Burton property - It's a long climb to the prices of 7 years ago.

Some landlords have been speaking to me recently about story’s in the press and their concerns about booming house prices and the next housing bubble. Whether you are an established landlord or one considering entering the market for the first time, it is so important you do your homework. Buying a property in Burton and the surrounding villages is an investment, and as such, one needs to do one's homework. I am often asked to give my opinion to existing landlords of mine, and even landlords with other agencies. I do not charge for this, as it is only my opinion, and you cannot charge for opinions, can you! Anyway, in a nutshell, Burton landlords can either go for low risk, low yield but decent capital growth, whilst others invest for high monthly yields, high risk but with a tendency of lower capital growth.

If you are going to be buying soon in Burton, it is vital to look to ensure you build in some capital growth by getting a property at a discount or by finding a way to add value. Securing capital growth is going to be tough over the coming years, but don’t lose out if it’s not bargain of the year. Prices would need to rise by 24.5% to get back to 2007 levels . That figure might surprise allot of people, but let me explain.

Yes, in Burton we are only, on average, 6.5% below the actual values that were being achieved in boom of Autumn 2007, however, this doesn't take into account inflation. Since 2007, inflation has risen over those six and half years by around 19%. So in reality, prices would need to be 25.5% higher today to be at the same 'real' level than they were in 2007. (25.5% made up of 19% inflation plus the 6.5% growth required to return to 2007 figures)

Some forecasters estimate that properties bought in 2007 at the height of the market, will take until 2020 or even 2025 to recover (when you include the impact of inflation). Many landlords will need to take a serious look at any existing property or new ones to make sure they can achieve capital growth, if that's what they desire, and that this increases in line with inflation. My answer to landlords, get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring when prices do start to rise again, you are in pole position.

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Burton sees 8.2% return on investing in the rental market.

I was talking to a landlord from Newton Solney the other day about the Burton property market, following my recent articles in the Burton Mail. With all the news about house prices rising, he wanted to know what had happened to average property prices since the New Year. 

Well there is no such thing as an ‘average property’, but according to my calculations, the ‘average value of a property’ in Burton is now £169,300, which is a rise of nearly £1,000 from the figure I quoted 3 or 4 months ago of £168,550. Now by my calculations, the average rent being asked in Burton is around £590pcm, which means the yields/annual return are an impressive 4.2% per year. In the last 12 months, the average value of a property in Burton rose by 4%, meaning landlords achieved a total return of 8.2% in the last 12 months.

When comparing this to what you get in return from banks, buy to let could be good investment for you. Don't get me wrong, there are pitfalls. My message to all the people of Burton, be you an existing landlord or you are thinking of dipping your toe in the water for the first time is quite simple. Take some independent advice before buying anything, unless you're 100% sure of what you're doing. I say this because I know what happens when people don't.

Even if it's not from ourselves, there are still a few 'lettings only' agents in Burton who are well placed to advise on whether the property you're buying will rent, and at what price. We're certainly more than happy for you ask if you pop in and see us at our office's on the High Street.

Call our office on 01283 517444  

Visit our website: www.pplets.co.uk

Burton census figures released

It seems a distant memory three years ago when we were filling in our census returns, but now the figures are beginning to be released, especially the statistics about property. The figures for each individual town and city have been released, so let’s look at the Burton’s (East Staffs Borough Council) figures .

In the town and immediate villages, nearly seven out of ten properties are owned, 69.6% to be precise (or around 32,880 households) and just over 7,135 householders rent their house (or 15.1% of households to be exact).Interestingly, over 13.5% of the houses are council houses (6,380 council houses), with the remaining properties being either Housing Association properties or tied cottages.

So, 15.1% of households are rented in the area, which is below the national average of 15.6%, but that is to be expected as Burton is a small town and hasn't seen the boom and potential bust cycles that other places in the North have seen. Demand continues to be good from quality tenants who are prepared a pay a decent rent, but only for a decent property (in next weeks blog, I talk about the landlords in Burton who, on average over 2013, achieved a total return of over 10%+ on their investment).

