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Research - Last updated 20/3/09
As with any form of investment, research is extremely important.
The problem with buy to let is that whilst an investor can get a load of information from numerous web sites it really is necessary to get out and explore the location on almost a street by street basis.
In that way buy to let differs from almost any other investment. You don't need to physically inspect the company whose shares you are buying or test the coffee.
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Now the web sites that you can visit broadly fall into three categories.
The first are those that provide information without any commercial bias, examples are:
The BBC with their regional property prices,
http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm
I love this area of the BBC site. It is worth setting up a spreadsheet to list the areas that you are interested in and then enter the relevant data on a quarterly basis and then you can make your own comparisons at a level not covered by any other index.
For example you can track the movement in terraced houses in Oxford or virtually any city of your choice. This can also go some way to explaining how property prices are falling at say 20% nationally but you are not seeing that sort of fall in your location.
Another example, a snapshot of East Anglia for the period ending Dec 2008 headlined a quarterly fall of 6.8%, + an annual fall of 7.5% across all properties, in the terraced section though the quarterly fall by location ranged from 2.4% up to 7.2% and the annual range was 0.9% up to 10.2%.
Another area that I do know something about is Wales, Dec 08 headline figures were annual fall 7.8%, a lot less than the papers were saying (20%), and quarterly 5.2%, but I was interested in terraced houses in the Rhondda Valleys where I wasn't seeing any fall of consequence but also very low activity.
The quarterly fall was reported at 2% which made more sense and which was really within the negotiation range given an average price of £ 78,573.
How you or we interpret these figures is covered in our Consultations but don't try and use them to prove your case for buying a property other than to drive down your offer price!
or
The Halifax House Price Index
http://www.hbosplc.com/economy/HousingResearch.asp
&
The Nationwide index.
http://www.nationwide.co.uk/hpi/review.htm
plus
National Housing and Planning Advice Unit
http://www.communities.gov.uk/nhpau/keypublications/research/buytoletliterature/
has to be unbiased because it is a .gov site, doesn't it! If you are intending to get into buy to let for the long term then this sort of site is worth spending a bit of time on. Also useful for stats that you can quote to your fellow investors!!
The University of York
http://www.york.ac.uk/ it is always worth checking on to see what the University has been up to recently. They are leading edge in research on the private letting sector. One of the most recent was the Rugg Report http://www.york.ac.uk/inst/chp/publications/PDF/execsumweb.pdf
The Joseph Rowntree Foundation http://www.jrf.org.uk/ another research organisation that is worth checking on to see what they are up to. Go to Publications and you can see latest, featured & upcoming reports all for FREE.
House Price Crash http://www.housepricecrash.co.uk/ packed with loads of stats, graphs predictions etc etc. All free and no need to even register!
Also look at Property Snake http://www.propertysnake.co.uk/ again no registration required and all the information is free.
This site is really interesting because you can punch in a post code and up will come a list of properties, how long they have been on the market and how much in % terms they have been reduced since their 1st listing. You can even look at the history of the listing and with some listings, click on it and go through to the selling agent.
What I look for is how many pages it takes to get down to a 5% reduction. I don't regard 5% as being serious as that is within negotiation tolerances. If you can't get a price reduced by 5% you are in the wrong game!
A snapshot of what I mean, I punched in CF42 5AR, Treherbert, Rhondda, an area with loads of terraced houses, got down to 5% on the 1st page, property on the market for 120 days. OK, so the market is slow and people aren't selling unless they get the amount they want.
Click the Search button for a new search, punched in DL14 9HH, East Green West Auckland, another terraced house location, again got down to 5% on the 1st page but the listing had only been on for 49 days, which would indicate that there was more activity in that market.
Also you can sort of walk around adjacent postcodes and every page includes Nestoria's average asking prices for that location. Great site, use it a lot.
You will also need house price comparables and there are a load of sites that will give you this information free. I can't see that any of the following are biased
I use the following combination and it helps to have either two screens or one large screen so that you can see both sites at the same time.
Rightmove. http://www.rightmove.co.uk/ to find what is selling in a given location and at what price. Always tick the box for Under Offer, Sold SST...
For house prices try House Prices http://www.houseprices.co.uk/ I like this site because having opened up a location you can sort of walk around clicking on sold houses which auto displays activity in the street going back years.
Also, if you enter your email address in to the email slot under "Track a Postcode" they will email you monthly updates on the postcode all for free!
Snapshot example, back to CF42 5AR, or rather CF42 6DR in this case. Rightmove had a listing in Kenry St at £ 80,700, Feb 09. House Prices list a sale of No 7 at £ 70k Jul 07. Not much indication of prices dropping in this area!
