Could your Warrington property save you from Pension oblivion?

If you were born in the early 1970’s or late 1960’s, if you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year) and £231.90 a week for a couple (£12,118 a year) as long as your partner has paid their stamp (although there are certain get out of jail cards if they have not). 

As a household, could you live on just over £12k a year?

However, could the property you are living in in Warrington save you from a life of financial difficulty when you reach retirement? You see, a regular income is vital in retirement, and the bricks and mortar you own in Warrington could provide a way for you to finance life when you retire.

If you are in your 30’s, instead of saddling yourself with bigger and bigger mortgages, going from your first time buyer flat, to a terraced, to the semi and then the large detached house, you could instead keep your terraced or small semi, turning it into a buy to let property. Let the rent pay the mortgage and then rely on capital growth to provide you with a lump sum when you sell the property and retire.  One of the biggest plus points of buy to let is what is known as leverage. Let me explain ... say you have a deposit of 25% and the value of the property rises by 3% a year, your gains in fact multiply to 12%.  However, if property prices drop, 'leverage' can be catastrophic, as losses will also be multiplied. Property values have dropped a number of times in the last 50 years, but they always seem to bounce back ... property must be seen as a long term investment. Equally if prices did fall you would choose not to sell ( so would not make a loss ) and continue instead to benefit from the monthly gain made from rent.

Let me explain how leverage could work for you. If you had bought an Warrington house in Spring of 1983 for £75,000, using a 75% mortgage and 25% deposit, (meaning your deposit would be £18,750). Today, that Warrington property would have risen in value to £542,842, a rise of 623.8%. However, when you look at the growth on just your deposit, the rise is even better ... instead of 623.8%, we see a rise of 2795% (remembering that the mortgage would have been paid off).

However, buy to let is not all about capital growth and in retirement, income is more important than capital growth, as rent is the key to a steady income.

So surely the best strategy is to buy those Warrington properties with the high rents (when compared to the value of the property). These are called high yield properties in the buy to let world because the monthly return is so much greater. So surely they are the best in Warrington? Possibly, but the properties that offer these higher yields (in the order of 7% to 9% per year) tend to be in areas that are not particularly desirable to live in. Historically these areas have not offered such good capital growth when compared to the town average and have a higher tendency for void periods. 

Therefore, if a high maintenance rental portfolio wasn’t for you, another strategy could be buy a property with relatively smaller rental returns of 4% to 6% per year (i.e. Chapleford Village), but in a more up desirable area. Properties such as these tend to suffer from fewer void periods (i.e. when there is no tenant in the property paying you rent) and they historically have had better long term capital growth when compared to the town average.

Every landlord is different and every property is different. All I suggest to you is do your homework. It is essential that you are buying property in areas that suit your needs, goals and desires. Talk to someone who knows the patch. This really is a key point…even as I am typing this I have broken off to speak to a local landlord who has been given advice by an agent who does not live locally and only recently has worked the Warrington market. Frankly the advice on achievable rents in certain locations he had been given were laughable!

As regular readers will know, I am happy to share my knowledge and experience of the Warrington property market, high yields, high capital growth, what to buy, what not to buy and where to buy. News and views on the Warrington Property market can always be found on the Warrington Property Blog www.warringtonpropertyblog.co.uk or you can email me on manoj@hamletwarrington.co.uk If you are in the area then feel free to pop in and meet my team over a brew we are based on 6 Bankside, crosfield street WA1 1UP the kettle is always on

Don't forget to visit the links below to view back dated deals and Warrington Property News. 

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Website, http://www.hamlethomeswarrington.co.uk/

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Warrington tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is the Warrington property. As a property agent I like to comment on the Warrington property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Warrington as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Warrington has nearly broken through the £650 a month barrier as the average rent for a property in the town, now stands at £644 per month, and whilst this was a drop of 0.3 % last month, rents for new lets are 7% higher than they were 12 months ago.

House price inflation has eased a little in Warrington from 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and the desire for good high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increases in Warrington rents are a sign that the Warrington economy is picking up. 

