Property Surgery
On Tuesday passed our Brian Gilmour took his usual chair on the BBC RADIO SCOTLAND Kaye Adams programme for his fortnightly property surgery. With it being being 31st October, the show had a spooky Halloween feel. If you missed it, here’s the transcription of the programme.
Louise: Brian Gilmour from Indigo Square Property is with us on the usual number 08085929500 and don’t forget you can also text Brian on 80295. We’ll be reading out all your texts and letting Brian chat to you a little later on when he comes in for his proper surgery, but in the meantime let’s just take a look at some of the other stories that are effecting your industry at the moment.
I gather there are big changes about to take place. The first in Scotland in 40 years, involving the private rented sector. Just outline the changes that we could be looking at and who’s likely to be affected, Brian.
Brian: Well, the big change is we are doing away with what the rental agreement, that most tenants who have got private landlords or have what is assured tenancy, and that is a lease, which will have a fixed interim. I mean, don’t get me wrong, we don’t end at that point. We can rule on and rule, but there is a date in the lease that’ll end in … 6 months short is your tenancy as a minimum, so there’s a date in 6 months time. Legalese in Scotland, it’s called S-Date. That’s when it ends or a year’s time or whatever.
So they’re doing away with that. It’ll now just be an open ended lease. The idea behind it is to give greater security of tenure to a tenant. They don’t have in the back of their mind that the landlord or the S-Date of the lease could just turn around and say, “Do you know what? I don’t fancy you being in the property anymore. You need to get out.” That’s gone to give them greater security of tenure.
Has spooked some landlords a wee bit the idea that they now can not get rid of a tenant on that date.
Louise: Yeah, because let’s look at it from their point of view. It might give tenants security and that’s good, but what happens if you’re a decent landlord and you’ve made a mistake and you’ve let somebody in who, quite frankly, just doesn’t cut it and you don’t want them around anymore ’cause you’re getting complaints from the neighbours or their not keeping the property up?
Brian: Well, fortunately the requirements in relation to antisocial behaviour, not paying the rent, all those types of things, they still stay in place. The things that are unnerving landlords, I think they’re wrong to worry too much because a good tenant will be in the property for a good length of time. Most landlords, they own properties for a longer term investment, so they want a tenant who’s in for long period of time. A good tenant still gonna be in for a length of time.
Bad tenants exist today, bad tenants will exist in the future. You need way of getting those tenants out. There’s 18 specified ways in the legislation to be able to remove a tenant. Actually, one of the things they’ve done is reduced the amount of paperwork that a landlord needs to issue in the event that do need to move towards eviction of a tenant. It’s now just gonna be called “A Notice to Leave” and it’s one piece of paper as opposed to, currently, 2 pieces of paper.
Then there’s dispute resolution with the Housing First-Tier Tribunal, which is supposed to be a less onerous step than having to go through the courts. Those steps have also been brought in to try and make it easier.
Louise: Okay. So, new issuing of forms called 85 or 87, I’m sure that will mean a great deal to landlords and tenants out there if they are thinking of setting a tenancy agreement. Bringing in benefits for tenants, they’re no longer going to feel … They’re gonna feel more secure and less paperwork, as you’ve been explaining, for private landlords.
Nevertheless, though, do you think it makes it just a little bit tougher for landlords out there if somebody is thinking of becoming a landlord?
Brian: There’s actually been a lot of legislation in the last few years, all aimed at greater safety for the tenant, but it has added costs to landlords. What we’ve seen is hardwired smoke alarms come in, heat detectors come in interlinked with hardwired smoke alarms, the requirement for electrical safety certification, energy performance certificates, parts testing, which is portable appliance testing. All of this is good stuff because it’s all about making sure that the tenant is protected.
The challenge for a lot of landlords has been in a concentrated period of time, so if you bring in lots of changes in a quick period that’s put their costs up very quickly because they’ve got to implement all these changes. That is part of the reason why we’ve then seen a knock on effect of rents starting to go up ’cause landlords need to recoup these costs that they’ve been putting out for them.
There’s been a lot of changes with that type of legislation. The biggest change in terms of how somebody lives in a home, that’s coming in this year. The other thing that’s effecting people like me is in 2018, your Letting Agent needs to be a registered Letting Agent. The process starts, we need to be qualified, we needs to have qualifications.
Louise: I think that’s good.
