Friday, 11 December 2015

'Needs Work' 5 Bedroom Townhouse (7.5% Gross Yield)

This 5 bedroom townhouse needs redecoration, flooring and the lack of suggests these may need to be replaced but even so, having done the work it could return 7.5% Gross Yield

I'm basing the figures on a single let to a family, it may be that you could get a higher return renting it as a Multi Let (but care must be taken if renting all 5 bedrooms as given it is over 3 stories it would then be classed as an HMO requiring a license)

Assuming you pay the OIRO £79,950 then spend a further £15k on improvements it will return 7.5% Gross Yield based on £595pcm rent





It's being marketed by Alfred Pallas so click here http://www.rightmove.co.uk/property-for-sale/property-52319710.html for details and call them to arrange a viewing

Give me a call if you'd like to discuss this or any aspect of property investment in Sunderland - call 0191 567 8577 or email neil.whitfield@belvoirlettings.com

Thursday, 10 December 2015

Three Bedroom Farringdon Semi - Reduced by £5k (8.25% Gross Yield)

This 3 bedroom semi in the popular Farringdon area has just been reduced by £5,000 and as it is being sold by an online agent it suggests the vendors may be disappointed by a lack of interest since first being listed in May and therefore open to offers


The most recent sale on this street was for £83,500 in August 2015 so it may be worth matching this or going in with an even more cheeky offer

It looks to be in a decent lettable condition and has a conservatory in addition to a lounge and dining room, plus

You should work on £550pcm rent so assuming the property could be picked up for £80,000 this would deliver a decent 8.25% Gross Yield

It's being sold by Express Estate Agency so you'd need to contact them (but the vendor is likely to conduct the viewing) - click here for details http://www.rightmove.co.uk/property-for-sale/property-34500687.html 


If you'd like to discuss this or any aspect of property investment in Sunderland please call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com




Tuesday, 8 December 2015

Sunderland Asking Prices Are Down vs 2014 But Sold Prices Are Up

As 2015 draws to a close I thought it may be worth taking a quick look back at how the Sunderland property market has performed in the last 12 months

The first trend to catch my eye was that based on 3 month moving average data, Asking Prices are down on all property types compared to December 2014

The graph and below shows an average fall of 3% across all property types and that detached homes showed the greatest fall, being 12% down on December 2014 with an average asking price of £284,249 in December 2015

This goes against expectations as detached homes, typically appealing to more established, affluent buyers tend to be cushioned against market conditions and operate somewhat in a bubble

Semi's and terraces both showed decreases (1% and 3% respectively) with the Asking Prices for flats down 5%



I thought it may be interesting to compare this with sold prices (what is actually paid) and looking at this data gives a slightly more positive picture, with most property types showing slight increases in the prices paid this year compared to last

Given this is based on Land Registry data there is a slight lag in the data being registered and published, so for this we are comparing September 2015 and September 2014


The average sold price in Sunderland in £140,561 which is up 9% compared to the same time last year

Splitting this down to look at property types, detached properties have shown an increase of 13%, terraces an increase

The only property type showing a fall are semi's with an average sold price in Sept 2015 of £130406 compared to £137,758 in Sept 2014, a fall of 5%

Finally I've taken a look at the health of the market by comparing the number of properties on the market now vs 2014

Given the media headlines that the UK property market needs cooling (and the tactics and strategies being employed to solve that 'problem'), it's concerning that overall there are 10% fewer properties on the market in Sunderland now than in December 2014



Looking at this by property type the largest fall has been within semi detached properties (15% down compared to December of last year, with 584 properties on the market at the moment compared to 684 at the same time last year), with terraces and flats down 11% and 9% respectively, with only detached properties showing a slight increase 

The problem with this is that to be healthy and robust the property market needs to allowing a smooth flow where buyers can trade up from one property type to another in keeping with their economic progression & lifestage, with the typical property buyers 'journey' being from a flat or terrace First Time Buy to a larger terrace or semi, then eventually to a detached

When there are bottlenecks, caused by a lack of supply, it can destablise the market or cause price peaks if there are shortages of particular property types 

It may be that the relative lack of supply causes a correction in the sold prices of Sunderland semi detached properties next year and that if we looked again at the sold price data in six or twelve months time this would also be showing positive growth once again

