Thursday, 14 February 2019

Property bargain to be had for this Penicuik stone built buy to let opportunity?

In The Penicuik Property Blog today we are revisiting a property that we first blogged about in early November because the passage of time might well mean that there is a bargain to be had – the property has been on the market since 30 September 2018 which is forever in current market terms!

Today’s buy to let opportunity is a flat in a traditional stone build block in Imrie Place, Penicuik .... so it’s handy for the centre of town.  It is a 1 bedroom, main door flat.  The property has a lounge with a modern kitchen off it, a double bedroom and a shower room.  It has gas central heating and double glazing. 

Outside, there is a garden to the rear .... which apparently needs some work to ‘bring it up to scratch’ .... and on street parking.

Running the number on this one.  The flat is on the market with Stuart & Stuart for offers over £88,000 so lets say it goes for £95,000 because it has been sitting on the market for a while now.  A property like this in this area should rent for around £625 pcm which give you a yield of 7.9% which is good for a traditional stone built property given their rarity.

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).

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #propertyinvesting

Friday, 8 February 2019

Welcome to The Key Place’s blog - Confessions of a Letting Agent

Landlords often ask us what goes on behind the scenes at The Key Place and so we thought we would share our experiences, and what we have learned from those experiences, with you.

Property inspections – they are certainly not all dull, and this particular one did make me laugh!

One of The Key Place’s newer members of staff went to carry out an inspection at a property where we had long term tenants who had never given us previous cause for concern as a result of inspections. 

The staff member arrived back at the office looking somewhat stunned, to say that the tenants were growing cannabis plants in the bedroom – she saw a number of plants, underneath specialist lights. 

In recent times we have been made increasingly aware of the problems of cannabis farms in rented properties.  Staff have been briefed in being vigilant.

I decided to visit the tenants immediately to see if they could shed some light (no pun intended) on the situation, as this seemed very out of character.  I called and asked if I could pop by and took my office manager with me.  On answering the door, I asked the tenants outright if they were growing cannabis plants.  Amidst much laughter, they explained that it was not a cannabis farm but the tenant’s mother’s tomatoes, which they were looking after while the mother was on holiday.  They invited me in to have a look and sure enough I was able to confirm that those were indeed tomato plants!

This was a good learning curve for The Key Place staff member as we were able to educate her in how to tell a cannabis plant from a tomato plant in the real world!  And on the plus side, I was delighted with her vigilance. 

For information on all of The Key Place services, please visit our website,

Thursday, 7 February 2019

Penicuik buy to let property opportunities compare well with Edinburgh ones


In Penicuik, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read The Penicuik Property Blog that shows that the Penicuik rental market is doing reasonably well, with rents and property values rising. 
When I was having a chat with one of these landlords over a cup of tea in Haigs the other day, he asked me two completely unrelated questions that got me thinking.  The questions were, how is Penicuik doing from a property point of view compared to Edinburgh and how much he should be paying per square foot?

Interestingly, we both thought that prices in Edinburgh would be rising significantly faster than Penicuik and similar towns but, going by my mantra of ‘never assume nuthing’, I did my research and was interested by what I found.

Over the last twenty years, property values in Penicuik have risen by 247.02%, compared to Dalkeith’s 247.00%, Musselburgh’s 244.65%, Linlithgow’s 247.00% and 247.01% in South Queensferry ….. and when you take a look at Edinburgh property values over the same period, they have increased by 248.26%.

This is an interesting result as it shows that Penicuik is doing similarly well to other towns around Edinburgh and these towns are it turn doing similarly to Edinburgh itself.
However, this is only looking at capital growth and it is worth taking into account other factors.
Firstly, there is income yield – in Penicuik and similar towns you can get easily 6-8% per year whereas in Edinburgh you are lucky if you get 4-5%.

And then there is the ease with which you can get a house.  It is difficult to get a buy to let property in Edinburgh that makes financial sense at the moment given the strong strong demand for people who want to live in the property themselves and are prepared to pay ‘over the odds’ to get this ‘dream’ property.  Whereas, it is easier to get a property at a sensible price in Penicuik and similar towns at the moment.

Therefore, whilst the capital growth in Edinburgh is a tiny bit more than in Penicuik, the higher rental yields and the relative ease with which you can buy a Penicuik property mean that Penicuik properties make good buy to let investment opportunities ….. so long as you buy the right ones of course!

What about the ‘how much he should be paying per square foot’ question I hear you say?  Well, that’s a topic for a future blog post .... watch this space.

Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit The Penicuik Property Blog (, contact me for a chat (phone on 01968 674601), come and see me in my office (6 Bank Street, Penicuik) or email me (

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #privaterentedsector #prs #firsttimebuyers #lettingagents

Thursday, 31 January 2019

Something new to think about in the Penicuik property market

There has been lots of building activity next to our office in Bank Street over the last few months and the fruits of this have now come to the market,

The first floor of the block between the Storehouse and the premises that used to be the pet supplies shop is being changed from office accommodation to residential flats and the first of these flats is now on the market with McDougall McQueen.

There are one and two bed flats available and, from the pictures, they look to be fitted will all mod cons and finished to a high standard …. although they do have electric central heating rather than gas.

The one bed flats are on the market for offers over £120,000; I can’t seem to find prices for the two bed flats.

There are lots of photos of the inside on the website but none of the outside as this is still a bit of a building site.

According to the sales blurb, the flats are aimed at ‘first time buyers, professional couples and for those looking to downsize to a property conveniently located and within walking distance of all town centre amenities and transport links’ …. presumably rather than buy to let investors. 
However, they may also be attractive to buy to let investors who are looking for a modern, easily maintained property although the rental yield will not be that high on them …. I suggest that you pop along for a viewing.

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).

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #propertyinvesting

Friday, 18 January 2019

Today’s Confession, well, where do I even start?

Latest from The Key Place’s ‘Confessions of a ..... Letting Agent’ series which takes a behind the scenes look at the operation of a busy lettings business.

We have a property on our books which we have managed for a long time.  The tenant is a 50 year old man who lives with his mother, and the lease is in his name.  The tenant has a sister who is not on the lease but who has been authorised by the tenant to deal with all property related matters on his behalf.  And so the sister, let’s call her Susan, is who The Key Place has to deal with.

Now I suspect Susan is the older sister.  She works for a public sector body and has the talking style of a 6 page letter without punctuation.  She clearly has too much time on her hands given her level of involvement in the property, and she has read up on every single possible legality with regards to renting in Scotland, England, Ireland, Wales and beyond.  She claims to record every call we have with her.

We wanted to inspect the property but were refused access.  The reason given was that the tenant would be too stressed by the inspection, plus he has allergies which prevents anyone who has gone within an inch of a bar of soap from entering the property.  We gave the required notice as per the lease to gain access to the property to carry out an inspection.  Myself and a manager were on our way to the property when we received a phone call from Susansaying that under no circumstances were we to come to the property and if we did, the police would be called.  The reason given was that we had not sent written confirmation that we accepted their conditions of entry – we hadn’t had this request so couldn’t give written confirmation.  We abandoned the inspection as we knew we could not inspect without approval or a court order.

We refused to give up!  Eventually it was agreed that our Chief Exec could inspect the property as long as he didn’t shower with soap that morning and used no deodorant or aftershave.  He had to agree that the tenant would smell him at the door before he was allowed access (yes really!).  And so the inspection took place.  The property was found to be OK, not in the best condition but not bad.  There were some things needing seen to, however the family were not keen (you can imagine) on work being done in the house, and so we had to negotiate what could be actioned, balancing landlord obligations under repairing standards verses smaller jobs that could be left. 

The main repairs needing attention were a damaged back door, some work to the kitchen and a cracked front door step.  Taking the front step as an example of how difficult this all became - the tenant eventually agreed the step could be fixed but stated the repair could take no more than 1 hour.  Apart from this 1 hour they wanted continuous access to their house.  When we explained that this was impossible and that the tenants were being unreasonable Susan said she would go the police, MP’s, the newspapers.  As we always do when we are threatened by people, we acknowledged that it was Susan’s right to go to the police, MP’s, the newspapers etc. but we suggested that speaking to a lawyer in the first instance might be a better idea from herpoint of view to ensure that her position was sensible.  This surprised Susan who has assumed that her threats of ‘taking things further` would scare us, but, as we were doing things by the book, we had nothing to be concerned about.

And so where are we today?  Well the step has been mended after incredible negotiation, however some of the other repairs have not been dealt with due to tenant refusal.  The property does at least meet the repairing standard.  We have not been allowed to re-inspect yet but we hope to shortly.  The landlord has been kept fully informed at all points and knows exactly what is going on at his property.  We do not believe the tenants are going to intentionally damage the property and they pay their rent every month without fail.  The owner would need to spend money on his property if the tenants were to leave, and so for him, he would rather keep the paying tenants, even although we can’t carry out inspections as regularly as we would like.

