Penicuik Buy to Let Deal of the Day

This property has recently come to the market through Andersonbain.  It's a 2 bedroom upper villa in Pentland Terrace in Penicuik. Andersonbain have it on the market for an asking price of offers over £89,000, so let’s say you can get it for £95,000. This property would rent for £625 pcm giving you an annual gross yield of 7.9%. 

Double click here to get more details on this property

The villa, which is in a lettable condition, has a large lounge with dining area, a fitted kitchen, two double bedrooms, a bathroom, triple (!) glazing, gas central heating, a low maintenance garden and a drive way giving off street parking.  A wee added bonus is that there is storage space in the attic!

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 me in my office (6 Bank Street, Penicuik), phone me (01968 674601) or email me (lettings@thekeyplace.co.uk).

Penicuik’s Premier Property Investor List .... join to stop keeping on missing out on the perfect Penicuik investment property

We are almost halfway through 2016, it seems that the first half of this year has just flown by. The last time I invited my blog readers to join our Premier Investor list was around 6 months ago so I thought I would share this post again.  Our premier investment list will give you direct access to any properties we find in Penicuik which will make a good investment. 

Having found our blog, you probably know a little more about the local market and about us, and you've probably even been in contact to ask us about something you've already seen. All good so far.

So why wait?

With blogs featuring great deals published daily, wouldn't it be great to be able to 'jump the queue' and get the inside info a few days early? We constantly check the market and keep an up to date list of potential Buy To Let properties in the Penicuik area, so we have a database we can refer to should you wish to consider a selection of options.

If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call or email us now and get your name put on our Premier Investor list on 01968 674601, pop through the door of our offices at 6 Bank Street in Penicuik or send us an email on lettings@thekeyplace.co.uk.

Don’t forget to visit the links below to view back dated deals for properties in, and articles about, the local Penicuik property market on www.penicuikpropertyblog.co.uk. 

‘Generation Rent’ in Penicuik to grow by 40% by 2021

A landlord of mine from Australia, who is always keen to buy more buy to let properties, emailed me last week to say that he was concerned that he had missed the boat by not buying a property before 1 April this year.  There was a surge of people buying buy to let properties before 1 April when the Scottish Government brought in the additional 3% Land & Buildings Transactions Tax (Scottish Stamp Duty) on second homes (a buy to let property is generally classified as a second home) and my landlord was concerned that this ‘flood’ of new properties would over supply the market meaning it wasn’t worth him buying another buy to let property for years.

My immediate response was to repeat my often said mantra of ‘the demand for rental properties over the next 20 year + will be very strong’ so, whilst there may have be a short term over supply around 1 April this year, the future for renting is strong.

However, it got me thinking that it would be good if I could back up this mantra with figures to provide more comfort.  So I have done this.

There are currently 37,472 properties in Midlothian.  The Midlothian Annual Housing Land Audit shows that 4,286 properties are due to be built by 2021 meaning that by 2021 there will be 41,758 properties in Midlothian.

62.5% of properties in Midlothian are currently owned, 26.7% are Council/social rented, 1% are rent free and the remaining 9.8% are private rented. 

We know that home ownership is coming down and we know that there are not that many Council/social properties being built.  According to Sheffield University, buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades.  By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% (today it is 62.5% in Penicuik) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Penicuik it stands at 9.8% today).

I estimate that by 2021 home ownership will fall to 60%, Council/social rented and rent free will remain the same at 26.7% and 1% respectively which would mean that private rented would increase to 12.3%.

This would mean that by 2021 there would be 5,136 private rented properties which is a 39% increase from the current level of 3,961.

Therefore, whilst there may have been a wee glut of properties on the rental market around 1 April of this year, the medium to longer term outlook for the rental property market is good.  My overseas landlord was comforted by this, so much so in fact that tomorrow I am viewing the buy to let property on Cranston Street, Penicuik that I blogged about last week for him!

If you would like to explore how we 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 lettings@thekeyplace.co.uk or pop into the office at 6 Bank Street for a chat.

Penicuik new build flats .... good buy to let investments?

The properties that we feature in the Penicuik Property Blog are not mainly new properties as you have a better chance of picking up a bargain in ‘second hand’ properties.  However, new properties can be attractive to certain buy to let investors, particularly new investors, so today I am featuring a new build property.

