Tag: 2015

21st January 2016

2 Bedroom Apartment, Three Bridges, Crawley

The Pembroke Park development in Three Bridges, Crawley is ever popular with both tenants and investors alike. Here’s a 2 bedroom apartment on the development being marketed by estate agents Moore & Partners with a guide price of £210000. The property details indicate a price range of £210000 to £230000. For a closer look here is Rightmove link :  http://www.rightmove.co.uk/property-for-sale/property-39221817.html

Commonealth Dr 18-1-16

The property looks to be in good condition from the marketing photos and the apartment block itself benefits from lift access – always useful for carrying the weekly shopping ! In addition, there is a an underground parking space, a balcony and the property is offered with no chain. Other similar apartments are being offered mostly at slightly higher prices, although the vendors here would presumably like to get as close to £230 000 as they could.

As we’ve said before, flats at Pembroke Park are in an excellent location for access to Three Bridges mainline station (fast trains to London & the South Coast), Manor Royal and Gatwick Airport.

Properties like the apartment featured here attract couples as well as professional sharers. It is therefore good to know that the main family bathroom has a shower over the bath, with tiling up to the ceiling in the “bath area”.

In terms of rent, these apartments are now commanding between £1000 and £1100 pcm. Taking the best and worse case scenarios in terms of purchase price paid and rent achieved, you get a potential range of gross rental yields between 5.2% & 6.3%. Pretty healthy indeed.

If you’re considering investing in property in and around the Crawley area, either now or some time in the future, you can always give us a call for a chat. Our advice is free and if we don’t know the answer to your question, we  almost certainly “know a man who does” ! So, give us a call on 01293 515588 or alternatively drop us an e-mail to crawley@northwooduk.com.

 

 

 

 

Crawley Property: Market Review 2015

Here’s wishing you a Happy & Prosperous 2016.

Just before the Christmas break one of our long standing landlords popped into the office to wish us the Seasons Best and we got talking about what the Crawley property market has in store for the coming year. There are numerous changes afoot in the property market in general and in particular for the private rented sector (PRS). However, as we were just collecting information together for this article we were able to take a brief look at what the market here in Crawley had done in 2015. Here’s the bones of what we discussed.

When our landlord came into the office the Nationwide Building Society had just published their December 2015 House Price Index (see http://www.nationwide.co.uk/about/house-price-index/headlines). The index had shown a steady annual increase in average property prices of 3.7% to the year ended Nov 15. This puts the average price for a property in the UK at just over £196 000 compared with just over £189000 a year earlier – see Table 1 for details. As always there is considerable regional variation in prices, with London & the Southeast coming out on top, with areas to the North & in Scotland lagging some way behind. Indeed, the Nationwide survey shows that the so-called North – South divide is alive and kicking (at least in terms of property prices) and has actually widened further. More on this later.

So much for the national picture, what about our local property market here in Crawley ?

In order to compare national trends with those in Crawley, we’ve used Land Registry price paid data and calculated the average change in local property prices. As the latest property price information from the Land Registry is up to the end of Nov 15, we’ve used this date to compare local and national trends. The information comparing Crawley and UK wide property prices is shown in Table 1 for the years ending Nov 13, 14 & 15.

Table 1

16-1-16 Table 1

* Price data from Nationwide Building Society

** Calculated as 3 month moving averages from HM Land Registry Price Paid Data to the nearest £100

As you can see from Table 1, the average Crawley property price in Nov 15 was £264500. This is some 35% above the national average as quoted by the Nationwide at £196305. The difference between these prices is only to be expected for a town like Crawley which lies in the South East of England, one of the most expensive parts of the UK. The table also shows the year on year rate of property prices rises, which are also shown on Graph 1.

 

Slowing Rate of Property Prices Rises

As we are all no doubt aware, prices in Crawley have been increasing over the last few years. However, as shown in Graph 1, the rate of increase has slowed to 6.8% for the year ended Nov 15 from a peak in 2014. The trend of year on year property price rises seen in Crawley  over the last few years is mirrored nationally, but at a lower rate – as shown in Graph 1.

Graph 1

Graph 1 16-1-16

The reduction in property price rises shown in Graph 1 is not unexpected, as wage rises have increased at a much lower rate. In addition, the Government, via the Bank of England, has tried to clamp down on the availability of mortgages and imposed much stricter lending criteria in the so-called MMR (Mortgage Market Review). More recently, the Bank of England has also announced a tightening on Buy-to-Let lending, in an effort to limit property prices rises to a more sustainable long term level. So the slowdown in the rate of property price rises is to be expected and is largely welcome – after all, no one really wants another boom & bust ! Let’s hope the politicians and the Bank of England know what they’re doing !

