South West property prices take a tumble, but Bournemouth still on the increase!

The Land Registry has today released the property price data from March, and it shows a surprising picture. As you know, March was the last month for investors to complete on purchases before the increase of Stamp Duty on the 1^st April. With this in mind, it was predicted to be a heated month of property transactions and inflated property prices – but what actually happened was transactions tumbled by over 5% and prices across the UK fell by 0.5% - the greatest tumble in over 6 months.

The South West, having seen a high annual growth of 6.7% as at the end of February, saw one of the biggest property price tumbles in the UK – a huge drop of -0.9% in monthly property prices. This however had no effect on the property prices in Bournemouth which has seen yet another month of consecutive property price increases, +0.7% on last month which continues to exceed property price forecasts made before the start of the year. This brings the average price of a property in Bournemouth to £196,262 which is an annual growth of 7.9% compared with March 2015.

As the property market slows down, Bournemouth Landlords realise the true cost of the Stamp Duty changes

From the 1^st April 2016, Stamp Duty has increased for the purchase of investment properties and additional homes. As many of you will know, this change has increased the cost of Stamp Duty by 3% of the overall purchase price of the property affecting tens of thousands of buyers. It’s no surprise then that we saw huge increases in volume of transactions in the months leading up to the change as investors looked to complete their purchases before the tax changes came into effect. But what is the true cost of this tax change? Is it still worthwhile investing in Bournemouth property?

I have been speaking to a number of buy to let landlords over the last few weeks about this very subject. Yes, many landlords have been put off by the recent tax attacks on landlords, not just the increase on Stamp Duty. Having said that, when you look a bit closer at the figures and work out the true cost of the changes, you might be just a little surprised. 

Dorset house prices dip, but Bournemouth continues to rise!

According to the Land Registry House Price Index, February saw a stutter in the overall property market. The UK as a whole dropped 0.2% in the month of February despite the increase in demand from private landlords looking to complete purchases before the Stamp Duty increase took effect. Despite the strong demand and historic price jumps month on month, even Dorset stumbled with a -0.1% drop in prices.

The South in particular, along with London, has seen huge increases in property prices over the last few years. So it’s interesting to see some areas dropped in value despite the increased demand to buy at the start of the year from property investors. But despite the average property price dropping in Dorset as a whole, Bournemouth has certainly continued strong, growing in value for another consecutive month at +0.5%

Bournemouth landlords - What group of tenants should you target?

When planning to invest in property, there are a number of considerations you need to make; where to invest, how much to invest, how the investment will be funded, expected return on investment etc. But really, all of things result from the number 1 question you should be asking – who is my target market.

When businesses are formed, it is best practice to write up a business plan. The business plan can vary greatly in what it contains, but in essence it states what the business does, how much it plans to make, and who is going to buy the product/service. For the majority of property investors, only the first two elements are focused on – what you do (let out a property or room) and how much you plan to make (working out the gross/net yield). Far too often, the final element is only focused on once the property has been purchased – who is going to buy (who is the tenant). By then it’s too late.

Is it time for Bournemouth landlords to sell up?

Since the budget two weeks ago I have had a number of blog readers call and message me regarding some of the changes and how they will affect them going forward. It’s great talking to you all, and please do continue to get in touch if there is something on your mind that you wish to discuss. I did want to share one of the big questions I have had asked quite a lot however, and that is whether it is time for Bournemouth landlords to hang up their boots and sell up.

Landlords have been coming under increasing attacks over the last few years, and the latest budget didn't fail to pack another few punches. The Stamp duty tax increase of 3%, the capital gains surcharge of 8%, the reduction interest you can offset against tax coming next year. It almost seems as if landlords are on par with bankers to be the most disliked group of people. But why is that?

Housing tops the investment Charts in 2015

Why Bournemouth housing beats any other types of investments

Housing tops the charts for the best annual return on investment in 2015 for the first time since the recession. It is the only investment in 2015 to beat inflation and has given over 8% of a better return than the next class which was Shares.

Housing has always been known as a great investment – ‘Safe as houses’ was a common description, and rightly so. It is always in demand, you can physically see it, and over time it would always go up in value. But according to data supplied by BullionVault, since the recession hit in 2008 housing has been consistently outperformed by Bonds, Shares, Gold and even lower than inflation in some years. However last year, the average return for the property investor hit 9.48% which is by far the best performing investment class, and indeed the only investment to beat inflation.

