Month: October 2015

30th October 2015

2 bedroom maisonette, Langley Green, Crawley

Here’s a maisonette in Langley Green, Crawley which according the agents, Fox and Sons, requires a little tender loving care. Well, we certainly wouldn’t disagree with them ! However, with a guide price from £200000, there may be some scope to add value and provide a good buy-to-let investment. Here’s the Rightmove link for more further details http://www.rightmove.co.uk/property-for-sale/property-37349547.html

LG30-10-15You may recall that we featured a Langley Green maisonette previously (16th September 2015 blog) which was in tip-top condition and had a guide price of £220000.  At the time rents for these types of properties were, and still are, in the region of £975pcm. All things being equal this gave a gross rental yield of around 5.3%.

If the property we’re featuring above were in a similar condition to the one in our previous blog, we would expect it to achieve a similar rent of £975pcm. Assuming that you could buy at the lower end of the guide price range, you can see that there is some room (perhaps even up to £20k) to completely renovate the property. Of course, if your renovation costs were lower, your rental yield, based on purchase price & renovation costs, would be even higher.

As we’ve previously mentioned, if you can move quickly on any deal, you may well be able to drive a harder bargain & hence get a lower price. This idea was also mentioned in todays’ FT ( http://www.ft.com/cms/s/0/b902e6e4-7e54-11e5-a1fe-567b37f80b64.html ). There’s also another aspect that might help you in your bargaining position if you went for this property. Can you guess what it is ?

The internal pictures of the maisonette show that, not only is it in need of a “make-over”, but it’s also empty! An empty property is one that is not earning money, or is perhaps costing mortgage payments to someone. So may be the vendor might accept a lower price for a quicker sale. Who knows ? But, if you don’t ask, you don’t get !

If you’re looking for investment properties in Crawley or surrounding towns, or have your eye on a potential buy-to-let and would like a second opinion, we’d be happy to have a chat with you. Just give us a call on 01293 515588 or e-mail us at crawley@northwooduk.com.

28th October 2015

1 bedroom apartment, Commonwealth Dr., Three Bridges, Crawley

Moore & Partners have just marketed this 1 bedroom apartment in the ever popular Commonwealth Drive development, Three Bridges, Crawley. The guide price ranges from £180000 to £200000. This development is ideally located for access to Three Bridges main line station, the Town Centre, Manor Royal industrial estate and last but not least, Gatwick airport. Location-wise, it is ideal investment property material. For more details take a look at the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-53724203.html

Commonwealth Dr 27-10-15Rents for apartments like this have been pushing up towards the £900 pcm level and even higher, which seems astonishing for just 1 bedroom! That’s supply & demand for you.

As far as gross rental yield is concerned, if you can secure the deal at the lower end of the guide price range, you’re looking at 6%.  Even at the upper end of the price range the return is still 5.4%.  Not bad at all.  If you’re an investor and in a position to move quickly, do bear in mind that you might be able to drive a harder bargain, particularly if the vendor wants completion before Christmas.

If you’re thinking of making a buy-to-let investment, perhaps for the first time, choosing the right property can seem quite a daunting task. If you would like a second opinion on what to buy & where, we’d be more than happy to have a chat with you. It doesn’t matter if you’ve seen a property advertised with another agent, we’re still happy to give you advice and, what’s more, it’s free ! Give us a call on 01293 515588 or e-mail us at  crawley@northwooduk.com.

26th October 2015

BBC News Headlines: Prices of flats rising faster than houses, says Halifax

One of our landlords called up recently regarding an article he’d seen on the BBC News website. The headline that grabbed his attention was that capital growth in flats had out-performed houses over the last 10 years, having increased in value by 60%. As he has both flats and a house that he rents out in Crawley, he was wondering if the same trend applied to his properties. If you’re interested, here’s the link to the article on the BBC News website http://www.bbc.co.uk/news/business-34444201.

On reading the BBC article further and looking into the information it was based on, it became clear that the main reason for flats out-performing houses was due to what we term as the “London Effect”. Because of the sheer size & value of the capital’s property market, the “London Effect” often skews house price information for the whole of UK. This can make it difficult to determine trends outside of the capital, unless London prices are excluded.

The BBC News report was based on research by the Halifax. If you want to take a look at their report, here’s the link http://www.lloydsbankinggroup.com/globalassets/documents/media/press-releases/halifax/2015/150923-property-types-final.pdf. In Table 1 below we show the property prices from the Halifax report.

