Property Focus - Issue 9 (Glasgow)

ISSUE 9

The magazine for property professionals

Oct - Dec 2017

Glasgow – see inside the ‘Second City of the British Empire’ Hot Topic

How will the proposed letting agent fees ban impact the market?

Plus!

Get all the latest stats, news and views from the property market.

W

elcome to issue 9 of Property Focus.

Winter is making its approach with the recent September equinox marking the first day of

autumn but we’ve got our latest issue to keep you company through the colder months.

We’ll be delving in to the stunning city of Glasgow, as well as providing our usual round-up of all the latest news, views and figures from the UK property market.

What’s more, for a chance to win £50 to spend at Amazon, simply answer the following question: According to Property Focus, where is the biggest regeneration project in the UK outside of London taking place?

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

One lucky winner will be chosen on 8th December – good luck!

Priya Gill – Editor propfocusmag@gmail.com

oldglasgow.tumblr.com

The Survey Says…

Almost a third of buy-to-let landlords are unaware of the proposals for a bill banning letting agent fees!

31% of landlords across the UK are oblivious to the proposed letting fee ban which could have a knock-on effect.

The research from property management platform No Agent coincided with Westminster discussions on the ban.

The same survey found that more than a third (35%) of landlords agree with the government’s argument that the ban will force agents to become more competitive and provide better service for landlords.

Some experts believe that the banning of fees will end up hurting tenants, which is the very people the government aims to help out the most. Landlords

are also unlikely to escape unscathed, especially as the planned ban will mean tenants in England will no longer have to pay anything other than rent and a refundable deposit meaning other charges are likely to be passed onto landlords.

Almost half – 46% - feel that the deposit cap of one month’s rent would make them less likely to let properties to tenants with a poor credit history.

37.7% said the ban would make them less likely to let a property to tenants with children or pets while a majority of landlords – 57.38% - think that a cap on letting fees for tenants will work better than an outright ban.

NOSY NEIGHBOUR

In each issue we take a sneaky look at what’s been going on in rental properties across the UK Liverpudlian landlord risks tenants lives by cutting corners!

A private landlord in Liverpool has been handed a fine for putting his student tenants at risk of death.

Following an inspection of the rental property in Hartington Road, Toxteth it was found to have several fire safety issues which placed the students at risk in the event of a fire.

Findings revealed that some of the exit doors did not conform to fire door standards as they would not shut properly and were fitted with key operated mortice locks, which would have prevented an easy

escape in the event of a fire. Additionally it was found that there was a defect with the fire alarm system, the fire extinguishers in the property had not been sufficiently serviced and the staircase was not fire protected.

The landlord in question was ordered to pay almost £4,000 after he pleaded guilty to eight offences in relation to serious breaches of management of Houses in Multiple Occupation (HMO). The landlord also pleaded guilty to failing to obtain a HMO licence for the property.

£339,000 fine for landlord who let out squalid studio flats A rogue landlord who rented out squalid flats which breached council planning laws and failed to meet basic living standards has been ordered to pay out almost £339,000 by Harrow Crown Court.

Back in March 2012, the landlord ignored a planning enforcement notice issued by Brent council and ended up conning more than 100 vulnerable tenants out of thousands of pounds.

The landlord and his limited company were convicted for illegaly turning a former hotel in Nicoll Road, Harlesden into 26 flats six years ago. The case was brought before Harrow Crown Court by Brent Council.

Legally the minimum size requirement for a studio flat in London is 37sqm and yet this landlord charged rent for properties measuring between 9sqm and 20sqm with poor insulation, which failed to meet basic living standards. Issues were also raised about the poor maintenance of the properties as well as the fact that the tenants were living in insanitary conditions.

Harrow Crown Court has issued the company with a £300,650 confiscation order under the Proceeds of Crime Act. On top of this amount there is £20,000 of fines as well as £18,268 to cover Brent Council’s costs.

brought to you by

RENTING TENANCY AGREEMENT

BUYING The average tenancy length in the UK is now up 18% from 2014,

Burnley has been named the most affordable place to purchase a property for first-time buyers, with average house prices of under

with an average renter

£85k

staying in a property for

20 months (Your Move)

31% of letting agents saw landlords putting rents up for tenants, an increase from 27% in May

(Hatched.co.uk)

A first-time buyer in the UK is looking at having to pay over

£200,000 on average for their first home compared to (ARLA Propertymark)

£75,000 in 2000

The annual rate of rental

(Hatched.co.uk)

growth across the country doubled from

1.1 to

2.2% between June and July

Greater Manchester has become a key destination for property investors with a strong house price growth rate of

6.7%

(Monthly Lettings Index)

(Properties of the World)

HOT TOPIC How will the proposed letting agent fees ban impact the market?

