Tag: 2016

6th June 2016

3 Bedroom Terraced House, Southgate West, Crawley

Isn’t it amazing how much better & more inviting properties look when the sun comes out !

Take a look at this property, a 3 bedroom terraced house in Downland Drive, Southgate West, Crawley which is being marketed by Williams Harlow of Banstead, Surrey at £275000. Here’s the Rightmove link for a closer look http://www.rightmove.co.uk/property-for-sale/property-54035092.html

6-6-16 Downland Dr

From the marketing photos the property looks to be in good condition and, in addition, also has a garage.

So what about the rental yield ?

Market rents for 3 bedroom houses in the Southgate West area of Crawley are in the region of £1200pcm to £1300 pcm and possibly even higher. Based on these rents and a For Sale price of £275000, the potential gross rental yield would range from 5.2% to just under 5.7%. We think you’ll agree, these rental yields are really quite impressive.

Do remember that one of the key markets for a property like this are families. Families often come with children & children often come with pets ! So if you have an aversion (in the lettings sense) to either children or pets, it’s probably best not to consider a property like the one here. On the plus side, however, families do tend to stay longer as they put down roots in an area & children get established in the local schools. Void periods i.e. empty periods between tenancies, should therefore be lower.

If you’re looking to invest in property in or around Crawley, why not give us a call on 01293 515588 for a chat. We have a wealth of experience & knowledge in the lettings business and can provide you with free advice to make sure you get the most from your property investments. Alternatively , just 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.

 

1st June 2016 (already !)

Studio Flat, Pound Hill, Crawley

Here’s a very pleasant looking studio flat in the Maunsell Park development, situated on the Pound Hill / Three Bridges border in Crawley. The property is marketed by Estate Agents Move Revolution at a guide price of £160000.

One of the features of Maunsell Park is its proximity to Three Bridges mainline station. As I’m sure everyone knows, Three Bridges station is ideal for commuting to Gatwick, London, the South coast etc….. In other words, in our opinion the location of this flat is absolutely brilliant. Here’s the Rightmove link if you want to take a closer look. http://www.rightmove.co.uk/property-for-sale/property-42169128.html

1-6-16 Maunsell PkStudio apartments at Maunsell Park command rents in the region of £725pcm to £795pcm. As with all rental property, however, the better the condition, the higher the rent that can be charged & the quicker it will let – no mystery there !

With a For Sale guide price of £160000, rents of £725pcm to £795pcm would give impressive gross yields of between 5.4%  & nearly 6.0%. As a second property of course you might wish to factor in the Stamp Duty surcharge of 3%, which would add an additional £4800 on to your purchase costs. Nonetheless, the gross rental yields calculated are pretty high when you consider that the average in the UK as a whole are only about 5%.

If you’re looking for buy-to-let property in or around the Crawley area, why not give us a call on 01293 515588 for a chat. We have many years of experience in the lettings business and, what’s more, our advice is free ! Alternatively, you can also 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.

 

 

 

 

 

 

 

 

31st May 2016

3 Bedroom House, Foxglove Walk, Broadfield, Crawley

A lot of comment in the property press recently has concerned investors looking towards areas such as Manchester to purchase much higher yielding properties and off-set some of the effect of the recent tax hikes.

Somewhat closer to home, however, there are also relatively high yielding properties available in Crawley. One such property is a 3 bed terraced house in Foxglove Walk, Broadfield, Crawley that has recently been advertised by Estate Agents Zoom995. The property, which is on the market for offers in the region of £230000, is offered with no onward chain. Although Broadfield may not be regarded by some as one of the better parts of town, nonetheless rental yields can be relatively high here. To take a closer look at the property here’s the Rightmove link. http://www.rightmove.co.uk/property-for-sale/property-42153333.html

31-5-16 Foxglove Walk

Please do bear in mind that properties like the one considered here are principally family homes. As such, a large proportion of prospective tenants will consist of couples with children & possibly even pets. If pets & children are not your thing then our advice would be to steer well clear ! With regard to pets, however, you can always ask for a higher deposit and specify that any damage is repaired/replaced on an new for old basis.

So what about the rental yield ?

Properties like this one in Broadfield, Crawley rent for between £1100 to £1250pcm. Obviously time of year and internal/external condition will be major factors in determining just how much rent can be achieved. However, based on an asking price of £230000 and the rents quoted above, gross rental yields will range from around 5.7% to 6.5%. These yields are pretty good and some of highest we’ve seen in Crawley. Don’t forget that you will also have to pay an extra 3% stamp duty surcharge if you already own a property. However, with average rental yields in the UK at around 5%, this property in Broadfield could offer an investor an above average return.