Looking at these figures as a whole, it's interesting to note that Asking Prices are down yet Sold Prices are up - this may be explained by Asking Prices being informed by pessimism on behalf of local vendors and Estate Agents (so properties are being valued & advertised conservatively) but the relative scarcity is contributing to the increase in what is actually being paid

Overall whilst it is a little concerning to see that there are 10% fewer properties being advertised for sale now compared to the same time last year this scarcity may in turn lead to the modest increase in sold prices continuing into 2016, which could lead to a more positive outlook by vendors and Estate Agents and in doing so encourage more properties to be listed

Feel free to get in touch if you'd like to discuss any aspect of the Sunderland property market - call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com

Immaculate First Floor Moorside Flat (7.4% Gross Yield)

This 2 bedroom first floor Moorside flat looks to have a lot going for it, it has a stylish new kitchen and shower room/wc, the only downside I can see is that it doesn't look to have GCH

This may be reflected in the £80,000 asking price but that's a potential bargaining tool as in our experience to attract (and crucially retain) tenants you'd need to budget for installing a gas boiler and central heating - in our experience tenants don't tend to stay for 2 winters in one of these if it just has electric heating!


Assuming you can negotiate the cost of this from the £80k price it should be able to achieve the upper end of Moorside flat rents at £495, giving a decent 7.4% Gross Yield





It's being marketed by Your Move so click the link here http://www.rightmove.co.uk/property-for-sale/property-52386484.html for details and call them if you want to arrange a viewing 

We manage a number of similar flats in Moorside and know this particular street very well having managed a similar flat here since 2008

You may be interested in reading my very first blog post from January 2014 which compared Moorside flats with flats in Ashbrooke - clearly the figures aren't up-to-date but they haven't really changed since then therefore the principles still apply Moorside Outperforms Ashbrooke By Almost 40%  

Give me a call if you want to discuss this property, investing in Moorside or any area within Sunderland - call 0191 567 8577 or email neil.whitfield@belvoirlettings.com



Monday, 7 December 2015

Stylish 2 Bedroom Bonners Raff Apartment (9.75% Gross Yield and 47% of Last Sale Price)

Regular blog readers will know I like the Bonners Raff development due to it's quirky nature, riverside location and spacious, good quality apartments which all lead to its ability to attract Good Tenants

This 2 bedroom, 2nd floor apartment is being offered at £79,950, it has two double bedrooms including a master bedroom with ensuite, river views and secure parking

Based on paying the asking price and achieving a realistic £650pcm rent it will deliver 9.75% Gross Yield

It's interesting to note it was bought in 2007 for £171,000! That means it's now worth at most 47% of what was paid in 2007, suggesting that whilst it may never rise to that level again there is plenty of room for some capital growth

It's being marketed for sale by Your Move, click here for details http://www.zoopla.co.uk/for-sale/details/38539975 and call them for more information or to arrange a viewing

Give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com to have a chat about this opportunity or to discuss any aspect of the Sunderland property market

Friday, 27 November 2015

Cash Buyers Only! Bargain Basement Seaham 2 Bedroom Terrace (12% Gross Yield)

This 2 bedroom terrace in Seaham is being sold at auction on 14th December with a tempting Guide Price of £26,000 that will get a lot of interest from investors

It does need work prior to letting but it looks to be mostly cosmetic and should be achievable for no more than £5,000

The three most recent sales on this street sold this year for £38,000, £28,250 and £32,000 respectively so assuming you don't get carried away at the auction and spend no more than £40,000 in total (purchase price plus refurb) it will return 12% Gross Yield

This street will attract a mix of both working and non-working tenants but assuming the property is improved to a good standard then attracting a good working tenant shouldn't be an issue


Click here for details http://www.rightmove.co.uk/property-for-sale/property-38015418.html it's being sold by Kimmitt and Roberts at the Agents Property Auction so contact them for details or to arrange a viewing

Call me if you would like to have a chat about this property or investing in Seaham or Sunderland - call 0191 567 8577 or email neil.whitfield@belvoirlettings.com


Thursday, 26 November 2015

Another 'Flipping' George Osborne Blow For Sunderland Investors?