Brian: I do think that’s good. It’s the type of thing I’ve wanted for 25 years because who are the butt of jokes? The Estate Agents and people about it.
Louise: I would never do that.
Brian: But the reason they’re the butt of jokes is because you can have charlatans getting in the industry. If you have a more robust process, people getting checked or fit & proper proper, by the end of September 2018 … The process starts at the New Year, but by the end of September we need to be qualified and we need to be registered. If you’ve come across a Letting Agent that isn’t, don’t use them.
Louise: Okay. So, plenty of warning for you guys. When it comes to the changes that we’re talking about this morning, which are due to be introduced in one month, December the 1st, how much warning have people had?
Brian: Well, we’ve known that it’s coming, but the lease was going to be, initially, in place in April of 2017 then it was January 2018, now it’s December. We got the paperwork, we got the sample leases because the type of lease we don’t make it up, it’s provided by the government. We as Letting Agents got those about 10 days ago. In terms of actually getting the paperwork, maybe could’ve had a bit more notice. It’s only for new leases that start on the 1st of December.
Louise: I was gonna say that. What happens if you are in an existing lease?
Brian: So, if you’re in an existing lease that keeps going and that keeps rolling, unless there’s a mutual agreement by the tenant and the landlord that you want to flip over onto the new type of lease. The new type of lease at the moment, you’re in it for minimum period of, say, 6 months. That’s the shortest. It could be a 12 month lease. After that point, a landlord or a tenant need to give 2 months notice.
The new type of lease … In, say, the first 6 months the tenant only needs to give 28 days notice. That’s the biggest thing that spooks landlords. They could have a tenant that moves in, after a week think, “Do you know what? I made a mistake. I shouldn’t have been here.”, and only give 28 days notice.
Louise: Okay. As I say, you’re here for your property surgery. You’re gonna be back very soon, looking at a whole range of issues including whether the name of your street could work against you if you’re trying to sell your property. I know you’ll get some humdingers for us. Not everyone’s the sweetest living in Meadow Lane or something like that. There are some really horrors out there.
Brian: There are. There are and I’ve got some gazing property jokes if anybody …
Louise: Oh great! We love a smile on the programme. Okay, Brian, you want to hear from anyone who’s got a property question. If you’re buying, renting, thinking of selling, Brian is here to take your calls. Get them in nice and early on 0805929500. You can also text Brian 80295. We’ll make sure that all your questions and all your calls reach him. Brian, for the moment, thank you. You can grab yourself a cup of tea and we’ll get you back in very soon.
Right. I don’t know whether he wants to play, but he certainly wants to offer advice. Brian Gilmour is back with his property surgery. Brian, nice to see you again.
Star spotting. We were quite keen to hear from our listeners about star spotters. Have they seen anyone famous? We’ve had a Billy Connolly. Benedict Cumberbatch has been seen in Glasgow. Any famous people?
Brian: Well, I have seen the filming in Glasgow. Yesterday I got stuck in traffic, so I had to sit and watch it. My problem is, as you get older you lose touch with popular culture. I was sitting next to someone at a Glasgow airport and sending about 20 texts out to people with terrible clues saying, “Who am I sitting next to?” It’s a bit like Name the Place, except I don’t know the answer. Like you have to know the answer …
Louise: You’re kind of looking up and thinking, “You’re vaguely familiar. I’ll assess your height and assess your hair colour and see if anybody actually knows you.” Who was it?
Brian: Yeah. It was Brad Pitt.
Louise: Really?
Brian: Yeah.
Louise: And you didn’t know who he was?
Brian: Yeah.
Louise: Brian, you’re not that old
Brian: I know.
Louise: Anyway, there’s nothing wrong with your facilities when it comes to property advice ’cause you’ve got lots and lots for us. We’ll be going to calls in just a moment. Lots of different questions going to come in thick and fast for you. Who do you want to hear from today?
Brian: Well, anybody. It would be really interesting if somebody phoned in and they lived in a spooky street place. That would be really good to hear today.
Louise: That would.
Brian: But anybody who’s got any questions or queries about moving house, moving into the wintertime. So people might want to know should they be putting the house on the market in the winter, if not, should we be renting in the winter, that type of thing. Should we buy in the winter?
