Most Expensive and Least Expensive Properties in Harpenden

It's been a little while since I wrote about this topic so I thought I'd review it to see if anything had changed since my last article which you can find here.

First I'll look at the list of the most expensive streets in Harpenden.

Most expensive 

Clearly the data is sparse for West Common Close but it shows that, with an average transaction value of £3.6m this is the number one most expensive place to buy property in Harpenden.

Park Avenue South tops Park Avenue North by just over £170,000 in capital value, on average. Swiftly following on their heels are Cross Lane and Oak Way. Interestingly these areas are split between the avenues in Central Harpenden and roads set to the south of Harpenden around East and West Common, which may come as little surprise to many but it's worth noting that a significant number of properties in the avenues areas are easily competing and surpassing the East and West Common neighbourhoods which formerly were, according to many, the ‘Holy Grail’ of Harpenden living – perhaps we will see more of this balancing with further building of luxury property in central Harpenden in years to come.

For a bit of fun, the mortgage payments for a property on West Common Close would come to approximately £7,753 per month at 3% over 30 years, and that's if your LTV is 50/50. How do you feel about spending £93,000 per annum just on your mortgage? Of course, these property purchases work differently at this level, but even still it's a considerable investment and fascinating to put into real terms. It would be a bad day indeed if interest rates change for the worse!

Least expensive

 

Moving on to the least expensive roads in Harpenden, the latest data shows that the lowest priced development in Harpenden is Reed Place on Bloomfield Road, being flats this is to be expected. The remainder of the roads are generally centred around Westfield and Batford in the Northern and North East side of Harpenden, save for Loire Mews which lies off Cravells Road.

An interesting matter to note is that, while these are merely average values and do not show the lowest priced property, it does show that even the most affordable areas in Harpenden are close to the national average house price. This perhaps isn't good news for those moving within the town, or for those moving in, but for anyone imminently moving away from the area, any equity gained here will stand you in good stead for purchasing more land and more space elsewhere in the country.

Again, in terms of mortgage payments and following the same figures as before although this time using a 10% deposit, (3% interest rate and a 30 year repayment term) the monthly payments would be a far more manageable £817pcm or £9804 per annum - although do bear in mind this is likely to be a once or two bed flat or starter home. Food for thought!

Highest turnover

Now moving on to the highest turnover streets (where properties change hands most frequently) we see that Station Road tops the chart for properties with a large number of families moving in and out of homes on that road. This data is a little predictable in so much as the roads concerned are either main roads or long roads with higher numbers of residential properties on them, but still it's an interesting metric to note to those looking to move locally or those looking to move into the town (budget permitting of course) as these may be roads to keep an eye on as properties are likely to come up in these locations more often.

I hope you've found this useful, interesting, informative, or even just a bit of a fun insight into the Harpenden market as it currently stands. If you're interested to know more, please go ahead and get in touch on info@hawkandchadwick.co.uk

Sorry about the silence!

Ok so I'm going to first apologise for not writing anything on here for ages, I've just been so busy that I haven't had a moment where I've either had the time or the energy to write a long post.

But anyway, here it is - What I'm going to try and do from now is record videos and write less so you might want to look at the Youtube channel for Hawk & Chadwick and see what comes up on here as you might find it interesting.

I'll try to write a few more blog posts about the local markets and what's happening on a national scale, and how that affects us locally.

Please share this blog as more readers means I'll write more posts!

Thanks for reading so far.

Alasdair

The Harpenden Estate Agent Cull??

Bit of Friday fun. Well, it made me laugh anyway.

 "Estate Agent culling in the United Kingdom is being trialled as a way to reduce Estate Agent numbers in a set area, in the hope of controlling the spread of smarmy overused adjectives. Humans can catch the flagrant overuse of superfluous adjectives, but public health control measures, including the English Language education vaccine mean it is not a significant risk to human health. 

The disease affects car salesmen and other high street conmen (including bankers, a small subsection of letting agents, double glazing salesmen, insurance salesmen, and llamas), and some species of town based wildlife including Estate Agents, mortgage brokers and a few members of the general public. Geographically, the use of pointless adjectives has spread from isolated pockets in the late 1980s to cover large areas of the west and south-west of England and Wales in the 2010s. Some people believe this correlates with the lack of Estate Agent control.

In October 2013, culling in England was controversially trialled in two pilot areas in Birmingham and in Hertfordshire. The main aim of these trials was to assess the humaneness of culling using "free shooting" (previous methods trapped the Estate Agents in cages before shooting them). The trials were repeated in 2014. In August 2015 it was announced culling would be rolled out across the Greater London Area with a target of 615 to 835 Estate Agents being culled there, while also being continued in Birmingham and Hertfordshire. 

Licences were granted to allow six weeks of continuous culling in the three counties until 31 January. In December 2015, HMRC released documents confirming the Estate Agent cull had "met government targets" with 756 muppets culled in Greater London, 432 in Birmingham and 279 in Hertfordshire. As of December 2015, there is no UK-wide policy of Estate Agent culling, however due to public pressure the government is currently reviewing its standpoint on the issue." 

 Adapted from the Wikipedia page on the controversial (and serious) issue of Badger culling. Harpenden could certainly nominate a few candidates I'm sure.

Fire Safety in Properties

When it comes to property, there are definitely risks - most of us look at the financial aspects when it comes to looking at our homes and investments, but the physical risks are quite obviously a factor as well. We've all seen the adverts and the promotion about house fires and the importance of alarms in recent years, and anyone who has seen a burned out house may think it's something that can never happen to them.

The fire statistics published by the Home Office on the 29th June 2016 covering the reported cases in 2014/2015 amass to roughly 496,000 incidents, of which six percent were related to dwellings - which equates to 31,300 homes affected by fire.

The most dangerous room in your house for a fire?  The living or dining room, believe it or not! And you're most at risk if you smoke in the property or if you're over 60, according to the statistics on fatalities in house fires during this period. Perhaps unsurprisingly, misuse of cooking appliances accounts for a huge number of casualties and fire related incidents every year. The most common time of day for a fire to break out?  The evening, between 4pm and 10pm. There were 7,600 casualties attributed to fire related incidents in England in 2014/2015.

We need to take note of this information, and assist our fire departments in reducing the number of fires that break out - their work has seen a massive reduction in the number of fires and fire related deaths since 2003, but there's still more we can do to ensure our homes and investments are fire safe. I spoke to Ben Cornish from Red & White Fire Protection to get the inside track on what we need to look out for to not only stay compliant, but more importantly stay safe;

"There are several important pieces of legislation which impact on fire safety within dwellings" says Ben.

"Some affect all dwellings irrespective of the layout or how it is occupied. Some legislation only applies to dwellings which are occupied by tenants who are unrelated or only applies to certain parts of the building."

Ben offered a list of legislation, which we'd like to share with you below. 

"Depending on the type of property and how it is occupied some or all of the following will apply."

A. Building Regulations 2010 Part B.

Application - all dwellings where any significant building work is carried out.

B. Housing Health & Safety Rating System ("HHSRS")

Fire is included in the 29 hazards covered by the system introduced by Housing Act 2004.

Application - this applies all dwellings, rented or private.

C. The Smoke and Carbon Monoxide Alarm (England) Regulations 2015

This applies to all rented dwellings.

