Apathy In The Cambridge Property Market

 Apathy has hit the Cambridge housing market as sellers await the outcome of the general election and stricter mortgage regulation suppresses buyer demand.  This is mirrored around the UK as Rightmove reported the number of homes registered for sale per estate agent fell to its lowest level for five years in December, with available stock 10% lower than in the same month a year earlier. 

Looking at Cambridge, in the early Autumn of 2014, each estate agent in Cambridge had on average 16.7  properties on its books (as there were a total of 618 properties up for sale in Cambridge at the peak in the early Autumn just gone). Our research shows that number plummeted to 9.8 per agent in December.  While the lack of new properties coming onto the market in the later months of 2014 in Cambridge pushed asking prices up slightly from November to December, traditionally a quiet season for the housing market, property sellers will need to work hard in 2015 to complete a sale.

The length of time a property takes to sell has increased over the last few months. Two bedroom properties in Cambridge are now taking 55 days to sell, three bedroom 53 days, four bedrooms 83 days, but here an interesting figure, one beds are taking on average 70 days to find a buyer

2015 will be the year of the selective mover.  With only 405brand new properties a year being built in Cambridge since the turn of the Millennium, this woefully low and insufficient number of new buildings in the City over the past few decades and a systemic change in the type of properties homeowners want (with families splitting etc so we have too many larger houses and not enough smaller ones), buyers are becoming dissatisfied with, and therefore dismissive of what is up for sale.

I would confirm the heat has gone out of the Cambridge property market and I anticipate a moderate reduction from the high transaction volumes seen in 2014. That might mean Cambridge landlords could bag a bargain during this period of uncertainty, especially if the financial markets do not like the election outcome. Markets and buyers do not like uncertainty, but savvy Buy to let landlords know buy to let is a long term game, and irrespective of short term apathy, reduction in the quality and quantity of stock for homeowners to buy  or the election, if people don’t buy property they rent.  The Council aren’t building anymore properties, the council house waiting list is decades, not years for the better type of property .. the only other place to get a roof over your head .. rent a property!  Good old Bricks and Mortar!

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. Email me on cambridge@northwooduk.com

Scott Stewart

Fen Ditton Bungalow fresh to the market

I don't normally look into bungalows as they have a stigma that young working professionals wouldn't rent them, well guess what....you're wrong. I have friends who have rented and brought bungalows and working in the industry I see it regularly. So this two bedroom bungalow is on with Pocock & Shaw and does need some restoration. I would factor in £5000 for a tidy up new bathroom/kitchen, and don't worry you property investors will know the right people to get the work done at the right price one would assume? However we all know what happens when we assume so I have added and extra £2000 for safe keeping and any tins of worms lying around. This would then rent for £1200 a month showing a yield of 5.5%. I don't think that's a bad deal....do you?

                     http://www.rightmove.co.uk/property-for-sale/property-48358447.html

Cherry Hinton has one to watch !

 

 

 

On the market with Radcliffe & Rust is this little beauty. It has no work to do what so ever. The location is also spot on for the buy to let Cambridge market. You could pick this up for £172,500 and rent it out at £850 giving a cheeky 6% return. Obviously you will have lease charges to consider but the rental amount may also sit slightly above that.

The market seems to be getting busier now so keep an eye on this blog if you want to make some money this year.

 

 

http://www.zoopla.co.uk/for-sale/details/35995572

A Cambridge man’s home ..is his semi .. or terrace ... or bungalow!

Ok, a slight turn of phrase there on the classic, an Englishman’s home is his castle but when it comes to the UK  the ‘Brit’s are still a nation of homeowners ‘(although wasn’t it Napoleon who thought we were all shop keepers!). It  is interesting to note that up until the mid to late 1960’s, more people rented their home (albeit mostly from the local council) than owned their own. In fact, I was surprised to read that in 1921, oveer 75% of homes in England and Wales were privately rented with the remaining 25% being owner occupied. 

 It was only after the Second World War, when the Beatles were rocking, that people started to buy instead of rent .. but instead of owning our property outright, we borrowed money from banks and building society’s to buy them and the roots of the growth of the private rental sector can be drawn back to the late 1970’s early 1980’s, when the council houses began to be sold off under the right to buy scheme. Even though 22,443 households in Cambridge were owner occupied in 2001 and that number had only dropped to 22,171 households by 2011, the percentage of homeowner properties in Cambridge dropped drastically from 52.6% to 47.4%.  Why, because whilst an additional 4,056 properties were built in Cambridge between 2001 and 2011, a lot of them were bought as buy to let investments, thus more than doubling the number of private rental properties in Cambridge. In fact, the number of properties in Cambridge, that were privately rented jumped from 7,295 in 2001 to 11,170 in 2011!

