2 Bed Flat Denmark Road 6.3% Yield

We have let quite a few of these flats in Holland Court, over the years and I just spotted this one on the market with Andrews. It is on the market for just short of £100,000 and will let for £525 PCM easy. You will have a service charge but it  wont be much here. The communal areas here are always kept in tip top condition and the flats are always very popular as rentals.

                              http://www.zoopla.co.uk/for-sale/details/17500278

Why not give Andrews a call and take a look. It looks ready to go! If you would like any advice on this or any other property, then please do email me on neil.west@belvoir.co.uk.

One Bed - Hatherley 5.2% Yield

Not many one bed houses become available , so when I spotted this one with Andrews, I thought I would let you know about it. On the market for £134,950, this will let for £575/£595 PCM , which is yield of 5.2%. As I say not many one bed houses around so they always let well, particularly in good areas like this.

                             http://www.zoopla.co.uk/for-sale/details/35935790

This is a great " safe " bet for landlords who don't like taking many risks and I recommend that you take a look ASAP. If you would like advice regarding this or any other property, please do contact me neil.west@belvoir.co.uk

£113 Million – the total rent paid by Cheltenham 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 the  one of the 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 Cheltenham, there are 22,471 people renting 10,260 rental properties. The average rent of a Cheltenham property in 2008 was £883 per month. If Cheltenham 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 Cheltenham should be today £883 + 19% = £1,050. At this moment in time, the average in Cheltenham is £923.. 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 Cheltenham over the last ten years, 12.07% of property being rented in 2001 to 20.1% in 2011, the number of homeowners in Cheltenham only dropped by 4.9% (there were 34,201 homeowners in 2001 in Cheltenham, but it only dropped to 32,879 homeowner households by 2011 in Cheltenham). 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 Cheltenham tenants is an awful lot of money, £113 million a year in fact, but as rents are free to move up, but just as important down, why fix what isn’t broke?

P.S. For those who are interested the total rent payable by tenants in Gloucester is £75 Million

Don't laugh , a great opportunity!

Ok its not pretty, in fact its pretty grim. However this could be a great investment opportunity. On the market for £60K , spend £30K , who knows ? and then for £90K, you've got a great 2 bed terrace property. Rent it for £525 PCM ( or more ) - 7% yield ! If you don't want to rent it out ,then sell it on.

                              http://www.zoopla.co.uk/for-sale/details/35995713

I think if you are serious about a project, then this is one to look at. Be careful though with the figures. I know a great builder if you want some idea of refurb costs. If you want some advice on this or any other property, then please contact me on neil.west@belvoir.co.uk .

PS  Listed today with The Property Centre  -  I bet its sold within a week!

Gloucester Apartments - 1 beds or 2 beds ?

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 Gloucester, the average rent for a one bed property is around £426 per month with an average value of £80,300. This means an approximate return/yield of 6.36% per year. This is of course the average. There are one bed apartments on the market for rent at a higher price than some two bed apartments. In fact, some one bed apartments in Gloucester can attract rents in the early  £700's whilst some converted terraced houses with flats in them can be rented for as little as £300 per month. This means yields on one beds can range between 5% and 7%.

Two bed apartments in Gloucester can be priced anywhere between £190,000 in modern upmarket developments in the Gloucester Docks area and as low as £70,000. Again, rents can be quite varied, ranging from over £800 per month to £400 per month. However, looking at the average rent for a two bed apartment in Gloucester, I calculate it to be £573 per month with the average value being £118,700 which gives a return/yield of 5.79% per year.

Whilst there is a little difference in the yields when it comes to the number of bedrooms, it is only one of many factors you should consider before buying a property. Whilst two bedrooms are more expensive to buy, they will always let better. Do they sell better? Well, 38.3% of the two bed apartments on the market in Gloucester at this moment in time are sold stc compared to 34.7% of 1 bed apartments – so the answer is yes, but not much difference though.

