New Additional 3% Tax on Landlords, thaks Mr Osbourne, luckily it's not as bad as it seems, claims Paul Ainsworth Lord, Darwen's Local Property Expert and Estate and Lettings Agent

Osbourne's Impact on the Darwen Property Market

Has Osborne killed buy to let in Darwen? Don't be silly!

Well George Osborne, in his Autumn statement the other week, caused Darwen landlords to ask whether buy to let is a viable investment option, when he announced that landlords, when buying another buy to let property from April 2016 will have to pay an additional 3% stamp duty on top of the standard rate.

So for example, if you were to buy a for say £75k today you wouldn’t pay one penny in stamp duty but next April it will be £2,150. For more upmarket landlords, it means that the stamp duty bill for a £120k buy to let home will rise from £0 to £3,600 from April next year. 
 

Some say property in Darwen will be worth less because potential landlords will not be willing to pay as much for them, and if house builders or existing home-owners don't feel they are going to get as much for them, then there is less motivation to build / sell them?... and the person we can blame for this is George himself.

Back in 2012, he choose to utilise the British housing market to kick start the UK economy, with  subsidies, Funding for Lending and Help to Buy. However, whilst that helped the Tory’s get back into power in 2015, some say this impressive growth in the UK property market has been at the expense of pricing out youngsters wanting to buy their first home.
 

Others say this is the straw that breaks the camel’s back as over the next four years Landlords will slowly lose the ability to offset all their mortgage interest against tax on rental income, after changes announced in the Summer Budget.

At the moment, landlords can claim tax relief on buy to let mortgage monthly interest repayments at the top level of tax they pay (ie 40% or 45%). However, over the next four years this will be reduced slowly to the basic rate of tax – currently 20%.

Surely this is the end of Buy to Let in Darwen? I don't think so personally, but there's no doubt a lot of people are worried... but before we all run to hills panicking .. let me give you another thought.

Stamp Duty rules were changed in December 2014. Before then, landlords were eagerly buying up properties under the ‘old slab style Stamp Duty’ system. For example, the stamp duty bill on a £285,000 property was lower on the old slab style duty (pre Dec 2014), at £8,550, yet it isn’t a million miles away from a new £12,800 stamp duty bill.

Interestingly though, George has left a legal loophole in the new rules, because when it comes to selling up, they can offset purchase costs against any eventual capital gains tax, including stamp duty.

I believe that total returns from buy to let will continue to outpace other investments, such as the stock market, gilts, bonds and even pensions. Also, the best part about investing in property is that it is bricks and mortar. You can touch it, you can feel it, and it isn’t controlled by some City whiz kid in Canary Wharf .. the British understand property and that goes a long way!

Buy to let has enough impetus behind it that prospective landlords will continue to buy even with a larger stamp duty bill. Us Darwen landlords will need to be savvy with what property they buy to ensure the extra stamp duty costs are mitigated.

Buying buy to let property is a long term venture. In the past, it didn’t matter what property you bought in Darwen or at what price – you would always make money. Now with these extra taxes, the adage of ‘any old Darwen house will make money’ has gone out the window (well not quite - and I'll cover this in another blog post soon).  

You wouldn’t dream of investing in the stock market without at least looking in the newspapers or taking advice and opinion from others, so why wouldn't you take the same advice and opinion about buying a buy to let property in Darwen?

One source of information, opinion and advice is this DarwenPropertyBlog



 HOWEVER If you want to know about some of the new strategies I have been working on to circumnavigate this additional tax on us Landlords then make sure you register for updates.

Once I have seen the specific details of the planned changes I will be happy to discuss them openly with you guys.



PLUS If you want to know what the real threat is to us here in Darwen is then watch out for another article I'l be putting out early in the new year.

And as always.... the other source of advice is directly from myself, so if you've seen any interesting deals and want a second opinion here's my details:

My office is in Darwen Town Centre opposite Boots the Chemist..

Ainsworth Lord Estates
49 Market St
Darwen BB3 1PS

Or ring me on 01254 760660

or ping me an email..  Paul@AinsworthLordEstates.com

Darwen Buy To let – Freehold House or Leasehold Flat? an 116% Increase in Value offers food for thought, but beware of high service charges, says Paul Ainsworth-Lord. Local Property Expert. Sales and Letting Agents in Darwen

Beware of excessive service charges

Darwen Buy To let  – Freehold House or Leasehold Flat?

