Tag Archives: Running A Business

04Mar 2011

Current Property News: Approved Agents would provide improved Housing.

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By Steve Roulstone

It’s time for me to bang on the same drum again, as another slice of news has appeared on my desk and the opportunity to improve a situation by ensuring that licensed or approved Agents and or Landlords looked after the Private rented sector through a Government sponsored (but in my opinion Industry monitored) system immediately suggested itself. Well it does to me and I would welcome commitment or debate about my thoughts!

33% of Private rented stock in poor condition.

 

This information is taken from the recent English Housing Survey, just released by the Department of Communities and Local Government. This figure is a surprise, especially as the same paper suggests that Social housing is in better condition (some 23%) The headline figures for the Social and Private rented sectors are now very similar, with 17% of stock forming the Social sector and 15.6% the Private sector, this translates in big round numbers to 850,000 Social houses and over 1 million Private houses. But my own experience would suggest that the majority of these lie in the self managed sector, for in my own Company (as I would expect from all professional agencies) we would recommend what was needed for property to be acceptable to offer to the rental market before accepting the property on our books. This of course means we will not manage property that was unfit and I have indeed wiped my feet on the way out of many houses in the past. Of course, most Landlords follow our advice and repair, renew and renovate as needed.

Professional Industry creates Professional standards.

 

My own point being, that improving the state and condition of property in this Country is rightfully a main target for Government (no matter what colour) by ensuring those responsible for the care and standard of rented property were approved and this approval relies on the correct standards, then the improvement in property would be dealt with, I would suggest, very efficiently and rather quicker than any Government targets are currently achieving.

Same old same old.


It is not the first time I have championed professional membership or approval schemes and it will not be the last. What we need to do and what I do at every given opportunity as a Professional Letting Agent, is to open this debate with and actually put our conclusions in front of those who make the decisions at every given chance. What I hope is that the bodies that represent our Industry are continuing to do the same. I would think it would be difficult to argue against my conclusion in this case and only those who could not afford to renovate properties currently rented would find a reason for doing so, but is this not the objective? Because then the alarming figure of over 1 million properties rented in poor condition would be removed from the market, allowing better quality property to replace it. This of course is providing Landlords can get the right Mortgage to allow renovation or buy new housing stock – but that is another topic for debate.

02Mar 2011

Franchise News: Why choose a Property Franchise NOW!

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By Steve Roulstone

Last year I wrote a Blog about why somebody should choose a Property Franchise when looking for a new future in Franchising. This week some figures have been released as a result of the Communities and Local Government English Housing Survey for 2009-2010, which confirm if ever there was a right time, that time is now!

Increase in Rental properties.

The figures released based upon a survey of a total of 21.5 million properties in England, has shown what can only be described as a mammoth increase in the Private Rental sector over the preceding twelve months, which even outstripped the increase at the start of the housing sales slump in 2008 of 1.2%. This time the increase is 1.4% and this is confirmed by recent news items, suggesting that demand could see this increase outstripped during this current year. Indeed figures are being discussed which would give another record increase approaching an additional 2% possible this (current trading) year.

Steady growth.

The overall percentage in the private rental sector as shown in this survey is now 15.6% (Current figures being discussed are 17%) with the social rental sector now falling to 17%, it clearly looks as if private rented property could overtake the social sector to become the largest sector, within the next twelve months. In big round numbers, this is an increase of nearly 300,000 properties in one year, which is all additional potential business for Letting Agents, at a time when more and more self managed Landlords are also turning to the Industry.

Effect on local markets.

So how does this affect local markets, well let’s look at Birmingham, who confirmed 420000 properties within the City Council boundary paying Council Tax last year. 1.4% growth would represent a potential of up to 6000 additional properties, which, at £1000 average earnings per year as a conservative estimate, would produce potentially £6 million pounds additional turnover for the area. Even in a quarter of the City, £1.5 million additional turnover, should encourage anybody able to make a start in Franchising, that the market is buoyant and still growing.

Continued growth.

But it is not just the current growth which is encouraging, for the market has shown growth of over half of one percent year on year for the last decade. What is happening now is a clear sign that this growth is constant and growing. The icing on the cake for Letting Agencies is that the number of potential Tenants continues to grow. This has also been widely reported in the press, and again in a period after this latest survey. So never has there been a better time to become a Letting Agent so you will have to excuse me, whilst I go and make sure there is a clear path to my door!!

