A guide to student accommodation for landlords

A recent study found that two thirds of landlords and agents expect to have their student properties let by the end of May. Interestingly enough, 68% of those surveyed said they would rather let to students than non-students.

It is clear that the student lettings market has become ultra-successful and with that it has become ultra-competitive. For any landlord thinking about entering the student market there are plenty of things to think about and now is the time to act ahead of the new academic year, starting in September.

Letting your rental property to students can be a very lucrative move. For one, you are pretty much guaranteed a regular stream of income as the student demographic is reliable and consistent. As well as this, the pool of potential tenants is replenished at the start of every academic year, making the chances of filling your property very high.

There are, however, some downsides for landlords going down the student accommodation route. Using our experience as estate agents working all across the South of England, we outline what some of these pros and cons are.

Pros

If your property is in a large university town or city, you shouldn’t have too many issues sourcing tenants. Demand for student accommodation will nearly always outstrip supply, which means your investment should be fairly secure from a financial perspective. Rent money coming in on a regular basis, something every landlord seeks, is a big likelihood in this market.

Students might be a little more particular about where they live nowadays, but generally speaking they will be more flexible and less picky than certain other demographics. They won’t care so much about sparkling décor or brand new fixtures and fittings. If your property is structurally sound and requires no essential or emergency maintenance, there should be no issues in letting it out as it stands. This will obviously save you money on redecorating/refurnishing costs.

Additionally, being able to rent each bedroom individually is likely to secure you a higher profit margin than if you rented the property as a whole. The living room could even be transformed into an extra bedroom if required. This can all lead to a fairly substantial rise in rental income.

Student rental prices have been on the up for quite a number of years and this trend isn’t predicted to change anytime soon. As such, investing in this area of the property market is one of the less risky options for a landlord.

Cons

Given the age of most students, it might be quite tricky to get references and credit checks. This, of course, leaves you less covered if damage is caused or problems arise (things that are not uncommon in student digs). For added protection, it’s often worth asking for a guarantor to give you extra peace of mind.

A bit of wear and tear in student accommodation is inevitable. As a result, you will probably have to carry out more maintenance than if you were letting to professional tenants. The horror stories regarding the living standards of students are often exaggerated, but they aren’t likely to be the most house proud. This is an important thing to bear in mind if you are thinking of renting property in this marketplace.

Arguably the biggest disadvantage of student accommodation is the hard to swerve void periods. Although demand for student houses is mostly very high, this demand is also intrinsically linked with the university timetables. Universities have long summers and most students will return home during this time – as a natural consequence of this, it will be harder to fill your property and you may be losing more money than you’re making. One possible way of countering this is to charge a holding fee for students who wish to live in your property for a second or third year, but this is far from infallible.

University hotbeds

At ChimneyPots we cover a number of large and small university towns and cities. Southampton and Portsmouth have significant student populations, whilst Winchester and Chichester have smaller but still substantial numbers in this demographic. Plenty of people studying at these institutions will be looking for somewhere to live, making these areas ideal for investment in student accommodation.

For further advice and guidance on letting your property, please contact us on: 0844 809 993. To find out how much your property could be worth in monthly rents, you can use our instant online valuation tool.

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The downsizing revolution – Pros and cons for property sellers

Downsizing is a trend that is currently very much in vogue, particularly among the over 55's and retirees whose children have flown the nest and who now have less need for extra space and bedrooms.

Put simply, downsizing is when people move from a larger house to a smaller abode – so, for example, from a detached house to a bungalow or a townhouse to a flat. This is usually for financial reasons, as moving from a bigger house to a smaller house is a good way of saving money.

The act of downsizing has become a major part of the sales market in recent years. It’s important to bear in mind that there are both pros and cons to this growing trend, though. Below, using our experience as estate agents working all across the South of England, we outline what some of these are.