 Well my Darwen Property Blog reading friends, as seems to be all the rage with Jeremy Corben asking the PM questions emailed in to him at Prime Minster Question Times, I to wish to answer a question emailed into me from a potential Darwen landlord last week. 

Nice chap, lives in Tockholes, and it turns out, after having a coffee with him, he works in IT, has a spare bit of cash (now the kids have flown the nest) and wanted to buy his first buy to let property. 

His main question was ... 
"Do I buy a freehold house or a leasehold flat in Darwen?"

Well, most people will say freehold every time, especially the southerners, because you own the land and there are less issues with financing (but only when there are less than say 80 years left on the lease).

However, it’s not as simple as that (it never would be would it!). 

The definitive answer though is to research what tenants are looking for in Darwen and in which areas. The tenant is ultimately your customer, and, if they don't want to rent what you decide is best to buy, then you are not going to have a successful BTL investment. 

So starting with the tenant in mind and working backwards from there, you won’t go far wrong. In a nutshell, find the demand before you think about creating the supply.

Leasehold flats and apartments in Darwen are excellent in many respects as they offer the landlord certain advantages, including the following:

• Flats can be initially cheaper to buy. 
• Yields can be quite good, offering better cash flow. 
• The building will already be insured and yes there is a service charge, but it’s still for a service at the end of the day and that cost is spread between many others (i.e. when your freehold house roof goes, its falls 100% on your shoulders) 
• There is often no garden to maintain or blown down fences to replace! 

However on the flip side we have to conside these points too:

• Whilst in the past Darwen leasehold flats can have seen some fabulous capital growth, I do expect they will struggle to compete with the more traditional types of housing stock going forward, but hey that's only my opinion..  
• Service Charges - Now this is the thing to watch for as some leasehold properties have no cap on the level of the service charge and it may get out of control - service charges on the apartments up off Anyon St and on Clearwater Village up Marsh House are as high as £100 per month! which seriously impacts on the yields. 
• The length of the lease will significantly affect value if not renewed before it gets too short (not really an issue here in Darwen). 
• Thankfully there’s not many, but some Darwen apartments/flats have burdensome clauses. 
• Finally, with leases, there can be sub-letting issues – which means you can’t let them out.

So what do the numbers look like? 

Well since 2003, the average freehold property in Darwen (detached, semis and terraced) has risen from £80,527 to £137,837, a rise of  71% 

whilst the average Darwen leasehold property (flats and apartments) has gone up in value from £43,238 to £93,813, a rise of 116.97%. 

I was really interested to note that of the 8,113 rental properties in the Blackburn with Darwen Borough Council area that the Office of National Statistics believe are either let privately or through a letting agency, 1,482 of them (or 18.3%) are apartments. 

However, there are only 6,852 apartments in the whole council area (be they owned, council rented or privately rented), which represents 11.9% of the whole housing stock in the area. 

This really intrigued me that, quite obviously, there is a high proportion of Darwen’s leasehold apartments/flats rented to tenants compared to detached, semi’s or terraced. Fascinating don’t you think? - But do remember, every Darwen apartment block, every terraced house or semi is different. 

Like I said at the start, the definitive answer though is to research what Darwen tenants want in the area of Darwen they want. Demand for apartments, within easy reach of the town centre and near good transport links can be popular and can offer the Darwen landlord very good yields with minimal voids. 

However, Darwen terraced houses and semis, whilst not always offering the best yields (although sometimes they can when chosen correctly), they do offer the Darwen landlord decent capital growth. 

My advice to the prospective landlord as it is to you is do your homework.  

One such website, which only talks about the Darwen buy to let Property Market, is this one.... www.DarwenPropertyBlog.com

Another source of info many Darwen landlords use is me! 

What many Darwen landlords do, irrespective of whether you are a landlord of ours, a landlord with another agent or a DIY landlord, if you see any property in Darwen, that catches your eye as a potential buy to let property, be it a terraced house, semi or flat ... email me and I will email you back with my thoughts (although I will tell you what you need to hear .. which might not be what you want to hear!)

So if you want a second opinion why not get in touch (or register for my blog updates by filling in the simple registration form on here). 

