Peaceful Buy to Let Northampton

Today I have found this suitable buy to let property in Westone, Northampton, although it’s a bit further out of the town it is very popular with tenants wanting more of a peaceful surrounding.

It’s a ground floor maisonette and is offered to the market with No Upper Chain. Accommodation comprises; entrance hall, sitting room, kitchen, two double bedrooms and bathroom. Outside there is the benefit of two allocated parking spaces one to the front and another to the rear of the property. Further benefits include gas radiator heating and double glazing.

I would expect to see a rental value in the region of £650.00 pcm on this type of property, in this location, so when we compare this with the asking price of £124,995 would see a healthy return of 6.2%.

With flats and maisonettes there is normally the lease to consider and possible charges for the services and ground rents, but I notice on the advert it says the vendor advises there are 107 years remaining on the lease and the service charge is £675 PA – which isn't too bad either!

Belvoir are the selling agents of this one, so get in touch with them for more information or follow the link below to view the advert on Rightmove…

http://www.rightmove.co.uk/property-for-sale/property-45304371.html 

High Demand Property Northampton

Two bedroom houses are in high demand with tenants at the moment, so why not check out this property for sale as a possible investment…

It appeared today on Rightmove and is being sold with Connells estate agents in Kingsthorpe Northampton. 

They describe it as a well presented two bedroom terraced property with accommodation comprising entrance hall, cloakroom, kitchen and lounge with French doors onto the garden. First floor, two bedrooms and bathroom. Outside driveway providing off road parking for two cars side by side and rear garden.

Personally I would give it a once over decor wise to freshen it up and perhaps tone down the purple……… tenants love to move into a property that smells of paint!

The likely rent for this type of property in good order would be £700.00 pcm, giving you a return of 5.0% gross so it really does work as an investment.

http://www.rightmove.co.uk/property-for-sale/property-45253935.html

Private Renting set to grow by 6,800 Northampton households by 2025

I was having a most interesting chat the other day with a Northampton landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Northampton, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the Northampton Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and Price Waterhouse Cooper (PWC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Northampton.

Well some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand… if the RICS and PWC are indeed correct, what does this mean for Northampton? The fact is, as a country, we are facing a precarious rental shortage and need to get Northampton building in a way that benefits a cross-section of Northampton society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 90,000 households in Northampton, currently 38,900 tenants live in 15,900 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Northampton needs to rise by 6,800 (i.e. 42.8%)  taking the total number of rented properties in the town to 22,700.

That means Northampton landlords need to buy around 800 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 16,700 people will want to live in all those 'additional' Northampton rental properties – so why is the government penalising landlords?

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Northampton house prices, the majority of new Northampton households will be relying on the rental sector in the future to house them. 

I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Northampton society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.

Preparing a property for Winter

We’ve certainly felt the cold here in Northampton today, so before the winter sets in check out our top tips for winter proofing your property...

716% - Rise in Northampton Property Prices since 1981

Roll the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’.   Haven’t things changed? The number of homeowners and property investors who said they wish they had hindsight and bought up every house in Northampton all those years ago, especially when you consider what has happened to Northampton property values, as…

 

Northampton Property Values since 1981 have risen by 716%.

Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Northampton are 444.1% higher.   It’s no wonder people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Northampton Property market run much deeper than property value changes as no one could have predicted how the property market has changed in Northampton over the last 30 years.

Looking at the Local Authority data for Northampton Borough Council in 1981, 32.9% of Northampton people lived in a Council House, whilst today its 17%... a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House.  The private rental sector since 1981 has, as one would have expected, also changed.  The proportion of properties privately rented in the Northampton area (i.e. through a private landlord or a letting agency) has almost trebled, rising from 6.1% to 17.8% of property.

So, let us consider those people who own their own home, surely that has had a massive drop?  In 1981, the proportion of people who lived in the Northampton Borough Council area who owned their own home was 60.8%… and today its… 62.7%. Not the seismic change most of you were expecting (including myself!).

Homeownership in the 1980’s and 1990’s in Northampton did in fact rise, but as I have discussed in previous articles in the ‘Northampton Property Market Blog’, that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent.

... and this is why the buy to let market in Northampton is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (like they were in the 1950’s/60’s and 70’s).  

The Northampton property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important.

Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Northampton buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market.  These opportunities will provide a more stable platform for knowledgeable and wise Northampton buy to let landlords to thrive in.  If you want to learn more about the Northampton Property Market, feel free to pop in for a coffee with me at our office on the Wellingborough Road and have a chat with me. 

Project Property Northampton

Today’s buy to let deal requires refurbishment so if you fancy a bit of a project this one could work for you...

It’s recently been listed For Sale with Acorn estate agents and they have marketed it for £110,000. I estimate this refurbishment costing in the region of £15,000 which would mean your total out lay would be around £125,000 (if you pay the full asking price...!). This coupled with a potential and realistic rental of £650.00 per month produces a great yield of 6.%!

Check out the details on the link below and get in touch with the agent if this is the type of thing you’re looking for!

http://www.rightmove.co.uk/property-for-sale/property-43805112.html  

Bloomsbury Buy to Let Deal Northampton

On my daily search of Rightmove I have come across this two bedroom leasehold property for sale in the town centre…

Located in the sought after building of Bloomsbury House adjacent to the Derngate Theatre, the house offers in brief two bedrooms, bathroom and an open plan lounge, kitchen and dining room. The home also includes an allocated parking space in the St Johns car park across the road. Located to the town centre, access to amenities are exemplary, with a park, supermarket, theatre, cinema, health clubs, restaurants and high street retailers all within very close proximity.

It’s on for sale with the estate agents Jackson Grundy and they have it marketed for £139,995 and knowing this building very well as it’s popular for buy to lets, and we let one here just last week I would say £695.00pcm is the right rental figure for this one.

So what is the rental yield, well if we take the annual income from the rent and divide it by the asking price that give us 5.9%, but if there is a deal to be done on the asking price this could get better!

Of course when going further in to the sums, remember that most apartment blocks will be subject to ground rent & services charges, so make sure you factor this in, when working everything out in more detail…

This is the link to the property on Rightmove for more information…. 

http://www.rightmove.co.uk/property-for-sale/property-43780164.html

If you are thinking of getting in to buy to let in Northampton and would like to speak to us for some impartial advice and guidance please feel free to give us a call on 01604607080.

Hot Spot Rental Northampton

This morning I've come across this modern two bedroom ground floor apartment being sold with a tenant in situ and advertised as **INVESTORS ONLY** so I thought it would be worth a mention today!

It’s in the hot spot rental area of The Life Building in St James, Northampton and is marketed for sale with William H Brown.

Unfortunately I cannot see on the advert how much rent the current tenant is paying, so a call would need to be made to them to check that out. In today’s market, the rent should be in the region of £695.00 pcm which would offer a very respectable return of 5.9% per annum based on the asking price of £140,000.

I have suggested properties with tenants in situ in the past, and would say it's quite a straight forward process but make sure you have a good agent managing it for you!

This is the link to the Rightmove advert, but if you’re interested give the selling agent a call….

http://www.rightmove.co.uk/property-for-sale/property-55001038.html

Opportunity to buy multiples in Northampton

My buy to let deal today is a pretty normal looking apartment located in the popular Abington area of Northampton… but there’s a bit of twist with this one…

I’ve noticed the selling agent Whites Estate Agent, have put in the description that there are currently three two bedroom flats available to buy, and could be sold as a package! Opportunity to get yourself a deal? Possibly!

This one in particular is a purpose built first floor two bedroom apartment; it looks like the kitchen is open through to the lounge diner and there’s an en-suite shower room too!

Whites have also said the property is currently let, however they have mentioned the current rental value but I would suggest if this property was to be put back on the market for let you would be looking in the region of £650.00 pcm.  The asking price is £114,995 so based on these figures you would look to achieve a yield of 6.9%!

If you could buy three like this, then you could have the start of or an addition to a great Northampton rental portfolio!

Click on the link for more information…

http://www.rightmove.co.uk/property-for-sale/property-39072570.html.

If you would like to know more about buy to let in Northampton then I’m happy for you to pop in to our office on the Wellingborough Road and see me, or give me a call on 01604607080. 

Barry Road catchment area properties outperform Northampton average by 61%

I was having a chat with a Northampton property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property. Anecdotally, I have always known this to be true, a good school creates good demand and good demand does affect house prices. So, I asked my colleagues on the front line, who take the phone calls from people putting themselves on our mailing list and they confirmed that most people cite location as their number one factor.