How the Budget 2016 affects Bournemouth Landlords

Stamp Duty 3% surcharge, Insurance Premium Tax increase, Income Tax Changes. Just another budget right? But how is this going to affect YOU - The property owners and investors of Bournemouth?

Hello everyone! My regular blog followers will notice this week’s article has been posted up quite late. It’s been a very busy month, and I wanted to write a special article following George Osbourne’s 2016 budget announcement. There are a number of huge announcements that will affect Bournemouth landlords that have been announced, from Stamp Duty changes to Income Tax changes, so I hope you find this article helpful.

What is your Bournemouth property investment yielding?

According to a recent survey, over 45% of landlords don’t know what their buy to let property is yielding for them. The majority of which state their main reason is due to their lettings agent who takes care of this, but they haven’t been communicated too! Around 20% of landlords do not know what their investment is yielding because they don’t know how to work it out. Maybe that is a reason for some of the 68% of landlords who didn't increase their rents last year despite the increasing costs.

As well as the number of professional landlords who invest in the Bournemouth area due to the great returns on investment and capital growth, there are a number of new investors and accidental landlords who have buy to let properties in the area. In fact, I have worked with a number of new investors recently all of which have huge amounts of energy, enthusiasm and high aspirations. Now that is all great and will really help them move forward and growing their portfolios, but what they don't have is knowledge and experience. Working with an experienced lettings specialist is vital, and a good one not only tells you what a good investment property will be, they educate you as to why it would be a good investment and how you can work it out for yourself. That is my aim at least.

Is this the end for first time buyers in Bournemouth?

The Bournemouth property market is at an all-time high. Coming out of January with the highest property growth of any UK town (2.9% growth compared to the UK average of 0.2%), and property transactions the highest they have been for many years. All the signs point to a great few years of investment and capital growth in and around Bournemouth. But is all of this growth pushing first time buyers out of the market?

I had the pleasure of meeting one of my younger readers of the blog, a university student studying multimedia who wanted to interview me for a TV news project he was doing. Talking about the local property market, in particular how it has changed over the last 20 years, Jack raised some very good questions. Yes, the market growth is certainly great for investors and home owners who have a growing asset, but what effect is this having on people looking to get on the property market – the first time buyers.

Bournemouth sees highest house price growth in the UK

You have probably seen in my articles over the last few months how well the Bournemouth property market is performing, and in particular how bright the next few years look for property owners and investors in this area. We are just a couple of months into the year, and already it looks like the market is going to far exceed every ones expectations.

In fact, Bournemouth has seen the sharpest increase in house prices in the whole of the UK over January, an increase of 2.9% making the average price for a house jump from £253,870 to £261,232. To put this growth in perspective, the rest of the UK has seen a growth of just 0.2% in January.  

Christchurch Road, Bournemouth proving to be a great investment for this landlord!

For Buy To Let landlords, there are two key factors that determine their return on investment – the rental yield, and the capital growth of the property. Across Bournemouth, both of these factors have been very strong over the last few years, making it one of the best current places to invest in the UK for Buy to let.

I was speaking to a landlord I have known for a while who has owned a few properties on Christchurch Road for the last thirteen years. She came in to our office to discuss the rise and fall of property prices on the street and how this has affected her yield over the years, compared to Bournemouth overall. 

Should I invest in a 1 bedroom flat in Bournemouth?

I was talking to one of my landlords on Friday last week about his recent purchase of 3, 1 bedroom flats in central Bournemouth. We were discussing the number of investment opportunities around the town centre, which has a massive rental demand, but people were missing them because they were unsure about whether such flats would make a good investment.

I thought I would share with you a few of the things we discussed, and some of the facts around investing in 1 bedroom properties in Bournemouth. In particular, how a new development investment could work for you.

Bournemouth: Buy To Let Investors can make bucket loads in rent

I have a few passions in life. Talking about the Bournemouth property market is certainly one of them. But I also like spending time down the beach during the summer. The sun shining bright, a light cooling breeze, the smell of fish and chips in the air. The greatest of all though, the child busying himself with his bucket and spade. Yes we are not quite in summer yet, but we are one month down and this year is flying. And there is a reason I’m talking buckets...

