What to Know Before You Buy Your Next Investment Property - by Hazel de Kloe

Investing in property can be very exciting.  It can also be extremely complicated or stunningly simple depending on whom you speak to.

As a special treat and New Year gift to you, I have put together a new report to help you make the best and safest property decisions going forward in 2015.....

To view the rest of Hazel de Kloes' article, please click here.

Collins Road vs Grecian Way

A landlord came into our office looking to purchase a new buy-to-let property.  She had seen two properties of interest, one in Grecian Way, Broadfields and the other in Collins Road, Pennsylvania so wanted my advice on which would be best.

Collins Road offers a wide variety of properties, from bungalows and two bed terraced houses to large detached houses, so it appeals to a wide audience.  Due to the popularity of the road, it has an average rent of £1061pcm, which is slightly higher than the Exeter average, however when looking at the average property value, it is around 7.3% lower than the whole of Exeter combined, possibly due to the high number of rental accommodation units in the area.  A lower property value and higher rent means only one thing, a higher gross yield – averaging around 5.3%, which is around 13.2% higher than the whole of Exeter combined.

Grecian Way in Broadfields is a very popular residential area.  Generally people tend to buy property in the area to live in rather than rent out so this keeps the values higher than the Exeter average, however interestingly though, the average rent paid is considerably lower – around 17.1% lower in fact.  So we now have the opposite position to Collins Road, a higher price and a lower rent, therefore giving an average gross yield of only 3.56%. 

Moving on to compare the two roads directly, the gross yield for Collins Road works out at around an incredible 49.7% higher than Grecian Way, however the properties values are around 15.44% lower. 

This clearly shows that the question of yield over capital growth is the first one to overcome.  The higher property values in Grecian Way mean that in general the capital growth will be greater, depending on market conditions, however if you are looking for a good yield, Collins Road is the place to be.

If you are looking to buy a property in Exeter, please come and see us or call me on 01392 254488.

Stamp Duty 2014

Following my recent article on the rise of stamp duty in Exeter, as many of you will be aware, changes come into force tomorrow that will dramatically change the sales market.

George Osborne said 98% of homeowners in England and Wales would pay less after the changes than they do under the current system and that only people who buy homes worth more than £937,000 will pay more in tax.

The current system:

Stamp duty, which currently operates throughout the UK, charges successively higher rates on the whole of the purchase price. For this reason it is often criticised as a "slab tax". Its structure means there are sudden increases in stamp duty, when the price goes above the next threshold.

For example, someone buying a home for £250,000 would currently pay £2,500, or 1%, in stamp duty. But if the price was £1 more, they would pay an extra £5,000, as they then pay 3% on the whole purchase price.

The new system:

From midnight on 3rd December, the new rates of stamp duty will only apply to the amount of the purchase price that falls within the particular duty band, making it more like income tax.

In other words, someone buying a house for £200,000 will pay nothing on the first £125,000, and then 2% of the next £75,000, giving them a bill of £1500. Previously they would have paid 1% on the total purchase price, giving them a bill of £2,000. Thus although the percentage rates appear higher in some cases, the overall charge will mostly be lower.

The new rates will be

• Up to £125,000 : 0%
• £125,001 to £250,000 : 2%
• £250,001 to £925,000 : 5%
• £925,001 to £1.5m : 10%
• Above £1.5m : 12%

On average, someone buying a home in England and Wales will now pay £4,500 less in stamp duty. The new system will also smooth out the steps - or sudden jumps - in existing stamp duty thresholds.

Please find below a link to the HM Revenue & Customs stamp duty calculator.

http://www.hmrc.gov.uk/tools/sdlt/land-and-property.htm 

Capital growth or yield?

A couple came into our office this week looking to purchase another buy-to-let in Exeter.  

They already have three other properties in city and are getting a good monthly return, however as the properties are of relatively low value, they are concerned that the capital growth they will be getting may not be enough to cover their future plans, especially as they are currently on interest only mortgages.

I decided to look into the areas of Exeter that have achieved the greatest capital growth over the last six months, although this is a relatively small time period to make an accurate judgement on a market, it does show the current demand and trend.

Interestingly EX1 came out on top of the list, with an increase of just over 6.8%.  EX1 encompasses the city centre, Heavitree, Whipton, Monkerton and half of Pinhoe.  These areas are not known for their particularly high house prices, the average property price is currently just over £232,000, however as there are a large proportion of terraced properties (around 36.5% of the housing stock), they lend themselves well to the investment markets and buy-to-let landlords.  The area has excellent access routes and public transport so it is ideal for people working in and around the city.

