New Home Building in Rugby 2018 rises to 16.2% above the post Millennium average

Nationally, the number of new homes created in 2018 was 222,194, the highest since 1989. Yet since 2002, the average number of properties built in the UK has only been 146,700 per year. You would think, seeing all the new homes sites around, you could ask are we building too many houses, especially off the back of those impressive 2018 build figures? However, to keep up with the ever-growing population, lifestyles and people living longer, official reports state the Country actually needs 240,000 new homes built every year to just stand still.

It is estimated, by the Chartered Institute of Housing, that the current national backlog of new homes required is in the order of 4.7 million (i.e. because of the bottled-up household formation by younger adults living with parents, shared housing and unaffordability). As a Country, we cannot meet all these needs immediately and it will take time to build up an effectual plan to address these issues.

Looking closer to home, you will also see from the graph below the long-term trend of new homes building (the yellow dotted line) has been going in a downward direction. Although, the 2018 new homes build stats for Rugby are 16.2% above the post Millennium average.

The cure is simple: we need more homes… yet who is going to build (and pay) for them. Some Rugby people will say why can’t the local authority build most of them?

In 2018, 578 new dwellings were created in the Rugby Council area and of those 578; interestingly 23 were Council and Housing Association homes

So, if our local authority had a more ambitious annual target of say an additional 500 homes on top of those figures, where could they be built and how would they be paid for? Of course, there are the normal apprehensions about infrastructure issues such as roads, schools, hospital capacity and doctors’ surgeries but our local authority has a Local Plan and that has the locations of where they envisage the new housing will be built (and the infrastructure that goes with it).

The Tories lifted the cap on what local authorities could borrow to build Council houses in late 2018 meaning Councils could borrow more money to build more Council houses. Let’s say we built those 500 homes a year for the next 5 years in Rugby, that would cost the local authority £375 million to build, which would produce in total £17.4 million in rent. At current interest rates, the interest would be £9.5m per year leaving a surplus of £7.9m for property maintenance and management – meaning the Council houses pay for themselves!

Therefore, what does all this mean for Rugby homeowners and Rugby buy-to-let landlords?

Well, the chances of our local authority getting the full funding for an extra 500 homes a year is slim as there is only so much money to borrow. If every UK local authority got funding for 500 additional homes a year for the next 5 years, an impressive 867,500 homes would be built in those 5 years but that would require the councils to borrow £130.1bn – and Central Government doesn’t have that kind of money for Councils to borrow (more like £10bn to £15bn).

The 4.7million long term housing shortage means house prices will remain strong in the long term (despite blips like Brexit etc). Demand for private rental properties will continue to grow and if you read my recent article on Rugby rents, this can only be good news for Rugby landlords. This attention on the housing crisis by the Government is good news for all Rugby homeowners and Rugby buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants and stability on house prices.

What Has Happened to the Rugby Property Market Since the Last Property Market Crash?

A handful of Rugby landlords and homeowners have been asking me what would happen if we had another property crash like we did in 2008/9?

The UK property crash in 2008/9 caused property prices in the UK to drop by an average of 18.37% in a period of 16 months.

On the run up to the Parliamentary vote on Brexit scheduled for March, a number of people asked what a no-deal Brexit would do to the property market and if there would be a crash as a result. I have discussed in a previous article on the chances of that (slim but always a possibility) … but assuming it happens, it is my opinion the outcome of a no-deal Brexit would be no worse than the country’s 2008/9 credit crunch property crash, the late 1988 property crash, the 1974 property crash, 1951 property crash … I could go on. The British economy would bounce back from the shock of a no-deal Brexit with lower property values and a continued low interest rate environment (together with an additional round of Quantitative Easing) and that would mean we would see a similar bounce back as savvy buyers saw it as a fantastic buying opportunity.

So, let me explain the reasons I believe this…

Many said after the Brexit vote in June 2016, we were due a property crash – but we all know what happened afterwards.

Initially, let’s see what would happen if we did have a crash, how quickly it would bounce back and then finally discuss how the chances of a crash are actually quite minimal.

Therefore, to start, I have initially split down the types of property in Rugby (Det/Semi etc.) and in the red column put the average value of that Rugby property type in 2009. Next in the orange column what those average values are today in 2019.