After looking through our mailing list, it confirms there is a close correlation between the high demand areas of Northampton and the close proximity to a good primary school. 

Talking to my team in a recent morning meeting, they agreed many people would  look to increase their budget quite significantly, whilst others would consider downgrading their property requirements to be close to a good primary school.

Those of you who regularly read this blog will know I like a challenge, so I decided to look at the science behind these assumptions. According to the SchoolGuide website, Barry Road Primary School is one of the better primary schools in Northampton. There is also an excellent pupil/teacher ratio of 20.4 to 1 and a higher the national KS2 rating of 28.4 (higher than the National Average) and 79% of pupils reaching Level 4. Looking at property sales within a quarter of a mile of the Barry Road Primary School, property values have risen in value since 2003 by 43.7% whilst according the Land Registry, the Northampton average as a whole has risen in the same time frame by 27.17%.

That means the parents of Barry Road have seen the values of their properties rise proportionally 60.83% more than the Northampton average... interesting don’t you think?

However, whilst a good primary school significantly contributes more to house prices, the same can’t be said for secondary schools . There are two reasons for this, firstly, as secondary schools are much larger, so their catchment areas are correspondingly much larger, meaning parents don’t need to live so close to the school. Secondly, in the UK, whilst the difference between the top 25% and bottom 25% of secondary schools is not insignificant, in the primary school sector, the difference between the top 25% and bottom 25% is, according to the London School of Economics, is considerably and significantly more.

Many other Northampton landlords, both who are with us and many who are with other  Northampton agents, like to pop in for a coffee or ring/email us to  discuss the Northampton property market, to consider how Northampton compares with its closest rivals and hopefully we can answer all their questions. You must take lots of advice and seek out the best opinion. 

Over 30,000 Spare ‘Spare’ Bedrooms in Northampton.

That isn’t a typo, of the 89,984 households in Northampton, 30,085 of those properties don’t only have one spare bedroom, but two spare bedrooms! … and it is this topic I want to talk about this week, my Northampton Property Market Blog readers – because this could be the cure for Northampton’s housing crisis. The fundamental problem of the Northampton housing ‘crisis’, is the fact that the supply of homes to live in has not historically met demand, increasing property values (and in turn rents), thus ensuring home ownership becomes an unattainable ambition for the twenty something’sof Northampton.

Call me a realist, but it’s obvious that either demand needs to drop or supply needs to rise to stop this trend getting worse for the generations to come. Don’t get me wrong, I admire Downing Street’s plans to build 200,000 starter homes which will be offered to first time buyers under 40 with a minimum 20% discount price. However, the building of starter homes on current building sites, where new homes builders already have to build a certain number of affordable ‘starter’ homes at the moment under a different scheme, does not increase the stock of new ‘starter’ homes, it simply replaces one affordable scheme with another.

One option that could resolve the housing crisis is if the Government literally looked closer to home, concentrating on matching households with the appropriate sized home.

In Northampton, 61,817 households have one spare bedroom and of these, 30,085 have two or more spare bedrooms.

This compares to 3,897 households in Northampton that are overcrowded (ie there are more people than bedrooms in the property).

Looking specifically at the homeowners of Northampton, 21,738 owner occupied Northampton houses have one spare bedroom. Now having a spare bedroom is not considered a luxury. However, in addition to those 21,738 households with one spare bedroom, there are on top, a further 26,231 owner occupied Northampton households with two or more spare bedrooms.  

Therefore, I am beginning to see there is the spare capacity in the Northampton housing market. Principally, I will concentrate on the group that makes up the bulk of this category, the owner occupiers of large properties, in their 60’s and 70’s, where the kids flew the nest back in the 80’s and 90’s. They call it ‘downsizing’, when you sell a big property, where the extra bedrooms are no longer required, to move into a smaller and, usually, less expensive property.

However, there are many explanations why these individuals do not downsize. These people have lived in the same house for 30, 40 even 50 years, and as one matures in life, many people do not want to depart from what they see as the family home. Much time has been invested in making friends in the area and it’s nice to have all those rooms in case every grandchild decided to visit, at the same time, and they brought their friends!  But on a more serious note, more and more people are beginning to downsize earlier, but in my opinion, not at a fast enough rate. As the years go one, we will have a situation where younger families will be living in smaller and smaller houses, whilst all the large houses with a couple of 70 something empty-nesters rattling around them! I believe the Government should put more weight behind downsizing, because with the right incentives, many could be encouraged to think again and make the spare rooms available.

