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Rental Yields Rise On Woodside Terrace, Burley, Leeds

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Published: 12/09/2018   Last Updated: 17/10/2018 11:57:18   Tags: Rental Yields, Burley, Leeds

A landlord I know has owned a property on Woodside Terrace for the last 22 years and we’ve been managing the property for the past 4 years. She came in to our office to discuss the rise and fall of property prices on the street and how this has affected her yield over the years.

In 1996, she purchased the property on Woodside Terrace for just £28,500. The average value of for a house on the street was £30,320.

Fast forwarding a few years…. between 2010 and 2012 sales on the street recorded an average price of £114,750 - an increase of 402% within 16 years. The rental yield at this time on Woodside Avenue was 4.92% (an average of £470pcm).

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Burley has some of the most affordable properties in Leeds

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Published: 05/09/2018   Last Updated: 17/10/2018 11:50:28   Author: JG    Tags: Burley, Leeds, Buy To Let, Property Prices

A landlord came in to our office earlier this week to discuss the affordability of property in Burley, with the current national market property market being in recovery with increasing house prices. Some of the best advice I can give to those looking to invest in property is our secret trick of the trade. You can judge the affordability of a town 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 Burley currently has an average property value of around £166,000 with the average salary being £25,203. This is a respectable ratio of 1 to 6.59. We tested this against our other local postcodes.

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What are the downsides of investing in HMO’s in Leeds?

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Published: 29/08/2018   Last Updated: 17/10/2018 11:46:22   Author: JG    Tags: HMO, Leeds

 If you’re asking yourself this question, congratulations, this is a great question to ask! If you don’t explore this before buying or converting a HMO, you may be in for a costly ride! You won’t find this content in any training course and in few books, yet I think it’s very important to understand this.

Have you really got your numbers right? 
When looking at your investment numbers you will generally have a spreadsheet which totals up all of your costs, and then all of your income. Basic calculations of income against costs will give you your investment numbers - yield, ROI, cash flow etc. When you compare these to buy to lets your eyes will widen and your heart will start to beat a bit faster. But don’t get too carried away yet. Most people under estimate their costs at this stage. The greatest margin for error here is your refurb cost. Even if your trusted builder has priced up the job, even his experience can’t tell him what he has yet to find. You will need a contingency figure here. 10% would usually cover it, but 20% would be prudent. The next thing investors are under estimating at the moment here is voids. If your voids contingency looks like just 10%, you may need to think again!  Which leads me on to me next point.

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Why are more and more people wanting to invest in HMO’s in Leeds now?

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Published: 22/08/2018   Last Updated: 17/10/2018 11:42:11   Author: JG    Tags: HMO, Leeds

 Should I buy a HMO in Leeds? Lots of people who are interested in property are asking this question right now.

HMO’s have always been popular for investors seeking high yields but recently we have seen interest skyrocket from investors.

Why is that?

There’s a number of reasons, I’ll explain a few.

  1. The ‘Section 24’ tax changes. The government are taking away the tax break investors and landlords used to get by off setting their mortgage payments against tax. This includes interest, capital repayments, and finance costs. This began to be phased out in 2017-2018 and by 2020-2021 none of these costs will be tax deductable.
  2. Stamp duty hike for investors. From April 2016 the government have increased the rate of SDLT on property purchases by 3% (where the property isn’t being used as your only home and residence, i.e on all rental property).
  3. The rise of property investment training companies. This is big business with day courses selling for around £500 and weekend courses selling for around £1500. The big training companies teach various property investing strategies, including HMO’s as one of their main ones.
  4. High entry price and low returns in the south east and London. High returns and low entry price in the north. Lots and lots of cash is coming from the south are investors head up the M1 to benefit from this!
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Burley or Kirkstall - which is better for a Buy To Let investment?

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Published: 15/08/2018   Last Updated: 17/10/2018 11:37:13   Tags: Buy To Let, Burley, Kirkstall, Leeds

Should you be investing in Burley or Kirkstall when it comes to property?

Kirkstall covers a slightly larger geographic area but Burley has a higher concentration of houses. Each have a similar number of homes at around 5000 each. Burley is closer to the city centre and is known for its traditional Leeds style terraced properties.  Kirkstall is slightly farther away from the city centre in a north westerly direction travelling along the A65/Kirkstall Road, and has more semi detached properties. For these reasons Burley tends to attract a younger population and Kirkstall tends to attract more families.

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How To Get A HMO License In Leeds

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Published: 04/10/2017   Last Updated: 04/10/2017 17:02:55   Author: JG    Tags: HMO License, Leeds

Inner Leeds has an Article 4 direction which monitors and controls the use of properties as HMO’s. What this means is that if your property is within the Article 4 area and you wish to use the property as a HMO, you will have to apply for planning permission to change its use. If the property is outside of the Article 4 area, then there is no requirement to apply for a change of use.

Here is Leeds’ Article 4 area

The use class in question is a change from C3 (dwelling houses) to C4 (shared dwellings/HMO)
A common misconception is that you cannot be granted a change of use inside an article 4 area. This is incorrect but there are no guarantees on whether the planning department will accept the application for change of use.