D. Fire Safety Order - [The Regulatory Reform (Fire Safety) Order2005]

See the guidance on Fire Safety in purpose-built flats.

See the guidance for common parts of bedsits and converted flats in LACORS guide.

Application - common parts (i.e. the shared areas including shared stairways, landings, kitchens, bathrooms etc.) of dwelling buildings containing in bedsits and flats both converted and purpose built.

Ben goes on to add a little further information regarding smaller dwellings;

"If a flat is occupied as bedsits there are two sets of common parts within the building. The first is the shared access route to the flat front door and other is the shared areas within the flat e.g. hallway, shared kitchen, bathroom etc - in that instance, both areas would require risk rating."

"But, remember it does not apply to shared houses let on a joint tenancy, unless it's an HMO (House in Multiple Occupation) in which case it does apply"

We've linked above to the relevant documents so you can read for yourself - as you can see, it's a minefield of legislation and while the danger may be slim, as a landlord or a property owner it is your responsibility to ensure the property, it's fixtures and fittings and contents are fire safe - in the event of a fire, you'd need to be able to prove that you took all the necessary steps to prevent it.

If you're confused or unsure of your obligations when it comes to fire safety, our recommendation is that you do not take chances and do everything you can to make sure you're compliant, and part of that should be contacting either myself directly so that I can put you in touch, or go straight to Ben to conduct a comprehensive fire safety review.

Stay stafe, and make sure you're compliant.

Online Low Cost Estate Agents - Do they really save you money?

This is part of a much much larger piece that I've been planning on discussing for some time, but some recent news events have once again spurred me on to share this with local folk who are thinking of 'saving thousands' by using a cheap alternative.

Now before I start, and without mentioning any names, I have worked for an 'Online Agent' and it was eye opening to say the least. I took stock of the situation and learned everything I could about what they were doing and set up on my own with what I believe to be the right focus - offering clients my expertise and the best service I can possibly manage with the resources I have available. That experience gives me a higher than average standpoint and the qualification to make comments on how one of the larger ones was run, and how much of an embarrassment the place was.

The focus of the articles I want to share with you though is one particular online offering in Manchester who claimed to have saved a client in London a substantial sum - so much so in fact that it was published in the most credible news source around.....The Daily Mail. The firm in question claim that they sold the home, worth £24 million, for just £549, saving their client a whopping £30,000 in fees. That sounds brilliant, cue the stampede of vendors looking to cut their selling costs - there's a bargain bin over here and the savings are tremendous!

Here's the original Property Industry Eye article reporting the Daily Mail's Article.

That all sounds great doesn't it?  I mean, who would bother going to a high street agent when you could save that much money on any size home? Well, it does sound great until you find out that it was a load of rubbish.

Today, high end agent Knight Frank have set the record straight and it shows that it was in fact they who sold the property - so maybe the article was just a big publicity stunt, but how many of the other listings are false and how many of the claims made by low price tag firms are fibs to entice you in?

You might be thinking - who cares?  If it can be done for £500 or less - why not just do that? Well, not wishing to be rude but I feel this can only be approached with a blunt instrument.....I'm afraid you're showing your thorough lack of understanding for what this industry actually does for you when you engage any of us to act on your behalf in a Sale or a Let.  Can it be done for less?  For next to nothing?  Yes, of course it can - anything can - to say otherwise would be obtuse and farcical. Almost any product or service can be done on the cheap and mass produced - you can buy a cheap house, a cheap car, cheap food from a cheap supermarket, cheap clothes, a cheap holiday, you can have cheap furniture in your home, a cheap TV, you could even go so far as to live on the cheapest road in the cheapest town in the cheapest country. And you can even get a cheap tattoo while you're at it.......

Getting the picture yet?  Ok, so clearly, nobody does that - it's ridiculous. We all have a priority list for things that we feel should be quality. We might have the home and car we can just about afford, but hey what's wrong with a designer suit or a nice pair of shoes - we're entitled to luxuries, that's part of why you go to work to earn your wages, so you can occasionally have nice things, otherwise why bother?? BUT...what I'd like you to do is take a moment for a little introspection and think about the last time you bought something that you needed to rely on and it failed. Sure, doesn't always happen - I've bought cheap and it's done the job it was meant to do - maybe not perfectly, maybe it's not as luxurious as the higher priced things, but it worked.....for a while......ok once......and it could have worked better I guess, but hey it got the job done.

Ever had that dialogue with yourself or somebody else? Nice bit of post-purchase rationalization going on there! It happens all the time - maybe you took your respectable car that you bought at a bargain price to a local garage to have it fixed, and it came back with something else more serious broken, and you vowed never to use them ever again, the greasy nincompoop spanner monkeys. Maybe you wanted that £100 pair of shoes but settled for the cheap pair from the wall of trainers at the Sports shop for £20 - bargain! They fell apart 6 weeks later didn't they. It could be anything. Think about how you felt that you'd spent money - admittedly less money - but you didn't really get much for it.  Angry? Upset? Annoyed? Foolish? Embarrassed? You rationalise your mistake by making excuses. Why do you feel that way? It's because you've been conned into a low quality low priced product and you didn't actually get what you needed.

Now I want you to consider your home, or your investment property. How much is it worth, to you? I don't mean the market value, but how much effort and time and stress did you put into viewing it, offering on it, securing the mortgage, going to work busting your butt to make the payments, dealing with agents and solicitors and paperwork and banks and oh LORD it's never ending, all of that to get to where you are. The money you've sunk into this asset is immeasurable and it's eaten up a large proportion of your income for years now, and now you need to find a new tenant or you need to sell to move on - and you're telling me you want to deal with a busy call centre of people who are paid so little there's literally no reason for them to care about any of your needs or what you're trying to achieve?  Or a company with a 'local expert' who doesn't need any qualifications or experience to do the job and will be so desperate to do deals they'll put that above your needs? Companies who will charge you upfront and keep your money even if they don't sell your home.

No two house sales are the same - the circumstances of the buyer and the vendor are absolutely unique and need to be considered, and as Property Professionals negotiating sales or lets it is our job to understand them both, otherwise you simply will not get the best price (note I say best, not highest - there's a difference).

Now it's fair to say that we need to be balanced - the other end of the scale is a traditional High Street outfit with huge glassy offices, cars, sharp suits, rolexes and a slimy disposition. These sharks want to keep your business, but are scratching their empty heads as to why people are getting a bit pissed off with being charged 1.5% - 2.0% + VAT and are still getting a teenager who's favourite phrase is "I don't know" on a viewing, and his babysitter negotiating the finer points of a house sale that could potentially lead to your triumph or utter ruin if they cock it up. I completely and wholeheartedly agree with you - with the average house price in the UK sitting at around £300k, most of you will hand over £4,500 plus another £900 in VAT on top of that to somebody who's top skills appears to be holding clipboards, shaking hands, driving too fast and drinking cheap coffee (surely they can afford something better than this base gutrot for their customers?!) - yeah, damn right you should be annoyed. There has to be another way. Right? Right??  Please tell me this isn't our fate!

