Thursday, March 31, 2016

Only 1,056 Council Houses in the Bingham and Rushcliffe area left – opportunity or problem?

The ‘Right to Buy’ scheme was a policy introduced in 1980 which gave secure council tenants the legal right to buy the council home they were living in with huge discounts. The heyday of council ‘Right To Buys’ was in the 80’s and 90’s, when 1,719,368 homes in the country were sold in this manner between October 1980 and April 1998. However, in 1997, the discount available to tenants of council property was reduced and the numbers of properties being bought under the Right to Buy  scheme declined.

So what does this mean for Bingham homeowners and landlords? Well quite a lot in fact!

Looking at the figures for our local authority, whilst the number of ‘Right to Buys’ have dwindled over the last few years to an average of only 82 ‘Right to Buy’ sales per year, one must look further back in time. Looking at the overall figures, 2,257 council properties were bought by council tenants in the Rushcliffe Borough Council area between 1980 and 1998. Big numbers by any measure and even more important to the whole Bingham property market (i.e. every Bingham homeowner, Bingham landlord and even Bingham aspiring first time buyers) when you consider these 2,257 properties make up a colossal 6.4% of all the privately owned properties in our area (because in this local authority area, there are only 35,142 privately owned properties).

Bingham first time buyers and landlords can now buy these ex-council properties second hand as those original 80’s and 90’s tenants (now homeowners) have passed the time of any claw back of the discount they received.

Now let us all be honest, some (not all), but some ex-council properties lack the vital kerb appeal that some landlords crave. The new home builders know all about kerb appeal as they dress up the exteriors of their new homes to make them more appealing to buyers.

Yes, the modern stuff being built in Bingham is lovely, but too many landlords purchase buy to let property solely based on where they would choose to live themselves, instead of choosing with a business head and choosing where a tenant would want to live ... because remember the first rule of buy to let property … you aren’t going to live the property yourself. What an ex-council property lack in terms of kerb appeal, it will more than make up for in other ways.  Tenants tend to be more interested in how close the property is to a particular school or family members for childcare, for example, than the look of a property.

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is more than made up for in the much higher yields – and those built between the wars or just after are really well built. Tenant demand for such properties is good since Bingham property values are so expensive, a lot of people can’t get mortgages to buy, so they will reconcile themselves to renting, meaning there is a good demand for that sort of property to rent. Also, the very fact the council were forced to sell these Bingham properties in the 80’s and 90’s, means that today’s younger generation who would have normally got a council house to live in themselves, now can’t, as many were sold ten or twenty years ago.

So to Bingham landlords I say this … don’t dismiss ex-council houses and apartments – but remember the 1st rule of buy to let (see above).  Bingham landlords should go in with their eyes open and take lots of advice. Not all ex-council properties are the same and even though they have good demand and high yields, they can also give you other headaches and issues when it comes to the running of the rental property. 

That just leaves the 1,056 council houses still owned by the local authority to be sold to their tenants in the coming years!

Friday, March 25, 2016

2 bed investment property on Cropton Grove in Bingham

This 2 bedroom property looks to be in excellent condition inside and is on the market with Rex Gooding for £150,000, with the potential to see a 5% return. 

This looks like the sort of property that will require very little work to get it ready to let.

Thursday, March 24, 2016

Private Renting in Bingham increases by 51.57% in 20 years

You find me in a reflective mood today as I want to talk about the future of investing in property in Bingham. Many people have mistaken the ever rising Bingham (and in fact the whole of the UK) property market since the 1960’s as the eternal gift that kept giving as property prices constantly rose and doubled every five to seven years.

Whilst George Osborne has decided now is the time for changes in taxation of buy to let property, many pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable and safe return on property with these changes. You need to study the market, take advice and opinions from many people and then decide what the future demand will be.  Remember, tenants will always want a roof over their head and I don’t see the HM Government building the millions of houses required to house them?

No one could have predicted how the property market has changed in Bingham over the last couple of decades. Looking specifically at the Newark Parliamentary Constituency, twenty years ago, 24,502 households (meaning 67.05% of property) was owned and only 3,138 households were privately rented (meaning 8.59% of property was rented out by private landlords). Roll the clocks on twenty years and the change shows that now 30,268 of properties in the Constituency are home-owners (a drop to only 54.30% being owner occupied) with the jump in private renting increasing as 5,430 properties are now privately rented; proportionally 13.09%. (NB neighbouring constituencies show similar changes as well).

Who would have predicted in 1995 the private rental sector in
Bingham would have grown by 51.57% in the proceeding 20 years?

