Hope for a Better Rental Market in 2017

Despite government changes and fresh challenges in the ‘buy-to-let’ market, the future for rented property will continue to be one of the best bets for the country’s growing number of tenants as well as landlords.

Although the market is likely to be slowed down by the threat of stricter ‘buy-to-let’ rules - including tougher affordability checks for buy to let mortgages and the withdrawal of tax relief on mortgage interest – we are still reporting an increase in demand for houses to rent.

If you are a cash investor, or perhaps an ‘accidental landlord’ who has inherited a property with no mortgage repayments, you can expect a very healthy return on your investment – far better than you could achieve from mainstream savings products.  

A priority in 2017 will be to carry on sourcing more local, good quality rental accommodation to satisfy both landlord and tenant client demand across the board.

Recent figures suggest an encouraging rise in the number of rental properties coming onto the UK market in nearly 60 per cent of UK towns and cities. And although rents are rising modestly they are, nevertheless, rising.

A Labour-backed inquiry into the nation’s housing crisis revealed that almost two-thirds of UK tenants don’t expect to afford a mortgage in the next five years either.

Meanwhile, government house building targets have let them down again. A House of Lords committee called for 300,000 new homes to be built in England each year - but in 2015-16 just under 190,000 new properties were added to the housing stock.

The private rented sector plugs a serious gap and provides essential good quality, affordable housing for a modern generation of tenants while opening up new opportunities for people who can invest in ‘buy-to-let’ properties.

New property investors will need to have a very clear strategy, in terms of what they expect from rental returns and capital growth. Renting in 2017 is expected to be an increasingly real alternative to home ownership but landlords need to buy property at the right price and thoroughly research its marketability.

If you are considering investing in a property please give me a call for honest advice on rental returns on 01664 569700. 

2 Potential Investment properties new to the Melton Mowbray Property Market

This is on the market with Fox Butler for £130,000 and is a 2 bed semi on Staveley Road in Melton Mowbray. 2 beds on this road generally let for £ 575 pcm  and I don't see why this couldn't achieve the same level of rent. That could be a potential return of 5.3%...

http://www.rightmove.co.uk/property-for-sale/property-46521612.html

  



This nice 2 bed in Asfordby is on the market for £139,950 with Melton Premier.
It would easily let for £ 550 pcm which is a potential 4.7% return if purchased for the asking price.

http://www.rightmove.co.uk/property-for-sale/property-64164224.html

  



As many of you know I am always conservative when talking about rental valuations as I feel any investor considering a property should use realistic figures. It will be likely that we can achieve a little more on the day. 

There are other costs that should be taken into consideration include Conveyancing Fees and Stamp Duty which is higher when purchasing a second property. 

If you are considering investing in a buy to let then please give me a call for honest advice on rental returns. 

Just reduced to £130,000 - Asfordby Hill 5.3% potential return

***Update*** Harrison Murray have just reduced the asking price to £130,000 and at £575 pcm you could be looking at 5.3% return 


I keep looking at this property on for sale with Harrison Murray. It is in Asfordby Hill and this area attracts families due to the local Primary School. It is currently on for £135,000 and has been on for a little while now. 

Looking at the details it looks like it needs a new kitchen but the rooms are large and the fabric of the building looks to be in really good order. The rear of the property might not suit everyone but I believe we could get £575 pcm for this which is a potential return of 5.1% if purchased for the asking price. 


http://www.rightmove.co.uk/property-for-sale/property-56267806.html

Asfordby 2 bed - 4.8% potential return

This 2 bed semi close to the centre of Asfordby could make a great investment property. It is on the market with Melton Premier for £135,000. It would let for £550 pcm easily - giving a potential return of 4.8% 

It looks to be double glazed throughout and in good order. Its an affordable rental so I would expect it to let quickly. Asfordby is a popular location for tenants commuting to Leicester.

http://www.rightmove.co.uk/property-for-sale/property-63876914.html

Melton Mowbray - A plan for the future ...

Last week on the blog I looked at Capital Growth of property in Melton Mowbray, but the capital growth a town can hope to achieve is reliant on the Melton Borough being a desirable place to live over the next 20 years.

This is where we rely on the Melton Borough Council delivering a well thought out plan for the Borough that considers the needs of the families in the town and also employers.

One great thing about Melton Borough Council is the availability of information.    Reading through the plan it is clear they are seeking to improve –

•          Traffic flow
•         Housing that will appeal to first time buyers and young families in Melton.

