Are fewer people moving house in Nottingham?

I have recently been looking at the Nottingham property market for annual comparisons on property purchases and how the property market has changed from the same period a year ago. Looking at the figures I haven’t seen any change in recent months and the Nottingham market as a whole seems pretty stable. 

In the early part of the year the top end of the market did have a bit of a spasm in places such as Mayfair and Chelsea with the prospect of a Labour/SNP pact and a possible Mansion Tax for properties over £2 million, but in Nottingham we've not really been affected particularly since only two properties have sold above the £2,000,000 mark in the last 7 years.  

Looking at the numbers for Buy to Let properties in the area current figures suggest that of the 876 properties that have come on to the market in Nottingham since the 2^nd of April, 107 of them have been brought and are sold subject to contract which is just over one in eight (12.21%).

Things are starting to change in the way people in Nottingham buy and sell property.  Back in the 1970’s, 1980’s and 1990’s the tradition was to buy a terraced house as soon as you left home and refurb it.  Meanwhile property prices had gone up, so you could trade up to a 2 bed semi after a while and repeated the process, until you found yourself in a large 4 bedroom detached house with a large mortgage. 

Looking into this a little deeper and as mentioned in my previous articles, the public’s attitude to home-ownership itself has changed over the last ten years.  The pressure for youngsters to buy has disappeared as renting, not buying is considered the norm for the younger generation. This isn't just a trend in Nottingham but a national occurrence as I have noticed that people buy property by upsizing or downsizing because they need to, not because ‘it’s what people do’.  This does means there are a lot less properties on the market compared to the last decade.

A by-product of less people moving, is less people selling their property. My research shows there are a lot fewer properties each month selling in Nottingham compared to the last 10 years.  For example, in February 2015 only 472 properties were sold in Solihull. Compare this to February 2002 were 761 properties sold and February 2003, were 835 properties sold.  I repeated this comparison to more recent years and the results were identical if not greater.  So what does this all mean?  Demand for Nottingham property isn’t decreasing but with fewer properties for sale, it means property prices are proving reasonably stable too. Consistent and steady growth of property values in Nottingham year on year, without the large peaks and troughs we saw in the late 1980’s and mid/late 2000’s might just be the thing that the Nottingham property market needs in the long term.

For further information and opinions like this on the Nottingham Property market please email me on jaclyn.bartlett@centrickproperty.co.uk  

Should I extend my Nottingham buy-to-let?

There’s been a lot of press recently regarding the rise of buy-to-lets and particularly how to maximise the income from property investments. Clearly, if you are considering getting into the game, it’s going to be vital that there’s enough profit in it to make the commitment worthwhile. This led me to wonder whether extending your property investment would affect the rental income enough in the long term to achieve a decent return.

Having more available space is generally thought to be consistent with better quality accommodation, which homeowners and tenants are usually prepared to pay for. On average, the figures suggest that if you added an additional bedroom to a two bed terraced, it will add 10% to the value of the property. Likewise, adding a further bedroom to a three bed terraced will add 9% to the value.

However, before you rush off to the planning department, there are some important considerations to think about.  What would be the cost of making that extra bedroom? The average value of a terraced house in Nottingham is currently £105,100 whilst the average value of a semi detached house is £139,700, therefore to make any money, you would need to keep the costs of your extension between £14,668 and £19,984.

This led me to wonder how much the number of bedrooms affected rental prices and “rent-ability”. I.e. would the construction of an extra bedroom be worth the hassle and expense? Interestingly below, you will see that whilst bedrooms do have an obvious effect on the rent, it’s generally not worth getting excited and calling your local builder.

• ·        19.6% of the one bed properties on the market to rent in Nottingham have a tenant with an average rent of £488 per month.
• ·         28.9% of the two bed properties on the market to rent in Nottingham have a tenant with an average rent of £626 per month.
• ·         32.2% of the three bed properties on the market to rent in Nottingham have a tenant with an average rent of £714 per month.
• ·         10% of the four bed properties on the market to rent in Nottingham have a tenant with an average rent of £840 per month.

So, let’s say you did spend £19k on extending your 2 bed terraced to achieve a third bedroom - and you found a tenant to rent it straight away. Hypothetically, If house prices stayed roughly in line with inflation, you would on average, achieve an extra £134 per month -  meaning that it would take roughly 85 years to make the money back again from the rent alone. Of course, the capital value of the house is likely to rise, but there are never any guarantees in the property market.

If you are a Nottingham landlord and are wondering how to achieve the most from your investment, there is one great tip that will cost a lot less than adding additional bedrooms.  Try sprucing up the exterior, emulsion in all the rooms and install some fresh carpets and curtains. The property will rent faster and your tenants will be happier, meaning you’ll hopefully achieve a long and happy tenancy.

For more advice on the Nottingham Property Market, email me on jaclyn.bartlett @centrickproperty.co.uk