Friday, 30 January 2015

Property values rise by £188 per week in Margate

Last week, a landlord who lives in the Kingsgate area had a chat with me to discuss the rising property values in the Thanet Peninsula area. He owns a varied portfolio of rental properties, primarily in Margate and Ramsgate with one in Broadstairs, so it is interesting to compare the increase in property values around the area.

Over the last 12 months in Margate average property values have risen from £172,800 to £182,600, a rise of £9,800 or £188 per week. When I looked at some of the surrounding towns, Ramsgate has had a much higher average increase in property values, at around £265 per week (the average value of a Ramsgate property rose by £13,800 taking its average value to £186,600), whilst Broadstairs has had a even higher rise of around £311 per week (taking an average property from £248,300 to £264,500 over the last 12 months).

However, when one looks at the percentages, Ramsgate has performed the best, rising by 8% in the last 12 months, compared to Margate at 5.68% and  Broadstairs at 6.5%! It is, nonetheless, a rise in all the town’s average property values which suggests the market is increasing steadily in all of Thanet – good news for home owners and landlords alike. 

When considering this landlord’s buy to let portfolio, yields can be in the order of an average 4% to 7% per year, depending where you buy, so combine that with steady rental growth, excellent increases in capital values of the properties themselves and it could be a good time to invest in the property market in Margate, Ramsgate or Broadstairs as property values start to rise.

If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market please call into our offices at Marlowe Innovation Centre, Marlowe Way, Ramsgate or phone on 01843 610 611.

Wednesday, 28 January 2015

Westgate on Sea property with over 6% yield

I have just seen this property come on to the market in Westgate on Sea. It looks in good condition, no forward chain and ready to rent. All the amenities and the sea are all within walking distance.
Listed for £135,000 and would easily reach £725.00 pcm rent. Producing a  6.4% yield that’s a pretty good return.

Thursday, 22 January 2015

Thanet Property Market – What has 2015 got install for us?

I had an interesting chat with a landlord from Broadstairs last week, when we got talking about the Thanet property market and thought other landlords might be interested. You see, property values didn’t stop dropping in Thanet until June 2012 so after a strong run over the last 31 months, the ever upward drive of house price rises has started to turn with increases now at an almost standstill for the first time since the start of 2013. Now it could be said this easing of the housing market in Thanet can be attributed partly to the time of year (last year property values in Thanet dropped by 0.1% in November but recovered by 1% in February 2014), it is obvious that estate agents in Thanet are wary about the direction of the market as a result of the not as strong demand and fewer house sales.

With the uncertainty of a possible interest rate rise, new mortgage rules, a general election on the horizon and recent warnings of a house price bubble. Although the main indicators suggest that buyers will start to gain the upper hand, especially with the new stamp duty rules announced recently by George Osbourne. However, there are many homeowners who don’t need to sell and won’t bother unless it’s economically beneficial to do so, but most homeowners are homebuyers, so what they loose with one they gain with another.

This is all good news for landlords looking to buy rental property with the changes in stamp duty and later in 2015, the new rules regarding pensions, where you will be able to take money out of your pension pot to invest in property. However, at the same time, I would say don’t just buy any old property in Thanet. First time landlords need to be cautious. The doubling of house prices every seven to ten years which has taken place since WW2 doesn’t seem to have been seen since the mid 2000’s. The property market is shifting with more properties being built and restrictions put on mortgage lending, the likelihood of the property market increasing at the same levels as the past are questionable. But investing in property is also about receiving the rent.

On the one hand going for high yielding Margate property to rent out seems an obvious choice, but high yielding property often doesn’t go up in value that well and in some circumstances doesn’t keep up with inflation, meaning in real terms you have a depreciating asset. So surely you should pick a property that has great capital growth then, because of the obvious potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties (in areas such as Broadstairs) tend to be low meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.

My advice to existing and potential landlord investors is take advice. Take advice from me, take advice from other agents, because only then, once you have all the facts, can you make the best decision for you

Thursday, 15 January 2015

What happened to the Thanet Property Market in 2014

A number of landlords, who own property in Thanet, have made contact with me recently asking for my thoughts on the future of the buy to let market in Thanet. In future articles, I will talk about the Thanet and what has happened to rents, property values, tenant demand and yields; all important matters for a landlord.

Thanet property values throughout 2014 rose between 5.6% and 8% (5.6% in Margate, 6.5% in Broadstairs and 8% in Ramsgate. Good news all round, but when you consider property values in the peninsula have previously dropped by 17.8% between February 2008 and April 2009, this is not as good as the media would have you believe.  It should be no great surprise to hear that Thanet property values are starting slow up as we head in to the New Year.  Property values in the peninsula were growing at 1.3% a month in the late Spring /early Summer months of 2014, but in the later Autumn months they slowed down considerably to increases of between 0.1% and 0.2%.

The reality is we have had a year and a half of decent market conditions in Thanet, but now all that pent up demand is starting to fade. The big question moving forward is whether the Thanet market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Thanet property market.

Looking at the UK as a whole, because we can’t look at Thanet in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.
Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.
However, back to Thanet, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-

·         “Should I sell my property in Thanet, or even buy another?”
·         “Is the time right to buy another buy to let property in Thanet and if not Thanet, where?”
·         “Are there any property bargains out there in Thanet?”

Many other Thanet landlords, both who are with us and many who are with other  Thanet letting agents, like to have a chat and coffee with me to  discuss the Ramsgate, Margate and Broadstairs  property market, how Thanet compares with its closest rivals (Canterbury, Herne Bay and Dover), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.
In the meantime may I take this opportunity to wish you all a prosperous 2015.

If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market please call  me on 01843 610 611.