SHOULD I BECOME A LANDLORD IN EASTBOURNE?

Buy-to-let involves buying a property and letting it to tenants. But it should be seen as a long-term investment to provide regular income, not a get-rich-quick scheme. And it is not stress-free. Dealing with tenants and lettings agencies can be a headache.

You should also be aware of the risks. There might be times when the property is empty and you have to meet the mortgage payments out of your savings.

As recent years have proved, house prices do not always rise. In March 2002, prices were growing by 26.2 pc a year, according to Nationwide. But in November 2007, they began to fall. Since then, the total drop has been 11.4 pc.

Almost a third of landlords will be in negative equity — owing more on their mortgage than their property is worth — if house prices fall by 5 pc in 2011 and a further 5 pc in 2012, according to credit agency Standard & Poor’s.

Against this, though, would-be landlords must weigh rising rents and yields. The yield is the amount of money a landlord receives in rent over one year, shown as a percentage of the property value. If you paid £100,000 for a property and the annual rent was £5,000, the yield would be 5 pc.

The average yield across England and Wales was 5.1 pc in April compared to 4.8 pc last year, according to estate agency LSL Property Services, though this varies throughout the country. A study into the best seaside locations in the country to invest in for property return has Eastbourne riding high in the top third best returns at 4.36% rental yield.  Source from Globix Blog

While rents hit an all-time high last month, 11.8 pc of tenants were in arrears.

Average rents are highest in London, at £988 a month, but the high cost of housing means yields are 5 pc. But in the North-West, where rents average £560 a month, yields are 6.5 pc.

Rents are expected to keep rising as many young people are unable to get a mortgage and there is a shortage of homes they can afford.

WHERE AND WHAT SHOULD I BUY?

A common mistake novice landlords make is to buy a house they would like to live in themselves, rather than choosing a location and property that will provide the best return. Using a company such as Ghomes who know the Eastbourne rental market thoroughly could save a fortune in time money and long term yields. Come to Ghomes who will be more than happy to brief you on the types of properties that are easy to let and how much rent you can expect.  For example, students will want to live near a university, families near good schools and professionals near a train station.

The National Landlords Association says that houses of multiple occupations (HMOs) can provide the best returns.

These are properties let to three or more unrelated people — often students, young professionals or people on housing benefit.

Landlords might need to get an HMO licence from the local council. Rules differ among councils, but you will normally be charged a fee of between £300 and £1,000 every five years and your property will be inspected to ensure it meets safety standards.

Planned changes to housing benefit could lead to increased demand for this type of property. From April 2012, changes to the ‘shared accommodation rate’ paid could see about 88,000 25 to 34-year-olds forced to move from one-bedroom flats to shared accommodation.

Letting your property to people on housing benefit can produce returns of around 10 pc or even 15 pc. This is because the sort of properties required is often cheap to buy, in less desirable parts of towns and cities. However, these tenants can be more risky and unreliable.

There are some property firms that specialises in letting homes to people on housing benefit. The tenants pay their rent via a guarantor (usually a parent) who is responsible for paying rent and any damage to the property. If, for example, a tenant steals a boiler worth £2,000, the guarantor would be liable for the bill. These companies also ensure there is a maximum shortfall of just 5 pc between the amount they receive in housing benefit and the rent payable.

HOW DO I GET A BUY-TO-LET MORTGAGE?

You’ll need a specialist buy-to-let mortgage because banks and building societies calculate whether you can afford the mortgage differently to standard home loans. For starters, you will need a good credit history and a deposit of at least 20 pc. Then you will also need to demonstrate you will receive enough rental income to cover 125 pc of the mortgage interest payments.

For example, if your mortgage were £150,000 and you took a Coventry BS mortgage at 3.29 pc, your monthly interest-only payments would be £411. To cover this monthly rent would need to be £513.

The difference is factored in to cover other costs, such as maintenance, letting agent’s fees and safety tests.

Some lenders use a flat mortgage rate when working out how much they will lend.

‘For example, The Mortgage Works, part of Nationwide, uses 4.99 pc and Northern Rock uses 5.99 pc, even if your initial rate is lower.’

WHAT ARE THE BEST DEALS?

