Picket Twenty rental potential

The new development at Picket Twenty has been under development for a few years now and is growing steadily.  There are a variety of properties available from flats to 5 bedroom houses.  A smart community centre has been provided by Test Valley Borough Council and is run by a group of local volunteers for local events and can be hired for private use.  It’s a great facility, all of which helps to build a real community spirit for the area.  Picket Twenty also has a church backed primary school call Pilgrims Cross.

As with most new build properties they take a very small amount of time to let with close proximity to the A303 only adding to the attraction of the area.  A three bedroom townhouse can be bought for around £270,000 and achieve a rental income of around £1200pcm giving a yield of around 5.3% which is quite respectable for houses in the Andover area.

Two bedroom coach houses can be purchased for around £160,000 and will generally let for around the £850pcm mark achieving an even better yield of around 6.3% per year.

This development is proving more and more popular with tenants giving Landlord the peace of mind that void periods are likely to be minimal.

If you are considering purchase a buy-to-let property but just want to double check before taking the plunge feel free to pop in to our Bridge Street offices and we will be happy to advise you. For more information on Picket Twenty head over to Test Valley Borough Council's information page on the site. 

How to be the perfect tenant

It’s a sad fact that tenant evictions have steadily risen over the last few years.  This is something that not only the tenant does not want, both the agent and the Landlord would prefer to avoid it too so here are a few tips in how to avoid it.

Be aware of your own and your Landlords’ rights under a tenancy agreement – before you sign a tenancy agreement check what type it is, how long it is for, is there a break clause etc.  If you have any questions, ask the agent or Landlord, be clear on what you are signing before you sign it.  This is a legal document and must be stuck to or you will be in breach which could jeopardise your tenancy.

Look after the property – Landlords can evict tenants if damage has been caused.  Accidents happen and everyone accepts this but try to put things right if an accident occurs.  We would always recommend that tenants take out insurance.  That way any damage caused could be covered and put right by the insurance thereby keeping you in the Landlords good books!

Avoid falling into arrears – This is the most common cause of evictions.  Before you commit to taking a property do your sums taking into allowance things like holidays.  If you do find you are struggling, talk to your Landlord or Agent.  Most good agents and Landlords will try and help if you talk to them.  If you ignore them you will leave them little option but eviction.

Don’t upset the neighbours! – The second most common cause of eviction is anti social behaviour.  If you think your neighbour may complain either justifiably or not, again, let your Landlord or Agent know.  Better still, try to avoid confrontation of any sort!

These points are all common sense but as with all relationships communication is key!  Talk to your agent or Landlord about any issues and they will be far more forthcoming than if you bury your head in the sand.

Preparing your home for sale- Part 2

In our last blog we gave you a few hints and tips on how to make your property look ideal to viewers. Keep reading for some more great tips. 

Condition

Don’t expect others to see past the ‘foibles’ that you have lived with; the hole in the ceiling; the scuffed paint work on the door frames. Ask your friends to be honest about what they see that you no longer notice. Fix the problems, particularly the easy ones such as repainting.  Don’t mask serious problems. If the property has damp and it isn’t something you are willing to fix, get quotes for the work and leave them with your agent. Trying to disguise an issue will eventually come back to haunt you, when a survey brings it to light it will provide an opportunity to negotiate down the price.  Clean windows let in more light, as does removing any netting or blinds that you normally have up. Let viewers see your rooms with all the natural light you can get. It will always look better and the rooms will look bigger.  In the kitchen consider replacing the unit doors and handles if they are shabby but the unit carcasses are in good condition. They don’t need to be expensive, just look good.

“Show home” living

No nasty smells.

Always make sure the bin is empty. If you have pets move them outside for a viewing if possible and make sure their food & water trays are clean and washed with no litter trays in the house. You may not be able to smell anything, but non-pet owners will notice the odour.

Keep it tidy.

At some point in the sales process you will sigh and say “….but I have to live here”. True, but you’d rather be living somewhere else so it’s worth making the effort to keep the property permanently on show until you have a sale. A buyer might want to come round at short notice so always have the house ready to be viewed.

Details matter.

In the bathroom make sure the towels are neatly folded on the radiator, the shower screen is streak-free, the bath, hand basin and toilet are sparkling and a new bar of soap looks better than one which is melting away. If the bathroom is tiled, ensure both tiles and grout are clean.

Kitchen work tops

These benefit greatly from under-unit lighting - so if you have them, turn them on. Ensure all light bulbs work – especially in cupboards and under the stairs where prospective buyers might want to look. Open the windows in summer. In winter ensure the house is warm.

