Property Focus - Cambridge

ISSUE 6

The magazine for property professionals

Oct - Dec 2016

Cambridge - get strong capital gains in a thriving buy-to-let city

Hot Topic

Should landlords cover all letting agent fees?

Plus!

All the latest news and views from the property market!

W

elcome to Issue Six of Property Focus – our free online magazine for landlords, letting agents and property investors.

In this issue, the grand city of Cambridge goes under our microscope. We’ll also be rounding up all the latest news, views and stats from the UK property market.

Plus, for a chance to win £50 to spend at Amazon, simply answer the following question: According to Property Focus, what is the average asking price for a home in Cambridge?

Email your answer to propfocusmag@gmail.com or tweet it to @citylandlord for a chance to win!

One correct answer will be chosen on 9th December - good luck!

Richard Williams – Editor propfocusmag@gmail.com

Old Map of Cambridgeshire

THE SURVEY SAYS...

A number of landlords are unaware of the latest changes to legislation in the private rental sector.

A survey of landlords has revealed that the UK private rental sector is not as knowledgeable as it could be.

Of 5,000 landlords surveyed, 50% didn’t know when the Right to Rent scheme started in the UK, although over 70% were aware that they could be charged a £3,000 fine for non-compliance.

45% of landlords don’t fully understand carbon monoxide requirements with over 35% admitting to not knowing where detectors should be positioned.

Whilst nearly 25% didn’t think they had any responsibility for legionella control a further 3% admitting to ‘just leaving it alone.’

However, 97% of landlords correctly identified their gas safety responsibilities.

The survey by urban.co.uk has highlighted that

many landlords are struggling to keep on top of changes to legislation in the fast moving private rental sector.

Southampton was revealed as the most knowledgeable area when it comes to changing legislation, followed by Oxford and Reading in third place.

Lewisham (4th), Reigate (5th), Hereford (6th), Lancaster (7th), Middlesbrough (8th), Luton (9th) and Guildford make up the top ten most knowledgeable areas.

The least knowledgeable area according to the survey is Newcastle-under-Lyme.

Landlords - keep up to date with all the latest changes in the market at the Landlord Centre.

NOSY NEIGHBOUR

In each issue we take a sneaky look at what’s been going on in rental properties across the UK Landlord ordered to pay close to £7,500 for HMO failings A London landlord has been fined for cramming six families into a single semi-detached house in the borough of Brent.

A raid by council enforcement officers found that the four-bedroom home had been turned into six bedsit style rooms with a shared kitchen and bathroom.

However, the landlord had no consent and had not applied for a HMO license despite 16 people living in the property.

The landlord had also failed to install basic fire safety measures with inadequate smoke alarms and no fire doors.

The rogue landlord did not attend a hearing at Willesden Magistrates Court and was convicted in his absence of offences under the Housing Act 2004 and fined £6,000 as well as being ordered to pay costs of £1,318 and a victim surcharge of £170.

A council spokesman said: “The contempt [the landlord] has shown for this legal process by not even bothering to turn up for sentencing speaks volumes. The vast majority of landlords and lettings agents in Brent are honest and law abiding, but

we take a zero tolerance approach to the minority who think they can treat their tenants like this.”

Landlord faces fines of £28,000 for trying to scam investigators A landlord and her accomplice have been handed a £28,000 penalty for trying to con investigators into believing a property was meeting health and safety regulations.

The landlord rented out a five bedroom house in High Wycombe but lied about installing toilets and fire doors and forged a fake builder’s invoice to dishonestly prove that the work had been carried out at the property.

Following an inspection by the council, both parties were told that the property required a number of improvements but none of the works were actually carried out.

The landlord has been fined a total of £17,986, which includes a £16,000 fine, £1,866 in costs and a victim surcharge of £120. Meanwhile, the accomplice has been ordered to pay £8,000 in addition to £1,866 as well as a victim surcharge of £120.

October 2016

brought to you by

Apr 2016

RENTING Landlords number one priority is securing tenants that have passed all necessary reference checks with

70% citing this as extremely important

BUYING Parents are willing to pay an extra

ÂŁ18,000

on average for a home in the right school

catchment area

(Santander)

(Hunters Estate Agents)

One in seven

33% of homeowners

renters go on to break one

are choosing to undertake

or more rules which have

home improvements

been set out in their

to add value to their

tenancy agreement

property and move up the housing ladder

(Landlord Today) (comparethemarket.com)

Edinburgh has been revealed as the best An average of

74% of

city in the UK to invest in student property

income is put towards rent in

London which is the highest rate across the UK

(Agency Express)

(Chestersons)

HOT TOPIC Should all letting fees be covered by landlords?

