Monday, 28 November 2016

Warrington Landlords and Tenants : What does the Tenant Fee Banning order mean for you?


  • ·         Tenant Fees set to banned within 12 to 18 months
  • ·         Rents due to rise as those fees passed to Landlords
  • ·         Landlords won’t be worse off – and neither will tenants or agents


With our new Chancellor of the Exchequer revealing a ban on tenant fees in his first Autumn Statement last Wednesday what does this actually mean for Warrington tenants and Warrington landlords?

The private rental sector in Warrington forms an important part of the Warrington housing market and the engagement from the chancellor in Wednesday’s Autumn Statement is a welcome sign that it is recognised as such. I have long supported the regulation of lettings agents which will ensconce and cement best practice across the rental industry and,  I believe that measures to improve the situation of tenants should be introduced in a way that supports the growing professionalism of the sector. Over the last few years, there has been an increasing number of regulations and legislation governing private renting and it is important that the role of qualified, well trained and regulated lettings agents is understood.

Great News for Warrington Tenants

So, let’s look at tenants .. this is great news for them, isn’t it?  Well before you all crack open the Prosecco, read this …

Although I can see prohibiting letting agent fees being welcomed by Warrington tenants, at least in the short term, they won’t realise that it will rebound back on them.

First up, it will take between 12 and 18 months to ban fees, as consultation needs to take place, then it will take an Act of Parliament to implement the change. A prohibition on agent fees may preclude tenants from receiving an invoice at the start of the tenancy, but the unescapable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents.

Published at the same time as the Autumn Statement, hidden in the Office for Budget Responsibility’s Economic and Fiscal Outlook on the Autumn Statement (The Office for Budget Responsibility being created by Government in 2010 to provide independent and authoritative analysis of the UK’s public finances), it said on Wednesday …

“The Government has also announced its intention to ban additional fees charged by private letting agents. Specific details about timing and implementation remain outstanding, so we have not adjusted our forecast. Nevertheless, it is possible that a ban on fees would be passed through to higher private rents”


The charity Shelter and Scotland

Scotland banned Letting Fees in 2012. The charity Shelter have been a big voice in persuading and lobbying the Government since it managed to persuade the Scottish Parliament to ban fees in 2012. On all the TV and radio shows at the moment, they keep talking about their Independent Research, which they said showed that,

“renters, landlords and the industry as a whole had benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.”

Going on,

“Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees”

.. yet the devil is in the detail….

Only yesterday Shelter were quoting this Research from December 2013 to say rents never went up following the tenant fee ban in Q4 2012. I have read that research and I agree with that research, but it was published three years ago, only 12 months after the ban was put into place.

I find it strange they don’t seem to mention what has happened to rents in Scotland in  2014, 2015 and 2016 .. because that tells us a completely different story!

What really happened in Scotland to rents?

I have carried out my research up to the end of Q3 2016 and this is the evidence I have found..

In Scotland, rents have risen, according to the CityLets Index
by 15.3% between Q4 2012 and today

 (CityLets being the equivalent of Rightmove North of the Border – so they know their onions and have plenty of comparable evidence to back up their numbers).

When I compared the same time frame, using Office of National Statistics figures for the English Regions between 2012 and 2016, this is what has happened to rents

·         North East 2.17% increase
·         North West 2.43% increase
·         Yorkshire and The Humber 3.21% increase
·         East Midlands 5.92% increase
·         West Midlands 5.52% increase
·         East of England 7.07% increase
·         South West 5.82% increase
·         South East 8.26% increase

·         London 10.55% increase

….and let me remind you about Scotland … 15.3% increase.





Are you really telling me the Scottish economy has outstripped London’s over the last 4 years? Is anyone suggesting Scottish wages and the Scottish Economy have boomed to such an extent in the last 4 years they are now the Powerhouse of the UK? .. because if they had, Nicola Sturgeon would have driven down the A1 within a blink of an eye, to demand immediate Independence.



So what will happen in the Warrington Rental Market in the Short term?

Well nothing will happen in the next 12 to 18 months .. it’s business as usual!

… and the long term?

Rents will increase as the fees tenants have previously paid will be passed onto Landlords in the coming few years. Not immediately .. but they will.

