Thursday, 26 July 2018

‘Taxing’ Time for local landlords

Between 1960 and 1990, a large majority of 20-somethings saved up their 5% deposit, went without life’s luxuries for a couple of years and then bought their first home.  By 2000, 51.6% of Stamford 25-29 year olds owned their own home (compared to 46% nationally) as did 72.1% of 30-34 year olds (compared to 64.2% nationally), whilst the remaining youngsters mostly rented from the council and occasionally, privately rented.

Now it’s 2018, and those levels of homeownership have slipped dramatically and now only 27.5% of Stamford 25-29 year olds own their own home and 48.5% of local 30-34 year olds (interestingly mirroring the national picture of 24.5% for the younger age cohort and 64.2% for the older 30 to 34 year range).

There was concern in government since the late noughties that this shift from homeownership to private renting wasn’t good for the well-being of the country and things needed to change to make it a more level playing field for first time buyers.  House prices needed to be more realistic and there needed to be incentives for both landlords and first time buyers.

It’s just in this post credit crunch/Brexit environment, the use of higher interest rates wouldn’t directly affect landlords, as around two thirds of buy-to-let properties are bought without a mortgage.  Therefore, an increase in interest rates would have hardly any effect on landlords but hit first time buyers - the very sector the government would be trying to help!

In the 1980’s and 1990’s, interest rates was the government’s weapon of choice to cool or heat up the UK housing market – and it did work – up to a point.   However, interest rates also affected many other sectors of the UK economy (and not always positively).  Also, given muted growth of real income in the past few years, an uplift in interest rates (from their ultra-low 0.5% current levels) would have a massive effect on Brit’s household disposable income. Yet, over 90% of new mortgages in 2018 being taken are fixed rate and with such low rates, it has made buying property comparatively attractive.

Instead, over the last 8 years the government has encouraged first time buyers and implemented taxes and restrictions on property investors.  First time buyers have had the ‘Help to Buy’ Scheme, Stamp Duty Exemption and contributions to their deposit by HMRC.  On the other side the coin, the way landlords were able to offset the tax relief of their mortgage payments against income has now changed for the worse, plus an increase in Stamp Duty and they will be hit with additional costs as the government will be phasing out fees to tenants in the next 12 - 18 months.

For resourceful landlords it’s all about looking at your property/s and ascertaining if your current portfolio, mortgage and gearing are designed to hit what you want from the investment in terms of current and future income, capital growth and when you plan to dispose of your assets.  
In fact, some local landlords have strategically SOLD some of their portfolio to either reduce mortgage debt or more often to adjust their portfolio and buy other types of property that to help them meet their current and future investment goals.

Monday, 23 July 2018

The Oakham Bank of Mum and Dad lent £1.97m last year

My analysis has shown that up to the end of the last quarter, Oakham first time buyers purchased 146 properties. With wages rising at 2.8%, unemployment at a low rate of 4.2% (down from 4.6% from a year earlier and the joint lowest since 1975), national GDP rising at 1.87% and inflation at 2.3%, tied in with indifferent house price growth (compared to a few years ago), this has given first time buyers a chance to get a foot hold on the Rutland property market.

Over the last year, the average purchase price of an Oakham first time buyer property has been £190,200 and the average deposit was £30,812. Furthermore, my calculations show Oakham parents on average contributed £13,480 of that £30,812 figure. “The Bank of Mum and Dad” is for countless 20 something’s, perceived to be the only way they will ever be able to afford their first home. In fact, Oakham parents put up a substantial £1.97m in the last 12 months to help their children to purchase their first home with help in raising the deposit.

With mortgage rates at all-time lows, few 20 something’s would struggle to make mortgage repayments, but it is the requirement of the deposit which is the issue, although where parents and grandparents are helping out where they can, it does little to address the real problems of the housing market, whether for renting or buying their first home.

If you think about it, as a country we have been fortunate that the older generation who control the biggest share of the nation’s wealth are so plentiful to those following after. We need to remember, though, that this generosity is
 a sign of the issues of the British housing shortage, not its solution.

Note that in a previous paragraph, I used the word PERCEIVED… Granted, the average first time buyer deposit is 16.1%, but that is an average. Did you know 95% mortgages returned to first time buyers in late 2009 and have been available ever since? Also, many mortgage lenders and building societies now offer 100% mortgages (i.e. no deposit) at 2.75% fixed for 3 years. The perception is you need 15%, 20% even a 25% deposit to be a first-time buyer – you don’t! You don’t need any deposit, but (there is always a but!)...

