Demand still on the increase but price rise slows

The latest Halifax House Price Index has shown that the price increases seen in recent times are beginning to slow.

In the 3 months up to September prices showed an 8.6% increase compared to the same period last year and are showing and are showing a 9.9% increase in the 3 months to August.

However, prices fell a little between August and September with the average house price now standing at £202,859.

Martin Ellis, Halifax housing economist, saw no reason for pessimism though as demand is on the increase and he expects prices to carry on increasing.  He recently stated “Housing demand has been strengthening recently, underpinned by economic growth, rising real earnings and very low mortgage rates.

“Increasing demand is combining with very low growth. There is little reason to expect any fundamental shift in the key market drivers over the coming months.”


Separate research showed that detached houses and bungalows had shown the slowest growth in value over the past decade at 21% and 28% respectively while flats have shown the greatest increase at an impressive 60%.

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.

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!

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.

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.

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

'Winterise' your property to avoid unnecessary damage

Not preparing your house for the winter months can cause a lot of damage- to you home and your wallet! 

I’m sitting here writing this and the rain is lashing down – winter is definitely on its way.  Although it has been mild recently, there are a few tasks that should be undertaken now to hopefully avoid any nasty surprises further into the winter:

1.        Check guttering – now that most of the leaves are off the trees it’s a good time to check and clear gutters.  In our experience a lot of damp issues are often caused by blocked and overflowing gutters and down pipes.
2.        Check roof tiles and chimneys – you can take a look in the loft initially as this will show any possible damp spots.  If there are issues, get the roof checked for cracked and slipped tiles.  Another favourite area for letting in damp is chimneys.  Do they need capping?  Is the flashing in good order?  All these tasks can be checked by a good roofer or builder.
3.        Ensure all pipes are adequately lagged– this especially applies to external pipework, even a short run to an outside tap.
4.        Switch off the supply to outside taps and drain them down to avoid pipes freezing and bursting.

Always remember though that buildings need to breath, so ventilation is still very important to avoid a build-up of condensation.

Land Registry reports a slower market

The September report from the Land Registry showed that the rising of house prices is slowing.  The report for September, released this week, shows that the average price of a house in England and Wales is now £177,299.  This is down by 0.2% on the previous month although up by 7.2% on the same time last year.

The figures for Hampshire are slightly better with the average house price higher at £228,020 with the monthly difference standing at 0.8% and the yearly figure showing an increase of 7.7% from the same point last year.

A positive note from the report showed that repossessions were down compared to the same period last year.  In the months of April to July 2014 repossessions averaged 890 per month across the country compared to 1324 in the same period last year.  On the whole repossessions would appear to be on a downward trend.

The importance of thorough referencing

We cannot stress enough the importance of through referencing. A tenant in St Just, Cornwall has recently been jailed for 2 years for fraud as, on 3 separate occasions, she took up tenancies having supplied false references and payslips.  Once moved in, she failed to pay the rent and then refused to leave.

This highlights the importance of thorough referencing.  A good reference includes a credit type check and an employment reference direct with the employer checking that the contract is for longer than the initial tenancy and that the salary paid is as reported.  The final element is the landlord reference, which again must come direct from the current landlord or agent if the property is fully managed.

If you need any advice regarding referencing, please feel free to pop into our office for a chat.

Bargains on Burghclere Down

A landlord became ever more curious about the Burghclere Down Buy to Let market after reading our newsletters about various areas of Andover, so decided to pop in and ask our advice.

I found that a fairly typical four bedroom semi-detached townhouse with a garage on Hibiscus Crescent was bought for £187,000 in 2012. The same property sold for £225,000 in June this year, which is a rise of 20%. Prices in the town during this same time period rose by an average of 10.8%, so it should have sold for £207,200 if it had followed the towns average house price trend.

A three bedroom detached house again on Hibiscus Crescent sold for £226,950 in the summer of 2006, and was sold this summer for £249.950. This is again a decent rise of 10%, but average prices in this time have risen by a much more remarkable 26% in the area.

With rents for detached houses on the estate could achieve between £900 and 1100 per month, yields are around 5%. I think in terms of a rental investment, there are better properties, such as smaller two or three bedroom semis, or even ex local authority properties, but for owner occupation there are some bargains.

Our passion lies firmly within the residential property market, so please feel free to talk to us at any point about our diverse area.

House of multiple occupation: Good money - if you do it right....

Owning and letting an HMO (House of multiple occupation) can lead to good yields on an investment for a Landlord.  However, if you get it wrong the fines can by huge.

Two Landlords (not in the Andover area) were recently both fined £30,000 for breaches of the rules covering HMO’s in their area.  In one instant a Landlord was found guilty of 46 offences relating to 4 different properties by the Magistrates Court in Cambridge for allowing tenants to live in dangerous conditions, namely fire safety issues, dangerous electrics and poor security.  He was also charged £1250 in costs.

In a separate case another Landlord was again fined £30,000 for leaving a property with 5 tenants in it with no heating or hot water for 4 weeks during the winter, as well as a leaking toilet.  The fine was high as he was charged £15,000 for failing to licence the house as an HMO, £5,000 for failing to fix the boiler, £5,000 for failing to fix a soil pipe and a further £3,000 for failing to respond to an investigator.  On top of this he was also charged £2,160 in costs.

So the rewards for owning an HMO can be high but beware.  Always ensure you fully comply with the Management of Houses in Multiple Occupation (England) Regulations 2006 and talk to your local authority as there are regional variations to deal with as well.  If in doubt – ask your local authority or a good agent!

Buy to Let opportunity with ready made tenant

This newly listed property is a great buy to let prospect as the current owners would like to rent it from the new owner if possible!

