Warrington Property Blog: July 2017

Thursday, 27 July 2017

Don't miss out on a property deal like this in Warrington & join my premier investor list.

It feels like a very long time since I have shared a deal on the Warrington Property Market blog, as these usually go straight to my premier investor list, but it’s better late than never. Today I have been scrolling through the online portals in search of a deal.

It didn’t take too long to come across this lovely 3 bedroom house in Latchford.

This property has so much potential. Although it is on the market for £99,950 with Ashton’s in Stockton Heath, I believe it would go for around £90,000.

Now let’s look at the street.

The last property to sell on that street was 18 Mersey Walk, which sold on the 28th April for (wait for it) – £137,000. This is also a 3 bedroom house very similar to the one I’m writing about.

Without actually viewing the property, so just going off the images, I believe it needs around £10,000 - £15,000 worth of work going into it. So, if the property was bought for £90k + £15k refurb costs and extras you are looking at an estimated total of around £105,000.

A property like this
one – done up to a
rent-able condition – can let for around £600pcm. This will achieve and annual yield of around 6.8% - not bad at all.

Looking at the history of the street we can see that by doing the works on property you will be adding a lot of value, especially when the last 3 bedroom house sold this year at almost £140,000.

So, not only does this property offer a fantastic yield, it has great potential for future growth. In Warrington I find that 3 bedroom houses are as popular as 2 bedroom houses… the only difference is that 2 bedroom houses can be picked up very cheap, so it’s rare to get a 3 bedroom house at such a steal. Once you find the right tenants (usually a small to medium family) you tend to have them in for life, as their kids work up the different stages of education.

Click here to view this property

Having found our blog and one of our deal of the day posts, you probably know a little bit more about the Warrington property market and about me. You might be coming to the conclusion that you'd like to start investing, or even growing your portfolio and have found my blogs to be packed full of useful information - all good so far then.

So why wait?

Wouldn't it be great to 'jump the queue' and get the inside info as soon as it's available? We constantly check the market and keep an up to date list of potential buy to let properties in the Warrington area, and we even have a database should you wish to consider a selection of options.

If you want to be the first to know about the next Warrington investment opportunity, call me on 01925 235338 or email me on manoj@hamletwarrington.co.uk. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and 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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Thursday, 20 July 2017

Ask Andy – ‘Help! How do I do Right to Rent checks on my Warrington tenants?’

Question:

‘Hi Andy,

I’ve advertised my property online and have tenants interested in moving in. This isn’t my first time dealing with new tenants, however I read about something online called a ‘Right to Rent check’. Is this something that’s compulsory? How do I carry out a right to rent check?

Thanks,

Mark’

Andy’s Answer:

First of all, good luck with your new tenants in your property!

Right to Rent is part of the Immigration Act 2014. As of 1^st February 2016, Landlords must not allow any adult to occupy a property as their only or main home by creating a tenancy agreement, unless they have the 'right to rent' in the UK.

Someone who has the right to rent is defined as someone who is the following:

a British citizen
a European Economic Area (EEA) or Swiss national
has a right to rent in the UK e.g has a valid visa which expires after the proposed tenancy end date.

All adults who fall under the above criteria must be checked, regardless of ethnicity, nationality, etc.

This responsibly falls on all landlords who are renting privately, have a lodger, sub letting a property, or are an agent appointed by the landlord. These checks must be carried out prior to signing any proposed tenancy.

There is a range of documents which you can use to check this, which can be found on https://www.gov.uk/government/publications/right-to-rent-document-checks-a-user-guide.

The easiest documents to use are passports, identification cards and if necessary, any visas. However, there is a comprehensive list on the link above to a range of documents which can be used to carry out the checks. There are services out there which can carry out the checks for you (many referencing agencies carry out this process for you as an optional extra) or ensure you are using the correct documents in your checks.

If you have any further questions, feel free to drop me an email or give me a call. Email me on andy@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

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

Follow The Buy-To-Let Property Investment Market in Warrington

Warrington Property Market LinkedIn Page

Hamlet Homes Letting Agents Warrington Facebook Page

Hamlet Homes Letting Agents Warrington Twitter Page

Warrington Investment Property Specialist Hamlet Homes Website

Thursday, 13 July 2017

The Warrington Property Market, the Beatles, Sweden and 50 year Mortgages

Fifty years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. In the same year, Sweden switched from driving on the left-hand side to the right-hand side of the road. The average value of a Warrington property was £2,746, interest rates were at 5.5%! The Beatles released one of my favourite albums – their Sergeant Peppers album... but what the hell has that to do with the Warrington property market today?

