My Tenant Says The Council Have TOLD Them Not To Leave Is This Right?

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My Tenant Says The Council Have TOLD Them Not To Leave Is This Right?

 

If you are reading this blog because your tenant has been told the above, after you have told them you wish to take back your property and have served notice, the first thing to say is, you are not alone.

Hundreds of councils up and down the country have this ludicrous policy that by asking a tenant to stay put until evicted, they reduce the amount of people on their requiring housing list.

Most Landlords are quite shocked when they realise that they must go through the courts to obtain possession and this, if done via a solicitor will cost north of £1000 on average and this assumes no dispute from the tenant which can push the legal bills much higher.

Worse still, the time it takes to get a hearing depending upon the borough will be months away in most cases.

So what can you do next?

Well, it depends entirely upon your circumstances but if you wish to sell, it will be possible to do so with a tenant in place but the price achieved will depend upon factors such as the current rent and the price achieved will be less than the vacant possession value. In these circumstances, we can assist with the sale through our auction partners if this is a route you choose.

“But I want to get the best price”

Ok then we need to start proceedings against the tenant, as vacant possession is usually the only way to obtain the best price. The notice that you serve will be dependent upon the circumstances but we would typically suggest that only a mandatory ground notice be served, if there are no arrears this will typically be a section 21 notice, these have recently changed so you need to ensure that you are serving the correct one.  The section 21 notices will generally be giving your tenant (s) two months from the rent due date to vacate. It is often after you have served this notice that you may have received a letter from your local authority, telling you that your tenant does not wish to be difficult. However, this generally means that they have sought advice and the council have told them to sit tight until evicted.

It’s Not The Tenants’ Fault

Please bear in mind that it is not the tenants’ fault, it is the way local authorities define their council housing lists that is in my view a terrible waste of time and money. In the end, any Landlords forced to evict (usually) housing benefit tenants ( as these are the ones most likely to go to the council for advice) are very likely to be alienated from ever letting to benefit tenants again. So much for shortening the housing queue with this strategy then!

Primary legislation to change this is currently going through parliament but this will not help you right now.

Ducks in a row

Even if you have already served on the tenant, I would suggest that you double check, preferably with the help of a competent solicitor that you have served notice correctly. This will include deposit protection being in place, a gas safety certificate and EPC should also have been given to the tenant. Failure to get the notice right now will inevitably lead to failure to obtain possession in court which will require that you start all over again, from a new two-month notice, starting from the next rent due date!

So if you need further help do get in touch, good luck!

 

Ken

 

 

 

 

 

Scandalous Over Valuations Cost Vendors An Average Of £20,000

Lies, damn lies, scandalous valuations end up costing Vendors

Which? The consumer group recently analysed over 370,000 house sales.

What they have discovered makes very interesting reading.

They say that because of ‘greedy Estate Agents overvaluing’, 19% of these sales had been heavily reduced from their asking price.

This indicates a gulf the size of Mexico between some Estate Agents pricing and the real world. Welcome to the seedy world of Estate Agency.

It is fair to say that many agents will set their clients asking price at a level which gains them the instruction but won’t sell the property.

It is no accident that these agents will often require very long contracts, this gives them time to grind down the price or hope for a market uplift.

If you are thinking this is a very unethical way of doing business, you are absolutely right, though it can be hard to hear that your home may be worth a little less than others have said, it can also save you both time and money to get accuracy on the initial sale price.

What may shock you is that Which have found that the properties which were vastly over valued end up getting an average of £20,000 less than those that are correctly priced in the first place.

Bang goes the myth that you set the price high to negotiate! The key to achieving the best price is to set the asking price at a competitive level so as to achieve strong interest from day one.

The internet ensures that things can go stale very quickly as serious browsers search every day, by day ten, they are already ignoring ‘old’ properties.

So how to check your price? Put yourself in the buyers’ shoes, search Rightmove in your postcode for similar homes, then ask yourself objectively, how does my home compare in a given price range? Another handy hint is to check Nethouseprieces.com as this provides actual sales figures for your road, it can be quite revealing. In any event good luck and if you need advice, call me

 

Ken

How To Find A Good Estate Agent

At this time of year with spring fast approaching, many people are thinking about selling their home but are unsure how to go about it.

There are many options open to sellers including the online only or more traditional high street agents. Only you can decide which is right for you and this is a personal choice, there is no right or wrong answer, what may be right for one client could be entirely wrong for another. The downside of online estate agents’ lower prices is that you’ll often have to pay up front; it can be argued that they would not have the same motivation as a no sale no fee traditional agent and telephone contact may be more limited.

