Friday, 30 October 2015

Thanet Property Market - Asking Prices Drop but Values rise










Those of you who regularly read my weekly articles in the Thanet Property Blog will know I like to keep abreast of the Thanet property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.
 Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the borough have dropped, yet property values have increased.  The average asking price of a Thanet property, according to Rightmove, fell 1.2% this month yet the average value of a Thanet property rose by 0.9%.
So how does this relate in monetary terms?  This anomaly has driven the average asking price of a Thanet property down slightly to £262,100 whilst the average value is now 219,100.
So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without research and can result in overpriced properties that don't sell. As the Summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property.
On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, in a nutshell, Thanet property values are continuing to rise and those homeowners in Thanet who have properties on the market, last month on average, reduced their asking prices .. great news for property owners and buyers alike!
In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Thanet home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate.
Most homeowners don’t want to sell and have nothing to buy.
But that’s the beauty of the much maligned English and Welsh house buying process. You can find a purchaser for your property, then ask them to wait. By agreeing a sale (subject to contract) before you try to buy sounds concerning to many, but with fewer properties for sale you need to have a buyer for your property or you will be treated as a less serious buyer yourself. If you cannot find the right home for you, you can slow the deal with your purchaser until it comes along. If nothing suitable does comes along and you lose your buyer then the worst outcome is that you have to find another purchaser or take your property off the market and stay put for now, and as long as you mention this at the start they must not commit to any costs until you have agreed your onward purchase.
However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 500 flats for sale, 200 terraced houses and over 250 semis for sale in Thanet.  Landlord/Buy to let investors can normally pick up some bargains in the Autumn months, as sellers who are selling their homes often have a pressing need to sell by this time.
The types of houses a Thanet landlord typically buys, are not the same types as the homeowners wanting to move to a posher area of the borough as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones).  There are in fact too many of these smaller properties for sale .. just look at the numbers of properties for sale (mentioned in the previous paragraph).
If you are a landlord or thinking of become one for the first time, and you want to read more articles like this about the Thanet Property Market together with regular postings on what I consider the best buy to let deals in Thanet, out of the hundreds of properties on the market,  irrespective of which agent is selling it, then you might like to visit the Thanet Property Blog www.thanetpropertyblog.com.

Thursday, 29 October 2015

3 Bed house for sale £140,000







 http://www.rightmove.co.uk/property-for-sale/property-36716751.html


Good Morning I saw this pop up on Rightmove yesterday. It needs some work but nothing too onerous.  At rhis price its a great  investment.  Houses like these rent easily for £800.00 PCM. Thats a yieled of 6.8%.

If your looking for advice on investing in Thanet just pop in have a coffee and biccies.

Friday, 23 October 2015

Upton catchment area properties outperform Thanet average by 59.5%







I was having a chat with a Thanet 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 Thanet 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, Upton Primary School is one of the best primary schools in Thanet.  Its figures are certainly impressive. Their last Ofsted Report classified it as Outstanding, 96% of 11-year pupils achieving Level 4 or above in maths, reading and writing whilst 48% of them achieved level 5.  Finally, the schools’ KS2 rating was classed as Excellent.
Looking at property sales within half a mile of Upton, property values have risen in value since 2002 by 114.57%, whilst according to recent figures, the Thanet average as a whole has risen in the same time frame by 71.83%.
That means the parents of Upton have seen the values of their properties rise proportionally 59.5% more than the Thanet 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%, according to the London School of Economics, is considerably and significantly more.
Many other Thanet landlords, both who are with us and many who are with other Thanet agents, like to pop in for a coffee or ring/email us to discuss the Thanet property market, to consider how Thanet 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. One good source of opinion, specific to the Thanet property market is the Thanet Property Blog www.thanetpropertyblog.com  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

Thursday, 22 October 2015

This is a great little investment oppertunity. Fantastic Yield!

