Tuesday, 23 December 2014

2014 – a funny year for the Ilkeston property market?


 

A number of landlords, who own property in Ilkeston, have made contact with me recently asking for my thoughts on the future of the buy to let market in Ilkeston. In previous articles, we have talked about Ilkeston’s history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values rose by 4.5% (Oct 13 to Oct 14) in Ilkeston over the same time frame. Good news all round, but when you consider property values have previously dropped by 17% between September 2007 and June 2009, this is not as good as the media would have you believe.  It should be no great surprise to hear that Ilkeston property values are starting slow up as we head in to the New Year.  Whilst property values in Ilkeston were growing by nearly 1% a month in the Summer months, on the run up to Christmas, they have slowed and now actually dropped last month by 0.1%. 

The reality is we have had a year and a half of decent market conditions in Ilkeston, but now all that pent up demand is starting to fade. The big question moving forward is whether the Ilkeston market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Ilkeston property market.

Looking at the UK as a whole, because we can’t look at Ilkeston in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Ilkeston, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-

“Should I sell my property in Ilkeston, or even buy another?”
“Is the time right to buy another buy to let property in Ilkeston and if not Ilkeston, where?”
“Are there any property bargains out there in Ilkeston?”

Many other Ilkeston landlords, both who are with us and many who are with other  Ilkeston letting agents, like to pop in for a coffee to  discuss the Ilkeston property market, how Ilkeston compares with its closest rivals; Eastwood Belper and Heanor, and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a prosperous 2015.

Thursday, 18 December 2014

Are less properties for sale in Amber Valley and Erewash?


 

My friends often call me an estate agent, but then I remind them that whilst a lot of estate agents do both sales of property and letting of property, we are a letting agent only and always plan to be. One landlord who emailed me (which followed on with a telephone conversation) about the Amber Valley and Erewash property market got talking to me about how he thought there were less for sale boards in Amber Valley and Erewash than there were ten, even fifteen years ago.

All the newspapers talk about is a crisis of a lack of properties. Building new property is not like the Mars bar factory that can keep the machines going an extra couple of hours to make more Mars bars. The Government says 200,000 properties need to be built each year for the next ten years. For Erewash to take its share of that 200,000, that would mean 441 properties would have to be built in the area each year for the next ten years, whilst in Amber Valley, they would need to build 476 properties in the same time period... yet in the last ten years in Erewash we have only build 119 properties a year on average and in Amber Valley 158 per year.

People in popular areas, such as our own in Amber Valley and Erewash, say they want more properties for their children and are usually in favour of more homes being built, as long as they are not in their local area. Increasing supply of houses leads to more congestion, crowded amenities and loss of greenbelt. Then, and here is the big reason, those homeowners have a vested interest to keep the building low because an increased supply reduces the value of their existing home.

Therefore, existing local homeowners have a vested interest in keeping the supply as low as possible in their area. Finally, a lack of council houses since Mrs T. encouraged the sale of council housing after she was elected in 1979, the number of new social housing to replace them (a euphemism for council housing) has been very low.

However, getting back to the point, it’s a simple fact that since the 2007 crash, the number of properties that are selling in  Derbyshire has dramatically reduced. In the late 1990’s  around 1,256 properties a month were selling each month in Derbyshire. In the first half of the 2000’s decade, when we had a rising market, around 1,640 properties were changing hands each month in Derbyshire. In 2008, the year of the property crash that dropped to 470 per month and didnt grow that much until the back end of last year, whilst in 2014 (throughout the Spring and Summer of 2014) on average 1,100 properties in Derbyshire have sold.

If you would like to discuss my thoughts on the rental markets in Ilkeston, Eastwood, Heanor and Belper, please pick up the phone on 01332 910499 or pop into our offices in Denby House Busyness Centre, Tailor Lane, Heanor DE75 17A or email me at jeremybullock@sprucetree.co.uk

Thursday, 11 December 2014

What sort of property is selling in Heanor?




