Thursday, 4 September 2014

Are the Heanor and Eastwood Property markets a runaway train?




 

Some of my landlords invest for yield, some invest for capital growth (however, it’s very difficult to get both in this market). Everyone is different; if you are a landlord in Erewash and Amber Valley, who invests for capital growth as opposed to yield, it is crucial to build in capital growth in a property by getting a property at a discount or by finding a way to add value.
So, how can you get a discount in this property market, with Erewash and Amber Valley property values alight and property being snapped up over night? Achieving capital growth in the area is going to be tough over the coming few years isn’t it? Well yes and no, looking at the headline figures, of the 231 properties available for sale today in Eastwood, 56 of them are sold subject to contract, an impressive 24.2% which is obviously a sign of a decent Eastwood property market (I can remember when less than 1 in 20 houses were sold at any one time a few years ago). Looking at Heanor the figures are very similar with an identical number of properties on the market with an impressive 70 sold, subject to contract.  This means that 30.1% of houses have a buyer. 



We asked Rightmove for all of the properties that had come on to the market in Eastwood in the last 28 days (51 to be precise), and after one month, how many of those 51 had found buyers? ... Well only 2 properties!  Looking at Heanor and of the 46 properties that have come on to the market in the last 28 days only 6 are sold, subject to contract.. this indicates the property market is good but it’s not a runaway train, is it?

The main thing is that landlords must take as much advice as possible. They will need to take a long and serious look at any existing properties or new ones to make sure they can achieve capital growth and that this increases in line with inflation.  I have a great technique for finding properties that have been on the market for sale over three months or more. You don’t need any special software. All you need to do is ask Rightmove to list your search results (when searching), with the most recent first. The ones on the last few pages are by definition, the ones that have been on the market longest and potentially ready to do a deal .. simple but effective.

As we don't sell property, we are able to look at the whole of the Ilkeston, Heanor, Eastwood and Belper property market.  In all four towns, there are good agents and bad ones, but one thing is always the same,  they are all paid by a vendor to sell you a property, not paid by you to help you buy. Therefore, when they show you that bargain, don’t get pressured into buying a property until you have a good feel for the market. We have many landlords who send me a web link of any Erewash and the Amber Valley properties they are interested in and I always give my honest opinion. (It might not be what you want to hear, but it will always what you need to hear!).

So why do we do that? Well, we are a Lettings Agency. Once you’ve bought the property, we would very much like to manage it for you or help with just finding you a tenant. If we give our opinion, at no cost or obligation, then we start to build a relationship, you may just start to trust us and as we will be giving you great customer service, which at the end of the day, is what landlords want from their letting agent and you might end up asking us to be your agent in the future (but of course there is no obligation to do so). With that considered, it’s very much in our interests that you buy something that’s sensible and lettable – we don’t want you buying a dud, or something where the figures don’t stack up! 

If you would like to discuss my thoughts on the rental markets in Ilkeston, Heanor, Eastwood and Belper feel free to email me on lettings@sprucetree.co.uk or pick up the phone on 01332 910499

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