Tag Archives: Property Advice

12Oct 2012

Current Property news: Increased Student fees biting deep for Student Landlords.

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By Steve Roulstone

I guess everybody wondered what the effect of the new style Student fees would have and reports have abounded supporting both sides of the fence. What cannot be denied are hard facts and in Stafford there is no doubt that Students have looked differently for their accommodation needs and because of the reduction in numbers, several Landlords have found themselves with no takers for their Student accommodation.

Change of use.

Of course at this time of year it is clear if nobody has come forward yet, then they are hardly likely too for the academic year that has just started and I have had three difficult conversations with Landlords about what options they have in their properties at present. Of course change to family let has been the recommendation on each occasion, but strangely this problem has not occurred in what we have found this year.

No vacancies!

We manage a large purpose built block in Stafford with 68 rooms spread between 14 flats. Our numbers are slightly down on last year, but have held up far better when compared to what seems to be happening in the traditional Houses of Multiple Occupation. Why? Well the cost is less and a Warden is present as well as private room and en-suite facilities. Add its location next door to the main Stafford College and perhaps we have the answers. But because our occupation is still high this is why I suggest they have looked at the market differently.

Market forces.

No doubt there has been a reduction in numbers, because most Student Landlords would manage the property themselves, so if we have seen three empty houses, the Town probably has two dozen! This would represent a marked drop in the overall Student accommodation requirement. But I am also convinced that quality is starting to play a hand as well and it is Market Forces that is driving demand as students search harder for value for money.

Still need for change.

Of course, none of this assists the Landlords of houses that are still empty now, especially if they are looking to move back to Students next year! Some requirements for the general market just do not sit with a more traditional ‘Family’ let. (Not to mention furniture which is hardly ever the best and rarely matching?) Locks on bedroom doors, fire blankets, Card Meters! All of these are better removed and of course rarely can that be done without affecting appearances. But worst of all, that dreaded style of decoration, woodchip wallpaper!

Back to market forces.

I was present in a property yesterday which was very well presented, but had to be honest with Landlords who were already going to see quite a drop in monthly income, from three students to a Family in a 1st floor flat, my advice had to be based on the property they were competing with! Small properties with three types of carpet that can all be seen from most of the rooms will not be well received when judged against the common fashion of using the same carpet throughout. It is comparing against other property that has to be the benchmark.

Conclusion.

The bottom line is in most cases lots of improvements need to be made and cost is always going to be an issue, but to then change back again is going to be a double whammy as for example, hardly anybody has storage room for furniture and would therefore have to buy new. Ironically it could be that very change that might attract Students in a market being driven by services and quality as I believe it now is. Either way, tired or poor accommodation will continue to struggle and the next two years could be a very hard challenge as more Students drop off after three years and the intake continues to fall!

04Oct 2012

Current Property Landlord news: Landlord complaints not being addressed?

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By Steve Roulstone

A report from Shelter (as reported on the BBC news pages today) states that complaints about Landlords have risen by 27% over the last three years. As always there are statistics and statistics and the ones quoted in this report are a little ambiguous, but let’s take them at face value and assume they mean exactly what they say and assume we are measuring one year against another and that the 27% figure applies from 2008/09 to 2011/12.

More houses bigger numbers.

So let’s look at what has happened at face value, because some of this increase is purely down to trends. For a start, there are some 5% more houses in the private rental sector than there were four years ago and of course nowadays, people do choose the easy route and register a complaint with the authorities prior to actually reporting the issue to the Landlord. This must apply to at least 10% of the figure quoted.

No excuse.

But do not get me wrong, as a Letting Agent I am not making excuses for these figures, far from it, just wanting to put a little bit more reality to the situation. At our office for example, we have only ever had two instances of problems being reported to the Council and on both occasions we were not spoken to first. Problems can occur without the Landlord or Agents knowledge and unless we are informed we are powerless. In the two instances we have been involved with a Council inspection, only one resulted in work being needed and that is work that would have been completed should we have been made aware first!

Flooding in!

In the report for instance specific mention is made of damp houses. This year this is not a surprise as I can verify as a Tenant. Many Landlords will have found damp patches and rising water (In a cellar in my instance) without prior expectation or knowledge, as the water table has risen dramatically this summer and started from a high point (as it did in Staffordshire) this spring.