Also, if you had asked someone in 1995 to predict what would happen to property values over the proceeding 20 years (ie between 1995 and 2015), they might have predicted similar growth to the growth experienced over the previous 20 years (ie between 1975 and 1995), which was a very impressive 351.55%. Yes, property values in Bingham have increased over the last 20 years (between 1995 and 2015), but by a more modest 126.63% (and most of that can be attributed to house price growth between 2000 and 2006.)

The property market is constantly changing and buy to let for too long has been heavily dependent solely on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the doom-mongers and see it as bringing many opportunities. You might need to change your buy to let benchmarks and / or your approach to financing, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.

The advice I give to my landlords is this: these changes will make some landlords panic, meaning competition for decent Bingham buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise Bingham buy to let landlords to thrive in. If you want to learn more about the Bingham Property Market, feel free to pop in to our office for a chat with me.  Keep your eye on this blog too, which is solely based on the property market in Bingham and potential buy to let investments with honest return figures.

Wednesday, March 23, 2016

Tried and Tested Buy To Let For Sale in Bingham

This property is being marketed to investors only, by Hammond Property Services.  It is currently achieving a monthly rental of £595.00 and so is a fairly low risk investment for any landlord.

See full details here:

Picture 1  Picture 4  Picture 2  Picture 7

Saturday, March 19, 2016

Investment Property for Sale in Calverton - Good Yield

This family home is situated in the popular village of Calverton.  A large village with plenty of amenities and good schools, Calverton offers good access to Nottingham city and also the Nottinghamshire countryside.

The property would make a good investment due to its relatively low asking price, and hence high rental yield of around 6%.  There may be some minor maintenance works to be done, and so would need to be viewed to make an assessment.

It is on the market with Gascoines of Calverton, with a current asking price of £129,950.

Thursday, March 17, 2016

£170,000 inheritance - Is buying Bingham Property still the best place for my windfall?

I had an interesting email from someone in Bingham a few weeks ago that I want to share with you (don’t worry I asked his permission to share this with you all). In a nutshell, the gentleman lives in Newton, he is in his mid 60’s and still working. He has a decent pension, so that when he does retire in a couple of years time, it will give him a comfortable life. He had recently inherited £170,000 from an elderly aunt. 

One option he told me was put it into a savings account. The best he could find was a 2 year bond with the Post Office which paid 1.9%; meaning he would get £3,230 in interest a year. One of his other options was to buy a property in Bingham to rent out and he wanted to know my thoughts on what he should buy, but he had concerns as he didn’t want to take a mortgage out at his time of life. He was also worried about all the tax changes for landlords he had read about in the news.

Notwithstanding the war on Bingham landlords being waged by George Osborne, the attraction of bricks and mortar endures for many. As my contact is a cash buyer, he would not have to deal with the intricate cut to mortgage interest tax relief that will diminish, or even eradicate, the profits of many Bingham landlords. It’s true he would face the extra 3% in stamp duty to buy a second property, but with some good negotiation techniques, that could soon be mitigated.

I told him that buying a Bingham buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £3,230 a year or, as he rightly suggested, invest in property in Bingham. The average yield (yield being the equivalent of the interest rate on the property) at the moment in Bingham is 4.11% per annum, meaning our potential F.T.L (First Time Landlord) should be able to, depending on what he bought in the town, earn, before costs, £6,987 a year.

The bottom line is that the success of investing in Bingham buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike with a savings account, with property the capital you invested can also go up (and yes, it can go down as well – more of that in second). Property values in Bingham have risen in the last twelve months by 4.7% meaning, that if our chap had bought a year ago, not only would he have received the £6,987 in rent, but also seen an uplift of £7,990 …meaning his overall return for the year would have been £14,977 (not bad when compared to the Post Office!).

..  but the doom mongers amongst you will say, property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices had bounced back to their ’79 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped in 1988 and did take 13 years to reach back to those ’88 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Land Registry, average property values in Nottinghamshire currently stand 5.8% below the January 2008 level, and anecdotal evidence suggests that in the nicer parts of Bingham, we are well above these sorts of levels. Therefore, all this talk of property crashes is unfounded.

… and what would that £170,000 get you in Bingham? A brand new 2 bed semi on Bowland Road or a 3 bed terrace on The Paddock .. 

Modern Apartment in Eden Walk, Bingham - Perfect Investor Property

These apartments are so easy to let and with very little in the way of maintenance, they make a fantastic choice for buy to let investors.

