Buy-To-Let Deal Of The Day

After scanning through the new Rightmove listings this morning one property definitely stood out from the rest as an attractive buy-to-let opportunity.

Ellerslie House is a small 19th Century former vicarage, just to the north of the city centre, now converted into a dozen or so self contained apartments. Our office look after a couple of units within the house which rent at £595pcm respectively. 

This particular apartment, on the market with Henry Adams, appears to be in superb decorative order throughout, and boasts use of a private courtyard garden. In the present rental climate I would expect this property to comfortably achieve £625pcm.

At a sensible guide price of £135,000, a gross yield of 5.5% would provide a healthy return, and I genuinely wouldn't expect this property to be available for long.

http://www.rightmove.co.uk/property-for-sale/property-51344159.html

As with all shared freehold and leasehold apartments, it is important to do your research with regards to the annual maintenance contributions, service charges, and any ground rents payable, as these factors will naturally impact the net yield of the investment.

Buy-To-Let in Graylingwell Park

I was talking to someone yesterday who lives in one of the 'Eco' town houses in Graylingwell Park. He wants to purchase his first Buy-to-Let property and has noticed that we were actively looking for properties in the development, so was interested in getting to know the market a little bit more.

As he had bought his property from new, and lived in Graylingwell Park for nearly 4 years, he felt comfortable investing there as he knew it well. We started to discuss the property market in this area and found that 22 houses have sold in the Lloyd Road alone since 2009.

Property values in Chichester have risen on average by around 8.75% over the last 3 years, but most properties in Graylingwell Park have beaten that rise. For example, a three bedroom terraced property on Lloyd Road rose from £275,000 in 2011 to £314,500 in 2014.

One bedroom apartments are available for purchase on the next phase of the development, priced at circa £165,000. When it comes to letting, new build properties always attract a lot of interest, and the one bedroom apartments in Graylingwell comfortably rent at £750-£795pcm.

This would attract a gross annual yield of around 5.7%. If you combine this with the current year-on-year capital growth this development could soon become an attractive Buy-to-Let hot-spot!

The History of Chichester Property Prices

I was speaking to a landlord of ours yesterday, when the subject of Chichester's property values came up. Not just in the last few years since the recession, but those of over the decades.

I found that the average value of a property in Chichester was a mere £667 in 1930 (although a lot of money at the time), which then dropped to £582 in 1934. The average value the jumped to £2,161 in the late 1940's, and in the 1950's the average value was £2,334.

In the late 1960's, the average value had risen dramatically to £5,247. This was followed by a big jump in average values between 1978 and 1980, with an increase of over 40% from £17,636 to £26,685. The late 1980's saw a huge surge in values, with an average price of £62,026.

At the turn of the millennium, average values had managed to rise to £114,845. Today, even following the crash of 2008, Chichester's average property value is £310,289, which is £42,500 higher than the rest of the country.

The Funtington Property Market

A landlord who has invested in rental properties throughout Chichester asked me about the property market in her home village of Funtington. 

What we found out about the village was quite interesting. The average value of a property in Funtington is £580,800, which is a whopping £242,300 above the average price in the neighboring village of Nutbourne. The most expensive street in Funtington is Five Acres Close, where an average property is worth in excess of £910,000. Clearly the people love living here, as only 3 of the 184 properties in the village were sold in the last 12 months.

The most expensive property was an elegant wing of a Grade II listed renovation in Funtington Hall, which sold for £850,000 in January of this year. Rental properties are few and far between in the area, with only two properties currently listed in the village. However, asking prices for rentals in the PO18 area have been known to reach £10,000pcm.

Student Letting Opportunity with Potential 7% Yield

One of our landlords visited the office last weekend who owns two apartments in Chichester that are rented to professional sharers. She wanted to discuss entering the student lettings market and wanted our advice.

