Latest / The Property Unleashed Podcast / Record-High Room Rents

Transcript

Record-High Room Rents · The Property Unleashed Podcast

0:10
SPEAKER_02: Hello and welcome to today's session.
0:13
SPEAKER_02: This is our monthly update from normally uh Alison and Anthony from Homemaker Properties, but today we're just joined by Anthony uh and he's got some interesting facts and stats that we're gonna be talking about in today's session.
0:26
SPEAKER_02: So, first of all, great to have you on, Anthony.
0:28
SPEAKER_02: How are you?
0:29
SPEAKER_01: Oh, fantastic, toasty, toasty hot.
0:31
SPEAKER_01: Um, we haven't got air conditioning in our offices, unfortunately.
0:34
SPEAKER_01: We haven't splashed the cash to be used probably a week a year or maybe two, as it's gonna be maybe two weeks a year because we had that little heat wave earlier on in the year.
0:44
SPEAKER_01: But yeah, we've just renewed our lease on the offices here, so it may not be something I consider.
0:48
SPEAKER_01: The team will love me for it.
0:49
SPEAKER_01: I'm sure they've got their little desk fans, but I think everybody's suffering at the moment.
0:54
SPEAKER_01: We just want 22, 23, bit of sun.
0:56
SPEAKER_01: We're all we're all happy there.
0:58
SPEAKER_01: But and then um, yeah, so it was Mr.
1:00
SPEAKER_01: Busy.
1:00
SPEAKER_01: But counting down to holiday, I'm sure.
1:02
SPEAKER_01: But um, no, it's very good.
1:03
SPEAKER_01: We love the sunshine.
1:04
SPEAKER_02: We do, we do, and of course, you are our local weatherman as well, aren't you?
1:07
SPEAKER_02: Because every time we do a call, we always have a jab out of weather.
1:11
SPEAKER_01: It's all about the wonder.
1:13
SPEAKER_01: We've got to be the wonder, gotta be in the sunshine.
1:15
SPEAKER_01: It's all good.
1:16
SPEAKER_02: So I know obviously, you know, you're in the cut and thrust of lettings, which is one of your businesses.
1:21
SPEAKER_02: I know you have a few businesses as well of sourcing and selling properties on as well, and working with investors, but you've been looking at some of the latest news reports, and of course, you're gonna cover some of those and also how you're finding the market, and I'll talk about how I'm finding the market as well.
1:35
SPEAKER_02: So I'll let you sort of lead lead the discussion.
1:38
SPEAKER_01: I want to, because Alistair's not with me today.
1:40
SPEAKER_01: I thought let's try something.
1:41
SPEAKER_01: I'm gonna be got looking, I got my news reader.
1:43
SPEAKER_01: We tapped in my top in my paper on the desk.
1:46
SPEAKER_01: It's one of those things, there's been a number of different um subjects and news that have been coming out recently.
1:52
SPEAKER_01: And I thought, okay, what are the things that are going to relate to property investors in particular?
1:56
SPEAKER_01: So the first subject I'm gonna be going on to.
1:58
SPEAKER_01: Now, I'm sure a lot of us that are HTML landlords were using Spare Room, the website of Spare Room.
2:03
SPEAKER_01: So the actual a spokesperson from Spare Room has come out, room rent, reach record high, says spare room.
2:11
SPEAKER_01: I'm like, right, okay.
2:13
SPEAKER_01: Okay, I'll obviously I'll I've I'm gonna read you out obviously some information that's been coming from that particular article, and then we can discuss things further a little bit more on how I'm finding it here in Coventry, the fantastic Skyway City, and I've got uh there's enough bragging rights, as you'll see, and then we can discuss between the two of us.
2:30
SPEAKER_01: So, new data from sparing shows that room rents have reached record highs across much of the UK, while supply of rooms has reduced, and we'll come on to that a little bit later on.
2:40
SPEAKER_01: 3.2% is the reduction in the number of rooms that are available compared with the same time last year, and that's the first time that has reduced in three years.
2:49
SPEAKER_01: It's been steadily increasing or maintaining, however, it is now reduced.
2:53
SPEAKER_01: So economies of scale, less products, more demand, prices go up, which is what's happening.
2:59
SPEAKER_01: So the average UK rein rent now is around 761 pounds per month across the country.
3:05
SPEAKER_01: Now, what we'll do after I've read these little bits here is to give you a bit of an idea of how we're doing, and obviously, you can do the same with your area.
3:12
SPEAKER_00: Yep, yeah.
3:13
SPEAKER_01: 7% higher than three years ago.
3:15
SPEAKER_01: 7%.
3:16
SPEAKER_01: Now, if I look five years ago, it's an awful lot higher, bear in mind what we were in COVID.
3:21
SPEAKER_01: And the record highs in six of the nine regions and notable increases, including Norwich, Exeter, Liverpool, and drum roll, Sky Brew City Company.
3:37
SPEAKER_01: So South West had the largest annual rent increase.
3:41
SPEAKER_01: Greater London was the only region to record a decline.
3:46
SPEAKER_01: So London asset driven, yes.
3:49
SPEAKER_01: Houses fluctuation.
3:50
SPEAKER_01: If they're gonna go, they're gonna look like a steam train in there.
3:53
SPEAKER_01: But rents and cash flow and return on investment, that area that may not be your area as far as London's concerned.
4:00
SPEAKER_01: Norwich recorded the steepest annual increase, whilst Coventry and Middle Keynes achieved notable growth in rents.
4:06
SPEAKER_01: London was the most expensive city for flat shares, not surprisingly, really, it's the capital city.
4:12
SPEAKER_01: And Lincoln, the cheapest.
4:16
SPEAKER_01: Despite the introduction of the renters' rights, like spare room warns that affordability remains a major challenge.
4:21
SPEAKER_01: The platform says that unless rental supply increases, tenants are likely to continue facing higher rents, reduced choice, and greater competition for available properties.
4:33
SPEAKER_01: So I'm like, well, okay, if I'm a landlord, I'm an investor, that's surely loads of positives there.
4:43
SPEAKER_01: To give you an idea of typical rents are achieving in Coventry.
4:47
SPEAKER_01: It's difficult because as much as the city that we are, you know, the 10th or 11th biggest city in the country, there are different areas, and it's the same in every city.
4:55
SPEAKER_01: You've got different areas where different caps almost on what rents are achievable.