The area with the lowest capital growth over the last six months is EX2, at around 5.85%.  EX2 covers a large area, from Dunchideok through Alphington, part of St Thomas, Countess Wear, St Leonards, St Loyes and Broadfields to Clyst Heath, Digby and Sowton.  Similarly to EX1, this area has excellent transport links and a wide variety of housing stock so it suits many different types of households.

The decision of where this couple should buy could be very different to where you should buy; it is linked to your personal position and requirements.  Therefore, if you are looking to buy an investment property in Exeter, come and talk to us so we can look at the best place for you.

A few facts about the property market around Exminster

A landlord who has invested in rental properties throughout Exeter asked me about the property market in her home village of Exminster.

Exminster and the surrounding areas are highly sought after , due in part to the beauty of the surroundings, relaxed lifestyle and wide open spaces. Many people purchase second homes in the area and it is also highly popular with retired people. 

The most popular types of property in Exminster are detached houses, making up nearly 48% of all available properties. This reflects the area’s popularity with families with children. In comparison, the least common type of accommodation is flats, which make up only 5.6 per cent of the market. It can be difficult for first time buyers in the area, as there is a distinct lack of new affordable housing. 

Unemployment is low in the area and many people living here are generally affluent, living in villages and commuting to towns and cities, such as Exeter and Plymouth. 

In EX6, some of the highest priced streets to live on are Haldon Drive, Lumley Close, in Kenton, and Castle Gate, also in Kenton. In these roads, house prices are on average, about £550,000. Some of the most affordable streets in the area include Kenton Mews, again in Kenton, Courtenay Terrace , in Starcross, and Alexandra Terrace, also in Starcross where prices average at about £110,000.

If you would like to discuss property in your area or where you are looking to invest, please come and see us at our office on South Street or call us on 01392 254488.

Keeping your tenants happy in Exeter

The value of properties up and down the country are still increasing, so it is more important than ever to provide your tenants with a comfortable home where they will be happy to stay for a long term, there will certainly be other landlords willing to do so if not. 

This does not mean that it is necessary to fully refurbish all your properties every six months, however there are a few simple steps that can be taken to ensure your tenants stay for the longest time possible.

The first and possibly most important question to ask yourself, and answer honestly, is if you walked into the property, would you live in it in its current condition?  If the answer is no then there is work to be done.  Modern and clean is not a tenant luxury, it is a basic requirement if you are to secure a decent tenant at the right rent. 

Neutral décor does not have to cost the earth to achieve, especially if the costs are spread throughout the length of a tenancy, perhaps put 10% of the monthly rent into a “refurbishment fund”, with the average rent being around £750pcm, after a six month tenancy you would have £450 towards some new paintwork.  Also remember some of these costs, subject to your personal position, are tax deductible.

Once you have got your tenants, you should be trying to keep hold of them.  There is a very simple message here and that is; a good landlord is an attentive and responsive landlord.  Don't hide from them, ignore them or hope they will go away.  Deal with their issues as soon as possible.  This simply means that you listen to their needs and act on them.  If you use a managing agent, listen to their advice, they will be trying to make the most of your investment for you and they will be able to advise on where best to spend your money.

If you want your tenants to remain happy, give them the tools that they need to keep the property in good shape. This could mean supplying that lawn mower which you were not going to offer originally, however, by offering one you are ensuring the continued support of your tenants and you are also giving your property the best chance to remain in good condition for as long as possible.

These are the basics and many landlords choose to go far above and beyond these points; they are the ones whose tenants stay for 3, 4, 5 years plus.

If you would like more advice on how to look after your property or how our “Cashback for Landlords” scheme could give your property the cash injection it needs to bring it back to life, please come and see us at our office on South Street or call us on 01392 254488.

Exeter owner occupation

Last week, a couple from Crediton, came into our office to discuss potentially investing in Exeter for the first time.

As our regular readers will know, the initial consideration you must make before investing in property is the balance between annual return and capital growth. However, what affects these two things in Exeter are very varied and complex.  The quantity of property and whether property is owner occupied or socially rented has a big difference on yield and capital growth.

It is worth looking at where the largest proportion of rented vs owner occupied properties are, will this have an effect on house prices and annual returns?

