£80,000 flat with high return, CASH PURCHASE ONLY

I've highlighted flats in Northampton House previously on this blog, as these are always attractive to investors when priced sensibly, and another appeared on Rightmove yesterday which meets this criteria.

This is a 2 bedroom apartment with large balcony in Northampton House - very central location.

Here it is in all it's glory! http://www.rightmove.co.uk/property-for-sale/property-61104880.html

It will rent without issue for £650PCM, and looks to be in good order. It will need to be a CASH PURCHASE as getting a mortgage in this building is tricky, and the service charge will be high too. Irrespective if you buy it with the intention of retaining it for a while it's difficult to see how you can go wrong - even with the high service charge you'll get a high return on investment here.

Pros.	Cons
Great Central Location	Cash Purchase Only
Further Regeneration Planned Locally	High Service Charge
Cheap
VERY rentable – strong tenant demand
High yield – over 7% after charges

richard.baker@belvoir.co.uk with any queries

APARTMENT BLOCK DEVELOPMENT - BUILD & SELL / RENT

Not the type of deal that's featured on this blog previously, but I'm in discussions about a piece of prime development land that's about to come to the market.

Whilst I don't have plans yet, this is a town centre plot with outline consent for around 40 apartments. It's a good location, in a proven rental area. It would need someone to buy it, build it, then either rent the apartments or sell them - clearly I'm looking to be retained for either. I'm talking to a couple of interested parties already, but would be keen to hear from companies or individuals who have a track record of delivering on this type of development - it's not one for the amateur. Alternatively for those with finance, I could introduce a builder who has delivered previously to the required high standard. A crowdfunded solution is less appealing to the vendor. 

Headline figures suggest it would cost in the region of £1.5m to buy the land, and the finished apartments would have a market value of around £4.5m, sold as individual units. Rental income on the whole lot should be in the region of £0.35m per annum.
Please email me as required. richard.baker@belvoir.co.uk

Changing Markets : Rising Rents in Northampton

I was talking to a landlord earlier today who has had properties in Northampton for a decade. As he'd admit himself he bought at the top of the market in 2006 / 2007 so has had to wait some time for his properties to regain their value after losses in 2007 / 2008. But they've always been rented - we calculated that Belvoir had signed up over 20 tenants for him over the years off 3 properties so the income has never been an issue.
What's interesting is that the income is now starting to rise. Since starting the business in 2006, we've never really struggled to find tenants - it's usually landlords and properties that we're short of. But until recently this hadn't translated into rising rental prices.

The graph above shows the rent actually achieved for a 2 bed house in St James - in Wimbledon Street. I've chosen this one as it's a fairly typical rental property - the type of thing a lot of people own and a lot of tenants want. It's in decent to good condition and doesn't really have void periods. 

You'll note that for the first half of the last decade the amount of rent only crept upwards slowly. We were getting something starting with a £5 for it and when we tried for something starting with a £6 nothing really happened. But move on to 2017 and we'll get something starting with a £7 and this is the case for most other 2 bed properties that are in decent condition and in decent areas. 

It's the same with most other types of property too: 1 bed apartments that for years have traded at around the £500 mark are now achieving £550 assuming the condition is decent. 3 bed houses that for years have been somewhere between £750 and £800 are now at £900 with very little issue. There's been a general upward movement of 10%-15% for most places up to 3 beds. 

And the rise is being caused by supply and demand. There's a lack of supply because fewer people move out of rental property these days, and also because there hasn't been a huge amount of new build in recent years - particularly of smaller properties. Equally there's ever increasing demand - over 70% of enquiries for rental properties are from EU migrants who have little trouble finding employment given the huge and increasing warehousing industry around Northampton. The result is appreciating rental prices. 

The landlord I was speaking to related higher rents with higher property prices - if it costs me more to buy it, I can charge more to rent it, etc - but I'm not sure it's that simple. It's hard to envisage a situation where demand for rental property may significantly fall in Northampton, but if it did that certainly would squeeze returns for owners who's bought more recently. 

£150,000 - FREEHOLD - 6% return

6% used to be the net return figure that everyone tried to avoid going below, but these days not much offers a return of this level so a freehold, ALREADY TENANTED at this level is a good buy in relation what else is available in the same price range.

This is a 4 bed ex Local Authority house in Thorplands - tenanted already at £750PCM. It's in good internal order (or was when the tenant went in!) so is not one you'd be expecting to spend a fortune on in the near future.

If you look at comparables in the area you'll see that some 2 beds and quite a few three beds are priced at the same level or in excess of this - so it's actually quite good value at the price the vendor is asking. It's one that sold, but it doesn't look like the purchaser can raise a mortgage - we're seeing quite a bit of this currently and I'll be blogging on it later this week.

All enquiries to richard.baker@belvoir.co.uk as ever.