Heanor Landlords and Tenants : What does the Tenant Fee Banning order mean for you?

Tenant Fees set to banned within 12 to 18 months

Rents due to rise as those fees passed to Landlords

Landlords won’t be worse off – and neither will tenants or agents

With our new Chancellor of the Exchequer revealing a ban on tenant fees in his first Autumn Statement on Wednesday what does this actually mean for Heanor tenants and Heanor landlords?

 

The private rental sector in Heanor forms an important part of the Heanor housing market and the engagement from the chancellor in Wednesday’s Autumn Statement is a welcome sign that it is recognised as such. I have long supported the regulation of lettings agents which will ensconce and cement best practice across the rental industry and,  I believe that measures to improve the situation of tenants should be introduced in a way that supports the growing professionalism of the sector. Over the last few years, there has been an increasing number of regulations and legislation governing private renting and it is important that the role of qualified, well trained and regulated lettings agents is understood.

Great News for Heanor Tenants

So, let’s look at tenants .. this is great news for them, isn’t it?  Well before you all crack open the Prosecco, read this …

Although I can see prohibiting letting agent fees being welcomed by Heanor tenants, at least in the short term, they won’t realise that it will rebound back on them.

First up, it will take between 12 and 18 months to ban fees, as consultation needs to take place, then it will take an Act of Parliament to implement the change. A prohibition on agent fees may preclude tenants from receiving an invoice at the start of the tenancy, but the unescapable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn will be passed on to tenants through higher rents.

Published at the same time as the Autumn Statement, hidden in the Office for Budget Responsibility’s Economic and Fiscal Outlook on the Autumn Statement (The Office for Budget Responsibility being created by Government in 2010 to provide independent and authoritative analysis of the UK’s public finances), it said on Wednesday …

“The Government has also announced its intention to ban additional fees charged by private letting agents. Specific details about timing and implementation remain outstanding, so we have not adjusted our forecast. Nevertheless, it is possible that a ban on fees would be passed through to higher private rents”

 

The charity Shelter and Scotland

Scotland banned Letting Fees in 2012. The charity Shelter have been a big voice in persuading and lobbying the Government since it managed to persuade the Scottish Parliament to ban fees in 2012. On all the TV and radio shows at the moment, they keep talking about their Independent Research, which they said showed that,

“renters, landlords and the industry as a whole had benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.”

Going on,

“Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees”

.. yet the devil is in the detail….

Only yesterday Shelter were quoting this Research from December 2013 to say rents never went up following the tenant fee ban in Q4 2012. I have read that research and I agree with that research, but it was published three years ago, only 12 months after the ban was put into place.

I find it strange they don’t seem to mention what has happened to rents in Scotland in  2014, 2015 and 2016 .. because that tells us a completely different story!

What really happened to rents in Scotland?

 

I have carried out my research up to the end of Q3 2016 and  this is the evidence I have found..

In Scotland, rents have risen, according the CityLets Index by 15.3% between Q4 2012 and today

 (CityLets being the equivalent of Rightmove North of the Border – so they know their onions and have plenty of comparable evidence to back up their numbers).

When I compared the same time frame, using Office of National Statistics figures for the English Regions between 2012 and 2016, this is what has happened to rents

North East 2.17% increase

North West 2.43% increase

Yorkshire and The Humber 3.21% increase

East Midlands 5.92% increase

West Midlands 5.52% increase

East of England 7.07% increase

South West 5.82% increase

South East 8.26% increase

London 10.55% increase

….and let me remind you about Scotland … 15.3% increase.

Are you really telling me the Scottish economy has outstripped London’s over the last 4 years? Is anyone suggesting Scottish wages and the Scottish Economy have boomed to such an extent in the last 4 years they are now the Powerhouse of the UK? .. because if they had, Nicola Sturgeon would have driven down the A1 within a blink of an eye, to demand immediate Independence.

So what will happen in the Heanor Rental Market in the Short term?

Well nothing will happen in the next 12 to 18 months .. it’s business as usual!

… and the long term?

Rents will increase as the fees tenants have previously paid will be passed onto Landlords in the coming few years. Not immediately .. but they will.