Whether you’re a seasoned property investor or considering the buy-to-let market for the first time, why not give us a call to discuss the opportunities that Crawley  & surrounding towns have to offer. Our advice is free and what’s more…….we don’t bite ! 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.

 

 

 

 

Reduced Tax Relief – Will It Affect You?

Attacks & More Tax !

In March the Chancellor announced tax changes for property investors. In this article we consider the effect of one of these changes ….. Reduced Tax Relief.

From 2017 the amount of tax relief that some landlords can claim on their finance costs (such as mortgage interest payments) is gradually being reduced. When the changes take full effect in the 2020/21 tax year, landlords will only be able to claim tax relief at the basic rate of 20%, instead of 40% or 45% for those in higher or top rate tax brackets, respectively.

The Current Rules
Currently as a landlord you can claim all of the interest-only part of your buy-to-let mortgage against the rental income generated from your property. So, if you’re in the 40% income tax bracket, your tax bill will be 40% of the difference between these two elements.
For example, let’s say your Crawley investment property generates £12000 pa in gross rental income. If you have a buy-to-let mortgage & pay interest of £9000 pa, your net profit will be £3000pa.

If you pay income tax at the basic rate of 20%, then you would owe the Revenue £600 i.e. 20% of £3000. If you’re in the 40% higher tax band, however, you would have to pay £1200 in tax i.e. 40% of your £3000 profit. Our example is summarised in Table 1.

25-4-16 Table 1

New Tax Regime from 2017
By 2020/21, when the transition period for changes to tax relief are completed, you will only be able to deduct 20% of the mortgage interest from your tax liability. To illustrate the impact, let’s re-visit the previous example. Again, this is summarised in Table 1.

If you’re a basic rate tax payer, in 2020/21 your tax liability will still be £600 i.e. 20% of your £12000 rental income LESS 20% tax relief on your mortgage interest. So nothing changes.

Unfortunately, if you’re a higher rate tax payer you won’t be so lucky. As a taxpayer in the 40% income tax bracket, from 2020/21 onwards your rental income will be taxed at the rate of 40%, BUT your mortgage interest relief can only be deducted at the rate of 20%.

With reference to our previous example, if your rental income is £12000 pa, you’ll have to pay tax on this amount at the rate of 40% i.e. £4800. Although you will be able to deduct mortgage interest, in 2020/21 this can only be done at the basic rate of 20%. In our example this amounts to £1800. Hence your tax bill for the property in 2020/21 would be £3000. So you would be £1800 worse off compared with now.

Please note the above is not & should not be considered as tax advice. In order to obtain expert tax advice your should consult with a qualified accountant or tax advisor. They may be able to suggest ways in which you can reduce your tax liability.

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.

 

 

27th March 2016

Happy Easter – Buying Off-Plan !

One of our landlords called the office last week to ask what we thought about buying property off-plan. He’d seen some flats being advertised on the site of the former nurses’ home at Fairfield House in West Green, Crawley. The site is being developed by Fabrica and they’ve been asking prospective purchasers to register their interest for the off-plan launch on 16th April. 1 bedroom flats are being marketed from £190000 & 2 beds from £240000. Fabrica can be contacted on 01293263083. Here’s the Rightmove link for a further details http://www.rightmove.co.uk/new-homes-for-sale/property-58469585.html?premiumA=true

28-3-16 Buying off plan

The question posed by our landlord, like most in the world of property, is difficult to answer as there are so many variables to consider. For example, are property prices going to tumble due to recent tax hikes imposed on buy-to-let landlords ? What rental prices will the properties achieve when they’re built ?  Are the properties going to be completed to a high standard ? Etc…..

One thing we would say about buying off-plan is not to be taken-in by hype. In every property transaction boring old “due diligence” is always the order of the day. If you ever hear of people queuing around the block to “snap up” property that is being sold off-plan as they did in 2007, my advice is to walk the other way as quicly as possible ! Although the long term trend in UK property prices has been upwards for a very long time, price corrections do occur from time to time, as we saw after the credit crunch of 2008.

That’s the warning out of way, so now let’s consider some of the details of the advertised off-plan development !

