Why I like houses more than flats by Lawrenson of LettingFocus.com

Ah, us British and Irish we just love those lovely Victorian and early Edwardian houses don’t we.
We love them so much so that we are happy to chop them up into “conversions” and make little flats out of them.
Our love affair for the converted flat can be seen in the fact that many people are prepared to pay as much if not more for a two bed converted Victorian flat than they would for an equivalent two bedroom ex local authority freehold house with a garden on a nice estate in a similar area.
As a property investing landlord who has owned both types of property, I’m not convinced by these Victorian conversions.
In the long run, properties that are freehold and have gardens will always keep their price – just as long as they are in decent areas.
If I had to choose between a converted Victoriana flat with no garden and a freehold two bed modern house with a garden I would always tend to go for the house.
Why?

CONVERSIONS CAN BE A PAIN IN THE NECK
Well, it’s more than just money, it’s time too.
You see, if you have a problem with a flat, you may also get problems with neighbours too. Think leaks and how leaks tend to damage anywhere below where the leak occurs and you’ll know here I am coming from.
Often, conversions also seem to have poor plumbing and heating systems – another consequence of the fact that they were not built to be separate dwellings.
Think about noise and inconsiderate neighbours. In converted flats, noise is always a real problem because the properties were never built to be soundproofed in the first place.
And too many converted flats have problem leases too which make it really hard to get a freeholder to do anything, like fix the building.
Recently I looked after a property for some friends who had gone overseas.
What a nightmare! I constantly had noise issues, leaks, endless plumbing issues and antisocial neghbours to deal with.
A good pal of mine in the trade, who I can’t name, has a business where he helps people extend leases and buy freeholds. He knows how hard it is to enforce your rights as a leaseholder or get agreement on a shared freehold and he says he would never buy a flat. He should know!
If I really had to buy a converted leasehold flat, I would only buy where there was just one other leaseholder in the block – and even then I would want to see a rental yield at least 2% higher than on an equivalent freehold to make up for all the extra work involved.

BELOW MARKET VALUE SHOW GOES ON
At our recent networking event Simon Taylor, the founder of GetAnOffer.co.uk told us that serious buyers with cash or access to lending are still using the downturn to their advantage to buy below market value properties.
Simon has accepted that with legislation imminent, the party is over as far as Sale and Rent Back is concerned but is still confident that on his site where sellers pay to advertise their properties below market value deals can still be had.
His site has some interesting features and is worth checking out.

INFLATION NOT DOWN MUCH – SHOCK HORROR
I see that the commentators were a bit surprised that the latest inflation numbers were not as low as expected. Goodness gracious, where did they study economics.
I would have thought it pretty obvious that with the pound so low, the impact of “imported inflation” for anything made abroad (which these days is pretty well most things) was always going to be pretty significant.
The scribes were also surpised that yesterday’s mortgage numbers were the highest since way back in the autumn.
More proof that the doomsayers who forecast further huge falls in the price of property will be proved wrong.

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ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the property letting experts. Read Articles for Landlords.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - buy Landlords Book.
The new edition is for accidental and experienced landlords and is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert property writer and property speaker - and I run the well known landlords blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice and consulting to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
Find out about some great deals we have arranged at our Landlords Resources page.
Copyright: David Lawrenson 2009. This blog is updated roughly once a week.
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Sale and Rent Back in the Dock says Lawrenson of LettingFocus.com. Also, Local Housing Allowance and Rents.

I see that the OFT has asked eight firms in the, er, Sale and Rent Back “industry” to come to see them for coffee and biscuits and while they are there, try to justify the advertising claims they made to try to get hapless home owners to sell them their property at knock down prices.
Of course, this is all part of an overdue investigation into that industry which is now ongoing.
I’d like to have been at that meeting to see some of the less straight of these firms struggle to explain the quite outrageous advertising claims they had been making in the past.
Another meeting I’d like to be at is the one today where Sir Fred Goodwin of RBS and his pals try to explain how they just about destroyed a bank and helped b****r up the UK economy in the process.
I trust they will entering the building by the back door and well away from angry protestors.

WHY ARE RENTS FALLING?
Lots of people (well five this week actually) keep asking me why rents are falling and how much longer and further they have to fall.
Well, there are various reasons for the fall in rents.
First, there is a lot more property about which is available for rent.
Many would be house sellers cannot bear to take 15 or 20% less on their property than they would have got 18 months ago and so they opt to rent the house out instead.
With lots of stock about tenants can be choosy. In London and the South East, which have seen the local economy hit hardest due to the large number of financial services firms, rents are down about 10% on last year overall.
Second, as many landlords’ mortgage payments have fallen in line with the falls in the base rate, they can afford to cut the rents a bit.
Some people think rents will keep falling slowly as long as this situation persists.
But I am not so sure because there are a few things that will underpin rents.
First of all, at the lower end of the market, the Local Housing Allowance (LHA) rent levels provide a sort of buffer below which private rents will not fall much. OK, I know LHA is supposed to reflect private rents but the process by which the government adjusts them is slow. Think of the big Afghan family in the large house in Hampstead that recently made the news as a good example of this!
Second, mortgage lending is only going to unfreeze very slowly. Heck those bankers have still got bonuses to pay so they need to keep up both high mortgage margins over base rate and high product fees for quite a while.
Add in all the doom and gloom in the news plus the fear over jobs and I think we can see a scenario in which an increasing number of would-be first time buyers will opt to be tenants for some time yet.
And with this increased demand for renting, rents will not fall too far.
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ABOUT LETTINGFOCUS.COM and DAVID LAWRENSON
I’m David Lawrenson of LettingFocus.com - the landlord and property letting advice experts. Read More Articles on Property by David Lawrenson.
I’m the author of “Successful Property Letting” which for the last 3 years has been the UK’s top selling property book - Buy Successful Property Letting - How to Make Money in Buy to Let.
The new edition is fully up to date with all the recent changes to tenancy deposit schemes, HMOs, licensing, capital gains taxes and it has new sections on sale and rent back.
I’m an expert freelance property writer and property speaker - and I run the well known property investment blog that you are reading now.
I contribute to newspapers and a host of property websites, write a number of columns in the press and I provide general property letting advice for a fee to anyone looking to buy property for themselves or to let out. I can help private individuals with any aspect of buying property or buy to let.
What’s unique about lettingfocus.com is that we are independent property investment advisors because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from these sources.
We simply give one to one unbiased advice and are often asked to evaluate other property investments.
In my corporate consulting role I also advise banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my blog & find details of my networking, advice and property training programme at my website.Copyright: David Lawrenson 2009. This blog is updated once a week.
WANT TO BE KEPT UPDATED WITH OUR LATEST BLOGS?
It’s easy.
If you are on the home page of our blog, go to the bottom of any post, and click on “LINK TO THIS POST” to bring up the page for a specific post, then hit END …and on the right you’ll see “Site feed.”
If you are already on a specific post page, just hit END and you will see the site feed.
You then just copy the link that comes up into your News Reader or News Aggregator. Even a non techie like me managed to do all this.
Please note if you have a website & are thinking of reproducing material here - that’s fine but we DO require the full links shown in each blog to be included, including also the links in this section. The full article including all links must be available to ALL VIEWERS of your site and not restricted to members.