 

Heanor attracts property hunters seeking a home in our town that strikes a wonderful balance between old and new. Luckily, just about every accommodation preference can be catered for here, from highly desirable detached houses in Heanor and the rest of the Amber Valley, which are perfect for families, popular 1930’s bay front semis houses, imposing late Victorian terraced houses and modern luxury apartments dotted around the Town. But with newspapers giving mixed messages on what is exactly happening in the town, let us have a look at what has happened over the last 12 months, in particular, what type of property is actually selling.

Between August 2013 and August 2014, 323 of the 7,221 properties sold and changed hands in Heanor. The best performing type of property was terraced houses, with an average sale price of £92,642; representing 34.8% of the property sold in Heanor (which when you consider only 27.1% of Heanor property is terraced, this means terraced houses have done well). Next are semi detached houses. They represented 32.5% of the sales but semi detached properties only make up 38.3% of the property in Heanor.

Detached houses in Heanor represented 32.5% of the house sales in the last 12 months, but they make up only 28.6% of the housing stock in the town, again this is great news for owners of detached houses showing that this type of property has sold well in the last 12 months. 

However, the anomaly seems to be apartments because, according to the Land Registry, no flats or apartments have sold in the town during the last 12 months even though there are 422 in Heanor.

What does this mean for the property owners of Heanor? It means that there is a two tone property market place in Heanor. Most homeowners start with a terraced, aspire to move to semi detached houses, then as finances allow, they move to a detached property. The majority of apartments, especially in the Town Centre, were purchased by landlords to rent out to tenants, so they have no need/want to trade up on the property ladder.  There are a small number of homeowners who are still in negative equity, which in some cases, property values of some Heanor apartments sold at the height of the boom are still 20% to 25% lower than what was paid for them in that 2007 boom.

However, on average general Heanor property values are only 11% off those 2007 property boom, we are seeing some good sales and if you look hard enough, you may chance upon a "hidden property gem" in the most unlikely of places.

Thursday, 4 December 2014

What is really happening in the Derbyshire property market?



 

In Derbyshire (excluding the city itself), property prices are still 11% below the level that was achieved in the 2007 property boom (before it went pop in early 2008 with the credit crunch).  If Derbyshire people sold their properties today, the cost of living has increased by 19% over the last seven years too, so the money they would get from the property would actually be, in real terms, 30%  lower ( 19% inflation/cost of living  + 11% below the 2007 boom)  than if they’d sold in 2007.

Average Derbyshire house prices are in a constant state of microflux. Over the last nineteen months, the trend has been in an upward direction. The price of a typical Derbyshire home increased by just 0.2% in September, whilst in August they rose by 0.6% and in July 0.8% (but in May they remained stagnant at 0%).  Looking at monthly figures can be dangerous, so looking at the Land Registry figures, the annual rate of Derbyshire house price growth moderated in September to 5.3% from 5.7% in August.

The slowdown was not entirely unexpected, given mounting evidence of a moderation in activity in recent months.  Mortgage approvals declined by almost a fifth between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries. But on the other side, with the labour market strengthening, landlords are looking for a home for their savings, mortgage rates are expected to remain low and with consumer confidence rising activity is likely to recover in the months ahead.

Rightmove have recently released some data on Derbyshire and the immediate area, and they make fascinating reading. The peak of the property market last decade in Derbyshire is recognised as November/ December 2007.  Whilst property values are still 11% lower than that boom, homeowner’s asking prices are 0.3% higher than the 2007 boom.  Therefore, there is an argument to say, some (not all) Derbyshire asking prices are a little high but the price the properties are actually selling for, is a decent and reasonable figure. .. there you should always make a decent and realistic offer!

It all comes down to doing your homework, asking questions of the agent and the owners. Find out their motivation for selling and see if you can ‘bag that bargain’. Trust me they are still out there. As we don’t sell property, I can look at the whole of the market and give you an honest opinion on its investment potential. In fact very soon, I will be starting to put on what I consider the best buy to let deals there are on to the ‘Spruce Property Blog’.