As a responsible letting agent, I have a business to run. It takes, according to ARLA, (Association of Residential Letting Agents) on average 17 hours work by a letting agent to get a tenant into a property. We need to complete a whole host of checks prescribed by the Government; including a right to rent check, Anti Money Laundering checks, Legionella Risk Assessments, Gas Safety checks, Affordability Checks, Credit Checks, Smoke Alarm checks, Construction (Design & Management) Regulations 2007 checks, compliance with the Landlord and Tenant Act, registering the deposit so the tenants deposit is safe and carry out references to ensure the tenant has been a good tenant in previous rented properties.

All of which the vast majority of lettings agents take very seriously and are expected to know inside out making us the experts in our field. Yes, there are some awful agents who ruin the reputation for others, but isn't that the case in most professions?

.. but business is business.

No landlord, no tenant and certainly no letting agent does work for free.

I, along with every other Warrington letting agent will have to consider passing some of that cost onto my landlords in the future. Now of course, landlords would also be able to offset higher letting charges against tax, but I (as I am sure they) wouldn’t want them out of pocket, even after the extra tax relief.

So what does this all mean for the future?

The current application fee for a single person at my lettings agency is £170 and for a couple £200 .. meaning on average, the fee is around £185 per property.

I am part of a Group of 500+ Letting Agents, and recently we had to poll to find the average length of tenancy in our respective agencies. The Government says its 4 years, whilst the actual figure was nearer one year and eleven months, so let’s round that up to two years.

That means £185 needs to found in additional fees to the landlord, on average, every two years.

In Actual Pound Notes

In 2005, the average rent of a Warrington Property was £597 per month and today it is £624 per month, a rise of only 4.5% (against an inflation rate (RPI) of 38.5%).

Using the UK average management rates of 10%, this means the landlord will be paying £748.80 per annum in management fees.

If the landlord is expected to cover the cost of that additional £185 every two years, rents will only need to rise by an additional 2% a year after 2018, on top of what they have annually grown by in the last 5 years.

So, if that were to happen in Warrington, average rents would rise to £701 per month by 2022  (see the red line on the graph) and so the landlord would pay £841.20 per annum in management fees .. which would go towards covering the additional costs without having to raise the level of fees.





.. but that is bad news for Warrington Tenants?

Quite the opposite. Look at the blue line on the graph). If the average rent Warrington tenants pay had risen in line with inflation since 2005, that £552 per month would have risen today to  an average of £764 per month. (Remember, the average today is only £624 per month) .. and even if inflation remains at 2% per year for the next six years, the average rent would be £830 per month by 2022 .. meaning even if landlords increase their rents to cover the costs tenants are still much better off, when we compare to the £701 per month figure to the £830 per month figure.

Conclusion

The banning of letting fees is good news for landlords, tenants and agents.

It removes the need for tenants to find lump sums of money when they move. That will mean tenants will have greater freedom to move home and still be better off in real terms compared to if rents had increased in line with inflation.

Landlords will be happy as their yield and return will increase with greater rents whilst not paying significantly more in fees to their lettings agency. Letting agents who used to charge fair application fees won’t be penalised as the rent rises will compensate them for any losses.

.. and the agents that charged the silly high application fees .. well that’s their problem. At least I know I can offer the same, if not a better service to both my landlords and tenants in the future in light of this announcement from Phillip Hammond.



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 
6 Bankside, Crosfield St, WA1 1UP. 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, 24 November 2016

Advice for Investing in the Warrington Property Market in 2017


The Warrington buy to let market has been quiet over the past few weeks. Sellers have not been keen to sell at levels that would be interesting to investment buyers, who lack confidence in the current market or bought earlier in the year to avoid Stamp Duty changes. But some sellers have come to realise that unless they take action on their pricing they will not be selling this year.

If you do not buy now, the New Year will bring the usual inflated prices that come with the optimism of the turn of the year, even if it is not warranted. April then represents the next opportunity to invest if the first quarter does not deliver for sellers. In my experience April is always the first month that you can call the market for the year. If the first quarter has been strong, all will be fine. If it has not, it will be April before sellers react and start to take action to get sold.

Top Tips for Investing in Warrington

Before investing, there are numerous things you need to research (including, but not limited to): cash amounts, mortgages and rates, fixed costs (such as service charges in flats), potential repairs and improvements, furnishings, gross and net yields, plus likely returns on capital employed.

