Milton Keynes Buy To Let Yields of 4.98% – Should you look further afield?

 

I was at a recent business networking event in Milton Keynes, when a landlord (who it transpired had a couple of Buy to let properties) bent my ear on where the next hot spot town or city is to invest his money in and where the best rental yields are. Now it can be tempting to just look at Milton Keynes when growing a buy to let property portfolio, but there can be big differences in the amount of rental income you receive and how much your property will appreciate by considering other locations in the country.

Now regular readers of my articles of the Milton Keynes Property Blog know of my love of the ‘buy to let seesaw’. On one side of the seesaw is yield and the other capital growth. Landlords should be looking for a high rental yield so that they can comfortably cover any mortgage payments and make some profit from the income return, but you also want the property to rise in value over time so you can get some capital growth when you come to sell. However, high yielding property in say such areas as Netherfield and Beanhill  in Milton Keynes, (so the seesaw arm with yield on it goes up on one side), will suffer from low capital growth (so the other arm with capital growth on the seesaw goes down).  The relationship works in reverse as well, so in such upmarket areas as The Shenley’s and Woughton on the Green, properties offer good capital growth, but at the expense of a decent yield.  

The North East and North West of the UK are landlord magnets for great yields. The average yield in Milton Keynes today is 4.98%, which when you compare with say Hartlepool in the North East, which achieves 7.73% or  9.43% in the Anfield area of Liverpool, doesn’t look too healthy. Now of course, these are only averages and some of my Milton Keynes landlords are achieving 6% to 7% on some of their Milton Keynes properties, but at the expense of capital growth. Anyway, after wasting a tank full of petrol up the A1 to Teeside or the M1/M6 to the Home of the ‘The Reds’,  that Liverpool property, would have dropped in value by 2.2% in the last 12 months and the Hartlepool property would have dropped by 1.4%.

When you compare the long term house price growth, it gets even worse. Looking at the graph, since 1995, property values in Milton Keynes have risen by 218.89%,compared with Hartlepool at 21.02% and Liverpool  at 90.11% – it just shows you shouldn’t always chase the yield because of the poor increases in property values in those two places. As I always like to explain to landlords when they either email me, pick up the phone or pop into my offices for a coffee (both my own and even landlords who use other agents (you are all welcome at ours), together with soon to be FTL’s (first time landlords)), a decent yield is important, but when you come to sell your buy to let property it would also be nice to make a decent profit.

At the end of the day, as a Milton Keynes landlord, you want to be making gains from both your rent and house price growth, particularly when you want to sell, because when combined, the rental yield and capital growth, that gives you the real return on your investment.

 

Your property isn’t selling? Here are a few reasons why

When selling your home, it can sometimes feel like a breakthrough is never going to come and your house is destined to remain on the market forever.

You might be struggling to get viewings or you might have casual interest from buyers that is failing to translate into something more concrete.

Fear not though, there are a number of steps you can take to increase your chances of selling…

First things first, you need to ensure you are pricing your property correctly. Every seller wants to get as much as possible for their home, but if priced too high you run the risk of deterring would-be buyers.

Likewise, if you price your property too low, you’ll be short-changing yourself. This is where you need to lean on the local knowledge of your estate agent. They’ll use their expertise and experience to set a fair, realistic price for your property. In turn, you’ll receive more interest, the number of viewings will go up and the possibility of a sale will be much greater.

Viewings, in particular, can make or break a sellers’ chance of selling. It’s your chance to shine a light on your property and convey its best attributes in a passionate, genuine way. Getting it right isn’t a straightforward task, though – in fact, it’s very easy to get it wrong.

Decluttering is the golden rule; make sure the house is painted in neutral colours, carry out those little DIY tasks that you’ve been putting off  and get your house looking as attractive as it possibly can be.

It’s also important to have your house ready for a viewing at any time. Sometimes potential buyers might want to visit at the drop of the hat, which means you need to be alert and on the ball. If you don’t feel confident enough about conducting the viewing yourself, your agent can carry it out on your behalf.

Another possible reason for your house not selling is a malfunctioning marketing strategy. Pull back, take a look at it with fresh eyes and see if there is anything you can revise/change to make sure your property stands out from the crowd. Have you got high-quality, professionally taken photographs? Have you got a punchy and memorable online ad? Are you making best use of traditional marketing tools such as For Sale boards and newspaper adverts?

