Tuesday, 30 December 2014

2014 Grantham Estate Agents League table

Unless an agent is going to be working over the next day or so, here is the final league table of Grantham Estate Agents for 2014.

This is what they have put on to the market in 2014 in NG31 + NG32 + NG33

1.       Newton Fallowell  360
2.       Wiliam H. Brown 237
3.       Pygott and Crone 223
4.       Haart 161
5.       Winkworth 159
6.       Buckley Wand 126
7.       Escritt and barrel 119
8.       Connells 103
9.       Wisemove 80
10.   Harrison Murray 51
11.   Moores (Stamford) 28
12.   Belvoir 27

Thursday, 11 December 2014

Grantham landlords - should you take DSS tenants?

In my years of being an estate agent and letting agent, if I had a pound note every time a potential tenant has asked me whether a particular property will accept people who are receiving  DSS benefits.

Why? Quite simply that’s because there’s large demand for properties that will accept benefit claimants – SKDC have ‘waiting lists’ running into the thousands which continue to grow. It is a specialised area of the market, and one that you must not enter casually. However, for some Grantham landlords it is a very lucrative market, and I know a few landlords who are buying to meet the tenant demand.

These tenancies can work well, but it’s really important that the landlord understands in advance how these tenancies work, and what the pro’s and con’s are. I’ll go through these below.

Should I, Shouldn’t I?

The main question Landlords should ask is ‘do I need to accept Housing Benefit Tenants to rent my property’?, For the vast majority of Landlords, the answer to this question will be no – there will be a large enough supply of good quality private tenants happy to pay the rent you want. As such you’ll stick to the private market as it is, statistically, less hassle. Grantham landlords generally need to consider a tenant on benefits :
  1. if their property is in an area where there’s low demand from private tenants, or
  2. if the local market is such that there’s a shortage of private tenants generally.
What are the advantages?

If your property isn't in the best area, there are many!
  1. You can get a premium rent for your property – SKDC, in fact all council's have a set ‘scale’ they pay against, based on the size of the property, and not based on the area. As such if you’ve got a property in one of the poorer areas of town, you’ll get more for it with a Housing Benefit tenancy than with a private one.
  2. In many cases South Kesteven District Council (SKDC) will provide a guarantee bond instead of a deposit. This is usually capped at 1 months rent..
  3. Housing Benefit tenancies statistically last longer – if you’re claiming benefit and you want somewhere nice to live, the world is by no means your oyster! As such when tenants get somewhere nice, they tend to stay longer.
  4. In certain areas of town, a housing benefit tenant may be a safer bet than a private tenant – a single parent with children is always going to be entitled to funds, whereas a private tenant on low income and in / out of work, may struggle more to pay.
  5. More often than not, a decent letting agent should be able to arrange to receive direct payment from SKDC, which mitigates the likelihood of the tenant not paying.
What are the disadvantages?

There are a few here also. It's important you understand these in advance.
  1. Rent is paid in arrears, not in advance.
  2. SKDC, in fact all local Authorities, make 13 rental payments a year instead of 12. You still get the same amount of rent annually, only in smaller chunks.
  3. Without wishing to over generalise, tenant often struggle to deal with issues that arise (such as their benefit entitlement being changed) and deal with this by ignoring it, or burying their head, rather than coming and telling you.
  4. If tSKDC overpays housing benefit, they will take it back from whoever they paid it to. As such if we’re getting direct payment for your tenant, and the LA subsequently decides the tenant wasn’t entitled to that money, they will deal with it by simply taking the money back – that's democracy for you!
  5. SKDC aren’t geared up to communicate with landlords, and very much see the tenant as their ‘customer’. If the tenant's entitlement to benefit changes, you can bet the local authority won’t tell you – the first you’ll know is when the money stops coming in. As such Housing Benefit tenancies can take a lot more management.
  6. If you want to / need to get rid of your tenant, you can bet SKDC won’t help you – you’ll very much have to rely on the court process unless your tenant is happy to play ball!
  7. Your agent will lose a little bit of flexibility on which tenant they let to – SKDC doesn’t like to see us making arbitrary decisions, and rejects any form of 'discrimination'.
  8. The secret to success is hence understanding the above and managing it. If you get a reliable tenant, and a relaxed landlord, it can work really well and deliver a great yield for the landlord. If you get an unreliable tenant and an inflexible landlord, problems can ensue!

