Press Articles

An Optimist's view of rentals potential
Eastern Daily Press - Friday April 4th 2003

FALLING stock markets, general economic worries and the Middle East conflict have created anxiety which has inevitably seeped into the UK housing market. While property professionals admit the residential scene has definitely cooled after several years of very strong growth, there is a rising awareness of the dangers of "doom and gloom" becoming self-fulfilling.

Changing conditions usually bring new opportunities. With property prices easing - falling in several regions of the country - and some private sector landlords becoming jittery, there could be good buys for the shrewd investor over the next months.

This is the up-beat view of chartered surveyor David Bush, one of the most seasoned observers of the Norwich and Norfolk property scene over the past four decades. He is principal of busy letting and management company Bush Management, based at Fishergate, Norwich and in the late 1970s was a leading light in the formation of the near 30-member firm Norwich and District Association of Estate Agents, which sells the majority of homes in the city and surrounding country areas.

"There is certainly evidence of more property coming onto the market now, and although I would personally rule out the prospects of a collapse in prices, I do think the next three months will provide a window of opportunity for the canny investor. "The war in Iraq and economic uncertainty is making a number of vendors very twitchy, and anxious to get out of the market."

Mr Bush does not suggest that after three months, prices will start rising again: "However, I do think they will hold up, and good quality properties in the better locations will in all probability continue to rise in value, though in single figures compared to the double figure values of the past two years." Property investors look to a combination of capital appreciation and rental return for total investment return. While they have done exceptionally well recently with capital growth, rising house prices have depressed rental return. "This trend is about to reverse, as we see a change in the rental market". "Tenants are now staying much longer in rented property, as either they cannot afford to buy, or they take the view that property prices have levelled off, so they can sell their existing home and move into rented accommodation while biding their time to look around for another purchase".

"With a number of Buy to Let landlords exiting the market, there are more tenants chasing fewer properties, so rents should now start rising again through the whole sector. Pressure is at its greatest at the lower end, but we are also seeing the upper end pick up again after a spell of stagnation. "Private individuals are looking to rent superior accommodation again, having sold their own home, and are taking over the part of the market previously the domain of the corporate sector."

He cautions Buy to Let investors not to be put off by adverse media property publicity. "This tends to paint a global picture, with London as a barometer. What we see now is more of a regional market, rather than a national one, with different parts of the country performing according to the economy of that region. "The London market has suffered with the collapse of the banking and financial sector, where big bonuses drove the market and Stock Market investors dived into property without applying the same careful analysis they would have done with stocks and shares.

"These people are not true property investors, but equity market investors who have looked for an alternative home for their money. Consequently, they have bought without the right professional advice and are now looking to make an exit." The fact that property is still much cheaper in the north of England could represent danger for potential investors.

"There is a great temptation to compare these prices to the south and think there are bargains galore, but lots of people have already been caught with eye-catching advertisements in the national dailies by cowboy speculators promising high returns, which have failed to materialise."

David Bush is convinced that Norwich is better placed than most other areas to keep moving ahead, because it is expanding and has low unemployment.

"Now that transport links are much improved, the medium to long-term prospects looks good. Providing interest rates remain low and jobs look secure, I do not visualise the downturn we had during 1989-94, but I would urge potential investors to seek advice from experienced and qualified local agents."

Landlords incomes can suffer from voids
Eastern Daily Press - Wednesday February 5th 2003

Experienced private rental sector landlords and letting/management agents know the importance of acting decisively when conditions in the marketplace change - as they can do quickly.

While rental properties should always be kept in good repair, both structurally and internally, other essentials include minimising the risk of messy rent arrears disputes, and of avoiding prolonged void periods where homes stand empty between tenancies.

The rental scene in Norwich and the county remains buoyant for moderately-priced properties, but there has been some softening further up, says chartered surveyor David Bush, principal of Bush Management, Fishergate, Norwich. "Locally we have seen a weakening of tenant demand in the higher price bracket, where landlords have enjoyed rents somewhat higher than normal market levels. It is now important to recognise this and adjust asking rents accordingly," he states in his latest newsletter. Bush Management has produced a handy rental void table, highlighting the effect of homes standing empty over two weeks to three months in the ??300 to ??950 per calendar month price range. It provides telling evidence of just how significantly voids can affect a landlord's income. For example, a ??600 pcm rental home sitting empty for two months would achieve the same annual income if rented at a reduced ??500 pcm, for a full year with no void periods. A ??300 property, empty for the same period, would generate the same annual income if fully let at ??250, a ??950 home at ??790.

"Although there is naturally a reluctance to reduce the asking rent, the actual effect on income is minimal, provided the reduction is made soon enough to stop a void occurring," adds Mr Bush.

Student letting scene is a winner for landlords
Eastern Daily Press - Wednesday January 22nd 2003

How time flies! Christmas seems barely gone but already some well organised teenagers intending to take up higher education courses in the autumn are on the trail of rented accommodation (possibly urged on by over-anxious parents).

Like many other university cities in the UK, Norwich has a shortage of student houses and flats in the private sector. It is a situation which looks set to get worse as the University of East Anglia, boosted by the opening of the new medical school last autumn, expands the number of degree courses it offers.

The UEA is building on its already good reputation, and is climbing steadily up the desirability list.

According to the latest Sunday Times university league table, it now stands at 18th position out of 123 university and higher education colleges, a gain of five places on 2001. Facilities, teaching and research standards are improving steadily.

Chartered surveyor David Bush, who runs Bush Management at Fishergate, Norwich, says landlords who have not previously let in the specialised student market should consider the benefits. Writing in the latest issue of the Bush Telegraph, his company's newsletter, he comments: "Inquiries from students looking to secure accommodation for the following academic year are received as early as January, and are at their highest levels in March when the UEA stages its housing week, attended by our letting consultants".

"The number of students who contact us looking for accommodation runs into the hundreds, with demand far exceeding the supply of student houses available".

Mr Bush, whose company has had long links with the UEA, adds: "One of the principal benefits is the continuity of let with only a minimum void period, as the initial term of lease for student properties is normally 12 months. Furthermore, with parental guarantees and three or more students in each property under 'joint and several' agreements, the rent is virtually guaranteed".

All music to the ears of landlords involved in the student letting scene