Stunning 3 bedroom terraced house for sale - great investment property.

So as it's Saturday I thought I would pop on a little Saturday special for you to ponder. Now if your an investor looking to buy something that little bit special with the thought in mind that "a great property breeds a great tenant" then potentially this is the one for you?

This little beaut is up for sale with TuckerGardner for £300,000 which I would say right now is a bargain! This property is situated close to Fenditton offering direct links to the M11 and London and its conveniently placed to Cambridge's Airport making it even more commutable without being too close. Your now thinking ok that's two plus points so what is the down fall here? Well as I stated prior this property appears to be a bargain and there is no down fall, in fact quite the opposite as this property also boasts off road parking, a garage and the interior is fantastic!

Finished to a high specification with a modern style this property would instantly rent for around the £1800pcm offering you an instant yield of 7.2% which for Cambridge at this current point in time is great. Still seems too good to be true? why not take a look for yourself? Check out the link below this picture for full details and don't hang around as I'm certain this one will go fast.

http://www.rightmove.co.uk/property-for-sale/property-37015116.html

Cambridge House owners desert the housing market with an 8 year low

Even though the housing market is in an upbeat state in many parts of the UK, getting on the property ladder is still challenging for many and regarded as unattainable by some.  However, that goal has become even worse recently in Cambridge as the number of houses available to buy is at an 8 year all-time low.

Back in Winter 2007, there were over 1,400 properties for sale in Cambridge and since then this has steadily declined year on year, so now there are only 342 for sale in the city.  This continuing diminishing supply of housing has been happening over those years for a while and there simply aren’t enough properties in Cambridge to match demand.

According to a recent report by the National Association of Estate Agents, that said, “There are now 11 house hunters fighting after every available house which isn’t sustainable.”   What that means is Cambridge youngsters, who are looking to buy their first home, are finding themselves being squeezed out by the competition.  However, in the meantime, nobody wants to live with parents until they are in their 30’s, so that in turn creates demand for more rental properties, which means landlords have a greater demand for more rental properties so are buying more, resulting in even less smaller properties for the youngsters to buy, it’s a vicious circle.   

Talking to fellow agents, mortgage arrangers, surveyors and solicitors in the City, all of whom have extensive dealings in the Cambridge property market like myself, most of us agree the movement in the Cambridge market is taking place in the middle to upper market, higher up the property ladder and it’s second and third steppers pushing through the properties that are being bought and sold.

That has meant as people tend to move less in the middle to upper market, the number of the properties actually selling has drastically reduced over the last couple of years.

When we look at the individual areas of the city, it paints an interesting picture.

• CB1 - Cambridge (Central, South), Teversham 49 properties sold in May 2015 (with an average value of £507,951), whilst over the Summer months of 2014, the number of properties selling in this postcode reached into the mid/late 60’s.
• CB2 - Cambridge (West) 8 properties sold in May 2015 (with an average value of £737,187, whilst in the late Summer of 2014, the number of properties selling in this postcode reached into the 100’s.
• CB3 - Cambridge (North-West), Girton 9 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Spring months of 2014, the number of properties selling in this postcode was always between 13 and 16 per month. (Interestingly the average value of those properties was £399,888).
• CB4 - Cambridge (North) 38 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Summer months of 2014, the number of properties selling in this postcode was always between 53 and 62 per month. (Interestingly the average value of those properties was £375,943).
• CB5 - Cambridge (East) 12 properties sold in May 2015 (with an average value of £299,708), whilst over the Autumn months of 2014, the number of properties selling in this postcode reached into the early 20’s.

So what does this all mean for homeowners and landlords alike in Cambridge?  Demand for Cambridge property is good, especially at the lower end of the market.  However, with fewer properties coming up for sale, it means property prices are proving reasonably stable too.

You see I believe a more stable, consistent Cambridge property market, with less people seeing property as an easy way to make a quick buck (as many did in the early 2000’s when prices were rising at nearly 20% a year so people were buying and selling every other minute), but a property market that has a steady growth of property values in Cambridge, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late 2000’s might just be the thing that the Cambridge property market needs in the long term.

For more insights, comments and facts on the Cambridge Property market please visit the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/ where you will find many similar articles to this.

2 bedroom semi-detached house for sale offering minimum yeild of 4.8%

This two bedroom semi is up for sale through Bush for offers in the region of £300,000 and looking at the pictures its in great condition (always go and look for yourself of course), its also a great size with masses of potential.

