Thursday, 22 February 2018

Warrington Landlord's The Do’s and Don’ts with Carbon Monoxide


Landlords are being urged to step up and ensure that all rented properties and accommodation meet recent laws relating to carbon monoxide alarms.The legislation, which came into effect in Autumn 2015, states that smoke alarms must be installed on every floor of a property and be tested ahead of any new tenancy, with carbon monoxide alarms placed in every room containing a solid-fuel burning appliance, including wood burners and open fires.

However, a survey we carried out identified that only 6% of students are aware that their digs is likely to need a CO alarm whilst only a third (32%) of student accommodation is believed to have a working CO alarm.To stop students being at risk from the ‘silent killer’, landlords and letting agents are being reminded of their obligations to install lifesaving detectors.Servicing of appliances and alarms should also be high on the agenda as new tenants move in, as well as the installation of alarms.Our survey discovered that just one in eight people in rented accommodation were aware of a landlord’s duty to provide a carbon monoxide alarm in rooms with a solid-fuel burning appliance in their properties. This contrasts with the overwhelming four in five people who are aware that a smoke alarm must be provided.

Renters were also shown in the poll to be unaware of a landlord’s responsibility to provide an up to date gas safety certificate. Only four in 10 had asked for this when moving into rented accommodation.
Our research also reveals a worrying lack of knowledge among the public of how to detect CO, the so-called ‘silent killer’.
When asked how you would know the gas is present, 28% of people believe you can smell it, 8% think you can taste it, 6% answered see it, 2% insist you can hear it, while 1% of those asked reckon you are able to touch it.
Key indicators that carbon monoxide is present in your property and things to warn your tenants to look out for are: if the cooker flames are yellow or orange, sooty marks on walls around boilers, stoves or gas fire covers, pilot lights that frequently go out or there is increased condensation inside windows.
True or False: It is possible to smell carbon monoxide being emitted in the home.
Answer: False. Carbon monoxide is both colourless and odourless so is almost impossible to detect without an alarm.
True or False: Carbon monoxide poisoning is extremely difficult to diagnose.
Answer: True. The symptoms of carbon monoxide poisoning are similar to that of flu so it makes diagnosis very difficult. They include; headaches, nausea, dizziness, tiredness, confusion and eventually loss of consciousness.
Currently, GPs don’t all have access to equipment to check carbon monoxide levels and the only way to the presence of carbon monoxide is with a blood test. Some 46% of GPs have seen patients with carbon monoxide poisoning symptoms but only 18% say that they wouldn’t consider CO poisoning as a diagnosis. Find out more about the symptoms of CO here.
True or False: Carbon monoxide won’t leak if I have new gas appliances or if I have my appliances serviced regularly.
Answer: False. Although having brand new gas appliances, such as a new hob or boiler, will significantly reduce the chances of them leaking carbon monoxide it doesn’t rule them out.
CO can be emitted from appliances new or old and if you’re worried you should see your GP. Regular servicing of your gas appliances is the best way to reduce the risk of your property being subject to a CO leak and having an alarm fitted is the best way of detecting if and when something has gone wrong.
True or False: Carbon Monoxide can only leak from my boiler.
Answer: False. Carbon Monoxide can leak from any gas appliance in your property. This could include an oven, gas fire, or a boiler.
CO is produced when there is not enough oxygen to form carbon dioxide. For example, when a flame is burnt in a poorly ventilated space. This is why it is extremely dangerous to barbecue in a tent as there is often too little oxygen for carbon dioxide to be produced and so carbon monoxide is released instead.
One of the main things to look out for in your property are if flames on gas appliances burn a yellow or orange colour rather than blue as this could mean that they are not burning properly.
For a more information on how you can keep your tenants safe from the dangers of Carbon Monoxide, visit this webpage.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.
Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 15 February 2018

Warrington’s £181,394,640 “Rentirement” Property Market Time Bomb


Yes, I said ‘rentirement’, not retirement ... rentirement and it relates to the 1,161 (and growing) Warrington people, who don’t own their own Warrington home but rent their home, privately from a buy to let landlord and who are currently in their 50’s and early to mid-60’s.

