Month: February 2016

23rd February 2016

2 Bedroom House, Redwood Close, Northgate, Crawley

If you’re looking for a freehold investment property rather than a flat, take a look at this 2 bedroom house in Redwood Close, Northgate, Crawley. The house has just come on to the market with estate agents King & Chasemore for Offers Over £240000. From the marketing photos the property looks to be in very good condition and includes a garage to the rear, accessed through the back garden. Here’s the Rightmove link if you want to take a closer look http://www.rightmove.co.uk/property-for-sale/property-40042080.html?premiumA=true

20-2-16 Redwood Cl

The agents are planning an Open House on Saturday 27th February, so if you’re interested give them buzz and put it in your diary !

Estate agents usually advise their clients (i.e. the sellers) about the buying positions of any potential purchasers. As a property investor, hopefully with your finances already sorted, you should therefore be in a good buying position if you wish to proceed.

However, please don’t forget to factor in the proposed stamp duty hike for buyers of 2nd properties, which “kicks-in” (in more ways than one !) at the start of April this year. If you can complete on your purchase before 1st April, you will pay at the standard Stamp Duty Land Tax (SDLT) rates on the purchase price. If, however, completion were to take place on or after 1st April, you’ll have to add another 3% in SDLT ! At present it is believed that the additional 3% SDLT can be offset against future capital gains when you sell (see, for example, http://www.thisismoney.co.uk/money/buytolet/article-3333949/The-buy-let-stamp-duty-tax-trick-landlords-sleeve.html) . However, do bear in mind that governments have a nasty habit of “moving the goal posts”, particularly when it comes to tax. In other words, even if in theory you can claim back the additional SDLT now, there is no guarantee the rules won’t be changed in future.

So that’s the bad news, what about the good news ? Let’s have a look at the rental yield.

Properties like the one we’re considering here let for between £1025pcm & £1150pcm. Indeed, we let one back in September 2015 at £1025pcm. Assuming that you could secure the purchase at £240000, the range of rents we’ve quoted would give yields of between 5.1% & 5.75%. In our opinion yields of this size are very respectable indeed for the Crawley property market.

If you’re looking for further property investments in and around the Crawley area, or perhaps you’re looking at Buy-to-Let for the first time, why not give us a call on 01293 515588. We have many years of experience in the Crawley property market and, what’s more, our advice comes for free. Alternatively, you can always drop us an e-mail to crawley@northwooduk.com.

The opinions expressed in this article are those of the author only and not of Northwood. If you are considering investing in property, please make sure that you seek appropriate professional advice.

20th February 2016

Seasonal Uplift in Crawley Property Prices

The daffodils are well & truly out in Crawley and, at the time of writing, we’re still only three quarters of the way through February !

20-2-16 Daffodils

As the weather warms-up & we move towards the Spring, buyers also begin to emerge from Winter hibernation. As a consequence, we start to see the annual pick-up in the housing market up and down the country.

Reflecting this increased activity in the housing market, the February 2016 Rightmove House Price Index (see http://www.rightmove.co.uk/news/February-2016-Property-Trends-Infographic) indicated an average month-on-month increase in asking prices of 2.3%. If this rise were repeated throughout the year, it would mean an annual increase of over 31% !

Well, I can hear you say, “that’s not going to happen, is it !” Our answer to that is …. you’re right, it’s not going to happen !

Nonetheless, however, the 2.3% month-on-month rise reported by Rightmove is indicative of the seasonal factors that provide a boost to asking prices everywhere, including Crawley.

As a number of our landlord investors know, seasonal factors are not the only effect behind the increase in property prices this year. One other important (and hopefully never to be repeated) factor, is the UK Governments proposal to increase stamp duty by 3% for those purchasing 2nd homes, including Buy-to-Let investors.

The Government has argued that Buy-to Let investors have been instrumental in pushing-up property prices, way beyond the reach of first time buyers. To contradict this, however, data released by the Council for Mortgage Lenders (CML), and reported in Landlord Today, (https://www.landlordtoday.co.uk/breaking-news/2016/2/first-time-buyers-outnumber-landlords-three-to-one) shows that although Buy-to-Let investors formed a large proportion of borrowers in 2015, they were in fact out numbered 3 to 1 by first time buyers.

