Burnley investments

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  • Burnley investments

    Hi. Is anyone on here from Burnley? I am considering looking at some property in this area and would appreciate any help, possibly even meeting up with someone if your local.

    I would return the favour and can help anyone who would be interested in diversifying in areas I currently operate.

    What is the rental market like? Current yields? etc..

  • #2
    Not an area I would consider and I am from the north.

    Property appears cheap however local economy, level of rents and prospects for capital appreciation put me off.

    Best of luck, I may be wrong and betting wrong horse by concentrating in other areas in north with better prospects.

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    • #3
      My other half is from up that way too and he seconds your comments.

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      • #4
        Yes I am aware of the current problems but I tend to look more to the future when investing, not dwell on the past.

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        • #5
          Whatever is happening up there is current, not the past. Fingers crossed for the future though.

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          • #6
            BTL is a gamble, to a certain extent, in every area. Why do I say this?: because past/ current performance is no guarantee to future performance.

            Let's look at 2 extremes: 1/ London 2/ Burnley

            1/ London has bucked the trend in falling house prices over the past 5 years. Yields are low (sub 10%) generally.

            2/ Burnley has some of the lowest house prices in the country. But, it also has some of the highest rental yields.

            So what to do, should we buy in London on the basis of capital growth over the last few years? If so, will that growth continue? It has to to make BTL worthwhile. And if prices should fall...

            Or should we look to get 12-15%+ yields? We might not do that, because we might be fearful of further reductions in capital values.

            As I said, 2 gambles, very different ones. You can look at any factors you like; widening north/ south divide, austerity, globalisation, affordability, the list could go on and on. At the end of the day it's down to your own opinion. Personally I'd choose Burnley over London without much hesitation, but many (most even) here would disagree.

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            • #7
              Well said, London is a time bomb waiting to go off, it was over priced in 2007 and has continued to rise. I like Burnley as there has been a lot of investment - £500million in the local schools/hospitals/infrastructure. There is huge a aerospace place that makes the airbuses which is building a £200million plus factory and making most of its airbuses there. I am going to take a look round and have been in touch with one of the largest landlords in the area who manages 550+ units, anyone wanna come private message me and I can either meet you there or pick you up enroute. Got to be worth a look if you ask me. It has been one of the worst performing places in the Uk, actually the worst which means there is only 1 way for it to go!

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              • #8
                I'm not sure if London is a time bomb waiting to go off. It could be though. All it needs is foreign investment to lose confidence there and there could be a major crash. It's not U.K. money that's driven the rise.

                As for cheap properties only having one way to go, again, I'm not sure! I suspect that in the medium/ long term you could be right. But nothing is certain. Globalisation is posing a serious threat to salaries and disposable incomes. I suspect that prices would have dropped much lower had there not been so many migrant workers from the E.U. And had the Labour government not created a massive welfare state rents would be much lower. The current government is slowly but surely cutting a lot of this out and I can see this continuing. Not because I agree with it (it's certainly not good for BTL landords in poor areas) but because in a smaller world, there is no viable alternative. So, no guarantee that the bottom of the market is where we stand at the moment.

                But, with an ever growing population allied with not enough houses being built, demand is sure to remain strong in most areas. And a future government might try to curb the growing north/ south divide. It might just stand a chance of being elected if it highlighted this intention...

                My houses are in the north too, not in Burnley. I've got them on the basis that the yields give me a living without working too much. If the prices drop I don't care, as I'll keep them, and still have a living, even if rents drop a little. In 10 or 15 years from now I reckon I'll at least get back what I paid for them.

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                • #9
                  I like the idea of buying cheaper properties with high yields, but down here in SE London that's not going to happen.

                  I don't think London is a time bomb waiting to go off. We had the crash - prices dropped and I grabbed a few properties at well BMV. I would not have taken the risk at the full market value prior to the crash. Because the area is fairly expensive, I would never buy at full market value - I only consider buying properties BMV where value can be added. If a crash happens again, at least you have a greater chance of riding the storm.

                  If you buy at regular prices, the yield is too low, factor in a couple of interest rate rises and it's not worth it.

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                  • #10
                    Hi Ricco/Claymore - No I am not saying that the houses only have 1 way to go I am saying Burnley was rated the worst in the UK for economic activity/prospects out of every area, as it is rated the very worst it can only get better.

                    The reason I think London is a time bomb is that whilst most of the UK which was over priced has lost 30% some areas 50% of there values London had a huge wave of foreign money from countries worried about there own economy, this also happened in places like Berlin. The main question is that do we think these rich people from countries like Portugal, Italy, Greece, Spain, Ireland etc.... will keep all of there money in London property, obviously not.

