LANDLORDS : Beware of Ambulance Chasers

Arguably this was inevitable, but companies are now setting up with the specific intention of helping tenants make claims against their landlords, on a no win, no fee basis. 

This relates to tenancy deposits. Since 2007, landlords (or their agents) have been required to register tenancy deposits and provide tenants with certain 'prescribed wording' in relation to that deposit. If this doesn't happen within a certain period of time, and the tenant goes to court, the automatic penalty is the landlord paying the tenant 3x the value of the deposit, plus the original deposit. The average deposit we hold is about £800, so that's £3200 a landlord would need to pay out. 

This is scary, but manageable. As part of our standard service we register deposits and give out prescribed information. This is given to us by the deposit provider - in our case https://www.tds.gb.com/. Since 2007, we've never been caught out once for failing to get this right (yet!) and as such neither have our landlords. 

The difficulty comes when individual courts start making strange decisions over tenancy deposits. One recent case seemed to suggest that prescribed information should be issued again when a tenancy moves from a fixed term to a periodic. This has never been mentioned previously, and has had the whole lettings industry (including the deposit scheme providers themselves) running round trying to figure out if they are compliant or they aren't. (http://bit.ly/147YrnW). In honesty they probably don't know until there are further test cases.

SOLD Northampton, 2 Bed House, £95k

I own one I rent on the same street, and this looks a very decent buy. Assuming it's not falling down(!), it's advertised at £95,000 and will therefore probably sell for a few '000 less. I suspect it's a little rough round the edges but the fundamentals all look to be there and anything else can be tidied up by us within a few days. Mine rents at £550 every day of the week, and £575 currently - this one should be no different. Private tenant. Decent yield.

I'd suggest this to landlords who are on a budget, but don't want to buy on a council estate - this is a good one if you're entering the market and want something relatively easy. It's on Northcote Street, NN2. Any questions, email me.

REFURBISHMENT OPPORTUNITY : Northampton

I'm not a huge fan of auctions because in recent years I've seen novice investors get caught up in the atmosphere and overpay. As such vendors have done better out of auctions than purchasers. This one is worth more than a casual glance, not least because it's going into the Derby auction, so it may fall under the radar of those who get a nose bleed when they venture outside the M25. 

• It's in the Headlands area, which is perfectly rentable - £595 when done. 
• Clearly it needs everything - full refurbishment - not for the inexperienced investor.
• It's non standard build too - this is fine, it will both rent and sell, but again not for the inexperienced investor. 
• Much will depend on the accuracy of the guide price. It's quoted at £50,000 and at that money there's clearly an opportunity for someone. However if it ends up nearer £75,000 the opportunity lessens - and that sort of price isn't out of the question as this will be an attractive area for some people. 

Google BAGSHAWS RESIDENTIAL AUCTION DERBY for this.

ABINGTON - Refurbishment Opportunity

Haven't seen this one, but someone tipped me off about it today. It's a straight forward 2 up, 2 down, in a good area. As I understand, there are no structural issues, but full internal updating is required. It's worth £125k once done, so there's a small margin to be made for someone who enjoys a 'project'. Far more likely is that someone will keep it and rent it - a nice house round here will currently fetch £625PCM, and will be very popular - condition is the all important factor.

A certainty is that it won't be around very long at this price! Contact me for details.

Northampton & Rugby - Where are the deals?

It's a tricky time for investor purchasers! The last few months have seen a lot of people contact me to express interest in buying. Many of those have bought at what I'd consider to be 'market rate'. The hardy few who have hung on in search of a deal have found it tough going - there's very little out there for those of us that have short arms and deep pockets!! I'd like to add to my own portfolio, but I'm struggling! This is in contrast to 2012 - there was far more available then. It's equally apparent that when most buyers are in "buying mode" they generally find something quickly - an estate agent sells them something - good deal or not. It almost makes you consider going into sales....

4Why there's a shortage of deals, I'm not sure. There is a renewed enthusiasm for buy to let, certainly - I've got lots of first time landlords coming into the market, and this generates competition for lower priced properties. Estate agents also tell me that the recent government intervention in the market has created an impetus - whilst the banks have finally realised that over lending represents bad business, the government seems willing to plough on regardless(!), which keeps prices at the bottom end of the market buoyant.  I've also seen a lot of estate agents talking enthusiastically about auctions. This isn't because they see auctions as an opportunity to offload difficult properties - it's because in recent months auctions have become a way of creating a bidding war between eager buyers - if you look at auction results online, it's hard to find someone who's got a 'steal'!

So where does this leave us? Shrewd purchasers will hang on! Those less shrewd will let an estate agent talk them into paying £130+k for a 2 bed in East Hunsbury. Meanwhile I've just had a landlord pay £47k for a 1 bed flat in town. Irrespective of what happens with house prices if she's got a long term mortgage, she'll clear £250 profit per month on a relatively (by today's standards) modest investment, and as such can't really go wrong. My advice to others is to seek out these deals, and to hold firm until you're happy you have one - don't get pressured into buying a lemon!
We continue to closely watch both the Northampton & Rugby markets and alert landlords to properties for sale that we feel have something to offer. If you're not on our email lists, and want to be, please email me and I'll add you.