What's in store next year for the Burton property market?

A number of landlords, who own property in Burton, have made contact with me recently asking for my thoughts on the future of the buy to let market in Burton. In previous articles, we have talked about Burton’s history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values rose by 4.2% (Oct 13 to Oct 14) in Burton. Good news all round, but when you consider property values in the town have previously dropped by 14.91% between November 2007 and June  2013, this is not as good as the media would have you believe.  It should be no great surprise to hear that Burton property values are starting slow up as we head in to the New Year.  Property values in the town were growing at 0.7% a month in the summer this year, but in October they dropped by 0.1%.

The reality is we have had a year and a half of decent market conditions in Burton, but now all that pent up demand is starting to fade. The big question moving forward is whether the Burton market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Burton property market.

Looking at the UK as a whole, because we can’t look at Burton in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Burton, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-

“Should I sell my property in Burton, or even buy another?”

“Is the time right to buy another buy to let in Burton and if not Burton, where?” 

“Are there any property bargains out there in Burton?” 

Many other Burton landlords, both who are with us and many who are with other  Burton letting agents, like to pop in for a coffee to  discuss the Burton property market, how Burton compares with its closest rivals (Nottingham, Lichfield, Derby, Loughborough and Swadlincote), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a prosperous 2015.

Put the party poppers away. The Burton property market is kaput…

OK, I know it’s party season and all that but, as far as the local property market is concerned, you can put the streamers and silly hats away, the party that is ‘The Burton Property Boom’ is over! The balloon has burst. It is kaput.

During the last 3 months, property values have only risen by 0.1%. So surely this is doom and gloom time isn’t it?

Well, no actually because the Burton housing marketing is entering a new phase. It has been through the 2001 to 2007 boom, a bust in 2008 and 2009 and a recovery cycle since 2012, and as we head into 2015, a year that will see the formation of a new Government, we are now entering a more stable, yet still challenging era.

As I said to a landlord from Repton, who has recently changed agents to us, in the Midlands, (especially the big towns and cities like Nottingham, Derby, Loughborough and our own Burton) we are all facing a housing crisis, because in the Midlands – with its high employment rates, excellent quality of life, and rapidly growing strengths in a range of sectors, it is becoming a victim of its own success.

People want to live here but nobody wants to build on greenbelt. With planners not willing to give planning permissions for thousands of new properties that are required for our ever growing Burton population, accommodation in the town is in ever greater demand whilst supply remains worryingly slow to come through.

Just because property prices have levelled off in Burton, doesn’t mean the housing market is ready to jump off a cliff. I actually see this as a good thing, in fact, for the savvy landlord, a blessing in disguise. If you think the housing market is done and dusted for 2014, think again. This is the perfect time to snap up a bargain.

Despite recent mild weather, chill winds are hitting parts of the market now. This means every seller has three strong reasons to get their business done this side of Christmas. You see, as a landlord with cash in your pocket, ready to buy the next buy to let investment, you can get a bit of a bargain at the moment. We have seen it in Burton as a seller’s market for 12 months, but as the pressure mounts for property sellers to sell, the market has tipped.

Another reason sellers want to do a deal as soon as possible is the uncertainty surrounding the general election in the coming Spring. In the past, the prospect of an election means buyers hold back until they know how their income and tax might be affected. But for the brave landlord, it’s a chance to look at properties with fewer rival landlord purchasers waiting in the wings.

As we approach the end of 2014 - which, personally, has been a great year for me and for Professional Properties - I would like to say thank you to all the landlords and tenants who have popped into the office or have rang and emailed me their queries and questions regarding the residential rental market. I hope I have given you some valuable information to help make more informed decisions.

I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion. Email me if you want a chat and i can call you back or call me on 07973 666229!

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a  prosperous 2015.

Poor rental returns normally means good capital growth. What about Repton?

Hello again readers!

Well, there are only 28 sleeps until Christmas (sorry to remind you!). Over the festive period, many landlords make their investment plans for the new year so it may well be a good opportunity to look back over my past articles as they might give you some ideas and some invaluable information.

Well, last week’s article about rental returns in Repton made the phone ring!

The subject of investing in villages for buy to let is an interesting one. In fact it can be as risky as investing in student lettings or HMO’s (Houses of Multiple Occupation where everyone has a bedroom with a  shared kitchen and bathroom).

As I keep saying in these articles, investing in the Burton property market is something that shouldn’t been done lightly. For those new to the buy to let investment game, the rental return is the yearly rent from a property reflected as a percentage of the value of the property (one might consider it in the same light as the interest rate from your savings account) whilst the 'capital growth' is the amount the property goes up in value each year reflected as a percentage of the value of the property.

Last week we said Repton property values were 7.3% above the 2007 peak of property prices (before average UK property prices slumped 15% in 2008). However, property investment cannot be judged over short time frames and most certainly not by averages.

