1,278 Rother Properties lie empty– An injustice for the 1,150 people on the Rother Council House Waiting List?

Easy problems should have easy solutions – shouldn’t they?

Problems like Bexhill’s housing crisis, where we have a rudimentary numerical problem of too few homes for too many people- the answer is clearly to build more property in Bexhill – but that, unfortunately for those desperately seeking to purchase or let a property, takes a lot of time and huge amounts of money. So what are the other solutions?

I was a part of the recent jobs fair which was held at the De La Warr Pavilion in April, where the subject of property was mentioned. Normally someone always mentions empty properties as the solution to the problem. On the face of it, it seems so obvious.

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£5,800 boost to Bexhill First Time Buyers

There’s a whole legion of wannabe Bexhill first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Bexhill landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Bexhill buy to let landlords has dropped away, in the interim, it offers Bexhill first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.

Looking at the average value of a terraced house in Bexhill currently standing at £195,900, that means if our Bexhill FTB went up against a Bexhill landlord, the landlord would have to pay an additional £5,877 in stamp duty. Early antidotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Bexhill properties to reflect the extra stamp duty.

Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Bexhill property market as a whole.

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Brexit and Bexhill Property Market – 20% more properties on the market

April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty George Osborne imposed on buy to let properties after the 31st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Bexhill, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.

Then we have the Brexit issue, which is also having a tempering effect on the Bexhill property market – although if you recall I wrote about this a few weeks ago, and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. In another article I wrote previously, I spoke of the growth rate of Bexhill property values, and whilst the rate of growth is slowing, Bexhill property values are still 9.5% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015. Interestingly though, a very recent members survey of the Royal Institution of Chartered Surveyors states that only 17% of members believed property values would increase over the next Quarter compared to 44% at the end of 2015.

All this has led to increase in the number of properties for sale.

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Bexhill Property Market in Crisis: Who is to blame?

As I mentioned a couple of weeks ago, at the end of the First World War, 77% of people rented their home (the vast majority renting from a private landlord as Council Housing was still very much in its infancy). Homeownership rose very slowly in the 1920’s and started to grow as the economy grew after the Great Depression. However, after the Luftwaffe had flattened huge swathes of housing in the early 40’s, the priority was to get people into clean and decent accommodation, so Local Authority’s (Councils) took up the baton and they built large council estates in the 1950’s and 1960’s.

As the UK economy got back on its feet in the middle part of the 20th Century and wages rose, people decided they wanted to own their own home instead of renting. Throughout the post war decades, it became easier to secure a mortgage. Interestingly, by 1977, 61% of 30 to 34 year olds were owner occupiers with a mortgage compared to 8% of 30 to 34 year olds being in private rented accommodation (the remaining either being in council housing or living with friends or family). Ten years later, in 1987, saw some significant growth in homeownership, as 68% of 30 to 34 year olds had a mortgage and only 4% of people privately rented. A decade later and there wasn’t much change as, in 1997, the homeownership figure was 68% but private renting had jumped to 12.1% in the same 30 to 34 year old age group.

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Rents in Bexhill rise by 2.9% in the last year

I was reading the Sunday Papers and, when reading the financial pages, it was announced UK inflation had increased to its highest level in a year. Inflation, as calculated by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months.  The report said it had risen to the those ‘heady’ levels by smaller falls in supermarket and petrol prices than a year ago. If you recall, in early 2015, we had deflation where prices were dropping!

So what does this mean for the Bexhill property market, and especially what does it mean for the tenants?

Back in November, the Office of National Statistics stated average wages only rose by 1.8% year on year, so when adjusted for inflation, Bexhill people are 1.5% better off in ‘real’ terms.   Great news for homeowners, as their mortgage rates are at their lowest ever levels and their spending power is increasing, but unfortunately the news is not so good for tenants.

The average rent that Bexhill tenants have to pay for their Private Rental Properties in Bexhill (i.e. not housing association or council tenants) rose by 2.9% throughout 2015, eating into most of the growth.  2015 wasn’t a one off either.  In 2014, rents in Bexhill rose by 2.2% (where salaries only rose by only 0.2%) However, it’s not all bad news for Bexhill tenants, because in 2013 rents rose by 1.8%, (but salaries rose by 2.2%).

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Bexhill-On-Sea property values rise by 0.7% month on month

I do enjoy eating out at Picasso Express in Devonshire Road in Bexhill-On-Sea. Whilst in there, a suited gentleman approached me and asked if I was the person who wrote the newsletters about the Bexhill property market. We ended up having an interesting chat about the local property market, as he was concerned his daughter would never be able to buy her own property, a place in Bexhill that she herself can call home.

My latest analysis, using the Land Registry and Office of National Statistics, shows that overall, month on month, Bexhill property values increased by 0.7%. The year-on-year figures showed the value of residential property in Bexhill has increased by 9.5% in the year to the end of February 2016, taking the average value of a property in the council area to £215,600.

It gets even more interesting when we look at the last few months’ figures and see the patterns that seem to be emerging.

  • January 2016 – a rise of 0.6%
  • December 2015 – a rise of 0.8%
  • November 2015 – a rise of 1.0%

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28% of Bexhill people rent – Is that healthy?

Renting used to be a dirty word in the 1960’s and 1970’s. You either lived in a ‘Rigsby Rising Damp’ style bedsit with wood chip on the wall and a coin operated electric meter (that buzzed in the night) or you lived in a council house. In the latter part of the 20th Century, the British were persuaded that rent payments were ‘wasted money’. However, owning often makes less financial sense than renting and as the rate of home ownership is starting to drop substantially, as we roll the clock forward to today, there is no stigma at all to renting -a substantial amount of people are now doing it. In fact, of the 41,203 residents of Bexhill, 11,336 of you rent your house from either the local authority/social provider (ie council house or housing association) or private landlords – meaning 27.51% of Bexhill people are tenants.

The idea of home ownership is deeply embedded in the British soul, in fact 29,286 Bexhill people live in an owner occupied property (or 71.07%). Housing is at the heart of Government policy, as George Osborne has promised 200,000 new properties a year so first time buyers can buy their first home whilst recently changing the tax laws for buy-to-let landlords. To get votes, Margaret Thatcher (and everyone since) ran election campaigns promising everybody their own home, and as a country, we seem to equate home ownership the goal of British life.

So as more and more people are renting nowadays, are we turning to a more European way of living?

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Private Renting in Bexhill increases by 102% in 20 years

You find me in a reflective mood today as I want to talk about the future of investing in property in Bexhill. The truth is that we have got lethargic, with many people having mistaken the ever rising Bexhill (and in fact the whole of the UK) property market since the 1960’s as the eternal gift that kept giving as property prices constantly rose and doubled every five to seven years.

The days of making money from property as easy as falling off a log, like taking candy from a baby are sadly over!

Whilst George Osborne has decided now is the time to milk the ‘Golden Cow’ of UK’s private landlords, with changes in taxation for buy to let property, many pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable and safe return on property with these changes. You see, I have always seen investing in the Bexhill buy to let market (as I would anywhere in the UK), as I might see mother nature, creating some truly wonderful stunning warm weather but at the same time, she will bite, creating catastrophic situations such as snowstorms and hurricanes.  You need to study the market, take advice and opinions from many people and then decide what the proverbial property weather will be … remember, tenants will always want a roof over their head and I don’t see the HM Government building the millions of houses required to house them?

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