This means Warrington landlords are continuing to benefit from the Warrington property market. The most recent Land Registry data suggests the annual property price rises in the town have eased over 2015, leaving property values 9.76% higher than 12 months ago. So as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates low and returns still very attractive, there has rarely been a better time to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the town, different types of properties are experiencing quite different changes.  For example, the average length of time on the market the 170 Warrington properties up for rent between £250 to £500 per month is 213 days, whilst the average length of time for the 324 properties at £500 to £1000 per month is 163 days and finally 30 properties that fall into the £1000 to £2000 per month price bracket is 72 days.

When you start comparing different parts of Warrington, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the Warrington Property Blog. In the Warrington Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Warrington Property Blog. If you have seen a deal and would like a second opinion drop me an email on manoj@hamletwarrington.co.uk or pop into our office 6 Bankside, crosfield St WA1 1UP plenty of free parking + the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News. 

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Website, http://www.hamlethomeswarrington.co.uk/

Great Value 2 Bed Terrace £65k with over 8% yield

Click here to view property

Good morning property hunters, take a look at this hidden gem. If its cash flow you are looking for then this is the right property for you.

The house is in a popular rental street so you shouldn't be expecting a long void period. Also looking at the pictures the house looks ready to let once all the furniture has been removed. However i would recommend a viewing a two. Remember the agents are working in the best interest of the vendor and themselves so don't get lured in by the sales patter.

Chances are there will be some small cosmetic work to be done on the property such a new paint job and a deep clean before moving potential tenants in.

I would expect this property to achieve around £450 rent pcm which makes this ideal for an investor looking for cashflow.

you may or may not know but I am here to give you my opinion good or bad, I will come along to viewings with you and sit down to really tighten the strategy to make sure you find the right investment property for yourself – remember this is not a house/flat you are living in and it should be a business decision. I charge absolutely nothing for this as we will make our money on finding you the right tenant and managing the property for years to come.

Call or email us now and get your name put on our Premier Investor list on 01925 235 338 manoj@hamletwarrington.co.uk  pop through the door of our offices on 6 bankside, crosfield street, WA1 1UP.

The ‘Liquorice Allsorts’ Warrington Property market

Despite the UK economy heading in the right direction with record low mortgage rates and unemployment figures dropping, the rate of property prices rising in Warrington has slowed since the start of the year. Property value increases continue to outpace the growth in salaries; however the gap is closing, helped by a lift in salaries over the last 6 months.  Property values in the North West region as a whole are 8.1 higher than a year ago.  Compare this to the neighbouring regions of the South West at 3.6% higher and West Midlands at 3.5%, the majority of the country continue to see annual house price gains - the exception being Wales which recorded a slight  decline of -0.6%.

Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer towards the end of 2015 amid heightening activity in the Warrington property market.  As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Warrington property prices. Therefore, my overall opinion is that Warrington property prices will rise by 4-6% over 2015 and roughly the same in 2016.

Property investment is a long term business.  Buying the right sort of property is vital.  I have recently been speaking with a number of Warrington landlords about the importance of a balanced portfolio, when buying and renting out property.  The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) versus properties that do go up in value quicker but often offer a lower yield.  So, what type of properties have performed best over the last few years in Warrington, especially in terms of their capital growth?

Compare the average price of detached, semi-detached, terraced and flats back at the start of the Millennium to the present.  The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed almost similar except the flats over the last 15 years:

• Detached Houses in 2000 were selling on average for £195,284 and so far in 2015, they have been selling on average in Warrington for £308,990, a rise of 58%

• Semi -Detached Houses in 2000 were selling on average for £109,562 and so far in 2015, they have been selling on average in Warrington for £173,098 a rise of 57.9%

• Terraced Houses in 2000 were selling on average for £88,069 and so far in 2015, they have been selling on average in Warrington for £127,341 a rise of 44.5%

• Flats and Apartments in 2000 were selling on average for £107,569 and so far in 2015, they have been selling on average in Warrington for £127,074 a rise of 18%

What should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

“Should I sell my property in Warrington?”

“Is the time right to buy another buy to let property in Warrington and if not Warrington, where?”

