Tuesday, 29 September 2015

Local knowledge of Penicuik property market unearths a gem!


Our long, long experience of the Penicuik property market means that we can be invaluable to buyers, sellers and renters in the Peniciuik property market.  Today’s Penicuik Property Blog is a case in point.

This property a 3 bedroom semi-detached house at 5 Meggat Place in Ladywood, Penicuik.  It has been on the market for quiet a while but it is worth having a look at.  The house has been done up to a high specification throughout and it truly is in lettable condition.


It’s on the market with Alan McDougall at a fixed price of £118,500 and it would rent for £800 pcm, therefore you could be looking at an annual gross yield of 8.1%. 

Although the property has been on the market for quite a while now, as the current owners bought it for £117,500 in 2011, I am not sure there will be that much negotiation on price ...... I suspect they need around £118,000 and will stay in the property until they get this price!

So how does our long, long experience of the Penicuik property market help with this opportunity?  Well, it de-risks it!  We used to rent out this property before the current owners bought the house and did it up so we know it is a good buy to let property – we walk the walk as well as talking the talk!

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Friday, 25 September 2015

Keen seller for this quality, stone built 2 bed flat in Penicuik


Local knowledge is the cornerstone of the Penicuik Property Blog.  Today’s Buy to Let opportunity is testament to this.

This property is a two bed, upper flat at 15 Peebles Road in Penicuik – as the name suggests, Peebles Road is the road south from Penicuik to Peebles.

The flat is in a stone build block and it is in walk in condition.  It has a lounge, dining area, fully fitted kitchen, two double bedrooms and a shower room.  It has gas central heating, double glazing and the decor is neutral.  Well maintained, stone built properties like this are not that common in Peniciuik.


This flat is on the market with Allan McDougall for offers around £105,000.  Our local knowledge means that we know that the owner is looking to move from Penicuik and is therefore going to be sensible on price.  The right tenants should pay £625 for a flat like this so that’s a yield of 7.1% which is reasonable for a good quality, stone built property in this part of town. 

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Thursday, 24 September 2015

Why are less and less people moving house in Penicuik?


Years ago, it seemed that people moved all the time, friends of mine always seemed to be packing up and moving on to their next home. I actually read on the internet that the average UK person moves 8 times in their life or every 9 to 10 years. However, from research I have carried out it shows things have changed considerably in Penicuik in recent years, and interestingly, the trend is getting worse!

In Penicuik, there are 6,627 properties. However, after we remove the 1,014 council houses, 371 housing association houses, 490 privately rented houses and 40 houses where the occupants live rent free, that leaves us with 4,712 owned properties, be that 100% outright, with a mortgage or shared ownership. This means 71% of the properties in Penicuik are occupied by the owner (the national average is interestingly 62%) but the number of people who have sold and moved house in Penicuik, over the last 12 months, has only been 245. This means that, on these figures, the homeowners of Penicuk are only moving on average every 19.2 years.

There are a couple of reasons for this. Firstly, the cost of moving house has risen dramatically over the last twenty years and, secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors leading to driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels.

So what does this all mean for Penicuik buy to let landlords? Well, for the same reasons existing Penicuik homeowners aren’t moving, less ‘twenty something’s’ are buying their first home as well. Penicuik youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. 

As a society, we now expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit?  Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit. Why should they if there is no longer a social stigma in renting or pressure to buy as there was say a generation ago?

Where is my evidence for this?  Well it is the significant increase over time in the number of properties being rented – 8% of Penicuik properties are currently privately rented, double the level it was ten years ago.

As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing.

If you are planning on investing in the Penicuik property market, or just want to know more, things to consider for a successful buy to let investment please feel free to contact me on 01968 674601 or pop in an see me at out office at 6 Bank Street.

Tuesday, 22 September 2015

Family Sized Accommodation for Investment – Auchendinny, Penicuik


Last time on the Penicuik Property Blog we showcased a 3 bed mid-terraced house ..... well we are highlighting another one this time!

Today’s property is at 2 Firth Crescent, Auchendinny, Penicuik.  Firth Crescent is a lovely, quiet cul de sac off The Brae in Auchendinny.  The property itself is a 3/4 bed mid-terraced property with a lounge/dining room, a fitted kitchen, 3 double bedrooms and a study/nursery/small 4th bedroom, a family shower room and, as a bonus, a large attic room that you get to via a Ramsay ladder – ideal older children den territory.  In addition, there are gardens front and rear a garage.  The property is virtually in walk in condition; a wee bit of re-decoration may be needed subject to decor taste! 

A couple of points to consider as that the property has a family shower room not a bathroom and it has a spiral, rather than a normal, staircase.