 With stagnation in the number of people who own their home in Cambridge and no more council houses being built, this is increasing the number of people looking to renting, as everyone needs a roof over their head. With the Cambridge City Council house waiting lists being in the 5 to 10 year range for a decent property in a decent location, it shouldn’t be forgotten that it is Cambridge landlords who house tenants waiting for a council house. Cambridge landlords do not receive any subsidies from HMRC and income tax is paid on rent paid by the tenant combined these reduce the cost on the tax payer.

 However, it’s not all doom and gloom in Cambridge, as we have noticed more and more of the younger generation are renting because they can‘t afford to buy (raising a deposit being the sticking point for most), and a high percentage of the expansion in private renting actually from those who need and want temporary accommodation. There are even a few landlords who rent their own Cambridge property out for the short term, for ease, and not necessarily purely for profit.

 Therefore, with every report stating the rental market will continue to grow throughout the rest of this decade, with high demand and limited supply in the Cambridge, if you are considering buying a property for investment in the near future in Cambridge, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. If you are a landlord, new or old, I am certainly more than happy for you to pick up the phone or visit the Cambridge Property Blog  www.cambridgepropertyblog.com

Bar Hill Potential Investment

Having my morning coffee this morning scrolling through Zoopla as all us property maniacs do every morning this one really caught my eye, now Bar Hill is a little bit further out of the centre of Cambridge and therefore value for money is apparent. This perfect rental three bedroom semi is available to buy from the well known Tucker Gardner and is located on the quiet street of Hill Crest at £225,000. This would rent out for £1200 leaving a comfortable average yield of 4.9%. Apparently prices are rising and deals are becoming harder to find?

http://www.zoopla.co.uk/for-sale/details/35823830

Why this might not be good time to get into the Cambridge Buy to let market

 

The buy to let sector in Cambridge, in fact the whole of the East Anglia buy to let sector is doing very well at the moment, but it can be a minefield. I could regale you with many stories where investors have got it tremendously wrong in Cambridge, like those charming and well presented 1930's town houses on Brampton Road in Cambridge. One sold in 2007 for £234,000 in 2007, just before the crash. It sold again in November 2014 for £234,000. It is interesting to note that house prices in Cambridge are on average are 25.8% higher today than the 2007 peak (someone got a bargain!).  The thing is, I still see mistakes being made on a  day by day basis in Cambridge, such as some modern one bed apartments  in the City on the market for the price of a decent  two bed apartments (and in my opinion) much more desirable areas. If you make even a small mistake, it could still prove to be very costly.

Mortgage rates on buy to let are really low at the moment and for the right property and person you can get rates below 3.9% if you put down a decent deposit of 25%, but the best rates are for deposits of 40% deposit and, as I type this, you can get a 5 year fixed rate buy to let mortgage from the Post Office for 3.65%.  Also, the deposit will ensure you have plenty of equity in the property, if the property market stagnates in the future. The important thing to remember is the amount you can borrow is driven by the rental income, so it is vital you can identify a property with a decent yield that lets easily.

Finally though, if you are investing so much time and money in building wealth for you and your family, it is equally important for you to identify ways to protect it.  Do not forget, if you spend years building a successful property empire in Cambridge, when you pop your clogs, your family could face an inheritance tax bill of 40 %, which they would have to pay within six months of the death.  In a buoyant market, selling in six months is not an issue, but what if the market was like it was in Cambridge between 2008 and 2012, when things took seasons to sell, not weeks.  Quite apart from losing nearly half of the assets you built for your family to the tax man, if they had to sell some of your portfolio, possibly at a discount because the taxman wanted his money so quick, it might be wise to consider some life insurance that will offer protection against inheritance tax.

There are plenty of good advisors in Cambridge that can help you with the mortgages and life insurance.  However, we are a letting agent, so what we can help with is choosing the right Cambridge property to buy.  It’s in our interest to do so, because if we offer the best advice and opinion, without any conflict of trying to sell you anything, you might consider (although there is no obligation) to trust us to manage the property.  If you want to know what the best deals are in Cambridge, then visit the Cambridge Property Blog www.cambridgepropertyblog.com.

