By Mike White of Martin & Co Lettings
Over the summer, we have taken on board lots of new clients who are not only new to us but are new themselves to the world of being a landlord and property investment. The majority of whom have taken the view that they’d be lucky to get one or two pc on their savings with the bank so why not buy real property and receive an income of around 5-6%? Their expectation being, the property market will gradually recover during the next few years and so their investment will grow as well as paying an income. Cash in the bank unfortunately, won’t do that for you! Yes, there’s a risk involved (of property prices going down more) but the risk/reward potential is quite compelling.
So if you’ve got a few bob to spare and you’re contemplating property investment where and what should you buy?
The following is a view based purely on our letting experience. Let’s start with the What……..
1). We generally have more demand for houses than flats.
2). Houses tend to let (and more importantly re-let) more quickly than flats.
3). There is a surplus of new build unsold/ unoccupied flats in Norwich currently.
4). Flats are perceived to be cheaper to maintain than houses (not always true)
5). New build flats can be today’s must have and tomorrow’s ghetto.
6). Two and three bed houses offer very good rental yields.
1). People in Norwich love to walk or cycle to work. The “Victorian” neighbourhoods are very popular, therefore.
2). As are the suburbs such as Taverham, Thorpe Marriott, Dussindale, Sprowston etc
3). Three Score and Chapel Break are always in demand.
In fact, since most of Norwich is pretty attractive, it would probably be easier to list the places to avoid but I’m not going to! The trouble with this type of Where and What list, inevitably there is a lot of generalization. If you’ve read this far, you’re probably thinking you need to steer clear of flats. This isn’t necessarily true; we’ve let a bucket load of flats this summer so it all depends where it is, how much you pay for it and what condition it’s in. In practice, if you’ve got money earmarked for property investment you need to sit down with a good letting agent and a good estate agent (note: these are 2 very different people) to discuss what properties are out there to purchase and to evaluate their sustainability from a lettings perspective.
I can tell you demand has been very good in Norwich this year and, at the time of writing, a number of agents have a fairly thin stock of good quality properties on their books. Yes, rents have gone down but for the new landlord just coming into the market, that should not be of concern since the purchase price will reflect this already.
Mike’s at Martin & Co., on 01603 766860 or at 13 St Giles Street Norwich.