“Are there any property bargains out there in Warrington to be had?” 

Warrington landlords, who are letting their property both with us and other  Warrington letting agents, like to pop in for a coffee,  pick up the phone or email us to  discuss the Warrington property market, how Warrington compares with its closest rivals (Bolton, Wigan and St Helens), and hopefully answer the three questions above.  

I don’t bite, I don’t do hard sell, but I will give you my honest and straight talking opinion and look forward to hearing from you.  Contact me Manoj Patel on 01925 235 338 or email me on manoj@hamletwarrington.co.uk If you are every in the area feel free to pop into the office for a chat we are based on 6 Bankside, Crosfield St, WA1 1UP (plenty free parking)

Don't forget to visit the links below to view back dated deals and Warrington Property News. 

Facebook, https://www.facebook.com/hamlethomeswarrington

Twitter, https://twitter.com/HHWarrington

Website, http://www.hamlethomeswarrington.co.uk/

Hamlet Homes Basic Guide On Buy-To-Let In Warrington

Being a Warrington lettings agent really does help when it comes to choosing the right property to invest in, I have the opportunity to see which properties in what areas are in high demand, which bring in the biggest yields and which properties give me capital gains, i also understand my market and know what my tenants are looking for, all this helps when i have first time investors looking to purchase their first buy-to-let like John who popped into the office a few months ago after reading my previous articles. We chat about the basics on choosing an investment property in Warrington.

Size is not always the main consideration, quality and location are more important. Investing in new-build flats, old houses or typical suburban terraces all have merit in different ways, it depends on your investment objectives, timeframes and budget. Before investing there are numerous things you need to research including – but not limited to – cash amounts, mortgages and rates, fixed costs (such as service charges in flats), potential repairs and improvements, furnishings, gross and net yields, plus likely returns on capital employed. 

Houses seem to be more popular than flats in Warrington, larger bedrooms are better than singles, good nearby transport links are also useful and double-glazing is becoming a requirement for most tenants. Location of the property is also vitally important - the main drivers are access to train stations, good shops and restaurants and in the case of growing families, good schools.

The condition of property should also be considered. Tenants want dry, structurally sound properties in good condition (cracked fittings, marked walls, damaged appliances, grubby kitchens and bathrooms are all a turn off). Think carefully about the size and layout of the accommodation too. Most tenants will dislike small living spaces, odd shaped rooms and bathrooms without natural light. And remember, tenants have a strong sense of rental values so the days of landlords setting the rent to cover their mortgage are gone and they must therefore buy wisely.

A BTL property should look good from the outside (kerb appeal). If the inside is immaculate but the outside isn’t, you will struggle to get people through the door. Ideally the property should be semi-detached and have gas central heating and a shower. Double-glazing is another benefit.

Think about the age of the property. The younger the property, the less maintenance you will have. If you purchase a Victorian property it is likely you will have to rewire the property, therefore I would strongly suggest that BTL landlords have the gas and electric checks done on the property before Exchange of Contracts. If problems are found the cost of rectifying the issues could potentially come off the agreed sale price.

2 and 3 beds are the most popular (with 2 beds usually giving a better return on an investment), but it is essential that you understand the BTL market and complete all your homework before purchase. I would urge all BTL landlords to carry out a cost analysis before committing and have sufficient funds set aside for potential void periods and major repairs (a new boiler could cost around £1000, if you cannot afford to replace it then don't buy the property).

If you would like some advice about buying to let, whether you are a landlord with an existing portfolio or someone thinking of investing in the Warrington rental market for the first time, call me on 01925 235 338 or visit our office in Warrington, we are at 6 Bankside Crosfield St, WA1 1UP for further details. The Kettle is always on, me and my staff are always excited to get stuck into finding new BTL deals in and around Warrington. Let us take the stress away from you.

Don't forget to visit the links below to view back dated deals and Warrington Property News. 

Facebook, https://www.facebook.com/hamlethomeswarrington

Twitter, https://twitter.com/HHWarrington

Website, http://www.hamlethomeswarrington.co.uk/

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