Wednesday, 31 August 2016

Fantastic 2 bed lower villa in Penicuik for buy to let ....

Good morning, check out today’s property. This is an opportunity to grab yourself a ready made investment, with hopefully no hassle.

Have a look at this 2 lower villa in Cuiken Terrace, Penicuik to see if you think it will work for you. 

Turning to the financials.  The asking price for this property, which is on the market with Allan McDougall, is offers over £93,000 so let’s say it goes for £100,000.  Based on my experience, a rent of £630 pcm should be achievable on this property.  So that gets you to a yield of 7.6%.

We hope you find our posts useful.  If you would like some advice with your potential investment, please pop in to the office for a chat at 6 Bank Street Penicuik, call me on 01968 674601 or email me on

Friday, 26 August 2016

18% of Penicuik Homes Are Three People Households

I was having an interesting chat with a Penicuik buy to let landlord the other day when the subject of size of households came up in conversation.  For those of you who read my Brexit article published shortly after the referendum, one of the reasons on why I thought the Penicuik property market would, in the medium to long term, be OK, was the fact that the size of households in the 21st Century was getting smaller – which would create demand for Penicuik Property and therefore keep property prices from dropping.

Looking at the stats going back to the early 1960’s, when the average number of people in a home was exactly 3, over the years it has steadily dropped by a fifth to today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the population remained at the same level for the next 50 years and we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties (or 105,769 per year) .  When you consider the Country is only building 139,800 properties a year. It doesn’t leave much for people living longer and immigration, looking closer to home.
In Penicuik, the average number of occupants per household is 2.4 people exactly the same the national average.

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting, a fascinating picture appears.
The vast majority of homeowners who don’t have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone. People living on their own are more likely to live in a Council house (43%) and the largest households (those with 4 or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy. What surprised me was the even spread of private rented households and how that sector of population are so evenly spread across the occupant range – in fact that sector is the closest to the national average, even though they only represent a sixth of the population.
When we look Penicuik figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears...
But it gets even more interesting when we focus on just private rental properties in Penicuik, as it is the rental market in Penicuik that really fascinates me. When I analysed those Penicuik private rental household composition figures, a slightly different picture appears as around:
  • 36% of Private Rental Properties are 1 person Households
  • 35% of Private Rental Properties are 2 person Households
  • 15% of Private Rental Properties are 3 person Households
  • 9% of Private Rental Properties are 4 person Households
  • 5% of Private Rental Properties are 5+ person Households

As you can see, Penicuik is not too dissimilar from the national picture but there is story to tell. If you are considering future buy to let purchases in the coming 12 to 18 months, I would seriously consider looking at 3 bed houses. Even with the numbers stated, there are simply not enough 3 bed houses to meet the demand. They have to be in the right part of Penicuik and priced realistically, but they will always let and when you need to sell, irrespective of market conditions at the time, will always be the target of buyers.
To keep up-to-date with the rented property sector in Penicuik, visit my property blog by clicking here.

A few more interesting articles about the Penicuik property market:

Thursday, 18 August 2016

Post Brexit property disaster - more like a ‘soft landing’ so far Nationwide claims

 Nationwide has recently reported that house prices continued to rise 0.5% in July and up by 5.2% annually. Although their chief economist, Robert Gardener, warns that demand could still fall.

"This is the first month's data following the EU referendum. However, it is important to note that, in constructing the index, we use data at the mortgage offer stage, this means any impact from the vote may not be fully evident in July's figures, as there is a short time lag between a buyer making the decision to purchase a property and applying for a mortgage."

"It would be tempting for commentators to assign any trends in the coming months to the impact of the referendum. Housing market transactions were always likely to soften over the summer after the surge in activity in March, as buyers bought forward purchases of second homes to avoid the Stamp Duty levy (Land & Buildings Transaction Tax), which took affect in April."

Commentators and speculators all have differing opinions of how much impact the referendum will have overall but as a result of the tax changes on Buy to Let properties and uncertainty over the economy there will inevitably be an overall softening of the housing market.

The lack of supply and Estate Agents stock levels already being so low has lead to more of a 'soft landing' than a full blow crash. The same is very much true for Lettings, new investment landlords are being generally cautious buying properties until they see how prices fair and tenants are tending to stay to see how much rents will rise or fall, all leading to a lack of supply in the rental sector. This continued lack of supply will inevitably lead to a continued rise in rents and house prices demand continues to outstrip supply.