The Pros

In these more austere times, where the cost of living is outstripping wages for many, the benefits of a smaller house speak for themselves. Lower utility bills, lower maintenance costs and lower mortgage repayments will all help to leave you more financially secure while also freeing up extra funds to spend on various recreational activities. In fact, Lloyds Bank’s Downsizer Report for 2014 showed that those downsizing from a detached to semi-detached property freed up an average of £121,686 and those moving to a bungalow from a detached home raised an average of £103,715.

Additionally, downsizers have the advantage of less housework and not having to worry so much about the upkeep of large gardens or big heating bills.

Downsizing is also the perfect excuse to declutter. As well as being a therapeutic exercise, it will also allow you to get rid of all those unnecessary items that haven’t yet made it to the charity shop. With less space in your new house, you’ll have to be discerning about what you take with you – this is a great way of working out what’s worth keeping and what isn’t.

The Cons

Moving house can often be a very expensive undertaking, with stamp duty, conveyancing quotes and costs and estate agents’ fees to be factored in. This can, in some cases, significantly reduce the amount of money downsizers make from their transaction.

Furthermore, a smaller house means a more confined living space. You’ll have less room for your belongings and will have to adapt to more restrictive living quarters. Whilst this isn’t the end of the world, it could have an effect on your ability to entertain or accommodate house guests. For people in or reaching retirement age, this is quite a big consideration to bear in mind.

Downsizers may also suffer financially in the long-term. There are more people downsizing than buying larger homes and there is a dearth of people looking to get on the property market, which means that downsizers might have to accept less than their asking prices when they trade up.

Lastly, those eager to downsize need to consider the emotional ties that come with moving house. Downsizers are likely to have lived in their property for quite a while so the strain of leaving a beloved house should not be underestimated.

Prospective sellers need to think carefully and weigh up all the costs before they decide to downsize. You need to ask yourselves the following questions: will we have enough space for our possessions? Are we going to miss the extra space provided in a larger house? Will we be worse off in the future?

Please get in touch with ChimneyPots Estate Agents on 08448 099931 for advice on buying and selling property. What’s more, you can find out how much your property could be worth with our instant online valuation tool.

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Rental property: To furnish, or not to furnish?

It’s one of the biggest dilemmas you will face as a landlord. Should you furnish your rental property or leave it empty, allowing your tenants to provide their own furniture instead?

There are pros and cons whichever path you decide to go down. As estate agents working all across the South of England, we aim to give you some guidance on this forever relevant question.

Obviously, letting an unfurnished property will be considerably cheaper and easier as you won’t have to splash out funds on beds, sofas, wardrobes and dining tables. Furthermore, recent research has shown that a large proportion of tenants are seeking unfurnished properties, which means you will have a much bigger pool of tenants to choose from if you leave your rental property untouched.

With sky-high house prices and tougher lending criteria on mortgages, many people have been priced out of the property market and are now resigned to renting for the long-term – or, in some cases, life. As such, it’s not hugely surprising that many tenants prefer to choose their own furniture rather than relying on their landlord’s idea of a comfy sofa or a chic wardrobe. Also, tenants renting empty properties tend to hang around longer as they are able to put their own personal stamp on the house/flat they’re living in, making things more homely by filling their surroundings with their own possessions.

On the other hand, some tenants will need certain basic items – beds, settees, wardrobes, coffee and bedside tables, bookcases – and you may be limiting your chances of finding someone suitable by not providing these.

Financially speaking, there is also an economic benefit to providing a furnished property as you are able to lower your tax bill by claiming a 10% wear and tear allowance. As long as your property is fully furnished, this means you won’t pay any tax on the first 10% of your annual rental income. As well as this, furnished properties usually demand higher rents than those that are unfurnished, so decking your property out could bring great rewards in the long-term as well as higher property value next time you’re looking to sell.