The thing that everyone seems to miss is what people actually need. If you're selling or letting, you are seeking somebody who is an expert in the local market, who knows the prices, who knows the lay of the land, but also somebody who is capable of reaching a large audience of potential buyers, and can arrange everything for you, do the bits you're unsure of and you're willing to pay a modest fee for that. Sure, if you had the time you'd do it yourself, but you're too busy, so you look for a person who can just get it done, find a buyer and do all the technical bits on your behalf so you can get on with your life. The point is - service and expertise are the things people need, not low prices or smooth talking thick rich kids. The public aren't cheesed off with the price, they're cheesed off with paying that price for not getting what they need.

The fact of the matter is with this cheap fee idea, you have to look at it from the other end. Nobody, even online agents, start a business as an act of altruism - they all need to make money. The staff won't take a job answering phones and dealing with the inevitable stress piled on them from dealing with complicated house sales for less than a certain amount - that, plus offices and computers and heating, lighting, insurances, professional memberships, compliance, tax, accounting, all creates overheads that must be paid from the revenue.  With me so far?  So how do you save revenue? You cut your costs - biggest overhead in a business?  Staff and premises. So you lose the shop front, and you do what with the staff?

That's right, they hire low paid inexperienced unqualified chickens reading from a script to keep gullible customers just happy enough so that they don't ask too many questions, and if they DO ask too many questions, bounce them round and don't call back until they wear themselves out like an angry toddler (not my words, and yes it was said in the office and laughed about - that's what you're buying into folks!). This inevitably erodes the service you get, so the con is that you're actually looking at the wrong thing - the price. You're ignoring the intangible - the things that you get with a product or service at a higher price point that are thoroughly stripped away with cheaper alternatives. Warranties, insurances, after care, and most importantly people taking a vested interest in doing their best for you because you're paying them what they're actually worth to undertake a complex and challenging task on your behalf.

When you try to save money, do you think you're getting the same service? Ask yourself honestly if you moved a fridge for somebody who paid you a tenner, would you care about how you handled it? Would you care more if they paid you £100? Does paying less guarantee you the absolute best price for your asset? Will it be from somebody who is fighting hard on your side because you're actually paying them well for an extremely complex and challenging task, pouring in their years of experience and qualifications to assist you because they're going to do well out of it alongside you?

You know the answer to that.

The evidence is everywhere, everything that is cheap and you pay less for is going to come at a price elsewhere - and in this instance it's service and care. You may save money, and you may be fortunate in taking the epic gamble with the largest financial asset you'll ever own and get through the process completely painlessly. But have got to ask yourself one question - do I feel lucky?

Well......Do ya?



P.S.

I think the bottom line of this sign says it all, frankly.

Footnote:

A real life example I heard from an industry colleague is illustrated quite simply by looking at some figures from a house they were looking to sell but the vendor wanted to go 'online';

The client had their home valued and had two options. An online agent charging £500 upfront, and a local full-service agent charging 1% on completion (nothing upfront).  The property was worth approximately £375,000 and was on the market for £382,000 to allow potential buyers to make offers and give the owner some wiggle room. The client loved the idea of saving £3250 in agency fees (if he sold at market value) and was honest with my colleague about being sucked in by the dulcet tones of the Online offering.

Here's my colleagues response;

A: "So.....let me get this straight......you're telling me that you're considering using an agent who is cheaper by £3250?"

C: "Yes, it's a no brainer - I'll save a fortune!"

A: "OK, so would you use me if I said I can make you at least £6,500 on the sale"

C: "That would be brilliant, but I don't see how you can do that??"

A: "Simple - because you pay me a rate that is not only enough for me to care about the sale to work hard and actually sell at your asking price or above, but also enough for me to give the time and resources required to achieve the price you want - if you paid me £500 upfront, what incentive to I have to bother? When I work with you I'm an expert in my field and the local area and I can sell this property for a price that more than covers my fee, and put more money in your pocket - if you go online, it might only cost you £500 upfront, but you could potentially stand to lose £6,500 on the sale of the house"

C: "............"

The client signed up and they sold the house within a week for more than the asking price. Not a tactic I've personally used, and certainly not true in every case as all businesses are different and have different methods, but to me it just demonstrates that paying somebody what they're worth is how you get results, cutting corners might get to the end of the race but it's going to fall way short of where you could have been had you paid the right money for a professional in the first place.

How times have changed...

Inspired by a post I saw on Facebook where a Lettings Agency colleague shared an article about the cost of living in 1974 published by The Guardian, I was spurred on to have a look at the differences between then and now, particularly in terms of housing.

In a recent radio interview with BBC Three Counties on the Roberto Perrone show, I was part of a panel of property experts discussing the state of the British housing market, and in particular how it affects the local area.  We were on air on the day of the Brexit vote, and so we couldn't discuss that particular elephant in the room, but one thing came up with didn't sit right with me - "When I bought my first house, it was just as hard as it is now." It seemed tinged with pomposity and self righteousness, and seemed to belittle the struggle of anyone who might be pushing forth toward their dream of owning their own home, no matter how modest that may be.

At the time, I didn't have the figures to hand, and statistical analysis is a tough game to be in - as they say, you can say anything with facts - and indeed many factors go into comparing one period in time with another, however I've wanted to look at this for a while and this article gave me the impetus to do a little research.

Recently an online battle between Baby Boomers and Millenials (personally I sit between the two in terms of generational age so I get to see the whole debate from a unique viewpoint) as to whether it really is just as hard now as it was then has erupted with each side slinging accusations at the other. The younger generation feel that their elders managed to get rich on a booming housing market, and had an easy route in to generating great wealth, which they're now enjoying in their golden years, some in great luxury. And the older generation feel they had to work hard, and live on very little in order to get where they are, and they sometimes view the younger generation with scorn and disdain for being idle thrillseekers with little concept of what hard graft really means. Who is right here? It's true to say that not everyone agrees with either camp, but the bitter aftertaste is there - the younger wondering why they cant have what their parents and grandparents enjoy, and sitting in baffled bemusement about how they're supposed to get there, and the older generations scoffing at the impetuous comments of coasting millenials.

Here are the facts I managed to dig up - bear in mind i'm not a member of MENSA or some kind of mathematician, but I think you'll agree the results are certainly interesting. The Guardian Article cites the average house price in 1976 as £12,704 and the average wage of £72 per week - that works out to £3,744 per annum. Based on that, the average wage made up 29.47% of the average house price. The annual average interest rate was 6.8%. Fast forward to 2016, the average wage is £27,600 and the average house price is £211,230 (Land Registry, May 2016) which means the average uk wage is now just 13.06% of the average house price. Interest rates are 0.5%.

That's a decrease of 55.68% in the purchasing power of modern wages against those of the populace in 1976. Yes, borrowing is far cheaper when you isolate interest rates, however access to borrowing is much tighter than it has been for years thanks to the banks ruining the economy in 2007/2008. Not only this but look at the population figures - 56.21 million people lived in the UK in 1976, versus 65.11 million in 2016 - an increase in population of 15%. When you add in to the mix a scarcity of property, you end up with inflated house prices.

That all seems to point to the fact that todays first time buyers have got it far harder than those who went house hunting back in 1976 - more competition, harder to get a bank to lend to you, larger mortgage payments and greater in terms of length to keep those payments down. It's a frightening set of statistics, but it's important when looking at statistics like these to understand that 'averages' don't paint the whole picture, and the ease/difficulty will have differed depending on where you lived, what work was available, infrastructure, transport, daily living costs - all of these things play a part. It has to be noted that the country had over 1 million people unemployed, the economy was in the toilet and there were massive public sector strikes, as well as one of the hottest summers on record. Incidentally, it was also the year that Ford Fiesta was first produced - hence the picture.