Over the last decade, many tenants have upgraded into homes that they (or any generation before them) could never historically have afforded as a first time buyer. The British housing market has started to change - renting is now seen as a choice with many young (and increasing older) people are becoming more at ease with the flexibility offered by private renting a property rather than being tied to home ownership. Oakham landlords will continue to see growth in sector, and today’s tenants will become homeowners in 20 years’ time – when they will inherit the wealth of their parent’s home.


Thursday, 19 July 2018

Do you want to style your bed like a pro'?

Here's how to make your bed look great for sales viewings...

1. Buy the best bedding, covers and accessories you can afford. Treat styling your home as an investment in your house sale. A well styled home can add to your house value and don't forget you can take the items with you to your new home.

Reversible duvet cover sets are really on-trend at the moment. Mix and match prints together to add contrast. Turn down the top for added interest.

2. Add a bedspread. You can add more colour and texture here and update for different seasons - a lightweight weave or jacquard for spring/summer or a heavier cable knit or faux fur for autumn/winter.

3. Add a throw. Keep it casual and don't fold it too carefully. It needs to look informal.

4. Pillows. These need to be big, fat and ready to plump. 4 for a king or double bed and 2 for a single. If you have a super-king bed, buy super-king pillows.

A question I am asked most by our vendors is whether to place the pillows on top of the duvet or beneath it? Personally, I prefer to see the pillows placed on top of the duvet.

5. Cushions. Odd numbers can work well and fill the space - try 3 or 5 on a larger bed. Mix different styles, sizes, colours, textures & designs.

Save your new bedding (and new white towels in your en suites and bathrooms) for viewings!

Call us to see how we can help you achieve sales success.

We have lots of creative ideas on how to make your home stand out from its competition and to maximise on its value.


Lottie Crooke

Creative Director, Stylist & Cushion Plumper!

UPP Property, Selling homes across Stamford & Rutland

01780 484 554

Should you buy a brand-new home?

Over the last 10 years, 2,864 new homes have been built in the South Kesteven area.  Historically, there were 2 distinct camps of property buyers; those who would only contemplate living in characterful period properties, and those people who preferred the low maintenance of a new home.
Now, in an attempt at appealing to a wider audience, developers are changing those uniform rows of identical homes into developments that are as individual as the families that live in them.  Whatever home you buy, be it old or new build, there can be hidden or supplementary costs that are often not taken into account by potential homeowners or buy-to-let landlords.

Unsurprisingly, over the last 10 years, a greater proportion of detached homes have been built locally (39.4% when compared to the national average of 29.2%) and fewer flats (11.4% locally vs 22.3% nationally). This is because of the nature of the Stamford area, its position in the country, the availability of building land, local government planning restrictions and the price of building land.

If you are considering new, look out for items such as curtain rails, TV aerials, kitchen appliances, carpets and curtains, gardens and patios being excluded from the sale.  With older properties, consider energy efficiency and look into the insulation, heating type and windows etc., Do your research, ask questions and get a surveyor to make a detailed inspection of the property so you are fully informed.
My research further revealed there was a pattern to when people bought a new home locally.  I discovered there was a drop in new homes buying in the credit crunch years (2008 - 2010) and since then the general trend has been better!  Looking at the much larger second hand housing market in Stamford over the same 10 years, the correlation between the new homes market and used market has been quite strong, which shows the new home builders don’t make (or break) the Stamford housing market, they just follow it (although with the planned building locally in the next 10/20 years – who knows if that will continue to be the case?).

If price is your sole motivator, then new homes are always CHEAPER when the economy is bad.  However, in normal and good housing market conditions, you will pay a ‘new build premium’. The Royal Institute of Chartered Surveyors admits that this can be as high as 10% extra, when compared to a similar second hand property. 

One final thought, at least with new homes there is no gazumping or no upward chain to ruin any sale completion dates!


Tuesday, 10 July 2018

NEWS... We have SOLD our lettings division

NEWS ... NEWS... NEWS...

We have sold our lettings division to focus on property sales.

Having worked hard over the last 9 years to establish a reputation envied by many of our competitors, we have sold the lettings division of the business to Leaders Romans Group, one of the UK’s (and Stamford’s) leading lettings and property management specialists.

This has been a difficult and sometimes emotional decision to make. It was very important to me and Lottie that our clients and colleagues would continue to be looked after and that the same personal level of service and performance could be maintained by the new owner of the lettings agency. We believe this has been achieved and Leaders’ national strength, financial backing and local market knowledge will allow the company to grow and introduce new services.