.. and it would have to be incentives, as the using the stick (instead of the carrot) would be political suicide for any party, especially the Tory’s. One option is to allow retired downsizers not to pay stamp duty on the new property, saving them thousands of pounds and another for the planners to work with builders to build not only starter homes for under 40’s, but also have housing built just for retired downsizers .. or is this one step too far in ‘social engineering’?

The fact is not enough properties are being built in Northampton, and with population rising at a faster rate, something needs to be done. However, I believe the Northampton population (and in fact the whole of the UK) is slowly turning into a more European model of house ownership. In Europe, most people rent in their 20’s and 30’s, only buying in their 40’s and 50’s, when they inherit money from the sale of their late parent’s property. That works particularly well in Germany and I can’t see why it can’t work here. In the meantime, there is an opportunity in the coming 20 years for people to supplement their pension by buying smaller properties to rent out, as that is where the demand will be in the next few decades in Northampton. 

Only 11,355 Council Houses left in Northampton – Opportunity or problem?

The Right to Buy scheme was a policy introduced by Maggie Thatcher in 1980 which gave secure council tenants the legal right to buy the Council home they were living in with huge discounts. The heyday of Council ‘Right To Buys’ was in the 80’s and 90’s, when 1,719,368 homes in the Country were sold in this manner between October 1980 and April 1998. However, in 1997, Tony Blair reduced the discount available to tenants of Council Houses and the numbers of properties being bought under the right to buy declined.

So what does this mean for Northampton homeowners and landlords? Well quite a lot in fact!

Looking at the figures for our local authority, whilst the number of ‘Right to Buys’ have dwindled over the last few years to an average of only 41 ‘right to buy’ sales per year, one must look further back in time. Looking at the overall figures, 5,396 Council properties were bought by Council tenants in the Northampton local authority area between 1980 and 1998. Big numbers by any measure and even more important to the whole Northampton property market (ie every Northampton homeowner, Northampton landlord and even Northampton aspiring first time buyers) when you consider these 5,396 properties make up a colossal 9.7% of all the privately owned properties in our area (because in local authority area, there are only 55,622 privately owned properties).

Northampton First Time Buyers and Landlords can now buy these ex-council properties second hand (or the PC brigade like to call them ‘pre-loved ex–local authority dwellings’) as those original 80’s and 90’s tenants (now homeowners) have more than passed the time of any claw back of the discount they received (Council discount was repayable if the first owner sold within a stipulated time period ie usually 5 years).

Now let us all be honest, some (not all), but some ex-council properties lack the vital KSA that some landlords crave. The new homes builders know all about KSA (or Kerb-Side-Appeal) as they dress up the exteriors of their new homes to make them more appealing to buyers .. and if you don’t believe me .. why do Showhomes exist? Going on the exterior looks of a modern property might be a theoretically good way of choosing a Northampton buytolet property, but in a challenging market, some Northampton investors are finding a more no-nonsense down to earth approach brings the largest returns.

Yes, the modern stuff being built in Northampton is lovely, but too many landlords purchase buy to let property solely based on where they would choose to live themselves, instead of choosing with a business head and choosing where a tenant would want to live .. because remember the first rule of buy to let property … you aren’t going to live the property yourself. What an ex-council property lack in terms of KSA, they more than make up for in other ways.  Tenants more worried about how close the property is to a particular school or family members for child care matter to them far more than the look of a property.

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is more than made up in the much higher yields – and those built between the wars or just after are really well built. Tenant demand for such properties is good since Northampton property values are so expensive, a lot of people can’t get mortgages to buy, so they will reconcile themselves to renting, meaning there is a good demand for that sort of property to rent. Also, the very fact the council were forced to sell these Northampton properties in the 80’s and 90’s, means that today’s younger generation who would have normally got a council house to live in themselves, now can’t as many were sold ten or twenty years ago.

