Could the Property Market be turning around for Landlords?

According to Home.co.uk during London’s recent property boom house prices soared ahead of rents. Investment fever drove prices up more than 50% in just 5 years, where rents only rose by 10% causing yields to collapse; however, over the last year prices have fallen by around 2.3% and rents jumped by 4.3%.  Although there are still some prime central London locations feeling the pressure of decreasing rents, many pockets of London have seen considerable growth in rents as well as rental yields, bringing a smile to many landlords and buy-to-let investors!

London-Eye-2009

Emma How, Director of Sales & Lettings gives us her insight …

“Comparing our data from Q3 2017 and Q3 2018, we have seen tenant enquiries increase by around 24%. We believe this increase in demand is due to the fall in supply because of tax changes (tax relief, loss of wear and tear allowance and 3% stamp duty levy), and landlords deciding to leave the market. In addition, increased activity in the commercial market has tempted some of our landlords with larger portfolios to consider converting blocks of residential flats into commercial offices.

Colored doors in an alley of London

Demand from international tenants remains strong from both students and professionals. Demand from professional tenants who were previously looking to buy has increased, while we wait to see what deal will be agreed when we leave the EU. This has also meant tenants are staying longer than 12 months.

Magnifying glass in front of an open newspaper with paper houses. Concept of rent, search, purchase real estate.
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Properties that are in good condition, well designed and stylish and have good amenities are being rented out quickly and at a premium as more and more tenants buy into the ‘lifestyle factor’.

real estate rent concept - old key with tag

We feel the private rented sector is a good place to be and with less stock available, it could drive rents up. As ever, it is important for landlords to be flexible and competitive. We believe that rentals will remain strong for the next six months as Brexit approaches.”.

HOW MUCH DOES IT COST TO RENT AN OFFICE?

It is sometimes thought renting conventional office space is the same as renting a residential property. As a result, many find themselves out of budget as they fail to factor in all the additional costs which need to be included.

Front view of a long office room with wooden floor, long tables with desktops and big ceiling lamps. 3d rendering.

When moving into a new office the initial costs can quickly add up. A tenant will often be expected to pay a rent deposit, which Is often in the region of 3 to 6 months’ rent depending on the strength of the company’s accounts. The offices are often not fitted out and often not in a condition to be occupied straight away. The incoming tenant should not expect to be allowed to fit-out the office until the lease has commenced, so they will need to consider what works need to be done and how long it will take. Depending on the condition and required specification the incoming tenant may wish to install meeting rooms, kitchenette, server, cabling, internet access or any other services or facilities. Often this may require a License for Alteration, which will be another additional cost that needs to be accounted for.

Many try cutting their ‘move-in’ costs by not instructing an agent or a solicitor to work on their behalf. Cutting professional fees however often comes back to haunt the tenants as they can end up agreeing to a lease much more in the Landlord’s favour. This can leave the tenant exposed to additional costs or obligations that they would have otherwise avoided.

Once the lease has begun the tenant should be aware that it is not solely the rent they have to budget for. Other costs that may be included could be;

  • Contribution towards Service Charge for the building’s management. This can vary depending on the level facilities and services within the building. These can include lifts, reception or air conditioning.
  • Contribution towards the Building insurance
  • Contribution towards a Sinking Fund to cover any additional works that would not be covered by service charge or insurance.
  • Business Rates Tax

A tenant must be aware of the terms within their lease, as may need to take professional advice and prepare for a future increase in costs. This may include a rent review, which often which often surprise tenants if they are not prepared for an upcoming review.  In a Full Repairing and Insuring lease, the Tennant is responsible for keeping the property in a good state of repair. This can leave the tenant liable for expensive repairing obligations if the property falls into poor condition.

Renovate a office building.

At the end of the tenancy the tenant is normally responsible for returning the office back to its original state. If this is not completed by the tenant before they vacate the premises they may remain liable and be forced to cover the Landlord’s costs of doing the works themselves. This can be expensive as the tenant will lose control over the cost of the refurbishment works. If they are moving into new offices at the same time this can become very costly!