There are several things to consider with student lettings; it is a seasonal market - there's a marketing window between January and March for which students view properties ready for the Summer. Either side of this window and landlords can often struggle to secure tenancies. Increased wear and tear - with the best student tenants in the world, shared accommodation usually warrants an annual (or every other year) redecoration, which can often swallow up a full months rent in one swoop. Furnishings - student properties require a basic level of furniture (beds, desks, wardrobes, sofas etc) which involves an element of initial outlay and upkeep.

That being said, the potential rental return from a student property can often be 50% more than it would be if a property was let as a traditional 'family home'. On average in Chichester, a decent sized bedroom in a student house can fetch £300-400pcm.

Taking this three bedroom, two reception room ex-local authority property in Hay Road on the market with Cubitt and West (http://www.rightmove.co.uk/property-for-sale/property-31409226.html?premiumA=true). This property could quite easily turn the dining room into a bedroom and achieve £350 per room, per month (or £1400pcm as a whole dwelling). If purchased at the asking price of £240,000 a gross yield of 7% would illustrate a healthy return on investment.

Top Ten Most Expensive Streets in Chichester

A couple of weeks ago we discussed the 'Top Ten' most affordable streets in Chichester. I thought it might be an interesting comparison to research the most expensive streets in the city. The figures below are based on sale prices registered with the Land Registry since January 1995.

1. North Pallant - £818,639
2. North Street - £814,950
3. Mount Lane - £751,250
4. Pine Grove - £729,817
5. Mill Lane - £700,645
6. West Broyle Drive - £698,089
7. Fordwater Road - £685,495
8. The Rummers - £681,178
9. Keepers Wood - £653,605
10. Lower Walls Walk - £630,027

4.8% Gross Yield PLUS £24,000+ Annunal Capital Growth in Donnington

When entering the buy-to-let market, one important factor to consider is the amount of maintenance and upkeep an investment property is likely to require. As a result we have found that in recent years more and more landlords are choosing to add new-build properties to their lettings portfolios.

I noticed on Rightmove this morning that one of the new homes on the Birdham Road (just opposite the new Co-Op store, by the mini-roundabout) has come up for sale. The property is on the market with Charles Peck at a smidgen under £250,000 and appears to be very well appointed and finished.

http://www.rightmove.co.uk/property-for-sale/property-48265526.html

Our office looks after several new build properties on Birdham Road which are always extremely popular with professional couples and small working families. You could expect to see monthly rental of circa £995 on a property of this ilk, resulting in a 4.8% gross yield.

However, what is even more appealing to an investor is that properties along the Birdham Road have seen, on average, a £24,278 increase in house prices compared to this time 12 months ago.

Low maintenance + steady gross yield + increased capital growth + high tenant demand = an investors dream!

Charles Avenue Property Market Out Performs City Walls By 26%

On Monday afternoon, a gentleman from London came into the office to discuss potentially investing in properties in Chichester for Buy-To-Let. As a landlord, one of the most important considerations before investing is the balance between annual return/yield and the annual value increase/capital growth.

Properties within the City Walls are generally considered as one of the most desirable locations in the PO19 area. Set in the backdrop of the cathedral, and a short walk along The Pallants to the cosmopolitan shops, boutiques and restaurants that the city has to offer. The average two bedroom apartment in North Walls sells at around £220,000 and rents are roughly £850 per calender month.

Compare this to the properties we discussed a couple of weeks ago in Charles Avenue, off the Oving Road, as you head out of the city towards the A27. Average sale prices for similar sized two bedroom flat here are £138,800, and achievable rents can be around £675pcm.

The gross annual yield that could be achieved in Charles Avenue is 5.8%. When we compare this to the 4.6% return in North Walls, Charles Avenue comes out over 26% higher.

However, we must remember that yield is not the sole consideration when it comes to Buy-To-Let property. The average sale price of a Charles Avenue apartment in 2003 was £115,300, which has risen by 20% in the last 11 years. A similar sized North Walls apartment averaged a sale of £167,750 in 2003, showing an impressive 31% capital growth over the same period.