So to Northampton landlords I say this …don’t dismiss ex-council houses and apartments – but remember the 1^st rule of buy to let (see above). However, those very same Northampton landlords should go in with their eyes open and take lots of advice. Not all ex council properties are the same and even though they have good demand and high yields, they can also give you other headaches and issues when it comes to the running of the rental property. That just leaves the 11,355 council houses still owned by the local authority to be sold to their tenants in the coming years! 

Where are the Twenty Somethings going to live in Northampton

My parents bought their first house in the 1980’s, they were in their early 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s, the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s. 

This year alone, 3,144 people in Northampton will turn 28, and 3,084 in 2017...and dare I say in 3,053 in 2018.. year in year out, the conveyor belt carries on .. where are the Northampton youngsters going to live?

Ask a Northampton ‘twenty something’ and they will say they do not expect to buy until they are in their mid thirties, seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’, as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Northampton people is the large deposit needed to get a mortgage… or is it?

The average price paid for an apartment in Northampton over the last 12 months has been £116,900 meaning our first time buyer would need to save £5,845 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday, the latest iPhone upgrade or the latest 4k HD television. That could soon be saved if these ‘luxuries’ were with held over a couple of years but attitudes have changed.

Official figures, from the Office for National Statistics, show the average male in Northampton with a full-time job earns £548.90 per week whilst the average female salary is £415.00 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for apartment.

I was reading a report/survey commissioned by Paragon Mortgages from the Autumn of last year. The thing that struck me was when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the sector and 24% intended to buy a house in the future, with the proportion of respondents citing the “unaffordability” of housing as the reason for renting privately increasing from 69% to 74%.

However, time and time again, in the starter home category of property (i.e. apartments), nine times out of ten, the mortgage payments to buy a Northampton property are cheaper than having to rent in Northampton. It is the tenant’s perceptions that believe they can’t buy, so choose not to. Renting is now a choice. Tenants can upgrade to bigger and better properties and move up the property ladder quicker than their parents or grand parents (albeit they don’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting, unless that attitude changes, I expect that the private rental sector in Northampton (and the UK as a whole) is likely to remain a popular choice for the next twenty plus years. With demand for Northampton rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. I also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed. 

Northampton’s ‘Generation Rent’ to grow by 3,264 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 at
Bartella's Coffee House just down the road here. 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 say 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 Northampton is only going in one direction – and not the direction the papers say they are going.

According to Sheffield University, buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% (today it is 64.2% in Northampton) by 2032, while the rate of private sector renting will increase to 35% (Interestingly, in Northampton it stands at 17.7% today).

Therefore, the demand for rental accommodation in Northampton will grow by 3,264 households in the next five years and these are the reasons why, irrespective of the distractions set out in the newspapers…

         

Northampton property values over the last six years have risen a lot more than average wages/salaries, meaning as homeownership and mortgage availability is dependent on your ability to pay 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 Tory’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy Isa, and 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 to the ‘20 somethings’ of Northampton and as I keep saying they will still need a roofover their heads!

Currently, 38,901 people live in private rented accommodation in Northampton

You see, with the new rules on tax, more and more landlords will be looking to move away from the previous honeypot of central London, because its higher prices meant lower rental yields. With the new tax rules and central London’s cooling of house price inflation, more and more landlords will look further afield, including Northampton (interestingly, I have already been chatting to a few central London landlords after they read the Northampton Property Blog).

So, by 2021, the number of rental properties in Northampton will rise to 22,249

This prediction in growth of the Northampton rental market is even on the back of the government clamping down on tax reliefs 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 Northampton. The balance of capital growth and yield, especially in this low interest rate world we live in, means Northampton landlords need to do more homework to ensure the investment in property gives the desired returns. 

Upton Northampton Buy to Let Investment

Morning all! What a wet a miserable day it is today out there, well maybe this buy to let investment could brighten up your day…

This is a lovely looking apartment set on the Upton development of Northampton, so offers easy access to the M1, A45 and A43, while also benefiting from immediate access to a variety of restaurants, shops and supermarkets. The internal accommodation comprises entrance hall, spacious living / dining area with balcony, open to a modern fitted kitchen (with integrated dishwasher, washing machine and cooking appliances), two double bedrooms (Juliet balcony to master) and a ‘Jack ‘n Jill’ bathroom adjoining the main bedroom and entrance hall. Allocated parking is positioned behind secure electronic gates, while a secure bicycle store is also available.

