Friday, 30 September 2016

Penicuik house buy to let opportunity

Today’s buy to let opportunity from the Penicuik Property Blog is a fairly standard, 3 bed property in Ladywell – this one is at 58 Yarrow Court.

It is a 3 bedroom, terraced house.  The property has a large lounge/dining room, a fitted kitchen, 3 bedrooms, a family bathroom with a shower over the bath, gardens to the front and rear and on street parking.

The decor is fairly neutral (other than the removable swirly carpet in the lounge) although the kitchen and bathroom are getting a wee bit tired.

Let’s do the maths.  This house is on the market with Clancys Hendrie Legal

(a new one on me!) for offers over £130,000 so let’s say it goes for £135,000.  A flat like this in this area should rent for £800 pcm so that gets you to a yield of 7.1%.

If you would like any advice on buying a property to let, feel free to give me a call 01968 674601, email me on ( pop into the office for a chat (6 Bank Street, Penicuik).

Thursday, 29 September 2016

Penicuik property – is it cheaper to buy or rent?

One of the points I will be discussing at the property seminar we are running in Penicuik in later this year will be the affordability of property in Penicuik.

Whilst property values in Penicuik have only increased 1.9% in the last year, in the past decade prices are up by over 20%!

At the same time interest rates have plummeted, so whilst renting used to be on a par in terms of cost compared to owning your own home, now it has become incredibly cheap to finance a property purchase.

Recently a very pleasant two-bedroom terraced house on Merlyon Way on the market for offers over £120,000; a perfect first-time buyer starter home.

Let’s say it sold for £126,500.  Our first-time buyer would require a £6,325 deposit, nothing for Land & Buildings Transaction Tax plus money for the legal fees. Their £120,175 95% mortgage with a five year fixed rate of 2.69% would cost £521 per month (which, importantly, includes paying down the debt).

That same house was in fact sold to a buy-to-let investor and is now up for rent… £625pcm!

So, if it’s so much cheaper to buy why doesn’t everyone do so?

Well there’s certainly some who choose to rent rather than buy for social and job mobility reasons. Some don’t want to be tied down to a particular property or area and in today’s more nimble economy this can be a sensible practice for many.

But affordability issues remain a major factor; with difficulties in raising the deposit as well as getting the banks to lend enough money in the first place.

A couple with a joint income of £27,500 are likely to be able to borrow around £110,000 from a bank……not enough to buy the two bedroom house I mentioned earlier without having an extra £10,000 to spare.

Consider that same couple earning £27,500 could theoretically RENT a property up to £765 per month (based on affordability criteria set by referencing agents) and you can see why some are choosing to rent a nicer property than they could ‘afford’ to buy (they could afford to buy it, they’re just not given the chance to).

As I mentioned at the start of this post, the Penicuik Property Blog is hosting a property seminar in Penicuik later this year – watch out for more details.

If you would like any advice on buying a property to let, feel free to pop into our office at 6 Bank Street, Penicuik for a chat, give me a call on 01968 674601 or email me on

A few more interesting articles about the Penicuik property market:

Tuesday, 27 September 2016

Buy to let made easy in Penicuik

We are beginning to see properties in the Miller development at Dalmore come up for re-sale – today’s buy to let from the Penicuik Property Blog is one of these.

It is a 2 bedroom, ground floor, corner flat.  Like all the properties in the Dalmore development, it is virtually brand new so is in good condition and has all mod cons. 

The flat is ready to let – it is one of the easiest buy to let properties you will ever come across.

Let’s do the maths.  This flat is on the market with McEwan Fraser for offers around £130,000 so let’s say it goes for £130,000.  A flat like this in this area should rent for £700 pcm so that gets you to a yield of 6.5% which is good for a desirable, modern, low maintenance flat like this.

If you would like any advice on buying a property to let, feel free to give me a call 01968 674601, email me on ( pop into the office for a chat (6 Bank Street, Penicuik).

Thursday, 22 September 2016

0.25% interest rate cut – what will it do for the Penicuik Property Market?