Following the announcement of proposals to ban tenant fees in the Queen’s speech earlier this year, we consider the impacts the planned legislation is likely to have on different parties in the buy to let market.

Positively The Tenant’s Fees Bill has been proposed to promote a greater level of transparency in the housing market.

Currently fees are paid by tenants to the letting agent for taking references, getting credit checks or investigating immigration status. The average amount paid is currently £223 according to government figures, however housing charity Shelter found that one in seven renters pays more than £500 and tenants in London have complained about fees of up to £2,000.

The disparity between these figures provides an indication in to the hugely varying amount that tenants are charged. Separate research by Citizens’ Advice found that 42% of people paying letting agents’ fees had to borrow money to pay them.

With rents continuing to increase, tenants are in tight financial situations and the removal of the additional burden of paying letting agents fees would be welcome news for those renting in England.

Letting agents fees to tenants have already been banned in Scotland. A report by Shelter suggested that despite the worries of how the ban could have a negative impact, rises in rents had been ‘small and short-lived’ in Scotland. Furthermore, landlords in Scotland were no more likely to have increased rents since 2012 than landlords anywhere else in the UK. Campbell Robb, Shelter's chief executive, has said that banning them elsewhere was welcome.

"Millions of renters in England have felt the financial strain of unfair letting agent fees for far too long, so we are delighted with the government's decision to ban them. We have long been campaigning on this issue and it is great to see that the government has taken note," he said.

The ban is not one sided however and is also being considered to prevent landlords being hit with dubious fees. The effort to create more transparency means landlords can easily shop around for an agent to provide the quality of service they want at a reasonable price. This in turn will lead to an increase in competition between letting agents and hence could lead to a fall in prices – a positive for both landlords and tenants.

Negatively Some experts argue that a ban on letting agents’ fees means that landlords will be required to cough up for the extra costs and that this is most likely to be through higher rents.

Many individual landlords already have a number of costs, including mortgage payments, insurance, service charges and tax changes and the addition of extra costs incurred because of the letting agents’ fees ban could be a deterrent to those considering investing in the private rental sector.

As a result, it is predicted that rents could rise by £103 per tenant per year and there are claims that the ban contradicts the Government’s aim to encourage longer term tenancies.

The industry has reacted strongly to the proposed ban with many arguing that administration has a cost. There has been an alternative suggested in the form of stronger consumer protection through regulation of the sector rather than an outright ban.

Furthermore, ARLA Propertymark has found that the new rules could cost up to 4,000 jobs.

There are also concerns that the ban in England could lead to unintended consequences such as tenants on low income being impacted if agents choose to only reference potential tenants who are a ‘safe bet’ due to taking on these costs themselves.

David Cox, managing director of the Association of Residential Letting Agents (ARLA), said: "A ban on letting agent fees is a draconian measure, and will have a profoundly negative impact on the rental market.”

"It will be the fourth assault on the sector in just over a year, and do little to help cash-poor renters save enough to get on the housing ladder. This decision is a crowd-pleaser, which will not help renters in the long-term. All of the implications need to be taken into account.”

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.

Glasgow

Introduction

Connections

Located on the banks of the River Clyde, Glasgow is the largest city in Scotland and the third-largest in the United Kingdom by population.

Glasgow has a considerable transport system encompassing air, rail, road and an underground rail line.

The city grew from a small rural settlement to become the largest seaport in Britain and was known as the “Second City of the British Empire� for much of the Victorian era and Edwardian period.

The city has the most extensive urban rail network in the UK outside of London with two mainline railway stations providing regular links to London Euston as well as destinations as far south as Penzance.

In addition to this network, Glasgow has its own

CITY SPOTLIGHT

DID YOU KNOW? It’s said that the Glasgow City Chambers boasts more marble than the Vatican. The 1888 building cost £578,232 to build back in the day which is the equivalent of £40 million today!

Glasgow City Chambers GLASGOW GLASGOW

completely underground metro system which is recognised as the world’s third underground railway after the London Underground and the Budapest Metro.

Glasgow also has excellent road links with the M8 motorway running through the city and the M6 providing a direct connection to the south of the country and London.

