Wednesday 29 November 2017

Increase in interest rates to cost local homeowners £300 pa

In Rutland there are 3,920 homeowners with a mortgage, with the average mortgage being £120,312. 
 
Of those homeowners, 1,684 have a variable rate mortgage and the remaining are on a fixed rate. The total amount owed by those on variable rate mortgages is £202,608,739 meaning the average monthly mortgage payment for those home owners before the interest rate rise was £938.10 per month and now its £963.16 per month - meaning the interest rate rise will cost local homeowners on average an extra £300.78 per year.
 Whilst this is the first raise in interest rates in over 10 years, it must be noted it is at a significantly low level compared to figures in the 1970s and early 1990s. Many of my readers talk of interest rates at 17% when Sir Geoffrey Howe increased them to try and combat the hyperinflation (from the fallout of the financial crisis that hit Britain in the 1970’s) and Norman Lamont in September 1992 with the infamous Black Wednesday crisis, when interest rates were raised from 10% to 15% in just one day.
So, what will this interest rate actually do to our local housing market? Well, if I’m being frank – not a great deal.
 
The proportion of local homeowners with variable rate mortgages (and thus directly affected by a Bank of England rate rise) will be smaller than in the past, in part because the vast majority of new mortgages in recent years were taken on fixed interest rates. The proportion of outstanding mortgages on variable rates has fallen to a record low of 42.3%, down from a peak of 72.9& in the autumn of 2011.
If more homeowners are protected from interest rate rises because they are on a fixed rate mortgage, then there is less chance of them having to sell their properties because they can’t afford the monthly repayments or an even worse, have them repossessed.
However, for every 1% increase in the Bank of England interest rate, it will cost the average Rutland homeowner on a variable rate mortgage £100.26 per month
Because UK inflation levels are at 2.9% (the country’s highest rate since April 2012) and the Bank of England is tasked by HM Government to keep inflation at 2% using various monetary tools (one of which is interest rates), you can see why interest rate rises might be on the cards in the future as increasing interest rates tends to dampen inflation.
 Now of course there is a certain amount of uncertainty with regard to Brexit and the negotiations thereof, but fundamentally the British economy is in decent shape. People will always need housing and as we aren’t building enough houses we might see a slight dip in prices in the short term, but in the medium to long term, our local property market will always remain strong for both homeowners and landlords alike.
 
 

Friday 24 November 2017

The 3 BEST properties on this week's Stamford & Rutland property market

Three great but very different properties this week; the first offering an impressive 6.2% yield, having been priced attractively to sell.  Then I've selected a modern, low maintenance new build and lastly, there's a reno' project to consider.  Something for everyone...


PROPERTY 1)

WHAT? Spacious 2 bedroom first floor apartment for sale.
WHERE? The Maltings, Mill Street, Oakham

WHY? Large, well proportioned rooms, great central location and it's price!! Oh, and it's CHAIN FREE...

HOW MUCH?  Guide Price: £95,000
FINANCIAL RETURN? Rent approx. £495pcm / Yield 6.2% /
Annual Income: £5,940


MORE DETAILS?  Click here...
http://www.rightmove.co.uk/property-for-sale/property-66142781.html





PROPERTY 2)

WHAT? 2 bedroom coach house

WHERE? Coleridge Way, Oakham

WHY? Modern, 2 double bedrooms, in a popular location with a single garage.

HOW MUCH?  Guide Price £160,000
FINANCIAL RETURN? Rent approx. £550pcm / Yield 4.1% / Annual Income: £6,600
MORE DETAILS?  Click here...
http://www.rightmove.co.uk/property-for-sale/property-50737245.html

 
Property 3)


WHAT? 3 bedroom terraced house for sale

WHERE? Trinity Road, Stamford

WHY? Great renovation project, 3 bedrooms, 2 reception rooms plus a conservatory

HOW MUCH?  OIEO £170,000
FINANCIAL RETURN? Rent approx. £700pcm* / Yield c4.5%**
MORE DETAILS?  Click here...