Whatever the merits or otherwise of the Governments proposed stamp duty increase, D-day for the rate hike is set for 1st April 2016. So, if you’re currently in the process of purchasing a Buy-to–Let property, make sure it completes before April fools day, or you might be landed with more than just a silly prank for your efforts !

Some commentators have predicted that after 1st April 2016, demand from Buy-to-Let investors will start to dry up. As someone who does not own a crystal ball, I cannot guarantee this is going to happen – only that the argument seems plausible.

So what about the effect on Crawley property prices ?

It’s clearly too soon to see whether there will be a spike in actual prices paid up to April 2016. This information will probably not be available from Land Registry until sometime in the middle of May. However, a good indication of whether prices are starting to increase is to look at advertised asking prices. This is because an increase in asking prices usually translates into an increase in actual prices paid.

To get a feel for the seasonal effect on property prices, together with any rise associated with the imminent stamp duty increase, we’ve looked at asking prices for 2 bedroom flats at Crawley’s ever popular Commonwealth Drive development. Average advertised asking prices in the last 4 months of 2015 have been compared with those that have come on to the market since the start of 2016. The results are shown in the table below.

Table: Average advertised sales & rental prices for 2 bedroom flats at Commonwealth Drive, CrawleyTable 20-2-16* From Rightmove advertised prices    ** Rounded to the nearest £100

 

The table shows that the increase in average asking prices in 2015 compared with 2016 is £7900, or nearly 3.6%. So the price rise for the Commonwealth Drive flats in Crawley has been even higher than the 2.3% rise reported nationally by Rightmove.

As a property investor, one question to ask will be, if the increase in asking prices translates into actual prices paid, how will this affect rental yield ?

In order to give an answer to this question, we checked the average advertised rents over the same periods. We’ve then simply calculated the resulting yield based on advertised asking prices. The results are also shown in the table. As you can see, average rents, which have increased from £1006pcm to £1053pcm, have risen by 4.7% i.e. over 1% more than the advertised asking prices for the same period. The resulting gross rental yields (the right most column in the table) have also improved, albeit, slightly.

In conclusion, although we’re seeing the usual seasonal increase in property prices in Crawley (at least as far as the flats at Commonwealth Drive are concerned), there is also the possibility of an additional effect due to the imminent stamp duty hike for Buy-to-Let investors. Advertised rents have also increased at a higher rate, with rental yields nudging up a little as well.

Please do bear in mind that we can’t judge trends in the whole Crawley property market based on one set of data. Nonetheless it will be interesting to see just what effect the increased stamp duty hike will have on asking prices for flats at Commonwealth Drive and elsewhere in Crawley.

Post April 2016 of course, we’ll also be looking to see whether there are any signs of reduced demand for investment properties from Buy-to-Let landlords. Rest assured, we’ll be on the case just as soon as the information becomes available !

The opinions expressed in this article are those of the author only and not of Northwood. If you are considering investing in property, please make sure that you seek appropriate professional advice.

 

 

 

 

17th February 2016

3 Bedroom House, Collins Rd, Bewbush, Crawley

Apartments have featured quite heavily recently with regard to our analysis of investment opportunities in the Crawley property market. So for a change, here’s a very presentable 3 bedroom house that has recently come on to the market in Bewbush, Crawley.

The property, which is being advertised by estate agents King & Chasemore, has a guide price of £265000. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-39901038.html

Collins Rd BB 14-2-16

The property is clearly a family home, but could also just as easily appeal to sharers. Advantages in this regard are ample off-road parking, a downstairs WC and a bathroom which appears to include a bath & shower cubicle – though please check this with the agents.

From an investment point of view, comparable properties let from around £1100pcm to £1200pcm. Based on the guide price of £265000, this would in our opinion give you a good range of potential gross rental yields from around 5% to 5.4%.

Should you consider investing in this property, however, please don’t forget to check that the bathroom includes a shower !

If you’re new to property investment, but would like to consider “dipping your toe in the water”, we can help guide you through the process. We’re happy to give you advice on any property you see, be it through ourselves or even through another estate agent…… and what’s more, we won’t charge you ! So don’t hesitate to pick up the phone and give us a call on 01239 515588. Alternatively, you can always drop us an e-mail to crawley@northwooduk.com. We look forward to hearing from you.

PS      We’ve recently published our February issue of the Crawley Property Update. In this issue we look at the performance of the Crawley property market over 2015, compare the relative performance of flats in Redhill & Crawley and also look at how to target your investment property to maximise its’ potential. If you’d like a copy of the Crawley Property Update, then give us a call or e-mail us your request. As with our advice, the Crawley Property Update is free !