This has been back up by The National Association of Estate Agents' whose June housing market report found 57% of agents reported a drop in demand and 58% saw supply fall in the week following the vote. However, agents remain positive, predicting this would level out over July.

Mark Hayward, managing director of the NAEA, said “In periods of extreme political and economic uncertainty, the housing market will always respond.  We remain upbeat and need other in the industry to do so as well. The new housing minister confirming his commitment  to building a million new homes will be encouraging for many buyers, especially those looking to buy their first home. Hopefully we should soon see housing market confidence bouncing back to the levels pre-brexit."

Monday, 15 August 2016

Post Brexit Life in the Penicuik Private Rented Sector

The latest report from the Association of Residential Letting Agents (ARLA) shows that the buy to let rental market remains stable post Brexit announcement.

77% of letting agents saw no change in rents as a result of the announcement, whilst 12% of letting agents reported an immediate dip in rent.  This contradicts expectations, as before the result 19% predicted rents would increase, and 20% expected them to fall. 61% thought they would stay the same.

Supply and demand has also so far been unaffected with 67% of letting agents seeing no change in supply and 64% reporting no change in the number of people looking to rent.  Scottish letting agents have reported a surge in interest from landlords in recent weeks, showing the confidence in the Scottish market.

Lenders are continuing to offer very good rates on buy to let mortgages which is proving to be attractive to Scotland’s many landlords and investors, who typically reside within Scotland.

Robert Young, author of the Scottish Property Blog series says “Inch by inch, we are beginning to see what life will be like in the post Brexit vote world and there is evidence that life will continue .... as if it wouldn’t.  There is not enough housing being built to satisfy the increased demand for housing – this supply and demand imbalance will not be fundemantely affected by the aftermath of the Brexit vote, whatever the aftermath may be”.

It is worth bearing in mind that for the majority of people property investment is a long term (10-20 year) strategy.  If this is so, then it is a case of weathering the storm, and things should be OK.  In the long term things will pick up if there is a blip.  Currently buyers are being a little cautious which may present itself as an opportunity as fewer people will be jumping in with both feet.

RICS , the surveyors’ professional body, has published advice on its website to members about valuations post-Brexit.  It strongly implies that surveyors may be in danger of stating too high a price in their valuation reports.  It suggests a form of wording which essentially advises customers that the valuation may not be reliable as the “probability” of that price being achieved in the event of a sale “has reduced”.  So what does this mean for buy to let property investors?  It means that sellers are more likely to be open to price negotiation at the moment so you could ‘bag yourself a bargain’!

In summary, we don’t know what the effect of Brexit will be on the local market yet. We don’t know how long it will take to trigger Article 50 and, once it is triggered, we don’t know how long it might take to sort all of the issues out.  However, if we look at the performance of the rental market (see accompanying newsletter article on the Private Rented Sector) we do know there is a huge and growing demand for rental property.

For now the rental market remains calm, with no immediate fallout.  The government needs to incentivise landlords to stay in the Private Rented Sector, and needs to encourage institutional investors to stay in the market.  If these 2 groups pull away, tenants will be further affected as the lack of supply (which is already chronic) will push up rents.

The Penicuik Property Blog will keep you posted on any post Brexit changes if and when they happen.

Thursday, 11 August 2016

It’s summer time .... and there are burglars about in Penicuik

When the weather is good, there’s no beating a Scottish summer. It’s the time to enjoy barbecues, outdoor entertaining, children splashing in the paddling pool and balmy evenings.  

However, because there is never any guarantee of really hot weather, British households tend not to have air conditioning, unlike other countries where sweltering summers are inevitable. So when things hot up, we tend to revert to our manual air-conditioning system – we open the windows!

The problem is that we often forget to close them again, or we deliberately leave them open night and day, providing a perfect opportunity for burglars and opportunists to pounce. Indeed, insurance companies report a 21% increase in claims following an unforced entry during the summer months. Small easily-snatched items such as handbags, car keys, mobile phones and jewellery are among the most popular thefts; lucrative for the thief and really, really, annoying to lose. Burglars can be in and out of a property in seconds, often whilst unsuspecting occupants are in the garden or watching television in another room.