This is an on-going difficult situation as we still have a job to do.  We certainly feel that we have earned our management fee on this one!

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #privaterentedsector #prs

Thursday, 17 January 2019

Guide to painting Penicuik rental properties to increase demand

I was having a chat with a ‘do it yourself’ landlord in Penicuik the other week and she was bemoaning the fact that she was finding it really hard to get one particularly property of hers rented out.  I had to be honest with her and say that we are finding that rental properties are flying off the shelves at the moment which has increased prices – one bed flats are now doing for £650 when last year you were lucky to get £600 for them – so I wondered whether the property that she was renting was the problem rather than the market. 

At this point, she had to confess that she had wondered about getting the property re-decorated as it was looking a bit tired but has hoped that she could get away without doing this .... well, perhaps not I said as politely as I could!

Investing in your rental property is key to maintaining a successful investment, which is why a fresh coat of paint is a great way to increase the tenant demand and rental income.  Here are our tips to help you successfully paint your rental property.

Use Simple Colours

Paint using simple neutral colours like magnolia, cream, beige, grey, and off-white, as these colours don’t outdate and are attractive to most people.  Picking paint colours outside the neutral colour scheme that are on sale or that you personally like runs the risk of you painting colours some tenants may be turned-off by, potentially lowering demand towards your property.

Use Light Colours To Open Up The Room

Keep the colours light and neutral to help open up the rooms.  The tenant’s furniture also has a better chance of fitting into the property’s colour scheme when neutral, bright colours are used continuously throughout the property, helping make your property more attractive.  We see some properties painted white throughout, making them look light and uplifting, and it’s an economic way of redecorating.

Use Good Quality Products and Contractors

Avoid the temptation of buying cheap paint, because this generally chips easily and won’t last as long as good quality paint.  Before long you’ll have to repaint the property, making cheap paint only a short-term solution to increasing demand and rent.  Not only that, the appearance will look increasingly poor, which lowers the appeal, tenant quality and rent.
If you are getting somebody in to paid your property, use a quality contractors that has been recommended to you – they may cost you a wee bit more initially but the job that they do is likely to be better and last for longer saving you money in the long run.
How To Cover Up Imperfections

If the wall surface is imperfect pick, a paint with a mid or low sheen, as the finish will help hide this.  Paint also offers the opportunity to repair imperfections using ready mix fillers, making paint a good choice if your Penicuik investment property has damaged walls.

When Not To Paint

To avoid a patchy finish, try not to paint when it’s really hot so the paint doesn’t dry too fast.  Also avoid painting when it’s raining, as the paint won’t be able to cure in wet conditions, causing its longevity to likely be affected.

Careful Masking

Aim for the best quality job.  Ensure areas that aren’t being painted are carefully covered with masking tape to avoid the appearance of a cheap job.  Light and power switches or their covers should be removed, and carpet and flooring should be carefully covered.
I am happy to give you my thoughts on decorating, to recommend a good decorator to you or even to recommend a good type of paint to you!  I can be contacted on 01968 674601 or; alternatively pop into my office at 6 Bank Street, Penicuik.

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge

Friday, 11 January 2019

Changes to smoke detection rules for Penicuik landlords

It has been a few years since it has been law to have smoke detection equipment in private rented properties. 

The law currently is that you need a smoke alarm in each living area (in practice, living rooms) and circulation areas (in practice, halls and landings) as well as heat alarms in kitchens.  These need to be hard-wired and inter-connected (meaning that is one goes off then all go off).

Most landlords can get their heard around the benefit of having this safety detection equipment in their properties but there is genuine gripes about the damage or unsightliness of the hard-wiring particularly in older buildings with, for example, ornate cornicing.  This is particularly the case given the significant advances in battery technology since the law was introduced.

The Scottish Government has listened to these concerns and from 1 March 2019 landlords will be permitted to install inter-linked long life sealed lithium battery alarms instead of mains powered ones.
As an aside, from 1 February 2021 all properties in Scotland must meet the same standard of smoke/heat and CO alarm provision as the Private Rented Sector, regardless of tenure.  This means that there will be a level playing field in this regard for private, social and Council landlords ….. which is something that private landlord has been asking for for a long time now.