Yesterday's Autumn Statement announcement of 3% stamp duty being applied to BTL properties from April 2016 followed the recent trend of George Osborne giving Landlords and Investors a kicking, in what is clearly becoming evident as a deliberate government policy to force Landlords with small portfolios out of the industry and make way for large institutional investors to fill the vacuum...

Look at the various Landlord and Investor forums on the Internet and there's lots of panic-mongers claiming that the world is about to end as a result of this, however on closer inspection it's clearly not good news for Investors but it may not be quite as bad as first appears...if you take a long term view


The stamp duty does not apply to BTL properties valued at under £40,000 but for those valued at £40,000 to £125,000 the 3% duty applies, with higher values for higher properties (that really won't affect Sunderland investors much!)

There's still a degree of vagueness about the details of the announcement but it would appear that 'Professional Landlords', which seems to be those with over 15 properties, would not have this Stamp Duty applied!

Properties valued at £125,000 to £250,000 will have the additional 3% applied on top of the standard 2% stamp duty applied to all properties within this band, making 5% stamp duty payable in total

Looking at this from a Sunderland perspective, most investors buying to keep and rent out will be buying under the £125,000 threshold (unless they are buying HMO's)

Most Sunderland BTL properties are priced in the range of £60k - £90k so taking the average of £75,000 that will generate a £2,250 Stamp Duty bill

That's £2,250 onto the price you'll pay and therefore £2,250 from the profits you can make (unless you pass it on)

Looking at this from a short term perspective it will cause a 7.9% Gross Yield (based on buying at £75k and renting out at £495pcm) to fall to 7.7%

That's still a good investment compared to many other forms of investment and I'd argue you'd not notice the 0.2% difference, especially in the long term

Take the long term view and amortise that £2,250 across the average length of time a BTL property is held (let's say 10 years for sake of argument but it could be double that) and that's £225 a year or less than £20 a month

You'd pay a much higher amount for properties over the £125,000 threshold but given most in Sunderland at that price bracket are likely to be HMO's the return from such properties will be so much greater that it will minimise the impact to again barely-noticeable levels over the long term

It will certainly make things interesting for those looking to buy Below Market Value properties especially for those searching for properties with a market value of around £50,000 - £60,000 

I imagine there'll be a lot of £39,999 BMV offers being made in the future and joking aside it may have more of a negative impact on those distressed sellers with low value properties than it does to the potential buyers

Infact, this could have a positive impact on areas such as Sunderland where it is possible to invest in a decent property for less than the £125,000 threshold where stamp duty steps up to 5% in total

It will be interesting to see if there is a stampede for investors looking to buy before this is applied in April 2016...which could make an interesting start to the year!

I do think that it could have more of a negative impact on those looking to Buy to Sell ('Flip') properties in Sunderland

I say this as clearly the stamp duty won't be able to be absorbed over the long term and as suggested on an earlier post (Why Are There So Few 'Flipping' Good Property Deals In Sunderland?) it may be necessary to initially pay more for a larger property to Flip to enable sufficient value to be added to make it worthwhile - your standard £60k - £90k Buy to Lets aren't likely to increase in value enough in the short term to make profitable Flip, you need to hold onto them to get a return

This may mean that those Flipping in Sunderland have to factor in the 5% stamp duty applied to over £125k properties when buying

Given most Flips would be sold to owner-occupiers rather than investors (and therefore they wouldn't be paying the 'extra' stamp duty) it could just be that the added cost is applied to the selling price

There's a question over how this would be policed and it may be that they will require mortgage lenders or solicitors to share information on BTL mortgages taken out so it may be that this additional Stamp Duty could be avoided if the property was purchased in cash or using Joint Venture finance avoiding the need for a BTL mortgage? There's also the consideration that using Bridging Finance may avoid this but the cost is usually higher - given the announcement was only made yesterday these are very much 'off the top of my head' thoughts!

As it stands selling costs (including Stamp Duty) can be offset against Capital Gains Tax when a property is sold so whilst the Stamp Duty will need to be paid out in the first instance it can be claimed back...but I'm not particularly hopeful that given the way things are heading this loophole won't eventually be closed off!