So I would say that if you purchased this property and then let it out straight away without lifting a finger it would let for around the £1200pcm mark meaning that you haven't broke into a sweat you are already making a yield of 4.8%

The property offers off road parking and is easily accessible to both Cambridge and boasts direct access to the M11 to London making it a commuters dream. Looking at a bigger picture there's plenty of room for a two story side extension meaning that you could have a lovely 5-6 bed HMO if you planned it right. Certainly food for thought this one.

For more pictures where you will see that this property could be instantly let and further information please see the link below:
http://www.rightmove.co.uk/property-for-sale/property-36846237.html

Homes under the hammer style Auction?

A bit of Monday morning madness.
Fancy a go at your very own homes under the hammer style auction? This lot is for sale by auction as lot 200 on 29th October 2015 with allsop and a guide price of £200,000.

A Leasehold Three Bedroom Self-Contained First and Second Floor Maisonette subject to an Assured Shorthold Tenancy.

The property is held on a lease for a term of 125 years from 9th September 2015 (thus having approximately 125 years unexpired) at a ground rent of £250 per annum.

The property is situated on the south side of Cherry Hinton Road, close to its junction with Rock Road. Cherry Hinton Road leads onto Clifton Road, providing access to the Leisure Park, where a range of shops and facilities are available. Cambridge city centre is two miles to the north-west and provides an extensive range of shops, facilities and the Universities of Cambridge. Cambridge's main Railway Station is a mile to the north-west and Local schools and colleges are within a mile, including Homerton College and Saint Bede's Inter-Church School. All in all putting this in a great location.

Problem is there are no pictures to view which usually means this property is a doer upper, is it worth a gamble? Its certainly worth doing your homework and taking a good look. This property could rent for £600 per room pcm if done up right and could make you a potential yield of up to 10% but do make sure you do all of your homework with this one first!

For more information please see the link below:
http://www.rightmove.co.uk/property-for-sale/property-51877663.html?premiumA=true

 

The perfect portfolio starting point!

Hi there fellow bloggers, so lately I have been going a little wild throwing out ideas of grandeur and potentially forgetting that not everyone has millions of pounds to spare? So I decided today to find you something that is a lot more affordable and indeed the perfect start to a portfolio, making this little gem the perfect starting point.

This Studio apartment is up for sale with a guide price of £149,950 with SAB and is situated in a great location, Its close to all the local Cherry Hinton amenities and also close to Addenbrookes hospital and Cambridge Airport making it the perfect property to capture the attention of a local working professional offering a rental of £600pcm giving you an instant yield of 4.8% and its ready to let instantly as its not in bad condition at all.

So now we pop on our thinking caps and think what could be done with this property to increase the yield?
The solution is simple, Put your hand into your pocket and turn this simple studio into a high end compact apartment - give it a high end makeover you will be amazed what 10K could do to this. Take the extra on your mortgage get the kitchen and bathroom revamped and decorate in a neutral yet stylish manor (you cant beat white walls). White walls you say, wont they just get ruined fast? Nope because there so easy to maintain, they make the property look bigger and with the right furniture totally transform a place.

So your total expenditure is now say £160,000 and you have a prestige high end compact apartment on your portfolio which is now renting for £800pcm and offering you a 6% yield not to mention that your apartment has now shot up in value!

For more pictures and information please see the link below:
http://www.rightmove.co.uk/property-for-sale/property-51790591.html

Could your Cambridge property save you from Pension oblivion?

 

If you were born in the early 1970’s or late 1960’s, if you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year) and £231.90 a week for a couple (£12,118 a year) as long as your partner has paid their stamp (although there are certain get of jail cards if they haven’t). 

As a household, could you live on just over £12k a year?

However, could the property you are living in in Cambridge save you from poverty when you reach retirement? You see, a regular income is vital in retirement, and the bricks and mortar you own in Cambridge could provide a way for you to finance life when you retire.

If you are in your 30’s, instead of saddling yourself with bigger and bigger mortgages, going from your first time buyer flat, to a terraced, to the semi and then the large detached house, you could instead keep your terraced or small semi, turning it into buy a buy to let property, let the rent pay the mortgage and then rely on capital growth to provide you with a lump sum when you sell the property and retire.  One of the biggest plus points of buy to let is what is known as leverage. Let me explain ... say you have a deposit of 25% and the value of the property rises by 3% a year, your gains in fact multiply to 12%.  However, if property prices drop, 'leverage' can be catastrophic, as losses will also be multiplied. Property values have dropped a number of times in the last 50 years, but they always seem to bounce back ... property must be seen as a long term investment.

