2 bed or 3 bed homes – Which Sell the Best in Tamworth?

A few months ago, I wrote an article on the Tamworth Property Blog about the length of time it took to sell a property in Tamworth and the saleability of the different price bands (i.e. whether the lower/middle or upper local property markets were moving slower or quicker than the others). For reference, a few months ago it was taking on average 34 days from the property coming on the market for it to be sold subject to contract (and that was based on every Estate Agent in Tamworth) … and today … 77 days  .. does that surprise you with what is happening in the UK economy?

Well, a number of Tamworth landlords and homeowners, who are looking to sell in the coming months, contacted me following that article to enquire what difference the type of property (i.e. Detached/Semi/Terraced/Apartment) made to saleability and also the saleability of property by the number of bedrooms) As I have said before, whether you are a Tamworth landlord looking to liquidate your buy to let investment or a homeowner looking to sell your home; finding a buyer and selling your property can take an annoyingly long time… but anything you can do to mitigate that is helpful to everyone.

So, I did some research on the whole of the Tamworth property market .. and these were my findings …  to start with by type (i.e. Detached/Semi/Terraced/Apartment)….

As you can see, the star players are the terraced/town house and semi-detached variants of Tamworth property, whilst detached seem to be sticking in Tamworth.

Next I looked at what the number of bedrooms does to the saleability of Tamworth property..

… and as you can see the four bed properties seem to be taking the longest time to sell ..and to answer the question in the title .. it’s three bed properties!

So, what does this mean for Tamworth buy-to-let landlords and homeowners?  

There is no doubt that there is a profusion of properties on the market in Tamworth compared to 18 months ago … it’s not because more houses are coming on to the market, it’s because they are also taking a little longer to sell. This makes it slightly more a buyer’s market than the seller’s market we had back in 2014/5/6. Therefore, in some sectors of the Tamworth property market, it is much tougher to sell, especially if you want to sell your Tamworth home fast.

Therefore, to conclude, on the run up to the New Year, if you are looking to buy and plan to stay in the buy to let market a long time, perhaps take a look at the Tamworth properties that are sticking as there could be some bargains to be had there? Want to know where they are .. drop me a line and I will tell you a nifty little trick to find all the properties that are sticking.

Contact me 01827 425195 lorraine@hallandthompson.co.uk

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Things to consider when buying a Tamworth Buy-to-let property

If you are thinking of becoming a Buy-to-Let Landlord there are many things to consider when looking for a property. The most important – what exactly are you looking to achieve.

welcome to Tamworth
welcome to Tamworth

It may be income, capital growth or an investment that can be passed down to your children or a combination of all of these.

Not all properties meet each of these criteria to the same degree. As a general rule property with a high yield is more likely to suffer low capital growth and the reverse is also true.

Most landlords try to buy a property that has a sensible growth potential with a yield that will at least cover their costs.

Average yield in Tamworth? 4% to 6%

Generally a two bedroom modern house which is in a good location is the best buy.

Victorian may have lots of character and appeal but the maintenance of these properties tend to be higher.

A flat will usually be leasehold so you have the annual service charges to consider. Flats tend to have a lower capital growth as there are usually quite a few on the market.

A three bedroom house  is a good buy however there will be more wear and tear from a family occupying the property so your maintenance charges are generally higher.

If you are sitting on the fence and contemplating when’s the right time to buy ? well it’s a bit like having  kids – when is the right time to start a family. By procrastinating and never committing, your property journey will never start!

Our property journey started some 10 years ago with at least another 10 years spent hesitating. When we finally did dip our toes into the Buy-to-Let market it was the best thing we ever did, that is apart from starting our family.

Don’t forget …You will have to pay stamp duty for second home purchases,. Details here

There are some advantages  of setting up a limited company to purchase the property, but they are limited unless you are buying several properties. An accountant will be able to advise.

Almost certainly  you will need to pay income tax on the income, but you should take advice from an accountant and you will need to complete tax returns annually.

You will need to pay CGT  (capital Gains Tax) when you sell assuming the profit exceeds your annual allowance and purchasing costs. There are things you can do to mitigate this cost which your accountant can help you with.

So like us, if you are in property for the long haul, you won’t get rich quickly however you will make money in years to come and you may even enjoy being a property landlord!

If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on Lorraine@hallandthompson.co.uk

Don’t forget to visit the links below to view back dated deals and Tamworth Property News.

Blog  –

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Happy House Hunting

Extra Funding Is Required for Affordable Homes in Tamworth

In my blog about the Tamworth Property Market I mostly only talk about two of the three main sectors of the local property market, the ‘private rented sector’ and the ‘owner occupier sector’. However, as I often stress when talking to my clients, one cannot forget the third sector, that being the ‘social housing sector’ (or council housing as some people call it).

In previous articles, I have spoken at length about the crisis in supply of property in Tamworth (i.e. not enough property is being built), but in this article I want to talk about the other crisis – that of affordability. It is not just about the pure number of houses being built but also the equilibrium of tenure (ownership vs rented) and therein, the affordability of housing, which needs to be considered carefully for an efficient and effectual housing market.