Don't forget that there's likely to be more scrutiny by the Bank Of England on BTL and lending restrictions are on the way - I certainly wouldn't suggest this is likely to be the last anti small Landlord activity in the near future but I have faith that more often than not markets change and adapt to cope with such change and for every loser as a result of these changes there are likely to be an equal amount of people who benefit

If you'd like to have a chat about the impact of this change or any further policies that may affect property investment in Sunderland feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com




Wednesday, 25 November 2015

Versatile "Full Refurb" 3 Bedroom Terrace (7.0% Gross Yield)

This 3 bedroom, 2 reception room terraced house is very close to the University and walking distance from the City Centre, meaning it could potentially be rented by families, students or professional sharers

It's being marketed at OIRO £69,950 and realistically will need a further £25,000 - £30,000 spending to bring it to a good standard throughout

Based on paying the asking price and spending £25,000 on improvements it will return 7.0% Gross Yield based on being rented to a family at £750pcm or could return significantly more if rented on a room-by-room basis to students or working adults



Click here for details http://www.rightmove.co.uk/property-for-sale/property-52232581.html and contact Alfred Pallas to arrange a viewing or for more details

This property does give you a number of options so if you'd like to discuss what may be the best strategy for you please feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com

Tuesday, 24 November 2015

Three Bedroom First Floor Flat in Eden Vale (8.3% Gross Yield)

This 3 bedroom first floor flat in Eden Vale is close to the City Centre & University and it looks to be an established rental property that will return 8.3% Gross Yield

It's being marketed For Sale at £65,000 and is also on the market to rent at £450pcm (which is exactly what it should be on for) and from the 2 photos supplied the condition looks OK so no further investment would be required prior to getting the rent flowing in


It's being sold and rented by Hackett Property so click here for details http://www.rightmove.co.uk/property-for-sale/property-38061165.html and you'd need to arrange a viewing and request further details from them 

Call me if you'd like to discuss this property or any aspect of property investment in Sunderland - call 0191 567 8577 or email neil.whitfield@belvoirlettings.com 

Monday, 23 November 2015

'Needs A Lot Of Work' 3 Bedroom Terrace in Thornhill (7.5% Gross Yield)

This property needs a complete renovation but it's priced accordingly and once complete will be an attractive family home - we know this as we've just let a property on this street

It's on the market with Pattinsons for £90,000 - factor in a further £30k to improve it both inside and out to a good standard and you should have an attractive property and given the most recent sale of a similar property on this street was £140,000 in June of this year you'll build in capital growth at the start

Based on a total investment of £120,000 and £750pcm rent (which is what we easily achieved for the one on this street a couple of months ago) you'll make a healthy 7.5% Gross Yield





Click here for details http://www.rightmove.co.uk/property-for-sale/property-55065638.html

Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com to discuss this or any aspect of property investment in Sunderland


Thursday, 19 November 2015

Exciting Times Ahead For The Sunderland Property Market?

Last week I attended the first Sunderland Professionals Network meeting and was lucky enough to hear a presentation given by Andrea Winders of Sunderland City Council about the exciting developments she is currently working on in Sunderland, many of which will undoubtedly have a positive impact on the housing market in the City


Andrea (who's official title is Executive Director of Enterprise Development) was like a breath of fresh air, with the passion, enthusiasm and drive you'd expect from someone with a history of success in the private sector prior to taking her first public sector role with Sunderland City Council last year

Sunderland is often seen by property investors as attractive due to the ability to achieve good Yields and positive cashflow but the lack of potential for capital growth due to the lack of house price increases in recent years is an obvious downside

Similarly Sunderland is perceived to have a problem with talent leaving the City rather than staying or actively choosing to move here and this impacts on both housing sales and rentals

It must be said that we see this on the ground with the flats and apartments in the City Centre or nearby likely to appeal to a younger professional tenant (rather than students) having a shortage of tenants but at the same time there is insufficient supply of family homes in the more outlying areas to meet the tenant demand

I'd hope that some of the projects Andrea is working on may address those issues, making Sunderland even more attractive for Homeowners, Landlords, Investors and Tenants alike