Often, when looking at a market for a landlord, I like to take a longer look at the market, and consider 10 to 15 years a more suitable time frame for capital growth. After doing my research, looking at every Repton property that sold in 1999 (and there were quite a few!) and the very same property selling again recently, average property values had risen on average by 227.5% in Repton, whilst in Burton they had only risen by 185.3%.

That's not to say everything in Repton turns to gold! One property in Brook House on the High Street of Repton, sold recently for a matter of a few thousand pounds above the price paid in 2008, the year of the slump.

I pride myself by knowing the market with all its ups and downs, so I can give some great advice and opinion. It might not be what you want to hear but, I can assure you, it is what you need to hear!

We are currently undertaking a mini office refurbishment at the moment so, if you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street and see what we are doing.

You can also call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

      

Click HERE to arrange you FREE RENTAL VALUATION.
Click HERE to ASK AN EXPERT anything to do with residential lettings.
Click HERE to visit Professional Properties WEBSITE.

Should you invest in the villages? Rental returns in Repton are awful!

I have recently been speaking with a number of landlords about the importance of a balanced portfolio when buying and renting out property. We discussed the balance between buying properties that offer good monthly returns but quite often offer poor capital growth and properties that do go up in value quicker but often offer a lower yield.

Another consideration has to be the mix of town properties and village properties. Choosing the right village though is very important. Living in villages often has higher costs, especially transport and petrol costs. Some tenants don't buy because they can't afford the mortgage, so if you buy in the wrong village, you could limit yourself to the type of tenant who can afford those extra transport
costs.

However, one village that has a high demand with tenants is Repton. The village consists of some 1,036 dwellings of different housing types and a population of 2,867 people. With an average property value of £301,200 and average rents in the order of £789 per month, the average yield achieved in Repton are a miserable 3.14% a year .. you might as well put it in the bank!

So, does that mean you should stay clear of buying a property in Repton as a buy to let investment?
Before we can answer that, you must really consider the capital growth vs rental return question. Some Burton buy to let investors often make the mistake of chasing yield over capital growth and believe that by chasing high yielding properties, in say the ‘poorer’areas of Burton, they will make a faster profit than waiting for capital growth.

The problem with this is that to achieve high yield you usually have to compromise on capital growth. Therefore it would seem the most logical solution is to find a high yielding property in a strong capital growth area but, these simply don't exist and in actual fact, most of the time, lower yielding properties have a better capital growth. This is because there is generally a contrary relationship between yield and capital growth so the higher the yield, the lower the capital growth and the higher the capital growth, the lower the yield. Property investment in Burton is about balancing the two.

A few weeks ago, I said property values in Burton were 6.5% below the 2007 property boom, but here is the interesting news, in Repton they are 7.3% above the 2007 boom prices.. this means if you had bought an ‘average’ property in Repton as opposed to Burton back in 2007, whilst your yields would have been low, in terms of the value of the property, you would be £36,600 better off.

It just shows you need to look at the bigger picture when deciding what and where to buy your next buy to let property and I hope I have made all the property owners in Repton very happy after reading this!

I will always give all landlords my unbiased opinion on what to buy and not buy. I pride myself by knowing the market with all its ups and downs, so I can give some great advice and opinion. It might not be what you want to hear but, I can assure you, it is what you need to hear!

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

      

Click HERE to arrange you FREE RENTAL VALUATION.
Click HERE to ASK AN EXPERT anything to do with residential lettings.
Click HERE to visit Professional Properties WEBSITE.

People more relaxed about moving as Burton town centre stops bubbling!

As we recover from the bubbling cauldrons of Halloween and the raging inferno’s of Bonfire Night, the temperatures have started to drop and, over the last month or so, the Burton Town centre property market has lost some of the momentum that was seen in the first half of the year. Prices rose by just 0.5% to leave annual price growth at 4.5%, on average, in the town centre (compared to nearer 5.5% for the neighbouring villages).

It was interesting to see The Nationwide Building Society House Price Index showed its first monthly price fall for 18 months in September 2014 and three-month on three month price growth fell by more than half the levels seen in March 2014.

So, what factors have caused this change? It could be down to an increase in supply. Looking at the Burton and immediate surrounding villages, during the first 3 months of 2014, on average 131 properties were coming on to the market each month and for anyone potentially looking for a new
property had, on average, 673 properties to choose from.

In September, there were sixth more properties for a buyer to choose from (781 to be exact) and the number of new properties coming onto the market also increased to 183 per month. Greater supply with tempered demand has eased the market and this can be seen as good news as we would not want a repeat of the overheating in the mid 2000’s where property values in Burton were increasing by over 20% a year between 2001 and 2004. Other factors that are driving the town centre market slowdown – namely the emerging impact of mortgage regulation and threat of interest rate rises are having an influence on buyer (mainly landlord) sentiment. When it comes to mortgages and
finance, people are certainly a lot more cautious than they used to be!