 

As a responsible letting agent, I have a business to run. It takes, according to ARLA, (Association of Residential Letting Agents) on average 17 hours work by a letting agent to get a tenant into a property. We need to complete a whole host of checks prescribed by the Government; including a right to rent check, Anti Money Laundering checks, Legionella Risk Assessments, Gas Safety checks, Affordability Checks, Credit Checks, Smoke Alarm checks, Construction (Design & Management) Regulations 2007 checks, compliance with the Landlord and Tenant Act, registering the deposit so the tenants deposit is safe and carry out references to ensure the tenant has been a good tenant in previous rented properties.

All of which the vast majority of lettings agents take very seriously and are expected to know inside out making us the experts in our field. Yes, there are some awful agents who ruin the reputation for others, but isn't that the case in most professions?

.. but business is business.

No landlord, no tenant and certainly no letting agent does work for free.

I, along with every other Heanor letting agent will have to consider passing some of that cost onto my landlords in the future. Now of course, landlords would also be able to offset higher letting charges against tax, but I (as I am sure they) wouldn’t want them out of pocket, even after the extra tax relief.

So what does this all mean for the future?

The current application fee for a single person at my lettings agency is £125 and for a couple £250 .. meaning on average, the fee is around £200 per property.

I am part of a Group of 500+ Letting Agents, and recently we had to poll to find the average length of tenancy in our respective agencies. The Government says its 4 years, whilst the actual figure was nearer one year and eleven months, so let’s round that up to two years.

That means £200 needs to found in additional fees to the landlord, on average, every two years

In Actual Pound Notes

In 2005, the average rent of a Heanor Property was £438 per month and today it is £501 per month, a rise of only 14.5% (against an inflation rate (RPI) of 38.5%).

Using the UK average management rates of 10%, this means the landlord will be paying £601 per annum in management fees (excluding VAT).

If the landlord is expected to cover the cost of that additional £200 every two years, rents will only need to rise by an additional 2% a year after 2018, on top of what they have annually grown by in the last 5 years.

So, if that were to happen in Heanor, average rents would rise to £592 per month by 2022  (see the red line on the graph) and so the landlord would pay £710 per annum in management fees .. which would go towards covering the additional costs without having to raise the level of fees.

 

.. but that is bad news for Heanor Tenants?

Quite the opposite. (Look at the blue line on the graph). If the average rent Heanor tenants pay had risen in line with inflation since 2005, that £438 per month would have risen today to  an average of £606 per month. (Remember, the average today is only £501 per month) .. and even if inflation remains at 2% per year for the next six years, the average rent would be £659 per month by 2022 .. meaning even if landlords increase their rents to cover the costs tenants are still much better off, when we compare the £592 per month figure to the £659 per month figure.

 

Conclusion

The banning of letting fees is good news for landlords, tenants and agents.

 

It removes the need for tenants to find lump sums of money when they move. That will mean tenants will have greater freedom to move home and still be better off in real terms compared to if rents had increased in line with inflation.

 

Landlords will be happy as their yield and return will increase with greater rents whilst not paying significantly more in fees to their lettings agency. Letting agents who used to charge fair application fees won’t be penalised as the rent rises will compensate them for any losses.

.. and the agents that charged the silly high application fees .. well that’s their problem. At least I know I can offer the same, if not a better service to both my landlords and tenants in the future in light of this announcement from Phillip Hammond.

 

 

 

 

 

 

 

 

 

 

 

Are there any good property deals in Eastwood?

 

I was talking to one of my landlords the other day about the impending Christmas festivities and her plans for next Year, when she explained there were no property bargains for her to buy in Eastwood or the surrounding area.  With prices having risen recently it’s always easy to fall into the mind-set that the bargains have gone. So after having a quick look here is what I discovered in terms of bargains in and around Eastwood.

A 2 bed terraced house on Maws Lane, Kimberley, sold in 2007 for £105,000. In September of this year (2015), it sold again for £57,000, a drop in value of nearly 20%!

Another 2 bed town house on North Street, Langley Mill, sold for £76,000 in August this year, whereas back in 2007 it sold for £90,000. A near 16% reduction. These are excellent value properties, even before taking inflation in to account.

Finally, one of those nice 1900s three-storey town houses on Garden Road, sold for £108,000 in the Autumn of 2007. Considering property values are approaching those being achieved in 2007, some lucky person picked up a bargain in the Summer, when it sold again for £96,000.