 

Increasing North – South Divide

Both Graph & Table 1 also show another interesting trend in property prices – the so-called North – South divide. As clearly seen in Graph 1, the rate of property price increases in Crawley (blue line) has been consistently higher compared with the national trend (red line). Prices in Crawley have therefore been increasing at a faster rate than those nationally.

The difference in average prices between Crawley and the rest of the UK is shown in more detail in Graph 2. Again, the blue line shows Crawley prices and the red line, the UK average. You will notice that the price data for Crawley is more “lumpy” than that seen nationally from the Nationwide. This is due to the relative amounts of data used to produce the two graphs. Nonetheless, the upward trend in property prices in both cases is obvious to see. Trendlines have also been added to the graphs (the dark grey dashed lines) for clarity.

Graph 2Graph 2 16-1-16 Firstly notice that the trendlines are good fits to both sets of data. Secondly, it can be seen quite clearly that the trendline for Crawley has a steeper slope than that for the UK as a whole. This indicates the more rapid rise of property prices here in Crawley. By way of example, in Nov 13 the difference in average prices between Crawley and the rest of the UK was just under £52000. Fast forward to the end of Nov 15, however, and the difference had increased by nearly 32% to just over £68000. So, the North – South divide in property prices continues to widen.

Well, so much for what has happened to the Crawley property market in 2015, what about 2016 ? Over the next few blogs we’ll take a more detailed look at what could lay in store for us in the coming year. We’ll also take a more detailed look at some interesting properties as they come on to the market.

If you’re interested in property investment in Crawley or the surrounding towns, why not give us call on 01293 515588. Our advice is free and we’d love to have a chat with you about our favourite subject – property ! Alternatively, you can also e-mail us on crawley@northwooduk.com. Either way, we’d love to hear from you.

23rd December 2015

Making your property appeal to the widest range of tenants

Did you get the answer to the question I posed on Monday ? It is, of course, that there is no shower over the bath in the family bathroom. The shower head attachment is fixed low down (for washing hair etc….) and the walls above the bath are only part-tiled.

To appeal to the widest range of prospective tenants, you will need to tile the walls up to the ceiling around the bath and then raise the shower head, so that someone can have a proper “stand-up” shower. The cost of doing this is not too great (perhaps a few hundred pounds), but do make sure there is sufficient water pressure to operate the shower ! In terms of rental investment, however, the cost of not installing the shower may be considerable, due to increased void periods i.e. when the property is untenanted. Most people would know this as being “penny-wise but pound foolish”. Don’t fall into that particular trap !

A word of caution, however. If you install a shower over the bath, please ensure that the walls are properly treated and made waterproof prior to tiling. In the shower area, the walls will get very wet and water penetration will then occur if /when the grout between the tiles starts to cracks. This will often happen naturally as the grout ages. Then, if the underlying walls are not waterproofed, you’ll have a much bigger & more expensive job on your hands than just re-grouting ! We’ve even come across some landlords who tried to use “waterproof” paint on their walls instead of tiles …….you don’t need us to tell you the outcome of that particular type of “DIY disaster” !

That’s enough on showers for now.

However, if you do have a question about what you might need to do to make your property more appealing to propective tenants, give us a call on 01293 515588 and we’ll hopefully be able to steer you in the right direction. Alternatively, you can e-mail us at crawley@northwooduk.com.

 

 

21st December 2015

2 bedroom apartment, Pound Hill, Crawley

I spy with my little eye…..a 2 bedroom apartment that has just come on with estate agents Greenaway. The Guide price is £210000, although they also give a price range of up to £230000. A major bonus for a property like this is its proximity to Three Bridges mainline station with fast trains to and from London.  Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-36504540.html

Trafalgard Gdns 21-12-15

As we saw in our last blog post, the agent has used rather summery looking pictures of the outside of the development, which may be indicative of  some prior marketing activity. In fact, checking back at the marketing history it appears that this flat was up for sale with the same agents back in September.

According to the agents’ description, the apartment is currently tenanted with the tenants contract due to expire in February 2016. As the property is not being specifically marketed for “Investors Only”, we can only assume that the vendor will sell to a fellow investor or someone looking to make the property their home.

Looking at the description, there are a couple of key features to consider from an investment point of view. Firstly, the flat is on the ground floor, which can be considered by some as more of a security risk. Personally, I wouldn’t let this put you off. To its advantage the apartment has its own (small) patio area and of course, no stairs to climb with bags of heavy shopping after a trip to the supermarket.