The truth is that these Warrington people are prospectively soon to retire with little more than their state pension of £155.95 per week, probably with a small private pension of a couple of hundred pounds a month, meaning the average Warrington retiree can expect to retire on about £200 a week once they retire at 67.

The average rent in Warrington is £651 a month, so a lot of the retirement “income” will be taken up in rent, meaning the remainder will have to be paid for out their savings or the taxpayer will have to stump up the bill (and with life expectancy currently in the mid to late 80’s, that is quite a big bill …  a total of £181,394,640 over the next 20 years to be paid from the tenant’s savings or the taxpayers coffers to be precise!

You might say it’s not fair for Warrington tax payers to pick up the bill and that these mature Warrington renters should start saving thousands of pounds a year now to be able to afford their rent in retirement.  However, in many circumstances, the reason these people are privately renting in the first place is that they were never able to find the money for a mortgage deposit on their home in the first place, or didn’t earn enough to qualify for a mortgage …and now as they approach retirement with hope of a nice council bungalow, that hope is diminishing because of the council house sell off in the 1980’s!

For a change, the Warrington 30 to 40 somethings will be better off, as their parents are more likely to be homeowners and cascade their equity down the line when their parents pass away.  For example, that is what is happening in Europe where renting is common, the majority of people rent in their 20’s, 30’s and 40’s, but by the time they hit 50’s and 60’s (and retirement), they will invest the money they have inherited from their parents passing away and buy their own home.

So, what does this all mean for buy to let landlords in Warrington?
Have you noticed how the new homes builders don’t build bungalows anymore ... in fact some would said the ‘bungalow storey’ is over.  The waning in the number of bungalows being built has more to do with supply than demand.  The fact is that for new homes builders there is more money in constructing houses than there is in constructing bungalows.  Bungalows are voracious when it comes to land they need as because bungalow has a larger footprint for the same amount of square meterage as a two/three storey house due to the fact they are on one level instead of two or three.

That means, as demand will continue to rise for bungalows supply will remain the same.  We all know what happens when demand outs strips supply … prices (i.e. rents) for bungalows will inevitably go up. 
Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Thursday, 8 February 2018

Warrington Private Rents Hit £9.58 per sq. foot




As I am sure you are aware, one the best things about my job as an agent is helping Warrington landlords with their strategic portfolio management. Gone are the days of making money by buying any old Warrington property to rent out or sell on. Nowadays, property investment is both an art and science. The art is your gut reaction to a property, but with the power of the internet and the way the Warrington property market has gone in the last 11 years, science must also play its part on a property’s future viability for investment.

Many metrics most property professionals (including myself) use when deciding the viability of a rental property is what properties are selling for, the average rent, the yield and an average value per square foot.

However, another metric I like to use is the average rent per square foot. The reason being is that is a great way to judge a property from the point of view of the tenant ... what space they get for their money. Now of course, location (location, location in a Phil and Kirstie style) has a huge influencing factor when it comes to rents (and hence rent per square foot). Like people buying a property, tenants also have that balancing act between better/worse location, more vs. less money and size of accommodation (bigger and more rooms equalling more money) and where they live (location) verses making ends meet.

Interestingly, I know there are a lot of you in Warrington who like to see my statistics on the Warrington property market, so before I talk about the rental figures per square foot, I wanted to share the £ per square foot on the values. In Warrington, the current AVERAGE figures are being achieved (and I must stress, these are average figures, so there will an enormous range in these figures), but on average, properties in Warrington, split down by type are achieving …

·         Warrington Detached Property - £239 / sq ft
·         Warrington Semi Detached Property - £207 / sq ft
·         Warrington Terraced Property - £169 / sq ft
·         Warrington Apartments - £204 / sq ft

So, the rental figures:

The extent of space you get for your rent is replicated in the space you get for your money when buying a property. The average size of rental property in the Warrington area is 807.3 sq ft (interesting when compared to the national average of 792.1 sq ft)

This means the average rent per square foot currently being
achieved on a Warrington rental property is £9.58 per sq ft per annum

So, what we can deduce from this?  Well the devil is always in detail!

