Tag: Crawley

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.

 

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.

 

 

 

 

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.

 

 

14th December 2015

Property Investments – Seeing the wood for the trees

As we approach Christmas so we are seeing quite a few properties coming on to the market which are already tenanted. This may be because some landlords have had enough of renting – after all it’s perhaps not as easy as it seems at first glance. It may also have something to do with that Mr Osbourne, the Chancellor, and his rather unhelpful tax announcements for buy-to-let landlords. We’ll be saying at little more about these in the next few weeks or so….so keep a look out.

Whatever the reasons for these landlords deciding to sell with their tenants in-situ, the same criteria about buying investment property still applies. Just because the property is currently tenanted, it doesn’t mean that it is necessarily a good long term investment. We still need to apply our critical faculties and look at each opportunity as objectively as possible.

Location, of course, is one of the keys to unlocking investment potential, as are the additional facilities that a property has to offer. In this context “facilities” refers to the general situation of the property concerned, particularly in relation to what propsective tenants are looking for. In other words, it is crucial that you have researched & know your market really well. If you try to put yourself in the shoes of prospective tenants you’re more likely to make a better & more informed investment decision. You can also talk to your local letting agents as well. They should have a mine of information on what type of property lets well and, perhaps more importantly, what doesn’t !

To illustrate the point, let’s take a look at a couple of flats that have recently come on to the market. They’re both on the popular Pembroke Park development in Three Bridges, Crawley. For those of you who know Crawley quite well, this developement, which was completed in 2010, is on the site of the old leisure centre. This location is ideal for access to Three Bridges train station with its fast line to London. In addition, you are also in a great position for access to Gatwick Airport, Crawley Town Centre and Manor Royal industrial estate. In our opinion, the location of this development is pretty much spot on.

So let’s look at the other “facilities” the flats have to offer ?

One of the flats we’re considering was featured in our blog post of 1st November. It is marketed by Connells with an asking price of £230000. Since then the advertised status of the property has changed to “sold subject to contract” – here’s the link to our blog post https://thecrawleypropertyblog.com/2015/11/01/1st-november-2015/ and to the Rightmove details http://www.rightmove.co.uk/property-for-sale/property-37376022.html?premiumA=true

The second flat we’re looking at has only come on to the market in the last couple of days. It’s being marketed by House Network.co.uk with a Guide Price of £225000. According to the agents, this flat is currently being let on an Assured Shorthold Tenancies (AST’s). Here’s the Rightmove link for further details http://www.rightmove.co.uk/property-for-sale/property-34542621.html

Page Ct 15-12-15

Take a moment to look at the details for both of the flats. What do you consider to be the main difference between them in terms of medium to long term investment potential ? Remember, try to look at them objectively from the point of view of prospective tenants !

In our opinion, the main difference between these two flats is the availability and quantity of parking.  The Connell’s flat has a secure underground allocated parking space, plus a permit to park and a visitors parking permit. However, in the case of House Network.co.uk’s flat, there is only apparently permit parking available. This usually means you do not have a guaranteed parking space and it’s more on a “first come first serve” basis. In essence, therefore, the Connells’ flat has the best part of twice as much parking as the other.

Clearly, statistically speaking, the flat with more available parking is, in the long run, more likely to rent quicker and have fewer & shorter void periods. I know which one I would consider buying.

Assessing whether a property is a good long term investment can often be quite difficult to do. As we’ve tried to illustrate above, even similar properties on the same development could lead to very different investment outcomes.

If you find yourself in an quandary, where you can’t see the “wood for the trees” with regard to a potential investment purchase, why not give us a call ? We’ll be able to cast a fresh & experienced eye on the situation and give you our objective, unbiased opinion. Don’t hesitate to call us on 01293 515588 or e-mail us at crawley@northwooduk.com.

20th November 2015

Horsham v’s Crawley !

Well, the Christmas Season is really starting to gather pace now. As it does you’ll usually find that the sales & lettings markets start to quieten down a bit. However, do keep your eyes peeled. There will be some bargains to be had, particularly as most people will be turning their attention towards the festive season.

One of our landlords called up the other day after reading the blog we posted on 6th November. If you re-call, in this blog we showed why the price of flats in Crawley had underperformed houses over the last 10 years. Well, the landlord concerned lives just outside of Horsham and has investment properties there, as well Crawley. He asked us if the price of his flat in Horsham had similarly underperformed the market.

When we compared average sold prices of flats in Crawley & Horsham over the last decade, Horsham clearly came out on top. As shown in the Table below, the difference in the average sold price between flats in Crawley & Horsham was barely discernible in 2005. By 2010, however, it had increased to 3.7% and over the last 5 years had widened even further to 21%. So in direct answer to our landlord’s question, his Horsham flat had probably performed much better over the last decade, outpacing Crawley by a good 20% or so.

Table: Sold Prices in Horsham & Crawley (From Land Registry)

Crawley Blog 19-11-15 Table 2

Just to round off the Horsham v’s Crawley story, we also decided to check the current average For Sale prices advertised on Rightmove for flats in both towns. These were calculated by taking a snap-shot of flats advertised on 13th November. By doing this we found the average For Sale price of Horsham flats was about £220000 and was 11% higher than Crawley, with a figure of £198000.

In contrast to the average For Sale price, however,  when we looked at  average rents being advertised on Rightmove on the same day,  we found that Crawley was ahead at £930pcm, with Horsham lagging behind at £880pcm. Using these average rents and the current average For Sale prices, we calculated rental yields for both towns. In this case, Crawley again came out on top with an average yield of 5.6%, while Horsham was 4.8%.

So it would appear that where Horsham outperforms Crawley in terms of Capital Growth, the reverse is true for Rental Yield.

As we’ve seen before, Capital Growth & Rental Yield tend to move in opposite directions. It’s therefore well worth taking the time to consider your investment strategy thoroughly. You need to decide if you’re looking to maximise you income now, or go for maximum long term capital growth and sell later on. Of course, you could also take a compromise position between the two.

Whatever your answer is to the Capital Growth v’s Rental Yield question, we’d be more than happy to have a chat with you to explore the different options available. Why not give us a call on 01293 515588 or e-mail us at crawley@northwooduk.com.