As we ourselves don’t sell property and don’t charge for our advice, we can give impartial advice without any conflict of interest to our landlords. Whether you are a landlord of ours or not, drop by our offices or give us a ring if you would like any advice.

Heanor Property - Do you know the Facts and Figures?

 

Here at Spruce Tree Lettings, we can guide you to the right places to identify property values and yields in Heanor and other useful property related information so you can make sure you get all the information you need about your future investments. Here are just a few property facts about our town of Heanor....

There are 249 streets in the DE75 postcode with 8,384 households and nearly 31% of all those houses (2,597 to be precise) have changed hands since 2005.

Compared to the national average - Heanor has 40% more detached houses, 15% more semi detached houses and as for flats – there are very view with less than 1% of housing stock in Heanor being made up of flats – compared to the national average of around 17.5%. Interestingly, around only 4% of all households across Derbyshire are flats, although this figure will no doubt increase as more are built.

This is all a good indicator that Heanor is good place to buy property in. If you would like more useful facts and figures pop in to see us at our offices.

Shipley View Estate, Ilkeston – Property everywhere but none to rent?

 

I was recently asked why there are so few properties to rent on the Shipley View Estate. I did some research and found that since the beginning of 2015, only twenty five properties have been available for rent on the Shipley View Estate, one of Ilkeston’s most popular housing estates. Now whilst the market may be starting to slow a little now as we approach Christmas (which starts for many around the 18th December!), as more people focus on the holidays, many of the properties that have been to let on the Shipley View Estate this year have let in typically 2 to 3 weeks, proving it’s popularity.

As we speak in early December 2015 there are several 2-beds available but they haven’t been on the market for long – all less than two weeks - and probably won’t remain so! So the fact is that actually there is property to rent on the estate – tenants just have to be quick about reserving theirs when they come up.

We can help you identify property values and other useful property related information to make sure you can get everything you need about your future investments. Here are just a few property facts about Ilkeston…

The average house price is around £142,500, and the average income of someone living in Ilkeston is £18,530 per year. Price to earnings ratios are effective measures of the relative affordability of property in a given area (the higher the number – the more expensive it is to buy). In Ilkeston it is the ratio is 7.69 compared to 8.75 across all of Derbyshire and 11.21 nationally. Of course these ratios are dwarfed by those in places such as Kensington & Chelsea where the ratio is a staggering 46.94!

 

 

 

Buying to Rent in Eastwood... What’s your plan?

 

Some experienced landlords and I had a discussion about the property market in Eastwood, when the subject of risk against returns arose.

All landlords are different in the way they deal with property. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start getting involved, it is a good idea to have a plan.

For a low risk investment, you could buy property in and around the areas of Eastwood which are perceived as being more desirable, such as Mill Road and out into Newthorpe and Giltbrook, where you may be able to achieve an annual yield of around 4-6%. Following my article a few weeks ago, if you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 6-8%. This level of risk can be typically taken with cheaper terraced houses around Eastwood, in Lynncroft for example, or the ex-local authority properties off Queens Road South. If you are after annual yields of 8% and over, you could take more of a risk with houses of multiple occupancy or properties in the poorer areas of town which may attract tenants of a low quality. We manage some HMOs across the area and if they are well presented, well positioned and well managed – they will attract employed tenants and they can be very good income-earners for landlords.

If you would like any advice on choosing properties, come and see us at our office or email us.

 

 

Bargains in Duffield and Belper

We always like to keep an eye on what if happening in our local markets, which is helpful for when landlords decide to pop in and ask our advice, but also helps keep us close to the latest trends.

Looking in and around the Belper area I found that a four bedroom 1920s semi-detached property on Ecclesbourne Avenue, in Duffield, was bought for £265,000 in the Autumn of this year. The same property sold for less than £25000 in the Summer of ’98! This is 963% or almost a tenfold rise, a ten-bagger or just a plain 1000%! However, prices in the town during this same time period, some 17 years, rose by 179.6%, so it should have sold for a little under £70,000 if it kept up with the towns average house price. This could be down to that highly potent mixture of buying property a little under-value, adding value and modernising, then letting time do it’s work. Whatever happened here though that is a staggering rise!

