To buy or sell in the Falkirk property market? That is the question

One of my landlords from Larbert rang me last week, after he had spoken to a friend of his. They were discussing the Falkirk property market and both could not make their mind up if it was time to either sell or buy property. If you read the newspapers and the landlord forums on the internet, there is a good slice of doom and gloom, especially with Brexit, the general uncertainty in the world economic situation, changes in the taxation towards landlords, the increasing legislation affecting the sector etc. 

I would admit, there are certain landlords in Falkirk who have over exposed themselves in the last few years with high percentage loan to value mortgages. Those mortgages, with their current (yet artificially) low interest rates, will start to suffer, as their modest monthly positive cash flow/profit (ie income (rent) less costs (mortgage, fees, tax)) will become negative when the tax and mortgage rates rise.

It appears to me these landlords seem to have treated the Falkirk Buy to Let market as a sure bet and have not approached this as a business and, as a result, they will suffer as they thought "Buy a house - rent it out so it covers the mortgage and make a few quid on top".  These are the people who will be thinking twice. I see opportunity everywhere and won't be stopping, I am here to stay. It’s going to be an exciting year.

Gone are the days when you could buy any old house in Falkirk and it would make money.  Yes, in the past, anything in Falkirk that had four walls and a roof would make you money because since WW2, property prices doubled every seven years years… it was like printing money – but not anymore.

True, since January 1999, the average price paid for a Falkirk terraced house has risen from £30,639 to today’s current average of £109,278 in the town, an impressive rise of 256.7% and semi-detached houses have risen in the same time frame, from £36,892 to £146,859, an even better rise of 298.1%. 

However, look back to 2009, and in that year, the average terraced house was selling for £81,760 meaning our Falkirk landlord would have seen a 33.7% rise and, interestingly, the semi-detached house owner would also have seen an increase of 33.7% as they were selling for on average £146,859 .... not bad until you consider inflation.

Since 2009, inflation, ie the cost of living, has increased by 31%. That means to retain its value, a Falkirk semi-detached house bought for £110,655 in 2009 would need to be worth £144,958 today to counter the impact of inflation. Therefore, our average semi-detached house landlord has only seen a marginal increase of 2.7% (ie 33.7% less 31% inflation) over these 10 years ie 0.27% per annum.

The reality is that in the period since around 2009 we haven’t seen anything like the average capital growth in property we have seen in the past largely as a result of the ongoing effects of the economic crash in 2009 and it’s not predicted to grow at the rates it has previously done either. So it is high time anyone considering investing in property stopped believing the hype and did some serious research using independent investment expertise.  You can still make money by buying the right Falkirk property at the right price and finding the right tenant. However, remember, investing in Falkirk property is not only about capital growth, but also about the yield (the return from the rent). It’s also about having a balanced property portfolio that will match what you want from your investment – and what is a ‘balanced property portfolio’?

If you would like to talk to me about your balanced property portfolio, please call me on 01324 469840, email me at robert@thekeyplace.co.uk or pop into the office at 6 Vicasr Street, Falkirk for a chat – the coffee is always on.

www.thekeyplace.co.uk

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

Today’s Confession, well, where do I even start?

Latest from The Key Place’s ‘Confessions of a ..... Letting Agent’ series which takes a behind the scenes look at the operation of a busy lettings business.

We have a property on our books which we have managed for a long time.  The tenant is a 50 year old man who lives with his mother, and the lease is in his name.  The tenant has a sister who is not on the lease but who has been authorised by the tenant to deal with all property related matters on his behalf.  And so the sister, let’s call her Susan, is who The Key Place has to deal with.

Now I suspect Susan is the older sister.  She works for a public sector body and has the talking style of a 6 page letter without punctuation.  She clearly has too much time on her hands given her level of involvement in the property, and she has read up on every single possible legality with regards to renting in Scotland, England, Ireland, Wales and beyond.  She claims to record every call we have with her.

We wanted to inspect the property but were refused access.  The reason given was that the tenant would be too stressed by the inspection, plus he has allergies which prevents anyone who has gone within an inch of a bar of soap from entering the property.  We gave the required notice as per the lease to gain access to the property to carry out an inspection.  Myself and a manager were on our way to the property when we received a phone call from Susansaying that under no circumstances were we to come to the property and if we did, the police would be called.  The reason given was that we had not sent written confirmation that we accepted their conditions of entry – we hadn’t had this request so couldn’t give written confirmation.  We abandoned the inspection as we knew we could not inspect without approval or a court order.