On the market for £ 129,950, it is situated in a lovely residential development, with easy access to the A52 and A46 for Nottingham, Grantham, Leicester and Newark.

It should see a healthy return of over 5%.

See full details here:

Picture 1  Picture 3  Picture 6  Picture 10

Thursday, March 10, 2016

303 Bingham Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?

I bumped into a local property investor and he wanted to know my thoughts on the future of the Bingham property market, and I would now like to share with you that conversation, my Bingham property Blog reading friends.

People are always going to need a roof over their heads – it’s a necessity for every single person. The 22 to 30 year olds of the town have a choice in what type of roof they have ... they can rent from the council, they can rent from a private landlord or finally they can get a mortgage and buy something. In the 70’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently, fewer young people of Bingham have been buying; choosing to rent instead – mainly from private landlords (as councils have been selling off council housing on the Right to Buy schemes).

Roll the clock back 20 years and Bingham was a different place. There were 2,900 households in Bingham and 2,248 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 34.1% to 3,889 and quite surprising (to me at least), the number of owner-occupiers has increased to 2,969.

However, it's the rented sector that is truly fascinating … twenty years ago, only 111 properties were privately rented in Bingham ... and now its 414!

The twenty-somethings of Bingham haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 365 to 119 over the same twenty year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Bingham and those who educate themselves and treat it as a business will survive and prosper.

The best way Bingham landlords can protect their property investment (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Bingham (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

I have also been asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are, that with such low supply (numbers of property for sale), and high demand, it is hard to imagine Bingham property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the the housing market should return to balance.

Monday, March 7, 2016

Bingham Buy to let £134,950 - 4.9% return

This 2 bed is an ideal investment opportunity as it is only on the market for £134,950 with Rex Gooding.

Popular with professional couples and being conservative I would expect to achieve £550 pcm which would give a potential yield of 4.9% if purchased for the asking price.

Thursday, March 3, 2016

Bingham Buy to Let sees returns of 8.01% in 2015

I got chatting with one of my out of town landlords who was back in Bingham visiting his family the other day.  Brought up in Bingham, he went to Toothill School back in the 1970’s and is now a University Lecturer in central London.  He has a small portfolio of four properties in the town and wanted my advice on where to buy the next property in Bingham.

I reminded him that the most important thing when considering investing in property is finding a Bingham property with decent rental yields for income returns, yet at the same time, having the potential for capital growth from rising house prices over time. Going into 2016, Bingham landlords will be under more pressure to find the best permutation of yields and capital growth, as extra stamp duty charges for buying properties and a squeeze on mortgage interest relief will raise their costs.

Before we look at yield and capital growth, one important consideration that often many landlords tend to overlook, is the propensity of how likely the rent will increase. Interestingly, the average rent of a Bingham property currently stands at £614 per month, which is a rise of 6.2% compared to twelve months ago (although it must be noted this rise in rents is for new tenancies and not existing tenants).

Anyway, back to yield and capital growth, the average value of a Bingham property currently stands at £234,100, meaning the average yield stands at 3.15% per annum, which on the face of it, many landlords would find disappointing.  That is the problem with averages, so if I were to look at say 2 bed houses in Bingham which are the sort of properties a lot of landlords buy, in Bingham, the average value of a 2 bed house is £142,400, whilst the average rent for a 2 bed house is £511 per month, giving a yield of 4.31%.   However, if that wasn’t high enough, there are landlords in Bingham who own some specialist properties with specialist tenancies, that are achieving nearly double that yield – again it comes down to your attitude to risk and reward (give me a tinkle if you wanted a chat about those sorts of properties – although they can be fun and games!).

Ultimately investors want to be making gains from both rent and house price growth. When combined, the rental yield and capital growth gives you the return on investment. Return on investment is everything.   So, looking at property values in Bingham, these have risen in the last year by 3.7% …. which means the current annual return on investment in Bingham for a typical 2 bed house is 8.01% a year .... not bad.

To answer the question on what he should buy, once or twice a week, I post what I consider to be the best buy to let deals in Bingham, irrespective of which agent they are being marketed with.   

Wednesday, March 2, 2016

Cracking Family Home in East Bridgford Would be a Great BTL Investment

This is a fab family home in the popular village of East Bridgford.  Full of amenities, including a primary school, the village itself has a semi-rural feel, yet still being only 10 miles from Nottingham. Its up for sale with Richard Watkinson for £159,950.

The house looks good to go, with little maintenance needed to bring it up to letting standard.

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Image 2 of 12: Council tax band

Image 4 of 12: Sitting room

Image 6 of 12: Dining kitchen