Polmennor Road vs Pengarth Rise, Falmouth

We were talking to a couple recently, who are considering entering the buy-to-let market and they were looking for advice as to whether a property in Polmennor Road or Pengarth Rise in Falmouth would make a better investment. They were interested in 3 bed family homes and whilst decent properties in both streets let well, we wanted to do a bit more research to help them with their decision. 

The average value of a 3 bed semi-detached property on Polmennor Road is around £225,000; whilst in Pengarth Rise it is 11% less, at around £200,000.

To better understand the investment opportunities available, we considered the rents of semi-detached properties in these streets. The average rent likely to be achieved on Polmennor Road is in the region of £850 pcm, giving an average yield/return of c.4.5%.  On Pengarth Rise the average rent is slightly lower, at around £795 pcm, with a similar corresponding yield/return of c.4.8%.

However, it is also good to consider capital growth and how the value could change over time. In 2006, a semi-detached house on Polmennor Road would have cost approximately £185,000 and on Pengarth Rise the average value was £176,000. This shows that the average property value on Polmennor Road has risen by 22% since 2006, and on Pengarth Rise has risen by 14%.

Ultimately, we found both streets to be good buy-to-let investment areas with Polmennor Road showing a stronger capital growth opportunity.

Belvoir Falmouth don’t sell property - we are lettings specialists, but we do give advice on what might make a good buy-to-let investment in Falmouth, Penryn, Helston and the surrounding areas. We don’t charge for this service but we would like to manage your property or help you find great tenants!

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Smoke and carbon monoxide alarms to become the law

Landlords will be required by law to install working smoke and carbon monoxide alarms in their properties, under new measures announced by housing minister Brandon Lewis. The government says the move will help prevent up to 36 deaths and 1,375 injuries a year. The measure is expected to take effect from October 2015, and comes with strong support after a consultation on property condition in the private rented sector.

 England’s 46 fire and rescue authorities are expected to support private landlords in their own areas to meet their new responsibilities with the provision of free alarms, with grant funding from government.

 Lewis said: “In 1988 just 8% of homes had a smoke alarm installed – now it’s over 90%.

“The vast majority of landlords offer a good service and have installed smoke alarms in their homes, but I’m changing the law to ensure every tenant can be given this important protection.

“But with working smoke alarms providing the vital seconds needed to escape a fire, I urge all tenants to make sure they regularly test their alarms to ensure they work when it counts. Testing regularly remains the tenant’s responsibility.”

 The proposed changes to the law would require landlords to install smoke alarms on every floor of their property, and test them at the start of every tenancy.

Landlords would also need to install carbon monoxide alarms in high risk rooms such as those where a solid fuel heating system is installed.

 Those who fail to install smoke and carbon monoxide alarms would face sanctions and could face up to a £5,000 civil penalty.

 Alan Ward, chairman of the Residential Landlords Association said: “This is a policy that we campaigned hard for, and was a key part of the RLA’s manifesto for the private rented sector.

“Proposals for funding to provide free alarms to landlords are particularly welcome and I look forward to seeing the details of this.”

Tenant Administration Fees - Are they justified?

Ed Miliband and the Labour Party recently announced that if they win the General Election they will introduce a law to stop lettings agents from charging tenants fees for renting property in a bid to provide a fairer deal for tenants.

We thought it would be fair to set the scene as it is now.

At Belvoir Falmouth we charge an upfront administration fee to cover the cost of some of the work we do on the tenant's behalf.  It is kept at a reasonable level and is openly discussed with tenants from the outset.  All our tenant fees are also clearly listed on our website so there is nothing hidden.

I know from personal experience that not charging this fee before referencing can leave you out of pocket when a tenant changes their mind or fails the checks.

Administration fees vary from agency to agency and some do seem very high. There are also agencies who charge tenants fees for other services such as check-in, inventory, deposit registration, check-out and tenancy renewal, all of which can all get expensive.

It's unclear whether these additional charges are included in the Labour Party plans. However, the upfront Tenant Administration Fee definitely is.

So if Labour are successful, how will we make sure that we don't lose money if a prospective tenant - with no financial risk to himself - potentially puts in offers on several properties at the same time, either to hedge his bets or, worst case, in the hope that at least one agent won't reference thoroughly and find out something he wants to hide?

Pass the Administration Fee to the Landlord?

There has been the suggestion that these fees will be passed on to the Landlord instead. And maybe where the administration fee is relatively small that will not cause too much concern.  It is more likely though that a number of things could happen as a result of this action.

- Rent Increases. Landlords may put up their rents to cover their increased charges.  Does this have any benefit for the tenant?

