Thursday, 19 October 2017

My 5 Golden Rules to investing in Warrington.


As a Warrington landlord myself,  I thought I would share some of my rules/tips on finding the right investment property for you in Warrington and its surrounding areas.

Rule 1 -  LOCATION.  

My number 1 rule is invest in a town you know. What better town to invest in than the town you grew up in? Now you will know which areas are high in renters and which areas are high in home owners. You will know where the schools are, local shops and most importantly the commuter links.

Think about the sort of tenant you want to attract – if you are looking for professional tenants then you will need to look at properties which are close to bus/train stations in Warrington. The properties you tend to get close to the town centre are flats.  If you are a regular reader you will know I am not a fan of Flats as an investment strategy for many reasons!  

If you are looking to attract families then you may want to look at property that’s away from the hectic town life with noise and traffic etc and find somewhere which is close to shops, schools and parks.  

Warrington offers plenty of areas suitable for both, you have areas such as Padgate, Orford, Latchford to name a few and these locations are all great for rentals both Families and Professionals as town is not too far away but far enough from all the hustle and bustle.


Rule 2 - motivated sellers

Im not sure what you think of when you hear motivated seller but what pops into my mind is someone who will take a very low price for a quick sale. When I say low I mean anywhere between 10%-30% below market value.  Finding these motivated sellers is not easy, you can start by looking at how long a property has been on the market. Usually November seems to be a good time to negotiate the price down on a property as people want to be out and in their new home for Christmas. Another motivated seller is usually someone who has inherited the property.

Rule 3 – The figures.  

So we have established the sort of tenant you want, you now have the location and a list of motivated sellers. Now you need to make sure all this stacks up financially. At the end of the day you are in this to make money rather than breaking even or being in a loss. Make sure you do plenty of research on the sorts of rents your potential investment property can achieve – my advice is to give my team a call and pick our brains. We are local to Warrington and we are Warrington Landlords. Me and my team will be able to give you accurate numbers of the rents you can achieve in and around Warrington.  You will also need to set a buffer aside for unexpected expenses, usually this is general maintenance but we have had the odd boiler needing replacing which requires forward thinking.

From my experience with my own properties and properties I manage is when undertaking work. Often other issues arise which need sorting out and this will always add more time to the job and it usually means you will go over budget.  But if you do it correctly then you will have a sound solid investment.

Rule 4 – Not a get rich quick

The Warrington property market has gone up and down in the last 10 years and it’s very difficult to predict what the changes will be and if the prices will change.  As a Landlord in Warrington, think about the long goal. Use this as a plan for the future and the short term ups and downs will not affect you as much.

Rule 5 – Understand your market. 

This is similar to Rule 1 (location) however you can never do to much research, ring other landlords from Warrington, speak to several local agents. The independent agents can make instant decisions there and then as the owner of the business tends to be close by (you will always find me in the office). They are more likely to sit down and give you their time, even if it means they get no business from it they just love to talk all things property.


There you have it, my 5 top tips to investing in Warrington. If you are a seasoned landlord or you are just looking to start me and my team are always happy to chat about your goals and plans. We can point you in the right direction and even  accompany you on viewings so you have a second opinion.

If you find yourself passing our office then pop in (the kettle is always boiling). We have plenty of free parking available and I’ll even get the ‘posh’ biscuits out.

Our office address is based at 6, Bankside, Crosfield Street, WA1 1UP. Many of my blog readers also email me with RightMove , Zoopla or On The Market  links to look at and offer a second opinion so if that’s more convenient my email address is manoj@hamletwarrington.co.uk

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

Thursday, 12 October 2017

Moving from a 2 bed Warrington Property to a 4 bed will cost you £1,004 pm


Moving to a bigger home is something Warrington people with growing young families aspire to. Many people in two bedroom homes move to a three-bedroom home and some even make the jump to a four-bed home. Bigger homes, especially three-bed Warrington homes are much in demand and it can be a costly move.

If you live in Warrington in a two-bedroom property and wish to move to a four-bedroom house in Warrington, you would need to spend an additional £178,073 (or £723.05 pm in mortgage payments (based on the UK Bank average standard variable rate)). However, going straight to a four bed from a two-bed home is quite rare as most people jump from a two to three-bedroom home, then later in life, from a three to four-bedroom home.

So, after being asked my thoughts on moving home in Warrington by a friend recently, please find my analysis of the local property market and then some thoughts. To start with, let us see what the average property price is for a Warrington property by the number of bedrooms it has.

