Why am I receiving more enquiries from Buy to Let investors? It’s not just because of the recently announced stamp duty rise.
The last 6 months has seen a large increase in the number of enquiries coming through our door from investors looking to purchase in Dunstable and the surrounding areas. This is mostly due to the affordability of property in the area and the demand from tenants. With the stamp duty changes due to start on 1st April many are also now trying to push their new purchases through before the deadline when the extra 3% stamp duty on Buy-to-Let purchases will hit them.
I welcome all investors who wish to visit the shop to talk about possible investment property in the area, the best places and properties to invest in and the likely rents achievable. This is why you will find me presenting the Lettings Update every month at the Luton Property Investors Network (PIN). (If you would like to attend for Free contact me for a voucher code)
Yesterday a landlord walked into our shop asking where the best place to purchase a 3 bedroom house in Dunstable was. He lives in Hemel Hempstead and the cost of purchasing a house in his area as an investment now makes it unaffordable and the rental yield is now too low because of this.
Like many landlords in London and Hertfordshire he is aware that he has been priced out of those areas by the cost of housing and therefore he has investigated the surrounding areas and realised that Dunstable and Houghton Regis offers good housing, at affordable prices, with a high tenant demand from local workers. The accessibility to the M1 is also appealing for workers who need to drive into London or use the M1 for work.
A quick check on Rightmove and there are eight 3 bedroom houses on the market at under £250,000 in Dunstable and 18 more between £250,000 to £300,000. His budget was up to £300,000 which gave him plenty of choice in the area. With rents for 3 bedroom houses generally ranging from £950pcm to £1,250pcm he was looking at a rental yield of at least 5% with no service charges or ground rent to consider.
Many investors are fixed on the type of property they wish to purchase as an investor and with that budget he could have considered purchasing a couple of 1 bedroom apartments.
At the moment in Dunstable a good modern 1 bedroom apartment will cost around £125,000 and will rent for £625pcm. Of course there would be service charges and ground rent to consider, but the demand and choice of tenants for 1 & 2 bedrooms is far higher than 3 bedroom houses and it is unlikely that both apartments would ever be empty at the same time reducing the amount of rent lost during void periods.
During writing this article I had a couple of ladies arrive who had an appointment booked for them by my colleague. I had no knowledge what the appointment was for and was surprised to find that they were looking to purchase a 1 bedroom property and their budget was £125,000. An opportune moment to show them the above text on my screen explaining exactly what they were looking for ! Having discussed the various 1 bedroom apartments on the market and the pitfalls of a couple they had just been given the details of by one of the Estate Agents they left much better informed and ready to do battle with the other agents. They will be emailing me links to any properties they have an interest in so that I can advise on their suitability as an investment.
Our friends at Deakin-White ( http://www.deakin-white.co.uk/ ) who opened in Dunstable in June and have been very successful in selling all the properties placed with them confirmed that the majority of their buyers are from London and they have established a tie-up with a London Agent to capture that market.
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