Gloucester’s property market has outperformed Lechlade’s by over 176%

Within Gloucestershire we have many towns and areas that make up our fine county, from the up market posh areas of the Chipping Campden, Lechlade and Cirencester all the way to the working class non nonsense areas of the Mitcheldean and Cinderford.  In fact I have a few landlords from the Cotswolds, one in particular who has a decent portfolio of buy to let property in Gloucestershire (especially in his home town of Lechlade and also Gloucester). Let’s be honest Lechlade is a sophisticated Cotswold market town which enjoys a well-earned reputation for stylish and convenient living close to abundant countryside. 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 Lechlade around £443,900.

Our city of Gloucester has an excellent choice of shops, banks and restaurants, but not in the same league as Lechlade’s. Our city offers excellent rail and road links and there is a good choice of schooling within the area, including Sir Thomas Rich’s School and The King’s School and a number of decent primary schools. All these factors make the average value of a property in Gloucester around £204,300.

In the last 12 months, the average value of a property in Lechlade and Gloucester has risen in both places by roughly the same amount (Lechlade £15,900 and Gloucester £19,000). However, that doesn’t tell the whole story, because average property values are much lower in Gloucester. As a percentage, values in Lechlade have increased by a modest 3.7%, but in Gloucester they have increased at more than double that rate, in fact 176% proportionally more at 10.3%. It shows that Gloucester is a city 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 on Worcester Street in Gloucester to chat about the ups and downs of the property market in Gloucester.

Browning Mews Cheltenham 4.7% Yield

This 3 bed property has just come on the market with Northwoods. Browning mews is a popular area of Hatherley and I would expect this to let at around £750 PCM. The sales price is £189,950, so that's a rental yield of 4.7%. Not great , I hear you say, but bear in mind capital growth and a property like this, in an area like this, should provide good capital growth as well.

                              http://www.zoopla.co.uk/for-sale/details/35283867

Family homes, in good areas, with good schools will always let well and should sell well too! If you would like advise regarding this or any other property, please contact me on neil.west@belvoir.co.uk

Longhorn Avenue - Gloucester- 5.8% Yield

This modern 2 bedroom flat has just become available for sale with the Property Centre. It is on the market for £122,500 and should rent for around £600 PCM , giving a yield of 5.8%.

                                 http://www.zoopla.co.uk/for-sale/details/35259279

The property has 2 double bedrooms and is in a popular area of Gloucester, near lots of shops and with great access to the motorway and Cheltenham. Great for professional sharers or a couple. 

If you would like advise about this or any other property, please do contact me. 

What has the Help to Buy scheme done to the Cheltenham and Gloucester property markets?

The Government 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, Cheltenham and Gloucester continues to have a buoyant property markets. 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 these areas.

Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Cheltenham and Gloucester 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 Cheltenham and Gloucester of around 4% to 7% per year and the values increasing by 6.8% in Cheltenham and 10.3% in Gloucester, and the overall yearly return is the region of 10% to 16% per year.

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 either of our offices in Cheltenham and Gloucester 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 Cheltenham and Gloucester to be had.

Cheltenham -2 bed terrace 4.9% Yield

This 2 bed end terrace has just come on the market with RA Bennett. On  the market for £170,000, should rent for £675/£695 PCM- that's a yield of 4.9%. Ok , the yield is not going to make you rich but its safe and much better than the bank, particularly as the value of the house should go up as well. 

                               http://www.zoopla.co.uk/for-sale/details/35214317

Don't forget , don't just look at the rental yield, also look at the potential capital yield. If you would like advice on this or any other property, please do contact me. 

Herbert Street, Gloucester - 6.9% Yield

This three bed terraced house has just come on the market with Movearound. It is on the market at £100,000, chain free. The selling agents expect it to rent at between £575 and £625 PCM . Even if you take the lower estimate, which I think is achievable , that would give you a yield of 6.9%. 

                              http://www.zoopla.co.uk/for-sale/details/35193670

Please click on the link above for more information. By anyone's standards 6.9% is an impressive yield , so be quick and register your interest with Movearound. 