The old school advice was always get three valuations and opt for the one in the middle, this unscientific approach is ill advised and can result in an inexperienced agent luckily hitting the mid spot and gaining the instructions to sell for you for no good reason! Think about the best person rather than the middle or higher number.

So then the first part of the exercise should be to find the good ones in your area. A good place to start is online at Allagents.co.uk, just pop in your postcode and look at what others have said about the various agencies.

Once you have found three that look good, start with a telephone call to their office, how quickly do they respond? Bearing in mind they could be responding to a sales enquiry about your home, this can be crucial in getting buyers through the door. If they are not bright and attentive, consider this before inviting them around for a valuation.

When the agents come to visit, think to you, do I trust this person to help me with one of my most important decisions?  Do they seem genuine or are they just scripted sales people? The most important qualities listed by our survey of local sellers in the past six months are honesty and integrity.

Valuations are one of the most difficult areas of estate agency. It requires a lot of investigation to get right, even the professionals sometimes get it wrong. Most agents will start at a figure suggested by the client and quite often the higher valuations are just fishing for the business. It is very hard therefore to know what is true. Do not be afraid to ask difficult questions such as contract length and fees.

A good way to start is to do a search on Rightmove or Zoopla and search for a property like your own. The question that buyers will ask is how does this house compare with others in the price range? You may see some that are worse or better depending upon the price, this should give you a realistic idea of price range. Finally go to nethouseprices.com and pop in your postcode, you will then see actual prices achieved on your street from land registry.

I hope this helps. Good luck with your move and call me!

Ken

Housing White Paper – Where Is The Small Landlord In This?

dog reading a newspaper

 

The government have issued a new white paper in order to fix the ‘broken’ housing market.

 

 

You cant live in a planning permission says Mr Barwell the housing minister.barwell

Of course this is true but you also cannot live in a home that you cannot afford.

 

 

 

Let me give you some numbers around this.accountant dog with pencil and calculator

In 1968 the government provided 191,000 public homes.

This year, the government have provided 36,000 public homes.

So where is the fix? What the white paper conveniently ignores are the fact that we have the most highly taxed property market in the world.

Put together with rising construction costs, a lack of skilled workers, the solutions are not easy to find.

The implications of this knock on to both homeowners and of course tenants.

Any review must surely be welcomed but this should be a consultancy between stakeholders  rather than a few well chosen soundbites.

That said, some of the suggestions contained in the white paper  are welcome, particularly in regard to dealing with unscrupulous landlords and one of the more positive ideas is for longer term tenancies ( three years ) for rental.

Handled correctly, this could really assist tenants, particularly those with children in local schools.

We have yet to see the fine detail on the three year tenancy idea and it is rumoured to be aimed at corporate landlords and institutions.

Time will tell if it may apply to smaller landlords.  However if it is like the dark days of the 70’s where removing a tenant is nearly impossible, you will find any affected landlords bolt faster than a speeding bullet.

We will then find an even more limited supply of rental property, leading to rent rises and a a lack of mobility for workers.

In a sector where we have growing demand and many long term landlords leaving the sector, we need to nurture a mutual trust between the government and small Landlords.

Given the governments’ total disregard for the small landlord, the exodus is hardly surprising.

We don’t see that trust or any attempt to nurture it from  this white paper.

I cannot help thinking that Mr Barwell is a strange choice for housing minister given he has no previous experience in this sector and I wonder if the lack of perspective is a result of a career politician being given a job due to his ability to skew statistics as seen on his interview with Andrew Neil.

If you wish to see evidence of this, I give you Section 24, otherwise known as the tenant tax plus the punitive stamp duty increases.

If the government really wanted to assist the private rented sector, they would look to incentivise small, responsible Landlords to acquire a growing portfolio. Unfortunately such foresight seems sadly lacking with this government.

The talk of the day is about ‘greedy’ Landlords. Jealousy prevails in the sector and small Landlords have been made to feel like something on the housing ministers shoe.

Many Landlords feel that the government is actively looking to squeeze out the small Landlord so that their friends with larger companies can ‘professionalise’ the sector.

The lack of foresight here beggars belief. Corporates will answer to shareholders and they will look to squeeze the very tenants that the government claims it will help.

Conversely smaller Landlords are more likely to look at keeping a good tenant ahead of the headline rent.