We refused to give up!  Eventually it was agreed that our Chief Exec could inspect the property as long as he didn’t shower with soap that morning and used no deodorant or aftershave.  He had to agree that the tenant would smell him at the door before he was allowed access (yes really!).  And so the inspection took place.  The property was found to be OK, not in the best condition but not bad.  There were some things needing seen to, however the family were not keen (you can imagine) on work being done in the house, and so we had to negotiate what could be actioned, balancing landlord obligations under repairing standards verses smaller jobs that could be left. 

The main repairs needing attention were a damaged back door, some work to the kitchen and a cracked front door step.  Taking the front step as an example of how difficult this all became - the tenant eventually agreed the step could be fixed but stated the repair could take no more than 1 hour.  Apart from this 1 hour they wanted continuous access to their house.  When we explained that this was impossible and that the tenants were being unreasonable Susan said she would go the police, MP’s, the newspapers.  As we always do when we are threatened by people, we acknowledged that it was Susan’s right to go to the police, MP’s, the newspapers etc. but we suggested that speaking to a lawyer in the first instance might be a better idea from herpoint of view to ensure that her position was sensible.  This surprised Susan who has assumed that her threats of ‘taking things further` would scare us, but, as we were doing things by the book, we had nothing to be concerned about.

And so where are we today?  Well the step has been mended after incredible negotiation, however some of the other repairs have not been dealt with due to tenant refusal.  The property does at least meet the repairing standard.  We have not been allowed to re-inspect yet but we hope to shortly.  The landlord has been kept fully informed at all points and knows exactly what is going on at his property.  We do not believe the tenants are going to intentionally damage the property and they pay their rent every month without fail.  The owner would need to spend money on his property if the tenants were to leave, and so for him, he would rather keep the paying tenants, even although we can’t carry out inspections as regularly as we would like.

This is an on-going difficult situation as we still have a job to do.  We certainly feel that we have earned our management fee on this one!

www.thekeyplace.co.uk

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #privaterentedsector #prs

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Changes to smoke detection rules for Falkirk landlords

It has been a few years since it has been law to have smoke detection equipment in private rented properties. 

The law currently is that you need a smoke alarm in each living area (in practice, living rooms) and circulation areas (in practice, halls and landings) as well as heat alarms in kitchens.  These need to be hard-wired and inter-connected (meaning that is one goes off then all go off).

Most landlords can get their heard around the benefit of having this safety detection equipment in their properties but there is genuine gripes about the damage or unsightliness of the hard-wiring particularly in older buildings with, for example, ornate cornicing.  This is particularly the case given the significant advances in battery technology since the law was introduced.

The Scottish Government has listened to these concerns and from 1 March 2019 landlords will be permitted to install inter-linked long life sealed lithium battery alarms instead of mains powered ones.
As an aside, from 1 February 2021 all properties in Scotland must meet the same standard of smoke/heat and CO alarm provision as the Private Rented Sector, regardless of tenure.  This means that there will be a level playing field in this regard for private, social and Council landlords ….. which is something that private landlord has been asking for for a long time now.

www.thekeyplace.co.uk

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge #smokedetection

Top Tips – Protecting Your Falkirk Property From The Upcoming 2019 Cold Snap

Winter is well and truly with us, the daily chore of de-icing your car has started and, if you listen to the weather forecasts, we are in for the Beast from the East Mark 2 shortly.  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

#falkirk #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #privaterentedsector #prs #firsttimebuyers #lettingagents #beastfromtheeast #winter #badweather #storms #emergencies #propertyemergencies

Falkirk landlords – help from HMRC with your tax return

Happy, happy New Year to you.

I know, I know, I know that I am being brave mentioning the words ‘HMRC’ and ‘tax return’ on the first day back after the festive break but I am trying to be helpful ….. honest!

Landlords are required to submit tax returns to HMRC annually declaring ALL their income and all the tax they have paid on this income already eg tax deducted at source. 

Tax returns for the 2017/18 tax year to 5 April 2018 needs to be submitted and, any tax arsing thereon, paid by 31 January 2019 at the latest.

To be helpful to landlords ….. as well as all other tax payers ….. HMRC are running a series of webinars aimed at helping different groups from amongst the 5.5 million individuals expected to complete a self-assessment form in the next few weeks.

One of these webinars is just for landlords and considers in detail the completing of the property section of the online tax returns.

You can see a link to register for the webinars by clicking here.

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

www.thekeyplace.co.uk

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #hmrc #taxreturns