Meanwhile a 3 bed detached house on Eyam Walk sold for £110,000 in May 2014, and was sold again this August for £125,000. This is a solid rise of 14%, but average prices in this time have risen by a little more at 17.3% in Belper.

Finally a 1900s 2 bed semi-detached on Belper Road sold for £124,900 in January 2013 and then sold again £158,000 in September of this year a decent uplift of 27% or around 9.2% per annum.

With both owner-occupier and rental demand for quality properties in these areas always being strong, it’s worth keeping an eye out for the next bargain.

Our expertise is in the residential property market, so please feel free to talk to us about our area or any properties you may have your eye on.

 

New-Build Developments off the Heanor Road

 

 

What with many builders in the region starting to go into over-drive to build their developments, I often get asked about new-build developments so I thought I would look at some in the Heanor area. Looking at some of the new build developments that have sprung up off the Heanor Road leading out of Heanor and towards Smalley, there are two that are rapidly being established now – Smalley Pastures and Smalley Manor.

Smalley Manor, being built by William Davis – a privately-owned family business – consists of 2, 3 and 4 bedroom properties and is located behind Marina Road and the Grange. Meanwhile, Smalley Manor, being built by Peveril Homes, also has a range of houses and also some smaller bungalows.

Typically, it generally takes a short amount of time to let properties on such new-build developments. Tenants love the fresh appeal of crisp, newly built properties and whilst they will still consider the proximity of the local amenities and transportation links, they often will compromise a little to get into a new home. They are not unlike house-buyers in this respect, many of whom will “settle” a little in terms of location (and size/space) in order to acquire a newly-built abode. Both developments are on the convenient side of town for access to Derby, close to Heanor Gate Science College and are only a mile or so from the centre of Heanor itself.

A three bedroomed semi-detached property or townhouse, could be purchased for around £180,000 to £200,000. The rents that could be achieved for these are between £595 and £675 per month. This means landlords can potentially expect yields of around 4.5% per year. When this is factored into relatively short voids and good growth prospects, especially as the states mature, these levels look reasonable.

Two bedroomed houses have been reserved at around £130,000 and they typically can let for between £525 per month, meaning yields of around 5% per year are achievable.

If you have already done a search for property or are trying to figure out where to start, we’re happy to advise on properties before you buy. It’s in your interest that you purchase something that can let, whether you are currently a Spruce Tree Lettings landlord or not.

Is Buxton Avenue Heanor’s sleeping giant?

 

A landlord recently missed his chance to buy a nice three bed semi-detached property on Buxton Avenue, in Heanor, as it sold quickly. He asked me if there something special about the area, so I did a little research.

I have included roads surrounding the Buxton Avenue area such as Sunningdale Avenue, Owers Avenue and Coppice Drive amongst others in my findings. Many of these properties were built around the 1950s.

A number of the three bedroom semi-detached properties have sold in the area for between £90,000 and £135,000 in the last two years. Remember though that to prepare a property as a rental investment could take additional funds and depending on the work needed could be as much as £10,000, or more, so some of these properties may have needed some care and attention.  These properties would achieve rents of around £495-550 per month, which would provide a reasonable annual yield of around 6%.

The three bedroom semi-detached properties in the Buxton Avenue area are now asking a minimum of £125,000 and upwards. The older houses offer the tenant and buyer larger rooms, which can be more appealing.

Even though the purchase price is heading upwards, the rents being achieved are also edging upwards, meaning the annual yield is still good especially as the houses have seen great increases in value and are popular with buyers and tenants.

So, if you would like to talk to us about property in our area please feel free to visit our offices.

Ex-council properties in Ilkeston... Are they good buy to let investments?

 

In previous articles we have found that ex-council properties can achieve good annual yields of well above 7%. Yet their average value tends to stay quite stable when we compare this to the average capital growth on the more modern estates of say Shipley View, which have had a more significant rise.

Nevertheless, a three bedroomed semi-detached property on Beauvale Drive sold for £88,000 in April of this year having originally sold for £65,000 in 2011 which is a return of over 35% in less than 4 years. Another example of good capital growth from an ex-council property is a three bedroomed semi again on Beauvale Drive which was sold in 2011 for £103,000, following an increase in value of around 30% in just over two years.

The best performing property for capital growth in 2015 so far was bought in September 2011 for £69,000 and has recently sold for £160,000. This is a significant return of 132% - or over 25% per annum. However, this was not a typical rental property, it was a detached house on Cotmanhay Road!