We will miss working with our lettings colleagues and thank them for their hard work, support and loyal dedication over the years. Thanks to Louise Howe, Mel Close, Lucy Barnes, Sarah Howe, Martin Matthews, Eleanor Burge and Lisa Sherriff.

Moving forward, Lottie and I will continue to be proud local business owners but will now focus all of our attention in the development and growth of our sales offering local homeowners. It’s a very exciting and positive time for us. The Stamford and Rutland property market continues to expand as a result of our micro-property markets, local area regeneration, government ‘help to buy’ incentives, superb local education authority schools and a wealth of outstanding private day and boarding school alternatives that all contribute to energising property sales and boosting relocation figures.

However, we sincerely believe that a buoyant property market shouldn’t make for marketing complacency. In fact, with a strong market comes the need to offer homeowners more creative marketing solutions as they plan to sell their home or investments. We know there is a better way to sell property and we want to offer our clients something different to what’s currently available, such as advising our clients on how to make their house stand out from its competition and suggesting practical ways to help them maximise on their home’s value.

As we continue to strive forward, we know we are well supported by a strong sales team with shared values, with Janet Cottis - sales manager, Lorna Bright - sales negotiator and welcome a newcomer to the team with local Rutland resident Ben Schofield as sales valuer.

Moving on and moving UPP!




Sunday, 8 July 2018

43% Drop in Rutland Properties For Sale Compared to 10 Years Ago

There is good news for local landlords as ‘top of the range’ well-presented properties are getting really decent rents compared to a year ago.  However, this rise in rents is thwarting many potential first time buyers from saving for a deposit and saving in general.  In addition, there is also a shortage of homes coming on the market thus adding to the slowdown and affecting not just first time buyers but also those moving up the housing ladder.

Whilst it is true that the government’s initiatives targeted at improving the supply of homes built and helping first time buyers obtaining necessary funding are slowly starting to take effect), I also believe that to boost more properties onto the market, we need to see a better focus on those looking to downsize.

Incentives such as removing stamp duty for those downsizers (as was done for first- time buyers last year), together with encouraging even more first-time buyers with 100% mortgages to buy the smaller properties, would in turn release more mid-range properties onto the market.  In turn, this would encourage more mature homeowners to downsize and buy those mid-range properties - thus completing the circle. 

Rutland property values and transactions continue to be sluggish, and the monthly peaks and troughs of house prices and properties changing hands doesn’t mask the deficiency of suitable realistically priced property coming onto the Rutland property market, meaning the housing market is slowly becoming inaccessible to some.


Referring back to research for early summer 2008, at that time 168 properties were on the Rutland property market for sale, whereas today, there are only 95 properties for sale – that’s a drop of 43%.  And, in the last 6 months, only 313 Rutland homes changed hands.

The government needs to seriously consider the supply and demand of the UK property market as a whole to ensure it doesn’t seize up. It needs to do that with bold and forward-thinking plans but, in the meantime, people still need a roof over their head, so as local authorities don’t have the cash to build new houses anymore, it’s the job of landlords to take up the slack. I must stress though, I have noticed a distinct ‘flight to quality’ by local tenants, who are prepared to pay more for an exceptional home to rent. 

Thursday, 28 June 2018

Stamford Property Values 7.7% higher than year ago

It’s been nearly 18 months since Sajid Javid, the Conservative Housing Minister published The White Paper “Fixing the Broken UK Housing Market”, meanwhile Stamford property values continue to rise at 7.7% (year on year for the council area) and the number of new homes being constructed locally remain slow, creating a potential perfect storm for those looking to buy and sell.
The White Paper is important as it will ensure we have long-term stability and longevity in property market as a whole. Stamford homeowners and landlords need to be aware of these issues in the report to ensure they don’t lose out and ensure the local housing market is fit for purpose.  The White Paper wanted more homes to be built in the next couple of decades, so it might seem counter-intuitive for existing property owners to encourage more homes to be built and a change in the direction of housing provision – as this may have a negative effect on their own property.
 Yet the country needs a diversified and fluid property market to allow the economy as a whole to grow and flourish, which in turn will be a greater influence on whether prices increase or decrease in the long term.

The first of the four points raised was to give local authorities powers to speed up house building and ensure developers complete new homes on time.  Secondly, statutory methods demanded local authorities and builders build at higher densities (i.e. more houses per hectare) where appropriate.  The other two points were incentives for smaller builders to take a larger share of the new homes market and help for people renting.

