Only yesterday we confirmed another deal, they are there for the taking at the moment. This one has the potential to convert from a one bedroom to a two bedroom, it’s in a purpose built block in W1 and comes with a long lease and has been agreed at £625k. The property is a great deal and is in a very desirable block and it is priced almost at the level as some ex local authority properties are.
It helped that the agent, whom I have never met, has been doing business with us since 2009. We have bought several bits from him over the years hence there was an instant connection and the deal was agreed over the phone. Central London is a funny place, it the hub of the wheel, you can be working with someone for years before you even meet them.
The rental cover on BTL mortgages is increasing as well as the interest used to stress test these amounts, this will have the effect of reducing the amount of loan you can get when purchasing a BTL mortgage. Traditionally this used to be 125%, meaning if the mortgage was £1,000pm your rent would need to be £1,250pm. The amount used to calculate the monthly mortgage is also increasing, instead of using the actual amount paid many lenders are using a higher percentage for this calculation.
This will mean it will be difficult for new entrants to enter the BTL market, especially in Central London. Many will need to start in places outside of London where prices are lower and the rents higher. This is due to the rents not keeping pace with the capital growth of property in Central London over the last few years.
There was a golden period in the UK property history, when the doors were wide open. It seemed the only requirements for a mortgage where a clean credit score and a desire to take the plunge. The market is always changing and evolving, reacting to changes in stamp duty, tax, lending and the economic environment.
The property market in London is a 500 year old market, one thing is for sure it will not go out of fashion.
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Cutting corners can cost you more than you think!
A couple of tenants, who had passed referencing were about to rent a property. Everything was ready for the move date, so in preparation I informed the landlord of the cost of an inventory and check in at the property. "How much??? There's nothing in there, it is unfurnished" was the landlord’s response. Despite me informing him the importance of having such a document for deductions at the end of the tenancy his attitude was "I’ll do it myself, it can`t be that hard.” So he did! He conducted an inventory and check in “report” on half of an A4 sheet of paper!
The tenants moved in, the rent came in on time and things went well. Although the landlord was getting frustrated because the tenants seemed to be reporting every little issue they found to him and making a mountain out of a mole hill. Despite this the tenancy continued for a further few months until the tenants gave notice to leave in one months' time. After notice was given the relationship between the landlord and tenant soured due to the dramatisation of every dripping tap or missing light bulb and the landlord being pestered all times of the day and night by them, it came to the point that I had to relay messages between them as neither would take each other's calls (not a standard part of the service but I'm always happy to help). The landlord advised that the tenants should leave the property on the agreed date and hand the keys back to me at the office so I could conduct a free of charge check out (again not part of the standard service but I made an exception as it would take me about 30 seconds, seeing as I only had half an A4 page to go by).
The day soon arrived, and I headed to the property. Upon visiting the property I found that the tenants had left the property clean and tidy and that everything that was listed on the inventory was in fact still there. However the landlord had forgotten to list a few keys areas of the property which I had to inform him were no longer at the property! The tenants had removed the…toilet, sink, bath, cooker, fridge, washing machine, and the kitchen units!
As the landlord had left out these areas on the inventory, he could not make any claim from the deposit, the police classed this as a civil matter, and the insurance he had was that of occupier not as a landlord, so he had no way of receiving funds from any of these avenues.
Cost of the inventory: £300 inc vat
Cost of new bathroom and kitchen: £7,000
Landlord saving: -£6,700
This situation could happen to any landlord, however with our service and helpful advice we will make sure that you are provided with all the facts and options that could affect your investment from beginning to end! Feel free to contact me at the office for a property health check, or just a chat regardless of whether we handle your investment or not!
