We have a number of new developments in Dunstable which are attracting a number of enquiries from investors asking me about their suitability as a property investment.
There are a number of buyers who are usually new to property investment and are understandably attracted to a new property with its clean modern finishes and NHBC 10 year warranty, but there is usually a premium to be paid for this. Just as in purchasing a house in an area and having a budget for that type of property there will always be a ceiling price for a rental property and just because you have paid £30,000 more for that property this doesn’t mean you can command an extra £100 per month or more over a similar property that might be only 10 years old.
If for example one of our investors was looking at the new Linden Homes development in Dunstable they would be looking at paying £175,000 - £200,000 for a 2 bedroom apartment. Currently an equivalent 2 bedroom apartment in The Parklands in Dunstable, a sought after gated development in the Theatre District, would be available for a maximum of £160,000. To achieve the same return as can be achieved on The Parklands apartment when purchasing one of these new apartments by Linden Homes you would have to be asking £100-£200 per month more from your tenants. Not only are you unlikely to find tenants in the area searching for a 2 bedroom flat in that price range, but you have now stepped easily into the 2 bedroom house rental market and even the rental figure for a good 3 bedroom house if you are asking for the higher rental figure.
When we then look at houses we find that many period properties can offer features that are rarely found in new-builds and investing in them makes good business sense because they tend to outperform new homes in terms of rental levels and enjoy above average price rises.
Of course, contemporary properties have their own attractions, with many investors keen on the fact that such developments are literally ready to go. Not everyone has the funds available to refurbish an older house, or is able to wait several months before it is ready to let and start earning income.
However sometimes the easiest property to let is a well-maintained, well-equipped, older one that has been finished to a high specification.
Such homes are always in big demand and rarely stay on our books for long. If a landlord is looking to invest in a property that never sits empty, then the best bet is very often one with age and character.
When discussing the pros and cons of older properties with investors I will normally offer the following advice:
Older properties may require more work upfront and will need a bigger on-going maintenance budget than a new build, but the rewards are worth it.
Get it right and you will find yourself with an investment that not only yields a secure, premium rental income but also goes up in price at a rate faster than that of the average new-build.
Will the distraction of parties & presents and the slowing of the housing market for Christmas and New Year mean now the best time for the property investor to go to work ?
We always hear it this time of year that the housing market slows as everyone turns their attention to Christmas and New Year but what of the properties that do get listed during this time which are overlooked until the New Year. The smart investor will keep an eye on what comes to market for the next few weeks and get those viewings in while everyone else is distracted by parties and presents.
A quick look to see what has just appeared on the market and these 2 properties could be worth a look.
A spacious 2 bedroom house on Princes St which is chain free and in need of modernisation.
Close to Dunstable town centre, 2 double bedrooms, a living room and dining room this type of property is very popular with tenants.
The guide price is £190,000 but allowing for the work required there must be some room to negotiate on this figure and I would guess a quick sale is preferable. The rental figure on a good 2 bedroom house in this area is now in the region of £850pcm
It is on the Market with Taylors and the details are here Princes Street 2 bedroom House
A refurbished 1 bed aground floor apartment on the High St with parking and new lease.
The bedroom is at basement level with a window but is over 7m long at its longest point and the lounge above is also as long.
As a refurbished 1 bedroom apartment with parking in Dunstable you would be looking at a rent of approximately £600 plus pcm and the asking price is in excess of £108,000
It is on the market with Connells and the details are here High Street South 1 bed apartment
It would definitely be worth keeping an eye on new properties appearing over the next few weeks for any that could be snapped up while the market is quiet for buyers.
If you do see any properties during the next few weeks and would like me to give you an opinion on their suitability for renting and a guide on the potential rent please enter the details and submit the form below.
Why investors and landlords should note the The Highs and Lows of recent house sales in Dunstable and Houghton Regis
As we reach the end of the year it is always interesting and useful to see how some of the properties in Dunstable and Houghton Regis that have recently sold have performed. Although I am a Letting Agent I must always be aware of the trends in house prices as well when advising landlords and investors which properties and areas are best for their next purchase.
Let’s start with properties in the LU5 postcode.
The properties that have performed well include No.32 Sundown Avenue which is a 3 bed semi and sold in March this year for £302,000. This was resold in September just 6 months later for £345,000 an increase of 14%. Another property that sold in September was No.3 Hayley Court a 3 bedroom detached house. This house was sold in January 2014 for £190,000, but sold in September this year for £270,000 an increase of 42% in less than 2 years.
