Buy to Let investment of the week – Arnold Avenue, Blackpool

2What an investment!

Some times we look too much at yields, but we as landlords forget that the properties that let quickly, attract good tenants (who look after the property as if its their own) and tenants who live long term. It is actually this mix of factors that lead to higher returns on your buy to let investment. Also going for properties in areas where we may think there is a lower ‘yield’ is usually where property values will rise higher proportionately and generate higher capital returns.

This area of South Shore has always experienced high demand from professional families, tenants and buyers. Great schools, overlooking a a park, close to a retail park, motorway links, Highfield Road (for all amenities, restaurants, cafes and bars) and sea front. Three bedrooms here, will always experience a high demand.

This property requires modernising, allowing you to purchase at below the average price on the street (£140 000 – £150 000), creating equity in your investment and also allowing you to modernise for your future tenant.

Rents range in the area between £650 and £725. On the market with Entwistle Green:

https://www.rightmove.co.uk/property-for-sale/property-73941772.html

 

This property will make a great buy to let investment.

Hamza Investment of the Week – 7th of June

2

 

I love this property, as I know high demand from larger families are in the Blackpool area. Location is ideal, in the popular are of South shore, close to motorway link, sea front, local shopping area and great schools.

For me this property represents, the opportunity to add value to the property, creating capital wealth whilst also having the opportunity to own a high yielding investment, with our team currently securing rents of around £1000 for such properties (in a reasonable condition).

Elliot booth are currently marketing the property:

https://www.rightmove.co.uk/property-for-sale/property-65456175.html

 

 

Is This a Good Time to Buy Your First Home in Blackpool?

Slide1

Should you wait to buy your first home in Blackpool or buy now? What sort of mortgages are available? What sort of deposit is required? These are questions all Blackpool buyers are asking at the moment, yet this week I would like to focus on Blackpool first time buyers and what it means directly and indirectly to Blackpool homeowners looking to move up the Blackpool property ladder and Blackpool buy to let landlords.

Well quite frankly, to answer that question it’s contingent on what Blackpool property you are looking to move into and even more significantly, how long you are hoping to live in that property.

We have many armchair economists and even professional economists predicting Armageddon when it comes to the property market, yet the Blackpool (and UK) property market is essentially very sound. Don’t forget the Chancellor himself, George Osborne warned that if we voted to leave the EU two things would happen. Firstly, the UK property market would crash and property values would drop by 18% in the two years after the vote. Secondly, there would be an ‘economic shock’ to the country’s economy that would increase the cost of mortgages (through increased interest rates as there would be a run on the Pound). UK GDP rose by £132bn in the two years after the referendum and interest rates actually dropped and locally with regard to property values…

Blackpool house prices fell by 0.5% in the 2 years following the Brexit vote

Lloyds have predicted an enormous 30% fall in property prices over the next 36 months whilst Savills have suggested a short dip of 5% during the summer, based on very low transaction numbers, with property prices bouncing back to be just over 15% higher in 5 years’ time. This assumes that the UK plc economic downturn is short & sharp, and that no substantial gap opens up between supply and demand in the property market (i.e. everyone doesn’t dump their property market all at the same time).

 

Blackpool Property Values after the 2008 Credit Crunch crisis plummeted 13.03% between 2008 and the end of 2009

Yet, the circumstances of the 2008/9 property crash were fundamentally different to today. Many ‘armchair economists’ assume there will be a re-run of the 2008/9 and 1988 property crashes in the coming 12 months in terms of house value falls. Yet, dissimilar to the last recession, this dip has not been led by previous years of strong property price growth like the other two crashes. House prices in many parts of the UK have been down in the last 12 months.

You would think Blackpool first time buyers who have already saved their deposit could grab a bargain in the coming months, you would believe they would have less competition in the market because of landlords holding back buying additional rental properties. This is because of the press speculation that rent arrears are sky high from tenants who are unable to pay their rent. Yet evidence from many professional bodies in the private rental sector state rent arrears across the whole of the Country are appearing to be very low indeed, despite Covid-19.

Interestingly, the firm Yomdel who handles ‘web live chat’ and ‘phone support’ for thousands of estate and letting agents have reported national activity is higher than the two months of the Boris Bounce (in January and February 2020). The number of new buyer enquiries for the last two weeks is double (108.9% higher to be precise) than the 2019 yearly rolling average. New landlord enquiries are 32.1% higher than the 2019 average and tenants are 150.1% higher than the 2019 average  .. these are all great signs and go against the doom monger economists.

My best advice to all Blackpool property buyers is, be they second time buyers, first time buyers, landlords.. whatever number buyers, they should buy with a medium-term view of future Blackpool property values, instead of an expectation of always looking to making a quick few pounds flipping a property (i.e. selling it quickly).

