Our sincere congratulations go to Emma Barnes, for being nominated as this month’s Top Dog. It was an easy and unanimous decision, as Emma has made such a positive impact on the Mansfield office as a whole. Her administration and communication skills coupled with her enthusiasm for letting property has changed the dynamics of the Mansfield letting department.
Emma has, during her time with PWR, become proficient in all aspects of the business since joining us in 2010, but we are delighted to see her finally find her true niche processing the applications and letting properties from inside the office. Her addition to a relatively new team has allowed everyone to be slotted into roles in which they thrive and the performance from all the staff this month is tantamount to that.
Emma is a self-motivated enthusiastic individual whose sheer presence raises the spirits of those fortunate to work with her, we are very proud to have her as a member of our team.
Tenants in the private rented sector (PRS) are more satisfied with their home than their counterparts in social housing.
This is according to new figures included in the annual English Housing Survey, which show 83 per cent of people in the PRS are happy with their accommodation, compared to 81 per cent of social tenants.
It was also revealed that during the 2012-13 year, the PRS overtook social housing to become the second largest form of housing in the country. Some 18 per cent (four million) of households are now in the PRS, while 65 per cent (14.3 million) are owner occupied and 17 per cent (3.7 million) are social.
However, the PRS had the largest proportion of homes that were classed as "non-decent" with 33 per cent of properties in the sector falling into this category. The figure is 15 per cent and 20 per cent for social and owner-occupied housing respectively.
In terms of rents, the survey found the cost of living in the private sector increased by 6.5 per cent between 2008 and 2013, which represents a fall in real terms. Social housing rents grew by 25.3 per cent in the same period.
While they are rising at a slower pace, private rents remain more expensive than social, with the survey saying this is due to the PRS containing a much larger and more varied stock of properties, where as social accommodation tends to be cheaper purpose-built flats.
For many, buy-to-let is an attractive investment when interest rates are low and the stock market is volatile. But if you’re considering investing in property in 2014 - or improving your return on a property you already let - it's important to do things correctly to make the most of that investment. Simon Perkins, partner at PWR Lettings, gives his top tips on making a rental investment work for you.
Research the market
Before you begin, make sure you’ve done your research. There are many benefits that come with letting a property – but you need to know the pitfalls too. There are a number of legal requirements that you’ll need to be au fait with – from what your rights are as a landlord to what will be expected as a legal requirement from your tenants. You’ll need to have the right cover too. Contents insurance isn’t enough. You’ll need specialist landlord’s insurance that covers factors such as public liability and legal fees, which will be invaluable if you ever need to call upon it.
Location, location, location
Make sure you ask yourself the right questions when choosing a property to buy. Look for properties in up-and-coming areas so you can, with as much certainty as possible, predict a longer term return on your investment. Look at the style of the house you want to buy, the area it’s in and the type of people that will want to live there. Do they all marry up? There’s no point buying a one bedroom apartment in an area where the rental demand is for family homes. Ask yourself some challenging questions and you’re more likely to get it right.
The days of double-digit house price rises are gone so you’re unlikely to get rich quick with a buy-to-let property. Be realistic. Focus on rental income rather than capital growth in the short term – and make sure you’ve done the maths.
Do your sums
Don’t commit to buying until you know your sums work. Look at the mortgage rates available and probable rental income. Don’t forget costs such as mortgage arrangement fees, insurances and any work that might need doing upfront to get the property habitable. Then consider what you will do to cover the costs if the property sits empty for a few months.
Get the best advice
Why not ask a reputable letting agent, independent of your estate agent, for a view on the letability of the property before you buy. They can give you the best indication of possible rental yields and the profile of your potential tenants as well as give you some useful impartial advice.
It might sound obvious but make sure you look at the different buy-to-let products on the market to ensure you get the best possible deal. Speaking to an independent mortgage advisor can often be invaluable and they regularly have access to products that aren’t available on the high street.
Who’s your target market?
When getting your property ready for rent, think about the type of person that will want to rent from you and make any adjustments necessary to ensure your property will appeal. For example, if it’s a student let, consider letting it furnished and putting desks for computers and shelves for books in bedrooms.
Do a thorough check
Property is a significant investment and although contracts should always be in place make sure you do the relevant checks on your potential tenants. Get credit checks and references and don’t be afraid to say ‘no’ to a prospect if you’re not confident they will make good tenants. Check your insurance policy as well to see if you’re covered against a tenant failing to pay.
In your hands
Consider how hands on you want to be. Do you want to manage everything yourself, from marketing the property to dealing with any odd jobs that crop up, or would you prefer to work with a letting agent to manage the property on your behalf?
A word of caution
Beware low rates. While you’ll reap the benefits of low interest rates now, what goes down must go back up and you will need to be confident that your investment will stand the test of time.
Findings from a landlord survey carried out by outsourced property management firm Rushbrook and Rathbone suggest that landlords who adopt a full management service are more focused on long term investment through capital appreciation than short term gains via high rents.
The survey revealed that the majority of landlords who use a full leting, rent collection and management service are least concerned with achieving maximum rent (only 2%) and more focused (51%) on the importance of finding a quality tenant. A further 42% said care and respect for their property, as well as professional management support, is most important to them as a landlord. Interestingly, a staggering 71% of respondents admitted not seeking any form of advice relating to the financial costs of running a buy-to-let property prior to making their first investment, and yet 90% claim the yield they generate provides them with sufficient income to enable them to reinvest in maintaining the property.
