The battle of the postcodes in East Derby.

I was asked last week if postcodes make a difference to property values. Well in swanky West London, the difference between SW3 and SW10 can make values drop or rise by hundreds of thousands of pounds.

However, in our little city of Derby, we don’t have many Russian Oligarchs and Saudi Prince’s buying our properties. Despite that, after doing some investigating, I did find out some interesting information. I would like to start with East Derby (I will look at other parts of the city in future articles). I found an amazing trend that I think will interest the people of East Derby as well as landlords and potential investors.

Over the last decade, property values have always risen in Allenton, Alvaston and Boulton Moor first (DE24), then they plateau allowing Chaddesden and Spondon (DE21) to catch up 18 months later. Then Allenton, Alvaston and Boulton Moor have another spurt, again leveling out and now we are half way through Chaddesden and Spondon catching up again. I have no idea why this happens, but I just know it does!!

Let me explain further. In 2008, property values in both areas were roughly 11.7%  lower than they are today, therefore they had plateaued. By the time we had got to 2010, Allenton, Alvaston and Boulton Moor (DE24) had risen by 3.3%; compared to 1.5% in DE21 (Chaddesden and Spondon) doesn’t sound much but it’s over twice the growth of the other!

Get to 2012, and Chaddesden and Spondon had caught up, increasing by 6.9% compared to Allenton, Alvaston and Boulton Moor’s growth of 3.7%. Since 2012 Allenton, Alvaston and Boulton Moor have had another spurt of 4.6%, compared to Chaddesden and Spondon’s  meagre 3%. I believe over the coming few years, Chaddesden and Spondon will have another spurt to catch up.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. It really is down to local area knowledge and knowing what to look for in the figures and statistics that are available.

If you are a landlord, new or old, feel free to pop through the door of our offices on St James Street, call me on 07977 235545 or send me an email.

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

Derby census figures make interesting reading

It seems a distant memory three years ago when we were filling in our census returns, but now the figures are beginning to be released, especially the statistics about property. The figures for the each individual town and City have been released, so let’s look at the Derby City Council figures.

In the city, just over six out of ten properties are owned, 61.4% to be precise (or around 62,800 households) and just over 17,150 householders rent their house (or 16.8% of households to be exact).      
Interestingly, over 12% of houses are council houses (12,470 council houses), with the remaining       properties being either  Housing Association properties or tied cottages.
So, 16.8% of households are rented in the area, which is slightly above the national average of 15.6%, but that is to be expected as Derby is a city and hasn't seen the boom and potential bust cycles that other cities in the North have seen.

Demand continues to be good from quality tenants who are prepared a pay a decent rent, but only for a decent property (if you remember a few weeks back, I said the landlords in Derby, on average over 2013, achieved a total return of over 10%+).

If you are considering becoming a landlord, or are an established landlord who is thinking of buying another property to rent out, please do your homework. Feel free to ask my opinion on what makes a 'decent property'. It's in my interests for you to buy the right property, for you, not me. I obviously don't charge for my opinion, because I hope you will recommend me to your friends, which, of course, is the best compliment you can give me.

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
Email me!

Labour plan to ban letting fees to tenants

Thousands of letting agents have voiced their anger and frustration at Labour’s plans to force a Commons vote through next Tuesday on banning letting fees to tenants – and made clear their determination to fight every inch of the way.

The large majority of letting agents believe the move will have an adverse effect on tenants rather than, as is assumed, any perceived benefits. They believe that a ban on tenant fees would simply result in having to charge landlords more, while landlords in turn would pass costs on to tenants in the form of raised rents.

Here are some of the comments we have received so far from industry leaders:

Christopher Hamer, The Property Ombudsman: “There are certain costs that have to be incurred in setting up a tenancy and these will have to be borne by either tenant or landlord.

“If the landlord pays, it is inevitable that the cost will be rolled up into the rent and so is hidden from view. Better in my view that full disclosure of non-optional fees chargeable to a tenant applies. That is in accordance with the ASA ruling and makes the actual cost to the tenant transparent.

“Some research has suggested that landlords would not add the cost to the rent but seek out a cheaper agent. I have said previously that selecting an agent purely on price is a risk.”

Isobel Thomson, chief executive of the National Approved Letting Scheme: “NALS is very concerned about Labour’s call for a vote on the abolition of agents’ fees.

“It’s clear that at present there is a basic lack of understanding about how – and why – letting agents charge fees with an assumption that these charges are unfair.

“Anyone working within the industry on the other hand will know that time and manpower goes into tasks such as drawing up inventories, checking references and administration.

“These practices, when done properly, are valuable for all parties and the commercial reality is that they simply cannot be done for free. If all of the costs are transferred to the landlord this will ultimately mean that rents go up. We would encourage Labour to focus their attentions on making it a mandatory requirement for agents to be part of a Client Money Protection scheme.”

Andrew Bulmer, UK residential director, RICS: “There needs to be given careful consideration to any impact that this proposal may have on the property market, as it may lead to increased rents being passed onto consumers and result in landlords exiting the market, thereby potentially further limiting the supply of properties on the market.

“It’s vital that there is absolute clarity around consumer costs, with reasonably priced, upfront fees explained fully. However, fees from this type of work are important to chartered surveyors, particularly the smaller, independent, letting agencies which are already bearing the cost of regulations.”

Susan Cope, MD Professional Properties : “From the reputable agents, tenants receive a very good service. This service is designed to protect the tenant and their interests and to ensure they have security of tenancy. Obviously such services come at a price and if agents are unable to charge, there is a risk that service will suffer and the quality of administration processes will diminish. Tenants need to be protected but have to understand it comes at a cost to the agent. 

“If the ban is goes through and the tenant doesn't have to pay, it will become part of the monthly rent if the costs are transferred to the landlord as the landlord still has to make a return on his investment."

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

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

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

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.