Thursday 28 January 2016

Stamford Landlords could be fined £93,000pa



“Who would want to move to Stamford in weather like this?” was what one landlord said to me as we shook hands outside his property the other afternoon. It was dark, windy and cold.  It had been raining most of the day and it was the last appointment of the day at 4.45pm. I will admit, as I had been out of the office all day, I was looking forward to getting home, putting the heating on, and watching 'Location, Location, Location'.  But this landlord lived in neighbouring Peterborough and this was the earliest he could do.
It turned out he had been self-managing the property himself over the last few years, but was worried with all the new legislation that had been introduced recently. He was particularly concerned about the up and coming ‘Right to Rent’ legislation, and as his tenant had handed in their notice recently, he called us for our opinion in time for the next tenancy.

For those Stamford landlords that don’t know, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the 'Right to Rent' rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub-let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.

Our landlord from Peterborough wanted to know how much of a real issue was ‘Right to Rent’ in Stamford. I was able to tell him.  The last available figures (from a couple of years ago) show that 31 people (whom were registered as 'Non-UK Born Short-term Residents') moved into private rented accommodation in the South Kesteven District Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £93,000 to the landlords of the town.
It doesn’t sound a lot when you think there are 19,701 residents in Stamford, and of those, 18,086 people (or 91.80%) were born in the UK.  But Stamford is a growing cosmopolitan town, and the country of birth of the residents in Stamford can be split down as follows:

·         UK                                                                      91.80%

·         Ireland                                                               0.61%

·         Europe                                                               3.87%

·         Africa                                                                 0.97%

·         Middle East and Asia                                      1.68%

·         Americas and Caribbean                               0.81%

·         Australia and Pacific region                          0.22% 

 
However, it must also be recognised that landlords, by checking up on tenants, could potentially be accused of discrimination under the Equality Act. This is a real minefield for landlords, especially when you consider that not all of the 763 Europeans in the area necessarily have the right to live in the UK either.
In a nutshell, Stamford landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include:-

·         UK Passport

·         EEA Passport/Identity card

·         Travel document or Permanent Residence Card showing indefinite leave to remain

·         Paperwork from Home Office stating their Immigration status

·         Certificate of registration or naturalisation as a British citizen

 
I hope the new law will target dishonest landlords who repeatedly fail to carry out 'Right to Rent' checks by making it a criminal offence. This means they could face imprisonment for failing to check on their tenants. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.

So what did our landlord do?
Well after our chat, he asked us to find a tenant and manage the property for him - he had been reading the Stamford Property Blog for a while and because of the knowledge we impart to the landlords of Stamford, we obviously know what we are talking about.  Even better news for him, even though this would cost him agency fees, I was able to get him an additional £50 per month for his property (when we found him a tenant one week later)

Now, together with the peace of mind we will keep him the right side of the law and put a stop to midnight phone calls complaining about dripping taps, it was a win-win situation for everyone.

Monday 25 January 2016

3 of the best Buy-2-Lets on the market this week...


Property 1. 
Northgate, Oakham via Spencers 01572 366022
 
This 2 bed terrace on Northgate, Oakham has off-road parking, and is all about LOCATION...as it is set within an easy walk to Oakham train station, shops etc.,
 
This property will easily achieve £550pcm being located so close to the town centre.  In fact, this type of property is pretty unique due to its location so if the time comes to sell, it would be snapped up!
 
Purchase Price £185,000 with rental of approx. £550pcm
 
 
 
Property 2.
The Leas, Cottesmore.  Call Adrian McCarthy, UPP Property Agents 01572 725 825


At a bargain price of £190k, this 4 double bedroom property is located in the sought after village of Cottesmore. 

The home has huge rental potential and one that would almost always remain occupied.
 
This property would suit all sectors of the rental market and at a rent of £875pcm it has to be deemed as a sound purchase.
 
 
Guide Price: £190,000 with a rental of approx. £875pcm
 
Marketed via UPP Property Agents on 01572 725 825

 
 

 
 
Property 3. 
Trinity Road, Stamford £159,995 through Murray Estate Agents on 01780 695 021
 
3 bed terraced home in a very sought after area.  It would make a great family home or perfect for a young couple looking for their first home. A good solid purchase with what should be low maintenance upkeep.
 
Marketed at £159,995 with a rental valuation of approx. £725pcm

http://www.rightmove.co.uk/property-for-sale/property-57463271.html

Alternatively, if you are considering another strong property and would like my opinion (good and bad!), please email me via david@upp-property.co.uk

I look forward to hearing from you.
 
 

Friday 22 January 2016

Where will Stamford Property Prices be by 2021?


I was having lunch the other day with a local Stamford solicitor friend of mine, when the subject of property came up. He asked me my thoughts on the Stamford property market for the next five years.
Property prices are both a British national obsession and a key driver of the British consumer economy.  But before I can predict what will happen over the next five years to Stamford house prices, firstly I need to look at what has happen over the last five years.