However, the some of the surrounding market villages of Burton have benefitted from a delayed ripple effect from the South and saw their strongest quarterly price growth for four and half years.
It now seems certain that the spectre of interest rate rises and the uncertainty around the General Election will suppress the short term potential for further price growth in Burton as a whole, but, considering we have a couple of years of decent growth, great demand for rental properties with little or no voids on most properties, this easing could be a blessing is disguise, as I don’t know about you, I wouldn’t want to see a repeat of the boom and bust property market of the last decade.

I will always give all landlords my unbiased opinion on what to buy and not buy. I pride myself by knowing the market with all its ups and downs, so I can give some great advice and opinion. It might not be what you want to hear but, I can assure you, it is what you need to hear!

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

      

Click HERE to arrange you FREE RENTAL VALUATION.
Click HERE to ASK AN EXPERT anything to do with residential lettings.
Click HERE to visit Professional Properties WEBSITE.

A European mindset in Burton. Piggy bank or iPhone?

Following my article last month on property values up to July, I am pleased to say that Burton house prices edged up by a further 0.5% in August. As a result, the annual pace of house price growth is Burton down to  4.1% from 4.3% in July. When you consider house prices were stagnant a few years ago in Burton, as house price growth continues to outpace earnings by a wide margin, with average wage growth running at less than 1% in recent months.

I am not an estate agent, but know most of the estate agents in town well and they say new buyer enquiries have moderated somewhat in recent months, and the prospect of interest rate increases together with subdued wage growth may temper demand in the year to come. The demand should be there as the brightening economic outlook and consumer sentiment remains buoyant thanks to        declining inflation and sustained decreases in unemployment down in Burton to one of its lowest rates of 1.5%. (or 1705 people)

Nevertheless, Burton housing affordability does not appear stretched by historic standards, in part due to the low level of mortgage rates. The cost of servicing a typical mortgage remains close to the long run average of 30% of take home pay and it has been proved time and time again to be cheaper than renting.
A lovely three bed semi can be yours in Burton in one of the top areas for £130,000, meaning if you could save the £6,500 deposit, it would be cheaper to rent than buy. So why are first time buyers buying their first house instead of renting?

It comes down choice and lifestyle of the tenants. In many cases renting provides the flexibility some people, especially young people, want and need. For others home  ownership is top priority but when there is no social pressure to buy and you can ring the landlord and sort out any issue , why would someone want to buy. Youngsters find it harder to save for the deposit when Apple launch their latest iPhone each six months or the next 50 inch LCD TV needs buying. Renting is a choice and we are developing a more  European mindset it would seem.

Therefore, my message to Burton landlords is renting is here to stay for the long term, but the short term outlook for the Burton and East Midlands housing market remains uncertain. The number of mortgage approvals fell by  almost 20% between January and May, suggesting that activity was cooling.

However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of Mortgage
Market Review  rather than an underlying loss of momentum.

It’s all about buying a property that will attract the right sort of tenants, a good balance of yield and capital growth and when you do come to sell it in ten or twenty years, it will sell whatever the market is doing at the time. As I don’t sell property, I can give you my honest opinion on any property.

Many landlords send me Rightmove links to property, asking my advice. You can to if you want .. its no trouble at, but i will warn you, I will always tell you what you need to hear, not what you want to hear.

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

      

Click HERE to arrange you FREE RENTAL VALUATION.
Click HERE to ASK AN EXPERT anything to do with residential lettings.
Click HERE to visit Professional Properties WEBSITE.

In Burton, building properties is not like making Mars bars!

My friends often call me an estate agent, but then I remind them that whilst a lot of estate agents do both sales of property and letting of property, we are a letting agent only and  always plan to be!

By specialising in lettings, it enables me and the team to get the job done right. In a recent article, when we spoke about the difference between Burton and Nottingham property markets and their prices, one landlord who popped his head round our door on the High Street to chat about the Burton property market got talking about how he thought there were less for sale boards in Burton than there were ten, even fifteen years ago.

All the newspapers talk about is a crisis of a lack of properties. Building new property is not like the Mars bar factory that can keep the machines going an extra couple of hours to make more Mars bars. The Government says 200,000 properties need to be built each year for the next ten years. For Burton to take its share of that would mean we would have to build 610 properties each year for the next ten years.. yet in the last ten years, in Burton, we have only built on average 315 properties per year.

People in popular areas say they want more properties for their children and are usually in favour of more homes being built, as long as they are not in their local area. Increasing  supply of houses leads to more congestion, crowded amenities and loss of greenbelt. Then, and here is the big reason, those homeowners have a vested interest to keep the building low because an increased supply  reduces the value of their existing home. Therefore, existing homeowners have a vested interest in keeping the supply as low as possible in their area.

Finally, a lack of council houses since Mrs T. encouraged the sale of council housing after she was elected in 1979, the number of new social housing to replace them, has been very low.