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge #smokedetection

Thursday, 10 January 2019

A profitable Penicuik buy to let opportunity that won’t be every tenant’s cup of tea

Today’s opportunity from The Penicuik Property Blog is a three bedroom upper villa on John Street, Penicuik.

The property has a large lounge, a fitted kitchen, three bedrooms (two double and one single and a bathroom.  It has gas central heating and double glazing.

Outside, there is a garden area to the rear and on-street parking.

The property looks as if it is in good condition for renting subject to putting in the safety stuff required.

This property will not be every tenant’s cup of tea because it is (I) an upper villa so, for example, families with young children and older people are less likely to be interested in it and (ii) it is on a main road (John Street).  However, these are items that can be factored into the price which may well make it an attractive investment ….. All I advise is that you go into a potential purchase of this property with your eyes open.

Running the number on this one.  The flat is on the market with Clyde Properties for offers over £120,000 so lets say it goes for £130,000 (I suspect it will  not sell quicky).  A property like this in this area should rent for around £800 pcm which give you a yield of 7.4% which is higher than for most properties reflecting the location of the property as well as the potential for longer void periods.

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).

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #propertyinvesting

Thursday, 3 January 2019

Penicuik landlords – help from HMRC with your tax return

Happy, happy New Year to you.

I know, I know, I know that I am being brave mentioning the words ‘HMRC’ and ‘tax return’ on the first day back after the festive break but I am trying to be helpful ….. honest!

Landlords are required to submit tax returns to HMRC annually declaring ALL their income and all the tax they have paid on this income already eg tax deducted at source. 

Tax returns for the 2017/18 tax year to 5 April 2018 needs to be submitted and, any tax arsing thereon, paid by 31 January 2019 at the latest.

To be helpful to landlords ….. as well as all other tax payers ….. HMRC are running a series of webinars aimed at helping different groups from amongst the 5.5 million individuals expected to complete a self-assessment form in the next few weeks.

One of these webinars is just for landlords and considers in detail the completing of the property section of the online tax returns.

You can see a link to register for the webinars by clicking here.

We hope you find our posts useful.  If you would like some advice with your potential investment, please call us (on 01968 674601), come and see us in our offices (6 Bank Street, Penicuik) or email me (

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #hmrc #taxreturns

Monday, 24 December 2018

The Penicuik Property Blog - Festive Greetings To All Our Readers

Well investors 2018 is drawing to a close and the property world is beginning to go into Christmas hibernation, so I wanted to take this opportunity to thank all the followers of the blog for your support during 2018.

Your support has been much appreciated and I have enjoyed the debate the blog has generated with you all, the majority of whom have become good friends, as well as valued customers. It has been an interesting year for investors in the Penicuik property market, with increases in average prices combined with much new and rents in the face of the BREXIT uncertainty, new legislation to take on board particularly for letting agents; announced changes in ADT rates, to name but a few.

Those of you who follow the blog know my views moving into the New Year and those of you with existing profitable portfolios in place have different challenges, to those just starting out in their property investment careers. As ever, I will endeavour to continue to post articles covering all investment opportunities in the property market in Penicuik, when I return to the blog the week commencing 7th January.

In finishing I would like to wish all my readers a very Merry Christmas and a happy and prosperous New Year.

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 call me on 01968 674601 or email me on

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

Don't forget to visit to view back dated articles and deals from the Penicuik Property Blog.

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge #epc #childbenefit #benefits

Friday, 14 December 2018

Implementation of minimum EPC rating for rental properties from 1st April 2020 .... the problem and the solution!

Problem: Implementation of Minimum “EPC” rating to enable property to be let

Solution:  Read Below

The Energy Performance Certificate (“EPC”) rules are being tightened up so that:
  • As from from 1 April 2020, any new tenancy will require the property to have an EPC rating of at least band “E” to enable the property to be legally available to be let.
  • By 31 March 2022, all rental properties require to have a Band E property rating.
  • By 31 March 2025, all rental properties will need to have at least an EPC band D rating.

There is some ‘free’ funding available to help landlords with the improvements required to achieve these higher standards so long as their tenants are registered for at least of the benefits set out in Appendix 1.  This covers things like:
  • Internal Wall Insulation for stone/solid/system built properties (eg old tenements, bungalows, etc) heated by (a) plug in mobile heaters, (b) electric storage heaters or (c) electric panel/room heaters.
  • Loft insulation for properties with less than 100mm of existing loft insulation, this can be topped up to 400mm.
  • Cavity wall insulation for properties that have not had treatment for cavity wall insulation before. 
  • Room in roof insulation - this is where a room has been built into the loft area, but doesn’t have adequate insulation.
  • Under Floor Insulation – must have access hatch to under floor and 1m clear head room.
  • First time central heating – for properties that don’t have a current central heating system,  there is funding for a full central heating system. This will start from January 2019.
Experience of ‘free’ funding schemes is that it is best to get in quick before the money runs out ..... so do not delay!