For the second feature, take a look at the bathroom in the property details. What do you see, or should I say, what do you not see ? If you’re unsure, think about the property and how it should appeal to the widest possible range of potential tenants. This will ensure minimum void periods and maximum rent. By way of a clue, check out one of our previous blogs e.g. 14th September 2015 at https://wordpress.com/post/thecrawleypropertyblog.com/13   If you’re still unsure, I’ll provide the answer for you tomorrow.

What about the potential yield ?

Properties like this one currently let for between £975pcm and £1000pcm. So in terms of yield you are looking at a range from 5.1% to 5.7%. We’ve calculated this range based on the “worst case” scenario in which the flat is purchased for £230000 and lets for £975pcm. The upper range or “best case” occurs where you buy the flat at £210000, but manage to let it for £1000pcm. Yields for both “worst” and “best” cases are certainly very respectable, but you should of course try to secure a property like this for as low a price as you can.

If you’re looking to invest in Crawley or surrounding towns why not give us a call to discuss what options are open to you. Our advice is free and, due to our years of lettings experience, we can provide you with many valuable insights. Call us on 01293 515588 or alternatively drop us an e-mail on crawley@northwooduk.com.

NB Don’t forget, we’ll give you the answer to our question tomorrow.

 

 

18th December 2015

1 bedroom flat, Copeland House, Rathlin Road, Broadfield, Crawley

Here’s a charming looking 1 bedroom flat in Copeland House, Broadfield, Crawley that has just come on to the market. It’s on with estate agents Zoom995 at £169995.

The warm sunshine in the picture, however, gives the game away a bit. A little further digging indicates that the property actually first came on to the market back in September …. which indicates the vendor hasn’t been able to sell at this price ! Well, not to worry, we’ll store that piece of information away and use it later  …. here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-36615825.html

Rathlin Rd 17-12-15

You’ll see from the internal photos that the property appears to be presented in very good condition, which is all to the good.

1 bed flats in Copeland House are renting for between £750pcm and £800pcm. In fact there’s one available now for £875pcm …… which may be just a little too high. It’s still on the market To Let and has been since the end of November. Only time will tell if they achieve this price.

If we look at the rental yield for this flat based on the rents that have been achieved i.e. £750pcm & £8000pcm, we get a range from 5.3% to 5.6%. So, not too bad at all.

Of course, using our “inside” knowledge regarding the actual marketing date of the property, you should have a better than evens chance of negotiating the price down a bit. As we always say, if you don’t ask, you don’t get !

If you’re looking for investment properties in and around the Crawley area, why not give us a call on 01293 515588. We’re more than happy to give you advice & will even view properties on your behalf before you buy. Please note, we don’t charge for this service either ! That way you get an independent, unbiased opinion of a property’s investment potential. Always remember that the selling agent in any property deal acts for the vendor, not the purchaser ! Alternatively, you can e-mail us at crawley@northwooduk.com.

 

 

17th December 2015

Price Reduction: 2 bedroom flat, Furnace Green, Crawley

You may recall back in November we published a blog featuring a 2 bedroom flat in Furnace Green, Crawley. Here’s the link https://thecrawleypropertyblog.com/2015/11/23/23rd-november-2015/

According to the selling agents (Astons) the property, which was being marketed to investors, was let for £875pcm. Back in November the asking price was £169950.

Well, the same property (with the same summery photo !) has just been relaunched with a £4k price reduction at £165950. Here’s the Rightmove link in case you want a closer look http://www.rightmove.co.uk/property-for-sale/property-52224724.html

Furnace Green 23-11-15

Based on the new asking price & quoted monthly rent, the potential rental yield has notched up a couple of tenths from just over a 6.1% in November to 6.3% as of now. Readers of this blog will know that a yield of this size  is  pretty healthy for the Crawley buy-to-let market. However, as we’ve said before, where the rental yield is high, capital growth is often lower.

One question that you might be asking yourself is whether, after a £4k price reduction, the flat is now reasonably priced. The second question, of course, is whether the vendor would be prepared to accept an even lower offer.  To answer the second question first, just ask. The worst that the vendor can say is no !

There are a couple of pieces of information that might help us decide whether the flat is now reasonably priced.

Consider, for example, the sold price history for this particular flat which is shown on the Rightmove details. At the peak of the market in 2007 the flat sold for £150000. Our previous analysis of sold prices for flats in Crawley over the last 15 years (see our blog post of 6th November) indicates that prices have only increased by a relatively small amount (approx 6% ) from the 2007 peak. If we were to assume that the flat under consideration here had increased in value by 6% since it was last sold in 2007, it should now be worth about £159000.

