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

Cheap Fees in Burton - You must be Crackers!

I went out to a rental valuation a few days ago in Winshill and, as I always do, did my preparation on the property, the area and suitable tenants. I introduced myself but, before I could begin speaking, he said “How much then? What are your fees?”. Now don’t get me wrong, the subject comes up pretty much most of the time but not usually that quickly!

It got me thinking about landlord fees and how landlords perceive agents. Lots of agents advertise ‘Free fee deals’ – we have in the past! Do they work? No! But why don’t they?

Well, at my local Sainsburys at Burton town centre, they often give out free crackers as you shop. Does it sell more crackers? I doubt it!

‘Free’ is a fine way to grab attention, but more often, it's the wrong sort of attention. How many times have you tasted the free crackers from the supermarket and gone on and bought that product …?
When I discuss our fee packages with potential landlords, they always ask "What do I get for that and is it worth it?" The shoppers at Sainsbury’s who munch a few crackers as they do their weekly shop aren't asking that question. When focusing on free, the 'worth it' question never comes up, because when seduced by the zero price alone, we fail to answer the question about worth or value.

We had a new lettings negotiator start last week and he asked me “How can some agents in Burton charge such a small fee for a fully managed service?”. “It depends on your definition of a fully managed service” I replied with a wry smile!

So, is a cheap or non-existent fee at the forefront of a landlords mind? No, it’s not! I can put my hands on lots of independent reports from lots of property experts, where thousands of landlords are surveyed each year, and each year, only 3% to 5% landlords want the cheapest fee.. most want the best value fees.. and value is measured when someone says, “What do I get for my money?”

So Mr and Mrs Landlord, if you have a rental valuation always ask the question; “What do I get for my money?” Even ask your existing agent the same question when your current tenant leaves because, let’s face it, that’s the ideal time to switch!

If you are a landlord, new or existing, 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 the email address below.

If you are a landlord, new or existing, 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.

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

Take a trip down the A38 and see the price difference!

A few weeks ago I said that property values in Burton had risen by 4% over year, or to be more precise £6,600. The interesting thing is that this rise hasn't been a smooth rise. 12 months ago, prices in Burton were around £162,700, 6 months ago they reached the heady heights of £172,000; around 3 months ago, average prices had actually dropped to £167,300 but have since recovered in the last 3 months to today’s £169,300. This is great news for anyone who owns their own home in the town.

Looking at our neighbouring City of Derby, North along the A38, the average value of a  property rose by £11,900 in the last 12 months. My experience in both markets shows that what happens in Derby one year happens in Burton the next, which on the face of it, makes Burton properties a possible bargain.
However, take a road trip along the A38 to Lichfield and a completely different story has been seen. An average property in Lichfield has seen a huge increase in average property values by around £15,750 over the last 12 months. However, don’t all start going South down the A38, as the average house price is £335,900, so in fact prices have risen by a more modest 4.9%, not too dissimilar to the figure achieved in Burton.

I find it amazing that three places along the A38 of Burton, Derby and Lichfield, all within a few miles of each other, can experience such variations in property prices. With average rents steadily rising by 1 to 2% a year and with continuing troubles for first time buyers raising the £10,000+ for the deposit and fees, I can only see greater demand for rental properties in Burton, which will mean more people will continue to buy property for buy to let, and where there is greater demand, the price tends to go up.

This however, is only my opinion. 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

The Burton lettings expert hits a decade. It’s only tin for ten years!

Burton’s usual lettings expert, David, has been given a week off from research and article writing to allow me, Susan Cope - Managing Director, to sing his praises!

David has been with Professional Properties for 10 years this month and has been our lettings expert in Burton for around 9 years 11 months of the 10!

Traditionally in this country, tin is the celebratory metal associated with a 10 year anniversary so the Burton team have kindly got him a four pack of baked beans as gift!

The reason that this 10 year anniversary is so important for us, as an agent, and you, as a landlord, is the local area knowledge that David has developed over this time. Knowledge of a particular area is based on experience, it is adapted to the local culture and environment and it is dynamic and constantly changing.
In the world of lettings and property investment, it is so important to get the right information before making decisions on what to buy and where to buy it.

