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www.OxfordPropertyBlog.co.uk is hosting a Landlord seminar

On 2 March 2017, we will host a seminar featuring expert speakers from Martin & Co, Hedges Law, Critchleys Chartered Accountants and...

Wednesday 25 April 2018

Oxford Is The Best City For First-time Buyers


According to MoneySupermarket, Oxford is the best of 35 Cities surveyed for first-time buyers.  The Index analysed 35 UK cities against key criteria for first-time buyers, including the cost of a one-bed property, crime statistics, job opportunities and average salary in the local area.

Best five cities for first time buyers:

Oxford - first place due to high average salaries, good job opportunities and its position within the commuting belt to London.

Bath - second place due to the highest job availability of all cities analysed, with 13.76 vacancies per 100 capita, while big company headquarters within commuting distance of Bath - such as Clark’s Shoes, Screwfix and Future Publishing - also make it an attractive city for those looking to settle down.

Wolverhampton - third place because it scores marks for affordable housing, with an average one-bed property costing £97,821 - significantly lower than the national average of £134,561.

York - fourth place despite relatively high housing costs - at over £155,000 for a one-bed flat - due to a low contents theft rate, at only 6.9 per 1,000 capita. A relatively high disposable income, at £17,663 per household, also puts this city in the top five.

Aberdeen - fifth in the rankings and beats Glasgow by 17 places, thanks to a higher average disposable income and good average house prices - £164,041 compared to London’s average of just under £500,000 (£484,172).

At the other end of the spectrum is London, which ranks lowest in the table, alongside Newry, Hull, Sheffield and Leicester.

Wednesday 18 April 2018

The Martin & Co Spring 2018 Landlord Seminar


Background
According to OneSavings Bank research 51% of UK brokers have been approached by Landlord looking to diversify their portfolio of properties over the last 6 months.  56% of landlords surveyed wanted to diversify into Houses of Multiple Occupation, 14% wanted to diversify into commercial property, and 9% into mixed use.  The primary reason given was to mitigate recent tax increases related to mortgage interest rate relief and higher stamp duty.

Recent research by Mortgages for Business suggests that the average yield of an HMO is 3.3% per annum higher than an unshared residential property.

The Martin & Co Spring 2018 Landlord Seminar
The next Martin & Co Landlord seminar consider how existing owners of HMO or multi-let properties and/or commercial properties can save significant sums by fully utilising their capital allowances.  It will illustrate how one owner of 5 HMO properties was helped to claim £67,000 of capital allowances with the help of our speaker Chris Bailey or the eponymous Bailey Group.

Whether you are considering diversifying your portfolio or whether you already have one or more HMO or multi-let properties this seminar is a MUST ATTEND 90 minutes.

Location and date
24 May 2018 at 6pm running through to 7.30pm at The Oxford Spires Hotel on Abingdon Road.

Attendance by reservation only
Spaces are limited and over half have already been booked. Email me at bill.cooper@martinco.com to reserve your space.

Monday 16 April 2018

Why would an Oxford landlord sell her properties?


I’m not often surprised to be asked a question by one of my landlord clients, but I am finding myself asked the same question by lots of landlords - client and non-client alike. For most of those who have asked this question, the answer seems to me to be so glaringly obvious, I’m surprised it’s been asked.  So, what’s the question?

Should I sell one or more of my portfolio given the changes to mortgage interest rate relief?


One of my favourite clients posed this question recently, and I know she won’t mind me using her to illustrate why I am so surprised at being asked in the first place. 

The landlord in question owns two properties, one that was bought in 2005 and the other in 2011.  According to Hometrack’s City Index for Oxford, properties have risen on average by 51% since 2011 and by 80% since 2005.  Of course, much of the gain between 2005 and 2011 was wiped-out by the credit-crunch, which also triggered increased demand for Oxford rental properties from people struggling to secure the mortgage needed to buy.

My client bought the property in 2005 for £235,000 which was pretty much the average house price.  It is now worth £400,000.  That’s growth of 70%, some way below the Oxford average over the same period.  The property has new tenants paying £1,625pcm giving a return on investment of 8.3% per annum.  In aggregate – taking into account the compound annual growth rate (CAGR) in capital value of 4.53% and the 8.3% gross rental yield over the next 12 months – the property is delivering a gross return of nearly 13% per annum.

She bought the second property in 2011 for £265,000 and it is worth £435,000 today.  That total growth of 64% which is well above the Hometrack average for Oxford.  That’s a CAGR of 8.61%!  The rent during the coming 12 months will be £1,625 giving an annual return on investment of 7.4%.  Taken together this property is delivering a gross return of 16% per annum.

