Thursday, 24 March 2016

My Concerns About The Penicuik Property Market

I am genuinely concerned about the Penicuik property market, but in a way that might surprise you.

Zoopla announced that average ‘asking prices’ rose in the last three months by 0.9% in Penicuik, leaving them 2.7% higher than a year ago. 

Looking at all the data on the Penicuik property market, and putting aside the need for more houses to be built in the next decade to balance out the increase in population (helped in part by inward European migration) but not matched by a similar increase in housing being built, my research shows there is a widening gap between what property buyers want and what is available to buy.

In a nutshell, many more buyers are looking for the smaller one and two bed properties (the typical semi detached and smaller terraced houses/apartments), whilst there is an over supply of the four and five bed properties, which are the typical large detached properties available.

Demand for smaller properties comes from both first time buyers and the growing number of buy to let landlords, where it is more cost effective and efficient to buy smaller properties to let out compared to larger properties which tend to offer poorer returns. Also, landlords with larger loans (on those larger more expensive properties) will also be hit harder with the changes in the way tax is paid on buy to let investments, which starts in 2017.

I recently carried out some research on how various types of properties have performed in Penicuik since the year 1996 and what struck me was just how different the various types of properties have performed over the last 20 years and what this means for our property market and for people trying to trade up from their starter home to their next home. In a nutshell, this mismatch of supply and demand isn’t a new phenomenon, it’s been happening under our noses for years!

In the last 20 years, the average terraced house in Penicuik has risen in value from £36,154 to £145,880 whilst the detached house has risen in value from £94,231 to £313,732. Nothing seems amiss until you look at the percentage growth. The terraced house has grown in value by 293% whilst the detached house grew by only 233%, meaning the gap between the inexpensive terrace’s and expensive detached properties has in percentage terms narrowed enormously (this isn’t just a Penicuik trend, it has happened all across the Country).

I am concerned because more houses need to be built, not only in Penicuik, but in the Midlothian and Scotland as a whole. In particular, there is specific need for more affordable starter homes for the growing demand from both tenants (and the landlords that will buy them) and first time buyers.

The government needs to face up to the fact that unless they can get the planners (to release more building land), the banks (to finance the building of house), the builders (to build houses) and themselves together to ensure long term plans can be made and implemented, this issue will continue to worsen.

It is estimated that the country needs 30,000 houses a year to be built to start to tackle the chronic housing shortage that we have. Last year, only 16,270 properties were built, the year before 14,890 and 14,050 in the year before that.

This means only one thing for Penicuik’s landlords. Unless Nicola Sturgeon and John Swinney start to rip up huge swathes of the Scottish countryside and build on acres and acres of green belt, demand will always exceed supply when it comes to property for the foreseeable future.

Therefore investment in the local Penicuik property market as a buy to let investment could be the best move to make as stock market investments are possibly on the wane. Everyone is different and, trust me, there are many pitfalls in buy to let. You must take lots of advice and seek out the best opinion.

If you would like to explore how I can help you with your property investments, or should you require any advice about investing in the Penicuik property market, wish to enquire about our Investment Analysis Reports, Property Sourcing, Residential Lettings or Property Management services, please do not hesitate to contact me on 01968 674601 or at

Alternatively please feel free to pop in and see me at our offices in Bank Street for a chat, the coffee is always on.

Tuesday, 22 March 2016

Penicuik property market goes ballistic .... but is it good news for investors?

Spring is here.  The tell tale signs are all around us – the crocuses are out and the Penicuik property market has gone ballistic.

Since the beginning of March, 21 new Penicuik properties have been listed for sale which is just under half of all properties that are currently for sale in Penicuik.

I have assessed the make up of these new properties and have spotted a few interesting trends:

1)   Most properties are larger, family home type properties which is a change as there were more smaller properties for sale before this.  The properties listed since the beginning of March have the following number of bedrooms:

o   1 bed – 2
o   2 bed – 6
o   3 bed – 9
o   4 bed – 4

2) Most properties are on the market at ‘Offer Overs’ whereas before most were ‘Offers in the Region Of’ or ‘Fixed Price’ which is a sure sign that there is more confidence in the market.  The current make up of pricing types is:

o   ‘Offers over’ or ‘Offers in Excess of’ – 17
o   ‘Offers in the Region of’ – 3
o   Not stated – 1

3) Prices range from £85,000 for a 1 bed flat in Evelyn Terrace, Auchendinny to £335,000 for a 4 bed house in Lower Valleyfield View, Penicuik.