Investing in new-build flats, old houses or purpose-built halls of residence and pods all have merit in different ways in Warrington. It depends on your investment objectives, time frames and budget.

Warrington is a great place to invest, especially close to the town, university, or even near the hospital on Lovely Lane as there are many doctors and nurses, students, professionals and commuters to and from Manchester and Liverpool looking for accommodation. If you do go down the HMO route, always make sure that the property has sufficient bathroom and kitchen facilities to match the number of likely occupants.


Size and Location

Two bedroom properties seem to be the most popular, houses OR apartments, with larger bedrooms better than singles. Good nearby transport links are also useful and double-glazing is becoming a requirement for most tenants. 

However, three bedroom properties have grown in popularity. I am noticing more requests for three bedroom properties by Warrington tenants; however the supply just is not there. I understand in most cases the yields are very similar to that of a two bedroom, but the initial cost is more for the larger property. However, you have fewer void periods with a larger three bedroom property and if you purchase at the right price the chance of growth will be greater than that of a smaller property.

As mentioned above, location of the property is vitally important in Warrington. The main drivers are access to train stations, local shops and restaurants… local schooling can also be a factor.

Think carefully about the size and layout of the accommodation too. Most tenants will dislike small living spaces and odd shaped rooms.


Condition

The condition of property should also be considered. Tenants want dry, structurally sound properties in good condition (cracked fittings, marked walls, damaged appliances, grubby kitchens and bathrooms are all a turn off).

Think about the age of the property. The younger the property, the fewer maintenance issues you will have. If you purchase a character property, I would strongly suggest that BTL landlords have the gas and electric checks done on the property before Exchange of Contracts. If problems are found, potentially, the cost of rectifying the issues could come off the agreed sale price.

A BTL property should look good from the outside (kerb appeal). If the inside is immaculate but the outside isn't you will struggle to get people through the door.


When Should You Buy?

So if you are buying to let in the next six months, it is worth getting out now and looking for those motivated sellers. Or you can keep watching the market (and this blog!) with a view to buying in April or beyond. There is of course the possibility that the economic news will be sufficiently good through the first quarter to encourage others to buy… then you will have to go with higher market values!


If you are looking for an agent that is well establishedprofessional 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 6 Bankside, Crosfield St, WA1 1UP. 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, 17 November 2016

How to Switch Letting Agents in Warrington with Ease

Whether you are receiving my Warrington Property newsletter for the first time or are a seasoned reader, you’ll not be surprised to learn that we have started to attract many landlords seeking advice with their residential lettings. Ultimately, they are seeing a better and more professional service from an agent who is firmly established, than they receive from their current letting agent.

We are getting more and more landlords approaching us who are unhappy or dissatisfied with their current agent and have been asking us how to go about moving management of their property to us.

If you have a property in or around the Warrington area and are unhappy with your current agent, then why not switch?

There is a general feeling amongst landlords that it is better to wait until their current tenant has given notice to leave the property before they even contemplate changing agents, as it is far more problematic to change agents midway through a tenancy. While this can be true, it is not your hassle as we can do most of the work for you! 

Have a look at our 5 step process if you are considering moving from your current letting agent if you are dissatisfied with their service:

Step One: Giving Notice

You will need to find out how much, if any, notice you are required to give your current agent as detailed within the Terms and Conditions you signed at the start of your contract.

When you have determined your notice period, give the required notice in writing to terminate your agreement. If you need any advice regarding this, please contact us. It may help if your notice coincides with your current rent due date as it will make the switching process much more straightforward.

Step Two: Collecting Tenant Details

If you are on a fully managed service then it would be wise to obtain the contact details for your current tenant. Your agent should give you these.

Step Three: The Paperwork

We will arrange to meet you, either at your home or at our offices, where we will go through our terms of business. We will also outline our lettings process and our commitment to providing an unrivalled lettings and management service.

We will provide you with all the necessary paperwork for you to read and complete.

Step Four: Informing Your Tenant

We will arrange to meet your current tenant at their property to explain everything to them. We provide them with a welcome pack which includes a new standing order to pay their rent. We can also advise on cancelling their existing standing order.