26Jan 2011

Current Property News: HMO Licensing could cost £millions.

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By Steve Roulstone

I am not one to look at matters with a doom and gloom outlook, but I do believe in being factual about the outcome of actions when there is a danger that there could be far reaching implications of a change to legislation, or changes carried out by any legislative body, as is the case with the decision by Oxford City Council in reference to ALL of the Houses of Multiple Occupation within the City.

 The decision.

What they have done, is to decide that every property that falls under the description of an HMO will, on a timetable spread across the next two years, need to be licensed by the owner with the Council, in order to improve the standard of the property and in order to receive approval from the Council to continue to operate as an HMO.

What is an HMO?

The HMO’s which fall under Mandatory Licensing are those under the three storey and five people rule, but any property where more than two unrelated people abide as their main residence, is an HMO as designated by the 2004 Housing Act. Not as so often been mistaken in the past, mandatory licensed property only. Indeed, the legislation confirms that all HMO’s are subject to exactly the same safety regulation inspection as the licensed properties. And this is the potential problem for every Landlord who operates Houses of Multiple Occupation.

The implications                   

This applies on two fronts, firstly the charges for licensing every property, as every license has to be paid for by the Landlord, are set by each local Council respectively, so charges can both vary and are entirely at the whim of the Council’s concerned. Reports for Oxford state that this number could be as many as 4000 properties in the City. Should they decide to charge the average cost as confirmed by a Communities and Local Government survey (Executive Summary) £387 per application (The range goes as high as £1500 per application) then Oxford City Council at a time of great austerity, would raise a total of £1.5 Million. Even allowing for the stated intent of the act that charges should reflect the cost, this kind of income has to be looked at seriously. (Although what should happen with a major increase in licenses to be issued is a reduction of the average cost) It does not take a huge leap of faith to see how much this could interest any Local Council at present as Local Councillors struggle to cope with achieving budget targets imposed by Government. (At a time when suggestions such as heating swimming pools with heat generated by crematoriums are being put forward and seriously looked at, all such methods of income are bound to be considered) Secondly, the result of any inspection by the local Council, may not result in lifts and fire escapes all round, but my experience is that minor recommendations, such as fire doors and walls when deemed necessary, could result in costs up to £1000 per property with ease.  

Who pays?

Well this is where the effects of any such move are always badly judged in my opinion, because whilst the bill will of course become the Landlords, the costs are almost bound to be passed on to the Tenants. Especially where there is knowledge that every rental property is being treated in the same way! So improved accommodation is the stated desire, increased rents is the effect, but unusually for me, I would finish by repeating the warning, Landlords beware, Licensing may be just around the corner for your HMO, even if it is a Bungalow or any other form of ground floor accommodation!

20Jan 2011

Franchise News: Franchisee guidance and timetable – The key to clarity.

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By Steve Roulstone

If I have learnt anything in my first year as a Franchisor, it is that the best help and assistance I can give to any potential Franchisee is twofold; clarity of purpose and a clear route to achievement. I should not be surprised at all and really should have known from day one, as it was what I was looking for when I first approached Franchising as a way of achieving my objectives in life, back in 1999. But as it is something that happened in my case rather than something I knew I needed, it was something I accepted without questioning why or even realising it was what was being offered and subsequently was then delivered to me.

Franchise visits.

At the time that I was investigating the Franchising market, which luckily for me was in the autumn of that year, just at the time of the National Franchise Exhibition, I visited several organisations from differing trades and Industries, all of which in my mind could be an industry that I could operate in. In the end it did not take me long to choose the Company I now head, but looking back at why, is more revealing.

Why Castle Estates?

So why did I choose Castle Estates? I had decided that it was an Industry that I felt comfortable operating in (Requirement number one!) but they were not the only organisation that I looked at as I visited the possible partners in Franchising with my Wife (which is exactly what any prospective Franchisee should do, right from the start, as it is so important to ensure that all partners believe in the venture you are about to launch) so I asked her when I was thinking about the answer what she remembered of the day at the then Head Office in Milton Keynes and her answer was what formed the basis for this Blog.

A vision of how it worked!