More than anything, whether you choose to furnish or not will depend on the type of tenant you are trying to entice. Generally speaking, families and more mature tenants will be after unfurnished houses and flats. They are more likely to stay put for longer and will probably have more disposable income to make their rental property feel like ‘home’. Meanwhile, students and house sharers are much more likely to want fully furnished accommodation – shorter-term renting habits, less house-proud, etc. If you decide to let through a nearby college or university, they will insist that you provide desks in every bedroom.

From a safety point of view, any soft furnishings you provide – whether that’s mattresses, sofas, rugs or duvet covers – must comply with latest fire regulations. Fire retardant labels should be attached to these items, unless they were manufactured before 1950.

It’s also important to bear in mind that most tenants would expect their rental accommodation to include ‘white goods’ – things like fridges, washing machines and ovens – even though there is no legal requirement for landlords to provide these. However, you shouldn’t feel obliged to provide ‘luxury’ items such as dishwashers, microwaves and tumble dryers unless the property you are looking to let is at the higher end of the market.

For further advice and information on letting your property, please contact us on: 0844 809 993. At ChimneyPots, we also provide an instant online valuation tool to allow you to work out how much rent you could be earning.

http://chimneypotsestateagent.co.uk/

How to present your property for sale in its best light this winter

While winter may not seem like the ideal time to sell – with the long, dark days and bitter weather – the first few months of the year can actually be a very productive period for buyers and sellers. As we discussed in a previous blog, property transactions are set to be carried out much earlier in 2015 thanks to ideal buying conditions, the prospect of an interest rate rise and the upcoming general election.

In addition, sales are likely to go through quicker in the winter market as both sides are more eager to complete quickly. After all, many people like to make life-changing decisions in the New Year. Decisions don’t come much bigger than choosing to move home, and there are things you can do to ensure that your property stands out for those willing to brave the nippy temperatures for a spot of house-hunting.

Presentation is key

That’s right, first impressions really do count. The outside of your house is the first thing prospective buyers will see. So if it looks tatty, weather-beaten and unmaintained, they will notice. In winter, front gardens and paths can look a little dreary, so it’s worth sprucing things up a bit where possible. Replace any plants that have fallen foul of the big chill and clear away any fallen leaves.

Keep things toasty

A simple but vitally important measure – not to mention something your potential buyers will greatly appreciate. Entering a warm and cosy house is the perfect antidote to wintry weather and will help prospective buyers feel at home immediately. It will also reassure them that the heating system and insulation in your house are working efficiently. If you have an open fire or a wood-burning stove, light it for the duration of the viewing. Nothing creates a homely vibe like a proper roaring fire!

You want your would-be buyers to spend a fair amount of time viewing their potential future home, so keeping things well-heated will encourage them to linger longer, really exploring every nook and cranny.

Turn on the lights

Another simple but often overlooked tip. A bright, well-lit house will be more attractive to buyers, particularly at a time of year when the days are shorter and there is less natural light around. Making sure all your bulbs are working will help to show off your house in its best light (if you’ll pardon the pun). Outside and security lights will appeal to safety conscious buyers, so it could be worth investing in these to increase your chances of pushing through a sale.

Paint it neutral

Repainting your walls in neutral colours – autumnal creams and whites work especially well – will increase the chances of you selling your house as this kind of décor will appeal to the widest audience. Giving your property a fresh lick of paint won’t leave you out of pocket either, but it could be the difference between an offer and a ‘thanks, but no thanks’ rejection.

Always be prepared

Your future buyer could want a viewing at short notice, at any time of the day. Whilst there needs to be flexibility on both sides, the more accommodating you are when it comes to house viewings, the greater your chances of securing a sale. When you are looking to sell, it’s important to keep your house spotless at all times. If you do have to conduct a viewing at the drop of a hat, you’ll be ready and raring to go.

Please get in touch with ChimneyPots Estate Agents on 08448 099931 for advice on selling your property in the South of England. Our user-friendly and instant online valuation tool can give you an idea of how much your property value in the current local market.