Let me explain how leverage could work for you. If you had bought a Cambridge house in spring of 1983 for £50,000, using a 75% mortgage and 25% deposit, (meaning your deposit would be £12,500). Today, that Cambridge property would have risen in value to £345,917, a rise of 591.8%. However, when you look at the growth on just your deposit, the rise is even better ... instead of 591.8%, we see a rise of 2667% (remembering that the mortgage would have been paid off).

However, buy to let is not all about capital growth and in retirement, income is more important than capital growth, as rent is the key to a steady income.

So surely the best strategy is to buy those Cambridge properties with the high rents (when compared to the value of the property). These are called high yield properties in the buy to let world because the monthly return is so much greater. So surely they are the best in Cambridge? Possibly, but the properties that offer these higher yields (in the order of 5% to 6% per year) tend to be in such areas as Arbury in Cambridge, historically they haven’t offered such good capital growth when compared to the city average, have a higher tendency for void periods and such properties tend to attract tenants that have a greater propensity to be high maintenance.

 

Therefore, if a high maintenance rental portfolio wasn’t for you, another strategy could be buy a property with relatively smaller rental returns of 3% to 4% per year (i.e. lower yields), but in a more up market area such as Newnham. Properties such as these tend to suffer from less void periods (i.e. when there is no tenant in the property paying you rent) and they historically have had better long term capital growth when compared to the city average.

Every landlord is different and every property is different. All I suggest to you is do your homework.

As regular readers will know, I am happy to share my knowledge and experience of the Cambridge property market, high yields, high capital growth, what to buy, what not to buy and where to buy in the Cambridge Property market can always be found on the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/

A little something special - or not so little with a 5.1% yeild

This is not the usual investment opportunity that I put on my blog but if your looking to start a portfolio with a few properties then why not have them all together?
This attractive terrace of 4 houses which is up for sale with Bradshaw/Carter Jonas with a guide price of £2,600,000 provides 20 rooms which are situated very close to the railway station and boasts a private rear garden. This property is currently used as halls of residence for graduate students so is ready to be let instantly as all requirements are already met.

Situated in an excellent central location very close to the railway station and many city amenities, this well maintained run of four almost identical properties extending to a total of 4,908 sq ft would make a great start or boost to any property investors portfolio.

The properties were built about 12 years ago to a good specificationm with double glazing, gas fired central heating and Telephone and TV points in most rooms. To the front of the properties is a small garden area with dwarf wall and railings which leads to the front doors and entrance halls beyond making them low maintenance and perfect for working professional sharers or students meaning an abundance of potential tenants and an average market room rental of £550pcm. 

So doing my maths based upon letting this property straight away in its current condition which isn't bad at all you would potentially earn £550 x 20 = £11,000pcm giving you a yield of 5.1%

For more pictures/brochure etc please see the link below:
http://www.rightmove.co.uk/property-for-sale/property-55360088.html

Cambridge tenants feel the squeeze as rents continue to rise.

As my regular readers know, my passion is talking about Cambridge property. As a property agent I like to comment on the Cambridge property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Cambridge as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Cambridge has nearly broken through the £1300 a month barrier as the average rent for a property in the city, now stands at £1288 per month, a rise of 0.7% last month, leaving rents for new lets 0.4% higher than they were 12 months ago.

House price inflation has certainly eased in Cambridge from the heady days of 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Cambridge rents are a sign that the Cambridge economy is picking up. 

This means Cambridge landlords are continuing to capitalise on the Cambridge property market. The most recent Land Registry data suggests the annual property price rises in the city have eased over 2015, leaving property values 7.11% higher than 12 months ago, so as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, there’s rarely been a better time to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the city, different types of properties are experiencing quite different changes.  For example, the average length of time the 156 Cambridge properties up for rent between £500 to £1000 per month is 61 days, whilst the average length of time the 244 properties at £1000 to £2000 per month is 52 days and 60 properties that fall into the £2000 to £5000 per month price bracket is an eye watering 101 days.

When you start comparing different parts of Cambridge, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the Cambridge Property Blog. In the Cambridge Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Cambridge property Blog http://cambridgeproperty.blogspot.co.uk/

5 bedroom terraced house with sitting tenants and an amazing 7.2% Yield.