Let’s not forget that mortgage interest rates are another important factor: they are at a 325-year low, so borrowing money has never been so inexpensive. If you know you are going to be living in your first (or second) Blackpool home for five years and you want the peace of mind of knowing precisely what your mortgage payments will be, then it’s very attractive. At the time of writing, Barclays are offering any first-time buyer a 95% mortgage on a 5-year fixed rate of 2.75%. The average value of an average terraced house in Blackpool is £94,700 and so with the 5% deposit of £5,000 on a 35-year term the…

Mortgage payments on a typical Blackpool terraced house would only be £333 per month (i.e. much cheaper than renting)/ Many lenders are lending money even if you are on furlough, yet you may find you won’t be able to borrow as much pre Covid-19. Interestingly, some mortgage companies will even take into account total income, where your employer is topping up the Government’s furloughed amount, whilst other lenders will consider mortgage applications on a case-by-case basis. The best advice I can give is, don’t assume what you can or can’t borrow. Speak to a whole of market mortgage broker, to see what is possible – not what your friend on Facebook tells you what you can or can’t borrow.

You only need to put down a 5% deposit for the property you would like to buy

If you think about it, it’s inconsequential if Blackpool property values drop or not, or if they do drop whether they bounce back quickly (or not as the case maybe) because it’s impossible to know the bottom of the property market. I would say if you find the right Blackpool property for you, at the price that feels right, that will be your home together and you are going live in that Blackpool property for the next five to ten years, it’s not a bad time to be buying.  It’s like waiting for the next piece of tech – there will always be a better model or an assumed better time. We are talking about your home here – a home for you and your partner and family, be that your kids, dog, cat, pet or favourite pot plant because…

Spending money on rent is all wasted money – at least when you buy your own home, you start to pay your mortgage off from day 1

So many first-time buyers use the Bank of Mum and Dad to help with their deposit, yet I have spoken to many parents who wouldn’t want to interfere in their mature children’s life and subsidise day to day expenditure, yet are embarrassed to offer help with the deposit. If you don’t ask …you don’t get!

New Electrical Safety Regulations could cost each Blackpool Landlord £350+ in the next 13 months

Blackpool Electricians are going to very busy in the next 13 months as they will have to test the electrics of every private rented property in Blackpool and potentially may have to install new fuse boards and wiring in some circumstances.

New regulations set out in the Housing and Planning Act 2016 gave the Secretary of State of Ministry of Housing, Communities and Local Government the authority to compel private landlords to test their fixed electrical systems.  Currently, these responsibilities only apply to licensable Houses of Multiple Occupancy (where a house is split into individual rooms) yet these new rules will come into force for any new tenancy or renewal of any private rented home from the 1st July this year (2020).

All new tenancies from the 1st July 2020 will need to have had their electrics tested

The new IET electrical regulations enforce a duty on all private landlords to ensure that their electrical installation complies with the 18th edition (from 2018) of the IET wiring regulations.  Therefore, any property built before the middle of 2018 will have electrics to 17th edition regulations (or a previous edition).  It might not sound a lot, but the 18th edition regulations were a substantial update over the 17th edition which were published in 2008.  Now, just because a rental property was built with its electrics up to the prevailing 15th, 16thor 17th regulations at the time of building, it doesn’t necessarily mean it will automatically fail this test.

A qualified electrician will need to test your rental property against the new 18th Regulations (as that is standard practice in the industry), which will cost in the region of £150 plus VAT for a small one bed flat through to £250/£350 plus VAT for a large 4 or 5 bed house (again these are ballpark figures).  The Electrician won’t fail a property who complies with a previous regulation (e.g. 16th or 17th) unless there is a good reason to do so.  No doubt there will be further clarification notes issued before the implementation date to sort this out – and I will keep you informed in this blog.

Electricians are telling me any property built after 16th Regulations came into force in 1991 (and they deem it to have failed the test) will probably require a new fuse board and other minor works at an average cost of around £355 per property, although it could be as low as £300 and up to £500 per property to upgrade, meaning…

The potential cost of upgrading every Blackpool buy to let Home to 18th edition regulations (if they all failed) could total £6,177,355

Some Blackpool landlords might think they can circumnavigate the regulations by renewing the fixed term every 6 months, yet the Government have  protected against that by stating,  irrespective of what tenancy is in place, all rental properties by the 1st April 2021 must have been tested against  the 18th Regulations standard.

Slide3My concern is all 17,401 rental properties in Blackpool will need their electrics testing before the Spring of 2021 and that there are only 66 qualified electrician firms within a 2-mile radius of Blackpool to do all these tests and work

Blackpool landlords must give any new Blackpool tenant a copy of the inspection report before they start the tenancy.  Also, Blackpool landlords must give a copy of the report to any prospective tenant who asks for it in writing within 28 days of a request during the tenancy itself.