When you think of International employers you think of Nissan but Andrea was able to highlight that in addition to the car giant (which produces more cars in Sunderland than all the Italian manufacturers combined!), Sunderland is home to over 80 foreign owned companies employing over 25,000 people and is infact in the top four small European Cities for Foreign Direct Investment strategy

One of the most exciting developments off the back of this is the International Advanced Manufacturing Park to be located near the current Nissan site which is predicted to deliver 5,200 new jobs and £300m of private sector investment by 2027

IAMP site overview

Separate to this is the regeneration of the Port of Sunderland which I didn't realise had recently had it's rail link re-established to increase it's cargo handling capacity and increase it's ability to win and retain new business

It's not often highlighted but Sunderland is actually the UK's only net exporting region (clearly this is on the back of Nissan's 1000's of cars rolling off the lines) so any attempts to build on this or allow Sunderland's own infrastructure to be used to transport the goods made here (rather than transporting the vehicles by road to ports elsewhere) can only help the City

The Port will be the focus when the City plays host to the Tall Ships Race in 2018 and it is anticipated that significant development will take place to regenerate that part of the City to present the most attractive experience to Tall Ships visitors but also to leave a lasting legacy in what is currently not one of the most attractive parts of the City!

Sunderland is one of only three 'Digital Catapult Centres' nationally, which sounds painful but is actually the reason behind the new Software Centre at Tavistock Place - a £10m small business space designed to attract and encourage hi-tech digital start ups to the City

Also in the City Centre, the long overdue redevelopment of the Vaux site looks to be within touching distance of getting underway (with Phase 1 looking as if it may get the green light very soon) and is part of £700m of planned investment in the City Centre over the next 10 years 

This is designed to attract businesses, create jobs and give a much needed boost to the City Centre economy

Given I was among the hundreds of Vaux workers made redundant when the brewery closed in July 1999 this is something very close to my heart so I will continue to watch this with interest...

I'm usually pretty cynical but must admit to being very encouraged by what Andrea Winders had to say and her passion for seeing it through - having spoken to a number of attendees after the meeting we all shared similar positive feelings about how this could have a significant benefits to the City

A thriving City and regional economy are vital to a bouyant and robust housing market so I'm excited to think that these developments may start to give the Sunderland housing market a much needed boost

Separate to this, if you get a chance you should support the Sunderland Professionals Network, it's being organised by Rowlands Accountants and there seems to be a real desire to build a spirit of co-operation and collaboration within the Sunderland business community that can only help both the individual businesses and the City as a whole

If you'd like to chat about how these developments may affect the Sunderland property market in the future or chat about any aspect of in Sunderland give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com




Wednesday, 18 November 2015

Superb 3 Bedroom Terrace Suitable for High End Multilet (+9.4% Gross Yield)

This 3 bedroom terrace close to the hospital would make an ideal family home but based on the £149,950 asking price it wouldn't stack up as an investment - let 3 rooms on a room-by-room basis to professionals and it does make an altogether more attractive investment

It's decorated and finished to the very high standard that could attract doctors working at the hospital or similar discerning professionals and they would be willing to pay around £90-£100 per room per week



I've worked the calculations on the lower figure and renting out the 2 first floor double bedrooms and 1 of the downstairs reception rooms as a double bedroom leaving the one of the reception rooms as just that, although to squeeze the pips further it may be possible to rent this living room out as a bedroom 

This may reduce interest as this sort of tenant may want some shared space & whilst the kitchen is great it's not big enough to be a communal area in which to gather


Based on the 3 room strategy and paying the asking price it will return 9.4% Gross Yield (10.4% if you achieved £100 per room) or 12.5% and 13.9% Gross Yield if you did manage to rent out 4 bedrooms


Being only a 2 storey property and having less than 5 bedrooms it would be classed as an HMO but crucially it wouldn't need a License 





It's on the market with Thomas Watson so give them a call for more information or to arrange a viewing https://www.onthemarket.com/details/2208504

Give me a call on 0191 567 8577 or email neil.whitfield@belvoirletttings.com if you'd like to discuss this Multi-Let strategy in more detail or to chat about any aspect of the Sunderland property market

Tuesday, 17 November 2015

'Needs Work' Three / Two Bedroom Millfield Cottage (7.9% Gross Yield)

This Millfield cottage is being advertised as having 3 bedrooms but on closer investigation the 3rd bedroom in the first floor loft conversion is accessed through the 2nd, which is less than ideal...