Louise: Okay. Lots of things to discuss, you’re gonna be staying with us. We’ll be counting the property surgery right over the 11 o’clock news. Let me just bring you the number 08085929500, that’s the number to put your calls through to Brian. You can also text your questions 80295, but Brian prefers to chat to you. 08085929500.
Let’s go to Ed, first of all. Ed, good morning! Thanks for joining us on the Property Surgery. How are you today?
Caller: Good morning. I’m good. Thank you. Yourself?
Louise: Not bad at all. What would you like to ask Brian? He’s all ears.
Caller: Hi, Brian. Thanks for taking my call.
Brian: Hi, Ed.
Caller: Hi there. I recently bought my pencil house about 7 months ago. I’m on way to rent the house out. I know you do lose the discount if you decide to sell it within 3 years and wondered could you help me at all?
Brian: Yes, you’d like to rent your home out. You’re quite right. If you buy a pencil home and you get a discount and you sell it, if you’re selling it in the first 7 months to a year. So, in say, first 12 months you lose your discount and, say, the first 2 years you lose 2/3 of your discount and, say, the first 3 years you’ll lose 100% of your discount and then it’s yours. For renting, you’re entitled to rent it out and then do whatever you need to do.
Louise: Okay. Is that the answer you wanted to hear, Ed?
Caller: Thank you very much for that.
Louise: Excellent. Nice to chat to you, Ed. So, that’s the kind of questions that we like to get.
Brian: Yes, makes happy answers.
Louise: And you know the answers. It’s amazing you’ve got all this information at your fingertips. Let’s go to John. John, good morning.
Caller: Morning, Louise.
Louise: Hi. Good morning. What would you like to ask Brian?
Caller: Brian, thanks for taking my questions, Brian my mortgage will be finished next December and I’m thinking of selling my house. My house has only about 150,000. It was built as 4 bedrooms, but I’ve changed it to sort of a public room and then 3 bedrooms upstairs. Will I get more money if I sell as 4 bedrooms or the 2 public rooms and 3 bedrooms?
Brian: It depends. Are you in an area that’s particularly suited to families?
Caller: Yes. Yeah.
Brian: Well, it’s … Obviously, there’s an appeal to people with having the 4th bedroom, so seeing you’ve a 4-bedroom home can immediately make it appeal to people. That’s probably the best description of the property. Having said that, seeing 3 bedrooms and 2 public rooms is not going to massively change and detract from the value of the property, but in terms of an initial grabbing hold of people, getting eyes to then read more detail of your home, saying it’s a 4-bedroom is probably more likely to just get those extra 2 or 3 interested parties.
Caller: The other question then was: when I’m thinking of selling it next year, there’s a lot of new developments and I’m looking of downsizing to a 2-bedroom flat. If I don’t have a mortgage, am I best to parts exchange? The flat I’m looking at is about 143,000, so am I best to sell or transfer the values over.
Brian: What’s the market like? We can talk in general about the market’s doing. What’s the] market like in your area for the 2 or 3 streets around your home? Have you noticed it’s doing well, average, poorly?
Caller: Yes. The houses are selling quite fast, but it’s a new development that I’d be moving into.
Brian: Yes. So if you’re selling fast, the benefit of selling … It’s a bit like if you’re trading in your car, you’ll have slightly more cash if you then go and sell it. If you do a part exchange, the builder’s got to make a profit out of the whole transaction. The builder might not necessarily give you full market value for your home. It’s always best to have a conversation with the builder. What you might find is some builders with part exchange but would be happy for you to sell first, that would be the preference. You may be able to get a deal where you can try it yourself for a month or two and if that doesn’t work you know that it’s their place.
Louise: In a word, Brian, is it a buyer’s market?
Brian: Lots of places, actually, it’s actually a seller’s market just now because there’s a reduced volume of properties of the market in Scotland, so properties are selling quickly.
Louise: Okay. We’re hosting our Property Surgery here with Brian Gilmour on BBC Radio Scotland. If you’ve got a question you want to put to Brian, 08085929500. He’s staying with us after the news, so get your calls in.
As it is Halloween, we will talk about a spooky one in just a moment. Then we’ll hear from Elsie in Bearsden who’s got a question for you. So, spooky street names or any negative street name, can it impact on the likelihood that you’re gonna be able to sell your house?
Brian: We love to think we’re really sophisticated people and such petty matters don’t impact us, but the evidence here would suggest that it does. Cemetery Lane in Cambridge and Helene and Brettport has not had any house sales in 10 years.