The price of this property is £164,950 and you could expect to achieve around £800pcm giving a yield of around 5.8%.  Add to this the added benefit that the new owner will collect rent from day one!

Click here for more information 

Andover property market outperforms other towns in the area

A landlord with a small property portfolio came into our office on London Street last week. He lives in a village between Ludgershall and Andover, and has properties in both towns. He wanted to ask our opinion on where he should buy his next Buy to Let property.

Looking at Andover, the average property price can be an impressive £282,400 and the average rent is equally high at £1045 per month. In Ludgershall, an average property is £195,000 and the average rent is only £608 per month. The annual yield in Andover could be around 4.5% per year, compared to Ludgershall where he could achieve an annual yield of nearer 3.7%.

It made me consider two other towns close by, Whitchurch and Pewsey. In Whitchurch, I found property values are much higher than in Andover, with an average property price of £359,600. They have an average rent of £1372 per month, which could achieve a yield of 4.6%. The average price of a property in Pewsey is £361,150, with rents of around £815 per month. This could achieve a yield of 2.7% per year.

It goes to show our town of Andover can be a good area for an investment property as the purchase price can be reasonable, but it is a decision that shouldn't be taken lightly. These are only averages, so the yields for some small to medium sized properties in popular areas of Andover can achieve yields of 4.5% to 6.5% per year.

If you want to know our thoughts on property in Andover, pop into our office.

Is Spanish Town Andover's sleeping giant?

A landlord recently missed his chance to buy a three bed semi-detached property on Madrid Road, near the shops and Corunna Main, as it sold in a matter of days. He asked me if there something special about the area, so I did a little research.

I have included Corunna Main, Colenzo Drive, Valencia Way and Seville Crescent in my findings for the Spanish Town area. Corunna Main is the main road going through the development with smaller roads coming off of it.  The development was built in the 1960’s, mainly to encourage workers to move to Andover as the government of the time were making a conscious effort to move businesses out of London to areas such as Andover. 

A number of three bedroom semi detached houses have sold for around £200,000 in the last two years. These properties tend to generally be offered in good order so will require minimum time and effort to get ready for letting and this could achieve rents of around £900 per month, which would provide a reasonable annual yield of around 5.4%.

Well presented three bedroom semi-detached properties in the Spanish Town area which were selling for a maximum of £190,000 two years ago, are now selling for £230,000 or even £240,000. The older houses offer the tenant and buyer larger rooms, which can be more appealing.

With achievable rents of between £875 and £900 per calendar month and, as the houses have seen great increases in value and are popular with buyers and tenants, this makes them very attractive to both home owners and investors. So, if you would like to talk to us about property in our area please feel free to email or come and see us in our office.

Ex council properties can make great investments!

If you are looking for a reasonable return on your investment don’t discount ex local authority properties.  They make good rentals as they are generally well built and offer tenants lots of storage which is always a plus.  I recently found a property advertised by Your Move in Andover on Galahad Close for the asking price of £150,000.  The average rental in that area is £775pcm, depending on the condition.  Therefore even if you were to buy this property at the advertised price this would still represent a very respectable 6.2% yield on your investment.

Likewise ex local authority flats offer good value for money and again tend to offer good storage and occasionally garages.  The management fees are very often lower on these flats but beware as the management company do not hold much of a sinking fund as with other block management companies.  Therefore when additional work is required such as repairs to roofs, decorating communal areas etc they will send you a bill!  Click here for a good example of an ex local authority flat which again offers a yield of around 6.2% even if buying at full asking price as a monthly rental value of £650 should be achievable:

If you are considering investing in a rental property and want to know if what you are considering is a good purchase, pop in to our office and we will be glad to advise you.

Herons Rise Vs Berry Way

A landlord came into our office to ask whether Berry Way, Burghclere Down or Herons Rise would be a better place to invest in. He was considering purchasing a 2 bedroom mid terraced house, after reading a recent newsletter we had sent him.

The properties on Herons Rise were predominately built in the 1970's. They were built by a local builder, predominately for the first time buyer market.  This has remained the case but they have also become popular with buy to let investors. The Burghclere Down development was built in the early 2000’s. The properties here are more aesthetically attractive as is often the case with properties built after the 1970’s, and are of a similar size to those on Herons Rise. The average value of a mid terraced house on Herons Rise is £149,000 whilst on Berry Way a mid terraced house has an average value of £180,000

On Herons Rise, a two bedroomed mid terraced house can achieve rents of around £725 per month, with a three bedroomed mid terraced house achieving around £800 per month. Looking at the rents for Berry Way, a two bedroomed mid terraced house can potentially achieve £775 per month, with a three bedroomed semi-detached house achieving around £875 per month.  Both have similar yields of around 5.8% to 5.2% per year, therefore making both areas sensible propositions.

If you would like any advice when choosing properties, you may come and see us at our office on London Street.

Hello!

Hello to you all! This post marks the beginning of the Andover Property blog. I don't know about you, but we're very excited about it!

And who are we? We are Carole and Anna Bazzoni, a mother/ daughter estate and letting agent team who have both lived in Andover our whole lives. We have been working in the property industry for a combined total of 18 years now- 19 if you include Anna answering the phone and doing the filing on a Saturday. All these years have been a steep learning curve for us and this blog is to try and make everyone else's dealings with property that much easier.

We hope to post an article at least once a week about anything; from the ideal rental, to how to make your property more sale-able, and possibly even the odd post about the day to day life as an Andover lettings and estate agent.

We would love to hear your feedback and suggestion about this blog by either the comments section below, or you can email Anna direct at anna.bazzoni@martinco.com .