To add insult to injury, insurance companies will not usually honour a claim for such theft unless the homeowner has “taken reasonable steps to prevent loss or damage”. An open window is an invitation to a burglar and hardly demonstrates the reasonable care demanded by insurers.

There are obvious yet often overlooked ways of avoiding the anxiety of a summer theft, such as:
  • Never leave front doors or windows open or unlocked when you are at the back of your property or in the garden.
  • Never leave valuables on windowsills.
  • Use restrictors on windows so they can only be opened part-way.
  • Regularly review your home insurance needs.
  • Support your local Neighbourhood Watch scheme.

May we wish you a happy and secure summer!

A few more interesting articles about the Penicuik property market:

Friday, 5 August 2016

A look at how the Private Rented Sector is performing, Summer 2016

New research has revealed that the Private Rented Sector (PRS) is now the biggest form of tenure after home ownership.  Furthermore, it is predicted that growth is going to treble over the next 5 years (Knight Frank).  Currently in the UK around 5.4 million, or 20% of households are being let out to private tenants.

Recent Legal & General research found that brokers in Scotland are the most positive about the future of buy to let, with 63% believing it will remain the same size as last year despite the introduction of the Land & Buildings Transaction Tax (LBTT) and forthcoming changes to tax relief.

The Knight Frank report also states that 53% of tenants favour a six month or one year tenancy on their rental property.  Whilst there are many benefits to a longer tenancy, landlords are paying out around £5 billion because of damage to property and unpaid rent (Access Legal Survey 2015).  Landlords need to bear in mind that when they get their property back at the end of a long tenancy, there will likely be significant wear and tear which will cost money to put right.  This is of course different to malicious damage. See accompanying newsletter article on wear and tear.

The same Knight Frank survey found that for 52% of tenants the key priority in choosing their rental property is finding somewhere close to work or their place of study.  30% of tenants stated that their main reason for moving was to upgrade to a nicer or bigger property.  38% of tenants have lived in 5 or more rental properties; most have relocated within a mile or so of their previous property, however 19% have moved more than 60 miles to relocate for work or study.  This highlights the flexibility people are finding in renting properties.  Overall, a very large percentage of those staying in the PRS are choosing to stay there as renting suits their lifestyle.

Interestingly a quarter of those who are renting think they are not likely to buy a home in the future.  Less than half of those who have expressed a desire to be a home owner are actually saving towards a deposit. 

A quarter of those living in the PRS live alone, 34% are a couple (no children); 43% of 18 to 24 year olds live in a flat share with other young adults.  Looking at age groups within the PRS, in the last 10 years the number of under 45s living in rented accommodation has more than doubled.  The 25 to 34 year age group make up 37% of the PRS.

Looking at the supply of rented properties, the PRS is still made up largely of private landlords, many of whom have more than 1 rental property.  The PRS increased dramatically in the 1990’s along with the increased availability of buy to let mortgages.  Current buy to let mortgage products are very attractive, drawing new investors into the market and allowing existing landlords to expand their portfolios.  Predictions are that the market is set to continue growing.  It is likely that we will also see an increase in large-scale institutional investors within the PRS, building purpose built rental properties.  This is common in other countries, where rented accommodation is a specific asset class.

All of the above confirms the seismic shift there has been over recent years in the PRS.  More people are renting and this is set to grow.  Tenants are choosing to make rental properties their long term homes.  Fewer people are considering buying their own home.  And there is a great deal of confidence that buy to let will remain strong in 2016 and beyond.

For information and advice on buy to let contact The Key Place now.

Thursday, 4 August 2016

Penicuik’s population set to rise to 17,900 by 2036

Penicuik faces a predicament - the population is growing and the provision of new housing isn’t keeping up. With the average age of a Penicuik person being 41.3 years (compared to the Midlothian average of 40.6 years old and the national average of 40.4 years of age), the population of Penicuik is growing at an alarming rate. This is due to an amalgamation of longer life expectancy, a fairly high birth rate (compared to previous decades) and net immigration, all of which contribute to housing shortages and burgeoning house prices.

And the population is going to continue to increase.  Using data provided by the National Records of Scotland, I forecast that the Penicuik population will grow as follows:
  • 2016 population           16,337
  • 2021 population           16.760
  • 2026 population           17,210
  • 2031 population           17.607
  • 2036 population           17,895

The normal ratio of people to property is 2 to 1 in the UK, which therefore means that we need just over 800 additional new properties to be built in Penicuik over the next 20 years.