An efficient and effectual housing market is in everyone’s interests, including Tamworth homeowners and Tamworth landlords, so let me explain ..

An average of only 36 Affordable Homes per year have been built by Tamworth Borough Council in the last 9 years

The requirement for the provision of subsidised housing has been recognised since Victorian times. Even though private rents have not kept up with inflation since 2005 (meaning tenants are better off) it’s still a fact there are substantial numbers of low-income households in Tamworth devoid of the money to allow them a decent standard of housing.

Usually, property in the social housing sector has had rents set at around half the going market rate and affordable shared home ownership has been the main source of new affordable housing yet, irrespective of the tenure, the local authority is simply not coming up with the numbers required. If the local authority isn’t building or finding these affordable homes, these Tamworth tenants still need housing, and some tenants at the lower end of the market are falling foul of rogue landlords. Not good news for tenants and the vast majority of law abiding and decent Tamworth landlords who are tarnished by the actions of those few rogue landlords, especially as I believe everyone has the right to a safe and decent home.

Be it Tory’s, Labour, SNP, Lib Dems, Greens etc, everyone needs to put party politics aside and start building enough homes and ensure that housing is affordable. Even though 2017 was one of the best years for new home building in the last decade (217,000 home built in 2017) overall new home building has been in decline for many years from the heady days of the early 1970s, when an average of 350,000 new homes were being built a year.  As you can see from the graph, we simply aren’t building enough ‘affordable’ homes in the area. 

The blame cannot all be placed at the feet of the local authority as Council budgets nationally, according to Full-Fact, are 26% lower than they have been since 2010.

So, what does this mean for Tamworth homeowners? Well, an undersupply of affordable homes will artificially keep rents and property prices high. That might sound good in the short term, but a large proportion of my Tamworth landlords find their children are also priced out of the housing market. Also, whilst your Tamworth home might be slightly higher in value, due to this lack of supply of homes at the bottom end of the market, as most people move up the market when they do move, the one you want to buy will be priced even higher.

Problems at the lower end of the property market will affect the middle and upper parts. There is no getting away from the fact that the Tamworth housing market is all interlinked .. it’s not called the Property ‘Ladder’ for nothing!

If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on  Lorraine@hallandthompson.co.uk

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Investing in Retirement Homes in Tamworth – Pros and Cons of

With banks offering minimal returns on your savings, are there savvier ways to invest your money?

For those approaching retirement age, have you considered  investing in a retirement home for your retirement income.

Lots of social activities

Lots of social activities

Benefits of investing in retirement homes

Retirement homes or villages tend to be situated in chocolate box villages or towns which are popular with an older folk, such as Devon.  Here residents can enjoy a slower pace of life with their picturesque surroundings.

More and more people are discovering the benefits of downsizing, after all that big rambling house is no longer required and it’s  too much to maintain.

You may not feel ready to move into a retirement village  yourself, however you may welcome the additional income. So, even if you decide moving into a retirement home is not for you, now or in the future, the rental yield would be most welcome.

Recent research shows that half of all people over the age of 75 live alone, and one in ten of those aged 65 or over say they feel lonely. Half of all older people consider the TV to be their only form of company.

Loneliness can have a impact on one’s health – research has shown that lonely people are twice as likely to develop Alzheimer’s than those who interact with other people.

Retirement homes regularly hold bingo evenings, coffee mornings, day trips to local excursions, they have Wellness Spa & Gym centres, a restaurant and a library. This gives residents the opportunity to socialise with each other as much or as little as they wish, folk are never lonely in a retirement home.

With the UK’s ageing population, there will always be a demand for residential homes/villages. For those of us who are not quite ready to sell up the family home and move into a retirement village, good rental returns are guaranteed. Leases can be flexible  so that they can be passed on to other family members should anything happen to the investor.

The cons of investing in retirement homes

As care homes are limited to the over 55s, there is a smaller pool of potential residents, however with the UK currently having a large elderly population, occupancy levels should be  relatively good.

Charges will be payable as there will be management  company overseeing the daily running of the care home, so this will reduce the rental yield. However, if the property is purely an investment opportunity it could be a completely hands off investment.

So whether you consider a retirement home for yourself or as an investment, why not look into the facts and figures.

As always any thoughts are always welcome, lorraine@hallandthompson.co.uk

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Tamworth Buy-to-Let Return / Yields – 3% to 8.5% a year

The mind-set and tactics you employ to buy your first Tamworth buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise. When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget (because as my parents always used to tell me – you get what you pay for in this world!).

Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite. Inexpensive Tamworth properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.

This means, if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Tamworth buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.

To give you an idea of the sort of returns in Tamworth…

The average buy to let yields in Tamworth
The average buy to let yields in Tamworth

 

Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Tamworth area.

As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield – and are doing so by buying cheaper properties.

The average range of buy to let yields in Tamworth
The average range of buy to let yields in Tamworth

 

 

However, before everyone in Tamworth starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Tamworth buy to let property to buy.  Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too. Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Tamworth landlords who are looking for capital growth, an altered investment strategy may be required.

