Stamford home owners move every 11.9 years

During my school years, my parents seemed to move every other year (or it seemed that way). In reality, looking back at the house moves, we actually moved 3 times before I left home. However, whilst my parents kept the removal van people in business whilst I was at school, from research I have carried out it shows things have changed considerably in Stamford over the last few decades, and interestingly, the trend is getting worse ... for the removal van people at any rate!

In Stamford, there are 8,994 properties. However, after we remove the 1,399 council houses, 1,497 privately rented houses and 138 houses where the occupants live rent free, that leaves us with 5,960 owned properties (be that 100% outright, with a mortgage or shared ownership). This means 66.3% of the properties in Stamford are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Stamford, over the last 12 months, has only been 500. This means on these figures, the homeowners of Stamford are only moving on average every 11.92 years.

These are the reasons; Firstly, the cost of moving house has risen over the last 20 years. Secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels.

This change to a relatively low inflation Stamford property market (i.e. Stamford property values not rising quickly) is significant because the long term consequences of sustained low house price growth is that it eats into mortgage debt more slowly than when property price inflation is higher. Stamford homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in say the 1970’s and 1980’s.

So what does this all mean for Stamford buy to let landlords? Well for the same reasons existing Stamford homeowners aren’t moving, fewer ‘20 somethings’ are buying their 1st home as well. Stamford youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their 1st property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngsters wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. As a society, we expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit? Why go without holidays, the newest smart phone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was... say... a generation ago?
Even though, in real terms, property prices are 5% cheaper than they were 10 years ago (when adjusted by inflation), 16.6% of Stamford properties are privately rented (nearly double it was 20 years ago). As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing.


For advice and opinion on the Stamford Buy-To-Let property market, please visit our office on 12 St.John's Street, Stamford.

Are 'would be' Rutland homeowners warming to the idea of renting?

I was reading a report the other day produced by the Halifax, about the UK property market & why of the younger generation seem to be renting rather than buying. I find it fascinating that over the last 10 years, the British obsession of buying a house almost as soon as you left school, & the fact that if you rented you were seen as a 2nd class citizen, has turned on its head to a point where the hopes & dreams to own a nice home will be replaced by the ambition simply to live in one.

In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property, constantly upgrading, until eventually they carried you out in a box.  However, the perceived shame and stigma of renting is no longer the case, as it seems the British are now beginning to accept this flexible lifestyle.  This is a very important consideration for both Rutland homeowners and Rutland landlords, as it will transform the way the Rutland property ladders looks in the future, and I might ask, whether or not it will exist at all for some people? 

The make-up of households is one important factor, especially in the Rutland property market. The normal stereotypical married couple, 2 kids & dog of the 1970’s & 80’s has changed. Increasingly we have the need for larger houses where two families come together after divorce (plus kids), & need a property to house everyone, through to an increase in the number of one person households.

Looking at the data for Rutland, of the 1,741 private rental properties in the Rutland County Council area, 34.69% are 1 person households. However, when we compare the number of 1 person Rutland households who have bought their own property with a mortgage, of the 10,556 owner occupied households in the area, only 5.77% are 1 person households. Compared to a decade ago, this explosion in demand for decent high quality rental properties that 1 person households require has not been met with an increase in supply of such properties. Increasingly I believe Rutland landlords need to consider this change in the make-up of Rutland households, as I see an opportunity here. Another interesting stat’ was that 13.84% of those 1,741 rental properties are lone parent households as well. Again, another opportunity for landlords!

The government’s introduction in 2013 of the ‘Help to Buy Scheme’, where first time buyers only needed a 5% deposit, changed the perception of people’s ability to buy without having to save for a huge deposit. However, it might surprise you that 95% mortgages were re-introduced within 6 months of the ‘credit crunch’ in late 2009. So again, it comes down to people’s own perception. Many youngsters think they won’t get a mortgage, so don’t even bother trying.

Coming back to the deposit, it is still a fact that once you start renting, it becomes much harder to save for a deposit, regardless of the size. Interestingly, 86% of the renters polled by the Halifax refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit. This is the real reason why people aren’t buying – but renting. And, why demand for renting will continue to grow in the future (great news for landlords).

Rutland tenants can upgrade the quality & size of the property they live in for a minimum rent increase. The average rent of a 2 bed property in Rutland is £525pcm, a 3 bed is £170 more at £695pcm, whilst the average 4 bed is £995pcm. If you had to make that jump when buying, the monthly mortgage payments would be stratospherically higher. Without any social pressure & with better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation. The UK is becoming more like our European neighbours, where renting is ‘the norm’. Who is going to supply all these properties to rent? Landlords!
Whether you are an existing landlord looking to grow your portfolio, or looking to become a ‘first time landlord’, my thoughts are to take advice from as many people as possible.