I had an interesting chat with a Valleyfield landlord who owns a few properties in the town. He popped his head in to my office as his wife was shopping at the Friday market, we had not spoken before (because he uses another agent to manage his Penicuik properties) yet after reading my blog on the Penicuik Property Market for a while, the landlord wanted to know my thoughts on how the recent interest rate cut would affect the Penicuik property market and I would also like to share these thoughts with you …

Well it’s been a few weeks now since interest rates were cut to 0.25% by the Bank of England as the Bank believed Brexit could lead to a materially lower path of growth for the UK, especially for the Financial Services and Construction industries. You see for the country as a whole, the Financial Services and Construction industries are still performing well below the pre credit crunch levels of 2008/09, so the British economy remains highly susceptible to an economic shock. This is especially important in Penicuik because, even though we have had a number of local success stories in Financial Services and Construction, a large number of people are employed in these sectors. In Penicuik, of the 8,028 people who have a job, 602 are in the Financial Services industry and 594 in Construction meaning …

7.5% of Penicuik workers are employed in the Financial Services sector and 7.4% of Penicuik workers are in Construction

The other sector of the economy the Bank is worried about, and an equally important one to the Penicuik economy, is the Manufacturing industry. Manufacturing in Penicuik employs 409 people, making up 5.1% of the Penicuik working population.

Together with a cut in interest rates, the Bank also announced an increase in the quantity of money via a new programme of Quantitative Easing to buy £70bn of Government and Private bonds. Now that won’t do much to the Penicuik property market directly, but another measure also included in the recent announcement was £100bn of new funding to banks. This extra £100bn will help the High Street banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages… which will have a huge effect on the Penicuik property market (as that £100bn would be enough to buy half a million homes in the UK).

It will take until early in the New Year to find out the real direction of the Penicuik property market and the effects of Brexit on the economy as a whole, the subsequent recent interest rate cuts and the availability of cheap mortgages. However, something bigger than Brexit and interest rates is the inherent undersupply of housing (something I have spoken about many times in my blog and the specific affect on Penicuik). The severe undersupply means that Penicuik property prices are likely to increase further in the medium to long term, even if there is a dip in the short term. This only confirms what every homeowner and landlord has known for decades ... investing in property is a long term project and as an investment vehicle, it will continue to outstrip other forms of investment due to the high demand for a roof over people’s heads and the low supply of new properties being built. 

A few more interesting articles about the Penicuik property market:

Thursday, 15 September 2016

Penicuik landlords remember your “Consents to Let”!

For many Penicuik homeowners, letting provides an obvious investment opportunity as an alternative to selling. With the right expert help from your letting agent, the matter should be quite straightforward, although there are certain consents that should be obtained if you are to avoid some potentially costly problems. 

As with far to many things in life, the devil is in the detail so make sure that you take into account the small print. 

You will certainly need the consent of your mortgage provider. They are unlikely to object, but you could be in breach of your mortgage terms if you have not obtained their consent before letting your property. They may also charge an “administration” fee. One important thing to check is that there is no clause that increases the interest rate on your loan should the property be used as a “commercial venture”.

Your title deeds are something else you should check to see whether they impose any restrictive covenants of which the tenant should be aware. For example, there may be a restriction preventing anyone keeping a caravan on the forecourt, or storing building materials for more than a few days.

Importantly, once consent has been obtained, you must ensure that your tenant is aware of, and complies with, any obligations that you yourself would observe as owner in residence.

Finally, insurance. You should obtain permission from both your buildings and contents insurer. There is likely to be a change in cover as the property is being let out and this may increase your premiums, although there are insurers who specialise in this. As a minimum you should ensure that you are covered for any third party liability in respect of injuries to your tenant whilst at your property and I would do further and recommend you get malicious damage and loss of rent cover.

Please let us know if you would like advise what consents are required in your specific case to ensure your peace of mind for a successful let.    

A few more interesting articles about the Penicuik property market:

Tuesday, 13 September 2016

Impressive stone build 1 bed Penicuik buy to let opportunity

A grateful landlord was buying me coffee in Giovanni’s Bistro yesterday when he asked my thoughts on this Penicuik property.