In Tamworth, for example, over the last 20 years, this is how the average price paid for the four different types of Tamworth property have changed…

  • Tamworth Detached Properties have increased in value by 229.3%
  • Tamworth Semi-Detached Properties have increased in value by 252.1%
  • Tamworth Terraced Properties have increased in value by 237.3%
  • Tamworth Apartments have increased in value by 243.2%

It is very much a balancing act of yield, capital growth and void periods when buying in Tamworth. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to contact me and let’s have a chat. What do you have to lose?

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Ask Lorraine – I’m looking to get into buy to let in Tamworth

🙋  Landlord’s Question: 

I’m  looking to get into buy to let to help the shortfall in my pension which the government has stolen from me.  I’m keen to buy in Tamworth,  any quick hints and tips?

Welcome to Tamworth
Welcome to Tamworth

Lorraine’s Answer:

If you are considering becoming a landlord and buying a property to let out there are many things to consider. I think the number one thing is to decide exactly what you are looking to achieve.

Is it purely an income to subsidise your pension, capital growth, or even an investment that can be passed onto your children that you are looking for?

As a rule of thumb, you generally find that property with a high yield does not obtain a high capital growth and property with a high capital growth does not usually net a high yield.

The majority of landlords tend to buy a property that can give a decent growth potential with a yield that covers their costs plus a little extra.

The average yields in Tamworth are 5 % – 6%

So what  should you buy?

Landlords tend to buy locally to them as they have the knowledge of their own area and do not want to travel too far if they manage their own  properties.

I personally like a Victorian house, lots of character unlike the boxes of today, however the purse strings tend to be open a lot more on these properties, so I would say a two bedroom modern house which is in a good location would be a good bet.

Always buy a freehold property so that you don’t have the yearly maintenance charge eating into your yield and I wouldn’t recommend  buying a four bed if you are looking at single lets. Generally the bigger the house the lower the yield, plus larger properties tend to have more wear and tear from having a large family in residence.

Take into consideration any fees to purchase the Buy to Let before you start your property journey, stamp duty is payable… Details here

and have you sought advice as to any advantages of setting up a limited company, it’s usually only an advantage if you are purchasing a number of Buy to Lets, are in the higher tax band or looking to become a property tycoon.

Buy to let is still a good source of income even with the Government screwing over landlords. I’m always banging on about capital growth, so purchasing a Buy to Let should be a long term plan and not for the faint hearted, buy today and jump tomorrow.

*** If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on Lorraine@hallandthompson.co.uk***

Don’t forget to visit the links below to view back dated deals and Tamworth Property News.  http://www.Tamworthpropertyblog.co.uk

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Coton Green, Tamworth BTL – Yield 5.27%

I’ve just noticed this,  three bedroom semi terraced house on the very popular Coton Green area of Tamworth. The property is a very nice spec and good to go, that’s right, drive it straight off the forecourt.  Two good size bedrooms and a smaller room ideal as a study/cot room.  A modern kitchen, guest cloakroom, extended garage and generous rear garden.

Interested? then call our good friends Taylor Cole and book yourself a viewing  01827 796861

 

 

 

http://www.rightmove.co.uk/property-for-sale/property-59013526.html

So the burning question, what yield can I expect? well if you pay the asking price of 165K and rent for £725pcm you can achieve a yield of 5.27%

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*** If you are thinking of getting into the property rental market and don’t know where to start, speak to us for impartial advice and guidance to get the best return on your investment.**** For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01827 425195, you can always email me on Lorraine@hallandthompson.co.uk

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Pants Yield – But Plenty Of Capital Growth Potential – Two Gates, Tamworth

How’s this for a ship shape and ready to go deal? You don’t get more ready to go than a newbuild, do you? This 3 bedroom detached house in Tamworth  is part of a newbuild development in the Two Gates  area, which has always been a highly sought after area and continues to grow in popularity. The property is being marketed by Morris Homes  01827 796843  at £244,750.

The yield may be pants but if you are a landlord and it in for the long haul, then the capital growth may temp you? Interested then why not call Morris Homes for a viewing.

Newbuild

 

 

 

 

 

 

‘Flipping’ Heck – Tamworth Property Values Rise by £24.77 a day


Investing in Tamworth buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Tamworth’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Tamworth, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Tamworth property has risen by £45,200 (equivalent to £24.77 a day), taking it to a current average value of £201,700. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

Why not try to flip

Flipping Property

This demonstrates how the Tamworth property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Tamworth landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Tamworth people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Tamworth, then one place for such information would be the Tamworth Property Blog. http://www.tamworthpropertyblog.couk

Would you like some impartial advice on your next BTL or are you looking to break into the BLT market, why not give me a call 01827 425195  or email me lorraine@hallandthompson.co.uk

If you enjoyed reading my article, feel free to take a look my other online resources below:

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Hall and Thompson Estate Agents Tamworth Facebook Page

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Hall and Thompson Estate Agents Website

BTL yield 5.57% Cracking Bungalow, Tamworth B79

Walking through Tamworth yesterday I spotted what looks like a cracking good Buy To Let so I thought I would share it with you.

This 2 bedroom semi-detached bungalow  is up for sale with our good friends at Hunters and has recently been reduced – Offers in Region of £139,950

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