This one is the ideal investment opportunity and available to purchase as a ready-made licensed HMO. Located in Orchard Park on Circus Drive and up for sale with Belvoir for £440,000 This property is a 5 bedroom unit which is currently achieving £2,640pcm.

It has a 5 year license which was renewed in April 2013 and It is fully furnished and equipped to HMO standards making it the perfect investment opportunity offering an amazing 7.2% yield which for the current time in Cambridge is fantastic.

For more pictures and information please see the link below, Don't wait around as this one will sell fast:
http://www.rightmove.co.uk/property-for-sale/property-51336061.html

Cambridge Property Market - Asking Prices Drop but Values rise

Those of you who regularly read my weekly articles in the Cambridge Property Blog will know I like to keep abreast of the Cambridge property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.

 Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the city have dropped, yet property values have increased.  The average asking price of a Cambridge property, according to Rightmove, fell 1.2% this month yet the average value of a Cambridge property rose by 0.9%.

So how does this relate in monetary terms?  This anomaly has driven the average asking price of a Cambridge property down slightly to £548,300 whilst the average value is now £394,300.

So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without research and can result in overpriced properties that don't sell. As the summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property.

On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, in a nutshell, Cambridge property values are continuing to rise and those homeowners in Cambridge who have properties on the market, last month on average, reduced their asking prices.. Great news for property owners and buyers alike!

In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Cambridge home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate.

Most homeowners don’t want to sell and have nothing to buy.

But that’s the beauty of the much maligned English and Welsh house buying process. You can find a purchaser for your property, and then ask them to wait. By agreeing a sale (subject to contract) before you try to buy sounds concerning to many, but with fewer properties for sale you need to have a buyer for your property or you will be treated as a less serious buyer yourself. If you cannot find the right home for you, you can slow the deal with your purchaser until it comes along. If nothing suitable does comes along and you lose your buyer then the worst outcome is that you have to find another purchaser or take your property off the market and stay put for now, and as long as you mention this at the start they must not commit to any costs until you have agreed your onward purchase.

However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 100 flats for sale, 81 terraced houses and over 50 semis for sale in Cambridge.  Landlord/Buy to let investors can normally pick up some bargains in the Autumn months, as sellers who are selling their homes often have a pressing need to sell by this time.

The types of houses a Cambridge landlord typically buys, are not the same types as the homeowners wanting to move to a posher area of the city as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones). There are in fact too many of these smaller properties for sale .. Just look at the numbers of properties for sale (mentioned in the previous paragraph).

If you are a landlord or thinking of become one for the first time, and you want to read more articles like this about the Cambridge Property Market together with regular postings on what I consider the best buy to let deals in Cambridge, out of the many properties on the market, irrespective of which agent is selling it, then you might like to visit the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/

The Spinney catchment area properties outperform Cambridgeshire average by 55.04%

 

I was having a chat with a Cambridge property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property.  Anecdotally, I have always known this to be true, a good school creates good demand and good demand does affect house prices.  So, I asked my colleagues on the front line, who take the phone calls from people putting themselves on our mailing list and they confirmed that most people cite location as their number one factor.

After looking through our mailing list, it confirms there is a close correlation between the high demand areas of Cambridge and the close proximity to a good primary school.  Talking to my team in a recent morning meeting, they agreed many people would look to increase their budget quite significantly, whilst others would consider downgrading their property requirements to be close to a good primary school.

Those of you who regularly read this blog will know I like a challenge, so I decided to look at the science behind these assumptions.  According to the SchoolGuide website, The Spinney Primary School is one of the best primary schools in Cambridge.  Its figures are certainly impressive. Their last Ofsted Report classified it as Outstanding, 97% of 11 year pupils achieving Level 4 or above in maths, reading and writing whilst 63% of them achieved level 5.  Finally, the schools’ KS2 rating was classed as Excellent.

Looking at property sales within one mile of The Spinney, property values have risen in value since 1999 by 230.62%, whilst according to recent figures, Cambridge average as a whole has risen in the same time frame by 148.75%.

That means the parents of The Spinney have seen the values of their properties rise proportionally 55.04% more than the Cambridge average ... interesting don’t you think?

However, whilst a good primary school significantly contributes more to house prices, the same can’t be said for secondary schools. There are two reasons for this, firstly, as secondary schools are much larger, so their catchment areas are correspondingly much larger, meaning parents don’t need to live so close to the school. Secondly, in the UK, whilst the difference between the top 25% and bottom 25% of secondary schools is not insignificant, in the primary school sector, the difference between the top 25% and bottom 25%, according to the London School of Economics, is considerably and significantly more.

