A fifth of the landlords that took part in the survey said they expected to purchase more property in the next 12 months, which demonstrates great confidence in the market.

The landlords were asked to rank the type of property they saw as the most desirable investment which gave the following order:

1. Terraced houses.
2. Flats.
3. Semi-detached houses.

The landlords also informed the survey which type of tenant was currently most prevalent which gave the following order:

1. Young singles.
2. Young couples.
3. Families with children.

This survey demonstrates that most investment landlords are acquiring large numbers of smaller properties, which are the types of properties most in demand.  The greater number of properties also provides diversification of risk over a larger number of units.  In is interesting to note that there is greater preference for terraced houses over flats, which might indicate landlords are conscious of the resale market where flats remain out of favour.

The property is located between Bicester and Oxford and has an asking price of £995,000 and the passing rent of over £73,000 per annum.

This investment offers a great opportunity with a current gross yield of over 7%.

We are the managing agents for this property and specialise in letting and managing residential property.

Please contact Shona Endicott in our Bicester office for further information – her contact details are 01869 324711 or shona@bannisters-property.com.

The March 2012 Budget removed this special treatment and the VAT relief that currently applies to alterations to listed buildings is being withdrawn with effect from 1 October 2012. This is unless a signed building contract is in place prior to 21 March 2012; whereupon the zero rate can apply to eligible work undertaken up to 20 March 2013. Works performed after 20 March 2013 will revert to the Standard Rate.

It is therefore time to consider prioritising any potential alterations particularly as Listed Building Consent is likely to be required that may take around 8 weeks to obtain.

The specialist mortgage brokers, Independent Mortgage Solutions report:

• Halifax is to increase their Standard Variable Rate (SVR) from 3.5% to 3.99% on the 1st May 2012.
• Bank of Ireland will increase its SVR from 2.99% to 4.49%, The increase will take place over two stages, with the bank initially raising its SVR by 1%, from 2.99% to 3.99%, from June 2012 and will then increase by a further 0.5%, from 3.99% to 4.49%, from September 2012.

To put this into perspective a rate rise of just 0.5% would mean a £43 per month jump in mortgage payments for borrowers with a £150,000 variable repayment mortgage currently paying 4.00%.

These specialist mortgage brokers recommend that borrowers who are reaching the end of their mortgage product or who are currently on the lenders SVR should review their options carefully.  Michelle Niziol of Independent Mortgage Solutions offers exceptional advice and has access to market leading products.  Michelle’s contact details are given below:

t:  01869 248339

t:  0800 0746752 (Freephone)

f:  0871 7146752

e: michelle@IMSinternet.co.uk

w: www.IMSinternet.co.uk

Helen & Douglas House has the time and expertise to care for children and young adults with life-shortening conditions and support their families. The two hospice houses offer specialist symptom and pain management,  medically-supported short breaks and end-of-life care, as well as counselling and practical support for the whole family.

More information can be found on their website at http://www.helenanddouglas.org.uk/

The first event which is being undertaken by Bannisters is the 13 mile Daybreaker walk on 19 May, for which we are entering two teams.  Please generously sponsor the teams by clicking on either of the following links:

http://my.helenanddouglas.org.uk/TeamPage.aspx?teamID=49311&langPref=en-CA&Referrer=direct%2fnone

http://my.helenanddouglas.org.uk/TeamPage.aspx?teamID=49313&langPref=en-CA&Referrer=direct%2fnone

Thank you

• Britons paid £48 billion to private individuals and institutions in 2011 and forecast that this will rise to £70 billion within five years.
• Rental growth and modest improvements to income yields are beginning to change investor behaviour, though low income yields remain the biggest barrier to long term investment.
• Affordability relative to income also varies dramatically.  In London the average rent for a two bedroom property averages 53% of the average single person’s salary.  In the North East it is 25%.
• Increased supply is critical to offering tenants more choice, raising the standard of private rented accommodation and addressing affordability issues affecting some markets.  A comparison between Oxford and Milton Keynes illustrates this.  In the former the average rent for a two bedroom property equates to 57% of the average salary, while in the latter it is 32%.
• Rightmove research indicates that 63% of current tenants expect rents to be higher in 12 months, illustrating that the shortage of supply is creating severe upwards rental pressure.
• Gross income yields are currently much higher for smaller properties where occupational demand is more heavily weighted to renting.  The average gross income yield for a one bedroom property of 6.7% compares to 5.3% for a three bedroom property.
• Headline yields for two bedroom property vary between 7.8% in the 10% of the postcodes with the highest yields to 4.4% in the 10% of postcodes with the lowest yields.

Knight Frank has also recently published their 2012 Residential Investment Report which highlights the lack of institutional investment into the private rented sector.  This is surprising considering strong historical capital growth and steady income returns.  Tim Hyatt, head of lettings at Knight Frank, says: “There is no doubt that the private rented sector is flourishing, a trend which started in earnest with the boom in buy-to-let mortgages and which has been boosted in the years since the financial crisis as would-be buyers have been forced into this market.”  The proportion of owner occupied houses in England has dropped from 70% in 2001 to 66% in 2011, while the proportion of private renters has risen from 10% to 16.5% over the same period.  In addition, to this shift in tenure is the long-term problem of under-supply of homes.  It is claimed 200,000 to 250,000 homes need to be built each year to meet the current demands, which compares to only 110,000 being built last year.  This lack of supply is not only helping underpin house prices but is putting upward pressure on rents as demand outstrips the number of properties available.

