Why should you consider getting into buy to let in Erewash, Broxtowe and the Amber Valley

 

In a recent article, when we spoke about the difference between the four towns of Ilkeston, Heanor, Eastwood and Belper property markets, it produced a number emails and a couple of people making contact with me  for a chat about investing in buy to let.

Many people in our part of Derbyshire and Nottinghamshire have seen the buy to let market become all about nest egg investment, over the last few years. 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 Erewash and Amber Valley, the average annual yield is in the order of 3.4% to 5.5% per year (depending on which town and type of property you buy of course).

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 the market, you will have an asset that in real terms is dropping). Taking Ilkeston as an example (but the figures are just as relevant for Heanor, Eastwood and Belper) as we mentioned in a previous article, average property values in Ilkeston currently stand at £143,400. Property values in Ilkeston have risen by 15.4% 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 Amber Valley and Erewash landlords. Roll the clock back 10 years to 2004, the average value of a property in Ilkeston was £97,700. 15 years to 1999 makes interesting reading, as the average Ilkeston property value was only £50,100, 30 years makes it £15,700 and just for a bit of fun, we looked at 1974 when it was £5,940!

However, if one looks at say a 30 year investment period, if you had put £15,700 into the stock market in 1984 instead of buying a house in Ilkeston, your shares today would be worth £91,008. Put the same £15,700 in a Building Society account and you reinvested the interest back into the account, and your Building Society passbook would have £86,889. Compare that with the property market in Ilkeston and the property would be worth £143,400 today. Quite a bit of difference to the building society until you realise that with the rental property you would have received in excess of £78,000 in rent over those 30 years, which wouldn’t have received with the Building Society account!

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

Quick to Rent, 7.5% yield Kirk Hallam

 

Kirk Hallam is always popular when it comes to renting and this 2 bedroom home new on the market is sure to sell fast.  It’s  priced at £79,950 and we believe it could easily achieve a gross rent of £490 per calendar month.  There really isn’t much for you as a landlord to do as it’s practically ready to let, except for may be removing the kitchen carpet and popping some lino down!  If you can haggle the price down, you’ve got a minimum yield of 7.4% - book that viewing as properties like this one sell fast.  When you’ve seen it, give me a call so we can discuss your strategy further!

Ilkeston v Heanor v Eastwood v Belper property values – which town has performed the best?

One topic that I am always asked about, both by existing landlords and new ones, is how one towns’ 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, also known as capital appreciation, has been strong in recent times in both Amber Valley and Derby to Erewash areas 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 yield, or annual return.

A landlord from West Hallam who has a number of properties in both Amber Valley and Erewash, asked me a few weeks ago about the difference between the Ilkeston, Heanor, Eastwood and Belper housing markets. I was quite surprised with my findings and wanted to share them with you.

The average property price in Ilkeston is currently £143,400. In the last 3 months property values in Ilkeston, according to my calculations, have risen by just over 3%  which starts to claw back the losses we experienced in the latter half of 2011 when values dipped by nearly 6% in the town. However, irrespective of the roller coaster prices that we have seen in the Ilkeston, they are still 15.4% higher than the 2009 slump (before you get the party hats on, we still have 6% to go before we reach the 2007 peak!).

Looking across the rest of the area property values in Heanor have risen by 3.5% taking an average property up to £137,100, whilst Eastwood has seen property values rise by £3,200, taking an average property up to £117,000, a rise of 2.8%.  Finally, Belper has seen the highest monetary value increase with an average property rising by £6,000 in the last 3 months, but as average property values in Belper were quite high to begin with, this is only a 2.9% increase in the last 3 months (an average property in Belper presently being worth £209,700).

Each Ilkeston, Heanor, Eastwood and Belper landlord will have different needs and requirements in his or her property investment. We don't sell property, so are 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 us to spot any trends or opportunities for buy to let landlords. If you would like to discuss my thoughts on the rental markets, feel free send me an email to lettings@sprucetree.co.uk or telephone me on 01332 910499

Erewash, Broxtowe and Amber Valley – Battle of the Postcodes?

