Live and Die by Your Reputation

With the end of April nearing I’ve been doing some stats and research. The information has given me great peace of mind and truly does demonstrate how strong our reputation is and how much it has continued to grow.

We are now averaging a new house builder/developer client via a direct referral every ten days. That’s an incredible statistic and an exceptional mark of our strength of reputation.

Where these referrals come from is another interesting and diverse thing. Some of course come from regular and often long standing developer clients but now we are being referred to by lenders and bridging finance companies. Ironically we have never dealt with these companies direct but our reputation and recent performance means that the BASTION name is being referred to again and again. One specific bridging finance company has just referred their fourth developer client to us in the past couple of months and we have never actually spoke to them, but Bastion are the company they tell developers to contact. Impressive!

To add to this some of the larger land & new homes agents are using us as a standard default referral to developers who need early sales, end of scheme sales or are under financial pressure.

What is our strength in comparison to other similar but larger companies? We think it is a mixture of time in the business, our straight talking style, not over promising and under delivering and having the right knowledgeable people out in the field willing to visit sites and talk to developers face to face.

Long may it continue.

Private Rental Market Has Doubled Since 2000

Whatever your politics are and whatever your thoughts are on the housing market I’ve made comment again and again on this blog about the changing face of home ownership in the UK. Even if the media doesn’t like the private landlord and the the high street lenders keep tightening the criteria when lending the simple fact is the private landlord is of paramount importance to the overall housing market. I have said it before and I’ll say it again, people are becoming long term renters, the age of the first time buyers keeps on growing, an increasing number will rent for life and we are simply becoming more European in our habits. Things are changing and have been for a long time but many simply dare not highlight the changes.

Now we have a government minister sayingthe proportion of people living in private rented accommodation has doubled since 2000“. This isn’t new news to most in the property market but good to actually read in formal government terms.

The new focus on affordable rental homes and helping families to secure long term rents will merely underlined the focus on the buy to let market and help to remove the rogue landlord and extreme rents. Speaking from a perspective of a company that predominantly focuses on new build homes we do not deal in squalor or inappropriate substandard homes and we present new build, warrantied homes to the rental market and encourage high occupancy which means keeping rents at a sensible market level.

Great Start to 2017 as UK Property Continues its Drive Forward

As January comes to a close it’s interesting to reflect upon a crazy month when often January is a quiet and takes most of the month to simply gather momentum. It certainly hasn’t been quiet!

We hit the ground running with an array of sales progression issues, calls and emails and some early month meetings in Liverpool, Manchester, Barnsley, Scarborough Leeds and Nottingham. The first ten days back seemed to put us ahead of deadlines and ahead of many of our perceived competitors.

We have secured discounts on new build schemes ideal for the buy to let property in Liverpool, Doncaster and Tyne & Wear. In addition we have secured land instructions in Holmfirth and Wakefield. We have also secured meetings with two new developers in Manchester, both of which have come to us by direct recommendation.

As a result of the above new opportunities and previous instructions from December in this month alone we have agreed £2M worth of buy to let property sales, three freehold sales totaling a value of £250,000 and two apartment block sales to asset management funds at £1.2M.

The legal completions have been coming in fast throughout most of the month and lots more due in February. The diary is filling up with developer meetings, site visits and new funds keen to invest in the UK buy to let market.

What does all of this tell us? Clearly there is huge demand, that private funds and pension funds are active in the UK property market and that any 2017 nerves haven’t appeared as some predicted. Whilst most buy to let mortgage lenders aren’t making life easy for the private landlord buyers and therefore not easy for us in the process, the market is busy and will continue to be so. We as a company must simply ‘box clever’, spread our wings and utilise our skills, connections and professional reputation.

 

 

A Premier League Decision and Ongoing Support

Not all business decisions are made purely with business in mind and some simply have to made with the heart. Whether or not that statement is relevant to this blog post or not I’m not quite.

Bastion Estates have formally renewed their commercial partnership with Huddersfield Town Football Club for the third year. The press release was released by the club earlier this week reads as below:

Bastion Estates operate nationally with a network of highly experienced property professionals who specialise in the buy to let property market.

The team at Bastion has over 100 years’ worth of property experience in estate agency, land, new homes and the buy to let market.

Guy Davis, Director of Bastion Estates said:

“The buy to let property market continues to produce unrivalled returns for the landlord investor with demand for quality rental properties outstripping demand. Property maintains a strong bricks and mortar approach to investment for those looking to produce additional income and plan for their financial future. Our reputation goes from strength to strength and we run a straight talking forward thinking business”.

“As a company, we are proud to renew our commercial agreement with Huddersfield Town and look forward to many more years working together.

Huddersfield Town’s Commercial Director, Sean Jarvis commented:

“We are delighted that our partnership with Bastion Estates has been renewed for a third year. As a club we feel we have built up a great relationship with Guy and his team and look forward to working with them over the next 12 months.”