Both of these improvements will encourage investment from employers through a good pool of appropriately skilled work force and ease of movement to major road networks.

You can read the draft plan at www.meltonplan.co.uk    The plan is currently at draft plan stage and completion for adoption by the council is 2018.   This is when we hope to see investment in the form of new developments and roads that will help the town to thrive in a sustainable way for the growing population.

Property investment should be carefully considered to include the potential future plans of an area. Good levels of capital growth cannot be achieved unless an investor has thought through how the town could look in 20 years time - when they may be considering selling their property.    If it's yield you are after the considerations are different.

I regularly meet with people looking to invest and each person has a different aim for their potential investment.    We have an honest discussion around the pro's and con's of any property - call me to arrange a meeting or pop into our office on Burton Street.    It is important for us that our landlords make the right investment. 

Asfordby Hill - Potential 5% return on investment

This is a really smart property on Asfordby Hill for sale with Newton Fallowell. It is a good size and looks like it needs nothing doing to it. 

It's on the market for £ 145,000 and would easily achieve £600 pcm, I always like to be realistic with my rental valuations and we would expect to achieve more than that on the day.

http://www.rightmove.co.uk/property-for-sale/property-63946250.html

Capital Growth in Melton Mowbray

If you are thinking of investing in property you need to consider the growth on the capital invested in a property as well as the rental yield you can be likely to expect.

I looked through the figure for properties in Melton Mowbray and this week I concentrated on my firm favourite a modern 2 bed house.

There are a few developments that were built around 10 years ago – still modern enough to be built with efficiency in mind and you would expect them to be low maintenance for the next 10 years.

Using Rightmove’s log of sold prices you can see exactly what each house was purchased for and what they have recently sold for as the data is collected from the Land Registry.

I found modern 2 bed properties that had been bought in 2005 and sold again in 2016 had seen an average of 11.5% growth in the capital over this time. When you consider during this 10 year period we have also had a double dip recession I think that’s pretty good going.

The rental income on these has also increased over this time. Back in 2005 we would be getting £525pcm for these 2 beds and now we are getting £595pcm.

Asfordby has also seen an increase on the 2 bed houses built around the same time, these have seen a 15% growth in capital since 2005. There are not many of these types of houses in our area though as a lot of the new building stopped around 2008.

If you consider purchasing a brand new property in 2017 you can expect to pay a premium and unless a deal can be negotiated with the developer the yields are not always favourable for investors – this is why many like the properties built around 2005.

The difficulty for investors is getting hold of these types of properties. They don’t come on to the market very often and they sell quickly. Keep an eye on my blog for properties coming up for sale in the Melton area.

New Year Resolutions

As I look to welcome in the New Year I have started to think about New Year resolutions. If you have considered investing in property then 2017 might be the year to do it.   

Although the Government’s attitude to landlords appears to be fairly negative at the moment; I think that they will soon realise the housing market needs a good balance of quality rental properties alongside affordable homes.

The government must also encourage people to plan for their future.  The historic poor performance of many pension plans has put people off these types of investments.   A lot of our landlords see their investment property as a source of income when they retire.

Property investment is not a quick cash option but a long term investment and with the right consideration can give you a mortgage free asset in 20 years.   Even with the ups and downs of the recessions if you are in a position to hang onto your investment property is a great option.

Looking at Rightmove there is a really nice 2 bed on the Country Park Estate for just under £120,000 with a garden and a garage in a block.   It is on the market with Harrison Murray and they have said the vendor is keen to sell as the property is currently empty.  This would let really quickly for at least £550 pcm.  (I always like to be realistic with any rental valuation so investors can calculate yields based on an easily achievable figure). See my blog post on the 22nd December 2016.

Why not make an appointment to talk to myself or Katie at our office or at your home and we can go through what it's like to be a landlord.   We will ensure you have all the facts and figures to make sure you can make the right decision.   We can help you find a property that will appeal to tenants and give a stable return on your investment.

So my resolution for 2017 is I believe it is going to be one of hard work and making the most of the opportunities we have.

Christmas Bargain - £119,950 on the Country Park Estate 5.5% return!

Harrison Murray have just listed this great 2 bed ground floor property with its own private garden and a garage in a block. These were built I believe as an affordable option on the Country Park Estate - I guess in the 1970's?

Its one of the nicest areas in Melton Mowbray and a great location for local schools. These typically let for £550 pcm which is a 5.5% return if purchased for the asking price. 

http://www.rightmove.co.uk/property-for-sale/property-63668129.html

New Street Asfordby, 5.3% return on £122,500 investment

This is a nice 2 bed on the market for sale with Harrison Murray for £122,500 and is in Asfordby.

