Kings Residential

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

Many of our City Centre’s are awash with cranes as apartment complex after apartment complex change the horizon of our towns and cities.

These are largely funded by the Buy-to-Let investor. The developers are offering easy-in options to the Buy-To-Let investors so it is attractive at least on paper to the Buy-To-Let investor.  

However, on re-sale it is not feasible to offer the same easy-in incentives to lure the property investor. In these locations the apartments become much more like a commodity item. Realistic re-sale values are based much more on demand and supply and the income potential of the property than the original purchase price. The majority of these apartments are too expensive for the local population to buy in the kind of numbers that the long-distance investors are buying. This immediately makes these apartments difficult to re-sell so the price has to be lowered to a level that appeals to investors.

In deciding where to buy, the investor should be looking at the overall income potential of the investment and that is based far more on the rent-paying potential of the local population than any other factor. The income of the local young professionals and wannabe city centre dwellers dictate the realistically achievable rent for a property. In Manchester, for a standard apartment this equates to £750-850pcm in the city centre, £650-750pcm on the periphery. Obviously facilities such as parking, gymnasiums, pools, concierge, and extra large apartments will result in higher rents.

The reality for many Buy to Let investors is that the rental incomes are not covering the mortgages. This is not necessarily a huge issue as in many investors eyes the affordable difference between rent and mortgage is a small price to pay for the long-term return because a third party (the tenant) is paying the majority of the mortgage. However,  those who believed they would achieve significantly higher rents or have purchased multiple properties, and have mis-budgeted find themselves in a negative equity-negative rental income trap. They cannot realistically find a buyer fast enough to leave the property empty for re-sale. Equally they cannot afford the mortgage payments without the rental income and even with the rental income they are falling uncomfortably short. Once a tenant is in the property it is only realistically saleable to another investor but the developer down the road is offering a very sweet deal indeed.

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We have had a few viewings on our property and all the feedback has been the same - the third bedroom is too small. Obviously we can’t change the size of the bedroom but is there anything else we can do?

Mr T, Stretford

Without seeing your property it is difficult to say exactly what could be done but it is worth looking at how the room is furnished.

The ‘box room’ should always be dressed as a bedroom rather than a study and there should be no clutter, just the basic bedroom furniture. This helps show viewers that a single bed will fit in comfortably; without the furniture it can be hard for some people to visualise.

If this has already been tried with no result it may be that your asking price is a little high for a property of your size, after all, everything will sell for the right price.

Try a reduction of at least £5000 to make an impact and bring buyers from a whole new price bracket in to view your property. Look for an agent who offers honest advice based on viewer feedback from yours and similar properties. Some will even offer free ‘house doctor’ advice to make sure that your property is shown at its best.

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I have a house for sale in Stretford and it is not selling. It has been on the market for 5 months and only had about 2 viewings. My neighbour who went with the expensive agent up the road has had loads of viewings and has sold the house in about a month. He can afford the expensive agent because he is a bit flash and bragged recently about spending £20,000 on a new kitchen and bathroom. I updated my house in 1966 just in time for the World Cup Final and it is still going strong. They just don’t build ‘em like they used to. I am asking £5,000 more than my neighbour but I have a garage that my father installed just after the war (it even had electricity installed). My neighbour has one of those horrible concrete and pebble-dash things with an up and over door whereas mine has craftsman installed wooden doors. My father last painted the garage in 1947 and still looks great.

Gordon.

Gordon, I suggest that you wait approximately 5 years. Then get 5 Estate Agents round to provide you with a market appraisal of your property. Hopefully with several years appreciation, a strong pound, a good head wind you will achieve the price that you are hoping for.

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If the Tenancy Agreement makes no provisions for the landlord to make a rent increase, then you have two options to increase the rent :
 

1. Renew the contract at the end of the fixed term but at an increased rent.

2. At the end of the fixed term, serve a Section 13(2) Notice of the Housing Act 1988, proposing an increase in rent.

The rental increase should be considered in relation to the rental to that of other similar properties in the same area. If the increase puts the rent well above the current market value, tenants can apply for the rent to be assessed by a Rent Assessment Committee. If they then reduce the rent, you are bound to this figure for 12 months.

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My Estate Agent in Stretford wants me to leave him with a key whilst I am on holiday so that he can do viewings. I don’t like the idea of the agent snooping around my house while I am not there.

George

George,

 I am puzzled. Why is it OK for your agent to snoop around your property when you ARE there?

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I have a house for sale in Urmston which I think is worth more than the estate agent thinks it is. They put it on the market 14 weeks ago at the price I wanted and it has not sold. I instructed another agent as a joint agent 8 weeks ago and still no offers and only a few viewings. The agents are trying to get me to lower the price. I think it’s just the estate agents trying to get the price dow because they aren’t doing their jobs properly. What do you think?