Many buy-to-let lenders have rejoined the market after disappearing during the credit crunch, leading to lower interest rates.

A year ago, the average interest rate was 5.3 pc, today it is 4.97 pc — a saving of £42 a month on an interest-only mortgage of £150,000, according to comparison site Moneyfacts.

However, landlords can still expect to pay large arrangement fees, sometimes of between 2 and 3.5 pc of the mortgage, and interest rates are around 1 percentage point higher than ordinary residential mortgages.

If you have a 35 pc deposit, you can get a two-year fixed-rate with Coventry BS at 4.35 pc with a £999 fee. Monthly interest-only payments on a £150,000 mortgage would be £544.

If you have a 40 pc deposit and want a variable rate, Woolwich (the mortgage arm of Barclays) offers a lifetime tracker pegged at 3.49 points above Bank of England base rate, giving a current rate of 3.99 pc. The fee is £1,500 or 1.5 pc of the mortgage — whichever is greater. Monthly payments would be £499.

Those with a 20 pc deposit can get a variable offset mortgage with Yorkshire Bank at 4.99 pc with a £999 fee, giving monthly payments of £624.

SHOULD I USE A LETTING AGENT?

Letting agents can find tenants, draw up contracts, collect rent and maintain the property. Most charge from 10 pc of every month’s rent paid for finding tenants and getting them checked in and out (known as ‘letting-only’) to 15 pc or more for full management of the property, including arranging maintenance.

A good agent will have the necessary expertise to ensure the property is being let legally and smoothly.

Make sure they are a member of the National Approved Letting Scheme or of the Association of Residential Letting Agents, the Royal Institution of Chartered Surveyors, the Property Ombudsman or the UK Association of Letting Agents.

Be sure to ask for a clear breakdown of all their fees, including VAT, before signing anything. For example, most charge a fee for renewing a contract if a tenant wants to stay on for another year. Don’t be afraid to negotiate

WILL I HAVE TO PAY ANY TAX?

The taxman will want his share of your investment when you buy, during the rental period and when you sell.

Stamp duty is payable as normal on buy-to-let properties. The rates are 1 pc on properties bought for more than £125,000, 3 pc above £250,000 and 4 pc above £500,000. The highest rate is charged on the whole value of the property.

You must also pay income tax on the rent, in line with your basic or higher-rate tax bands (so 20, 40 or 50 pc).

You will, however, be able to offset mortgage interest payments, letting agency costs and maintenance expenses against the taxable rental income. For example, if you are a higher-rate taxpayer paying tax at 40 pc and you receive £1,000 a month rent, but you pay £500 for the mortgage and £100 for the letting agent, you would be charged tax on only £400 of rental income. So you would pay £160 of your monthly income to the taxman.

If you sell the house, you might also have to pay capital gains tax (CGT) on profits. This does not apply when you sell your main home. CGT is charged at 18 pc (28 pc for higher-rate taxpayers) of all gains over £10,100.

Investing in buy-to-let will mean filling in a self-assessment tax return every year. There are a lot of tax implications.

SAFETY AND RED TAPE

Landlords also face paperwork and additional expenses. If you get it wrong, you could be letting illegally.

Since October 2008 all rental properties must have an energy performance certificate (EPC). It costs around £50 and you can choose an energy assessor from www.epcregister.com.

Landlords must carry out an annual safety check by someone registered on the Gas Safe Register and give a copy of the certificate to the tenant every 12 months. All properties built after June 1992 must have a mains-operated, inter-connected smoke alarm fitted on every floor. Properties older than this should have battery-operated alarms.

Any furniture, including sofas and beds, must have a fire resistance label showing it meets 1988 regulations.

You must ensure your tenant’s deposit is ring-fenced in one of three schemes. The Deposit Protection Service is free to use, but you must hand over the cash. With My Deposits or The Tenancy Deposit Scheme you keep the cash, but pay a premium to the scheme.

Contact Vicky: 01323 521 027  email: vpeppe@ghomes.co.uk  for further information
 

Eastbourne was chosen as the film location for the remake of a classic murder thriller filmed in October and November 2009. 

A remake of the 1947 movie Brighton Rock began filming in Eastbourne mid October after producers felt that the resort’s traditional seafront provided the perfect setting for the film.