Speaking personally I’m a fan and always been a supporter of Huddersfield Town and to be in a position as a locally based business to support your home town club in such a way is something I’m proud of. Our formal association with the club means that Bastion Estates sponsor the home team changing rooms at the stadium as well as an array of other things. The club is having an amazing season and has not dropped from the top six in the Championship all season and we strive for a long absent push into the Premiership. It is an exciting time to be involved with the club and also to be a fan though like any football fan you support your team through good and bad times. As a fellow club partner says Stronger Together which is very true.

Full press release link -> http://htafccommercial.com/news/bastion-estates-extends-htafc-partnership/

2017 – Stress Testing, Rental Coverage Increases. Problem?

I hate negative headlines but I’m going to do one here just to highlight some issues that UK buy to let faces this year.

Rental stress coverage is increasing to 145% for most lenders so buy to let landlords will have to watch the rental returns far more keenly. The stress testing interest rate will be a perceived ‘standard’ on interest rates being 5.5% and let’s not forget overall affordability checks. All of this sounds terribly dramatic and makes us think that the lenders simply don’t want to lend but let’s put this into perspective and work out an example of a recently available new build 3 bed property we have in Merseyside.

The discounted purchase price is £115,000 meaning the buyer would need a 25% deposit (£28,750) leaving a required buy to let mortgage of £86,250. Most lenders are saying we have to assume a stress test based upon 5.5% interest rate so that means the payment on the stress test would be £395 a month. Then assume we need 145% rental income coverage of this payment meaning the minimum rent for the lender to be happy would be £573 per month. In our example currently available property the rent is forecasted at £650 per month would some agents suggesting £695. So here the rents are more than sufficient to cover the stress testing interest rate and more then sufficient to over the increased rental coverage requirements. So…is the stress testing and increased rental coverage a real and genuine problem or is this more negative headline grabbing nonsense? Let’s be fair and say YES we naturally have to be aware of the changes and take all changes and requirements into consideration but the simple fact is that as long as the property ticks the right boxes, is fully researched, ‘quality checked’ for the buy to let market AND offers true market discount the problem suggested really isn’t a problem.

Back to our Merseyside example to finish our point. We have market comparables and a RICS valuation to support the market price at £142,500, so that’s £27,500 cheaper than the registered professionals state the property is worth. So in brief summary a buyer would be £27,500 ahead of the local market in an ‘instant equity’ way, the property is circa £70 plus ahead of the new increased rental coverage requirements per month and that’s based upon the hefty 5.5% interest rate test. Problem? We don’t think so!

Straight Talking Forward Thinking.

2016 Has Been a Crazy Year for Bastion Estates and Buy to Let Property

How do you summarise a year when it has been as crazy as it has. Growing demand, low interest rates, stamp duty introduction, tax changes, more buy to let bank lending scrutiny, media messages vilifying the buy to let landlord, letting agent fees proposed to be abolished, banks making house builders lives difficult and of course Brexit. The list could go on but what a year!

Throughout this turbulent year of change our business has been incredibly strong and we have had an exceptional year of growth. This growth has predominantly been down to the demand from the buy to let investor. Our services have been in demand and our reputation has gone from strength to strength. Referrals have ‘gone through the roof’ with new buyers and new developers coming to us by direct recommendation of existing clients. No business can ask for a lot more!

There has been more demand from the ex-pat market, mostly from the far east and the Northern Powerhouse has continued to appeal to investors from the south of England.

Land demand and our activity in the land market has grown with land sales in West and South Yorkshire, Nottinghamshire and Lincolnshire.

It has also been encouraging to see our consultancy side of the business be in increasing demand. Consultancy work has always been part of our working life and demand has varied but 2016 has been a big year on this front. Advising estate agents, student housing, house builders and even a recruitment company on property, procedures, training, social media and much more. We have contracts in place for our time well into 2017.

What does 2017 hold for the UK buy to let property market? The signs are good, solid and stable. The economy is such where interest rates are unlikely to change and if they do it will be very marginal, the property market continues to be the backbone of much of the economy, the government is committed to support and invest in the property market and tenant demand continues to increase by the day. Trends are changing and the buy to let property market is vital to the rental market, the overall property market and of course produces better long term returns in the form of growth and income than probably any other easily accessible investment market.

2017 will be exciting, challenging and rewarded for all those involved in the buy to let property market so feel free to talk to us. We are an informed friendly team and are always happy to help.

We wish you all a Merry Christmas and here’s to a happy, healthy and prosperous 2017. 

 

 

52% of ARLA Members See Rents Increasing in 2017

No real surprises from the Association of Residential Letting Agents (ARLA) in some of the forecasts for 2017 but it is still interesting to read. Of course the headline was predictably negative but the article is not. We decided not to even show you the headline!

However, article as follows: The number of new rental properties coming onto the market in the UK will fall next year, as a result of the increased stamp duty surcharge on additional properties, it is claimed.

According to the predictions for the coming year from the Association of Residential Letting Agents (ARLA) some 37% of members envisage supply falling in 2017.