Many other Cambridge landlords, both who are with us and many who are with other Cambridge agents, like to pop in for a coffee or ring/email us to discuss the Cambridge property market, to consider how Cambridge compares with its closest rivals and hopefully we can answer all their questions. You must take lots of advice and seek out the best opinion. One good source of opinion, specific to the Cambridge property market is the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

Cambridge’s £1.8 billion Mortgage Powder Keg

Eight years ago, in the summer of 2007, hardly anyone had heard of the term ‘credit crunch’, but now the expression has entered our daily language and even the Oxford Dictionary.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Cambridge Property market, but in November / December 2007, and for the following seventeen months, Cambridge property values dropped each and every month like the proverbial stone. The Bank of England soon realised in the late summer of 2008 that the British economy was stalling under the continued pressure of the Credit Crunch. Therefore, between October 2008 and March 2009, interest rates dropped six times in six months from 5% to 0.5% to try and stimulate the British economy. 

Thankfully, after a period of stagnation, the Cambridge property market started to recover slowly in 2011, but really took off strongly in late 2013 / early 2014 as property prices started to rocket. However, the heat was taken out of the market in late 2014/early 2015, with the new mortgage lending rules and some uncertainty, when some people had a dose of pre–election nerves.  

With the Conservatives having been re-elected in May, the Cambridge property market regained its composure and in fact, there has been some ferocious competition among mortgage lenders, which has driven mortgage rates to record lows. Whilst I have no actual figures to back this up, I know an awful lot of long serving bank managers, mortgage arrangers and people in the finance industry, all of whom have told me on previous occasions when interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise that was the catalyst for many homeowners and landlords to re-mortgage but the second or third increase.  The reason being that it was only by the time of the third rate rise,  it started to hit the wallet.  However, the issue is, by the time of the second or third rate rise the best fixed rates, were in all instances, no longer available as they had been pulled by the banks months before.

But here is the good news for Cambridge homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  I read that the well respected UK financial website Moneyfacts said only a couple of weeks ago, the average two year fixed rate mortgage has fallen from 3.6% twelve months ago to just under 2.8%.

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK.  So what about Cambridge?  In Cambridge, if you added up everyone’s mortgage, it would total £1.8 billion.  Even more interesting is when we look at Cambridge and split it down into the individual areas of the city,

• CB1 - Cambridge (Central, South), Teversham £744.9m
• CB2 - Cambridge (West) £289.9m
• CB3 - Cambridge (North-West), Girton £186.9m
• CB4 - Cambridge (North) £508.4m
• CB5 - Cambridge (East) £153.7m

Since 1971, the average interest rate has been 7.93%, making the current 0.5% very low.  So, if interest rates were to rise by only 2%, according to my research, the 7,491 Cambridge homeowners, who have a variable rate mortgage would, combined, have to pay an approximate additional £20,520,000 a year in mortgage payments.  That means every Cambridge homeowner with a variable rate mortgage, will on average have to pay an additional £2,739 a year or £228 a month in interest payments.

I know over the last couple of posts, I have talked about mortgages a lot however, I am not a mortgage arranger but a letting / estate agent and as regular readers know, I always talk about what I consider to be the most important issues when it comes to the Cambridge Property market and at the moment, in my humble opinion, this is the most important thing!

Buy to let is all about maximising your investment, increasing income and reducing costs.  I give advice, opinions, thoughts, concerns, worries, expectations and fears about the Cambridge Property market in my blog on the Cambridge Property Blog.  If you are interested in the Cambridge Property Market, you might learn something by visiting the blog.http://cambridgeproperty.blogspot.co.uk/

3 bedroom semi-detached house for sale with huge investment potential.

So today for you I have this potential little gem? Now you will have to spend some money so expect to spend considerably more than the original guide price of £375,000 which is being asked from Cheffins.
Now as it stands this property with a quick glam up would rent for in the region of £1,500pcm offering you a yield of 4.8% which that alone is about right for Cambridge right now. Of course the 4.8% is based upon you paying the full guide price and spending very little on refurbishing the property?
Lets just say you pay the full asking price of £375,00 which is reasonable and will certainly make you a profit over the next 5 years so your job is potentially done right? Wrong!! why just settle for a little profit?

So picture this.......