Jenny’s words not mine, that was her answer and it is exactly what I have learnt in putting together the manner in which I present not only our Company, but also the Industry and most importantly, Franchising itself, to all who come to discuss the opportunity of becoming a Letting Agent with Castle Estates. It can be frustrating sometimes to realise why and how some things come together, what I have come to describe as ‘earth shatteringly obvious moments’! As a Franchisor, we need to offer a clear route to becoming a Franchisee, so that it is understood what is needed and how our goals are achieved, offered within a timetable which clearly states when all of this fits together as we work towards starting this all important and all encompassing venture for both parties. Added to clarity of vision, so that what we are trying to achieve is clear for all to understand and how it is achieved is understood as well as what is needed to continue to progress towards completion and the start of a new business. 

What to look for.

This is not something that has come easily and needs careful consideration in ensuring the plan (which in my case has taken the best part of six months to assemble, this with the assistance of professionals trainers to ensure nothing is left to chance) that every franchised organisation puts together is consistent and delivers ‘what it says on the tin’ (a saying I am using more and more) but I would recommend everybody looking at a Franchised Company considers this methodology above all others. Only when what you buy in too can be clear and decisive about what they deliver, can the end result be worthy of your investment.

18Jan 2011

Current Property news: Mortgage demand providing a good platform.

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By Steve Roulstone

Even as early as the second week in the New Year, agencies are reporting a big increase in Mortgage demand and the majority seems to be in the rental sector as Landlords continue to react to the need for an increased number of rental properties. Indeed, as a Country that normally follows what happens in the USA by way of financial trends, it could be argued that we are right on the heels of trends in America as they start to ease the availability of mortgages across the pond.

 Follow that lead!

I have stated before and would repeat with this very current news of increasing demand, that we are building up a head of steam which would when the market releases a product that would be acceptable to Landlords, result in an increase in sales for the coming year, which I believe will at the very least aid the recovery (if not start the recovery) of the housing market in the UK. There is no doubt that the Mortgage houses are looking at what demand would bring as they continue to sample the market place with short term offers, and this is producing strong demand, confirming my beliefs that the demand is high amongst Landlords, who are only delaying because they do not wish to be tied in too the wrong style of mortgage for their investment portfolio.

Strong Rental demand

There is no doubt that the demand is continuing to grow and this at what is normally a quiet time, even allowing for the spike of demand caused by the extended Bank Holiday blues! As Agents, at Castle Estates we are gearing ourselves to be ready for a year of high demand by ensuring we have the right technology to supply our Tenants demand for information and ensuring we remain competitive in an industry where Tenant charges can sometimes be difficult to justify. We have always maintained that the relationship with our Tenants is the key to the art of good Management and we wish to ensure we supply the service demanded by an ever increasing technically knowledgeable customer.

Producing higher rents.

For the result of the current shortage of rental property will result in higher rents for the Landlords, that is what market forces will dictate, even with the knowledge that affordability will be a large part of any increases in the current financial climate that we are living through, so giving Landlords even more reason to increase their portfolio of property. The market professionals and providers know this and will be looking for sustained signs before releasing the products that the industry requires. There is no doubt that this continued increase in demand will be playing a large part in providing that very proof!

07Jan 2011

Property Landlord advice: Positive property news reported negatively.

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By Steve Roulstone

Once again I have cause to comment on the way that news concerning property is reported in a negative manner. During December according to most organisations reporting on prices, we saw an increase of the average price. In fact Nationwide reported that during 2010 prices increased at the same rate of 0.4% overall. Guess what was reported as a forecast for 2010 a year ago?

BBC looking for bad news

The commentator in this report states that forecasts for 2010 were between a slight increase and a decrease of up to 20% The guest from the RICS states that they forecast a slight increase and the commentator goes on to ask what changes would signal a decrease. Well Mr Leaf, well done you got it right and yet again the BBC reporter shows just how much they love taking a negative view of housing!

Now for 2011

What changes can we see for 2011 then, well it looks as if we will not see any! Even when figures confirm the slight increase, the BBC still manages to find a negative slant on the news and even more depressingly, a report from my own professional body, stated the same increase and then within the article commented that some (unconfirmed) bodies are forecasting a decrease of up to 20% next year, but goes on at the end of the article to confirm who is saying what and the maximum forecast is only shown as -5%!  