It has just come on the market for sale with Jackson Grundy and working out some number it looks to me to be a good investment, especially as the condition looks fantastic you shouldn’t need to spend any money improving the property.

So what are the figures; it is on the market for £145K and properties like these can rent from £700.00 to £750.00 per month. This coupled with the purchase price would deliver a respectable yield of 5.8% and 6.2% respectively.

The agent has also noted the lease information, which is great as these figures will also need to be considered with your final calculations.

This is the link to Rightmove….

http://www.rightmove.co.uk/property-for-sale/property-38455980.html

where I saw the property advertised, but why not give the agent a call to arrange a viewing.   

Or if you would like some independent advice about buy to let Northampton please feel free to call me on 01604607080. 

34.9% of Northampton tenants in the private rented sector are on Housing Benefit

“What does the ideal Northampton tenant look like?”, asked one of my landlords from Abington the other day, to which he carried on before I could reply, “Let me guess, a professional couple, both in their 30’s, flawlessly tidy, pays their rent early, doesn’t complain or fuss, who has no plans to move and cheerfully accepts annual rent rises”.

Before I can answer that question properly, I have always believed all a landlord wants (and expects) of their tenants is too pay their rent on time and look after the property as if it were their own. In return, the landlord should provide a property that is warm, clean, modern and damp free and sort any issues (such as repairs) quickly and without fuss. 

Back to the tenants. Tenants tend to fall into several groups ... 20 something professionals, young and middle aged families, corporate tenants (ie their employer finds their employee a house to live in), students, older singles/couples and housing benefit claimants – and they come with different needs and wants. So choosing who best suits your Northampton property – and steering clear of bad tenants – is a big factor in making property investment a success.

One topic that I am often asked is should they, as a landlord, accept tenants on housing benefit?

It might interest the landlords of Northampton that of 14,657 private rented properties in the local council area, 34.9% of the tenants of those properties are on some form of housing benefit

(5,123 properties to be exact). I know many landlords have suffered late rent payments with tenants on benefit, especially since 2008, when local authorities started paying housing benefit to tenants rather than directly to the landlords, but you cant ignore the fact, there are housing benefit tenants make up a significant proportion of the Northampton rental population. My opinion is the final choice of accepting such tenants has to be the landlords but you can’t tar every tenant with the same brush ( I will always give you a balanced opinion if ever asked).

Interestingly, it might surprise some readers of the Northampton Property Blog, when we compare Northampton to the national picture, Northampton’s Housing benefit claimants are lower, as nationally a higher proportion of private tenants claim the benefit. Nationally, 39.2% of the tenants of the 3,891,467 rental properties in Great Britain claim some form of housing benefit ( ie 1,526,915 properties).

Now, let us look at the occupation’s of Northampton tenants, which makes even more fascinating reading. Of the 14,657 privately rented properties in the Northampton area, 11,910 of the head tenant (the head tenant being classified as the head of the household) is in employment (the other 2,714 rental properties head tenant’s either being retired, long term sick, student or job seekers).

Splitting those 11,910 head tenants down into their relevant professions, 3,945 of them are Managers, Directors, Senior Officials, Professional or Technical Professions, 1,092 in Administrative and secretarial occupations, 1,136 in Skilled Trades, 1,199 in the Caring, Leisure and other service occupations , 1,043 Sales and Customer Service Occupations, 1,248 Process, Plant and Machine Operatives and finally, 2,762 in  Elementary Occupations.

The one thing I have always known anecdotally, but until I did my research, never had anything to back it up with, was the high proportion of professionals and skilled trades renting property in Northampton – intriguing! Maybe in future articles, I will look deeper into the corporate tenant market, young and middle aged families, students and older people  rental markets.

Parklands Property with Garage Let Separately

I spotted this property this morning on Rightmove as its popped up as being reduced and would making a cracking investment with the rental figures its achieving!

It’s a two bedroom first floor maisonette situated in the sought after area of Parklands, which also has a garage that is let out separately.  The accommodation looks to have been modernised, with recently a fitted kitchen and new bathroom, its got neutral décor and carpets too.

It’s being marketed for sale with Horts; a local estate agent in Northampton and they say the maisonette is being let out for £650.00 pcm and the single garage is let for £50.00 pcm totalling £700 pcm.

The marketing price is £115,000, which means if you paid the full asking price and calculated the yield on the rental income of £700.00 pcm, you would be achieving a fantastic 7.3% return!