4) The sales market in Penicuik continues to be dominated by Allan McDougall who has listed 8 of these new properties for sale and Stuart & Stuart who has listed 6.  Mov8 has listed 3 of these new properties for sale and Sturrock, Armstrong & Thomson, Campbell Smith, Warners and Purplebricks have each listed one.

Standing back from it all, whilst there has been an explosion of new properties on the market this is not necessarily good news for buy to let investors as prices seem to be going up and most of the new properties on the market are family homes which can be less attractive to buy to let investors given the higher capital required to buy them. 

However, there are still bargains to be had in Penicuik for buy to let investors so long as you know where to look.

If you want some advice on where to look for Penicuik property bargains this Spring, come and see me in my office (6 Bank Street, Penicuik), give me a call 01968 674601 or email me (

Thursday, 17 March 2016

Investment properties in Penicuik come in all shapes and sizes

I recently attended a local meeting in Penicuik where I got recognised as being the Penicuik Property Blog chap (well you have to be recognised for something, why not that!).  A question I was being asked repeatedly was ''What is the ideal property to invest in in Penicuik?''.  So I thought I would share my thoughts with you.

When considering a buy-to-let purchase what is believed to be a good deal will vary from person to person.  Everyone will have a different budget and varying preferences on location, style of property, condition etc as well as having different financial situations. That isn’t unusual, no different to everyone who has a different taste in music (I’m a 1980’s person myself with love of Abba if you are interested!).

It has been well documented recently that the additional 3% increase in Land & Buildings Transaction Tax (the Scottish stamp duty to you and me) for buy to let purchases coming into place on the 1st April 2016 will affect the market, and opinions on that also vary, but I am already seeing a change in requirements of some investors in that they are lowering their budgets and considering smaller properties to avoid paying out more than needed on tax.
I have always been of the opinion personally that “spreading the risk” is wise if you have a large portfolio.  A few flats, a few houses, a couple in Cornbank, a few in Valleyfield,  some in Ladywell etc, makes sense. All your eggs in one basket is a risk if something unpredicted were to occur.

I am also of the opinion that buying two properties for £85,000 is better than one house at £170,000.  If you choose wisely two properties at £85,000 might rent for £525 a month each, but you’d struggle to find a £170,000 house that would rent for anywhere near £1,050.

Then there is the view that flats change hands more regularly than houses, so for longevity of tenancy buying a house might be wiser. But then these houses are rented by families with children, and children might lead to more wear and tear on the property, the “what if’s” are endless.

One thing is for certain, demand for one, two and three bedroom properties in the rental sector is high which means that there is room to trial many different stratagies.

We have developed a checklist which guide peoples to work out what sort of property is likely to fit their circumstances.  Please get in touch is you want a copy.

In short, don’t assume.  Feel free feel free to get in touch and ask me what I think about your plans. I would be happy to cast an eye over the property you are considering buying and let you know what I think the pro’s and the con’s of it are – you can pop into my office at 6 Bank Street (the kettle is always on), call me on 01968 674601 or email me on

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Penicuik property market together with regular postings on what I consider the best buy to let deals in Penicuik out of the many of properties on the market irrespective of which agent is selling it, then visit my blog, the Penicuik Property Blog, or sign up for our monthly newsletter, the Penicuik Property News.

Tuesday, 15 March 2016

Deal to be done on this Penicuik flat

I have been tracking this flat for some time now and the eagle eyed amongst you will remember that I featured in on the Penicuik Property Blog in November.

The flat is being sold by our friends at Stuart & Stuart.  It is a fairly basic 1 bed flat at 4 Andrew Court in Penicuik, just off the Queensway, although it does have gas central heating and double glazing.  

The description and pictures do not make it clear whether the bathroom has a shower or not so it would be worth checking this.  Also, the bathroom picture does not have a full shot of the WC so I am not able to see whether it has the tell tale sign of repossession – tape across the WC seat!  Again, worth checking this out.  Finally, the external picture shows that there is a defective communal down pipe and it is worth considering the difficulties landlords sometimes have in getting even simple communal repairs done.

The property is now on the market for a fixed price of £70,000.  It will rent for £500 which gives a yield of 8.6% based on asking price of £70,000.  However, this property has been on the market for some time now, actually since July last year, so a cheeky wee offer may secure the flat for a lower price – a price of £60,000 would get you to an impressive yield of 10%.

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), give us a call 01968 674601 or email us (

Friday, 11 March 2016

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 property is on the market with McEwan Fraser offers over £99,995 so let’s say it goes for £105,000.  Rent of £800 pcm is achievable on a property like this particularly with housing benefit tenants which gets you to a 9.1% yield.  On top of this, there may be scope for a negotiation on price as the property has been on the market for over a year.