As such there can be problems with accepting tenants in receipt of housing benefit. It’s not a market that suits everyone and if you’re the sort of landlords that treats their rental properties as extensions of their own home, it’s not the market for you. That said, you can pick up a cheap property in one of the less upmarket areas of Grantham and rent it for good money. I know a number of landlords who operate successfully in this market.

Wednesday, 10 December 2014

Are there any property bargains in Grantham and how to find them.

Well, if you read this blog, i often post deals that you, the good people of Grantham should be buying for buy to let.

In the coming weeks, not only will I look current bargains, in some future articles, I want to look to look at some old bargains that have come good.

Let's start with this one, Hill View Close (off Goodliff Road near the junction Dysart Road .. think Hillingford Way but a little nicer). This 3 bed semi/ end townhouse came on the market last Summer(August 2013) for £104,950 and sold  a few months later for £103,000 (completing in early Spring 2014) .. nice isnt it?

However, roll the clock back a few years to December 2010, and it was bought for £66,000... Have a look at the photos from the time it was marketed in 2010 below .. here is the best bit .. it was marketed at £79,950 and sold for £66,000.

So the person who saw through the purple walls and crappy decor made a decent wedge .. a rise of 56% (or 14% a year).

There are still plenty of bargains out there, even in this market. The most important question you should ask an agent (and do this face to face .. not over the phone or email)  is 'WHERE ARE THEY MOVING TO.......AND TELL ME, WHY ARE THEY MOVING?'  

The first is is a sop to hit them with the second question. people who put their property on the market fall into two categories, (1) GOT TO SELLS and (2) LIKE TO SELLS .. Try and find someone in the first category who have been on the market a long time .. how do you find stuff that has been on the market a long time .. easy .. do a search as you would on Rightmove.. once it gives you a results in a  list, in the top right hand corner there is a drop down menu , called 'Sort by' ... 99.9999999999999999999% of people leave it at Highest Price first. You should drop it to 'Most recent first'.... then just keep scrolling down page by page and the stuff on the last few pages is stuff that has been on the market a long time

PS .. I have now added a subscription link at the top right hand corner of this blog (you need to be reading it on a desktop or tablet - it wont show on mobiles_ .. just pop your email in and it sends an email when I post something new. I don't get to see your email either, so you wont be spammed with crap (not that i have anything to sell you that is! )

Tuesday, 2 December 2014

How affordable are Grantham properties?

I had an interesting chat with a chap who lives in Barrowby last week. He is thinking of buying his first buy to let property and he wanted my opinion on the state of the Grantham property market and if it was a good time to invest.

He was particularly worried that with all the newspaper headlines of a booming housing market, there wouldn’t be any demand by tenants. One of the best pieces of advice I can give to those looking to invest in property is a simple trick of the trade. You can judge the affordability of an area’s property market (and thus how much demand there could be) by simply finding the ratio of the average property price to the average salary. The lower the ratio, the more affordable property is.

When we put this to the test, we found that an average property in the Grantham currently has an average property value of around £176,600 with the average salary being £18,510. This is a ratio of 1 to 9.5, which is very close to the UK National average of 1 to 9.46.  So lots of first time buyers should be buying property? Not really. The issue isn’t affordability, it’s the raising of the 5% deposit, which when you take into account fees, will be in the order of £9,000.

Tenant’s inability to raise that sort of money for the deposit is driving demand for rental property.

Friday, 14 November 2014

Ex-council Princess Drive semis out perform Stephenson Ave property market by 49%

We all know Stephenson Avenue as one of the sought after places to live in Grantham, as it’s the major entry road into the modern Gonerby Hill Foot Estate with good schools nearby. The average property here sells at around £175,400 and the average rents are £637 per month.

These are reasons a landlord came to our office to find out if Stephenson Avenue would be a better rental investment than Princess Drive, where she has a property at the moment. When we compared the two, we found Princess Drive is made up of three bedroomed semi-detached properties which were built in the 1950’s and are ex-local authority. On average they sell at around £98,700 and can rent at around £525 per month.

It became interesting when we compared the possible annual yields, as Stephenson Avenue could achieve 4.3% per year but yields are proportionately 49% more on Princess Drive at around 6.4% per year. However, we must remember that yield is not the sole consideration when investing in buy to let. The average value of property on Princess Drive has risen by 52% since 2001, but Stephenson Avenue has risen by 83%.

