Street of the Week - Dorchester Close - Nailsea
Street of the Week – Dorchester Close Nailsea
Let me admit from the start that I am a bit of a snob, and in the past I may have been a bit snobby about Nailsea. You see Nailsea was a pretty village that had been over developed and was full of anonymous boxes and had no soul. The fact that I had hardly been there was no reason why I shouldn’t display my prejudices.
But I was wrong….I’ll repeat that for those who know me well……I WAS WRONG. Well I wasn’t entirely wrong. You see Nailsea is now one of THE places to live in North Somerset. When a family home in Nailsea comes onto the market, we choose the tenant from our waiting list of eager applicants, in fact Nailsea properties are always over-subscribed.
Nailsea has become a middle class haven with all the middle class trappings required. It has pleasant restaurants, nice shops, and of course a farmers market. And to crown its move from the "Yate of North Somerset" to "The Chipping Sodbury of North Somerset" Nailsea has been bestowed with the highest middle class accolade you can get: the Somerfield has been changed to…….A WAITROSE.
How did this happen? How did Nailsea become the place to live? As Mr Blair so famously said "education, education, education". It is no secret that the schools in Bristol are not great. That is why Bristol has so many private schools. Schools in North Somerset however are a different matter entirely Backwell, Churchill, Gordano and Chew Valley Schools all have excellent reputations and Nailsea long seen as the one to avoid has recently had an excellent Ofsted and is now on a par with its local rivals.
This is how a school can affect rental income: As a rule, middle class families flock to areas with good schools. A good school means properties in the catchment area are sought after which means landlords can charge higher rent, which means that only families with a certain income can afford to rent property in the catchment area which means that schools are likely to attract wealthier families who on the whole are pushier when it comes to schooling which means that the schools results continue to improve which means that more people want to live there which means that prices increase etc etc. It is self-perpetuating and this is now happening to Nailsea. A home in a good school catchment area is seen as a cheaper alternative to school fees. (Known in the local letting industry as the Redland Green effect)
The good news is that Nailsea is at the beginning of this upward curve. It is nowhere near Backwell or Chew Magna levels, but it is on its way, and if you’re looking to invest in a family home, there is still a window of opportunity to invest in Nailsea
Dorchester Close is a typical 1960’s/70’s mid terraced 3-bedroom house that is prevalent in Nailsea. We currently have it on the market for £750 per month, although by the time you read this it will probably be let. If you wanted to buy a similar property local estate agent Stephen Pring told me "I wish I had a property to sell on Dorchester Close, as it is the kind of property that is incredibly popular for families. I would expect a house similar to the one you are advertising to sell for between £175-185,000" Stephen has been selling property in Nailsea for 25 years longer than anyone else in the town so he really knows what he is talking about. He told me about the state of the local market "Although nationally it has been a tough 3 years in estate agency, we have found that Nailsea has largely missed the worst of the problems other areas have had. House prices are holding their own and demand for family homes remain high." Steve agreed that the popularity of the school has helped and that the opening of Waitrose shows how far Nailsea has come. "Nailsea is now a destination for people" Stephen told me.
Before you invest in a buy to let family home in Nailsea you do need to do your research. Spend time finding out about the area before making your offer.
So here are my top 4 tips for buying an investment property to rent out for families
- Look at the surrounding area. What are the shops like? Cafes, delis and other upmarket shops are a sure sign of an area on an upward curve A Starbucks is good, a Waitrose is fantastic!
- What are the local amenities like? Is there plenty for people to do? Look for ballet schools, drama groups and sports clubs with a large active junior section
- Most importantly read the local school’s Ofsted Report
- Spend time on Rightmove, Zoopla and the other property websites. See what is currently available and how much the asking rent is. Talk to your letting agent, and ask him for a "best price" guide.
So if you were to buy a house in Dorchester Close for your buy to let investment portfolio, how do the figures "stack up"?
As always the good people at Vivid Financial Services have looked at the mortgagability for Dorchester Close. Fiona of Vivid told us:
"I have worked out some figures for Dorchester Close:
- Value £180,000 rental £750 pm.
- Buy to let mortgages with a deposit/equity of 25% (equity in case someone is thinking of refinancing a current property to let out in that area) so a mortgage of £135,000
- 1 year fixed at 3.64%, £423.83 per month
- 2 year fixed at 4.24%, £493.70 per month
If you are wondering about tracker rates then the fixed rates are currently better as a 1 year tracker is 3.49% above Bank Base Rate (currently 0.5%) giving current rate of 3.99% - a monthly payment at current rates of £462.34 and the 2 tracker 3.90% above Bank Base Rate giving a current rate of 4.40% and a current monthly payment of £507.38.
Therefore fixed are currently better value plus you will have guaranteed monthly outgoings for the 1 or 2 year period. "
So there you are, you could add a 3 bed family home in Nailsea to your buy to let portfolio and get nearly £4,000 profit per year. Maybe now is the time to look at less traditional properties and add a family home to your property portfolio.