Cheap fees and free cheese in Derby!

I went out to a rental valuation a few days ago in Allestree and, as I always do, did my preparation on the property, the area and suitable tenants. I introduced  myself but, before I could begin speaking, he said “How much then? What are your fees?”. Now don’t get me wrong, the subject comes up pretty much most of the time but not usually that quickly!

It got me thinking about landlord fees and how landlords perceive agents. Lots of agents advertise ‘Free fee deals’ – we have in the past! Do they work? No! But why don’t they?

Well, at my local Sainsburys at Kingsway, they often give out free cubes of cheese. Does it sell more cheese? I doubt it!
‘Free’ is a fine way to grab attention, but more often, it's the wrong sort of attention. How many times have you taken the free sample from the supermarket and gone on and bought that product …?
When I discuss our fee packages with potential landlords, they always ask "What do I get for that and is it worth it?"  The shoppers at Sainsbury’s who munch four pieces of cheese aren't asking that question. When focusing on free, the 'worth it' question never comes up, because when seduced by the zero price alone, we fail to answer the question about worth or value.

In a meeting the other day, a new employee asked me “How can some agents in Derby charge such a small fee for a fully managed service?”. “It depends on your definition of a fully managed service” I replied with a wry smile!

So, is a cheap or non-existent fee at the forefront of a landlords mind?  No, it’s not! I can put my hands on lots of independent reports from lots of property experts, where thousands of landlords are surveyed each year, and each year, only 3% to 5% landlords want the cheapest fee.. most want the best value fees.. and value is measured when someone says, “What do I get for my money?”
So Mr and Mrs Landlord, if you have a rental valuation always ask  the question; “What do I get for my money?” Even ask your existing agent the same question when your current tenant leaves because, let’s face it, that’s the ideal time to switch!

If you are a landlord, new or existing, feel free to pop through the door of our offices on St. James Street, call me on 07977 235545 or send me an email to the email address below.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE.

Call me at our office on: 01332 366171 or visit the website: www.pplets.co.uk

The battle of the postcodes in East Derby.

I was asked last week if postcodes make a difference to property values. Well in swanky West London, the difference between SW3 and SW10 can make values drop or rise by hundreds of thousands of pounds.

However, in our little city of Derby, we don’t have many Russian Oligarchs and Saudi Prince’s buying our properties. Despite that, after doing some investigating, I did find out some interesting information. I would like to start with East Derby (I will look at other parts of the city in future articles). I found an amazing trend that I think will interest the people of East Derby as well as landlords and potential investors.

Over the last decade, property values have always risen in Allenton, Alvaston and Boulton Moor first (DE24), then they plateau allowing Chaddesden and Spondon (DE21) to catch up 18 months later. Then Allenton, Alvaston and Boulton Moor have another spurt, again leveling out and now we are half way through Chaddesden and Spondon catching up again. I have no idea why this happens, but I just know it does!!

Let me explain further. In 2008, property values in both areas were roughly 11.7%  lower than they are today, therefore they had plateaued. By the time we had got to 2010, Allenton, Alvaston and Boulton Moor (DE24) had risen by 3.3%; compared to 1.5% in DE21 (Chaddesden and Spondon) doesn’t sound much but it’s over twice the growth of the other!

Get to 2012, and Chaddesden and Spondon had caught up, increasing by 6.9% compared to Allenton, Alvaston and Boulton Moor’s growth of 3.7%. Since 2012 Allenton, Alvaston and Boulton Moor have had another spurt of 4.6%, compared to Chaddesden and Spondon’s  meagre 3%. I believe over the coming few years, Chaddesden and Spondon will have another spurt to catch up.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. It really is down to local area knowledge and knowing what to look for in the figures and statistics that are available.

If you are a landlord, new or old, feel free to pop through the door of our offices on St James Street, call me on 07977 235545 or send me an email.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE.

Call me at our office on: 
01332 366171

Visit the website: www.pplets.co.uk

Derby census figures make interesting reading

It seems a distant memory three years ago when we were filling in our census returns, but now the figures are beginning to be released, especially the statistics about property. The figures for the each individual town and City have been released, so let’s look at the Derby City Council figures.