5:00
SPEAKER_01: Typically, if someone said to me, Anthony, I've got a really good double room with an en suite in a househare, five-bedroom in a good area, I'd be saying around the 600 bar.
5:10
SPEAKER_01: That's the sort of area, but you could get 700 if it's a stonker, it's got a nice little seating area, it's got a lovely sale, great location, all these different things, and it's enormous.
5:20
SPEAKER_01: That's what's achievable.
5:21
SPEAKER_01: But you could well be getting 525 in an area that's not so desirable.
5:27
SPEAKER_01: And it's basically you've got six and a half meters squared, plus you've got your room, and it's as small a smaller ensuite as you could possibly get.
5:35
SPEAKER_01: Double rooms, 400 worst case, 500 best case if you've got a shared bathroom, depending upon location and different areas and whatnot.
5:46
SPEAKER_01: What I will say to you, and as far as rent is demand, I'm not sure whether other cities have been the same, but as far as our notable um as far as demand is concerned on rooms, the first five months of this year have been lower than they've been for many, many years as far as demand is concerned.
6:07
SPEAKER_01: People weren't moving.
6:08
SPEAKER_01: That's not just rooms, that was in general an awful lot lower.
6:12
SPEAKER_01: So, for example, in the city of Cobalty, the size of portfolio properties that we've had as an agency has maintained.
6:18
SPEAKER_01: It's been pretty steady.
6:19
SPEAKER_01: You lose the number amount you were gaining.
6:21
SPEAKER_01: It was not been really our focus with other areas we're looking to focus on going, but the we're maintaining the same amount of properties.
6:26
SPEAKER_01: But the number of lets in 2020, let me think we're in 26 now, 25, 2024, the number of lets 2025 was about 20, 25% lower.
6:38
SPEAKER_01: That's the number of people moving.
6:40
SPEAKER_01: That wasn't the number of properties.
6:42
SPEAKER_01: We had the same amount of properties, but the number of people moving reduced by 25%.
6:45
SPEAKER_01: The start of this year, it was down another 25%, which is incredible in comparison to what it was previous year.
6:53
SPEAKER_01: Based upon if we had the same amount of lets for the first five months of this year for the rest of this year, I'd be like, wow, over the last two years, we've lost 25% of the number of people and 25% of the number of people moving.
7:02
SPEAKER_01: Now, voids were lower, rents were higher than they've ever been.
7:05
SPEAKER_01: So lots of positives on that.
7:07
SPEAKER_01: However, my word, it's as though someone started the engine and put the nitro boost on.
7:13
SPEAKER_01: June has been absolutely fantastic, and July has started tremendously as well.
7:18
SPEAKER_01: So, what could that be?
7:20
SPEAKER_01: Has the Rentist Rights Act meant people have got flexibility now, they know they can get a new tenancy, and they're thinking oh it's only on new tenancy or sp- I don't know.
7:29
SPEAKER_01: It's just gone berserk.
7:30
SPEAKER_01: I'm delighted, as you can appreciate as a letting agent, because the major revenue of our company is tenants that are moving in setup fees.
7:38
SPEAKER_01: So that's on me as a positive, and and colorabies of scale, it's it's it's a it's a simple if there's less demand.
7:45
SPEAKER_01: But as I'll come on to a little bit later on with one of the subjects I'm going to come on to with regards to house prices and where that's going and what's happening there.
7:53
SPEAKER_01: We are finding landlords with a number of different reasons are leaving the marketplace, meaning there's less properties available, there's less rooms available.
8:02
SPEAKER_01: So if you're staying and you're there for the long term, it's a very much a positive.
8:06
SPEAKER_01: So not sure how you're what your thoughts are on that and how you're thinking and how things have been going for you and what your rates are.
8:11
SPEAKER_02: Well, the our average is is down a lot less than 700, you know, uh, which it was around there.
8:17
SPEAKER_02: Uh we we quids in massively, but they obviously they have gone up, they have creeped up massive, but not massively.
8:22
SPEAKER_02: I'd I'd say on average, you know, for a double en suite up of where we are, it's about 575 a month.
8:29
SPEAKER_02: Yeah, yeah, yeah.
8:29
SPEAKER_02: I mean, when I first started doing this, an en suite, a double en suite was about well, it's probably about 450.
8:37
SPEAKER_02: Wow.
8:37
SPEAKER_02: So it's you know, that now that's been over eight years, which you'd expect obviously the rents to go up and stuff.
8:42
SPEAKER_02: So uh I don't know what the percentage is on that.
8:44
SPEAKER_02: I haven't worked that one out.
8:45
SPEAKER_02: I'll have to have a sit down and work it out.
8:46
SPEAKER_01: Would you say since COVID, though?
8:48
SPEAKER_01: Because after COVID, that's the significance.
8:51
SPEAKER_01: Because I know we've done presentations in the past, and in particular in commentary and the fact of what the rents were five years ago, and the rent increase in certain sectors, certain postcodes has been ginormous over the last five years.
9:03
SPEAKER_01: Let alone the three years they're saying as far as this article I've got here, seven percent increase over three years.
9:08
SPEAKER_01: But if you did five years, it's an awful lot bigger growth.
9:11
SPEAKER_02: Well, that's it.
9:12
SPEAKER_02: I mean, on the HMO side specifically, uh, because I've got more HMOs than anything else, COVID and everything.
9:17
SPEAKER_02: Obviously, the the market didn't really change, and it was very much the case of you know, just we were just happy that people were there and people were paying for the government because keep paying the rent.
9:26
SPEAKER_01: You can do it.
9:28
SPEAKER_02: We can't kick you out.
9:30
SPEAKER_02: That's it, sit and see it through and everything.
9:32
SPEAKER_02: But then after that, in my area, I was actually quite concerned because I I put my prices up probably before like a lot of other people did in the marketplace, only slightly, but just because I just wanted to test it to see do I get a better class of tenant?
9:46
SPEAKER_02: Because we obviously we were struggling a bit as well.
9:49
SPEAKER_02: You get a lot of people coming through, a lot of chairing and stuff.
9:51
SPEAKER_02: But we actually got now that they they moan a bit more, but they moan about things that potentially is all right to moan about.
9:57
SPEAKER_02: Do you know what I mean?
9:58
SPEAKER_02: Oh pedantic things, but a lot of people say I don't mind paying that bit extra because it normally means that I live with a better class of person.