Why not call in for a coffee (we only do nice coffee)..

My office is right in the Darwen Town Centre, opposite the Darwen YourMove office:

Ainsworth Lord Estates
49 Market Street
Darwen BB3 1PS

there's plenty of parking.

or you can:

ring me for a chat on 01254 760660

ping me an email: Paul@AinsworthLordEstates.com

Looking forward to it.

Paul Ainsworth Lord
Darwen Property Expert
Sales and Letting Agents in Darwen and Blackburn 

Snape Street Darwen offering 8% return, offered by YourMove estate agents in Darwen. But beware! says Paul Ainsworth Lord, Darwen's Local Property Expert.

Snape Street is a popular rental street in Darwen.

I've never had any problems renting out on Snape St. and we have over a dozen on here. Demand is good because its a pleasant street in a decent location.

The rents I get on here vary from £395 to £445 and as you'd expect depend on the standard and finish being offered. These houses are generally good-sized 2 bedders.

Pseudo 3 Bedder....
 
I noticed this one that's a '3 bedder' and being offered for sale by our friends across the road at the Your Move office here in Darwen. They are claiming it has: '3 good sized bedrooms upstairs'. Now, I'm not one to diss other agents in my town, but in my world bedrooms that are only 6' wide do not count as 'good-sized' bedrooms.

Here it is:

Click Here for So called 3 bedder on Snape St Darwen

 http://www.rightmove.co.uk/property-for-sale/property-35303076.html?premiumA=true


Now you'd spot this straight away if you were to view it, but more importantly.... if you were to refurb this one and leave these bedrooms as they are you will struggle to find a tenant. I promise!

Beware...

Two - Bed Properties that have been poorly being marketed as '3 bedroomed properties' for sale or rent and priced as such are tough cookies to move. And this is more common than you think. Often innocently marketed by mistake by some of the estate agents in Darwen, Blackburn and other areas.

What people think is that by splitting one of the big bedrooms in two and creating 3 beds will not only increase rental returns, but also add capital values and in theory this should work, but when you create 2 box rooms that are neither use nor ornament you create a problem for yourself. Tenants aren't daft.

Often the result then is that you have a house that 'doesn't work' and struggles to rent, has high voids and doesn't deliver on returns.


Opportunity.....

Fortunately for us investors these come to the market - often because the landlord loses interest and decides to sell. This is where we can usually snap up a decent buy.


So how do we make good this little baby and deliver an 8+% yield? Well, I'd be happy to have a chat with you about this. Why not give me a call and we'll go through it.

My opinion?

I reckon this house is a good buy.. better at 35k!

This would make a good investment for either a new 'wannabe' landlord or someone

looking to add another renter to their portfolio.

But don't hang about, I know this has been on the market for a good while now (originally on at £45k) and was reduced to £40k about a month ago. Now I have written about it it will go, I'm certain!

You know where I am...








My office is...

Ainsworth Lord Estates
49 Market Street
Darwen BB3 1PS
(There's plenty of parking)

If you can't get down, give me a ring or ping me an email...

01254 760660
paul@ainsworthlordestates.com

Legionella Legislation - the importance of adhering to it.

 How would a £20k Fine affect your property investment model? 

£20k Fine? No thanks!

For us Landlords there doesn't seem to be a month goes by without us having to take on board and make adjustments to our business to accommodate yet another piece of legislation.

Bonkers or what?

Some of this legislation, I know is bonkers, but the tightening up things to minimise the risk of our tenants becoming exposed and potentially very ill (sometimes fatally) is certainly one thing we must not ignore.

It's serious, very serious.

What if I don’t comply with the new rules?

• If you fail to carry out the basics listed above, basically causing your tenant to contract the disease you can receive a criminal prosecution and a fine of up to £20,000 per breach; per property. 

If you are using a good agent, they should be upto speed on this matter. But might just be worth putting a call into them to make sure.


Read the full article on our Ainsworth Lord Estates Blog.

Click here to see.

Ainsworth Lord Estates is one of the few Estate and Letting Agents in Darwen that has already implemented Legionella Assessments. Why not give me - Paul Ainsworth Lord, a call if you want to chat more about this.