Action.

But none of this does remove the fact that more action is required and this is what concerns me about the report. Shelter ask for more positive action to be taken by Councils at the same time confirming a rise in the number of successful prosecutions or orders for improvements. But if Shelter feel this is not sufficient, then it is clear the system is not working and something else needs to be done.

Further breakdown.

Firstly, I would like to know exactly what the breakdown is between privately run property in the hands of Landlords and fully Managed property in the hands of Agents. As I have confirmed, two houses reported in twelve years with nearly 400 houses under our Management would suggest, if other Agencies operate with both the correct knowledge and standards, that the majority would be privately managed. So firstly let’s have a better breakdown of the figures and more information as to which areas Shelter feel better action needs to be taken.

Now for the old chestnut.

Because when figures are broken down and if Councils are unable to follow up and prosecute sufficient cases then clearly a new system is required and yes, for me that is qualified Agents who pass a Government designed test (with the co-operation and involvement of the Industry professional bodies if possible) and all Landlords must be registered and approved themselves, and if not then approved and registered Agents must look after their properties.

Standards improving.

There is no doubt that the quality of housing in the Private rental sector IS improving and best advice to all Landlords which should always be our objective when marketing a property, is to consider the competition. To Landlords who are not prepared to present and protect property and therefore their Tenants correctly, we must always point out what needs to be done and why using the same principle! If the advice is not taken, then we cannot manage the property. Surely, professional standards to the same level would be the solution bodies such as Shelter wish for?

Drum banging time.

Legislation is overdue because of confirmation in reports like this that the current system does not work. Councils are too thin on the ground and cannot police and control the current system. If all Agents and Landlords had to meet qualifications laid down or not be able to rent property out, the system would be self policing – surely this is the way forward.

28Sep 2012

Tenant advice: Avoiding costs by reporting problems as they occur.

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By Steve Roulstone

Today’s subject has been a thorny one for Tenants as long as I have been a Letting Agent and longer. Problems that occur within houses if not reported can make far more damage than if reported without delay once it has been noted. The issue is who’s responsibility is the additional damage caused and who is liable for any costs in putting the situation right.

Old cases.

There are many that I could quote but I suppose the first time this happened is the one that I remember the best. This was a leak from a bathroom and the subsequent damage to a kitchen ceiling. The problem was water tracking around the side of a shower curtain and slowly soaking the plaster above the kitchen until a whole section fell off.

Tenant view.

The Tenant view was that the fault was with the shower curtain and that she could not be held responsible for the damage caused. Our view was that both the fact that it was obvious that water was finding its way through and the additional damage caused by failing to report the matter were both the responsibility of the Tenant. Just because something does not work correctly, does not mean you should keep using it ignoring the consequences.

Coverall.

Of course your agreement should ensure that it is quite clear that if secondary damage is caused under these circumstances then the cost is down to the Tenant for failing to address the issue (report it) then half of the battle is won, but we must not forget that we now have the arbitration system if Tenants disagree and I can confirm that the system has always supported us in such cases when claim has had to be made.

Long process.

Of course the knowledge that we should be proven right is not the whole and not what we rely upon, because in the first instance somebody has to pay for the remedial work and as we have found on numerous occasions, a system that does not allow for immediate resolution can annoy those who have to pay for works that they should not have to do so, and wait until a Tenant vacates before the money can be re-cooped.

Getting it right from the start.

This is why good Agents will endeavour to get resolution at the time of the incident and why Tenants may find themselves involved in lengthy discussions that they feel are invasive at the time. But as Property Managers, Agents cannot just ignore the situation.

Current case.

What bought the issue to mind is a Company let, where secondary damage is quiet severe, as a known leek from a cistern, instead of being reported, was contained in a small bowl and repeatedly emptied. The inevitable happened and the bowl was forgotten along it seems with the leak. The subsequent damage is a ruined carpet and underlay, damp walls to well over a meter high and ruined plasterwork and of course the decoration. Apart from anything else, having now dealt with the leak (The only bit the Landlord is responsible for) we now will have to wait several weeks, with the aid of a de-humidifier, before the repair work can be undertaken.

Conclusion.

