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.

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!

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.

£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?

 

 

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.

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.

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.

 

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