Warrington’s ‘Generation Rent’ to grow by 564 households by 2021

“The growth of the private rented sector, and the arrival of an investor class of buy to let landlords within it, is an issue that won’t be going away anytime soon… no matter what you read in the Daily Mail.” I said, as I chatted over a coffee with a landlord client of mine in the town. Whether you are a landlord of mine (or not, as the case maybe), I am always happy to look over any properties you are thinking of buying for buy to let purposes – and more so over a coffee!

Some commentators are saying buy to let is about to die.

With the new stamp duty changes and how mortgage tax relief will be calculated, some are saying that 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘bad news sells newspapers’? Let me explain why buy to let in Warrington is only going in one direction – and not the direction the papers say they are going.

Facts and Figures

According to Sheffield University (a centre of excellence on the topic), buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades.

By their estimates, the rate of homeownership nationally will fall to 50% by 2032. Today it is 63.6% in Warrington. Meanwhile, the rate of private sector renting will increase to 35%. Interestingly, in Warrington it currently stands at 16.89%.

Therefore, the demand for rental accommodation in Warrington will grow by 560+ households in the next five years. These are the reasons why, irrespective of the distractions set out in the newspapers.

 Generation Rent

Over the last six years, Warrington property values have risen a lot more than average wages/salaries. As homeownership and mortgage availability is dependent on your ability to pay a deposit, this has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%.)

Now it’s true the Torys’ efforts to fix the deficiency of affordable housing have focused on those who want to buy a home – ranging from Help to Buy, the much vaunted Help to Buy Isa and even the Starter Homes Scheme (an initiative offering a 20% discount for first time buyers). But if you are unable to save for the deposit, none of this means anything. Especially to the ‘20 somethings’ of Warrington and they still need a roof over their heads!

What is the effect on Warrington Landlords?

These are big numbers and a sizeable chunk of the electorate. So, whilst it appears Warrington “Generation Rent” youngsters will continue to rent and to not to buy, Warrington buy to let landlords will be lifted by the projections of greater rental demand. Warrington and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live.

With the new rules on tax, more and more landlords will be looking to move away from the previous ‘honey pot’ of central Manchester or Liverpool, because its higher prices mean lower rental yields.

With the new tax rules and central Manchester’s and Liverpool’s cooling of house price inflation, more and more landlords will look further afield, including Warrington (interestingly, I have already been chatting to a few central Manchester landlords after reading the Warrington Property Blog).

This prediction in growth of the Warrington rental market is even on the back of the government clamping down on tax relief for landlords. The point is this: gone are the days of making guaranteed returns on BTL property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it… but not now. You must take a more considered approach to your existing and future portfolio, especially in Warrington. In order to balance capital growth and yield, especially in this low interest rate world we live in, Warrington landlords will need to do more homework to ensure investment in property gives the desired returns.

One place for Warrington landlords and homeowners to visit for such information is the Warrington Property Market Blog.

As always, if you are an investor in the Warrington property market and would like a second opinion on a property you have seen then send the URL of the properties you have seen online over to me. Or if you would like to pop in and have a chat, then you can either email me on manoj@hamletwarrington.co.uk or call on 01925 235 338. Our address is 6 Bankside, Crosfield Street (opposite Iceland and Aldi – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

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/

Which Flat Should I Buy in Warrington?

Going back to August last year, I wrote a blog article about what is more investable: a one bedroom flat or a two bedroom flat. Now if I remember correctly, it was one of the first times I was spotted in Warrington town centre whilst shopping. The gent recognised me from the Warrington property blog and was looking to invest in the local property market. His strategy was to invest in flats, but which is better… one or two bedrooms? CLICK HERE FOR A RECAP OF THE 2015 ARTICLE

If investing in flats is your strategy you have to remember that as much as they are in high demand, do not always expect a long term tenant. From experience, one bedroom flats attract a single person working in the town centre. Now, if that tenant meets someone, they may start to look for something bigger… possibly a two bedroom flat. In time, they may even consider starting a family. A two bedroom flat would be ideal for a couple with one child. However, I notice, eventually, a family that size tend to look at finding a two up two down with a garden, something close to schools – planning for the future and somewhere to get comfortable.  Investing in flats is a great strategy, providing you know all the pros and cons.

So what is it you’re after: a high yield or capital growth?

Answering this question will help you figure out which properties you should buy...

The average asking price of a one bed flat in Warrington is £77,500 today, compared with £95,000 for a two bed flat. The one bed achieves an average rental price of £450 per month, compared with £595 per month for a two bed flat. That’s a yield of 6.9% for the one bed against 7.5% for the two bed.

So surely, the two bed flat is the better bet?

Well, it does offer a better rate of return and the two beds are much more desirable and easier to let out (therefore less void period). I almost forgot to mention that two bedroom flats are also much easier to sell in than one bedroom flats.

The numbers used in this article are taken from Rightmove and I am working with averages. Deals can be found for one or two bedroom flats in Warrington to achieve even larger yields. It’s about having that local street knowledge and knowing when and where to buy. So what are the pros and cons for investing in flats? Pop in… meet me and the team. Let’s have a chat.