Also I know Kenry St as you should if you are thinking of investing in this area, you should already have walked this street.
There are many other combinations that you could use, for house sales google just that with a "uk" included "house sales uk" and you can take your choice, findaproperty, homesonsale etc etc.
For house prices google "house prices uk" and take your choice.
How I love the web and all this free information! The only problem is, can you understand it, if not then maybe we can help, for a small fee of course!
The second are those sites that provide information with possibly a commercial bias or at least can't be put into the totally unbiased category that the BBC sits in assuming that you agree that the Beeb is unbiased as far as property values are concerned.
Hometrack http://www.hometrack.co.uk/ is a good example in that it is pro the housing market. This is a very good site for research purposes providing loads of reports but remember they tend to be bullish about property as against Capital Economics who are invariably bearish. You decide how you interpret the information.
For London Investors My Property Guide is a must. http://www.mypropertyguide.co.uk/ if only they covered the whole country. What a resource.
For online valuations that are FREE, unlike Hometrack, try:
Property Price Advice http://www.propertypriceadvice.co.uk/home/ they will even give you a printed version of the valuation plus tips on how to improve the value.
Zoopla http://www.zoopla.co.uk/ another free resource, a bit more involved than Property Price Advice, but take a look and see what you think.
Savills Research http://www.savills.co.uk/newhomes/Research.aspx can't be said to be unbiased but they are as unbiased as they can be in order to protect their reputation. Another source of free reports.
For those that love the stats try House Prices UK www.houseprices.uk.net lots of lovely numbers, stats and graphs plus predictions on where house prices are going which might surprise you and news. Again all for FREE.
Then we move onto the third category, firms offering free guides and publications that profess to be unbiased but, in my opinion, are being used as a marketing tool for the business concerned.
Into this category fall Mortgage Brokers and Estate Agents
Take The Money Centre for example: http://www.themoneycentre.co.uk/index.asp?type=1&email=&link=
hover over Buy to Let & About Buy to Let leads to 4 options the first of which is "Building a portfolio......" which takes you straight into some number crunching that is quite reasonable but all to do with selling you a mortgage whereas the 1st option that should be on that list is in fact the last option "Thinking about buy-to-let", a more logical starting point particularly for the novice investor.
And The Money Centre is one of the better sites in this context most mortgage sites do little more than carry the mandatory health warning that your home is in danger if you don't keep up the payments.
Take another household name Jon Charcol. http://www.charcol.co.uk/knowledge-resources/guides/ this link takes you straight to their News & Resources/Guides page. At the bottom you have a link to Buy to let. Open it and you see 6 headings, 5 of which are all about mortgages, the 6th is What if I'm not sure? Which is the one I wanted and it didn't work!
That said Ray Boulger, a veritable guru on the mortgage market, has a blog on this site, which is well worth reading and copying to your Favourities. Direct link http://www.charcol.co.uk/knowledge-resources/ray-boulgers-blog/
Another source of freeby information and guidance is Paragon Mortgages, this link takes you straight to their Literature Library where you will find a number of guides http://www.paragon-mortgages.co.uk/portal/site/pmlmain/menuitem.e09b27ae4c59badf371ae91037a056a0/?vgnextoid=72e665e8c5ad0110VgnVCM100000730a650aRCRD
If you want a more personal touch on mortgages and market conditions go to Buy To Let Funding Services http://www.buytoletfundingservices.co.uk/ Geoff Laird is an old mate of mine, produces a nice little monthly newsletter free, you can get on his mailing list by emailing loanarranger2006@hotmail.co.uk, that's loan arranger not loan ranger, also Geoff is great and cheap, sorry inexpensive, competitive anything but a cheep mortgage broker! We are affiliates.
I will be adding to this list of mortgage brokers providing free info for research purposes as time goes on and more come to my attention. So if you know any please email me, david@buy-to-let.com and title it Research or it may end up in my spam tray!
Now to The Estate & Letting Agents sites, these sites are all commercial, location specific and often tenant specific. Some extol the virtues of students for example others don't.
I started off looking at some big names, Halifax, Nationwide, nothing.
Then I tried Temples because I know the MD, David Temple, lovely man, http://www.temples.co.uk/index.html and found a nice little guide under How Temples help Landlords, London office, or Landlords Guide to Letting, Cheshire office.
Of course all aspects of the journey from your front door to being an up and running landlord can be handled by Temples but then again what would you expect. That said they have a branch in Clapham which I have used and would invest in that area again.