It needs work anyway so my advice would probably be to knock through and have a decent 2 bedroom property rather than a 3 bedroom property with obvious shortcomings

It needs looking at for damp, redecoration and a new bathroom for starters - you may choose to update the kitchen whilst you were at it

Based on the above and achieving £495pcm once the work had been done to a good standard it would deliver 7.9% Gross Yield based on paying the £55,000 asking price with a generous £20k budget for renovations

It's being sold by Peter Heron so click here for details https://www.onthemarket.com/details/1607494  and get in touch with them for more info or to arrange a viewing

Call me on 0191 567 8577 if you'd like to discuss this further or to chat about any aspect of the Sunderland property market

Monday, 16 November 2015

Two Dovedale Court, Seaham Apartments (9% Gross Yield)

Two similar 2 bedroom apartments are available in Dovedale Court, Seaham and both are being advertised for offers over / offers around £60,000

The last 3 apartments in this development have sold for £59k, £63k and £60k respectively so these prices look about right

Based on renting them for £450pcm and paying £60,000 they'll return a healthy 9.0% Gross Yield (but don't forget being leasehold there'll be service charges to consider & budget for)



One is being sold through Castledene http://www.rightmove.co.uk/property-for-sale/property-37940850.html and the other Jonathan Lewis http://www.rightmove.co.uk/property-for-sale/property-37947246.html so get in touch with either or both to get more details or arrange a viewing

Give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com if you'd like to have a chat about the rental appeal of these apartments or any aspect of property investment in Seaham or Sunderland

Friday, 13 November 2015

Superb 'Ready To Let' Town End Farm Semi (6.1% Gross Yield)

This 3 bedroom semi in Town End Farm looks to be in great condition with a stylish dining kitchen & modern bathroom - it will be popular with tenants

No work would be required prior to letting and whilst this does mean there's limited scope for adding value to the property, it does mean that it's ready for tenants to move in immediately

Based on paying the £89,950 asking price and £550pcm rent it will return 6.1% Gross Yield

It's on the market through Good Life so you'd need to arrange a viewing through them but click here for details http://www.rightmove.co.uk/property-for-sale/property-51981247.html

Call me on 0191 567 8577 or email to chat about this property or any aspect of the Sunderland property market

'Ready to Let' Two Bedroom Grangetown Terrace (7.6% Gross Yield)

This two bedroom, two reception room mid terrace in Grangetown is just off Leechmere Road and walking distance to the main shops and also ASDA. It looks to be in great condition so will attract interest from both couples and young families

It's on the market at £75,000 and you won't need to spend a lot prior to letting it so based on getting a realistic £475 rent it will return 7.6% Gross Yield






It's on the market with Peter Heron, click here for details http://www.rightmove.co.uk/property-for-sale/property-52172557.html

Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com if you'd like to discuss this or to any aspect of property investment in Sunderland

Thursday, 12 November 2015

2 Bedroom First Floor Farringdon Flat (9.2% Gross Yield)

We know this block very well as we managed a property here for many years and also have other flats in the similar nearby blocks such as Dunster House, Carlisle House and Cragside House


This first floor, 2 bedroom flat looks Ready to Let and at OIRO £51,950 it will return 9.2% Gross Yield based on a realistic £400pcm

We know that these blocks are popular with a range of tenants and being close to both the A19 and Doxford International are definitely seen as positives

It's on the market with Dowen so click here for details https://www.onthemarket.com/details/2182846  then get in touch with them to arrange a viewing - but I'd be quick, based on our experience of when similar properties came up this may be popular

Call me if you'd like to discuss this or our experience of renting properties in this area - call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com

Wednesday, 11 November 2015

Total Refurb Pallion Cottage Only £35,000

This is worthy of a look as it's on Mafeking Street which is the end of Pallion closest to Sunderland Royal Hospital. Other than that it looks like a full refurb job, which is reflected in the £35,000 asking price

It's not worth listing what you'd need to address (just think everything) but it looks to be desperately in need of some damp proofing and roof repairs judging by the state of the walls