                    Looking at Sterling and our position it is very odd that money has not started to flow back out as we are in quite a bad position and have already had a 20% devaluation of our currency. I feel it is a time bomb as sterling is going to weaken further and sooner or later people will start to take there money back, once prices begin to start to decline then there may very well be a deluge of people trying to sell.

                    1. Prices are unaffordable. 2. they are artificially high through foreign capital. 3. Yields are too low to be sustainable.

                    I may be wrong but its not a market I will be entering. Claymore I am not sure what crash happened as most people I speak to said the market has continued to go up and up. The crash we have had has been extreme, example - I just bought a building sold for £117,000 in 2007 for £35,000 - last year I bought a building sold for £560,000 for £100,000 many houses are trading at well below 50% off - when you see whats happened to the rest of the country compared to London you will understand that there is a massive risk.

                    Flats selling for £400,000 to first time buyers. I may be wrong but judging by the adjustment I have seen in at least 5-6 cities I operate in there is a major adjustment due in London to catch up to the rest of the UK and I feel it was only the foreign money that kept it so high but I am by no means an expert in that area.

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                    • #11
                      I think we are talking slightly at crossed purposes - I'm on the edge of London so suburbs really - trust me the crash happened here in 2008. I picked up some amazing bargains at auction (about 40% below the peak prices), and all decent stock. I get a very decent return on the rents and have managed to take the majority of my own money back out of the properties.

                      What I worry about in places like Burnley - house prices are very cheap - yields high, but I think you are only likely to attract non-working tenants - and if they trash the place, your profits would be quickly wiped out bringing the property back to standard.

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                      • #12
                        Hech, just looked at your figures again. I think I will start buying up north after-all!

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                        • #13
                          Burnley was one of the main towns of the Lancashire Cotton Industry which started in 1780.
                          But the cotton industry has gone now but I don't if the cheap houses you talk about now were those built 200-300 years ago.


                          " Burnley probably existed as a small hamlet as early as 800 AD, but not until 1122 is it first officially mentioned, in a charter by which one Hugh de la Val granted the church of St Peters to the monks at Pontefract Priory. Sometime around 1200 Geoffrey married the daughter of Roger de Lacy and was granted land to maintain a dwelling in the area. Thereafter the name of Towneley has closely connected with the Burnley district. (See Towneley Hall). Burnley was one of the possessions of the Lacys, a powerful family who were Lords of Blackburnshire for several generations up to the end of the 13th century. In 1294, Henry de Lacy obtained a charter from King Edward I granting the right to hold a weekly market at his house in the manor of 'Bruneley' and to have a three day fair once every year, on the "...eve and morrow of the feast of the Apostle Peter and Paul".
                          In 1559 Burnley Grammar School was founded by Gilbert Fairbank. The town was once known as the greatest cotton-manufacturing place in Britain and during its heyday at the end of the 19th century boasted over 100,000 looms operating within the borough. With 20th century decline in the textile industry, saw the town fall on hard times, but now it seems to have fully recovered and to have replaced its old industries with light engineering and other commercial ventures."

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                          • #14
                            Hi Hech123,

                            As our company owns and manages alot of properties in the Burnley area, i would always recommend 3 bedroom properties. The area does have a lot of 2 bedroom's available. The area is very strong for the LHA market.

                            One bedroom rate: £75.00 per week
                            Two bedroom rate: £85.00 per week
                            Three bedroom rate: £95.00 per week
                            Four Bedroom rate: £137.31 per week

                            A few street i would recommend keeping away from would be:

                            Sandhurst Street, Holbart Street, Hunslet Street and Thurston street


                            Hope that helps.

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                            • #15
                              Gordon, thanks for the history lesson, very interesting. Pony, great news thanks, what do you pay for properties in Burnley and what are the returns? Claymore, you ever want any advice or are interested in joint venture feel free to message me.

                              My update on Burnley is currently - I spoke to the manager of 500+ units there, he said yes you can get houses for £15,000 but most of these are in bad areas and tenants will be constantly moving and trashing the place. His advice was to buy at possibly £40k-£50k in much better areas, this I may look at but I was hoping for lower prices and higher returns to be honest.

                              One idea would to be to try and buy a full street in a bad area or the outskirts of one and refurb the full lot changing the name etc... Obviously we may need a few investors working together in this. I do not mind LHA tenants but understand there seems to be an over supply in Burnley and the local population has been in decline.

                              Pony is it possible to get things for £20k-£30k that would rent out ok? Let me know your thoughts and I may be interested in meeting up/talking

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