House in Burley with potential 10% return

This 5 bed house on Village Street in Burley is in a great spot, especially for professional renters. It’s not far from Burley Park train station and close to plenty of bus routes making commuting into town or nearby areas easy and quick.

The lure of the possibility of having a property that would bring in the rent of 5 tenants is understandably appealing but looking at the ad closer it says to me that you’re unlikely to get that. Not only is this property one of many where too many rooms have been squeezed in to the space, it also only has one bathroom. Obviously you could then use the space better to create another one but this suggests to me that in its current state it wouldn't meet the requirements in order to be granted a HMO licence. If that was the case you wouldn't be able to convert in to a licensable HMO property as the council have put a stop to that.

In any case, this property has only been let to 3 tenants which should probably tell you all you need to know. The floor plan of its current lay out shows how the space isn't being used to its full potential.  I would suggest converting it into a 3 bed en-suite property, fitting a new kitchen and re-carpeting & decorating. This way you would be able to achieve a far better rent and if done to a high standard it should bring in around £1,235pcm or £14,820pcm.

The work involved should probably cost around £30k so if you managed to get the property for around £125,000 it should give you a return of nearly 10%, plus with such a high quality property you’d be safe in the knowledge that it would easily let out all year round. 

http://www.rightmove.co.uk/property-for-sale/property-51720025.html

Headingley and Burley Buy To Let Yields at 7.63% - but should you look further afield?

I was at a recent business networking event in Headingley and Burley, when a landlord (who it transpired had a couple of Buy to let properties) bent my ear on where the next hot spot town or city is to invest his money in and where the best rental yields are. Now it can be tempting to just look at Headingley and Burley when growing a buy to let property portfolio, but there can be big differences in the amount of rental income you receive and how much your property will appreciate by considering other locations in the country.

Now regular readers of my articles of the Headingley and Burley Property Blog know of my love of the ‘buy to let seesaw’. On one side of the seesaw is yield and the other capital growth. Landlords should be looking for a high rental yield so that they can comfortably cover any mortgage payments and make some profit from the income return, but you also want the property to rise in value over time so you can get some capital growth when you come to sell. However, high yielding property in say such areas as St. Matthias Estate on the edge of Burley or the Granby estate off St. Michaels Road in Headingley, (so the seesaw arm with yield on it goes up on one side), will suffer from low capital growth (so the other arm with capital growth on the seesaw goes down).  The relationship works in reverse as well, so in such upmarket areas as Canterbury Drive area, properties offer good capital growth, but at the expense of a decent yield.  

The North East and North West of the UK are landlord magnets for great yields. The average yield in Headingley and Burley today is 7.63%, which when you compare with say Hartlepool, the North East’s buy to let hotspot  at 7.73% pa, is very good. However, when you compare it with the 9.43% in the Anfield area of Liverpool, doesn’t look as good. But Liverpool property,  have dropped in value by 2.2% in the last 12 months and the Hartlepool property market has gone down by 1.4%.

When you compare the long term house price growth, it gets even worse.  Looking at the graph, since 1995 property values in Headingley and Burley have risen by 125.84%,compared with Hartlepool at 21.02% and Liverpool  at 90.11% – it just shows you shouldn’t always chase the yield because of the poor increases in property values in those two places. As I always like to explain to landlords , a decent yield is important, but when you come to sell your buy to let property it would also be nice to make a decent profit.

At the end of the day, as a Headingley and Burley landlord, you want to be making gains from both your rent and house price growth, particularly when you want to sell, because when combined, the rental yield and capital growth, that gives you the real return on your investment.

Is the Burley Property Market in crisis?

Since the 1960’s more people have owned their own home than rented but, for many young Burley people, the dream of buying their own home is dying...or is it?

Since the turn of the Millennium, in Burley (as in the rest of the Country) there has been a significant change in the proportion of people who own their own home. In 2001, 42.47% of homes in Burley were owner occupied, today the figure is 29.1%, a significant decline in such a short time.  Buy to let landlords can find tenants because young people say they cannot afford a deposit to buy unless they inherit money or are given a loan from the Bank of Mum and Dad.

In Burley, only 39.5% of 25 to 34 year olds have a mortgage. When you compare Burley against the national average of 35.93%, it just shows how different parts of the country have different housing markets. However, the really interesting fact is this - roll the clock back to 1991 and nationally, 67% of 25 to 34 year olds had a mortgage. After the second World War the supply of properties being built kept up with demand as millions of council homes were built (the most being built in 1950s, surprisingly under Tory Governments!). Also private house building increased in the 1950’s, but especially in the 1960’s and 1970’s, and as the Country  got more prosperous it meant that by 1971, there were more home owners than renters. 