If you would like some advice about buying to let, please come and see us at our offices.

Ilkeston Property - Do you know the Facts and Figures?

 

 

Here at Spruce Tree Lettings, we can guide you to the right places to identify property values and yields in Ilkeston and other useful property related information so you can make sure you get all the information you need about your future investments. Here are just a few property facts about our town of Ilkeston....

In the DE7 postcode there are 23,090 households, of which 26% are detached, 40% semi-detached, 32% terraced and only 2% are flats (half the county average in Derbyshire). Some 71% of all these properties are owner-occupied and around 15% are privately-rented. Looking at the sales activity over a quarter of all those houses (7,179 to be precise) have changed hands since 2005.

Compared to the national average - Ilkeston has 10% more detached houses, 20% more semi detached houses, about the same percentage of terraced houses and 89% less flats. This is a good indicator that Ilkeston is good place to buy property in.

If you would like more useful facts and figures pop in to see us at our offices.

Rents Remain Steady on Nailers Way, Belper

 

A landlord I know was interested in properties on Nailers Way, in Belper. She came in to our office to discuss the value of property suitable for renting on the street and how this has changed over time in terms of the yields one can achieve.

Looking back over the last 10 years, between 2005 and 2007, before the 2008 slowdown, 2 bed terraced and semi-detached houses tended to sell from around £95,000 depending on aspect, condition, whether mid-terraced or not and so on.

Interestingly, between 2011 and 2012, these properties were still selling on average at around £110,000, showing good resilience following on from 2008. Fast forwarding to 2015 however, we can see that 2 bed properties in the immediate area are still tending to push the £125,000 stamp duty threshold, and beyond when looking at newly built properties. Certainly, it seems, she could have done reasonably well in terms of capital growth if she had invested in this area.

We then looked at the rents over the ten years since 2005. In 2005 the average rent for 2 beds was £450 per month, a return of around 5.5%. Looking at the average rents for 2 beds in 2010, they had increased a little to between £475 and £500 per month. Now, in 2015, rents again have edged upwards and are upto £525 per month, giving a return of around 5.3% per month, which is steady in light of the capital growth also shown by these properties.

If you would like some advice with your potential investment, please come and see us in our offices.

Eastwood has some of the most affordable properties in the region

 

A landlord called me up this week to discuss the affordability of property in Eastwood, with the current regional property market being generally in recovery with increasing house prices. The best advice I can give to those looking to invest in property is one of our secret tricks of the trade. You can judge the affordability of a town by simply finding the ratio of the average property price to the average salary. The lower the ratio, the more affordable property is.

When we put this to the test, we found that Eastwood currently has an average property value of around £142,500 with the average salary being £19,675. This is a respectable ratio of 1 to 7.24. Meanwhile across the motorway in Hucknall, the ratio of property values to salary is 1 to 7.77, which suggests the property in that town is 7% less affordable than in Eastwood.

Both towns compare favourably though to the overall average of Nottinghamshire where the average property value is £157,600 and the average salary is £18,892, giving a ratio of 1 to 8.34.

This means that property generally in Nottinghamshire is a rather significant 13% less affordable than Eastwood, with a ratio of 1 to 8.34.

This could mean that now is a brilliant time to invest in Eastwood’s property market, while the average value of property is low compared to the average salary. If you would like to talk to us about your potential investment, please come into our offices.

How can you find a good property deal in Heanor?

I was talking to one of my landlords the other day, when he explained there were no property bargains for him to buy in Heanor. We don’t sell property and don’t charge for our opinion nor advice, but we can give impartial advice without any conflict of interest to our landlords. Here is what I discovered recently about finding bargains that I had discovered over the last few months.

A 3 bed semi-detached house, with an ensuite to the master bedroom, on Mundy’s estate sold in 2008 for £159,950. This summer, she sold again for £129,000, a drop in value of 19.4%!

Another 3 bed semi-detached house on Kirkstone Avenue sold in 2004 for £130,000, then sold for £116,000 in May this year. This is a near 11% reduction.

Finally, one of those nice modern detached houses, with an ensuite on Brookfield Way was bought for £164,000 and then sold again for £145,000 – some lucky person saving £19,000 or 11.5%.

