MANAGING PARTNER OF BLACK BRICK PROPERTY
Q. I own a flat and I'm just about to move out of London and rent it. What are your thoughts on renting furnished or unfurnished?
A.Renting unfurnished tends to encourage tenants to stay longer in properties as they have the hassle of moving their furniture in and out. Also your inventory checks will be less complicated! You may not achieve quite as much as if it was furnished but you could well have fewer void periods. On the other hand, renting furnished offers convenience for tenants and if your lease allows, you may even be able to offer it for short lets which should bring in a premium (although your letting fees will be higher). Also if you rent furnished you will be able to offset an amount for wear and tear on the furniture against your rental income.
Q. What do you think will happen to property prices in London for the rest of the year? Surely prices can't go up any higher?
In central London, it looks like prices will continue to increase as the shortage of supply of property to the market continues. This is a structural issue, as many international buyers have bought property in London over the past few years and have no intention of selling regardless of market conditions. There is therefore an ever dwindling pool of property to buy. Rents are also starting to rise which means that landlords are also less likely to sell their investment property. Therefore when a good flat or a house hits the market there is significant competition. The only things that will tempt/force more stock onto the market will be greater liquidity in the mortgage market allowing vendors to trade or a significant interest rate rise.