It’s a stone build, main door 1 bed flat in Imrie Place.  Imrie Place is off Kirkhill Road.
The flat has a combined living room/kitchen, a double bedroom and a shower room (there is no bath in the property).  There is double glazing, gas central heating, an easily maintained garden and on street parking.

Let’s do the maths.  This flat is on the market with Allan McDougall for offers over £82,000 so let’s say it goes for £90,000.  A flat like this in this area should rent for £525 pcm so that gets you to a yield of 7% which is good for a desirable, stone build, main door flat like this.

If you would like any advice on buying a property to let, feel free to give me a call 0131 603 4570, email me on ( pop into the office for a chat (6 Bank Street, Penicuik).

Thursday, 8 September 2016

Penicuik’s ‘Generation Rent’ to grow by 1,790 households by 2021

“The growth of the private rented sector, and the arrival of an investor class of buy to let landlords within it, is an issue that won’t be going away anytime soon… no matter what you read in the Daily Mail.” I said, as I chatted over a coffee with a landlord client of mine in the town. Whether you are a landlord of mine (or not, as the case maybe), I am always happy to look over any properties you are thinking of buying for buy to let purposes – and more so over a coffee!

Some commentators are saying buy to let is about to die.

With the new Land & Buildings Transaction Tax (LBTT) changes and how mortgage tax relief will be calculated, some are saying that 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘bad news sells newspapers’? Let me explain why buy to let in Penicuik is only going in one direction – and not the direction the papers say they are going.

Facts and Figures

 According to Sheffield University (a centre of excellence on the topic), buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades.

By their estimates, the rate of homeownership nationally will fall to 50% by 2032. Today it is 71.0% in Penicuik. Meanwhile, the rate of private sector renting will increase to 35%. Interestingly, in Penicuik it currently stands at 7.4%.

Therefore, the demand for rental accommodation in Penicuik will grow by 1790 + households in the next five years. These are the reasons why, irrespective of the distractions set out in the newspapers.

 Generation Rent

Over the last six years, Penicuik’s property values have risen a lot more than average wages/salaries. As homeownership and mortgage availability is dependent on your ability to pay a deposit, this has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%.)

Now it’s true the Government’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home – ranging from Help to Buy to the much vaunted Help to Buy Isa. But if you are unable to save for the deposit, none of this means anything. Especially to the ‘20 somethings’ of Penicuik and they still need a roof over their heads!

What is the effect on Penicuik Landlords?

These are big numbers and a sizeable chunk of the electorate. So, whilst it appears Penicuik “Generation Rent” youngsters will continue to rent and to not to buy, Penicuik buy to let landlords will be lifted by the projections of greater rental demand. Penicuik and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live.

With the new rules on tax, more and more landlords will be looking to move away from the previous ‘honey pot’ of central Edinburgh, because its higher prices mean lower rental yields.

With the new tax rules and central Edinburgh’s cooling of house price inflation, more and more landlords will look further afield, including Penicuik (interestingly, I have already been chatting to a few central Edinburgh landlords after reading the Penicuik Property Blog).

This prediction in growth of the Penicuik rental market is even on the back of the government clamping down on tax relief for landlords. The point is this: gone are the days of making guaranteed returns on BTL property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it… but not now. You must take a more considered approach to your existing and future portfolio, especially in Penicuik. In order to balance capital growth and yield, especially in this low interest rate world we live in, Penicuik landlords will need to do more homework to ensure investment in property gives the desired returns.

One place for Penicuik landlords and homeowners to visit for such information is the Penicuik Property Blog.

As always, if you are an investor in the Penicuik property market and would like a second opinion on a property you have seen then send the URL of the properties you have seen online over to me. Or if you would like to pop in and have a chat, then you can either email me on or call on 01968 674601. Our address is 6 Bank Street, Penicuik (just round from the TSB – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

A few more interesting articles about the Penicuik property market:

Tuesday, 6 September 2016

Penicuik buy to let investment – it ain’t pretty but the sums do add up!