The Halifax data in Table 1 shows that the price of flats have indeed increased UK wide by 60%. In addition, it should not be forgotten that during this period the UK suffered from a credit crunch from 2008 onwards, which saw UK property prices plummet after their peak in 2007. The Halifax data shows that all types of property have similarly shown an increase in value over the same period, with the next highest being terraced houses (41%), then semi-detached (32%), bungalows (28%) and lastly detached houses (21%).

Table 1 26-10-15To see if the same or similar trends apply to Crawley, we looked at the change in flat & house prices using Land Registry data. The results are shown in Table 2.

Table 2 26-10-15The property price trends for flats in Crawley in Table 2 are very different from those reported in the BBC News & Halifax headlines. In contrast to the 60% UK wide increase in the price of flats over the last decade, flats in Crawley have only increased by 26%. One reason for the lower price increase is the “London Effect”, which is obviously not present here in Crawley. In fact, looking at the data in Table 2, we see that the price of flats in Crawley have in fact underperformed houses by at least 15% over the last decade.

In Graph 1 below we show how average prices for houses and flats in Crawley have changed year on year over the last decade. The effects of the double dip recession in the UK economy on prices can also be clearly seen for both types of property. One aspect that is also very clear from this graph is the divergence in prices between flats and houses from 2005 onwards. In 2005, for example, the average price paid for a house in Crawley was 49% higher than for a flat. Over the intervening years this difference has increased. In 2010, it was 73% and in the current year it has increased to 113%. The main reason for this divergence is that the price of flats in Crawley over the last decade have remained relatively subdued compared to houses. Again, this trend is clearly shown in Graph1.

Graph 1 26-10-15

So what conclusions can we draw ?

The first is that the BBC News & Halifax headlines that flats had outperformed houses over the last decade, does not apply to the Crawley market. In fact, by detailed analysis of the Land Registry sold price data, we have shown that the reverse is in fact true for Crawley.

The second conclusion is that price increases seen for flats & houses in Crawley have diverged over the last decade. Flats have performed relatively poorly with only a 26% increase in their value compared with 41% for houses.

In later blogs we will look more closely at the possible reasons to explain the relatively poor capital appreciation achieved by flats in Crawley market over the last ten years.

*Average Flat & House prices calculated from Land Registry data

23rd October 2015

1 bed flat in Broadfield, Crawley

For those investors interested in high rental yields, this 1 bedroom flat in Broadfield, Crawley has just come on to the market with agents Taylor Robinson, priced at £139950. Here’s the Rightmove link if you’re interested in taking a look http://www.rightmove.co.uk/property-for-sale/property-51455587.html. From the pictures, the flat looks to be in good order.

Broadfield Pl 23-10-15With regards to letting, we would expect a flat like this to achieve a rent of between £725pcm & £775pcm. Based on a purchase price of £139950, this would give a gross yield of between 6.2% to 6.6%. Followers of our blog will note that this is probably the highest potential gross yield we have reported to date. Do remember the “Golden Rule” of property investment, however, that when the rental yield is high, capital growth tends to be lower.

If you’re considering investing in a buy-to-let property in Crawley or surrounding towns, why not give us a call. We’re more than happy to have a chat with you about our favourite subject ! Alternatively, drop us an e-mail to crawley@northwooduk.com.

21st October 2015

3 bedroom terrace house, Tilgate, Crawley

This 3 bedroom house in Tilgate, Crawley, popped on to the market yesterday with estate agents Moore & Partners. The Guide Prices starts at   £260000. From the pictures the property looks to be in very good order and should make an ideal family home whether renting or buying. For more details have a look on Rightmove. Here’s the link: http://www.rightmove.co.uk/property-for-sale/property-49700830.html?premiumA=true.

Apparently there’s an open day on the 24th October, so if you’re interested give the agent a call and have a look round.

Johnson WalkIn the present market, houses like this one will usually rent for between £1150 pcm to £1250 pcm. If you could secure the house at the lower end of the guide price range, these rental figures translate into a gross yield of between 5.3% to to 5.8%. Pretty good !

Two things to bear in mind. If you’re an investor with nothing to sell and are willing to progress the sale quickly, this can be attractive to a vendor. The vendor could therefore consider an offer from you more favourably than someone else who is, for example, in a sales chain. The other point is that the lettings market usually goes fairly quiet over Christmas, not picking up again until late January /early February. As such, if you purchase the house and complete during the festive period, you may have a longer than usual void period i.e. when the property is without a tenant. Don’t panic (Captain Mainwaring !), however, as the lettings market normally picks up again at the end of January / beginning of February.

