Boydens Buy To Let 5.7% Return

This period two bedroom home has recently been reduced and is offered with no upward chain and is situated in the popular New Town area offering good access to the Town and Railway station.

In the current market the property would let between £595 - £625 PCM and if purchased at the asking price would achieve a gross yield of 5.5% - 5.7%. This not only offers a strong rent return but also a long term investment.

For further details see the link below

http://www.rightmove.co.uk/property-for-sale/property-40137309.html

Private Renting in Colchester increases by 340.72% in 20 years

You find me in a reflective mood today as I want to talk about the future of investing in property in Colchester. The truth is that we have got fat and lethargic, with many people having mistaken the ever rising Colchester (and in fact the whole of the UK) property market since the 1960’s as the eternal gift that kept giving as property prices constantly rose and doubled every five to seven years.

The days of making money from property as easy 
as falling off a log, like taking candy from a baby are sadly 
over my Colchester Property Blog reading friends

Whilst George Osborne has decided now is the time to milk the ‘Golden Cow’ of UK’s private landlords, with changes in taxation for buy to let property, many pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable and safe return on property with these changes. You see, I have always seen investing in the Colchester buy to let market (as I would anywhere in the UK), as I might see mother nature, creating some truly wonderful stunning warm weather but at the same time, she will bite, creating catastrophic situations such as snowstorms and hurricanes.  You need to study the market, take advice and opinions from many people and then decide what the proverbial property weather will be … remember, tenants will always want a roof over their head and I don’t see the HM Government building the millions of houses required to house them?

Nobody knows the future, and yes people can predict but I wouldn’t be afraid of this change .. because as a famous French proverb says, (I told you I was a reflective mood today), ‘the more things change, the more they stay the same’.  I mean, no one could have predicted how the property market has changed in Colchester over the last couple of decades? Looking specifically at the Colchester Parliamentary Constituency, twenty years ago, 25,502 households (meaning 65.65% of property) was owned and only 2,033 households were privately rented (meaning 5.23% of property was rented out by private landlords). Roll the clocks on twenty years and the change has been seismic …. Now 26,723 of properties in the Constituency are home-owners (a drop to only 58.74% being owner occupied) and the jump in private renting has been out of this world, as 10,487 properties are now privately rented proportionally 23.05%). (NB Neighbouring Constituencies show similar changes as well).

Who would have predicted in 1995 the private rental sector in 

Colchester would have grown by 340.72% in the proceeding 20 years?

Also, if you had asked someone in 1995 to predict what would happen to property values over the proceeding 20 years (ie between 1995 and 2015), they might have predicted similar growth to the growth experienced over the previous 20 years (ie between 1975 and 1995), which was a very impressive 351.55%. Yes, property values in Colchester have increased over the last 20 years (between 1995 and 2015), but by a more modest 246.45% (and most of that can be attributed to house price growth between 2000 and 2006.) 

The property market is constantly changing and buy to let for too long has been heavily dependent solely on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the doom-mongers and see it as bringing many opportunities. You might need to change your buy to let benchmarks, your approach to financing or even consider places other than Colchester in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.

The advice I give to my landlords, and you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Colchester buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise Colchester buy to let landlords to thrive in. If you want to learn more about the Colchester Property Market, feel free to pop in for a coffee at our office for a chat with me.

Fenn Wright Buy To Let 6.2% Return

This modern two bedroom top floor apartment has recently come to market with Fenn Wright, situated within immediate walking distance of the Town Centre and North Railway Station.

In the current market this property would let for £675 pcm and if purchased at the asking price would achieve a gross yield of 6.2%. This is a fantastic return and the property would also offer a great long term investment.

For more information and to see the internal photo please follow the link below.

http://www.rightmove.co.uk/property-for-sale/property-50316575.html

Colchester Buy to Let sees returns of 13.18% in 2015

Well, as Spring is upon us I remembered that a few days after New Year, I got chatting with one of my out of town landlords who was back in Colchester visiting his family.  Brought up in Colchester, he went to the Colchester Royal Grammar School for Boys back in the 1970’s and is now a University Lecturer in central London.  To enhance his retirement, he has a small portfolio of four properties in the town and wanted my advice on where to buy the next property in Colchester (as he lives in a college owned flat and anyway, would never dream of buying where he lives in Kensington (where the average value of a flat is £1.62m and a town house £4.1m.    Eye-watering to say the least!!).

Before I could advise him, I reminded him that the most important thing when considering investing in property is finding a Colchester property with decent rental yields for income returns, yet at the same time, it must have the potential for capital growth from rising house prices over time. Going into 2016, Colchester landlords will be under more pressure to find the best permutation of yields and capital growth, as extra stamp duty charges for buying properties and a squeeze on mortgage interest relief will raise their costs.

However, (you knew there would be a however) before we look at yield and capital growth, one important consideration that often many landlords tend to overlook, is the propensity of how likely the rent will increase.  Interestingly, the average rent of a Colchester property currently stands at £945 per month, which is a rise of 1.4% compared to twelve months ago (although it must be noted this rise in rents is for new tenancies and not existing tenants).

Anyway, back to yield and capital growth, the average value of a Colchester property currently stands at £290,400, meaning the average yield stands at 3.90% per annum, which on the face of it, many landlords would find disappointing.  That is the problem with averages, so if I were to look at say 2 bed houses in Colchester which are the sort of properties a lot of landlords buy, in Colchester, the average value of a 2 bed house is £192,200, whilst the average rent for a 2 bed house is £758 per month, giving a yield of 4.78%.   However, if that wasn’t high enough, there are landlords in Colchester who own some specialist properties with specialist tenancies, that are achieving nearly double that yield – again it comes down to your attitude to risk and reward (give me a tinkle if you wanted a chat about those sorts of properties – although they can be fun and games!).

Ultimately investors want to be making gains from both rent and house price growth.   When combined, the rental yield and capital growth gives you the return on investment, and that is what I told our University friend from Kensington.   Return on investment is everything.   So, looking at property values in Colchester have risen in the last year by 8.4% …. which means the current annual return on investment in Colchester for a typical 2 bed house is 13.18% a year .... not bad.