10:05
SPEAKER_02: And predominantly I I have people that are working hospitals, people that work in solicitor firms and stuff, you know, that they're normally the juniors, but they're quite happy to pay a little bit more.
10:15
SPEAKER_02: Now, not saying every room's like that, on every property is like that, but where we can do that's what we've been doing.
10:19
SPEAKER_02: So we've gradually obviously always done the rent increase every time, you know, periodically every time you know it comes through, we put it up slightly.
10:28
SPEAKER_02: I do tend to always look after somebody in the house if they're looking after me with the bins and stuff, you know what I mean?
10:33
SPEAKER_02: I I'll say to them, I won't put it up for you if you keep doing that because it saves me a job.
10:37
SPEAKER_02: But yeah, prices definitely have gone up.
10:40
SPEAKER_02: But I'm finding, like you said, the marketplace went dead.
10:43
SPEAKER_02: We had a couple of empty rooms when the renters' rights bill came in.
10:48
SPEAKER_02: And my God, could I fill we can fill those for love no money?
10:51
SPEAKER_02: And I haven't had trouble really filling rooms.
10:54
SPEAKER_02: I mean, sometimes it can take you between two to six weeks to fill.
10:57
SPEAKER_02: Yeah, but we uh it it was I mean, it was ages, but like you say, they've been snapped up now.
11:02
SPEAKER_02: We now we have got more people now that are handing in their notice and moving on, which is which which is normal.
11:08
SPEAKER_02: But also the marketplace is quite there is quite a lot of empty properties out there, you know, and not fully empty, but a lot of rooms available.
11:16
SPEAKER_02: So to say, I wouldn't say in our marketplace right here, right now, that we are, you know, that there's there's too much supply for demand.
11:23
SPEAKER_02: I would say that yeah, the other way around for us.
11:27
SPEAKER_01: It's it's and you know, the balance we obviously was speaking with landlords saying, look, you know, this is the rent.
11:32
SPEAKER_01: You've then got this whole juggling in the fact of right, you've got tenants in there that are paying X.
11:38
SPEAKER_01: You need to let that room avoid cost more than achieving an optimum rent.
11:43
SPEAKER_01: Do we reduce that rent down to such and such?
11:45
SPEAKER_01: But if the tenants in the house see that rent's going for that price, you're like and then uh it's yes, it it's the way it goes.
11:55
SPEAKER_01: But we, you know, it's it's it's good in a way.
11:59
SPEAKER_01: Um, but uh for me, I'd be interested to see how the remainder of this year goes, and if we can, as far as the number of people moving, I you would assume it's going to increase in comparison to last year, based upon the fact that seven or eight months of the year you've got now the Renters Rights Act, which gives people the ability to move after two months.
12:19
SPEAKER_01: So you'd assume.
12:20
SPEAKER_01: So I would hope it will at least do the same as last year, as far as the number of people moving.
12:24
SPEAKER_00: Yeah, yeah.
12:25
SPEAKER_00: Yeah.
12:25
SPEAKER_01: We shall see.
12:26
SPEAKER_00: We will, but because I like that.
12:28
SPEAKER_00: Point number two.
12:29
SPEAKER_00: We shall see.
12:31
SPEAKER_00: Right.
12:31
SPEAKER_00: Point number two.
12:32
SPEAKER_01: Oh it's it's that's all I can do is I can sigh on this one.
12:38
SPEAKER_01: Government data shows damp in 10% of private rented homes.
12:45
SPEAKER_01: Of course it does.
12:47
SPEAKER_01: This happens.
12:48
SPEAKER_01: So new government data shows that 10% of private rented homes in England were affected by damp in 2024, while 15% were classes non-decent, and 8% contained a category one hazard.
13:04
SPEAKER_01: Now, damp is the most common in parts of the Midlands, the north, and London.
13:07
SPEAKER_01: Well, that's the whole blooming country.
13:09
SPEAKER_01: Let's be realistic now.
13:11
SPEAKER_01: Come on.
13:12
SPEAKER_01: And it's increasing the likelihood of targeted enforcement by local councils.
13:15
SPEAKER_01: So this is where the councils are looking to get more money out of their investors and their landlords, as by the sound of it.
13:21
SPEAKER_01: So with government planning to introduce the decent home standard, as we know, with the Renters' Rights Act, to the private rental sector and an updated the gosh, the tongue twist that it is the housing, health and safety rating system, as we all the HHSRS, powers already enforced.
13:38
SPEAKER_01: So landlords are being urged to address stamp and disrepair issues promptly.
13:42
SPEAKER_01: A point to also highlight is that the HHSRS penalty charges have been implemented recently.
13:48
SPEAKER_01: So there's new ones that have just come into play.
13:50
SPEAKER_01: They've increased stuff so they can basically have more power to find.
13:53
SPEAKER_01: But the report highlights the growing importance of keeping maintenance records and tackling recurring problems before they become compliance issues and order to have everything that you do.
14:02
SPEAKER_01: So, in order, you know, the older houses that you have, review open doubt complaints quickly, as you should do with anything.
14:10
SPEAKER_01: Check the root cause, so whether that's condensation, tenants are drying their clothes on the radiator and not opening the blooming windows.
14:19
SPEAKER_01: It's minus two outside and it's 30 degrees inside.
14:22
SPEAKER_01: Where's the doubt gonna go?
14:23
SPEAKER_01: It's gonna attack the walls, of course it is.
14:25
SPEAKER_01: And carrying up periodic visits, keep detailed notes and communication with tenants in case of any council actions against you.
14:32
SPEAKER_01: Budget for ventilation, roof, guttering, and insulation works.
14:36
SPEAKER_01: The issue is becoming more measurable, allowing councils to act.
14:41
SPEAKER_01: Oh and I tell you the frustrating thing is it's when you have tenants, oh, we've got damp, damp, oh, it's damped, it's awful in my room.
14:52
SPEAKER_01: We then send out a company that does free assessments and they come back with an independent report that says it's condensation.
15:00
SPEAKER_01: I've gone into the room, they're drying their clothes, they're not opening the windows, that's your problem.
15:06
SPEAKER_01: And unfortunately, not all windows have trickle vents, which will give some form of ventilation of some sort.
15:12
SPEAKER_01: I believe all new windows now have ventilation or the trickle vents in them.
15:16
SPEAKER_01: It's very frustrating, but landlords, particularly HMO's landlords, are obliged.