As the majority of landlords buy their 'Buy-to-Let' properties in the same town as where they live, you might need specific advice about Rutland itself. 

Please call me to arrange an appointment at either my Rutland or Stamford office and I will be happy to assist you.

Stamford Buy-To-Let; Demand and Supply

 

Following on from my recent article about the state of the Stamford property market, and in particular, what had happened to the rents Stamford tenants have had to pay since the 'Credit Crunch'. If you recall, I said rents in Stamford are still 4.86% lower than they were in 2008. A Stamford landlord has since rung me after reading the Stamford Property Blog, wanting to know more of the story of what was happening to current rents in the town. The reason he asked was that his current agent hadn’t increased his rent for a number of years and was concerned if he was getting the best return from his buy-to-let investment.

The Stamford rental market is all about supply and demand (isn’t it so in all parts of the economy?). On the supply side, 40 rental properties have come up for let in the last 31 days in Stamford. It sounds a lot until you consider there are 1,497 rental properties in Stamford, that means only 2.67% of the rental stock of properties in Stamford are coming onto the market each month (it is normally around 5%). One reason for this lack of new rental properties coming on the market is the fact that tenants seem to be staying in properties longer.

With this lack of supply, newer tenants have to pay more to secure the property they want. And this is the crux of the matter ...properties they want. Older properties in Stamford that haven’t been maintained still retain their wood chip wallpaper from the 1970’s and thread bare carpets have seen their rents stagnate or drop. Tenants want　either modern properties with all the 'mod cons' or older style properties that have been presented to an exceptional standard – and they are prepared to pay for the privilege. Rents for top quality properties in Stamford have risen by 0.4% in the last month. Any properties, old or modern, put on the market in good or excellent condition will rent in a matter of days. 　　

Interestingly, looking at Stamford property values, the Land Registry have just released their latest set of data on property values. Throughout April 2015 (the latest set of data), property values rose in Stamford, with 1% growth, meaning they are now 4.3% higher than they were a year ago. When one looks at the regional picture, the East Midlands average property values rose by 1.4% in the last month. The difference doesn’t concern me, as the regional and local property values always even themselves out over the months.

Looking forward, after considering all the statistics and talking to other property professionals, I expect property values in Stamford to rise by 3% to 5% over the coming 12 months, following the Conservative victory.  In a forthcoming article, I will discuss how the number of properties changing hands each month has dropped considerably in the last 10 to 15 years in the town.

...And so back to our landlord. Each property is unique and as his tenancy agreement allows him to inspect the property with notice to the tenant, we will be visiting the property next week. For more in depth thoughts and opinions like this on the Stamford Property market ... keep visiting the Stamford Property Blog.

Oakham Buy-To-Let; To extend or not extend...?

Last week, a landlord from Oakham emailed me to ask, after reading the Oakham Property Blog, if he should extend his terraced house making an extra bedroom in the loft. He had a builder friend who owed him a favour, and thought a good way would be get an ‘inexpensive’ extension.

Having more useable space is generally thought to be consistent with better quality accommodation and homeowners and tenants are prepared to pay for it.　If you added a bedroom to a two bed terraced to make a three bed terraced, it will add 10% to the value of the property. Turn a three bed terraced into a four bed terraced and 9% will be added to the value. Looking at　semi detached properties, turn a two into a three bed and 12% will be added to the value, whilst making a three bed semi into four bed will add 9% in value.

 

 

However, before you rush off to the planning department there are some important considerations, whether you are a homeowner or landlord. What would be the cost of making that extra bedroom? The average value of a terraced house in Oakham is currently £196,300 whilst the average value of a semi detached house is £230,300, meaning to make money the cost of the extension would need to be less than £18,648 on the terraced property and £24,181 on the semi detached house. Talking to a number of trades people in the town, most are booking up into the New Year. Also, no matter how good a friend he was, I know of no builders that would charge as little as that. Maybe the builder was just thinking of a bit of pointing work on the chimney!

Well, that got me thinking about how bedrooms affected rental prices and rent-ability as well. Interestingly below, you will see that whilst bedrooms do have an effect on the rent that can be achieved and the rent-ability of the property – the difference does not warrant the expense, hassle and trouble of extending.