Brighton Rock stars Sam Riley as the film’s lead character of Pinkie, originally played by Lord Richard Attenborough, while Dame Helen Mirren and Andrea Riseborough also star.

Filming in Eastbourne began on Sunday 18 October 2009.

With the town featuring in the new Burger King TV commercial being shown now, and with the Pier being used for a major Halifax Banking advert earlier this year, Eastbourne has adorned billboards, televisions, and now, cinema screens in 2010.

And having played a major part in successful films over recent years such as Angus, Thongs & Perfect Snogging, Harry Potter and the Goblet of Fire, and Notes on a Scandal, Eastbourne offers a film fan’s paradise with a range of real life sets to explore.

Apartment one Penthouse:

This stunning bright airy south facing penthouse apartment has 3 double bedrooms 2 bathrooms, and it commands glorious costal and downs views from all the rooms. The apartment benefits from a huge roof terrace, with views towards the pier and downs; this is an ideal venue for entertaining and watching the sun go down. The kitchen is fully integrated with all white goods including a washer dryer, and dishwasher. The generous main bedroom has an en suite bathroom with a double shower cubicle and sizeable walk in dressing room. The apartment has an allocated space in the underground car park. Overall the apartment provides an outstanding light spacious home, and must be viewed to appreciate its many desirable features.

Offered unfurnished at £1250.00 PCM available at the end of January

Second Apartment: Fourth Floor 2 Bedrooms 1 Bathroom

A nice light apartment with terrific views from the balcony; accommodation comprises of 2 double bedrooms, beautiful bathroom, good size living/dining room and a modern fully equipped kitchen with all white goods including a dishwasher and washer- dryer . Additional benefits include double glazing, gas central heating, south aspect balcony facing pier and downs, storage, neutral fully fitted carpets, laminate flooring in the hall and allocated underground parking.

Offered unfurnished at £795.00 available for renting immediately 

Third Apartment: Fourth Floor 2 Bedrooms 2 Bathrooms.

This is a particularly large bright apartment with a fantastic wrap around balcony with views to the sea and Hastings, a perfect spot to see the sun rise.  The accommodation encompasses 2 double bedrooms, the main bedroom has an en-suite walk in shower and generous built in wardrobe. Measuring 22’2”x 11’3” this lovely sunny living/dining room has patio doors leading to the balcony. There is a modern fully equipped kitchen with all white goods including a dishwasher and washer- dryer. Additional benefits include double glazing, gas central heating, neutral fully fitted carpets, laminate flooring in the hall and allocated underground parking.

Offered unfurnished at £875.00 PCM Let Prior to Press!                                    

To see full details of all properties go to www.ghomes.co.uk or ring 01323521027 mobile 007769741016 to view ask for Vicky

An unexpected opportunity has arisen again, for a chance to rent a truly magnificent three bedroom split level penthouse apartment in one of Eastbourne’s premier locations in Meads, at the foot of the South Downs national park.  Living at All Saints will be an experience in which you will be able to take advantage of everything that Eastbourne and the surrounding area have to offer, the sea front, Meads village,  great restaurants, shopping, leisure facilities.  

This wonderful building was converted and refurbished in 2009 by Berkeley to an exceptionally high standard; they have effortlessly blended old and new. This penthouse apartment combines traditional features with contemporary styling to offer the very best in modern living. It has electric under floor heating with mains pressure hot water and individual wall mounted thermostats in every room. Access is through a front door via the entry phone system to the interior designed communal area with passenger lift or stairs rising to the penthouse.  Light streams into the beautifully proportioned entrance way from the fully restored timber sash windows which are set in stone tracery surrounds.  Retained timber beams and high ceilings feature throughout the apartment.  The substantial living space has breathtaking views across the parkland to the English Channel and South Downs national park.  In addition to this entertaining space you will find a further surprise:  A ‘Belvedere’ room with picture windows and seating area. Climb a small set of stairs from the living area into the triple aspect kitchen/ breakfast room, and marvel at the workmanship of the period stone windows and further stunning views. To truly appreciate this fabulous apartment a viewing is highly recommended.