Even with the coronavirus situation, only last week the Government indicated that Landlords should still make every effort to follow these new electrical safety regulations from the 1st of July, yet those same regulations also allow for situations where a landlord cannot carry out their obligations. To stay the right side of the law, they must demonstrate they have taken all reasonable steps to comply with the law. If they do that, they will not in breach of the new regulations (including the duty to comply with a remedial notice). My advice would be if a landlord could keep copies of all communications they have had with their tenants and with electricians as they tried to arrange the work, including any replies they have had, together with any other evidence they have on the electrics of their rental property.

The local authorities are tasked with policing this – and they too have the right to request to see copies of any Electrical Report and works done.  They can force a landlord to comply with the legislation and also may issue a civil penalty up to a maximum of £30,000.

Remarkably, if the letting/managing agent doesn’t organise the Electrical reports, there is nothing in the legislation which allows a landlord to pass the blame onto their letting/managing agent.  That means Blackpool landlords could be at significant risk from dishonest or badly organised letting agents who won’t/don’t sort the electrics out, so my advice to all Blackpool landlords is to speak to your letting/managing agent right now and plan ahead.  Rest assured, we have had plans well in hand for our Blackpool landlords since last year, because I knew this legislation was on its way.

The regulations are obviously important for the safety of tenants and, in essence, these new laws and regulations will mean new accountabilities for the private rented landlords with not much time in which to get prepared and be compliant.  If you are worried about these new rules or don’t have ultimate confidence in your current agent, then please do pick up the phone and let’s have an informal chat about how we can help you with this issue, you don’t want to fall the wrong side of the law do you?

The Lockdown Landlords of Blackpool

Despite Government regulations that have been in place since the 26 March 2020, when in-person viewings were made illegal, Blackpool buy to let landlords have during that time been chomping at the bit to build their property empire by looking at buying additional properties for their Blackpool buy to let portfolio.

There are plenty of investors who think nothing of legally committing to buying a property ‘off plan’ before it’s built – yet over the last few weeks, it has become the norm in the second-hand Blackpool property market and they have now stolen a march and bagged some property bargains.

Normally, the face-to-face viewing is step one of the second-hand house buying process .. yet now it’s becoming the ‘new normal’ that some Blackpool agents are carrying out semi-professional video viewings or 360-degree video tours. Even homeowners are getting in on the act and managing a Facetime or Zoom video viewing by walking around their house with their mobile phone.

Yet the Government announced on Wednesday, 13th May 2020 that the Estate & Letting Agency industry could reopen meaning people could view houses, visit agents and move home be they tenants, buyers, landlords or home-sellers. This is all subject to general and specific social distancing rules, specific hygiene regulations and suitable PPE being used.

What has been happening in the last few weeks in the Blackpool property market?

The average time between sale agreed and exchange/completion of contracts on a house sale (i.e. the keys and monies get sorted) is 17 to 19 weeks, which means buying today would mean you wouldn’t be getting your hands on the property until late September or October at the earliest.

Spring is the time when most properties come onto the market, yet as one would expect, the number of Blackpool properties coming onto the market has been somewhat reduced since lockdown as ..

 

72 Blackpool properties have been put up for sale in the last month

This reduction in supply of new properties coming onto the market combined with this pent-up demand from both Blackpool landlords and the ‘Boris-Bounce’ could in fact be good news for the Blackpool property market, let me explain…

Rightmove stated that people going to their website initially dropped by 40% at the start of lockdown, yet now has recovered, with a near doubling of people searching for properties with gardens (for both sales and renting). For many Blackpool buy to let landlords (and in fact Blackpool homebuyers) now is the very best time to do research into the Blackpool property market. All the portals have access to 25 years of property sales with pictures, so you can compare and contrast what has happened to various different property types around Blackpool to spot those under-priced bargains, meaning you can get moving quickly after lockdown.

Rather than feeling trapped or powerless, this time can be used fruitfully by Blackpool buyers and Blackpool sellers to get their ducks in a row

One of the biggest barriers in April was mortgage lending. In the early days of the pandemic, most mortgage lenders removed many of their best deals and enormously restricted their capacity. Currently, though, we are seeing a revitalisation in the mortgage market. In May, with many mortgage products becoming accessible again for borrowers, and with many mortgage companies integrating more digital processes (including Virtual Surveyor Mortgage Valuations in some cases) the mortgage market now has plenty of options available to those who are keen to obtain borrowing.

There is no doubt the Blackpool housing market got off to a sturdy start in 2020. With Brexit at least partly resolved, the ‘Boris-Bounce’ was starting to take off. With Blackpool house prices being robust and rental demand was high, the Blackpool property market was already in a good place to deal with the subsequent Covid-19 issue.

