Friday, 20 November 2015

Values of Stamford Terraced Houses smash through the £250/sq ft barrier


The Council of Mortgage Lenders latest snapshot of the Buy-to-Let (B2L) mortgage market shows us that Buy-to-Let landlords haven’t been put off by the Chancellor's announcements on the way Buy-To-Lets are taxed.
Last month, the Council of Mortgage Lenders stated £1.4billion was borrowed by UK landlords to purchase 10,500 B2L properties, up 26.5% from the same month in 2014, when only 8,300 properties were bought with a B2L mortgage.
Go back two years and the number of B2L mortgages used for purchasing (again not re-mortgaging) is 36.4% higher! Even more interesting has been the fact that the average amount borrowed has risen as well. The average B2L mortgage last month was £133,330, up from £128,480 a year ago.
In Stamford, I am speaking to more and more landlords, be they seasoned professional landlords or first time landlords, as they read reports that the Stamford rental market is doing reasonably well, with rents and property values rising.
Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).
The first thing you have to decide is whether you want great capital growth or great rental yield, as every knowledgeable landlord knows, you can’t have both. Over the last twenty years, property values in Stamford have risen by 137.2%, compared to Greater London’s 436.2%.
This has proved that capital growth increases faster in the more expensive South, but your investment money doesn’t go very far, meaning there won’t be as much rental yield from a 1 bed flat in Chelsea (2% pa at best with a fair wind) as a 2 bed semi in Stamford.
However, whilst the figure of 137.2% is an average for the area, certain areas of Stamford have seen capital growth much higher than that and others areas much worse (we have talked about those in previous articles).
If you recall in an earlier article, my research reveals that Stamford apartments tend to generate a better yield than houses, probably because several sharers can afford to pay more than a single family. But houses tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built.
So what should you be buying in Stamford, and more importantly, for how much?
·    Average apartments in the town are currently selling for approx. £278 / square foot.
·   Terraced houses in Stamford are currently obtaining, on average, £237,000 or £254 / square foot.
·   An average semi in Stamford is selling for £218,600 (and achieving £229 / square foot). 
Now these are of course averages, but it gives you a good place to start from.
In the coming weeks, I will look at rents being achieved on Stamford houses and apartments, and the yields that can be obtained, depending how many bedrooms there are.
 

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