If you would like more infomation on this or any other property. please email me on neil.west@belvoir.co.uk .

Cheltenham and Gloucester Property Market – should you be buying?

A number of landlords, first time buyers and investors have approached me recently, asking about the Cheltenham and Gloucester property markets. With all these headlines of massive increases in property values in the UK over the last 12 months, should we be worried we are about to have a price crash? 

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 Cheltenham have risen by 6.8% in the last 12 months whilst in Gloucester they have risen by 10.3%. When I look at the South West as a whole, prices have risen by 8.7% and nationally by around 9.6% over the same 12 months. Compared to the boom years of 2001 to 2004, when property values increased by 22% in 2001, 24.8% in 2002 and 12.1% in 2003 in Cheltenham and Gloucester, 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 (including our own in the South West) and creating a picture of a broadening market recovery, and I expect prices to continue to rise steadily in the short term.

Speaking to others, Gloucester (although the same story is being told in Cheltenham), the issue isn’t house price inflation, but a lack realistically priced properties coming onto the market for sale, a lack of supply. In the months of May and June this year 102 and 110 properties respectively came on to the market for sale in Gloucester City centre.  A few months later in September only 65 properties came on to the market. So should you be buying a property in Cheltenham and Gloucester? 

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. Cheltenham and Gloucester 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 Cheltenham and Gloucester 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 Cheltenham and Gloucester 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 Cheltenham and Gloucester aren’t prepared to pay over the odds for a property to secure it. Maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Cheltenham and Gloucester property markets?

3 Bed - Kempton Grove Cheltenham -5.7% Yield

I have just spotted this three bed terraced house on the market with Peter Ball at £165,000. This looks great value for money. Three bedrooms, conservatory, kitchen diner. The garage has also been converted into a reception room. This would let for £775/ £795 PCM which would give a yield of around 5.7%.

                           http://www.zoopla.co.uk/for-sale/details/35149500

This is a good yield for a family sized property that will have few void periods. As I say came on the market today, I bet its sold by next week! If you would like any information on this on any other properties, please email me on neil.west@belvoir.co.uk

2 Bed Terrace Linden - 6.2% Yield

2 bed terrace in Linden on the market for £99950. Steve Gooch say that it is in need of modernisation and no pictures so hard to make a judgement as to the extent of work required. If we make an assumption of £10,000 required that would make a total investment of £110k. I believe that this would let for around £575 PCM and that would give you a yield of 6.2 % . Pretty good and you've added value to boot. 

                               http://www.zoopla.co.uk/for-sale/details/35121848

I really think that this is worth a look at and if you would like some advise on this or any other property, please do contact me on neil.west@belvoir.co.uk 

Why don’t people buy instead of renting in Cheltenham and Gloucester?

Quite often, when talking about the rental market, we talk about property and seem to forget the other party in the equation, the tenant. Without tenants, there is no demand for the rental property. The profile of the Cheltenham and Gloucester tenant has changed and continues to change. Although this is in part due to the credit crunch, job mobility and the raising of deposits, an increased number of people in their twenties are choosing to rent rather than buy and have done so, even when they were in a position when they could have bought a property.

Since the credit crunch, rents have been good value for money for most tenants outside London. Few rents (outside London) have kept pace with inflation as they tend to track wage inflation. In 2008, the average median gross wage according to Office of National Statistics in Gloucester was £22,107 whilst in Cheltenham it was £26,055. Latest figures for Gloucester in 2014 show average salaries in the City have risen to £24,782 a rise of 12.1% whilst in Cheltenham, the same survey shows that average salaries are now £29,703 an increase of 14%. Recent research results from the Bank of England with regards to inflation, goods and services that cost £100 in 2008 would cost £119 in 2014, making inflation 19% over those seven years. 

