Newark On Trent Property Market Statistics to May 2019

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It’s been quite a while since our last update so we wanted to share with you the changes to the market in NG24 as we have seen it during 2019. Data has come from properties we have let, Land Registry and Home.co.uk. We’d love to know how your property compares so please leave any comments below.

(Figures in brackets are from the last update)

Average Monthly Rent In Newark

£590 (£599) – Let by Buttercross Estates
£564 (£542) – According to Home.co.uk

Average Monthly Rents By Type

£492 (£485) – Flats
£585 (£599) – Terrace
£645 (£624) – Semi Detached
£749 (£898) – Detached

Average Monthly Rents By Postcode District

£554 (£564) – NG24 1
£616 (£608) – NG24 2
£591 (£569) – NG24 3
£622 (£679) – NG24 4

Average Weekly HMO Room Rate

£84 (£86) – Standard
£110 (£120) – En-Suite

Total Value Of Properties Sold

£61,097,116 (January to May 2019)

Average House Price By Type (Sold Price Data)

£104,595 (£104,251) – Flats – 22 total
£131,003 (£128,643) – Terrace – 107 total
£174,237 (£148,916) – Semi-Detached – 125 total
£242,060 (£233,749) – Detached – 95 total

Average Gross Yield By Type

5.64% (5.58%) – Flats
5.35% (5.58%) – Terrace
4.44% (5.02%) – Semi Detached
3.71% (4.61%) – Detached

Sales data has been released up to the end of May. Interestingly there have been practically the same number of sales for this period Jan-May (349) as there were for the same period in 2018 (348). If the rest of the year also follows 2018 then we will see another 604 sales before the fireworks over London Eye.

House values rose across the board with semi detached homes rising the most significantly (17%). Despite the price rises there were still bargains to be had, 2 Charles Street was snapped up for £60,000 and 80 Barnby Gate for £64,000. In all, 9 flats and 18 terraced houses sold for under £100,000.

At the other end of the market, the most expensive home sold was a 3 bedroom detached house, 4 North Church Walk which has lovely views over St Mary Magdalene Church. This sold for a cool £450,000.

If you’re looking to invest in Newark or the surrounding areas and want a bit of guidance, our door is always open. It’s easy to buy the wrong property and this could be a very costly mistake. Call today to book your slot 01636 343014.


Decreasing Numbers of Younger Homeowners in Newark

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Shaun Bell, 34-year-old father of two from Newark, was out house hunting. It was a pleasant August Saturday afternoon, and our man cycles along on his bike. He cycles up a street of suburban semis, where he spots a few retired mature neighbours, chatting to each other over the garden fence. He leans his bicycle against a lamppost and launches softly into his property search.

“Anyone on the road contemplating moving?” Shaun asks, “I am not a landlord or developer, I’m just a Newark bloke trying to get out of renting, buy a house, do it up and live in it with my wife and two children”

“The only way I will leave here is in a box”, answers an 80-something lady, wearing her fading Paisley patterned housecoat from the 1970’s.

“I‘ve lived here since before you were born, its lovely up here… we aren’t moving, are we Doris?” (as her neighbour sagely shook his head at his wife).

Shaun, like many Newark people born in the late 1970’s to the early 1990’s, is keen to get a slice of prime Newark real estate. Yet people like Shaun in Generation Y (or the Millennials as some people call them i.e. born between 1977 and 1994 and needing family housing now) are discovering, as each year passes by, they are becoming more neglected and ignored when it comes to moving up the property ladder.

Looking at the graph for the UK as whole …

Over 75 percent of Brits aged 65 and above (the baby boomers) are owner-occupiers, the biggest share since records began and a proportional rise of over 48.3% since the early 1980’s. Looking at those Baby Boomers (the current 65+year olds) .. and roll the clock back 36 years (to when they were in their 30’s and 40’s and two thirds (65.6%) of them owned their own home.
Whilst today, just under a half of 25 to 49 year olds (47.3%) own their own home.

However, the biggest drop has been in the 18 to 24-year old’s, where homeownership has dropped from a third (32%) in the 1980’s to less than one in ten (8.9%) today. Looking at the Newark statistics, the numbers make even more interesting reading.

Government policy contributes to the generational stalemate. Stamp Duty rules prevent older Brits from moving as the price of land and planning rules make it harder to build affordable bungalows that are attractive to members of the older generation who want to move.