Buy the property for £375,000 apply for planning permission onto the side of the property for two ensuite ground floor bedrooms and two first floor rooms and then finally partition the living/dining room as its huge and will give you another bedroom ultimately now giving you a 8 bedroom HMO. So if you plan to spend 100k on the build and do the property up to a high furnished standard you would be left with six rooms renting for £550 pcm and two rooms renting for £625 pcm factoring in your HMO licence and the works entailed in becoming HMO compliant into your 100k you will find yourself spending £475,000 to obtain a high speck HMO in central Cambridge that would now earn you a monthly rent of £4,550 giving you an annual rental fee of £54,600 and a new yield of 11.5%.
That's a great yield and that's not mention that your property value has now increased vastly far superseding your extra 100K.

For further information on this property please click the link below:
http://www.rightmove.co.uk/property-for-sale/property-51615457.html

Interest rates set to rise – How will that affect the Cambridge property market?

A couple of weeks ago, I mentioned in this blog about how the Bank of England has been indicating recently that UK interest rates will be going up in the not too distant future. Therefore, if you are one of the 13,142 homeowners in Cambridge, who own your own home with a mortgage, then you need to consider your options and start to budget for an interest rate rise. However, if you are a landlord, who owns one of the 12,684 rental properties in the city, whilst your exposure to interest rate rises is lower, it is most certainly something you should be aware of.

Since the spring of 2009, British interest rates have been at a record low of 0.5%. It’s not a case of if, but when, they will rise. Some people think it will be before Christmas, although I am of the opinion, it will early in the New Year around Easter time, when they do rise. I also expect those rises will be slow, steady and limited. It depends on what is happens to UK wage rises, UK inflation and the general state of the British economy. Nevertheless, as much most of us in Cambridge would love to pull the shutters and stick two fingers up to the world, we have to recognise we are part of a global economy and global economic worries still exist to prevent an abrupt and instantaneous rate rise.

Those Cambridge landlords, who do have a mortgage, need to realise that as interest rates rise, their monthly mortgage costs rise. It’s easy to say you will look at your mortgage next month, then before you know it, Christmas will be here!  Don’t forget, mortgage lenders have always removed the juicy low rate mortgage deals a few months before interest rate rise. Speak to a qualified mortgage arranger, there are lots of them in Cambridge and seriously consider fixing your mortgage rate now.  You didn’t buy your Cambridge buy to let property for it to become a millstone around your neck. It’s all about mitigating your costs and maximising your income to make your Cambridge buy to let property the investment you want it to be.

However, on the other side of the coin, two in three landlords who have bought property since 2007, have done so without a mortgage. A rise in interest rates might be a good thing. Let me give you some background first, then I’ll explain why. Cambridge landlords have see their return on investment for their Cambridge buy to let property, over the last couple of years, perform very well indeed with Cambridge property values rising by 31.39% since the Spring of 2009. However, when rates do rise, whilst more expensive mortgage rates will ease the demand for borrowing, on the other hand, it may temper house price growth, making the property market more competitive... and therefore, we should see the return of some bargain property buys in Cambridge!

Finally though, can I ask all Cambridge homeowners and Cambridge landlords, who have a mortgage that isn’t fixed, they need to recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels.  I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage arranger and, if appropriate, fix your mortgage before interest rates rise. Don’t say I didn’t warn you!

In the meantime, if you are a landlord looking for a bargain now, don’t despair ... there are plenty out there, if you know where to look! One place is Rightmove, another Zoopla and another OnTheMarket. However, sometimes, you can’t see the wood for the trees. At the time of writing, Rightmove had 264 properties for sale in Cambridge, Zoopla 123 properties for sale in the city and OnTheMarket 119 properties ... where do you start?

A lot of savvy Cambridge landlords like to visit the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/, where, irrespective of which agent is selling it, I regularly post what I consider out of the hundreds of properties on the market, to be the best buy to let deal in Cambridge.   

Crisis in the Cambridge Property Market ..probably?

 

I don’t know about you, but if you watch Sky News every waking hour or read the newspapers, it always seems we as a Country, Europe or the World seem to lurch from one crisis to another. Another week, another crisis averted. It was only last summer the soothsayers were predicting the end of the world over the supposed house price bubble that many believed was developing in the South. Property prices were rising at 20%+ per annum in London, only for things to ease as the property market in the Capital showed a controlled slowdown and cooling in activity with price growth easing to a more realistic 8% to 9% per annum. Interestingly, there was no panic when some modest price drops were seen in some of London’s highest priced suburbs.

