Could an Ampthill & Flitwick rental property save you from a pension disaster?

Retirement is getting closer if you were born in the early 70’s or late 60’s, even if you haven’t given it much thought yet. The current pension rates are £115.95 per week for singletons, and £231.90 per week for couples (£12,118 a year), and this is providing your national insurance contributions are up to date. Would you be able to survive on those amounts..? It doesn’t fill me with joy looking at them.

So is there a way to try and help you boost this figure?

Buying an investment property in Ampthill or Flitwick could be an answer. A lot of people in their 30’s have a smaller one or two bedroom place, then sell that one and buy a bigger and bigger property as their family or needs grow. However, if these smaller properties could be kept as buy-to-let investments then they could very well be an alternative pension fund.

Let’s look at some historical property prices for Central Bedfordshire:

Flats – the average price for a flat in January 1995 was £34,025. Fast forward 20 years and the average price for a flat in January 2015 was £104,481. This is a 207% increase in value, which works out at 10.3% per year on average. So, if we were to assume the same 207% increase over the next 20 years for the latest data available (September 2015’s value of £118,890) then we have a figure of £364,992 for September 2035.

Semi-detached Houses – using the same data we can take the average price paid for a semi in January 1995 as £64,757. Whereas the same average price in January 2015 was £198,851 – the same 207% increase. So let’s take September 2015’s value of £212,951 and increase that by 207%, making a whopping £653,759 predicted for September 2035 if we follow the same path as the last 20 years.

Let’s now assume you used a 25% deposit to buy a Semi-detached House in January 1995, costing £16,189. If you had a repayment mortgage running for 20 years and that mortgage was paid off in 2015, you get an increase of £16,189 > £212,951 with no mortgage left at the end, making a massive 1215% return!

Of course nothing is plain sailing for us though, there’s maintenance and management costs to bear in mind, interest rates could rise sharply and values could also go down. We can see early 2008 was a peak in the market here (Just before the credit crunch) at £194,463, and average house prices in the region dropped by 17.74% to £159,950 in May 2009. But the latest average price data for September 2015 in our region is now £210,163, meaning an overall 8.07% increase since the 2008 peak.

What can we conclude from all this? History shows property prices have always risen over long periods, and they’re a good solid investment when viewed this way. If you’re looking to make money quickly then buy cheap, add value and sell on as fast as possible. But if you’re looking for really big gains then hold for the long term – the longer the better!

If you'd like a chat about anything property related then give me a call on 01525 838848, send me an email at graham@1st-house-lettings.co.uk, or drop in for a coffee at 1st House Lettings, The Rufus Centre, Steppingley Road, Flitwick, MK45 1AH.

(I must point out that there’s absolutely no guarantee that prices will increase by 207% from 2015 to 2035 – Solicitor told me to write this bit!)

George Osborne Announces 3% Stamp Duty Increase For BTL Or Second Home Purchases, Starting April 2016!

Goerge Osborne has delivered a bombshell for landlords and investors today in his Autumn Statement And Spending Review, starting April 2016:

"So I am introducing new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.

It will be introduced from April next year and we’ll consult on the details so that corporate property development isn’t affected.

This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership."

Self Cert Mortgages To Make A Comeback In 2016...?

Do you remember self-cert mortgages? Well they could be making a comeback from a lender based in Eastern Europe to get around the UK's finance laws:

http://www.moneymarketing.co.uk/banned-self-cert-loans-set-for-return/

A new lender is looking to bring back self-certified mortgages at the start of next year.

The FCA banned so-called ‘liar loans’ in the Mortgage Market Review.

However, Graeme Wingate, the founder of unsecured lender Quick Loans, is looking to bypass UK regulation by setting up in an Eastern European country, the identity of which he would not disclose.

While the new lender, selfcert.co.uk, will not have to abide by UK regulation, it will have to adhere to the incoming Mortgage Credit Directive, although it is less strict on rules around creditworthiness and income verification.

The directive merely states that the borrower’s income must be “appropriately verified, including through reference to independently verifiable documentation when necessary”, whereas the MMR explicitly states “a firm must not accept self-certification of income”.

Wingate says: “We’re setting up a new company [in Eastern Europe]. The regulator out there has been very friendly and helpful to us, walking us through the process of getting a licence. It is quite a straightforward process.”

Wingate plans to passport into the UK under the Electronic Commerce Directive.

An FCA spokeswoman says: “A firm located in an EEA Member State can provide a lending service under the Electronic Commerce Directive to UK consumers, but the service has to be provided solely at a distance and online.