If you’re considering buying an investment property in Crawley or the surrounding towns, why not give us a call on 01293 515588. If you see a potential investment property through another agent, we’re more than happy to take a look ourselves on your behalf. We can then give you an unbiased opinion on whether the property represents a good investment or not. There’s no charge for this either ! Alternatively, drop us an e-mail to crawley@northwooduk.com.

19th October 2015

Renovation Project  – Does it Stack Up?

3 bed semi, Three Bridges, Crawley

Here’s a three bed semi-detached house in Crabbett Road, Three Bridges, Crawley, in need of complete modernisation. The property is being marketed by Fox & Sons with a guide price of £260000 to £280000. If you can buy the property at the right price and take care not to overspend on the renovation costs, the property could be a good investment. Here’s the Rightmove link for more details: https://www.rightmove.co.uk/rmplus/property/showPropertyMcr.action?propertyId=37026873

Crabbett Rd 3 BridgesSo I can hear you asking, is it a good buy or not?

Well, there are clearly two aspects to this property from an investment point of view. Doing it up and then either selling or letting it out.  Let’s consider the property from the point of view of renting.

Assuming that you’re not a “slum landlord”, the property clearly needs a top to bottom revamp. You’ll also notice from the picture above that the house next door has off-road parking to the front and what looks a garage at the end of the shared driveway. In our opinion, both off-road parking and a garage would be highly desirable and would need to be factored in to any cost analysis. Remember that when these properties were built, families did not usually own more than one car, if that. Nowadays, however, many have 2 or even 3 cars. So providing additional parking/garaging space is, in our opinion, a priority to seriously consider.

One way of seeing whether an investment deal stacks up is to consider how much it would rent for. If we assume that the property is in “tip-top” condition, with additional parking etc…., we would expect it to rent for around £1200pcm (and may be a bit more) in the current market.

Now assume that the property achieves a sensible gross yield of say 4.5% to 5%. Based on the achievable rent and yield figures, we can now calculate how much the property should be worth. If you like, this is a “reverse yield” calculation, where we know the likely achievable rent and a sensible range of yields for the property type.

So, based on a 4.5% to 5% gross rental yield and a rent of £1200pcm, the value of this property in “tip-top” condition would be expected to be somewhere in the region of £288000 to £320000.

Does this range of calculated values for the property look sensible, or is it wide of the mark?

Well, looking at the Rightmove comparables there is in fact another property in Crabbet Road which was marketed at “Offers in Excess of £330000” by agents Mansell McTaggart. This property is now under offer – here’s the link https://www.rightmove.co.uk/rmplus/property/showPropertyMcr.action?propertyId=50464786. The Mansell McTaggart property, however, has a large garden & has been extended to give additional downstairs space and 3/4 bedrooms. However, like the property we’re considering, it also needs modernisation.  In our opinion, our calculated price range does seem to fit reasonably well with that of the slightly larger property advertised by Mansells.

Now for the final bit…. at last!

Let’s assume that the property we’re considering is now in tip-top condition and worth about £290000 i.e. towards the lower end of our calculated value range. If we bought the property for £260000, we would have in theory £30000 to play with in order to do the renovation work. If we spent any more than this, we may well be overspending and putting more money in to the property than it is worth. Of course, if the property once renovated were worth £300000, we would effectively have £40000 to invest in the renovation works, before we started to overspend.

Having completed our calculations and looked at the comparables for both sale and rent, the property appears to stack-up as a potential investment…. at least on paper.  If we were interested in going further with this property, we would now need to view it and see just how much money was needed to be spent, in order to bring it up to “tip-top” order.  For this we may also need to take trades people along to provide quotes for the work required.

If you’re looking for a renovation project, or want a second opinion on one that you have your eye on already, why not give us a call on 01293 515588 for a chat. Our advice is free. Alternatively, just drop us an e-mail to crawley@northwooduk.com.

16th October 2015

2 bed apartment, Three Bridges, Crawley

Another flat in Commonwealth Drive, Three Bridges, Crawley has just come up for sale. Marketed by Cubitt & West at £220000, this property is £5000 cheaper than a similar apartment we featured a days ago. Apparently there’s an open day tomorrow (17th October) …..so if you’re interested, you’d better get your skates on and give Cubitt’s a call. Here’s their number 01293 263037 ! For more information about the property check out the details on Rightmove at http://www.rightmove.co.uk/property-for-sale/property-36990450.html

Commonwealth DrLike the property featured recently, rents have been pushing upwards and we’re starting to see these flats let for between £1025 to £1100pcm. Based on the quoted asking price of £220000, this would give a gross yield ranging from 5.6% to 6%. These yield figures are pretty good and we’ve certainly seen them creeping up over the last few months, as demand outstrips supply. You may well see things ease off a bit, however, towards Christmas and further into Jan 2016. Makes you shiver just thinking about it !