The rental price is £1500.00 per calendar month which includes:

 Service and ground rent charges

Gymnasium

Allocated parking

Concierge service

Access to a meeting room

A large lock up garage is available by separate negotiation

To see full details go to All Saints Penthouse

To Arrange a visit ring: 01323 521027 or 07769 741016

All Saints development has effortlessly blended old and new. This penthouse apartment combines traditional features with contemporary styling to offer the very best in modern living. It has electric under floor heating with mains pressure hot water and individual wall mounted thermostats in every room.

Access is through a front door via the entry phone system to the interior designed communal area with passenger lift or stairs rising to the penthouse.  Light streams into the beautifully proportioned entrance way from the fully restored timber sash windows which are set in stone tracery surrounds.  Retained timber beams and high ceilings feature throughout the apartment.  The substantial living space has breathtaking views across the parkland to the English Channel and South Downs national park.  In addition to this entertaining space you will find a further surprise:  A ‘Belvedere’ room with picture windows and seating area. Climb a small set of stairs from the living area into the triple aspect kitchen/ breakfast room, and marvel at the workmanship of the period stone windows and further stunning views.

The rental price is £1750.00 per calendar month which includes:

 Service and ground rent charges

Gymnasium

Allocated parking

Access to a meeting room

There is also an opportunity to rent a garage within the development for £100.00 per month.

We highly recommend an early inspection of this desirable apartment Property details

It is as much a national obsession as football, pets and complaining about the weather.

For millions, the ideal of buying, owning and making a hefty profit from one’s own home has gone from a dream to an expectation, and fuelled an insatiable demand for TV property programmes.

But in the post-credit crunch world, reality is slipping behind the fantasy of ever-rising prices and a mortgage for all.

According to a report by the Chartered Institute of Housing, the era of the owner-occupier could be in decline, with millions facing a lifetime as tenants rather than freeholders.

It warns that while 100,000 new UK homes are expected to be built in 2010, the number of new households each year for at least the next 11 years is expected to be more than double that.

As a result, the study raises fears for what it calls the “in-betweens” – those typically earning more than £12,000 but less than £25,000, too poor to make it onto the property ladder but too well-off to qualify for social housing.

But could a national consciousness forged in the eras of Right To Buy and Sarah Beeny ever truly be reconciled to paying off a landlord’s mortgage rather than one’s own?

It may be that millions will have little choice. While owners trapped in negative equity as a result of the crash in prices learn hard lessons about the downs as well as the ups of speculation, an ever-increasing number of young would-be buyers are finding it harder than ever to make their first steps into the market.

According to statistics from the Council of Mortgage Lenders (CML), the average first-time buyer is now putting down a deposit of £35,000.

The estate agency Savills predicts that this high threshold will mean an increase in the percentage of Britons renting privately and a drop in the proportion lucky enough to be owner-occupiers.

By 2020, it forecasts that some 20% of households will be privately rented – up from 15% today and a low of 9% in 1988. By contrast, it predicts that owner-occupied households will make up 62% by the start of the next decade – down from the 2010 figure of 67% and an all-time high of just under 71% in 2003.

If an era really is coming to an end, it will be a harsh awakening for a country which has come to view owning one’s own bricks and mortar almost as an article of faith. 

By contrast, Britain’s continental neighbours have long approached property tenure very differently. In 2007 just 56% of French and 43% of German households were owner-occupied – thanks in no small part to legal systems which make renting more attractive and secure. 

Could the UK now follow their lead? One expert synonymous with the national property obsession – Location, Location, Location presenter Kirstie Allsopp – thinks a rise in the proportion of renters is likely, but is sceptical that their numbers will ever reach continental levels. 

She notes that in Germany, tenants have greater security and more freedom to decorate their homes. Moreover, she says, most Britons plan for modest pensions on the understanding that they will have paid off their mortgages before they stop working. 

And most of all, she believes, aspiring to be an owner-occupier runs deep in the British psyche. 

“Even if renting were more practical here, culturally and emotionally, we like to own our own homes,” she says. “I remember how thrilled I was when I first got my own roof over my own head and I think, in general, that people share that. 

“However, renting does allow you more in the way of instant gratification and a disposable income in the short term, and I think the culture of sacrifice for home ownership isn’t as fashionable as it was.” 