Miller Homes as building flats at Dalmore Mill which is between Penicuik and Auchendinny.  Dalmore Mill was the home to Midlothian’s last remaining paper mill and stands in a hollow, on Glencorse Burn, near the North Esk River.

The properties are bright spacious two bedroomed apartments with an open plan L shaped living and kitchen area with French doors.  Being new builds, they will come with a fully fitted kitchen, a fancy bathroom and all mod cons.  These properties also come with an allocated parking space. 

Double click here to get more details about these flats

The 2 bed flats are on the market for £130,000.  Rents of new properties are harder to assess as they, or properties similar to them, have never been rented before but I can see you getting £625 - £650/month.  This gives you a yield of 5.8% - 6%.  This yield level is lower than normal for 2 bed flats in Penicuik due to the new build nature of the properties.  You will also want to find out about Factorial Charge and take this into account in your calculations.

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 either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Penicuik city centre stone built flat with 7% return

I spotted this little number, which I think should be right up any buy to let investors street.  A well maintained, 1 bed apartment in a stone building within walking distance of the city centre and with easy links to the bypass, perfect for the commuting tenant.  1 bedroom apartments in this area are renting for in the region of £525 pcm at the moment.  This apartment has great size accommodation and ample on-street parking although it has a shower room rather than a bathroom which may put off some potential tenants. 

Double click here to see more details of this property

Allan McDougall have an asking price on this property of £90,000, so if you do your calculations on these figures, you are looking at a potential annual return of 7.0%, much better than what you are getting in the banks at the moment.

If you would like any advice on buying a property to let, feel fee to give me a call 01968 674601. 

Is the grass greener away from the Penicuik property market?

I was out walking back from the old graveyard in Penicuik the other day (I was getting a stunning picture for the next edition of the Penicuik Property News before your ask!) when I met one of my most experienced landlords.  He was having a bit of a ‘downer’ about the Penicuik property market after all the recent tax changes by John Swinney and George Osborne as well as the safety stuff that has been brought in, was thinking up for giving up on the Penicuik property market and buying a buy to let property in France, Italy, Spain, Germany or some country like that and asked my views on this.

Now property prices in other countries can be cheaper than the UK so on the face of it, if you believe the marketing hype, they can look like good investments.  However, there are a few things to think about when buying abroad. 

You need to make sure that you get what you think you are buying with all the consents and permissions required.  I know of somebody who bought a property in Spain only to discover sometime later that planning permission had not been obtained properly and the property is now threatened with demolition.

Overseas property markets can be much more volatile than in Penicuik.  We all remember the fantastic falls in property prices in Spain and Ireland during the financial crash of 2007/2008 – they made the property price changes in Penicuik look very small!

Rents levels can be capped thereby making them more like social housing rents rather than free market rents.

Also, each Country has its own laws and regulations about property and in particular renting out property so you would need to get your head around these. 

The tax rules are different in each Country and there are some great examples of spectacular changes with little or notice in the tax rules.  For example, in 2012 the French Government imposed a 15.5% social charge on capital gains from the sale of second homes or rental income – a measure which was estimated to bring in €250 million a year. Tax on rental income rose overnight, from 20% to 35.5%, while capital gains tax on property sales rose from 19% to 34.5%.  These new tax measures hit overseas investors hard and meant that a British couple who bought a French property for €200,000 20 years ago and were selling it for €750,000 would have to pay almost €60,000 in charges, on top of the existing capital gains tax. They received no credit against their UK tax bill for this amount.

“So, buying a property to let abroad has a few issues but surely it is worth it to avoid all the negative stuff that is being introduced here that will affect my  buy to let properties in Penicuik that will make them uneconomical” my landlord said. 

“Well, not really” I said and went on to explain.