Louise: I mean, who live in cemetery what? Cemetery Lane …
Brian: Cemetery Lane and Hell Lane.
Louise: Why would anybody and who is it that actually names streets? Is it down to city planners? Who get the final say?
Brian: It’s principally developers who will recommend a street name to the council, councils will do it. Those are the 2 main groups of people who come up with street names. If you don’t like your street name, it’s really difficult to change it.
Louise: I guess what you can do to avoid it is just don’t move there.
Brian: Yes. Which is …
Louise: And that might be the first solution.
Brian: Yes.
Louise: But when it comes to … Let’s just say you and the neighbour’s get together, let’s say there’s been a major news event that you could never have predicted that makes the name of your street something that you just don’t particularly want because it becomes associated with, say, a bad news event or something like that through no fault of your own.
What do you need to do to actually change the name of your street? What’s the process?
Brian: You need to get a petition. You need to get sufficient numbers of people in the street saying, “We agree to this.” Then go to a council. It’s expensive. It’s the things that you don’t think about. Every single person in the street will then need the title deed of their property changed. Every single person in the street will then need to get their mortgage provider to change details …
Louise: So, this it’s involved as that?
Brian: So, it’s as involved as that ’cause if you think about it.
Louise: Changing your name is easier.
Brian: It is. Yes because you could just say … I could easily say tomorrow to start calling myself by something else and people would start corresponding with on that different name. I don’t want to formalised with bank details and, obviously, by depot I need to change it, but that is all easier than changing a street name.
Louise: Okay. So, they’ve got to get a petition. They’ve got to go through the motions. Basically, unless you do that, you’re kind of lumbered with that, aren’t you?
Brian: You are. There has been some street names … There’s been a street name in England that was changed because they were fed up with American tourists coming to visit.
Louise: I would like to ask you … Well, okay. You’re wondering … I tell you what let me run that by a producer before you actually go and alert that one or send that one out.
What about haunted properties? What about properties associated with unlucky numbers? For example, do you know of streets where there’s no #13?
Brian: Yeah. I grew up in a street with no #13. I always thought it was a bit odd because the people in #15 knew that they lived next door to #11, so they knew they actually lived in #13, but there was no #13 in the street. There’s a block of flats that if you craned your head round you’d see, from here in Glasgow, where the 1st floor is ‘A’, the 2nd floor is ‘D’, the 3rd floor is ‘F’ and then they start at #1. It’s all to avoid having a 13th floor in the building, so it goes up to 12. The top floor is floor #12.
People have avoided those … You might go the other way. I mean, if you live in Witch Road, Kilmarnock, maybe a witch and a warlock goes out of their way to live in that street.
Louise: Well, you never know. Right. Lots more to talk about in all things property. You’re gonna be staying with us. 08085929500 to get in touch with Brian.
Let’s go to Bearsden. Elsie, it’s lovely to chat to you. Welcome to the programme. What’s your question for Brian?
Caller: Hello. Just a quick question:: that’s offers over a certain amount what exactly … How much over are we expecting to get from the property?
Louise: That’s a very good question because I think I can probably predict the answer you’re gonna give her, but nevertheless, the system hasn’t changed. That is a very common way of people selling their houses in certain parts of the country.
Brian: It’s an excellent question, Elsie, because the answer is it varies at time to time in the market and it varies location to location. At present, a lot of this is now governed because we got the home report. The home report must be produced before the property goes on the market. That’s the property, the value of the property set before it comes on the market. As a consequence, most of the time, we’re seeing no more than 5% offers over asking price is now happening. That’s why we’ve seen an introduction of things like offers in the region of as opposed to offers over. Offers over, normally about 5%, if it goes to a closing date, well, it’s always a good idea to try and find out if the estate agent will give you an indication of how many people are offering at the closing date because more people that are offering … General rule of thumb, the higher above the offers over the more people interested.
Louise: If you see a property that says “fixed price”, it used to be in the old days that that was a clue that the property wasn’t selling.
Brian: Yeah.
Louise: And owners were perhaps frustrated and they just wanted the thing done and dusted. Is that still the case?