Now, assuming we had a property crash like we did in 2008, when average property values dropped nationally by 18.37%, I applied a similar drop to the current 2019 Rugby figures (i.e. the green column) to see what would happen to property values by the middle 2020 (because the last crash only took 13/14 months).

…and finally, what would subsequently happen to those same property prices if we had a repeat of the 2009 to 2014 property market bounce back.

Of course, these are all assumptions and we can’t factor in such things as China going pop on all its debt … yet either way, the chance of such a crash coming from internal UK factors are much slimmer than in another of the four property crashes we have experienced in the last 80 years. Why, you might ask?

The seven reasons I believe are these …

1.     The new Bank of England mortgage rules on lending 2014 to stop reckless lending that fuelled that last crash.

2.     Low inflation.

3.     Low mortgage rates (the average Brit’s fixed rate mortgage is currently 2.26% and the variable rate mortgage of 3.07%).

4.     Wage rises are forecast to continue to outgrow inflation.

5.     Unemployment figures dropping to 4% (down from 8.4% in 2011).

6.     The high percentage (67.7%) of all British mortgages being on a fixed rate.

7.     And notwithstanding the distractions of Brexit over the last few years, it cannot be denied that the British economy has slowly and steadily been heading in the right direction for a number of years, built on some decent foundations of a steady housing market (unlike the 1988 and 2008 crashes when the housing market got overheated very quickly on the run up to the crashes).

So as the circumstances are much different to the last two crashes, the chances of a crash are much slimmer. Yet if we do have a crash, for the very same 7 reasons above why the chances of a crash are unlikely, those 7 reasons would definitely contribute to making the ensuing recession neither too long nor substantial in scale.

One final thought for the homeowners of Rugby. Most people when they move home, move up market, meaning in a decreasing market you will actually be the winner, as a 10% drop on yours would be much smaller in £notes than a 10% drop on a bigger property … think about it.

One final thought for the new and existing buy to let landlords of Rugby. Well, the questions I seem to be asked on an almost daily basis by landlords are: –

·      “Should I sell my property in Rugby?”

·      “Is the time right to buy another buy to let property in Rugby and if not Rugby, where?”

·      “Are there any property bargains out there in Rugby to be had?”

Many other Rugby landlords, who are with us and many who are with other Rugby letting agents, all like to pop in for a coffee, pick up the phone or email us to discuss the Rugby property market, how Rugby compares with its closest rivals (Coventry, Lutterworth and Daventry), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight-talking opinion. I look forward to hearing from you.

Rugby First Time Buyers Need 7.5 Times Annual Salary to Get on Housing Ladder

What is it to be British? Our stubbornness, long-suffering stoicism, our vexation at injustice, our obsession with football and rugby, we are weather obsessed external awkward noncommittal modest people whilst underneath seething like a volcano because someone jumped the queue….. and our No.1 obsession is with the property ladder.

This ‘love affair’ with owning our own home has been both good and bad for the UK as a whole; giving people financial freedom in their later years whilst also reducing the quantity (and quality) of housing provision whilst adding the extra pressure of a ‘them and us’ society. Strong words I know .. but let me explain more.

I honestly believe that most Governments since the end of the 1970’s, Conservative and Labour, have attempted to nourish our addiction to home ownership (to keep the housing market on track) with the Council House Right to Buy sell off in the 1980’s, tax relief of mortgages, relaxation of the mortgage rules in the late 1990’s/early 2000’s and most recently, the Help to Buy scheme.

But the Brits haven’t always had this obsession.

Roll the clock back 100 years and, in 1918, just under a quarter of all Brits owned their own homes and the other 77% rented. Go back 50 years to 1968, and only 46% of people owned their own home, the rest rented. This homeownership thing is quite a recent phenomenon.

According to my research, anyone looking to get a foot onto the property ladder as a first-time buyer in Rugby today, AS A SINGLE PERSON, would need to spend 7.5 times their earnings on a Rugby first time buyer property.

Using the numbers from the Office of National Statistics (ONS), the average value of a first-time buyer property in Rugby today is £155,000, compared to £124,000 in 2007. If we divide those property values by the average annual earnings of first time buyers – in 2007, that was £16,722 pa and that has risen to £20,699 pa .. giving us the ratio of 7.5 to 1.