If you’d like some advice about property investment in Crawley, then do please get in touch with us. Our advice is free and we’d be more than happy to have a chat with you about our favourite subject ! Whether you’re an experienced landlord or completely new to buy-to-let, give us a call on 01293 515588 or e-mail us on crawley@northwooduk.com

13th October 2015

2 Bedroom Flat, Pembroke Pk, Three Bridges, Crawley

This 2 bedroom flat has just come on to the market today with estate agents, Mansell McTaggart. With a guide price range of £225000 to £235000, the property includes a balcony & allocated underground parking. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-55362476.html

Pembroke Pk13-10-15There are two key aspects to this property that should appeal to potential investors. Firstly, there is an en-suite shower to the main bedroom & a shower over the bath in the family bathroom. Secondly, both bedrooms are doubles. The apartment should therefore appeal to both couples and sharers alike, which is certainly an investor plus point in helping to reduce void periods between lets.

Properties like this rent for £1000pcm to £1050pcm in the current market. Assuming you were to buy at the bottom end of the guide price range, you’d expect a gross yield of between 5.3% to 5.6%. Not too bad at all !

If you’re new to buy-to-let investments or are an experienced landlord contemplating adding to your existing portfolio, why not give a call on 01293 515588 for a chat. Alternatively, you can send us an e-mail to crawley@northwooduk.com.

10th October 2015

2 Bedroom, Split Level Maisonette, Ifield, Crawley

Take at look at this 2 bed, split level maisonette in Ifield, Crawley, that has just come on to the market. The property is a “Commission property” i.e. built as part of the Crawley New Town development, post 2nd World War. As such, although it is not new, it has the advantage of much larger all round accommodation, compared with its contemporary counterparts. Add to that a large private garden and we think it would make a good long-term investment.

The property is being marketed by Martin & Co with a Guide Price of £210 000. Here’s the Rightmove link for further details: http://www.rightmove.co.uk/property-for-sale/property-51870907.html

Ifield - Warren DrProperty like this one in Ifield, Crawley, will appeal particularly to couples with young children because of the private garden. Based on the guide price, to get a 5% gross annual return, you would need to achieve a rent of £875pcm. We would estimate that a property like this should achieve £875pcm to £950pcm.

If you’re looking for property investment in and around Crawley, or know someone who is, give us a call on 01293 515588 to discuss what options are available in the area. Alternatively, e-mail us on crawley@northwooduk.com.

8th October 2015

3 Bed Semi, Three Bridges, Crawley 

This property has just popped up today in St Richard’s Mews, Broomdashers Road, Three Bridges, Crawley. On the market with King & Chasemore for offers in the region of £290 000, the property was previously marketed for £299 950 from April this year. The drop in price is probably an indication that the vendors are motivated and would really like to sell in the current “selling season”. For more details here’s the Rightmove link: http://www.rightmove.co.uk/property-for-sale/property-54703412.html

Broomdashers 8-10-15As an investment, this property would appeal to a family with children. In our opinion it is has a number of things going for it. These include: 2 allocated parking spaces and proximity to local schools, the town centre & Three Bridges station for fast trains to London – good for commuters. Decoratively, at least from the pictures, it also appears to be in good condition.

The other feature we like about this property is that it is Halls Adjoining with next door. So, if the next door neighbours are overly sensitive to noise from TV’s etc….. the doors to the lounge/diner can be closed providing a sound barrier. Less hassle for tenants, neighbours & landlords alike !

Looking at houses in the area from a rental perspective, this type of property should achieve between £1200pcm & £1250pcm (and may be more). Based on these rental figures and assuming you could secure the property for £290 000, you would expect to get a gross yield of between around 4.9% to 5.2%. Of course, as an investor with (presumably) no dependent sale, you might be in a strong position to negotiate the price even lower, particularly if you are willing to do the deal quickly !

If you’re an experienced landlord looking for new property investments, or perhaps you’re new to “Buy-to-Let” and would like some advice, why not call us on 01293 515588 for a chat about  the different options Crawley has to offer. You can also e-mail us on crawley@northwooduk.com