33.3% of the one bed properties on the market to rent in Oakham have a tenant with an average rent of £390 per month

33.3% of the two bed properties on the market to rent in Oakham have a tenant with an average rent of £514 per month

53.8% of the three bed properties on the market to rent in Oakham have a tenant with an average rent of £678 per month

60% of the four bed properties on the market to rent in Oakham have a tenant with an average rent of £1,139 per month

 

Now, if you want to increase the value of your property, be you an Oakham landlord or homeowner, there are things that cost a lot less than building extra bedrooms. Spruce up the exterior, emulsion all the rooms, install fresh carpets and curtains. For homeowners, a matter of a few hundred pounds will add thousands - whilst for landlords, these things can add an extra 10% to the rent that you can achieve.

 

For more advice and opinion on the Oakham property market, please visit our Church Street office and keep visiting our blog for new updates.

Property Values rise by 0.2% in Stamford

Property Values rise by 0.2% in Stamford

Property values in Stamford rose by only 0.2% last quarter.  This follows several months of sluggish activity in the Stamford property market in the run up to the General Election, putting the average price of a property in Stamford at £274,100 - which is 3.8% higher than in March 2014.

Interestingly, over the last few months the Council of Mortgage Lenders and estate agent trade bodies have reported seeing a fall in mortgage lending and enquiries from prospective homebuyers.  This is important because it comes amid an overall fall in housing market activity in Stamford.  Data from the Land Registry said completed house sales in Stamford in the 3 months to January 2015, (the most up to date figures available) fell by 13.22%, compared to the same 3 month period up to January 2014.

However, I believe that the slowdown in the property sales in Stamford is supporting Stamford property values, as there is a shortage of houses coming onto the market.  Even though in the whole of the first quarter of 2015, Stamford property value increases may seem subdued when compared to 2014, let us remember, property values are still rising well above the level of inflation.

As I have said many times before, the population in Stamford is growing at a much higher rate than the number of properties being built.  This increasing demand for a roof over people’s heads, which is outpacing the supply of new houses being built in Stamford, is creating a severe imbalance in the Stamford (in fact, in the whole of the UK’s) housing market.  Thus making home ownership an ever increasingly distant dream for many of Stamford’s potential 1^st time buyers.

In fact, I still maintain the view that house prices are likely to rise by around 3-5% in Stamford in 2015, ever taking into account this blip at the start of the year.  The reason being is that the rise reflects both strong economic conditions and steady market conditions with (and this is the most important factor) very low numbers of properties on the Stamford property market.

Many Buy-to-Let landlords know that investing in the Stamford property market is a long-term strategy of 10, 20 or even 30 years.  Governments come and go, but unless South Kesteven District Council start to build hundreds of new properties per year to make up for the shocking lack of supply, Stamfordians will always want a roof over their head, and irrespective of whichever party is in power, if there aren’t any council houses and they can’t (or are unable to buy), a demand for rental properties will always remain strong.

As my existing Stamford landlords will testify, (whether you manage your property yourself, or another local agent manages your property), everyone is always made to feel welcome when they pop in for a coffee to see us, to discuss anything to do with the Stamford property market such as how the town compares with its closest town rivals for example.  I don’t hard sell, I just give you my honest, straight talking opinion.  However, if you are too busy to pop into town, please just  keep visiting this blog for advice, intelligent commentary and analysis of the Stamford property market.

Super Semi-Detached in Stamford for Sale

Essex Road, Stamford on for sale with a guide price of £124,950

Excellent 3 bedroom mid terraced home, close to the town centre, schools, college etc., no upper chain, rear garden, spacious sitting room and my favourite feature...."ripe for renovation". 

Spend a bit on this now and it will add value to your investment.  Be that as a family home or as long term buy to let.

 Contact Adrian McCarthy, UPP Property Agents on 01572 725 825 to arrange a viewing. 

This is priced right and is an attractive proposition to all buyers.  My advice is this won't be on the market for long.

Click on this link for full details:

http://www.rightmove.co.uk/property-for-sale/property-35356773.html

3 Bedroom Semi in Oakham for sale

Check out this great 3 bedroom semi-detached home just on for sale with Moores Estate Agents.

Parkfield Road, Oakham £129,950 (OIEO - Offers In Excess Of)

I think it's a solid family home; ether for owner occupancy or as a buy-to-let option.

3 bedrooms, good sized sitting room, fitted kitchen, close to town centre and Oakham train station, mains gas connection with gas fire in the sitting room, bathroom with shower, driveway parking and good sized rear garden.