However, what must be remembered is that these are raw statistics from the ONS and don’t take into account other factors, like most people buy their first home as a couple. Also, mortgage rates are at an all-time low and who can remember mortgage rates of 15%+ in the 1990’s, meaning borrowing today is relatively cheap. Also, 95% Loan to Value first time buyer mortgages have been available since the end of 2009  (i.e. you only need to save a 5% deposit) and first timebuyer rates of 2.19% fixed for 5 years can be obtained (correct at time of writing this article)… it is cheaper to buy than rent .. fact!

I believe there has been a mind-set change to owning a home. Home ownership was the goal of the youngsters in the latter half of the 20th century. Britain is changing to a more European model of homeownership, where people rent in early to mid-life, wait to inherit the money from their parents when in their 50’s and then buy.. thus continuing the circle – albeit in a different way to the last Century.

This means the demand for privately rented accommodation will, in the long term, only continue to grow. If you would like to know more about where the hot spots are for that growth in Rugby, if you want to drop me an email or telephone call, feel free to pick my brain on the best places to buy (and not to buy) in Rugby to ensure your rental investment gets you want you want. The choice is yours!

25 Days to Sell a Property in Rugby

Whether you are a Rugby landlord looking to liquidate your buy to let investment or a homeowner looking to sell your home, finding a buyer and selling your property can take an annoyingly long time. It is a step-by-step process that can take months and months. In fact, one of the worst parts of the house selling process is the not knowing how long you might be stuck at each step. At the moment, looking at every estate agent in Rugby, independent research shows it is taking on average 25 days from the property coming on the market for it to be sold subject to contract.

But trust me … that is just the start of a long journey on the house selling/buying process. The journey is a long one and therefore, in this article, I want to take you through the standard itinerary for each step of the house selling procedure in Rugby.

Step 1 – Find a Buyer

You need to instruct an estate agent (of course we can help you with that) who will talk through a marketing strategy and pricing strategy to enable you to find a buyer that fits your circumstances. 25 days might be the average in Rugby, yet as I have said many times, the Rugby property market is like a fly’s eye, split up into lots of little micro markets.

Looking at that independent research, (which only focused on Rugby), it was interesting to see how the different price bands (i.e. different micro markets) are currently performing, when it comes down to the average number of days it takes to find a buyer for a property in Rugby.

Interestingly, I thought I would see which price band had the highest proportion of properties sold (stc)… again – fascinating!

So, now you have a buyer … what next?

There are a variety of distinctive issues at play when selling your property in Rugby, together with the involvement of a wide and varied range of professionals who get involved in that process. That means there is are enormous differences in how long it takes from one property to another. Moving forward to the next steps, these are the average lengths of time it takes for each step to give you some idea of what to expect.

Step 2  – Sort Solicitors (and Mortgage)

Again, something we can point you in the right direction to, but it will take a good few weeks for your buyer to apply and sort their mortgage and for your solicitors to prepare the legal paper work to send to the buyer.

Step 3 – Legal Work and Survey

Once you buyer’s solicitor receives the paperwork from your solicitor, then your buyer’s solicitor applies for local searches from the local authority (to ensure no motorways etc., are going to be built in the back garden!).  These Searches can take a number of weeks to be returned to the buyer solicitors from the council, from which questions will be raised by the buyer’s solicitor to your solicitor (trust me – you don’t see a tenth of the work that goes on behind closed doors to get the sale through to completion). Meanwhile, the surveyor will check the property to ensure it is worth the money and structurally sound. Overall, this step can take between 3 and 6 weeks (sometimes more!).

Step 4 – Exchange of Contracts

Assuming all the mortgage, survey and legal work comes back ok, both the buyer and solicitor sign contracts, the solicitors then perform “Exchange of Contracts”. When contracts are exchanged, this is the first time both buyer and seller are tied in. Before then, they can walk away … and you are probably 4 or 5 months down the line from having put up the for sale board – this isn’t a quick process! BUT hold on … we aren’t there yet!