Anyway, perhaps the sad reality is that owning a home now is something that will simply never happen for a lot of people without making some heavy sacrifices elsewhere in their lifestyle, and they may find themselves renting for life. It's up to us all to work to change the tide away from 'generation rent' if we think it's important to us as a nation. It does have severe implications - young families renting won't be in a position to remortgage to cover nursing home costs, or take in elderly relatives. If you're wise and invest in property now and push to become a Landlord, you can probably rest assured that you won't be short of tenants - or nursing home funds - for a long time yet.

You can read The Guardian article by Viv Gorskop here

Photographical science, dear Watson

 Since I started Hawk & Chadwick I’ve always had a bee in my bonnet about Estate Agents and their god awful pictures. Just go look on any major portal right now and I’m willing to bet my left kidney that within the top 10-15 listings you’ll find photographs that appear to have be taken by somebody who forgot their orthopaedic shoes when they left for work that morning. 

 It’s infuriating because when you think of the service you expect when marketing your property with a local professional, you’d be well within your rights to be outraged if they can’t even operate a camera and show up without a tripod. Equally you should be outraged by third party image manipulation with clearly false blue skies being pasted into the background of dreary images. 

 I know I might sound like a grumpy old man, but the fact of the matter is we are now working in an environment where the first thing a potential buyer or tenant is going to see is a photograph of the front of your house, or possibly one of the internal rooms. They will make a split second decision on whether to view your property based on that image, and so it has to be bloody good to catch their attention.

 Let me explain why that is the case. When our eyes our open, our vision accounts for two-thirds of the electrical activity of the brain. Approximately 40% all nerve fibres connected to the brain are linked to the retina, and more of our neurons are dedicated to vision than the other four senses combined. And as if that’s not nearly enough, your brain processes visuals and images 60,000 times faster than it does text. Now you know why an image is worth 1000 words. 

 When you extend this biological predisposition for visual stimuli into the screen-ruled social media world we live in with far more people walking into lamp posts than ever before, it starts to really add up. Recent studies found that nearly half of all Internet users have re-posted a photo or video they have found online, and Tweets with embedded images receive 150 percent more retweets – same for Facebook posts that are image rich. Agents who post social media content with relevant images get 94 percent more views than content without images. 

 The bottom line is that strong imagery elicits an emotional response in the viewer. So to be all dandy about it, what I do as a photographer of your home is to convey that homeliness and that sense of warmth, comfort, attraction, safety and the welcoming nature of home to the observer (who hopefully will later become an enquirer, a viewer and then a tenant or buyer) – of course, there is a large amount of that which depends on who that person is and their purposes and mindset when viewing the photograph, but looking at the scientific data mentioned earlier it absolutely stands to reason that putting in the effort required to present your home smartly and professionally and with the absolute best quality images available is what I like to call a No Brainer.  
 And listen, I’m not about to fly into some uber-technical tirade about the Rule of thirds, The Golden ratio, the Fibonacci sequence or something else that sounds like a Dan Brown novel. Yes, those techniques exist and yes they’re relevant but the main thing to take away from this is that just having images is good, but it’s not enough. High quality and attention to detail within your images, and how they are presented to the general public (i.e. the people who ultimately will be the key to your financial advancement) is VITAL to succeeding in a marketplace where you’re trying to attract the buyer that’s thinking of buying your neighbour’s house across the street. You need Every. Single. Competitive. Advantage. 

 Start with excellent pictures. Then pick an agent who has a verified track record of success in using them.

I'll just do my own inventory

Let me start by just telling you what an incredibly bad idea that is.  No, really - it's the worst idea you've had, ever. Doing your own inventory for your property can only be compared to attempting skydiving without instruction, or attempting to fly a helicopter after a heavy absinthe binge - possibly even lion taming while blindfolded and wearing a meat coat.

The problem is, you might be lucky and have a situation where nothing happens - you might even have ran tenancies for years without any problems, but to coin a term - one swallow does not a summer make.

For those who haven't a clue what I'm on about, let me explain something. When a tenant agrees to rent a property, the landlord will often make a reasonable effort to give the property to their new tenant in a good condition - clean, freshly decorated and in a generally operable and liveable condition. Many tenants do their best to look after this and return things in a pretty good state, but there's always been this grey area - is it like a hotel room, or do i treat it like my own house?  Hmmmm....

Now without getting into the legal semantics and boring the pants off everyone lets just say that the way it works in 2016 is that a tenant pays a deposit (usually between 1-2 months worth of rent) to the landlord who holds the money against any damage and returns it at the end of the tenancy - the deposit has to go into an approved scheme and be properly protected.

"So who decides what's damaged and what isn't? Surely things wear out over time?"

Exactly, young gwasshopper. That's what the inventory is for - you have to hold some kind of record of what it was like at the start, in order to be able to prove that there is a difference at the end - savvy?

So what happens if you write your own inventory on the back of a fag packet - well, besides obviously missing things out and ending up with a huge tangled mess when you get to the end and your tenant turns out to be a qualified solicitor or a housing officer....or worse a letting agent....the other problem you have is impartiality (which, incidentally, is why getting your letting agent to do your inventories is equally daft) because you can be accused of twisting things in your favour.

So what's the solution? Well, as usual being the author of this article I get to have the pompous self righteousness to dole out advice as I see fit, but in all sincerity the best option you have is to approach an AIIC qualified inventory clerk and have a robust detailed inventory carried out on your property.

The level of detail will ensure that far from having to resolve disputes at the end, there simply won't be any - if you leave no margin for error and no grey area, then there can be no argument and everything will be fully signed and squared away meaning you and the tenant can walk away at the end without a bad word between you.

An inventory clerk also takes note of things such as meter readings, ensuring you and your tenant aren't paying more than you should be for utilities and bills when tenancies change. It keeps everything in the open, documented and very fair.

Having a hyper detailed inventory also compels the tenant to look after your property and to report and problems promptly. It's just one of the many ingredients that go in to making managing property a breeze rather than a headache.

Another hidden benefit is if you are able to file away your inventories you can look back and create budget projections for the replacement of larger items, meaning you can really nail down your cash flow and start thinking very clearly about allocating budgets which will allow you to expand your portfolio.

For every tenancy I put in place, I insist on using a fully qualified inventory clerk - yes, sometimes our clients choose to save money and do their own, and yes sometimes it goes without a hitch and they escape any bad weather - but it's a risk I certainly wouldn't take if I had the option, and in the property game where risks should be eliminated, it would seem counter intuitive to adopt more exposure.

So there we are, don't be an inexperienced lion tamer - and don't let pride come before a fall (sorry, that was a terrible pun) - it's only going to cost you money if you don't use a professional, and for the sake of less than £150.00, that's not a lot to protect you from deposit disputes at the end of your next tenancy.

Precedent set as letting agent loses referencing court case

I've just read a really interesting article by Warren Lewis from Property Reporter that should be of significant interest to Landlords regarding the level of references undertaken by agents when submitting tenants to a property.