Looking at data from the Local Government’s Association in South Kesteven, the council is below the regional average, only spending £23.33 per person, compared the regional average of £32.05 per head – which will mean the planning department will be hard pressed to meet those targets. 
Also, 87% of planning applications are decided within the statutory 8-week initial period, below the regional average of 89% (see the graph below).  I am slightly disappointed with the numbers for our local authority when it comes to the planning and the budget allocated to this vital service.

I would agree with the government’s ambition to make more efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing needs, ensuring that the density and form of development reflect the character, accessibility and infrastructure.  It’s all very good building lots of houses, but we need the infrastructure to go with it.

Talking to local homeowners their biggest fear of all this building is a lack of infrastructure for those extra houses (the extra roads, doctors’ surgeries, schools etc.). I know most want more houses to be built to house their family and friends, but irrespective of the density it’s the infrastructure that goes with the housing that is just as important.  This is where I think the White Paper failed to go as far as I feel it should have done. 



Friday, 15 June 2018

Nearly 5 Babies Born for Every New Home Built in the Past Five Years in Rutland

This discovery is an important foundation for my concerns about the future of the Rutland property market - when you consider the battle that today’s 20 and 30-somethings face in order to buy their first home and get on the property ladder. This is particularly ironic as these youngsters are being born in an age when the number of new babies born to new homes was far lower.

This will mean the babies being born now, who will become the next generation’s first-time buyers will come up against even bigger competition from a greater number of their peers unless we move to long term fixes to the housing market, instead of the short term fixes that successive governments have done since the 1980’s.

In 2016, 11.20 babies were born in Rutland for every home that had been built in the 5 years to the end of 2016 (latest data). Interestingly, that ratio nationally was 2.9 babies to every home built in the ‘50s and 2.4 in the ‘70s.  I have seen the unaudited 2017 statistics and the picture isn’t any better! (I will share those when they are released later in the year).

Our children and grandchildren will be placed in an unprecedented and unbelievably difficult position when wanting to buy their first home unless decisive action is taken. It doesn’t help that with life expectancy growing year on year, this too is also placing excessive pressure on the availability of homes to live in, with normal population growth nationally (the number of babies born less the number of people passing away) accumulative by 2 people for every 1 home that was built since the start of this decade.
Owning one’s home is a measure many Brits to aspire to. The only long-term measure that will help is the building of more new homes on a scale not seen since the 50’s and 60’s, which means we would need to aim to at least double the number of homes we build annually.

In the meantime, what does this mean for local landlords and homeowners? Well, the demand for rental properties in Stamford and Rutland in the short term will remain high and until the rate of building grows substantially, this means rents will remain strong and correspondingly, property values will remain robust.


Monday, 4 June 2018

3 Best Property Deals on this week's Stamford & Rutland Property Market


WHAT? 3 Bedroom Semi-Detached
WHERE? Coleridge Way, Oakham.  On the market with Newton Fallowell.
WHY? Modern, spacious, built over 3 floors, master bedroom en suite, garden and garage.  Strong, sought after rental property.

Price: £180,000 (OIEO)
Rent: £750pcm approx.
Annual Income: c£9,000
Yield: c5%

MORE DETAILS?  Click here...


WHAT? Renovation Project. 2 bedroom town centre terrace.
WHERE? Kings Road, Oakham.  On the market with Murray Estate Agents. 
WHY? Full renovation needed of this spacious Victorian terrace with 2 reception rooms and 1st floor bathroom, sought after location and good sized garden.

Guide Price: £139,950 
Rent:£600pcm (once renovated)
Annual Income: c£7,200
Yield: c5.1%

Property 3)

WHAT? 1 bedroom, ground floor apartment
WHERE? Keble Court, Stamford. On the market with Knight Partnership.
WHY? Fully renovated throughout, good location, ground floor with off-road parking. 

Guide Price: £90,000
Rent: £400pcm approx.
Annual Income: c£4,800
Yield: c5.3%

MORE DETAILS?  Click here...

If you are considering investing in property and would like to chat through the figures with me, please contact me.  I am happy to help.

David Crooke, Owner and MD

UPP Property, Sales & Lettings 

Stamford 01572 725 825 / Oakham 01780 484 554


Friday, 1 June 2018

How Affordable is Stamford Property for Average Working Families?

If the supply of new properties is limited and demand continues to soar, the values of existing properties will continue to remain high and stay unattainable for many.  Looking at some recent government statistics, the ratio of the lower quartile house prices to lower quartile gross annual salaries in South Kesteven District Council (SKDC) has hit 8.73 to 1. 