(*estimated rental amount based on a refurbished property).
((**not taking into consideration works))

If you are considering investing in property and would like to chat it through with me, I would love to hear from you. 

I look forward to discussing property with you.

David Crooke, Owner and MD
UPP Property, Sales & Lettings 

Stamford 01572 725 825 / Oakham 01780 484 554
david@upp-property.co.uk





 

Wednesday 22 November 2017

The Rutland House Price Index: 135.78

I had the most interesting conversation the other day with a local Oakham accountant, who asked me about my articles on the local property market.  He was particularly interested with the graphs, facts and figures contained within them – so much so that he recommends his clients also read them.  However, one question that kept me on my toes was, With so many House-Price-Indices, how do you know which one to use and how can you calculate what is exactly happening in Rutland?

To start with, there are indeed a great number of these Indices, including the Land Registry, Office of National Stats, Halifax, Nationwide and LSL to name but a few. The issue occurs when these different house price indices give diverse pictures of the state of the UK housing market. Whilst some indices measure the average value of every property in the UK (sold or unsold), others measure the average ‘price-paid’ of houses that happen to be sold over a fixed time scale… confusing, isn’t it?

A lot of the variance between house price indices occurs because of the distinctive ways in which the numerous indices endeavour to beat these issues. You see, the biggest problem in creating a house-price-index when comparing and contrasting with most other indexes (e.g. inflation where the price a ubiquitous tin of beans can easily be measured over the months and years), is that every home is unique and as Rutlanders are only moving every 13.5 years, it appears the only thing that can be measured is the price of property sold in a given month.

By their very nature, all of the indices are only able to paint a picture of the whole of the UK or, at best, the regional housing market. As I have said many times in my articles, it is important to look to the medium term when considering house price inflation/deflation.

I can guarantee you in the coming few months, on a month-by-month basis, one or more of the indices will say property prices will have dropped.  Let me tell you, no property market indices are representative of the housing market in the short term.  Many indices have shown a drop around the Christmas and New Year months, even the boom years of 2001 to 2007 and 2013 to 2015.

So, back to the question, how do we work out what is happening in the local property market and can there be a 'Rutland House Price Index'?

To calculate what I consider is a fair and proper ‘House Price Index for Rutland', I initially needed to decide on a starting place for the index. I have chosen 2008 as far enough away, but still gives us a medium/long term view. Next, I split all the house sales into their types (Detached/Semi/House /Apartment) to give us an indication of what is actually selling by postcode district. So, for example, the following tables shows the LE15 postcode district (the sample shows 2008, 2016 and 2017.
 
 
2008
2016
Proj 2017
Detached
49.6%
48.8%
45.8%
Semi Det
27.9%
18.3%
22.9%
Terraced
17.5%
26.2%
27.9%
Apartment
5.1%
6.8%
3.4%

Then I look at the actual numbers of properties sold in the LE15 postcode district. Below is the graph with the numbers for the years already mentioned. 


Next, I have looked at the prices paid for those types for every year since 2008, again in this example using the sample years of 2008, 2016 and 2017 for the LE15 postcode.


Finally, I amalgamated the same data points for the other postcode districts covered by Oakham and the surrounding villages, weighted it accordingly, to produce the Rutland House Price Index ... which after all that work, currently stands at for Q4 2017 at 135.78 (Q4 2008 = 100).

I hope you found that of interest and, over the coming months, I shall refer back to ‘Rutland House Price Index’ in future articles.
 
 

 


 

Friday 17 November 2017

1 in 13 Stamford / SKDC rental properties will be illegal in 2018


As the winter months draw in and the temperature starts to drop, keeping one’s home warm is vital.

Yet, with gas, oil and electricity taking on average 4.4% of a typical Brit’s pay packet (and for those Brit’s with the lowest 10% of incomes, that rockets to an eye watering 9.7%), whether you are a tenant or homeowner, keeping your energy costs as low as possible is vital for the household budget and the environment as a whole.