In 2011, the area of Exeter with the highest percentage of owner occupation was EX3, with around 75.2%.  This correlates to the average property value, currently at £395,158, and the highest in the Exeter area, however gross yields are in the region of only 2.7%, therefore it may not be the best place to invest for annual returns but the capital growth should be strong.

On the reverse side, in 2011 properties in EX1 and EX4 had the lowest average prices of £227,605 and £222,601, and owner occupation of 56.50% and 57.16%.  Looking at these figures I feel it is safe to say the higher the percentage of owner occupation, the higher the property price.  Interestingly, EX4 has the highest average rent of £916pcm, giving a gross yield of around 4.9% so if you are looking for a higher annual return, this is certainly one of the areas I would focus on.

There are numerous reasons why EX4 may be a preferred area for rental properties, there are lots of good schools, Exeter University draws students and employees, the Met Office and excellent access into the city centre.

There has been an increase in the number of households privately renting and this could be linked to the decline in the number of households getting on the housing ladder, usually by way of a mortgage. Those who read our recent article “How affordable are Exeter properties” will understand the difficulties buyers are facing.

To discuss investing in Exeter as there are many points to consider, please come and see us at our South Street office or call 01392 254488.

Prepare your Exeter property for winter

Extreme weather such as unexpected snow, strong winds and gales like we have experienced in the past couple of winters can put a huge strain on our homes, leading to burst pipes, boiler breakdowns and big bills.  

All it takes is a few simple checks (preferably BEFORE the first cold snap) to get your home winter fit.  Here's how.

Do Some Pre-Winter Maintenance

A few spot checks around your home will reduce the likelihood of winter rains, wind and cold causing structural damage. 

* Clean out the guttering and check for any leaks or damage.
* Cast your eye over the roof from ground level to look for problem signs such as loose or missing tiles. Check that TV aerials are securely fixed.
* Look out for cracked, loose or missing pointing or rendering on exterior walls and have this fixed before water finds it way in.
* Get your boiler and/or central heating serviced by a Gas Safe Registered engineer.
* Clear out leaves and debris blocking up drain grilles and clean patios and footpaths before they get slippery from a build-up of dirt.
* Have chimneys and flues swept if you use an open fire or wood burner.
* Get your insulation up to scratch - lag pipes and water tanks, fit draught excluders and insulate your loft properly.
* Make sure your smoke alarms and carbon monoxide alarms are in full working order.
* Show every adult and teenage member of the household where the stopcock is, plus where to turn off electricity and gas supplies in case of emergency.
* Keep a list of useful numbers handy in case of emergency. Include your plumber, gas installer, electrician and doctor.

Whether your property is one you live in yourself or rented out, we all have to take responsibility for the effects of extreme weather.  Landlords of rental properties should also show due diligence in making sure that the above checks are carried out on their properties both to avoid additional expense to themselves and discomfort and inconvenience for their tenants.

Here at Martin & Co Exeter, we can give advice on the types of precautions you should take and also who you can call if you need help with any of the suggested actions.  We want all our tenants to be happy and comfortable in their homes throughout the winter, together with ensuring our Landlords get the steady income from their rental property with a minimum of hassle.  Why not give us a call to find out how we can help you?

The rise of Exeter stamp duty

I recently read an interesting article looking at the rise in the stamp duty that has been paid in the south west.  New figures show a £1.5 billion rise in the total Stamp Duty Land Tax yield from residential sales in 2013/14.

While conducting sales appraisals I am finding that I have to discuss stamp duty with more and more sellers, especially when looking around the £250,000 mark and in my opinion it is also restricting some house prices.

There have been around 50,000 transactions in Devon, Cornwall and Somerset alone and those who read my recent article “How affordable are Exeter properties?” will know the area is not the easiest for first time buyers – these transactions gave the treasury around £250 million in 2013/14.

It is interesting to see what happens when you work out the current and future income the treasury may receive.  The average price paid for a property in Exeter over the past three years was £232,730 and there were 7088 transactions, bringing in £16,495,902.50 in stamp duty.  The current average price for a property is now £256,675 pushing it over the 3% threshold, due to an increase in values of around 8.5% over the last year, and assuming the number of transactions remains the same over the next three years, this would then bring in £54,579,372!

If you are looking to invest in property come and talk to us at our office on South Street so we can work out the best options for you.

If you would like to read the article you can find it here; http://www.exeterexpressandecho.co.uk/House-price-rises-Devon-prompt-stamp-duty-reform/story-23044044-detail/story.html

Willmott Dixon to build £7.6 million Steiner academy

Willmott Dixon have been chosen to construct a new 4,707m2, two-storey facility alongside a full refurbishment to Thomas Hall, the grade II listed building that was formerly a hall of residence for the university. 

