Kings Residential

My current agents are saying that the current tenant will not allow access. The current tenancy ends in 1 week and I am getting worried I will not find another tenant quick enough. Can the tenant refuse access..?

The law states that a landlord or his agent must give the tenant at least 24 hours  notice in writing (unless there is an emergency). In most shorthold tenancies it states that the landlord/agent will require access for viewings once they enter the final month of the tenancy. In past experience the tenant will allows access if they are contacted over the phone as long as they are given 24 hours notice. Your agent should hold a spare key so that if the problem arises  the tenant is unable to refuse access as long as the correct procedure is followed.

It is also possible that the other agent is trying to hinder the new agent. But your old agent would never do such a thing would they?

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I am thinking of selling an investment property which has tenants in it. I have spoken to them about this and they are fine with it. Is there anything I need to consider here?

First of all I am glad that you have spoken to your tenants about this. Many landlords don’t and this can cause a lot of bad feeling and even cause your tenants to leave early. Unless it is written into their original contract tenants do not have to allow viewings and if the agent continues to do them against their permission that could amount to you breaking your side of the contract, which must allow them peaceful enjoyment of the property, and therefore not being entitled to rent! Since the tenants are happy with the arrangement make sure your agent has the tenants contact details and a set of keys / fobs. Ask your agent to give the tenants reasonable notice (at least 24hrs) and ask your tenants to keep the property tidy for viewings. Keep in contact with both your agent and tenants to make sure viewings are going smoothly.

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I have had to put my mother’s property in Stretford on the market as she has now moved into a home. I do not live locally to it and do not want it to start to look shabby. What do you think is necessary in this situation.

It can be a good idea to ask the local gardener to pop round periodically and keep the outside areas looking nice - kerb appeal is very important. Your agent should be able to visit the property periodically as agreed between you and inform you of any major problems that occur (leaks etc). It is a good idea to have the system drained down and gas supplies switched off (the buildings insurance often requires this if a property is left empty for a long period of time - check with your insurer). If you are really worried you could employ a cleaner for the inside but I would not think this would be necessary for the initial marketing period.

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I have been trying to sell my Apartment in Manchester City Centre for a while now and am getting quite desperate as my cash flow is now very tight. Should I give up and consider renting instead

If selling is still your first choice the first thing to do is look at your asking price - everything will sell for the right price and if yours has been on the market for a long time with little interest in the way of offers then the price needs to go down to secure the sale. Also ask your agent for any other suggestions they have. If you are happy to rent for a while before selling the best course of action is to find an agent who can put it on for sale and to let simultaneously and see which comes first, then you can make a final decision!

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I have been getting feedback from my viewings suggesting my house is quite dark - is there anything I can do bar making the windows bigger!

When people view make sure that all blinds are pulled back and all curtains tied up. If you have net curtains it might be a good idea to remove these as they block a lot more light than you might think. Make sure no large ornaments are blocking any windows or large pieces of furniture blocking the flow of light into the whole of the room. Also look at the decor; rooms should have light neutral coloured walls to look their best - dark colours will make a room look darker (and smaller!). Also make sure you put the lights on if it is a dull day!

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My estate agent has told me that I need to do some work on the outside of my house but surely its the inside that counts?

People often form their opinion of a property in the first 30 seconds or so. If that opinion isn’t good you are then fighting an uphill battle for the rest of the viewing.

Simple things can make all the difference. Make sure gardens and tidy, lawns are looking healthy and flags are cleaned. Some pretty flowers can really brighten things up, no need to go overboard just a few strategiacally placed and perhaps a hanging basket or two. If you are coming up to winter some evergreens can have the same effect. Home owners also tend to overlook cleaning the front door (especially white UPVC ones that show up all the dirt!) and external windowsills.

If your viewer sees that the outside of the property has been cared for they will be reassured and less likely to be looking for problems throughout the rest of the viewing.

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Darren Shaughnessy, Director Kings Residential, Estate Agents in Manchester  and Letting Agents in Manchester writes:

The National Housing and Planning Advice Unit (NHPAU) announced that an additional 270,000 homes over and above the governments existing targets are required to meet demand.

Professor Stephen Nickell, one of the authors of the NHPAU report pointed out the following amazing fact:

If you’d like to put this sort of thing into perspective we built more than that number back in the 1930s in Britain when we had a considerably smaller population,”.

The advisory body has said that “the current aim of building three million new homes will not resolve problems for many first-time buyers in the face of what are predicted to be continually rising prices”. They have obviously reading my blog entries from last week.

Come on guys, keep up!

Getting a foot on the property ladder

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Darren Shaughnessy, Director Kings Residential, Estate Agents in Manchester  and Letting Agents in Manchester writes:

 With house prices reaching all time highs and at multiples that are beyond the first time buyer with no equity something needs to be done to help the virgin home-owner onto the ladder.

Reductions in interest rates do not work because this just increases spending power across the board and drives up prices. Building and regeneration programs don’t seem to work because they are in the wrong locations for the new home owner and are snapped up by the long-distance property investors and filled with tenants (or wannabe first time buyers) who cannot afford to buy the same properties in the first place. Clearly we require more housing stock but with buy to let investors fuelling the house price boom the very people who underpin the housing market, the first time buyers are priced out. 