Average Property Price in Warrington by Bedroom
1 bed
2 bed
3 bed
4 bed
5 bed
£96,348
£131,505
£195,148
£385,902
£550,578


I then decided to calculate what it would cost to make the jump upmarket from one bedroom to two bedrooms, two to three bedrooms etc, etc, both in actual money and in mortgage payments (using the current standard variable rate of UK Banks of 4.74% - so the mortgage cost could be higher or lower depending on the mortgage taken).

Warrington
Price Difference to make the move
Cost per month to move up market (Mortgage)
1 bed to 2 bed
£35,157
 £138.87
2 bed to 3 bed
£63,643
 £251.39
2 bed to 4 bed
£254,397
 £1,004.87
3 bed to 4 bed
£190,754
 £753.48
4 bed to 5 bed
£164,676
 £650.47

There are some interesting jumps in costs when moving upmarket as a Warrington buyer. The cost of moving from one to two beds, and two to three beds is relatively reasonable, whilst the jump from three to four beds in Warrington is quite high and therefore financially prohibitive for most families. This helps provide a partial explanation as to why some four-bed properties are currently taking slightly longer to sell.

As an aside, there is a lesson here for all my blog readers. You can quite clearly see why the larger 4 and 5 bed properties don’t offer the best returns for buy to let. Simply put the monthly finance costs and rents achieved don’t match up so well (i.e. a mortgage for a 4 bed home in Warrington would cost you 97.75% compared to a 3 bed mortgage, but the jump in rent would be a lot less than that). I don’t wish to be dismissive about the solidity of investing in larger properties because it does depend on your circumstances. Four bedroom properties sometimes offer other advantages. Pick up the phone if you want to know what they are in more detail.

A further look at the stock of properties in Warrington is revealing.

Housing Stock in Warrington by Bedrooms
1 bed
2 bed
3 bed
4 bed
5 bed
5.31%
27.89%
38.91%
21.78%
6.11%


The most active purchasers are 20 and 30 something home-owning parents with growing families. Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle. For landlords looking to buy within Warrington, they face stiff competition from these 20/30 something families, making the three bedroom Warrington home massively in demand, often attracting spirited offers and selling within weeks of listing. This mix of homebuyers and landlords is a pressure point in the Warrington property market.  Again, if you are a landlord, call me and I will show you areas with decent returns where you aren’t in so much competition with young Warrington family homebuyers.

Yet, the cost of an additional bedroom can be too much for some Warrington buyers. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be quite disconcerting, with families often having to move to a different part of town to get the bigger home they need.

Nevertheless, that’s the position many homeowners find themselves in with the cost of the additional bedroom being too much to bear. To those buying their home for the first time, all I suggest is they not only consider the mortgage payments and other costs of their first home, but also do their homework into their next rung up the Warrington property ladder. Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.


..and Warrington landlords – well these changes in the way people live also mean there are opportunities to be had in the Warrington rental market. Many Warrington landlords are starting to pick my brain on this, so if you don’t want to miss out – drop me a line.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

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

Thursday, 5 October 2017

Warrington Property Market Review 2017

Time now for a quick round-up of what has been happening in the sales and lettings market in the Warrington area throughout July - September 2017. (Figures are obtained from Rightmove and do not include private lets.):


You can see from the rental figures above that it’s 1, 2, 3 and 4 beds that are most in demand – with 2 and 3 beds being the most popular by some margin. If we look back at this time last year, it was the 3 bedrooms that were the most popular with a total let of 44.4% followed by 4 bedrooms at 31.7%. 
Now if we look at the sales again we can see its 2 bedroom houses and 3 bedroom houses that are in front. Again if we go back to last year is was just 3 bedroom houses in a league of their own. 
So, as an investment, what should you buy?

Well, demand is there to rent anything up to 4 bedrooms, but there are already a high number of potential private purchasers chasing those same properties (3 bedroom houses), so this will inevitably increase pressure on availability and start to drive prices up. 2 beds are in a lot less demand by buyers, yet these are often prized by renters. Our experience here tells us that 2 beds will always find a rental market and they will always rent out quickly, but there will be more churn (turnover of tenants). These will command a slightly higher yield than 3 beds. 
charts


However, for families wishing to rent, 3 beds are a must. In the catchment area of great schools (particularly secondary), they will always be in high demand and with less churn. It is these properties that tend to offer better scope for capital growth in the long term, whilst providing a steady yield of around 7-10% in the Warrington property market today.

I like to keep an eye on the market every day, searching for the next hot Buy To Let deal. Remember this is not a get rich quick scheme. You are planning for the future.