Potted plants or fresh flowers

These brighten up the room, but make sure their smell is not overpowering. The smell of furniture polish gives the impression the home is well cared for.

Leave a light on

This can create a relaxed atmosphere and brightens the room. Ask viewers to take off their shoes when looking around – it makes people realise that you care about your home, and gives the impression the property is well looked after. 

Outside

Cut back overgrown bushes and trees. Fill in old ponds or sand pits. These measures can add to the size of an existing garden and allow a better view. Look out of your windows front and back. What can you see? If it’s not pretty in the distance then create something nice to look at close by. Use brightly coloured plants in pots or tubs if you don’t have a garden to catch the eye.  Remove old sheds or greenhouses. Getting rid of these not only creates space, but also lets in light.  Ensure that the garden is tidy; the lawn should be free of leaves, paths swept, weeds removed, loose paving fixed and clean the garden furniture. Hanging baskets, planted tubs and window boxes make a house look cheerful and create a fresh smell. Even in winter a floral display makes a property look cared-for and desirable.  Look at the front of the property -perhaps the front door or garage door needs re-painting or a new one fitted? Make sure external paintwork, guttering and doors all look to be in good order.

This may all sound like a lot of effort but, believe me, it will pay dividends and should help to secure a buyer more quickly, thereby cutting down on the amount of viewings and giving you the chance to move on to the next one sooner!

Preparing your home for sale- Part 1

Thinking of selling?  Here are a few hints and tips.

Since modern buyers can look up how much you paid for your property you will need to convince them that you have added value through improvements, or that prices generally have gone up. Don’t imagine that simply because you have done lots of work you will automatically get it back as added value. There is a “value ceiling” set by neighbourhood average property values and no matter how much you have spent improving your property it may not exceed this ceiling.  Work which adds space such as a loft conversion will almost certainly add value, but cosmetic work such as a new bathroom may not add value although it may make your property easier to sell.  An en-suite bathroom can add 5% to the property’s value but don’t do it at the expense of a double bedroom as this will devalue your property. The number and size of bedrooms is still the preferred indicator of property size and therefore of value for most people.

Maximise the space you have on show. No matter how big or small your property is it’s the available space that sells it.

You can maximise that feeling of space by showing more of it! Think about buyers being able to see under furniture, leaving space under beds, sofas on legs. And don’t use the space to store things – buyers will see it and think there is not enough space for their own stuff.  Store excess furniture, ornaments and general ‘stuff’ out of sight, preferably in a storage warehouse. The investment will pay off; buyers will see space and will not notice the odd missing chair or side table. You can make do with what is left whilst you are selling.  Don’t use the garage to store excess. Buyers will want to see the garage and won’t be fooled if they find it’s full.  Using the loft for storage is what people expect – but make sure that it is well organised, as a buyer wants to see that it is useful space which can be easily accessed.  Floors need to be clean and tidy to increase the sense of space. If you have a carpet, get it cleaned. If the flooring is badly scuffed or marked think about changing it.  All surfaces, shelves and tops of cupboards to be kept clear. If you can’t make room for items out of sight then think about putting more into storage. No-one will notice if the toaster is missing from the worktop but they will remember there was not a lot of kitchen worktop space.

Move furniture around so that when you enter the room you see more floor space. 

There is no harm in leaving out your Gucci bag so the buyer see’s the ‘sort of person’ that lives in a house like this one. If you have a home office make sure it is spotless, no bits of paper lying about and no dust on a printer that is rarely used.

Remove as much of the clutter as you can – don’t imagine that because you are selling a family home the next buyer wants to see a rooms full of children’s toys. This includes the paintings and drawings that are on display around your home, they appeal to you but may be getting in the way of a buyer seeing how they might organise and use the space.

Depersonalise

Neutralise strong colours and decor. Orange kitchen walls may look lovely to you, but will put off more people than they attract. Magnolia might be dull, but it won’t offend anyone. The aim is to appeal to as many people as possible.  Store away quirky, personal items as they might be distracting. If you are a collector put away the collection. It is personal to you and not relevant to the buyer. Restrict the number of photos on display. A few will help to give a ‘lived’ in friendly feel, but too many will clutter up the rooms.

Further clarification on smoke and carbon monoxide alarms

Following on from our recent article there has now been a further update concerning alarms in properties.  This has been necessary as, unfortunately, this whole thing has been dealt with pretty badly so clarification was needed.

Basically the Landlord will have an obligation to fit an alarm on each storey of a rental property and a carbon monoxide alarm in any room which contains a solid fuel appliance. However, there has been no definition of what constitutes an alarm in terms of minimum requirements under British Standards so it seems any old thing will do.