Sunday, 30 November 2014

Yearning for a high yielder in Marlpool?


This 2 bedroom semi in popular Marlpool appears impressive.  Your Tenants will find a bright modern and spacious home ideal for a small family.  In walking distance of the nearest school, doctors and dentist and even major supermarkets if they’re feeling that bit energetic!   
 
 
Marlpool always attracts lots of attention and I’m sure this wouldn’t sit empty in your portfolio for too long!  Priced at £85,000 we think you could easily achieve around about 7.2% yield.  I’ll get writing the lettings advert to attract you some great tenants if you give me a quick call after your viewing.

Saturday, 29 November 2014

Weekend Treat - 8.2% Yielding Heanor Home!

This Heanor 3 bedroom property advert jumped out at us when we looked at it.  Internally we can’t see too much going wrong, but a little extra kerb appeal wouldn’t go amiss to make it more attractive outside.
It’s been on the market a little while now so the owners might be ripe for an offer!  At just £84,950 we think even if you paid the asking price you’d yield 7.4%.  If you can sweet talk the vendor’s agents you might be able to get yourself a more impressive yield of around about 8.2%! 
 This property really does seem worth a look – Once you’ve viewed we can discuss it over a coffee!

Friday, 28 November 2014

Eastwood bargain - potential high yield


 
Eastwood gives us this little 2 bedroom gem, priced at just £80,000 ready for the smart investor.  We think you could easily achieve a 7.4% yield.  It’s a tidy property presented nicely with very little to do.
This property has great transport links.  It’s  convenient location near schools and supermarkets makes it ideal for a young couple or a family.  Why not view it and then place an offer as it seems like too good an opportunity to let it pass by.  Remember, we don’t sell houses, we only let so you know we’ll give you an unbiased view.  Give a call.

Thursday, 27 November 2014

£14,109,984 – the total rent paid by Ilkeston tenants a year


 

In the last few months, politicians in Westminster have decided to step into an area which affects many of us - property. Anyone who rented property in the 1970s and 1980s knows the difficulties of tenancy agreements from that era which allowed the tenant the right to stay in the property for life. In some cases, tenancies could be transferred to their children, rents could not be increased and tenants could not be removed. One of the suggestions by one of the opposition parties is rent controls. With more than 4.4 million people renting 3.4 million properties in England alone, it was clear that this could be a policy that was purely playing with the sentiments of these tenant voters.

Under the current legislation, tenants are already in a position to challenge rent increases that are unreasonable and they have the advantage of giving a months’ notice to the landlord (when the tenancy is a rolling agreement ie periodic tenancy) . But do rents need capping? Well in Ilkeston, there are 5,235 people renting 2,333  rental properties. The average rent of a Ilkeston property in 2008 was £525 per month. If Ilkeston landlords had raised the rents in line with inflation, (which sounds a very fair to anyone), as inflation has been a total of 19% since 2008, the average rent in Ilkeston should be today £525 + 19% = £624. At this moment in time, the average in Ilkeston is £504.. and those figures are being repeated all around the UK.

However, restricting rent rises in the future could put more properties back on the market for sale as it would destroy the confidence in the housing market. In turn, this would reduce property prices. With less property available to rent, and a lack of interest from potential investors (due to the poor yields) this policy would end up creating a shortage of affordable housing.

Even with the vast increase in renting in Ilkeston over the last ten years, (5.85% of property being rented in 2001 to 11.8% in 2011), the number of homeowners in Ilkeston only dropped by 3.2%.  It is clear that the changes to the law of tenancy agreement made in Housing Act 1988 resulted in benefits to both landlords and tenants. The law has made it easier to rent a property and at the same time, the Assured Shorthold Tenancy gives the tenants a right to quiet enjoyment of the property for a period of time. Yes, the total rent paid by Ilkeston tenants is an awful lot of money, £14,109,984 a year in fact, but as rents are free to move up, but just as important down, why fix what isn’t broken?