For the last 10 years, every private rental property must have an Energy-Performance-Certificate (EPC) rating.  The property is given an energy rating, very similar to those on washing machines and fridges with the rainbow coloured graph, of between A to G (A being the most efficient and G the worst). New legislation comes in to force next spring (2018) for English and Welsh private landlords making it illegal to let a property that does not meet a certain energy rating.
 
After the 1st of April next year, any new tenant moving into a private rented property or an existing tenant renewing their tenancy must have property with an energy performance rating of E or above on the property’s EPC and the new law will apply for all prevailing tenancies in the spring of 2020. After April 2018, if a landlord lets a property in the ‘F’ and ‘G’ ratings (i.e. those properties with the worst energy ratings) Trading Standards could fine the landlord up to £4,000.

Personally, I have grave apprehensions that many landlords may be totally unaware that their rental properties could fall below these new legal minimum requirements for energy efficiency benchmarks. Whilst some households may require substantial works to get their property from an F/G rating to an E rating or above, my experience is most properties may only need some minor work to lift them from illegal to legal. By planning and acting now, it will mitigate the need to find tradespeople in the spring when every other local landlord will be panicking and paying top dollar for work to comply.

Whilst there is money and effort involved in upgrading the energy efficiency of rental property, a property that is energy efficient will have greater appeal to tenants and other buy-to-let landlords/investors and this will enable you to obtain higher rents and sale price (if you come to sell your investment).

So, how many properties are there in the area that are F and G rated? Well quite a few in fact. Looking at the whole of the South Kesteven District Council area, of the 8,389 privately rented properties, there are:

535 rental properties in the F banding

138 rental properties in the G banding

That means just under 1 in 13 rental properties in the Stamford and surrounding area has an Energy Performance Certificate (EPC) rating of F or G. From April next year it will be illegal to rent out those homes rated F and G homes with a new tenancy.

Talking with the Energy Assessors that carry out our EPC’s, they tell me most of a building’s heat is lost through draughty windows/doors or poor insulation in the roof and walls. So why not look at your EPC and see what the assessor suggested to improve the efficiency of your property?
 
Contact us if you need some guidance on finding out the EPC rating or need a trustworthy contractor that can help you out.
 
David Crooke, Owner and MD
UPP Property Agents 01780 484 554
 
 

 

Wednesday 15 November 2017

RIPE FOR RENO' - The 3 best properties on the Stamford & Rutland Property Market this week...

Each of these properties are in need of modernisation and all 3 have great potential. 
 
Renovated and refurbished to the right standard will improve the value either for a short-term flip or for long-term investment. 
 
But remember if you're not going to live in the property yourself, don't overspend or invest in the wrong areas. 
 

Ask me for advice if you are unsure on this, as I often see costly, unnecessary mistakes or indeed the wrong corners cut...

 
 
Property 1)

WHAT? 3 bedroom semi-detached for sale
WHERE? Queen's Road, Oakham
WHY? Chain Free, recently fitted boiler, on a large plot with good sized rooms




HOW MUCH?  Guide Price £160,000
FINANCIAL RETURN? Predicted rent approx. £650pcm *
MORE DETAILS?  Click here...

http://www.rightmove.co.uk/property-for-sale/property-51527613.html


Property 2)

WHAT? 3 bedroom house for sale
WHERE? Haddon Road, Stamford
WHY? Central location with off-road parking and garden




HOW MUCH?  £210,000
FINANCIAL RETURN? Predicted rent approx. £750pcm*
MORE DETAILS?  Click here...

 

Property 3)
 
WHAT? 2 bedroom semi-detached cottage for sale
WHERE? East Street, Stamford
WHY? Characterful red brick cottage, good town centre location with front and rear gardens


HOW MUCH?  Guide Price £180,000
FINANCIAL RETURN? Predicted rent approx. £700pcm*
MORE DETAILS?  Click here...
http://www.rightmove.co.uk/property-for-sale/property-62496043.html
 

If you prefer modern / new build properties then please call me as I can suggest some alternatives for you to consider.  As a landlord myself, I know what makes a good property investment.

