Looking for an investment in Ifield

The highest yields are always to be found on the smaller properties and I’ve seen this little one bedroom maisonette that is true to form.  The photo’s probably do not it justice but with a yield of 5.5% it does have true potential.

http://www.rightmove.co.uk/property-for-sale/property-58958273.html

These maisonettes in Ifield West have a great shape to the living space that allows for distinct areas for lounge & dining – which is unusual in the smaller properties.  They also have enclosed kitchens rather than the current craze of having cookers and washing machines open plan to the main living area.  Because of the detached private garden the conservative rental value would be £750 per month but with some updating and modernisation it could achieve the higher guide of £800.  Ifield West is not best served by public transport but car owners would enjoy the allocated parking space. 

If purchased at the marketing price of £164,950 the yield would be a respectable 5.4% if rented at the lower end of the guide price.

One Bed Maisonette For Sale in Ifield

Has owning a home become an unattainable dream for the 1,528 Crawley 28 year olds

My parents bought their first house in the 1960’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, 1,528 people in Crawley will turn 28 and 1,403 in 2017 .. and dare I say 1,167 in 2018 .. year in year out the conveyor belt carries on .. where are the Crawley youngsters going to live?

Ask a Crawley ‘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 Crawley people is the large deposit needed to get a mortgage .. or is it?

The average price paid for an apartment in Crawley over the last 12 months has been £176,600 meaning our first time buyer would need to save £8,980 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 amount could soon be saved if these ‘luxuries’ were withheld over a couple of years but attitudes have changed.

One Bedroom House for sale with Martin & Co with guide price of £175,000 to £190,000

Official figures, from the Office for National Statistics, show the average male in Crawley with a full-time job earns £593.20 per week whilst the average female salary is £498.30 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for an apartment.

I was reading a report/survey commissioned by Paragon Mortgages from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the rental 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 (ie apartments), nine times out of ten the mortgage payments to buy a Crawley property are cheaper than having to rent in Crawley. It is the tenant’s perception that they 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 so, unless that attitude changes, I expect that the private rental sector in Crawley (and the UK as a whole) is likely to remain a popular choice for the next twenty plus years. With demand for Crawley 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.

Broadfield One Bed With 5% Yield

This little one bedroom house has just been listed by my own office and is being sold with the tenant in situ.  Last year the house underwent a full redecoration and had new kitchen fiited as well as a new electric shower in the bathroom.  

You can see the full details by clicking the link  http://tinyurl.com/zq33m8d

Kenilworth Close - Broadfield

Boasting a perfect location for access to Gatwick either by car or using the FastWay bus network the area has always proved popular with singles and young couples.  These properties make the perfect homes for that fiest move away from home or as the first property rented in a new area.  The house itself benefits from a side garden that offers a good degree of seclusion and would make a perfect venue for a weekend barbeque.  Rents have been rising and it is not uncommon to see similar one bedroom houses being advertised for £825 or even £850 per month.

Bountiful Bewbush 3 Bedroom

With house prices being at their highest level & the government taking a bigger slice of the landlords income we worry there aren’t any good investments to be had in Crawley.  But I think there are – this 3 bedroom house come on the market this week Mansell McTaggart in Crawley High Street.

http://www.rightmove.co.uk/property-for-sale/property-40992771.html

Investors might gasp at the £260,000 price tag but the hard work has already been done – it looks to be in move in condition.  Now it’s not just sales prices that have been climbing, we have recently let a similar end of terrace house in Bewbush for £1150 per month, that’s a yield of 5.3%.   Rents in this part of town have risen by over 20% in the last three years and if the current commentators are to be believed, they show few signs of slowing down.  The new stamp duty rules would increase the stamp duty bill by an additional £7800 but those investors with a long term view would be happy to recoup from the capital gains tax when the property is disposed of.  For any advice on rental prices or the Crawley rental market don’t hesitate to get in touch.

3 Bedroom House - Bewbush

Crawley’s ‘Generation Rent’ to grow by 1,290 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 Affogato on Broadway in the town. 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 Crawley 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 60.3% in Crawley) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Crawley it stands at 14.7% today).

Therefore, the demand for rental accommodation in Crawley will grow by 1,290 households in the next five years ... and these are the reasons why, irrespective of the distractions set out in the newspapers

         

Crawley 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%). 

Goffs Park, Southgate, Crawley

 

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 something’s’ of Crawley ... and they still need a roof over their heads!

Currently, 16,485 people live in private rented accommodation in Crawley

These are big numbers and a sizeable chunk of the electorate. So whilst it appears Crawley “Generation Rent” youngsters will continue to rent and to not to buy for the reasons set out above, Crawley buy-to-let landlords will be lifted by the projections of greater rental demand. Crawley and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live. 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 Crawley (interestingly, I have already been chatting to a few central London landlords after they read the Crawley Property Blog).

So, by 2021, the number of rental properties in Crawley will rise to 8,870

This prediction in growth of the Crawley 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 Crawley. The balance of capital growth and yield, especially in this low interest rate world we live in, means Crawley landlords need to do more homework to ensure the investment in property gives the desired returns. One place for Crawley landlords and homeowners to visit for such information is the Crawley Property Market Blog.