So the question becomes what are you trying to achieve Mr Barwell? If it is the continued alienation of the smaller landlord with a view to tenants finding rents higher than ever, well done, you are already well on your way to achieving this.

If you want a truly mobile workforce, then you you need to respect, incentivise and help the smaller landlord. We see nothing in this white paper that does this.

Ken Hume

 

 

 

 

 

 

 

 

 

 

Housing Market Update February 2017

The local housing market has continued to buck the trend with viewings and offers coming in at a healthy pace, mainly driven by a lack of new sellers and a growing realisation that the local  area has great future growth potential .

Buyers appear to have already discounted Brexit and Trump  as not relevant whilst a as lack of supply drives demand.

As indicated by the latest analysis from Hometrackaccountant dog with pencil and calculator, we see demand at its strongest for properties at the lower end of the market with two and three bedroom houses showing the greatest levels of viewings and  interest.

First time buyers dominate in this sector with buy to let taking a back seat for the first time in many years due to the tax changes taking effect.

The new white paper suggesting improvements to planning and pressure upon developers to build once planning is granted will assist in supply but will only scratch the surface of London’s housing issues although longer term tenancies could help with families planning their childrens education.

We are already receiving enquiries from potential spring sellers and we are hopeful of an upsurge in supply to equalise the demand that will no doubt grow stronger as the weather gets warmer.

The September Property Market and the ‘Mum factor’

Make no mistake, the property market is seasonal and although we have more buyers than sellers most of the time, releasing your property at the optimal time can mean a higher sale price.

Time your move well to get the best price

When the property market is tougher, the seasonal buyer trends have more of an impact. Therefore, timing the release of your property (to coincide with the time most new buyers are looking) becomes more important to secure the most viewings and therefore the best price.

Everyone knows that spring is a really popular time for new home hunters to start their search, but by the end of June, the flurry has all but petered out, leaving only a few buyers left looking.

By July, the holiday season is upon us and particularly when the schools break up, most people are either on holiday or enjoying/suffering (whatever the case may be!) their children’s company.

This trend tends to make august the second worst month for new sales. The worst of course being December but I will come back to that.

September is a very good window for selling but it shuts down quite quickly so understanding your buyers’ movements and timing the release of your property for sale can be crucial.

Our experience is that the second week in September is very busy and my advice to vendor clients is always to try and have the property on the market by then.

crowded

When you are out of space as the family grows, it’s time to get a bigger place

Over the summer holiday many families start to feel cramped in their existing homes. The children have grown a bit then it rains, the children and their toys/bikes come into the house from the garden. This is often the time of stark revelation that the house is just too small.

In my experience (at least in my local area of SW16) the mother is often the person feeling the brunt of this situation and feeling a real need to get into a more comfortable environment.

When the holidays are over and the children are back at school, it gives the family space and time to think about buying and selling to ensure that they are not in a worse situation next year. That is when the hunt tends to start in earnest.

This is why we get nearly as many valuations the second week of September as in the first sunny week in spring.

In the UK many of us think of Christmas and the new calendar year as very finite points in time. It is for this reason that people want to find, sell and buy prior to the Christmas/New Year break.

As the average sale in the UK takes between 8-12 weeks, you can see that this doesn’t leave much time.

In my experience the September window – or as I fondly refer to it, The Mums’ Market window – slows to a halt and by the end of October the rush is over. By this time people have either found or given up the hunt.

So next time you see a headline in August saying how quiet the property market is or in September when there is an ‘unexpected surge, I hope I  may have given you  a new perspective as to why that might be.

The Seedy Side Of Estate Agency


burglar
Now I do not want to give the wrong impression, the vast  majority of agents are honest hard working people. However the culture of questionable practice does seem to run deep amongst many large corporate agents.

I  think that if people knew how some big brand Estate Agents behaved, they may well think twice about their choice of agent and in turn do some research, not just relying on a known brand because well known and trustworthy are two completely different things.

Malpractice locally is so rife that just in the past two weeks here are three examples, all in our local area of very seedy practice.

Firstly by a large corporate that over values ( a lot.) We hope you understand that we cannot name names as we are the little guy here and have neither the time nor budget for expensive slander cases, however we can and always do tell the truth.

We had a Sole Agency with a client, a week later he naively signed up with said corporate after scamcallmuch pressure and a promise of a higher figure than we were marketing for. They were well aware that he was already on the market Sole Agency with us and did not warn him of his potential liability for two fees. They did not locate a buyer for the property, we did and the matter is proceeding.