The project will also include construction of a separate hall and kitchen, six kindergarten classrooms, new car parks and landscaping of the grounds. It is planned that the Steiner Academy Exeter will open in September 2015 and accommodate 624 full time students aged between four and 16 years old.

For a landlord this can only be good news, many construction workers will be involved in the build and they will need somewhere to live.  Furthermore, following the construction, the parents of these extra 624 students will surely want to be nearby, considering the students could be at the school for 12 years, this could make a very nice long term let!

http://www.willmottdixongroup.co.uk/news?actv_news_news_id=371

What to look for when buying an investment property in Exeter

I was talking to a landlord recently who asked for my opinion on what to look for when purchasing a Buy-to-Let property. 

One piece of advice I was able to offer was that a good property should sell easily when you need to release funds. So, if you are a landlord considering buying a property to let out, you want to buy a property that is saleable.

There are a number of ways you can work out how saleable a property is, for example, how long properties on a road or area have taken to sell in the past and the amenities nearby.  There can also be a vast difference in the number of properties sold in an area in relation to the property stock.

Taking the number of properties sold in a road in relation to property stock first of all, looking back from January 1995, we can see that one of the highest turnover areas in Exeter is Clyst Heath, with the number of transactions here being around 138% higher than the number of residential properties in the area.  With an average gross yield of around 4.1% the area makes a fairly reasonable return on the investment and properties here usually let very quickly.  I find we get lots of interest for properties to let around Clyst Heath, the access to the M5 is excellent and the school is very sought after.

At the opposite end of the scale New North Road, which is predominantly made up of the apartments in Isca Place and larger properties opposite, has had 76% fewer transactions compared to stock.  This could possibly be because the apartments have been mainly bought by investor landlords who have kept hold of them due to their good gross yield of around 5.1%.  Being in the city centre the apartments in Marcus House are very popular for post graduate students and we rarely find them staying up to let for long.  Constantine House has larger apartments which attract sharers and families so no matter what your budget is, there will be demand for the property when it comes up for let.

Both of these areas have good amenities nearby, whether it is supermarkets, large employers, schools or public transport, so they will always let very well and have high demand.  Where there have been few property transactions there are likely to be many buyers waiting in the wings to catch any new properties coming to the market, similarly where there have been more transactions, it is likely this demand will have remained the same, so whether there have been many transactions or few, this should not drastically alter the saleability.

The length of time properties have taken to sell can also vary considerably, however this is largely affected by the price of the property and the current market conditions.  Come and talk to us if you are considering buying, selling or letting a property and we can provide more detailed information specifically for you. Please view our website www.martincoexeter.co.uk for our current sale properties.

Deposits… The Facts…

As part of the Housing Act 2004 the government introduced tenancy deposit protection for all assured shorthold tenancies (ASTs) in England and Wales where a deposit is taken.  

From April 6^th 2007, all deposits paid under an AST should have been protected within 14 calendar days of receipt by the landlord and from 6^th April 2012, deposits for all ASTs in England and Wales must be protected with 30 calendar days of receipt by the landlord, this change is a result of the Localism Bill 2011.

The aim of the legislation is to ensure that tenants who have paid a deposit to a landlord or letting agent and are entitled to receive all or part of it back at the end of that tenancy, actually do get back the amount to which they are entitled.

Who is affected?

The legislation covers virtually all new AST contracts through which private landlords let property in England and Wales; however the following will not need to be registered with a tenancy deposit protection scheme:

·          Company lets.

·          Student accommodation let directly by universities or colleges.

·          Resident landlords (those living in the property).

·          Landlords with tenancies over £100,000p.a.

Deposits taken before April 2007 do not need to be protected by a scheme such as the DPS; however if an existing tenancy is renewed and a landlord agrees to a new fixed-term tenancy, the initial deposit taken must then be lodged with a tenancy deposit protection scheme.

Why is legislation needed?

The return of a deposit at the end of a tenancy is by no means guaranteed, for example according to the DPS in 2008/9:

·          70% were returned in full.

·          17% were returned in part.

·          13% were not returned at all.

Nearly 1 in 5 (17%) of tenants who had some or all of their deposit withheld felt that it had been withheld unjustifiably.  The new tenancy deposit protection schemes will ensure all landlords safeguard the deposits they take, which is in every landlords and tenant’s interests.