However some of the developments that completed in 2006/2007 are yet to reach the prices that were paid for them at that time and we have had many new landlords purchase a bargain in these developments as the owners decide to sell now that the prices are rising.
Take for example No.10 The Parklands, a sought after prestigious gated development close to the centre of Dunstable and next to the theatre. This 1 bedroom apartment was sold in November 2006 for £154,000 and it was sold in October this year for £121,000 a figure that is 21% below the purchase price. No.24 Bramley Court which is in a development right next to the new Amazon Fulfilment Centre was purchased in August this year for £142,000 but was previously bought in November 2006 for £169,995 a drop of 16.5% on the new purchase price.
If we now look at the LU6 postcodes which are centered more on Dunstable town centre we can see similar rises which is no surprise as we have recently seen a large number of owner buyers and investors from London purchasing property in the area. On a recent night out with some local businesses I was talking to the owners of Deakin-White an Estate Agent based in Dunstable who opened in June this year. They have had a huge impact on the local sales market since and they confirmed that the majority of their buyers are from London.
A four bedroom detached house at 154 London Road was purchased in July 2014 for £320,000 and sold in August this year for £387,500, a rise in value of 21%. Nearby No. 125 London Road a 2 bed maisonette sold in October this year for £155,000 having been purchased in July 2014 for £125,000, a 24% rise in just 15 months. Another surprise was No.71 Frenches Gate to the North of Dunstable. This is quite a modern development and a 3 bed semi purchased here in May 2014 for £189,950 sold in August 2015 for £230,000 an increase of 21%.
In contrast we saw No.48 Watling Gardens which would seem to be a shared ownership 2 bedroom apartment sold for £60,000 in July 2015, a drop of 22% on the purchase price of £77,500 in September. Also No.34 Oldhill a 3 bedroom house which was purchased in November 2009 for £170,000 sold for £152,750 in July 2015, a drop of 10% on the purchase price.
It is information such as this that landlords and investors need to consider before buying their next investment property, and a meeting with a local property expert is invaluable.
If you would like to discuss the local market further and would like advice on which properties and areas are the best for purchasing your next investment property please fill in and submit the form below.
I have been reading a few articles about the Buy-to-Let market slowing down and investors considering their options following the chancellor’s recent announcements, but so far I have seen no sign of this and the landlords contacting us for advice on which properties they should be buying hasn’t slowed down at all. This could in part be due to the huge demand for rental properties in Dunstable following the recent opening of the Amazon Fulfilment Centre, the announcement that another major employer Signature Flatbreads is increasing its staffing level by 200 and the increasing number of companies locating to the Woodside Industrial Estate.
A year ago I would have told you that 2 bedroom properties are the most sought after and although still in huge demand most enquiries are now for studios and 1 bedroom apartments which is probably an indication of the changing workforce in the area.
One of our existing landlords who has a 1 bedroom apartment in Dunstable has been investigating various investment strategies over the last 6 months and attending seminars on Rent to Rent and Options. He also attended our recent Tax information evening we held for Landlords to update them on the recently announced changes. This week he called me to say that after all his investigations he has decided that singles lets are his best option and after reading my recent articles and talking to me at our information evening he is looking to add 2 more 1 bed apartments in Dunstable to his portfolio.
We also had a retired couple who have previously held a portfolio of properties in Hertfordshire and Bedfordshire and are now looking to invest again visit our shop in Dunstable. After a discussion about the area and the potential for investing and demand for rental properties they are now actively looking for good quality apartments. We will of course be working with them and advising them on the suitability of any properties that catch their eye.
Another investor I spoke to 3 months ago called yesterday as he is just about to complete on an apartment and is looking for more. He has a number of properties in Watford but the increase in property prices close to London means that the figures no longer stack up for him and his chosen investment town is now Dunstable. We expect to be working with him on a number of properties in the near future.
These are a few amongst many enquiries we have had from investors this week and why I am not seeing any negative effect form the recent announcements, but Dunstable would seem to be an investors choice at the moment with its proximity to London, the creation of jobs and the increase of small and large businesses locating to the area.
If you are thinking of investing in the Dunstable, Houghton Regis or Leighton Buzzard areas and would like an unbiased opinion on a property you are interested in purchasing as an investment or a revaluation of an existing property you own and are currently renting please enter the details below
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