However, since the 1970’s, the population has grown but the number of new properties being built hasn’t kept up at the same rate, the result is that there have been huge rises of property prices in the early ‘70s, the late 80s and more recently between 1999 and 2004. 

Interestingly, since the early 1970’s, out of the 34 richest countries in the world, the UK has seen highest property prices rises.  95% mortgages have been available to first time buyers since late 2009, but with property prices rising by 125.84% since the early Spring of 1995 in Burley, as property prices have been rising and first time buyers have been saving, the amount they have to save is continually rising at the same time. The stress on saving even for that kind of deposit, coupled with the new stricter mortgage rules introduced in 2014, means that most 20/30 something’s in Burley are renting instead of buying. 

The issue quite simply comes back down to a lack of new homes being built. In Burley, only 16 properties a year are being built. The supply of new homes has been limited by planning laws, local councils not having the money to build council houses, hard hitting green belt limitations, and our old friend NIMBY’ism.  With a rising population and net migration, especially from the EU, the mismatch between demand and supply is why we have the problem. Until politician’s have the backbone to realise the country needs a lot more decent homes built, the problem will just get worse. 

In the meantime, demand for rental property will continue to grow because people need a roof over their head at the end of the day - and that can only be good news for us landlords!!

Why are less Burley people moving house?

During my school years, my parents seemed to move every other year (or it seemed that way). In reality, looking back at the house moves, we actually moved four times before I left home. However, whilst my parents kept the removal van people in business whilst I was at school, from research I have carried out it shows things have changed considerably in Burley over the last few decades, and interestingly, the trend is getting worse ... for the removal van people at any rate!

In Burley, there are 3,419 properties. However, after we remove the 820 council houses, 1,556 privately rented houses and 47 houses where the occupants live rent free, that leaves us with 996 owned properties (be that 100% outright, with a mortgage or shared ownership). This means 29.1% of the properties in Burley are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Burley, over the last 12 months, has only been 118. This means on these figures, the homeowners of Burley are only moving on average every 8.44 years.

There are a couple of reasons for this. Firstly, the cost of moving house has risen over the last twenty years. Secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors driving fewer moves by existing homeowners. 

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels. 

This change to a relatively low inflation Burley property market (i.e. Burley property values not rising quickly) is significant because the long term consequences of sustained low house price growth is that it eats into mortgage debt more slowly than when property price inflation is higher. Burley homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in say the 1970’s and 1980’s.

So what does this all mean for Burley buy to let landlords? Well for the same reasons existing Burley homeowners aren’t moving and less ‘twenty something’s’ are buying their first home as well. Burley youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting.  

I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. As a society, we expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was... say... a generation ago?

Even though, in real terms, property prices are 5% cheaper than they were ten years ago (when adjusted by inflation), 45.5% of Burley properties are privately rented (nearly double it was twenty years ago). As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing?

Great 2 bed house ideally located in Burley with a 9% return

This two bed house located on Argie Road is located between Kirkstall Road and Burley Road so ideally situated for professional renters. It's close to main transport links with buses going by every 5 mins or so taking you straight into Leeds city centre and Burley Park train station. It takes less than 10 minutes to get into town and is just a walk away from Cardigan Fields which is home to a cinema complex, gym, shops, restaurants and bars.

This great size two bed house offers plenty of space and from looking at the photos, you wouldn't have to spend much on it as it's pretty much ready to move in to as it is. It's got two great sized bedrooms and plenty of communal space so should rent easily.  The price of this house is probably what stands out the most, priced at offers over £100,000 it's a great deal. Other two bed properties in this area go for around £750pcm so when you do the sums you'd be looking at a 9% return which is pretty good!

http://www.zoopla.co.uk/for-sale/details/37953779

Very attractive house in Burley with potential 10% yield

This 4 bed house on Beechwood Terrace has recently been done out and has been nicely finished and attractively decorated. It's located just by Burley Park train station and is only a couple minutes walk away from Cardigan Road with it's numerous bus stops. This location often appeals to both professionals and students so this house would be a great investment as it means you have a much broader market. 

This house has got three really good size bedrooms and one slighter smaller one so even though it's been done out really nicely there is always a chance that the fourth room could possibly causes issues letting it out. As the house already has two full bathrooms next to the bedrooms in the basement and the top floor, in my opinion the best option here would be to convert that smaller bedroom on the first floor into an en-suite for the other larger bedroom on the first floor. 

Even though you would be losing a bedroom, from my experience having a small bedroom poses quite an issue these days and tenants are less likely to rent out these small rooms even if you were to offer less rent for it. 

By creating a desirable en-suite property it would then enable you to rent the house for around £14,040 per annum and you would be safe in the knowledge that all the rooms would be in high demand. 