Of course, renting will always have its advantages, such as fewer hassles, greater flexibility and less exposure to the turbulent property and mortgage markets. 

But very different sentiments are expressed by those who desperately want to get on the housing ladder but cannot even reach the lowest rung. 

Supporters of the Right to Buy revolution of the 1980s may proclaim that it opened up the prospect of home ownership to millions, but, according to the National Housing Federation, some 4.5 million people are now stuck on waiting lists for social housing. 

With council and local authority homes now stigmatised and apparently reserved for the very worst-off, journalist Penny Anderson, author of the Renter Girl blog – in which she covers housing issues as well as her own experiences as a tenant in Glasgow – says the British will begrudge renting privately until they enjoy similar rights to their counterparts in Germany. 

“It’s very hard to find anything positive about renting in this country,” she says. 

“It doesn’t feel like living in a home – it’s insecure, you can’t decorate, you can’t have pets. You feel like you’re living in someone else’s piggy bank.” 

Indeed, for now it appears unlikely that most Britons will voluntarily choose to become long-term renters until the financial and legal status of tenant’s changes. 

A recent survey by the property search website Zoopla suggested that taking out an interest-only mortgage on a home was cheaper than renting in 74% of UK locations – although in areas like Huddersfield, Oldham and Brighton it was more cost-effective to take out a tenancy. 

Nonetheless, the country has not always idealised ownership. Writer Lynsey Hanley examined the changing status of social housing in her book Estates: An Intimate History, and points out that the popularity of post-war council homes superseded the property boom of the 1930s which had led to a brief rise in home ownership among better-off working class people. 

“This is a weird country,” she says. “In some ways we’re quite individualistic and in other ways quite socialistic. 

“It would take a massive change in people’s priorities for renting to become truly popular again – but then again, it’s a generational thing. My grandparents didn’t think about owning their own place, they just wanted somewhere nice to live.” 

Perhaps it is simply finding somewhere nice to live which is the real national obsession. Until Britons believe that renting is the best way to achieve that, however, it could be that millions are about to fall short of their aspirations. 

This article was on the BBC web site  

By Jon Kelly BBC News Magazine 

Wednesday, 18 August 2010

Green Letting is a new web based property letting and management company based in Eastbourne. We aim to be an outstanding company which knows the rental market and offers the best in customer service. The managing director has been connected with Eastbourne all her life, she has lived in Eastbourne for a total of twenty years so she has an in depth knowledge of the rental market in Eastbourne and the surrounding area. We have been investing and letting out rental properties for over twenty years, our tenants stay in our properties for an average of five years, which we consider reflects the good relationships we foster with our tenants and the successful management strategy. Green Letting has developed from our personnel experiences and reactions from our tenant’s and other stakeholders.

From the feedback received, we have ascertained that tenants are searching for property almost exclusively on the web, especially in the last few years; this can be corroborated by www.rightmove.co.ukthe largest on line property portal in the U.K. Well over half of the UK’s population has access to the Internet be it at home, work or elsewhere. Broadband connections are booming and revolutionising how people search on-line for their rental property.  By being a virtual property rental company we can offer our landlords huge savings, as much as 50% on full management of a rental property. These savings will not compromise the service in any way.  We can guarantee customer service the personnel touch will be enhanced, by face to face meetings, no interruptions from high street foot fall or constant phone calls.

Green Letting is not just a Letting agent; we are committed to our client’s landlords and tenants. Our objective is to give you all the tools, help and information you need to keep your property permanently let out, or to find the perfect property, whilst saving you money. We are at the forefront of scanning the rental market for the latest trends, and we have come up with some exciting new products. Such as DIY landlord and a property manual exclusively written for your property. To find out about all our services register on our web site www.ghomes.co.uk    

As an introductory welcome we are offering landlords with properties in Eastbourne and the surrounding area FREE advertising on our web site, this applies to the first five landlords to register with us on www.ghomes.co.uk  please Quote BM1 after your name on the registration form and we will contact you.

We do reserve the right not to advertise your property if we feel it is not suitable for the type of tenant that is using Green Lettings services.

Contact Details: T: 01323 521027 M: 07769741016 or email: info@ghomes.co.uk  web site: www.ghomes.co.uk