However, this month’s crisis is the buy to let boom and as George Osborne always likes to be topical, in the July emergency budget, he declared that he will start to scale back, from 2017, the tax relief that those high income tax rate landlords with a mortgage have benefited from. The Daily Mail ran headlines stating it was the end of the private landlord; predicting many landlords will give up on buy to let altogether and we will be inundated with rental properties up for sale as landlords feel squeezed from the market.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy to let property market could destabilise the whole UK property market. He was concerned landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

End of the world then?   .. this week, yes probably, but next week .. that’s another story!  Before we all go and live like a hermit in the Scottish highlands, let me explain to you my perspective on the whole subject. As I mentioned a few weeks ago, two thirds of buy to let properties bought in the last eight years have been bought mortgage free – so they won’t be affected by the Chancellors’ tax changes.  Also, something I feel is often overlooked but very important, is the fact that landlords historically have only been able to normally borrow up to 75% of the value of the rental property.  In the last property crash of 2008, property values dropped by the not so insignificant figure of 18.29% in Cambridge, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no landlord would have been in negative equity in Cambridge.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy to let, and the property market as a whole, will carry on relatively intact. It’s true reducing tax relief will hit landlords who pay the higher rate of income tax and this may slightly diminish buy to let as an investment vehicle, but I doubt people will sell. Many landlords have been lazy with their investments, buying with their heart, not their head. You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Cambridge property market as a buy to let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Cambridge buy to let market still offers good investment opportunities to new and old alike. Those who have bought in the last twelve to eighteen months have reaped the benefit from buying in Cambridge, because the city offered a combination of reasonable house prices with subsequently increasing rents.  Property values have risen by 13.02% in the last eighteen months in Cambridge, whilst looking at rents, in Q2 2015, average rental values for new tenancies were 7% higher than Q2 2014, and they rose by 9.4% between Q2 2013 and Q2 2014.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Cambridge Property Blog where I have similar articles to this about the Cambridge property market and what I consider to be the best buy to let deals around at anyone time in the City, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Cambridge .. you are missing out! .. http://cambridgeproperty.blogspot.co.uk/

3 bedroom semi-detached house for sale offering a 4% yield?

This 1950s semi-detached house occupies a popular and convenient location just north of the river, close to Stourbridge Common and the proposed new train station. It has been extended to the side to provide a tandem garage and large studio and offers particularly well-presented living space that has been significantly improved in recent years.
The property is for sale for £400,000 with TuckerGardner and is ready to let straight away with a monthly rental value of £1,500pcm offering you an instant and easy 4.5% yield.
This property would sell itself as a rental property for a professional family and will certainly earn you a nice little profit over the next 5 years with the new train station being built on its doorstep.

So if your looking for a nice easy hassle free investment then this is the one for you.

For more information on this property please follow the link below:

http://www.rightmove.co.uk/property-for-sale/property-36224697.html

5 bedroom semi-detached house for sale giving you a 6.3% Yield

This house is up for sale with Cheffins with a guide price of £450,000 and was constructed post war and enjoys an established position conveniently placed for the city centre, excellent local schools and commuter links. This makes this property either great for a professional family or if you look at the bigger picture the property would make a great HMO.
The property has been extended to almost double its original size and the current owners have carried out a programme of refurbishments. The re-development includes solar panels and an air source heat pump system. It is not only friendly to the environment but offers a potential purchaser a huge financial saving.

The kitchen/dining/family room has been refitted with stylish and contemporary storage cupboards which includes granite working surfaces and both bathrooms have been refitted with luxury suites potentially selling itself to tenants. The garden has been professionally landscaped and is generously proportioned yet easy to maintain and enjoys excellent levels of privacy making this property the perfect HMO for high end working professionals.

Why not offer these rooms for £600pcm per room which would give you a monthly income of £3,000, take into consideration the alterations for your HMO licence and the fact that you will now be liable to pay the council tax and you would be left with a yield of around 6.3% which is not bad at all for Cambridge.

You will find more pictures and information on this property by following the link below:
http://www.rightmove.co.uk/property-for-sale/property-51486079.html

Cambridge Property Values 7.1% higher than year ago

 

Cambridge property values rose by 0.2% last month, meaning they are 7.1% higher than 12 months ago. Overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the city, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Cambridge property market), the steady long term growth in Cambridge property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Cambridge property market is likely to continue in the second half of 2015.