This case will of course mean several difficult conversations and meetings but that is what we must do to protect the Landlord but as a clearer case I trust you can understand why the damage should not be at the Landlords expense and also understand why the Landlord should not have to stand out of pocket for works which are liable to cost anything up to £500 to repair.

18Sep 2012

Current Property News: What Landlords want to know?

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By Steve Roulstone

As part of our good practises when reviewing our methods of operation, between us we always discuss what Landlords ask about and speak about when we visits them to give a valuation and review of their property. It is important for us to be aware of any new trends and old ones and surprisingly, one trend that does not change is that Landlords are still discussing and talking about ‘Nightmare Tenant’ stories and what is done to stop them occurring.

Changed Market.

The market has changed considerably and I am sure will keep evolving over the next ten years. Certainly technology and mobile phones have meant we have to make information available quickly and accessible. Standard of housing has improved as competition for Tenants continues to grow and more and more properties enter the market. Yet the one thing that will not go away is the stories of Tenants trashing houses and the fear that brings with it.

Not common.

Yet certainly as far as I can comment on the houses we have been involved with, this is something that rarely happens now and I cannot remember the last time we had a property that was badly damaged by the Tenants.  We, like all Agents, get Tenants that do not care for property in the way that both our Landlords and we would prefer, but this is always a case of standards rather than actual physical damage done.

Strange beliefs.

There are also plenty of situations where what should be done and what the Tenants actually believe needs to be done differ, such as the Tenant who stated they did not need to clean one bedroom, because they had never used it during the Tenancy. Or the person who broke a window when mowing the lawn and said the Landlord had to be responsible because the lawn from where the stone came was the Landlords and not hers!

Manage to avoid.

The answer for me is to catch problems early and make sure the Tenant knows both their responsibility and our role as Agents in what you are trying to achieve together. In short, good Management will ensure damage limitation. But what this does prove is that some cases must still happen and that bad stories are the ones most Landlords hear first, or perhaps take note of!

Practical experience.

In the middle of writing this Blog, I have visited a new Landlord at their property, student accommodation it may have been, but she described the manner in which the last Agents had allowed the students to live last year. Not a property wrecked, as I have stated, more a question of standards. But it does rather prove my point. Whether self Managing or appointing an Agent, make sure that visits take place and that problems are resolved head on and not left to fester. Perhaps then we may allay Landlords fears by reducing further tales of the ‘Horror Tenants’

12Sep 2012

Property Landlords advise: Finding drugs in rented property.

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By Steve Roulstone

Like all good Letting Agents, we carry out property visits to ensure that our Tenants are looking after the home and living in line with their Tenancy agreement. We are used to looking for evidence of unofficial Tenants, would easily spot any Tenant growing cannabis, but have found a property we manage used for the storage of drugs and that has proven to discover what the house is being used for in these circumstances is a big challenge.

First indication.

The first we knew of a problem at the house was a phone call from the local CID advising us they had suspicions concerning activity of a house in a quiet country location. This was both a heads up but also a request to allow them to go about their business following a raid at the property. They later confirmed that drugs and a large amount of money had been found and seized from the house.

Information.

This was followed up with a visit to our offices where they gathered information about the Tenant, rent payments and our knowledge of what was happening at the property. We were able to supply information which we believe was of use and hand over keys to avoid any further damage and ensure the house was securely locked.

Property inspection.

A week later, with the knowledge that little damage had been caused and confirmation from the police that the house had not been abused and was in good order, we were able to visit the property and officially check out the Tenant at their request and see for ourselves just how the drugs had been stored.

Fridge Freezers.  

Now forgive me, but I have no knowledge of how and where drugs can be stored, but as soon as we opened the fridge and freezer doors, it became evident just what the appliances had been used for. The issue for us was that we had been to carry out a property visit some two months prior and because the house was being looked after and all was clean, as you would expect, we had no indication of the problem. Because the appliances belonged to the Tenant, we would also have no intention of looking in the fridges to check how they were being used. But as soon as we opened them now, even though they had long been emptied, the smell was overpowering!

Systems.

This situation, which is subject of a review of our practises as I write this, is a warning for us all. We have no right to open fridges, washing machines, cupboards and draws or look in boxes, cases or even envelopes that are the property of the Tenant and nobody would expect us to. Cooker yes, because that is always the property of the Landlord, but we need to be aware of the possibility, for if nothing else, this incident has, to say the least, sharpened our focus.