I know there are a few doom mongers in the National Press spouting about a massive crash in the UK property market. There is a natural tendency for newspapers to latch onto the worst-case scenario in any economic forecast. Who can forget the country received similar projections in the lead-up to the 2016 Brexit vote with HMRC itself stating that UK house values would drop by at least 10% in the first 12 months should the UK vote for Brexit and 20% in two years!

With the rollercoaster of the stock market in recent months, investing one’s money into good old-fashioned bricks and mortar has started to seem a good place again.

Buying a property for investment means you have a tangible asset, something you can touch and feel (and understand). The returns from investing in property come from both capital appreciation and income from the rent, and yes whilst property values can go up as well as down, successful buy to let landlords are inclined to take a long-term view on their property investments.

£498 per month – The average gross profit from a Blackpool terraced/town house

To give you an example of the current buy to let returns, the average Blackpool terraced/town house sells for £94,700. By taking the ‘Birmingham Midshires’ BTL 5-year fixed rate of 1.62%, with only £1,995 in up-front fees, a 20-year repayment mortgage would cost you £277 per month or interest only mortgage would only cost £77 per month  .. considering the average rent for a terraced/town house in Blackpool is £575 per month .. even before management, tax, maintenance and other associated costs, that’s a decent gross profit (the £498 gross profit is an illustrative example using the interest only mortgage and the capital element would need repaying at the end of the term).

Isn’t it funny the newspapers aren’t latching on to some reports to say the property market might go in the other direction? Remember – bad news sells newspapers!

So, should you wait to buy your Blackpool buy to let investment?

Before you buy consider factors like the strength of your financial future, your credit score, the current state of the property market and even more importantly, the state of the mortgage market. Look at the current interest rates, they have never been so low and deliberate the experts’ opinions and just as equally your own opinions as to whether Blackpool property values are on the rise, will stay the same or are likely to fall.

Interest rates are at record lows, meaning borrowing money is cheap money now, so it may be a good time to buy, as you will pay a reduced cost for the pleasure of borrowing money to buy that investment. Yet, if you waited and Blackpool property values are on the decline, it may be a good idea to wait, as you could end up getting a better deal on the same type of home, yet if that happens, access to the cheap finance might dry up (meaning you could save some of the purchase price, but the cost of borrowing could go up). It can be very hard to accurately predict what interest rates or property values will do, so these shouldn’t be deciding factors – but they are worth considering.

So, what will happen to the Blackpool (and UK) property market?

To be honest – nobody knows. What I do know is the Swine Flu in 2009 caused some volatility in the UK property market, but the market stabilised within months. Even in disaster scenarios such as the current one, property remains comparatively stable and will continue to be one of the best places to invest in.

Yes, we could see unemployment rise in the next 6 months (yet the Furlough Scheme has been extended until the autumn) and historically, it has been proved house price falls are not caused by high unemployment; yes GDP will drop drastically because of lockdown yet it could bounce back like it has in China; yes, the number of property transactions will drop, yet that will only really effect the pockets of Blackpool removal people, Blackpool solicitors & estate agents and the Chancellor of the Exchequer in lost stamp duty receipts; yes there is £82bn worth of property sales on ice during this lockdown (some of which might not complete) .. it’s all ifs, buts and maybes.

Calamity changes things: with every predicament, humanity shifts to become more productive – it’s the way it’s always been

The national debt at the end of the Napoleonic Wars of 1815 in today’s money was an eye watering £4,421,000,000,000 (£4.42 trillion) and today even with the eye watering borrowing to fund Covid-19, it stands at £1,821.3 trillion – we have been here before and we came out stronger.

The Bank of England failed in 1825, yet we recovered stronger; the Great Depression of the 1930’s cut the Stock Market by 90%, yet we recovered; WW2 took national debt to 200% of GDP like it had in the Napoleonic Wars in the early 1800’s – yet we recovered; the oil crisis quadrupled oil prices in the 1970’s – and we came back …. The list goes on with Hyper-inflation in the 1970s of 25%, mass unemployment in the 1980’s, Black Monday in 1987, Dot-com bubble in 2001 and the credit crunch in 2008/9.

With every economic crisis, the long-term effects of them make people look at their decision making differently.

Slide4The simple fact is for decades, demand for homes has outstripped supply – hence why property values have remained so robust. People are living longer (71.1 years in 1960 and 81.1 years nowadays), the mass exodus of EU nationals has not taken place since Brexit and the birth rate has increased by 9.1% since the Millennium which means since 2000, the country has needed at least 240,000 households per year to satisfy the demand. On average, we have only built 150,000 households a year, meaning we have a shortfall of 90,000 households each year for 20 years .. a true shortfall of 1.8m households .. and until we start building anything over that 240,000 requirement … demand will always outstrip supply – and we all know what happens to prices when that happens!