Part of this transfer may include a new tenancy agreement for the tenant to sign. This is to protect all parties as all of our tenancy agreements are updated regularly for changes in legislation. We will also deal with any necessary deposit transfer/registration.

Step Five: Your Personal Property Manager

Both you and your tenant will be assigned a dedicated property manager who will be your contact throughout the tenancy, should any matters arise that require our attention.

That’s it. It really is that easy!

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 
6 Bankside, Crosfield St, WA1 1UP. 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, 10 November 2016

Property Bargains to be Found in Warrington

About two months ago I attended a local property networking event in Warrington. I don’t usually go to these, but it was recommended by a landlord of mine and I thought I’d see what it was about.

This particular landlord, Kevin, actually came to me two years ago when he found my newsletter in his accountants’ office. He wanted me to come to the networking event to share my thoughts on the Warrington Property Market, meet other local landlords and give people a friendly face to contact if they are interested in investing in Warrington.

Well, to my surprise, about a month later, a gentleman called Tom that I had spoken to at the networking event decided to pop into my office and take me up on my offer of tea and biscuits!

Warrington Property Deals

It wasn’t long until we got talking about Warrington’s property market. Tom was sure that there are no longer any bargain properties to be had in Warrington… I look for deals every day, so I decided to show Tom when and where to look!

I found a good sized, three bedroom semi-detached property on Wheatcroft Close that was bought for £124,000 in August 2015. The same property sold for £160,000 in July this year, which is a rise of 29%. However, prices in the town during this same time period rose by 4.23%, so it should have sold for £129,245 if it kept up with the town’s average house price.


‘It’s a case of knowing when to buy.’

A three bed terrace on Station Road, in Padgate, sold for £104,000 in the summer of 2014, and was sold again this summer for £160,000. This is a rather impressive rise of 53.8%. But as we mentioned on the Warrington Property Blog a few weeks ago, average prices in this time have risen by a much more remarkable 9.48% in Warrington.

All this is well and good – and I was proving a point to Tom to show him bargains can be found.

However, property investment is usually a long term plan so buy well and buy smart, as you make your money on the purchase price.

With rents for the average 3 bedroom detached houses in Warrington achieving between £750 and £850 per month, yields are around 5.8%. I think in terms of a rental investment, there are better properties, such as smaller two or three bedroom terrace achieving yields of 8% plus.


If you spot a property and would like a second opinion then feel free to get in touch with me. My only interest is to make sure you get the best outcome from your investment. I operate a letting agency, so you can rest assured I have no motive to try and sell you a house and I will not be biased towards any one vendor.

My interest is to find you the right property to match your investment strategy.

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 6 Bankside, Crosfield St, WA1 1UP. 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.



Wednesday, 9 November 2016

Trump - Not the end of the world for the UK or its Warrington Property Market


Whilst I don't like the man - the American people have spoken. However, this isn't the end of the world for the UK, or its Property market.

Cancel the Nuclear Shelter off Amazon and just take a deep breath for a second.

There are questions about the level of competence of Mr Trump, but before you all go and panic: don't forget that Reagan was also regarded as grossly incompetent by the world's media and the High Brow Washington establishment, but not by Republican voters in 1980 (and re-elected in 1984).


The upper-class Washington types depicted Reagan as some sort of B-rated cowboy film star who was all 'yeaa-haw' and a loose cannon, who might be just tolerable as the governor of California, but who was definitely not sophisticated enough to comprehend, let alone conduct, foreign policy of the US Presidency.

If memory serves me well - on most things (not all) - he did a pretty good job.

There are plenty of other factors, closer to home, that we need to be concerned about other than the President of the US and the effect of the UK Housing Market.


Just my opinion – but I would be interested in yours.