Another point to consider is that the property is currently being marketed to “investors only” and probably means that the  vendor would ideally like to sell the flat with the tenant in-situ. This type of sale can be advantageous for both purchaser and seller alike. From the purchasers point of view he gets a tenant from day one. As far as the seller is concerned, however, he should in theory be paid rent up to the day the sale completes. This is of course infinitely better than having to pay a mortgage on an empty flat while the sale (hopefully) goes through! In addition, with the imminent 3% increase in stamp duty for buy-to-let property purchases due to come into effect in April 2016, a vendor in this position would presumably rather sell sooner than later.

Thus armed with your analysis and understanding of the property market in Crawley you can make a more informed decision about whether to buy the property and what price you should be paying.

Whether you’re an experienced property investor or a buy-to-let novice, you can always give us a call for free advice on what the property market in Crawley has to offer. Call us on 01293 515588 or e-mail us on crawley@northwooduk.com.

7th December 2015

3 Bedroom House, Tilgate, Crawley

Here’s a 3 bedroom house on Ashdown Drive, Tilgate, Crawley that has just come on to market with a guide price range of £260000 to £290000. Moore & Partners are the estate agents and there’s an Open Day on 12th December. So give them call if you’re interested. For a closer look now, however, here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-56472209.html

Ashdown Dr 7-12-15

The agents (Moore & Partners) indicate that the property could do with some updating. We’d agree with this, although from the pictures the house is presented in a neat and tidy condition. However, the green bathroom suite is a bit of a giveaway ! Of course, with your investors hat on, one key element you would need to have in the bathroom would be a shower over the bath. From the pictures and description, this appears to be missing. If you don’t change the bathroom suite (for a white one !), the minimum we would recommend is to make sure that there is a shower over the bath.

Please also check that the property has double glazing through out. It is mentioned in the description a couple of times, but in relation to specific windows & doors only.  A quick call to the agent will remove any doubts.

If you were interested in the property with a view to updating it, one question to ask yourself is how much is reasonable to spend on the remedial works ? Of course, there are no “hard & fast” rules in answering this question. However, we looked at a similar scenario in our previous blog of the 19th October 2015 and the analysis there can also be applied here. Here’s the link to the blog in case you want to take a look https://wordpress.com/post/thecrawleypropertyblog.com/274

In reality, any renovation project should be concerned with making sure that what you plan on doing is “reasonable” and “fits in” with similar properties in the area. To that end, similar properties in the Tilgate area that have already been updated are being marketed for sale in the £280000 to £300000 price range.  One property is up for sale at £295000, with a tenant in-situ. In terms of rental returns, however, properties like the one we are considering here currently rent out for between £1150pcm to £1200pcm.

If you consider a 5% rental yield as a benchmark return on your investment, these rents translate into prices ranging from £276000 to £288000 with an average of about £282000. Hence, spending £15000 to £20000 on top of a purchase price of £260000 to renovate the property would, in our opinion, not seem too excessive. Of course, the assumption is that the money is spent wisely and not, for example, on gold-plated taps ! One item that the selling agent hints at is the potential for off road parking (subject to planning consent). In our opinion, this would be something well worth considering if updating the property.

If you have your eye on a renovation project, be it to do up and sell or rent out, don’t hesitate to give us a call. We’d be more than happy to give you our opinion as to what would be reasonable to spend your hard earned cash on. Call us on 01293 515588 or e-mail us on crawley@northwooduk.com.

30th November 2015

Bargain or not ?

Take a look at this 1 bedroom flat at Connaught Gardens, West Green, Crawley, on the market with Astons at £167950. The property is marked for “Investors Only”, which probably means that there’s a tenant in-situ. However, no rent is quoted and there are no internal photographs.

Connaught 30-11-15

For further details, here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-52224760.html

One thing to notice straight away is that the picture looks quite “summery”, rather than indicative of the end of November!  A little further digging and we found an identical photograph, advertising (presumably) the same property, from July 2015 at a lower price of £164950. Here’s the Rightmove link https://www.rightmove.co.uk/rmplus/property/showPropertyMcr.action?propertyId=35578086 You’ll also notice that there is a “Sold STC” flash on this picture. So presumably, an offer was accepted by the vendor, but for one reason or another the sale did not go through to completion.

If the property didn’t sell at £164950, why market it now for £3000 more?

