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.

Click HERE to arrange you FREE RENTAL VALUATION.

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

Buy-to-Let in Burton puts Building Society Interest to shame.

In recent article, we spoke about the difference between Burton and Derby property markets. This produced a number emails and couple of people popping into my offices for a chat about investing in buy to let.
Many people in our part of Staffordshire, over the last few years, have seen the buy to let market become all about nest egg investment. It is fuelled by pitiful interest rates on building society savings. It reflects the fact that building society savings accounts are paying half a per cent interest and pension returns are struggling to match expectations, turning more and more people into landlords to secure their future.

So what can you expect from your rental property investment? In the short term, rental yields are important, and in Burton, the average annual yield is in the order of 3.79% per year. However, that is based on averages and most landlords in Burton tend to buy starter homes, apartments and terraced houses the majority of which are achieving 4.3% to 6.5% per year depending on location and price in the town.

In the long term though, the question of capital growth is as important, if not more important because if you have great short term yields but the value of the property doesn't keep up with the rest of market you will have an asset that in real terms is    dropping in value. As we mentioned in a  previous article, average property values in Burton currently stand at £171,600.
      
Property values in Burton have risen by 10.3% in the last 5 years. On the other hand, property investment is a long term game, so I wanted to share with you the research I did for a couple of Burton landlords.

Roll the clock back 10 years to 2004, the average value of a property in Burton was £146,700. 15 years to 1999 makes interesting reading, as the average Burton property value was only £66,100, 30 years makes it £28,400 and just for a bit of fun, we looked at 1974 and it was £10,075!
However, if one looks at say a 30 year investment period, if you had put £28,400 into the stock market in 1984 instead of buying a house in Burton, your shares today would be worth £134,690. Put the same £28,400 money in a Building Society account and you reinvested the interest back into the account, your Building Society passbook would read £158,240. Compare that the property market in Burton, and the property would be worth £171,600 today.
Not much difference to the building society until you realise that with the rental property you would have received in excess of £113,000 in rent over those 30 years, which wouldn’t have received with the Building Society account!

If you would like to have a chat about any matter relating to property in Burton, pop in and see me, or my team, in our  offices on the High Street.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE

Which has performed better? Burton or Derby.

One topic that I am always asked about, both by existing landlords and new ones, is how one town's property values have performed against another. When purchasing a buy to let property, there are two ways landlords make money through property letting - capital growth and rental income growth.

When a property increases in value over time, it is known as 'capital growth'. Capital growth has been strong in recent times in both Derby and Burton, but the value of property does go up as well as down, and of course the local conditions surrounding your property have a big effect.
Rental income is what the tenant pays you - hopefully this will grow over time too. If you divide the annual rent into the value (or purchase price) of the property, this is your annual return.

A landlord from Ticknall, who has a number of properties in both Burton and Derby, asked me a few weeks ago the difference between Derby and Burton housing markets. I was quite surprised with my findings, and wanted to share them with you.

The average property price in Burton is currently £171,600. In the last 3 months, property values in Burton, according to my calculations have risen by just over 2.4%, which starts to claw back the losses we         experienced in the middle part of 2012, when values dipped by nearly 4.7%. That sounds a lot, but roll the clock back a few years and in 2011, values dropped 6.2% from property values being achieved the year before.
However, irrespective of the roller coaster prices we have seen in Burton, because between those downturns, we have seen equally good price rises. That is why it so important to look at house prices in the long term. To make Burton property owners happy, they are still 10.3% higher than they were in 2009 (but before you get the Champagne on ice, we still have 7% to go before we reach the 2007 peak).

Derby, has seen a slightly different story. Whilst in Burton, prices would needed to rise by 7% to take average values back to the 2007 peak, Derby’s property values are 8% away from those 2007 peak prices. Therefore, is Burton or Derby the better bet? Well, the other part of investing is yields. As we have         mentioned in previous articles, yields are very similar in both places, with Derby probably having slightly higher yields. However, a couple of trips in the car up the A38 will soon finish off that difference.

One final thought though, landlords often buy what they know and they like to have their rental properties in the town they live in .. because they know the area. These sorts of things can’t be expressed in values and yields.

Each Burton (and Derby) landlord will have different needs and requirements in his or her property investment. I am able to give an objective and unbiased opinion on what (and what doesn't) make a good property investment. Knowing what has happened to values in different towns, enables me to spot any trends or opportunities for buy to let landlords. If you would like to have a chat about any matter relating to property in Burton, pop in and see me, or my team, in our  offices on the High Street.


If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE

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