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 (

Thursday, 10 March 2016

The Post Office or a Penicuik Buy to Let Property?

I had an interesting email from someone in Penicuik a few weeks ago, that I want to share with you (don’t worry I asked his permission to share this with you all). In a nutshell, the gentleman lives in Mauricewood, he is in his mid 60’s and still working. He has a decent pension, so that when he does retire in a couple of years’ time, it will give him a comfortable life. He had recently inherited £140,000 from an elderly aunt. One option he told me was put it into a savings account. The best he could get was a 2 year bond with the Post Office, which paid 1.9%, meaning he would get £2,660 in interest a year.  One of his other options was to buy a property in Penicuik to rent out and wanted to know my thoughts on what he should buy, but he had concerns as he didn’t want to take a mortgage out at his time of life he was also worried about all the tax changes he had read about in the papers for landlords. 

Notwithstanding the war on Penicuik landlords being waged by both John Swinney and George Osborne, the attraction of bricks and mortar endures for many. As our man is a cash buyer, he would not have to deal with the intricate cut to mortgage interest tax relief that will diminish, or even eradicate, the profits of some Penicuik landlords. It’s true he would face the extra 3% in Land and Buildings Transactions Tax (the old ‘Stamp Duty’) to buy a second property, but with some good negotiation techniques, that could soon be mitigated.

I told him that buying a Penicuik buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £2,660 a year, or as he rightly suggested, invest in property in Penicuik. The average yield (yield being the equivalent of the interest rate on the property) at the moment in Penicuik is 5.8% per annum, meaning our potential F.T.L (First Time Landlord), should be able to, depending on what he bought in the town, earn before costs £8,120 a year. (However, I told him there are plenty of landlords in Penicuik earning half as much again (if not more), if he was willing to consider more specialist investment types of properties – again, if you want to know where – look at my blog or drop me an email).

The bottom line is this, the success of investing in Penicuik buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike a savings accounts, with property the capital you invested can also go up (and yes, it can go down as well – more of that in second). Property values in Penicuik have risen by, on average, 1.8% per annum over the last three years, meaning that on top of your £8,120 in rent, but also seen an uplift of £2,520 …meaning his overall return for the year would have been £10,640 (not bad when compared to the Post Office!).

...  but the doom mongers amongst you will say, property values can go down, as they did in 2008 and in 1988 and 1979. Yes, but after 1979, prices had bounced back to their 1979 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped 1988 and did take 13 years to reach back to those 1988 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Registers of Scotland, average property values in Penicuik currently stand 10.7% above the January 2008 (ie pre crash) level, and anicdotal evidence suggests that in the nicer parts of Penicuik, we are well above these sorts of levels. Therefore, all this talk of property crashes seems unfounded.

… and what would that £140,000 get you in Penicuik? A decent 3 bed semi detached or terraced house in many parts of Penicuik including... in fact, the world is your oyster. But which oyster?

If you would like a chat to find out more about investment property and property management in Penicuik please pick up the phone (01968 674601) or pop in (6 Bank Street, Penicuik) or email (

Wednesday, 9 March 2016

Sought after, quality stone built 1 bed flat in Penicuik

A few weeks ago on the Penicuik Property Blog we had a stone build flat that in Auchendinny .... today we have stone built flat in the heart of Penicuik which is also an uncommon occurrence in and around Peniciuik!

This property is a one bed, ground flat at 41 Cranston Street in Penicuik.  Cranston Street is off Wilson Street between the back of the post office and the Craigiebield Hotel.

The flat is in a stone build block.  The property has been well maintained and it has a lounge, a modern kitchen, a double bedroom and a wet room along with double gazing and gas central heating.  However, an older person has been living in the flat and you will need to neutralise some of the decor and the carpets. and it is in a ready to rent condition having been well maintained. 

Normally, I would comment negatively about there only being a shower – you will have heard me on this topic before, everybody wants a bath but nobody used a bath! – but in this case I am less fussed as this flat is not going to be a family home, rather it will attract young professionals or older people who are often less fussed by a bath.

This flat is on the market with Allan McDougall for offers around of £90,000 so let’s say you get it for £90,000.  Adding £4,000 on for decor and carpets gets you to a total spend of £94,000.  The right tenants should pay £525 for a flat like this so that’s a yield of 6.7% which is good for a 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), call us (01968 674601) or email either of us (

Sunday, 6 March 2016

Why the 3.1% increase in Penicuik Prices?