Over half, some 52% of member agents expect rent prices to increase in 2017 as lower stock levels, combined with mortgage interest relief and the ban on letting agent fees will put upward pressure on rents.

At the same time they expect demand for rental properties to rise and with less stock available for prospective tenants, competition will be high in 2017.

Also, they are predicting that due to the rise in landlord taxes in 2016, landlords may be forced to sell some or all of their buy to let properties and exit the market. Also, for prospective new investors, it will be more difficult obtain buy to let funding in 2017 as lenders introduce tougher criteria.

‘Our private rented sector report findings over the past few months have been positive and we were confident approaching the end of the year,’ said David Cox, ARLA managing director.

‘However, following the announcement of an outright ban on letting agent fees during the Chancellor’s Autumn Statement, we expect rent prices to rise and tenants to be forced to look for properties in cheaper areas,’ he explained.

BASTION ESTATES COMMENT: It is clear rents will continue to steadily increase and the reasons why are driven by demand and the marginal dip in supply. We know the rental market is changing and nothing will realistically effect the ongoing demand. Will there be a drop in supply of houses coming onto the market is a different question and one we will have to wait and see for, but the simple facts are that buy to let property can produce exceptional returns for the investor with ongoing growth in price, rent and demand. If you want to know more feel free to contact one of the team.

Three Up Front Event – Talking Business, Buy to Let & Life

Yesterday evening Bastion Estates sponsored an event with Huddersfield Town Football Club and what a great night it proved to be. Called THREE UP FRONT three local business owners were asked a series of questions about football, life, business and aspirations from host Sean Jarvis (Commercial Director of the Club) in a chat show style event.

I was up first, quizzed accordingly by Sean and conversation ranged wildly from lederhosen, life, football memories, league predictions, business, buy to let and back to football. Joined then by Andy Needham from Approved Foods who as always is entertaining and amusingly direct and then by  Mark Young of John Walton Machine Tools Ltd who delivered his replies in a similar style. Whilst all three businesses were very different it is interesting that the three of us had similar opinions on what is important in business.

With an audience of around sixty people predominantly made up of other business people the evening went well, was amusing and hopefully informative. It was great to get some very complimentary feedback from those who attended who said they found it amusing and interesting.

Twitter activity went a little crazy during and after the event and one specific quote from me was Tweeted (with a terrible photo) “Straight talking might not win you friends all the time, but you have to be honest“. Whilst there was more to the conversation and this was one snapshot it does demonstrate a solid point and one I repeated a few times whilst on the sofa.

Another interesting Twitter comment was – open, honest and thoughtful – 3 fellas to be proud of Huddersfield. Not sure I’d entirely agree but good to read.

In summary, great evening with some great people and some good publicity.

Damaging Your Own Business by Naive Use of Social Media

Business changes and in the property world we are often effected by governmental changes, new tax rules, lending criteria changes and much more. Naturally articles are then written with striking headlines and of course a good scaremongering overtly negative headline attracts peoples attention.

Then social media goes crazy; re-Tweeting and sharing the same negative headlined article.

Ask yourself a simple question. Why promote negativity about your own business? Surely it is a type of self harm under the naive guise of appearing to be informed by re-posting the articles. I am not suggesting that we should hide relevant genuine information but far too many companies just click without thought and damage themselves in the process for the sake of appearances. How stupid can some people be?

One company I know made this mistake this morning and whilst I was probably being petty I emailed them and questioned them why. This then led to a call from their MD asking me what I meant and then agreeing, apologising and then speaking to their social media staff member to think before re-Tweeting.

Social media can be a great tool to promote your business but use it wisely.

If there is a point to this it is think positive, promote the positives, be straight and be enthusiastic.

Buy to Let Property Demand – Success When Others Fail

The buy to let market is unsurprisingly busy as demand continues to grow. Landlords new and experienced appreciate that there is nowhere else that produces the kind of returns that UK buy to let property do, as long as the properties bought offer discount and are in researched locations.

None of this is new news but I’m amazed how many so called buy to let investment companies are struggling and that almost entirely seems to be down to lack of suitable property to offer to landlord buyers. Stock is undoubtedly king, meaning good quality discounted new build stock is often hard to find but so much of securing opportunities is down to reputation, referrals and a proactive approach.

In the past week we have met developers and visited sites in Manchester, Lincoln, Leeds, Nottingham, Mansfield, Rochdale, Liverpool, Wakefield, Barnsley and Heywood. Every one of these meetings was with existing developer clients, old contacts, referrals from other developer clients and by reputation. Not all have led to immediate business but some have and most of the others will in time.

Spending time on the road meeting people is key to many businesses and it is something far too many companies or small businesses simply don’t do enough of. It is easy to sit behind a desk and fire emails and ultimately be reactive but getting out there can’t be beaten. We are guilty of the same sometimes but a proactive approach pays dividends.

Whilst stock is still king this does show that reputation and straight talking secures results.