All this shows that for the discerning property buyer there is always good value to be found.

Whether you are a landlord of ours or not, drop by our offices if you would like any advice.

Monopoly in Heanor... How would you play?

 

A couple of local landlords and I had a discussion about the property market in Heanor, when the subject of risk against returns arose.

All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.

For a low risk investment, you could buy property in the areas of Heanor which are perceived as being more desirable, such as to the west of the town off the Heanor Road such as the modern properties on Sovereign Way or Sandringham Drive, where you may be able to achieve an annual yield of around 4-6%. Following on from my previous articles, if you don’t mind a slightly higher risk of void periods or a more variable quality of tenant, and you ae prepared to look elsewhere in the town, then you are likely to be rewarded with a higher annual yield of 6-8%. This level of risk can be typically taken with older terraced houses around Heanor. For example we manage many variants on the side streets off the A6007.

If you are after annual yields of over 8%, you could take more of a risk with houses of multiple occupancy or properties in the poorest areas of town which may attract tenants of a low quality.

If you would like any advice on choosing properties, come and see us at our office or email us.

Belper Property Values have Increased by £200.25 per week

Last week, a landlord came in to our office to discuss the rising property values in Belper. He owns a varied portfolio of rental properties, primarily in the Belper area, so it is interesting to compare the increase in property values around the area.

Over the last 12 months the average property value in Belper has risen by nearly £10,500, from £211,000 to £221,500. This is a very reasonable 4.9% increase. When we looked at the values for detached houses, this average increase is even greater at £18,300, or 6.5%. This is a considerable average increase of £351.92 per week.

When I looked at some of the surrounding towns, Derby has a lower average increase in property value, at around £63.11 per week, whilst Nottingham has a more modest average increase of around £56.21 per week. It is, nonetheless, a rise in average property values to suggest the market is recovering in our area.

When considering this landlord’s buy to let portfolio, the rental values across the East Midlands have increased by about 6% over the last12 months, therefore it could be a good time to invest in the property market in Belper.

If you would like some advice about buying to let, please come and see us at our office.

 

Should you be buying in West Hallam, Smalley or Horsley Woodhouse?

 

 

In other articles I have discussed the differences in the rent that could be achieved from properties in the villages around Ilkeston, compared to the town itself. However, I didn’t mention the average values in both and how that affected their annual returns/yields.

The average terraced house in Ilkeston is worth around £98,000, whilst terraced houses in the surrounding villages, such as West Hallam, Stanley, Mapperley, Smalley and Horsley Woodhouse, are worth around 34% more with an average in the region of £131,500. A similar, although not so pronounced difference, was found for the value of an average semi-detached house worth £125,000 in the town, with the value increasing by 17% in the villages at £146,000. For a detached house in the town, you can pay approximately £221,000. This value is increased by 11% in the surrounding villages, with average values of £246,000.

If you are a landlord who is looking to buy property to let, before you buy in West Hallam or any DE7 6 village, you should consider the possible annual returns/yields. In the villages the yields are quite low, at around 4%, compared to around the 5+% annual yield you may receive from properties in town.

Specifically in West Hallam though we have recently had a spate of rentals – all of which have rented well (some positively flying out the door!) and also enquiries about the rental prospects of other properties in the village – so things are looking good for the village-landlord.

So if you would like any advice when choosing properties, you may come and see us at our offices.

 

 

Bargains in and around Kimberley and Eastwood

A landlord became ever more curious about the Eastwood’s Buy to Let market after reading our articles about various areas around Eastwood, so decided to pop in and ask our advice.

I found that a small two bedroom cottage on Sydney Street, Kimberley, was bought for £85,000 in the summer of 2011. The same property then sold, after a full scheme of refurbishment, for £170,000, twice the original purchase price, in April this year.

Looking at some of the after photos shows what a lovely job has been done on this one!

 

A traditional 2 bed terraced property in Noel Street, Kimberley was acquired for £68,500 and then sold for £98,500 in May of this year giving a very respectable gain of 44%. However, prices in the town during this same time period rose by just 12%

Another property, a tidy 3 bed semi-detached house in Charles Avenue, Eastwood, was purchased for £100,000 in July 2013 and then resold in March this year for £140,000, a 40% gain in less than 2 years, compared to the average growth in the area, across the same time period, of some 11%, so it should have only sold for £111,000 if it had merely kept up with the towns average house price.