The work involved to install an en-suite & to move some doorways for the other bedrooms to have the current bathrooms as en-suites would only really cost around £5k as nothing else needs to be done so if you managed to get the house for around £135,000 you would then be looking at a good return of 10%. 

http://www.rightmove.co.uk/property-for-sale/property-54367661.html

Remember when you could buy a house for the same price as a 50” telly?

Talking to an elderly relative recently, he reminded me that in his day, you could have bought a property for the same price of what a decent second hand car would sell for today and that his father was buying property for the same price as a decent 50 inch LCD TV! 

Now of course, these are only headline prices and we have had wage growth and inflation.  Interestingly, since the Second World War, property values in Headingley doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.

Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people.   

It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating  us (although we know what has happened to the Spanish property market over the last few years!).  In the 2000’s, the British situation was different in two regards.  First the property value boom started earlier and saw more sustained increases and secondly, the regional pattern was fairly uniform. 

However, since 2010, the regional pattern has been completely different in the UK.  Compared with  2007 (the last property boom), average property values today in England and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher, whereas in Headingley they are 13.44% lower. The London property market has been like a different country.  

Looking specifically at Headingley though, it has continued to be difficult for first time buyers to get on the housing ladder.  The best measure of the affordability of housing is the ratio of Headingley Property Prices to Headingley Average Wages, (the higher the ratio, the less affordable properties are).  

·        1997       3.30 to 1  (the average value of a Headingley property was 3.3 times higher than the average annual wage in Headingley)

·         2000       3.35 to 1

·         2002       4.05 to 1

·         2003       4.72 to 1

·         2007       6.41 to 1

·         2009       5.14 to 1

·         2012       5.59 to 1

·         Today     6.24 to 1

You  can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in following subsequent years with Headingley house price’s rising but wages not keeping up with them,  the ratio started rise.  This has meant there has been a deterioration in affordability of property in Headingley over the last couple of years.   

This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house.  The local Council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.

With fewer people able to save up the deposit required by mortgage lenders, more and more people are looking to rent, this has also resulted in a change in attitudes towards renting over the last decade.  This delay in moving up the property ladder has driven rents up in Headingley over the last few years, as more people are seeking properties to rent.  All these things have combined to make the demand for rental property in Headingley rise.  

If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or what not) to buy in Headingley, then feel free to give me a call or pop into the office for a chat.

Great property in Burley with a lot of scope for investment

This property on High Cliff in Burley doesn't immediately jump out at you with it's old fashioned interior, somewhat unappealing layout and small bedroom on the first floor but it's definitely got a lot of scope for improvement and could be a great investment. 

It's location is highly in demand by professionals with it being so close to Burley Park train station and plenty of main bus routes going straight into Leeds City centre in less than 10 minutes. Looking at the advert, it does say that it could potentially go to a group of students but from my experience it's too far out of the area that student's ideally want to be. The areas much more residential & populated by professionals. 

I've given the floor plan a good look and it appears that the property is pretty much a blank canvas depending on how much you'd want to spend on it. If you re-jigged some of the rooms around, you could definitely utilise the space better to create a 6 bed all en-suite property and if done right you could create a high quality boutique professional let which could achieve around £28,000 per annum. 

I would suggest moving the kitchen from the basement up to the ground floor where there is currently a bedroom. There's also quite a bit of wasted space with a large hallway on the first floor so I would utilise this space better to create a larger kitchen. Down in the basement I would have two good size en-suite bedrooms; one where the kitchen used to be and by moving the door for the other bedroom to go directly into the bathroom. On the first floor I would use some of the space taken up by the larger bathroom to make that small bedroom larger and in it's place fit a smaller shower cubicle instead of a bath. I would then move the door to the other bathroom to be accessed by the other bedroom. On the top floor I would then add in two en-suite bathrooms. 

Depending on the amount you wanted to spend on it there's scope for removing the chimney breasts and fitting dormers on the top floor or at least taking the eves right back to the floor to create much more space. 

I'd imagine for the work I've described and to decorate and re-carpet it you'd probably be looking at spending around £40k. Even if you bought it at the asking price of £180,000, I think for a high end boutique professional let with en-suite bedrooms you would be looking at around £90 per room exclusive of bills.  That's a whopping 12.8% return. 

http://www.rightmove.co.uk/property-for-sale/property-51124243.html

Brilliant conversion opportunity in Burley with over 10% return

This 4 bed house on Haddon Avenue located in Burley has fantastic potential. Firstly it's positioned perfectly for professional renters as it's close to plenty of local amenities such as Cardigan Fields with it's shops, restaurants and cinema complex. It's also close to Burley Park train station and plenty of bus routes which take you straight into Leeds City centre in less than 10 minutes. 

Secondly, and most importantly for investors, this property provides a great opportunity to renovate and create a property that will stand out from the crowd and ensure it rents out all day long and limiting any void periods. 