Do you want a good yield or do you want capital growth? Remember, since 2001, inflation has been  44.4% according the HM Government.

So Princess Drive has only gone up, in REAL terms by 7.6%  (52% less 44.4% which equals 7.6%) whilst Stephenson has gone up in REAL terms by 38.6%  (83% less 44.4% which equals 38.6%)

Yield or Growth?  That is the question!

PS I have had a few Grantham people email me Rightmove links of properties they are considering buying. As I don’t sell houses or even let them (anymore), I am always happy to give my opinion (good and bad) on their suitability as rental investments .. bang an email over and i will give you my thoughts

Monday, 20 October 2014

What not to buy in Grantham for buy to let

Been a way for a few days, so sorry about the lack of posts.

When investing in property, it’s easy to get it wrong. Before I was a lettings agent, I bought a new build 2 bed flat because that’s what everyone else seemed to be doing. I still have it – mainly because no one is going to take it off me for the price I paid for it! You live and learn. But it’s important to remember that you make your money when you BUY a property, not when you sell it. If you buy at the wrong price, it’s more or less impossible to rectify that going forwards unless a rising property market saves you. If you buy sensibly, you can also expect to sell sensibly if you ever need to. Try to avoid:

• Simply overpriced. Once you’ve established you can buy a nice 2 bed property in a given area for £X, don’t pay £X + 5,000 for one because you’re impatient. If you overpay at the point of purchase, you’re playing “catch up” regarding the value of the property from day 1. So DON’T overpay!
• Needs work, and this isn’t reflected in the price. DON’T be put off by properties that need work, as these are often the best buys. But DO ensure this is reflected in the price. If it’s £X for a nice one, its £X minus £5,000 for one that needs a kitchen and bathroom.
• Unrealistic rental price. If you’re buying in an area where flats rent for £550.00, don’t expect yours to rent for £600.00 on the basis that it’s just been painted – expect it to rent for £500.00 if you don’t paint it!
• Lacking key features. If you’re buying in the suburbs to attract the family market, don’t buy the one house on the street that has no garden, or no parking. Families want gardens!

• Following on from my comments above, don’t buy in somewhere like the rougher parts of Earlesfield if you’re looking to attract a private tenant. Accept it will be housing benefit before you start.

Tuesday, 10 June 2014

Tuesday 10th June Grantham Buy To Let deal of day

Just popped into my friends at the Buckley Wand and they are about to list a stunning 2 bed terrace in Queen Street near the train station for a bargain 79950 .. Won't be round for long .. Not even on their website yet!

Sunday, 8 June 2014

Grantham Property market - 8th June 2014 update

A few weeks ago I posted an article about the Grantham property market .... caused a bit of eyebrow raising.

So in the spirit of good eyebrow raising .. here is another update.

Of the 100 properties that have come onto the market in Grantham in the last fortnight, guess how many have sold?


Only 6 my blog reading friends. These are the ones that have sold ..

http://www.rightmove.co.uk/property-for-sale/property-30592950.html  (this was a deal of the day 10 days ago .. nice to know I got at least one!)


So before you all go screaming property market boom.... lets all take a chill pill and be sensible with our asking prices

Friday, 30 May 2014

Gonerby Hill Foot BTL deal of the week - (tenants must like trains though!)

Three bed semi just come on the market yesterday with Newton Fallowells at £109,950. Ok, it looks like it backs onto the train line, but you get nobody looking into your garden except an HST 125 flying by at 100mph. Have a look at the internals  ( http://www.rightmove.co.uk/property-for-sale/property-30592950.html)  and you will see its a little sweetie. I dont think this will be around for long.

Even with the trains, you should get £525 to £550 per month (there is one round the corner at £625 which is steep). Depending what you buy her for, a yield of 6.1% to 6.3% a year is very good.

Now where is my train spotter handbook?

Wednesday, 28 May 2014

Nice 3 bed detached house in Grantham

Ooo..3 bed detached houses with double garages don't come around that often.

I like this, may be not a decent buy to let, but a property which I like.


Tuesday, 27 May 2014

Grantham property market over heating?

Over the last 14 days, according to Rightmove, which most agents use, 126 properties have come on to the market in Grantham and the immediate surrounding villages.