Whilst I was able to quote the average overall figure and the fact my research showed it was quite clear from data that there is relationship between the average £ per sq ft figures on property values and average £ per sq ft on rental figures as a property grows in size. However, something quite intriguing happens to those figures, in terms of what the property will sell for and what it will rent for, when we change and increase the size of the property.

My research showed that doubling the size of any Warrington property doesn’t mean you will double the value of it … in either value or rent. This is because the marginal value increases diminish as the size of the property increases. In layman’s terms … Subject to a few assumptions, double the size of the house doesn’t mean double the value … what really happens is a doubling of the size gives only an approximately 40% to 65% uplift in value, but here comes the even more fascinating part … when it came to the rental figures, double the size of the house meant only 20% to 45% in increase in rent.


In a future article, I will be discussing the actual added value an extension can bring ... but in the meantime, in an overall and sweeping statement, most of the time it makes sense to extend if you are going to live in the property as long as the extension is proportionate to the property, but if you are going to rent it out ... possibly not.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Friday, 26 January 2018

My thoughts on the future of the Warrington Buy-To-Let Market


I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result.

Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector. 

Interestingly I was chatting with a self-managed landlord from Lymm, when I was out socially over the festive period, who didn’t realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).

If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Lymm landlord popped into my offices in the New Year, and I checked all his paperwork and ensured he was on the right side of the law going forward – and I offer the same to any landlord in the Warrington area if you want me to cast my eye over your buy to let matters (and at no cost – ok just bring in some chocolates for the girls in the office!)

But what of all these extra properties being dumped onto the market in Warrington? When I looked at the records the number of properties on the market in Warrington now, as opposed to a year ago, the numbers tell an interesting story …


1st Jan 2017
1st Jan 2018

Detached
117
80
-32%
Semi
183
118
-36%
Terraced
143
117
-18%
Flat
97
75
-23%
Plots +
Other
54
23
-57%
Total
594
413
-30%

  
Overall, Warrington doesn’t match the national trend, with the number of properties on the market actually dropping by 30% in the last year.  It was particularly interesting to see the number of semis on the market drop by 36%.

However, speaking with my team and other property professionals in the town, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Warrington Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Warrington landlords who have been releasing their monies from their Warrington buy to let properties - as is the nature of all investments!

Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.

Nevertheless, some Warrington landlords will want to release the equity held in their Warrington buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in.  However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Warrington area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids).

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.



Thursday, 18 January 2018

Youngsters unable to buy their first home in Warrington – Are the Baby Boomers and Landlords to Blame?

Talk to many Warrington 20 something’s, where home ownership has looked but a vague dream, many of them have been vexatious towards the Baby Boomer generation and their pushover ‘easy go lucky’ walk through life; jealous of their free university education with grants, their eye watering property windfalls, their golden final salary pensions and their free bus passes.

If you had bought a property in Warrington for say £15,000 in first quarter of 1977, today it would be worth £227,343, a windfall increase of 1415.6%.

But to blame the 60 and 70 year olds of Warrington for that sort of rise seems a little unfair, with the value of the homes rising like rocket, I don't believe they can be censured or made liable for that. A few weeks ago, I discussed in my blog the number of people in the Warrington area who have two or more spare bedrooms (meaning they are under-occupying the house). I see many mature members of Warrington society, rattling around in large 4/5 bed houses where the kids have flown the nest years ago ... but should they be blamed?

We are all just human, and the mature members of UK society have just reacted to the inducements of our property and tax system. The mature generations who joined the property market party in the 1970’s and 1980’s were able to take out huge mortgages, protected in the knowledge that inflation would corrode the real value of the mortgage, while wage gains would boost their ability to repay.


Neither do I directly blame the multitude of Warrington buy to let landlords, buying up their 10th or 11th property to add to their buy to let empire. They too, are humbly reacting to the peculiar historic inducements of the UK property market.

So, who is to blame?