However, getting back to the point, it’s a simple fact that since the 2007 crash, the number of properties that are selling in Burton has dramatically reduced. Look at the graph and you will see in the late 1990’s (what most say was a normal market), around 100 properties a month were selling each month in Burton. In the first half of the 2000’s decade, when we had a rising market, around 120 properties were changing hands each month in Burton. In 2008, the year of the property crash that dropped to 60 per month and hasn’t grown that much since, although we started to see a rise in 2014. Hence those poor old estate agents aren’t selling as many properties.. it must be tough for the little dears!

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

      

Click HERE to arrange you FREE RENTAL VALUATION.
Click HERE to ASK AN EXPERT anything to do with residential lettings.
Click HERE to visit Professional Properties WEBSITE.

In Burton, find out which properties are top of the league for sales!

Burton attracts property hunters seeking a home in our town that strikes a wonderful balance between old and new. Luckily, just about every accommodation preference can be catered for here, from highly desirable detached houses in Stapenhill, which are perfect for families, popular 1930’s bay front semi's houses in the Rolleston Road area plus imposing late Victorian terraced houses and modern town houses dotted around the town.

But with newspapers giving mixed messages on what is exactly happening in the town, let us have a look at what has happened over the last 12 months, in particular, what type of property is actually selling.

Between August 2013 and August 2014, 936 of the 31,802 properties were sold in Burton and immediate villages. The best performing type of property was, surprisingly, the terraced house. With an average sale price of £100,462; over 352 of them sold, representing 37.7% of the property sold in Burton (which when you consider only 33.7% of Burton property is terraced (that includes those modern town hosues), this means terraced houses have done well). 

In very close second are apartments. They represented 5.7% of the sales but flats make up 5.5% of the property .. again good news for all flat owners (compared to Derby where the flat market is on its knees).

Of the 9,645 semi detached houses in Burton, 283 changed hands in the year, showing that whilst 30.3% of property in Burton is semi, they respectably represented 30.2% of the sales. However, it is the detached property market, that seem to have performed not as well. Whilst there are 9,618 detached properties in Burton and the immediate villages (representing 30.2% of the housing stock), only 246 changed hands in the year, representing only, but still a very respectful 26.2% of the sales.

What does this mean for the property owners of Burton? 

Most homeowners start with an apartment, then a terraced, aspire to move to semi detached houses, then as finances allow, they move to a detached property. The majority of terraced houses, especially near the Town Centre, were purchased by landlords to rent out to tenants, so they have no need/want to trade up on the property ladder. There are a small number of homeowners who are still in negative equity, which in some cases, property values of some Burton apartments sold at the height of the boom are still 6.5% lower than what was paid for them in that 2007 boom, but whilst bad news for those homeowners, I would estimate this only affects between 2% and 3% of homeowners in Burton. 

We are seeing some good sales and if you look hard enough, you may chance upon a "hidden property gem" in the most unlikely of places of Burton.

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

Click HERE to arrange you FREE RENTAL VALUATION.

Do your homework and bag a Burton bargain!

It finally happened! I was asked to speak to a group of landlords and property investors at a networking event in Hilton so I thought I would briefly share my topic with you.

In Burton, property prices are still 6.5% below the level that was achieved in the Spring 2007 property boom (before it went pop in early 2008 with the credit crunch).

The cost of living has increased by 18% over the last seven years so if Burton people sold their properties today, the money they would get from the property would actually be 24.5% lower ( 18% inflation/cost of living  +  6.5% below the 2007 boom)  than if they’d sold in Spring 2008!

Average Burton house prices are in a constant state of microflux. Over the last seventeen months, the trend has been in an upward  direction. The price of a typical Burton home remained stagnant  in July (yet increased 0.5% in June and even increased in May by 0.4%). Looking at monthly figures in isolation can be dangerous, so I also looked at the Land Registry figures which showed that the annual rate of Burton house price growth moderated in July to 4.3%from 5.4% in June.

The slowdown was not entirely unexpected, given mounting evidence of a moderation in activity in recent months.  Mortgage approvals declined by almost a fifth between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries. But on the other side, with the labour market strengthening, landlords are looking for a home for their savings, mortgage rates are expected to remain low and with consumer confidence rising activity is likely to recover in the months ahead.

Rightmove have recently released some data on Burton and the immediate area, and they make fascinating reading. The peak of the property market last decade in Burton is recognised as Spring 2008. Whilst property values are still 6.5% lower than that boom, homeowner’s asking prices are 0.2% higher than the 2007 boom. Therefore, there is an argument to say, some (not all) Burton asking prices are a little high but the price the properties are actually selling for, is a decent and reasonable figure.

It all comes down to doing your homework, asking questions of the agent and the owners. Find out their motivation for selling and see if you can ‘bag that bargain’!

Trust me they are still out there. As we don’t sell property, I can look at the whole of the market and give you an honest opinion on its investment potential. In fact very soon, I will be starting to put on what I consider the best buy to let deals there are on to the ‘Burton Property Blog’.

If you would like to discuss my thoughts on the rental market, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to: davidm@professionalproperties.co.uk

Click HERE to arrange you FREE RENTAL VALUATION.

Top dog in Burton!