If you require further assistance with renting an office, please do not hesitate a member of our team.

modern  loft office . 3d rendering concept

Urban Myth?

On your wanders around Westminster, have you ever noticed that each lamp post in the borough has 2 letter Cs interlocking, painted in gold on a black background?  Seeing as our office is slap bang in the middle of the City of Westminster, (Fitzrovia to be exact) it’s amazing how few people at Davis Brown have actually noticed this!  Having said that, our Estate Agents aren’t known to dawdle …

C

You would be forgiven for thinking this was the world renowned Coco Chanel logo, but is this really homage to the iconic French designer or just a piece of architectural design?  It’s true that the Duke of Westminster was madly in love with Coco in the ’20s, and it was rumoured that he decided to put her logo on all the lights around Westminster to show how she lit up his life. Well, I feel I’m about to disappoint all you romantics out there, but this lettering is also rumoured to merely mean “City Council”.  I know, how extremely un-glamorous!  There is also another, for want of a better word – squiggle, some might say, an elaborate letter W on all these lamp posts too, could this be the W from Duke of Westminster, or could it be the W from Westminster City Council?

W

Whatever you choose to believe, Coco Chanel’s spirit is still alive & kicking with her fashion legacy,  lamp post or no lamp post.

 

 

About Last Night …

DG&MrsNoseda

To say there may be a few sore heads in the world of property today might be an understatement – but boy, they sure are worth it!  We celebrated our 20th Anniversary of Independence in style at the beautiful Searcys Knightsbridge,  with around 60 friends & colleagues last night. The evening began with champagne, canapes & chats in full flow, with the addition of a fun competition whereby guests had to decide which of our Directors may or may have not sold a property to Will.I.AM or signed the Official Secrets Act and so on.  It turned out that Chris Gotla knew us the best and was the lucky winner of 6 bottles of top notch red.

EH&sauvingnonsozzlers

After a brief welcome by our very own Tony How, we were ready to tantalise our taste buds, so Tom Gilby – the highly skilled connoisseur from The Vintner, took the reins and led us into the fascinating world of wine with his sharp wit & superb knowledge.  We had six tables of guests, all lead by a Davis Brown director – The Rose Rebels was led by David Green, Champagne Charlies was Tony How’s (arguably the biggest cheat of the night!) team, Emma How (aptly) headed up the Sozzled Sauvignons, Tony Guerguis and his school of Chardonnay Sharks,  David Moon and his Beaujolais Boozers and last but not least Susan Battson was the matriarch of the Merlot Mavericks, and so the competition to identify the grape, vintage, country of production & price of each wine began. Rose Rebels displayed a pretty consistent knowledge most of the way through, leaving the rest way behind them, but were cruelly pipped at the post at the last minute by the Sozzled Sauvignons when they identified the mystery magnum.  Fluke?  We’ll never know.  I must say, David Moon (who is partial to imparting his knowledge of the grown-up grape juice) disappointed, by pricing a magnum of pretty special wine at only £50 (actual price £100.).  Must try harder.

TOMG

And that was far from the end of the evening, there were plenty more bottles of Chateauneuf du Pape, Viognier, Sauvignon Blanc and a whole host of other fabulous wines quaffed, suffice to say it was a thoroughly enjoyable night.  I won’t tell you who were the last to leave, but I will say that the more mature of our guests win in the stamina stakes!

THBeaujolaisboozers

A huge thank you to all who attended and helped to make it such a memorable evening.  Special mention to Susan Battson and Emma How.

TH

Rental Guide to Securing your Home

Having a place to call your own is something everyone dreams about, whether that be purchasing or renting. But when it comes to actually taking those steps it can be quite daunting and unfamiliar. With a huge variety of properties and agents to choose from, knowing the process can certainly help put your mind at ease. This is the 20 steps to securing your rental home …

Your Budget – Being able to understand what you can afford each month on rent alone is the perfect starting block, as going forward you would have to ensure you can keep up with your monthly rental repayments.

POUNDSIGN

Location Location Location – Somewhere quiet? The City Centre? Near to family or work? Each location offers unique benefits and varies in price, so finding which area suits your needs should be of high importance.