Cheltenham and Gloucester tenants are paying less than both wages and goods inflation. Cheltenham and Gloucester rents are in fact still only around 4.5% above the level being achieved in 2008 but the tenants are being paid between 12.1% and 14% more. That is why we have seen a greater demand for Cheltenham and Gloucester rental properties with more and more people becoming tenants. So renting has since the credit crunch, on average, delivered good value for money for tenants and hence the healthy demand and lack of void periods for most property.

Overall, considering the recent rises in property prices over the last 12 months, we are between 2% to 3% above the 2007 boom prices in Cheltenham and Gloucester. With reasonable rents, many would-be first time buyers in Cheltenham and Gloucester have been wise to remain in the private rental sector. Rents tend to move in line with wages as opposed  to inflation and if something goes wrong with the property, inevitably landlords pick up the bill, so tenants aren’t hit with awful expenditure surprises as a normal homeowner would be. In addition, renting offers better mobility both from a location perspective, but also from a trading up or down perspective in terms of rent commitment which, in this tough job market, could be considered a wise move.

From the landlords point of view, the consequence of this steady / solid market throughout the Cheltenham and Gloucester area, with good tenant demand, decent long term capital growth (as mentioned in last week's article) and average yields of around 3.8% to 4.5% with home owners it used to be buy, sell, buy, sell as one rose up the property ladder.. Now it’s buy, hold, buy, hold.

If you would like to discuss my thoughts on the rental markets in Cheltenham or Gloucester, feel free to pop into either of our offices in Cheltenham or Gloucester or email me on neil.west@belvoir.co.uk 

1 bed Apartment - Brookbank Close Cheltenham 4.7% Yield

We are marketing this lovely one bed apartment for sale in this popular development , Sovereign House. This is rented out by us and we currently have a great tenant in place who is paying £550.00 PCM. 

Properties allways let quickly in this development to professional people. The yield is reasonable when you  consider that this will be low maintenance going forward. 

                   http://www.rightmove.co.uk/property-for-sale/property-48875831.html

Please follow the link for information and if you would like more info on this or any other property, please do contact me on neil.west@belvoir.co.uk 

3 Bed Semi Gloucester- 6.0% Yield

This 3 bed semi has just come on the market today at £125K with Michael Tuck. It will probably need some updating and once done would achieve a rental of around £625 PCM which would be a healthy yield of 6.0%. Three bed family properties are in great demand and this would let relatively easily. 

                             http://www.zoopla.co.uk/for-sale/details/35061338

This is what is the selling agent have to say: Michael Tuck are offering this substantial three bedroom bay fronted semi detached house located on Tredworth Road in Gloucester offering ease of access to Eastern Avenue & Gloucester city centre as well as being well served by local shops, schools & amenities. The accommodation comprises of: Entrance hall, 3 reception rooms, kitchen, upstairs bathroom, 3 bedrooms and enclosed rear garden. Offered for sale with no onward chain

If you would like advise on this or any other property, please contact me on neil.west@belvoir.co.uk 

Is the Gloucester Property market 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 Gloucester, who invests for capital growth as opposed to yield, it is crucial to look 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 Gloucester property values alight and property being snapped up over night? Achieving capital growth in Gloucester is going to be tough over the coming few years isn’t it? Well yes and no. Looking at the headline figures, of the 1,812 properties available for sale today in Gloucester, 875 of them are sold subject to contract, an impressive 48.2% which is obviously a sign of a runaway Gloucester property market? Well, no it isn’t. Don’t get me wrong it is a lot better than it was a few years ago, but there are still good property deals to be had. 

We asked Rightmove for all of the properties that had come on to the market in the last 28 days (542 to be precise), after one month, how many of those 542 had found buyers .. around one in five (113 to be precise or 20.8%). Look at the last 56 days (2 months) and of the 895 properties that have come on to the market in Gloucester, only 283 have a sale agreed on them (or 31.6%) .. 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.

In both Cheltenham & Gloucester, 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 Cheltenham or Gloucester 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 either Cheltenham or Gloucester, feel free to pop into either of our offices in Cheltenham or Gloucester or email me on neil.west@belvoir.co.uk