2014 – A funny year for the Gloucestershire property market?

A number of landlords, who own property in Cheltenham and Gloucester, have made contact with me recently asking for my thoughts on the future of the buy to let market in both Cheltenham and Gloucester. In previous articles, we have talked about the history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values rose by 8.4% (Oct 13 to Oct 14) in Cheltenham and 7.9% in Gloucester over the same time frame. Good news all round, but when you consider property values in both places have previously dropped by 19.43% between December 2007 and June 2009, this is not as good as the media would have you believe.  It should be no great surprise to hear that Cheltenham and Gloucester property values are starting to slow up as we head in to the New Year.  Whilst property values in Gloucester were growing at 1.5% a month in May and in June, in Cheltenham they rose by 1.6% July this year, on the run up to Christmas, they have slowed to a mere 0.3% monthly increase. 

The reality is we have had a year and a half of decent market conditions in Cheltenham and Gloucester, but now all that pent up demand is starting to fade. The big question moving forward is whether the market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the local property market.

Looking at the UK as a whole, because we can’t look at Cheltenham and Gloucester in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Cheltenham and Gloucester, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-

• “Should I sell my property in Cheltenham and Gloucester, or even buy another?”

• “Is the time right to buy another buy to let property in Cheltenham and Gloucester            and if not Cheltenham and Gloucester, where?” 

• “Are there any property bargains out there in Cheltenham and Gloucester?” 

Many other local  landlords, both who are with us and many who are with other  local letting agents, like to pop in to  discuss the Cheltenham and Gloucester property market, how Cheltenham and Gloucester compares with its closest rivals (Bristol, Tewkesbury and Evesham), and hopefully answer the three questions above. I don’t do hard sell, and I will just give you my honest opinion.

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a prosperous 2015.

2 Bed terrace - 5.6% Plus Yield

I have just spotted this 2 bed terraced property on the market with Andrews. Looks a bit shabby and will need some work doing. Priced at £145,000, if you had to spend £15,000 that would make a total spend of £160,000. Should let for around £750 PCM , giving a return of 5.6%. 

                             http://www.zoopla.co.uk/for-sale/details/35219004

This is potentially a good opportunity as good yield and you would have added value to the property. So if you fancy a project then this may be for you. If you would like advice on this or any other property please contact me. 

2 Bed Gloucester- 5.5 % Yield

This 2 bed flat is on the market with Alistair Bone at £115,000. This two bed ground floor should rent for £525 PCM , which is a yield of 5.5 % . The property is located close to the hospital, so will always be in demand. 

                              http://www.zoopla.co.uk/for-sale/details/35385240

I think you should check this out but don't forget the service charges and ground rent. If you would like advice regarding this or any other property, please contact me on neil.west@belvoir.co.uk 

Are there any property bargains in Cheltenham?

Newspapers report property prices in England have soared to a record high – sparking predictions that the country is facing another dangerous property bubble. Values in the South West are still 3.8 per cent lower than their previous peak in the Autumn of 2007. Even with that news, I have been speaking to a couple of landlords over the last few weeks who had concerns in some quarters that the state backed schemes to boost the supply of mortgages such as Funding for Lending and Help to Buy are inflating a new housing bubble. Those landlords are asking if this means the end of property bargains in Cheltenham?

Well, if you do your homework, there are still plenty of good buys in Cheltenham. Don’t expect them to come on the more popular streets in the town. The first rule of buy to let investment is that it is isn’t you that is living in the property, it’s the tenant, and there is always demand for every street in Cheltenham.

Back in July 2013, a two bedroom apartment situated in a Grade II listed period town house on St George’ Road in Cheltenham came up for sale with an asking price of £179,950. I kept the photos of the inside and it was very pleasantly presented inside, however, furniture had been removed and it did look rather stark. It sold for £167,000 in November 2013. A few months later, in May 2014, with what I can see was just some inexpensive new carpets, some emulsion on the wall  and a bit of furniture from Ikea, it sold again for £202,000 some eight months later, a rise of 20.96%, not bad when you consider that the average Cheltenham house price only rose by around 5.5% during the same time frame!

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 freely to anyone who asks, be they an existing landlord of ours or of another agents. I will also give it to anyone thinking of 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 could 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 Bath Road in Cheltenham to chat about the ups and downs of the property market in Cheltenham

3 Bed Cheltenham 5.5% Yield

This well presented 3 bed semi has just come on the market for sale with us. Its not often that I blog our own properties but this one would make a great investment for a buy to let investor. On the market for £165,000 and should rent for around £750 PCM, giving a yield of 5.5%.

                   http://www.belvoir.co.uk/12-quebec-drive-cheltenham/87983

Please give me a call on 01242221188 or email me neil.west@belvoir.co.uk if you would like to discuss this property or any other. My advice is free !

Two bed terrace - Gloucester 5.7% Yield

This 2 bed terraced property is on the market with Steve Gooch at £119,950. Linden has always been a popular rental area and this should let for around £575 PCM , giving a yield of 5.7%.                                   

http://www.zoopla.co.uk/for-sale/details/35348344

Some of these terraced houses have downstairs bathrooms, this one is upstairs and that always makes them more appealing. Check out what Steve Gooch have to say and if you would like more advice, then please contact me. Don,t forget we are willing to visit the property, so that we can give you our expert opinion and there is no charge for this.