Tuesday 29 April 2014

The A52 road trip!

A couple of posts ago I said that property values in Derby had risen by 5.7% over year, or to be more precise £11,900, of which 40% of that increase has been over the last 3 or 4 months. This is great news for any who owns their own home in the City. Looking at our neighbouring City of Nottingham, the average value of a property rose by £8,100, which on the face of it, makes Derby property values streets ahead. However, when you consider average property prices in Nottingham are nearly 7% less than Derby, this means prices in Nottingham have actually risen by an impressive 5.3% during the last 12 months.

However, take a road trip along the A52 to Ashbourne and a completely different story has been seen. An average property in Ashbourne has seen a huge increase in average property values by around £29,400 over the last 12 months, or 10.7% year on year. However, don’t all start going West up the A52, as average annual yields/returns are only 2.6% a year.

I find it amazing that three places along the A52 of Derby, Nottingham and Ashbourne, all within a few miles of each other, can experience such variations in property prices. With average rents steadily rising by 1 to 2% a year and with continuing troubles for first time buyers raising the £10,000+ for the deposit and fees, I can only see greater demand for rental properties in Derby, which will mean more people will continue to buy property for buy to let, and where there is greater demand, the price tends to go up.

This however, is only my opinion. If you want to chat about any matter relating to property in Derby, pop in and see me or my team in offices on St. James’s Street.

If you would like to arrange a FREE RENTAL VALUATION then click HERE.
If you would like to see our selection of Investment Properties for Sale, then click HERE.

Call me at our office on: 01332 366171

Visit the website:  www.pplets.co.uk




Thursday 24 April 2014

Derby Terraced houses .. why a 7% difference to Burton makes all the difference.

I was talking to one of my landlords from Stanton by Bridge the other week, when we were looking over a few properties that he was considering to buy in Derby or Burton. As we cover both towns from our offices in Derby and Burton, I was able to discuss the two towns in depth. We started to notice an interesting pattern in the house prices between the two towns. Derby has always been a more expensive town to buy in comparison to Burton, but depending on what type of property you buy, there are some fascinating differences.

Let's start with flats in Burton, the average value of is £109,500 whilst in Derby they are identically priced at £109,400. Next, detached houses in Burton , the average value is around £259,600 whilst in our city of Derby , they are £256,200 (1.3% less). Semi detached houses in Burton are £150,100 whilst in Derby, they are 5.2% lower at £142,400. So nothing out of the ordinary so far. However, when we look at terraced houses, you might expect them to be around 5% to 10% lower in Derby looking at the trends above. Quite the opposite, a terraced house in Burton is £102,300 whilst in Derby they are 9.8% higher at £112,600. It just goes to show, one has to look deeper into the figures to judge which town’s property market is performing better.

So why the differences? Well after investigating, it transpires that in Derby, there are proportionally 7% less terraced houses than Burton. These different housing provisions in the two towns just go to show that you need to know your marketplace and decide which is the best area for your money. If you want to rent to young professionals, then Derby might be the better bet..... the choice is yours.
If you would like to discuss anything in more detail, we're certainly more than happy for you to pop in and see us at our office's on St. James’s Street for a chat.

Call me at our office on: 01332 366171

Visit the website:  www.pplets.co.uk



Wednesday 16 April 2014

Derby sees 9.3% return on investing in the rental market

I was talking to a landlord from Quarndon the other day about the Derby property market, following my recent articles in the Derby Telegraph. With all the news about house prices rising, he wanted to know what had happened to average property prices since the New Year. Well there is no such thing as an ‘average property’, but according to my calculations, the ‘average value of a property’ in Derby is now £170,600, which is a rise of nearly £6,000 from the figure I quoted 3 or 4 months ago of £164,650. Now by my calculations, the average rent being asked in Derby is around £510pcm, which means the yields/annual return are an impressive 3.6% per year.  

In the last 12 months, the average value of a property in Derby has risen by 5.7%, meaning landlords achieved a total return of 9.3%.

When comparing this to what you get in return from banks, buy to let could be good investment for you. Don't get me wrong, there are pitfalls. My message to all the people of Derby, be you an existing landlord or you are thinking of dipping your toe in the water for the first time is quite simple. Take some independent advice before buying anything, unless you're 100% sure of what you're doing. I say this because I know what happens when people don't.

