I’ve just finished looking at a property with an agent, the price isn’t cheap at £2.5m. The property is a duplex, with its own entrance, and is facing a beautiful green square.
Four people are interested in buying this property, and one contract is already out on it at full asking price. What’s the attraction? It certainly is not the economic environment, neither is it the price bracket at this level as the market is soft and a little unstable. So why the high interest?
Very simply it’s a rarity to get a property like this with such features of high ceilings, a private entrance, and access to a square which no one seems to use. This is probably the closest you will get to living in a house. You will have Hyde Park a few minutes’ walk away and a huge square as your front garden. Perfect for a family and dog lovers.
It’s simple demand and supply. If you want to live in a square you have a very limited supply in Central Locations.
Even in a soft London market, with the uncertain economic environment, here is a situation where if the current buyer does not move fast there is a real chance he will be gazumped, perhaps even by us. For this is a beautiful property and in a strong market I see it attracting a very solid price to the tune of £4m, maybe even higher. It’s the only one in the road with its own private entrance.
The above situation shows the fundamentals of the property market do not change, whatever the weather. There is a finite supply of stock and the demand comes from all corners of the globe. So, when a rare diamond surfaces, unsurprisingly buyers will come out of the woodwork.
Clearly someone on an average wage in Westminster of £36,000 could not afford this. A large chunk of the demand is currently foreign money, as the current softness in the pound means there’s a discount when purchasing London property. The Knight Frank Report confirms the top property investment destination for high net worth individuals in 2016, was London, ranking above New York and Paris.
If you do not have this kind of budget you still can invest in Central London, without compromising on the most important mantra in property, which is location. This can be done through Codeinvesting at https://www.codeinvesting.com, where you can invest from as little as £1,000 and still jump onto the property ladder.
This is very convenient solution for the following reasons. Firstly, you can come in low. Secondly, it avoids the need to obtain a mortgage, which is becoming more and more cumbersome, and you need a larger deposit due to the increase rental cover. Thirdly, there are tax changes which will mean for a high rate tax payer you will be unable to offset the interest element from the rental. This will force many BTL investors to start selling.
Agony Agent
Each week, we answer a reader’s rental property question, from first-time landlords needing pointers about contracts to experienced owners. Agony Agent, is here to help!
Q: Last week you wrote about how to ensure a smooth check-out at the end of a tenancy, but what happens if there’s a dispute with the deposit?
A: Deposit Protection Schemes (DPS) and the procedure of returning or keeping the money are in the hands of a third party – the Alternative Dispute Resolution (ADR) service. Here are a few things to keep in mind:
l The deposit belongs to the tenant until decided otherwise
The deposit is automatically the tenant’s. This means that you cannot make personal use of it throughout the tenancy, even if it’s in an insurance-based scheme, and especially not to jet off to the Bahamas. If a dispute arises, you must put the disputed amount into the scheme in the allotted time frame you are given by the administrator.
l Proving a case is the landlord’s responsibility
If there is a dispute, the burden of proof rests on you because it is the tenant’s money. This is why an in-depth inventory should always be taken before the tenant moves in.
l Avoid the dispute in the first place
Arguing over deposit money often means going around in circles, particularly if the proper preliminary measures haven’t been taken. These include a well-planned tenancy agreement, a list of reasonable tenant instructions and a detailed inventory. The inventory is the most important document you can have when involved in a deposit dispute. If it is thorough, contains clear photographs and has been signed and dated by both parties, then it will be able to prove whether or not the tenant has damaged something. If you can convince your tenant that they don’t have a leg to stand on (in the nicest way possible!), you may well avoid the extra hassle of the ADR. Also, remember that a landlord can’t claim for fair wear and tear – a deposit is not a general maintenance fund to spruce things up between tenancies – so try to be reasonably forgiving if it’s a borderline issue.
l Keep records
Communicate clearly with your tenant about the deposit and try to come to an agreement before going further. Try to do it by email so that you have proof of your interactions. Make notes of phone conversations. This will come in handy if the dispute makes it to the ADR. As well as the inventory, you’ll need any relevant invoices, receipts and quotes for repairs and/or replacements, bank statements, and bills.
l Dealing with a formal dispute
If you and your tenant are at odds over deposit money, your DPS provider will arrange an ADR. The precise details of the procedure will vary according to your particular scheme but there are some general rules. Neither party is required to meet with the adjudicator, nor will the adjudicator visit the property. The process is purely evidence-based. Before an ADR can go ahead, it requires both parties’ consent. The decision is binding, although it can be challenged in the Courts, always seek legal advice before proceeding with this final step.
