It’s good news for those landlords who have invested in the Rotherham property market with the long term in mind because prices have risen by 22.5% in the last five years. What’s behind this rise? Read on for our analysis.

Over the last five years we have seen some interesting, subtle changes to the local property market. In Rotherham, the buying patterns of landlords has changed ever so slightly. 12 months ago, 6,700 buy-to-let mortgages were granted (in the same month) for £900m. This means that the average was £124,200. However, looking at the last month, the lending figures were down… but not as much as you would think with the Brexit issue hanging over the country. In total there were 6,100 buy-to-let mortgages for a total sum of £800m, which is an average landlord mortgage of a respectable £131,100.

Compare both of these statistics to 2014, a boom year in the last decade. In 2014, in the corresponding month only £1,030 was borrowed on 8,300 buy-to-let properties, giving an average of £124,100. From these statistics, you could argue that it seems Brexit is having no effect on landlord buying habits.

What about Rotherham?

As we previously mentioned, the buying patterns in Rotherham have changed slightly.

Throughout 2018 we regularly spoke to more and more landlords. Some were seasoned professionals and some were first time landlords. Across the board, their attitude has been mostly positive. Instead of reading the scare stories, those Rotherham landlords look with their eyes and see a local property market that is doing reasonably well. There are medium term rents, property values rising and (as the above statistics identified) landlords that are still buying.

One question we get asked all the time is “what type of buy-to-let property should I buy?” We addressed this topic here in terms of the number of bedrooms, but today we would like to consider the money made from property through both the rent (expressed as a yield) and the actual value of a home.

We have records of what each type of property (i.e. Detached/Semi/Terraced/Apartments) has achieved per square metre going back 20 years … and looking back over the last 5 years, these are the numbers:

It is clear that these all have a similar percentage uplift but there is some variation throughout. Although only slight, this can of course equate to thousands of pounds in monetary terms.

It can be seen that semis and terraced houses have performed the best. However, these are just averages. Landlords in Rotherham should always consider when the purchase of an apartment may be best for them. Whilst they haven’t been the best performers in terms of capital growth, they do tend to generate slightly better yields than a house (because, in general, several sharers can afford to pay more than a single family). Houses tend to appreciate in value more rapidly and may well be easier to sell because there are fewer houses being built.

Obviously we are talking in averages, but this gives a good place to start.

The bigger picture and why landlords are well positioned for the future

We must continue to consider the big picture.

Irrespective of what is happening in the world (Brexit, Trump, China, whatever…), people in Rotherham are still going to need a roof over their heads. As the UK hasn’t kept up with home building, even if we have a short term Brexit-related property value wobble this year, in the medium term demand will always outstrip supply and prices and rents will increase. The local council just doesn’t have enough money to fix the issue and the national government seems a bit pre-occupied at the moment. Therefore, as the population increases, the only people who can fulfil the demand is the private buy-to-let landlord.

Are you worried about the future?

Hopefully we’ve settled some nerves by looking at how competent the Rotherham property market seems to be at this moment in time. However, you will still be needing advice and guidance on where to invest your money or how to rent out your property most efficiently. That’s where we come in. We can take care of all your worries and give important, robust advice on the property market. Please get in touch to find out more.

It is midway through February and Rotherham property values are unexpectedly 6.1% higher than at the end of 2017. With the uncertainty of Brexit, it’s hard to know what will happen but this has exceeded all the predictions of economists, which is an astonishing sign of strength for the local Rotherham (and wider national) economy.

Whilst these Land Registry statistics are positive, they come after a lethargic year for the number of properties in Rotherham compared to the actual prices achieved for those properties.

Read on for a brief overlook of the local property market and predictions for the rest of 2019.

The average value of a Rotherham property today currently stands at £152,200: how will it grow in the future?

It’s important for landlords who are buying a property as an investment for later in life to understand the value of properties. The average value of a Rotherham property is at a pretty decent level but it’s important to consider the finer details.

Property sales in our area over the last 12 months is somewhat lower than the 20 year average (2,159 sales compared to 2,914), indicating a recent trend of people moving less.

At Bricknells, our perspective is that property value growth will be more reserved in 2019 after two decades of weaker wage rises. One of main drivers in the demand (and thus the price people are prepared to pay for a home) is the growth of peoples wage packets. Unfortunately, our property values are 166.79% higher than they were in January 2002, yet average salaries are only 76.1% higher over the same time frame. This means over the last few years, with average property values so high compared to salary/wages, many potential buyers have been priced out of being able to purchase their first home.

