Streetwise Property Alert 13th June 2014

Members always seem to be interested in London. Here’s what’s been happening news and view-wise…

London’s Rental Standard

We note that Boris Johnson has launched the capital’s first ever rental standard, a city-wide badge of accreditation, ‘to help millions of Londoners rent with confidence and to give the city’s 300,000 landlords peace of mind that they are complying with the law and doing the right thing.’

The London Rental Standard brings together seven landlord accreditation schemes which will operate under a single framework. The badge will be awarded to all landlords and letting agents who meet a set of significant core commitments set by the mayor. These outline a minimum level of service that renters should expect including transparent fees, better property conditions, better communication between landlords and tenants, improved response times for repairs and maintenance, and protected deposits.’ The full London Rental Standard can be downloaded at the London.gov.uk site.

Thoughts & Ideas

Purple Brick’s CEO Michael Bruce is in the news this week, offering thoughts and ideas across the spectrum. Let’s quote. ‘I want to see property prices become affordable for as many people as possible. The London property market is no longer a ‘bubble’ – it has become a balloon that has risen above the rest of the UK. Just how big is the balloon going to become? Every month it sweeps up more and more regions, leaving fewer people able to afford the rising prices.’

‘My top tip for adding value to your home is ‘space, space, space’. Buyers love it and today they need it. Buy cheaper if possible and extend. First-time buyers trying to get on London’s property ladder should take a longer term view of their ideal home. Look at the current London balloon (not bubble), establish where the perimeter is and buy just on the edge before the balloon engulfs that area. Buy something that needs some work and take your time doing it up.’ Good ideas!

Investors! The Doors Are Open

We no longer introduce London properties to the general membership as we invariably have to wade through 200 daydreamers to find the serious investors. We now run these introductions behind the scenes to some 50 investors. We’ve just had a clearout of 23 members who, having signed up, have not replied to any introduction for three months. (The word ‘free’ is great but it attracts serious investors and nuts alike). Anyway, we have 23 spaces left for serious investors who want a steady stream of (slightly) BMV deals, leaseback opportunities and various other property investments inside the M25. You will also be invited on exclusive tours with me and presentations. All I ask is that you are a serious investor and not barking mad!

Auction Finance?

We have access to funding products which are available and fast.

Example: Clients saw an attractive investment property in an auction catalogue. It needed some work but in advance of the auction they needed to know how much they could afford to bid. We arranged a flexible facility by the lender taking a charge on an existing property to provide them with the auction deposit and a credit limit with which to bid at the auction. The clients were prepared and put their hands up to bid with the confidence required!

100 per cent of purchase price and refurbishment works available – with additional security.

Advances from £10,000 to £1,000,000.

Terms up to 12 months.

England Wales and Scotland.

No upfront fees payable to the lender.

Payment options available.

After eight months the clients re-mortgaged to a buy to let lender at 75 percentage of the improved value (after renovating and renting out for six months) getting their capital back out and is now looking to buy another auction property. Email for details.

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How Long To Sell?

Members are usually interested in what else is happening on the market so that they can compare what they are doing with other ‘averages’. We note that the Home website suggests that the ‘typical time on market’ for England and Wales is now 90 days; the shortest since April 2008. As ever, we need to ask ourselves how representative an average actually is. London figures seem to be at the 48 days mark whilst the North-East comes in at 167 days.

Doug Shephard at Home.co.uk says, ‘The UK property market remains highly diverse in respect of marketing times. London seems a world away from the difficult and slow markets in the North. The sub-inflation price rises observed in Yorkshire, the North West, Scotland, Wales and the North East correlate well with the long marketing times shown above and indicates that, contrary to the rest of the country, supply is broadly in balance with demand in these regions.’

‘However, market conditions are currently improving rapidly in the North, Scotland and Wales. Hence, we may soon be able to add some, if not all, to the list of booming regional markets over the next 12 months. Goodness knows how the London and South East markets will look by then.’ Do let us know where you are looking to buy – I am tempted to trial some regional services (Surrey, Kent etc) if there is a sufficient show of hands.

Rental News

Strutt & Parker reports am increase in investors in London since 2012. As an example, more than 25 per cent of buyers in Chelsea are purchasing for investment compared with under 5 per cent back in 2012. ‘The rental landscape in prime central London is fast changing. Investors are no longer fixed on chasing high rental yields and are happy to invest for the capital growth alone. Consequently, investors are incorporating larger family accommodation into their portfolios, resulting in more family houses coming to the market.’

‘With discerning, long-term renters now the norm, more and more landlords are comprehensively refurbishing their properties in order to attract the best tenants and this is also having an impact on pricing and the type of property most in demand. We are finding that there is no longer such as obsession with home ownership amongst our younger tenants. The majority of our tenants are in their 20s and 30s and very used to renting. Singles or couples in their 20s tend to favour one and two bedroom flats, whilst married or cohabiting couples in their thirties, sometimes with one baby, usually prefer three or four bedroom mid-size houses or large lateral apartments.’ Food for thought – and more to come as we are visiting again with investors next week.

All for now, see you again soon.

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