Bedrooms – What is the minimum & maximum amount of bedrooms you are looking for? 

Minimalistic classic bedroom, white interior design

Size – Do you have a minimum size you are looking for?

Furnished or unfurnished? – If you have your own furniture you would need to ensure that any property you find can come unfurnished and vice versa.

When do you want to move? – understanding when you are able to start a contract is important as you don’t want to be looking too early in advance. We advise to start searching for your new home 6-8 weeks prior to your ideal contract start date.

Time to start looking – Rightmove, OnTheMarket & Zoopla. These are the three main property search portals where you can find suitable properties matching your criteria. 

Colored doors in an alley of London

Make a shortlist – There will be a lot of properties to choose from, therefore we always advice to make a shortlist of your top 5 properties that match each of your requirements.

Getting in Touch – After finding properties that catch your eye, the next step would be to get in touch with the agent. Their details are found on the advert and you have a choice of calling them directly or sending them an email enquiry. If you email them, you should expect the hear back within 24 hours.

Schedule Your Viewing – Arrange with the Estate Agent a suitable time and date for yourself to view the property. The rental market is very fast paced and we therefore always advise viewing at your earliest convenience to avoid losing out on the property.

On the Viewing – When you are on the viewing, take a good look around and take your time. Ask as many questions as you can think of, as the more you know the more you can put your mind at ease moving forward.

Is it the one?! Decide whether the property is the one for you.

Let board DB

Submit an offer – Speak to the agent who showed you the property and advise them you wish to proceed and submit your offer. Within your offer, you want to include the monthly rental price, contract start date, length of contract and any conditions you may have (professional clean, removal of any items etc).

Offer Acceptance – The agent will then formally submit your offer to the landlord and revert with their comments. This usually takes between 24-48 hours.

Holding Deposit Transfer – Once the terms of your offer have been accepted, the agent will ask you to transfer a two-week holding deposit to show you are committed to the property and in turn will reserve the flat, withdraw it from the market and cancel all further viewings that are booked in.

References – Once a holding deposit has cleared in the agent’s client account, they will then commence with references. We advise gathering these documents whilst the agent is speaking to the landlord as it can help speed up the process and put you one step ahead. References usually include – passport, three months’ bank statements, three months’ pay slips, work reference/contract & previous landlord reference (if applicable).

Remainder of the monies – You have just received the great news that you have passed the reference checks – whoop! The agent will then request you transfer the remainder of the monies to them which include one month’s rent in advance, a further four-week security deposit and any additional administration costs.

Signing of the contract – We strongly advise you have a thorough read of the contract before signing as it is legally binding.Handing over the house keys from one person to another.

Inventory Check In – An inventory clerk will be scheduled to go to the property & note down the condition prior to occupation. Come the end of your tenancy, a check out clerk will be scheduled to ensure the flat is given back in the same condition it is given to you. This document is vital as it can potentially save you hundreds or thousands of pounds should there be any disputes.

Move in day – The day has finally arrived!! Time to put your feet up, kettle on and enjoy your new home!

Cozy home. Candles, book and cup of tea

Serving Notice for Possession of a Residential Property

Text Eviction Notice typed on retro typewriter

Since the Landlord & Tenant Act 1985 came into force, it is illegal for a landlord to harass or try to force their tenants out of the property without following the correct procedures.

As a Landlord, you may reach a point during the tenancy where you may want to regain possession of your property. This could be due to non-payment of rent, antisocial behaviour,  unauthorised works etc. So can you do, if you need to take possession?

Most properties are let on an Assured Shorthold Tenancy agreement. The most common types of Notice are Section 21 and Section 8. A Landlord can serve a Section 21 Notice without any grounds for possession of the property or a Section 8 Notice with sufficient grounds.

The simplest of Notices is Section 21 under the Housing Act 1988.  This can be enacted so long as the Landlord has followed the correct contractual and legal procedures. Otherwise obtaining possession could become difficult. A Landlord can use this Notice to evict a tenant by either

  1. A) it is after a fixed term tenancy ends, (if there is a written contract)

Or

  1. B) during a tenancy with no fixed date, known as a “Periodic Tenancy”

You cannot use a Section 21 notice if the procedures have not been followed, for example did you know that a tenant must have seen the gas safety certificate, EPC and the Governments Guide on How to Rent Guide. We must also remember that a Section 21 cannot be served within the first 6 months of a tenancy, also if the fixed term has not ended unless there is a break clause in the contract.