Let me start today’s Penicuik Property Blog with an apology and a thanks.  Firstly, the apology – apologies for this edition of the blog coming out on a Sunday rather than the normal Thursday.  Secondly, thank you to all the concerned readers of the Penicuik Property Blog who got in touch to see if anything was wrong given that the ‘regular as clock work’ Thursday blog was not posted. We are issuing the first edition of the Falkirk Property News shortly to accompany the Falkirk Property Blog that has been going for some time and this has kept me a wee bit busy!

Now, back to important matters – the Penicuik property market.

Penicuik’s continuing housing shortage is putting the town’s (and Scotland’s) repute as a nation of homeowners ‘under threat’, as the number of houses being built continues to be woefully inadequate in meeting the ever demanding needs of the growing population in the town.
In fact, I was talking to some friends the other day at a get together and the subject of the Penicuik Property market came up in the conversation after the weather and politics. It was said that it used to be that if you went out to work and did the right thing, you would expect that relatively quickly you would be buying a house, you would go on holiday every year and you would save for a pension. But now things seem to have changed. 

At least 30,000 new homes are needed each year in Scotland to tackle the chronic housing shortage this Country has. 

As you can see from the graph above (courtesy of the Office of National Statistics), only 18,285 properties were built in 2015 in Scotland as a whole (split down 12,050 built by private builders, 3,060 built by Housing Associations and a paltry 1,160 council houses).  Also, and perhaps more concerning are that facts that the last time we build more than 30,000 homes a year was in 1977 (the year of the punk explosion and the Queen’s silver (yes, silver!) jubilee depending on your taste) and we have only built 21,000 homes per year on average over the last 10 years.

The current Scottish Government is helping – they are committed to see the building of 6,000 homes per year on average and are on track to deliver this.  However, this still leaves another 24,000 homes per year to build.

The picture in Penicuik is similar to the Scottish wide trend.

There are simply not enough houses in Penicuik and the shortage of supply has meant Penicuik property values have continued to rise, meaning they are 3.1% higher than 6 months ago.

I was taught at school that it is all about supply and demand, this economics game. The demand for Penicuik property has been particular strong for properties in the good areas of the town and it is my considered opinion that it is likely to continue this year, driven by growing demand among buyers (both Penicuik home buyers and Penicuik landlords alike). You see, Penicuik’s economy is quite varied, meaning activity is expected to remain relatively strong into the early Summer of 2016, especially as some Penicuik buy to let landlords try to complete purchases ahead of the introduction of new Land & Buildings Transaction Tax (stamp duty to you any me!) rules in April.

…and of supply, well we have spoken about the lack of new building in the town holding things back, but there is another issue relating to supply. Of the existing properties already built, the concern is the number of properties on the market and for sale. The number of properties currently for sale in Penicuik is only 28, whilst 12 months ago this figure was 62 and three years ago it stood at 87… a massive drop!

With demand for Penicuik property rising, minimal new homes being built and less properties coming onto the market, that can only mean one thing, now is a good time to be a homeowner or landlord in Pencuik. 

If you would like a chat to find out more about investment property and property management in Penicuik please pick up the phone (01968 674601) or pop in (6 Bank Street, Penicuik) or email (

Tuesday, 1 March 2016

Penicuik flat that needs refurbishment but a 10.7% yield is the carrot!

The Penicuik Property Blog’s buy to let opportunity today needs a refurbishment but, if you are up for the challenge, then I recken that you can get a yield of up to 10.7% on the property after refurbishment.

This property is a 3 bed, upper villa in a block of 4 on Carlops Avenue.  Carlops Avenue is off John Street at the Angle Park garage junction.  The flat has a lounge, an unfitted kitchen, three bedrooms (2 double and 1 single) and a bathroom without a shower.  The property needs to be refurnished.  It needs a new kitchen, a new bathroom and re-decorated and re-carpeted throughout.  Let’s say this costs £12,000.

This flat is on the market with Glasgow Property Agenda at a guide price of £78,000 which is £12,000 less than the Home Report value.  Given the condition of the property (ie needing refurbishment) and as the selling agent is not a ‘known commodity’ in Penicuik, it is hard to get a read on the sellers views on price so let’s say it is in the range of £78,000 (the guide price) and £90,000 (the Home Report valuation).  Adding the estimated refurbishment costs of £12,000 would get you to a total spend of between £90,000 and £102,000.
Housing benefit tenants should pay £800 pcm for a flat like this which gets you to a yield of between 10.7% and 9.4%.

If you would like to pick my brains about this property or buying any other properties for investment purposes, pop into our office at 6 Bank Street, Penicuik for a coffee and we can have a chat.