Even if it's not from ourselves, there are still a few 'lettings only' agents in Derby who are well placed to advise on whether the property you're considering will rent, and at what potential price. 

We're certainly more than happy for you to pop in and see us at our office's on St. James’s Street for a chat.

Call me at our office on: 01332 366171

Visit the website: www.pplets.co.uk


Tuesday 8 April 2014

Derby property prices .. the long climb back to 2007 prices

Here's a post that you may have to read a couple of times to get the gist!

Some landlords have been speaking to me recently about story’s in the press and their concerns about booming house prices and the next housing bubble. Whether you are an established landlord or one considering entering the market for the first time, it is so important you do your homework. Buying a property in Derby and the surrounding villages is an investment, and as such, one needs to do one's homework. I am often asked to give my opinion to existing landlords of mine, and even landlords with other agencies. I do not charge for this, as it is only my opinion, and you cannot charge for opinions, can you! Anyway, in a nutshell, Derby landlords can either go for low risk, low yield but decent capital growth, whilst others invest for high monthly yields, high risk but with a tendency of lower capital growth.

If you are going to be buying soon in Derby, it is vital to look to ensure you build in some capital growth by getting a property at a discount or by finding a way to add value. Securing capital growth is going to be tough over the coming years, but don’t lose out if it’s not bargain of the year. Prices would need to rise by 25% to get back to 2007 levels. That figure might surprise allot of people, but let me explain.

Yes, in Derby we are only, on average, 7% below the actual values that were being achieved in boom of Autumn 2007, however, this doesn't take into account inflation. Since 2007, inflation has risen over those six and half years by around 19%. So in reality, prices would need to be 26% higher today to be at the same 'real' level than they were in 2007. (26% made up of 19% inflation plus the 7% growth required to return to 2007 figures)

Some forecasters estimate that properties bought in 2007 at the height of the market, will take until 2020 or even 2025 to recover (when you include the impact of inflation). Many landlords will need to take a serious look at any existing property or new ones to make sure they can achieve capital growth, if that's what they desire, and that this increases in line with inflation. My answer to landlords, get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring when prices do start to rise again, you are in pole position.

If you want to speak to me then please give me a call on 01332 366171.

Tuesday 1 April 2014

The future of the Derby rental market..

Derby Cathedral, Irongate
It might surprise some readers that the average rent, that tenants have had to pay for a rental property in Derby, are around 4% to 5% lower than the peak of Spring 2008. After Spring of 2008. There was a major dip in the rents that were being achieved for Derby property of around 10% to 11% in late 2008 and early 2009. However, since 2010, rents have steadily risen by around 1% to 1.5% (depending on area) a year since the credit crunch and in 2013 rolling into 2014, a lack of decently presented stock available to rent means rental averages are, in the main, rising.

Rents have steadily risen in 2013, despite the squeeze on Derby wages, due in part to the demand of tenants from Nottingham who are happy to commute. There are still plenty of tenants willing to pay for well maintained properties in great locations, such as Ockbrook and commute from Spondon into central Nottingham in 24 minutes.

At the start of 2012, the average rent in Derby was approximately £491 per month (a decent rise from the 2009 average of £476 per month). As we go into the Spring of 2014, average rents in Derby stand at £498 per month.

From a landlord perspective, the steady rise in rents is good news, as ideally rents need to keep up with inflation to maintain investment returns. Property prices in Derby are also starting (nearly 7% in the last 12 months) to rise after large falls since the credit crunch of 2008, so maybe Derby could be one of the few areas across the UK where it might be possible to secure capital growth returns and potentially higher income (yields) in the future.

As my colleague and Managing Director, Susan Cope has always said, "It all comes down to buying the right property, in the right location, for the best price possible, and that is where we can help. We are a lettings agent, not an estate agent that does lettings on the side. As we don't generally sell property, we can look at the whole of the market in Derby, and just like a price comparison website, if you trust what we say, we are one step closer to potentially getting your business, because if you trust our opinion, you might trust us to find you a tenant for the property. We give our opinion without the expectation you have to give us the business though .. the choice is always yours Mr and Mrs landlord, as there is always, no obligation."

With that considered, it’s just as much in our interests, as it is yours, very much in our interests that you buy something that’s sensible and lettable – we don’t want you buying a dud, or something where the figures don’t stack up!

Feel free to pop through the door of our offices on St James Street or send me an email to simonj@professionalproperties.co.uk