Today’s buy to let opportunity from the Penicuik Property Blog is a 2 bed upper villa on Dykes Road in Penicuik.  Dykes Road is off Queensway.

The villa has a good sized lounge, a dining kitchen, 2 bedrooms, a bathroom with a shower over the bath and private gardens to the front and rear.

Turning to the financials.  The asking price for this property, which is on the market with McEwan Fraser, is offers over £89,995 so let’s say it goes for £95,000.  Based on my experience, a rent of £630 pcm should be achievable on this property.  So that gets you to a yield of 8%.  As I said in the title to this blog, the property ain’t pretty but the sums do work!

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

Thursday, 1 September 2016

Penicuik property prices set to drop £18,000 in the next 12 months due to Brexit?

Even the most sane person in Britain has to admit the Brexit vote will, in one shape or another, affect the UK property market. Excluding central London which is another world, most commentators are saying prices will be affected by around 10%. So looking at the commentators thoughts in more detail, property values in Penicuik will be 10% lower than they would have been if we hadn’t voted to leave the EU.

As the average value of a property in Penicuik area is £177,952, this means property values are set to drop for the average Penicuik property by £17,795… batten down the hatches... soup kitchens and mega recession here we come... it’s going to get rough.

...but before we all go into panic mode in Penicuik, the devil is always in the detail.

Look at the phrase again, and I have highlighted the relevant part “property values in Penicuik will be 10% lower than they would have been if we hadn’t voted to leave the EU”.

Property values today, according to the Registers of Scotland Land Registry are 8.21% higher than a year ago in Penicuik. The 12 months before that they rose by 4.37%. If we hadn’t voted to leave I believe, based on these figures, we could have safely assumed Penicuik house prices would have been 8% higher by the summer of 2017.

… and that’s the point, we won’t see a house price crash in Penicuik, it’s just that house prices in a years time will be 2% lower than they are now (i.e. 8% less the 10% lower figure because of Brexit). Let’s look at the historic figures and how that compares to today’s figures for the Penicuik Borough Council area and Penicuik as a whole.

Average Value of a property 20 years ago                      £ 49,685
Average Value of a property 10 years ago                      £ 150,141
Average Value of a property 2 years ago                        £ 158,067
Average Value of a property 1 year ago                          £ 164,458
Average Value of a property today                                   £ 177,952
Projected Value of a property in 12 months’ time          £ 174,393

Therefore, I believe the average value of a Penicuik property will be £3,600 lower in 12 months’ time than today which is still well above the average value 12 months ago.

That’s not to say Penicuik property prices might not dip slightly on the run up to Christmas (in fact they always have done just about every year since the year 2000 and most of those were boom years)... but in 12 months time this is my considered opinion of where Penicuik property values will be and looking at the historic prices, even if I (and many other property market commentators) are wrong and they drop 10% from TODAY’S figure, in the whole scheme of things, we have been through a Credit Crunch, Black Monday and 15% interest rates over the last 20 to 30 years and still Penicuik house prices have always bounced back.

Whilst the UK's vote for Brexit has created an uncertainty in the Penicuik housing market, there is no need to panic and prospective buyers should merely use common sense about their purchases. I always say to people to be prudent and if you are taking out a mortgage at some stage during the life of that mortgage circumstances will be difficult. We won’t have a 2008 Credit crunch fire sale of properties because after the Mortgage Market Review which took place in the spring of 2013, mortgage borrowers are not as highly leveraged this time around.  As a result of this, with any luck there will not be too many distressed sales, which cause widespread price reductions.

… and Penicuik landlords? They have recently been thrashed by Swinney’s and Osborne’s tax changes, but yields could rise if Penicuik house prices fall/stablise and rents grow, and this might also make it easier to obtain mortgages, as the income would cover more of the interest cost. If prices were to level or come down that could help Penicuik landlords add to their portfolio, as rental demand for Penicuik property is expected to stay strong as more people find it more and more difficult to obtain mortgages.

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: