Property TV | Property Question Time – S1 Ep123 Joanna Leggett, Stephen Galphin and Paul Mahoney

Lucia France: Hello and welcome to property question time with me, Lucia France. This is a show where you get to bombard our panel of property experts with all of your burning questions. Now joining me in the studio today, we have Joanna Leggett from Leggett Immobilier, and she is a founding director. We’ve also got Stephen Galpin, property consultant extraordinaire, and joining us from down under in Australia, we’ve got Paul Mahoney, CEO of Nova Financial Group.

So we’ll be asking them all of your questions and we’re going to start with Joanna here today. So Joanna, to start with, we’ve had a question in from one of our viewers who says, I live in the UK. I’m getting on in years and I’m thinking of buying a place in Provence as a long term investment, as a holiday home for me to enjoy in my remaining years, but also my two grownup kids. When I say investment, I mean somewhere that at least maintains its value. Also myself and my family will probably only use it for two to three months each year. So I’m looking for somewhere that perhaps we could ren out. My daughter wants access to beaches in Italy, my son favors more towards Marseille for easier transport links. I have about 150k to spend. I wonder if what I’m proposing is a realistic proposition or something that will turn into a burden and a worry. Any advice?

Joanna Leggett: Well I’d say there’s good and bad news here. First of all, the good news is that the property prices have started to increase in France, so there is no chance of them going down as such. So from an investment point of view, you’re not going to lose any money.

I would say that the bad news is that with that sort of budget you’re not going to get very much. In Marseille you’d probably be looking at just a studio apartment, which if you want to use it for the family, isn’t going to be great. In Cannes, again, those sort of areas along the Cote d’azur where you can easily get into Italy, again, you’re going to be needing a lot more money than that. The average house price in the Provance, Cote d’azur is around about 280,000. So 150 is quite small.

However, if you go slightly back from the coast, I mean coastal properties are very expensive in all areas of France. But if you come slightly inland a bit, maybe half an hour, 40 minutes, then that budget could get you a nice little one bedroom cottage, or you know, again, it will hold its value. So you’re not going to lose money, but it really depends on what you’re looking for. How many bedrooms you’re going to need if you’re using it as a family. And I do think that that is quite small budget for the areas that you’re looking at. So you may want to rethink.

The other thing I would always suggest is to pick a city, somewhere like Bordeaux for example, draw a half hour circle around it. So then you get the best of both worlds. You can go into the city for the children, for more things to do, but you can also have the countryside for relaxation. And if you’re outside of the cities, the prices are a lot lower.

Lucia France: And is there a chance for rental as well outside of the cities? Would you say that that’s something that they could go for it because-

Joanna Leggett: Yeah, again, if it’s a half an hour commute, because the French don’t tend to commute as much as we do in the UK. So like an hour journey would be too long before for the French. They don’t tend to commute that way. So if you’re renting to French, then you’d need to be within half an hour of a city, I would say. If you’re renting in the holiday market, which I presume you would be rather than a permanent let, then you’d be looking at really between April and September are the big rental months. Unless you’ve got heating, et cetera, and those types of things, which most properties don’t have because you don’t need apart from the winter months. So yeah. So I would say that, yes, you will get a holiday rental between April and September.

Lucia France: And in terms of the budget that we’re talking here, 150k, is there another area of France that you could sort of recommend that that might be a more realistic budget for?

Joanna Leggett: Well, for example, in Charentes, the Poitou-Charentes area where you’ve got the beaches like La Rochelle and Roya quite close by, not near Italy, unfortunately for her son, but those sort of areas, the average house price there’s 110,000 euros. So you’d get a really nice property in the Poitou-Charentes, maybe an hour from the beach. You’ve got Poitier as a main city, so for rental, etc. You’ve also got Angoulême, which is a major city where easy to rent. In fact, me, myself, I live sort of 25 minutes outside of Angoulême so I’m quite rural, but I can go in 20 minutes I’m in the city.

Lucia France: Okay. And is that somewhere that other people have kind of bought around that area for rentals and for the sort of reasons that they’re looking for?

Joanna Leggett: Yeah, I mean, there’s 82 million tourists visit France every year. It’s one of the biggest tourist visited countries in the world. So you’re guaranteed that you’re going to have enough people for rental income for a start. And also most of the southwest of France is very beautiful. So people do want to go there. It’s very big for tourism and obviously very good value for money in the southwest.

Lucia France: And in terms of transport links, that was a concern there as well, what are we talking, about airports and stations near there?

Joanna Leggett: It’s very, there’s lots of different ways you can fly. There’s four major airports. You’ve got Bordeaux, you’ve got Poitier, you’ve got Angoulême, there’s Bergerac, Brive, there’s lots of areas that you could fly into.

But also the TGV is very good. It’s very fast. For example, from Bordeaux to Paris, now it’s under two hours.

Lucia France: That’s fantastic isn’t it. Yeah.

Joanna Leggett: So again, that’s quite commutable if you wanted to go for a day trip or whatever. And then there’s also driving. The roads are nothing like they are in the UK unless you’re in Paris or a major city.

Lucia France: They’re a lot freer, there’s a lot less traffic isn’t there?

Joanna Leggett: Exactly. And so motorway driving on motorways is very easy and very fast and there isn’t the traffic that we get here in the UK.

Lucia France: And when you put the destination in your sat nav, it actually does take you that long rather than another three hours.

Joanna Leggett: Yes, exactly. Yes. Yeah.

Lucia France: Great stuff. Okay. Thank you so much Joanna.

Steven, we’ve got your first question here. So from one of our viewers, he says hello there, I split up with my partner back in August. We have a flat together under a tenants in common agreement and I own 30%. He wants to stay in the flat and I would like to know what a reasonable time for him to give me my share of the money back from the flat. I know he says he’s in the process of raising the cash with extra borrowing, but there has been no movement or anything so far, apart from the verbal reassurance that things were being sorted, and that was a while ago. I would just like to know what would be considered a reasonable time to wait before having to take up a legal route.

Stephen Galpin: Right. Okay. Well after the south of France, that seems very mundane, doesn’t it? But anyway, look, first of all, we’re a little bit light on detail here, but you’ve got to go back to the beginning here. When these tenants in common are set up originally when the property is purchased, usually there’ll be a document that says or identifies, if you like, the process for coming out of this arrangement.

Now we don’t know if that exists here or not. If it did, it would specify how the property is to be valued, how the split is to be undertaken, whether the property is to be sold in total or whether shares can remain. So we’ll have to take it here that shares can remain. It is a classic example of the old maxim that says property is very easy to get into, not quite so easy to get out of.

Lucia France: Yes.

Stephen Galpin: Look, what’s a reasonable time to wait while your ex partner tries to raise finance? Difficult to know. Presumably he’s going to use the property as security. That’s going to mean a revaluation. Effectively, you’re going to go through a purchase process again and typically in the UK that can take two to three months at best. Could be longer. So I think that’s the sort of time.

The ultimate remedy here if you can’t get agreement is you can apply to the court for an order to sell the property, which actually solves the problem. But of course, it’s an expensive route to take, anything legal is, I’m afraid these days. But it might just be worth mentioning that to just speed the negotiations up a little bit, to say that, look, I want to move on with my life. I need to go and buy other property. We need to resolve this quickly. So either this gets sorted now or I have to go for an order for us to just distribute the proceeds from the property in total.

I think that’s the best advice I can give really, is just be a little bit patient. Remember what the process is when you bought it, it’s going to be a similar sort of time and just try and avoid the courts on this one.

Lucia France: Yeah. So basically kind of taking the time frame for the purchase process and sort of transferring it to this one as well.

Stephen Galpin: Exactly. So.

Lucia France: Okay. And what if there is still, after that kind of time, a bit of sort of stickiness, nothing’s happening. Maybe they still haven’t kind of shifted anything forwards. What would your advice be then?

Stephen Galpin: Well, as I say, the only remedy then is really to go to the courts and ask for an order to sell the property. But that would be quite a draconian order. The viewer here says that he or she has 30%, a court is going to be very cautious about ordering a sale of a property when it’s somebody’s home and you’ve got a 30% interest against a 70% interest of the other party. But it’s possible to do. But again, it comes back to that original document that probably did set out all the courses of action if there is a dispute at the end of the day.

Lucia France: Okay, great. Thank you, Stephen. We’ve just got time for one more question for Paul. So he, we have a question for Paul in Australia is I’m starting the process of looking for a property to buy as a first time buyer. I’m currently renting for me and my girlfriend, but we’re looking to buy a flat or apartment in Manchester. However, we’re finding that the majority of the properties on the market are marked up by to let only. Does this mean as a first time buyer looking for a flat to live in rather than rent out, we cannot put an offer in to buy it? I find it hard to believe that the seller would care if I go on to rent it or live in at once I own it. The money that we receive from the sale is the same regardless of my intentions with it afterwards. Furthermore, I cannot believe the government would have schemes for developers to sell their properties as buy to let only. This is really edging homeowners out of the market. By law, are they not able to sell that property as a regular residential purchase?

Paul Mahoney: Yeah. To be honest, that surprises me too. I know there are most definitely developments that are designed and built for the purpose of buy to let. There are quite a few PRS or public rental scheme, probably rental sector developments in Manchester which are for that purpose. But in general, from what I’ve seen, even those schemes will often sell to owner occupiers.

Perhaps as a first time buyer you’re looking to use one of the first time buyers schemes. You haven’t mentioned that but that might be the issue that you’re having because not all developments offer that. And some developments only offer it in very small portions so you might have already missed out by the time you look at it. So that might be part of your question perhaps.

But what I’d recommend is that you look a bit further afield perhaps. Or speak with speak with a property sourcing company or a property advisory company that again, perhaps has a bit more of an understanding of the broader market and what’s out there and what could work well for you and what you’re looking for.

So essentially just providing them with the criteria that the things that you need, and they can come back to you with some recommendations. So yeah, it does surprise me what you’ve said there. Perhaps it’s because you’re a first time buyer and you’re looking to use one of the first time buyer schemes. That makes a little bit more sense to me. If that’s the issue you’re having. But there are definitely some out there. So don’t give up, and either broaden your own search or seek some advice or guidance on what might work for you.

Lucia France: Okay. Paul, thanks very much from down there in Australia. We’ll be back very shortly after this break.

Hello and welcome back to property question time with me, Lucia France. Now joining me in the studio today we have Joanna Leggett and Steven Galpin and from Australia we have Paul Mahoney. So we’ve got lots more questions for you guys. We’ll start again with you, Joanna.

Now we bought our house about six years ago and have never received the deeds from the notaire. Is this normal and is it best to leave them with him as he will have to store them correctly or do we chase up on it?

Joanna Leggett: Well you should have a copy of your deed. Notaires are notoriously slow at sending them out. But you’ll probably find if you pop into your notaire’s they’ll be able to give you a copy, because they’re probably still holding them there. The notaire themselves will also have a copy and usually the notaire stays with the property. So when you go to sell it, they’ll keep the deeds for the next person, the next person, et cetera, unless you choose to change notaires.

But yes, it is quite normal for them to. They should have sent them out, of course, but it is quite normal for them to be quite slow. But I would say six years is probably forgotten rather than being a bit slow.

Lucia France: You’d think so.

Joanna Leggett: So, yeah. So I would suggest just pop into your local notaire and say that you haven’t yet received them and do get a copy because you will need them yourself at some stage.

Lucia France: And if they sort of didn’t have them, what are the problems that could arise from not having your own copy of your deed for your property.

Joanna Leggett: Well, it depends what you’re wanting to do. If you’re going to sell the property then obviously you would need a copy of your deed because for the estate agent or whoever’s going to take the property on would need to see the cadastral plans would need to see if there’s any right of ways, if there’s been any building work done to the property within the last 10 years, for example, and the deeds would show that.

So it would really be a time when you go to sell that you will need a copy. So just in case that is going to happen, I would try and get them as early as possible.

Lucia France: Yeah. And would it be worth checking with the notaire as well, maybe have there been any changes during those six years? It’s a long time, isn’t it?

Joanna Leggett: There wouldn’t have been any changes to the deeds because obviously they are as they stand. It would only be when you come to sell the property that the deeds may change if works have been carried out.

Lucia France: Right. Okay. Lovely. Thank you very much Joanna. And Steven, you’ve got another glamorous question here about damp. So our viewer writes in my property is suffering from damp due to a flower bed up against it in a neighboring property garden to the height of approximately four feet. It’s a rented house. I have repeatedly asked agents to contact the owner to have it removed to alleviate the problem and also to allow repainting of the brick work in that area, which could not be done with the rest of the wall. The present tenants also want work done. Do I have any legal rights to start quoting?

Stephen Galpin: Right, well, the simple answer here is probably not. The flower bed in the next property. I have some difficulty in visualizing how it’s actually affecting the viewer’s property here. It can only be next to it. So I can only presume that the damp is spreading laterally across and it won’t be to any great extent, I wouldn’t have thought. However the problem does need resolving.

Now the simplest answer here is the way that the viewer has already approached it is by asking the agent of the rented property next door to contact the owner to see if something can be done. Okay, well obviously drawn a blank there. The ultimate remedy is to go to the council. Now the council do have the power to issue notices to the owner of that property saying that it’s either a health and safety risk or is causing unpleasant damage to the property next door and indeed the property in question, owned by the landlord. And they can issue an order that the work be done.