Aftermath.

 Thankfully, the Tenant who is obviously the subject of ongoing Police enquiries (about which this is not the place to comment) was most co-operative and the property will be marketed again without delay. What we must do is build safeguards in to our system, without over-reacting to what has happened, that will ensure we keep our eyes open at all times to possible signs and the Police have been most helpful in discussing the matter with us. What it has proven though, is that ensuring a house is used for its correct permitted usage, remains as difficult as ever!

10Sep 2012

Property Landlord advice: Insulation now available!

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By Steve Roulstone

A few weeks ago I wrote that Residential Insulation which is currently being promoted through the Governments Carbon Emission Reduction Traget CERT and the possibility of Landlords being able to claim for expenditure against annual costs, was very difficult to explain to current Landlords and Tenants when the Industry itself had no way of communicating its message.

VNR Contracting Services.

I am pleased to confirm that I have now found a Company who is not only being proactive in speaking and working with other organisations, but that understood what we are trying to do, but is also happy to put leg work in themselves in achieving a result.

Landlord and Tenant choices.

What we need to know is that as Property Managers, we can rely upon a Company who specialise in the Insulation field to explain clearly the benefits of having Insulation fitted and the grants that are currently available for Landlord and Tenant alike, one through direct costs and one through the tax incentive currently being offered.

Action plan.

This means we will be able to write to our Tenants and Landlords alike with information relevant to them and then allow the Company to follow up with visits to answer questions and quote for the work direct ensuring that our Tenants and Landlords are able to take advantage of the schemes before winter this year, if they choose to get involved.

Service provided.

To us, this is part of what we should be doing as Property Managers on behalf of all of our clients, not for any other reason than from a central point we are in a position to receive information as Companies approach us and distribute the same to a wide audience. It is not for us to dictate what decisions are made or even recommend what options are pursued, rather to place the information in front of those who have the right to take advantage of the grants etc that become available.

Reliable Contractor.

What is reassuring now is that having struggled to find a Contractor to work with, we have been approached by one who already works with local Councils and as such carries a pedigree that is re-assuring. I am happy to recommend VNR Contracting Services Ltd and in reality that is only the second recommendations we have made in over two years of writing!

06Sep 2012

Current property news; Squatting finally made illegal.

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By Steve Roulstone

It is possibly one of the most depressing and sickening things that can happen to a property owner, to find that squatters have broken in to your property and that the law does not support this effective breaking and entering in any way and the responsibility to deal with the intrusion is thrown squarely on the shoulders of the rightful owner. These words, whilst repeated as I remember them, were used during a presentation to the Lettings Industry during a speech on the use of empty housing some ten years ago.

At last!

Now, after so many years the Government has reacted and made it an illegal offense to squat in premises without a legal right or reason to be present. What should have happened then is the unfortunate property owners who were suffering at present be given their voice and an outcry of at last should have been heard. What was heard was a cry of ‘unfair’ as housing groups and charities warned of rising homelessness.

Responsibility.

Now I must make myself clear here, I am not uncaring of the position people are in that sees them squat in the first place or the problems they now face if removed from property. My problem is that the house owner should have always been in the position of being able to rely upon the assistance of the law and it is unfair to somehow shift the responsibility back on the shoulders of the owners. This is clearly a failing of the social system in providing housing for all in the first place. This is said with full knowledge that there are some who will always remain outside of the system and be non-conformist!

Ignoring the Law.

I have always found it somewhat ironic that the Houses of Multiple Occupation laws were introduced to tackle safety in high rise City Centre properties and for ignoring them Landlords could be banned from owning property. Squatters, by the very nature of what they do, cause far more danger and would never consider such legislation in how they live, yet they are protected because their activity has always fallen under civil offense legislation and not an illegal act. To make it so at last corrects this ridiculous state of affairs.

Financial requirement.

What is so often forgotten is the financial requirement that the owner needs to fulfil and the difficulties they find themselves left in when a property is a target for squatters. In my small way, I feel I need to make a stand for the owners, and no matter how many stories there are of squatters who have maintained a property well, there are just as many of properties left in an appalling condition.

Enforcement.

