Last week we managed to exchange on a property, in Hatherley Grove, W2, with a longish four month completion. The seller tried to stick in a cheeky clause whereby they could complete early at their discretion, as opposed to the agreed completion time period. This is often typical of deals, either party tries to push in clauses which favour them, in the hope the other party’s desperation to do the deal will be the overriding factor. Not so in this case, we held our stance and in the end the seller folded and kept to the original agreed terms.
The reasons for the delay in completion, is twofold, one is to submit planning for a mansard and the other is to sell the property on without having to complete once the planning has been submitted. This looks plausible.
The property is 700 sq. ft. and has the potential to add another 300 sq. ft. at least, this is expected to increase the value to £1.1m from a purchase price of £700k.
This deal was presented to a number of investors. One party viewed the property twice, and then tried to impose their terms on the deal, which included a last minute switching of solicitor and reducing our fees.
This wasn’t really going to happen; I could have sold this deal on three times over, and so it was swiftly placed with another party on the same day who purchased it without seeing it. I’m quietly hopeful this deal will yield a plentiful harvest with the right manoeuvring.
We have just put another property under offer in the prime part of Notting Hill, the deal had 6 offers on it within a week. This demonstrates, regardless of the market conditions, there is always money seeking good stock, and this one is a real gem. It’s opposite one of the most expensive roads in Central London, Kensington Palace Gardens, where the average price of a property is £36m. However, our humble flat is only £550k, it comes with a 999 year lease and is in a very quiet road given the busy location. It is a probate deal, and hence requires a light refurbishment.
Our clients who agreed this deal have a retail business, and have a commercial property portfolio, however, they now wish to venture into residential property. Now is a good time to come in, when you can afford to choose the best proprieties. When the market is rising high any kind of property will sell, as everyone is jumping on the bandwagon. This is the herd mentality, which many species including humans tend to move in.
A property which we will be launching this week, is a two bedroom apartment with a long lease and a service charge of merely £600 per annum. This is exceptionally cheap given this charge includes buildings insurance. The location is off Church Street, NW8, an area which has been seen to be the poor part of Central London, but which is now set for massive capital growth. It’s an ex-council property and requires work, I would estimate about £15k. The property is priced at £400,000; you would be hard pressed to find anything in this location for this price, let alone a two bedroom flat. This deal is looking for a buyer, so do get in touch if you are interested.
Agony Agent
Each week, we answer a reader’s rental property question, from first-time landlords to experienced owners. Agony Agent, is here to help!
Q: I am about to complete on my first BTL property purchase. What would you recommend we do to get the apartment ready to let?
A: I would recommend you start with the following:
Make sure that you have obtained permission to let from your mortgage company, and/or the freeholder if it is a leasehold.
Make sure you have any necessary planning permissions. This may be needed if you are converting the property to an HMO (house of multiple occupancy), so it is something you should check out if you are going to have more than two tenants who are not members of the same family, in the property.
If there are any gas appliances at the property you will need to comply with the Gas Regulations. The appliances will have to be checked by an engineer registered with the Gas Safe Register, who will give you a certificate. The check must be done before the tenants go in, and annually thereafter, and the tenants must be given a copy of the certificate.
You will need to comply with all the various safety regulations, for example, all furniture provided must comply with the Furniture and Furnishings Regulations. This means that all soft furnishings, e.g. sofas, headboards, cushions and cloth covers on seats, mattresses, etc must be fire retardant and carry the relevant label. Under the Electrical Equipment Safety Regulations, any electrical equipment provided must be safe. If the items are not new, it is a good idea to have them tested by a qualified electrician. Make sure that plugs have no bare or damaged wires on leads.
You must fit smoke alarms on all floors where there is living accommodation and a carbon monoxide alarm in all rooms with a solid fuel burner. These need to be tested on the first day of the tenancy. Although it is not a general legal requirement at present (unless your property is an HMO), you should get the electrical wiring regularly checked, as you will be held responsible if it is found to be defective. Also note that landlords need to give tenants an Energy Performance Certificate before they move in.
Make sure you have adequate insurance cover, as general household insurance will not be sufficient. There are specialist policies available for landlords.
Keep records of all work done, all receipts e.g. for items bought and any repair and other work done, and any certificates and guarantees. It is a good idea to have an independent inventory done to list all furniture, electrical equipment, and general items in the property, with a note of their general condition; and check this over every time the property is vacated and then re-let.
If this sounds like too much of a headache for you then contact me today to see how I can assist you.