It looks to be in good condition inside and would easily let for £550 pcm. This type of property lets really quickly.

http://www.rightmove.co.uk/property-for-sale/property-63426056.html

Melton Mowbray Town Centre Stunning Refurbishment 5% Return

This former office building has been beautifully refurbished and looks to have a thoroughly modern finish while retaining the character features. This property has large rooms and would let really well I think. It has a parking space at the back and the high spec finish will help it achieve a potential 5% return on investment.

http://www.rightmove.co.uk/property-for-sale/property-57231658.html

Uncertainty in the Melton Mowbray Property Market for 2017

I have been reading lots of articles in the media about uncertainty in 2017, if 2016 is anything to go by who knows what will happen!!

It got me thinking about the Melton Mowbray property market, employment levels and the availability of credit?

We have to realise that the chronic shortage of housing will keep prices buoyant even if lending does become more difficult.

We have seen lots of changes in Melton Mowbray since 1998.  If there has ever been a problem for people to borrow money or to secure a mortgage, it has always increased the numbers of people looking to rent a property.

The increased demand, and shortage of rental available, only results in rents increasing.   Perhaps it will become more viable for a landlord to invest if they can see the returns on a rental property grow.

The government do seem keen to keep increasing the taxation levels on landlords.   Without people investing in property there would be no Private Rented Sector to cater for those who choose to and need to rent.   It’s often their only option or the best option for their current circumstances.

I believe we will see those with some cash to invest still buying property, especially if the yields become more favourable, as the returns from savings are expected to remain low.  The increasing yields would offset the increasing taxation levels for landlords but it is not going to help the tenants of Melton Mowbray – many who are just about managing at the moment.

If you are already a landlord and concerned about the effect of a potential unsettled period there are things you can do to minimise your exposure to risk.   The main things are ensuring your property is well maintained and regularly inspected.   Make sure you have a comprehensive Buildings insurance with reasonable excesses – you don’t want any nasty surprises from an escape of water for example.

It seems very unlikely, but should employment levels in Melton Mowbray ever be affected, Landlords could consider taking out a Rent Guarantee.   If a tenant becomes unable to pay then the rental income will be protected and the costly eviction process will also be covered.   I do believe here in Melton Mowbray we are well placed geographically for people to be able to find work.

If you would like to discuss anything about the Melton Mowbray Property Market please call me on 01664 569700

2 Bed Investment Could See Return of Over 5% - Wellington Way, Melton

These ever-popular 2 bedroom properties are situated on a quiet development on the north side of town.  They always let quickly and easily and this particular example looks to be in great condition.

On the market for sale with Newton Fallowell with an asking price of £139,950, it could give the investor a yield of around 5%.

Full details can be found here:

http://www.rightmove.co.uk/property-for-sale/property-57254650.html

Mill Street, with parking for £150K - 5.2% return

This is a nice 3 bed with a utility extension that would appeal to families in Melton Mowbray and as it has off road parking it would easily let for £650 pcm. It is for sale with Harrison Murray for £149,950 and if purchased for the asking price would see a potential return of 5.2%.

As it has parking and a good size living space it would let really quickly!  

http://www.rightmove.co.uk/property-for-sale/property-57058141.html

With interest rates set to remain low what other options are out there for investors?

Putting your money in bricks and mortar has long been a preferred option for many people of Melton Mowbray.   It is often part of the retirement plan or a way of seeing some income from your savings.

Over 20 years the capital is going to increase even with the peaks and troughs of the property market, as a long term investment there is little out there that can match it!

Belvoir has just released the rental index for Q3 2016, a look at the monthly rental price movements.  The report analyses the ups and downs of the rental market, not just at a national level, but breaking down monthly rental averages in London, the rest of England, Wales and Scotland as well as regional level.

In the East Midlands the average rent for the third quarter of this year is £625 which is a 3.75%  increase on quarter 3 2015.  The quarter 3 2016 average versus the 2015 annual average rent of £593 shows an increase of 5.5%.

As long as there is demand the rental market will continue to grow.   Because of the last governments shift in policy away from home ownership, also the lack of houses being built, across the UK there is now an urgent need for more housing for students, migrants and families looking for three bed properties and four to five bedroom homes.