From looking at the floor plan as it is now you'd have a real struggle on your hands to rent out the fourth, small bedroom on the top floor. If you converted that room into another bathroom then you'd create a 3 bed, 3 bath property. Now, if you click the link below you'll find that there aren't any internal photos so obviously an inspection on the property is vital but in order to create a high spec property you're likely to have to put in a new kitchen, new bathrooms, redecorate and recarpet so you're probably looking at around £15,000 for the refurb work. Even if you paid the asking price of £125,000 which I'm sure you wouldn't, you would be looking at a return of over 10%. Plus you can be confident that with such a high spec and appealing property you shouldn't have any void periods.

http://www.rightmove.co.uk/property-for-sale/property-53886266.html

Investment opportunity with potential 11% yield in Burley

This 5 bed property on St Ann's Avenue in Burley has got fantastic potential to generate a very healthy return and if done right could easily be rented as a professional houseshare, but you'd need to check with the agents that it has existing HMO status.

It's located in the prime area for professionals in Burley which is close to local shops, bars & cafes and it's very close to Burley Park train station and main bus routes.

It's on with Castlehill for just under £165,000 and they've suggested that it could achieve a potential income of £16,000 (which suggests it does already have HMO status, because it wouldn't achieve that level of rent as a single let). On the face of it that's a good return but looking at the dimensions of the rooms on the floor plan you'll see that one of the rooms on the first floor is pretty small, massively reducing the chance of letting that room out. If you were to re-jig things around it's definitely got potential to make all the rooms lettable and to achieve an even better return.

I would suggest removing that small bedroom and making one big bathroom. You wouldn't need to lose a bedroom however, just utilise the large storage space and bathroom in the basement better and create another bedroom and give each of those basement bedrooms en suites (making them the most desirable in the house!). That way you've created 5 good size bedrooms maximising your chances of all the rooms being let.

I would finish it off by putting in a new kitchen, redecorating and re-carpeting and that way you'd be able to achieve a rent of £75pppw or £19,500 per annum. If you managed to get the house for around £155,000 and spent £20,000 on the refurb works you'd then be looking at a fantastic return of 11% plus with such a great property you wouldn't have to worry about void periods.

http://www.rightmove.co.uk/property-for-sale/property-35663442.html

Fantastic investment opportunity in Burley with a potential 10% yield

This 5 bed property on Haddon Avenue has fantastic potential as a professional houseshare. Located in Burley between Kirkstall Lane and Burley Road it is ideally positioned close to all main transport routes and Leeds City centre is less than 2 miles away. 

It's currently on with Castlehill for £139,950 (although I'm sure you wouldn't end up paying that!) with an advised potential rental income of £13,500 which if that was achieved would earn a 9% yield. 

On the face of it that sounds like a pretty good deal but looking more closely at the floor plan the bedrooms look fairly small and cramped. This would prove tricky to rent out so that 9% yield might be a struggle to achieve. 

There is massive potential, however, to reduce the number of bedrooms and utilise the space and create a three bed all en-suite property. If the whole house was refurbished to a high standard you should be able to achieve around £95pppw for each room, so that's £14,820 per annum and it would rent out all day long!

The work would likely cost around £15,000 so if bought for around £130,000 once the calculations are all done that would give you a yield of just over 10% and you're also safe in the knowledge that your property would let very easily indeed and likelihood of any void periods greatly reduced! 

http://www.rightmove.co.uk/property-for-sale/property-50945386.html

If you're a landlord or a possible investor and would like any tips or advise on either this property or any others then by all means just give me a call on 0113 2304690 or 0113 2743488.

4 bed house in Hyde Park with great potential for over 10% return

This four bed house located on Thornville Road will appeal to both professional and student renters which would widen your potential market. Located in the heart of Hyde Park it's only a few short minutes walk away from all that Hyde Park has to offer and also has plenty of public transport systems that take you straight into Leeds City centre in less than 10 minutes. 

On the face of things, this house doesn't look like anything special but for the most part a lot of that it is purely cosmetic. In order to bring it up to spec you would need to redecorate, re-carpet and replace all the furniture. There's also no pictures of the kitchen but if the rest of the house is anything to go by it's likely to need a new kitchen. In addition to the cosmetic work I would also suggest making the small bedroom on the first floor larger by taking some of the space from the bathroom and creating a smaller shower room in it's place. There's also scope for creating a jack-and-jill bathroom on the top floor. 

By doing all of this you'll then be able to achieve an annual rent of around £16,640. You would probably need to spend around £20,000 to do all of this but if you managed to get the house for around £130,000 that would give you a very healthy return of 11%. 

http://www.rightmove.co.uk/property-for-sale/property-50513512.html