 

 

Tuesday, 25 November 2014

7% Yield in Stapleford


An apartment isn’t my usual choice but this 2 bedroom flat in Stapleford really caught my eye - being sold for just £86,000.
 
Built in 2005, this modern flat is ready to move into.  This property will appeal to professionals and especially to the security conscious.  It’s close to Nottingham and has parking behind electric gates. 

The property has a long lease and low service charge so it won’t eat into your profits.  Yielding approximately 7%, it’s worth a look.  When you’ve seen it get in touch so we can discuss the way ahead.

Thursday, 20 November 2014

Eastwood Terraced houses - three beds or two beds ? Which is the best for Buy to Let?


 

 

Last week, I spoke to one of my landlords and she asked me if the number of bedrooms in a property had any relationship to the return she could get. I did some research and followed up her query – I was actually quite surprised with the results...

Currently in Eastwood, the average rent for a two bed terraced house is around £478 per month with an average value of £82,100. This means an approximate return/yield of 6,98% per year. This is of course the average as there are some two bed terraced houses on the market for rent at a higher price than some three bed terraced houses. In fact, some two bed terraced houses in Eastwood can attract rents in the early £500’s whilst some smaller terraced houses can be rented for as little as £430 per month. This means yields on three beds can range between 6% and 9%.

Three bed terraced houses in Eastwood can be priced anywhere between £120,000 in one of the better streets in Eastwood and as low as £85,000. Again, rents can be quite varied, ranging from over £475 per month to £550 per month. However, looking at the average rent for a three bed terraced house in Eastwood, I calculate it to be £497 per month with the average value being £101,300 which gives a return/yield of 5.88% per year.

Quite obviously a two bedroom terraced house offers a much better yield than the three bedroom terraced. Whilst three bedrooms are more expensive to buy, sometimes they will let better. Do they sell better? Well, 25% of the three bed terraced houses on the market in Eastwood at this moment in time are sold stc compared to 26.8% of two bed terraced houses – so not much difference there.

It really comes down to the property and type of tenant. Three beds attract sharers, which brings both advantages and disadvantages to the landlord but two beds have better yields. It depends what you want from your investment. I know the lettings market in Eastwood so I can advise you what you can expect to achieve in rent and how it go up in value together. I don't sell property, so I don't make a penny out of you buying something, I make my money ensuring I can find the best tenants for the best properties. If you would like any advice on choosing properties, come and see us at our office in Heanor or email me at lettings@sprucetree.co.uk.

Thursday, 13 November 2014

Are yields of 8.4% per year on Cotmanhay Estate the best Ilkeston has to offer the investor?


 
 
I regularly talk to landlords about investing in Ilkeston, Heanor, Eastwood and Belper.  Following a discussion with one of them last week, he asked me to look into the Cotmanhay Estate area, and whether it was a good place for him to invest in.  There was a 3 bed semi up for auction in mid October with Guide Price of £76,000. Average rents in these types of properties have risen by 19.5% since 2008, which is amazing considering average rents in Ilkeston are in fact 4% lower (on average) than those being achieved in 2008.

Let’s say you buy it for £70,000, the achievable rent will be in the order of £478 to £500, depending how much effort you have put into presenting it; but being sensible, we are still looking at a yield in the region of 8.1% to 8.4% per year ... yields that are only normally achieved in risky HMO’s (Houses of Multiple Occupation ie Student housing .. with the fun and games that brings!). Property values since 2002 have risen, according the Land Registry, in Ilkeston, by 58% but looking at the properties that sold in 2002 and again more recently, average increases in property values on the Cotmanhay Estate been in the region of 41.5% over the same time frame (not bad for an ex-Local Authority area where one would think it would be considerably less than the town’s average).