Past performance

Is really what we need to look at here and if we consider the two reports mentioned above, then it seems that forecasting poor performance attracts the eyes of those who want bad news. The BBC 2010 forecast report stated figures between increases of a few % through to a decrease of up to 20%. Well and overall increase of .4% is so far from a 20% drop, this indicates that from this year’s forecasts (confirmed sources) in the NFOPP Newsletter article that we are liable to achieve a small decline at worst as the market continues to settle

Factors that affect the result

 We are all aware that there are several factors that will affect this result, how the Nationalised Banks will perform now that the Government have removed mortgage targets. But what we do not know is how the Building Societies will react now that the market is again a level playing field. Or indeed whether the need for Rental property will provide a lift as Landlords seek to supply property and market forces in the rental market take effect.

In conclusion

The statement about ‘forecasting being for fools’ is I feel the main point about house prices and that market forces will determine what happens over year to come, so let’s stop making bad news out of forecasts which are so wide of the mark. Negative comments ONLY have a negative effect. I for one will continue to comment on what happens and when asked for my opinion, will give it with honest confidence, not negative guesswork!

29Dec 2010

Current Property news: Confidence needed for Landlords to invest.

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By Steve Roulstone

As I said in my last blog and with good timing, news is beginning to spread of a confidence in the rental market and surely led by demand, an increase in Buy to Let products, which will enable growth again next year as Landlords seek to supply property to an increasing demand for Rental housing.

Drive the market            

I do not think we will ever see the type of mortgages available before the property crash, and most would say for the right reasons, but there is no doubt that Landlords buying for a readymade market, where rents and demand are both increasing, could give timely assistance to House sales. Therefore Societies need to have the confidence that products they make available will work. It is there job to place those products at the right level to attract business but hopefully they can also see the demand which will surely increase after both the winter season, which historically has a slowing effect on the market anyway as well as this current spell of bad winter weather.

Spring is round the corner.

So by the time Easter is upon us, again historically the time that the property market increases in volume (take note BBC!) in three months time, the markets and financial houses should be able to recognise the need and start to release the products. This is also the same time that Landlords start to look at increasing their property portfolio as I know only too well from the increased level of ‘Landlord shopping’ our offices are asked to carry out. So historically and with a market as strong as the rental sector is at present the demand and percentage of rental property looks to continue to grow in strength and size.

Walk first!           

So as my own group will be ready I believe what we need now is growing signs of confidence from the markets and it will be the mortgage products that confirms this confidence if they are made available (as seen recently with short term release or special offers made available for limited periods) then others will follow suit, whether they be Agents, Landlords, Mortgage brokers or Providers, the Buy to Let mortgage could soon be the vehicle by which the property market starts to recover. Nobody wants this to be without due consideration and that means careful product pricing and placement, but that is exactly what I both hope for and expect.

08Dec 2010

Franchise News: Renting on the web.

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By Steve Roulstone

Franchise News: Renting on the web.

Earlier this year, I posted a Blog about the importance of web presence. ‘Wrapped in the web’ I stand behind what I said in that post, but I have noticed just lately, that it is being suggested that it is possible to open new Letting Agencies solely using the web. This, in my opinion is not correct – not yet and certainly not for the majority of current Landlords.

Current Trends

As Franchisor when discussing possibilities with new Franchisees, I would not recommend starting a new business, in what has become and will continue to be driven as a professional market over the last and probably the next ten years as well. It is my role to ensure that all new offices are given every opportunity to succeed and that includes the need for visibility from a business address, preferably in the centre of any operation. Even five years ago, this was not the case, but at present it definitely is!

Personal contact

I believe that there are two main reasons for this, firstly, as a people we still prefer the ability to have ‘meetings’. The internet has not yet provided a way of assessing us technically, enabling Landlords to employ Agents without meeting. As a Landlord, distant or not, I would still wish to get a feeling for somebody through meeting them, a point which was summed up only today, by one of our Franchisees, who stated in an e-mail, ‘meeting is the professional way to do it’ well I know we would wish to stay professional!

No office to call home

Secondly, we are a conservative nation at heart, and like our traditional methods. For Landlords, that means a Letting Agent should preferably have an office, whether it be retail or serviced, it is where we are expected to work from. I have experienced all forms of working locations in my time as a Franchisee and I know the difference it made once we had a ‘presence’ in our town. We have never looked back! So do I believe in the web, absolutely unequivocally, yes! it is just as important to have a ‘presence’ on the web, but look at it like this would you expect a legal Company who provides a service for the public which encompasses the lives of other people as well to work from an invisible address? Now tell me if I was describing a Solicitors office or a Letting Agent – they both provide the same style of service after all!

