‘Flipping’ Heck – Basingstoke Property Values Rise by £44.85 a day

Basingstoke property

Investing in Basingstoke buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property - the fact that you can touch the bricks and mortar. It is this factor that attracts many of Basingstoke’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in Basingstoke, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases. Rental income is what the tenant pays you - hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Basingstoke property has risen by £81,850 (equivalent to £44.85 a day), taking it to a current average value of £329,300. Yields range from 3% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping - buying a property, carrying out some minor cosmetics and re selling it quickly). I have seen several investors recently who have made decent returns from this strategy.

For example …
• One Basingstoke Investor paid £252,000 for a 2 bed bungalow on Larkfield in February 2016. It appears some cosmetic work was done to the property and it was resold a few months ago (November 2016) for £305,000 … 20.79% return before costs (or compound annual return equivalent of 30.91% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=61646900&sale=4630885&country=england

• Another Basingstoke Investor flipped a lovely 2 bed semi on Pettys Brook Road, paying £242,500 in July 2015 and selling it again after some doing some basic cosmetic works, sold it for £290,000 a few months ago (October 2016) … 19.59% return before costs (or equivalent 14.97% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=43619589&sale=4630882&country=england

This demonstrates how the Basingstoke property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Basingstoke landlords and investors to become particularly wealthy.
As my article mentioned a few weeks ago, more and more Basingstoke people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Basingstoke, then one place for such information would be the Basingstoke Property Investor Blog.

Basingstoke First time buyers borrow £81.8m in the last 12 months

For sale

Basingstoke First Time Buyers borrow £81.8m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Basingstoke property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 1,702 properties have sold (and completed) in Basingstoke, worth £504.2m. Interestingly the number of properties changing hands in Basingstoke has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Basingstoke buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Basingstoke property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months …

Q4 2015 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers
Q1 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers
Q2 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers
Q3 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Basingstoke itself, first time buyers have borrowed more than £81.8m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Basingstoke economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Basingstoke, at this moment in time there are 354 properties for sale, compared to 242 properties a year ago. All this will be welcome news amongst Basingstoke first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners. For more thoughts on the Basingstoke property market like this, you might want to visit the Basingstoke Property Investoy Blog


186 Basingstoke Households Occupied by OAP Renters

rental properties

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant? In retirement, selling up could make financial sense to the mature generation in Basingstoke, potentially allowing them to liquidate the equity of their main home to enhance their retirement income. I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Basingstoke?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home. Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Basingstoke at age 65 (years) is 19.7 years for males and 21.3 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females). The burdens of financing a long retirement are being felt by many mature people of Basingstoke. The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Basingstoke? Of the 8,766 households in Basingstoke, whose head of the household is 65 or over, not surprisingly 6,404 of households were owned (73.05%) and 2,018 (23.02%) were in social housing. However, the figure that fascinated me was the 186 (2.12%) households that were in privately rented properties.

Anecdotal evidence, by talking to both my team and other Basingstoke property professionals is that this figure is rising. More and more Basingstoke OAP’s are selling their large Basingstoke homes and renting something more manageable, allowing them to release all of their equity from their old home. This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Basingstoke OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent. Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP - the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn't leave family members panicking to sell the property to fund care-home fees.

Basingstoke landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio. Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!