 

7 Days of Landlord Tips – 1. Voids

Average Void period (for Landlord who markets their own properties) is currently 7 weeks. Average rent in Blackpool and Fylde Coast is £530 pcm, equating to £856 loss of income.

Void periods is a hugely overlooked cost by Landlords, probably because you don’t see it as an expense as you say you would for a contractor invoice. Lost income is exactly the same as incurred expense!

With my portfolio and the properties we Manage on behalf of our clients, I always push this aspect, to aim to ensure we keep Void periods to a minimum. Our office has a target of achieving a Let within 21 days. Here are my tips to reduce the length of any future potential Void periods at your property:

  1. Keep your tenants – I know this is obvious, but it needs stating, the longer your tenants remain in your property, the less costly Void periods you will incur. Keep your tenants happy, look after and invest in your property and your tenants will remain happier and stay for longer. The biggest factor of rental moves is down to repairs (not being done)!
  2. Fixed term tenancies – a lot of Landlords are happy to let their tenancies commence on a monthly rolling contract, I don’t like this idea at all. A fixed term tenancy gives security to tenants and also means you as a Landlord know exactly when a tenant is vacating (subject to you managing your renewal process tightly), providing you a larger window to market the property prior to tenant vacating.
  3. Marketing – quality of photos is more important then ever, remember your property is competing with many similar properties. I always recommend professional photography and making sure your property is ready for photography prior. Floorplans, a good letting agent should arrange these, if you manage yourself, there are soo many apps you can use to simply produce your own. Tenants are busy, they don’t want to view properties they are not sure if they are suitable and this will lead to losing out on good tenants. Videos are a huge added bonus, we utilise 360 Photos for properties we market, but even a simple video walkthrough on your smart phone will work wonders in generating interest.
  4. Curb appeal – a let is won or lost within the first few seconds of the viewing, to avoid wasted viewings, ensure your property is clean, tidy and attractive externally. Garden areas tidied, good furniture on the door (handles etc.)
  5. Price – always ensure you price your property correctly when going to market, you don’t want to delay securing a Let by over pricing your property and delaying getting your property rented, as in most cases the extra rent will not cover the additional Void period incurred to secure the rent (also you may have dismissed a more suitable tenant in the process), leading to a false economy. Look at leading portals, see how much rent is being secured for similar properties to yours, how long have the properties been on the market for, and this will give you a good idea of current market rents for your property.
  6. Condition of property – Decor, Cleanliness and Repairs, I repeat Decor, Cleanliness and Repairs. Keep this in mind every time a tenant vacates and priorities these three areas, making sure your property is fresh and no outstanding repairs prior to tenants coming to view, will lead to less viewings to secure  a Let and will lead to your property being able to attract a better quality of tenant.
  7. Outsource to an Agent – you thought I would say that, right? But think about the facts, if it costs £856 in lost income by you managing the process of marketing and securing a property, would it not make sense if you could outsource to a pro-active agent who could secure a tenant quicker, deal with the enquiries and viewings, arrange reference checks, ensure the Let and Property is compliant with the vast legislation Landlords need to adhere to, conduct move in appointment……what-void-periods-cost

All of these points, will lead to you reducing Void periods and maximising the return on your investment. Profit, was this not the reason you purchased your buy-to-let?

10.1% of Blackpool Workers Worked From Home Before Covid-19 – Wonder How Many More Do Now?

Before the Covid-19 pandemic hit, 6,446 Blackpool people worked mainly from home, or about 10.1% of Blackpool’s 64,012 workforce (compared to the national average of 14.9%). Yet over the last few weeks, many hundreds, even thousands more Blackpool workers have joined them in their spare rooms or at their kitchen or dining room tables. Including 4 members of our Letting team (and I know you won’t believe me, but they miss the office).

Amongst warnings from the Government that some lockdown constraints could stay in place into 2021, businesses are dealing with an unexpected cultural shift in how many of us do our work. Talking to many Blackpool people who have been asked to work from home, for many it has been a pleasant success.

Working from home does have some negatives though. I have found myself still working at 8pm/9pm and beyond as I have forgotten to clock out and whilst many people might think working from home means doing less work, more often than not, the reverse is true for industrious and hardworking employees. When you don’t have that break of the commute the office, the workday can blend into the home life. Talking of commuting, the average British worker has a daily commute of 11.9 miles, whilst locally…

The average daily commute for a Blackpool worker is 7.1 miles

A least working from home, the commute is only to the dining room table or spare bedroom. Speaking to some friends of mine that are new to working from home, they said to me that they can feel out of the office-loop as they miss the ‘water-cooler’ moments or spur-of-the-moment brainstorming session over a brew, it’s tough to reproduce that from home.