For full details visit http://www.rightmove.co.uk/property-for-sale/property-49924129.html

It looks in good order internally and unlikely to require much work to prepare the property for tenancy. Great for maximising on your investment quickly. A property in this condition could achieve somewhere in the region of £575pcm to £595pcm for the landlord.

Alternatively, if you have spotted another great property on with another local agent, and would like my opinion, please email me the Rightmove link via david@upp-property.co.uk. 

I would be glad to assist you and discuss rental yields etc.,

Is the Rutland Property Market in crisis?

Since the 1960’s more people have owned their own home than rented but, for many young Rutland people, the dream of buying their own home is dying...or is it? Since the turn of the Millennium, in Rutland (as in the rest of the Country) there has been a significant change in the proportion of people who own their own home in Rutland. In 2001, 72.7% of homes in Rutland were owner occupied, today the figure is 71.5%, a significant decline in such a short time.  Buy-to-let landlords can find tenants because young people say they cannot afford a deposit to buy unless they inherit money or are given a loan from the 'Bank of Mum and Dad'.

In Rutland, only 36.8% of 25 to 34 year olds have a mortgage. When you compare Rutland against the national average of 35.93%, it just shows how different parts of the country have different housing markets. However, the really interesting fact is this... Roll the clock back to 1991 and nationally, 67% of 25 to 34 year olds had a mortgage. After WWII, the supply of properties being built kept up with demand as millions of council homes were built (the most being built in 1950s, surprisingly under Tory Governments!). Also private house building increased in the 1950’s, but especially in the 1960’s and 1970’s, and as the Country got more prosperous it meant that by 1971, there were more home owners than tenants.

However, since the 1970’s, the population has grown but the number of new properties being built hasn’t kept up at the same rate. The result is that there have been huge rises of property prices in the early ‘70s, the late 80s and more recently between 1999 and 2004. Interestingly, since the early 1970’s, out of the 34 richest countries in the world, the UK has seen highest property prices rises.

95% mortgages have been available to first time buyers since late 2009, but with property prices rising by 216.73% since the early Spring of 1995 in Rutland, as property prices have been rising and first time buyers have been saving, the amount they have to save is continually rising at the same time. The stress on saving even for that kind of deposit, coupled with the new stricter mortgage rules introduced in 2014, means that most 20/30 something’s in Rutland are renting instead of buying.

The issue quite simply comes back down to a lack of new homes being built. In Rutland, only 154 properties a year are being built whilst the population is rising by 240 a year. The supply of new homes has been limited by planning laws, local councils not having the money to build council houses, hard hitting green belt limitations, and our old friend NIMBY’ism.  With a rising population and net migration, especially from the EU, the mismatch between demand and supply is why we have the problem. Until Politician’s have the backbone to realise the Country needs a lot more decent homes built, the problem will just get worse.

 

In the meantime, demand for rental property will continue to grow because people need a roof over their head at the end of the day...fact.

Property Values in Rutland and Stamford since 1995

I wanted to share this graph with all the property owners of Rutland and Stamford.

It is an interactive graph (so you can hover over the graph and it gives you the exact values and even zoom into it by using your mouse and click + dragging a highlighted area into a rectangle)...enjoy!

Stamford Buy to Let Deal with Murray's

Our friends at Murray's have just put this three bed semi on the market on West Street Gardens for a very reasonable £165,000. Ok, it might not be the poshest area of Stamford, but they let well and sell down here. Remember, you aren't living in the property yourself Mr or Mrs Landlord!

Here is a link to the property... http://www.zoopla.co.uk/for-sale/details/36641026

Here are some pictures of the property (more on the Zoopla link)...but before I go, I don't think this will be on the market long.

New Property for Sale, The Sidings, Oakham

Oakham Opportunity...

2 Bedroom, modern 1st floor flat for sale
The Sidings, Oakham £104,995 on with Murray's Estate Agents

This apartment ticks lots of property searchers' boxes...modern, 2 bedrooms, gas central heating, allocated parking, central town position close to all amenities.  It's in good order and requires no work.  It's 'tenant ready' meaning you can get your rental income coming in quickly!

Click on this link for full property details and to contact Murray's to arrange a viewing.

http://www.rightmove.co.uk/property-for-sale/property-51436178.html

UPP Property Agents are currently managing a very similar property in the same development.  The landlord is achieving £495pcm with a recently renewed 6 month tenancy. 

This flat is the perfect property for landlords.  It will typically attract a young professional couple - i.e. 2 incomes.  It's size and age makes the property manageable for the tenants to look after during the tenancy, and crucially, for you the landlord to maintain going forward.