This property would rent for £800-900 pcm (depending on how you treat the study/nursery/small 4th bedroom), therefore assuming it sells for £130,000 you could be looking at an annual gross yield of 7.4% - 8.3%. 


We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Friday, 18 September 2015

10%! YES 10% return on Penicuik BTL property


This property has recently come to the market through Your Move, with an asking price of offers over £94,000. It's a 3 bedroom mid-terraced house in Teviot Grove in Penicuik. This property would rent for £800 pcm, therefore assuming it sells for £99,000 (being £5,000 above the offers over price) you could be looking at an annual gross yield of 9.7%. 


The house is in a lettable condition although you would want to check that there was a shower in the bathroom (you can’t see from the photos) and you would probably want to make the garden lower maintenance! Also, given its location, it is likely to appeal more to housing benefit type tenants but after all that’s why you are getting a yield of 10%.

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Thursday, 17 September 2015

Penicuik Property Values 3.3% higher than year ago


Penicuik property values rose by 1.4% last quarter, meaning they are 3.3% higher than 12 months ago. Overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the town, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Penicuik property market), the steady long term growth in Penicuik property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Penicuik property market is likely to continue in the second half of 2015.

However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Penicuik property market.  The two main points being low interest rates and a lack of supply of property.

Interest rates first – Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than seven out of ten people (73% to be exact) in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going in one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, this would affect home movers sentiment which would result in a marked slowdown in the rate of house price growth.

Shortage of Supply – As I have mentioned in previous articles, the number of properties on the market in Penicuik is comparatively low at the moment. One reason is the large number of buy to let landlords who have bought Penicuik property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are fewer properties coming onto the market ... thus restricting supply and sales.

If you are planning on investing in the Penicuik property market, or just want to know more, things to consider for a successful buy to let investment, please feel free to contact me on 01968 674601 or pop in and see me at our office at 6 Bank Street.

Wednesday, 16 September 2015

Marmite style Penicuik property opportunity!


I spotted this property today as I was doing my trawl for good properties for the Penicuik Property Blog.  It reminded me of Marmite – you either love it or hate it .... there is no in between!

This property is literally right in the heart of Penicuik.  It is a one bed, first floor flat at 15c John Street which is in the pedestrianised part of John Street; the flat is directly above The Original Factory Shop.

The flat is in a contempory block and it is in walk in condition.  It has a lounge, dining kitchen, double bedroom with walk in cupboard and a bathroom which has a shower over the bath.  The decor is neutral.  This short of property would suit a professional individual or couple.  One point to consider is insurance – flats above shops are generally more expensive/harder (but by no means impossible) to get insurance for given the increased fire risk from the, at times, unoccupied shops below.


So why is it a Marmite style property?  It’s because of its location.  Potential tenants will either love or hate being right in the heart of Penicuik.

This flat is on the market with ide legal.  This is a new one on me but their website says that ‘ide legal is a small firm currently located in the heart of Edinburgh's West End’.  It is on the market for offers over £80,000.  Let’s say it goes for £90,000 given that it recently on the market with Edinburgh agents who may have more Edinburgh, rather than Penicuik, price strategie/expectations.  The right tenants should pay £525 - £550 for a house like this so that’s a yield of 7% - 7.3%. 

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Friday, 11 September 2015

Motivated seller for this Penicuik BTL gem?


Last time the Penicuik Property Blog was talking about an upper villa in Dean Road; this time it’s a delightful terraced house in the pleasant Cornbank area of Penicuik that is perfect for a family – it shows we cover the whole market if nothing else!

Today’s property is at 37 Glencross Gardens, Penicuik.  Glencross Gardens is a quiet cul de sac off Rullion Road in the nice Cornbank area of Penicuik.  The property itself is a lovely 3 bed terraced property with a lounge, a dining room, a fitted kitchen, 3 bedrooms, a family bathroom with shower over the bath and, as a bonus, a large attic room that you get to via a Ramsay ladder – ideal older children den territory.  In addition, there are gardens front and rear a garage.  The property is in walk in conditions subject to decor taste!

This short of property would suit a professional family who could really make it their home so is likely to attach a longer term tenant.


Interestingly, this house is on the market with both Allan McDougall and Millar Stewart and it is on the market for offers in the region of £160,000.  Let’s say it goes for £160,000.  The right tenants should pay £900 for a house like this so that’s a yield of 6.8%.  My feeling is that the sellers are keen to sell – the property is empty and it is on the market with two sales agents – so you may get it for less that £160,000.

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Thursday, 10 September 2015

Penicuik – The 20 year Time Bomb on Home Ownership


Many people think the British obsession with owning your own home started with Thatcher in the early 1980’s, when she allowed council tenants to buy their council houses under the right to buy scheme. However, the growth actually started just after the Second World War. Looking at the country as a whole in 1951 30% of residential property was owner occupied then, every ten years that rose incrementally to 39% by 1961; 51% by 1971; 58% by 1981 and 68.1% by 2001 but after that, it dropped to 63.4% by 2011 and continues to drop today.