The future of the Exeter property market

There are many reasons why people see buy-to-let as a good medium term investment option.  There is a shortage of housing nationally and unless we start building on an extensive scale, it is only going to get worse. 

People’s lifestyles are changing and more people are now living alone, or in smaller family units, which adds to this demand. Pensions don’t seem to be delivering as they used to, so people are looking for other ways to fund their later life. It seems inevitable that as time goes on, the taxman will show a greater interest in buy-to-let, but that doesn't stop an increasing number of people ploughing in on a monthly basis.

There are many reasons why the long term demographics of Exeter make buy-to-let investment here an attractive option. The city is large, established, and conveniently situated as a hub for the South West.

There are excellent respected employers here too, the Met Office, Exeter Royal Devon & Exeter hospital, South West Water and Exeter University to name just a few. The schools, especially St James, St Luke’s, Isca and Clyst Heath Primary are huge magnets to the city and people shouldn't underestimate the importance of them.

A diverse city such as Exeter gives rise to a number of investment options too. There have been a large number of new houses built here over the last decade, including developments at The Rydons and Cranbrook and these are always popular with tenants. There’s a solid Victorian Terrace market – the staple rental territory of many UK towns. Equally, we have a number of areas of ex-local Authority properties which offer high yields and enjoy constant tenant demand.

Prices are pretty competitive as well. Two bed houses are the bread and butter of any rental market, and these range from about £130k in one of the cheaper areas of town, to £180k in one of the nicer new areas. For £160k to £200k you'll get something very rentable in an area you feel comfortable with.

In short ...  the long term prospects for Exeter look very good, although as there are no guarantees, it is certainly worth coming to see us to get advice on the best areas for you to buy.

Exmouth vs Dawlish

The comparisons between two coastal towns, from one side of a river to the other, can be quite remarkable, especially if you are looking for capital growth.

Following my feature in the June edition about average property values in Exeter increasing by £227 per week over the last 12 months, a couple visited our office to discuss potentially investing in a property to rent out for the first time.

They were particularly keen for the property to be in one of the coastal towns near Exeter, such as Exmouth or Dawlish. 

When I did some research into these areas I found the average property price in Dawlish is currently £217,118, which is around 3.3% lower than a year ago.  In contrast, the average price in Exmouth is £243,269; this has increased very slightly by 0.04% over the same time.  

If capital growth is what you are looking for then neither town is ideal, considering Exeter has increased by around 4% over the same time, however as Dawlish prices have gone down (possibly due to the recent floods), Exmouth is then the one to go for to protect against a devaluing portfolio. 

It is important to consider the average rents in each area, as well as the initial value of the property, and what you are expecting from your investment. Considering rents in Exmouth have a yield of around 11% higher than Dawlish, this adds to the evidence that Exmouth should be the preferred choice for an investment property.  If you are looking to move to Dawlish, then the benefits of the main train line, lovely beach and Black Swans may be more of a draw.

The property market is dynamic, so it is important to do thorough research before committing.  If you would like to talk to us about buy to let, please feel free to visit our office on South Street.

How affordable are Exeter properties?

Potential landlords often ask us, is now a good time to buy an investment property in Exeter?  When buying something as valuable as a property in a changing market, it is worth checking the facts and figures very carefully.

Last week I had an interesting discussion with a potential landlord who lives in Exwick. He is thinking of purchasing his first buy-to-let property and he wanted my opinion on the state of the Exeter property market and if it was a good time to invest. 

He was particularly worried that with all the newspaper headlines of a booming housing market, there wouldn’t be any demand by tenants.

To put things into perspective I thought it would be worth looking at earnings compared to property values to see how affordable properties in Exeter actually are.  I found that properties in Exeter currently have an average value of around £252,499 with the average salary in 2012 being £23,155. This is a ratio of around 1 to 10.9, which is a wider gap when compared to the UK National average of 1 to 9.46. 

It seems the issue is becoming both affordability and the raising of the 5% or 10% deposit, which when you take into account fees, will be in the order of £15,000-£30,000.  The good news for landlords and this gentleman is while buyers can’t get on the housing ladder, they will have to stay in rented accommodation.

If you are considering buying a property to let in the Exeter area, come and see us at our Martin & Co office on South Street.

The future of the Exeter property market

There are many reasons why many people see buy-to-let as a good medium term investment option: There’s a shortage of housing nationally and unless we start building on an extensive scale, it’s only going to get worse. 