Where a local authority believes a Landlord is not compliant then it is obliged to serve a remedial notice on him within 21 days.  The Landlord then has 28 days to make representation to the Local Authority as well as remedy the situation. If the Local Authority believes that the Landlord has not remedied the situation then they are obliged to do so within 28 days.  Perversely the Local Authority has no power to recover the costs of this work

If this regulation changes again we will of course let you know.

Monopoly- The Andover Edition! How will you play?

A couple of local landlords and I had a discussion about the property market in Andover, when the subject of risk against returns arose.

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 higher 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 areas of Andover which are perceived as being more desirable, such as Burghclere Down and Saxon Fields (click here to read about some great bargains on Burghclere Down), where you may be able to achieve an annual yield of around 5-6%. Following my article afew weeks ago, 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 6.5-7%. This level of risk can be typically taken with ex local authority 3 bed houses around Andover such as King Arthurs Way. If you are after annual yields of 8% and over, you could take more of a risk with houses of multiple occupancy but beware of this strategy as there are rules and regulations to be followed with those and inevitably they attract more maintenance costs.

If you would like any advice on choosing properties, come and see us at our office or email us.

Should I consider a two bedroom flat as an investment?

I was talking to one of my landlords recently when the subject of flats came up and whether they would make a good investment. Flats are not always the first choice for investors but they rent very well and generally offer good yields. There is a strong argument that buying a flat these days is not an issue as they are sensibly priced, the error people made in the past was buying them at the start of this century for more than the price of a house.

If you are a landlord with a limited budget, you can still find a decent property to let in Andover. Typically, a two bedroomed modern apartment can be bought for around £130,000 in the town centre of Andover in areas such as Heather Drive or Forge Field – the average rent for a property here is likely to be around £650 per month.

Always remember though, when buying a 2 bedroom flat, try to get two double bedrooms as this will inevitably make the property more popular and opens the market to sharers which is becoming a larger part of the rental market in this area.

Also remember with flats to factor into your figures management fees, ground rent etc.  These will usually be lower on ex local authority flats but they do not hold much of a sinking fund so you may have to stump up further funds as required for major works.

So, should you consider a two bedroom flat as a good investment? Yes. Yes you should. 

The Rise of the Rental Sector- Part 1

Two recently published reports have highlighted the recent rise in rental values whilst supply has dropped.

Sequence reported that new tenancies in the UK increased by 16% year on year.  They also report that demand is up by 11% annually but supply is down by 13% for the same period.  The average monthly rent, excluding London now stands at £702, up by 5% on last year.

In a separate report, Homelet, a referencing company, reported that the average rent on newly signed tenancies were up by 2.5% on those signed in December.

The situation in our area is very much reflected by these figures as we have noticed a definite increase in rental values whilst supply, especially of new properties to the market, has dropped whist there are still good quality tenants looking and frustrated by the lack of stock.

Smoke and carbon monoxide alarms. Will your rental comply?

The Communities Minister Penny Mordaunt announced recently at the Local Government Association annual fire conference that, following years of campaigning by various bodies, it would become compulsory for Landlords to install smoke and carbon monoxide alarms at all rental properties.

It will be the Landlords or Agents responsibility to ensure that these alarms are working on moving in but will be the tenants’ responsibility to test them throughout the tenancy and report any failures.

The British Property Federation, who have been campaigning for this law to be brought in, believe that this will force those few remaining Landlords who do not have these fitted to now get this work done.  They believe that this will save 36 lives a year.

There is further clarification awaited regarding this law but it is believed that Landlords have until October 2015 to ensure their properties comply.

For more information head over to the government website

Even more to look our for on property inspections!

An important point has been raised in the recent case of Edwards v Kumarasamy heard at the Court of Appeal which may have huge implications for both Landlords and agents who carry out inspections. 

The case centered on a tenant who injured his knee when tripping on a path outside the block of flats where he rented a second floor flat.  The Landlord did not own the block or the path but the tenant bought a disrepair claim under Section 111 of the Landlord and Tenant Act 1985 and was successful in his claim.

This has major implications for both Landlords and agents alike as both can now be held responsible for not dealing with repair issues to areas serving their properties regardless of ownership, should a tenant decide to pursue a claim.

Therefore agents and Landlords who carry out inspections should now also inspect areas over which they have rights.  There is no requirement for tenants to alert Landlords and Agents to any such problems but the Landlord is still expected to get any issues resolved when identified.