So, two assets one of which is yielding a 13% annual return and the second of which is delivering a 16% annual return.  At a time when the bank of England base rate is STILL at a quarter of 1%, building society accounts are yielding 1 to 2% per annum, and stock markets are running scared of Donald Trump’s global trade war-mongering, a solid, reliable, locked-in 13% to 16% return on investment is tough to beat.

One final thought – if you have assets in a market where the costs of re-entry are now so high (given the average price of Oxford property and the 3% Stamp Duty surcharge) why would you sell?  Unless you need the capital or know how you will invest it as securely and for a higher overall return, please, please, please recognise the value of the assets you own.

Saturday 14 April 2018

Oxford home owners earn more from their home than their salary!

According to data from Halifax, Oxford homeowners have earned more from the growth in the value of their home than from increases in their salary.

According to Halifax over the last 2 years the difference between the average increase in Oxford salary and the increase in Oxford house prices is £22,513 in favour of the property!

This places Oxford as no 10 in the charts of where your home will earn more than your job!  Alongside Fareham, Worthing, Guildford, Canterbury and North Hertfordshire, Oxford is one of just 6 places outside of greater London in the Top 10.

Next week I will publish an article that shows the value of Oxford property to those who are lucky enough to own and rent-out Oxford property.  The Halifax research shows that the benefits extend to both owner-occupiers and buy to let landlords.

Friday 13 April 2018

Why do Oxford house sales fall through?


Selling a house is easy right?  The process is well known, proven and routine.  In fact, 2,844 Oxford homes were sold over the last 12 months.  So what’s the problem?

Well according to recent research, 38.8% of property sales fell through – the highest proportion for over 10 years.  For Oxford, that suggests that 1,803 house sale transactions failed to complete, contributing to the 13% year on year reduction in the total number of Oxford homes sold.

What is the reason for so many house sales failing?

The most significant reason is Buyers changing their mind or Oxford Sellers ‘pulling the plug’ because the process is too slow.  Combined these account for 46% of house sale failures.  A good estate agent will properly determine buyers commitment, financial viability and requirements.  A good agent will probe and challenge to enable them to accurately match each buyer with the properties they have available.  Equally, a good estate agent will devote time and effort each week to sales  progression, ensuring that delays are minimised, but ensuring that all parties are kept fully informed of progress.

It may be that we are starting to see the weakness of the low-cost, up-front fee model favoured by online agents.  Once their fee is secured, such agents have no incentive to properly register buyers nor in devoting expensive time and effort to sales progression.  Ultimately, buyers get what they pay for, and with close to half of all sales fall-throughs caused by these reasons, it seems clear that agents MUST devote more time to ensuring they have proceedable buyers and that the sales progresses effectively.

The second biggest cause of Oxford house sales failing to complete is either the buyer or seller wishing to renegotiate the price agreed. With a transaction as significant as a house purchase, it is inevitable that the buyer will want to pay the least possible and the seller will want to achieve the best possible price.  The estate agent has a role to play here too.  Both parties need to be properly informed of the market price that closely comparable properties have achieved, and when a buyer makes an offer, a good estate agent will be able to advise their client on whether the offer represents fair value in the context of the local market.


Over one in ten house sales fall-through because the house survey identifies one or more adverse findings.  For example, many homes in and around central Oxford have a heightened flood risk.  As a rule of thumb, the factors identified when the seller moved-in, will again be identified by the buyers’ advisors.  The more that can be proactively divulged the better to ensure that they will not result in the buyer withdrawing.  Better to know early than after 8 weeks of sales progression.

So far, so familiar.  However, c12% of Oxford house sale fall-throughs are a direct result of the tougher lending criteria imposed by legislation in the post-credit crunch world in which we live.  This is another area where a good estate agent will advise a buyer, helping them to understand the size of deposit and the likely income required to secure and support their mortgage.  The best agents have relationships with a range of specialists who can advise buyer in light of the new rules and regulations.

The final top reason for Oxford house sales to fall-through is the property purchase chain collapsing.  When a buyer has a property to sell, and the seller has offered on a property to move to, each part of the chain is reliant on the other parts.  Fewer Oxford homes are being advertised for sale, and that creates shortages of properties for buyer and sellers to move to.  Good estate agents understand the importance of building a relationship with the other agents in the chain to work together to hold a chain together benefitting all their clients.

Oxford house sellers should think carefully when selecting their preferred agent, evaluating their ability to assist with all aspects of the sales process ensuring that their sale is not one of the c40% that fail to complete.  Like moves things in life, you get what you pay for!