People’s lifestyles are changing and more people are now living alone, or in smaller family units, which adds to this demand. Pensions don’t seem to be delivering as they used to, so people are looking for other ways to fund their later life. It seems inevitable that as time goes on, the taxman will show a greater interest in buy-to-let, but that doesn't stop an increasing number of people ploughing in on a monthly basis.

There are many reasons why the long term demographics of Exeter make buy-to-let investment an attractive option. The city is large, established, and conveniently situated as a hub for the South West.

There are an excellent number of respected employers here too. The MET Office, Exeter RD&E hospital, South West Water and Exeter University to name a few. The schools, especially St Peters, St James, St Lukes, Isca and Clyst Heath Primary and are huge magnets to the town and people shouldn't underestimate the importance of them.

A diverse city such as Exeter gives rise to a number of investment options too. There’s been a lot of property built in the last 10 years, which is always popular with tenants, such as The Rydons and Cranbrook. There’s a solid Victorian Terrace market – the staple rental territory of many UK towns. Equally, we have a number of main areas of ex Local Authority properties which offer high yields and enjoy constant tenant demand.

Prices are pretty competitive as well. Two bed houses are the bread and butter of any rental market, and these range from about £130k in one of the cheaper areas of town, to £180k in one of the nicest new areas. For £160k to £200k you'll get something very rentable in an area you feel comfortable with.

In short ...  the long term prospects for Exeter look very good!

Profit and Loss in Exeter

In this ever more difficult market, landlords and investors are always struggling to find a bargain.  A landlord who had been reading our articles about price changes in Exeter came in to our office recently to ask our advice about the best area of the city to invest in for capital growth.

I found that one of those superb four bedroom terrace houses in Gras Lawn was bought for only £125,000 in 2010.  Knowing Gras Lawn it is clear something extreme must have taken place with this property for it to sell at this price, however it is an example that properties can still be found below market value.  Gras Lawn tends to hold its price very well on average, being near the hospital, main route in and out of Exeter and being known as a prestigious development.  The same property sold for £342,500 in March this year, which is an increase of 174%. However, prices in the rest of EX2 during this same time period rose by 5.8%, so it should have only sold for £132,250 if in keeping.

This shows that although rare, there are still one-off deals to be had and money to be made. It is worth also looking at the opposite end of the scale, and remembering that money can be lost too.  For example, a bungalow on Sycamore Road sold for £190,000 in June 2013 and later sold for only £173,000 in March 2014, giving a loss of around 9%.  

Of course, it is not all about area.  I don't know what the specific issues were with the two properties, but superb terrace houses can have structural problems and flats on otherwise good roads can be in need of repair. But get the area right and you will at least be able to have confidence that, all other things being equal, your investment should perform above the average.

In our experience, it is always worth looking in detail at the way the property market has been performing at the local level before jumping in to what seems like a good purchase at the time.  Being experts in the Exeter property market we are always happy to give our impartial advice on the best (and worst) areas in which to buy – do get in touch or call in.

Selling a property in Exeter – An estate agents point of view

For me, one of the most exciting parts of being an estate and letting agent is putting a property on the market that you know will get very high volumes of interest and sell or let within a few days.

I recently put a house on the market for sale in Broadfields.  I listed it on a Friday afternoon and knew it would generate a great deal of interest over the weekend as similar properties do not come up too often.  It is a three bedroom semi-detached modern house with garage, parking and good sized garden and is near excellent schools and amenities.  Broadfields gives excellent access to the M5 so is popular for both people working in the city and those travelling further afield.

Monday morning came, I checked through the weekends’ enquires and lo and behold there were lots for this new property.  I called through the list, booking viewings for the following day.  It was impossible to pick and choose which applicants to call first; some enquires come through with lots of detail, such as their buying and selling position, availability of funds best viewing times.  Others simply asked for more details, but in the end, any one of them could be our buyer.  I managed to book one viewing for the following day and a few more for later in the week.

Tuesday came, viewing day.  I set off to the property with a copy of the draft sales particulars in my folder as we were awaiting approval of the full particulars from the seller; I had previously suggested to the sellers that although their young child was delightful and very well behaved, I thought viewers may prefer to have a viewing without toy cars and footballs being strategically thrown at their feet to trip them over so they could look more closely at how well decorated the property was.  The sellers had presented the property very well, the grass was cut, the beds had been made and the lounge had been tidied.  As the viewing was in the morning there was still a delicious smell of fresh coffee in the kitchen, always a welcoming aroma. 

