Had an
interesting chat with a landlord who lives in Newport, he called into the
office whilst his partner was at the new Southwater development. He is thinking
of buying his first buy to let property and he wanted my opinion on the state
of the market and if it was a good time to invest.
He was particularly worried that there wouldn’t be any demand from 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 area’s 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 property is.
When we put this to the test, we found that Telford currently has an average property value of around £158,600. The average salary of someone living in Telford is £22,361. This is a ratio of 7.1 to 1. Most lenders will only lend up to 4.5 times income, so to buy an average house in Telford, a first time buyer would need to be on a salary in the early £35,000+ and even then, would need to raise at least a 5% deposit, which when you take into account buying fees, will be in the order of £10,500.
Tenants’ inability to raise that sort of money for the deposit is driving demand for rental property. 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 for the first time, please give us a call or pop in and see me at our office at Grays, Forgegate in Telford.
See more thoughts and opinions at the
www.telfordpropertyblog.co.uk
Morning investors and
landlords on this "Black Friday" if you've had enough of shopping disposable
goods how about considering something a bit long term?
.