Now we must hope that this blight (although mainly a City centre problem) is dealt with in short order. It is a fairly simple statement for me to make, because no matter what your feelings, we should live by the letter of the law and I believe ownership rights should be amongst those at the top of the list of laws to abide by. My hope is that the charities and groups working with those made homeless by this change of law do not fund any legal challenge through the courts. Owners, who are not all £multimillion Companies who can afford losses, deserve the law to be enforced in full.

04Sep 2012

Property Landlord advice: British Gas laying down the Law!

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By Steve Roulstone

I am not a lover of utility suppliers, mainly because they never seem to know how our Industry works and prove time and again, that they do not have a system that can deal with people moving on a frequent basis. I have seen STWA send out invoices for a few days between Tenants at three times the rate of the normal daily cost, heard staff at British Gas say “let’s turn the fax of today, we have enough paperwork to deal with” and famously (for me) told British Gas, “sorry if I have not pressed the right option, there isn’t one for ‘we do not know what we are doing’ ”

Visit out of the blue.

This time however, they have gone too far! An engineer turned up at a house we manage last week to change the meter because the Tenants were stated as not having paid the Gas Bill. Unbelievably that simple fact was wrong, as the Gas Bill had been paid and was up to date. But that did not stop the BG Employee changing the Tenants on to a pay as you go meter and also whilst at the property looking at the appliances.

Gas Fire turned off.

Mistake number two. Whilst there, without looking at the operation of the fire, he decided the fire was unsafe, disconnected it and labelled it as unfit for use. The Tenant, understandably, phoned us and asked us to explain why? We sent a qualified engineer round, who confirmed, as he had when he carried out the annual Landlords Gas Inspection less than four months earlier, that the fire was perfectly OK and that there was no need what so ever to turn it off.

Not the first time!

What amazed me about this was that our Gas engineer confirmed that this was not the first time he had heard of this and that the meter people employed by British Gas were not even qualified as Gas Engineers. Rather they were trained to carry out a ‘Visual Inspection’ and it seems on that basis only without any qualified reason; the appliance was labelled as dangerous. Rightly, our Gas engineer has sent his invoice to British Gas, as why should the Landlord pay for the mistake?

Liability.               

Now I know from experience that they are not the purveyors of all things good as they like to be perceived (especially from the TV ads) but you have to ask the question, since when have they been given the role of sending unqualified people in too houses to carry out unsolicited inspections? It frankly beggars belief but they must see themselves as the protectors of all things Gas related in Britain’s houses to go about giving their staff this kind of instruction.

Admission.

Now they have apologised for even getting involved in the first place as the Tenants had as stated paid their Gas Bill and the meter will be changed back again. As to whether they will pay for the engineer’s time to confirm all was well? Knowing British Gas I doubt it, but hey, somebody who matters might just read this and agree they should. Feel free to get in touch!

Motivation.

That just leaves us wondering why they should do this in the first place? I am afraid in my opinion I only have one thought as to why and that is to generate income through the repairs that appear without the ability to check correctly, would have been generated from this incident – why else? Forgive me if I am wrong, but why else should British Gas staff be condemning appliances (even though they are unqualified in the first place) during visits they are not even supposed to be making? If we had not known better, the result could well have been a call to a British Gas engineer to repair the fire and the result of that would have been an invoice.

Summary.

By all means call me cynical, but I believe this would probably have been the outcome of a visit to a property lived in by the house owner and the only reason this did not finish in this manner, is because British Gas would not have expected a third party to have knowledge through the Landlords inspection of the appliances and be able to call upon an engineer as we did. In other words it resulted from British Gas NOT understanding how the rental system works, but then I already know that.

Bad practise British Gas, Bad Practise!

31Aug 2012

Current property News: Montague report offers the Key for growth? Part 2

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By Steve Roulstone

In looking at the second part of the Review of the Barriers to Institutional Investment in private Rented Homes, I have read and will comment on the sections headlined; The Barriers and Conclusion and The Recommendations.

 The Barriers.

 Most of these sections concentrate on the land and planning permission needs, but do refer to some rather confusing detail. Such as that Management costs are as high as 30% for Residential property. Now I know that National Companies specialise in offering services for Companies with large property portfolios, but when you consider the normal cost for Management on a local level would average at 10%, I find it difficult to see how this rises to 30% when managing from afar.

 Total Costs.

