Guest blog: Local house market research essential for buy to let success

Although a growing body of evidence suggests that buy to let investment is not as attractive as it once was, the serious professionals are actively out there looking for opportunities.

A recently released property tracking tool enables investors to get a head start and access unique insights into key market trends.

Developed by quick house sale experts Property Solvers, the local house market insights tool tracks the time from a property’s initial listing on Rightmove to the point at which it’s officially marked as ‘sold’ at HM Land Registry.

Furthermore, investors can also see the average differences between asking and sold prices in any given area.

 

The faster you can perform on the sale, the better

The latest data – tracking 89,582 property sales across England, Wales and Scotland – demonstrates that it took an average of 16.08 weeks to sell (just under four months) between June 2018 and June 2019.

This is from the moment a property gets listed on the UK’s leading portal Rightmove, followed by the viewing process, negotiation, sales agreement, conveyancing, survey through to exchange and completion.

How can this help you as a buy to let investor?

Using the tool to see how quickly houses are selling in your area enables you to position yourself as a firm buyer.  Showing a vendor that you have your ‘ducks in a row’ and can complete within a time period way below the local average can work wonders when it comes to negotiation.

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Understand the difference between asking and sold prices

With so much hearsay and market speculation, it’s easy to get caught up in the hype.

For example, many amateur landlord buyers assume that asking prices reflect the intrinsic value of properties on the market, forgetting the fact that estate agents (and even auction houses) frequently overvalue homes to win business.

Therefore, knowing the difference between advertised prices (initially listed on Rightmove) and sold prices (confirmed at HM Land Registry) is fundamental to making solid buy to let investment decisions.

The latest data outlined below – which shows the top 20 regions across England, Wales and Scotland with the widest disparities – underlines the importance of keeping an eye on these patterns and how negotiation is a must.

 

Region

Average Difference Between Asking and Sold Prices

No. of Properties Analysed

South West London -£85,142 802
North West London -£80,299 296
West London -£59,192 339
North London -£35,220 464
Kingston upon Thames -£32,901 817
Harrow -£31,166 346
Slough -£26,915 375
Twickenham -£25,273 582
Guildford -£24,081 964
South East London -£22,525 788
Western Central London -£21,297 15
Redhill -£20,195 816
St Albans -£19,953 353
Watford -£19,708 353
East London -£19,629 370
Inverness -£18,860 330
Bromley -£18,108 464
Enfield -£18,053 397
Ilford -£18,043 233
Hemel Hempstead -£17,869 790

 

Leading the pack are South West and North West London where sellers are accepting whopping discounts averaging £82,721.

According to Property Solvers co-founder Ruban Selvanayagam: “With Section 24 tax relief changes, stricter Prudential Regulation Authority stress-testing criteria and wider regulatory oversight, buy to let is becoming a sector where only professional operators wish to remain.”

 

“Yet, whilst talk of a mass-exodus may be overstated, unphased landlords may well be able to capitalise on these changing conditions.  Indeed, a growing number of properties may be released from reluctant landlords looking to offload.  As somewhat reflected in the data above, the mild panic surrounding Brexit may also be resulting in vendors being more open to offers.”

– Ruban Selvanayagam, Property Solvers co-founder

 

“We strongly suggest taking a value-based approach to buy to let investment.  Asking prices are by no means a true reflection of market conditions.  At the point of agreeing a price with a vendor, demonstrating how you can move forward with the sale much quicker than the rest will put you in good stead.”

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