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.

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

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