So is this an investors paradise – great rental growth, great yield and reasonable capital growth?. Well, all is not as it seems. This is a great example of the headline numbers (yield and capital growth) being not the only factor to consider when choosing an investment property, as you should also consider how long it takes to find a tenant. The average time it takes to find a tenant in the Cotmanhay Estate area can be up to six to eight weeks, whereas in most other parts of Ilkeston a tenant is usually found in one or two weeks. If you take into account the extra five or six weeks of void period for your property,  every six to nine months, because tenants in areas in such as the Cotmanhay Estate tend to have a high propensity to move more regularly and the extra fees a landlord has to pay each time a tenant moves in and out, the annual overall return from the property is lower than it seems.

We don’t sell property, but we can help you to find the best investment property with our specialist lettings advice. It is in our interest that you buy a property which will rent well, and for long periods of time. If you would like any advice on choosing properties, come and see us at our office in Heanor or, email me at lettings@sprucetree.co.uk.
 

Thursday, 6 November 2014

Who owns what property in Amber Valley?


 

Last week, a couple from Belper, came in to discuss with me about them potentially investing in the Heanor or Belper property market for Buy to Let for the first time. As my regular readers will note, the most important consideration you will make before investing in property is the balance between annual return/yield and the annual value increase/capital growth. However, what affects those two things (yield and capital growth) in Amber Valley are very varied and complex. The quantity of property and whether property is owner occupied, social housing (posh words for council housing) or private renting has a big difference on yield and capital growth.

 
The growth in home ownership in Amber Valley, which started in the 1950’s, continued through the 1960s and, by 1971, the proportion of owner occupiers was equal to those renting. By 1981, 56% of Amber Valley households were owner occupied and, for the first time, the proportion of rentals was less than home owners but by 1991, it reached 75.9%. Roll into the 21st Century and in 2001, there was hardly any change in the tenure structure in Amber Valley, as owner occupation stayed relatively unchanged at 77.16%. The significant change over the decade (1991 to 2001) was within the rental sector, where the proportion of households privately renting increased for the first time since 1918. 5.81% of households were privately renting in 2001, while those socially renting had decreased to 13.31%.

Between 2001 and 2011, the number of households in Amber Valley rose from 49,129 to 52,596, an increase of 7%, but the percentage of households that were owner occupiers in Amber Valley dropped significantly to 74.1% (from the previously quoted 77.1% in 2001). However, that doesn’t tell the full story, because whilst there was a significant drop in the percentages (77.1% to 74.1%), the actual numbers tell a completely different tale. In 2001, 37,911 households in Amber Valley were owner occupied but by 2011 that figure had actually increased to 38,978 households .. so why the drop in percentages when the actual numbers increased?

In 2001, 2,854 houses were privately rented (5.81%) in Amber Valley but roll on another ten years and there are 5,618 households in Amber Valley that are privately rented (10.7%). The rapid increase in the number of households privately renting in Amber Valley could be linked to the decline in the number of households getting on the housing ladder, usually by way of a mortgage.

This is mainly because of the increasing difficulty for first time buyers being able to raise deposits for a mortgage, which haven’t been helped by high property prices. The average Amber Valley house price for those who were first time buyers increased by 91.3% between 2001 and 2011. This meant larger deposits which are linked to the house price, were required. Also tighter lending requirements, especially in the wake of the recent credit crunch meant a larger percentage of the house value was required as a deposit, as 100% mortgages became a thing of the past.

Finally, declining wage growth and rising inflation over the period exerted pressure on household spending and eroded the value of savings. While in 2001 the average house price in Amber Valley was four and half times the average gross wage, by 2011 the average Amber Valley house price was seven times larger than the average wage. This meant households needed to save for a longer period in order to provide a deposit.