Time to blow ones own trumpet..

Professional Properties are, again, leading the way as the go to letting agent in the area!
In the four weeks to 27th September, 43 landlords decided that it was in their best interests to let their property with the letting experts.

Look at the stats from Rightmove..

I am very pleased that my business is leading the way in the Burton area. It is a great boost for our lettings team to know that we are the number one choice for landlords when they want a quality letting and management service!


That's why we do what we do!

Click HERE to arrange you FREE RENTAL VALUATION.

Great buy to let opportunity!

Found this great apartment for sale which I think would make a great buy to let investment!

It's a one bedroom apartment up for just under £90000. Potential rental of £400 - £425pcm would offer you a decent return. The other advantage is that it is new, modern and would rent very quickly thus reducing any void periods!

Check it out as it will go quickly!!

Click HERE to view the property!

Rent Controls in Burton? - That’s one way to destroy a city says economist.

In the last few months, politicians in Westminster have decided to step into an area which affects all of us reading this - property.

Anyone who rented property in the 1970s and 1980s knows the difficulties of tenancy agreements from that era which allowed the tenant the right to stay in the property for life. In some cases, tenancies could be transferred to their children, rents could not be increased and tenants could not be removed.

One of the suggestions by the Labour Party is rent controls. With more than 4.4 million people renting 3.4 million properties in England alone, it was clear that this could be a policy that was purely playing with the sentiments of these tenant voters.

In a damning report, the Institute of Economic Affairs says that Ed Miliband is going for completely the wrong solutions and accuses him of flawed thinking.

Instead, the IEA says he should instead look at a radical liberalisation of the planning system to allow the private rented sector to grow.

Under the current legislation, tenants are already in a position to challenge rent increases that are unreasonable and they have the advantage of giving a months’ notice to the landlord (when the tenancy is a rolling agreement ie a periodic tenancy). But do rents need capping?

Well, in Burton, there are 11,253 people renting 4,895 rental properties. The average rent of a Burton property in 2008 was £634 per month. If Burton landlords had raised the rents in line with inflation, (which sounds fair to anyone), as inflation has been a total of 19% since 2008, the average rent in Burton should be today £  £634 + 19% = £754.  At this moment in time, the average in Burton is £609... and similar comparisons are being repeated all around the UK.

However, restricting rent rises in the future could put more properties back on the market for sale as it would destroy the confidence in the housing market. In turn, this would reduce property prices. With less property available to rent, and a lack of interest from potential investors (due to the poor yields) this policy would end up creating a shortage of affordable housing.

Even with the vast increase in renting in Burton over the last ten years, 8% of property being rented in 2001 to 18.2% in 2011, the number of homeowners in Burton only dropped by 1.3% (there were 18950 homeowners in 2001 in Burton, but it only dropped to 18,713 homeowner households by 2011 in Burton.

It is clear that the changes to the law of tenancy agreement made in Housing Act 1988 resulted in benefits to both landlords and tenants. The law has made it easier to rent a property and at the same time, the Assured Shorthold Tenancy gives the tenants a right to quiet enjoyment of the property for a period of time. Yes, the total rent paid by Burton tenants is an awful lot of money, £35,553,420 in fact, but as rents are free to move up, but just as important down, why fix what isn’t broken?

The IEA’s report also says that rent controls in Britain between 1915 and 1989 were associated with the collapse of the private rental sector, from close to nine-tenths of the housing stock at the start of the 20th century to close to one-tenth by the late 1980s.

Swedish economist Assar Lindbeck once said: “Rent control appears to be the most efficient technique presently known to destroy a city –  except for bombing.”

As usual, if you would like to discuss any  aspect of letting your property then please contact me on 01283 517444 or pop into our office on the High Street.

Click HERE to arrange you FREE RENTAL VALUATION.

Does the number of bedrooms affect 'rentability' in Burton?

Last week, I spoke to one of my landlords and she asked me if the number of bedrooms in a property had any relationship to the return she could get. I did some research and followed up her query – I was actually quite surprised with the results…

Currently in Burton, the average rent for a one bed property is around £423 per month with an average value of £72,400. This means an approximate return/yield of 7% per year. This is of course, the average. There are one bed apartments on the market for rent at a higher price than some two bed apartments. In fact, some one bed apartments in Burton can attract rents of £500, if not more, whilst some converted terraced houses with flats in them can be rented for as little as £290 per month. This means yields on one beds can range between 5.2% and 10.2%!

Two bed apartments in Burton can be priced anywhere between £127,500 in one of those modern upmarket developments in the Grants Yard development (pictured) and as low as £50,000 on Alexandra Road (just off Ashby Road). Again, rents can be quite varied, ranging from over £850 per month for some bespoke unique apartments in the Anson Court development (off Horninglow Road) in Burton to £350 per month for a converted terraced house off Shobnall Street. However, looking at the average rent for a two bed apartment in Burton, I calculate it to be £496 per month with the average value being £82,700 which gives a return/yield of just over 7.1% per year.

