What to look for when purchasing a buy-to-let property?

Purchasing a buy-to-let can be daunting, especially if it is your first time.  I have many first time landlords come to see me for advice and I find the initial questions they usually ask me are “where can I look for a property” and “where in Exeter should I buy”.

Martin & Co and the majority of other Exeter estate agents market their properties first on OnTheMarket.com, so setting up a property alert on this site will ensure you receive properties as soon as they are available.

When considering where to buy, first ask why people may be moving in the first place; are they relocating for work, are their children now going to school or are they upsizing for example.  Once you have considered why people may move, you can start to think about where they will want to move to, for example if they will be working at the hospital, Wonford would be convenient or if their children go to school in Clyst Heath, Kings Heath may be of interest.  Using this thought process you can close in on areas that can support the type of tenant you are looking for. 

It is also worth considering if the property is near good transport links, is there furniture and is it fire safe, and does it currently hold all the necessary certificates such as a landlord gas safety certificate, electrical certificate and an HMO licence if applicable.

If you can purchase a property with a tenant already in situ you will benefit from receiving rent from day one.

If you are considering purchasing a buy-to-let property please feel free to call me on 01392 254488 to discuss the tenanted properties we currently have for sale or visit our office on South Street and we can discuss your personal requirements.

Landlords warned to remain vigilant for cannabis production

Landlords and agents are being warned to remain vigilant as new figures reveal the extent of cannabis cultivation in the UK. 

Direct Line for Business has analysed figures from the Office for National Statistics (ONS) which show that the police seized over 400,000 plants in the UK last year.  

The most seizures were made by the Metropolitan police (59,002), followed by police in Wiltshire, the West Midlands, South Yorkshire, Dyfed-Powys and Nottinghamshire  

Direct Line says that the number of seizures dropped by 10 per cent between 2013 and 2014 but that a third of police forces have reported an increase in the number of cannabis plants identified.
                                   
The insurer has reiterated a warning to landlords that they should vet their tenants carefully as cannabis farms can cause significant damage to their properties.

It says that damage caused by cannabis production can include damaged ceilings and wells, severe water damage and fires. 

In addition to the financial costs, landlords are also warned that they could face legal action if it is proved that they were aware of these criminal activities or have benefited from them financially. 

“Landlords should remain vigilant and investigate unusual tenant behaviour. In addition to carrying out rigorous tenant checks and regular inspections, landlords should be aware of odd smells, sudden fluctuations in energy bills and evidence that the electrical wires have been tampered with,” says Jane Guaschi, Business Manager at Direct Line for Business. 

"If as a landlord you suspect your property is being used as a cannabis farm, contact your local police straight away. Do not confront your tenants yourself,” she adds.

Written by Letting Agent Today

What does the national average of £179,817 buy you across the UK?

Data released by the Land Registry this week revealed that the average property price in the UK has risen, reaching £179,817 in April.

Let’s take a look at what you can get for your money across the UK…

Renfrewshire, Scotland – offers over £170,000

In Renfrew, 6 miles outside Glasgow, you could buy a 3 bed bungalow for just less than the national average. The property has 3 large bedrooms all with built in wardrobes, lounge, dining room, fitted kitchen, large family bathroom, and an extensive well maintained garden.

You can view the full property details here.

Wanstead, London – £175,000

This studio apartment in Wanstead, East London is ideal for first time buyers or buy-to-let investors. The property is located just a 1 minute walk from Wanstead Underground tube station and Wanstead´s popular High Street, and benefits from storage and a recently refurbished bathroom.

You can view the full property details here.

Biddulph, Staffordshire – £179,000

The largest property in our selection is this is 4 bedroom period home in Biddulph. The property benefits from a multi fuel stove, two bathrooms, beamed ceiling and a stained glass window in the porch. It also has off road parking with a carport and a rear walled garden.

You can view the full property details here.