 I may of course be wrong, but it rather looks as though it is the cost of maintaining the property that has been added to the running costs, however, as the report confirms that it is normally Capitol growth that is considered to be the income from residential and not the rental income, whereas with Commercial investment it is the opposite way round. Surely then, if Commercial values drop over time, the cost of maintenance should be offset against Capitol growth and it is both that should be considered, as they are real income, when comparing residential to Commercial? Is this where encouraging Tax breaks can be made?

 Local market.

 Otherwise, once again, local Management will answer the cost issue, rather than distance Management having to find a local Agent to carry out the role of providing a Tenant, let the Local agent be the sole property Manager. Costs halved? – probably!

Lack of Experience.

The report then states that there is a lack of experience in knowing how any scheme would operate. But this does not exist in the market place; rather this confirms that in compiling the report, the Property Management Industry has not been approached. A fact confirmed by the later statement in Recommendation Five: that the market would benefit from; the professionalism of the management service. Had the Industry been spoken with (also confirmed in the Terms of Reference) then Sir Adrian Montague would have been aware that one already exists.

Right Model.

I also believe that the right model already exists as well. There are numerous professional Letting agents, who also operate as Property Managers as well, looking after leasehold sites (Block Management) throughout the UK. Providing that any incentives in profitability and land availability are made available Nationwide and providing there exists Agents with the ability to run both, then costs can be controlled, the whole Industry will benefit and progress can be made throughout the UK.

Professional Management.

But I believe that this is another opportunity for the Government to change their attitudes towards the rental sector, which is growing at the same speed home ownership for individuals is declining giving a thriving rental sector the opportunity to be part of the growth if not the very reason for it, that this country desperately needs. Tied with ensuring the Industry moves forward in a professional self managed, or Government managed (although I believe this is where the lack of motivation currently exists) manner, ensuring the scheme meets all the requirements listed in this report and that the properties concerned will continue to give the profitable long term return institutional investors require.

16Aug 2012

Current Property news: Rents catching up with property prices.

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By Steve Roulstone

A report by the RICS in to rents paid dated July 2012 show an increase of 4.3% for the past year in rent levels across the Country. This confirms that the Industry is still healthy and demand continues to be strong. At the same time, house prices are predicted to start to rise again as the Country comes out of recession. This is probably not too much of a surprise given the drop in prices seen over the last few years, but does point to the current trends being a good time to buy property and develop portfolios as with continuing demand and climbing rents the investment, currently forecast at producing over a 5% return, should continue to rise.

Last Ten Years.

However, before there is too much clamour about greedy Landlords and long suffering Tenants some facts behind the figures should be given, for what happens year on year should, I feel, be balanced over a longer period of time, so that a more realistic figure can be arrived at. If we look at data for the last ten years the picture between Rents and House prices show quite different results.

Playing catch up.

In 2000 at a time when the rental market was less than 10% of UK housing stock, rent for an average 3 bed property in Stafford was £400.00 This is now £575.00 An average house in the UK cost £101500 and at present that price is £161777. Compare the two sets of figures and a quite different picture appears.

Renting still good value.

Because house prices rose so heavily (Ironically largely on the back of a rush for Buy to Let mortgages!) that average rent in 2000 was just under 4% of the house value. Now it is just over 3.5% The gap is still some £60.00 per month less than is currently being achieved and just shows how far behind house prices when considered as a percentage return, rental prices had fallen.

Predictions correct.

What this also confirms is that it is in line with the market levelling out for rents to continue to increase, and they are predicted to do so at 2% higher than house prices will rise. It is also of note that the period before 2000 was very stable and rents were indeed calculated against the value of the property. This obviously reflected the local market rather than national averages, but the comparison still stands up and I am more than aware that the rent locally is far behind that achievable in other Towns and Cities.                                                                                                                             

Statistics and Statistics!                                                                                                                                                        

Once again what appears on the face to be unreasonable increases can be explained when looked at over a wider period of time or against something which gives a broader context. I am also fully aware that others may be able to give a differing picture using their own parameters. So I will just go back to the more reliable method mentioned above, common when I started Castle Estates.

£400 rent against a house valued at £100000 gave £4800 per year, a return of 4.8%

£570 rent now against the same house valued at £159500 gives £6840 per year, a return of 4.2%

Therefore rents still have some way to go to seek parity with prices in 2000.