There are circumstances where your Section 21 Notice will be invalid. Such as properties that have been served with an Improvement Notice or houses of multiple occupation (HMO’s), without a licence from the council.

You must note that a Section 21 provide the tenant with 2 month’s notice to vacate.

A Section 8 Notice has different grounds which need to be satisfied by the court that have been broken by the tenant. There are mandatory and discretionary grounds. The Notice period varies for each ground.

It is important to notice that in both cases, if the tenant has not vacated upon expiry of the Notice, the Landlord must apply to the court for possession. Unfortunately, it is not as simple as serving a Notice and obtaining possession.

It is always advisable for a landlord to seek legal advice when completing a Section 8 or Section 21 Notice.

We are Recruiting …. Graduate Building Surveyor

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We are looking for:

A graduate Building Surveyor, 1 years’ post graduate experience ideal and a working knowledge of Party Wall matters and/or Contract Administration.

We are:

A well established, multi-disciplinary practice in the West End.  We offer a friendly working environment, a company dog and opportunities for training to complete RICS qualification.

Expressions of interest to:

Tony Guerguis – TGuerguis@davis-brown.co.uk

David Moon – DCMoon@davis-brown.co.uk

 

 

20 Iconic Locations in Fitzrovia & Soho

Being Estate Agents in fabulous Fitzrovia, we know the best places to go to eat, drink, be merry & to simply just enjoy the often-unexplored delights this neighbourhood has to offer.  As my mother always said to me “When you walk, look up or you’ll miss so much”, and she was spot on, so with that in mind Emma and Hannah took to the streets in the morning sunshine with their cameras (iPhones) with the purpose of showing you the weird & wonderful in our local streets which you might have never known were there.  Here’s what we found…

1  C O L V I L L E  P L A C E

Colville Place is a paved court connecting Charlotte Street with Whitfield Street. It was planned as a double row of modest dwellings, three storeys in height in stock brick with a plain parapet masking the roofs. Each house had two sash windows on the first and second floors, and the entrance door, with rectangular fanlight, and one window on the ground floor.  An old lamp stands in the centre line where the sloping pavement from each side met.  It was named after John Colville – a carpenter who helped to build it.

Colville Place

2  L E A F  L O V E R – G R E A T  T I T C H F I E L D S T R E E T

Emma eyeing up the blooms on show at this new addition to the area.

Leaf Lover (florist - its just opened) - Great Titchfield Street

3  S A N D E R S O N  H O T E L – B E R N E R S  S T R E E T

I get the feeling, somebody’s watching me….  Soft yet sophisticated with a twist of surprise.

Sanderson Hotel

4  N E W M A N P A S S A G E

This narrow alleyway links Newman & Rathbone Streets.  Dripping with Victorian atmosphere you’d expect Sherlock Holmes to pop around the corner!

Newman Passage

5  C H A R L O T T E  S T R E E T  H O T E L

Charming & quintessentially British, looking resplendent with the addition of Bloomsbury Flowers London, spreading their flowery love!

Charlotte Street Hotel

6  F I T Z R O Y S Q U A R E & B T  T O W E R

Fitzroy Square was originally part of the Bloomsbury Conservation Area,  over the years it has become associated with high-end, bohemian residents, many of which have had prominent careers in the Arts, Virginia Woolf to name but one.

So much adoration for the BT Tower!  But there didn’t used to be … back in the day when it was built (1965) Fitzrovia was a haven for both artists and aristocrats & the BT Tower was met with harsh criticism as it was thought it’s design wasn’t compatible with the areas, The critics of the tower in the 60s have since reversed their opinion, calling it a “building of merit”.

Fitzroy Sq

7  T H E  A T T E N D A N T – F O L E Y S T R E E T

Is she popping down for a coffee, or to spend a penny?!

