The latest analysis from the figures produced by Zoopla show a slowdown in the housing market so it should be a good time for an investor to look into buying their next property
A check of the latest statistics from Zoopla for Dunstable, Leighton Buzzard and Hemel Hempstead show that in the last 3 months prices have dropped in all these areas by just over 2%. We had seen a rise in the last 12 months of 7.48% in Dunstable, 6.84% in Leighton Buzzard but only 4.54% in Hemel Hempstead as the London housing market cooled and this in turn affected the towns on the outskirts such as St Albans and Hemel Hempstead which had previously seen large increases in property values and rents.
I highlighted in an article last week how a number of properties have been reduced in price since 1st April in the Dunstable area and I have also seen some properties that had been advertised for rent also being reduced recently as agents pushed the prices too high.
A comparison of the 3 towns to see where the best investment purchase would be for a rental yield shows that based on Zooplas current figures the average rental yield for a 1 bedroom apartment in Dunstable would be 6.42% against 4.48% in Hemel Hempstead, a 2 bed apartment would be 6.4% against 4.05% in Hemel Hempstead and a 3 bedroom house in Dunstable would be 4.65% against 3.92% in Hemel Hempstead so all round a better choice would be Dunstable right now. For Leighton Buzzard the figures are slightly better than Hemel Hempstead but still about 1.5% below Dunstable for all 3 property types.
With the average asking price in Hemel Hempstead at £379,410 and for Dunstable £212,981 we can see that Dunstable for many is an affordable area to still invest in with a better return on your investment.
As always I recommend an investor asks for a rental valuation from an independent local Letting Agent before purchasing a property and a conversation last week enforced why this is so important.
A landlord who called me last week had a 2 bedroom apartment on the market for a month with very few viewings and no tenants found. I had spotted this when it came to market and it stood out like a sore thumb as and it had been advertised at £925pcm on a development where the market value was £800-£850pcm maximum. It might be that the Estate Agent had sold him the property by suggesting a rental figure of £925 but by last week he had reduced it to £850 before speaking to me. Without seeing it I suggested a figure of £825pcm as it was now an ‘old’ property and had lost the market interest by being advertised too high. He asked me to see if we knew of anyone who would be interested without marketing as he now had it on with 2 agents already. A few calls and I came across a lady who did want to take the property at £825 but had already seen it with another agent and was still thinking about it. Leaving the matter in her hands to choose the agent to use she did go back to the one who showed her the apartment, discussed the £825 figure which was agreed with the landlord and he now has his apartment rented. The whole episode cost him money while it was overpriced and empty and yes I didn’t get to rent it for him, but assisted in the process of him finding a tenant and have now built some trust into a relationship started with a chance phone call.
Daniel Bourke is the owner of Belvoir Lettings Dunstable and in his previous career in Architecture he was an Associate in a leading London Architectural practice