David Crooke, Owner and MD
UPP Property, Sales & Lettings 

Stamford 01572 725 825 / Oakham 01780 484 554
david@upp-property.co.uk




 
* The predicted rental valuations are based on properties in a renovated condition.
 

Tuesday 7 November 2017

PART 2: Local Homeowners Are Only Moving Every 13.5 Years

In the credit crunch of 2008/9 the rate of home moving plunged to its lowest level ever. In 2009 the rate at which a typical house would change hands slumped to only once every 20.5 years. 

The biggest reason was a lack of confidence as property prices plunged after the onset of the financial crisis in 2008. 



However, since 2009, the rate of home moving has increased, meaning today:
The average period of time between home moves in Oakham is now 13.5 years.

This is an increase of 54% between the credit crunch fallout year of 2009 and today, but still it is a 21% drop in moves by homeowners, compared to 15 years ago.

 


In the UK in the 1960’s and 1970’s we were building on average 300,000 - 350,000 households a year. Comments in a recent study by ‘The Barker Review’, said that for the UK to keep up with housing demand we needed to build 240,000 households a year to stand still. In reality, we have only been building between 135,000 - 150,000 households a year. 

It must also be recognised that our ageing UK population is a less mobile one. Many of the older generation are stuck in property that is simply too big for their needs. The fact is that in Oakham and the Rutland area, more than 6 out of every 10 owned houses has 2 or more spare bedrooms.

So, as their children and grandchildren struggle to move up the housing ladder, with those young families bursting at the seams in homes too small for them (i.e. overcrowding), we have a severe case of under-occupation with the older generation having a profusion of spare bedrooms.

Regrettably, I cannot see how the rate of properties being sold will rise any time soon. Many commentators have suggested the government should give tax breaks to allow the older generation to downsize, yet in a recent White Paper on housing published just weeks before the General Election, there was no reference of any thoughtful and detailed policies to inspire or support them to do so.

There could be an opportunity for buy-to-let landlords to secure larger properties to rent out as the demand for them will surely grow over the coming years. Homeowners in the lower - middle Oakham market will find it a balanced sellers’ / buyers’ market, but will find it slightly more a buyers’ market in the upper price bands.


 
If you are considering selling your home or property investment, let me reassure those of you thinking about selling your property that in an uncertain market, IF promoted well from the beginning, your property can still generate genuine interest and achieve success.   We recently sold (stc) this fantastic 2 bedroom cottage in 1 WEEK with 6 OFFERS made.

Do call me, I am here to help.


David Crooke / email: david@upp-property.co.uk / 01572 725 825
Owner and MD












Friday 3 November 2017

PART 1: Local Homeowners are only moving every 13.5 years

The average house price in Oakham is 12.6 times the average annual Oakham salary.

This is higher than the last peak of 2008 when the ratio was 9.8. 


 Some commentators have anticipated following the Brexit vote, UK property prices might drop like a stone. In reality, some have and some haven’t. 

The market for Oakham’s swankiest properties does appear fragile (although they are selling if they are realistically priced) and overall, Oakham property price growth has slowed, but the lower to middle Oakham property market appears to be quite strong.

Oakham residents are moving home less often than they once did. Data from the Office of National Statistics shows that the number of properties sold in 2016 is again much lower than it was in the ‘noughties’. 

 

 


Even though we are not anywhere near the post credit crunch (2008 and 2009) low levels of property sales, the torpor of the Oakham housing market following the 2016 Brexit vote has seen the number of property sales in Oakham and the surrounding local authority area level off to what appears to be the start of a new long term trend (compared the ‘noughties’).
Today the property sales figures in the Oakham area since 2010/11, a new trend of number of property sales appears to have started. Interestingly, this has been mirrored nationally. The reasons behind this are complex, but a good place to start is the growth rate of real UK household disposable income, which has fallen from 5.01% a year in 2000 to 1.68% in 2016.  Also, things have deteriorated since the country voted to leave the EU as consumer price inflation has risen to 2.7% per annum, meaning inflation has eaten away at the real value of wages (as they have only grown by 1.1% in the same time frame).