15:21
SPEAKER_01: Now I know there is awful, awful stories where there is one extreme to another of the fact of the law that came in and the fact of that look that horrible situation of that child that unfortunately died because of the fact of the condition of the damp.
15:35
SPEAKER_01: If it's an issue that should be resolved, and hence the yes, on one side, yes, all day long.
15:42
SPEAKER_01: Please, please, please act and act quickly, particularly if this is something that you don't want it to escalate and cause any issues to any tenants, of course not.
15:49
SPEAKER_01: But when it's self- you're like, oh, okay.
15:57
SPEAKER_01: So the what I will say to you again, you're finding a balance here, of course.
16:01
SPEAKER_01: But in the end, if it's rising down, don't sit there thinking, oh my god, what am I gonna do?
16:06
SPEAKER_01: What do I have to do?
16:07
SPEAKER_01: It's it's it's fixable, but don't worry.
16:10
SPEAKER_01: It's a case of yes, in the places that have been impacted upon.
16:13
SPEAKER_01: And I I'll never forget there was an investor that we bought a property for, I sourced a property for a number of years ago.
16:19
SPEAKER_01: And as part of the purchase, obviously they've had the housing, the gosh, uh home buy survey.
16:26
SPEAKER_01: And basically they will go around and they all then do the survey of the property and the damp and all these sorts of things.
16:31
SPEAKER_01: And they reported back that was rising damp.
16:33
SPEAKER_01: And what I will say to you is when you're buying the property, please always have a survey, home buy survey on the property.
16:38
SPEAKER_01: Yes, it's a couple of hundred pounds, but it could save you a fortune, it could find something that was a can of worms that wasn't visible, hence the rising damp that was in this particular property.
16:47
SPEAKER_01: It was only in the lounge, but what's then happened is they've then come back with a report that says, ooh, it's gonna cost you.
16:55
SPEAKER_01: However, if it's the company doing it that did the survey that's gonna resolve it, then of course it's gonna cost a fortune for them doing it.
17:02
SPEAKER_01: However, if you're doing a refurbishment on the property anyway, get someone to go in there, go back to brick, get the company that's given the quote to go in there and do the actual injection into the wall, for example, the damp course and the damp proofing.
17:15
SPEAKER_01: But then as far as the pre and the post works, you can do the work.
17:19
SPEAKER_01: So as far as the right plaster board, the gut of the skirting boards and whatnot, yes, it will cost you money.
17:24
SPEAKER_01: But if you're buying the property with damp, say I'm sorry, here's the independent report.
17:28
SPEAKER_01: Can you please reduce the price I'm purchasing this property for?
17:31
SPEAKER_01: Because I'm having to do work that I didn't expect that I have to do.
17:33
SPEAKER_01: But the game that you then play is like, here's what they've said it's going to cost.
17:37
SPEAKER_01: You don't use them, you use your own contract, but it'll cost an awful lot less.
17:40
SPEAKER_01: You will still have them inject the wall, you'll still have them that give the guarantee, as far as that rising damp is concerned, because it comes back, they've got a guarantee for 5, 10, 15, 20 years, however long it'll be.
17:49
SPEAKER_01: And then maybe we'll give you some specifications of the certain type of plaster board and also skimming that you have to use to ensure it maintains that guarantee, but it's all very doable.
18:01
SPEAKER_01: But ventilation is so important.
18:03
SPEAKER_01: Now, one thing that we do do with regards to new tenants is when they move in, there's a My Deposits we use for our deposits.
18:09
SPEAKER_01: And it can be a reason for um tenants being, you know, having money taken off them if it's a case of it's happened.
18:18
SPEAKER_01: We've told them what they need to do, but we give them a leaflet for my deposits, which is about damp, giving guidance.
18:25
SPEAKER_01: And because everything we do is done to electronic signature, there's an audit trail of everything that you do.
18:31
SPEAKER_01: Periodic visits are then carried out.
18:32
SPEAKER_01: If it's then found that they're carrying on doing what they shouldn't be doing as far as drying clothes and not ventilating the room, and you can see it's having an impact.
18:40
SPEAKER_01: You then write to them and say, look, this is what we've found.
18:42
SPEAKER_01: You were given these notes, but you send them the leaflet again.
18:44
SPEAKER_01: The key thing is, and as has already been detailed here, any communications you have with your tenants, if it's something that's easily fixable and it's their self-impacting, tell them what they need to do.
18:54
SPEAKER_01: Obviously, if it's something else, send somebody out to investigate and act quickly.
19:00
SPEAKER_01: It's really, really important because the health and safety of your tenants is paramount.
19:03
SPEAKER_01: You want happy tenants, safe tenants, of course you do.
19:06
SPEAKER_01: But also it's your asset.
19:08
SPEAKER_01: You want to look after it.
19:10
SPEAKER_01: So, yes, it's it's uh I saw the article, or in London, the Midlands, and the north.
19:17
SPEAKER_01: But what about the east and the west?
19:18
SPEAKER_01: Maybe they may have some as well.
19:19
SPEAKER_01: I'm like, well, I don't want to get bliming damp.
19:22
SPEAKER_01: It it it happens.
19:23
SPEAKER_01: Damp country.
19:24
SPEAKER_01: Exactly.
19:25
SPEAKER_01: We get the bloody rain come in.
19:26
SPEAKER_01: There you go, it's got the weatherman back.
19:28
SPEAKER_01: So, yes, I'm not sure what your observations were on that.
19:31
SPEAKER_01: Is that the subject?
19:32
SPEAKER_02: No, I I'm I'm the same.
19:34
SPEAKER_02: I think sometimes the tenants do the right thing, they report and stuff.
19:38
SPEAKER_02: Now we had it where there was a wardrobe against the wall and rising damp.
19:43
SPEAKER_02: So it's somebody had like seen and noticed it because there was a radiator on the wall.
19:47
SPEAKER_02: Anyway, we got it treated.
19:48
SPEAKER_02: The landlord paid for it and everything, got it all treated.
19:51
SPEAKER_02: We just said we're just gonna have to remove or move the wardrobe off of that wall.
19:55
SPEAKER_02: Obviously, while it's treated, let it dry out sufficiently, but it will be okay.
19:59
SPEAKER_02: And it was, and I've had one where the tenants complained to the council about damp.