..... of those 126, nine have sold stc .... only nine ... that is a normal market not a run away market.

Thursday, 22 May 2014

Apartment - bargain alert on Marco's site £56,000 .. 8.5% yield

First floor one bedroom modern apartment on Bolsover Road. 

Situated in a popular location within easy access to the train station and Grantham Town Centre. Just off Springfield Road close to the A607 and the A1 both North and South. 

Great for the busy commuter/ first time buyer, buy to let.

At £56,000, this wont be around for long. Rent will be £400 per month so gross yield of 8.5%


Wednesday, 21 May 2014

Freehold 3 bed semi on Goodliff Rod - Buy to let deal of the week?

£85,000 makes this 3 bed semi / end town the bargain of the week when it comes to buy to let.

OK, it needs some love and TLC, but wow, what a bargain .. wont be around for long

Link below

Thursday, 15 May 2014

Saturation of the Grantham rental market?

Someone emailed me after the reading the blog and asked about saturation of Victorian terraced houses in Grantham.

Don't worry about saturation - there's no sign of this currently. If you gave a letting agent 10 or even 20 terraced house in Grantham, they would find you tenants, provided you priced them sensibly. They wouldn't be able to find 20 immediately, but I'd do one or two  a week for 10 weeks without too much trouble. Some times with new build blocks of terraced houses in the old Marco’s site(off Springfield Road) they all go to rental and they all complete on the same day. That creates a short term problem with supply and demand, but once the initial hurdle is overcome, normal service resumes.

Whether you should buy new build is another question! Some people do this as it looks nice and everything is guaranteed. If you're a good negotiator you may be able to get the builder to chuck in all the things you need to get it let - appliances, window blinds, flooring. It's an ultra low risk approach to buy to let. However you will always pay a premium for a new build property and whether it makes financial sense is another question entirely! 

Compare these 2 properties:

They are both going to rent for the same money - £595PCM. But one is £15,000 more than the other. A lot of people would still be more attracted to the new one as it's much prettier, but if these were the only 2 properties available I know where I'd be sticking my money! What I'd spend the £15k saving on is another matter entirely.

Tuesday, 13 May 2014

Where should you buy property in Grantham?

Unless you get phenomenally lucky, you cannot have your cake and eat it! There’s a general rule that the better the area you buy in (say Barrowby Gate, Gonerby Hill Foot etc etc), the lower the return you’ll get. This is because you’ll have to pay more to buy property in a nice area, and the amount of rent you’ll get doesn’t rise at the same level. Buying in a less plush area (Earlesfield, Queensway etc) doesn’t mean a property won’t rent, but it does have a bearing on the type of tenant you are likely to attract.

Different landlords value different things – some prefer to accept a modest yield (the monthly return) on their rental investment, in return for more certainty regarding tenant quality. Others are simply more interested in high returns. Before you start out, it’s a good idea to be honest about what would work, or more importantly what wouldn’t work for you. This will then enable you to filter much more easily..

Better Area, Lower Return
The most expensive 3 bed houses are in the new build areas on the outskirts of town.
Because you pay more for these to start off with, the return is never as good. Some
landlords prefer this because of the ‘comfort factor’ of owning in these areas. Paying £160k to £170k gets you a 3 bed detached house, which will let for £650 to £670 per month, a lowish yield of 4.8%. Maybe the 3 bed semi, which will cost you £130k to £135k and a rent of £625K(tops) gives the same safety factor, but a better yield of 5.6%

Middling Area, Average Return
Grantham has a town centre of Victorian Terraced properties, taking in places like Cambridge/College/Oxford Street’s, Victoria / Stamford Street, Dudley Road area, New Street / Redcross Street areas to name but a few. This is staple rental territory - there’s always good demand here from private tenants. Three bed terraced houses can be bought for £85,000 to £90,000 and with rents of £450 per month (depending on condition) , that’s a nice yield of 6.2%

Cheaper Area, Higher Return

If you want your money to work as hard as it can, you need to get into some of the less expensive areas of town. Much of the Earlesfield falls into this category, together with areas like Queensway and Brittain Drive. I know someone who has bought a one bed flat on Shaw Road (back of Northern Foods) for £50,000 recently. Done up, it should rent for the early £300’s a month, giving a yield of 7.7%