If you would like to pop in and have a chat, then you can either email me on manoj@hamletwarrington.co.uk or call on 01925 235 338. Our address is 6 Bankside, Crosfield Street (opposite Iceland and Aldi – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Facebook, https://www.facebook.com/hamlethomeswarrington
Twitter, https://twitter.com/HHWarrington
Website, http://www.hamlethomeswarrington.co.uk/






Tuesday, 8 November 2016

9% Yield on This Gem in Warrington





Good afternoon Warrington property readers, I have just come across this absolute Gem in Newton-Le-Willows. Its on the market for £62,000 however I believe the Vendor will take £60k for this property.
Bathroom

At £60k this will rent out in the region of £450pcm  however if you then spend £2,000 on a new bathroom as the floor is dated and it just needs to be made a little modern + a lick of paint throughout the property this will rent for around £495 taking the yield from 9% to 9.5% 

No work really needs to be done to the property its a straight forward investment property, you can buy this and have a tenant in within a couple of weeks without having to spice up the bathroom or give the place a lick of paint.


Its also located right near the new housing estate in Newton-Le-Willows. Ideally this would attract a Working couple looking to start a family or a single professional. It is walking distance to the town and train station so also ideal for someone working in Manchester or Liverpool.

Its on the market with Linder Griffiths in Golborne so don't hang around and give them a call to book a viewing. This will not be on the market long. 
Click Here To View This Property


If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Warrington Property Market, together with regular postings on what I consider the best buy to let deals in Warrington (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch.

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 6 Bankside, Crosfield St, WA1 1UP. 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, 3 November 2016

Top Tips – Protecting Your Warrington Property Over Winter


Well the clocks have gone back and it’s getting dark before 5pm in Warrington. The daily chore of de – icing your car has started. Winter can be a tough time for everyone – but none more so than landlords.

These colder months present potential risks to your rental properties, which could lead to costly problems. However, taking some time now to check your properties can help with un-expected costs and help ease you through a disaster free winter.


Void Periods

Void periods are a major threat during the cold months. If you know that your property is likely to be empty over the winter, you need to make extra plans to ensure its upkeep. Make sure that you visit regularly to open windows and check on the heating. If you can’t do this yourself, make sure that you arrange for someone else to visit.

If your property is likely to be unoccupied over the Christmas period, either while students are returning home or your tenants are taking a long holiday, ensure that you take the following precautions as expensive items on display are an easy target for thieves.

Invest in theft deterrents such as alarms (visible from the exterior of the property) and motion sensors. Ensure that the locking mechanisms meet the insurance policy requirements (usually 5 lever mortise locks but this may vary from policy to policy).

It’s also worth checking if there are any neighbourhood watch groups operating in the area and advise them of any void periods over the festive season.

Prevention

Even before you get to winter, get things checked out well in advance. If you are not covered by a guarantee or warranty it will probably cost more to get stuff fixed at Christmas time (and even if you do have a warranty it will take longer.) So, if the boiler is making a wheezing noise or the washing machine is clanking, have it checked out now. 

Keep Tenants Informed

Well-informed tenants are the best protection against winter property damage. Don’t assume that your tenants know how to deal with the cold weather; many won’t. Similarly, you should remember that it is your responsibility as a landlord to make sure they have the information they need.

Consider putting together an information pack, including things like the location of stopcocks, basic boiler operation, and so on. Remind tenants to periodically turn the heating on (using the timer system if one is available) if they go away over Christmas, in order to ensure that pipes don’t freeze. Another great way to warm up your property is to bleed the radiators. This releases any trapped air, allowing hot water to fill every part of your radiator and warm the property more efficiently. It may be worth dropping off some radiator keys to your properties and showing your tenants how to use them.

Make sure they know where the fuse box is and that they know how to turn off the gas. Tell them to keep a note of the number 0800 111 999 – they should call this if they smell gas.

Ask friends for names and phone numbers of good plumbers, heating engineers and other trades people. Have some portable electric fan heaters you can use to give your tenants to keep them warm if the heating conks out and no one can come out and fix it promptly.

Getting the Work Done

Only use properly qualified tradesmen who are member of a national body of association. Check what membership of the body gives you and check they really are members by asking for ID. For example, all gas engineers should be listed on
 http://www.gassaferegister.co.uk/(the new name for Corgi)

Decent plumbers and some heating engineers should be in
 http://www.ciphe.org.uk/(which also has a list of plumber and heating engineers who are available over the Christmas period) or the Association of Plumbing and Heating Engineers. Some white good suppliers are closed for only one day at Christmas.

If you are a landlord who may have a void property over winter, then feel free to get in touch and let us at 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 asset 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 6 Bankside, Crosfield St, WA1 1UP. 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.