The average value of an acre of prime building land in the UK is between £750,000 and £800,000 per acre. Bungalows are the favoured option for the older generation, but the problem is bungalows take up too much land to make them profitable for new homes builders. The housing market is gridlocked with youngsters wanting to get on (then move up) the property ladder whilst the older generation, who want to move from their larger houses to smaller, more modern bungalows, can’t. The problem is – there simply aren’t enough bungalows being built and the high price of land, means they are prohibitive to build.

So, what is my point? Well, all I would say to the homeowners of Newark is that one solution could be to start to talk to your local councillors, so they can mould the planners’ thoughts and the local authority thinking in setting land aside for bungalows instead of two up two down starter homes? That would free the impasse at the top of the property ladder (i.e. mature people living in big houses but unable to move anywhere), releasing the middle aged gridlocked people in the ladder to move up, thus releasing more existing starter homes for the younger generation.

…and to you Shaun… the wandering new home searcher – if things are going to change, it will be years before they do… so keep going out and spreading the word of your search for a new home for your family.

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What do Fernwood and Arsenal FC have in common?

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Fernwood

Q. What do Fernwood (residential area in Newark-On-Trent) and Arsenal FC (Premier League football club in North London) have in common?

A. They both look good yet have failed to really deliver over the past decade.

Let’s look at this a bit closer…

Fernwood is a residential development by David Wilson Homes situated to the East of Newark On Trent where it meets the A1. This development is the largest of its kind around Newark in recent years with the first sales completed around 2002. Building work is still going on to this day after having slowed during the recession. The winding estates have a good mix of apartments, town houses, semi detached and detached homes. Some very pretty parts.

Arsenal Football Club, managed by Arsene Wenger have developed an excellent style of football which is easy on the eye but frustrating for the fans. Quite often they try to pass their way into the opposition goal and quite often they fall short.

At the early days over in Fernwood you could pick up a detached house for anywhere between £200-400,000. A few of those properties have managed to sell recently for a profit, however the majority haven’t been so lucky.

Here are the sold prices for Dale Way, Fernwood and it makes for some scary reading. The only ones that have achieved any notable capital growth are those who bought at the start and sold before the crash. Since 2005/6 homeowners and BTL investors have seen very little capital appreciation on their assets.

It was reported that the average UK house price had risen above 2007 levels in Mid 2014. We can see an example of this with 40 Dale Way. In June 07 this was purchased for £354,995 then in May 2014 it fetched £355,000£5 profit!

Arsenal last won the FA Cup in the 2004-05 season and it took them until the 2013-14 season to win it again. They are yet to win the league since the 2003-04 season although this year might be the one. An incredibly frustrating period especially after they were dominating around the turn of the millennium.

With these new homes popping up in Newark and the Buy To Let boom in full swing, lots of investors jumped on board the Fernwood development and you can’t really blame them. Now, when it comes to letting a property in Fernwood, we are seeing a huge choice for tenants. This over-supply has kept rents down and competition fierce. When you compare neighbouring Balderton and New Balderton, this area is approx 4-5 times larger but has a similar number of properties for rent. Low rents and the possibility of added service charges mean that your yields are very poor from a rental perspective.

Low yields and low/no capital growth mean that many landlords in Fernwood are either facing negative equity, negative cashflow or both. They will soon feel the pinch when interest rates rise and if mortgage interest relief falls. I’ve been approached by a few landlords looking to offload but the numbers just aren’t adding up.

This month we have had an influx of people looking to invest in and around Newark On Trent. If you’re also considering putting your money into property get in touch and we’ll talk you through the best and worst places to buy in Nottinghamshire.

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Eyes On… Wycar Road, Bilsthorpe

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Wycar Road

This week we are talking about this 2 bedroom bungalow on Wycar Road, Bilsthorpe.

This is one to FLIP.

It is going to auction on December 15th in Leicester.

Bungalows are a popular choice for both investors, home owners & tenants. It came to my attention recently when I was asked to source a 3 bed bungalow for a client. They do not stay on the market for long.

It needs work but it has everything a buyer or future homeowner, perhaps of retirement age is looking for. A large garden, a garage & off road parking are generally expected with a bungalow.

As you would expect some work is needed inside & outside. There are some strange cupboards dotted around in peculiar places but nothing a sledgehammer can’t sort out.

This is one to view, one to do & one to flip. There is some profit to be made here.

This is going to auction with a guide price of £70,000.

A 3 bed bungalow on the same street is on for sale at £250,000.
A 2 bed bungalow in the area is on the market for £126,495.