Step 5 – Completion

Between a week and up to six weeks after exchange of contracts, the buyer solicitor sends the purchase money to the seller’s solicitor, and once that arrives, the keys will be given to the buyer … phew!

To conclude, all in all, you are looking at a good four, five even six months from putting the for-sale board up to moving out.

If you are thinking of selling your Rugby home or if you are a Rugby landlord, hoping to sell your buy to let property (with tenants in), either way, if you want a chat to ensure you get a decent price with minimal fuss … drop me a message or pick up the phone.

Value of Rugby Property Market falls £154.4m

The combined value of Rugby’s housing market has fallen by £154,363,248 in the last 6 months, meaning the average value of a Rugby property has decreased in value by an average of £6,084.  

This is great news for Rugby first time buyers and Rugby buy to let landlords, as there is a slight hesitation in the market because of the uncertainty over Brexit. As I have always said, investing in Rugby property, be it for you to live in or as a buy to let investment, is a long-term game. In the grand scheme of things, this minor change over the last 5 or 10 years is nothing.

The RICS’s latest survey of its Chartered Surveyor members showed that nationally the number of properties actually selling has dropped for the 16th month in a row. Locally in Rugby, certain sectors of the market are matching that trend, yet others aren’t. It really depends which price band and type of property you are looking for, as to whether it’s a buyers or sellers market.

The RICS also said its member’s lettings data showed a lower number of rental properties coming on to the market. Anecdotal evidence suggests that (and this is born out in the recent English Housing Survey figures) Rugby tenants over the last few years are stopping in their rental properties longer, meaning less are coming onto the market for rent. I have noticed locally, that where the landlord has gone the extra mile in terms of decoration and standard of finish, this has certainly helped push rents up (although those properties where the landlord has been remiss with improvements and standard of finish are in fact seeing rents drop). Rugby tenants are getting pickier – but will pay top dollar for quality. So much so, I believe there will be a cumulative rise of around fourteen to sixteen per cent over the course of the next five years in private rents for the best properties on the market.

Back to the Rugby Property Values though …

This drop in Rugby property values doesn’t particularly concern me. The fact is that over the last 6 months 415 properties have sold for a combined value of £106,534,650. You see, that drop must be seen in perspective in that 6 months ago, the total value of Rugby property stood at £6,606,665,824 (£6.61bn), and today it stands at £6,452,302,576 (£6.45bn) .. this change is a drop in the ocean.

In the short term, say over the next six months and assuming nothing silly happens in Korea, the Middle East or Brexit negotiations, it will be more of the same until the end of the year. In the meantime, the on-going challenges ensuring we as a Country build more homes (although the Office of National Statistics figures released in July showed nationally the number of new homes started to be built over the second Quarter of 2018 had dropped dramatically) makes me think that Rugby (and Nationally) property value is likely to recommence an upward trajectory as we go into 2019.

One final thought for all the buy to let landlords in Rugby (and indirectly this does affect all you Rugby homeowners too). I do hope the recent tax changes towards buy to let landlords don’t bite as deep as it is possibly starting to with certain landlords I know.  We talked about this in an article a few weeks ago and I know why the Government wanted to change the balance by taxing landlords and providing a lift for first time buyers .. however, this may well come at the expense of higher rents for those Rugby tenants that don’t become first time buyers, as the appeal of buy to let potentially weakens.

Rugby Property Market – How Does It Compare Historically to the West Midlands and National Property Market’s?​

Living in our own homes or owning buy to let property in Rugby and the surrounding areas, it’s often easy to ignore the regional and national picture when it comes to property. As a homeowner or landlord in Rugby, consideration must be given to these markets, as directly and indirectly, they do have a bearing on us in Rugby.

Locally, the value of property in Rugby and the number of people moving remain largely steady overall, although looking across at the different regions, there are certainly regional variations. Talking to fellow property professionals in the posh upmarket central London areas of Mayfair and Kensington, the number of people looking to buy and registering interest with agents is continuing to climb after 18 months in the doldrums, whilst in other parts of the UK, there is restraint amongst both buyers and sellers in some locations.