In 2012, legislation was introduced in Scotland which meant that landlords, rather than the tenants, were obliged to cover 100% of the letting agent fees. There has been talk in the press recently about extending the ruling to cover England and Wales also – we look at the pros and cons.

Yes

Charity Citizens Advice argue that while landlords have the advantage of shopping around for the best deals, tenants have no choice over the agent they deal with, or the fees that they are charged after finding a suitable home.

An increasing number of people, particularly renters, are contacting the charity with questions and complaints about letting agents. It received 6,500 calls about the sector in the year to the end of June, up from 6,200 at the same time the previous year, and 5,700 the year before that.

Whilst many tenants had previously complained about delays in getting basic repairs completed or having problems such as damp or cold rectified, the complaints increasingly now relate to agents’ fees, which have risen to as high as £700, Citizens Advice reports.

The fees tenants are charged for range from preparing the tenancy agreement, checking references and credit checks, but the charity believes that it is landlords that should foot the bills for these, not tenants.

“Private renters shop around for properties, not for letting agents. Landlords are better able to choose agencies based on performance and cost and it should therefore be landlords paying letting agent fees, not tenants picking up these rising costs,” says Gillian Guy, chief executive of Citizens Advice.

‘Landlords are buying a service and so they presumably have greater bargaining power in negotiating what they’ll pay. And arguably they should be the ones paying, rather than the tenant,’ says Which.co.uk.

Tessa Shepperson, writing for The Landlord Law Blog, says “The (letting) agents’ customer is the landlord. It is the landlord who employs the agent.

So why should the tenant have to pay anything at all towards the agent’s fees?”

No

Landlords' profits are already being squeezed by recent stamp duty increases and tax allowance changes and some argue that adding the cost of letting agent fees on top of this would reduce margins in the private rented sector to the point that many landlords will consider selling up.

David Cox, managing director of the Association of Residential Letting Agents (ARLA) insisted that letting agents have a “fair pricing structure” and do “not make a noticeable profit” on charging for services.

He points out that landlords already incur costs of their own for services such as advertising the property and arranging viewings.

“Rather than simply transferring the total cost onto the side of the landlord, what is crucial is to provide consumer protection through better regulation of the private rented sector,” says Mr Cox. Many critics of the idea have suggested that tenants would end up no better off if legislation came into force, as landlords would simply factor the cost of such fees into increased rents.

A survey by the Residential Landlords Association earlier this year found that 84% of private sector landlords said they are likely to increase rents due to the Chancellor’s recent tax assault on the buy-to-let sector and this would only be further reinforced if full responsibility for letting agent fees was added on top.

While landlords may not necessarily be expected to pay all letting agent fees, a letting agent must not charge a tenant for registering with it, or to show its list of properties available for rent, according to housing charity Shelter.

Letting agents also should not charge a tenant for routine inspections done during the tenancy.

According to Shelter, a letting agent may only ask a tenant to pay fees for: •

A holding deposit to 'reserve' a property before you sign a tenancy agreement

•

Drawing up tenancy agreements and an inventory of the property

•

Carrying out credit checks

•

Getting references from your employer, bank or previous landlord

•

Administrative costs such as phone calls and postage

CITY SPOTLIGHT In each issue we shine our spotlight on a different part of the UK, focussing on what it has to offer everyone from property investors to casual day trippers.

Cambridge

Introduction Located around 50 miles north of London, Cambridge is a major university city and the county town of Cambridgeshire. It has a population of around 139,000 - approximately a fifth of which are students.

Although city status was not granted until 1951, there is archaeological evidence of settlement in the area since the Bronze Age, and under Viking rule, Cambridge became an important trading centre.

Connections Cambridge has good rail links to the capital, with direct routes into London King’s Cross and Liverpool Street. Trains linking Cambridge with Brighton and CITY SPOTLIGHT

Gatwick Airport, via London St.Pancras are also due to start running from 2018.

Rapid growth in the 20th century means that Cambridge has a somewhat congested road network. As a consequence, the city has the highest level of cycle use in the UK. A 2013 survey found that 47% of residents travel by bike at least once a week. In recognition of this, the 3rd stage of the 2014 Tour de France started in the city centre, adjacent to Parker’s Piece common.