The site in West Green for this development is fairly central for Crawley town centre; close to the Asda supermarket; Crawley hospital and only a short walk to Crawley train station. One thing to look out for if you’re considering investing is the amount of parking available for each flat. Ideally you would need allocated parking (rather than first come first served). Our advice would be to try and secure as many parking spaces as possible.  This may sound a bit greedy, but allocated parking spaces can really help to let your property quickly and possibly at a higher rent. As an investor who may be investing at an early stage of the development, you can often negotiate additional “perks” to be included with your purchase, such as parking – if you don’t ask you don’t get !

If you consider buying one of the two bedroom apartments at the development, there are a few keys areas to look out for. For the advertised marketing prices we would expect to see ensuite facilities to the main bedroom. If this is the case, make sure that the family (communal) bathroom has a shower over the bath and that the walls are tiled up to the ceiling in the “bath” area.

Also remember that for one reason or another developers often have different sized properties, with different facilities. For example, some may have balconies, while others do not. Make sure that you scrutinise the plans and secure the best sized properties with the most facilities for your money. Last but not least, don’t forget to ask when the site is scheduled for occupation. This will normally be phased over a period of time as different stages of the build project are completed.

So how do the properties stack-up as potential investments ?

Current rental prices for modern 1- & 2-bed flats in the area are in the region of £895-£975pcm & £1000-£1175pcm, respectively. These rents, together with the advertised marketing prices, give yields ranging from 5.7%-6.2% and 5%-5.9% for the 1- & 2-bed flats, respectively. Rental yields such as these are very good for the Crawley property market. However, please do bear in mind that these properties haven’t been built yet and actual rents achieved, as well as future capital growth, will very much depend on future market conditions.

However, in answering our landlords’ enquiry, we hope that we’ve also given you a pointer towards the pros & cons of buying property off-plan. If you’d like to discuss any of the issues detailed above or have any more general questions about property investment in and around Crawley, don’t hesitate to contact us. Our advice is free…. just give us a call on 01293 515588 or e-mail 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.

3rd March 2016

1 Bedroom Maisonette, Tollgate Hill, Crawley

Anecdotal evidence from solicitors indicates that completion dates for property sales that have only just been started will almost certainly be after April 2016. For investors looking to build their property portfolios, this means (thanks to the Chancellor) you’ll have to fork out an extra 3% stamp duty on top of the purchase price.

So will it still be worth investing in Buy-to-Let property after April ?

The answer to this question will of course depend on a multitude of different factors, not least of which will be your own personal circumstances. Getting proper & up-to-date tax advice is increasingly important, as will be investing in the right property that fits within your overall investment strategy.  For example, are you looking for Capital Growth, Rental Income or a combination of both ?

For now, however, let’s take a look at a potentially high yielding property that has recently come on to the market with Astons estate agents at £125000. It’s a 1 bedroom maisonette in Tollgate Hill, Crawley and the agents state investment buyers only.  This could mean that the property is already tenanted and the current owner wishes to sell with the tenants in-situ. Alternatively, it could also mean that the lease on the property is quite short – so cash buyers only, as it will be difficult to get a mortgage. Of course, rather than speculate, if you’re interested in the property just give Astons a quick call and they’ll be able to tell you ! Here’s the Rightmove link for the property http://www.rightmove.co.uk/property-for-sale/property-53140177.html

 

Tollgate Hill 27-2-16

Assuming that if you purchased this maisonette it would be an “additional” property & that completion took place on or after 1st April this year, you the would pay a 3% stamp duty surcharge. In pounds, shillings and pence that equates to £3750 ! So does this property stack-up in terms of an investment package ? To try and answer this question, let’s look at the figures.

Maisonettes like the one we’re considering here currently rent for between £600pcm & £650pcm. If you were to purchase the property for the full asking price of £125000, the gross rental yield would range from about 5.8% to 6.2%. So, pretty healthy indeed.

If, however, you were to take into account the additional 3% stamp duty and just add it on to the purchase price, the rental yields would be reduced a little to around 5.6% to 6.1%. Despite the additional stamp duty, therefore, these rental yields are still impressive when compared with the Crawley & UK-wide property markets. In addition, it has been reported that the government is going to allow the additional stamp duty surcharge to be deducted from any capital gain when the property is sold.

Hence, by carefully choosing the right property to invest in, decent rental yields can still be achieved despite the forthcoming 3% stamp duty hike heading our way  this April.

So, if you’re looking to invest & see a property that catches your eye (even if it’s through another agent), give us a call on 01293 515588. We’re more than happy to provide you with free advice and we can even visit the property on your behalf – and there’s still no charge or obligation on your part. Best to make use of this service before you part with any cash on surveys etc… ! Alternatively you can always e-mail us at 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.

 

 

 

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.