyblog.co.uk.

www.thekeyplace.co.uk

  

#falkirk #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #firsttimebuyers

Home Buyers in Falkirk – Beware the Cost of 90% Mortgages

There are an increasing number of lenders willing to grant 90% mortgages to first-time buyers, but that doesn’t necessarily mean you should jump in without exhausting other possibilities.

You see, the cost of a 90% mortgage to first-time buyers compares quite poorly to those with a deposit of 15% or more; so much so that it could actually be beneficial to take out a separate loan to cover the difference.

Currently a first-time buyer with a 10% deposit can access a two-year fixed mortgage at a rate of 1.79%. Whereas having a 15% deposit in place would lower the rate on the same product to just 1.27% (meaning there’s 29% less interest to pay!).

If you’re reading this thinking a 0.5% difference in interest rates is negligible and all the mortgage rates seem very low, you’re right! But it can still make a real difference in the long-term.

Let’s say you’re thinking of buying a £125,000 house with a 10% deposit. On a repayment basis, you can expect to pay £465 each month towards the mortgage. But by raising your deposit to 15% those repayments would drop to £413 per month OR if you paid the same £465 a month as you were going to, the mortgage would be paid off three years quicker!

You may think you have little choice; and with the average property in Falkirk selling for £148,909, even a 10% deposit will require £14,890! But if you consider that by borrowing the additional £7,445 to step up to a 15% deposit could save you £62 per month in this scenario, you could actually afford to borrow this sum at 10% (interest only) to be no worse off. 

So even though the interest rates on a personal loan might be higher than a mortgage, the shorter length of the loan means you’ll pay it off quicker. This will boost the level of equity in your home, which will help when re-mortgaging in the future and could save you money in the long-term. However, and it is a big however, certain mortgage lenders take a dim view about this sort of thing.

I’m not saying you should borrow more to stretch yourself and this certainly doesn’t constitute financial advice (you should consider contacting the registered professionals for that). But, I would urge you to ensure you’re accessing money as cheaply as possible to future-proof yourself and keep more money in your own pockets rather than in the banks coffers!

And, of course, there is another alternative although I appreciate that this is an unpopular thing to say .... give up some of lives ‘less essential’ ‘essentials’ and save the greater deposit.

www.thekeyplace.co.uk

#falkirk #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #firsttimebuyers #90%mortgages #95%mortgages