Truro, Cornwall – £179,950

Just slightly over the national average and the furthest South in our selection is this 2 bedroom terraced house in Truro. The property includes two bedrooms with fitted wardrobes, a modern open plan kitchen/dining room, rear garden and allocated parking.

You can view the full property details here.

If you would like to see more properties across the UK you can visit our website or contact your local Martin & Co office.

Maximise your buy-to-let profits by paying less tax

The government recognises letting your property as being a business transaction. As such, certain elements of it are tax-deductible as ‘allowable expenses’.

Here is a brief guide to what you may, or may not, claim back to increase your profit.

Mortgage Fees Broker and arrangement fees are tax deductible, claimable in the year the mortgage was arranged. Any incidental costs associated with taking loans are claimable as expenses.

Mortgage Interest All interest paid on your mortgage can be used to offset your tax bill. In the case of interest-only mortgages, your whole monthly repayment is tax-deductible. In the case that your income roughly equates to your repayment, you’ll be exempt from income tax on the property. (Some landlords keep their property mortgaged even when they can afford to pay it off, just to benefit from this tax break)

Letting Agent Fees If an agent finds tenants for, or manages your property, you’ll probably pay between 10-15% of monthly rental income in fees. These are all claimable.

Securing Tenants If you rent your property privately, you can claim on all the following: advertising for tenants, purchasing a tenancy agreement, credit checking, referencing, deposit protection, and professional inventory costs.

Building and Contents Insurance Premiums These can protect the building, loss of rent, and your liability as a landlord, plus you can add extra cover, too.

Maintenance and Repairs Most of these are tax deductible, but cannot be claimed if the house is not fit for purpose. For example, fixing white goods is claimable – building a conservatory is not!

Furniture If the property is furnished you can claim back ‘wear and tear’ allowance (roughly 10% annual rent) or the exact cost of replacing individual items. You cannot claim the cost of furnishing the property in the first place.

Ground rent and Service Leaseholders will usually pay ground rent to the freeholder, and service charges are common. They include maintenance, heating and lighting, but can extend to security. You can claim back on any on-site services such as gardening and electrical costs, too.

Council Tax and Utility Bills If you pay any council tax or utility bills that a tenant would usually pay, you can claim the whole cost. You can also claim these costs during void periods.

Others Minor costs such as phone calls, stationery and cost of travel between properties (for purposes of the rental business) are claimable expenses.

With all this in mind it pays to keep all your receipts and to keep an eye out on all the costs you’re incurring as part of your property management

For further information on how to effectively run your let as a business, and to find out how to be as professional as possible, please contact us today - exetersales@martinco.com.

Landlord’s Guide: Grants For An Eco-Friendly Property

Everything today seems to revolve around the ‘green agenda’. Some people are passionate for the cause whilst others don’t view it as a main priority, or think it a maze of the unknown.

Landlords can often dismiss the green vision as a drain on their property profit, when in fact did you know you could cover such costs with various grants? And offering an eco-friendly property can actually make it more attractive and profitable?

What are the benefits of making your rental property more energy efficient to both you and your tenants?

• Increase in property value
• Lowers energy bills for tenants
• Reduces rent arrears
• Attracts longer term tenants
• Achieves higher EPC ratings
• Property is easier to let
• Reduction in emissions

We’re here to shed some light on a few of the great grants on offer to landlords and homeowners across England and the UK.

Green Deal

If your property has an electricity meter, then you’re eligible for the Green Deal. You can take out a loan to cover home improvements that will make your property greener, and repay through your electricity bill.

Because of this repayment method, both you and your tenant must agree to the terms. They will be expected to cover the bill if you choose to repay in this way as opposed to covering costs outright yourself.

How does it work?

A Green Deal Assessor will pay you a visit and decide which measures will be the perfect fit to improve your property. This could include adding insulation, improving the heating system; draught proofing, installing new windows or looking into ways your property can produce renewable energy.  From here you will be granted a loan to carry out the suggested works if you wish.

