Well as the nights draw in, if there is nothing on the telly, the significant other and myself like to play the board game Monopoly. The buying and renting of property, it’s like a busman’s holiday for me!
Interestingly, the game was originally invented at the turn of the 20th Century (in 1903) and the game was initially called ‘The Landlord’s Game’! Anyway, after a few years in the wilderness, the current owners of the game renamed it in 1935 and so began Monopoly as we know it today.
So whether you are a homeowner or landlord in Rotherham, what would a Monopoly board look like today in the town? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Rotherham today.
Initially, I have focused on the S60 postcode only, looking at the Brown Squares on the board, the ‘new’ Old Kent Road in Rotherham today would be Winifred Street, with an average value £53,400 (per property) and Whitechapel Road would be Duncan Street, which would be worth £55,100. What about the posh dark blue squares of Park Lane and Mayfair? Again, looking at S60, Park Lane would be Queensway at £368,700 and Mayfair would be Guiltwaite Hill at £505,400. Also, I can’t forget the train stations (my favourite squares), and over the last 12 months, the average price that property within a half a mile of the station sold for was £74,780.
So that got me thinking what you would have had to have paid for a property in Rotherham back in 1935, when the game originally came out?
- The average Rotherham detached house today is worth £223,920 would have set you back 405 Pounds 2 shillings and 9 old pence.
- The average Rotherham semi detached house today is worth £124,040 would have set you back 224 Pounds 8 shillings and 6 old pence.
- The average Rotherham terraced / town house today is worth £87,580 would have set you back 158 Pounds 9 shillings and 2 old pence.
- The average Rotherham apartment today is worth £103,670 would have set you back 187 Pounds 11 shillings and 5 old pence.
If that sounds like another currency, you must be in your 20’s or 30’s, because it was back in February 1971, that Britain went decimal and hundreds of years of everyday currency was turned into history overnight. On 14th of February of that year, there were 12 pennies to the shilling and 20 shillings to the pound. The following day all that was history and the pound was made up of 100 new pence.
Anyway, I hope you enjoyed this bit of fun, but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis and if you are going to invest in the Rotherham property market, you should consider the Rotherham property you buy a medium to long term investment, because Buy to let is pretty much what it sounds like – you buy a property in order to rent it out to tenants.
As I reminded a soon to be first time landlord from Whiston the other week, Buy to let in Rotherham (as in other parts of the Country) is very different from owning your own home. When you become a Rotherham landlord, you are in essence running a small business – one with important legal responsibilities. On that note, I want to remind landlords of the recent and future changes in legislation when it comes to buy to let. This year, rules have changed about tenant deposits, carbon monoxide detectors and early in the New Year, landlords will have responsibilities to do immigration checks on all their tenants. Failure to adhere to them will mean a minimum of heavy fines in the thousands or in some cases, prison … it’s a mine field! That’s why I write the Rotherham Property Blog, where it has an extensive library of articles like this one, where I talk about what is happening in the Rotherham property market, what to buy (and sometimes not) in Rotherham and everything else that is important to know as a Rotherham landlord. Please visit the Rotherham Property Blog
The 5th of March 2009 was the date Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5%.
In just under five months, starting on 8th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Now as we deck the halls with bows of holly nobody expected that, over six years later, rates would still be at that low level.
In the summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Rotherham, so I can not profess to know what will happen to interest rates. However, what I do know, speaking to my Rotherham friends and Rotherham landlords is that these low interest rates have hit savers really hard.
If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest. That is why more and more 40 and 50 year old Rotherham landlords have been investing some of that cash into Rotherham bricks and mortar, as they search for a low risk investment opportunity.
Buying a Rotherham buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.
The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, Rotherham house prices have been extraordinarily robust, increasing by over 1413.7% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!
.. and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.
.. but before you go out and buy any old Rotherham property, plenty of landlords still get it wrong. You have to be aware of your legal responsibilities when it comes to tenant safety, tenants deposits, energy certificates and in the new year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that’s why many agents use a letting agent to manage their property for them.
Next, you have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Rotherham and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner in a terraced house on Brown Street, close to Rotherham town centre .. a excellent investment this 2 bed mid terraced house has accommodation over 3 floors, 108 sq metres inside (1162 sq ft in old money) sold in January 2007 for £60,000. In the summer, it only obtained £46,500, a drop of 22.5% or 2.95% a year – a very disappointing result.
I cannot stress enough the importance of doing your homework. One source of information and advice is the Rotherham Property Blog where I have similar articles to this about the Rotherham property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Rotherham .. you are missing out!
Many landlords have been asking me my thoughts on the Rotherham property market recently, and in particular, what is happening to property values.
My calculations show property values in Rotherham quite interestingly dropped in the month of September by 0.9%. When one looks at the annual growth, Rotherham values are 0.5% higher (when comparing Sept 14 to Sept 15), impressive when you consider the annual growth of property values dropped to only 0.1% per annum in March. On the other hand, there are signs that the fundamental growth of property values in Rotherham has now peaked, despite those average property values being below levels recorded in 2007 (just before the 2008 crash).
Whilst the Rotherham headline rate appears to be better, i.e. the year on year (Sept 14 to Sept 15) growth rate of 0.5% is obviously better than the drop to 0.1% in March 14 to May 15), this impressive rise of Rotherham property values masks the underlying truth in what is really happening to local property values in the town. Throughout 2015, property values have been yo-yo like on a month by month basis, being quite volatile in nature. For example,
· September 2015 0.9% drop
· August 2015 0.7% rise
· July 2015 0.9% rise
· June 2015 0.3% drop
· May 2015 1.3% rise
· April 2015 0.4% rise
· March 2015 1.6% drop
This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by over 15% in August, according to the Council of Mortgage Lenders (CML).
The outlook for the Rotherham property market remains positive against the foundations of low mortgage rates and growing consumer confidence. However, I do have to question the recent CML mortgage data and whether that raises issues over whether the rate of growth since the Tory’s were re-elected in the early summer can continue? However, on a positive note, Rotherham property values are still running ahead of salaries and average property values are 18.7% below the levels recorded in 2007.
Talking to fellow property professionals in the town, demand for property has been showing signs of moderating in the final few months of 2015, which in turn will lead to a slight slowdown in the pace of house price growth in the run up to the festive season. You see, it is really important not to read too much into one month’s (September’s) headline figures.
Readers might be interested to note that before the 2008 property crash, all the UK region’s housing markets tended to move up and down in tandem like the Rotherham Synchronised Swimming team at the Rotherham Leisure Complex Swimming Pool! Since then though, the Greater London property market took off like a rocket in 2009/10, whilst the rest of the UK only really started to grow in 2012/13, and even then that growth was a lot more modest than the Capital’s. Looking closer to home, it can even be different in neighbouring towns, areas and cities, so whilst Rotherham property values are 0.5% higher than a year ago (as mentioned above), Sheffield property values are 4.2% higher than a year ago, yet Barnsley’ s is 2.4% higher. (Time to bag some bargains me thinks!)
I cannot stress enough the importance of doing your homework. One source of information and advice is the Rotherham Property Blog where I have similar articles to this about the Rotherham property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Rotherham….. you are missing out!