20:05
SPEAKER_02: Not us, not us, didn't come to us and say we've got a damp issue.
20:09
SPEAKER_02: The council, I had to meet the council official now.
20:11
SPEAKER_02: Luckily, I knew him.
20:12
SPEAKER_02: I'd met him a few times, a couple of times at my properties, but I've always gotten well with him because we're proactive in what we do, and I you know, and and he always says, I like working with you guys because I always see results.
20:23
SPEAKER_02: He says you should see some of the things that I said.
20:25
SPEAKER_02: I know, I've put it anyway.
20:27
SPEAKER_02: The usual thing, HMO room ensuite.
20:29
SPEAKER_02: What's he done?
20:30
SPEAKER_02: He's turned off the isolator switch, isn't he?
20:32
SPEAKER_02: And extractor fans, not extracting.
20:34
SPEAKER_02: He's then been in there, you know, three or four months, damp's obviously built up, the windows are closed, there's washing in it.
20:40
SPEAKER_02: So, anyway, we're in there.
20:41
SPEAKER_02: And I just said to him, Why haven't you notified us?
20:44
SPEAKER_02: And then I said to him, How long's that extractor fan been off for?
20:46
SPEAKER_02: Extractor fans never worked.
20:48
SPEAKER_02: I said, It will have worked, it'll have been switched on because I make sure in our when we onboard everybody, it's one of our tick sheets.
20:55
SPEAKER_02: Uh, and you've got a copy of that.
20:56
SPEAKER_02: You've also got a copy of the house rules and everything, which talks about damp and opening your windows and everything.
21:01
SPEAKER_02: So, anyway, I just went and flicked the switch, and of course it came on.
21:04
SPEAKER_02: I said, Well, it works fine, doesn't it?
21:05
SPEAKER_02: So I said to him at the end of the day, I said that switch is there as an isolator, not just to turn it off because you don't like the noise of it.
21:11
SPEAKER_02: What we'll have to do now is blank that over.
21:13
SPEAKER_02: So we'll have a fuse and everything in there, so it's still alive, but you won't be able to switch it on and off.
21:18
SPEAKER_01: I think that I know I I know there's some things that have happened in the past where there's a specific key you can get because you know you're saying your blanket off, you can cover it over.
21:26
SPEAKER_01: Well, there's a specific key that you can use that mostly the tent's probably gone, Amazon and really buy one, but but it's far less easy for them to then turn it on and off.
21:36
SPEAKER_01: But yes, it's very frustrating because it's one of the obligations you have as a HMO landlord, and it has to be a certain spec, it has to be a certain strength, all these different things that you have to jump through to facilitate tenants having an amazing room, and then they turn the bloody thing off.
21:50
SPEAKER_02: I know, I know it's because it it runs a bit after they've left the room, but that's the whole point.
21:54
SPEAKER_02: It's digging you with damp.
21:55
SPEAKER_02: If you had a shower, it doesn't just disappear.
21:58
SPEAKER_02: But the the thing that got me with That and that's just something for anybody watching this or listening to this and everything.
22:03
SPEAKER_02: Is that they didn't even let us know.
22:06
SPEAKER_02: They just that that riled.
22:11
SPEAKER_02: Now I don't normally get involved that much with tenants of a team that do that, but that did ra me a bit because I said to him, Why haven't you just spoken to us about it?
22:19
SPEAKER_02: Because we can have a chat with you, we can help you, and we can support you.
22:21
SPEAKER_02: And even the council guy said this is a bit of a waste of my time if you haven't even notified the company that's looking after the property.
22:28
SPEAKER_02: Um so even he had a bit of uh dressing down, and I said to him, We'll get it sorted, come back and see us.
22:33
SPEAKER_02: But this this has to stay on.
22:35
SPEAKER_01: Yeah, it's it's a bit of attention seeking, perhaps, or uh knowing that he was in the wrong in the fact that he turned the extractor off.
22:42
SPEAKER_01: So that's what happened.
22:44
SPEAKER_02: If you knew he was in the wrong, you wouldn't complain, would you?
22:47
SPEAKER_01: Although there comes the end of the tennis, and all of a sudden it is he still there.
22:51
SPEAKER_02: No, yay, yeah.
22:54
SPEAKER_02: No, no, he wasn't.
22:55
SPEAKER_02: No, he wasn't, but yeah, yeah.
22:57
SPEAKER_02: So it's just those things, like you say, it's all about having those checks.
23:01
SPEAKER_02: You know, when you go in there, it's checking all the rooms, it's checking behind things.
23:04
SPEAKER_02: You know, you don't have to rip everything out, of course, but we always do.
23:08
SPEAKER_02: I always say, just run your hand or something if you can behind the wardrobe because sometimes they're off a bit because of the skirting boards.
23:14
SPEAKER_02: And if you can feel you know any moisture or you get a bit of black or something on you, we know that we need to pull that out a bit or something like that.
23:20
SPEAKER_02: So it's just having those checks, but particularly with ensuites, because on as we all know, ensuites are great when they're brand new, but ensuites, after a few years, once water's been splashing around and stuff, you start to get damp, you start to get all sorts of leaks, you've got to reseal them.
23:35
SPEAKER_02: So, one of our periodic checks is we actually get the head of the uh shower and we go around all of the frame of the showers because I'll be honest with you, it's one of the tricks I had when I first started doing this because we had a brand new refurbished property, and it was like never gonna have a problem with this.
23:52
SPEAKER_02: And all of a sudden, it we were getting all these wet stains and pools of water on the floor after everybody had had a shower, and all it was is whoever plumber or whoever put the shower panels up didn't seal, they just screwed them straight to the wall, so there was gaps, so the water was squirting out and it started to rot one of the floors.
24:08
SPEAKER_02: So now one of the things that we do is we spray the shower head down the seals and see if anything comes out the other side.
24:13
SPEAKER_02: If it does, we just get it resealed.
24:15
SPEAKER_01: Absolutely.
24:16
SPEAKER_01: And I know you were talking about with regards to wardrobes, wardrobes on external walls.
24:21
SPEAKER_01: So, for example, if you've got an enterprise house and that wall is an external wall, that wall will get colder.
24:26
SPEAKER_01: It's not got rising damp, it's not got an issue.
24:28
SPEAKER_01: And in the fact that it's not got quite as much air to breathe around the back of that wardrobe.