The Agent is Pattinson Estate Agents Auction 0800 24 24 26

To keep up to date with industry news & local market news in Newark & Nottinghamshire, visit our blog

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Increasing competition in the letting market and how to protect your investment

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Rightmove Map

Every day I check Rightmove to see the movements in our patch around Newark & Bingham in terms of new properties to let, properties let STC and those that have been reduced. The area concerned is South of Witham St Hughs, North of Cotgrave, East of Radcliffe On Trent and West of Grantham.

Throughout most of the year the number of properties showing as available fluctuated between 195 and 205. Over the past 4-6 weeks I have seen this number grow to a staggering 235-245. This is around a 20% increase in the private rented sector properties.

The split is as follows;

  • 50% Houses
  • 23% Apartments
  • 7% Bungalows
  • 20% Commercial

What are the consequences of such a rise?

As you know with basic economics, if supply outweighs demand then prices fall. Landlords are usually encouraged to reduce rents to undercut others and attract prospective tenants. Sometimes rent free periods or cashback incentives are introduced. These options can work however it’s the landlord that suffers the financial hit. Funny that you don’t see the agent offering to reduce their fees…

Void periods are likely to increase as it takes longer to find a tenant. Be careful as you may be uninsured if properties are empty for too long. Check the terms of your insurance. This property in Newark has been on the market for almost 70 days.

How can you avoid the impact?

The better properties on the market will remain reasonably unaffected as good tenants like good homes. It’s the middle and lower quality properties that will be worse hit.

People filter properties on Rightmove in seconds so you want to make sure your property makes every tenants shortlist. Use an agent that takes high quality photographs to ensure your property stands out above the competition. Poor photographs will turn tenants off. The advert should contain a creative description about the property and the local area. This will be of great use to those moving into the area. Measure the room dimensions so that people can gauge the size of the property on offer.

Ensure you receive feedback from viewings. Agents should be getting feedback from each person that views a property and relaying that through to you. If there is a common theme such as they don’t like the olive bathroom suite then change it. Invest in your property and you will see the benefits over time.

By improving your property and marketing it better you should find that you do not have to resort to lowering the rent. That’s just a short term fix and won’t solve the problem when you’re looking for the next tenant.

If you want to work with a proactive letting agent that understands your property and the market then get in touch or pop in to see me, 4 Middle Gate, Newark.

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Newark On Trent property market update

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It’s time to take a look back to see how Q1 of 2015 compared with Q1 of 2014 using the Land Registry data for NG24.

Wilson St, Newark

Looking at the data, we have seen growth across the board from the previous 12 months. Excluding flats, the largest growth has been from semi-detached properties up 12.75% from an average of £123,392 to £139,126. This strong growth has been from the high end of the market where there have been 6 times more sales of properties over £200,000. the most expensive being 13 The Park for £325,000.

We also saw that there were more high end flats sold in 2015 accounting for the 44.70% increase in average price from £78,700 in 2014 to £113,881 this year. The recently renovated apartments on Barnby Gate and those at Castle Brewery a contributing factor.

The terraced property market saw a healthy increase of 10.99% within the year up to an average of £125,095. Interestingly, this is the first stamp duty threshold (£125,000) and it we shall see if buyers are prepared to pay over this. Sales on both Long Row and Mill Gate feature within the 4 cheapest for both quarters in 2014 and 2015 though the sale prices were £5,000 up from the previous year.

Whilst this does sound good for the average terraced landlord there were a couple of expensive sales in 2015 which have dragged up the average. 41 Victoria Street (A local B&B) and 57 London Road sold for £395,000 and £450,000 respectively. Without these two, the average price falls to £110,932 (1.57% fall).

Semi detached houses appear to be more popular as the number sold in 2015 under £100,000 was just a third of that the previous year. This has shown with the average house price up 12.75%. 328 Yorke Drive was picked up for £74,950 and looks like it was ready to rent. One would expect a healthy yield of 8% if let out.

Terraced and semi detached properties are still letting well but tenants are spoilt for choice so ensure your property is looking tip-top and take high quality photographs to really attract the best tenants.

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Double your returns in Newark On Trent

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The potential returns for an investment into 2 and 3 bedroom houses in Newark on Trent.

Example 1

Bottom Row, Newark

Having come onto the market at the end of March, this 2 bedroom middle terrace is on the market for £74,950. There has only been 1 sale in the past 4 years on the street which is a good indication that people may like it there. This last sale however was for just £66,750. Having just let a 2 bedroom terrace recently we know there is a lot of demand in the area as it went within a week of being advertised. Therefore you would expect to achieve around £485 pcm for the property.