Don’t forget to get into your garden (if you have one), stretch those legs. Ensure you are taking advantage of the daily exercise allowance. I see so many people walking around our neighbourhood daily who I haven’t seen before. Let’s hope they keep up the habit once lockdown is removed. You have to admit, it’s quite nice especially as there are far less cars on the road.

Blackpool workers commute 374,271 miles a day to work

That’s all the way to the moon and over half of the way home again – every day!

Some feel guilty if they don’t reply to co-worker’s emails or phone calls straight away. My friends stated that they didn’t want their team-mates to wonder if they were taking it easy rather than pulling their weight. The best advice I can give from working with my team is to overcommunicate, and I suggested (as I do to you) to tell their bosses and colleagues what you are doing and share their accomplishments using those video conferencing software packages.

The really hard part is having a dedicated space in your home. Attempt to set up a workspace and make it out of bounds to the rest of your household while you are working (although that is very difficult when you have children, or your partner is having to work from home as well). Is there anything worse than being on an important call to your boss or a client, only to have a delivery driver knocking on the door or having your kids and dogs yelling and barking in the background? It’s a balancing act!

Interestingly, looking at the stats and this internment in Blackpool people’s homes could be a catalyst for people wanting to move home later in the year be it for rent or for sale, thus giving a vital boost to the Blackpool property market. Would it surprise you that…

17,855 Blackpool households are either at full capacity or officially overcrowded?

The definition of full capacity is when the household has enough bedrooms for the occupants. The definition is set out in ‘The Allocations Code of Guidance’, which recommends that the ‘bedroom standard‘ is adopted as a minimum measure of overcrowding.

This means one bedroom should be provided for

  • each adult couple.
  • any other adult aged 21 or over.
  • two adolescents of the same sex aged 10 to 20.
  • two children regardless of sex under the age of 10

That means 26.62% of Blackpool households do not have a spare bedroom for their occupants to work from

(compared to the national average of 16.64% of household)

Even worse, I suspect there are many Blackpool families with two teenage boys or two teenage girls, and guidance is suggesting they can share a bedroom – do they live in the real world? This means there are probably even more Blackpool households that are at full capacity or even more overcrowded than the stats suggest, meaning plenty of people will be working from dining room tables (if they have a dining room that is) and quite probably the kitchen table … a recipe for even more people wanting to move home later in the year.

So, I don’t know how many Blackpool people are working from home, yet looking at the newspapers the consensus is that it has at least doubled. For all the reasons mentioned in this article, this looks like we could have a pressure cooker scenario of demand for Blackpool property once the restrictions have been fully lifted.

Meanwhile, a message to all you new homeworkers in Blackpool. Working from home is a tough one. The best advice I can give is to change your way of thinking. I know many friends who are missing their offices right now, yet is office-working really so great? Consider the relentless risk of disturbance when you are trying to finish that important project, the recirculated air conditioning with its germs, the shortage of quiet meeting rooms and as I have already mentioned before, the drawn-out and expensive commute.

Slide5Try breaking the cycle that being at work – time is productive and not being at work – time is only leisure. The new way of thinking that accepts the concessions of home-working and discards the traditional 20th Century conventions of office working. Yes, the downside is that as humans we are very sociable creatures and we acutely feel the need to be in face to face contact with each other often, meaning lockdown is quite tough for many of us. Yet, if we are able to connect the positive prospects for the future working and the situation that Covid-19 offers us, then together as a society we should be able to find the right balance between working from home and coming together. In the meantime, be considerate of each other and keep safe we are all in this together and we will all overcome this together.

 

 

Mandatory Electrical safety certification – what it means for you, the Landlord (perspective from a Landlord and Letting Agent)

Electric legisThe certificate:

The required certificate is an Electrical Installation Condition Report (EICR). An electrical engineer will check all of the circuits that leave the consumer unit of the property and ensure they are safe.

The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 require landlords in England to maintain their properties to the electrical safety standards, and to have evidence of this. This means your property must meet the 18th Edition of the Wiring Regulations and you must have a report that shows this from a qualified person.

A valid certificate lasts for 5 years.

When do you need it by:

For every time a new tenancy is created, or an existing one renewed, on or after 1st July 2020, you will require an EICR. It is important, that this legislation will apply to all existing tenancies (fixed or periodic), from 1st April 2021, all properties must have an EICR.

What do I need to do with an EICR?