Whilst there is a little difference in the yields when it comes to the number of bedrooms, it is only one of many factors you should consider before buying a property. Whilst two bedrooms are more expensive to buy, they will always let slightly better. Do they sell better? Well, 34% of the two bed apartments on the market in Burton at this moment in time are sold stc compared to 17% of 1 bed apartments – quite a bit of difference there.

It really comes down to the property and type of tenant. Two beds attract sharers, which brings both advantages and disadvantages to the landlord but one beds can be harder to sell (important as one day you will want to liquidate your investment).
It depends what you want from your investment. I know the lettings market in Burton so I can advise you what you can expect to achieve in rent and how it go up in value together. I don't make a penny out of you buying something, I make my money ensuring I can find the best tenants for the best properties.

Please feel free to pop through the door of our offices on the High Street, call me on 07973 666229, or email me at davidm@professionalproperties.co.uk

Click HERE to arrange you FREE RENTAL VALUATION.

Are rental returns in excess of 12% p.a really possible in Burton?

I regularly talk to landlords about investing in Burton and the surrounding areas.

Following a discussion with one of them last week, he asked me to look into the Waterside Estate area, and whether it was a good place for him to invest in.  There is a 3 bed semi up for sale with Guide Price of £45,000. Average rents in these types of properties have risen by 22.2% since 2008, which is amazing considering average rents in Burton are in fact 4%  lower (on average) than those being achieved in 2008.

Let’s say you buy it for £50,000, the achievable rent can be in the order of £500 to £525, depending how much effort you have put into presenting it; but being sensible, we are still looking at a yield in the region of 12% to 12.5% per year... yields that are only normally achieved in risky HMO’s (Houses of Multiple Occupation ie Student housing .. with the fun and games that brings!).

Property values since 2002 have risen, according the Land Registry, in Burton by 56.5%. One would expect properties in areas in Waterside not to have kept up with those sorts of increases, but looking at the properties that sold in 2002 and again more recently, average increases in property values in Waterside have kept pace with the rest of the town.

So is this an investors paradise – great rental growth, great yield and reasonable capital growth?. Well, all is not as it seems. This is a great example of the headline numbers (yield and capital growth) being not the only factor to consider when choosing an investment property, as you should also consider how long it takes to find a tenant. The average time it takes to find a tenant in the Waterside Estate area can be up to six to eight weeks, whereas in most other parts of Burton a tenant is usually found in one or two weeks. If you take into account the extra five or six weeks of void   period for your property,  every six to nine months, because tenants in areas in such as the Waterside Estate tend to have a high propensity to move more regularly and the extra fees a landlord has to pay each time a tenant moves in and out, the annual overall return from the property is lower than it seems.
Finally, the property is constructed with non-traditional means ie not a cavity wall of two skins of brick and breeze block, but of a    concrete frame. These are difficult to obtain mortgages on, so it’s only normally cash buyers who can go for these. I am not suggesting you don’t buy it, but go in with your eyes wide open and having done your homework.

Having this knowledge of the Burton property market to hand enables me to give to my landlords the best advice on what (or not) to buy for buy to let. Irrespective of you are a landlord with another agent or someone who is thinking of dipping their toe in the water for the first time as a buy to let landlord, if you want to pick my brains on any matter to do with the Burton property market, please feel free to pop through the door of our offices on the High Street, or call me on 07973 666229!

Click HERE to arrange you FREE RENTAL VALUATION.

What has happened to home ownership in Burton?

Last week, a couple from the Repton, came in to discuss with me about them potentially
investing in the Burton property market for the first time.

As my regular readers will know, the most important consideration you will make before investing in property is the balance between annual return and capital growth. However, what affects those two things (yield and capital growth) in Burton are very varied and complex. The quantity of property and whether property is owner occupied, social housing or private renting has a big difference on yield and capital growth.
The growth in home ownership in Burton, which started in the 1950’s, continued through the 1960s and, by 1971, the proportion of  owner occupiers was equal to those renting. By 1981, 62% of Burton households were owner occupied and, for the first time, the proportion of rentals was less than home owners but by 1991, it reached 71%.

Roll into the 21st Century and in 2001, there was a slight increase in the tenure structure in Burton, as owner occupation increased to 75.3%. The significant change over the decade (1991 to 2001) was within the rental sector, where the proportion of households privately renting increased for the first time since 1918. 6.9% of households were privately renting in 2001 in Burton, while those socially renting had decreased to 14%.
Between 2001 and 2011, the number of households in Burton rose from 42,717 to 47,251, an increase of 10.6%. but the percentage of households that were owner occupiers in Burton dropped significantly to 69.6% (from the previously quoted 75.3% in 2001).