Having this knowledge of the Amber Valley property market to hand enables me to give to my landlords the best advice on what (or not) to buy for buy to let. Irrespective of you are a landlord with another agent or someone who is thinking of dipping their toe in the water for the first time as a buy to let landlord, if you want to pick my brains on any matter to do with the Amber Valley or Erewash  property market’s, please feel free to email me at jeremy.bullock@sprucetree.co.uk

Monday, 27 October 2014

Roper Avenue (Heanor) property market outperforms Smalley Village by 32%



 
I was talking to a couple last week, who are considering becoming landlords for the first time after they had come into some money knowing the return they would get investing in the Bank. They have always lived Heanor and wanted to buy something in the town, or close by, as they know the area well. They were looking for advice as to what kind of property they should buy, but they particularly wanted it to be South of Heanor’s town centre.

Their budget was in the £200,000 to £220,000 region, so I initially looked at property in Smalley Village. The average value of a property in Smalley Village is £217,307.  An average property in Smalley Village rents for £841 per month, giving an average yield of 4.63%. They thought that yield was rather low so I then considered the Roper Avenue area of Heanor.  Semi detached houses are worth on average £102,200 here and rent for  around £523 per month, giving a much better yield of 6.14%, which is proportionally just over a third (or 36.2% to be precise) more than Smalley Village.

However, to judge a rental investment, you must consider the capital growth as well as the yield. Since 2002, the average Roper Avenue semi has risen by 79%, whilst properties in Smalley Village have risen by 112.1%. Ultimately, we found both areas to be a good investment depending on your own situation, but as you can see, Roper Avenue does offer better yields, but at the expense of better capital growth than Smalley Village offers.  

If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our offices Denby House Business Centre on Taylor Lane in Loscoe  for a chat or email me direct on jeremy.bullock@sprucetree.co.uk
 

Wednesday, 15 October 2014

What has the Help to Buy scheme done to the Belper 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 will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Belper 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 Belper 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 Belper of around 4% to 7% per year and the values increasing by 3.81% in Belper, and the overall yearly return is the region of 9% per year.  Of course these are averages and some landlords will get lower (or higher) figures.

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 in the Denby House Business Centre (just off Taylor Lane in Heanor) or email me on lettings@sprucetree.co.uk 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 Amber Valley and Erewash to be had.

 

Monday, 13 October 2014

What has the Help to Buy scheme done to the Eastwood 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 will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Eastwood 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 Eastwood 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 Eastwood of around 4% to 7% per year and the values increasing by 5.94% in Eastwood, and the overall yearly return is the region of 10% per year.  Of course these are averages and some landlords will get lower (or higher) figures.

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 in the Denby House Business Centre (just off Taylor Lane in Heanor) or email me on lettings@sprucetree.co.uk 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 Amber Valley and Erewash to be had.

Friday, 10 October 2014

Should you be buying property in Belper?


 

A number of landlords, first time buyers and investors have approached me recently, asking about the Belper 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 Belper have risen, on average by only 3.81% 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 Belper, 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 I expect prices to continue to rise in the short term.

Speaking to others in Belper, the issue isn’t house price inflation, but a lack of realistically priced properties coming onto the market for sale, a lack of supply. So should you be buying a property in Belper?  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. Belper 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 Belper 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 Belper 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 Belper 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 Belper property market?

Thursday, 9 October 2014

Are there any property bargains in Eastwood?


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 per cent 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 Eastwood (and the surrounding towns such as Ilkeston, Belper and Heanor)?

Well, if you do your homework, there are still plenty of good buys in Eastwood. 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 Eastwood.

Back in November 2012 a three bed link detached house came up for sale in Acorn Avenue, in Giltbrook with an asking price of £104,950.  I kept the brochure and it had an average white modern bathroom suite, modern kitchen but with tired decor and even more fatigued carpets. The property also offered gas central heating and double glazed windows.  It sold in April 2013 for a very reasonable £100,000 just over one year later, and the new owners replaced the carpets, gave the place a lick of paint, spent a few thousand pounds on the kitchen and sold it again for £130,000 in June 2014.  An uplift of 30% (not bad when you consider that average property values in the same time frame in the Eastwood area only rose by approximately 7%!).