As always, if you are an investor in the Warrington property market and would like a second opinion on a property you have seen, then send the URL of the properties you have seen online over to me. Or if you would like to pop in and have a chat, then you can either email me on manoj@hamletwarrington.co.uk or call on 01925 235 338. Our address is 6 Bankside, Crosfield Street (opposite Iceland and Aldi – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

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/

Bargains in the Warrington Property Market

Becoming ever more curious about the Warrington Buy to Let market (Great Sankey in particular) after reading our articles about various areas of Warrington, a landlord decided to pop in and ask our advice.

I found that a small 3 bedroom town house on Payne Close was bought for £43,500 in 2002. The same property sold for £120,000 in March this year, which is a rise of 175%. However, prices in the town during this same time period have roughly doubled so it should have sold for £87,470 if it kept up with the town’s average house price.

A four bedroom detached house on Wharfedale Close sold for £76,000 in the summer of 1996, and was sold again this March for £235,000. This is a rather impressive rise of 209%, but as we mentioned in the Warrington property blog a few weeks ago, average prices in this time have risen by  103% in Warrington.

With rents for detached houses in the area achieving between £800 and £900 per month, yields are around 5-6%. I think in terms of a rental investment, there are better properties, such as smaller two or three bedroom semis, but for owner occupation there are some bargains.

Our passion lies firmly within investments properties in the Warrington property market, so please feel free to talk to us at any point about our diverse area.

As always, if you are an investor in the Warrington property market and would like a second opinion on a property you have seen, then send the URL of the properties you have seen online over to me. Or if you would like to pop in and have a chat, then you can either email me on manoj@hamletwarrington.co.uk or call on 01925 235 338. Our address is 6 Bankside, Crosfield Street (opposite Iceland and Aldi – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

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/

The Warrington Love Affair with its 85,754 Terraced Houses

Call me old fashioned, but I do like the terraced house. In fact, I have done some research that I hope you will find of interest, my Warrington Property Market Blog reading friends!

The History of the Terraced House

In architectural terms, a terraced house or townhouse is a style in use since the late 1600s in the UK, where a row of symmetrical/identical houses share their side walls. The first terraced houses were actually built by a French man, Monsieur Barbon around St. Paul’s Cathedral within the rebuilding process after the Great Fire of London in 1666.  Interestingly, it was the French that invented the terraced house around 1610-15, but it was the 1730s in the UK, that the terraced/townhouse came into its own in London – and of course in Bath with the impressive Royal Crescent.

However, we are in Warrington, not Bath, so the majority of our Warrington terraced houses were built in the Victorian era.

Built on the back of the Industrial Revolution, with people flooding into the towns and cities for work in Victorian times, the terraced house offered decent livable accommodation away from the slums. An interesting fact is that the majority of Victorian Warrington terraced houses are based on a standard design:

·         a ‘posh’ front room

·         a back room where the family lived day to day

·         a scullery off the back room

·         off the scullery, a door to a rear yard

·         upstairs, three bedrooms (the third straight off the second)

Interestingly, the law was changed in 1875 with the Public Health Act and each house had to have 108ft of livable space per main room, running water, and its own outside toilet and rear access to allow the toilet waste to be collected – they didn’t have public sewers in those days in Warrington. At least, not where these ‘workers’ terraced houses were built.

It was the 1960s and 70s where inside toilets and bathrooms were installed, often in that third bedroom or an extension off the scullery. Gas central heating was added in the 1980s and replacement UPVC double glazing ever since.

Looking at the makeup of all the properties in Warrington, some very interesting numbers appear.  

Of the 283,660 properties in Warrington:

·         68,525 are detached properties (24.16%)

·         108,182 are semi-detached properties (38.14%)

·         85,754 are terraced/townhouse properties (30.23%)

·         21,199 are apartments/flats (7.47%)

And, quite noteworthy, there are 798 mobile homes which represent 0.28% of all property in Warrington. 

House Prices in Warrington

When it comes to values, the average price paid for a Warrington terraced house in 1995 was £24,810 and the latest set of figures released by the land Registry states that today that figure stands at £114,390. That’s a rise of 130%. Not bad when you consider apartments in Warrington in the same time frame have only risen by 93%.

But then a lot of buy to let landlords and first time buyers I speak to think the Victorian terraced house is expensive to maintain.  I recently read a report from English Heritage that stated maintaining a typical Victorian terraced house over thirty years is around sixty percent cheaper than building and maintaining a modern house – quite fascinating, don’t you think?

Don’t dismiss the humble terraced house – especially in Warrington!  For more thoughts on the Warrington Property Market – visit the Warrington Property Market Blog. www.warringtonpropertyblog.co.uk

As always, if you are an investor in the Warrington property market and would like a second opinion on a property you have seen then send the URL of the properties you have seen online over to me or you would like to pop in and have a chat, then you can either email me on manoj@hamletwarrington.co.uk or call on 01925 235 338. Our address is 6 Bankside, Crosfield Street (opposite Iceland and Aldi – so plenty of parking available). The kettle is always on and we will even pull out the posh biscuits!

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/