The opinions expressed in this article are those of the author only and not of 
Northwood. If you are considering investing in property, please make sure that you 
seek appropriate professional advice.

 

 

 

 

 

 

 

 

14th February 2016

1 Bedroom Maisonette, Tolgate Hill, Crawley

Happy Valentine’s day !   ♥

To celebrate here’s a 1 bedroom maisonette on with Astons estate agents at £129950 in Tolgate Hill, Crawley. Unfortunately, there are no internal pictures, but here’s the Rightmove link if want further details. http://www.rightmove.co.uk/property-for-sale/property-52995727.html

Tolgate Hill Maisonette 14-2-16

According to Astons marketing literature the property is being marketed to INVESTORS ONLY as there is a tenant in-situ, currently paying rent of £675pcm. If you consider purchasing this property together with the tenant, the “usual rules” apply – check that rental payments have been made on time and that the property is being looked after well. In addition, make sure you remember to ask about any outstanding maintenance issues. If there are any that are unresolved, our advice would be to insist that they are fixed before you complete on the purchase.

So what about the rental yield ?

Well, based on the purchase price & stated rent, the gross rental yield would be 6.2%, which is very healthy indeed for the Crawley market.

If you’re looking to beat the stamp duty threshold hike and purchase this property before April, you’d better get your skates on ! Having said that, please make sure that do all of the necessary due diligence before committing to buy the property. As someone once, “Act in haste, repent at your leisure” !

If you’re looking to invest in the Crawley property market and would like some advice on what and where to buy, please give us a call on 01293 515588. Our advice is free and we’d love to hear from you. Alternatively, you can drop us an e-mail to crawley@northwooduk.com.

We’ve recently published our February issue of the Crawley Property Update. In this issue we look at the performance of the Crawley property market over 2015, compare the relative performance of flats in Redhill & Crawley and also look at how to target your investment property to maximise its’ potential. If you’d like a copy of the Crawley Property Update, then give us a call or e-mail us your request. As with our advice, the Update is free !

The opinions expressed in this article are those of the author only and not of 
Northwood. If you are considering investing in property, please make sure that you 
seek appropriate professional advice.

11th February 2016

I’m

1 Bedroom Maisonette, Bewbush, Crawley

King & Chasemore estate agents are advertising this 1 bedroom maisonette in Waterfield Gardens, Bewbush, Crawley at Offers Over £160000. The pictures look very good indeed and the agent says that the property has been well looked after. The main picture they’ve used is one of the lounge/diner and it does look very inviting !

Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-39865725.html

Waterfield Gdns 11-2-16

The accommodation appears to be of a good size and properties like this can achieve between £700 pcm to £750 pcm in rent. Based on these rents, the rental yield ranges from around 5.3% to 5.6%, so very respectable indeed.

In terms of purchasing, as an investor you would probably be competing against first time buyers & people downsizing. For rental purposes, however, your target markets are more likely to be young or older couples (without children) & possibly singletons.

If you’re looking to invest in rental property and would like some advice about what to buy and perhaps more importantly, what NOT to buy, give us a call on 01293 515588. Our advice is free and we’d love to hear from you. You can also e-mail us on crawley@northwooduk.com.

 

 

 

 

8th February 2016

2 Bedroom Maisonette, Langley Green, Crawley

Choices estate agents have just put this 2 bedroom maisonette on the market today, with a guide price of £210000 to £220000. From the few internal photographs, the property looks to be in good order. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-52959433.html

Langley Dr Maisonette 8-2-16

One of the advantages these types of properties have over their more modern counterparts, is that the accommodation tends to be larger in size. For this particular property another plus point is that it has its own private garden. However, if you’re interested, please check whether or not the garden is attached/detached to the property. As the name suggests, with a detached garden you have to go out of your front door to gain access to the garden. This arrangement is clearly less desirable, particularly for people with children, than  the “attached” type. A quick call to the agents will clarify the matter.

From an investment point of view, the target market for this type of property would probably be a young family or alternatively, an older couple. The key for us, however, will be the garden location.

All things being equal, does the price stack up in terms of rental yield ?

Properties like the one we’re considering here currently let from between £950pcm to £975pcm. So based on the guide price, we can easily calculate the best and worst case rental yields. These come out at around 5.2% to 5.6%. So pretty healthy all round.