Note: Subsequent tenants will also be liable for this additional charge if you choose to repay via the property’s electricity bill, so you must tell them too. However, the money they will save in utility bills could well cancel out the cost of the repayments, and they will enjoy a clear, green conscience to boot!

Landlord’s Energy Saving Allowance

As a landlord, you could claim back up to £1,500 in tax reductions if you install wall or hot water heater insulation, draught proofing or cavity loft insulation. The rewards will be passed on to your tenants, as they will benefit from lower utility bills and a more eco-friendly and responsible home.

Note: You can include this in as many properties as you own, so if you have six properties, you could claim back up to £9,000 etc.

Feed In Tariff (Fits)

These were introduced in 2010 and are really something to get excited about! If you install a renewable energy source at your property such as a wind turbine, solar panels, anaerobic digesters or hydroelectricity, you could secure an additional revenue stream.

How? Because you can be paid for the electricity you generate with such measures from the national grid and energy companies – even if the property uses the energy itself! You even receive a ‘bonus’ if you provide the grid with additional energy.

It’s all part of an incentive to become a greener country less reliant on fossil fuels. It also enables your property to become more self-sufficient which is a major advantage for potential tenants.

There are a plethora of both grants and loans for landlords, but what is available from council to council varies so we recommend you contact your local council as a first port of call for help and advice.  You can also find more information on the Energy Saving Trust website.

Alternatively, if you have a property to let, why not contact our office?  You could also download our Landlord Brochure for information on the landlord services available to you.

Ten Points To Consider When Moving From Halls To A Student House

Moving from university halls to your very own shared student house can feel liberating and rather grown up. And it is a rather grown up thing to do, which is why you should treat it as a big decision and consider the following… 

1. Choose Your Housemates Wisely

Perhaps you’ll live with the same people you did in halls, or maybe other friends. Regardless, it’s usually a good idea to avoid living with ‘Party Pete’…awesome on a night out, not so good when the night out is in your living room at 3am on deadline week, and where’s his share of the rent again?

2. Make Sure You Use A Reputable Letting Agency

Some students choose to find (often unreliable) landlords on free advertising websites etc. While you may save a few pounds in the short term, when your boiler breaks you could find yourself cold for a very long time after the landlord fails to appear. Choosing a reputable agent gives you peace of mind that your home is safe and if anything goes wrong, it will be fixed quickly.

3. Make Sure Your Deposit Is Held In A Deposit Scheme

As of 2007, ALL deposits on rented properties are required by law to go into a recognised scheme. A Tenancy Deposit Protection scheme protects a tenant’s deposit and ensures that it will be refunded in full at the end of the tenancy providing certain terms are met. Martin and Co is the largest user of The Deposit Protection Scheme and all Martin & Co local offices hold deposits under one of the three Tenancy Deposit Schemes in England and Wales and the Safe Deposits scheme in Scotland.

4. Factor In ALL Costs

Gone are the ‘all inclusive’ student halls days. Make sure you know what is –and isn’t – included in your rent. Internet, gas, electricity, water and TV licenses all need paying for, and utility inclusion differs from property to property.

Also remember to attain the relevant form from your university to make you exempt from council tax! If you’re going all out and installing Virgin/Sky, remember the installation costs!

TOP TIP: Remember that you require a TV license even if you are only watching TV online. One license per house. Don’t be left with a hefty fine. 

5. Lay Out A Chores Schedule

Boring? Yes. Necessary? Absolutely. We’re not asking you to go all ‘Monica Geller’ on your new housemates… but sharing the tedious tasks avoids the inevitable arguments in the long run when the one person cleaning the toilet eventually cracks. Tidy space, tidy mind etc.!

On the subject of tidiness, use common sense – be clean and don’t break anything. If accidents do happen, let your landlord know as soon as possible. Treating the property, as if it were your own, will protect you when you come to the end of your tenancy and you need your deposit back.