The things that affect the national property market are the big economic numbers. Nationally, over the last few months, thankfully, the economic forecast and predictions have improved, notwithstanding the Brexit uncertainties. Inflation has mercifully throttled back its high growth seen in 2016 to the current level of 2.1% (from 2.7% average last year), coupled with marginally stronger wage growth at 2.5%. Unemployment is at a 42-year low at 4.2% and UK consumer spending power rose to an all-time high last month to £331.04bn – all positives for consumer sentiment.

Look further afield, a resilient property market depends on the UK’s economic health with the outside world, so if Sterling weakens, that makes imports more expensive, meaning inflation increases, and this matter I talked about a few weeks ago in my blog article … interest rates could be raised to bring inflation under control, which in turn could seriously affect the property market. On the assumption Brexit negotiations are successful, economic growth should continue to be upward and positive, meaning confidence would be increased … which is the vital element to a good housing market.

Looking closer to home now, Rugby landlords and Rugby homeowners might be interested in the how the regional and Rugby markets have performed over the last 20 years (compared to the National picture). Let’s look at the regional picture first,

Rugby has outperformed the West Midlands housing market by 4.82%……whilst nationally, Rugby has outperformed the country by 5.81%

That means a Rugby homeowner has profited by an additional £14,776 over the last 20 years compared to the average homeowners across the country.

I found it interesting to see the ups and downs of the Rugby, West Midlands and National markets in this graph. How the lines of graphs roughly go in the same direction, how the 2007/08 property crash timings and effects were slightly different between the three lines and finally how the property markets performed in the post-crash years of 2011 to 2014 … fascinating!

So, what does this all mean for Rugby homeowners and Rugby landlords?

Well, house prices going up or down are only an issue when you sell or buy. In the last 12 months, only 1,076,288 (let’s call it’s a straight million between friends!) properties changed hands out of 27.2 million households in the UK in 2017, meaning only 3.7% would have been affected if property values had dropped in the last year.

Property values in Rugby are 262.48% higher than the summer of 1998

Yet this has been a long-term gain. The number one lesson in property is that it is a long-term game.  The biggest issue in property isn’t house values or prices … it’s the number of homes built, because the number of households nationally has only increased by 6% since 2007, whilst the population has grown by 7.6%. That doesn’t sound a lot, until you express it another way…

If the UK population had had only grown by the same percentage as the percentage growth in UK households in the last decade, there would be 1,000,000 less people living in the UK today

The final thought for this article is this, apart from central London, over the last 20 years it hasn’t mattered what part of the UK you were in with regards to the property market. Be you a landlord or homeowner, property is a long game, so look long term and you will win because until they start to build more homes, from the current levels of 180,000 new homes built per year to at least 250,000 households built per year, demand will, over the long term, outstrip supply for owning and renting!

What Will Happen to Rugby Property Values if Interest Rates Rise?

The current average value of a property in Rugby currently stands at £254,300 and the base rates at 0.5%. In many of my articles, I talk about what is happening to property values over the short term (i.e. the last 12 months or the last 5 years), but to answer this question we need to go back over 40 years, to 1975.

The average value of a Rugby property in 1975 was £12,311

However, since 1975, we have experienced in the UK, inflation of 807.5%.

Back in 1975, the average salary was £2,291 and average car was £1,840. A loaf of bread was 16p, milk was 28p a pint and a 2lb bag of sugar was 30p. Inflation has increased prices, so comparing like for like, we need to change these prices into today’s money. In real spending power terms, an average value of a Rugby house in 1975, expressed in terms of today’s prices is £111,737.

That means in real terms, property costs a lot more today, than in the mid 1970’s, but has it always been that way? Looking at the important dates of the UK property market, you can see from this table, the last two property boom years of 1989 and 2007, show that there was a significant uplift in the cost/value of property (when calculated in today’s prices).

Before we move on, hold onto the thought that you can quite clearly see from the table, in real terms, properties are cheaper today in Rugby than they were in 2007!

So, it made me wonder if there was a link between house prices, inflation and other external economic factors, such as interest rates? Interest rates have a strong influence on inflation and property values, principally because changes in the interest rate affect the cost of mortgage payments for homeowners and they affect the flow of foreign currency in (or out) of an economy, thus changing the exchange rate and prices we can sell our goods and services abroad and prices we pay on imports.

So how exactly do interest rates affect property values?