Glasgow has the largest economy in Scotland and is still home to headquarters of major manufacturing firms including British Polar Engines, Weir Group, William Grant & Sons and many more.

Education

With two international airports within 45 minutes travel of the city centre, it’s safe to say that Glasgow is very well connected to the rest of the UK.

Glasgow is a major centre of higher education with four universities within 10 miles of the city centre: University of Glasgow, University of Strathclyde, Glasgow Caledonian University and University of the West of Scotland.

Economy

The University of Glasgow itself has more than 26,000 undergraduate and postgraduate students and is a major employer in the city with more than 7,600 staff.

Glasgow was once one of the most significant cities in the UK for manufacturing with the most prominent industry being shipbuilding (find out more on page 17).

Whilst manufacturing has declined slightly since, Glasgow's economy has seen significant relative growth of tertiary sector industries such as financial and business services, communications, biosciences, creative industries, healthcare, higher education, retail and tourism.

CITY SPOTLIGHT

Property Market The current average property price in Glasgow is £178,908 but property prices in the suburbs of the city are predicted to see the largest increase in average house prices in Scotland by 2021. High employment rates, growth in private house market

levels and an increase in rates of average earnings will all contribute to greater growth over the next five years.

Where to invest?

With over 10 leading universities and colleges located within the city, there is high rental demand from students and with a current average rental yield of 7.9%, Glasgow is a good investment choice for buy to let landlords.

This is the only destination in Scotland to rank within the top 20 areas of highest growth across the UK behind Westminster (31.9%), the Cotswolds (31.8%) and Warwick (29.5%).

Glasgow is continuing to reinvent itself and there are a host of projects in the pipeline that aim to change the face of the city over the next 10 years.

The £250 million regeneration of Sighthill is the biggest project in the UK outside of London, according to Glasgow City Council. Planning permission to build up to 650 new homes for sale has been granted and there are wider proposals which include a new community campus school and commercial facilities.

“Scottish cities compare favourably to other parts of the UK in terms of yields, entry prices and potential for growth. At nearly 7%, average gross rental yields in Glasgow are as high as they are anywhere else in the UK. Affordable Buy to Rent schemes are now well established in Scotland, with high levels of demand,” according to Stuart Montgomery, director of lettings at Rettie & Co.

East Renfrewshire

East Renfrewshire has been considered an ideal place for aspiring young families to live because of the excellent schools within the area. 53% of the population is educated to degree level and with this being synonymous with higher potential earnings, there is an upwards pressure on house prices.

East Dunbartonshire Situated north of Glasgow but within easy commuting distance, East Dunbartonshire offers the best of city living as well as a suburban lifestyle for parents who may be keen to set up home in the outskirts. The region has been ranked second in terms of growth and is expected to rise by 22.5%.

DID YOU KNOW? The name ‘Glasgow’ derives from the older Cumbric glas cau which would have meant ‘green basin’ or ‘green valley’.

Kelvingrove Museum and Glasgow University

GLASGOW

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

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

£536 pcm

£739 pcm

2 BEDROOM

£1,092 pcm

3 BEDROOM

£1,497 pcm

4 BEDROOM

£2,112 pcm

5 BEDROOM

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

£581 pcm

FLAT

£776 pcm

HOUSE

£1139 pcm

AVERAGE CAPITAL GAINS 7.3%

(source: liveyield.co.uk)

AVERAGE YIELD 7.9%

(source: liveyield.co.uk)

AVERAGE ASKING PRICE (source: home.co.uk)

£176,389

CITY SPOTLIGHT

Twinned with Glasgow is twinned with the below cities: Dalian

Bethlehem

Havana

China

Palestine

Cuba

Tourism • Famed for its culture, shopping and people, Glasgow is the perfect base for exploring more of Scotland, with great connections to the Highlands and the islands. You can spend your day exploring a wide range of fantastic free museums and galleries or enjoying the UK’s best shopping centre outside of London!

•

Glasgow has over 2 million visitors per annum and over 20 million day visitors!

•

Tourists spend over £482 million in Glasgow annually whereas day visitors have an expenditure of approximately £1 billion.

Population = 598,830 (2011 consensus)

Did Yo u Know?

Glasgow T ower is the only s tructure o n earth cap a ble of rotating 36 0 degrees in to the prevailing w ind and h o ld s the Guinness-W orld-Recor d for the talles t full y rotating f rees tand in g s tructure in the World!

GLASGOW

PLACES TO VISIT

Glasgow has a delightful mix of world-class museums, galleries and award-winning visitor attractions - many of which are free! The city is also an architects paradise with its rich and varied architectural heritage.