Foley Street - Fitzrovia's mini village

8  T H E F I T Z R O V I A  M U R A L – W H I T F I E L D  G A R D E N S

A historic mural painted in 1980, the mural depicts various unnamed characters of Fitzrovia, the top half painted by Mick Jones (son of trade union leader Jack Jones), and the bottom half by Simon Barber.

Whitfield Gardens (looked up on google for more info)

9  P E A R S O N  S Q U A R E

This square was named after the Victorian architect John Loughborough Pearson, who designed the site of the Middlesex Hospital which first opened in 1745.  The hospital is no longer there, but instead there is a modern – some might say Brutalist, development in its place.

Pearson Square (brutalist architecture)PL

10  F I T Z R O V I A  C H A P E L

This exquisite piece of architecture was part of the Middlesex Hospital and stands in Pearson Square.  A space offering an oasis of tranquillity, peace & calm, and is open from 11am to 4pm every Wednesday.

The Fitzrovia Chapet

 

11  M E A R D  S T R E E T

Meard Street

Reputed to have been a street where ladies of the night worked in times gone by….

12   G A Y – O L D C O M P T O N  S T R E E T

GAY

Soho has a huge LGBT community and this nightclub is world famous.

13   T H E  Y A R D

The Yard - Colour

Soho’s most unique gay venue! It has a very pretty garden, tucked away in Rupert Street.

14   L I N A  S T O R E S

Lina Stores

This iconic family-run delicatessen is piled high with delicious home made pasta, cheese, cured meats & groceries.  Got your taste buds tingling?  You’ll find it on Brewer Street!

15   S O H O   S Q U A R E

Soho Sq

An oasis in the middle of Soho, just behind Oxford Street.  Have you ever wondered what’s inside the Tudor-style hut?  An urban myth claims it’s the entrance to a secret tunnel which leads to Buckingham Palace.  We can neither confirm or deny….

16   S O H O  H O T E L

Soho Hotel

Tucked away in Richmond Mews, this hotel is a great place to people watch (or celebrity spot), an very funky bar, with a library room and sometimes a cinema.

17   F I T Z R O Y  T A V E R N – C H A R L O T T E  S T R E E T

The Fitzroy Tavern

It would be hard to cover Fitzrovia without including it’s most famous pub.  This pub has been a haunt for many a London luminary over the years including Augustus John, Jacob Epstein & the famous occultist Aleister Crowley.

18   W A R R E N  M E W S

WM

The beautiful cobbled Warren Mews – hidden away off Warren Street, you wouldn’t think you were in central London!

19   B E R W I C K  S T R E E T M A R K E T

BERWICK

Street trading in Berwick Street started around the late 1770s, but wasn’t officially recognised as a market until 1892.  As you can see it’s still as popular as ever (had a lovely, juicy watermelon there this afternoon!).

20   T H E G R E E N  D O O R – 1 M A R G A R E T  S T R E E T

DBdoor

And we really couldn’t finish this without mentioning the only Racing Green front door in Fitzrovia “Ooh, who lives there?” You may be asking yourself, well it’s the home of the friendly Davis Brown team – pop along and see us anytime!

Should I assign or sub-let my commercial lease?

Lease agreement document with keys and pen

If you are planning to vacate your commercial premises it could be costly to negotiate a surrender of the lease with the Landlord, especially if there are several years remaining on the lease. To avoid this expense, an option could be to find a third party to occupy the premises covering the costs you would otherwise be paying. This can be done either by sub-letting or assigning your lease.

It is first important to read your lease and understand what the Tenant’s ‘alienation’ rights are as this could restrict your options. It is then essential to understand the key differences between the two, in order to decide on the best option, depending on specific circumstances.

In simple terms an assignment of a lease is the transfer of a lease to a third-party who will become the new tenant or ‘Assignee’. They will pay rent directly to the Landlord and take over all the responsibilities as stated in the original lease.

In a sub-lease the original Tenant continues to pay rent to the Landlord as usual, but the ‘sub-lessee’ would pay the original occupier a rent in return for occupying the premises.

So, what are the costs and benefits of each?