At Inspired Sales and Lettings marketing your home is where our main expertise lies. We have the experience and knowledge to get suitable buyers through your door, thus improving your chances of selling. Portals are the best way of getting your property maximum exposure, while office window displays, if done effectively, can still have the power to lure in interested parties.

Timing, too, can be vitally important. Dependent on which demographic you are looking to sell to, there are different times of the year when putting your house on the market  that will reach a larger pool of potential buyers. Retired people, for example, are more inclined to move during the summer.  Families, in contrast, prefer the spring or autumn months.

These measures may not guarantee a sale, but they will definitely enhance the prospects of one. 

If you would like more guidance on property selling in Milton Keynes, please don’t hesitate to contact us. Our knowledge of the local property market and our friendly, experienced staff allow us to offer an unparalleled service. For a free instant online valuation, check out our handy tool.

Fewer people are moving house in Milton Keynes

Well the dust has settled and the General Election seems a distant memory, we can get back to a more normal property market, or that is what the London based ‘Fleet Street’ journalists would lead you to believe.  You see I have been talking to many fellow property professionals in Milton Keynes, solicitors, conveyancers are one the best sources of info – the chap who puts all the estate agent and letting boards up in Milton Keynes, and all of them, every last one of them told me they didn’t see any change over April in business, compared to any other month on the lead up to the Election itself.

 I am now of the opinion that maybe in the upmarket areas of Mayfair and Chelsea, the market went into spasm with the prospect of a Labour/SNP pact with their Mansion Tax for properties over £2,000,000, but in little old Milton Keynes, there has only been one property sold above £2,000,000 mark in the last 7 years.   

In a nutshell, the General Election in Milton Keynes didn’t really have any impact on people’s confidence to buy property.  As I write this article, of 839 properties that have come on to the market in Milton Keynes  since the 2^nd of April, 331 of them have a buyer and are sold subject to contract, that’s nearly one in four (39.45% to be precise).

I think that things are starting to change in the way people in Milton Keynes (in fact the whole of the country as I talk to other agents around the UK) buy and sell property.  Back in the 1970’s, 80’s and 90’s, the norm was to buy a terraced house as soon as you left home and do it up.  Meanwhile, property prices had gone up, so you traded up to a 2 bed semi, then a 3 bed semi and repeated the process, until you found yourself in a large 4 bed detached house with a large mortgage. 

Looking into this a little deeper like I have said in previous articles Milton Keynes people’s attitude to homeownership itself has changed over the last ten years.  The pressure for youngsters to buy when young has gone as renting, not buying, is considered the norm for 20 something’s. This isn’t just a Milton Keynes thing, but, a national thing, as I have noticed that people buy property by trading up (or down) because they need to, not because ‘it’s what people do’.  This does means there are a lot less properties on the market compared to the last decade.

A by-product of less people moving is less people selling their property. My research shows there are a lot fewer properties each month selling in Milton Keynes compared to the last decade.  For example, in February 2015, only 305 properties were sold in Milton Keynes. Compare this to February 2002, and 443 properties sold and the same month in 2003, 477 properties.  I repeated the exercise on different sets of years, (comparing the same month to allow for seasonal variations) and the results were identical if not greater.  So what does this all mean?  Demand for Milton Keynes property isn’t flying away, but with fewer properties for sale, it means property prices are proving reasonably stable too. Stable, consistent and steady growth of property values in Milton Keynes, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late2000’s might just be the thing that the Milton Keynes property market needs in the long term.

Great Bradwell Common Buy to Let

Our friends at King estate agents have just take this on the market

This property is being sold with a sitting tenant giving a yield of 6%

Its not the greatest yield you would get but would give you good capital growth and a very central location so would have minimum void periods

don't hang around if you are interested I cant see it being around for long

http://www.zoopla.co.uk/for-sale/details/36980563

Milton Keynes Property Market – Post Election Blues?

With the election now over and the stability of Downing Street secure, with David Cameron and his Blue Tories as the largest party in Westminster,  in Milton Keynes (as in the rest of the UK) average wages are beginning to grow faster than inflation. This is good news for the Milton Keynes housing market, as some buyers may be willing or able to pay higher prices given the more certain political outlook and attractive inexpensive mortgage rates. However, sellers who think they have the upper hand due to the lack of property for sale should be aware that we should start to see an increase in the number of people putting their properties on to the market in Milton Keynes giving buyers some extra negotiating power.