One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth – key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy-to-let landlords have an appetite to continue purchasing buy-to-let property.
When the Tory’s came to power in May 2010, the total number of people who were unemployed in town stood at 1,945 (or 3.7% of the working age population in the Stamford parliamentary constituency).  Last month, this had dropped to 878 people (or 1.6% of the working age population).
As the Stamford job market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).

That is why, even with the colossal turbulence of the last few years, property values in the Stamford area are only 1.29% lower today than they were five years ago.
Many home occupiers have held back moving house over the past seven to eight years following the ‘Credit Crunch’ but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market.

With a more stable economy in the town, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Stamford.
I forecast that the value of the average home in Stamford will increase by 19.8% by 2021

19.8% might sound optimistic to some, but according to ‘The Land Registry’, values are currently rising in Stamford at 1.8% year on year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole.

However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Stamford housing market.
The number of properties for sale in Stamford is lower than it was five years ago, restricting choice for buyers (yet this keeps prices higher).

Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy-to-let taxation rules which are being introduced between 2017 and 2021 (although choosing the right sort of property / portfolio mix in Stamford will, I believe, mitigate those issues with the next taxation rules).
I am telling the landlords I speak to, that with interest rates at their current level 0.5%, the cash in your Building Society is going to grow so slowly that it might as well be kept under their bed. Property prices, by contrast, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation.

So my final thought ...  property is a long term investment, and has always outperformed most investments over the same period.
Stamfordians in their 40’s and 50’s would be mad NOT to include property in their long term financial calculations.

Just make sure it’s the right property, at the right price and in the right location.

Thursday 14 January 2016

What does 2016 have in store for the Oakham Property Market?


 
Will Oakham house prices go up or down? And if so, by how much?

Those of you who regularly read this blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion.  So here are my thoughts for the 3,248 Oakham homeowners and landlords.

The average Oakham property is 2.8% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (i.e. consumer/retail prices are dropping) and average salary growth is only around 2.5% pa. 
This is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (i.e. salary growth) is showing signs of weakening).
Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for Buy-to-Let landlords will really dampen the property market, with concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016.
Well, I hope you all read my previous article in my blog about what the new stamp duty rule changes would REALLY mean for Oakham landlords, but I believe the real issue in the Oakham property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or simply cannot afford to upgrade.
However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is “good luck George hitting those numbers”!
Why? Because houses take years to build, not months.  So, George and his fabled house building aside - where does that leave us in Oakham in 2016?

And talking of supply...whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there.  Oh, isn’t he doing well with those targets!), let us look at the shortage of properties for sale. Back in March 2012, 168 properties were for sale in Oakham.  Today that figure is 122.

On the face of it, this means there is less choice for Oakham buyers, but it also means with a restricted supply of properties for sale.  It keeps property prices high for Oakham house sellers and pushes up rental prices.
Everything isn’t all doom and gloom though.  Back in March 2012, the average property in Oakham took 111 days to find a buyer.  The latest figures state this has dropped to 96 days, a drop of 14% in the time it takes to find a buyer.
However, when you delve even deeper, the best performing type of property today in Oakham is the 2 bed, which takes just 89 days to find a buyer (on average) compared to the 1 bed, which takes 210 days. It just goes to show, even though the average has dropped since 2012, how varied that change has been!
So, back to the question everyone is asking – “What will happen to property values in Oakham in 2016”? 
I am going to suggest they will rise between 2% and 2.5%. Nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015!

 

 

 

Tuesday 12 January 2016

The 3 Best B2L properties for sale this week are...


The 3 best buy-to-let properties for sale are:
 
Property One: Ladywell, Oakham.  2 bed 1st floor flat with allocated parking.


http://www.rightmove.co.uk/property-for-sale/property-38657610.html
 
 
Sale Price: £117,500
 
Currently achieving: £495pcm
 
 
 
 
There is a tenant in place here until June, so this property is ideal for Buy-To-Let investors.  It's offered in excellent order and will generate an immediate rental income from day one.

Contact: Adrian McCarthy, UPP Property Agents on 01572 725 825
 

Property Two: Edward Road, Stamford.  3 bed end of terrace.

 
Sale Price: £159,995     Rental valuation: c£650pcm
 
Presented in very good condition. The yield for Stamford would be very good on this purchase.
 
Contact: Easy move Estate Agents, Peterborough

 
Property Three: Launds Green, South Witham.  2 bed terraced house.
 
 
 
Sale Price: £97,500
 
Rental valuation: £475pcm
 
 
 
 
 
An outstanding B2L purchase at this value with no work required (new kitchen and bathroom already in place), the rental return is tremendous at £475pcm. The village is becoming more popular with investors due to the yield being so good.
 
Contact: Adrian McCarthy, UPP Property Agents on 01572 725 825