Appendix A

The benefits mentioned above are as follows:

Disability Living Allowance (DLA)
Personal Independence payment (PiP)
Attendance Allowance
Carer’s Allowance
Severe disablement allowance
Industrial injuries disablement benefit
Income related Employment & Support Allowance (ESA)
Income-based Job Seekers Allowance (JSA)
Income Support
Pension Guarantee Credit
Tax Credits (Child Tax Credit or Working Tax Credit)
Universal Credit
Child Benefit   

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge #epc #childbenefit #benefits

Thursday, 13 December 2018

A wee bit of TLC needed to maximise the potential of this Penicuik BTL house

The Penicuik Property Blog’s buy to let opportunity is a house in Eastfield Drive, Penicuik that needs a wee bit of TLC to maximise its value.

It is an end terraced, 2 bedroom house.  The property has a lounge/dining room, a fitted kitchen, two double bedrooms with built in cupboards and a bathroom with a shower over the bath.  It has gas central heating and double glazing. 

Outside, there are gardens to the front and rear and on street parking.

A few points to note/check out.  The house looks like an older person has lived in it for a long time without much modernisation being done so it will need a bit of TLC.  It will need re-decorated and re-carpeted throughout as well as a new bathroom.  The kitchen looks ok from the photos but worth checking this out when you view the property.  Finally, rather oddly, it looks like the lounge/dining room radiator has been removed .... obvious from the different coloured painting on the wall behind where the radiator used to be. 

Running the number on this one.  The flat is on the market with Struart & Stuart for offers over £112,000 so lets say it goes for £120,000.  You will need to spend a bit of money on the TLC, let’s say this comes to £5,000.  This brings the property costs to £125,000.  Properties like this in this area should rent for around £725 pcm ..... we have just rented a similar one for this amount ..... which give you a rental yield of 7.0%.

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).

#penicuik #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #privaterentedsector #propertyinvesting

Friday, 7 December 2018

Mental health support .... all part of the day job for a letting agent

Latest instalment of The Key Place's regular blog 'Confessions of a  . . . Letting Agent'

Landlords often ask us what goes on behind the scenes at The Key Place and so we thought we would share our experiences, and what we have learned from those experiences, with you.

I have working in lettings for many years and can categorically state that in this job there are no 2 days the same.  I look back and think there are many times when I or my staff could have taken the easy option and been less helpful to our tenants, however often taking the roundabout route results in a more positive outcome for our landlords.  Here is one such example.

We had a lovely Italian tenant, Luigi, who was a long term tenant in a flat in the south side of Edinburgh.  He was the sort of tenant all letting agents and landlords want – a professional who worked in IT, paid his rent in full 6 months in advance, kept the flat clean and tidy, was never a bother.  I used to put extra time in my diary to do inspections at Luigi’s flat as he always made me a strong Italian coffee and we would sit and put the world to rights for a while.

After being a tenant for years Luigi became very paranoid.  Whether it was stress related, a mental health issue or down to too much strong Italian coffee, I will never know.  However as a result of the paranoia Luigi requested the locks be changed on his front door.  He wanted an additional lock fitted, so that he would have a Yale, a Chubb and a new extra Chubb lock.  His logic for this was that when tradesmen visited the flat, only the new Chubb would be locked – they would therefore only be given this key, and not the other 2.  Luigi was very anxious that we meet this demand and was really quite insistent.

Although a strange request, we agreed.  Thinking about Luigi as a tenant, we decided we wanted to keep him.  Often it is better to make a small compromise to keep a good long term tenant than to refuse help and risk losing them.

Sadly Luigi has left now and gone back to Italy to be with his family.  We miss him as a tenant and wish him well, although I do hope he is staying away from the Italian coffee!

For information about the services we offer, please visit our website

#bathgate #bonnyrigg #bo’ness #boness #dalkeith #edinburgh #falkirk #grangemouth #kelso #linlithgow #livingston #loanhead #musselburgh #penicuik #stirling #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning #energyefficiency #privaterentedsector #prs #firsttimebuyers #brexit #hardbrexit #cliffedge

Thursday, 6 December 2018

Hard Brexit - How Would It Impact Penicuik House Prices?