With rents for semi-detached houses in the area achieving between £550 and £600 per month, average yields are around 6%. I think in terms of a rental investment, this is worth consideration – buying carefully in the first place and assuming good capital growth – which we can definitely can see happening here.

Our passion lies firmly within the residential property market, so please feel free to talk to us at any point about our area.

Belper Property - What are the Facts and Figures?

 

Here at Spruce Tree Lettings, we can guide you to the right places to identify property values and yields in Belper and other useful property related information so you can make sure you get all the information you need about your future investments. Here are just a few property facts about our town of Belper....

There are 703 streets in the DE56 postcode with 18,490 households and 17% of all those houses (3,146 to be precise) have changed hands since 2010.

Compared to the national average - Belper has 69% more detached houses, 11% more semi detached houses, 19% less terraced houses and 77% less flats. This is a good indicator that Belper is good place to buy property in.

Looking at the latest Rightmove investor data that has popped into my email in tray, asking prices are up 3% in the last quarter, and 9% this year, whilst the average price of a 2 bed house currently stands at £161,000 and a 3 bed house at £226,000, with overall average rental yields standing at 5.81%.

If you would like more useful facts and figures pop in to see us at our offices.

Old Coppice Side or Buxton Avenue in Heanor...Which is the best investment?

 

I was talking to somebody last week from Heanor, who was considering becoming a landlord for the first time. I meet many such potential first time landlords and it’s always interesting to see what ideas they have. He visited our office to ask us whether buying a property on Old Coppice Side or Buxton Avenue would make a better Buy to Let investment, and which would offer a better return/yield. He knew the area well, as he lived around there some years ago. He knew that both streets were quite close and that houses on Old Coppice Side were, in the main, a little closer to the park. I confirmed that the properties on both streets let and sell well, but I wanted to do a bit more research to help with his choice.

The average price for a property on Buxton Avenue has been £133,278; while on Old Coppice Side it was 16% more, at £154,813. To better understand the investment opportunities available, we took a look at the rents achieved over the last year. The average rent achieved on Old Coppice Side was £560 pcm giving a yield/return of 4.34%. On Buxton Avenue the average rent was slightly lower, at £537 pcm, with a corresponding yield/return of 4.83%. What with the similar yields, albeit with those for Old Coppice Side a little lower, and the corresponding higher capital growth, in absolute terms, on Old Coppice Side (due to the naturally higher average prices),  we found both streets to be as good as each other, as there is only a small difference in the yields/returns, which we would not have identified without the extra investigation. In this case it really comes down to the best available property to buy on the day.

If you are a landlord, whether you deal with us or not, feel free to visit into our office on St Peters Hill to ask our opinion on which property investment is best for you.

Flats in Eastwood, are they good investments?

 

Many investors, especially those starting out, like to consider flats as their first investment…but some of our local towns don’t tend to have too many so I thought I would have a look at Eastwood to see what could be gleaned.

There are over 350 flats in Eastwood. This only represents around 1.2% of the housing stock here, with the national average being nearer 17.5% and the average across Nottinghamshire being around 7%. This backs up the impression that there aren’t that many flats around in parts of our region. The “Luxury Apartment” boom of the 90s and Noughties didn’t quite extend this far it seems. The average price of flats with one or two bedrooms in Eastwood is around £107,000, which is nearly 2% higher than 12 months ago.

You can buy a two bedroom flat in the Elevation Place development on Nottingham Road, for £115,000. If a landlord put down a £20,000 deposit and borrowed the rest, they could achieve around £525 per month in rent. Even after paying the service charge, yield on debt could approach 6.5% per year. However, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing. Other established flats in the area have tended to command lower rents this year – typically upto £495 for 2 beds, but equally they are cheaper to buy.

Finally, let’s not forget about the potential increase in capital value of the property. I was looking at those flats in the Elevation Place development, which was built just before the crash of 2008 and found that they have sold for between £100,000 and £114,000 just before the crash but dropped back to around £85,000 afterwards. These have now recovered and more so to the prices of around £115,000 now and who is not to say we couldn’t see further growth in the future.

If you would like some advice about what could make a good investment, please visit our offices.