University of Glasgow University Avenue, Glasgow Metropolitan Area G12 8QQ

The University of Glasgow is the fourth oldest university in the English-speaking world and one of Scotland’s four ancient universities. Alumni of the university include seven Nobel laureates and two British Prime Ministers. http://www.gla.ac.uk/

Kelvingrove Art Gallery and Museum Argyle St, Glasgow Metropolitan Area G3 8AG

Kelvingrove Art Gallery and Museum is one of Scotland’s most popular free attractions. The museum has been open to the residents of Glasgow since 1901.

The museum has 22 themed galleries displaying an astonishing 8000 objects, brought together from across Glasgow Museums’ rich and varied collection, which is a Recognised Collection of National Significance. www.glasgowlife.org.uk/museums/kelvingrove/pages/default.aspx

Duke of Wellington Statue Royal Exchange Square, Glasgow, Glasgow Metropolitan Area G1 3AJ

The equestrian Duke of Wellington Statue is an integral part of Glasgow. This classic sculpture is the work of Italian artist Carlo Marochetti and has been around since 1844. In 2013 the council planned to double the height of the statue, in hopes that it would deter the public from dressing Wellington up with a conical hat. However after a social media campaign called ‘Keep the Cone’, which received over 72,000 likes in 24 hours, council officials agreed to let it remain. image: bbc.co.uk CITY SPOTLIGHT

Provand’s Lordship 3 Castle St, Glasgow Metropolitan Area G4 0RH

This medieval house museum has been around since 1471, making it the oldest house in the city and one of Glasgow’s four medieval buildings to actually withstand the test of time. The Scottish 17th century furniture, selection of historic royal portraits, and beautiful brickwork make it well worth visiting. www.glasgowlife.org.uk/museums/provands-lordship/pages/default.aspx

Glasgow Cathedral Glasgow Cathedral, Castle Street, Glasgow, G4 0QZ

Glasgow Cathedral dates back to a period before the Scottish Reformation and has a former status as the Roman Catholic mother of the Archdiocese of Glasgow. The building is technically no longer a Cathedral since it has not been the seat of a bishop since 1690, however is still a place of active Christian worship, hosting a church of Scotland congregation who welcomes tourists. www.glasgowcathedral.org

The Necropolis Castle St, Glasgow Metropolitan Area G4 0UZ

50,000 burials have taken place at the Glasgow Necropolis and most of the 3,500 tombs have been constructed up to 14 feet deep, with stone walls and brick partitions. The myriad has monuments and statues, including the John Knox Statue, offering valuable insight into a Glasgow from a bygone era. www.glasgownecropolis.org

People’s Palace and Winter Gardens Glasgow Green, Templeton St, Glasgow Metropolitan Area G40 1AT

The People’s Palace and Winter Gardens is a voice for the city of Glasgow and a vehicle through which stories as far back as 1750 can be told. Delve deep into the maze of artefacts and interactive displays and catch a glimpse of Glaswegian life through wondrous and colourful social narratives. www.glasgowlife.org.uk/museums/peoples-palace/pages/default.aspx GLASGOW

Famous Residents Glasgow has a rich heritage of famous figures, below are some of the city’s favourite sons and daughters.

Nicola Sturgeon

snp.org

Nicola Sturgeon is the current First Minister of Scotland and has been leader of the Scottish National Party (SNP) since 2014. She's the first woman to hold the position of First Minister. Sturgeon is a Law graduate of the University of Glasgow, who after being elected to Parliament served successively as the SNP shadow minister for Education, Health and Justice. Forbes magazine ranked Sturgeon as the 50th most real woman in the world and 2nd in the UK in 2016.

Sir Alex Ferguson

itv.com

Alex Ferguson was brought up in Govan, Scotland and ended up playing for local Rangers, having worked his way up via clubs including Glasgow’s historic amateur club, Queen’s Park. Though Ferguson himself enjoyed a goal-packed career as a striker, he’s best known as a manager. During his time with Manchester United he won 13 Premier League trophies and two Champions League trophies.

Andy Murray

skysports.com

The Scottish tennis player is British No.1, 2012 US Open, 2012 and 2016 reigning Olympic Singles Champion, and the 2013 and 2016 Wimbledon Champion.

Murray ended years of British heartbreak by becoming the first British male in 77 years to win the highly coveted Wimbledon Championship in London in July 2013, and winning it again 3 years later in 2016.