Not all doom and gloom

At first glance, these stats are actually rather positive during this reported time of political uncertainty and the height of Brexit commotion. The press have always looked for the bad news and whilst we are not entering into the pros and cons of Brexit itself, the numbers do stack up quite well since the Brexit vote took place nearly 3 years ago. How things move forward in the next two months will determine the true legacy of political events.

When taken with the recent reduction in short to medium term number of property transactions (i.e. the number of properties sold), it should be noted that a lot of the this buoyant house price increase has a lot more to do with a shortage of properties on the market rather than an uplift in the housing market generally.

And we can’t forget that Rotherham isn’t in its own little bubble, as there are noteworthy differences across the UK in property value inflation. House prices in London and the South East have hardly risen or even fallen in some places, whilst in the Midlands and further north they have generally increased.

Our recommendation is that buy-to-let landlords in our area should expect house price growth to remain stable between 1.3-2.3% by the end of this year (with a slight dip in the summer)… as long as nothing unexpected happens in the world economically or politically of course!

If you need any advice regarding making an investment in the property market please get in touch with us. We also post the latest property tips for investors in our area to help those wishing to expand their portfolio. Be sure to pay a visit to that section of our website!

Bricknells are proud to support RTSA. A Chorus Line, their next fantastic show is in March at the Rotherham Civic Theatre.

The show is on between 19th-23rd March with evening performances at 7.15pm and a 2.15pm matinee. Book early to avoid disappointment. Call 01709 823640 or visit the Rotherham Theatres website.

The Rotherham property market can be tricky to navigate and that’s why so many landlords get in touch with Bricknells Rentals for our expert advice. One of the most common questions we get from landlords (and indeed, homeowners in our area) are which attributes and properties are likely to make their property more attractive when compared to other properties. It is important to know which features will detract from the price of your home.

Over time buyers and tenants naturally develop different wants and needs. These do change. However, despite this, it is clear that in our area location is still the number one factor that impacts the value of property. This is illustrated by this statistic: a property in one of the best neighbourhoods can achieve a price of almost 50% higher than a similar house in an ‘average’ area.

Nevertheless, after location, the next characteristic that has a significant influence on the desirability (and therefore price) of property is the number of bedrooms and the type of property (ie. detached/semi/terraced/flat).

The number of bedrooms for owner-occupiers very much depends on the size of the family and the budget. In contrast, Rotherham landlords have to consider the investment opportunity. We have analysed Rotherham’s housing stock into bedrooms and tenure. First, let’s look at Rotherham homeowners:

Here we can see that more than 75% of homeowners live in a home with 3+ bedroom.

Let’s look at private rented households in Rotherham:

In contrast, it can be seen that only 45% of private rented households have 3+ bedrooms. It’s quite clear that Rotherham owner-occupiers tend to occupy the larger properties with more bedrooms – this would be largely expected due to the demographics of people who own a house.

Investors may be tempted to think that there is an opportunity to purchase larger properties with more bedrooms to attract tenants requiring properties with more bedrooms. However, don’t be duped by the statistics – yes, they do show that there could be a few opportunities in this area, but before you go buying large 4 bedroom properties, remember that a lot of bigger properties in Rotherham just don’t make financial sense when it comes to buy-to-let.

For numerous years buy-to-let landlords have been the lone buyers at the smaller one and two bed starter homes of the market, as they have been lured by elevated tenant demand and eye-catching returns. Some landlords believe their window of opportunity has started to close with the new tax regime for landlords, whilst it already appears to be opening wider for first time buyers. This is great news for first time buyers… but don’t worry landlords, all is not lost, you can still pick up bargains if you do your homework. That’s where Bricknells comes in – please get in touch if you have any questions or visit our featured property page to see our best property recommendations for investors.

For most Rotherham people, a mortgage is the only way to buy a property. However, for some buy-to-let landlords or homeowners who have paid off their mortgage, they have the choice to pay exclusively with cash. Looking at the numbers locally, there was actually over a quarter of all properties bought in our area that were purchased without a mortgage.

The question for landlords in this position is whether you should you use all your cash or whether a mortgage be a more suitable option.

First let’s examine those local numbers. The total number of sales in the last 7 years was 22,441 and of these sales, 5,974 were made without a mortgage. This is an impressive 26.6%. However, this statistic is actually less than the national average where nearly a third (31.9%) were cash purchases during the same time period.

From the graph below you can see that the level of cash purchases against mortgage purchases has remained reasonably constant over those seven years.

Variable or fixed: which mortgage would you get?

Before considering the merits of a cash purchases against a mortgage purchase, it is important to consider what mortgage is on offer: would you fix the rate or have a variable rate mortgage? In the last quarter, 90.57% of people who took out a mortgage chose a fixed rate mortgage with an average interest rate of 2.27% so the trend is definitely in that direction (overall 65.79% of mortgages are on a fixed rate).

The level of mortgage debt compared to the value of the home itself (referred to as the Loan to Value rate – LTV) was interesting, as 61.9% of people with a mortgage have a LTV of less than 75%. Although, one number that did jump out at me was only 4.33% of mortgages are 90% and higher LTV – meaning if we do have another property slump, the number of people in negative equity will be relatively small.

The pros and cons of a Rotherham buy-to-let landlord taking out a mortgage

The main benefit for the buy-to-let landlord who chooses the mortgage route is that this will help them to increase their investment across more properties, thus maximising the opportunity for a greater return. Conversely, if you choose to put all your cash into one property then your investment will be restricted to that property. Having more than one property in your portfolio is beneficial as this means that if there is a void in the tenancy, there will still be rent coming in from other properties.. The flip side of the coin is that there is a mortgage to pay for whether or not the property is let.

The other great motivation for landlords to take a mortgage is that they can set the mortgage interest against the rental income. However, that will only be at the basic rate of tax by 2021 due the recent tax changes. Furthermore, Banks and Building Societies will characteristically want at least a 25% deposit (meaning Rotherham landlords can only borrow up to 75%) and will assess the borrowing level based on the rental income covering the mortgage interest by a definite margin of 125%.

As a result, a lot will depend on what you, as a landlord, hope to attain from your buy-to-let investment, as well as how relaxed you would feel making the mortgage payments whilst there is a void.(Interestingly, Direct Line calculated a few months ago that voids cost UK landlords around £3bn a year or an average of £1000 per property per year).

You also have to consider that interest rates could also increase, which would eat into your profit… although that can be mitigated with fixing your interest rate (as discussed above).

So, with everything that is happening in the world, does it really make sense to cash buy rental properties?

We support landlords to achieve their investment goals

At Bricknells Rentals we help both new and existing landlords work out their budgets and take into account other costs such as agent’s fees, finance, maintenance and voids in tenancy.

The bottom line is we as a country aren’t building enough property, so demand will always outstrip supply in the medium to long term, meaning property values will keep rising. That’s not to say property values might fall back in the short term, yet every time they have bounced back with vigour. Therefore, it makes sense to focus on getting the best property that will have continuing appeal and strong tenant demand.

This is an important point to conclude with: buy-to-let should be tackled as a medium to long term investment. Always! The wisest landlords see buy-to-let investment in terms of decades – not years.

As we mentioned above, we are here to help landlords in Rotherham and the rest of South Yorkshire so please do get in touch if you have any questions.

With constant advances in technology, medicine and lifestyles, people in the Rotherham area are, on average, living longer than they might have a few decades ago.

As our population ages, the problem of how the older generation are accommodated is starting to emerge. We, as a town, have to consider how we supply decent and appropriate accommodation for Rotherham’s growing older generation’s accommodation needs while still offering a lifestyle that is both modern and desirable.

Read our article to discover the statistics, see what opportunities there might be for local landlords and find out more about the issue of ageing populations.

The statistics

In Rotherham in 1997 around one in every six people (15%) were aged 65 years and over (and the local authority area as a whole), increasing to just under one in every five people (19%) in 2017. It is now projected to reach one in every four people (25%) by 2037. This means that over the next 19 years, the growth of the over 65 population in Rotherham will grow by 31.6% – a lot more than the overall growth population of Rotherham of 4.7% over the same time frame.

In fact, the number of those over 90 is expected to more than double in our local authority from 2,215 (0.8%) in 2017 to 4,591 (1.7%) by 2037.

And looking at the proportional percentage changes over those years:

An undersupply of bungalows and retirement living accommodation

Looking at Rotherham and the local authority as a whole, there is a distinct under supply of bungalows and retirement living (i.e. sheltered) accommodation. The majority of sheltered accommodation fit for retirement is in the ex-local authority sector whilst the majority of private sector bungalows were built in the 1960s/70s/80s and are beginning to show their age. In the medium to longer term, we need to build more bungalows and sheltered accommodation and, if we do that, that won’t only be of benefit to the elderly population of Rotherham – it will have a direct knock-on effect to the younger and middle-aged population by unlocking those family homes the older generation homeowners live in.

There have been 17 Housing Ministers since 1997. No one ever seems to stay in the job long enough to create a consensus and direction in Government Policy on the vital issue of the country’s housing shortage, yet the sound bites and White Papers seem only to focus exclusively on first-time buyers when there is an even more severe and disregarded shortage in suitable housing for the older generation.

Opportunities for landlords

There is an opportunity for investors and buy-to-let landlords in our area (and across the UK, to be honest). If you can buy a tired bungalow and do it up, there is the opportunity to flip it and make some money or rent it out to the numerous OAPs in the area looking for that sized property.

With a bit of thought, this area could be one of the most valuable in years to come. Please do get in touch with us if you need any help or recommendations. Furthermore, keep checking back on our featured property deals where we post some of the best current buy-to-let investment opportunities on the market.

Conclusions

A lot of thought is needed by the government in regards to our ageing population and with the Brexit distractions this is not necessarily forthcoming. Mature homeowners in Rotherham often feel trapped in unsuitably big family properties, unable to find smaller bungalows or suitable and affordable retirement apartments. The waiting list for council run sheltered accommodation is putting a strain on other aspects of social care.

There’s a lot of work to be done. In the meantime, Bricknells Rentals will be here helping ensure that those more mature members of our society looking to rent find the best properties that are suited to their needs.

Has the dramatic rise in Rotherham property prices of the last six years come to an end? Many economists (as well as the general public) agree that it has, but is this true? And either way, what does this mean for landlords?

If you read the national newspapers you’ll probably see a talk of doom and gloom in the British housing market. They talk about things such as strained buyer affordability (property prices have increased faster than average salaries), a lack of properties being built and Brexit uncertainties. They blame these factors on the slow down. Yet in the last 12 months people have still been moving, buying and selling in Rotherham at similar levels to the last six years. Perhaps the newspapers have been trying to create ‘bad news’ to sell their papers?

Instead, let’s look at what is really happening in our local property market.

Who is moving and why?

In the last twelve months most of the property sales in Rotherham involved semi-detached properties, which sold for on average £130,400. Terraced properties sold for an average price of £98,100, while detached properties fetched approximately £238,550.

In the homeowner sector in 2018 (i.e. owner occupation), 935 households moved within the tenure (i.e. sold the home they owned and bought another one) and 182 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).

What does this mean for buy-to-let landlords in our area?

Looking at the graph, it appears to be bad news for landlords. There were 435 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 343 Rotherham households moved to the private rented sector from owner occupation. On the face of it, this appears to be a a reduction in the private sector.

However, our own research shows that in addition to the above statistics, an additional 253 households in the private rental sector in Rotherham were created in 2018. We believe that these will continue to grow at those levels for the foreseeable future.

We have one final thought that could be a great opportunity for local property investors. 225 owner occupied households in our area sold in the last year where the homeowners passed away. These properties can be a potential goldmine and offer great returns because some of the older generation who have owned these homes for decades have spent money on high capital items such as double glazing and central heating but not on lower ticket items such as up-to-date carpets and decoration. These properties can often be bought more cheaply because most buyers can’t see past the brown bathroom suite from the 1970s. If you buy wisely, you might be able to generate a good rental yield.

Launching our brand new property investment deals page

To help you out, we’ve launched our very own property investment deal page right here on the Bricknells website. We’re posting property tips for investors looking to expand their portfolio – hopefully we can point you in the direction of a bargain or two!

And ultimately, whatever is happening in the world at the moment, the Rotherham housing market is looking in decent shape for the medium to long term. Like we say to anyone buying a property, whether you are a landlord, first time buyer or homeowner… property is a long game. If you play the long game, you will always win.

As always, if you need any help, please get in touch with us – we’re happy to help and advise!

Currently it is taking 116 days for a property coming onto the market in Rotherham to be sold subject to contract. This amount has been increasingly steadily throughout 2018. With a longer period of time to sell, a number of landlords who are considering selling some of their portfolio have been asking our advice to find out what difference the type of property makes to saleability. We’ve put together this article to highlight the latest statistics.

We’ve compared different types of property (ie. detached, semi-detached, terraced, apartment) as well as the number of bedrooms.

The clear winner here is the semi-detached variety of property in our area, which are taking 94 days on average to sell – less than the 116 day current average. At the opposite side of the scale, apartments (which many landlords own) are taking an average of 173 days.

Next we looked at what the number of bedrooms does to saleability in our area:

It is clear to see that two bed properties are taking the longest time to sell, whereas there’s not much difference between three bedroom and four bedroom properties (both take a lot less time than the current overall average).

So, what does this mean for buy-to-let landlords in Rotherham?

There is no doubt that there is a profusion of properties on the market in Rotherham compared to 18 months ago… it’s not just because more houses are coming on to the market, it’s because they are also taking a little longer to sell. At the moment we have a buyer’s market rather than the seller’s market meaning that it can be tougher to sell your property, particularly if you want to do so fast!

If you are not looking to sell a property in the short term future then there’s nothing to worry about.

If you are looking to sell up your portfolio, it’s worth inspecting the above data and planning accordingly. You may need to factor in a longer time frame when it comes to selling your properties.

A final bit of advice for those looking to stay in the buy-to-let market for a long time: in the run up to 2019 take a look at the properties that are currently sticking… you may find some bargains there with a high potential yield.

As usual, if you need any help with buying or selling and getting involved in the Rotherham buy-to-let market, please get in touch! Furthermore, our sister company Fenton Board can provide their expert advice and assistance when it comes to selling properties in South Yorkshire. Get in touch with us to ask any questions you may have.

“I just love looking over and keeping up to date the 100+ pieces of legislation that govern the rental of residential property in the UK” said no South Yorkshire landlord ever!

If you manage your own rental property in Sheffield or Rotherham, would it surprise you know that there are 108 separate pieces of legislation that govern the rental of private houses to tenants?! And on top of the 108 pieces of law, there are further 300+ regulations that are added in to the mix. Whilst landlords may once have preferred to manage their buy-to-let properties themselves to boost their profits, many landlords are starting to see this as a false economy.

In the last four years, an additional 812 landlords in Rotherham have converted from self-managed to having their property managed by a letting agent like Bricknells Rentals, taking the total number of properties under management in Rotherham to 3,304 (out of a total of 5,416 private rental properties in Rotherham).

Now, don’t get me wrong, self-managing your rental property can be a very fulfilling experience, allowing you, as a landlord, to build a deep relationship with your tenant and your emergency 24 hour plumber, builder (happy to do small jobs at a drop of a hat), decorators, first name terms with their deposit provider, lawyer and EPC provider to name but a few.

Furthermore, did you know if your tenants deposit isn’t registered, or doesn’t continue to be registered after the end the periodic tenancy upon renewal … you could be fined up to three times your deposit? With the average rental deposit in Rotherham being £915, each self-managed landlord in Rotherham could be fined £2,745 per tenancy if the deposit isn’t currently registered.

We’ve done some calculations and we’ve worked out that…

…if every deposit of every Rotherham self-managed landlord’s property wasn’t registered, the total fines would amount to £5,798,099

Now of course, I am not suggesting for one minute all the self-managed landlords in our area haven’t registered their deposits. Yet almost on a daily basis, we do come across horror stories to that effect.

Another two (but by no means all) hot issues that the courts are cracking down on include doing immigration ‘Right To Rent’ checks on all tenants (yes, all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot serve the section 21 Notice, meaning the tenant cannot be served notice to vacate the property.

To many, it’s really a case of DIY or getting a qualified professional in… which is why so many of those aforementioned Rotherham landlords have asked letting agents to manage their properties since 2014.

How can Bricknells Rentals assist you?

You might say, “Of course you are going to say all this – Bricknells Rentals are a letting agent!”

At the end of the day, the choice really comes down to your time and your knowledge. If a landlord is not equipped or able to devote time keeping up-to-date of legislation and law, nor doesn’t want to be bothered 24 hours a day, 7 days a week, 365 days of the year about a blown light bulb, dripping taps, missing rental payments or the requirement to arbitrate arguments and disagreements between tenants and neighbours, it is perhaps better to pass this accountability/responsibility onto a letting agent.

One thing we always underline is that letting agents aren’t all the same. Would it surprise you to know that letting agents aren’t regulated? How do you know which one to trust?

Landlords that do already use a letting agent should not forget that passing over management to a letting agent doesn’t mean they can disregard legislation and they are still responsible for deposit/rent repayment legal directives, civil fines or action if the letting agent makes a mistake. Therefore, it’s important to pick a respectable letting agent from the start. That’s where Bricknells can come in and help. Our vast experience has made a difference to so many landlords in Rotherham and Sheffield.

If you are a self-managed landlord in Rotherham, and want to know if your paperwork is in order please feel free to drop us a line – we are more than happy to ensure that you are the right side of the law. Similarly, if there are any questions about the above article, we’re happy to provide answers. Get in touch here.

Each month we give an overview of the lettings market here in Rotherham.

It’s important for landlords to keep up-to-date with the latest trends in the rental market in our area – that’s why we post our review of the lettings market here in Rotherham. Take a look at the overview for October 2018:

We’d love to hear from you, particularly if you are a landlord in our area that needs our assistance. Please get in touch with Chris Holmes on 01709 365584 or via chris@bricknells-rentals.co.uk