Ex-Council property in Clapham & Brixton? Buy now, the stigma is gone!

I was speaking to a buyer the other day and they were delighted with their new purchase. A two bedroom ex-local authority flat on the Cowley Estate in Brixton. They were delighted, despite it needing masses of work in the form of renovation. Having previously been let to a housing association you can imagine the state of disrepair it was in. Thankfully the bathroom was fully tiled, so that was the saving grace, just cleaning to be done there.

But as all good first time buys on a budget go, with a lot of blood, sweat, tears and elbow grease they will have that flat in pristine condition in no time. Or a lot of time, but it doesn't matter. Ultimately they have bought well. Having sold a few on the Cowley estate in my time I couldn't believe the way prices have changed over the years. For the better of course.

The estate itself has undergone a radical change over the years. Security gates with fob entry to keep the rogue parkers and their cars out, a refurbished playground for the children, and a whole host of improvements to windows and communal areas.

So who is buying these flats? Well it's not just buy to let investors that want to rent to LHA tenants. The buyers are young professionals who are buying to live in. And whether the new occupants are tenants or buyers, the number of people returning home from work in their suits and skirts (clearly just stepped out of the office in the City) was amazing. A real change.

These new buyers were telling me all of their friends were buying ex-local authority apartments. It's not just the Cowley estate that has massively improved over time, but others locally as well. Lambeth has been on a mission to improve their estates over the past few years and it certainly does show. The influx of professional buy to let landlords, together with competing first time buyers after value for money property is changing the demographic of these estates altogether.

I remember one of my first encounters in a block on Union road. Three girls came to see it. I arrived early, there were kids screaming, youths being thuggish and laughing around a burning car, boys on mopeds pulling wheelies. Nice. But gladly that doesn't happen any more, and prices have nearly doubled since then, in terms of rentals and sales.

So moral of the story? Ex-local authority flats are the new hot thing. If you're buying to live in or invest, the influx of suits that are a bit savvy is hard to avoid. Coming to an estate near you.

If you'd like some pointers with your purchase, investment or otherwise, feel free to pick up the phone and give me a call. Happy to talk. Or if it's easier drop me a line on jeroen@claphampropertyblog.com.

Everyone likes the lowest fruit in Clapham

Oh that looks great, an easy purchase. The property looks fantastic, in good order, modern kitchen and bathroom. Every tenant that walks through the door will be stuffing pound notes down my trousers to entice me to rent it to them. Well guess what, an easy life comes at a price.

How often have you looked at a property and thought "oh that's a developer jobby, they want premium money for their refurb." Guess what, they do - because they want to get paid for the time they slaved over designing, executing and paying for the refurb!

It's really easy to say "no" and want to do it yourself and save yourself the premium in the purchase price. However... time is money. You end up buying something (be it to live in or for investment) and you will have to...wait for it... spend more money, delay the move-in, put up with builders, spiralling costs, etc etc... If you are letting - time is money, and you can't charge for yesterday's void! So you should really consider a "finished" project so that you can let it quickly. If you are able to negotiate a few dates and times between exchange and completion you may even be lucky enough to let it without a void, straight from completion!

Sound good yet?

Picture this. A "finished" property costs £300,000. A property in need of work will cost you £275,000 and you reckon you can do the work yourself by doing a bit of painting and getting your mate Bob the Builder in. "spend 10k max" you reckon. You know by the time you've bought the place, got the keys, waited for Bob to fnish another job you're already two weeks in. TWO WEEKS... void, gone, forever. Anyway, work commences and you overrun. Two week job takes 4 weeks. total of 6 weeks' rent down the drain. As you are a savvy investor you based your figures on a weekly rent of £375pw. So you've just lost £2,250. Ouch. And Bob? Well, he found some bits and pieces he wasn't expecting, and you had to work a lot so you had to pay him to paint the lot too. he cost £15k in the end. so you had to stump up £55k (20% deposit) plus another 17k for the void and the works. Total of £72k and change, ignoring legal fees and stamp duty.

You would have stumped up £60k instead for an immaculately finished one in the same block. You've just wasted £12k. Savvy investor ey? Think again.