 

arfurNow they are claiming that he is in a Sole Agency contract with them and therefore owes them a fee! They have actually phoned me twice to ask who the buyer is. We know that they did not introduce this buyer and the  buyer has confirmed that we were the introducing party. Nonetheless the agent is calling me and asking for the name of the buyer. I will not provide this to them because I fear given their seedy behaviour thus far, they will then ‘find’ a viewing which they allegedly carried out with this person.

Second scenario came a week earlier. We received a call from our buyer on a property saying that sadly they had contracted a life threatening illness and therefore could not proceed with the purchase. We immediately called our Vendor client to explain what had transpired and we promised to call all of our cash buyers and serious buyers with large deposits immediately. Two members of staff proceeded to do this.  Another local corporate called our client and heard the story. They played on our clients frustration and pleaded that they had one cash buyer who had been desperate to get in and purchase the property, not advising our client that as he was a Sole Agent with us, he would be liable for our fees and theirs! Our client was in a vulnerable moment of weakness and agreed to this one cash buyer being introduced, all of course without our knowledge.
dog with piggy bankNext thing we know two of our cash buyers who we had already spoken to called and asked why we said we were the only agents when another agent had just sent them an email saying fancy this? With a link to our particulars. So we phoned our client and explained that clearly the other agent had no buyer, that even if they did, that would make him liable for two fees.

By this stage of course our vendor was not sure who to believe as the other agent had planted the seed of doubt that in some way we may have lied over the reason the original buyer fell through and if indeed we had received calls from our cash buyers.

We produced evidence of this and our vendor, having now realised had been well and truly lied to and misled by the other agent, called them and asked them why they had neglected to advise him of his liability for two fees and asked them never to call again.

The vendor now has complete faith restored in us thanks to this! He discovered that we had called all potential buyers after all and had just as many ( probably more ) contacts than said corporate.

Finally I have just discovered that the another corporate manager in our area has just been sacked for alleged dodgy dealing!

Now there are plenty of great independent agents out there, I hope the above has given you pause for though prior to appointing that big name, merely because they are a big name!

Independent agents like us are members of NAEA, ARLA , SAFEAGENT, Rightmove and Zoopla and we can provide both the coverage and indeed the personal owner in office coverage.

Careful guys it’s a minefield out there!Danger-Minefield

 

 

 

 

 

Brexit A Few Days In And How It Is Looking For The Norbury SW16 Market

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As predicted in our last blog, Mark Carney has said that a cut in interest rates is highly likely very soon.

But wait what does it all mean for the property market ?

 

 

 

 

Property-Auction

The Good News: For those of you with existing buy to let’s out of fixed rates, this is the fist piece of positive news to come out of Brexit.  This will mean lower repayments on your loans, thereby an increase in the yield of your portfolio.

Of the investors I have spoken to over the years, when I ask ( and I usually do ) what are the best deals you have ever done, they tend to have been in turbulent times.

 

upgraph

With arguably the biggest financial shock the UK has seen in our lifetime, the buy to let investor may well be one of the ‘winners’ in the short term of our current situation however the stock market bounce back has surprised many ( FTSE 100  is higher as I write than it was prior to Brexit.).

 

So what can we expect over the next few months?

Less property coming onto the market will be an immediate reaction as many see these uncertain times as the wrong time to make a move.

However with interest rates at almost zero and firm indications that they may stay there for a considerable length of time, it is unlikely that we will see a huge number of repossessed properties coming on the market.

The main reason is that it  is still a lot cheaper in London to pay a mortgage than it is to rent, meaning that anyone on the verge of repossession is unlikely to push their own red button and halt mortgage payments unless there is absolutely no alternative. What would be the point? The equivalent property would cost them at least twice the mortgage payments at today’s rates on average.

This is in stark contrast to the last real recession in the late 80’s when property values slumped as interest rates were on average ten times higher, meaning that mortgages were less affordable than rent, values tumbled and in rolled the property recession.

In stark contrast the 2006/2007 recession hardly touched the London and suburbs market. Any losses were quickly regained and more. We all now know that they accelerated beyond most of our expectations.

This was partly because of low interest rates and partly because of the fundamentals of supply and demand.

Buy to let was a small specialist area in the 1990s but by 2006 had grown into a huge industry worth billions.