24:33
SPEAKER_01: It may not be in the fact that it's damp or anything like that, or rising damp or anything like that, or even condensation.
24:39
SPEAKER_01: It's just air hasn't been able to circulate and it's a colder wall.
24:42
SPEAKER_01: So not a not a bad thing, but a good thing.
24:44
SPEAKER_01: But yes, periodic visits, we have a company that go out and do them, as well as our inventories, as well as our X inspection, same company.
24:51
SPEAKER_01: So they know those houses inside out, so they're gonna notice differences.
24:54
SPEAKER_01: But in addition to that, when an exit comes through and they've got there's a load of deductions, so well, we did the inventory very detailed, date stamped, independent.
25:04
SPEAKER_01: That's the key word.
25:05
SPEAKER_01: Independent organizations have done that.
25:07
SPEAKER_01: Everything's date stamped.
25:08
SPEAKER_01: Here's the report.
25:10
SPEAKER_01: This is now what it looks like.
25:11
SPEAKER_01: It's changed, it's different, and we haven't done that.
25:15
SPEAKER_01: It's you.
25:16
SPEAKER_01: This is why we're deducting the deposit from you.
25:18
SPEAKER_01: And I have to say, deposit disputes.
25:21
SPEAKER_01: I can't remember the last time I had one.
25:22
SPEAKER_01: It's wonderful.
25:24
SPEAKER_01: Yes, we're paying for an independent company, but here's the thing: doing an inventory, and you have because we used to have a member over the years, we've had a member of staff that would go out and do periodics and inventories for us.
25:36
SPEAKER_01: But typically the drive there, the photos, writing up the inventory, the amount of time it takes for that person to do that in comparison to paying an external company who you buy that you pay for them when you need them, it was comparable.
25:51
SPEAKER_01: And I thought I'd rather have a pay as you go rather than a member of staff.
25:56
SPEAKER_01: It's always nice to have another member of staff there in the office.
25:58
SPEAKER_01: Of course it is, but then holidays and sit, that's always good things.
26:01
SPEAKER_01: Yeah, it's a good thing to have.
26:03
SPEAKER_01: Right.
26:04
SPEAKER_01: Now that we're moving on to number three, final point of the day house prices edge up despite political chaos.
26:12
SPEAKER_01: Now we're not going to go into politics.
26:15
SPEAKER_01: I'm not going to start talking about who do you support and who don't you support.
26:19
SPEAKER_01: However, the latest Lloyd's house price index, it used to be Halifax, but Halifax have been kind of Bosch now, Lloyd's.
26:27
SPEAKER_01: The latest Lloyd's house price index shows that house prices rose by.
26:31
SPEAKER_01: Are you ready for this?
26:32
SPEAKER_01: This is this is this is big.
26:35
SPEAKER_01: 0.2% in June.
26:37
SPEAKER_01: Woo! The first monthly increase since February, taking the average property value to£299,330.
26:46
SPEAKER_01: Annual house price growth also edged up 0.6%, suggesting the market retains that's the annual increase, and suggests that it's a resilient marketplace, um, despite ongoing political and economic uncertainty.
27:03
SPEAKER_01: A key fact to be aware of is the Bank of England data shows mortgage borrowing has fallen for the second consecutive month.
27:10
SPEAKER_01: Key factor, that one.
27:11
SPEAKER_01: For Bitelect landlords, the modest increase offers further evidence that property values are holding firm, helping to protect long-term capital growth even as the market remains cautious.
27:22
SPEAKER_01: Lower mortgage rates and improving consumer confidence are supporting demand, while industry experts expect activity to pick up gradually if borrowing costs continue to ease.
27:33
SPEAKER_01: However, affordability pressures and political uncertainty are likely to keep house price growth steady rather than rapid growth over the coming months.
27:45
SPEAKER_01: So, what's my thoughts on that?
27:49
SPEAKER_01: I'll be honest with you.
27:50
SPEAKER_01: I mean, obviously, we've been selling properties now, uh, and really we've expanded our product range and with the change in marketplace over the last two years.
27:59
SPEAKER_01: And as far as the estate agency side of things and property values, I'll probably say to you, yes, obviously, we've been a bit more wise to it over the last two years, but over the last five years, it's been very stagnant as far as investment properties are concerned.
28:15
SPEAKER_01: The impacts of that are if you do your cash flow, you do your ROI calculations, they've got to meet a certain value, or they've got to meet a certain point.
28:24
SPEAKER_01: Because you've got the increased costs of mortgages, you've got the increased stamp duty, you've got the increase of this, increase of that, every of these different things you've got to consider.
28:33
SPEAKER_01: People are willing to pay less for investment properties because the cash flow has to meet a certain point for a lender.
28:42
SPEAKER_01: A lender does their stress tests.
28:44
SPEAKER_01: They say that the rent has to be this in comparison to what your cash flow is.
28:48
SPEAKER_01: With that in mind, you're only able to pay X amount for this property.
28:52
SPEAKER_01: So that's impact and it's pushed down on the ability to, yes, I know rents have increased.
28:57
SPEAKER_01: Of course they have.
28:57
SPEAKER_01: Yes, they've gone berserk since 2000 and 2020 since 2021.
29:02
SPEAKER_01: However, other things have increased steadily to counter the ability to increase the values of buy-to-let properties.
29:10
SPEAKER_01: This is what I'm emphasizing on.
29:12
SPEAKER_01: We've been achieving some very we sold a four-bedroom property in a very good location in College for£250,000 quite recently.
29:20
SPEAKER_01: Did very, very well.
29:21
SPEAKER_01: We've sold some other properties for more uh motivated sellers quite recently that were, you know, three-bedroom properties for the lower end of the market, but they were auction properties, so there was auction fees involved, so that kind of countered the difference between what they would have paid if it was on the open market.
29:37
SPEAKER_01: And we've sold a number of other open market properties that have achieved good sell property prices because it tends to be we've got more investment vendors rather than residential vendors at the moment, as far as the marketplace we've been targeting, if I'm honest with you.
29:53
SPEAKER_01: As far as residential properties, not really applicable, I suppose, with the conversations we're having here, but they're still strong for me.
30:00
SPEAKER_01: If you've got a good property in a good location, you'll still achieve a very good people be willing because of, for example, schools, supermarkets, in particular families and schools in certain areas, desirable areas, like from where we live in over in Kenilworth, you will still be able to demand a good price.