We have written article about this which can be viewed here

Once you have established you can let your property as a HMO as far as planning is concerned, then you will need to apply for a HMO license from Leeds City Council.
To be granted a HMO license in Leeds, you will be required to meet various requirements that are set out by the council. These relate to a number of areas which are designed to properly address the suitability and safety of the property as a HMO.
The council define different categories of HMO’s so yours may be classed as either a Category A or Category B HMO, depending on how the property is to be used and who you plan to it to.
The areas that need to be addressed to meet the council’s HMO requirements include:

  • Fire safety measures
  • Heating
  • Ventilation
  • Storage space
  • Number of bathrooms
  • Washing and sanitary facilities
  • Cooking facilities
  • Room sizes
Each of these areas need to meet the specification and guidelines set by the council according to the category of the HMO you are applying for. For example the required fire safety measures may include fire doors, interlinked smoke detection, fire alarm, fire blanket, emergency lighting, and escape routes. The exact specification required may vary depending on the layout of the house.
Whilst this seems complicated at first, once you have a copy of the council’s guidelines the task becomes easier. Once you have done 1 or 2 HMO conversions they will become straight forwards.
Whilst obtaining change of use for a HMO can be challenging, obtaining a license is generally seen as being fairly straight forwards, provided you have followed the specification and guidelines of the council. If you have then there is no good reason for the council to refuse a HMO license.

Commonly asked questions:

Can I get planning for change of use in an Article 4 area? 
Yes, subject to a successful planning application, however the decision is certainly not guaranteed. Read more about this here
 
When should I apply for the HMO license? 
Generally once you know you have planning consent to use the property as a HMO, and after the conversion works have been done

Can I let the rooms before I have applied for my HMO license? 
If you have C4 planning consent, you can let the first 4 rooms without applying for the HMO license. You cannot let the 5th room until you have applied for the HMO license.

When will the HMO license by granted? 
There is no set timescale for this but Leeds City Council will often grant the HMO license within 6 months of the application being made. The license will be granted subject to a set of conditions that must be met and maintained. Surprisingly, the license is usually granted without a HMO inspector visiting the property, however an inspector will visit the property at some stage to verify the property is as described in the application.
At the time of writing and in recent previous years, the HMO team are generally under resourced and it may take them up to 5 years before they can inspect the property. Following the inspection, if they find something that is not to their satisfaction they will give a notice to rectify the issue which must be actioned. The HMO license may be revoked and possible large fines, as well as even a prison sentence may be applicable where there is a serious breach of the license conditions.

Can I let the rooms before my HMO license has been granted? 
Yes, provided you believe you have met the specification required AND you must have applied for the license before the 5th tenant moves in. We would advise obtaining receipt of application from the council before letting the 5th room.

What else do I need to know? 
The person classed as being in control of the property, or the managing agent must go on a HMO course to ensure they understand their obligations. This is currently being run by the RLA.

Dwell Leeds are the professional HMO specialists in Leeds. If you have any questions, please get in touch and one of our HMO experts can help you.


How to get started in property investing in leeds

Published: 27/06/2017   Last Updated: 28/06/2017 16:57:04   Author: JG    Tags: Property Investing, Leeds, Buy-To-Let

If you’ve struggled with finding a property that you know will work, you’re not alone. We’ve had many clients tell us they’ve faced similar challenges.

What to buy?
Where to buy?
What will give the best return?
Where can I be assured there is great demand from tenants?
What are the prospects for capital growth in this area?


These are some of the basic key questions that investors ask themselves every time they look for their next property.

If you haven’t defined your criteria and your goals yet, but you do want to buy a property – work this out first! Do not buy until you have defined this clearly!

If you’re just starting out, these questions could become a big headache, which in turn can become a big problem that becomes very difficult to solve without experience. Many people get stuck here and go no further with their investment dreams. There are many reasons not to buy, many unanswered questions, grey areas, and our greatest enemy – fear. Fear of the unknown and getting it wrong. It’s ok to feel this, in fact it’s perfectly normal! They key is to realise that fear is basic human nature (which comes from the fight or flight mechanism), and to move on and try to overcome it.

But just jumping in to get the experience could be very costly, especially once you weigh up your deposit and buying costs. What if it doesn’t work and you need to sell? Can you be assured you’ll get your money back and cover your costs? You don’t want to learn the hard way here, that would be very expensive, stressful, and time consuming!

So what is the solution?

The best thing you can do, is to seek out good information, relevant knowledge, and quality advice from others that have been there and done it, and are still doing it. And are still doing it well!

Build your team of advisors who can help you when questions arise. Some call this a ‘Power Team’ and in property investing that could include an Estate Agent, Letting Agent, Sourcing Agent, Mortgage Broker, Solicitor, Planning Consultant, and Architect. ‘Your net worth is down to your network’, goes the adage.

The team here at Dwell Leeds have 30 years experience working day-to-day in the Leeds property market.  This includes letting, property management, sales, and sourcing for investors and landlords, like yourself. We advise first-time landlords through to seasoned investors across many strategies including buy-to-let, single lets, family let, HMO and multi let, and serviced accommodation. Not only that we’re experienced investors ourselves too, so we understand first hand the challenges that you face as a property investor.

Beware of taking advice from someone without plenty of direct experience - this isn’t advice! And be sure, remember that when you’re down the pub and you hear that bloke that talks like he knows everything there is to know about everything!! You know the type...

If you want to invest in property and need help working out your goals, or advice on what works in the Leeds property market right now – go no further.

Contact us today for your free and no obligation Investment Consultation so that we can show you we can help you best.

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