Mary Queen of Scots Mary Queen of Scots is one of history’s true enigmas. She was crowned Queen of Scots at just nine months old and smuggled to France at age five. After returning to Scotland, the queen became a political pawn in England for 19 years at the hands of Queen Elizabeth I. Mary was found guilty of treason for plotting against Elizabeth. She was executed in 1587 and her son became James I of England and VI of Scotland after Elizabeth’s death in 1603.

bbc.co.uk

Macbeth Scotland is the land of Macbeth. The titular character of William Shakespeare's play was a Scottish king who was an inspiring leader with fearless spirit. Of all the plays Shakespeare wrote, Macbeth most clearly reflects his relationship with James I. The tragedy dramatizes the damaging physical and psychological effects of political ambition on those who seek power. It was first published in 1623 and is Shakespeare’s shortest tragedy.

visitscotland.com

William Wallace

Born in Elderslie in 1270, near Glasgow, William Wallace is hailed by many as the greatest of Scots. He was to become the leader of the Scots resistance against the English occupation at the beginning of the Scottish Wars of Independence. Most famously, he defeated the army of the ‘Auld Enemy’ at the Battle of Stirling Bridge, but was eventually betrayed and executed in London.

CITY SPOTLIGHT

dailymail.co.uk

History Glasgow is Scotland’s largest city and is renowned for its culture, style and the friendliness of its people.

The city was once one of the most significant cities in the UK for manufacturing with the most prominent industry being shipbuilding.

Govan Shipping History Scotland was once the shipbuilder to the world and the heart of its industry was cited in Glasgow.

The advent of the steam engine marked massive opportunities for Glasgow to expand its heavy industry.

Between 1844 and 1963, Denny’s shipyard alone built over 1,500 ships.

For many though, the heart of the shipping industry in Glasgow lay in Govan and Fairfield yard which took the Upper Clyde to great heights and worldwide prominence.

The yard was founded in 1864 by William Elder, a talented marine engineer who developed the compound engine which transformed shipbuilding by allowing vessels to use fuel more efficiently and travel further.

At its peak before World War 1, the Fairfield shipyard was part of a local industry which directly employed 70,000 workers in 19 yards.

The largest crane in the world, with a maximum lift capacity of 250 tons, was built at the Govan yard in 1911 and in the following year Fairfield had 12 ships under construction at the same time.

The inter-war years saw a gradual decline but Clydeside’s largest shipyard still built many famous ships during this time and was a major builder for the Royal Navy.

However, after World War 2, the decline set in swiftly and despite a major modernisation programme in the 1950s the yards of the Clyde were unable to compete with new shipbuilding superpowers such as Japan.

Robert Napier It can be said that the industrial legacy and historical significance of shipbuilding on the Clyde can be traced back to one man - Robert Napier. He was responsible for building the first steamships on the Clyde in the late 1830’s. Which in turn helped stimulate investment for building ships on the Clyde. Many of the names most synonymous to the shipyards apprenticed under Napier with arguably the most famous being Fairfield Shipbuilding and John Brown & Co.

Finnieston crane Glasgow GLASGOW

SALES & RENTAL INDEX Average Rent per Region

Overall UK average = £925 (+1.1%) North East = £526 (-1.7%) North West = £698 (+2.3%) Yorkshire and Humber = £625 (+1.1%)

East Midlands = £620 (+3.2%) West Midlands = £680 (+2.4%) East Anglia = £919 (+1.6%) Wales = £613 (+1.3%) London = £1,564 (-0.6%) South East = £1,025 (-0.9%) South West = £823 (+2.4%) Homelet Rental Index: July 2017 (Year on year change)

Average House Price per Region Overall UK average = £223,257 (+4.87%) North East = £130,065 (+2.5%) North West = £156,392 (+5.54%) Yorkshire and Humber = £157,762 (+4.93%)

East Midlands = £182,166 (+7.1%) West Midlands = £185,082 (+4.73%) East Anglia = £286,623 (+7.22%) Wales = £151,672 (+3.57%) London = £481,556 (+2.87%) South East = £320,168 (+4.93%) South West = £246,159 (+5.33%) Land Registry: September 2017 (Year on year change)

"We are undoubtedly a sentimental people, and it sometimes plays havoc with that other celebrated sense of ours, the practical.�

J.M. Barrie - playwright and novelist.

Glasgow Central Bridge

Words

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

Priya Gill

Anethe Carvalho

Kinga Wazydrag

Miao Yu

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