I then tried googling the town eg Oxford letting agents where I would expect to find some specialist agents particulary for HMO's given the student demand again bar a couple of, pro the letting agent newsletters, nothing
Then I tried googling "free buy to let guides" a plethora of results mostly from mortgage providors offering free mortgage linked guides. About the best you get on these sites are FAQ's.
Then I remembered Winkworth http://www.winkworth.co.uk/ with over 80 offices independently owned and operated. Try this link http://www.winkworth.co.uk/Help/PropertyPrice.aspx and download the PDF file.
What you will find is a table covering all their offices, and most are in London, giving you average prices & rents across a range of properties. Wow and it's Free again. The only gripe is that they don't do the calcs and come up with the % yields!
The present format is progress though because they used to list the values by office on one page and the rents achievable on another. I complained so they may have listened!
They are a franchise by the way so you always get at least one switched on, awake, person in every office or franchise!
Their "Market Comments" http://www.winkworth.co.uk/Market/MarketComments.aspx franchise by franchise makes interesting reading, again presented as a PDF download.
I used them quite a lot when I developed a portfolio in Wandsworth. Biased may be but I rather have biased info on which I can take a view than no info at all. No affiliation here by the way.
I have already listed the non-commercial sites that I use. These include house price statistics plus property valuation sites. I have also featured as far as is possible the free sites. Most require you to register, which of course I have done, without any downside to date.
Now it is possible to gain free information from most if not all the sites that offer an "Armchair Investment Service" but they are coming from the point of persuading you that buy-to-let is a good idea and that investing through them is the best idea of all. Just like us!
Now to the "on location" research. Regardless of how much information you are able to glean from sites on the Internet, nothing compares with getting out on location, breathing in the air or carbon monoxide as the case may be, feeling the ground under your feet and talking to the residents.
I have done location days all over the country with my students and this has involved going to the worst local areas by reputation, getting out of the car and walking the streets, best take a friend with you!
When we found a property that was of interest, maybe for sale, we then stand outside the next door property hoping the occupier will come out to find out what we are up to, no good they suspect.
We then explain and, hey presto, we are swamped with local information and often given a house by house guided tour, warts & all.
We generally slip them a business card and offer to pay them a couple of hundred pounds if they let us know when a house in the street is going to be sold and we buy it.
Often this all revolves around someone in the street dying or being already dead, hence warts and all.
The moral of the story/anecdote, Get out of your car, trust the neighbourhood, talk to the local people, check with the local pub/shop/post office, if it still exists,/fish & chip shop.
Often we are asked back into their own homes for a cuppa. Accept, they know what works in their home location, what they want and like by way of tenants and you should try and listen to their opinions and meet their hopes. That way your investment will be more successful, as you won't risk the neighbours from hell.
Finally got to mention some other web sites that you should have a look at:
The Move Channel http://www.themovechannel.com/ check their Features & Blogs in particular.
Bank of England http://www.bankofengland.co.uk/statistics/index.htm good for interest rates & statistics
Council of Mortgage Lenders http://www.cml.org.uk/cml/statistics again good for statistics.
Land Registry http://www1.landregistry.gov.uk/ more stats plus some useful general information
Two Forums:
Whilst you will find forums on loads of other sites these two go back to the dark ages.
The Fool http://www.fool.co.uk/ and two boards, Property Investing Practical & Property - Markets and Trends. Beware taking everything that is said on this site as gospel, I was involved many years ago in some big arguments on this site but I never liked the fact that someone could rip into me and effectively remain anonymous!, My user name was davidhum, if you type it into the Search box you will come up with some interesting old posts. Anyway worth a visit if only for the flavour of the place.
Singing Pig http://www.singingpig.co.uk/ another forum that goes way back but the site has changed considerably since I first registered and gone all commercial with a load of BMV related matters plus Free Investor Resources. I will have to check out the content of this site and report further.
Now to Auctions:
I will return to this topic at length but in the meantime there is one site that you must use. The Essential Information Group or EIGroup http://www.eigroup.co.uk/ run by David Sandeman, who you will come across as a speaker at various events and is oft quoted in the press.
This is a subscription site costing £ 395 plus VAT for a year's membership, though through us you will get a reduction as we will give you some of our commission. We are affiliates.
In the meantime, if you are thinking about buying at auction you must join this site. Simple as that.
So click http://www.eigroup.co.uk/public/future_property_auctions.asp
for a free look at the site.
I think you can wander around the site for a couple of days before needing to pay to be able to continue and then you can join but do mention us when you receive a call from one of their staff.
Great site, well worth the money, we have been members for years and if you want any help on buying, viewing etc call me.
I may charge you, dependent on what you want, but I will tell you first.
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