When interest rates rise, it has a substantial effect on increasing the monthly cost of mortgages. Higher mortgage payments will discourage prospective homebuyers or people looking to move up market (meaning their mortgage payments go up) – thus making it comparatively cheaper to rent.

Furthermore, the high cost of mortgage payments sometimes also pushes some existing home owners to sell, meaning there is an increase in house sellers and a decline in house purchasers, and as the law of economics state, when supply is increased and demand falls, (house) prices fall. Another fallout of a rise in mortgage payments is a rise in repossessions. Interestingly, repossessions in the UK rose from 15,000 per annum in the late 1980’s to over 75,000 per annum in the early 1990’s, meaning even more properties came onto the market, exasperating the issue of over supply – pushing property values even lower.

High interest rates caused property values to fall in mid 1970’s, early 1980’s and most recently, the early 1990’s (who can remember the 15% mortgage rate!) Conversely though, the drop in property values in 2008/2009 – was not due to interest rates, but due to the credit crunch and global recession.

So, what will happen if when interest rates rise?

It is vital to remember that interest rates are not the only factor affecting property values. It is also possible that when interest rates increase (which they will from the current 0.5%), property values can also continue to rise (it happened throughout the mid to late 1980’s and again between the boom years of 2002 and 2007). When confidence in the economy is good, and we as a Country experience a period of rising real incomes (i.e. after inflation), then the British in the past have continued to buy bricks and mortar, notwithstanding the rise in interest rates.

Another important factor on property values is the supply of housing. A big reason in the current level of Rugby house prices is due to the shortage of supply, which has kept property values higher than I would have expected. An additional factor is whether homeowners have a variable or fixed rate mortgage. 90.6% of new mortgages taken in the last Quarter were at a fixed rate, and 66.2% of all mortgaged homeowners are on fixed-rate mortgages, therefore, they will not notice the effects of higher interest rate payments until they re-mortgage in a few year’s time, meaning there is frequently a time-lag between higher interest rates and the effect on property values. Another factor on mortgages is the ability to get one in the first place. Back in 2014, mortgage providers were told to be stricter on their lending criteria when arranging mortgages following the footloose days of 125% loan to value mortgages with the Northern Rock.  These new rules are a lot more rigorous on borrowers’ ability to repay the payments (although it makes me laugh, when with starter homes it nearer is always cheaper to buy then rent!).

I think the final point is this … affordability is the key. Look at the graph (the red bars) and you will see in REAL HOUSE PRICE terms – it’s cheaper to buy a home today than it was in 2007, yet why aren’t we seeing people buying property at the levels we were seeing in the 2000’s before the credit crunch? Again, looking at the reasons why, I will talk about in future articles.

In conclusion, interest rates are important – but nowhere near as important on the Rugby (and British) property market than they were 15 or 20 years ago.

So, before I go, one final thought – how do we measure the success of the Rugby property market? Well I believe one measure that is a good bellwether is the number of property transactions, as that could show a more truthful picture of the health of the property market than property values. Maybe I should talk about that in an up and coming article?

How Valuable is your Time?

Are you up to speed with all 170 Rented Sector Regulations?​

We are coming across landlords on a daily basis who currently manage their own tenancies, for want of a better word – ‘unintentionally badly’. Legislation now imposed on landlords is lengthy and ongoing – 170 items to be exact. It is abundantly clear from our seminars and workshops that private landlords are unaware of what their obligations are and legal liabilities. In the event of an incident where non compliance can be proved – the consequences could be catastrophic. We have known landlords across Warwickshire to be taken to court, penalised with heavy fines and in some cases, particularly in London, prison sentences have been levied. Local Authorities are now carrying out spot check inspections on properties and issuing fines where necessary, fines as high as £30,000.

If you would like a schedule of all the legislation you need to be aware of please let us know.

We note from our records that you may currently let and manage your own rental property and just wondered if this was the case is now the time to reconsider your options and free up your valuable time to do more of the things you enjoy? Let us carry the burden of ensuring you are following the letter of the law and not leaving yourself exposed.