With meagre ‘real income’ growth, it has become more difficult for homeowners to accumulate the savings needed to climb up the housing ladder as the level of saving has also dropped from 4.26% of household income to -1.11% (i.e. people are eating into their savings).

Next week in part two of this topic, I will be discussing how these issues (and other issues) has meant the level of Oakham people moving home has slumped to once every 13.5 years.



David Crooke
Owner and MD

david@upp-property.co.uk




 

The 3 Best Property Deals on the Stamford & Rutland property market this week

Well, there aren't many property bargains out there but the following 3 properties do have attractive 4% yields - plus I mention a great property with a 5% yield, but, I'm sorry to say that you're all too late on that one, as we sold it in one week!

Not all properties appear on the open market, and many of our sales are done so discreetly.  We have a lot of landlords currently looking to adjust their portfolios in one way or another, and many would be interested in selling their properties through us discreetly.

To make sure you don't miss out, please make contact with us and register your interest - call 01780 484 554.

In the meantime, here are the 3 best property deals on the Stamford and Rutland property market for this week, irrespective of which agent it is being marketed by.

PROPERTY 1)

WHAT? 3 bed terraced house for sale
WHERE? Christchurch Close, Stamford

WHY? Modern and ideally located, situated within walking distance to the town centre.  This low maintenance, 3 bed property has allocated parking and will be highly sought after by tenants.

HOW MUCH?  GP £210,000.  Marketed by Knight Partnership.
FINANCIAL RETURN? Rent approx. £700pcm / Yield 4% / Annual Income: £8400
MORE DETAILS?  Click this link
http://www.rightmove.co.uk/property-for-sale/property-69595328.html

 
PROPERTY 2)
WHAT? 2 bed terraced house for sale
WHERE? Ribble Walk, Oakham

WHY? An ideal first time buy, these homes have a great layout with spacious, light filled rooms.

HOW MUCH? GP £150,000.  Marketed by Newton Fallowell.
FINANCIAL RETURN? Rent approx. £400pcm / Yield 4% / Annual Income: £4,800
MORE DETAILS?  Click this link...
http://www.rightmove.co.uk/property-for-sale/property-51218646.html

Property 3)

WHAT? 1 bed maisonette for sale
WHERE? Chepstow Court, Barleythorpe

WHY? Modern, in a sought after location and presented in immaculate order.

HOW MUCH?  £123,000.  Marketed by Newton Fallowell.
FINANCIAL RETURN? Rent approx. £425pcm / Yield 4.1% / Annual Income: £5,100
MORE DETAILS?  Click this link...
http://www.rightmove.co.uk/property-for-sale/property-50802441.html
 

And lastly, to reassure homeowners in an uncertain marketplace, a property marketed for sale well from the beginning can generate genuine interest and achieve success:-

We sold this fantastic 2 bedroom property in Caldecott in JUST 1 WEEK with 6 OFFERS made.  The property attracted a real mix of purchasers across the board from first time buyers, retirees looking to downsize and investor landlords. 

WHAT? 2 bed cottage

WHY? Sought after village location with good access to nearby towns, great condition, characterful and with parking.

HOW MUCH?  GP£119,000  SOLD stc

FINANCIAL RETURN? Rent approx. £500pcm / Yield 5% / Annual Income: £6,000


***Don't forget to register your interest for properties for sale that DO NOT MAKE IT ONTO THE OPEN MARKET: CALL US on 01780 484 554***

Best wishes
David

#happyhousehunting   #upp    #understandingpeopleandproperty

Stamford 01572 725 825 / Oakham 01780 484 554
david@upp-property.co.uk