Looking for a buy to let in Burnley? An overview. July 2020

Burnley is a complex housing market. Here in the office, we deal with a lot of enquiries from investors who aren’t overly familiar with the town and want to know things like ‘which postcode to search in’ or ask ‘if I spend £65000 what rent will I achieve?’

 

The reality is that those questions are too broad and the answers don’t provide any would-be investor with any useful information. Take the BB10 postcode of Burnley as an example, it covers two of the more affluent parts of Burnley in Worsthorne and Cliviger but also the covers the Duke Bar district where house prices on some streets won’t top £40,000!

 

If you are looking for an investment in Burnley a landlord needs to be clear on what is important to them.

 

Is it a high rental yield?

Is the property something that is going to be kept over a 5-10 year period and so a property offering a lower rental yield but found in a better part of the town where capital growth has better potential more suitable?

 

Below I will try and break down districts of the town suitable for all levels of investment, giving an overview on rents achieved and any other factors that contribute to an investment in Burnley. I choose to break down the properties in price bandings.

 

Band 1 – £30,000 – £50,000

Given the house price these properties will never be in the best parts of Burnley but offer the highest rental yields. Areas for this price of property will be: Burnley Wood, Duke Bar, off Accrington Road and the lower part of Cog Lane. These areas are popular with landlords and we will rarely see owner-occupiers’ complete purchases in these parts.

 

Very few properties exist below £30,000 in the town, and anything you see at or around that price will likely require modernisation to bring the home to rentable standards. In the areas mentioned previously housing priced between £40,000 and £50,000 will predominately be in good condition and immediately lettable, some may be being sold with tenants already in situ.

 

Rents in these parts of the town don’t tend to exceed £400pcm and benefit applications are likely, but against a purchase price of £50,000 that still gives a rental yield of nearly 10% per annum – hence the popularity with landlords!

 

One lesser-known fact about Burnley, it operates a selective license scheme in which homeowners based outside of 40miles of the town have to appoint a local contract/managing agent. If you choose to appoint a managing agent, that agent has to be on the councils approved agent list. We at JonSimon are an accredited letting agent with Burnley Borough Council and would be happy to assist in any capacity we could. The licensing scheme comes at a cost and varies on the part of the town the property is situated in. Further information can be found here: https://www.burnley.gov.uk/residents/housing/private-rented-sector/selective-licensing.

 

Band 2 – £50,000 – £80,000

At this price, we’ll start getting into more affluent parts of Burnley but the rental return on offer won’t reach the heights of 10% seen on the cheaper properties.

 

The hope would be these areas are more popular with owner-occupiers as well as buy to let investors so would see more growth in house prices over the next few years so the diminished rental return is balanced by an increase in the value.

 

Areas for landlords to consider on this basis would be Lower Brunshaw, Harle Syke and Briercliffe. As mentioned previously these areas are popular with owner-occupiers so expect competition when looking for properties!

 

At the lesser end of the banding (£50,000) expect the homes to require refurbishment and not be in immediately lettable condition whilst at £75/80,000 the properties should be in good order and not require any refurbishment whatsoever.

 

Rental prices tend to be quite consistent over these 3 districts with 2 bedroom terrace housing achieving as much as £500pcm and three bedrooms, in some cases a little over i.e. £525pcm.

 

Band 3 – £80,000 – £100,000

 

This will be the final band and tends to be the least popular with investors.

 

Personally I feel this is an area where investors should consider more. The aim in this price band would be to find an ex-local authority semi-detached home with a garden and off-road parking.

 

Ex council housing estates haven’t always had the best reputation over the years but we’re a long way from the ‘problem’ estates of 20 years ago. The houses are well built, offer generous accommodation and tend to be popular with families.

 

As is to be expected, at the bottom end of the banding properties will require modernisation whilst towards £100,000 (and in some cases exceeding) homes will be well kept and immediately rentable.

 

Rents tend to be strong. Demand is always high. A well-presented ex-council semi-detached home should be priced between £600pcmand £650pcm so offering a yearly income of £7800 a year in some cases.

 

I hope this gives investors a clearer picture of Burnley. What is on offer various throughout the price bands and people have built successful portfolios throughout the price ranges.

 

Property management is a forever changing landscape and landlords must be kept up to date with anything affecting their property. Here at the office, we host monthly landlord clinics aimed at clearing up any areas of lettings law landlords are struggling with, or just for some impartial advice to landlords who are dealing with problem tenants.

 

We have previously held popular landlord seminars at the village hotel in Bury and plan on resuming those as soon as COVID will allow us!

 

If either myself or Laura (the lettings manager here in Burnley) can be of service please do not hesitate to contact us.

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