However, that doesn’t tell the full story, because whilst there was a significant drop in the percentages (75.3% to 69.6%), the actual numbers tell a completely different tale. Of the 32,206 households in Burton that were owner occupied in 2001, that figure increased to 32,879 households being owner occupied .. so why if the number of homeowner households had gone up, why the huge drop in percentages?
In 2001, 2,968 houses were privately rented (6.9%) in Burton, but roll on another ten years and there are 6,519 households in Burton that are privately rented (13.8%). The rapid increase in the number of households privately renting in Burton could be linked to the decline in the number of households getting on the housing ladder, usually by way of a mortgage. This is mainly because of the increasing difficulty for first time buyers being able to raise deposits for a mortgage, which haven’t been helped by high property prices.
The average Burton house price for those who were first time buyers increased by 91.3%  between 2001 and 2011. This meant larger deposits which are linked to the house price, were required. Also tighter lending requirements, especially in the wake of the recent credit crunch meant a larger percentage of the house value was required as a deposit, as 100% mortgages became a thing of the past.

Finally, declining wage growth and rising inflation over the period exerted pressure on household spending and eroded the value of savings. While in 2001 the average house price in Burton was four and half times the average gross wage, by 2011 the average Burton house price was seven times larger than the average wage. This meant households needed to save for a longer period in order to provide a deposit.

Having this knowledge of the Burton property market to hand enables me to give to my landlords the best advice on what (or not) to buy for buy to let. Irrespective of you are a landlord with another agent or someone who is thinking of dipping their toe in the water for the first time as a buy to let landlord, if you want to pick my brains on any matter to do with the Burton property market, please feel free to pop through the door of our offices on the High Street or call me on 07973 666229.

Click HERE to arrange you FREE RENTAL VALUATION.

Winshill’s property market outperforms Branston’s by 65%!

A couple from the Repton came to our offices to discuss purchasing a  Buy to Let in Burton after reading this ‘Burton Property Blog’.

I reminded them that one of the most important considerations you will have to make before investing is considering the balance  between annual return and the capital growth of the property that you buy.

One of the most sought after places to live in is Branston, on the southern side of Burton. There are 2,825 households here and an impressive 2,192 of those households (77.5%)  are owner occupied, yet only 391 of those households (or 13.8%) are privately rented. Branston has many different types of housing, but one the most popular are the 1990’s four bedroom detached houses, which sell for around £215k to £225k (although there are some rather more expensive ones in some parts of Branston) and rents are on average £875 per calendar month.

Winshill on the other hand is a different story all together. Only 2,220 of the 3,430 Winshill households are home owners (64.8%) and  surprising only 318 private rental properties (9.3%), the rest being made up of local authority owned housing.

With this in mind, I carried out some further research and found that three bedroom terraced and semi-detached houses in Winshill have outperformed those detached houses in Branston. This is because a three bedroom mid terraced/semi-detached house in Winshill have been selling on average recently for £80,200 and the achievable rents have been £510 per calendar month. The yield which could be achieved from property on Winshill is therefore around 7.6% per year. When we compare this to the possible 4.6% per year yield on Branston, that return is 65% proportionally higher in Winshill than Branston.
We must remember however that yield is not the sole consideration when investing in Buy to Let properties. Areas which offer good yields (ie Winshill), often suffer from poor capital growth.
Looking at average property values in Branston back to 2000, the average property in Branston has risen by 120.5% up to today. However, average values in Winshill have only risen by 90.4% in the same time frame.  It just goes to show that you sometimes have to look behind the statistics before making a decision. Do you want good returns or do you want capital growth when in investing in buy to let property?

If you would like more information on investing in Burton’s property market, please call me directly on 07973 666229, call the office on 01283 517444 or pop in and see me at 171 High Street in Burton town centre!

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Is now the right time to buy in Burton?

A number of landlords, first time buyers and investors have approached me recently, asking about the Burton property market.

With all these headlines of massive increases in property values in the UK, should we be worried we are about to have a price crash? We are at the early stages but the economy is now actually looking a lot healthier and there are signs we are seeing an actual recovery after several false starts.

I am of the opinion that over the last few years, whilst mortgages have been a little more difficult to obtain than the last decade of the 2000’s, this lack of mortgages has produced some pent up demand for property.

Now we appear to be on the other side of the financial crisis, and the banks are more willing to lend, this is why sales, prices and first-time buyer numbers have improved so rapidly. It has been like opening a shaken can of fizzy pop. You get the initial fizz of activity, and then it flattens. What we're seeing is a relatively    normal market correction, not a quick transition from a recession to a boom.

Property values in Burton have risen, on average by only 3.5% in the last 12 months. When I look at the East Midlands as a whole, prices have risen by 7.9% and nationally by around 8.7%. Compared to the boom years of 2001 to 2004, when property values increased by 20% in 2001, 33.9% in 2002 and 8.4% in 2003 in Burton, I cannot see why some are concerned about an unsustainable price boom. I believe house prices are rising off a low base and talk of a housing bubble in relation to the national market is overdone.

We are seeing continued exceptional property price growth in London combining with modest gains across other regions and creating a picture of a broadening market recovery, and, although prices actually fell by 1% in the East Midlands in June, I expect prices to continue to rise in the short term.