Quite a lot actually. So, with my music turned up loud, let me explain my friends!

First Time Buyers in Warrington

I have been doing some research on the current attitude of Warrington first-time buyers. First-time buyers are so important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent (good news for landlords). If they buy, demand for Warrington property goes up for starter homes and that enables other Warrington homeowners to move up the property ladder.

First-time buyers are the lifeblood of the property market. They are, however, the most susceptible to interest rate rises and the affordability of mortgages. With that in mind, let us see what is happening to them…

The average value of a Warrington property is currently standing at £207,055 and UK interest rates at 0.25%. As each year goes by, it appears the age of the everlasting mortgage has started to emerge, prompted by these first-time buyers, eager to get a foot on the housing ladder. I was reading a report a few days ago where some mortgage companies confessed that the battle to gain big returns from the property market has led to mortgages that will take considerably longer than the customary 25 years to pay off.

Over the last few years, it has been commonplace for first-time buyer mortgages to be 30 and 35 years in length as the ‘Bank of Mum and Dad’ have been helping with the deposit (Beatles Sgt Pepper song - “With a Little Help from My Friends”). Now, some high street banks are offering mortgage terms of 40 years. This means first-time buyers could be paying until their mid 60s. I can hear that other great track from the same album "When I'm Sixty-Four" ringing in my ears! So, a 50-year mortgage does not seem as far-fetched now as it would have been back in the 1970s. After all, life expectancy for a male then was exactly 69 years and today its 79 years and 5 months!

Rising Warrington House Prices

Over the last ten years, Warrington property prices have continued to rise more than wages, therefore, first-time buyers are looking for bigger loans. If this development continues, the only way repayments can remain reasonable is by increasing the term of the loan.

However, some have said there are worries the mortgage companies are lending money over such a long term, they threaten leaving some first-time buyers with a generation of debt if the house price bubble bursts. Interestingly, when I looked at what had happened to average property values in Warrington over the last 50 years, there have been bubbles. First-time buyers should take heart, since as a county we have always recovered from it a few years later.

What if interest rates rise? Well looking at historic UK interest rates, the current rate of 0.25% is at a 300-year low. Mortgages will never be cheaper. I would however, seriously consider fixing the rate to cushion any future potential interest rate rises (since they can only go in one direction when they do change). If Warrington first-time buyers see buying a home as a long-term decision, based on the last 50 years, they should be just fine!

Before I go, a final thought for property buyers in Sweden, the land of Volvo and Abba. As Swedish property prices are so high, Swedish Regulators announced last year limits on the length of Swedish mortgage terms. They don’t bother with 50-year mortgages (On and On and On – Abba).

No, our Volvo-loving Swedish friends’ average mortgage length is 140 years (this is not a typo). Although such mortgages have had their Waterloo (Abba), regulators have significantly reduced the maximum term of a Swedish mortgage to 105 years. Either way, that’s a lot of Money, Money, Money (Abba again – Sorry!) to pay back!

Now I will leave you in peace as I listen to the 1980s Madness song ‘Our House’. My apologies to all the Beatles and Abba fans in Warrington - a bit of light hearted fun… albeit on serious topic.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

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

Thursday, 6 July 2017

Warrington Buy-To-Let Predictions up to 2037

On several occasions over the last few months, on my Warrington Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time, I felt that in some parts of the UK rents had dropped for the first time in over eight years. Recent research backs up this prediction.

Supply VS Demand

Rents in Warrington for new tenancies only grew by 0.9% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in Warrington, an interesting pattern emerges.

· 2016 - Rental Inflation in Warrington was -1.0%

· 2015 - Rental Inflation in Warrington was 2.1%

· 2014 - Rental Inflation in Warrington was 0.6%

The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants’ point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).

On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of Warrington property prices has compounded this.

Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.

Brexit

The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years, hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.

Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations), the simple fact is, we aren’t building enough properties for us to live in. Both in Warrington, the North West and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again.

Look at the projections by the Office of National Statistics.

Population Estimates for Warrington Borough Council over the next 20 years
2016 (actual)	2021	2026	2031	2036
209,117	215,954	222,147	227,162	231,594

Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Warrington, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants.

Simply put: rents must go up!

The fact is that I see this as a short-term blip and rents will continue to grow in the coming years. With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.

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