Leigh, Good time to buy property?

Following last week’s article, I had an interesting chat with a chap who lives in Leigh, who popped into our office on Broadway west, whilst his better half was shopping at Tesco’s (just round the corner from our office). 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 with all the newspaper headlines of a booming housing market, 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, as we talked about a few weeks ago, we found that Leigh currently has an average property value of around £298,000. The average salary of someone living in Leigh is estimated at £30,636, giving a ratio of 10.21 to 1. Most lenders will only lend up to 4.5 times income, so to buy that average house in Leigh at £298,000, a first time buyer would need to be on a salary in the early £66,000 (just over £66,222 to be precise and that is a minimum) and even then, would need to raise the 10% deposit, which when you take into account buying fees, will be in the order of £28,000 to £30,000.

The questions I seem to be asked on an almost daily basis by landlords are:-

 

·        “Should I sell my property in Leigh, or even buy another?”

 

·        “Is the time right to buy another buy to let property in Leigh and if not Leigh, where?”

 

·        “Are there any property bargains out there in Leigh?”

 

When considering this landlord’s buy to let portfolio, yields can be in the order of an average 4% to 6% per year, depending where you buy, so combine that with steady rental growth, excellent increases in capital values of the properties themselves and it could be a good time to invest in the property market in Leigh.

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 (second or third...) time, please pop in and see me at our office in Broadway west in Leigh or call me for a chat 01702 477754