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 do not charge for this service, because if I offer you an honest and straight forward opinion, you may 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 in Heanor or email me on lettings@sprucetree.co.uk or telephone on 08456 86 0499 to chat about the ups and downs of the property market in Eastwood.

Monday, 6 October 2014

What has the Help to Buy scheme done to the Heanor 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 will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Heanor 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 Heanor 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 Heanor of around 4% to 7% per year and the values increasing by 7.39% in Heanor, and the overall yearly return is the region of 12% per year.  Of course these are averages and some landlords will get lower (or higher) figures.
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 in the Denby House Business Centre (just off Taylor Lane in Heanor) or email me on lettings@sprucetree.co.uk 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 Amber Valley and Erewash to be had.

Friday, 3 October 2014

Should you be buying? Eastwood Property Market


 

A number of landlords, first time buyers and investors have approached me recently, asking about the Eastwood 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 Eastwood have risen, on average by only 5.94% 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 Eastwood, 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 I expect prices to continue to rise in the short term.

Speaking to others in Eastwood, the issue isn’t house price inflation, but a lack of realistically priced properties coming onto the market for sale, a lack of supply. So should you be buying a property in Eastwood?  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. Eastwood 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 Eastwood 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 Eastwood 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 Eastwood 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 Eastwood property market?

Thursday, 2 October 2014

Ilkeston property market has outperformed Bakewell’s by over 166%


 

Along with Ilkeston we have many towns and areas that make up our fine County, from the up market posh areas of the Hope Valley, Bakewell and Ashbourne all the way to our no-nonsense areas of Amber Valley and Erewash.  In fact I have a few landlords from Bakewell, one in particular who has a decent portfolio of buy to let property in Bakewell, the Amber Valley and Erewash. Let’s be honest Bakewell is a sophisticated market town which enjoys a well-earned reputation for stylish and convenient living close to abundant countryside and commons. The thriving High Street, offers a comprehensive range of upmarket shopping facilities and the schools in are highly sought after having excellent Ofsted results. All these factors make the average value of a property in Bakewell around £357,500.

Ilkeston has an excellent choice of shops, banks and restaurants, but not in the same league as Bakewell’s. Ilkeston will soon offer a brand new railway station (once the Great Crested Newts are sorted) together with existing excellent road links and there is a good choice of schooling within the area.  All these factors make the average value of a property in Ilkeston around £144,500.

In the last 12 months, the average value of a property in Bakewell and Ilkeston has risen in both places by roughly the same amount (Bakewell £13,629 and Ilkeston £13,795). However, that doesn’t tell the whole story, because average property values are much lower in Ilkeston. As a percentage, values in Bakewell have increased by a modest 3.96%, but in Ilkeston they have increased at more than double that rate, in fact 166% proportionally more at 10.55%. It shows that Ilkeston is a town that people want to invest in.

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 at no charge to anyone who asks, be they an existing landlord of ours or indeed another agent. I will also give it to anyone considering becoming a buy to let landlord for the first time.

I do not charge for this service, because if I offer you an honest and straight forward opinion, you may 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 in Heanor or email me on lettings@sprucetree.co.uk or telephone on 08456 86 0499 to chat about the ups and downs of the property market in Ilkeston.

Friday, 26 September 2014

Should you be buying in Heanor?


 
A number of landlords, first time buyers and investors have approached me recently, asking about the Heanor 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 Heanor have risen, on average by only 7.39% 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 Heanor, 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 I expect prices to continue to rise in the short term.

Speaking to others in Heanor the issue isn’t house price inflation, but a lack of realistically priced properties coming onto the market for sale, a lack of supply. So should you be buying a property in Heanor?  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. Heanor 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 Heanor 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 Heanor 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 Heanor 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 Heanor property market?