Economy Cambridge’s river access means it is traditionally a market town, supplying items such as butter and livestock to merchants who would visit from across

DID YOU KNOW? The Saxons called Cambridge ‘Grantabrycge’ (bridge over the river Granta). The name of the town gradually changed to Cambridge. The name of the river then changed to Cam, so it may be said that the river is named after the town, not the town after the river!

CAMBRIDGE CAMBRIDGE

the country. Today the city’s economy is more diverse, with strength in sectors such as research, development, software consultancy, creative industries and engineering.

Property

Education

Due to its enduring student population, Cambridge is a good investment choice for buy-to-let landlords.

Despite high property prices - the median price is currently £360,000, higher than anywhere in England and Wales except London and St Albans - rental yields of up to 9% can be found in the area.

Cambridge is famous for its University, founded in 1209, it is regarded as one of the top five in the world (find out more on page 17). The city’s skyline is characterised by the King’s College Chapel and University library, along with the spire of the Old Lady and the English Martyrs Church.

The city has a strong private-rental sector, with rented property accounting for 28% of all households, compared to 18% across England and Wales.

According to forecasts, house prices in Cambridge will grow by 26% over the next five years and rental income is also expected to increase by 5% a year.

The city also has one University Technical College UTC Cambridge - which opened in September 2014, as well as a number of top private and state schools.

In 2014, estate agents Hamptons International ranked Cambridge as the country’s number one ‘buy-to-let hotspot’ - this is based primarily on rising house prices and potential capital gains, rather

CITY SPOTLIGHT

DID YOU KNOW? In 2009, residents of Cambridge spent more per head on takeaway meals than any other town or city in Britain.

than rental income however.

“The continued growth of the city means that it’s a safe bet, albeit at a high entry price,” says the Hampton’s head of research Johnny Morris.

accommodation for professionals. It’s not cheap though – a one bedroom flat here goes for around £335,000.

Pakenham Close, CB4

Cambridge is also an attractive prospect for foreign investors. Between 2008 and 2014, just under 1,700 new homes were completed in the south of the city, an estimated 30% of which were purchased by foreign buyers.

Located just 15 minutes cycle from the city centre, this location is ideal for students and professionals looking to rent due to high property prices. A three bedroom property here will set you back around £300,000-£400,000.

Where to invest?

“Investors are still placing a great deal of confidence in Cambridge,” says Mark Wood, a partner at Carter Jonas Bradshaw estate agents.

Glenalmond Avenue, CB1 Just 10 minute’s cycle to the train station and city centre, Glenalmond Avenue offers perfect

“Rents continue to increase by 5% year-on-year and capital growth is stable, so the city remains an attractive option, despite the loss of tax relief and the increase in stamp duty,” Wood adds.

CAMBRIDGE

Cambridge – the facts and figures Get the lowdown on the city with our handy infographics

PROPERTY RENTS BY BEDROOMS (source: home.co.uk) 1 BEDROOM

£919 pcm

2 BEDROOM

£1,051 pcm

3 BEDROOM

£1,021 pcm

AVERAGE RENTS BY PROPERTY TYPE (source: home.co.uk) ROOM

£538 pcm

FLAT

£1,148 pcm

HOUSE

£974

AVERAGE CAPITAL GAINS 9.0%

(source: Lendinvest.com)

AVERAGE YIELD 5.1%

(source: Lendinvest.com)

AVERAGE ASKING PRICE (source: home.co.uk) £579,164

CITY SPOTLIGHT

pcm

Twinned with Cambridge is twinned with the below cities: Szeged

Heidelberg

Hungary

Germany

Tourism

• Visitor economy is an important part of the economic success of the city with 5.3 million visitors per year bringing around £583million to the economy.

• The tourism industry accounts for 17% of local employment.

• Majority of Cambridge visitors only stay for one day.

Population = 138,750 (2016 estimate)

Did Yo u Know?

The firs t o fficial gam e of fo otball w it h rules we wo uld recognise w as playe d o n Parker’s Piece, the b ig public p a r k in the middle of Cambridge .

I t was playe d in 1 848 betwe en the city and the Un iversity.

CAMBRIDGE

PLACES TO VISIT

Cambridge attracts over 5 million visitors each year according to Cambridge City Council, and that’s not just because the scenic city is home to the famous Cambridge University. A proportion of the £583 million that tourism brings in is spent on exploring the rich mix of historical attractions that Cambridge has to offer.

