Monday, 28 December 2015

Very high spec 1 & 2 bed terraced property in Burley with 9% yield

You get 2 for 1 with this great terraced property on Woodside Place in Burley. You get a fantastic 2 bed house which has been done out beautifully and below that you get a 1 bed flat that's been finished to just the same high standard.

Both 1 & 2 bed properties are of high demand in this area to professional renters and I would foresee no difficulty at all in both of these properties being rented out. Not only is it done out so well (so no need to have to spend any money on it to get it rented out!), it's located in between Burley Road and Kirkstall Road so it's close to main transport links with buses every few minutes and close to Burley Park train station. It takes less than 10 minutes to get in to Leeds City Centre and is only a walk away from Cardigan Fields which houses a cinema complex, gym, shops, restaurants and bars.

As the add says, you'd more than likely achieve £750pcm for the 2 bed and £450pcm for the 1 bed. You're very unlikely to have any void periods with such high standard properties so you'd be looking at a very solid investment and if you managed to get them for around £160k you'd be looking at a return of 9%.

Friday, 11 December 2015

Burley Landlord’s mortgages top £3 million!

The Brits can’t stop talking about property. The hot topic of discussion at the posh dinner parties of Bramhope, Roundhay and Alwoodley’s movers and shakers is the subject of the Burley Property market, but in particular, buy to let. These people are buying up buy to let properties quicker than an ace Monopoly player ... or so it would seem if you read the Sunday papers. So is the buy to let market a sure fire way to make money?  Is it something everyone should be jumping into? Is it a sure fire way to make money? The answer is Yes and No to all those questions!

Firstly, the government gives tax breaks to landlords, as it allows the mortgage interest payments on a buy to let property to be tax deductible. Also, a landlord only has to flick through Rightmove or Zoopla, pick any property at random and agree a price. Then, find a modest deposit of 25% (often by remortgaging their own home) which for an average Burley terraced house, would mean finding £31,083 for the deposit (as the average Burley terraced house is currently worth £124,332) and borrow the rest with a low interest rate buy to let mortgage.  Finally, the landlord would rent out the property in a matter of hours for top dollar and live happily ever after, with the rent then covering the mortgage payments, with loads of money to spare and come retirement have a portfolio of property that would have quadrupled in value in fifteen years. Sounds wonderful – doesn’t it? Or does it???

Let us not forgot that the half of one per cent Bank of England base rate is artificially low. The international money markets can be fickle and if interest rates do rise quicker and higher than expected because of some unforeseen global economic situation, that monthly profit will soon turn into a loss as the mortgage will be more than the rent. Even though tenants are staying longer in their rental property, tenants still come and go and my guidance to landlords is they should allow for void periods, plus the maintenance costs of a rental property and of course, agents fees. .. all things that eat into that profit.

Interestingly, by my calculations, there are approximately 19 Burley landlords owing in excess of £3 million in mortgages on those Burley buy to let properties.  An impressive amount when you consider Burley only has 0.002% of all the rental properties in the Country. It really does come down to a number of important factors going forward to ensure you are water tight for the future. A lot of my existing landlords are fixing their mortgage rates. One told me that the Metro Bank are currently offering a 5 year fixed BTL remortgage rate at 3.79% for 5 years (based on a 75% loan). I don’t give financial advice, so you must speak with a qualified mortgage advisor... but that sounds very fair!

However, one thing I do know is that buy to let is a long term investment, it’s a ten, fifteen, twenty year plan and property prices will go down as well as up. You wouldn’t dream of investing in the stock market without advice, so why invest in the Burley Property Market without advice? We give bespoke detailed advice to our landlords to enable them to spot trends in the Burley Property Market before others, enabling them to buy better properties at better prices. For example, did you know that flats are selling for around 2% lower than 12 months ago in Burley yet semis are selling for 7% more (with every other type in between). This means we can advise on which properties will go up in value better (or lose less if property prices drop), we can also advise which have lower voids and which properties have higher maintenance issues.  

Information on the local property market and ability to process it is the strongest asset we can give you. As Lois Horowitz, the famous author says, ”Not having the information you need when you need it leaves you wanting. Not knowing where to look for that information leaves you powerless. In a society where information is king, none of us can afford that”

Friday, 4 December 2015

Burley Property Market Update

The Land Registry have recently released their latest set of figures for the NW Leeds Property market. It makes for an interesting read, as average property values in Burley rose by 0.1% last month. This leaves average property values 3.5% higher than 12 months ago, meaning the annual rate of growth in the area fell to its lowest level since May 2014. When we compare Burley against the regional picture, Yorkshire property values fell by 0.6%, leaving them 1.1% higher than a year ago.

Obviously this is a far cry from the price rises we were experiencing in Burley throughout 2014. At one point (October 2014 to be exact) property values were rising by 7.6% a year. All the same, even with the tempering of the Burley property values in 2015, property values are still higher. This is good news for local homeowners who had been affected by the downturn after 2007 and still find themselves in negative equity.

However, the thing that concerns me is that the average number of properties changing hands (i.e. selling) has dropped substantially over the last 12 months in the area. In September 2014, 45 properties sold in Burley but in September 2015, that figure dropped to 31.  I have been in the Burley property market for quite a while now and the one thing I have noticed over the last few years has been the subtle change in the traditional seasonality of the Burley property market. It has been particularly noticeable this year in that the normal post Easter flood of properties coming onto the market was not seen. This has made an imbalance between supply and demand, with less houses coming onto the market there is simply not as much choice of properties to buy in Burley and with the population of Burley ever increasing; this will generally strengthen house price growth for the foreseeable future.

So what does all this mean for Burley landlords or those considering dipping their toe into the buy to let market for the first time? For many people, buy to let looks a good investment, providing landlords with a decent income at a time of low interest rates and stock market unpredictability.

However, if you are thinking of investing in bricks and mortar in Burley, it is important to do things correctly. As an investment to provide you with income, for those with enough savings to raise a big deposit, buy to let looks particularly good, especially compared to low savings rates and stock market yo-yo’s. I must also remind readers, landlords have two opportunities to make money from property, not only is there the rent (income), but with the property market bouncing back over the last few years, property value increases has spurred on more investors to buy property in the hope of its value continuing to rise.

Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must rise and you need to know your property can stand that test. I saw some Burley landlords struggling in the mid noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having to make up a shortfall in the mortgage payments of £100 per month in 2007.

Its true many landlords were thrown a life raft when the base rate dropped to 0.5% in March 2009. Whilst interest rates have remained there since, mark my words, they will rise again in the future. 
However, even with the potential for costs to rise, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and thus rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Burley property market.

If you are planning on investing in the Burley property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Burley Property Blog