Crystal ball time

But in the future, no doubt this will be true, as new technology spreads, we already have the ability to hold meetings across the net, no doubt soon we will have the technology to sign agreements via the net as well, but not until all of our Customers have the ability, equipment and understanding of such procedures will a true Internet based agency be supportable. For Tenants, no doubt web based is perfect, although viewings still have to be held of course, but at the moment Tenants are not our Customers, Landlords are. In the meantime, we continue to give Tenants the information they require through the web, whilst respecting the need to give the type of servcie our Landlords expect.

03Dec 2010

Franchise News: Resolving Territory problems

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By Steve Roulstone

I have spent the last few weeks seeing many prospective Franchisees as a result of the National Franchise Exhibition at the Birmingham NEC held last October. This is a very busy time of year and of course very concentrated when it comes to discussing Franchising in general and the issues that affect people when they are considering joining the growing numbers of Franchisees in this country. As I said, concentrated, because I am being asked several questions on a daily basis and one of the major issues seems to be one of cross Territory trading.

Whose customer are you?

Boundaries are of course easier to define in some industries than in others. For example, we cannot insist that a Landlord only buys his property in the Territory that we ‘own’ as part of our Franchise agreement. This is easier for example if we were delivering produce, or providing a specific service at any particular address, rather than a centralised style of Management Business, especially one that the general public are associated with as Tenants, not because we are a Franchise, but rather because as a Franchised industry, we provide a service they want, such as housing.

Whose choice is it anyway?

The question that gets asked so often is how do we cope with property that falls in a different Franchised area, but where the Landlord wants to use the services of a different Franchise than the Franchisee who ‘owns’ the area where the property is situated. This will also be a problem for some service providing Indistries, especially where Family are concerned as they are bound to want to favour their own, and indeed may not even use the Company at all if it was not for this specific relationship.

Let the customer decide!

The answer is of course common sense, well it is for us, I cannot confirm for others. At Castle Estates we offer larger areas than most from the start, this means that our boundaries are always further from the central point (Office location) than others that operate within our (Management) Industry. This greatly reduces the chances of cross border problems, especially as we try to link areas that are both socially as well as geographically linked. But at the end of the day, by allowing the customer to decide and by accepting that it is the relationship with the preferred Franchisee that has given the opportunity for the business to be enjoyed by the brand in the first place, we ensure the customer (which for us means the Landlord) makes the decision.

Consequences

All we ask is the courtesy of advising your neighbour of what is happening, which again, because of the size of territory we offer, usually means co-operation in marketing anyway! Of course the other result of larger Territories is that we do not encourage cross border trading, as most of the Franchisees activity is bound to be close to the centre of operation and when borders are correctly positioned, for example, wherever possible, NOT through the centre of Towns and Cities, the risk is greatly reduced.

 

16Nov 2010

Franchise News: New Board Launch

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By Steve Roulstone

Twice a year all of the Castle Estates offices get together for a Network Day and later this week we will be holding our autumn meeting in Birmingham. These are days that I always look forward to and once again we will have a busy day ahead of us, with presenters from all aspects of our Industry and new ideas being discussed whilst old acquaintances catch up with each other.

Network Day agenda

We will be looking at new Landlord marketing ideas as well as reviewing the plans discussed last Spring, discussing the Tenants Deposit Scheme with a senior representative from one of the Government approved schemes, looking at how an Insurance and Referencing Company who we do not currently employ can possible give us better service and discussing new training methods as well as catching up with the current training schedule and planning. Not forgetting to mark the progress we continue to strive for in our web profile. A busy day for all!

Board Launch

But the most exciting part of the day for me, will be the launch of our new ‘To Let’ board, pictured above. Of course, as offices have needed to replenish supplies, they have started to use the new board over the last two months, but we still need to mark that official moment in time when the old boards are no longer available and because we have advertised the event, with most offices having the ability to comment about the design over the last six months, our offices will be ready for the change and order new stock without delay.

Marking the new era.

This is what is most significant for me, as a group we are now focused with the future in mind and the new board for me is the centre of that focus, significant in its message and new style of design, it mirrors the way in which Castle Estates has changed over the last 18 months and is a visual declaration of our intent to move in to a new era of style and Management. Bring on the future!