The viewers arrived and after introductions I started to show them around the property.  It is usually very obvious from early on whether or not a viewer likes a property; there are those who hide their emotions well but in the main the buying signals are obvious.  Being first time buyers this particular couple had not yet learnt the art of concealment, after lots of “oh wow’s” at the presentation of the master bedroom and “it’s amazing” references to the open plan lounge/diner, I had a pretty good idea they were keen.  I always enjoy showing and selling property to first time buyers, they usually give off a strange sense of both excitement and sheer terror at the thought they may become homeowners!

I let them have another look around the property and discuss it between themselves without me looking over their shoulder, then said thank you very much and they set off on their way home.

Shortly after getting back to the office I took a call from the couple, asking to arrange another viewing with their parents.  We did the second viewing on the same day and they went away to have a think overnight.

Wednesday came, I opened my email and there it was, our first offer for the property.  I called the vendors and discussed the position of the applicants and their offer.  Estate agents work for the seller so my priority and philosophy is get to the best price from the best buyer in the best time, and from all the buying signals in this case I knew we would be able to achieve a higher price for the seller.  Following many calls back and forth, we finally agreed a price.  After informing our very nice first time buyers we had agreed a price, solicitors were instructed and I sent out all the relevant paperwork. 

Then the fun began with the sales progression!

If you are looking to buy, sell or let a property in the Exeter area please come in and see us at our South Street office or call on 01392 254488.

Below is a similar property which I am sure will not hang around for long!

http://www.martinco.com/for-sale/property/177418

Rent guarantee…is it worth it?

Tenants can very often appear perfect at the outset, however during the period of tenancy this can quickly change.

The first thing a landlord notices is non-payment or late rent. The reasons for not paying rent are numerous but mainly related to loss of earnings, relationship breakups or other changes in personal circumstances.

So is it worth taking out rent guarantee when letting your property?

An example of a few things current policies can cover:

• Late payment of rent
• Court fees
• Repossession

A few of our landlords have already taken out policies as they see the cover offered provides real value and peace of mind, especially for those landlords new to buy-to-let.

A recent case of one of our landlords showing how it can go wrong is as follows:

A tenant stopped paying rent because of a change of circumstances. The appropriate legal notices were issued and we are now four months’ down the road.  Having gained a repossession order from the courts and the tenant still refuses to move out, we are now faced with another court order for bailiffs to attend to evict the tenant.

Even after the eviction order has been obtained, there can be more delays. The tenant can apply to the court to delay the eviction, or can simply resist the reasonable force the bailiffs are entitled to use to remove them obliging the bailiffs ask the police to attend the eviction. In this instance, the tenant did get an initial stay of eviction but failed to meet the commitments they had made to the court and when the courts ordered the bailiffs to go in they conceded defeat and moved out.

All in all, the cost to this landlord was five months’ loss of rent plus the legal costs. That came to more than £5000, even before we checked the property for damage.

So is rent guarantee worth it? I would suggest it is, as a good rent guarantee product would have covered the landlord in this case for most of the rent arrears and the cost of court action for as little as £120.00 subject to adequate tenant referencing. 

Cranbrook achieves 22% higher rent than Exeter

I have had several landlords contacting me over the last few weeks to ask my thoughts on buying an investment property at Cranbrook.

One in particular wanted to know if buying at Cranbrook would make a better long term investment than buying elsewhere in Exeter.

Over the past year average property values at Cranbrook have increased by around 4.4%, which is not particularly exceptional when the average for the South West is around 7.4%.

This leads to the question as to why so many landlords are buying at the new development.

I did some research into average asking rents in the area and it turns out that the average asking rent throughout Exeter is currently around £837pcm, this is in contrast to an incredible £1024pcm at Cranbrook, which is over 22% higher!

This higher rent could be due to many factors and certainly moving into a brand new home has its advantages.  However, for a landlord it is worth taking into account the time taken to let the property.  At Cranbrook on average it takes around 67 days and the rest of Exeter only 56 day.  I suspect this will change as the site develops.

We would advise you carry out a thorough handover and snagging list with the builder to ensure there are no outstanding issues when the tenants move in.

If you are considering buying, selling or purchasing a property to let at Cranbrook or in the Exeter area, come and see us at our office on South Street or click on our Landlord Buyers Guide to the left.