We've rented a couple of properties on this street and currently manage a similar layout cottage - based on this experience we know that once completed to a high standard this could be popular with a range of tenants

It's on the market with Peter Heron so click here https://www.onthemarket.com/details/2186512 for details and give them a call for more info or to arrange a viewing

Give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com if you'd like to discuss this investment opportunity or any aspect of property investment in Sunderland 

Tuesday, 10 November 2015

How To Profit From Property In Sunderland Without Needing A Mortgage Deposit

Everyone knows the normal way to get into property investment is to save up a deposit and buy a BTL property. The more creative or educated investor may adopt the 'Buy, Refurb, Remortgage' model to recycle one deposit pot to purchase multiple properties over time. But what if there was another way where you could control and profit from properties without the need to actually buy them with a mortgage?

One method being employed is using Lease Options to control a property, taking full responsibility for a property for a period of time (including maintenance and paying the mortgage) and therefore allowing the investor to profit from the rent received during the period as well as any capital growth over and above an agreed (deferred) purchase price


A Lease Option actually includes 2 parts, the lease and the option, the former giving control of the property and the latter giving the buyer the right to purchase the property (but crucially no legal obligation to do so) but legally obliging the seller to sell within the terms of the agreement if the buyer chooses to exercise his or her right to buy 

As the above suggests, a Lease Option is a complicated legal transaction but that in itself should give reassurance...it's likely to involve solicitors acting for both sides and is perfectly legal and above board. Whilst they are certainly not mainstream and unlikely to be featured in the Daily Mail or Sunday Times, there's certainly nothing inherently 'dodgy' about the practice and in-fact Lease Options are commonplace in the USA and Australia and also the UK commercial property market where they have been widely used for many years

Lease Options tend to work best with a Motivated Seller, someone who has perhaps tried and failed to sell using the traditional methods or who needs to find a solution quickly due to negative equity, relocation or separation - they won't be of interest to someone prepared to sit out and wait for an offer through a traditional Estate Agent or who needs the money from the sale right now

A successful Lease Option needs to work for both parties and typically will agree that a buyer has the right to purchase the property for an agreed price at any point during the option period and during that period will take control of the property, taking both responsibility for it and profiting from any rental income received

Lease Options tend to be created for a period of years (3 - 7 years being the norm, although they can be created for longer) so buyer and seller are entering into a long term business relationship. This clearly means a Lease Option has both benefits and risks and means that it essential that both sides conduct their own robust Due Diligence

There are a number of risks, the most obvious being if the legal paperwork isn't created correctly in the first place. This really isn't something that can be done DIY, even by experienced investors, and even appointing a conveyancing solicitor may not be suitable as most are not sufficiently familiar with Lease Options - you really do need to seek out a specialist (and I can point you in the direction of a number of specialists if needs be)

Other risks include if the vendor goes bankrupt or dies during the option period -  depending on the way it has been created the Lease Option could be accepted by trustees and/or beneficiaries or could be challenged if they feel it was unfair, creating both a costly & time consuming need to defend & legally enforce the agreement

Lease Options are transferable, meaning there is a growing community of educated investors who are familiar with them and are comfortable trading such 'deals' when they arise 

Typically they'll not arise through Estate Agents or Letting Agents (unless they have undertaken specific & detailed training on Lease Options, as I have) and will often come from more unusual sources (or 'Sourcers') - have you often wondered what all those scruffy, badly written, usually yellow "We Buy Houses" boards are all about?

Without doubt Lease Options are not for everyone and it is very much a non-mainstream 'Marmite' strategy but it can offer those unable buy a property through the traditional methods a way to control and profit from property and it can also present deals that ordinarily wouldn't come to market - if you want to have a chat about Lease Options (I'll be able to recommend a number of ways to educate yourself further on them), feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com




Thursday, 5 November 2015

Three Bedroom Redhouse Semi (7.7% Gross Yield)

This 3 bedroom semi in Redhouse doesn't look too great on the outside but is in a good internal condition with a decent kitchen and bathroom - it should be popular with tenants

It's got an attractive garden with a raised decked area and looks to be well maintained throughout

It's new to the market and is on at £77,950 and based on achieving £495pcm rent it will return 7.7% Gross Yield

Click here for details http://www.zoopla.co.uk/for-sale/details/38577330

Call me on 0191 567 8577 or email neil.whitfield@belvoirlettings.com for more information or to discuss any aspect of property investment in Sunderland

Wednesday, 4 November 2015

Are You A "Consumer" or "Professional" Buy To Let Borrower?

Hot on the heels of the recent rumours of George Osborne giving the Bank of England more powers to regulate the BTL mortgage sector, new European regulations being introduced in March 2016 look likely to beat them to it with legislation that will create important distinctions between Professional Landlords running property businesses and 'Accidental Landlords' requiring consumer protection

The Mortgage Credit Directive is a piece of EU legislation which has been around since 2003 and many aspects of it have already been introduced under the Mortgage Market Review which affected residential home loans




The UK government has interpreted this in such a way that will cause BTL mortgages to become regulated for the first time

From 21 March 2016, anyone taking a buy-to-let mortgage that isn't being used for a property business will need have to take out a regulated product

This includes anyone who has inherited a property that is let out, or who plans to rent out a home they previously lived in. This is because under the MCD they will be deemed a consumer rather than a professional buy-to-let borrower

The rules will change the way mortgages are sold and mortgage brokers and lenders will need specific permissions from the Financial Conduct Authority to advise and provide these Consumer Buy-to-Let loans

Until now BTL borrowers have not had to undergo the same sort of affordability tests that apply to residential mortgage applicants but from March of next year "Consumer" BTL borrowers will need to do so  - the treasury estimate 11% of existing BTL mortgages fall into this category

It's unknown how the lenders will react, I can't see it having a hugely significant impact on the choice of mortgages or providers but just as with the mooted increase in BoE powers I can see that this could have a significant & destabilising effect when 'Accidental Landlords' come to remortgage 

I say this as by their very nature Accidental Landlord properties are unlikely to offer the same sort of yields & cashflow as those properties specifically bought as investments and it may be that if they fail the required criteria to obtain a remortgage their owners are forced to take alternative action such as selling their property 

With the forthcoming changes to Landlords tax relief on mortgage interest payments it could provide further impetus for lenders to focus more on providing BTL mortgage products for those borrowing through dedicated property companies 

Click here for an excellent This Is Money article giving more details on the likely changes and their impact http://www.thisismoney.co.uk/money/buytolet/article-3296957/How-know-consumer-professional-buy-let-borrower.html

If you'd like to have a chat about the likely impact of this legislation, I'm not a financial adviser so couldn't offer advice but could certainly have a chat about it! If you'd like to discuss any aspect of property investment in Sunderland feel free to give me a call on 0191 567 8577, email neil.whitfield@belvoirlettings.com or pop into our 11 Frederick Street office for a chat

Three Tenanted Redhouse Semis Giving over 7.6% Gross Yield (Same Owner - Could Be Desperate?)

These three tenanted 2 bed semis in Redhouse have all been listed by the same agent on the same day, so it's clear that they are owned by the same Landlord - this looks to be the same Landlord that looked to offload 6 properties in March 

Click the link below for the blog post from March and you'll see one of them below was being offered back then

Portfolio of 6 Tenanted Properties in SR5 (For Sale as Portfolio or Individually) - 8.8% Gross Yield 

In light of this you may be able to strike a deal if you bought all three - even if you didn't they look to provide a decent enough return if you believe the estate agents figures and assuming they are in good condition - the lack of internal pics is a slight concern but it may just because the tenants are messy!




They are being sold for 75,000 achieving £500pcm (8% Gross Yield), £75,000 with £520pcm rent (8.3% Gross Yield) and £75,000 with £475pcm rent (7.6% Gross Yield) respectively

Click here for details
http://www.rightmove.co.uk/property-for-sale/property-37555641.html
http://www.rightmove.co.uk/property-for-sale/property-37555644.html
http://www.rightmove.co.uk/property-for-sale/property-37555647.html

Given all three have gone on the market together it does suggest the owner might be susceptible to negotiation

Give me a call  on 0191 567 8577 or email neil.whitfield@belvoirlettings.com if you'd like to chat about them or for more information about the Sunderland property market in general