Sam

Sam, I don’t go to your place of work and tell you how to sweep the floors. Multiple agents have told you to lower the price. Listen to them.

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I think my property for sale in Urmston is worth more than the estate agent thought it was, they put it on the market 14 weeks ago at the price I wanted and it’s not sold. I instructed another agent as a joint agent 8 weeks ago and still no offers and only a few viewings. The feedback has been they thought it was too expensive.I think it’s just the estate agents trying to get the price down. What do you think?

Sam

I think you are right. The agents are trying to get the price down becaue you ignored their initial advice and your house is unlikely to achieve the price that you desire. Remember, your agent sells houses and he knows what he is talking about. He can look at your house objectively without any emotional involvement to gauge the appropriate price at which to market your house. Remember, more than one agent has given you the same advice.

You should take on board what the agents have said. Reduce your price. After 3 months on the market your property is a stale instruction to the agent and if you are unwilling to reduce the price and the price is unrealistic then the agent probably won’t bother doing anything with it. If you were my client and were not taking my advice and after 3 months you were still unwilling to drop the price then I would have dis-instructed myself as you would be costing me money in advertising and marketing costs. The property market is a buyers market at the moment and if you are unrealistic in price then your property will remain unsold. Check with the landregistry on www.mouseprice.co.uk or www.nethouseprices.com and by putting your postcode in you can see what properties in your road sold for over the last 5 years, if yours is well over the highest then you are trying to push the price up on your street and this only works in a strong sellers market.

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My Estate Agent in Stretford wants me to leave him with a key whilst I am on holiday so that he can do viewings. I don’t like the idea of the agent snooping around my house while I am not there.George

Estate Agents see far too many properties to have a particular interest in ’snooping’ around yours. I would suggest that you hand the agent a key and let him enjoy unhindered viewing access while you are away and unable to get under his feet and mess the place up. Simply tidy up, hand over the key and enjoy your holiday while your agent gets on with his job

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My estate agent wants a key for my house, but I don’t want to give one to them. I want to be there for the viewings.

Cathy

If you don’t trust a key to the estate agent get one that you do trust. An estate agent is a sales man/woman and if you put problems in the way then they’ll sell something that is easier to sell. Your agent is employed by you to sell your house so let them do it, if they ask for a key then let them have one.

An estate agent needs access when the buyer wants to see it. One ‘trick’ of an estate agent is to have a potential purchaser to view one property and also have the keys for another similar one, and in a lot of cases this results in a sale. If you put obstacles in the way then if you only have yourself to blame if your property doesn’t sell.

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I have inherited my mothers old house, it is beautifully presented with patterned brown carpet, draylon sofas and G-Plan furniture and is jam packed with lots of interesting ni-nacs and antiques. The kitchen is okay, old but clean and the bathroom is avocado in colour with matching sink and toilet.
The property externally is tidy. It is a standard post war semi detached, the central heating is new and the double glazing was fitted 3 years ago. The probate took an age to come through and the estate agent seems to have lost interest. I did get a couple of offers in the first few weeks but because of the probate taking to long they found other properties.
Have you any suggestions how I can sell this quickly?

Enid

Enid

This is a straight forward situation, firstly clear the personal items and clutter out. Have a car boot sale, or sell them on eBay or take to the local charity shop.

The furniture will be fine to show the property off, however thin it out, a living room should really only have sofas, coffee table and perhaps a sideboard/bookcase, dining room a table and chairs and perhaps a sideboard, bedrooms should have beds, wardrobe and bedside tables. If the furniture is tatty chuck it out.

The bathroom could be cleaned up, however buyers do get a little put off if the bathroom and kitchen need replacing, that is a warning sign which could be expensive. Avocado suites will never come back into fashion, it is a vile colour that never looks clean. Replace it with a white suite. You can pick up a suite for around £200 at most DIY shops DO NOT go for any shell design, this is nearly as bad as Avocado, just go for simple and straightforward style, a plumber can easily swap them over in half a day and charge around £200-300 and cart the old one way.

Patterned carpets are my pet hate, worse than Avocado bathroom suites! Replacing them can be costly though, cream carpets are a good replacement but I would strongly suggest holding fire on changing this. A clear out and a bathroom change will make the property more appealing to buyers. Another tip is make the garden look respectable. You want to create kerb appeal to the buyers.

Clearing out your property will also make selling it so much easier, the personal possessions are dealt with and when you do have a buyer you just have to get a house clearance company to get rid of everything else.

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