It seems that Brexit has been around for a long, long time but more and more the concept of a hard Brexit has been taking centre stage in the Brexit discussions recently. 

I am often being asked how a hard Brexit would affect the Penicuik property market so I am going to try and give you what I consider a fair and unbiased piece on what would happen if a hard Brexit takes place in March 2019.

After the weather and football, the British obsession on the UK property market is without comparison to any other country in the world. I swear The Daily Mail has the state of the country’s property market on its standard weekly rotation of front-page stories! There are better economic indexes and statistics to judge the economy (and more importantly) the property market. The number of transactions are just as important, if not more, as an indicator of the state of the property market.

Worries that a ‘Yes’ vote in the Brexit referendum would lead to a fast crash in Penicuik (and national) property values were unfounded, although the growth of property values in Penicuik has reduced since the referendum in the summer of 2016.

Now, it’s true the Penicuik property market is seeing less people sell and move and the property values are rising at a slightly slower rate in 2018 compared to the heady days of a few years, but before we all start panicking, let’s ask ourselves, what exactly has happened in the last couple of years since the Brexit vote?

Midlothian house prices have risen by 13.41% since the EU Referendum…

 …and yes, in 2018 we are on track (and again this is projected) to finish on 1,850 property transactions (i.e. the number of people selling their home) … which is slightly more than 2017 … and higher still than the long term 10 year average of 1,402 transactions in the local council area.

So, it appears the EU vote hasn’t caused many major issues so far, however, if there was a large economic jolt, that could be a different game, yet how likely is that?

 The property market is mostly influenced by interest rates and salaries.

A hard Brexit would subdue wage growth to some degree, yet the level of the change will depend on the undetermined type of Brexit deal (or no deal). If trade barriers are imposed on a hard Brexit, imports will become more expensive, inflation will rise and growth will fall, although at least we are not in the Euro, meaning this could be tempered by the exchange rate of the Pound against the Euro. In plain language, a hard Brexit will be worse for house prices than a deal.

So why did the Governor of the Bank of England suggest a disorderly hard Brexit would affect house prices by up to 35%?

I mean it was only nine years ago we went through the global financial crisis with the credit crunch. Nationally, in most locations including Penicuik, property values dropped in value by 10-15% over a three to four year period. If we had a similar percentage drop, it would only take us back to the property value levels we were achieving in 2016.

And let’s not forget that the Bank of England introduced some measures to ensure we didn’t have another bubble in any future property market. One of the biggest factors of the 2009 property crash was the level of irresponsible lending by the banks. The Bank of England Mortgage Market Review of 2014 forced Banks to lend on how much borrowers had left after regular expenditure, rather than on their income. Income multipliers that were 8 or 9 times income pre-credit crunch were significantly curtailed (meaning a Bank could only offer a small number of residential mortgages above 4.5 times income), and that Banks had to assess whether the borrower could afford the mortgage if interest rates at the time of lending rose by three percentage points over the first five years of the loan … meaning all the major possible stumbling blocks have been mostly weeded out of the system.

So, what next?

A lot of Penicuik homeowners might wait until 2019 to move, meaning less choice for buyers, especially in the desirable areas of Penicuik. For Penicuik landlords, Penicuik tenants are also likely to hang off moving until next year, although I suspect (as we had this on the run up to the 2015 General Election when it was thought Labour might get into Government), during the lull, there could be some Penicuik buy to let bargains to be had from people having to move (Brexit or No Brexit) or the usual panic selling at times of uncertainty.

Brexit, No Brexit, Hard Brexit … in the whole scheme of things, it will be another footnote to history in a decade. We have survived the Oil Crisis, 20%+ Hyperinflation in the 1970’s, Mass Unemployment in the 1980s, Interest Rates of 15% in 1990’s, the Global Financial Crash in 2009 … whatever happens, happens. People still need houses and a roof over their head. If property values drop, it is only a paper drop in value … because you lose when you actually sell. Long term, we aren’t building enough homes, and so, as I always say, property is a long game no matter what happens – the property market will always come good.

Growth in UK property values as well as in Penicuik seems fated to slow over the next five to ten years, whatever sort of Brexit takes place.

We hope you find our posts useful.  If you would like some advice with your potential investment, please call us (on 01968 674601), come and see us in our offices (6 Bank Street, Penicuik) or email us (

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