  • you must give a copy of the EICR to your tenants before their tenancy starts, like we do with a gas certificate, energy performance certificate, how to rent guide, deposits
  • When you replace the EICR, you must provide your tenants with a copy of the new report within 28 days of the inspection
  • If you tenant requests a copy of the EICR in writing, you must also provide them with one within 28 days
  • If the local authority requests the EICR, you must provide them with a copy of it within seven days. Penalties could apply for non-compliance.
  • You must also give a copy to any prospective tenant (who request one in writing) within 28 days.

 

How much is it going to cost me:

We have negotiated rates with electrical contractors (who cover Lancashire area) and the cost of certification costs start from £85 (dependant on size of property). Please be vary that if you haven’t rewired recently, there is remedial works that are required to get to the required standard, then you need to take into consideration the costs you will incur for remedial works. If on inspection the property doesn’t meet levels for certification (breach), then you have 28 days from that point to get works sorted or if currently vacant, works need to be done prior to the commencement of new tenancy.

Screenshot 2020-05-12 14.59.50What if I don’t get the certification?

 This is a good question and be honest, I know some of you may have considered this option. Let me be clear, this is not an option, don’t consider it and put yourself at risk!

  • Fine of £30 000 per breach
  • Will be enforced by local authorities, please note tenants can report non compliance if they haven’t received certification
  • If possession required via quote, you will have waived rights under Section 21 notice as the tenancy commenced in a non-compliant way, hence meaning youi cant serve the notice

Few common issues to expect when you carry out your first certificate:

  • Fuse box – needs RCD protection
  • Light fitting in bathrooms – many fittings aren’t compliant with standards, if you have standard fittings, then this will need action

 

 

232 Thornton-Cleveleys Families in Limbo Due to Coronavirus

An immediate fallout of the Coronavirus pandemic is that it has placed many Thornton-Cleveleys families house moves on hold. Government guidelines state all house buyers and house sellers who are in the process of selling their Thornton-Cleveleys house and moving to a new house must adapt to these temporary arrangements, adjusting their usual practices, agreeing different dates to the house move after the removal of the stay at home actions we are all adopting. In essence, putting the house move ‘on ice’ during lockdown.

However, where the house being moved into is vacant, Government guidance states that you can continue with this transaction although you must observe the Governments guidance on house removals. There are also exceptions allowed where existing accommodation becomes un-fit to live in (e.g. flood or fire) or occurrences of domestic violence. Thankfully, the Government have asked mortgage companies to extend the expiry date of any mortgage offer and the Law Society have implemented a standard legal process for delaying completion dates.

So, what does all this mean for the people of Thornton-Cleveleys?

This means the house moves of 232 Thornton-Cleveleys families have been put on hold since the coronavirus restrictions brought the UK housing market mainly to a halt in late March.

These are Thornton-Cleveleys properties where a sale was agreed between October 2019 and February 2020. During the time between sale agreed and completion, the properties are classified as sold subject to contract.  Interestingly, it has been taking upwards of 14 to 19 weeks from agreeing a sale to the move-in over the last few years. This means typically, these 232 property transactions mentioned above would have completed between April and June/July 2020 yet have now been placed on hold after the Government asked buyers and sellers to delay house moves where possible.

The value of Thornton-Cleveleys property sold subject to contract amounts to £35,903,000

The pandemic hit just as the Thornton-Cleveleys market had been experiencing the Boris Bounce following his General Election landslide in December. It appears talking to my team and other agents in Thornton-Cleveleys, just about every buyer and seller is happy to wait until the restrictions are lifted because they had been holding back their house move because of Brexit. Interestingly, many of the Thornton-Cleveleys homeowners in limbo mentioned above are moving up the property ladder, and whilst being ‘in limbo’, it has made them realise more than ever that the homes they are moving from are too small for their needs and they are keen to crack-on with the sale once restrictions are lifted.Slide3 Finally, we cannot forget the tenants of Thornton-Cleveleys. Currently there are 970 families looking to make that move, yet unable to as tenants are under the same restrictions as house buyers. This means they too cannot do a physical viewing nor can they move house during lockdown unless where existing accommodation becomes un-fit to live in, e.g. flood or fire or occurrences of domestic violence or the person moving is an essential worker. That doesn’t mean tenants cannot view the property and prepare the paperwork in advance. In fact, many agents think the first Friday after lockdown will be the busiest ever moving day in the history of the UK as there will be a huge pent up demand to move on that date.

For more information on the Thornton-Cleveleys Property Market – please follow me on social media for more up to date articles on the local property market.

 

 

 

 

The New-Norm (for property)

There is a lot we don’t know, there is a lot we can’t control, these are uncertain times. However, haven’t all times been uncertain?

What we do know, is life will never quite be the same again and we will all start adapting to the ‘new-norm’. The same of course applies to property, and Covid-19 will change how the world sees property forever. My advice to you (Landlord/Investor), is not to dwell on what we can’t control, but take action on what we can control.

“Life is 10% what happens to me and 90% how I react to it.” –  Charles Swindoll

Let’s just look at residential property, this is the part of the property industry that supplies Humanity their ‘home‘. Whats more important than home? (peanut butter, possibly)

Here are 10 ways I think property will be affected post-Covid-19.

  1. Divorce Rates – Yes we all know it, divorce rates will significantly increase due to the lockdown measures. This will mean additional houses will need to be sold, or different type of properties will be required by couples who were previously sharing
  2. Mortgage defaults – with job losses, reduced hours/earning potential, businesses ceasing to trade and all the other financial uncertainties the economy faces, we are aware there will be a minority of mortgage holders who will not be able to keep up with there repayments. Lets just think about the first time buyers, who purchased under the help to buy scheme, the vast majority just about got together the deposit (which was significantly lower than the norm at just 5%), this group would be extremely sensitive, to significant increases to interest rates and changes in there income. This will lead to a certain part of our population now being unable to keep up with mortgage payments, banks taking possession of property and then leading to these properties coming ontotythe open market. According to the following article, a third of our population has less than a £1000 in savings:https://www.express.co.uk/finance/personalfinance/1267717/savings-account-uk-coronavirus-personal-finance-average-uk-savings-covid19-latest
  3. Uprise – the UK population has been spending more time in there homes then ever before, due to the lockdown restrictions imposed. This has led to home occupiers, realising that they don’t have as much space as they initially thought, especially if they are sharing their homes with others. Habits will change post lockdown and the trend will see more people socialising etc in their homes. This will ultimately lead to future buyers, prioritising space a property provides much higher on their list then they previously did.
  4. Potential buyers of the past, may now look to rent instead – uncertainty leads to people not wanting to commit! With potential first time buyers now uncertain of their job security, their future potential employment, the way the economy will go, this segment may decide to delay their purchases, or decide renting is the better fit for them currently,
  5. Downsizing – minimalism is going to be a trend that will start to develop. When you have to go through difficult economic conditions, this will scar you and the way you see money and spending going forward. I honestly believe, that there will be a lot of people who will significantly spend less, reduce overheads, stop consuming unnecessarily and lead more simplistic, minimalist lives. This trend will see some people identifying they could suffice in a smaller property, release equity, reduce mortgage payments, monthly overheads etc….
  6. Sod Property – bear with me on this one. There will be people who will have used the current lockdown situation to reflect on their lives, their ambitions, goals and come to the realisation ‘life is too short’. If they currently own a property, they may see an opportunity to sell, release equity and go on their next adventure of life, be it travelling, starting a new vocation, educating themselves, whatever it maybe.
  7. Home Improvements – it was reported there was queues on B an Q’s website of over 365 000 and this led to a wait of over an hour just to get onto the website! I don’t think anyone in this country has picked up on ‘niggly’ items since the lockdown. Consumers will also be using this opportunity to reflect on what they want to do with their properties and what they would like. With property, becoming even more important, home owners will want to improve and invest in their properties. Look out for a sharp upturn in house extensions, renovations coupled with the governments relaxed planning criteria. I know I would love a cinema room and gym 🙂
  8. Home working space – any of you that have had to work from home for the first time, I am sure you will join in me admitting you have fantasised about the ultimate home working space. Picture of my ultimate office below. We will see a drastic rise in home working and this will lead to the requirements of residential properties being adapted, dedicated home working spaces will lead to an increase in demand. We will also see a change in way people perceive areas to live in, as previously one of the main drivers of renting or purchasing Propety, would be the proximity to their work space
  9. Garden offices – maybe just my fantasy, however I mustn’t be alone in wanting to have a dedicated, isolated space for me to go and be productive in my zen office set-up. Watch out for a rise in garden offices!
  10. Staycation – people will still go abroad, but let’s consider trends. A vast majority of us, some due toeing deemed as highly vulnerable, carers for vulnerable people or just out of caution will avoid travelling, mass gatherings and the like. Airtravel isnt projected to get to pre-Corona levels until 2023 and some suggest that it may never reach them levels again. UKs holiday destinations will see a huge upsurge in UK travellers visiting. AirBNB was a growing platform and we will see a significant increase in the growth of this platform.

As a Landlord or Investor, Buy To Let will still continue to grow, it was a growing trend prior to Covid-19 and the last recession led to the biggest boom to the buy to let industry in history and the current economic situation will lead to a further boom. We need to consider profitability, change our mindset from Landlord to Investor, this means maximising returns from our properties. This means looking at our Tenants needs. Shorter time to Let, longer term tenants, better quality of tenants, will all mean a better return from your investment. Give your customer what they want, a better home that suits their needs! Screenshot 2020-05-04 00.00.00