The property market in Penicuik in particular and Scotland and the UK as a whole is very good at finding ways to adapt to changes so that they do not have the bad impact that everybody shouts about initially.  There is evidence that this is happening with the recent changes.  The 3% Land & Buildings Transaction Tax (Scottish Stamp Duty) is meaning people are buying smaller, cheaper houses in an attempt to try and offset the 3% increase in the purchase price.  People are buying their buy to let properties in companies to avoid the restrictions on mortgage interest tax relief that are going to be introduced.  And then, of course, there is the most obvious one of all, people are increasing rents to cover the costs – you will have heard me say often that you can’t beat the market but you can join the market so if the market is increasing its price as it is then you can, for sure, join in.

So I politely suggested to my landlord that he keep looking at home in the Penicuik property market for good opportunities – for sure, amend the model to mitigate the adverse changes coming along but do not throw the ‘baby out with the bath water’ and leave the market completely to buy overseas where there are a whole new set of issues and potentially lower returns to deal with.

Go Penicuik!  The grass is not greener away from Penicuik.

If you would like advice on the Penicuik property market in general and ways to help mitigate the changes that are being introduced to the buy to let market then please get in touch.  Pop into the office at 6 Bank Street, Penicuik, phone me on 01968 674601 or email me on lettings@thekeyplace.co.uk.

New to the market, quality house buy to let opportunity in Penicuik

This great family home in Penicuik has just come on to the market with Allan McDougall and I think it would make a perfect investment property.

The property is a spacious three bedroomed terraced house 14 West Cairn Crescent in Penicuik.  Given the type of house it is and the location it is in, I would expect that this property will be sold fairly quickly so if you are interested in it, best you go and view it quickly.

The property has a lounge, a dining kitchen, three bedrooms and a bathroom.  It also has gardens front and rear, on street parking, gas central heating and double glazing. 

Double click here to get more details about this property

This house is on the market with Allan McDougall for offers around £120,000 so let’s say it goes for £120,000.  You should get a rent of £800 for a house like this so that’s a yield of 8%. 

If you would like to explore how we 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 lettings@thekeyplace.co.uk.

Alternatively please feel free to pop in and see us at our offices in 6 Bank Street, Penicuik for a chat, the coffee is always on.

Is Let to Rent a good idea for Penicuik owners?

A landlord of mine from Valleyfield phoned me up the other day to ask my advice on whether he should ‘Let to Rent’.  Now, I thought that I was fairly up on all these different terms (eg build to rent, buy to let) but this was a new one on me.  My landlord explained that basically he was looking to move to Abu Dhabi to work for a couple of years and was wondering if he should sell or rent out his house in Penicuik. 

Once he said that I understood him perfectly as this concept is not new in fact it has been around forever.  There are many reasons why people do this:

• Schooling often features heavily.  Families who want to live in a specific catchment area of a particular school let out the home the own and rent another one close to the school. 
• Also, working abroad or in another part of the country for a limited time or even taking a sabbatical is another reason to ‘let to rent’ as is the case with my landlord.
• Finally, having to move but not being able to sell your existing home could be another reason.  This is known as being an ‘accidental landlord’.  This was far more popular after the financial crash of 2007/8 but, thankfully, is becoming less popular as the economy has recovered.

There are huge benefits to let to rent. Selling and buying is a big step both emotionally and financially so if you know that the move is short term or if there's any doubt that it's the correct long term decision, letting to rent makes a lot of sense.

However, before you do then you need to think about a few things:

• Emotions.  It is not often that I talk about emotion in this blog other than to say “keep emotion out of buy to let investing”.  Well in this case, this advice is still correct but it is harder to take because, quite literally, it is your home!  You need to get over the emotional hurdle of somebody else living in your home and all that that entails.
• When you want the property back.  You may not be able to get the property back when you want it depending on the terms of the lease.
• Financial.  Like any other buy to let investment, you will be taxed on any net income you receive from the property.  Also, depending on the property, you may not get the sort of yield you could achieve in a purpose bought buy to let investment.  This was particularly the case with my landlord who had a lovely big house in Valleyfield.
• Costs.  As with any first time rented buy to let property, there are a bunch of costs involved eg making the property itself ready for renting, landlord registration, EPC, gas safety, EICR, PAT etc.
• Boring .... but important .... things like consents.  If you have a mortgage on your house, you will need to get the mortgage companies consent to change the ‘use’ of the property from residential home to buy to let investment to be able to rent it out.