These investors and now pensioners, free from the old regulations noose are looking to alternative investments but find that most cannot come close to property for security, yield and capital growth.dog with piggy bank

For this reason, some of my larger investors are on the hunt and particularly the overseas property investors. Their currency now buys considerably more pounds, effectively providing a huge discount, They are seeing this time as a huge opportunity to secure some great deals on buy to let investment.

binoculars dog searching looking and observing

This underpinning of the market by the investment side will assist in seeing that prices do not fall but may not be enough to see any house price growth in the short term.

So what? Well if you are a first time buyer, this pause for breath of the market could be an opportunity. to get in. With many unsure of whether the timing is good or bad, there will not be a rush to get in but enough interest together with a lack of supply to ensure that the market doesn’t fall.

What if it goes down? Well two things 1: Medium to longer term, history tells us that property always goes up as suggested above and when confidence returns, albeit in a year or two, the market will press ahead.

In the meantime consider this: If your buy to let investment is providing an income along the lines that you expected, nothing has changed for you ( unless you have a variable rate loan, in which case they just got better! ).

You may not be able to refinance and purchase more from the  gains in property value but  you have lost absolutely nothing and arguably secured your family’s future.

Builders are already indicating that they will slow down or stop some projects in the light of Brexit. Given that even if the ones that they had planned were built, London would still have a huge shortfall of housing stock. They have just amplified this problem, meaning that supply will go down in a market already struggling to provide sufficient housing.

In the end, supply and demand always determine price and that lack of supply coupled with a huge population trying to get into London make zone 3 up & coming areas like Norbury the gold bullion of the day..

Our next prediction? A soft landing for the property market and rents to rise as the lack of supply bites.

I have learnt over the years that property favours the brave, some of the richest clients I have continued to invest through both recessions.

Many are now in an enviable position where Brexit could not affect them anyway due to the sheer size of income over expense.

If you want to follow them, you need to have the courage to do the same.

As Mark Twain famously said, Buy land, they are not making any more

If I can help you in any way with your property choices, do get in touch

Ken

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Brexit- What Could It Mean For The SW16 Property Market

An historic day today, a lot of clients have been calling us and asking what the impact of dog reading a newspaper‪#‎Brexit‬ will be on the local property market here in ‪#‎Norbury‬‪ #‎SW16‬ here is our view:

The housing markets rely on the fundamentals of supply vs demand.

The referendum does not change the fact that we have a housing crisis.

Any drop in the value of the pound also makes UK housing a more attractive option when buying in any other currency, international investors will not hesitate to jump in if that gap widens, especially in London and the suburbs.

We expect an interest rate cut: soon.

Confidence may be knocked in the short term but if we were to trip into recession, it is likely that interest rates will be lowered further, this will bolster the housing market.

Many leading developers have said that they may slow down their housing programs and this will lead to an even greater imbalance placing upwards pressure on house prices

In the medium term there is talk of inflation. Inflation has historically lifted house prices as salaries rise to keep pace, so does borrowing capability.

Over the longer term house prices will move upwards as they always have, especially in up and coming areas like #Norbury with the essential mix of good commuting distance to London and relatively ‘affordable’ prices.

Landlords may indeed be the early beneficiaries of #Brexit. With a slowdown, less Landlords will buy to let and demand will grow as
the normal level of supply offered by the huge virtual army of new landlords drops.

The case for the ever growing need for accommodation here in South West London: We may see many more people keen to get into the UK ahead of any perceived ‘closing’ of our borders, many of whom will commute to London for work and only have two choices, rent or buy.

We believe that the most likely outcome is a slowdown in property sales and the predicted rises may now slow but are unlikely to reverse.

People will always need to move. If you already own and wish to sell, provided you have the equity and the house you are selling does not rise in value, the chances are neither does the one you are buying.

If you are thinking of selling and are concerned by #Brexit, give me a call

Ken

Budget Update March 2016

The chancellor has now confirmed that the 3% stamp duty surcharge (SDLT2)  on the purchase of secGeorge_osborne_hiond homes and buy-to-let properties will go ahead from April 1 2016.

He also reversed his former announcement that that larger investors will be exempt from the stamp duty changes – meaning all purchasers of buy-to-let properties and any second home purchasers  will pay the additional tax.

He says the money raised will go towards the  private rented sector via the build to rent sector.

This seems ironic given how he has treated Landlords with such contempt.

He also states that capital gains tax will be reduced BUT not for any gains on property.

The good news is that there are no further anti landlord measures announced.