Brian: Yes. As an agent, you would sometimes have a discussion with an owner and they would have an idea in their head as to what they want to achieve, the owner offers over. People might be making verbal offers that are not quite what they’re looking for and you might then discuss with the owner and say, “Look, you need to sell. You want to sell. Rather than have a quiz competition about what the magic number is, you’ve decided if you sell at X price, that’s the price you need to get so let’s just put it on at that price. Then the first person that comes along and offers it, you’re happy, they’re happy, and a sale’s done”.
Louise: Okay. Elsie, does that help explain a little bit of the background and, indeed, are you thinking of buying or selling at the moment?
Caller: Not really, but I just wanted to know just in case.
Louise: No, you’ve got to be informed and many thanks, indeed, for getting in touch, Elsie. Nice to chat to you. The property phone in here with Brian Gilmour. 08085929500, that’s the number to get in touch with Brian if there’s anything that you want to talk to him about, if you’re planning on buying or selling or renting.
Brian, we talked about the benefit of retrofitting. We discussed this on the programme before. Retrofitting energy efficiency stuff in existing home, but buying new build may be quicker and easier to slash your energy bills. What’s your kind of thought on this?
Brian: Yes. I mean, we discussed it 2 weeks ago about retrofitting an existing home and making some energy savings. It’s typically doing things like LED lights, better draft-proofing, items like that can immediately give financial benefit and give you money back on your investment. The other option is to buy a brand new home. New homes will be very, very energy efficient. They will typically be saving you 6-700 up to a 1,000 pounds year or in a typical energy bill …
Louise: And is that because building regulations now are so high when it comes to energy efficiency?
Brian: Yes. Technology has moved on. If you drive past a building set, you’ll see that the initial construction is a timber frame. You’ll see it’s almost like a black, polythene band you’ll see going around the outside of the home. Then the brickwork will be getting put roundabout it. It’ll have much thicker loft insulation. It’ll have really top quality double glazing, heating systems will be the best most modern, heating systems will be much more fuel efficient. You’ll often find that thermostatic controls within the home will be better and that’s why you can get a 600 to 1,000 pound saving.
Louise: Okay. Lots of texts coming in as well. Neil in Inverness: “My house has cavity wall insulation. No damp in 30 years. Still difficult to sell.” I don’t quite know what your question is there, Neil.
Louise: All right, so cavity wall insulation is a No-Damp mess, but you’re still finding it difficult to sell, but doesn’t specify why he’s finding it difficult to sell.
Brian: It may well be because people are identifying that there’s not a damp-proof course in a property and they’re concerned about dampness in it. The cavity wall insulation should make a difference. I just mentioned the 600-1,000 pounds on savings. I mean, that’s really the difference between having 150,000 pound mortgage and 160,000 pound mortgage. So, a well insulated home should be a great advantage to somebody selling their property. For some reason, as consumers we’re not really switching onto those benefits yet and taking that consideration of, well, that energy efficiency rating of ‘A’ in that home there means I won’t a 1,000 pounds a year saving on my bills total over the ‘D’ rated property around the corner. For some reason, we’re not wuite at that level yet.
Louise: I had a good conversation yesterday with our heating engineer. He came round to service the boiler and he’s completely retamed the boiler when it comes on in the morning and what temperature. He says, “I guarantee you, you are now operating much more efficiently.”
John on text says: “I have a relative on an existing fixed term lease, how can she give up the lease early?”
Brian: If you both agree, you can end the lease mutually at whatever date you want. So you don’t have to … We talked earlier about the S-Date in Scots law, so if John and the relative both agreed that they want the lease to finish prior to, due April next year, both agree to it you can mutually end a lease. You don’t need to wait until it’s expiration date.
Louise: Okay. “I’ve got a tenant who wants to lease for 10 months, that suits me, can I enter into that agreement with vacant possession in 10 months if it’s tenant driven at the outset”, says this caller.
Brian: You can now, but when the new lease comes in you can’t have that fixed date, even if it’s tenant led because the tenant could change their mind and the tenant is quite entitled to change their mind to say, “I want to stay on the property.” If you sign a lease before the 1st of December, so in the next 4 or 5 weeks, then you can have a ten month date.
Louise: Listen, thanks for making me smile on Halloween. Thanks, Jimmy. Good to talk to you. Brian, as always, great to speak to you as well. I don’t know how you store all that information in your head ’cause you’ve always got it at your fingertips. Many thanks, indeed.
Brian: Thanks, Louise.
Louise: Brian Gilmour, lovely to chat to you.
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