Weymouth-Dorchester ... good time to buy property?

Following publication of the last newsletter, I had an interesting chat with a chap who lives in Weymouth who popped into our office whilst his better half was shopping  in town.

He is thinking of buying his first buy to let property and wanted my opinion on the state of the market and if it was a good time to invest.

He was particularly worried that with all the newspaper headlines of a booming house market, there wouldn’t be any demand from new tenants.

One of the best pieces of advice I can give to those looking to invest in property is a simple trick of the trade..  You can judge the affordability of an areas property market (and thus how much demand there could be) by simply finding the ratio of the average property price to the average salary.  The lower the ratio, the more affordable the property is.

When we put this to the test we found that Weymouth DT4, currently has an average property value of £211,800.00 for a three bed with the average salary being £21,237.  This is a ratio of 1 to 8.83.  

Meanwhile in  Dorchester the ratio of property values to salary is 1 to 9.74  with the average price for a three bed house £245,700.00.  

Both of these ratios are very fair, comparing with other parts of the UK and are what you would expect and also obviously make Dorchester more expensive to buy. Here you must refer to yields to decide! (more next month)  

However, the issue isn’t affordability, it’s the raising of the 5% deposit, which when you take into account fees and other costs, will be in the order of £15/20,000.00

Tenants inability to raise that sort of money for the deposit is driving demand for rental property something we see every day in this office.   If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market, please come and see me at our office on St Thomas Street Weymouth

Why a property can stick and not let

I have a landlord who owns a property on Portland which is ‘sticking’ and quite rightly she is getting rather concerned.  We have discussed this at great length, have reduced the price twice and persuaded her not to go to a different agent!

The property is well presented however, in an attractive location and has character features.  However it does have certain disadvantages and it is these of course why it is not letting.

Despite being only 50 metres from the beach, unfortunately it has no garden, on street parking 30 metres away and a downstairs bathroom which all serve to limit its appeal somewhat.

This led me to thinking what makes a good buy to let and it is often not what makes a property a good buy to make your home. Tenants often have different criteria they are looking for.  Once you have calculated the potential yield a let property will give up you need to look at the area and the facilities the house will need to offer a potential tenant.  Generally a house needs a garden and easy parking.  Character features probably don’t feature too highly in future tenant’s plans!

A flat probably won’t need a garden but it might be an advantage if it is close to a good bus route.  A smart flat will at the least allocated parking.

Schools are important if your target tenant is a family and maybe the proximity of the doctors’ clinic.  

Every town has a ‘nice, desirable area’ and a ‘not so desirable’ area.  What is an undesirable area to you is fine to some folk who even desire to live there because ‘their mum lives over the road’ or their ‘sister lives next door’.  These are real life examples of why tenants have taken particular houses that have other real disadvantages.

It’s all about putting yourself into the head of a potential tenant and seeing your property from their point of view.  What you see as excellent features are not always what a tenant might see and what you see as potential downsides could be positive advantages to them.

With regard to my Portland house it is definiantly in the category of a ‘niche property’. Portland is either where you must be or where you couldn't possibly live.  There seems no middle ground. One thing I am sure of is trhat there is a tenant out there somewhere and it will let.  Two viewings tomorrow……… 

This little  two  bed is on the market for £149,000 Expect to pay at least £145000.  It looks very tidy and would rent very quickly given its location.  Rental wise we are looking at £675 to £700 per calendar month so the yield would be 5.8%.  at £700 per month    An excellent rental proposition it can be seen at:

http://www.rightmove.co.uk/property-for-sale/property-29465352.html