 

Fenstanton offering perfect investment property with great return.

So this morning I saw this little beauty with Ellis Winters. You wouldn't have to do anything to it other than the obvious...BUY IT. The area itself is very sought after so expect it to fly out the window.

I can honestly say for a two bedroom in that area and for that price it will sell extremely quickly. In fact I would click the link below on Monday and weep as you realise you missed out on a yield you could only dream of. On the market for £229,995 you could rent this with for £1200 achieving nearly 6%.

Need I say more.....

http://www.zoopla.co.uk/for-sale/details/35344564

What properties are actually selling in Cambridge?

Prices up, prices down, prices stable.....  the newspapers are full of good news, bad news and indifferent news about the Brit’s favourite subject after the weather.....  the property market. The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way.  At one end of scale is London, which has seen average prices grow in the last twelve months by a shade under 19% (and again that is an average because some Borough’s in London have risen by 26%) whilst in the land of Daffodils, by contrast, Wales only saw a 2% increase in property values (although in the Merthyr Valleys they dropped by over 11%).

Well we can’t ignore the rest of the UK, and we can’t forget that the Chancellor’s Stamp Duty reforms have polarised the London property markets above £1,000,000 because at the top end of the market, punitive Stamp Duty charges will dampen demand further. While the Bank of England warned of the growing London property price bubble in the Spring of 2014, even talk of a recovery in some areas was premature. In 2015, irrespective of where you are in the UK, one story will unite the patchwork quilt of markets – really slow property value growth.

But what about Cambridge? Well, we haven’t had the December figures from the Land Registry yet but the last few months’ activity and prices achieved would suggest neither house price growth nor drops.  In fact, most sellers are buyers anyway, so if you need to take less for yours, you won’t have to pay as much for the one you want to buy ... and that is good news for everyone as most move up market when they move. This is even better for landlord investors, as they can bag a bargain as well.

The question you should be asking though is, not only what’s happening to property prices, but which price band exactly is selling? I like to keep an eye on the property market in Cambridge on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Cambridge. 

Over the last two months (62 days to be precise), 79 properties with asking prices under £300k have come onto the market in Cambridge  and 53.1% of them (42 properties) have a buyer and sold stc. Between £300k and £450k, of the 120 properties that come on to the market, an almost identical proportion (54.1%) of them (65 properties) have a buyer. The £450k to £600k price range has seen 42 properties come on to the market, and 30.9% have a buyer (13 properties).  Finally, the £600k+ range has been slower, with only 13.7% (8 properties) of the 58 that have come on to the market in the last 62 days finding buyers.

The next three months’ activity will be crucial in understanding which way the market will go this year and I honestly believe we will not see any house price growth or drops this side of the election. Election or no election, people will always need a roof over their head and that is why the property market has rode the storms of the Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s (and especially Cambridge’s) chronic lack of housing will prop up house prices and prevent a post spike crash..... there is always a silver lining when it comes to the property market!

Another Cambridge investment not to be missed.

I saw this property on Zoopla this morning so thought I’d share it with you as it has potential to achieve an annual yield of 5.9%.

Being relatively cheap to buy at £180,000, this sort of property would easily achieve around £900.00 pcm in rent.

With the market the way it is at the moment, Tucker Gardner have it on the market and say they do not anticipate it being available for long and I have to agree, this type of property will fly out of the door so get down there and speak to them!

 

 

 

 

 

http://www.zoopla.co.uk/for-sale/details/35823824

Ideal investment oppertunity with a 4.8% Yield

This ideal investment opportunity is on the market with Belvoir for £250,000.
Located on the popular development of Orchard Park, convenient for Cambridge Science Park, A14 and the City Centre. This immaculate property comprises 2 double bedrooms, large lounge/diner and fitted kitchen with built in appliances, gas central heating and boasts allocated Parking which is a great selling point for tenants in Cambridge.

Looking at the pictures and reading into this property it appears as though it is in great order meaning that it is ready to let straight away and looking into the local market rental value this apartment should reach £995 pcm giving you an annual yield of 4.8%

Being a low maintenance property means that this one wont be on the market for long so make sure you grab it fast!

http://www.rightmove.co.uk/property-for-sale/property-50310902.html