Three Great Buy-to-let Properties

Property 1
A freehold ex-council under £300k, with rent at £1250pm that’s over a 5% gross annual rental! If this one is of interest, please talk to me first about the market, demography and a great way forward. End of chain and no service charges, take a look:
http://www.rightmove.co.uk/property-for-sale/property-50353349.html

Property 2
Three beds and two bathrooms – more modern town house style. We currently let one in this development so know they are popular! This will rent around the £1550pm mark giving over 4% gross annual rental, but the capital appreciation could be the way forward:
http://www.rightmove.co.uk/property-for-sale/property-51326936.html

Property 3
Great development and very popular with the professionals. New refurb, top finish, great proportions, garage, views and close to the town! Even at £1350pm this will still give a gross rental yield of 5% pa:
http://www.rightmove.co.uk/property-for-sale/property-34007331.html

What properties are actually selling in Epsom?

Prices up, prices down, prices stable.... the newspapers are full of good news, bad news and indifferent news about the Brit’s favourite subject after the weather... the property market. The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way. At one end of the scale is London, which has seen average prices grow in the last twelve months by a shade under 19% (and again that is an average because some Borough’s in London have risen by 26%) whilst in the land of Daffodils , by contrast, Wales only saw a 2% increase in property values (although in the Merthyr Valleys they dropped by over 11%).

We cannot ignore the rest of the UK, and we can’t forget that the Chancellor’s Stamp Duty reforms have polarised the London property markets above £1,000,000 because at the top end of the market, punitive Stamp Duty charges will dampen demand further. While the Bank of England warned of the growing London property price bubble in the Spring of 2014, even talk of a recovery in some areas was premature. In 2015, irrespective of where you are in the UK, one story will unite the patchwork quilt of markets – really slow property value growth.

But what about Epsom? Well, we haven’t had the December figures from the Land Registry yet, but the last few months’ activity and prices achieved would suggest neither house price growth nor drops. In fact, most sellers are buyers anyway, so if you need to take less for yours, you won’t have to pay as much for the one you want to buy ... and that is good news for everyone as most move up market when they move. This is even better for landlord investors, as they can bag a bargain as well.

The question you should be asking though is not only what is happening to property prices, but which price band exactly is selling? I like to keep an eye on the property market in Epsom on a daily basis, as it enables me to give the best advice and opinion on what (or not) to buy in Epsom.

If you look at Epsom and split the property market into four equally sized (into terms of households) price bands, each price band would have around 25% of the property in Epsom, from the lowest in value (the bottom 25% ) all the way through to the highest 25% (in terms of value). Over the last two months (63 days to be precise), in the lowest quartile, (those with asking prices under £300k) 85 properties have come onto the market in Epsom and 51.7% of them (44 properties have a buyer and sold stc. The next quartile, between £300k-£440k of the 124 properties that come on to the market, 49.1% of them (61 properties) have a buyer. The £440k-£585k price range has seen 116 properties come on to the market, and 31% of the properties have a buyer (36 properties). The most expensive 25%, the £585k plus range, has seen 21 of the 120 properties that came on to the market find buyers (17.5%). Fascinating don’t you think?

The next three months’ activity will be crucial in understanding which way the market will go this year and I honestly believe we will not see any house price growth or drops this side of the election. Election or no election, people will always need a roof over their head and that is why the property market has rode the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing, this will prop up house prices and prevent a post spike crash. ...there is always a silver lining when it comes to the property market!

As always, if you would like to discuss any aspect of buy to let in the Epsom area, please feel free to email me at ian@directresidential.co.uk or keep reading this blog.

Is the Epsom Property market holding its breath over the General Election?

Has apathy hit the Epsom housing market as sellers await the outcome of the general election, which along with stricter mortgage regulation may be suppressing buyer demand? Rightmove reported the number of homes registered for sale per estate agent fell to its lowest level for five years in December, with available stock 10% lower than in the same month a year earlier.

Looking at Epsom, in the early summer of 2014, each estate agent in Epsom had on average 37.8 properties on its books (as there were a total of 946 properties up for sale in Epsom at the peak in the Summer just gone). Our research shows that number plummeted to 31.6 per agent in December. While the lack of new properties coming onto the market in the later months of 2014 in Epsom pushed asking prices up slightly from November to December, traditionally a quiet season for the housing market, property sellers will need to work hard in 2015 to complete a sale.

The length of time a property takes to sell has ever so slightly increased over the last few months. Two bedroom properties in Epsom are now taking 22 days to sell, three bedroom 59 days, four bedrooms 68 days, but here is an interesting figure, one beds are taking on average 58 days to find a buyer.

2015 will be the year of the selective mover. With only 272 brand new properties a year being built in Epsom since the turn of the Millennium, this woefully low and insufficient number of new buildings in the town over the past few decades and a systemic change in the type of properties homeowners want (with families splitting etc so we have too many larger houses and not enough smaller ones), buyers are becoming dissatisfied with, and therefore dismissive of what is up for sale.

The heat has gone out of the Epsom property market and I anticipate a moderate reduction from the high transaction volumes seen in 2014, but it most certainly isn’t icy cold. That might mean Epsom landlords could bag a bargain during this period of uncertainty, especially if the financial markets do not like the election outcome. Markets and buyers do not like uncertainty, but savvy buy to let landlords know buy to let is a long term game, and irrespective of short term apathy, reduction in the quality and quantity of stock for homeowners to buy, or the election, if people don’t buy property they rent. Good old Bricks and Mortar! In fact with less properties coming on to the market in Epsom, hopefully that will keep prices quite stable.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. Email me here.

Ashtead – the place to buy an investment property?

Information is so important when making decisions on what (or not) to buy when investing in the Epsom property market. The demand for rental properties is much greater that the supply and in some circumstances, we have four to five prospective tenants for each quality property. As always the demand is much greater for properties that are in good areas. Also, we are noticing that tenants are staying longer in their chosen property with some tenants signing for the third and fourth years. This is obviously causing problems from the supply side, so we are relying on new investment Landlords to bring in some new properties.

Today, I want to look at Ashtead to the South Western edge of Epsom. By knowing the different areas of Epsom and the surrounding areas, I can weigh up potential hotspots in the rental market and show potential landlords where there could be an opportunity. The majority of properties sold in Ashtead during the last 12 months were detached properties which on average sold for £741,400. Semi-detached properties had an average sold price of £479,800 and apartments averaged at £255,000.

The overall average property in Ashtead is worth £529,600, which as one would expect is higher than the Leatherhead overall average at £444,000, but was cheaper than next door Fetcham at £575,700.
In Ashtead, there are 13,656 people living in 5,520 properties. It is the home ownership percentages that really got me interested, as it is this information, tied in with our intimate knowledge of the market, where we can match tenant demand to an under supply of rental properties. In Ashtead, of those 5,520 households, 83.0% own their property (compared to the Epsom average of 78.5%).

There are only 376 rented properties in Ashtead in the private rented sector (6.8% of Ashtead properties are privately rented compared with the Epsom average of 10.4%). The reason the private rental sector is much lower is that Ashtead has a high proportion of homeowners and a low percentage of local authority housing. The properties do sell well in fact, 554 properties have changed hands in the last two years. However, with such excellent demand from homeowners and tenants, this could be the right area to purchase your next buy to let investment.

Therefore, if you are considering buying a property for investment in the near future, as our company does not sell property, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. If you are a landlord, new or experienced, I am certainly more than happy for you to pick up the phone or to keep checking this blog.