When sub-letting a premises there is an opportunity to negotiate with the ‘sub-lessee’ and potentially achieve a higher rent or ‘profit’ rent. Terms within the sub-lease, such as a break-option could be included, which would allow the ‘sub-lessor’ to re-occupy the space. Depending on wording within the original lease there may be the option of sub-letting part of the demise. This appeals to many tenants if they are occupying more space than is required and want to reduce costs yet are planning to reoccupy the space when they expand in the future.

When sub-letting, the relationship between Landlord and the original Tenant does not change. The Tenant will remain liable for any costs, such as dilapidations at the end of the lease, no matter what the sub-tenant does. It is therefore important to have a carefully drafted sub-lease to avoid any problems or unexpected costs caused by the sub-tenant in the future.

In an assignment, the lease is transferred to the ‘Assignee’, and they will pay the Landlord directly. The ‘Assignor’ will longer be responsible for any costs or responsibilities within the lease and can walk away from the premises. There may also be an opportunity to seek a premium if the passing rent is significantly below the Market Rent.

The Landlord may request the ‘Assignor’ acts as a guarantor before they will grant consent for the assignment of the lease. This will mean that if the ‘Assignee’ stops paying the rent or goes into administration the Landlord can come back to the original Tenant to recover cost.  To reduce this risk, one should look for a company with a strong financial covenant when assigning a lease.

If you are considering assigning or sub-letting your space, there will be several factors you will need to consider that could include:

Is there an opportunity to get a ’profit’ rent or a premium?

What is permitted within the lease?

What are the costs of managing a sub-tenant?

What is the risk of the sub-tenant / assignee being unable to pay the rent?

And finally, to avoid any unforeseen costs or problems it is always worth seeking professional advice in advance!

20 Buildings to open over the last 20 Years – London

Us Londoners are so incredibly lucky with the architecture we are blessed with – our skyline is forever changing and there is always something new to admire/detest!  As it’s our 20th birthday this year, we’d love to share some of the capital’s buildings that have either been built or refurbished or added to in the last 20 years.

T H E  S H A R D

Opened in February 2013.

shard

T H E  W A L K I E T A L K I E  aka  2 0 F E N C H U R C H  S T

Opened in May 2014.

walkie

Q U E E N S  originally an Art Deco cinema – now an apartment block

Opened November 2014.

queens

B A T T E R S E A  P O W E R  S T A T I O N  – now residential and commercial units

Opened 2017.

Batpwerpic

3 0  S T  M A R Y  A X E  aka  T H E  G H E R K I N

Opened April 2004.

gherkin

S T  P A N C R A S  S T A T I O N

The renewal opened November 2007.

stpancras

L E A D E N H A L L  B U I L D I N G  aka T H E  C H E E S E  G R A T E R

Opened July 2014.

cheesegrater

T H E  M I L L E N N I U M  D O M E

Opened 31st December 1999!

Millennium_Dome_1

T A T E  M O D E R N (EXTENSION)

Opened June 2016.

tmext2

O L Y M P I C  S T A D I U M

Opened May 2012.

olympicstadium

F I T Z R O Y  P L A C E  aka  P E A R S O N  S Q U A R E  (developed from the former Middlesex Hospital site)

Opened 2015.

pearsonsquare

C I T Y  H A L L

Opened July 2002.

Using in-camera HDR in low light.

W E M B L E Y  S T A D I U M

The new 90,000 stadium opened 2007.

WEM

E M I R A T E S  S T A D I U M – home of Arsenal football club

Opened 2006.

ermiratesarsenal

C E N T R E  P O I N T – now a residential block

Opened 2018.

Centre Point 1

B B C  B U I L D I N G – new refurbishment

Opened June 2013.

bbc

P L I M S O L L  B U I L D I N G

Opened 2017.

buildington

photo ref: buildington.co.uk

L O N D O N  E D I T I O N  H O T E L  (formerly the Berners Hotel.)

Opened 2013.

berners

T H E  B R I T I S H  L I B R A R Y

Opened in 1998.

British_library_london

M I L L E N N I U M  B R I D G E aka W O B B L Y  B R I D G E

Opened June 2000.

London_millennium_wobbly_bridge