Young adults tend to start to think about settling down and moving out of the family home in their early-mid twenties.  After a couple of years, they will have a choice of either buying their first house (albeit with a mortgage) or decide to privately rent for the long term (because the Council House waiting list is measured in decades at the moment!). The ratio of people owning a house with a mortgage verses privately renting is an extremely important guide to what people are doing about their housing needs and what their attitude to renting vs buying is.  With that in mind, within the next 20 years, I am predicting there will be more people renting privately in Penicuik than own a property with a mortgage and that the British love affair of property ownership will fade as the decades roll on.

This is a really important change in the way we live, as I explained to a local Penicuik landlord the other day, knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in the town; Penicuik property prices and Penicuik rents.

In the Midlothian area as a whole there are 2,938 households that are privately rented via a landlord or letting agency verses 13,069 households that are owned with a mortgage, so my prediction appears to be outrageous. However, when we look deeper (as the devil is always in the detail), 6,093 or 47% of those 13,069 households are 35 to 49 year olds and 4,169 or 32% are households of 50 to 64 year olds. I would expect all the 50+ years to be paying their mortgage off as they enter retirement as I would with some of the people in their mid/late 40’s.

Meanwhile, at the other end, in the 25 to 34 age range (the age most people bought their first home in the 1970’s/80’s/90’s) only 1,861 or 46% of the 4,003 households occupied by those 25 to 34 year olds are owner occupiers with mortgages, because of the higher number of properties that are now being rented. This means 46% of 25 to 34 year olds have bought their house (with a mortgage). Twenty years ago, that would have a much higher percentage of homeowners (over 60%).

It can be seen that as the older generation pay their mortgages off as they start to get to retirement and the younger generation aren’t jumping on the property ladder like they were 20 or 30 years ago, the private rental sector will take up the slack as more and more people will want a roof over their head, but won’t buy one but rent one instead. With Local Authorities and Housing Associations not building houses anywhere near like the number of houses they were building in the 1950’s, 60’ and 70’s, the private landlord appears to have good demand for their rental properties for many decades to come.

This will create a polarisation in the housing market between those, mostly older, households who own outright and those, mostly younger, households who rent. Our housing market is very much turning into the European model. However, all is not lost; the younger generation will inherit their parents properties, which in turn will enable them to buy, albeit later in life.

If you are a landlord or thinking of becoming a landlord, why not pop in and see us at out office at 6 Bank Street.

Tuesday, 8 September 2015

TLC needed for this Penicuik bargain!


Today’s star property in the Penicuik Property Blog needs a TLC but given the price it is worth the effort.

The property is an upper villa at 5 Dean Road in Penicuik.  It is near Cuiken Primary School just up the road from Tesco.  The house has a large lounge/dining room, a fairly dated fitted kitchen, 2 bedrooms and a fairly dated bathroom.  It also has gas central heating and double glazing.  The TLC is needed to the kitchen (dated unit doors and wood panelled ceiling replaced) bathroom (new shower and possibly new suite), carpets and the decor.

Stuart & Stuart are selling the house for fixed price £85,000; the Home Report value is £95,000.


I would expect you could get £600 - £625 per calendar month in rent for this house which, based on a price of £85,000, gives a yield of 8.5% to 8.8% which would make it worth the effort of giving it a wee bit of TLC needed!

We hope you find our posts useful.  If you want some advice on this property, another property you have in mind or anything else property related, come and see us in our office (6 Bank Street, Penicuik) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Friday, 4 September 2015

Modern Penicuik flat with 5.6% return


I spotted this little one, which I think should be right up any buy to let investors street who is looking for a modern, low maintenance property.

50 Esk Bridge, Penicuik is a well maintained, 2 bed apartment in the modern Esk Bridge development within walking distance of the city centre and with easy links to the bypass, perfect for the commuting tenant. This apartment has great accommodation and an allocated parking space. 

http://www.rightmove.co.uk/property-for-sale/property-54235655.html

Allan McDougall are selling this property and the asking price is offers around £140,000.  2 bedroom apartments in this area are renting for in the region of £650 pcm at the moment.  So if you do your calculations on these figures, you are looking at a potential annual return of 5.6%, which takes account of the modern, desirable, low maintenance nature for the property.

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our offices (6 Bank Street, Penicuik), call us (01968 674601) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Thursday, 3 September 2015

George Osborne – The Penicuik landlord’s friend?