30:17
SPEAKER_01: They they haven't gone crazy or berserk since 20% since we bought, for example, we bought our property in 2021, just before the stamp duty holiday finished.
30:24
SPEAKER_01: Winner.
30:27
SPEAKER_01: The value of that property has gone up probably over the last what we're thinking that's five years, isn't it?
30:34
SPEAKER_01: 10 to 15 percent.
30:35
SPEAKER_01: So that's not berserk, but it's still grown.
30:39
SPEAKER_01: Residential property, that side of things in a desirable area.
30:42
SPEAKER_01: Whereas buy-to-lex, I don't think they've grown up by that much.
30:45
SPEAKER_01: I'll probably say that's more like a probably about a 5% increase, perhaps over the 1% a year.
30:50
SPEAKER_01: But you're seeing there what that's said over the last year, 0.6%.
30:53
SPEAKER_01: So that's where buy-to-lex looking at the moment, that's the residential.
30:58
SPEAKER_01: The political uncertainty has that impacted upon the number of people buying.
31:05
SPEAKER_01: Um I'd say more your Bank of England and the other stuff that's come in has had that impact, if I'm honest with you.
31:11
SPEAKER_01: But here's the positive.
31:12
SPEAKER_01: Let's look on positives on it.
31:14
SPEAKER_01: They're maintaining the value, they are reducing on that positive when you come to be finance.
31:21
SPEAKER_01: Yes.
31:22
SPEAKER_01: If if you're on an interest only, unfortunately, there's no way you're gonna be able to do release some equity from it.
31:28
SPEAKER_01: The likelihood will be that the equity growth won't be that much, and one percent a year if you're doing quite well.
31:34
SPEAKER_01: But yes, uh they're maintaining value, aren't reducing in value, and you would hope with some momentum in that there was rumors.
31:43
SPEAKER_01: I don't know whether this is true or not, rumours not, so I don't know whether this is gonna be introduced or not.
31:47
SPEAKER_01: Another stamp duty holiday somewhere.
31:48
SPEAKER_01: That'd be wonderful if they did.
31:50
SPEAKER_01: However, we've now got a new prime minister.
31:52
SPEAKER_01: So whether he's gonna have positive impacts or he's gonna kick us in the wax again and give us more trouble as landlords, who knows?
32:01
SPEAKER_01: I'm not sure how things have been looking in your area, but round here, very much that stagnant.
32:07
SPEAKER_02: I'd say exactly the same.
32:08
SPEAKER_02: I'd say exactly the same.
32:09
SPEAKER_02: You know, uh, mortgage brokers that I speak to at the moment just say, I've never known it's a choir.
32:13
SPEAKER_02: You know, in the last few years, it's there's a lot more people trying to get mortgages that are getting rejected.
32:18
SPEAKER_02: But and and a lot of it is whilst houses, all right, they're going up or they're staying.
32:23
SPEAKER_02: I mean, here the house prices I think are pretty much leveled off.
32:26
SPEAKER_02: If anything, it's it's a good time to try and get a bit of a bargain because it's it's it's stagnant.
32:30
SPEAKER_02: So it's great for investors, as you say there.
32:32
SPEAKER_02: The problem is the lenders are still charging high rates and high fees.
32:37
SPEAKER_02: What I'm finding is particularly for investors.
32:41
SPEAKER_02: So, you know, at the end of the day, we need more investors to buy, to rent, buy to let's potentially HMOs, you know, that sort of thing.
32:48
SPEAKER_02: But the affordability now is because of the lending is so high or the fees are so high, you it's difficult to get deals to stack.
32:56
SPEAKER_01: Do those hence what I was saying to you there is far as you want to push these prices up, but they can't because there's only limits on and different lenders will have different stresses.
33:05
SPEAKER_01: Sometimes the case than 1.4 times your um mortgage is what the rent has to be.
33:09
SPEAKER_01: And you're like, well, okay, that's quite a bit.
33:14
SPEAKER_01: But then you can have a lower obviously the lower loan to barrier, obviously, you're going to get the better rates, but the higher loan to value, the higher rates.
33:22
SPEAKER_01: But then if you want no fee included, then your rate's going to be higher.
33:25
SPEAKER_01: If you want a fee, all the different things you can do.
33:28
SPEAKER_01: But I I know with our mortgage advisor, we have our networking event we host.
33:32
SPEAKER_01: He says if you work out the sums, it depends whether you want the better cash flow as far as your mortgage is concerned, or you're happy enough that you want it the other way around.
33:42
SPEAKER_01: The cash flow is not critical, but you'd rather have a better different ways you can look at it, or you just want less money in at the start, or you want less money in every month.
33:50
SPEAKER_01: That's the way you've got to juggle it.
33:52
SPEAKER_01: But typically you're talking, you know, 5%.
33:56
SPEAKER_01: When I'm, for example, when I'm doing source property proposals and I'm then saying to people what your mortgage is going to be, I'm tending to say around the 5% mark is typically what your mortgage rate.
34:04
SPEAKER_01: Because some people have high loan to buy it, some people have the fees involved, some people won't have the fees involved.
34:09
SPEAKER_01: But around the 5% mark is where I kind of tend to pitch things.
34:13
SPEAKER_01: But yeah, it's positive.
34:16
SPEAKER_01: All you can do is control the controllables.
34:19
SPEAKER_01: It's positive they're maintaining value, but if you're out and looking at the motor, it's a good time to buy, which is a buyer's market at the moment, in my opinion.
34:28
SPEAKER_01: And if people then say to me, Oh, I want to sell a property for this, I say, Well, that may well be that it got valued by your mortgage lender at that, but it's only worth what someone will pay for it.
34:39
SPEAKER_01: There we go.
34:40
SPEAKER_02: So I wouldn't say it was a time to do flips.
34:42
SPEAKER_02: Um but if you're looking at buying something, adding value to it and getting it at the right price to hold, this is this is the best time for that.
34:50
SPEAKER_02: So the BRRR, so to speak, speak strategy is is a great strategy right now.
34:55
SPEAKER_02: I mean, I've I've I know a few people at the moment that are you know building properties that are doing properties up that are looking at flipping them.
35:01
SPEAKER_02: I say, What's your plan B?
35:02
SPEAKER_02: Just in case you might come across somebody that's like, no, I want that, it's brand new, happy days.