Speaking to others in Burton, the issue isn't house price inflation, but a lack realistically priced properties coming onto the market for sale, a lack of supply. In the last two weeks of April 65 came on to the market for sale in  Burton, two months later in  the first two weeks of June, only 62 properties came on to the market (it should traditionally a lot more in June than April). So should you be buying a property in Burton?

Now is a good time to buy, provided you accept prices may fall again in a few years. It depends on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it.
Burton first time buyers preparing to take the plunge should bear these factors in mind. The biggest issue must be that buyers ensure they can take the hit of future interest rate rises and therefore, I ask the first time buyers of Burton to make sure you'd be happy in your new home, because you could be stuck there in five years' time.

Landlords tend to buy for the long term, so these short term movements don’t tend to  affect them as much. The lack of supply in  Burton of new properties coming onto the market indicates people wanting to buy have to move quickly, and don’t have the luxury of a few weeks to decide to view the property. However, my findings show that first time buyers and landlords in Burton aren't prepared to pay over the odds for a
property to secure it. Maybe, just maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Burton property market?

Call me on 01283 517444 or pop into our offices at 171 High Street in Burton town centre!

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Are you still after a property bargain in Burton? They’re still out there!

Newspapers report property prices in England have soared to a record high – sparking predictions that the country is facing another dangerous property bubble.

Values in the East Midlands are still 13.5% lower than their previous peak in the Autumn of 2007. Even with that news, I have been speaking to a couple of landlords over the last few weeks who had concerns in some quarters that the state backed schemes to boost the supply of mortgages such as Funding for Lending and Help to Buy are inflating a new housing bubble.

Those landlords are asking if this means the end of property bargains in Burton?

Well, if you do your homework, there are still plenty of good buys in Burton. Don’t expect them to come on the more popular streets in the town. The first rule of buy to let investment is that it is isn’t you that is living in the property, it’s the tenant, and there is always demand for every street in Burton!

Back in the Summer of 2013, a two bed semi detached house came up for auction in Hilton with a guide price of £95,000. It wasn’t that bad inside. I kept the photos of the inside and it had a white modern bathroom suite and modern kitchen. The property also offered gas central heating and double glazed windows. It actually sold in August 2013 for £109,000. A matter of months into 2014, it sold again for £122,500. With an estimated rental income of £550 per month, that is still a 5.4% return!

Other ones I spotted were a lovely semi detached bungalow in Rolleston that was bought for £125,000 in the Summer of 2012 and flipped again in early 2014 for £150,000, with just a lick of paint and some new carpets.

By keeping an eye on the local market, I am able to judge if a property is good value to buy for a landlord. I give this advice and opinion freely to anyone who asks, be they an existing landlord of ours or of another agents. I will also give it to anyone thinking of becoming a buy to let landlord for the first time.

I have said it lots of times before, capital growth and rental returns are both as equally important as each other - with good local knowledge, you can achieve both! Let me advise you on where, what and how much!

I do not charge for this service, because if I offer you a honest and straight forward opinion, you could consider using me to manage your property. However, I must stress there is no obligation to do so. Feel free to pop your head through our door on the High Street in Burton to chat about the ups and downs of the property market in Burton.

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What has the ‘Help to Buy’ scheme done to the Burton property market?

The Conservative’s and Liberal Democrats launched ‘Help to Buy’ last year to give a boost to the housing market. The Help to Buy scheme involves the Government guaranteeing up to 15 per cent of a mortgage, acting as an indemnity for the banks and building societies who sign up (so far only three banks have done so). This means lenders can provide mortgages more confidently to borrowers with a 5 per cent deposit. It will apply to all types of properties, first-time buyers, home movers and re-mortgagers.

Quite interestingly, first timer buyers have had access to 95% mortgages since 2010 so I am not sure what it has done to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Burton continues to have a buoyant property market. Prices are rising, but not at the double digit level that was experienced in the early to mid 2000’s. If the scheme enables those who want to buy, to buy, then that can only be good for everyone in the town.

Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Burton to let out. Carrying out a quick search on one of the price comparison websites, I was able to find in seconds that landlords can get fixed rate buy to let mortgages from as low as 2.99% until the end of 2016. With rental yields in Burton of around 3.8% to 6.7% per year and the values increasing by 3.5% in Burton, investing in property could be a good idea.

However, buying a buy to let property is full of pitfalls. If you have a good tenant, in a good property and a good relationship between tenant and agent, then not much can go wrong, as long as the relationship   between the landlord and agent is exceptional. I pride myself on exceptional relationships with my landlords and their continued business speaks for itself.

If you are considering becoming a new buy to let landlord, feel free to pop your head through the door of our agency on the High Street in Burton for some advice and opinion on what (or not) to buy.

It is true the property market is showing signs of good improvement, but, if you know where to look, and more importantly, what to look for, there are still bargains in Burton to be had.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.

burton@professionalproperties.co.uk     www.pplets.co.uk