Bannisters is experiencing this imbalance between supply and demand in Aylesbury, Bicester and the surrounding areas.  There is currently an abundance of good quality tenants that are unable to find suitable properties to rent.  The highest demand in Aylesbury is currently 2 bed houses where rents can range between £700 and £795 per calendar month with the most sought after area being Fairford Leys.  In Bicester there is demand for larger 3/4 bedroom character properties in the villages, 2 bed houses for under £700 per calendar month and 3 bed houses for under £850 per calendar month.

This expansion has resulted in the area attracting significant interest from potential residential property investors.  Due to this interest we have produced a rough generic guide as to what rents might be achievable within Aylesbury in relation to the average asking prices.

In terms of which properties are in greatest demand by our applicants these are currently two bedroom houses in particular on Fairford Leys.

There is also reasonable demand for five bedroom properties up to £1,200 per calendar month but the number of applicants looking for this size of property over £1,500 is limited.

One of the most important rules to understand when investing in residential properties is that voids kill returns.  Therefore, it is sensible to acquire the type of property that is in demand, ensure it is in a good
condition (would you be happy to live there?) and ask realistic rents and have a property let quickly.  Holding out for an additional £50 a month might result in the property remaining vacant for an additional six weeks that in turn reduces the overall annual income.

Please contact Jill Hughes on 01296 399300 or jill@bannisters-property.com for a greater information regarding current rents achievable in Aylesbury and the surrounding area.

Notes

1. The asking prices above are based on the properties available on Rightmove on 1 February 2012.
2. The rental values are based on Bannisters’ view of average range of rents achievable, which do not take into consideration the extremes.
3. The gross yield is based on the average asking price in relation to the average rental value.
4. The gross yield ignores purchase costs such as stamp duty and legal fees plus the ongoing property costs such as maintenance, insurance and management fees.
5. The gross yield does not take into consideration gearing the investment (borrowing), which can enhance returns.

Many potential investors are unsure what returns are likely so we have produced a rough generic guide as to what rents might be achievable within Bicester in relation to the average asking prices.

In terms of which properties are in greatest demand by our applicants these are currently:

• One bed properties (flats or houses) for under £600 per calendar month.
• Two bed properties (flats or houses) for under £700 per calendar month.
• Three bed houses for under £850 per calendar month.

The properties out of favour are primarily three bed houses for over £1,000 per calendar month.

One of the most important rules to understand when investing in residential properties is that voids kill returns.  Therefore, it is sensible to acquire the type of property that is in demand, ensure it is in a good condition (would you be happy to live there?) and ask realistic rents.  If a landlord tries to hold out for an additional £50 a month it could take an additional six weeks to let the property that in term costs them six weeks of rent so over the year the overall income received is lower.

Therefore, the sweet spot for potentially achieving gross returns of 5.25%, and more, is to acquire properties in desirable areas and in a good condition for approximately:

• One bed properties for up to £135,000.
• Two bed properties for up to £160,000.
• Three bed properties for up to £190,000.

Please contact Shona Endicott, on 01869 324711 or shona@bannisters-property.com for a greater information regarding current rents achievable in Bicester and the surrounding area.

Notes

1. The asking prices above are based on the properties available on Rightmove on 1 February 2012.
2. The rental values are based on Bannisters’ view of average range of rents achievable, which do not take into consideration the extremes.
3. The gross yield is based on the average asking price in relation to the average rental value.
4. The gross yield ignores purchase costs such as stamp duty and legal fees plus the ongoing property costs such as maintenance, insurance and management fees.
5. The gross yield does not take into consideration gearing the investment (borrowing), which can enhance returns.

1. 93% of our clients judge the quality of our service to be excellent or good.
2. 91% felt the speed by which a tenant was secured to be excellent or good.
3. 98% of our landlords would recommend us to a 3^rd party.

Specific comments received include:

“Really happy with the service –everyone is very friendly and helpful immediately know who I am when I telephone and it is very refreshing these days to have such a personal service”.

“We are happy to recommend your business as the service you have given us over the years has been ‘second to none’”

“I have been very happy with the service provided by Bannisters and will continue to use them for as long as I have a rental property and have no hesitation in recommending them to someone else.  I feel completely reassured that Bannisters are looking after my property and feel I’m getting value for money.”

“This is the second time we have used Bannisters after bad experiences with other letting agents we tried beforehand.  The difference is that you care about what you do!”

“I have been highly satisfied with the service you provide; tenants found quickly and maintenance issues dealt with efficiently”

“Completely satisfied”

This questionnaire is very reassuring as the recommendations and testimonials of existing clients are the best forms of endorsement.

There are increasing numbers who are being made redundant and increasing numbers who are finding it difficult to meet their rental obligations due to soaring fuel and utility prices.

Landlords should take early action if their tenants default on payments. Arrears situations rarely rectify themselves, and in the current economic climate, landlords need to protect their interests.

Bannisters always undertake thorough referencing and credit checks before a tenancy commences to assist a landlord assess the tenant’s current ability to pay the rent. However, with the current economic uncertainty there is no way of predicting whether the tenant will remain in the same financial position throughout their tenancy term.

In order to protect themselves we would recommend Landlords consider taking out Rent & Legal protection the will guarantee the rent received and cover the legal costs in recovering possession of their property if necessary. This cover is included within our Rent Plus and Management Plus levels of service.