35:08
SPEAKER_02: But if you haven't, can you rent it out for a couple of years, let the market sort itself out, let you know, hopefully a lot of the unrest with the governments and everything sort itself out.
35:17
SPEAKER_02: And then if we can have a bit more of a stable market, then uh people will start to go out there and buy again.
35:22
SPEAKER_01: I know with a couple of properties we've got because we do auction now as well, and we've we've paired it with uh a national auction house as far as doing online auctions.
35:29
SPEAKER_01: Because if you're a motivated seller, they just need to get rid um with different circumstances, different situations, all sorts of different things that are happening.
35:36
SPEAKER_01: But uh, we've got two properties, one of which has gone on for the same vendor who's had a just sort of change of circumstances and just wants rid, whatever the lending is, just clear the lending.
35:45
SPEAKER_01: That's that.
35:45
SPEAKER_01: I just want red.
35:46
SPEAKER_01: I've made my money over the last couple of years.
35:48
SPEAKER_01: He's got the right mentality, might I add, but one of them needs more work than the other.
35:53
SPEAKER_01: And you do the sums, and people are coming, oh, it's a great flipper push.
35:57
SPEAKER_01: I'm like, it's not.
35:58
SPEAKER_01: And I said, What do you mean it's not?
35:59
SPEAKER_01: I said, look, do all your sums.
36:01
SPEAKER_01: So buy, refurbish, refinance, and rent.
36:05
SPEAKER_01: You'll make a good return doing it that way.
36:07
SPEAKER_01: Properties on this road have got some great values that you can see they've been sold for is you've got no worries of getting the value you want it to be valued at by a lender.
36:15
SPEAKER_01: But if you're looking to then sell it for the price that you're going to get the lender to say it's valued at, you won't.
36:22
SPEAKER_01: Why?
36:22
SPEAKER_01: I says, Because it's an investment.
36:25
SPEAKER_01: You're trying to sell it to an investor and the numbers don't work.
36:27
SPEAKER_01: I says it's a binary fair three finance.
36:29
SPEAKER_01: That's what this strategy will work for.
36:31
SPEAKER_01: There's another one we sold quite recently.
36:33
SPEAKER_01: There's a handful of different auction properties we've sold quite recently where they're very much fitted as you've just echoing completely the binary, furbitary, finance, and rent, keep it for a number of years, make good money out of it.
36:44
SPEAKER_01: And that's a good strategy, that's a good mindset to also implement to people to emphasize is if you've got a property that you want to sell, you need to sell, and all you've got in that property is your equity between what it's worth and you know what it's been sold for, but you're trying to get more.
37:04
SPEAKER_01: Listen, you've made money over the years from that property, it's paid you profit each and every year.
37:10
SPEAKER_01: Sell it for what a true value is so you can get some of your equity back out to use as you wish.
37:17
SPEAKER_01: Sell it for a price that's realistic because otherwise you're gonna sit there and it won't sell.
37:21
SPEAKER_01: And as far as the other thing to consider as well, if you're you can sell tenanted properties, but make sure that rent's up where it needs, because I know that you're echoing earlier on on making sure each and every 12 months you're increasing that rent just steadily.
37:33
SPEAKER_01: Look after your tenants, of course.
37:35
SPEAKER_01: But you've got that four months to give notice if you've got to give it vacant possession, which would probably work about right with the target taking some solicitor to process sales at the marriage.
37:48
SPEAKER_01: But what I will say, if that sale falls through, if those tenants vacate after that four months, you can't rent that property out again.
37:55
SPEAKER_01: So bear these things in mind.
37:57
SPEAKER_01: Um, but making sure that rent's where it needs to be is the right thing to do, making sure.
38:01
SPEAKER_02: No, brilliant, brilliant.
38:02
SPEAKER_02: And I think you know, the the three topics that we've covered there, it's great to sort of get our take on it from your area.
38:07
SPEAKER_02: I know you know you're you're Midland, so to speak, with Coventry and everything like that.
38:11
SPEAKER_02: I'm a bit sunny-south Yorkshire, as I like to say, and of course, down south, you know, it's it's I I think going across the board, you know, obviously you speak to a lot of different investors, as do I.
38:21
SPEAKER_02: And the I think what we've said there is pretty much on a whole of what the UK is is doing currently at the moment.
38:27
SPEAKER_02: So don't be put off by this, but just know what you're doing and have the right strategy for it.
38:33
SPEAKER_02: Because, as we always say, you know, one strategy doesn't fit all.
38:36
SPEAKER_02: So it's having a few.
38:38
SPEAKER_02: I always think you shouldn't, if you're investing, have a have a mixture of properties as well.
38:41
SPEAKER_02: I mean, if you want to stay with the same thing, that's fine.
38:43
SPEAKER_02: But I quite like to have a little bit of a mixture of different things, which case, if the government changes and they change a rule or something happens, at least you know, my portfolio isn't going to stop working for me.
38:53
SPEAKER_02: But yeah, if you're if you're currently flipping properties and stuff, just look to hold on to them for a bit.
38:58
SPEAKER_02: It'll come back round and at some point you'll be equiding.
39:01
SPEAKER_02: It might take a few years, and that's what we always say sweat the asset, look after the asset, and of course move forward.
39:06
SPEAKER_02: But absolutely great talking points today, but thank you very much.
39:09
SPEAKER_01: No worries.
39:10
SPEAKER_01: So, as far as future months, would you like have a think?
39:15
SPEAKER_01: Okay, if you could get your audience, your your your working with your your community.
39:23
SPEAKER_01: If they'd like us to do it this way around, admittedly, if there's certain things that we need to make sure we're in new legislation, may or maybe we do a bit more of a focused talk.
39:31
SPEAKER_01: However, if you'd like it to be this more sort of general route next time, then we just get some feedback.
39:36
SPEAKER_02: Okay, excellent.
39:37
SPEAKER_02: Yeah, I'll uh I'll send out, get some feedback from the guys and girls, and uh we'll uh send it across to you.
39:42
SPEAKER_02: Sounds good, all right, my friend.
39:44
SPEAKER_02: Brilliant.
39:45
SPEAKER_02: Well, thank you ever so much for your hells of wisdom today.
39:48
SPEAKER_02: Always a pleasure to see you, and I'll see you again and next month in the community.
39:51
SPEAKER_02: Take care, my friend.
39:52
SPEAKER_02: Have a good day.
39:53
SPEAKER_02: Bye bye.