Paul Ainsworth Lord
Tel 01254 760660
Paul@AinsworthLordEstates.com

49 Market St
Darwen
BB3 1PS

9% Yield on Hollins Grove Street from one of the Estate Agents in Darwen

Great 9% Yield in Darwen

I had a lovely couple in to see me the other day, asking me about a property they were
thinking of buying to rent out. 

They're pretty new to the renting game and because they're from out of town wanted some advice on whether I thought the house they were looking at was the right one for them?

They also acknowledged that they didn't know the areas of Darwen very well and wanted to know if this House on Hollins Grove Street was in the right area?

Buy on the right street

Now Hollins Grove St. is a bit of a mixed bag, and it's fair to say, making the wrong purchase on here could be a costly mistake (and it's fair to say that to some degree there are many streets in many towns that this would apply too).

But given my extensive local knowledge and the fact I've lived in Darwen pretty much all my life, I'm in a good position to comment on any street round here. (I love it when the banks ring up with details of a repo property and I can picture the house in my head.. and often tell them what colour the front door is!). I remember disputing with them once about a property that was up with an out of town agent and was supposed to have a board up, yet I was adamant there was no board up - nor had their ever been, and I knew this off the top of my head. Sad or what? (but handy nonetheless).

Anyway, the main good thing about Hollins Grove St. is it's location and with that I mean it's ease of access to the M65, and Darwen in general. There are some nice decent sized houses on here that bring decent rents (we rented a nice 3 bedder not that long ago for 500 per month - which is very good for here.

So.. once we'd done all the pleasantries I brought the property up on my screen, and sure enough it looks like a nice deal, and it's in a good spot.

There are several houses for sale on this street, but they're not all the same and not all in the same section either. However, this house is configured well and appears in very good condition etc... I reckon it will bring a nice rent - we did the sums and if they were to bag it for the right price we can expect it to bring in a nice healthy 9% yield. 

 My Conclusion: A Good Buy 

If you are thinking of buying in Darwen and would like to have a chat just to reassure yourself on whether or not you're are buying right, just drop into the office for a chat.

Or you could of course, give me a ring, or ping me an email...

01254 760660
Paul@AinsworthLordEstates.com

Always available for a second opinion!

Another Investor's Gem on Olive Lane Darwen Purchase Price £50k with 10%+ Yield up with Proctors Estate Agents in Darwen

I like Olive Lane. 

I know it's not everyone's cup of tea..... BUT...

When investing in property most of us know we have to sometimes just look at the numbers.... forget it's not where you would live, which is something I hear all the time, especially from new-ish investors.

It's all about the numbers! 

Put emotions aside and focus on the spreadsheet. The spreadsheet speaks for itself and never lies and doesn't' care if it is somewhere you or your mum might or might not live.



If you're not that well up on spreadsheets, or how to do them, there is plenty of free software.

Spreadsheets Never Lie

Google Docs has easy to use spreadsheets in here:   
https://docs.google.com/spreadsheets/

If you need any help how do create a simple property spreadsheet, there are loads of videos on YouTube, have a look here:

https://www.google.co.uk/search?q=spreadsheets&ie=utf-8&oe=utf-8&gws_rd=cr&ei=Y2rzVM_mE-_X7AbnzIFI#tbm=vid&q=how+to+create+a+property+spreadsheet


10% Yield not to be ignored.

Anyway, back to a deal I have been watching for a good while now and I think it's time to make a move on this nice little 10%er.

10% Yield not to be missed

It's a nice fully refurbed property on the bottom end of Olive Lane, up with our friends at Proctors.

It was up previously with YourMove and the pictures did look better back then, so don't worry too much about the pictures, as it does look pretty well inside.

I'm confident you'd find a decent tenant for this one with a healthy rent. Nice properties like this always pull in a better type of tenant, and who are prepared to pay a bit more.

Here is is:
I was originally on the market for £52k, but now reduced to just below £50k.
The time is NOW.

My Opinion: BUY NOW

Click here to see refurbed deal on Olive Lane

It looks better than this in real life

Fully Refurbed Throughout

So, what you waiting for... go call Proctors, the estate agent, and book yourself a viewing.

Once you've had a look at it if you want to have a chat about any concerns you have, and pick up a few tips on how to find a cracking tenant at top rent, I'm always happy to discuss it over a brew.

You know where I am... call me or email me, or just drop into the office.

Tel: 01254 760660
Paul@AinsworthLordEstates.com