“This service, however, would not be regulated by the FCA and if something went wrong, the FCA is not generally able to intervene. Additionally there would be no recourse to the compulsory jurisdiction of the UK’s Financial Ombudsman Service.”

Wingate says he expects to obtain a lending licence within the next week.

Self-cert loans were initially meant to be for self-employed borrowers or those with irregular income but in 2007 they accounted for over 50 per cent of new lending, according to the FCA.

Trinity Financial product and communications manager Aaron Strutt says: “Self-cert mortgages are a real blast from the past and many brokers will be surprised that there is even a chance they will be available again.

“It is hard to see how self-cert can play a part in a modern financial market, even if a lender can get around the rules by operating online and via another country.”

The lender expects to launch in mid-January.

Two Bedroom Maisonette In Flitwick - 5.25% Gross Yield

This is a nice example of a two bedroom maisonette to buy in in Flitwick:

http://www.rightmove.co.uk/property-for-sale/property-38040309.html

It's on the market for £160,000 and I think it would rent for a minimum of £700 per month, making it a 5.25% gross yield. 

However I would check the Leasehold carefully as it states there's only 57 years to run, and it usually costs £1000's to increase this with the Freeholder. You'll also find it nigh on impossible to get a mortgage on it with that amount of Lease left to run.

I'd be using this fact to negotiate a substantial discount on the asking price!

Chalet Bungalow & Building Plot In Bedford - £155k

This is looking like a massive bargain if it can be picked up for the guide price of £155,000. Looking at it on google maps the plot definitely seems big enough for another property:

http://www.rightmove.co.uk/property-for-sale/property-37898718.html

I really think there's good money to be made here, will be interesting to see what it goes for at auction. A quick search reveals it's been on the market for £190k (https://www.onthemarket.com/details/1306068/) and hasn't sold, so now it's up for auction with a guide price of £155k.

Warren Farm Development, Ampthill - Public Exhibition Dates

Warren Farm Development - Public Exhibition - The Council Chamber Ampthill Town Council Office, 66 Dunstable Street, Ampthill - Friday 4th December - 1.30pm and 8.30pm

Unfortunately the developers community engagement site has not been updated for some time: www.warrenfarmampthill.com

Above info was taken from https://www.facebook.com/Ampthill.Info/?fref=ts

Fine after tenants suffer carbon monoxide poisoning -

I only wrote a post yesterday about Smoke and Carbon Monoxide alarms, and then this story appears in the press today:

https://www.lettingagenttoday.co.uk/breaking-news/2015/11/fine-after-tenants-suffer-carbon-monoxide-poisoning

If you haven't got any alarms in your rental property then you really need to get them fitted, they're only £10-£20 each and take 5 minutes to fit.

Smoke And Carbon Monoxide Alarms - Has Your Rental Property Got Them?

It never ceases to amaze me how bad some agents are at keeping up with current legislations. Over the past two weeks I've been to see a property that's already managed by another agent which didn't have a smoke alarm fitted, and I spoke to another landlord who's agent told him he didn't need to put in smoke alarms until a change of tenancy. This was their interpretation of the new regs that come in on 1st October 2015.

Seriously? 

Both agents aren't doing their job properly. The regs changed on 1st October and every 

Two Bed House In Stewartby - Immaculate

Following on from the one bed flat in Stewartby from Saturday, have a look at this immaculate two bed end-of-terrace house on for £165k:

http://www.rightmove.co.uk/property-for-sale/property-35870628.html

This would easily rent to the first people who see it, as long as the price isn't too high! It looks immaculate inside, and that definitely helps set a rental property apart from other similar ones on the market.

I'd say this should rent for at least £750-£800 per month, possibly more, but without seeing it it's difficult to say exactly.

If you'd like a chat about anything property related then give me a call on 01525 838848 and i'll get back to you as soon as possible.

http://www.1st-house-lettings.co.uk/

One Bed Flat In Stewartby - £105,000 = 6.28% Gross Yield!

There's always good demand for one bedroom properties in Mid-Bedfordshire, and this flat in Stewartby would easily rent out for £550 per month:

http://www.rightmove.co.uk/property-for-sale/property-52086877.html

Looks like another one in the same block has just been sold as well, for the same price. If you're looking for an easy property to rent out, at around £100k then look no further!

If you'd like any advice on investing anywhere in Bedfordshire then give me a call on 01525 838848, or email graham@1st-house-lettings.co.uk and i'll get back to you personally.

Ampthill vs Flitwick - Average House Prices, Who's Higher..?

