Thursday 21 September 2017

Warrington Buy-to-Let Return / Yields – 3.3% to 9.7% a year


The mind-set and tactics you employ to buy your first Warrington buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise. When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget (because as my parents always used to tell me – you get what you pay for in this world!).

Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite. Inexpensive Warrington properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.

This means, if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Warrington buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.

To give you an idea of the sort of returns in Warrington...

Warrington Property type
Average Price paid (last 12 months) in Warrington
Average Rent Achieved in last 12 months in Warrington
Lower End of Yield Range in Warrington
Average Yield in Warrington
Upper End of Yield range in Warrington
Detached
£301,726
£1,195
3.37%
4.75%
5.59%
Semi-Detached
£175,668
£762
4.35%
5.21%
7.03%
Terraced
£126,118
£723
5.64%
6.88%
9.79%
Flats
£109,446
£576
4.94%
6.32%
7.27%

Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Warrington area.


As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield - and are doing so by buying cheaper properties.

However, before everyone in Warrington starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Warrington buy to let property to buy.  Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too. Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Warrington landlords who are looking for capital growth, an altered investment strategy may be required.

In Warrington, for example, over the last 20 years, this is how the average price paid for the four different types of Warrington property have changed…

·         Warrington Detached Properties have increased in value by 230.1% 
·         Warrington Semi-Detached Properties have increased in value by 233.6%
·         Warrington Terraced Properties have increased in value by 248.7%
·         Warrington Apartments have increased in value by 235.5%



It is very much a balancing act of yield, capital growth and void periods when buying in Warrington. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to drop in and let’s have a chat. What have you got to lose? 30 minutes and my tea making skills are legendary!

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 14 September 2017

Do you keep missing out on the perfect Warrington investment property? If so then join our Premier Investor List




2017 seems to be flying by, we are almost coming towards the end of the year and 'Winter is coming'. The last time I invited my blog readers to join our Premier Investor list was around 2-3 months ago so I thought I would share this post again, our premier investment list will give you direct access to any properties we find in Warrington which will make a good investment. 

Having found our blog, you probably know a little more about the local market and about us, and you've probably even been in contact to ask us about something you've already seen. All good so far.


So why wait?


With blogs featuring great deals and up to date Warrington Property News, wouldn't it be great to be able to 'jump the queue' and get the inside info a few days early? We constantly check the market and keep an up to date list of potential Buy To Let properties in the Warrington area, so we have a database we can refer to should you wish to consider a selection of options.


If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call or email us now and get your name put on our Premier Investor list on 01925 235 338, pop through the door of our offices at Bankside offices, Crosfield Street in Warrington or send us an email on manoj@hamletwarrington.co.uk


Dont forget to visit the links below to view back dated deals and Warrington Property News. 

Thursday 7 September 2017

Slowing Warrington Property Market? Yes and No!



My thoughts to the landlords and homeowners of Warrington…

The tightrope of being a Warrington buy-to-let landlord is a balancing act many do well at. Talking to several Warrington landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Warrington landlords as average Warrington rents have been on a downward trend recently. So look at the figures here...

Rents in Warrington on average for new tenants moving in have risen 1.4% for the month, taking overall annual Warrington rents 2.3% higher for the year

However, several Warrington landlords have expressed their apprehensions about a slowing of the housing market in Warrington. I think this negativity may be exaggerated.

The other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Warrington as well as the Warrington buy-to-let landlords).  I believe the Warrington property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry…

Property Values in Warrington are 3.08% higher than they were 12 months ago, rising by 0.34% last month alone!

However, the reality is the number of properties that are on the market in Warrington today has dropped by 16.7% since the New Year and that will have an interesting effect on short-term Warrington property values. As tenants have had less choice, buyers also have less choice.


Be you a homeowner or landlord, if you are planning to sell your Warrington property in the short-term, it is crucial, that whilst you allow room for negotiation, you must still realistically price your property when you bring it to the market. Given that everyone now has access to property details, including historic stats for how much property has sold for, buyers will be more astute during the offer and negotiation stages of a purchase.

Even with this short-term decrease in the number of properties for sale in Warrington, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,660 properties for sale compared to the current level of 441 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Warrington properties for sale will keep prices relatively high...and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought’s before I go – to all the Warrington homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving ... most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)


To all the Warrington landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Warrington Property Blog
For more thoughts on the Warrington Property Market, please visit the Warrington Property Market Blog.

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.