What would Brexit mean to the 14,500 Bexhill-On-Sea property owners?

If you read all the newspapers, the Brexit debate seems to be focused solely on central London. Many commentators have said Brexit would mean central London would have a lower standing in the world, meaning less people would be employed in Central London, with the implication of lower wages, fewer jobs etc. in Central London, but we are in Bexhill, not Marylebone, Mayfair or any part of Zone 1 London.

Now on the run up to the vote on the 23rd of June, I predict the ‘in’ camp will start to scare homeowners with forecasts of negative equity, and the ‘out’ camp will appeal the 20 somethings, who have been priced out of the property market with the prospect of a new era of inexpensive housing, should the fears of central London estate agents and developers, who believe the bottom will fall out of the market if we do leave, become real. The only reason the Mayfair’s, Knightsbridge’s, and Kensington’s of central London are attractive to foreign buyers are political and economic steadiness, an open and honest legal system and a lively cultural life. None of that is threatened by Brexit.

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Bexhill Buy to Let sees returns of 12.23% in 2015

I remembered that a few days before Easter, I got chatting with one of my out of town landlords who was back in Bexhill visiting his family.  Brought up in Bexhill, he went to the Battle Abbey School back in the 1970’s and is now a University lecturer in central London.  To enhance his retirement, he has a small portfolio of four properties in the town and wanted my advice on where to buy the next property in Bexhill (as he lives in a college owned flat and anyway, would never dream of buying where he lives in Kensington)

Before I could advise him, I reminded him that the most important thing when considering investing in property is finding a Bexhill property with decent rental yields for income returns, yet at the same time, it must have the potential for capital growth from rising house prices over time.  Going into 2016, Bexhill landlords will be under more pressure to find the best permutation of yields and capital growth, as extra stamp duty charges for buying properties and a squeeze on mortgage interest relief will raise their costs.

However, (you knew there would be a however) before we look at yield and capital growth, one important consideration that often many landlords tend to overlook, is the propensity of how likely the rent will increase.  Interestingly, the average rent of a Bexhill property currently stands at £1,003 per month, which is a rise of 6.0% compared to twelve months ago (although it must be noted this rise in rents is for new tenancies and not existing tenants).

Anyway, back to yield and capital growth, the average value of a Bexhill property currently stands at £262,500, meaning the average yield stands at 4.59% per annum, which on the face of it, many landlords would find disappointing.  That is the problem with averages, so if I were to look at say 1 bed flats in Bexhill which are the sort of properties a lot of landlords buy, in Bexhill, the average value of a 1 bed flat is £110,000, whilst the average rent for a 1 bed flat is £495 per month, giving a yield of 5.40%.   However, if that wasn’t high enough, there are landlords in Bexhill who own some specialist properties with specialist tenancies, that are achieving nearly double that yield – again it comes down to your attitude to risk and reward (give me a call if you wanted a chat about those sorts of properties)

Ultimately investors want to be making gains from both rent and house price growth.   When combined, the rental yield and capital growth gives you the return on investment, and that is what I told our University friend from Kensington.   Return on investment is everything.   So, looking at property values in Bexhill have risen in the last year by 7.1%, which means the current annual return on investment in Bexhill for a typical 1 bed flat is 12.23% a year which isn’t bad.

Whether you are a soon to be new landlord or existing seasoned landlord in Bexhill, you might be interested in a blog about the Bexhill property market, where you will find similar articles to this one about what is happening in the Bexhill property market at www.bexhillpropertyblog.com and to answer the question on what he should buy, well on the same blog, once or twice a week, I post what I consider to be the best buy to let deals in Bexhill, irrespective of which agent it is being marketed with.   Maybe you should visit the blog as well?

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6,438 Spare ‘Spare’ Bedrooms in Bexhill – Is this the cause of the Bexhill Housing Crisis?

That isn’t a typo, of the 20,198 households in Bexhill, 6,438 of those properties don’t only have one spare bedroom, but two spare bedrooms! … and it is this topic I want to talk about this week, my Bexhill Property Market Blog readers – because this could be the cure for Bexhill’s housing crisis.  The fundamental problem of the Bexhill housing ‘crisis’, is the fact that the supply of homes to live in has not historically met demand, increasing property values (and in turn rents), thus ensuring home ownership becomes an unattainable ambition for the twenty something’s of Bexhill.

Call me a realist, but it’s obvious that either demand needs to drop or supply needs to rise to stop this trend getting worse for the generations to come.  Don’t get me wrong, I admire Downing Street’s plans to build 200,000 starter homes which will be offered to first time buyers under 40 with a minimum 20% discount price.  However, the building of starter homes on current building sites, where new homes builders already have to build a certain number of affordable ‘starter’ homes at the moment under a different scheme, does not increase the stock of new ‘starter’ homes, it simply replaces one affordable scheme with another.

One option that could resolve the housing crisis is if the Government literally looked closer to home, concentrating on matching households with the appropriate sized home.

In Bexhill, 14,543 households have one spare bedroom and of these, 6,438 have two or more spare bedrooms.

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Only 712 Council Houses in the Bexhill and Rother area left – opportunity or problem?

The ‘Right to Buy’ scheme was a policy introduced by Margaret Thatcher in 1980 which gave secure council tenants the legal right to buy the Council home they were living in with huge discounts. The heyday of Council ‘Right To Buys’ was in the 80’s and 90’s, when 1,719,368 homes in the country were sold in this manner between October 1980 and April 1998. However, in 1997, Tony Blair reduced the discount available to tenants of council houses and the numbers of properties being bought under the Right to Buy declined.

So what does this mean for Bexhill homeowners and landlords? Well quite a lot in fact!

Looking at the overall figures, 1,909 Council properties were bought by council tenants in the Rother District Council area between 1980 and 1998. Big numbers by any measure and even more important to the whole Bexhill property market (i.e. every Bexhill homeowner, Bexhill landlord and even Bexhill aspiring first time buyers) when you consider these 1,909 properties make up a decent 6.3% of all the privately owned properties in our area (because in local authority area, there are only 30,060 privately owned properties).

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Has owning a home become an unattainable dream for the 365 Bexhill 28 year olds?

My parents bought their first house in the 1960’s, they were in their early 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s.

This year alone, 365 people in Bexhill will turn 28 and 383 in 2017 and dare I say 365 in 2018 year in year the conveyor belt carries on where are the Bexhill youngsters going to live?

Ask a Bexhill ‘twenty something’ and they will say they do not expect to buy until they are in their mid thirties – seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’ as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Bexhill people is the large deposit needed to get a mortgage or is it?

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