Personally I think this is going to be problematic as, most issues will need to be reported to the local authority when dealing with footpaths etc, or block management companies.  I would hope that a little bit of leeway will be granted to both Landlords and Agents that, if they have reported an issue to one of these bodies, from there on they are in that parties hands and cannot drive any repairs.  Time will tell!

Town house or traditional. Which makes the best investment?

A landlord came to our office for advice, just after Christmas, asking whether he should buy a three bedroom semi-detached house in the Augusta Park development.

We did some research and found a nice three bedroom semi-detached house on Barley Road for £225,000. We worked out the possible rent for this as £925 per month, which could achieve an annual yield of 4.9%. The properties in this area are quite popular with families and tend to have a great demand with investors and tenants alike, making it a relatively good investment.

A three bedroomed semi-detached town house on Herdwick Road, has a value of £240,000. The possible rent for this property is slightly higher, at £1000 per month, as it is slightly larger than the one on Barley Road. We found that although the rent can be higher, the annual yield was similar at 5%.

This shows that while a property can achieve a higher rents, it does not necessarily mean higher returns.

If you would like anymore advice on buying a rental property comment below or take a look at the rest of this blog.

Does your tenant have the 'right to rent'?

As promised last year we now have a little more information for you regarding the up and coming new regulations regarding referencing.

A trial is currently being carried out in the West Midlands on behalf of the Home Office and if successful will be rolled out across the country during 2015.

Basically it requires Landlord and Letting Agents to carry out more in depth checks on potential tenants from outside of the EU.  Passport information is to be input into a government database which will flag up any issues which the authorities will then take charge of.  Obviously ID must also be taken and kept on file.

There are mixed feelings surrounding this as arguably the Landlord and Agent are taking on the role of immigration officers.  However, if the Landlord or Agent does not comply and allows a tenant to move in when they shouldn't have done there is a maximum fine of £3000.

We will keep an eye on things and report when this is rolled out across our area. Take a look at our blog for more information on referencing.

Ludgershall investment opportunity

Ludgershall often offers good buy-to-let opportunities and here is one I found today.

This 3 bedroom flat should achieve around £700pcm on the rental market, giving a very respectable 6.2% yield.  Ludgershall is popular with tenants as it tends to be a little cheaper than Andover but still within easy reach of both Andover and Tidworth for work opportunities.

As with all flats though, check on the length of the lease before committing.  Bear in mind you will want to sell it on at some point and if the lease is short, that limits the number of buyers this will attract.

Comment below if you have any questions.

Andover Property - Do you know the Facts and Figures?

Here at Martin & Co, we can guide you to the right places to identify property values and yields in Andover and other useful property related information so you can make sure you get all the information you need about your future investments. Here are just a few property facts about our town of Andover....

There are 550 streets in the SP10 postcode with 17,964 households, and just a fairly small portion of all those properties (2,452 to be precise) have changed hands in the last 5 years.  Obviously this number is increasing all the time with the new build estates.

Compared to the national average - Andover has a slightly higher percentage of detached houses (2%), 3% less semi detached houses and 4% more terraced houses. This is a good indicator that Andover is good place to buy property in. If you would like more useful facts and figures or advice on a suitable buy to let property pop in and see us at our offices and have a chat.

Deposit disputes- an overview

The Deposit Protection Service recently reported that a large number of both Landlords and Tenants fail to submit evidence on time when adjudication has been agreed to during a deposit dispute.  18% of Landlords and 23% of Tenants miss the deadlines clearly set out at the start of the process, or even worse, fail to submit any evidence at all.  If deadlines are missed the DPS will automatically find in the Tenants favour.  This may seem a little unfair but it needs to be remembered that the deposit is the Tenants money and the Landlord needs to prove why they have a claim on it which, in turn, the Tenant need to argue why they don’t!

The DPS clearly set out the process at the very start of the adjudication but these dates are set in stone.  Dealing with adjudication can be time consuming if done properly but it is worth doing thoroughly as you really only get one shot at this. 

Evidence is key – both photographic and written.  It is worth spending time putting together all the evidence that the DPS request and any additional, relevant information.  Try to make the adjudicators job easier for them by highlighting appropriate paragraphs, numbering photographs referred to in documentation and number and list all evidence provided.  Adjudicators look through several of these every day so you want to make sure they don’t miss anything pertinent to the case. 

If evidence is received it will be sent to the other side for their comments, once the adjudicator has glanced over it.  This is the last point at which you can comment or provide any further evidence.  It will then go through the full adjudication.

Remember – the adjudicators’ decision is final!  So spend time on getting the evidence right as there is no comeback!

If you want any advice on adjudication please feel free to ask.  This is something that we will cover in further blog articles.

