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!

Click HERE to arrange you FREE RENTAL VALUATION.

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!

Click HERE to arrange you FREE RENTAL VALUATION.