We have specialised in managing properties for the last 29 years and we have won many awards over the years to back this up. We take the hassle and worry out of many of the things, you as a landlord have or will encounter whilst managing your investment yourself, these being:

  • Remaining Law and Legislation compliant – to encompass Gas Safety, changes to Electrical Check Regulations, proposed changes to tenancy lengths, Legionella Checks, HHSRS (Housing Health and Safety Rating System) Complaint, Mees (Minimum Energy Efficiency Systems)
  • Aware of all pending government changes and how it impacts you as a landlord and the requirement to pass all necessary information onto the tenant
  • Ensuring renewal agreements are created correctly in light of the Deregulation Act for tenancies post 2015
  • Ensuring Deposits are correctly registered with an approved Government Scheme
  • Ensuring now claims for being discriminatory are made – Race Relations Act & Disability Discrimination Act
  • Aware of Rent collection procedures
  • Managing rent arrears so as not to jeopardise servicing of a Section 6a
  • Arranging and conducting property inspections and to comply with the Equality Act 2010 (harassment)
  • Dealing with maintenance issues and logging all events inc due diligence for contractor liability insurance
  • Fully aware of the Landlord & Tenant Act 1985 Section 11 Landlords Repairing Obligations
  • Deposit dispute resolution & timelines involved
  • Dealing with eviction in the event of non-payment and aware of the Freedom from Eviction Act 1977
  • Dealing with complaints from neighbours
  • GDPR compliance – are you registered with the ICO (Information Commissioners Office) – have you issued your tenant with a Privacy Policy?

    These are the main areas of discontent for landlords but the ones we are experts in. We eliminate that ‘landlord/tenant/ relationship and will always address the situation as your agent and act in your best interest. The common issue that arises every time a landlord deals directly with the tenant is that they feel its often difficult to address delicate situations such as rent arrears, untidiness, complaints from neighbors and the eviction process.

    We would welcome the opportunity to discuss how we can help you alleviate any stress or concerns you may currently have. Let us show you just what we can do. We can do as much or as little as you like and tailor the service according to your needs. The benefit to you? More free time. No phone calls at inconvenient times. No need to organise repairs. No awkward conversations about rent arrears. No exposure to any potential legal action.

    If however, you are perfectly happy with your current set up then please forgive the intrusion. If you feel you may need us in the future you know where we are.

Exit of landlords from market pushing up asking rents as stock drops

A drop in available properties is pushing asking price rents to record highs, Rightmove has reported.

The portal says that available stock has dropped 8.7%, exacerbated by a 19.4% fall in London.

National asking prices for new rents, excluding London, in the third quarter this year are £802.

It is the first time that average asking rents outside London have been over £800.

In London, the average asking price has included down, from £2,000 per month in the second quarter, to £1,992.

Rightmove commercial director Miles Shipside said: “Rental demand is currently outstripping supply in many locations, especially in the capital.

“The exit of more landlords from the buy-to-let market has been due to a raft of different factors.

“What we’re left with is a lack of available homes for tenants looking to find their next place to rent, meaning that when the right kind of property does come along it isn’t sticking around for very long before it’s snapped up.”

Source: www.propertyindustryeye.com

Will the Rugby Property Market Crash?

And if it does … who will be the winners and losers?

Those Rugby people wanting property values to drop would be those 30 or 40 something’s, sitting on a sizeable amount of equity and hoping to trade up (because the percentage drop of your current ‘cheaper’ property will be much less than the same percentage drop of the more expensive property – and trading up is all about the difference). If you have children planning to buy their first home or you are a 20 something wanting to buy your first home – you want them to drop. Also, landlords looking to add to their portfolio will want to bag a bargain (or two) and they would love a drop!

Yet, if you have recently bought a Rugby property with a gigantic mortgage, you’ll want Rugby property values to rise. If you are retired and are preparing to downsize, you will also want Rugby property values to rise (because you will have more cash left over after the move). Also, if you, a landlord looking to sell your portfolio or a Rugby home owner, who has remortgaged to raise money for other projects (meaning you have very little equity), you will want Rugby property values to rise to enable you to put a bigger deposit down on the next purchase.

So, before I discuss my thoughts on the future, it’s important to look at the past…

The last property crash, caused by the Global Financial Crisis, was between Q3 2007 and Q3 2009 … when property values in Rugby dropped 14.47%

…taking an average property from £177,450 in September 2007 to £151,770 by September 2009 … and since then – property values have over the medium-term risen (as can be seen on the graph). 