A nice little earner!

I recently found this little gem on Rightmove:

http://www.rightmove.co.uk/property-for-sale/property-47922271.html

This would make a great little rental property.  The agent is suggesting a rental value of £775pcm but to be honest, we have several on this estate and they range anything from £750 to £850pcm, depending on the condition and specification.

I know I keep going on about ex council properties but, even on the figure of £775pcm, this property will offer you a yield of just over 6% which is about right for this area.

These properties always rent well, usually to families and most of our tenancies on this estate have all been long terms.  These properties appear to have been well built and will offer a good investment for years to come.

If you want any advice on good rental properties like this one, please pop in.

Which semi detached house should I buy in Andover?

A potential investor asked if they should buy a 3 or 2 bed semi detached property to rent out to tenants. The first question I asked them was what was are they looking for from the investment - capital growth in the property or a great yield?

Answering this question will help you figure out which properties you should buy...The average asking price of a 3 bed semi in Andover is £234,920 today compared to £202,535 for a 2 bed semi. The 3 bed semi achieves an average rental price of £940 per month compared to £780 per month for a two bed semi.

That’s a yield of 4.6% for the 2 bed against 4.8% for the 3 bed. So surely, the 3 bed semi is the better bet? Well it does offer a better rate of return, but a 2 bed semi is slightly easier to rent out (less void periods) and will be easier to sell in the future.  The main thing to remember if going for the 3 bed is always make sure that the third bedroom is of a reasonable size rather than just a box room as this can make it difficult to left. 

Pop into our office, call or comment below if you have any questions.

New to investing?

New to investing? – A few top tips

If you have made the decision that property is something you want to invest in as a buy-to-let Landlord there are a few important things you need to know before taking the plunge!

1.       Know your market.  Before you invest in a property, decide who you want to rent to.  Are you happy to rent to sharers?  Do you only want to rent to families?  If you are happy to rent to sharers then bedroom size is key.  Two sharers will want two double rooms whereas a family will take a house with two double rooms and one single but make the decision before you buy.

2.       Invest in kitchens and bathrooms.  These two rooms tend to be very important for renters.  If these rooms are a little tired look at re-tiling, putting in new worktops and changing cupboard doors if the units are sound.  Always make sure there is some sort of shower in the bathroom.  If either of these rooms need gutting and totally refitting don’t spend a fortune on it.  Don’t forget this is a business, not your home!  Put in units that are tough and durable but look good.

3.       Keep colours neutral.  To be honest, you can’t go wrong with good old magnolia.  That way it is easier to freshen up the property between tenancies.

4.       Specialist Landlord insurance.  You must take out specific Landlord insurance.  This is different from your normal buildings insurance in that it will also give you an element of liability insurance which hopefully you will never need!  Also, consider rent guarantee insurance, especially if you have a mortgage on the property.  Again, hopefully you will never need it!

5.       Use the services of a good agent!  Again, make a decision early on about whether or not you are happy to manage the property yourself or just want a tenant finding service.  Whichever it is, it’s always wise to use an agent as they will be able to reference any potential tenants very thoroughly (Find out more about referencing here).  This is likely to become even more important this year with new laws being bought in about identifying overseas tenants – more on that soon!

Keep an eye on our blog for more updates

Home ownership in Britain is falling

Eurostat, the EU’s official statistics office has recently reported that Britain now has one of the lowest rates of home ownership within the EU.  In 2013 the figure was 64.6% which is down from a figure of 70% in 2005.  Only France, Denmark, Austria, Germany and Switzerland were lower while eastern European countries had the highest rates with the top being Romania at 95.6%.

In a separate report the Department of Communities and Local Government state that between 2000 and 2012 2.5m new homes had been bought by Landlords with only 400,000 being bought by owner occupiers.

Stamp Duty Land Tax has changed!

As you are no doubt aware the Chancellor has made changes to the rate of Stamp Duty charged on a property purchase in his autumn statement.  The highlighted points are:

•          No Stamp Duty payable on properties up to £125,000
•          On ALL properties the first £125,000 will be free from Stamp Duty
•          Any amount over £125,000 up to £250,000 will incur a 2% charge
•          Charge of 5% incurred up to a sale price of £925,000
•          Charge of 10% incurred up to a sale price of £1.5 million
•          Then payable at 12% on any amount over this amount

Click here to see a useful calculation table which shows what you would have paid on the old system and what will be paid now.

The government claim that this will help 98% of home buyers but we will wait and see on that one!

Keep an eye on our blog for further information.

Click here for more information on the Autumn Statement