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The lower the turnover of tenants, the better for landlords

In the case of student accommodation, regular turnover of tenants is to be expected and, with such high demand from that demographic, welcomed. In most other cases, though, it’s best to try and keep turnover of tenants in your rental property to a minimum.

A landlord’s biggest nightmare is an empty property that is costing much more money than it makes. The fewer tenants you have, the less likely you are to have void periods – put simply, a void period is the time between tenants when a rental property is generating no rental income but the landlord still has to cover various costs, in particular mortgage repayments. Evading void periods will not only give you a regular and steady stream of rental income, it will also mean that you are more likely to have long-term tenants who will treat the place they live in as if it’s their own.

As estate agents working across the South of England, we know that reducing void periods relies on getting good, trustworthy tenants into your rental property from the very start. Once they are in place, it’s vital that you keep the property in tip-top condition and treat your tenants well. Satisfied tenants, after all, are much more likely to stay for the long-term; the ideal situation for any landlord.

First things first, you need to pinpoint the type of tenant you are looking for as they will all require something slightly different. Once you have worked this out, let your agent know and they will be able to target their search accordingly, only showing suitable would-be tenants around on viewings.

Keeping your property in ship-shape is a slightly easier but equally important step to undertake. Providing good quality furniture essentials such as beds, sofas, a cooker and fridge/freezer might sound like a lot of time, money and hassle, but if you think creatively you needn’t be left out of pocket. In addition, friends or relatives may be able to provide certain items at no extra cost. At the same time, it’s important that anything you put in your property is in good condition. Anything shabby, worn, tatty, broken or past its best will not give off the right impression to tenants.

A key way of keeping your tenants happy once they are in situ is regular communication. Tenants want to know they can pick up their phone to their landlord or letting agent at any time. Responding to enquiries, concerns and complaints in a prompt and efficient manner will make tenants feel like they are top priority. If they feel all their needs are being catered for, it stands to reason that they’ll be less likely to be casting their eyes elsewhere.

2015 looks set to be a good year for landlords, with more and more people in the UK turning to renting because of high house prices and the extra restrictions on mortgage lending introduced by theMortgage Market Review (MMR). With uncertainty surrounding the general election and a potential rise in interest rates, prospective buyers (particularly first-time buyers and young professionals) may think twice about buying and look to the private rented sector instead, mirroring what happens in many countries in mainland Europe.

A recent report by the Intermediary Mortgage Lenders Association (IMLA) stated that by 2032 over half of the homes in the UK will be rented. It also said that homeownership in Britain is increasingly becoming dominated by the older generations and that a return towards a 1970s-esque population of long-term tenants is likely. So, if you’re thinking about becoming a landlord now could be the perfect time.

ChimneyPots provide an instant online valuation tool to see how much your rental property could be worth in monthly rents. For further advice on letting your property, please contact us on: 0844 809 993.

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New Year to usher in perfect conditions for buying and selling property

Although this month may be spent thinking about turkey and presents, it should also be spent thinking about your property future. If you are thinking about buying or selling a property, now is in fact the perfect time to take advantage of an active and ever-changing market.

Every year, there is a spring rush in the property market as this is traditionally the time of year when us Brits like to move home. However, there are a number of reasons why here at ChimneyPots we believe that 2015’s spring activity is set to take place a few months in advance.

This month George Osborne announced in his Autumn Statement that he was reforming stamp duty rates after 300 years of the dreaded ‘slab tax’. The new rates, which will save 98% of buyers money, have re-injected the feel good factor into Britain’s property market and will also save sellers money as they will no longer have to lower asking prices around stamp duty bands.

What’s more, there is a general election in May, which will cause some jitters and doubt in the market. This means that people looking to buy or sell will be more likely to get their business done before the long run up to the election, starting in March, April time.

Another reason for early business in 2015 is the prospect of an interest rate rise in the second half of the year. And you can read more about that here.