Paying a premium sounding pretty attractive now?

If you're selling or letting your property it's important to have it look its best. Tenants crave something that isn't "average." Listen to me when I say magnolia is for the boring. Get a touch of wallpaper up, something to differentiate yourself from the laminate floor factory type flats of years gone by. Spend a bit of money on the right things. Ultra super duper fancy boiler that can heat water in a second? Nah, not selling it to me. You paid 10k for it? no thanks mr. landlord, I'll go with what looks pretty, pristine and new, thanks. Wallpaper costs nothing, neither does a funky glass splashback in the kitchen. Not compared to the void. The boring will receive their punishment in lower rents and longer voids and lower rental yields. Nobody wants boring. Well, not at a premium price of course.

So, the easy option is actually the cheapest when buying. Pay someone to do the work for you. Pick the lowest fruit. This is often the cheapest fruit!

If you're looking for buying, selling and letting advice pick up the phone and give me a call. Happy to talk. Or if it's easier drop me a line on jeroen@claphampropertyblog.com.

Southwark Council approves new landlord licensing schemes

Today's blog is by Richard Tacagni of London Property Licensing, specialist in helping residential landlords make sense of London property licensing.

Southwark Council is the latest borough set to implement new licensing schemes for private rented homes.

On 21 July 2015, the Council’s Cabinet approved borough wide additional licensing plus a network of smaller selective licensing areas spread across the borough. Both schemes will go live on 1 November 2015.

According to the Council, Southwark’s private rented sector has seen rapid growth and about 70,000 people now live in private rented homes – about a quarter of all residents.

The Council says that whilst much of the sector provides decent accommodation and is well managed, there are problems associated with parts of the sector arising from poor management, poor property conditions and issues of anti-social behaviour.

The Council says that their enforcement activity involving multiple occupied properties has increased by 289% over the past 5 years, leading to a 500% increase in the number of HMO prosecutions over the same period. Research by London Property Licensingplaces Southwark in the top five London councils when it comes to taking housing prosecutions.

Additional HMO licensing

The additional licensing scheme will extend House in Multiple Occupation (HMO) licensing to all HMOs in the borough. Every private rented property shared by three or more people who are not all related will need to be licensed – an estimated 10,000 properties.

Selective licensing

In certain parts of the borough, a new selective licensing scheme will extend property licensing to all private rented homes – including houses and flats rented by an individual or single household.

The scheme designation says it “…includes but is not limited to Walworth Road, Camberwell Road, Camberwell New Road, Camberwell Green, Coldharbour Lane, Denmark Hill, Camberwell Church Street, Bellenden Road, Southampton Way, Old Kent Road, Meeting House Lane, Queens Road, Rye Lane, Evelina Road, Lordship Lane (North), Lordship Lane (South)”.

Yet further investigation by London Property Licensing has found that the selective licensing scheme is far bigger than at first appears. The scheme extends across seventeen distinct areas including 134 streets and is estimated to include up to 5,000 properties.

This is one of the most complex licensing schemes to date and landlords and letting agents will need to study the arrangements very carefully.

Licensing fees

Whilst the selective licensing fee has been set at £500 / property for up to five years, the additional licensing fee for HMOs has been set at £250 / bedroom, making it £1,250 for a five-bed shared house for up to five years. This will become one of the highest additional licensing fees in London.

Landlords who apply within the first six months will receive a 20% discount, with a further 20% discount offered to accredited landlords.

The council says there will be an online application process and all properties will be inspected before a licence is issued.

Councillor Richard Livingstone, cabinet member for housing at Southwark Council said:

"With the rapid expansion of the private rented sector in Southwark, it is vital that we’re on the side of private sector tenants and those responsible landlords who provide a good standard of housing, particularly where children are concerned. We just want to make sure this is the experience of everyone residing in a private property in Southwark.

"On its own licensing will not solve the issues created by poorly managed private rented accommodation. But it’s a step towards ensuring that rogue landlords are held accountable and curbing anti-social behaviour."

Further information about property licensing in Southwark is available at www.londonpropertylicensing.co.uk/southwark, or by visiting the Council’s website.