Well, perhaps the agent could argue that the market has now “moved-on” a bit since July and the vendor, fed up with waiting for another sale, has also decided to let the property out. Hence it is now being marketed for “Investors Only”.

Of course, the above is just speculation on our part you understand, but these things do happen.

One bedroom flats like the one we’re considering rent for between £775pcm & £795pcm. So based on a marketing price of £167950, the rental yield would be in the region of 5.5% to 5.7%. Regular readers of our blog will know that a rental yield at this level is pretty good.

However, let’s take a closer look at the asking price.

Land Registry price paid information for properties can easily be found from sites such as Rightmove or Zoopla. Looking at the price paid information for Connaught Gardens, Crawley, on Rightmove, you’ll see that a similar one bedroom flat sold for £155000 (June 2015) and a 2 bedroom flat completed in April 2015 for £167500.

So the question remains, is the 1 bedroom flat we’re considering a bargain at £167950 or not?

Well, from the marketing price history of the flat, together with recent sold price information for other properties in the same development, £167950 does seem to be a bit on the high side. This is inspite of the fact that the   rental yield appears to stack up. So armed with the results of our investigation, you could sensibly approach the agent with a below asking price offer and argue quite a convincing case for it to be accepted.

Of course, it remains to be seen whether the vendor would be persuaded! However, your most powerful weapon in any negotiation is that you can make a “sensible” offer and then walk away. This will leave any decisions to be taken, firmly in the vendors hands. And remember, don’t get “hooked” up on any one particular property, there are others around to consider.

If you currently have your eye on a buy-to-let property in and around the Crawley area, but are not sure whether you’re paying too much for it, why not give us a call on 01283 515588. We would be more than happy to offer you our advice. Alternatively, you can also e-mail us on crawley@northwooduk.com.

 

27th November 2015

1 bedroom flat, Manor Royal, Crawley

Those of you with your ear to the ground or a finger in the air (to check wind direction !) , will have noticed how some office blocks in Crawley town centre are being converted into residential dwellings. Relaxation of the planning laws essentially means that provided the developer does not alter the outside of an office block, they can obtain “prior approval” to change its use.

The first office block to undergo this transformation in Crawley was First Choice House in Manor Royal, as reported last May in the Crawley News http://www.crawleynews.co.uk/successful-request-turn-offices-flats-Manor-Royal/story-21090362-detail/story.html

So, here’s a 1 bedroom flat for sale in First Choice House, Crawley. The property already has tenants paying rent of £850pcm, according to the marketing agent, Astons. The property is on the market for offers in excess of £180000.

For further details, here’s the Rightmove link http://www.rightmove.co.uk/property-for-sale/property-52230799.html

First Choice Hse 27-11-15

Clearly the vendor would like as much “in excess” of the purchase price as they can get ! However, bearing in mind that we are in a traditonally slow part of the year, with the the run-up to Christmas and IF you are an investor who can move quickly, do use your bargaining power.

If you can get the property for around the £180000 mark, with a rent of £850pcm, your potential gross yield would be just over 5.6%. So, pretty good. However, do check the tenant’s rent payment history and how well they’re looking after the property well.

Should you be an experienced investor, or new to the buy-to-let market,  do give us a call on 01293 515588. We’d love to discuss the different property investment opportunities that Crawley has to offer. Alternatively, you can also e-mail us on crawley@northwooduk.com.

 

 

 

 

23rd November 2015

2 bedroom flat, Furnace Green, Crawley

Marketed by Astons to “investors only” is this 2 bedroom flat in Furnace Green, Crawley on the market for £169950. The agents state that the property is currently tenanted and that the rent being achieved is £875pcm. Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-52224724.html

Furnace Green 23-11-15.jpg

As we’ve said before, if you plan to buy with tenants in-situ, do check their rent payment history. In addition, to avoid disrupting the tenants and to save yourself a few pounds, you might be able to get the white goods “thrown-in” with the purchase price. After all, it is unlikely that the current owner/landlord will have anywhere to put them ! Lastly, for the purpose of due diligence, always enquire as to why the owner is selling.

What about the rental yield ?

We’ve checked comparable properties in the area and the quoted rent of £875pcm seems spot on. So based on the purchase price of £169950, you would expect to get a return of close to 6.2%. So not too bad at all.

Whether you’re an experienced investor or considering buying an investment property for the first time, we’d be more that happy to have a chat with you. Should you see a potential investment property through another agent, we could also view it and give you an independent opinion on its suitability – before you part with any money on surveys or solicitors fees. We don’t charge for this service, so just give us a call on 01293 515588. Alternatively, you can also e-mail us at crawley@northwooduk.com.