I was having a look at some properties for first time landlords with a limited budget. I came across this Flat that is being offered for sale at £40,000





http://www.rightmove.co.uk/property-for-sale/property-53837660.html

It needs some paint and carpe to tidy  it up.  The EPC rating is low at F, however with some minor work that can be improved.

Flats like this rent easily for £400 - £450.00.

If your looking at  your first investment, or building your existing portfolio go and have a look.

Your move are only offering block viewings so book yourself in.















Friday, 16 October 2015

What effect will HS1 extension have on Ramsgate?




Those readers of the Thanet Property Blog will know of my interest in everything to do with the Broadstairs, Ramsgate and Margate Property markets. I have recently spoken to several landlords who have asked whether or not now is the time to invest in Buy to Lets in Ramsgate with the HS1 extension coming in the near future. In order for me to answer this question let me tell you a bit about HS1 extension:
The HS1 extension,  is being funded by Whitehall, Network Rail and the County Council. It is estimated £12 million will be spent on the Canterbury to Ramsgate section, upgrading the track, electrification, improvements to bridges, signalling and level crossings etc., to help increase the maximum speed of the trains. When the line has been completed in 2019, Ramsgate commuters will be able to reduce their journey times, but by how much?
Of the eleven trains that leave Ramsgate each day before 9am, the average journey time to London St.Pancras  is 1 hr 36 mins. However, leave on the 0655 and only takes 1 hr 18 mins and 0728 an eye watering 1 hr 14 mins!  The HS1, when completed, the line will enable commuters to be sipping Champagne at St Pancras within 63 minutes!
Those extra ten minutes don’t sound alot, but as part of my research, around the UK, there is almost a psychological barrier for commuters when they get past an hour. The best example is East Anglia. Grantham, whose town’s average property values are only £159,500, is 1 hr 14 mins away from Kings Cross (next door to St Pancras) and even at rush hour there is no rush! One stop down in Peterborough, and whilst the journey isn’t much different at 52 minutes, the platform is fuller than chipmunk’s cheeks and property values jump by over 20%, meaning the average value of a property in Peterborough is around £201,500.
So what does that mean for potential investors? Well the average value of a 3 bed property in Peterborough is £168,200 and the average rent is £710per month. In Grantham its £165,100 but the average rent is only £614 a month, meaning Peterborough landlords achieve average yields of 5.1% compared to 4.4% in Grantham. 
In light of the above, the HS1 extension will allow tenants to move in and out of London more easily and quickly. Ramsgate, with its parks, great bars and seaside location, will enable people to live in great surroundings, and only be 63 minutes from heart of London. With rents in London being £2500 to £3000 per month for a two bed apartment, in Ramsgate they are a fifth of that and a season ticket being only around £5,180 per year into London, demand should increase tremendously, when the tenants see how quick and easy it is to get in and out of London. This can only mean rents will rise tremendously, with an increase in yields.

Property type
Avg. current value
Avg. Current Yield
Avg. £ per sq ft.
Avg. £ paid (last 12m)
Avg. Number of  beds
Detached
£280,250
4.06%
£217
£258,711
3.4
Semi-detached
£200,100
4.77%
£198
£194,441
3
Terraced
£171,600
5.83%
£174
£167,968
3
Flats
£121,350
5.44%
£191
£113,633
1.8

So with yields set to rise, as demand from tenants will directly increase rents, what will happen to   property prices in the town?
Property values are quite reasonable at the moment in Ramsgate at an average at £192,600. Several sources are predicting a sharp increase in property prices in Ramsgate over the coming years. I am of the opinion that whilst we will see yields rise from 2019 onwards. Property values will be affected in the short term by other factors.   Some landlords will buy in the short term, with the anticipation of uplift in yields post 2019. The increase yields will naturally drive property prices up post 2020.
I think we may be looking at the next St.Albans, which everyone knows has been one of the South East’s star performers in buy to let investment.
If you are planning on investing in the Thanet property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Thanet Property Blog http://www.thanetpropertyblog.com/.