6. Split Bills Properly

There’s a few ways to do this:

a)    Make sure bills are in everybody’s name – not just one person’s. If they’re late andin one person’s name, it could affect their credit rating in future. (It may seem like miles away, but CCJs can stay on your credit file for SIX YEARS, and will stop you getting loans, mortgages or even phone contracts during this time!)
b)    Set up a joint bank account – all set up a standing order to pay into the account monthly (or as your student loans come in) and have all bills deducted from the joint account.
c)     Share the bills – i.e. one person is assigned gas, one electricity, one Internet etc…

7. Create An Inventory List

A good landlord is likely to create one for you, but it can’t harm to have your own. It’s amazing how much you can forget in a year. “Was that sofa in the living room or dining room?” and “Is the microwave mine or Sarah’s?” “Did we buy the mop or was it already here?”

You can incur charges upon checkout if:

a) Any items are in a different room from when you moved in;
b) Any items are missing or;
c) Any items need removing once you leave

Leaving an ironing board may seem like a kind thing to do, but if it’s seen as litter then is it really worth a removal fee?

TOP TIP: Take photos. Despite having inventory, having photographic evidence of every item as it was when you moved in gives your that extra bit of protection when it comes to getting your deposit back at the end of the year.

8. Read Your Tenancy Agreement

Knowledge is power. Arm yourself with all the information you need at the beginning of the tenancy to avoid any nasty surprises at the end.

TOP TIP: Never, ever move into a property without a copy of the tenancy agreement in your pocket. This is the only way to guarantee there’ll be no surprises – and you’re within your legal rights to request one.

9. Do Not Make ANY Changes Without Consulting Your Landlord/ Property Manager

A student house may seem a far cry from your rule-ridden halls of residence, but it’s still a rental property and rules still apply. Whether you think painting an purple wall is a good choice or not, always seek your landlord’s permission first or you could be charged for it when you move out! Even things as trivial as installing a picture hook could land you in hot water.

10. Research, Research, Research!

Research your landlord, research the area and research the house’s history if you’re unsure about something. Martin & Co have a great handbook filled with helpful tips, check it out.

In the mood to look at some seriously fab student properties? Then check out The Martin & Co website, where we have a load of student rental properties available in your areas.

Alternatively, you can contact our office so we can match you with students and properties in your area. We even have a dedicated student webpage, filled with help and advice:  http://www.martinco.com/students  

Election and the Sales Market

There is reason to believe that house prices can affect a general election and this can be tracked to a local level. High values can make homeowners feel better-off, economic confidence rises, people spend more money on other goods, the economy looks brighter and the current Government could possibly achieve some more votes.

But what of the impact of the general election on house prices?

Pre-election nerves

Recent figures from Nationwide showed that annual house price growth in the last quarter of 2014 to December was its most lethargic for over a year, in the south west prices increased by around 0.83% compared with 1.97% in 2013.

It indicated a faltering market where buyers are cautious of over-inflated prices and sellers may need to reset expectations after vigorous growth a year ago.

Post-results

Jitters in the housing market, thought to be caused in part by the election, do not necessarily translate into falling house prices.

Recent studies show that generally prices surge around the time of a general election and soon afterwards as pent up activity is released.

On average nationwide, prices 12 months before are 4.9% lower than at an election, while 12 months afterwards they are 8.6% higher.  To relate this to Exeter, we are currently running a little behind the pack.  In the last year prices in Exeter have risen by 2.17% according to Zoopla, which is just under 56% lower than the national average.  If this same 56% is translated to the next 12 months, that would indicate a potential increase of 3.78% for Exeter.

So does this mean sellers should wait until the election results to market their home?

Not quite. It is reported that election week is traditionally one of the busiest times in the housing market as a glut of sellers register their homes and competition becomes fierce.

It may be worth getting in there first in by listing your property for sale now to ensure it gets the maximum exposure and best price.  Please call or email me if you would like a sale appraisal or for more details. Regards, Jon.