What I find interesting, and yet deeply saddening, is that this is rife throughout the industry - the agent in this instance clearly believes that they can just sit back and let a third party company do all of the checks and they needn't lift a finger, but the comedy in all of this is that the agent is the responsible party who is supposedly a professional offering an often expensive service to landlords.

Is your letting agent checking your tenants thoroughly, or will YOU be left with an £8000 bill and a court case to fight?  Don't be the loser, use somebody who does it properly - if not, you've only got yourself to blame for not checking out the agent you picked.

Bigger isn't always better, in fact it almost always guarantees that the jobsworth handling your property won't have the experience, knowledge or care enough to thoroughly check things with attention to detail to filter out dodgy tenants who know their way around the system.

The Autumn Statement November 2015

So today the chancellor George Osborne released the Autumn Statement - everyone was braced for impact since the last couple of times he opened his mouth the entire of the property industry was given a swift and hefty kick in the pants - and today appeared to bear more of the same.

The biggest gasps can be heard quite clearly from Landlords who have just learned that in order to buy a property after April 2016 they will be relieved of an additional 3% of Stamp Duty Land Tax on their purchase price, save for properties below the £40,000 mark (I can tell you there are slim pickings for even a damp studio apartment anywhere south of Luton in that price bracket).

Add to this the removal of the current 45% mortgage rate relief for Buy To Let Landlords and you can bet your bottom quid that rents will be set to rise, and some Landlords will be inclined to say sod this for a game of soldiers and start binning their stock.

The opinions on this sway wildly from the satisfied cackle of the 35 year old first time buyer who can't afford to move out from under Mum & Dad, to the dismayed and angry jeers from Landlords who stand to lose a great deal, in some cases a whole lifestyle built around generating a healthy income stream to support relative financial freedom.

The other aspects to consider in this budget statement are the promises to build more homes (*yawn* - heard it!), the changes to social housing, benefits, universal credit, the U-turn on tax credit cuts (but the potential rises in Council Tax swoop in to save the day - or not). The 'middle class' stand to be better off with a rise in the 40% tax rate threshold, a rise in the personal tax allowance, and changes to inheritance tax thresholds, which all paint quite a refreshingly sunny outlook if you're generally doing OK in life, but woe betide you if you're struggling or at the bottom of the stack - it's going to get even more ugly, and there's 4 more years of cuts to come.

Allow me to explain.

When compared to the rest of the UK, the percentage of citizens in Hertfordshire who are priced out of buying AND renting is comparatively very low, with many gainfully employed and approximately 80% of the housing stock is owned or mortgaged, with around 10-12% privately rented, but it would be a very grave mistake indeed to settle into any sense of smug satisfaction that this won't transpose itself into problems on your doorstep.

The government is boasting in this statement (through the masterful and sensuous massage of figures and facts) that they have really reined in spending and that's put us in a position where we've got a few quid to slosh about on some new starter homes and begrudgingly build on old government land, a bit of money for sports and recreation, a little bit of cash to plug a few holes here and there - all sounds dandy.

The issue though is that when you take measures which strip the most disadvantaged and vulnerable in society of the little funding they have, those people have to sink or swim - so where they cannot buy, they must rent, where they cannot rent, they must approach the local authority to house them, and when that is not possible they must either become homeless or relocate - the issue here is that the problem doesn't just go away, we as a society still have to pay for it.

Now you're going to team up this watershed of effectively cutting loose the poor and letting them drift with a gentle plumping up of the 'middle mixers' of the country, but at the same time snatching away some of their vital income in the form of second homes and Buy To Let. Now this is interesting - and for more than one reason.  Many in my industry are saying George Osborne and the OBR (Office of Budget Responsibility) are buffoons, it's a bad idea - no, wait - a TERRIBLE idea, he doesn't know what he's doing, he's a clown, a nincompoop the whole thing is a sham purely designed to rip out the throat of the Buy To Let industry in an unceremoniously bloody fait accompli.

I can understand the rage - who wouldn't be appalled at losing an income stream that supports a certain lifestyle? Isn't this why people are so enamoured with Buy To Let? Landlords in the Private Sector quite rightly voice the opinion that they provide housing that Housing Associations do not or cannot provide for many people who cannot afford to buy their own home.  Again we return to the matter of affordability. There are some who argue that Landlords owning and continuing to buy all of the small housing stock creates a natural vacuum where there would otherwise be first time buyers - this is hotly rebuffed by the Private Rented Sector tycoons of course.

Part of the reality here is that in order to buy a property, people need to drastically change their lifestyle, and that is a big upheaval - you have to sacrifice a great deal to own a property and sometimes people are simply not prepared to do it, but does that mean they forfeit the right to be appalled by soaring house prices later? I'll throw that one to the floor to decide!

And tycoons of any variety haven't managed to escape the all-seeing-eye of George 'Lord Sauron' Osborne, as he's taken a neat little slice from dividend payments over £5000, restricted Non Dom status, increased insurance premium tax and tapered away the tax free allowances on pensions for those earning over £150,000 - the pinch may be more of a gentle squidge at this level as one can't upset all of ones old Eton chums by taxing them too much, but it's still there. Bless him for trying.

But when it comes to property, we're at the mercy of the common all garden Landlord. Private sector Landlords are faced with a choice over the next 12 months before the 3% Stamp Duty surcharge starts to pinch, swiftly followed by tax changes and possible interest rate rises - they can either go on a buying rampage and boost their stock with an aim of running a larger portfolio either privately or through a limited company setup, which will see a soaring demand for smaller properties, followed by an inevitable price boom, or they can start to shed stock and cash in on their asset, potentially consolidating bricks and mortar into their own home or a more modest portfolio of high performing stock - this could have the opposite effect of flooding the market with property which could make for a market correction unless handled very deftly.

This is where the battle will be fought, and if Landlords do not play their cards extremely carefully over the coming months, they could easily become the national scapegoat for a second housing crisis. A boom or tumble in small housing stock prices will have a knock-on effect over time on the equity of larger homes, and the meagre promise of 400,000 starter homes by 2020 really isn't going to make a dent in the problem - we haven't got enough property for those who need it, and the stock we do have is too expensive because wages haven't risen and we've had a six year lull in house building - that's what it really boils down to.

The most sensible course of action for any Landlord would be to conduct a rent review at the earliest available opportunity and maximise the profitability of their properties, serving rent increase notices where appropriate (only of course if ethical to do so) - an independent service that we can provide at Hawk & Chadwick. Landlords may also wish to consider quiet sales of 'fringe' properties to first time buyers before the rush really begins - when it happens it's going to be the Black Friday of the property industry, and there are bound to be casualties. Please don't be among them.

Hertfordshire Property Remains Strong

We're often asked to speculate on where the market is going and amongst the professionals we work with on a regular basis, as well as the public, we hear the same statement-and-question combo;

"House prices are still rising - how long can it go on for?!" with the subtle but unspoken implication that we're all on a runaway train headed for an outage in the tracks over a huge canyon - and here be beasties.

Let's examine the facts - worldwide population is growing by 2.5 new little people per second.  Just let that sink in for a moment and count 2.5 births per second. That's huge. Yes, the statistics of those who get to house-buying age and financial security will be a massively decreasing funnel, but that doesn't mean we can ignore it.