Well, hyperinflation in the 1970’s meant the real value of people’s mortgages was whipped out (as mentioned above). Margaret Thatcher and Nigel Lawson are also good people to blame with Maggie selling off millions of council houses and Nigel Lawson’s delayed ending of the MIRAS tax relief in 1987; meaning he too can get his share of indignation. The Blair/Brown combo doubled stamp duty in 1997 and again in 2000, which, as a tax on property transactions, precludes a more efficient distribution of the current housing stock. The Government has had plenty of opportunity to change the draconian stamp duty rules to incentivise those mature Warrington house movers to downsize.

However, I have started to see over the last few years a change in Government policy towards housing. The new breed of Warrington buy to let landlords that have come about since the Millennium, have had their wings clipped over the last couple of years, with the introduction of new tax rules (meaning it is slightly more difficult to make money out of property unless you have all the national information and Warrington property trends to hand).


It’s easy to think the only reason that hundreds of first time buyers have been priced out of the Warrington housing market is because of these landlords. Yet, I believe landlords have been undervalued with the Warrington homes they provide for Warrington people. With first time buyers struggling to save for a deposit, if it weren’t for those landlords buying up those homes over the last 10/15 years, we would have a bigger housing crisis than we have today. Since the global financial crisis of 2008/9, local councils have had to cut services, so certainly didn’t have enough money to build new homes ... homes that were provided to Warrington by these buy to let landlords.


One side of the argument is that 626 homes are being bought up by buy to let landlords each year in the Warrington Borough Council area when otherwise they might have become available to other buyers, the other side of the argument is the current national average deposit is £51,800, which is, by far, the greatest barrier to those wanting to buy their first home. Those homes bought by local buy to let landlords are not left idle, as they equate to 4,379 of new homes for local people, most of whom who see renting as a better option because of the choice, the simplicity and the flexibility which renting brings.

In the 60’s/70’/80’s, the traditional thoughts that you were a failure unless you owned your own home have now all but disappeared, because if you ask many young people, they would probably say renting was the perfect option for them at certain times of their life.


Many of you reading my blog ask why I say these things. I want to share my thoughts and opinions on the real issues affecting the Warrington property market, warts and all. If you want fluffy clouds and rose tinted glasses articles – then my articles are not for you. However, if you want someone to tell you the real story about the Warrington property market, be it good, bad or indifferent, then maybe you should start reading my blog regularly.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Thursday, 11 January 2018

Warrington Property Market and Hammond’s Budget Promise to Build 300,000 more homes

I miss the good old days of George Osborne as Chancellor, with his hardhat and hi-vis jacket. He must have visited every new home building site in the UK with his trademark attire! For the last few years, the nearest Philip Hammond got to donning a ‘Bob the Builder’ outfit was at his grandchild’s birthday party. However, with what appears to be a change in focus by the Tories to ensure they get back in power in 2022, they appear to have fallen in love with house building again with the Chancellor’s promise to create 300,000 new households in a year.

Nationally, the number of new homes created has topped 217,344 in the last year, the highest since the financial crash of 2007/8. Looking closer to home: in total there were 492 ‘net additional dwellings’ in the last 12 months in the Warrington Borough Council area, a small increase of 31% on the 2010 figure.

The figures show that 95% of this additional housing was down to new build properties. In total, there were 469 new dwellings built over the last year in Warrington. In addition, there were 52 additional dwellings created from converting commercial or office buildings into residential property.

While these all added to the total housing stock in the Warrington area, there were 29 demolitions to take into account.

Net additional dwellings in Warrington in the last 12 months
New build
Conversions
Change of use
Demolitions
Net Additions
469
0
52
-29
492

I was encouraged to see some of the new households in the Warrington area had come from a change of use. The planning laws were changed a few years back so that, in certain circumstances, owners of properties didn’t need planning permission to change office space in to residential use.

With the scarcity of building land available locally (or the builders being very slow to build on what they have, for fear of flooding the market), it was pleasing to see the number of developers that had reutilised vacant office space into residential homes in the local council area. Converting offices and shops to residential use will be vital in helping to solve the Warrington housing crisis especially, as you can see on the graph, that the level of building has hardly been spectacular over the last seven years!
  