Holy Sepulchre (The Round Church) Round Church Vestry, Bridge Street, Cambridge CB2 1UB

Universally known as The Round Church, the Church of the Holy Sepulchre is one of four medieval round churches still in use in England. It is the second oldest building in Cambridge and a stunning example of 12th century architecture. www.roundchurchcambridge.org

Church of St Mary the Great The University Church, Senate House Hill, Cambridge CB2 3PQ

Known as GSM, the church was designed in the late Perpendicular Gothic style of architecture and is a Grade I listed building. GSM has been mentioned in the history books as early as 1205 and continues to play a minor role in Cambridge University’s legislation. www.gsm.cam.ac.uk/great-st-marys

The Backs Queen’s Road, Cambridge CB3

The Backs is a picturesque area where several colleges of the University of Cambridge back on to the River Cam, their grounds covering both banks of the river. Historically, much of the land was used by the colleges for grazing livestock or growing fruit. www.visitcambridge.org/things-to-do/the-backs-p507481

The Fitzwilliam Museum Trumpington Street, Cambridge CB2 1RB

The Fitzwilliam Museum is the art and antiquities museum of the University of Cambridge and was founded in 1816. The museum has five departments: Antiquities, Applied Arts, Coins & Medals, Manuscripts & Printed Books, and Paintings, Drawings & Prints. In 2015, the museum displayed two bronze statues believed to be the only known surviving bronze sculptures by Michaelangelo. www.fitzmuseum.cam.ac.uk CITY SPOTLIGHT

Ely Cathedral Chapter House, The College, Ely CB7 4DL

Ely Cathedral is steeped in history with origins as early as AD 672 and the current building dating back to 1083. The impressive landmark is a major tourist destination and receives approximately 250,000 visitors per year. www.elycathedral.org

Anglesey Abbey and Lode Mill Quy Road, Lode, Cambridge CB25 9EJ

Anglesey Abbey is a magnificent country house boasting 98 acres of landscaped grounds featuring gardens, classical statues, topiary and flowerbeds. The mill that accompanies the grand property was restored to working order in 1982 and freshly ground flour can be bought direct from the chute or the Gift Shop. www.nationaltrust.org.uk/anglesey-abbey-gardens-and-lode-mill

Sedgwick Museum of Earth Sciences University of Cambridge, Downing Street, Cambridge CB2 3EQ

Sedgwick is the oldest of the University of Cambridge museums and is home to around 2 million rocks, minerals and fossils spanning a period of 4.5 billion years. The museum is involved in events throughout the year such as the Science Festival, the Festival of Ideas and Twilight at the Museum. www.sedgwickmuseum.org

Cambridge University Botanic Gardens 1 Brookside, Cambridge CB2 1JE

The landscaped gardens of the prestigious university span 40 acres of almost entirely level ground. Created in 1831, the gardens have a plant collection of over 8,000 plant species from all over the world. www.botanic.cam.ac.uk/Botanic/Home.aspx CAMBRIDGE

Famous Residents Cambridge has a rich heritage of literary, sporting and comedic personalities. Here are just a few of the city’s favourite sons and daughters.

Sir Jack Hobbs

gettyimages.co.uk

Regarded as one of the greatest batsmen in the history of cricket, Sir Jack Hobbs was born in Cambridge in 1882. He played for Surrey from 1905 to 1934 and for England in 61 Test matches between 1908 and 1930. His 5,410 runs for England helped earn him the nickname The Master.

Richard Attenborough

parade.com

Born in Cambridgeshire in 1923, Lord Attenborough was an actor, film director, film producer, entrepreneur and politician, as well as former President of the Royal Academy of Dramatic Art (RADA) and the British Academy of Film and Television Arts (BAFTA). He was an original cast member of The Mousetrap – British theatres longest running play - as well as portraying John Hammond in the hugely successful Jurassic Park film series.

Ted Hughes

theguardian.com

Poet and Children’s writer Ted Hughes studied at Pembroke College in Cambridge and is famous for classic works such as The Iron Man. In 2008 The Times ranked Hughes fourth on their list of “The 50 greatest British writers.” Hughes was married to American poet Sylvia Plath from 1956 until her suicide in 1963.