"Buying and selling property is the most stressful experience in modern day life"

A recent poll has revealed that buying and selling property has now hit the top spot for being the most stressful experience in modern day life.  

Interestingly, slow solicitors have been voted the most stressful aspect of selling a property, but is it really all their fault?  We have recently seen reports that that the searches solicitors request when someone buys a property are taking up to six weeks to be returned by one council in the region.  On average, searches take up to two weeks to be returned so this extra month is adding considerably to the stress and frustration for all parties. 

Estate agents did not fare much better with 40% of sellers thinking they could do a better job than an estate agent. 

Wherever the fault lies in these frustrations and delays, if you want to reduce the stress of buying or selling it is always worth taking time to look for a solicitor and estate agent with whom you are happy.  Not only do their fees vary dramatically but so do the services they offer for their fee.  

When choosing your solicitor, make sure that you are talking to the person who will be doing the conveyancing work, rather than an assistant or paralegal.  Estate agents too often have one person conducting valuations and starting the marketing of a property and others to do viewings and feedback so it can be difficult to keep track of who to talk to if you are unhappy or for updates. Make sure you know who your main point of contact is, how often they expect to report back to you and how they will report (email, phone, letter etc.)

THE 10 MOST STRESSFUL EXPERIENCES IN MODERN LIFE

1. Buying or selling a property

2. Relationship break-up/divorce

3. Being made redundant

4. Death of a grandparent

5. Getting the sack

6. Being in debt

7. Starting a new job 

8. Becoming a parent for the first time

9. Planning a wedding

10. Going broke / bankrupt

  

THE 10 MOST STRESSFUL ASPECTS OF SELLING A PROPERTY

1. Slow solicitors

2. The risk of it falling through

3. The huge sums of money at stake

4. All the documentation to complete

5. Endless phone calls

6. The survey

7. Difficult vendors

8. Difficult estate agents

9. Being gazumped at the last minute

10. Disruption caused to your working day

If you would like to discuss buying, selling or letting please call me on 01392 254488 or visit our office on South Street, Exeter.


Data from: http://www.dailymail.co.uk/news/article-2690545/How-buying-house-stressful-bankruptcy-divorce-death-loved-one-according-poll.html#ixzz37RLGuBzY 

Exeter – North vs South

I am always looking for the best places to invest in Exeter for both capital growth and yield; it is surprising the difference between the North and South of the city.

I thought it would be interesting to see how properties in EX4 (which is generally the North of Exeter) compare to those in EX2 (which is generally to the South).

Now it is probably not surprising that properties in EX2 are on average around 9.3% higher in value than in EX4, with the likes of St Leonards Road bumping up the price.  Property values in EX2 have increased by around 3.7% over the past year, however prices in EX4 have gone up by around 47.4% more over the same time.

This must surely mean that EX4 is the place to invest for capital growth?  Well, it is very much worth looking at the broader picture, a year is a very short time in the life of a property.

When we start to look at property prices over the last 5 years, prices in EX4 have increased by only around 2.7% more than EX2.

What would happen if we look at the last 10, 15 or even 20 years?

When we look at the yields for EX2 and EX4, it is interesting to see that there is a contradiction to the general “the lower the property price the higher the yield but the lower the capital growth” scenario.

Despite the average price in EX4 being lower, yields are also lower at around 4%.

If you are considering purchasing a property in Exeter, it is worth coming and seeing us at our Martin & Co Exeter office on South Street so we can look at where will be the best for you to invest to make the most of your money.

Student Shortfall

It is interesting to learn that the average student in the UK is short by around £277 each month, according to the website Save the Student.

It was found by The National Student Money Survey that students on average spend £735 per month but receive only £458 in loans.

Around 37% of students ask their parents for assistance during a financial emergency while a around a quarter take out a bank loan to cover the shortfall.

There is a small proportion, just 16% of students who have a part-time job to meet the monthly shortfall, while up to a fifth rely on money from their parents to support their studies.

The figures:                                       

·         80% of students constantly worry about money

·         46% have had their studies affected by financial concerns and 58% said it affects their diet

·         A third of students have never budgeted

·         A third feel that parents do not give enough financial support

·         The average student has £350 in savings.

Jake Butler, editor of Save the Student, said:

"It's a thorny issue of how much parents should contribute to the shortfall, and it entirely depends on individual circumstances. Ultimately I don't believe parents should have the expectation put upon them.

"However with hearing daily horror stories of students living on the breadline, I feel it's still important that parents are made more aware of the situation their child at university may be in."