Well the last few weeks have been rather hectic as Penicuik landlords, some who use us to manage their properties and other landlords who just read our Penicuik Property Blog, have been sending me emails or picking the phone up to me about the new rules on buy to let taxation announced in the recent budget. George Osborne confirmed in the recent summer budget that the tax relief given to landlords on mortgage interest payments, on their buy to let (BTL) properties, would be reduced over the coming years for higher rate income tax payers. The Chancellor said the tax relief that private buy to let landlords (who pay the higher rate of income tax) would change in 2017 from the current 45%/40% and would steadily reduce over the following four years to 20% by 2020.

With 8% of residential property in Penicuik being privately rented (as there are 530 privately rented properties in the town) these changes are potentially something that will not only affect Penicuik landlords, but also the tenants and the wider property market as a whole. The choice of rental properties could drop, especially at the top end of the market which could push up rents.

However, Penicuik landlords could protect themselves by buying one or more rental properties through, or reassigning one or more existing properties into, a company structure (eg a Limited Company, Partnership or Sole Trader) and by doing so, the total tax paid when the properties are in the company structure is greatly reduced, because a company only pays tax on the profit. Nonetheless, before everyone goes off setting up companies for their BTL portfolios, it must also be noted that there are Capital Gains Tax (CGT) issues to consider both when reassigning properties into a company as well as selling properties from a company which are specific to a landlord’s individual circumstances. In essence, by buying your BTL properties through a company, if you have a mortgage you are likely to pay a lot less monthly tax, irrespective of the interest rate, but the CGT bill will be higher when you come to sell ... as you can see, it is not a ‘get out of jail card’. Now it must be remembered, I am not a tax advisor, so you must take advice from a qualified person (more of that later).

Those planning to purchase a BTL property will have to factor these new rules into their calculations, and this could affect the offers they are willing to make. However, I am not that concerned, as the scaremonger reports fail to see the fact that two out of three BTL properties that have been bought since 2007 have been purchased without the support of BTL mortgage. With those two thirds of landlords paying cash for the purchase of their rental properties, that means this two thirds of landlords will be totally unaffected by the changes.

So what of the future? The British love their Bricks and Mortar, it’s an asset that they can touch and feel and has a 70 year track record of capital growth that has out stripped inflation. Buy to let will still be attractive to Penicuik investors and let me explain why. If you invested £30,000 in Penicuik property in July 1987, today it would be worth £117,311. If you had invested the same £30,000 in to the London Stock Market (the FTSE 100 to be exact), it would be only be worth £85,879 today, whilst Inflation would have taken the original £30,000 and pushed it up to £62,345.

It’s true some central Edinburgh landlords relying solely on the tax breaks rather than high yields may be forced out of the market, but even those landlords could seek to recoup any losses by increasing rents. However, those landlords may leave the market and this could constrict the availability of rented houses even more than it is already, increasing rents and thus pushing yields even higher for landlords and BTL investors still in the market... thus attracting new landlords into the market because of those higher yields.

The reality is, there is too much demand and not enough supply of homes for people to live in in the town. Official figures show the population in Penicuik is rising by 117 persons per year (ie demand rising), but only 71 properties are being built each year (ie supply is low). This sets up the Penicuik (and UK) property market to continue to create strong and steady returns, irrespective of any tax loophole being there (or not as the case maybe).

If the demand is there, I am happy to organise an informal seminar with a local Penicuik financial specialist one evening, whereby they can show you the options available and what might be best for you. Therefore, if you are interested in attending, please drop me an email to news@thekeyplace.co.uk and we will be able to get something organised very soon.

For more advice and opinion on the Penicuik property market, visit the Penicuik Property Blog at www.penicuikpropertyblog.co.uk

Tuesday, 1 September 2015

Scope for price negotiation to improve 9% yield on this Penicuik BTL property


Today’s buy to let opportunity is a 3 bed, upper villa on John Street opposite the Bank of Scotland that is being sold by McEwan Fraser Legal.  John Street is the main drag into Penicuik.

There is plenty of accommodation including a decent sized lounge, a fitted kitchen, 3 double bedrooms, a bathroom with a shower, gardens and on street parking.  The property is in lettable condition and, by the looks of the photos, it has been rented out before. Structurally there are a couple of things I would point out: one the bedrooms is a ‘small’ double (have a look at the photos and you will see what I mean!) and the fact that is an upper villa may put off some people, particularly families with small kids. 

Doing the maths. The price is offers in the region of £105,000.  Rent of £750 to £800 pcm is achievable on a property like this in the current market which gets you to a 8.6% to 9.1% yield.  On top of this, there may be scope for a negotiation on price as, even though the price has recently been reduced slightly, it is on the market for ‘offers in the region of’ and the property has been on the market since March.

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our offices (6 Bank Street, Penicuik), call us (01968 674601) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).