Did you know, that coastal towns demand some of the highest yields in the country? In fact according to a survey by HSBC, Bournemouth ranks the 2^nd highest yielding seaside town in the UK. It’s not all short term holiday lets either, with the majority of rented properties being taken for longer term lifestyle reasons, which is great news for investors who want to keep voids to a minimum. What better place to live, and invest.

3 bedroom terraced house delivering over 5.5% yeild in Spring Road, Bournemouth

I have come across a great example of an already modernised terraced house ready for the rental market. Over the last few years the property market has been glamourised by investors who buy cheap, add value, and sell with healthy profits. Done properly, it is certinly a great business model. However for investors who have limited building knowledge, this can be quite daunting. Is it possible to get strong yields without having to add value through property works?

This 3 bedroom terraced house in Spring Road, Bournemouth has been put on the market for £189,950 by the agent House & Son. It has already been modernised and is almost ready to be put straight up onto the rental market. It is a great example of a property priced reasonable that can still provide great rental yields for someone who doesn't want to have to do any major works on a house.

House prices increase by over 300% in Bournemouth over the last 20 years

It’s no secret that London and the South in particular have seen some very significant house price increases, both historically and at the present time. But just how much exactly has this been in Bournemouth, and what could we expect to see in the future?

Now I have to admit, I don’t have a crystal ball which tells me the future, nor am I very good at reading the stars – especially with all of these clouds floating around the sky at the moment. Even if I could, I still wouldn't be able to tell you exactly what is going to happen to the property market in the future, no one could. Having said that, there are ways to predict what is likely to happen using previous data trends and having a look at what is happening in the economy on both a local scale, and across the world. By giving you this information, it will put you in a stronger position for making more informed decisions. House prices will always fluctuate in the short term, but it’s what happens over the long term that is important to us if you are holding property.

Buy To Let investment in Bournemouth: Flat or a House?

It’s such a great discussion, because every investor I know has a strong opinion on the matter. On one side you have the ‘never buy a flat the service charges take all the profit from you and the flat never increases in value’. Then the other side usually pitches in with, ‘you will always get a higher yield on flats, they are cheaper, more available and the freeholder does all the major works to the building’. What works in one area may not work in another, so I will only give you my knowledge and experience which is on the Bournemouth property market.

High Yielding Detached House in Charminster, Bournemouth

This is a great example of making small changes to a house to turn it into a high-yielding Buy To Let property. It is a 3 bedroom detached house, converted into 1; 1 bed ground floor flat and 1; 2 bed first floor flat. On offer for £279,950 by Roberts, this property yields over 5.2%

It's not your usual 3 bedroom detached house. Converted into 2 separate flats with a small communal entrance area, this conversion really has maximised the rental potential of this property. Through this arrangement, the flats are of course freehold, avoiding the usual high charges associated with leasehold flats. It's worth mentioning that obtaining a mortgage may be slightly more difficult due to the arrangement of the property, it will be well worth speaking to a specialist mortgage broker for advice.

6.28% Yield Possible in Springbourne, Bournemouth

This is a great example of an investment property in Bournemouth, generating 6.28% yield. It is a 3 bedroom terraced house in Springbourne, which is just on the edge of central Bournemouth. Offered on the market by Chiswell & Co at £210,000 with a tenant in-situ paying £1,100pcm rent.

Oh no... tenant in-situ! I've heard it so many times before, tenant in-situ is too much effort. Wrong! It really can be a completely stress free process with the right approach, and what a great benefit of not having to find a tenant straight away, and no void period to worry about!

Bournemouth see’s greater house price increases than London?

It seems everywhere I go, all I hear about is how London is outperforming every town in the UK in terms of house price inflation. Yes, it’s true that key areas of London have seen seemingly large increases in property values, but could Bournemouth be experiencing something even greater?

I was actually talking to one of my landlords last week about this very thing. There’s a lot of doom and gloom in the papers for landlords; tax changes, stamp duty increases, wear and tear allowance disappearing etc etc... It led us on to the discussion of what is going to be the incentive for Buy To Let (BTL) Landlords in the next 5-10 years. Rental yield will always be important. It is after all what pays the mortgage and rental costs. But Capital Gain is something which can really impact an investment decision. But does that mean we all need to go and invest in London now?