Now we have had the autumn budget, Theresa May and Philip Hammond have set out their stall with housing as their key focus. I was glad to see the Government introducing a variety of changes to improve housing, including more funding for the supply side and an injection of urgency into the planning system.


The biggest question is, just where are the Government going to build all these new houses? Maybe a topic for a future article?

Back to the main point though and the focus on the housing market by the Tory’s is good news for all homeowners and buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.



Thursday, 7 December 2017

Increase in Interest Rates to cost Warrington Home Owners £204.71 a year



Warrington homeowners will be among those affected by the latest rise in the Bank of England interest rates. The first increase in 10 years; they have just been raised from 0.25 percent to 0.5 per cent. This uplift comes as inflation hits a 51-month high of 2.9 per cent whilst the national unemployment rate is at an all-time low of 4.3 per cent.
    
Interestingly, the Governor of the Bank of England has indicated that the interest rate is likely to increase again over the next couple of years, but Mr Carney said mortgages and savings would not be affected in the short term. However, look at all the big banks and just about all of them have increased their standard variable mortgage rate..  

The average Warrington mortgage is £81,883

I have to ask by how much Warrington homeowners (on variable rate or tracker mortgages) will see their repayments increase?

In the WA1-WA5 postcodes there are 35,958 homeowners with a mortgage, of which 15,448 have a variable rate mortgage (the remaining have fixed rate mortgages). The total amount owed by those WA1-WA5 homeowners with those variable rate mortgages is £1,264,898,595, meaning the average monthly mortgage payment for those home owners on variable rate mortgages before the interest rate rise was £638.46 per month and now its £655.52 per month … meaning

The interest rate rise will cost Warrington
homeowners on average an extra £204.71 per year

Whilst this is the first raise in interest rates in over 10 years, it must be noted it is at a significantly low level compared to figures in the 1970s and early 1990s. Many of my readers talk of interest rates at 17 per cent when Sir Geoffrey Howe increased them to try and combat the hyperinflation (from the fallout of the financial crisis that hit Britain in the 1970’s) and Norman Lamont in September 1992 with the infamous Black Wednesday crisis, when interest rates were raised from 10% to 15% in just one day.
So, what will this interest rate actually do to the Warrington housing market?
Well, if I’m being frank – not a great deal. The proportion of Warrington homeowners with variable rate mortgages (and thus directly affected by a Bank of England rate rise) will be smaller than in the past, in part because the vast majority of new mortgages in recent years were taken on fixed interest rates. The proportion of outstanding mortgages on variable rates has fallen to a record low of 42.3 per cent, down from a peak of 72.9 per cent in the autumn of 2011.
If more Warrington people are protected from interest rate rises, because they are on a fixed rate mortgage, then there is less chance of those Warrington people having to sell their Warrington properties because they can’t afford the monthly repayments or even worse case scenario, have them repossessed.
However, and this will be of interest to both Warrington homeowners and Warrington buy to let landlords …
.. for every 1% increase in the Bank of England interest rate, it will cost the average Warrington homeowner on a variable rate mortgage £68.24 per month

So, what next? Because UK inflation levels are at 2.9 per cent (the country’s highest rate since April 2012) and the Bank of England is tasked by HM Government to keep inflation at 2 per cent using various monetary tools (one of which is interest rates) – you can see why interest rate rises might be on the cards in the future as increasing interest rates tends to dampen inflation.



Now of course there is a certain amount of uncertainty with regard to Brexit and the negotiations thereof, but fundamentally the British economy is in decent shape. People will always need housing and as we aren’t building enough houses (as I have mentioned many times in the Warrington Property Blog), we might see a slight dip in prices in the short term, but in the medium to long term, the Warrington property market will always remain strong for both Warrington homeowners and Warrington landlords alike.


If you are a landlord who may have a void property over winter, then feel free to get in touch and let us at Hamlet Homes provide you with a fully reference checked and credit checked tenant in your property before the weather gets even colder, to ensure your property is protected.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.