In the city, just over six out of ten properties are owned, 61.4% to be precise (or around 62,800 households) and just over 17,150 householders rent their house (or 16.8% of households to be exact).      
Interestingly, over 12% of houses are council houses (12,470 council houses), with the remaining       properties being either  Housing Association properties or tied cottages.
So, 16.8% of households are rented in the area, which is slightly above the national average of 15.6%, but that is to be expected as Derby is a city and hasn't seen the boom and potential bust cycles that other cities in the North have seen.

Demand continues to be good from quality tenants who are prepared a pay a decent rent, but only for a decent property (if you remember a few weeks back, I said the landlords in Derby, on average over 2013, achieved a total return of over 10%+).

If you are considering becoming a landlord, or are an established landlord who is thinking of buying another property to rent out, please do your homework. Feel free to ask my opinion on what makes a 'decent property'. It's in my interests for you to buy the right property, for you, not me. I obviously don't charge for my opinion, because I hope you will recommend me to your friends, which, of course, is the best compliment you can give me.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE.

Call me at our office on: 01332 366171

Visit the website:  www.pplets.co.uk
Email me!

Labour plan to ban letting fees to tenants

Thousands of letting agents have voiced their anger and frustration at Labour’s plans to force a Commons vote through next Tuesday on banning letting fees to tenants – and made clear their determination to fight every inch of the way.

The large majority of letting agents believe the move will have an adverse effect on tenants rather than, as is assumed, any perceived benefits. They believe that a ban on tenant fees would simply result in having to charge landlords more, while landlords in turn would pass costs on to tenants in the form of raised rents.

Here are some of the comments we have received so far from industry leaders:

Christopher Hamer, The Property Ombudsman: “There are certain costs that have to be incurred in setting up a tenancy and these will have to be borne by either tenant or landlord.

“If the landlord pays, it is inevitable that the cost will be rolled up into the rent and so is hidden from view. Better in my view that full disclosure of non-optional fees chargeable to a tenant applies. That is in accordance with the ASA ruling and makes the actual cost to the tenant transparent.

“Some research has suggested that landlords would not add the cost to the rent but seek out a cheaper agent. I have said previously that selecting an agent purely on price is a risk.”

Isobel Thomson, chief executive of the National Approved Letting Scheme: “NALS is very concerned about Labour’s call for a vote on the abolition of agents’ fees.

“It’s clear that at present there is a basic lack of understanding about how – and why – letting agents charge fees with an assumption that these charges are unfair.

“Anyone working within the industry on the other hand will know that time and manpower goes into tasks such as drawing up inventories, checking references and administration.

“These practices, when done properly, are valuable for all parties and the commercial reality is that they simply cannot be done for free. If all of the costs are transferred to the landlord this will ultimately mean that rents go up. We would encourage Labour to focus their attentions on making it a mandatory requirement for agents to be part of a Client Money Protection scheme.”

Andrew Bulmer, UK residential director, RICS: “There needs to be given careful consideration to any impact that this proposal may have on the property market, as it may lead to increased rents being passed onto consumers and result in landlords exiting the market, thereby potentially further limiting the supply of properties on the market.

“It’s vital that there is absolute clarity around consumer costs, with reasonably priced, upfront fees explained fully. However, fees from this type of work are important to chartered surveyors, particularly the smaller, independent, letting agencies which are already bearing the cost of regulations.”

Susan Cope, MD Professional Properties : “From the reputable agents, tenants receive a very good service. This service is designed to protect the tenant and their interests and to ensure they have security of tenancy. Obviously such services come at a price and if agents are unable to charge, there is a risk that service will suffer and the quality of administration processes will diminish. Tenants need to be protected but have to understand it comes at a cost to the agent. 

“If the ban is goes through and the tenant doesn't have to pay, it will become part of the monthly rent if the costs are transferred to the landlord as the landlord still has to make a return on his investment."