If you’re considering property investment in or around Crawley, it is crucial to identify the different target markets that your property will appeal to. If you’d like any advice on which type of property suits which type of tenants, why not give us a call on 01293 515588. We’d be more than happy to give you some free advice. Alternatively, you can drop us an e-mail to crawley@northwooduk.com.

 

 

 

 

5th February 2016

2 Bedroom House, Cottesmore Green, Broadfield, Crawley

Here’s a presentable 2 bedroom terraced house that has just come on to the market with estate agents Connect UK at £215000. From a quick scan of the marketing photos we would say that the property may well be empty – not much on the kitchen worktop & the fridge/freezer plug looks as though it’s been pulled out. Take a closer look and decide for yourself –  here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-39735858.html

Cottesmore Grn 5-2-16

If the property is empty and there is a mortgage to pay, the seller may well be flexible with the asking price. So if you’re in a strong position with your finances arranged, don’t be frightened to use your bargaining position to negotiate a favourable deal.

There are two other pieces of useful information to consider about this property.

Firstly, the details say there is no onward chain. This could help you by potentially speeding up the sales process. If you can complete on the purchase before the start of April you won’t be liable for the additional 3% stamp duty charge the chancellor is bringing in for the purchase of second properties.

The second piece of information is that this property is not a leasehold flat ! We know that’s obvious just from the picture, but the buying process for flats tends to be more protracted than for freehold houses. The reason for this is that as part of the sales process, management information from the freeholder’s agents will have to be obtained. This can add weeks on to the length of time between an offer being accepted and completion taking place. So if you’re in a hurry (to beat the April deadline), buying a house rather than a flat would seem a sensible option, given the choice.

So what about the rental yield ?

Two bedroom properties like this rent from around £900 pcm upwards. In fact a similar property just around the corner in Jersey Rd was advertised at £1000pcm and has recently been let. Of course, as with property sales, the advertised & agreed rental prices may differ.

However, based on rents ranging from £900pcm to £1000pcm, together with the advertised sale price of £215000, the gross rental yield would range from 5.0% to 5.6%. So quite a good yield for the Crawley market. As always, if you can negotiate a price reduction, your yield will increase. Over to you if you’re interested.

If you’re a potential investor or just curious about property investment in and around Crawley, why not give us a call on 01293 515588. We’d love to hear from you. Alternatively, why not drop us an e-mail to crawley@northwooduk.com.

 

 

3rd February 2016

1 Bedroom Maisonette, Pound Hill, Crawley

Two properties for you today !

Both are 1 bedroom maisonettes in Wakeham Greens Drive, Pound Hill. The properties are being marketed by estate agents Mansell McTaggert and Park & Bailey. Coincidently,  both are priced at £150000.

It is quite possible, of course, that these properties are one and the same but being marketed by different agents – we had thought of that ! However, from a close inspection of the fixtures & fittings in the kitchen, it would appear that they are actually two different properties. If you’re not convinced, here are the Rightmove links for a closer look  http://www.rightmove.co.uk/property-for-sale/property-52875145.html  &  http://www.rightmove.co.uk/property-for-sale/property-39646083.html .

Wakeham Greens Dr #3

From the internal pictures the properties look in pretty good decorative order. In the current rental market you would expect to achieve £700pcm  to £750pcm in rent.  Based on an asking price of £150000, this would give you a potential gross yield of 5.6% to 6%. So, not too bad at all. We actually featured a similar property back in October 2015 – this time a 2 bedroom maisonette. The yield calculations gave virtually identical results. If you’re interested, here’s the link https://wordpress.com/post/thecrawleypropertyblog.com/222

Pound Hill is one of the more favoured locations in Crawley. In addition, from our experience, your potential tenant(s) should not have any issues finding places to park their car. These properties are further from Three Bridges mainline station than the likes of flats at Trafalgar Gardens, Maunsell Park, Jacobs Court etc…. However, the distance is definitely “walkable” in our opinion and should not put people off.

Both properties are being offered with no onward chain, so if you want to beat the April stamp duty deadline, you’d better give the agents a call !

If you’ve seen an investment property that catches your eye and would like an independent opinion on its merits for the rental market, give us call before you part with any cash on surveys etc… We’ll give you an honest opinion on what we think the property will let for. We’ll also be able to advise on whether you need to do any improvements, such as decorating, to achieve the maximum from your investment. Don’t hesitate to give us a call on 01293 515588 or send an e-mail to crawley@northwooduk.com.