Lately I’ve been looking at the differences in the average sale prices over the last 12 months for properties in Ampthill, compared to Flitwick. There’s a clear difference:

The average price for terraced houses in Flitwick is currently £208,709, whilst terraced houses in Ampthill are worth around 19% more with an average of £246,876. The same was found for the value of an average semi-detached house worth £248,804 in Flitwick, with the value increasing by 21% in Ampthill at £301,784. For a detached house in Flitwick, you can pay approximately £379,850. This value is increased by 18% in Ampthill, with an average price of £448,943.

So Ampthill is more expensive across the board by 18-21% for houses, not such a massive shock. But do the rental returns reflect this? I’ll be comparing the yields and rental returns later.

If you are a landlord who is looking to buy a property to let it’s worth considering the possible annual returns/yields, making sure it works for your figures. If you would like any advice when choosing investment properties then give us a call on 01525 838848, or drop into our office at 21 The Rufus Centre, Steppingley Road, Flitwick, by the new sports centre currently being built.


http://www.1st-house-lettings.co.uk


(Above price info was taken from Zoopla)

Rents continue to rise as more tenants throw in the towel on buying

Newly agreed rents are continuing to rise – but at a slower pace, it has been claimed.

Meanwhile, two-thirds of tenants have said raising a deposit to buy is unaffordable.

When London is excluded, the average new rent is £749, up 3.5% on last year’s £724 per calendar month.

While this is running ahead of inflation, it is much lower than the 8.5% rise reported earlier this year.

Average new rents in London are 7.5% higher than a year ago, at £1,560 per month.

It means London rents are now over £800 more per month – or 108% higher – than the average in the rest of the UK.

Tenancy referencing service HomeLet also reports in a survey of almost 15,000 tenants, that 64% expect to continue rented for the foreseeable future.

Martin Totty, CEO of HomeLet’s parent company Barbon, said: “Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit: 66% of those questioned said that a deposit wasn’t affordable for them.

“However, the positive news is that almost nine out of ten tenants told us they were happy with the standard of their current rented property, and the majority told us they were happy with the service provided by their landlord or letting agent.”

For the second month running, HomeLet reports that rents are rising fastest in Scotland, where new tenancies over the three months to October cost 9% more than in the same period last year.

Rents for new tenancies rose in nine out of 12 regions of the country. The exceptions were the north-west, East Anglia and Northern Ireland.

(The above article was taken from here: www.propertyindustryeye.com)

1 Bedroom House In Ampthill - 5.03% Gross Yield

This is a nice example of tidy little 1 bedroom cluster home, and would easily let for £600-£650 per month:

http://www.rightmove.co.uk/property-for-sale/property-55824365.html

If you could pick this up for £155,000 then its a steady 5.03% gross yield, not bad for Ampthill!

How Many New Build Properties Are Coming Up Around Ampthill & Flitwick?

Seeing as our office is in The Rufus Centre on Steppingley Road, Flitwick we see houses being built all around us every day now. The site called Froghall Fields and Steppingley Gardens is well under way, with the showhomes done and glitzy sales brochures available, you can see all the estate plans if you want to have a nose.

Then we thought about the site in Ampthill called St Andrews Place, have you seen it? It looks massive! I didn't think it was possible to squeeze such an impressive looking site in that manky old plot, but it looks really good.

Then we noticed a building site down Water Lane in Flitwick as we manage a house there. We're not sure who the developer is as it's very early days, but apparently whoever it also 

What's Worse - £50pm Less Or One Month Void..?

This time of year can be trick for renting a place out, it always starts to die down as people get ready for Christmas and New Year. So if you have a property just about to come on the market then it's worth doing your sums to make sure you don't lose out.

For instance, lets say there's two very similar properties on the market, one for £750pm and one for £700pm. Which one do you think a tenant would go for, and how much would the landlord get...?

Of course the tenant would take the cheaper one for £700pm, and the chances are at this time of year the £750pm one might sit empty for a month - or even two!

1 Bedder In Millwright Way - 4.6% Gross Yield But Potential For More

There's a one bedroom cluster home on Millwright Way up for £150,000, which would rent for £550 - £575 per month in it's current condition, but it's looking pretty shabby at the moment. I mean, the bathroom looks enticing doesn't it:

http://www.rightmove.co.uk/property-for-sale/property-55613267.html

Does Your Rental Property Need A Refurb? I Can Help

Over the last 12 years I've refurbished a lot of properties while being a landlord, and for the inexperienced it can be a daunting experience, especially if you're using individual tradesmen rather than one company to do the whole job. 

I was recently asked to manage a refurbishment for a landlord we already do business with, and I was more than happy to help. Here's some before and after photos: