Malcolm Sargent Catchment Area Properties Outperform Stamford Average By 33%

I was having a chat with a Stamford property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property.  

Anecdotally, I have always known this to be true; a good school creates good demand and good demand does affect house prices.  



So, I asked my colleagues who chat to all the house hunters and relocating families asking to be registered on our mailing list, and they confirmed that most people cite location as their number one factor.

After looking through our mailing list, it confirms there is a close correlation between the high demand areas of Stamford and the close proximity to a good primary school.  Talking to my team in a recent morning meeting, they agreed many people would look to increase their budget quite significantly, whilst others would consider downgrading their property requirements to be close to a good primary school.

Those of you who regularly read this blog will know I like a challenge, so I decided to look at the science behind these assumptions.  According to the SchoolGuide website, Malcolm Sargent Primary School is one of the best primary schools in Stamford.  Its’ figures are certainly impressive.  Their last Ofsted Report classified it as ‘Good’, a score of 105 on reading and Maths 106 (National Average 99.4 and 99.6 respectively) at Key Stage 2.  These results are even more impressive when you look at pupil/staff ratio of 25:1.

Looking at property sales within half a mile of Malcolm Sargent (the core of the catchment area), property values have risen in value since 2000 by 222.6%, whilst according the Land Registry, the Stamford average as a whole has risen in the same time frame by 167.1%.

That means the parents of Malcolm Sargent have seen the values of their properties rise proportionally 33.2% more than the Stamford average ... interesting don’t you think?

However, whilst a good primary school significantly contributes more to house prices, the same can’t be said for secondary schools.  There are two reasons for this; firstly, as secondary schools are much larger their catchment areas are correspondingly much larger, meaning parents don’t need to live so close to the school.  Secondly in the UK, whilst the difference between the top 25% and bottom 25% of secondary schools is not insignificant, in the primary school sector, the difference between the top 25% and bottom 25% is, according to the London School of Economics, is considerably and significantly more.

Many other Stamford landlords, both who are with us and many who are with other Stamford agents, like to pop in for a coffee or ring/email us to  discuss the Stamford property market to consider how Stamford compares with its closest rivals and hopefully we can answer all their questions.  You must take lots of advice and seek out the best opinion.  

David Crooke

Owner and MD

 

 

Moving in Oakham from a 2 bed to a 4 bed will cost you £944pm

Moving to a bigger home is something many residents with growing young families aspire to.  Many people in 2 bedroom homes move to a 3 bedroom home and some even make the jump to a 4 bed home. 

Bigger homes, especially 3 bed homes are much in demand and it can be a costly move.


If you live in Oakham in a 2 bedroom property and wish to move to a 4 bedroom house in the town, you would need to spend an additional £239,098 (or £944.44 pm in mortgage payments (based on the UK Bank average standard variable rate)).  However, this jump is quite rare as most people jump from a 2 to 3 bedroom home and then later in life move from a 3 to 4 bedroom home.

So, after being asked my thoughts on moving home in Oakham by a friend recently, please find my analysis of the local property market and then some thoughts.  

To start with, let us see what the average property price is for an Oakham property by the number of bedrooms it has.

 

Average Property Price in Oakham by Bedroom
1 bed	2 bed	3 bed	4 bed	5 bed
£155,530	£191,639	£249,080	£430,737	£534,360

 I then decided to calculate what it would cost to make the jump upmarket from 1 bedroom to 1 bedrooms, 2 to 3 bedrooms etc, etc, both in actual money and in mortgage payments (using the current standard variable rate of UK Banks of 4.74% - so the mortgage cost could be higher or lower depending on the mortgage taken).

 

	Oakham
	Price Difference to make the move	Cost per month to move up market (Mortgage)
1 bed to 2 bed	£36,110	£142.63
2 bed to 3 bed	£57,441	£226.89
2 bed to 4 bed	£239,098	£944.44
3 bed to 4 bed	£181,657	£717.55
4 bed to 5 bed	£103,623	£409.31

There are some interesting jumps in costs when moving upmarket as an Oakham buyer.  The cost of moving from 1 to 2 beds, and 2 to 3 beds is relatively reasonable, whilst the jump from 3 to 4 beds in Oakham is quite high (and hence why some 4 bed properties are taking slightly longer to sell nowadays).  

 On an aside, a lesson here for all my landlord property blog readers, you can quite clearly see why the larger 4 and 5 bed properties don’t offer the best returns for buy-to-let because the monthly finance costs and rents achieved don’t match up so well (i.e. A mortgage for a 4 bed home in Oakham would cost you 72.93% compared to a 3 bed mortgage, but the jump in rent would be a lot less than that - although depending on your circumstances, 4 bed homes can offer other advantages to buy to let – pick up the phone if you want to know what they are in more detail).

So, coming back and looking at the stock of properties in Oakham, this also makes thought-provoking reading …

 

Housing Stock in Oakham by Bedrooms
1 bed	2 bed	3 bed	4 bed	5 bed
5.26%	23.68%	44.74%	23.68%	2.63%

The most active purchasers are 20-somethings and 30-something homeowners with growing families.  Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle.  