The opinions expressed in this article are those of the author only and not of 
Northwood. If you are considering investing in property you should seek 
appropriate professional advice.

 

 

 

 

 

 

 

1st February 2016

Crawley v’s Redhill: Investment Property – Not Football !

One of our landlords called up the other day looking to invest in another flat. Flats are his thing rather than houses and he already has investment properties in both Redhill & Crawley. He’d seen a few flats for sale in both towns and was asking our advice as to which location we thought would be better.

This got us thinking about both capital growth & rental yields in both towns. So we decided to take a closer look by comparing roughly similar types of properties in both locations, to see which one was the “best”.

Crawley people will be familiar with the Maidenbower flats at Fenchurch Road, Lyon Close and Dakin Close, while those from Redhill will be familiar with the “St Anne’s” development. Both locations are fairly convenient for their respective town centres and mainline stations to & from London. As such, the flats were and remain very popular with both tenants & landlords alike.

In order to compare the two locations we have used price paid information from HM Land Registry. Historic rental prices, as advertised on Rightmove & Zoopla, were used to calculate rental yields. In Table 1 we show the average prices and capital growth percentages for the flats in Redhill & Crawley over the last 15 years.

Table1: Average prices & capital growth

Table1 1-2-16

* Calculated from Land Registry price paid data

Prices in 2000 were roughly the same for both locations, give or take just under £6k. However, average prices for the Redhill flats have increased by 130% over the last 15 years, giving a year on year average compound rate of increase of around 5.74%. This can be compared with Crawley where there has been a corresponding overall increase of 107%, or an average compound rate of increase of 4.97%, year on year. In monetary terms the average Redhill flats have increased by about £129300 over the last 15 years, whereas an average Crawley flat has “only” managed an increase of £99650 i.e. a difference of nearly £30k !

However, as we’ve previously mentioned before in these blog articles, there are two sides to every story and property investment is no exception. For property investment, the flip side to capital growth is rental yield i.e. how many pounds we get back in rent for each pound we invest. Areas with higher rental yields tend to come with lower capital growth and vice-versa. However, combine both and you get a much fuller picture of how well a particular investment is performing.

The investment strategy of the landlord who prompted this article is fairly well balanced between capital growth on the one hand & rental income on the other. In a perfect world he’s happy to sacrifice some capital growth for rental income, so that his investments cover running costs and provide some additional income on top. His running costs include a float for the inevitable breakdowns & repairs, as well as money for refurbishing his properties every 4 to 6 years to keep them fresh & up to date.

So on the face of it, investing in the Redhill flats is a better option in terms of Capital Growth than Crawley. However, what about Rental Yield ?

In Table 2 we show average gross rental yields over the last 10 years for the Crawley & Redhill flats in question.

Table 2: Average Gross Rental Yields

Table2 1-2-16

The figures in Table 2 show that on average the Redhill flats have a lower average gross rental yield compared with those in Crawley. Over the last 10 years, the difference in yields, shown in the middle column, vary from 9.8% to 16.0%. Another way to interpret this difference is that for every pound you invested in the Crawley flats, you get between 9.8% & 16% more back in rent.

So although the Redhill flats outperform Crawley in terms of Capital Growth, Crawley is clearly the winner when it comes to Rental Yield. Deciding on whether Crawley or Redhill are “best” for you will depend on your investment strategy….. is it driven by income or long term capital growth ?

As far as our landlord is concerned, he’s gone away to think over his investment strategy. His considerations are now whether to change the balance of his portfolio to give higher rental income (i.e. higher yield), sacrifice some of the income for longer term capital growth or stay as he is. We’ll keep you posted on what he decides to do !

If you’re thinking of investing in property in Crawley or surrounding towns, it’s well worth speaking to a property professional who can help point you in the right direction. What & where to buy will depend on your investment strategy, which may be balanced or more skewed towards either capital growth or rental income. We’re more than happy to provide you with free independent advice on any investment purchase you might be contemplating. Just pick up the phone and give us a call on 01293 515588. Alternatively, you can also drop us an e-mail to crawley@northwooduk.com. We look forward to hearing from you.

The opinions expressed in this article are those of the author only and not of 
Northwood. If you are considering investing in property you should seek 
appropriate professional advice.