If you are considering becoming a landlord or are an established landlord that is thinking of buying another property to rent out, please do your homework. Feel free to ask my opinion on what makes a 'decent property'. It's in both our interests for you to buy the right property! I don't charge for that opinion, because I hope you will recommend me to your friends, which is in fact the best compliment you make.

Call our office on 01283 517444  

Visit our website: www.pplets.co.uk

What's the future of the Burton rental market?

It might surprise some readers that the average rent, that tenants have had to pay for a rental property in Burton, are around 4% to 5% lower than the peak of Spring 2008. After Spring of 2008, there was a major dip in the rents that were being achieved for Burton property of around 10% to 11% in late 2008 and early 2009. However, since 2010, rents have steadily risen by around 1% to 1.5% (depending on area) a year since the credit crunch and in 2013 rolling into 2014, a lack of decently presented stock available to rent means rental averages are, in the main, rising.

Rents have steadily risen in of 2013, despite the squeeze on Burton wages, due in part to the demand of tenants from Birmingham who are happy to commute. There are still plenty of tenants willing to pay for well maintained properties in locations, such as Stapenhill and Stretton and commute from Burton train station into central Birmingham in 29 minutes.

At the start of 2012, the average rent in Burton was approximately £578 per month (a decent rise from the 2009 average of £548 per month). As we go into the Spring of 2014, average rents in Burton stand at £603 per month.

From a landlord perspective, the steady rise in rents is good news, as ideally rents need to keep up with inflation to maintain investment returns. Property prices in Burton are also starting (nearly 3.5% in the last 12 months) to rise after large falls since the credit crunch of 2008, so maybe, Burton could be one of the few areas across the UK where it might be possible to secure capital growth returns and potentially higher income (yields) in the future.

It all comes down to buying the right property, in the right location, for the best price possible, and that is where we can help. We are a lettings agent, not an estate agent that does lettings on the side. We can look at the whole of the market in Burton, and just like a price comparison website, if you trust what we say, we are one step closer to potentially getting your business, because if you trust our opinion, you might trust us to find you a tenant for the property. We give our opinion without the expectation you have to give us the business though .. the choice is always yours Mr and Mrs landlord, as always,there is no obligation.

With that considered, it’s just as much in our interests, as it is yours, very much in our interests that you buy something that’s sensible and lettable – we don’t want you buying a dud, or something where the figures don’t stack up!

Feel free to pop through the door of our offices on the High Street, send me an email to burton@professionalproperties.co.uk or call me directly on 07973 666229

Do semi-detached properties on the Beaufort Road estate make good investments for Buy to Let?

Stapenhill River Gardens

I was talking to someone who lives in one of those modern 4 bed detached houses on one of those nice cul-de-sacs off Beaufort Road, in the Stapenhill area, on the Eastern edge of Burton. The whole development was primarily built in the 1980’s through the early 2000’s, and offers mostly larger executive detached houses and also modern semis and town houses. Interestingly though, over 83.2% or property is Beaufort Road area is detached, compared to 33.9% in Burton on Trent as a whole. Something that wouldn’t happen today with the price of land (there would be more semis and town houses)!

Anyway, he wants to purchase his first Buy to Let property and has noticed our previous articles, so was interested in getting to know the industry a little bit more. As he has lived in the Beaufort Road area for over 8 years and he felt comfortable investing in there as he knew it well, we started to discuss the property market in this area. Firstly, we found that of the 346 semi-detached and town houses in Beaufort Road area, 149 of them have sold and changed hands since 1999 (some up to 4 times!), so obviously a good place to buy and sell in.

Property values in Burton have risen on average by around 109% over the last 14 years, but most semi-detached properties on the Beaufort Road area have beaten that rise, rising on average by 122%. For example, a top of the range 3 bedroomed semi-detached property on Mcadam Close rose by 127%, from £58,000 in 1999 to £132,000 in the summer just gone – and this is one of many.

With excellent capital growth you would expect yields to be comparatively lower, but most two bedroomed properties on the development can be picked up from £100,000 to £110,000 and could have achievable rents of £525 to £535 per month. This means annual yields can be around an attractive 6%! Feel free to pop through the door of our offices on the High Street or send me an email to davidm@professionalproperties.co.uk