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BUYING IN LAWLEY: New Build vs Early 2000’s

I had an interesting chat to a first time landlord earlier this week in our office in Broseley. Having read our previous blog post “Could a buy to let be your nest egg”, he wanted my opinion on the market, and more importantly, why he should consider buy-to-let and where to buy exactly. Knowing the different areas in and around Telford allows me to easily weigh up hotspots in the rental market and show potential landlords where there could be a good opportunity.

It became apparent that due to the nature of this landlord’s job, he didn’t want a property too onerous, in an area he was comfortable with, and with a return that would “wash its face” or in laymen’s terms, cover its costs! So, after a good chat, we settled on Lawley Bank/ Dawley Bank – an area he had once lived with a good choice of properties available within his £120,000 budget.

This area is fantastic, there’s so much going on within a 0.5 mile radius of the new Morrison’s that I could give a pretty broad recommendation with regards to the age and the size of the property, and more importantly what yield he could realistically expect. I suggested that he should aim to achieve around a 6% yield for the type of property he had in mind, a pretty looking property, in an area with a good balance of owner occupied and rentals.

In order for it to “wash its face” I think a 6% return is a good place to be when buying your first buy to let with a mortgage and although interest rates are historically low at the moment, they are likely to increase at some stage and a 6% yield should allow for room to breathe when rates do increase.

So, the next question was to opt for a new build, or something a little bit older. The primary benefit of a new build is exactly that, they are new! They’re attractive looking houses with a 10 year NHBC certificate, many with great bathrooms and stunning kitchens, these are lots of positives and I have to say, following a call in to a couple of the sites, there are some great deals to be had. Naturally, we have strong interest every time a new build comes on. However, the general consensus following a viewing is that they are often quite small, which is a down side although some will forgo size for the quality. So we then looked at houses circa 15 years old, in particular a couple of properties St Aubin Drive and Hunters Rise, only just up the bank! These still have that new build look, granted some are slightly dated, but the plot sizes are much larger and unlike new builds, these have great historic comparable evidence of what properties have typically sold for on that street and what the neighbourhood is like today.

I think its key to have an understanding of historic house prices and the balance of owner/occupier vs rented on the estate of the property you have in mind in order to build a strong portfolio. In this case, our landlord settled on St Aubin Drive, which was an area he knew well with a strong presence owner occupier, and more importantly for him, he could see what the houses on that estate previously had sold for! In this instance he didn’t feel he could get the same from a new build estate.

Whilst I feel both areas are great to invest, and we have had success letting properties of all areas, I think this landlord wanted a professional independent opinion on the market. If you are new to investing in buy to lets, or experienced but looking for a chat, feel free to pop in and see me in the office in Broseley.

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Ellie Garbett
Property Expert

Combining great communication skills with an eye for detail, Ellie is a licensed ARLA letting agent and a qualified book-keeper. As a landlord herself, Ellie knows what both landlords and tenants want from the local property market. 

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