Couple this with the undeniable fact that London is one of the most desired domiciles in the world. I know it's sounds sensationally Clarkson-esque to say "in the world" (now you're imagining Clarkson doing it aren't you?) but the reality is, whether red or blue, left or right, rich or poor, the United Kingdom has created a financial, social, economical and cultural beacon which gains admiration in some small way like no other City on the planet - personally, I don't really care for the place, but that doesn't mean I can make a wholesale denial of the fact that everyone else bloody loves it.

So naturally, people from all locations, denominations, faiths, races, backgrounds and intentions want to be here, wether to experience it, profit from it, or whatever the motivation, people are coming here and we have to put them somewhere.

Now what happens when you have a rising population (let's ignore where that's coming from because that's not really the point) they all need somewhere to live. When you've got a certain amount of buildings that people can live in legally and for a set price, you create scarcity, and scarcity is one of the economic ingredients that drives prices.

Right now, it's quite simple - we do not have enough available housing to meet the huge demand, and especially in areas close to the jewel in the crown of the globe (according to so many people) where everyone wants to be - so what we have here is a situation where the price will continue to grow as long as there is a supply imbalance and a soaring demand.  Your faithful dear government have actually done a masterful job of controlling this by keeping a firm hand on the throttle by tweaking mortgage approvals, changing stamp duty, making tax changes - they're very clever people and there are a lot of them who have a heavily vested interest in making sure the housing market doesn't cause the rest of the economy to go belly-up.

So, sadly (if you're a first time buyer) or thankfully (if you're the top of the chain and retiring to Spain) the prices are steadily marching upwards.  In Hertfordshire detached properties have risen from £602,498 in May to £631,167 in September. Flats have shifted up a gear from £187,493 to £196,415 in the same timeframe - when you look at stock levels, these are rising too after an uncertain year which has seen an increase in the number of service providers and a concerning drop in stock levels creating a fraught environment in the property sector locally.

The chart below is interactive (neat huh?) you can click on the legend at the bottom to remove different types, so for example you can compare flats to the overall average house price for Hertfordshire by 'switching off' the other columns.  Isn't technology awesome?!

So, come on then - the juicy bit - what does the Crystal Ball say about what's going to happen in the next year?

The situation remains stable - the prices are rising, but with impending tax changes for Landlords and murmurs of interest rate rises, we're already seeing some investors take the view that they will jettison some of their lower performing stock in the next 24 months. This could send a small ripple through the lower end of the market and unless handled carefully, the perfect storm could precipitate a tumble in prices.

This isn't going to be overnight though, and my feeling is that we're still on the upward curve. Just this week we've agreed an asking price deal on a property in deepest darkest Harpenden, which goes to show that while demand remains strong, the buyers are out there and it's worth holding your nerve just for now, but if you're thinking of taking the leap, I wouldn't wait until next Christmas to make the decision. I'll be keeping a close tab on market performance, so check back here for regular updates.

If you're interested in hearing more about the new tax rules for Landlords, or you're interested in learning about how rising population numbers is something we all need to be concerned about, you might be interested in attending St Albans Property Network which is held on the third Wednesday of every month at St Michael's Manor Hotel. The next event is on Wednesday the 20th of January and we have some fantastic speakers lined up for the new year, including Stephen Bown from the charity 'Population Matters' and Kevin Griffiths of Keycrest Accounting.

Schools and House Prices

It cannot be denied that there is a seemingly permanent bond between House Prices and Schools. The massive effect that a good school can have on property values in a given area is astonishing and creates an eye watering scenario for all parents who, naturally, want nothing but the very best educational environment and academic accolades for their children.

As most of you know however, locating a property in the right area and at the right price to get a school place can be compared to some form of medieval torture and is usually accompanied by much wailing and gnashing of teeth. The demand for school places is so high on top of the cultural and social benefits of living in an area as highly regarded as Harpenden that usually the only thing that will guarantee you some security for the future of your child's education is the size of your wallet. But let's not blame the rich denizens of the town, after all, if we had the means we would all surely do the same.

To make matters worse, the problem is set to worsen with an article in the Independent published back in September citing figures that show a projected increase of 12% in the number of secondary school pupils by 2023 - this claim is backed by the official government projections release in July 2015 which actually cites a greater 20% growth by 2024. Many local authorities are straining under the demand for school places, with many frantically urging already oversubscribed schools to take on more students.

To help those in the local area, and those moving in, we undertook a little independent research to try and figure out where the best buys are to get the best possible chance of school places. From our research we have tried to identify a handful of well regarded schools in the district so that we can find out how this affected house prices. Note that this does not mean these are the very best, as school rankings are incredibly complicated and we are not experts so please conduct your own independent research if you would like more information. We have left out a number of local schools as well as Private schools for the simplicity of illustrating a point about property prices.

The best regarded nursery schools;

1. Crabtree Infant & Junior School, 2. The Grove Infants School, 3. The Lea Primary School and Nursery

The best regarded primary schools;

1. St Dominic's Catholic Primary, 2. Roundwood Primary, 3. Crabtree Primary

The top three secondary schools;

1. St George's School, 2. Roundwood Park, 3. Sir John Lawes


Now onto the really interesting bit. The maps!

In order, the two maps below show the Zoopla 'heat map' of prices (for the uninitiated, the 'warmer' the colour, i.e. more red, indicates a 'hotter' or higher price) and the second map is the overlay of the locations of the schools with the Zoopla Property Price heatmap on top.

This gives us an interesting indication of prices around the various schools.

The schools are colour coded - the red pins are secondary schools, the yellow pins are the primary schools and the green pins are nursery schools.

The immediate thing that strikes out from this experiment in drawing correlative conclusions is that where one would have thought the highest value area in the town would be is not necessarily the case - it's clear that the big ticket properties in terms of price are almost exclusively located in the Avenues and the area to the north of Rothamsted (average price paid - £1.92m), and areas such as West Common, East Common and the 'ridge' of the hill upon which Harpenden lies (Dalkeith Road, Sauncey Avenue, Clarendon Road) which I'm sure allows residents an arguably deserved self-satisfaction. However, the concentration of outstanding education can be found and easily reached by purchasing property in the areas just off Station Road, namely, Dalkeith Road (£999,999), Langdale Avenue (£675,000) and Carisbrooke Road (£1.01m).

The downhill stroll to the station, the relative calm and safety of the tight-knit neighbourhood and easy access to the southern end of the town certainly makes this a high priority target for buyers looking in the area - and also adds a good selling point for homes;

"We're within striking distance of no less than seven of the towns best schools, darling!" - Now there's something to boast about over morning coffee at the tennis club.

So what about buying to get into a good school without annihilating your life savings? Well, let's be realistic for a start - this is Harpenden, so for most the experience could be eye-watering in terms of price, bearing in mind the National Average House Price as released by the Land Registry is now £196,000 compared to Harpendens £712,831 - over 263.68% higher than most of the UK (sources: Rightmove and Land Registry). Add to that the fierce competition from London money and you might want to be prepared to kiss a few frogs when looking for a deal. The other aspect to consider is that it's not just as simple as buying a house near the school and Bob's your uncle - there is a huge amount of statistical calculation that goes into which school place is offered to whom and when, and you're not guaranteed a place just by postcode, so don't be fooled into buying nearby and thinking you can secure a place as easily as that. There is way more to this, but we're interested in house prices for this article.

