PROPERTY INVESTMENT NEWS:
COULD NOW BE THE RIGHT TIME TO BUY IN RUTLAND?
Our thoughts…
Rutland has often been a great area to invest in from a property aspect. We wanted to explore further the reasons why people choose Rutland to invest in when it comes to property and why now could be the best time if you are looking to purchase your first rental property or add to an existing rental portfolio.
Capital Growth throughout the County…
In Rutland, the average house price has increased at a greater rate than the average UK home. Our research has shown that properties in Rutland have grown on average at a rate of 6.71% per annum since February 1995 compared to the UK rising at a rate of just 6.06%. Although the last 25 years hasn’t exactly increased at the same level each year, it has proven that the market place has enough resilience and ability to cope with economic downturns in the wider market place and still continues to grow. Looking at the time in the market between February 2008 and February 2020, Rutland’s average house price has increased by 31.38% to £310,402 whereas the UK’s average house price has increased by 25.05% to £230,331.
Rental Demand Locally…
The area has a lot of reasons for people to look to rent a property locally and the variety that you see for each rental property can ultimately depend on the property that is being offered to let. The area has two fantastic private schools located within Oakham & Uppingham. Both schools bring with it a number of teachers that look to rent for the initial few years before settling more permanently in the area and a number of parents that want to be closer to their children rather than having to part/full board at the schools. Along with the private schools, the area is also extremely lucky to have a number of very popular and highly rated state-run Primary & Secondary schools. Getting closer to these schools to meet the areas closing demands for catchment places has meant more and more people have taken to rental to make sure they secure their preferred school place.
Schools aren’t the only thing that bring people to Rutland, there are a number of local businesses that employ larger numbers of people. Some of these include Lands End and Rutland Plastics. Both companies and other companies bring in a large workforce to help with their operations and because of rising house prices and high levels of deposit required to secure a property, some take to rental to make sure they move in time for the start of their new job.
Bank of England Base Rate All Time Low…
In March 2020, the Bank of England made a further change to the Lending Base Rate and now reaches an all-time low of 0.1%. This has now started to have an effect on new Buy-To-Let mortgages and any variable-rate mortgages that are out there. We spoke with Matt Hines from the Mortgage Advice Bureau who said banks currently have a large appetite to lend in the UK and although that slightly changed towards the end of March; a lot of lenders have relaxed there slightly tightened lending measures.
We also asked Matt what the best Buy-to-Let mortgage rate is on the market currently… Matt said, "Not as easy as that; as every lender has very different lending criteria so one lender might better suit someone's circumstances more than another." He did say that the lowest Buy to Let rate he has seen recently has been a 1.19% rate with The Mortgage Works!
Food for thought….
Currently, the average price of a Semi-Detached home in Rutland is £259,288. We would expect at this purchase price, you would be able to achieve in the region of £875 PCM, giving approximately a 4% Return on Investment, prior to any fees and purchase costs that need to be accounted for.
If you look at average capital value alone, in five years time, the property could be worth £319,442. This is assuming that the Rutland property market increases on average by 4.18% as it has done over the last 10 years.
Growth of £60,154 over the next five years, along with the rental income of £52,500 over the five years could provide a very profitable income. It's key to point out that you also need to look at the costs like any financial interest fees, managing agent costs, general repairs and of course the initial purchase costs.
We hope this brief overview of the rental market in Rutland has been useful. If you would like further advice relating to purchase a new investment property in the area or add to your existing portfolio then we would love to help. Contact our friendly, knowledgeable team today on 01572 335005.
Source: Information taken from Land Registry Data obtained from the Data Sets published in April 2020.