It really comes down to the property and type of tenant. Two beds attract sharers, which brings both advantages and disadvantages to the landlord but one beds have better yields. It depends what you want from your investment. I know the lettings market in Gloucester so I can advise you what you can expect to achieve in rent .I don't make a penny out of you buying something from another agent, 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 on Worcester Street, Gloucester.

Are yields of 6.48% per year on the Hesters Way area the best Cheltenham has to offer the investor?

Are yields of 6.48% per year on the Hesters Way area the best Cheltenham has to offer the investor?

I regularly talk to landlords about investing in Cheltenham . Following a discussion with one of them last week, he asked me to look into the Hesters Way area, and whether it was a good place for him to invest in.  There was a 3 bed semi up for sale in mid November with Guide Price of £125,000. Average rents in these types of properties have risen by 13.4% since 2008, which is amazing considering average rents in Cheltenham are in fact only 4.5% higher (on average) than those being achieved in 2008.

Let’s say you bought  it for £125,000, the achievable rent can be in the order of £660 to £675, depending how much effort you have put into presenting it; but being sensible, we are still looking at a yield in the region of 6.4% to 6.5% 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 2000 have risen, according the Land Registry, in Cheltenham, by 92.5% but looking at the properties that sold in 2000 and again more recently, average increases in property values in the Hesters Way area have been in the region of 109.3% over the same time frame.

So is this an investors paradise – great rental growth, great yield and great 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 Hesters Way area can be up to six to eight weeks, whereas in most other parts of Cheltenham 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 Hesters Way area 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 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 on Bath Road, Cheltenham or email me on neil.west@belvoir.co.uk

Two Bed Cheltenham 5.3% Yield

This 2 bed property is on the market with Andrews at £145k. It looks as if it may need some work , so if you allow £10,000 that would make a total investment of £155K. The property should let for £695 PCM and that would give you a yield of 5.4%

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

This would make a great buy to let investment. An opportunity to add value and a reasonable yield to boot.
I doubt if this will be around long , so don't delay and contact Andrews for a viewing. If you would like some advise on this or any other property, please contact me on neil.west@belvoir.co.uk

Who owns what property in Gloucester?

Last week, I was talking to a couple from the Maisemore, Gloucester, about them potentially investing in the Gloucester 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 Gloucester are very varied and complex. The quantity of property and whether property is owner occupied, social housing or private renting has a big difference on yield and capital growth.

The growth in home ownership in Gloucester, which started in the 1950’s, continued through the 1960s and, by 1971, the proportion of owner occupiers was equal to those renting (private and council). By 1981, 62.8% of Gloucester households were owner occupied and, for the first time, the proportion of rentals (private and council) was less than home owners. By 1991, it reached home ownership had risen to 73.5%. Roll into the 21^st Century and in 2001, there was hardly any change in the tenure structure in Gloucester, as owner occupation stayed relatively unchanged at 74.08%. 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. In fact, 8.68% of households were privately renting in 2001, while those socially renting (council housing) had decreased to 10.45%.

Between 2001 and 2011, the number of households in Gloucester rose, after over 5,000 houses were built in City, taking the number of households from 45,765 to 50,863, an increase of 10%. Also, the percentage of households that were owner occupiers in Gloucester dropped significantly to 67.2% (from the previously quoted 74.08% in 2001).

However, that doesn’t tell the full story, because whilst there was a significant drop in the percentages (74.08% to 67.2%), the actual numbers tell a completely different tale. Of the 33,903 households in Gloucester that were owner occupied in 2001, that figure had only dropped to 33,858 households being owner occupied .. so with only 45 less owner occupier houses, why the huge drop in percentages? 

In 2001, 3,971 houses were privately rented (8.68%) in Gloucester but roll on another ten years and there are 8,012 households in Gloucester that are privately rented (15.9%). The rapid increase in the number of households privately renting in Gloucester 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 Gloucester house price for those who were first time buyers increased by 55.9% between 2001 and 2011. This meant larger deposits which are linked to the house price, were required.

Having this knowledge of the Gloucester 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 Gloucester property market, please feel free to pop through the door of our offices on Worcester Street or send me an email to neil.west@belvoir.co.uk