The roads where you're most likely to find a good family home and stand a good chance of getting into a local school are likely to be those in the 'cooler' areas on the heatmap, but still within that golden oval on the eastern side of the railway, up Station Road. Often the best deals can be found by understanding that there are roads that are on average, for one reason or another, valued lower than others. Residential streets such as Overstone Road (£547,250) and Cowper Road (£639,000) provide opportunities for you to get your family where it needs to be geographically while avoiding bankruptcy.

Space tends to be limited in the centre of town, so if the station isn't a deal breaker, my hot areas to watch in the town are Southdown, with it's cooler pricing and great access to schools, or North Harpenden and out towards Kinsbourne Green. You might have a greater battle in terms of distance from the schools, but you'll be compromising by having a larger garden and more breathing space.

Of course this isn't an exhaustive list of the top roads, and since your eventual home is such a personal thing it would be impossible and churlish of me to suggest that Dalkeith Road trumps Tuffnells Way or vice versa. Many agents in the town seem to forget one fundamental yet vital aspect of this business, and that is while one deal may certainly look like any other, it is the people involved with their myriad nuances of personal taste that make the entire thing so delightfully interesting.

If you've enjoyed this article, please share it on Twitter and Facebook. If you would like to find out where your next best buy will be, why not give me a call. Alternatively if you're interested in knowing whether your home is going to be a honeypot for the buying bees, you can reach me on 01582 346 111 to discuss your next move.

IMPORTANT NOTES - PLEASE READ:

The data listed and used in researching this article is based purely on government information sourced from the Department for Education school performance reports and data tables. We took into account overall school results to pick the nine schools highlighted above. Your individual biases, experiences and opinions may differ. We have no affiliation, preference or fondness for any particular school in the local area. These schools are not listed in any particular order and this is not a league table or a suggestion of preference, ranking, prowess, ability, cost or any other pitch of favour.

Please also note that in this article we have not examined other local schools such as Batford and Wood End which are also highly regarded educational establishments. It is necessary that you consider all schools in the area before making a choice. You can find a full list on the Department for Education website.

For detailed school information please contact the schools directly or contact your local council.

House Price Index Report - October 2015

Today the Land Registry released its latest report on the House Price Index, that hallowed knowledge of all things property - the dread that fills the faces of clients when we start to mention it is palpable - the colour drains from their faces, but fear not! We bring good tidings.

The initial views of the report show that property has risen in value by an average of 5.3% bringing the national average house price in England and Wales up to £186,553. The South East saw prices rise by 0.7% since August, and prices have risen by an average of 8.5% since the same time last year.

Throughout Hertfordshire the average price is now £311,247 with Greater London showing an average of £499,997.

The data goes on to show that Sales volumes are significantly lower this year than at the same point in 2014 and even 2013, however still appear to be buoyant when compared to figures for 2011 and 2012.

The number of sales over £1million decreased by 9% from July to September. The bulk of sales took place in the £300,000 to £400,000 price range.

The home counties are leading the way in terms of house price growth according to the latest figures. The report also shows that repossessions are following a downward trend, showing that mortgagors are keeping on top of things.

The data seems to support the gruff and surly chorus of agreement in the press that the Stamp Duty changes have started to pinch at the heels of £1m+ market, with fewer would-be buyers willing to take a bite out of the sixty grand tax sandwich that will be fed to them if they go through with it.

It seems that while it is of course still possible to make deals happen at a higher level, the nomansland between the sub £935,000 properties and the £1m+ properties is set to widen with the latter becoming more cash heavy and thinning the herd.  This is however great news if you're looking at going on the market for under £900,000 as you're suddenly going to have a lot of hungry buyers, and a larger proportion will be free of finance constraints, if lugging along a lengthy chain, but we can't all have our cake and eat it too.

The data also suggests a noticeable dip in stock levels, which I know has been felt by colleagues throughout the industry and has even forced some redundancies in local firms who are tightening their belts - the first thing to go is the staff. We keep getting CV's from highly experienced and qualified negotiators who are knocking at every door looking for a job.

Leading into the winter months with the family focus turning from School places and late summer breaks to Pumpkins, winter clothing and the panic buying of Christmas presents before the family comes to stay, the market is set to bed in for what could be a tough winter for Estate Agents (don't all laugh at once), yet still the prices are creeping slowly up which could mean a boon for anyone wily enough to take advantage of the huge demand and a marketplace with less and less competition.

Selling in Winter isn't something that only the brave can do, it's just a case of getting the presentation right. Think about what makes indoor and outdoor spaces appealing during winter - evergreens, red berries, a roasting fire, homely smells and a warm welcome. If you're stuck for inspiration and you need to get moving, drop me a line - 01582 346 111.

And remember, since we've got the Land Rover, when we get all that snow we can still bring people up for a viewing!  You'll just have to put the duvet back upstairs and change out of your pyjamas.

Universal Credit, or Universal Nightmare?

The NLA Meeting at Three Rivers District Council in Rickmansworth was where we heard about the latest updates to the Deregulation Bill, the changes to Council stances on their 'Easy Let' program which operated as a council run Lettings Agent to house low income and vulnerable families and individuals, and an introduction to the Benefits system changeover from the current DWP cocktail to the all-encompassing Universal Credit.

         

The crowd is a good mix - even including NLA Chairman and experienced Landlord Carolyn Uphill (pictured) who offered a brief but enlightening introduction to the waiting Landlords on how Landlords are vilified by society as money-grabbing heartless mercenaries, painted by the media to seem stingy, ungrateful and cruel. She goes on to say that the media reports of awful Landlords are a thin minority who give the bulk of those earning a crust in the Private Rented Sector a bad name - and judging by the clientele I'd say she was right.  Most were over 40, well dressed and came forth with a good degree of technical knowledge and questions for the panel of speakers for the evening - in some cases serving them a positive roasting.

The first of the panel to offer their view was a gentleman named Alan who represented Three Rivers and informed Landlords of the Housing Services Departments ability to locate tenants and place them in properties at no cost to the Landlord (excepting the fact that the quality of tenant and the amount of guaranteed rent is potentially a third of that which could be achieved through a qualified and experienced Letting Agent, but this wasn't mentioned) - it seems like a great deal on paper.

Backing this up however was the following dissemination of new practices as set out by the DWP when it comes to welfare reform. And this is where it all gets really interesting;

The new 'Universal Credit' is being rolled out piecemeal over several years and in specific distinct stages. The current phase of implementation is for single adults with no dependents. Once on Universal Credit, the individuals will receive 'benefit' by way of a monthly payment, and all of the former aspects of Housing Benefit, Income Based JSA, Income Support, Tax Credits and Child Benefit will all be rolled into one. The idea being that claimants will enjoy a 'simulation' of work until they can find sustainable employment - the support and methods sound almost utopian on paper, but there was one part which heavily rocked the boat with Landlords.

The matter of direct payment to a Landlord when a claimant encounters difficulty will be altered, and not in the Landlord's favour. Currently Landlords and tenants can elect for payment to be made directly into the Landlord's bank account, assuming the tenant has offered consent for the Landlord to be made aware, and therefore Landlords are notified immediately if there is a problem with payments.