So whether to ‘let to rent’ is a personal choice.  In this particular case, I  advised my landlord to ‘go for it’ mainly because he loved his house, he was sure that he would be coming back to Penicuik long term in a couple of years time.

If you would like advice on ‘let to rent’, ‘buy to let’, ‘build to rent’ or any other these property matter, get in touch.  Pop into the office at 6 Bank Street, Penicuik, phone me on 01968 674601 or email me on lettings@thekeyplace.co.uk.

Start your week with a Penicuik BTL flat yielding over 10%!

Today’s Penicuik Property Blog buy to let opportunity is a 1 bed flat that has been on the market for a many, many so it much surely be ripe for negotiating a cracking deal on it!

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.  There are more photos of the flat at the bottom of this article.

Double click here to get more details of this property

The property is on the market with Stuart & Stuart for a fixed price of £70,000 and it has been at this price since well before Christmas so surely there will be room for negotiation on the price to, say, £65,000.  It will rent for £500 pcm, possible £525 pcm.   Based on these prices and rents you get the following yields:

• Price £65,000; rent £525 pcm gives a yield of 10.5%
• Price £65,000; rent £500 pcm gives a yield of 9.2%
• Price £70,000; rent £525 pcm gives a yield of 9%
• Price £70,000; rent £500 pcm gives a yield of 8.6%

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 me in our office (6 Bank Street, Penicuik), call me on 01968 674601 or email me (lettings@thekeyplace.co.uk).

More photos for the flat are set out below:

Penicuik rent went up by 2.3% in the last year

I was reading the Sunday Papers and when reading the financial pages, it was announced the UK inflation had increased to its highest level in a year. Inflation, as calculated by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months.  The report said it had risen to the those ‘heady’ levels by smaller falls in supermarket and petrol prices than a year ago. If you recall, in early 2015, we had deflation where prices were dropping!

So what does this mean for the Penicuik property market ... especially the tenants?

Back in November, the Office of National Statistics stated average wages only rose by 1.8% year on year, so when adjusted for inflation, Penicuik people are 1.5% better off in ‘real’ terms.   Great news for homeowners, as their mortgage rates are at their lowest ever levels and their spending power is increasing, but the news is not so good for tenants.

The average rent that Penicuik tenants have to pay for their Private Rental Properties in Penicuik (i.e. not housing association or council tenants) rose by 2.3% throughout 2015, eating into most of the growth.  2015 wasn’t a one off either.  In 2014, rents in Penicuik rose by 1.2% (where salaries only rose by only 0.2%) However, it’s not all bad news for Penicuik tenants, because in 2013 rents rose by 1.0%, (but salaries rose by 2.2%).

… and it must be noted, the private rents Penicuik tenants have had to pay for a Penicuik property since 2005 are only 14.9% higher, not even keeping up with inflation, which over the same time frame, rose at 27.8% (although salaries were only 22.3% higher over the same time period).

More and more, talking to 20 and 30 somethings who rent – it’s a choice.  Gone are the days where owning your own property was a guaranteed path to wealth, affluence and prosperity. 

I know I keep mentioning Europe, but some of the highest levels of home ownership are in Romania at 96.1%, Hungary at 88.2% and Latvia at 80.9% (none of them European economic dynamos) and even West European countries like Spain at 78.8% and Greece at 74% (and we know both of those countries are on their knees, riddled with national debt and massive youth unemployment).

At the other end of the scale, whilst we in the UK stand at 64.8% homeownership, in Europe’s powerhouses, only 52.5% of Germans own a home and only 44% of Swiss people are homeowners.  Looks like eating chocolate, sauerkraut, renting and good economic performance go hand in hand.  Yet, joking aside, home ownership has not always been the rule in the UK.   In 1918, only 23% of people were homeowners, with no council housing, meaning in fact, 77% were tenants.

Tenants have a choice, the flexibility to move and they don’t have massive bills when the boiler blows up, it’s a choice.  Penicuik rents are growing, but not as much as incomes. To buy or not to buy is an enormously difficult decision.   So buying a Penicuik home is a dream for the majority of the 20 and 30 something’s of Penicuik have, it might not leave them better off in the long run and it isn’t necessarily the best option for everyone. 

That is why, demand for renting is only going in one direction – upwards.