Everybody likes a free hand out. However, in the realm of property, handouts are getting slimmer and slimmer. On the contrary, many in the industry would argue we are positively facing persecution by the government. The recent changes, which apply to high rate earners, mean that one will be paying tax on money not even being earned. It is a tax applied to the turnover and not on the profit generated by the property; and that’s without going into the numerous back to back hikes in stamp duty.
Pre 2007, one could purchase property purely with an intention to do so. Money was not a necessity or even a requirement. In fact, you could purchase a property with no money and even receive a cash back once the deal had been done.
Only ten years on, and the environment has changed considerably. Now, certainly in London, you would need a 30-40% deposit, due to the high rental cover used by BTL lenders.
The government has clocked on that the property industry is making too much money, and wants a piece of this pie.
The point being is that now, in the property market, it is extremely difficult to find a free handout. However, they do exist, if you know what to look out for.
Human nature is such that most of the population go forward whilst looking in the rear view mirror, in life and investment. This applies to property as well. It takes time for people to buy into, and see, the vision.
The government has various schemes to regenerate areas. This means investment in bringing up whole tracts of areas in a holistic manner, which includes transport. This perhaps being the most important aspect of a regeneration plan, transport connectivity.
By identifying these areas, you are in effect using government money to uplift your investment, by riding off the millions and billions they will be pouring into the location. This requires foresight, and a buy in of a vision presented by the planning authorities.
Wembley has seen massive regeneration over the last decade. The writing had been on the wall for all to see and react long before any of the plan manifested. Average property prices ten years ago were £280k, currently the average price is £437k. In 2000 they stood at only £138k. Over the last ten years they have increased by £16k per annum.
New build one bedroom flats are currently being sold for £420k, with two bedrooms selling for £535k. They are being advertised as being only 12 minutes away from Baker Street.
There still seems to be mileage in this location, as the average price for homes is still below the £500k mark, and it has as an enviable closeness to central London, both from Wembley Park and Wembley Stadium Stations.
A few things have happened here to raise the prices, for example, a prominent French school has opened up in the old Brent Town Hall. This had the effect of raising prices in Kensington, what to speak of Wembley Park. Also, the station has had a major overhaul and now has the capacity to take 22,000 people per hour. Wembley also benefits from having a forward thinking leader of the council, Mohammed Butt; who wants to ensure it is well known that Brent is open for business, and is actively working with developers to ensure the council is not seen as an obstacle but as a partner.
Agony Agent is here to help!
Q: I have my EPC and the GSC for my BTL property, but do I need an electrical safety report?
A: This question raises an important point in health and safety, to summarise it is highly recommended that this is done, but it is not a legal requirement, unless you have or are looking to have an HMO licence. Having an electrical test is very important as it could bring to light any hidden electrical issues.
In one case in St John’s Wood, in London, where the managing agents had recently overseen a refurbishment, including updating the fire safety measures in the building, a fire broke out in an individually rented flat as a result of a faulty fridge freezer, causing extensive damage. The Electrical Safety Council (ESC) says that whilst landlords are legally obliged to provide an annual gas safety certificate, there is no equivalent legal obligation for electrical installations.
In a further case, a tenant died when an electrical fault in her rental home caused the taps on the bath to become live. The electrical wiring in the property hadn’t been tested since 1981, and the ESC said that if an electrical report – known as a Periodic Inspection Report (PIR) – had been carried out, the faults leading to the tragedy could have been rectified and her death prevented.
The ESC recommends that agents and landlords should have a PIR carried out by a registered electrician at least every five years, or on change of tenancy. It has also produced a “Tenants’ Checklist” – to provide tenants with essential information to help protect themselves and their families by following a few simple steps.
You are also strongly recommended to ensure that you provide tenants with copies of manuals and safety instructions for all electrical items or at least make them available within the property.
Not all electrical accidents are caused by faults – some are due to people’s behaviour. To reduce the risk of electrical accidents and fires there are some simple and obvious rules which landlords can remind tenants of at the start of the tenancy and at property inspections:
l DON’T overload sockets
l DON’T attempt any repairs to the electrical wiring or appliances yourself
l DON’T plug adaptors into adaptors
l DO tell your landlord immediately if you think there’s a problem with the electrics
Also, at the start of the tenancy and during inspections, it is recommended that:
l Sockets, switches and light fittings are in good condition with no signs of damage such as cracking or burn marks
l Leads and flexible cables on appliances aren’t damaged or frayed
l Any electrical appliances provided by you have up to date Portable Appliance Test (PAT) stickers on them (although not a legal requirement but recommended)
l The fuse box has RCD protection. This is a life-saving device that protects against electric shock and reduces the risk of electrical fires
Fuse boxes with a wooden back; cables coated with black rubber, lead or fabric; old, round pin sockets, light switches and sockets mounted in skirting boards; and light switches mounted on bathroom walls - all these things show that the electrics are old and the property may not have had sufficient safety checks.
This is an inexpensive and quick check that could potentially save lives. So, I would personally recommend this to be done by all landlords.