Stephen Hawking Award-winning theoretical physicist and author Stephen Hawking attended Trinity Hall in Cambridge for his graduate study. He went on to write the ground breaking book A Brief History of Time. Since the age of 21 he has had a slow-progressing form of motor neurone disease and now communicates using a single cheek muscle attached to a speech-generating device.

maltatoday.com.mt

Mel Giedroyc Mel was born and raised in Surrey, but attended Trinity College, Cambridge - graduating with a 2:2 degree in Italian language and literature. A regular on British television, she hosts the BBC’s The Great British Bake Off with comedy partner Sue Perkins.The show has run for seven series and currently receives viewing figures of around 12 million per episode!

funnywomen.com

Jimmy Carr Comedian and television presenter Jimmy Carr studied political science at Gonville and Caius College, Cambridge in the mid-90s. He has since gone on to become one of British television's best known faces, as well as having several sell-out arena tours as a stand up.

CITY SPOTLIGHT

timeout.com

History The University of Cambridge is the second-oldest university in the English-speaking world and the world’s fourth-oldest surviving university. The university is formed of 31 constituent colleges and over 100 academic departments which are organised into six schools.

University Of Cambridge The university was originally formed when an association of scholars left the University of Oxford following a dispute with the townspeople. None of the colleges of the university are as old as the university itself, many of which were founded during the fourteenth and fifteenth centuries. The earliest found College was Peterhouse in 1284.

Over the course of its 807 year history, many Cambridge University alumni have gone on to become notable in their fields. The esteemed university has educated 61 Nobel Prize laureates which is 13 more than any other institution.

Consistently ranked as one of the world’s best universities, the departments of the university are divided into six schools: Arts & Humanities, Biological Sciences, Clinical Medicine, Humanities & Social Sciences, Physical Sciences and Technology. There are 30 undergraduate courses available at Cambridge spanning more than 65 subject areas.

Cambridge University occupies a central location within the city and its students make up a significant proportion (20%) of the town’s population. Many of

the older colleges are situated close to the river Cam along which it is traditional to punt to appreciate the iconic buildings and surroundings.

In addition to the world class teaching that the university offers, Cambridge University believes in the ‘work hard, play hard’ motto. There are hundreds of student clubs and societies to choose from as well as more than 50 sports with opportunities to get involved at any level.

Cambridge University Press Cambridge University Press publishes over 45,000 titles and over 300 research journals. It is the publishing business of the University of Cambridge and plays a leading role in today’s international market place with more than 50 offices around the globe.

Did you know?

Lord Byron was not allowed to keep a dog in his rooms at Trinity College so he kept a bear instead! As the college had no rules about bears in their statutes, they didn’t have a legal basis to ask him to remove it.

CAMBRIDGE

SALES & RENTAL INDEX Average Rent per Region Overall UK average = £913 (+3.1%) North East = £535 (-1.6%) North West = £699 (+4.3%) Yorkshire and Humber = £640 (+1.3%)

East Midlands = £621 (+1.0%) West Midlands = £674 (+3.3%) East Anglia = £915 (+5.8%) Wales = £654 (+5.2%) London = £1,497 (+2.7%) South East = £1,034 (+3.3%) South West = £799 (+1.6%) Homelet Rental Index: August 2016 (Year on year change)

Average House Price per Region Overall UK average = £216,750 (+8.3%) North East = £129,750 (+5.8%) North West = £150,082 (+6.1%) Yorkshire and Humber = £151,581 (+4.7%)

East Midlands = £173,783 (+7.8%) West Midlands = £176,598 (+6.4%) East Anglia = £273,806 (+13.2%) Wales = £144,828 (+4.0%) London = £484,716 (+12.3%) South East = £313,315 (+11.9%) South West = £237,291 (+7.8%) UK Land Registry: July 2016 (Year on year change)

“Cambridge is heaven, I am convinced it is the nicest place in the world to live. As you walk round, most people look incredibly bright, as if they are probably off to win a Nobel prize.”

“Cambridge is heaven, I am convinced it is the nicest place in the Sophie Hannah - Author world to live. As you walk round, most people look incredibly bright, as if they are probably off to win a Nobel prize.”

Sophie Hannah - Author

Architecture in Cambridge Clare University College

Words

Richard Williams

Design

Priya Gill

Anethe Carvalho

Miao Yu

We hope you’ve enjoyed the sixth issue of Property Focus, we welcome any feedback or suggestions, please email all correspondence to propfocusmag@gmail.com.

Alternatively you can write to us at 27 Great West Road, Brentford, London, TW8 9BW.