I would suggest probably that if that’s made known to the agent, they may be a little bit more proactive. From an agent’s point of view, unless they’re being paid to physically manage the property, they’re interest is going to be somewhat minimal. There’s no fees in it, there’s no advantage in it. And so you come back here to having a discussion with your neighbor. It says here that the neighbor is interested in having the work done too, obviously because the damp will be affecting them more than it is the next door neighbor.

I really would, I think, go the council rooted route. It will either by the building control office within the council or health and safety. It could be either. The problem is that the viewer here is next door, as I’ve said, the damp is probably going to be minimal on this side of things. And so it may be better that the tenant approaches the council, they may have more sway in actual fact. So good conversation between neighbors here, fairly strong words to the agent and perhaps the threat of going to the council. I think that’s probably the most constructive way forward here.

Lucia France: Yeah. And I suppose, like you said, the person who is actually living in the property probably has more sway on a day to day basis.

Stephen Galpin: I would have thought so. I would have thought the damp would be far more relevant to them. And also it’s their property, they’re occupying it. I suppose at the end of the day, if it’s not a complicated structure, if you’re fairly good at do it yourself, it wouldn’t be that difficult to rebuild a sort of flower bed there, but-

Lucia France: Yeah, I was kind of envisaging it sort of next to the property, raised up a little bit, so maybe they could just move it away from the house.

Stephen Galpin: Well possibly say, I mean if it does affect the structure of the building in any way, then obviously they’ll need landlord’s consent to do anything like that. But as I say, I think the real route here is certainly a conversation between the parties to start with, but if not, then recourse to the council.

Lucia France: Great. Okay. Thank you. Or get a good gardener, I suppose.

Stephen Galpin: Possibly.

Lucia France: And we have a question here for Paul as well. So this one’s to Paul. I have two rental properties. Both have buy to let mortgages. Each property has approximately 75% equity. I’m considering moving into property A and would therefore need to get rid of the buy to let mortgage on that property or transfer it to a residential property mortgage. My current mortgage lender told me that I can’t just transfer the current two mortgages to property B. I understand that there would need to be valuations and set up fees, et cetera. And that the only option I have is to either pay off mortgage A with funds I already have. I don’t have these funds. Or sell property B to pay off the mortgage or get a residential mortgage for property A. Could I not just re mortgage with another buy to let lender and then I could effectively pay off one buy to let mortgage on the one I want to live in. I don’t earn enough to replace the buy to let mortgage on property A with a residential mortgage. Would a residential lender consider the buy to let profit on property B as income? If so, I would earn enough for a residential mortgage. That is quite lengthy question. So Paul, what do you say there?

Paul Mahoney: Okay. I can understand why your current lender has told you that you can’t just transfer one to the other. Given that they’re both currently on a buy to let mortgage with 75% equity. I don’t see why you couldn’t do what you’ve just said there so far as re mortgage one of them and take the equity… Sorry, re mortgage property B with a new lender and perhaps assuming the properties are of the same value, you haven’t mentioned that, but let’s say they’re of the same value, 75% equity in each. You could re mortgage property B with a new lender, take that equity out and pay off property A. I don’t see any reason why you wouldn’t be able to do that. That would mean that property A would be debt free. You could then move into that property and you would have a 50% loan to value mortgage on property B. Which will be a buy to let mortgage.

I suppose that kind of means that your question about needing property income isn’t necessarily required, but just to answer it anyway. Some lenders will consider property income whereas others won’t. So it would be about seeking the lenders that do. Again, it makes sense to get professional advice there to get a broader understanding of the market, both the residential and buy to let mortgages. There is a broad range of products that are only available to intermediaries or advisers and aren’t available to individuals such as yourself if you were to walk into your high street bank.

Aside from that of course the knowledge of the market is quite valuable. So making sure that you get the best product for you, the best terms, the rates, save you money and time all that sort of stuff. So, going back to the original point of the question, I’m quite sure that you should be able to re mortgage property B, take that equity and pay off property A. Some lenders perhaps wouldn’t like that. Some lenders on property B perhaps wouldn’t like the fact that you’re using it to pay off debt on another property because they’ll want to know that the use of the funds. But again, that just comes back to finding lenders that are okay with it. And that is perfect job for an advisor to go out to the market, ask all of these questions from a broad range of lenders and get you the best outcome.

Lucia France: Well, that’s it for today. So thank you very much to our guests in the studio, Joanna and Steven, and of course to Paul in Australia. Now, if you have any questions you would like to get answered by our panel of property experts, then do get in touch. The best ways is to email, it’s info at property television dot tv, or of course, go to our website, www.property-tv.co.uk. So send your questions in there and we will try to answer them on a future episode. Thanks for watching today and we’ll see you soon.

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