At the last election in May 2010, there were 2,622 properties for sale in Milton Keynes and by February 2011, this had risen to 2,836, a rise of 8% in nine months. An increase in the supply of properties coming on to the market could tip the balance in the demand and supply economics seesaw, thus potentially denting prices. However, as most sellers are buyers and confidence is high, this means there will be good levels of property and buyers, well into the summer, as demand will continue to slightly outstrip supply.

Just before we leave the run up to the election, it is important to consider what the uncertainty in April did to the Milton Keynes property market. I mentioned a few weeks ago that property values (ie what properties were actually selling for) had risen by 1.2% in March 2015. Now new data has been released from Rightmove about April’s asking prices of property in Milton Keynes. It shows that pre-election nerves finally came home to roost in the final weeks of electioneering, with the average price of property coming to market only increasing by a very modest 1.1% (April is normally one of the best months of the year for house price growth).

I am sure our local MP’s, Mark Lancaster and Iain Stewart, would agree that the biggest issue is the lack of new properties being built in Milton Keynes. The Conservative manifesto pledged to build 200,000 discounted starter homes for first-time buyers in the next five years. For Milton Keynes to gets its share, that would mean only 179 such properties being built in Milton Keynes each year for the next five years, not much when you consider there are 98,584 properties in Milton Keynes.

Housing is not a big issue for Conservative voters and because London is an increasingly Labour city where the biggest housing issues are found by a country mile, so will it remain on the ‘to do list’ but won’t get recognition it deserves. Until another political party gets back into power, nothing will seismically change in the property market, thus demand for housing will continue to outstrip supply, meaning property values will increase (good news for landlords). However, as rents tend to go up and down with tenant wages, in the long term, rents are still only 7.4% higher than they were in 2008 (good news for tenants)... with renting everyone wins!

Property Values rise by 1.2% in Milton Keynes

Property values in Milton Keynes rose by 1.2% in March. This follows several months of sluggish activity in the Milton Keynes property market in the run up to the Election, putting the average price of a property in Milton Keynes at £247,200, 12.5% higher than in March 2014.

Interestingly, the Council of Mortgage Lenders and Estate Agent trade bodies over the last few months have reported seeing a fall in mortgage lending and enquiries from prospective homebuyers. This is important because it comes amid an overall fall in housing market activity in Milton Keynes. Data from the Land Registry said completed house sales in Milton Keynes in the three months to January 2015, (the most up-to-date figures available) fell by 7.83% compared to the same three month period up to January 2014.

However, I believe that the slowdown in property sales in Milton Keynes is supporting Milton Keynes property values, as there is a shortage of houses coming onto the market. Even though in the whole of the first Quarter of 2015, Milton Keynes property value increases may seem subdued when compared to 2014, let us remember, property values are still rising well above the level of inflation. 

As I have said many times before, the population in Milton Keynes is growing at a much higher rate than the number of properties being built. This increasing demand for a roof over people’s head, which is outpacing the supply of new houses being built in Milton Keynes, is creating a severe imbalance in the Milton Keynes (in fact the whole of UK’s) housing market, thus making homeownership an ever increasingly distant dream for many of Milton Keynes’s potential first time buyers.

In fact, I still maintain the view that house prices are likely to rise by around 3 to 5% in Milton Keynes in 2015, even after taking into account this blip at start of the year. The reason being is that the rise reflects both strong economic conditions and steady market conditions with (and this is the most important factor) very low numbers of properties on the market. 

Many Buy to Let landlords know that investing in the Milton Keynes property market is a long-term strategy of 10, 20 even 30 years. Governments come and go, but unless Milton Keynes Council start to build hundreds of new properties a year to make up for the shocking lack of supply, Milton Keynes people will always want a roof over their head, and irrespective of which party is in power, if there aren’t any council houses and they can’t (or are unable to buy), a demand for rental properties will always remain.

As my existing Milton Keynes landlord clients will testify, whether you manage your property yourself, or another Milton Keynes agent manages your properties, everyone is always made to feel welcome when they pop in for a coffee at our offices in Milton Keynes to discuss anything to do with the Milton Keynes property market, how Milton Keynes compares with its closest rival towns. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion. However, if you are too busy to pop into town, you could always visit the Milton Keynes Property Blog for advice, intelligent commentary and analysis of the Milton Keynes Property market.

Fishermead MK - Buy To let Heaven!

Our friends at Wilson Peacock have just put this one bed apartment onto the market for £107,000.  Great buy to let potential for the landlords - it even has a Garage!

Link to the property here http://www.zoopla.co.uk/for-sale/details/36840520   I really dont think this will be on the market long!

Some pictures below .. more on the link