- Self Management. Landlords may choose to do-it-themselves rather than use agents.  Most Landlords who use agents do so because they don't have the time or experience to self-manage.  Electing to do so now could mean falling foul of increasing regulations, leading to potentially bigger costs in the form of fines. Is this the best situation for the tenant?

- Focus on cost. Landlords could look for the cheapest agent. This is so often a false economy particularly with the fines that can be incurred as a result of non-compliance with legislation. Again, is this the best thing for the tenant?

So what is the answer?

The Advertising Standards Authority ruled that agencies have to advertise all non-optional Tenant Fees and to identify and provide information on any optional costs that can not be easily quantified.

Tenants and Landlords can, and should, use this information when selecting which agencies to work with.

We do understand the sentiment behind the proposal and Belvoir is completely in support of a review of the private rental sector, however in this instance the proposal will not have the desired positive outcome for tenants.

Are New Builds A Good Choice For Property Investment?

A local chap came into the office recently to discuss investing in a buy-to-let property. He was thinking about buying off plan and wanted to discuss the investment potential.

Tenants love new build property and will often pay a premium for them in the right location.

House developers build for a profit and charge a premium for their product, so after buying, the prices may fall or hover around their sale price for a year or two and then start to rise in line with the rest of the market.

However for new owners there are advantages to new build properties. They come with guarantees and when minor problems crop up much work can be done under warranty (such as a problem with the newly installed cooker, extractor fan or the odd leak which appears as a snagging issue)

However pay attention to service charges, these can dent rents.

Belvoir Lettings Falmouth don’t sell property - we are lettings specialists, but we do give advice on what might make a good buy-to-let property in Falmouth and the surrounding areas. We don’t charge for this service but we would like to manage your property or help you find great tenants!

Is Client Money Protection important to you?

This week Monday morning began with a call to the office from a new Landlord:

‘Hello, I am about to complete on a flat in Penryn and I’d like to know what you would charge to manage it?’

Nothing to complain about there and it’s always nice to talk to a new Landlord. We had a brief conversation. I found out more about the property and the Landlord, and he found out more about the services we offer at Belvoir and how we can meet his requirements. We’re due to talk again later this week, so all very positive.

But one thing really struck me about this Landlord, his last question to me was ‘Do you have Client Money Protection?’

He’d heard horror stories about agents using the rents they receive to support their businesses, resulting in Landlords not receiving rents for several months, and in the worst cases the agencies going out of business and that rent never being passed on to the Landlords.

Client Money Protection (CMP) gives peace of mind to Landlords AND tenants by ensuring that your money is safe and isn’t being used inappropriately.

At Belvoir Falmouth we’re part of the National Approved Lettings Scheme (NALS)  http://www.nalscheme.co.uk/ and their CMP scheme, however there are other similar schemes such as ARLA and RICS.

We recommend following this Landlord's example and asking any agent you talk to whether they have CMP and then looking at that scheme's website to check they’re up to date.

Student Letting

Have a listen to our latest podcast from Pirate 2 Homes & Gardens Show.  This week it's all about student letting.

https://soundcloud.com/elvoiralmouth/belvoir-segment-12-student-letting

Are You a Pet-Friendly Landlord?

At my letting agency business in Falmouth we are proud members of the Lets with Pets Scheme run by the charity Dogs Trust, a scheme supported by the National Approved Letting Scheme.

Instinctively, most Landlords would prefer not to rent their property to tenants with pets. Almost immediately concerns are raised around issues such as the noise of a barking dog, furniture being scratched by sharp claws on a cat and the occasional ‘accident’ ruining carpets. This can make it very difficult for pet owners to find a suitable home.

However, nowadays roughly 48% of the population have a pet, so taking a more pet-friendly approach can dramatically increase demand for your property!

Our experience is also that people with pets tend to be looking for homes for the longer term. Anyone who’s ever moved house with a cat can tell you how traumatic it can be, so it’s not something to do on a regular basis.

Obviously concerns will still exist but these can be mitigated by asking for a larger deposit, inserting additional clauses in the Tenancy Agreement and agreeing that the tenant will carry out a full professional clean at the end of the tenancy. Also, you can ask key questions up front such as whether a cat will need a litter tray or cat flap, and how long a dog will be left at home alone.

With 20% of homes in our area being privately let, opening up your property to pet owners could give it the edge!

If you're a Landlord considering whether to open up your property to those with pets, or you're a tenant finding it impossible to find a property with your pet in tow, please give us a call to discuss your situation.

The Lets with Pets scheme also has lots of helpful advice and guidance for landlords and tenants available on their website Lets with Pets