It is encouraging that the responses demonstrate many landlords appear to be taking a professional approach to their buy-to-let businesses which is borne out by many of PWR’s clients adopting a similar approach, seeking quality tenants, having the ability to reinvest in their properties in order to attract these tenants as well as encourage them to care for the property. It is, however, surprising that so few sought prior advice over the costs involved in such a huge investment.
We would always recommend that new buy to let landlords seek independent advice on such matters and also the expertise of a professional local letting agent when considering buying a property. Too many new Landlords often take advice from the estate agent they are buying from, when they are actually only interested in selling the property, rather than seeking the advice of a reputable local letting agent who can provide a better idea of the lettability of a property.
Make sure you obtain the correct advice before dipping your toe into the buy to let property world as it could mean the difference between a successful long term investment and a financial nightmare.
After 10 years in Lettings and Management across Nottinghamshire and the last 3 years in Woodthorpe, we have seen more and more accidental landlords considering selling when tenants are starting to vacate and rather than giving the business to other agents, we have chosen to accommodate these clients by offering sales through our new sales division.
Many clients ask whether we do sales and until now we have had to pass them to other companies, but rather than lose the client we can now provide a seamless approach to selling their property as well, whether it be as a tenanted investment or otherwise.
Rather than dilute our internal lettings and management structure to accommodate the sales function, we have chosen to launch our sales division separately under the PWR Residential brand with a dedicated team focusing purely on selling properties. This way we have specialist people on both sides of the business, focused on their own function, but with cross communication lines within the business. It is therefore an opportunity for expansion in the area for PWR and to build on our already well established reputation and to provide existing and new clients with a Unique Estate Agency experience.
The UK's private rented sector (PRS) could learn from its counterpart in Germany.
This is according to the joint managing director of Grainger Deutschland, who said there is a "deep cultural acceptance" of renting in the European nation compared to a heavy focus on homeownership and house price inflation in Britain.
There is much the UK could learn from the German rented residential market, but one must be careful and not assume that we can simply transplant the German model into the UK.
Nonetheless, there are features of the German rental market such as longer term tenancies and a culture of professional management, which help explain why it is such a successful investment asset class.
The British Property Federations (BPF) recent conference saw the organisation call on British councils to do more to support the construction of properties built with long-term renting in mind and to move away from a fixation with home ownership.
A keynote speaker at the event was Roberta Blackman Woods, Labour's shadow planning minister, who said she believes the PRS can do more to help the UK overcome its current housing crisis.
Ms Blackman Woods claimed Labour is committed to improving standards in the rental sector, especially for the 1.3 million families with children who currently rent their home.
Following the event, the BPF has released a report alongside legal firm Addleshaw Goddard that calls for more purpose-built PRS accommodation to be developed.
Entitled 'Making Renting Viable', the publication sets out a number of recommendations for how this can be achieved. These include strong and clear guidance from the National Planning Policy Framework and earmarking public land for PRS development.
Other suggestions include defined local authority targets for the building of rental homes and making it easier for councils to raise the necessary finance to construct PRS properties.
The BPF and Addleshaw Goddard want the government to provide official formal guidelines on the building of specialist rental developments.
A shortage of homes coming onto the nation’s housing market is seriously hampering growth and pushing prices higher in many parts of the country, says the RICS January Residential Market Survey.
During January, the number of houses coming up for sale across the UK hit its lowest point since July 2012, despite the amount of potential buyers continuing to surge ahead in most areas. However, despite vendor numbers not having seen any sustained increase for some months, some surveyors note that supply is expected to increase as we enter the traditional ‘spring bounce’.
However, last month, with the gap between listless supply and rising demand not seeing any considerable change, prices continued to grow in every part of the UK. During January, a net balance of 53% more respondents across the country reported growing prices (from +56% in December). The cost of a home in the UK has now been rising for just under a year.
Moving on to transactions, the number of homes sold per chartered surveyor reached 21.1* over the preceding three months. Although historically relatively low, this represents a sizable increase on the same time last year when respondents were selling a mere 16.
Across the UK, the biggest increases in activity have been seen in the South West and Yorkshire and Humberside where sales numbers jumped 50% and 40% respectively since January last year.
Looking ahead, the more positive outlook continues with a net balance of 32% more chartered surveyors predicting transaction numbers to increase over the coming three months, while expectations for future prices are also strongly positive.
*Homes sold per surveyor (by branch over the preceding three months).
After 5 years, sales transactions are starting to increase, consumer confidence is on the rise, the economy is improving and the full impact of Help to Buy is still to come, making the outlook appear brighter. However, high deposit requirements, restricted levels of lending and possible interest rate rises could check growth.
Indeed, PWR Residential our sister company are experiencing high levels of demand from would be buyers, with us agreeing the sale of 5 of the first 10 instructions within only weeks of the properties coming to the market.
Modest growth looks likely but fears of a bubble seem misplaced, especially with the Bank of England keeping an eye on things.
Mortgage approvals are also on the rise, though they remain below peak levels. Approvals in the third quarter of 2013 were at their highest for 6 years, however, new lending rules, in force from April 2014, following the mortgage market review will prevent a return to some of the lending practices seen before the credit crunch.
New instructions remain a challenge with numbers well below 2008 levels and with demand on the up and new builds falling well short of the targets put forward by the experts, the short supply is likely to fuel price growth in the short term.
Lending to buy to let investors is on the rise and is helping to take the pressure off the supply issues in the rental market. With capital values rising in many parts and high deposit requirements likely to underpin demand from tenants frozen out of the sales market, prospects look good for investor Landlords who do their homework.
Four out of five people think that average asking prices will be higher in 12 months time proving that consumer confidence is at its highest level in four years.
With so much positivity in the market, 2014 should be a good year for not only the sales market but also the rental market too.