If we systematically ordered every property in SKDC by their value, the average value of the lower quartile properties (i.e. lowest 25%) would be £148,000. If we then did the same calculation to salaries in the same council area, the average of the lowest quartile (lowest 25%) the average salary of the lowest 25% is £16,958 pa, thus dividing one with the other, we get the ratio of 8.73 to 1.

Assuming there is one wage earner in the house, the chances of a Stamford working family being able to afford to buy their own home (when it’s over 8 times their annual salary), is very slim indeed. The current affordability crisis is the unavoidable outcome of the accumulative effect in the failure to build enough homes to keep up with demand. Nevertheless, improving affordability is not a case of just constructing more homes. The council needs to ensure more properties are not only built, but built in the right locations, of the right type and at the right price to ensure the needs of these lower income working families are met, because at the moment, they presently have few options apart from the private rental sector.

Looking at historical data of the ratio, it can be seen that this has been an issue since the early 90’s to mid 2000’s. However, those on the bottom rung of the ladder (in the lower quartile of wage earners) used to be housed by the local authority. However, the vast majority of council houses were sold off in the 1980’s meaning there are much fewer council houses today to house this generation.

Many of the lower quartile working class families were given a lifeline to buy their own homes in middle 2000’s with 100% mortgages, but the 2009 credit crunch ended that opportunity. It is cheaper to buy than to rent, but securing the 5% deposit is the biggest challenge. Unless the government allows 100% mortgages again, demand for rental properties will continue to outstrip supply.

Long term, I suggest local communities hold their local politicians to account to ensure the affordability of housing and the extent to which they work with private developers and housing associations. In addition, they must be encouraged to use the planning tools at their disposal in safeguarding the local community, thereby effectively realising the required level of new households. SKDC could designate certain parcels of residential building land for private rented development only, eliminating the opportunity of the land being bought to develop large executive homes, which does not solve the current problem.

Short term, demand for rental properties will continue to grow, keeping house prices high and rents high.

Tuesday, 29 May 2018

106 Local Landlords Plan to Expand Their Buy-to-let Portfolios

A noteworthy number of British buy-to-let landlords plan to buy more properties over the next year notwithstanding the frustrations, challenges and seismic changes in the private rented sector.  According to the specialist buy-to-let lender ‘Aldermore’, their research shows around 41% of portfolio buy-to-let landlords' objectives are to GROW their portfolio.

Talking to the local landlords I deal with, most are feeling quite optimistic about the future of the Oakham rental market and the prospect it presents because they still see the Stamford and Rutland rental market as a decent investment opportunity.

With top of the range bank and building society savings accounts only reaching 1.5% a year, the rollercoaster ride of ‘crypto currency’ and the fluctuations of the stock market, the simple fact is, with rental yields in Oakham far outstripping current savings rates, the short term prospect of a minor drop in property prices isn’t putting off local landlords.

The art to buying an investment property is to buy the profit on the purchase price, not the anticipation of the future sale price.

No matter what the historical economy has thrown at us, with the global meltdown in 2008/9, dotcom crash of 2000, ERM in 1992, the 3 day week, oil crisis and hyperinflation in the 1970’s etc., the housing market has always bounced back stronger in the long term. That’s the point - long term.  Investing in buy-to-let is a long-term strategy. Over the long term with the increasing demand for rental properties, predominantly among Millennials as many cannot afford to get on the property ladder, and with councils not building enough properties of any kind, many youngsters are having to resort the private rental market for their accommodation needs.

There are 118 landlords that own just 1 buy-to-let (BTL) property in Oakham and 258 Oakham landlords who are 'portfolio landlords'.  Between those 258 Oakham portfolio BTL landlords, they own a total of 541 Oakham BTL properties.

Applying the Aldermore figures means 106 landlords have plans to expand their Oakham BTL portfolio in the coming year or so.  However, the Aldermore Research also showed that 8% of private landlords intended to reduce the number of properties they own.  Attributing their reasons to continuing government intervention in the housing market (as many landlords mentioned too many limitations and higher taxation), while some believed that tenants are excessively protected to the detriment of the landlord.

I would say there is no repudiating that the buy-to-let market has taken a bit of a beating, yet there still remains an overall consciousness of optimism among the vast majority of local buy-to-let landlords. Despite these latest changes, many landlords still view buy-to-let as a good investment, as long as you buy right and expand your portfolio taking into account the second rule of buy-to-let … assess your position on the ‘buy-to-let seesaw’ of capital growth and yield.

If you want to buy right and assess your own portfolio drop me a note.  I don’t bite and the opinion I give, whether you are landlord of mine or not as the case may be, is given freely, without obligation or cost.