So … what is happening now?

The simple fact is people in the UK are moving less (and hence buying and selling less). Estate agents up and down the land are blaming “Brexit” for this but the reality is that the problems in the British housing market are a lot greater than measly old Brexit!

There is a direct link between how people feel about the property market (sentiment) and the actual performance of the property market. However, the question of whether people’s sentiment moves as a result of changes in the property market, or whether changes in the property market drive sentiment is a question that baffles most economists – you see if someone feels assured about their financial situation (job, money etc.) and the future of property, they are more likely to feel assured to spend their hard-earned earnings on property and buy and if you think about it … vice versa. So, I believe Brexit isn’t the issue  – it’s just the “go to” excuse people are using. Humans don’t like uncertainty, and Brexit itself is causing uncertainty – it is, after all, the great unknown.

So, is it the flux of global politics? Politics are causing hesitation in the posh £5m+ markets of Mayfair and other high value Monopoly board pieces – but certainly not in sleepy old Rugby (I don’t think Rugby is too high up on the house buying list of all these Saudi Prince’s and Russian Oligarchs) … no the issues are much closer to home.

So, coming back to reality, one the biggest driving factors in the current state of play in housing market has been the part Buy To let landlords have played in the last 15 years. Making money as buy to let landlord in these golden years was as easy as falling off a log – but not anymore! Landlords had been getting off quite lightly when it came to their tax position, but with Osborne changing the taxation rules on buy to let … things have become a little more difficult for landlords.

Landlords have been hit with a supplementary rate of stamp duty, meaning they pay 3% more stamp duty than first time buyers. High rate taxpayers in the past have been able to offset the interest payments from their buy to let mortgages against their self-assessment tax bills – at their marginal rate. Between now and 2020 … this is being reduced in small steps, so they will only be able to claim back relief at the basic rate of tax. The bottom line is that it will be much tougher for investors to make money on buy to let. Tied in with this, the mortgage rules were changed a few years ago, meaning it’s also become slightly tougher to obtain buy to let mortgages (although if I’m being honest – they need too).

And what of Rugby first time buyers? Well, a few weeks ago in my blog on the Rugby Property Market, if you recall, I mentioned that last year was the best year for over decade for first time buyers. For the last 30 years, buy to let investors have constantly had more purchasing power than first time buyers, as they were older and more established, together with their tax breaks. Yet, now as many amateur landlords are having second thoughts in staying in buy to let, this has given first time buyers a chance to get on to the property ladder.

What will happen to Rugby property values? The simple fact is we don’t have the conditions that caused the crash in 2007 (i.e. sub-prime lending in the US, causing banks not to lend to each other, thus stalling the global economy as a whole).Assuming everyone is sensible on the Brexit negotiations, the biggest issue is interest rates.  As long as interest rates remain comparatively low (and don’t get me wrong – I think we could stand Bank of England base interest rates at 1.5% to 2.5% and still be OK, then the thought of a massive property market crash still looks improbable.

Yet correspondingly, I cannot see Rugby property values rising quickly either.

The double-digit growth years in property values between 1999 and 2004 are well gone. A lot of that growth was caused by an explosion of buy to let landlords buying property to accommodate the influx of EU migrants in those years.  Mark Carney at the Bank of England can’t make interest rates any lower, so it’s difficult to envisage how credit conditions can get any easier!

Balance of probabilities … Rugby property values will hover either side of inflation over the next five years, but if we did have another crash, what exactly would that mean to Rugby homeowners – if they dropped by the same percentage amount, as they did in the last crash?

If Rugby property prices dropped today by the same percentage as they did locally in the Global Financial Crisis back in 2007/9 … we would only be returning to the property values being achieved in November 2015 … and nobody was complaining about those!

Therefore, looking at the number of people who have bought homes in the area since November 2015, that would affect approximately only 17% of local home owners and landlords … and only a small percentage would actually lose – because you only lose money if they decide to move (and come to think of it, some of those sellers would fall into the category mentioned above that would relish a price drop!). So, really not many people would lose out.

Interesting don’t you think?