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 Erewash and Amber Valley, we don’t have many Russian Oligarchs and Saudi Prince’s buying multi million pound properties. However, I thought it would be a good idea to look at the different postcode areas in Erewash and Amber Valley and, after doing some investigating, I did find out some interesting info which I would like to share with you.

Four of the main postcodes of the areas are DE7 (Ilkeston + villages), DE75 (Heanor and the immediate villages), DE56 (Belper and the immediate villages) and NG16 (Eastwood and the immediate villages). Over the last five years, since 2009 (which was the year after the property slump of 2008) most property values in all of the postcodes mentioned have risen by 7% to 8% across the board. However, how each postcode area’s property values has got there, has been a completely different story.

By 2010, property values in the DE postcodes of DE7, DE75 and DE56 rose by 6.5%, 6.7% and 6.8% respectively, whilst Eastwood’s NG16 only rose by 4%. 2011 the tables were turned as Eastwood property values dropped by 0.9%. Not good in anyone’s books, but when compared to the Derby trio of postcodes, they slumped a lot further with DE75 dropping 6%, DE7 by 5.8% and DE56 by 5.1%. One year later in 2012 and our Derby trio recovered well, starting with DE56 where property values rose by 2.3%, then DE7 by 3.1% and DE75 by 3.8% but Eastwood’s NG16 property values dropped ever so slightly by 0.8%.

2013 was a level playing field, with all postcodes seeing an almost equal growth of 1.5% to 1.8% increase. Finally though, as we are over half way into 2014, values have seen another push in NG16 of 4.5%, whilst DE7,  not wishing to be hard done by, have put in a  decent effort with property values increasing by 3.6%, leaving DE75 and DE56 putting in a  respectable increase of 1.5% each.

Therefore, if you are considering buying a property for investment in the near future, as I don't sell property, I am always happy to give you my considered opinion on which area or  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 old, with us with someone else, just pick up the phone on 01332 910499 or email on lettings@sprucetree.co.uk

 

3 Bed with Office Space Langley Mill upto 7.75% Yield

Asking for offers over £70,000, this property could work out as a bargain...having plenty of space and already seemingly finished to a reasonable standard. Certainly worth a look to see how it stacks up against other terraced properties in te area. Check it out today and then give us a call to help you get it let! 

Belper – the place to buy a buy to let?

One of the final chunks of census data has recently been released by the Government, and for those of you that like to look at the data, it is a treasure trove of information. Information is so important when making decisions on what (or not) to buy when investing in property. The census data allows anyone to look at the data for villages, towns, housing estates, even down to individual roads. Such information allows us to weigh up potential hotspots in the rental market and show potential landlords where there could be an opportunity.

 

After chatting with landlord from Kilburn, I wanted to share with you some of the information I found out about Belper from the local census and how it helped him decide where to buy his next buy to let property. In Belper, there are 21,823 people living in 9,981 properties in the town. That means 1,275 new people live in the town as the population was only 20,548 in 2001.

However, it is the home ownership percentages that really get me interested, as it is this information, tied in with our intimate knowledge of the market, where we can match tenant demand to an under supply of rental properties. In 2001, there were only 8,788 households, so there have been nearly 1,200 houses built. At that time, 6.37% or 560 households were privately rented. You can see over half of those new homes have been bought by landlords, as, in 2011, the number privately rented properties had shot up to 1,119 properties.

 

So do we have over saturation? No, quite the opposite in Belper. The national average is 15.6% of households being rented, and in nearby Nottingham, it’s in the early 20%’s. Belper has a modest 11.8% of its households being privately rented. As it’s a great place to live and still very affordable, with such excellent demand from tenants but a below average percentage of available rental properties, this could be the right area to purchase your next buy to let investment.

Therefore, if you are considering buying a property for investment in the near future, as I don't sell property, 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 old, we’re certainly more than happy for you to pick up the phone or email me direct on lettings@sprucetree.co.uk

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Large 3 Bed 8% Yield Langley Mill

This large, 3-bed, end of terrace property  in Queen Street Langley Mill could do with some TLC as part of a general refresh – but it’s sheers size makes it worth a look – with a yield around 8% based on the £74,950 asking price. Go and have a look and see what you think.