Whilst focusing on population growth does not tackle the housing crisis in the short term in Penicuik, it has a fundamental role to play in long-term housing development and strategy in the town. The rise of Penicuik property values over the last six years since the credit crunch is primarily a result of a lack of properties coming onto the market, a lack of new properties being built in the town and rising demand (especially from landlords looking to buy property to rent them out to the growing number of people wanting to live in Penicuik but can’t buy or rent from the Council).

Although many are talking about the need to improve supply (ie the building of new properties), the issue of accumulative demand from population growth is often overlooked. Nationally, the proportion of 25-34 year olds who own their own home has dropped dramatically from 66.7% in 1987 to 43.8% in 2014, whilst 78.2% of over 65’s own their own home. Longer life expectancies mean houses remain in the same hands for longer.

In the short to medium term, demand for a roof over one’s head will continue to grow in Penicuik (and Scotland as a whole). In the short term, that demand can only be met from the private rental sector (which is good news for homeowners and landlords alike as that keeps house prices higher).

In the long term though, local and national Government and the UK population as a whole, need to realise these additional people over the next 20 years need to live somewhere. Only once this issue starts to get addressed, in terms of extra properties being built in a sustainable and environmentally friendly way, can we all help create a socially ecological prosperous future for everyone.

If you want to discuss any property matters, come and see me for a chat - my office is at 6 Bank Street, Penicuik.  Alternatively, you can either email me on or call us on 01968 674601.

A few more interesting articles about the Penicuik property market:

Wednesday, 3 August 2016

And so it came to pass in the Penicuik property market ....

In my 30 June 2016 posting on the Penicuik Property Blog, I suggested that post the Brexit vote there would be softness in property prices.

And so it has came to pass .... RICS, the surveyors’ professional body, has published advice on its website to members about valuations post-Brexit.  It strongly implies that surveyors may be in danger of stating too high a price in their valuation reports.  It suggests a form of wording which essentially advises customers that the valuation may not be reliable as the “probability” of that price being achieved in the event of a sale “has reduced”.

So what does this mean for Penicuik buy to let property investors?  It means that sellers are more likely to be open to price negotiation at the moment so you could ‘bag yourself a bargain’!

A few more interesting articles about the Penicuik property market:

Tuesday, 2 August 2016

‘Summer time and the livin’ is easy’ .... but not for the Penicuik property market

The song ‘Summer time and the livin’ is easy’ makes Summer sound fantastic and it is for most things.  However, Summer can make things a wee bit slow in the Penicuik property market – people are more interested in their holidays that buying and selling properties - and so it is just now. 

There are very few new, good properties for sale in Penicuik this week.  So I thought I would revisit an old favourite of mine.  I have mentioned this property on the Penicuik Property Blog before but it is worth another look as you are likely to be able to get a bargain as it has been on the market for a while now, since 10 March 2016 to be precise.

Today’s Buy to Let opportunity from the Penicuik Property Blog is a stone build flat that is ready to rent in Auchendinny .... stone built properties like this are not that common in and around Penicuik!

This property is a one bed, ground flat at 9 Evelyn Terrace in Auchendinny which is just up from the bridge at the bottom of the Auchendinny hill.  Auchendinny is surprisingly popular as it is close to the Bush, Roslin Institute etc so getting high quality tenants is fairly easy.
The flat is in a stone build block and it is in a ready to rent condition having been well maintained.  It has a lounge/dining room, a fitted kitchen, one double bedroom and bathroom with a bath with a shower over it.  It has double glazing and gas central heating, the decoration is in good order as is the flooring.

This flat is on the market with Mov8 for offers in the region of £85,000.  As I said, it has been on the market since early March 2016 so the seller should be open to a wee bit of price negotiation by now but let’s say it goes for £85,000 for now.  Auchendinny is popular with people working in Roslin at, for example, the Roslin Institute.  This flat will rent for £500 minimum and the right tenants may pay £525 for it so that’s a yield of 7.1% to 7.4% which is good for a stone built property in this part of town.  On top of this you may be able to negotiate a better price as the property has been on the market for a while which would improve this yield.

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