However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Cambridge property market.  The two main points being low interest rates and a lack of supply of property.

 

Interest rates first - Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than one in seven (73% to be exact) in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going on one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, the affect on home movers sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth.

Shortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Cambridge is at an all time low. One reason is the large number of buy to let landlords who have bought Cambridge property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market ... thus restricting supply and sales. In fact over the last four months, only 2,704 properties in the Cambridge City Council area have changed hands and sold, compared to 3,420 in the same time frame in 2014, a not so insignificant drop of 20.94%. 

If you are planning on investing in the Cambridge property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Cambridge Property Blog http://cambridgeproperty.blogspot.co.uk/

4 bedroom detached house in Girton offering a 5.3% Yield and ready to go.

Looking through RightMove today I have stumbled upon this little beaut. This 4 bedroom property is up for sale with Hockeys with a guide price of £450,000. This property looks great inside and out and I know these types of properties rent for around the £2,000pcm mark with ease.

 

Now with added extras like this kitchen and stunning bathrooms this property could even command a slightly higher rent so why not be bold and increase your yield further? If you was to rent this property for the average £2,000pcm it would give you a yield of 5.3%

This property is in pristine condition and would rent with ease so if you are looking for an investment then this is the one for you. You can find more information and pictures on the link below:
http://www.rightmove.co.uk/property-for-sale/property-54210962.html

My concerns about the Cambridge Property market

 

I am genuinely concerned about the Cambridge property market, but in a way that might surprise you.  Rightmove announced that average ‘asking prices’ rose last month by 1.2% in the East, leaving them 7.4% higher than a year ago.  Whilst it could be said that monthly change is very modest, in the same period a year ago, we saw a slight monthly rise of just 0.7% in the East, which is more the norm given the onset of schools breaking up and everyone going on holiday.

Looking at all the data on the Cambridge property market; putting aside the need for more houses to be built in the next decade to balance out the increase in population (helped in part by inward European migration) but not matched by a similar increase in housing being built; my research shows there is a widening gap between what property buyers want and what is available to buy.  In a nutshell, many more buyers are looking for the smaller one and two bed properties (the typical terraced and smaller semi-detached houses/apartments), whilst there are a larger proportion of the four and five properties, which are the typical detached properties available.

Demand for smaller properties comes from both first time buyers and the growing number of buy to let landlords, where it is more cost effective and efficient to buy smaller properties to let out compared to larger properties which tend to offer poorer returns.  Also, landlords with larger loans (on those larger more expensive properties) will also be hit harder with the changes in the way tax is paid on buy to let investments, which start in 2017.

If you recall, a few weeks ago I did some research on how different types of properties had performed in Cambridge since the year 2000.  I revisited those calculations and it hit me how different types of properties had performed over the last 15 years.  In a nutshell, this mismatch of demand and supply isn’t a new phenomenon, it’s been happening under our noses for years!

In the last 15 years, the average terraced house in Cambridge has risen in value from £133,451 to £418,121 whilst the detached house has risen in value from £251,713 to £605,845.  Nothing seems amiss until you look at the percentage growth.  The terraced has grown in value by 213% whilst the detached by only 141% meaning the gap between the inexpensive terrace’s and expensive detached properties has in percentage terms narrowed enormously (this isn’t just a Cambridge thing, it has happened all across the Country).

I am concerned because more houses need to be built, not only in Cambridge, but in the East and the UK as a whole.  In particular, there is specific need for more affordable starter homes for the growing demand from both tenants (and the landlords that will buy them) and first time buyers.  The Tories need to face up to the fact that unless they can get the builders, the planners (to release more building land), the banks (to finance it) and themselves together, to ensure long term plans can be made, and implemented, this issue will continue to worsen.

The country needs 200,000 houses a year to be built to keep up with demand, let alone reverse the imbalance between demand and supply.  Last year, only 141,040 properties were built, the year before 135,510 and 146,850 in the year before that.  This means only one thing for Cambridge landlords.  Unless David Cameron starts to rip up huge swathes of the British countryside and build on acres and acres of green belt, demand will always exceed supply when it comes to property for the foreseeable future.

Therefore, investment in the local Cambridge property market as a buy to let investment could be the best move to make as the stock market investments are possibly on the wane.  Everyone is different and trust me, there are many pitfalls in buy to let.  You must take lots of advice and seek out the best opinion.  One source of opinion, specific to the Cambridge property market is the Cambridge Property Blog  http://cambridgeproperty.blogspot.co.uk/