For landlords looking to buy within Oakham, they face stiff competition from these 20/30 something families, making the 3 bedroom home massively in demand, often attracting spirited offers and selling within weeks of listing.  This mix of homebuyers and landlords is a pressure point in the Oakham property market.  

 

Again, if you are a landlord, call me and I will show you areas with decent returns where you aren’t in so much competition with young Oakham family homebuyers.

Yet, the cost of an additional bedroom can be too much for some. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be quite disconcerting, with families often having to move to a different part of town to get the bigger home they need.

Nevertheless, that’s the place many homeowners find themselves in with the cost of the additional bedroom being too much to bear.

To those buying your home for the first time, all I suggest is you not only consider the mortgage payments and other costs of your first home, but also do your homework into your next rung up the property ladder.  Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.

...and to Oakham landlords – well these changes in the way people live also mean there are opportunities to be had in the Oakham rental market.  Many Oakham landlords are starting to pick my brain on this, so if you don’t want to miss out – drop me a line.

David Crooke  / david@upp-property.co.uk

Owner and MD

Oakham 01572 725 825

Sales & Lettings

 

 

 

 

 

Stamford and Rutland's 3 Best Property Deals This Week. (Yields of 4.3%-4.7%)

The following 3 properties have caught my eye this week.  They are all in great sought after locations and are well worth considering and investigating further.

PROPERTY 1)

WHAT? 3 Bed terraced house, marketed with Newton Fallowell

WHERE? Hetterley Drive, Barleythorpe, Oakham

WHY? Brand new, 3 bedrooms, end of terrace with 1 parking space

HOW MUCH?  £192,500
FINANCIAL RETURN? Rent approx. £700pcm / Yield 4.3% / Annual Income: £8,400
MORE DETAILS?  Click here...

http://www.rightmove.co.uk/property-for-sale/property-50784081.html

 PROPERTY 2)
 

WHAT? 1 bed maisonette, marketed by Moores

WHERE? Chepstow Court, Barleythorpe, Oakham

WHY? Modern, good sought after location with allocated parking

HOW MUCH?  Guide Price £125,000
FINANCIAL RETURN? Rent approx. £495pcm / Yield 4.7% / Annual Income: £5,940
MORE DETAILS?  Click here... 
http://www.rightmove.co.uk/property-for-sale/property-69161333.html

Property 3)



WHAT? 2 bed semi-detached, on with Nest Estates

 

WHERE? Newboults Lane, Stamford

WHY? Immaculate order, 2 double bedrooms, refitted kitchen

HOW MUCH?  £195,000
FINANCIAL RETURN? Rent approx. £700pcm / Yield 4.3% / Annual Income: £8,400
MORE DETAILS?  Click here... 
http://www.rightmove.co.uk/property-for-sale/property-69118349.html

Investing in property is a balancing act of yield, capital growth and void periods. 

If you are considering investing in property and would like to chat it through with me, I would love to hear from you.  As a landlord myself, I have an in-depth understanding of the buy-to-let investment market and how to achieve success.

I look forward to discussing property with you.

David Crooke, Owner and MD
UPP Property, Sales & Lettings 

Stamford 01572 725 825 / Oakham 01780 484 554
david@upp-property.co.uk

 

Stamford Buy-to-Let Return / Yields – 1.7% to 6.1% a year

  

The mind-set and tactics you employ when buying your first buy-to-let property needs to be different to buying your own home. 

With your own home, you may well pay a little more to get the ‘perfect place’ and you are less likely to compromise. 


Yet with buy-to-let, if your goal is a higher rental return (a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite), inexpensive properties can bring in bigger monthly returns. 

Most landlords use the term ‘yield’ instead of monthly return.  To calculate the yield, multiply the monthly rental amount by 12 to get the annual rent, and then divide it by the value of the property.
 
Thereby using the same calculation, if you increase the value of the property, the subsequent yield drops.  Or, to put it another way, if a buy-to-let landlord has the choice of 2 properties that create the same amount of monthly rent, the landlord can increase their rental yield by deciding on the lesser valued property.
 
To give you an idea of the sort of returns in Stamford...

Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Stamford area.

With the total amount of UK buy-to-let mortgages amounting to £199,310,614,000, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions.  Landlords are looking to maximise their yield, and are doing so by buying cheaper properties.
 
However, before everyone in Stamford and Rutland starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what buy-to-let property to buy.  Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too.  Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. 

Landlords can also make money if the value of the property goes up and for those landlords who are looking for capital growth, an altered investment strategy may be required.

In Stamford, for example, over the last 20 years, this is how the average price paid for the 4 different types of property have changed…

• Stamford Detached Properties have increased in value by 294.2% 
• Stamford Semi-Detached Properties have increased in value by 241.1%
• Stamford Terraced Properties have increased in value by 302.3%
• Stamford Apartments have increased in value by 288.8%

It is very much a balancing act of yield, capital growth and void periods with property investment.  Every landlord’s strategy is unique to them. 

If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord who doesn’t use a letting agent, or a landlord who currently uses one of my competitors – then feel free to drop in and let’s have a chat.   You might learn something, and my tea making skills are legendary!


David Crooke
Managing Director and Owner
UPP Property Sales & Lettings 01780 484 554 / david@upp-property.co.uk