Lets see how this looks as a potential investment…

£69,000 – Purchase Price
£17,250 – Deposit (25% of purchase price)
£1,200 – Legal Fees
£18,450 – Total Capital Invested

£5,820 – Annual Rent
Less Costs;
£1,548 – Annual Mortgage payments (Assuming 3% mortgage interest only)
£1,164 – Management & Maintenance Costs (Assuming 20% of the annual rent)
£3,108 – Annual Cashflow

16.85% – Return on Capital Invested

That only takes into account the return from cashflow. When you look at the historic capital growth, you will see that properties on this street have approximately doubled in value over the past 15 years.

Example 2

Bailey Road Newark

This 3 bedroom semi detached house is new to the market, priced at £115,000. Bailey Road has always been popular in the letting market. 3 Bed houses are popular with small/young families. We would expect to achieve around £550 pcm for this property given it looks well maintained.

Lets see how this looks as a potential investment…

£110,000 – Purchase Price
£27,500 – Deposit (25% of purchase price)
£1,200 – Legal Fees
£28,700 – Total Capital Invested

£6,600 – Annual Rent
Less Costs;
£2,475 – Annual Mortgage payments (Assuming 3% mortgage interest only)
£1,320 – Management & Maintenance Costs (Assuming 20% of the annual rent)
£2,805 – Annual Cashflow

9.77% – Return on Capital Invested

When you look at the historic capital growth for this 3 bedroom terrace, you will see that properties on this street have increased by around 50% over the past 13 years.

In summary you could potentially get almost almost double the return on a 2 bed house compared with a 3 bed. There are some cheaper 3 bedroom properties available on the market including a repossession for £90,000 but you’ll need to be quick as there is an offer on the table at the moment.

If you are looking to invest in Newark On Trent or the surrounding areas and unsure where to put your money then get in touch to formulate your strategy.

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Upcoming auctions in Nottinghamshire

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Auctions

April and May are a great time to pick up a project in auction. With a swift turnaround you can get a property back on the market either to let or sell just in time for the summer months.

So what’s coming up and what should you look out for…

John Pye – Online bidding starts on 7th May

One to watch – Lot 2

John Pye Auctioneers have been long established in the auction rooms but they have developed their business significantly in the past 12 months and have now entered the property auction market. They are very competitive with zero fees for sellers with buyers paying the premiums. Their online approach gives a week for you to place your bids.

Thy have a mix of lots from across the country but those in the development game may take interest in lot 2. A 6,200 sqft commercial premises in Ilkeston. Download the auction catalogue here.

Graham Penny Nottingham – 8th May, 11.30am @ Nottingham Conference Centre

One to watch – Lot 1

Graham Penny’s Nottingham auction ties in with the East Midlands Landlord Expo (details of which can be found here). There are 54 lots in this auction with one of the standouts being Lot 1, a semi detached house in Aspley requiring improvement, at a guide of just £65,000.

View the full auction listings here.

Savills – 14th May @ Nottingham Racecourse

One to watch – Not yet announced

The lots for Savills May auction have not yet been announced. You can register with them to be notified as soon as they are published here.

WA Barnes – 14th May, 3pm @ The Towers, Botany Avenue, Mansfield

One to watch – Lot 5

Following the Savills auction you may want to have a drive up the A60 to Mansfield for the WA Barnes auction. You tend to find you’ll get more property for your pennies than in the centre of Nottingham.

There are 17 lots in this North Nottinghamshire auction. Our pick is Lot 5 a detached bungalow in Selston.

Download the auction catalogue here.

Wallace Jones – 20th May, 7pm @ The Holiday Inn, Bostocks Lane, Sandiacre

One to watch – Not yet announced

Wallace Jones are one of the quiet auctioneers in the sense they don’t advertise too heavily. Those local will know that they always turn up some gems. Their lots are still being compiled however there are a handful to view on their website here.

There are also a few national auctions which are listing properties in Nottinghamshire. Namely Countrywide on the 29th April (Lots 102, 106, 120 and 125) and William H Brown on the 30th April (Lots 8 and 11).

Remember – always do your due diligence when buying at auction and have your solicitor read through the legal pack prior to auction. Make sure you yourself take a look at any amendments on the day.

Sometimes properties are put into auction for a reason (subsidence & japanese knotweed) so have a professional survey done if you are unsure.

Finally, if buying with a mortgage make sure you are armed with a decision in principle from a lender as you only have a short window in which to complete the purchase. Bridging finance can be useful but is an expensive option. Make allowances when carrying out your analysis.

Best of luck and happy bidding.

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