The boys who herd the cattle may know, better than their fathers, where the best grazing sites are. If you ask the fathers to show you the good pastures, you might  only get partial or inaccurate information. Asking the wrong people the right questions may result in poor decisions being made.

Anyway, back to David. He is definitely the right person to ask the right questions because he will give you the right answers!

Regular readers will have seen the articles he has written providing Burton landlords and investors with essential information and statistics on the local area. Which areas are best for investment, which properties sell the best, what is the future of the rental market in Burton and many more. In one great article, he even compares two neighbouring streets with very interesting results!

Well done David, here’s to the next 10 years…

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

Postcodes and the effect on Burton property prices.

I was asked last week if postcodes make a difference to property values. Well, in swanky West London, the difference between SW3 and SW10 can make values drop or rise by hundreds of thousands of pounds. However, in our little town of Burton, we don’t have many Russian Oligarchs and Saudi Prince’s buying our property! However, after doing some detailed investigating, I did find out some interesting information.

I would like to start with the two main postcode areas that neighbour the town centre. I found an amazing trend that I think will interest the people of Burton. Over the last decade, property values have always risen in DE15 first (Stapenhill, either side of Ashby Road after the River Trent, Newton Solney and Bretby), then they plateau allowing DE13 (Horninglow, Stretton and the Western Burton villages) to catch up a 18 months later. Then DE15 has another spurt, again plateauing and now DE13 is catching up again. I have no idea why this happens, but I just know it does.

Let me explain. In 2008, property values in both areas were roughly 11.1% lower than they were today, therefore they had plateaued. By the time we had got to 2010;  DE15 had risen by 5.5%, compared to 1.5% in DE13 (doesn’t sound much but its over three times the growth of the other).
Get to 2012, and DE13 had caught up, increasing by 6.14% compared to DE15 growth of 1.95%. Since 2012; DE15 and DE13’s have levelled out at an equal growth of 3.5%. I believe over the coming few years, DE15 will have another spurt and DE13 will catch up around 18/24 months later. I could be wrong, but the figures going back suggest that this will happen.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment.

If you are a landlord, new or existing, 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.

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

What type of property in Burton sells the best?

Knowing how saleable a property is half the battle when deciding what (or not) to buy for your next property investment. Why? Well because one day, you may need to sell that property. If you go into the purchase with open eyes, you know most of the risks and can barter the price accordingly if you have to.

Bearing this in mind, last week, a couple from Repton popped into our offices to ask about investing in property. Their concern was if we have another property slump (and we will because that is what has happened to the British property market ever since the 1950’s), if they did need to sell, what type of property would be easier to sell?

Now everything sells, even during a slump, but I did some research and followed up their query – I was actually quite surprised with the results. A good guide to the saleability of property is the number of properties for sale, compared to the number that are sold, subject to contract. Now I carried this comparison out a last week, so the numbers will be marginally different today, but in Burton, there are 853 properties on the market for sale. Of those, 577 are fully available on the open market waiting for a buyer and 315 have buyers and are sold subject to contract. That means 36.9% of property on the market has a buyer in Burton.

However, delve deeper, and in Burton today, 33% of terraced houses on the market have a buyer and, great news for semi owners, as 40% of them have buyers too. Bungalows are doing nearly as well, with 28 of the 72 on the market having buyers (making a 39%). The properties that appear to be sticking though are the detached houses – only 81 of 264 on the  market have buyers, a very low 31%. Leaving the best to the end though, its apartments that surprise me, with 35 of the 83 on the market (42%) having a buyer (interestingly in Derby only 30% of the apartments have buyers!).

I am always giving advice to my existing and new landlords in Burton on what to buy (or not as the case may be). Having this detail of information at my fingertips, allows me to spot trends in the local market, that enables to me to give the very best advice and opinion to my clients. I don't charge for that advice as I have plenty of opportunity to earn money by finding the best tenants for my landlords in the years to come on the investment that I have advised on.

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