Under the new Universal Credit, payments are automatically made to the individual claimant and the claimant must give express permission to send direct payment to the Landlord. Furthermore, the DWP will only pay arrears to a level of UP TO 20% of the outstanding monthly amount, each month, until the arrears are paid off.

The deadly combination of these two could mean that Landlords who previously accepted Housing Benefit Tenants and built their businesses around the existing DWP rules could find themselves losing up to three month's rent before they find that a tenant is experiencing difficulties. This hands a great deal of power to tenants who might be wise to the system.

The further problem here is that it introduces a higher barrier and more stringent checks for those in most desperate need of housing - tenants in arrears will be scrutinised more heavily, and if it weren't bad enough already, more Letting Agents will dumb down the idea of even considering Universal Credit applicants, and Landlords may begin to reject applicants from Councils, leaving both the public sector and the populace they are seeking to help in a dire situation - facing homelessness.

The feedback from the event seemed to be coloured by the notion that many in the room felt that the reforms were poorly thought out and the impacts had not been fully addressed.  I'm inclined to agree.

The final (and in my humble opinion most enlightening) element of the evening was Debenhams Ottway's Howard Kent speaking on the finer points of the Deregulation Bill.  I'll be releasing a video on this soon which you can see in due course on my company YouTube channel.

Howard really dug down into the effects of incorrect service of paperwork, and how the HHSRS contained within the Housing Act 2004 really starts to bite when tenants make reports concerning health and safety issues in properties and improvement orders are served. The legislation, amongst a myriad other tweaks, now prevents a Landlord from serving a Section 21 where such a notice is in force, or even where such a complaint has been made.

Landlords will now need to be even more vigilant about record keeping and understand the nitty gritty details of the law if they are to protect their financial interests - it might be time to consider speaking to a highly experienced, qualified letting agent who's already implemented this framework..........now if only there was somebody you could call..........

01582 346 111

(for those of you who haven't caught up yet, that's my number)

Rope Ladders, Balconies and The Art Of Balance

Recently released figures from Halifax show that house prices nationally have dropped by an average of 0.9% between August and September 2015. The market is still suffering from a stark imbalance of short supply and upwardly spiralling demand, only restrained by the relative increase in difficulty associated with obtaining finance to purchase property in the form of mortgages.

Mortgage rates remain low, which fuels the demand further.

The typical price of a home however remains 8.6% higher than the same time in 2014. Halifax feel that at this time the market will remain strong with prices continuing to hold steady and rise over the coming months.

So, in light of this news, what could topple the house of cards? Something that everyone seems to continually avoid discussing - so in my typical style, I've decided to roll up my sleeves and plunge both hands into the sticky gooey mess. Lovely!

Interest rates (i.e. the cost of borrowing, or conversely the risk of lending - depending on which end of the seesaw you're sitting on) are, in my opinion, the elephant in the room - nobody seems to want to discuss rising interest rates in case by some force of magic they skip up to the horrifying levels of 12-14% that we saw in the early 1990's. A rise in interest rates would slam the door shut for many who are currently able to afford mortgage finance, assuming they can tick all of the boxes during the inevitable interrogation from the banks.

It's unlikely that the government will overlook areas that would cause uncontrollable rises in interest rates, since the nature of these changes is always symbiotic and higher interest rates usually herald reduced consumer confidence, less disposable income, a focus on saving rather than spending and a consequence of a slowly shrinking economy, effectively undoing any hard work that has gone into achieving growth in recent years.

The MMR (Mortgage Market Review) rules which were introduced last year have previously come under harsh criticism for making borrowing more difficult to achieve for those struggling to purchase their first property and those looking to move up to a larger home, but being too relaxed on lending can have catastrophic results as we all know. Suspending our knowledge for now of the fact that most of the funds we are living on is supported by little more than our belief in it's intrinsic value (i.e. it's Fiat, there's no Gold backing our national currency), to open the sluices and allow a flood of uncontrolled lending would sweep away our foundations and repeat the harsh lessons we learned in 2007. This time around however the public are likely to be much less forgiving of government and banking irresponsibility.

Indeed, last time this happened we bailed out the banks purely because if we hadn't there would have been what can only be described as anarchy - the banks effectively held the government to ransom so they had no choice but to prop the whole thing up to avoid civil unrest and all the fun of the fair that comes with it. The comedy of this is that the public end up getting clobbered no matter what happened, but that's another story - we digress.

The government is therefore currently throttling demand by restricting borrowing - and by throttling I mean controlling the flow of demand in the housing market, rather than suffocating it - the restrained growth we're experiencing very much feels like we're paying out the main sheet oh-so-carefully in a strong gust to prevent us from capsizing the whole yacht.

The other side of the coin is that more housing is required - any fool can see that this is an undeniable truth. This too comes at a price. Diluting the stock too quickly will ruin the gravy - if you build too much, too soon, then demand for 'second hand' property (i.e. houses that we are trying to sell today) will see a fall in demand. However slight this may be, it will have a knock on effect. When nobody wants to buy something you have two choices - stop selling it or make the price more attractive. The net result?  Prices fall, equity is lost and the potential for a 'domino effect' of price drops and loss of confidence spreads like wildfire.

This also takes a tributary feed from the Buy To Let market; squeeze Landlords too much and they'll stop playing, pick up their ball and go home. There is absolutely no good reason for investors to put their money in an asset which doesn't generate significant capital gains or adequate cash flow. Some may criticize this, but in fairness it would be madness to let funds languish in investments that are no longer producing income. That door will shut and many Landlords may sell up, whether through necessity or choice, simultaneously generating a very welcome flood of stock for first time buyers, but utterly hammering the market position of anyone on the next rung up.

So we're playing a very careful balancing act - we can't lend too much, we can't build too much, we can't pinch too much with legislation and all the while prices are rising which is steadily making it harder and harder for people to buy and progress.  Think of an M.C. Escher style scene where a man on a balcony is pulling a rope ladder further out of reach of the person below him - this is rising house prices in action.  Now imagine a further balcony above, with another figure who is also pulling up their rope ladder - that's the widening gap between where he is and where he wants to go.  Rising house prices are relative, and that explains why - the only way around a rope ladder that is out of reach is to compromise and aim for a different balcony.

The problem with this situation is that rising prices are great if you've got a string of balconies and ladders beneath you, but they're awful if you're standing on the ground desperately leaping for the bottom rung and you need to buy some stilts from the bank to do it (who incidentally also own all of the rope ladders and the penthouse balcony, but forgive me for being cynical).

So will everything blow up in our faces? It's unlikely when the government is quite deftly playing puppet master to keep the strings and pulleys in motion while this all plays out, and while the show must go on, the curtain will fall eventually and one of these levees will break - will it be interest rates? Population growth? Economic growth? Too far one way and it all grinds to a halt - everyone will be at stalemate, and too far the other way and we'll face a runaway train with one final destination.

To wipe away the ash from this gloomy prediction - and I will always admit that I could be very wrong, after all I'm just saying what I see, I'm not a soothsayer, clairvoyant or a mystic - the key thing for any of us to do is assess the risk as it presents itself to our personal circumstances. Will buying or moving create a level of risk that you could not handle if things were to change? If the risk is something you can't bear, then stay put and wait unless pushed. But if you're smart and you can see a way through the jungle, then take the leap and swing from vine to vine (or climb from balcony to balcony) - remember that nobody ever got anywhere by standing still.