Thursday, 25 June 2015

Fantastic 2 bed in Meanwood with over 9% return

This fantastic 2 bed flat is located on Meanwood Road and is in the ideal spot for professional renters. It's just a stone's throw away from all the shops, restaurants and bars near Meanwood traffic lights so right in the middle of everything. As you'll know, Meanwood Road is a main road into Leeds city centre and with a bus stop right outside the property, it couldn't be better located. 

Inside it's been finished to a good standard so it wouldn't need any extra work to get it rented out. With 2 good size double bedrooms and spacious open plan living room and kitchen this property would easily rent out all day long for around £750-£800pcm. 

It's on with Alan Cooke for £105,000 so if you got it for £100k you'd be looking at a return of over 9%. 

Thursday, 18 June 2015

Headingley Property Market – Post Election Blues?

With the election now over and the stability of Downing Street secure, with David Cameron’s Tories the largest party in Westminster, in Headingley (as in the rest of the UK) average wages are beginning to grow faster than inflation. This is good news for the Headingley housing market, as some buyers may be willing or able to pay higher prices given the more certain political outlook and attractive inexpensive mortgage rates. However, sellers who think they have the upper hand due to the lack of property for sale should be aware that we should start to see an increase in the number of people putting their properties on to the market in Headingley giving buyers some extra negotiating power.

At the last election in May 2010, there were 265 properties for sale in Headingley and by October 2010, this had risen to 310, an impressive rise of 17% in five months. An increase in the supply of properties coming on to the market could tip the balance in the demand and supply economics seesaw, thus potentially denting prices. However, as most sellers are buyers and confidence is high, this means there will be good levels of property and buyers, well into the summer, as demand will continue to slightly outstrip supply.

Just before we leave the run up to the election, it is important to consider what the uncertainty in April did to the Headingley property market. I mentioned a few weeks ago that property values (ie what properties were actually selling for) had remained static in March 2015. Now new data has been released from Rightmove about April’s asking prices of property in Headingley. It shows that pre-election nerves finally came home to roost in the final weeks of electioneering, with the average price of property coming to market decreasing by 0.1% (April is normally one of the best months of the year for house price growth).

I am sure our local MP, Greg Mulholland, would agree that the biggest issue is the lack of new properties being built in Headingley. The Conservative manifesto pledged to build 200,000 discounted starter homes for first-time buyers in the next five years. For Headingley to gets its share, that would mean only 11 such properties being built in Headingley each year for the next five years, not much when you consider there are 6,238 properties in Headingley.

Housing is not a big issue for Conservative voters and because London is an increasingly Labour city where the biggest housing issues are found by a country mile, so will it remain on the ‘to do list’ but won’t get recognition it deserves. Until another political party gets back into power, nothing will seismically change in the property market, thus demand for housing will continue to outstrip supply, meaning property values will increase (good news for landlords). However, as rents tend to go up and down with tenant wages, in the long term, rents are still only 3.07% higher than they were in 2008 (good news for tenants)... with renting everyone wins!

Thursday, 11 June 2015

Fantastic house in Burley with potential for 10% yield

This four bed house on Beechwood Avenue is located in a prime location for professional renters. Its located just a short walk away from Burley train station. A trip to Leeds city centre takes less than 10 minutes and it's also a short walk away from local shops, cinema complex, gym, bars and restaurants.

Whilst in a great location this is a typical example of one too many rooms being squeezed into the space. Whilst it's understandable to want to fit in lots of bedrooms to try to maximise your rental income, in reality it's no big surprise that small bedrooms struggle to let. If you were to utilise the space in the attic better and remove the small bedroom you could create one big bedroom with an en-suite. As the property already has two other bathrooms located next to the other current bedrooms you would be able to create an all en-suite property without spending a great deal.

This would then create a fantastic property and as it's in a great location there would be no problem in getting it fully let and you're likely to achieve an annual rent of £14,040. Now, whilst the advert suggests it's already achieving an annual rent of £16,120 this also includes the tenants bills so in reality you'd be looking at an annual rent of somewhere in the region of £12,376 without bills.

As the rest of the property is already in pretty good condition I'd imagine you'll probably have to spend between £8-10k to do it all up. If you managed to get the property for around £130,000 and then factored in the refurb costs you'd then be looking at a return of around 10%.