During 2015 and 2016, it is the first time since the recession where wages have increased faster than inflation.   I wonder though how Brexit will affect the cash in people’s pockets; this could cause rents to stabilise.  The returns should still be better than other investments can offer, but investing in the right type of property is essential.

Ensuring that the property is going to appeal a broad range of potential tenants will mean it will let quickly and have minimal void periods.

Know your local market – tenants looking to rent in Melton Mowbray will have a different set of demands from those looking in Leicester City Centre.

Follow my property blog for honest advice on rental returns; we only deal with letting property so it is key for us that you make the right investment. 

Tamar Road - family 4 Bed

The private rental market of Melton Mowbray is crying out properties like this one. It would achieve £750 pcm as it has been extended and has four bedrooms. 

It is on the market with Harrison Murray for £ 205,000 and its the type of family property that usually sees long term tenants.

http://www.rightmove.co.uk/property-for-sale/property-62431811.html

Saxby Road - £125,000 - 5.5% return

This is a nice example of a 2 bed terrace that has an open plan living area. It makes these sort of properties feel really spacious and really appeal to tenants. This one is for sale with Newton Fallowell and has been reduced to £125,000. You would be looking at a potential return of 5.5% on this one, especially if they would take an offer on the asking price!

http://www.rightmove.co.uk/property-for-sale/property-56491786.html

Tracking Rental Values in Melton Mowbray

This week I wanted to look at the cost of renting a property in and around Melton Mowbray.

Often the average monthly rents reported in the newspapers will consider the rents currently paid by tenants.  These days many tenants are staying longer in their rented property and they are paying below market rents. Even if the rents are reviewed each year they do not always keep pace with the rent you could achieve if it came on the market to be re let.  Many landlords do not look to increase a rent if they have a good tenant.

Tenants looking to rent a property now also Landlords looking to invest in a property need to know how much rent the property is going to be if it is marketed today.

I looked at two popular examples of a rental property and tracked the rents achieved per calendar month as each sort came up for re let.  The first thing I noticed was the rents seemed to stay very steady from around 2008 to 2011, which ties in with the difficult economic times the country was experiencing.

I looked at large 2 bed terrace properties, in good condition with an upstairs bathroom and a small garden.  Popular with tenants and investors this type of property has seen a rental increase of around 15% since 2011, they are currently achieving £575 pcm.

The good size 3 bed semi with a garage is always an easy type of property to find a tenant for.  These have also seen an increase in rent since 2011 but it is closer to 12% for these properties.  They are currently achieving at least £650 pcm.

Of course the rental return always depends on the area and the condition of the property.  Keeping a property well maintained will help maximise the rental return you can expect.

Investing in the right type of property will ensure you continue to achieve the returns you are looking for from your investment.   Good advice is essential before making any investment.    

2 bed under £125,000 Melton Mowbray 5.2% return

This is a smart 2 bed on the market for £124,950 with Newton Fallowell, its on Kestrel road. Its a nice property that I think would achieve £550 pcm. 

It will need a kitchen upgrade at some point in the future looking at the photos but doesn't look to be something that would need to be done immediately. 

http://www.rightmove.co.uk/property-for-sale/property-56787646.html

Will a new housing development in Melton Mowbray change the rental market?

I was asked this question this week and I had a look into the numbers of property for sale this month and during 2016. We need to understand the current property market before we can consider how it could be affected.

In Melton we have considerably lower numbers of property on the market for sale at the moment compared to 2014 and previous years. The previous average seemed to be around 250 properties for sale each month in the LE13 area.

Looking at the figures across the market, since November 2015 they have been sitting around 150 in the LE13 area and the last 3 months the numbers have started increasing - September 2016 saw
an increase of 24%.

We have seen no large developments in Melton since 2008. Melton Mowbray is a popular place for families to live, offering employment opportunities and good access to Nottingham and Leicester. If we can start to meet the demand of those looking to live in the town and surrounding villages then the town will do well. From the enquiries we have each day I don't think there will be a shortage of buyers or tenants for our area.

But what about the rental market? 

We have investors looking for property to purchase to see a better return from their savings, but it is a big investment and needs to be the right property. With fewer properties for sale their choice is limited and many investors like to purchase new build property. If we see more choice for the investor or new developments starting then there will be more properties bought to let out. Then hopefully we can start to ease the pressure on the properties coming available for let. Tenants will have a bit more choice and as more tenants are looking for long term homes they may have a chance to find something in the right area. 

If you are considering investing in property give me a call for an honest opinion on rental returns please give me a call 01664 569700.