However, Horts have noted in the particulars, that this property has a term left on the lease of approx. 57 years, but the vendor has been advised that the owner can re-new the after a 3 year period of ownership – so the cost to renew the lease would need to be considered with in your purchase!

This is the link for the property:

 http://www.rightmove.co.uk/property-for-sale/property-52609804.html 

If you are looking to invest in Northampton why not give us a call here at Northwood for some impartial advice about what to and what not to buy on 01604607080.  

Northampton Buy to Let sees returns of 10.91% in 2015

Well, as the sands of 2016 start to trickle through the hour glass of life and Christmas a distant memory, a few days before Christmas, I got chatting with one of my out of town landlords who was back in Northampton visiting his family. Brought up in Northampton, he went to the Northampton School for Boys back in the 1970’s and is now a University Lecturer in central London. For his retirement, he has a small portfolio of four properties in the town and wanted my advice on where to buy the next property in Northampton (as he lives in a college owned flat and anyway, would never dream of buying where he lives in Kensington where the average value of a flat is £1.62m and a town house £4.1m.  Eye-watering!)

Before I could advise him, I reminded him that the most important thing when considering investing in property is finding a Northampton property with decent rental yields for income returns, yet at the same time, it must have the potential for capital growth from rising house prices over time. Going into 2016, Northampton landlords will be under more pressure to find the best permutation of yields and capital growth, as extra stamp duty charges for buying properties and a squeeze on mortgage interest relief will raise their costs.

However, (you knew there would be a however) before we look at yield and capital growth, one important consideration that often many landlords tend to overlook, is the propensity of how likely the rent will increase. Interestingly, the average rent of a Northampton property currently stands at £782 per month, which is a rise of 6.2% compared to twelve months ago (although it must be noted this rise in rents is for new tenancies and not existing tenants)

Anyway, back to yield and capital growth, the average value of a Northampton property currently stands at £233,400, meaning the average yield stands at 4.02% per annum, which on the face of it, many landlords would find disappointing. 

That is the problem with averages, so if I were to look at say 2 bed houses in Northampton which are the sort of properties a lot of landlords buy, in Northampton, the average value of  a 2 bed house  is £166,400, whilst the average rent for a 2 bed house is £709 per month, giving a yield of 5.11%. However, if that wasn’t high enough, there are landlords in Northampton who own some specialist properties with specialist tenancies, that are achieving nearly double that yield – again it comes down to your attitude to risk and reward (give me a tinkle if you wanted a chat about those sorts of properties – although they can be fun and games!)

Ultimately investors want to be making gains from both rent and house price growth. When combined, the rental yield and capital growth gives you the return on investment, and that is that is what I told our University friend from Kensington. Return on investment is everything. So, looking at property values in Northampton have risen in the last year by 5.8% .. which means the current annual return on investment in Northampton for a typical 2 bed house is 10.91% a year .... not bad! 

Northampton Buy to Let Deal

Good Morning, it’s a cold crisp morning here today in Northampton and I’m recommending this property we have just listed on the market for sale as an investment.

It’s a traditional two bedroom terrace home, located in a great position: Close to the town centre and walking distance to the train station in Northampton.

We have put it on the market for sale for £140,000 and rental wise; if we were to put it on the market for rent today we would be suggesting a figure in the region of £650.00 per calendar month. So let’s calculate the yield - take the monthly rent of £650.00 x it by 12 months and divide it by the sale price of £140000, this would give you a yield of 5.6% - not bad for a freehold property in Northampton.

There’s also the capital growth to consider when looking at a rental property as an investment too.  So that’s when the value of your investment increases over time, and looking at  this property in particular it has gone up a huge 107% since it was last sold back in 2002 for £67,500.

http://www.rightmove.co.uk/property-for-sale/property-57348053.html

Now given these figures I would expect this property to fly out the door, but if you are looking for an investment property to buy, or have a question about selling or renting in Northampton pick up the phone and give me a call, I’m Katherine Bond from the Northampton Letting and Estate Agency Northwood and you can call me on 01604 607080 or why not subscribe to our youtube channel  https://www.youtube.com/channel/UCQ028Nd4lZRTN4zzNKdClow  where you will find more videos on what is happening in the Northampton Property Market.