If you are thinking of getting into the Warrington property 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 01925 235 338 or pop along and speak to us in person at our office at 6 Bankside, Crosfield Street, you can always email me on manoj@hamletwarrington.co.uk



Thursday, 21 September 2017

Warrington Buy-to-Let Return / Yields – 3.3% to 9.7% a year


The mind-set and tactics you employ to buy your first Warrington 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 Warrington 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 Warrington 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 Warrington...

Warrington Property type
Average Price paid (last 12 months) in Warrington
Average Rent Achieved in last 12 months in Warrington
Lower End of Yield Range in Warrington
Average Yield in Warrington
Upper End of Yield range in Warrington
Detached
£301,726
£1,195
3.37%
4.75%
5.59%
Semi-Detached
£175,668
£762
4.35%
5.21%
7.03%
Terraced
£126,118
£723
5.64%
6.88%
9.79%
Flats
£109,446
£576
4.94%
6.32%
7.27%

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 Warrington 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.

However, before everyone in Warrington starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Warrington 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 Warrington landlords who are looking for capital growth, an altered investment strategy may be required.

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

·         Warrington Detached Properties have increased in value by 230.1% 
·         Warrington Semi-Detached Properties have increased in value by 233.6%
·         Warrington Terraced Properties have increased in value by 248.7%
·         Warrington Apartments have increased in value by 235.5%



It is very much a balancing act of yield, capital growth and void periods when buying in Warrington. 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 drop in and let’s have a chat. What have you got to lose? 30 minutes and my tea making skills are legendary!

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

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

Thursday, 14 September 2017

Do you keep missing out on the perfect Warrington investment property? If so then join our Premier Investor List




2017 seems to be flying by, we are almost coming towards the end of the year and 'Winter is coming'. The last time I invited my blog readers to join our Premier Investor list was around 2-3 months ago so I thought I would share this post again, our premier investment list will give you direct access to any properties we find in Warrington which will make a good investment. 

Having found our blog, you probably know a little more about the local market and about us, and you've probably even been in contact to ask us about something you've already seen. All good so far.


So why wait?


With blogs featuring great deals and up to date Warrington Property News, wouldn't it be great to be able to 'jump the queue' and get the inside info a few days early? We constantly check the market and keep an up to date list of potential Buy To Let properties in the Warrington area, so we have a database we can refer to should you wish to consider a selection of options.


If YOU want to be the first to know about what would make a great Buy To Let investment that is currently available either on the open market or via our own sources (landlord to landlord sales etc), call or email us now and get your name put on our Premier Investor list on 01925 235 338, pop through the door of our offices at Bankside offices, Crosfield Street in Warrington or send us an email on manoj@hamletwarrington.co.uk


Dont forget to visit the links below to view back dated deals and Warrington Property News. 

Thursday, 7 September 2017

Slowing Warrington Property Market? Yes and No!



My thoughts to the landlords and homeowners of Warrington…

The tightrope of being a Warrington buy-to-let landlord is a balancing act many do well at. Talking to several Warrington landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Warrington landlords as average Warrington rents have been on a downward trend recently. So look at the figures here...

Rents in Warrington on average for new tenants moving in have risen 1.4% for the month, taking overall annual Warrington rents 2.3% higher for the year

However, several Warrington landlords have expressed their apprehensions about a slowing of the housing market in Warrington. I think this negativity may be exaggerated.

The other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Warrington as well as the Warrington buy-to-let landlords).  I believe the Warrington property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry…

Property Values in Warrington are 3.08% higher than they were 12 months ago, rising by 0.34% last month alone!

However, the reality is the number of properties that are on the market in Warrington today has dropped by 16.7% since the New Year and that will have an interesting effect on short-term Warrington property values. As tenants have had less choice, buyers also have less choice.


Be you a homeowner or landlord, if you are planning to sell your Warrington property in the short-term, it is crucial, that whilst you allow room for negotiation, you must still realistically price your property when you bring it to the market. Given that everyone now has access to property details, including historic stats for how much property has sold for, buyers will be more astute during the offer and negotiation stages of a purchase.

Even with this short-term decrease in the number of properties for sale in Warrington, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,660 properties for sale compared to the current level of 441 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Warrington properties for sale will keep prices relatively high...and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought’s before I go – to all the Warrington homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving ... most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)


To all the Warrington landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Warrington Property Blog
For more thoughts on the Warrington Property Market, please visit the Warrington Property Market Blog.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

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