The  solution may lay in social exclusion from certain developments. What we need are a little more guts and forward thinking from the town planners and schemes like the one announced by Ikea recently. They are to offer houses at about 20% under the market value for comparable houses in the area. Only households with an income between £15,000 and £30,000 will be eligible to purchase the houses and the purchasers will have to complete an application form and pass pre-defined approval criteria. The buy to let investor is excluded from eligibility as are people who already own their own home (unless it is being sold due to a relationship breakdown).

The houses known as BoKloks are expected to sell for between £100,000 and £150,000 with flats from £70,000. The first of these developments is being located in Gateshead with Glasgow following shortly afterwards. So what we are looking for are socially responsible property developers to follow the lead and implement the same strategy across the country.

 The answer probably lies in the hands of the town planners. Instead of trying to woo any and all property developers to build on every plot of land lying bare or derelict and being grateful to them for it, perhaps they should be thinking about the wider social implications of what is happening. I am not aware of sale prices being a tool that the planners use to achieve their wider objectives but maybe it should be. If the planners looked at a development and said, “OK, we like it but the prices are going to exclude the local population so it does not meet our planning objectives - reduce the prices or planning application denied”, maybe the first-time buyer would get a chance to get a foot on the ladder and the entire market would be more robust.

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Darren Shaughnessy, Director Kings Residential, Estate Agents in Manchester  and Letting Agents in Manchester writes:

 It amazes me that the property developers keep building 1 and 2 bedroomed apartments in the numbers that they are and are ignoring 3 and 4 bedroomed apartments. Whilst there is clearly demand for one-bed apartments in Manchester it is also clear that 2 bed apartments are over-supplied and that the economics for the property investor are not as solid as they used to be. This means that in the longer-term the developers are going to have a harder and harder time selling the properties that they are building.

 I think the logic seems to be that families who would need 3 and 4 bedroom apartments are not really buying in city centres so there is no point in building this format of apartment. However, it is fair to say that owner-occupiers form a tiny proportion of city centre property buying anyway so this is not a logical argument to dismiss the idea. The people who are buying these properties are Property Investors and the people living in them are young professional tenants.

I believe that the developers and the town planners have got everything wrong here. The planners have been demanding 2 bedroomed units and the developers keen to placate them have been developing them. However, as the economics of the buy to let invetsment get tougher I think we really need to look at an alternative. Just check out the numbers: 

A 700sqft two bed flat for sale in Manchester at £180,000 with a £150,000 mortgage payment in the region of  £750 per month on an interest-only mortgage. With a rental income of £750pcm (before letting fees and void periods) this is not too bad as the bulk of the mortgage is paid for by the tenant. However, a 3 bed apartment in Manchester which would require about an additional 200sq ft would cost about an additional 30% but the rent would increase by 50%. Extrapolate these figures to 4 bedrooms and you get to 1100 sqft of apartment costing about 60% more than the 2 bed but achieving double the rental income.

 It seems so logical to me that this is the way forward both for the buy to let investors, the developers (keen to maintain the price per sqft) and also for the tenants. As a letting agent we see very few 3 bedroom city centre properties on the market for rent but when we do they are snapped up very quickly. I have never seen a 4-bed apartment in the city centre. So come on developers, lets see lots more 3 and 4 bedroom apartments. It is good for everybody.

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Darren Shaughnessy, Director Kings Residential, Estate Agents in Manchester  and Letting Agents in Manchester writes:

The International Monetary Fund (IMF) has warned that UK house prices are overinflated by as much as 40%. This is a stark warning when you consider that the US has seen a house market slump off the back of a lower level of house price inflation than we have experienced in the UK.

House prices in the UK are now nine times average income compared with 5 times in 2001. This kind of growth is unsustainable and clearly some level of correction is necessary. However, is it as simple as all prices will fall?

I take the view that the general public and property investors have come to view property as a straight-line ’safe as houses’ investment. They seem to think that you can buy any property anywhere and in 7 years time the price will double. However, the property market is not as straightforward as most people think.

The entire housing market can go up or down just like the stockmarket but with much more latency and with much less volatility. It takes a very serious situation to induce a major reduction in prices in the housing market. Unlike stockmarket investors, property owners don’t typically panic sell to cut their losses. It takes a few weeks to offload a property and as most property owners actually live in their properties a reduction in prices is far less likely than price stagnation.

However, this is a global view. There are regional variations in the housing market just as there are industry sector variations in the stock market. Individual houses, streets or suburbs can over or under-perform the general market in just the same way that a company can over or under-perform on the stock market.

In the solid established suburbs where hard working people have been buying properties based on sensible multiples of their income and the mortgage payments are affordable I see no reason why there should be a major fall in prices. We may see some stagnation in the market as people become nervous of buying property. Some locations are just plain desirable. If one potential purchaser is put off there will be 2 more around the corner. Some locations are on such a strong growth curve that even in the face of general price-stagnation they will continue to see small rises in prices despite what is happening elsewhere.

There are areas where I believe we may see a fall in prices. In these places the economics do resemble the dotcom boom to an extent, however I would not predict a catastrophic reduction in prices as occurred when the dotcoms went bust. (See my article Selling on the buy to let investment dream).

I believe that a major fall in prices can only really happen when home owners HAVE to sell or are repossessed as they were in the 1980’s when the interest rates crippled homeowners. I don’t believe this scenario can happen again on this scale. Margaret Thatcher and Nigel Lawson are on record as saying that their policy of increasing interest rates with the intention of reducing inflation was flawed. Can you imagine any Chancellor is making the same mistake again?

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