Millions to browse property sites over Christmas and New Year
As well as all the reasons detailed above, it seems the next few weeks will also contribute to an extremely active January. Property portal Rightmove recently issued its traffic figures for last year’s Christmas period which make interesting reading for both prospective property buyers and sellers.
Boxing Day 2013 saw 1.3 million people visit the property website, three times more than the number (500,000+) looking at property on Christmas Day.

The number of visits then rose to more than 1.4 million on New Year’s Day and 2.2 million by the first day back at work in January.

Due to the high numbers of eyes considering their property future over the festive period, sellers who delay marketing their property could miss out on exposure to a huge number of potential buyers.

On top of this, Zoopla says that there has been a total of £3.8 billion knocked off the original asking prices of properties currently on the site, something which is sure to entice even more prospective buyers to property browsing over the coming weeks.

Hopefully this has got your juices flowing and encouraged you to think about your property future. For any advice on selling your property, please get in touch on: 08448 099931. To see how much your property could be worth on today’s market, use our free instant online valuation tool.

What will the potential rise in interest rates mean for mortgages?

Over the last few months there has plenty of frenzied speculation about exactly when interest rates will rise and by how much. Bank of England Governor Mark Carney has kept his cards close to his chest, but he has dropped a number of hints that rises are coming in 2015.

Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, expects the Bank of England to increase rates twice in 2015, bringing them up to 1%.

Interest rates have been fixed at historic lows of 0.5% since 2009 as part of a move to get the economy back on track after the global financial crisis hit in 2008. At the Bank of England’s August meeting, two members of the nine-strong Monetary Policy Committee (the body responsible for setting interest rates) voted to raise interest rates, the first split vote for five years. As seven members voted to keep interest rates as they were, no change was made, but it seems clear that a rise is going to be happening sooner rather than later.



But what does this mean for homeowners and the knock-on effect it will have on their mortgage repayments? An interest rise of just 1% would add £1,000 every year to the cost of a mortgage, meaning that those looking to buy or sell would be well-advised to get moving as quickly as possible to avoid the rate rise and the additional costs this would bring. Current homeowners should also reconsider their existing mortgage deal to make sure they are well protected against any interest rate rises.

Many current or potential homeowners are uncertain about how an interest rate rise may affect their ability to meet their monthly mortgage repayments. Research carried out earlier this year by Equifax suggested that 50% of people believe they would struggle from a financial viewpoint to meet an increase in their monthly mortgage repayment. Furthermore, for anyone looking to renew or take out a fixed-rate mortgage, it could be the beginning of the end for low fixed rates. With the prospect of an imminent rise, the big lenders have been gradually increasing the price of fixed rate mortgages over the course of this year. Certainly, the run of record-low mortgage rates would appear to be a thing of the past.

When it comes to choosing a mortgage with rising interest rates in mind, there are certain mortgages that can protect you more than others. If you want to have monthly repayments that are set at one price, a fixed rate mortgage gives borrowers certainty over what their mortgage repayments will be for the length of the mortgage term. In addition, if interest rates were to rise significantly your repayments would not become more expensive. The downside to this, of course, is that it works both ways, and you would not benefit should interest rates fall.

Tracker mortgages, on the other hand, track the Bank of England’s rate plus a pre-agreed mark-up. For example, your mortgage could be the base rate plus 3%. So, as things currently stand, you would be paying interest of 3.5%. Another option is a variable rate mortgage, which can provide cheaper interest rates as lenders battle to offer the best rate. Having said this, rates vary at the discretion of the lender and they can potentially raise the cost of your mortgage.

So with lots of homeowners looking to sell this January and an interest rate rise expected later in the year, not to mention the general election in May which will have an effect on people’s purchasing decisions, if you’re looking to get on the move in the property market the next few weeks is the perfect time to start looking at what houses are on the market.

At ChimneyPots we can offer a free mortgage quote from a regulated mortgage advisor. You can also calculate the mortgage you can afford with our online mortgage calculator. To see how much your property is worth, use our free instant online valuation tool. And for any additional advice on buying and selling, please contact us on: 08448 099931.

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