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 years. The biggest reason being that confidence was low and many homeowners didn’t want to sell their home as Bexhill property prices plunged after the onset of the financial crisis in 2008. However, since 2009, the rate of home moving has increased (see the table and graph below), meaning today: Continue reading “Bexhill Homeowners Are Only Moving Every 14 Years (part 2)”
I was having a lazy Saturday morning, reading through the newspapers at my favourite Blueberries coffee shop in Bexhill. I find the most interesting bits are their commentaries on the British Housing Market. Some talk about property prices, whilst others discuss the younger generation grappling to get a foot-hold on the property ladder with difficulties of saving up for the deposit. Others feature articles about the severe lack of new homes being built (which is especially true in Bexhill!). A group of people that don’t often get any column inches however are those existing homeowners who can’t move! Continue reading “23.4% Drop in Bexhill People Moving Home in the Last 10 Years”
My thoughts to the landlords and homeowners of Bexhill…
The tightrope of being a Bexhill buy-to-let landlord is a balancing act many do well at. Talking to several Bexhill landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does however suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their Bexhill buy-to-let properties. Continue reading “Slowing Bexhill Property Market? Yes and No!”
Recently I was having a chat with one of my second cousins at a big family get-together. The last time I had seen them their children were in their early teens. Now their children are all grown up, have partners, dogs and children. Wow – how time flies!
So, I got talking over a glass of lemonade with my 2nd cousins and a couple of their children, about the times of 15% interest rates and how the more mature members of our family had to endure the 3 day week, 20% inflation and the threat of nuclear annihilation in 4 minutes … so, foolishly, I said what with all the opportunities youngsters had to day, they had never had it so good! Continue reading “The Unfairness of the Bexhill Baby Boomer’s £3,403,330,000 Windfall? (Part 1)”
As the dust starts to settle on the various unread General Election party manifestos, with their ‘bran-bucket’ made up numbers, life goes back to normal as political rhetoric on social media is replaced with pictures of cats and people’s lunch. Joking aside though, all the political parties promised so much on the housing front in their manifestos, should they be elected at the General Election. In hindsight, irrespective of which party, they seldom deliver on those promises. Continue reading “Bexhill Property Market and Mysterious Politics of the General Election”
The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?
Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Bexhill (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Bexhill property ladder.
However, I would say there has been something else at play other than the issue of raising a deposit – having sufficient income and rising property prices in Bexhill. Whilst these are important factors and barriers to home ownership, I also believe there has been a generational change in attitudes towards home ownership in Bexhill (and in fact the rest of the Country).
Well, hasn’t 2016 been eventful.
The ups and downs of Brexit, the Queen’s 90th, Andy Murray winning Wimbledon, Trump, Bake Off to Channel 4 and something close to the hearts of every buy to let landlord and homeowner in Bexhill … the Bexhill Property Market.
So, let’s look at the headlines for the Bexhill property market…
In the last month, Bexhill property values rose by 0.63%, leaving them, year on year 10.8% higher, whilst interestingly, Bexhill asking prices are down 2% month on month. All three statistics go to show the Bexhill property market has recovered well after the summer lull, which was worsened by the uncertainty surrounding the EU vote back in June. Irrespective of all the issues, the average value of a Bexhill home now stands at £288,200.
- Tenant fees set to banned within 12 to 18 months
- Concern this may cause rents to rise as those fees are passed to landlords
- Landlords won’t be worse off – and neither will tenants or agents
Our new Chancellor of the Exchequer, Phillip Hammond, revealed a ban on tenant fees in his first Autumn Statement on Wednesday. What does this actually mean for Bexhill-On-Sea tenants and landlords?
The private rental sector in Bexhill-On-Sea forms an important part of the local housing market and the engagement from the chancellor in Wednesday’s Autumn Statement is a welcome sign that it is recognised as such. I have long supported the regulation of lettings agents which will ensconce and cement best practice across the rental industry and, I believe that measures to improve the situation of tenants should be introduced in a way that supports the growing professionalism of the sector. Over the last few years, there has been an increasing number of regulations and legislation governing private renting and it is important that the role of qualified, well trained and regulated lettings agents is understood.
Great News for Bexhill-On-Sea Tenants
So, let’s look at tenants first- surely this is great news for them, isn’t it?
Although I can see prohibiting letting agent fees being welcomed by Bexhill-On-Sea tenants, at least in the short term, they won’t realise that it will rebound back on them.
First up, it will take between 12 and 18 months to ban fees, as consultations need to take place and then it will take an Act of Parliament to implement the change. A prohibition on agent fees may preclude tenants from receiving an invoice at the start of the tenancy, but the unescapable outcome will be an increase in the proportion of costs which will be met by landlords, which in turn may be passed on to tenants through higher rents.
Published at the same time as the Autumn Statement, hidden in the Office for Budget Responsibility’s Economic and Fiscal Outlook on the Autumn Statement (The Office for Budget Responsibility being created by Government in 2010 to provide independent and authoritative analysis of the UK’s public finances), it said on Wednesday …
“The Government has also announced its intention to ban additional fees charged by private letting agents. Specific details about timing and implementation remain outstanding, so we have not adjusted our forecast. Nevertheless, it is possible that a ban on fees would be passed through to higher private rents”
The charity Shelter and Scotland
Scotland banned letting fees in 2012 and the charity Shelter have been a big voice in persuading and lobbying the Government since it managed to persuade the Scottish Parliament to ban fees in 2012. On all the TV and radio shows at the moment, they keep talking about their Independent Research, which they said showed that:
“Renters, landlords and the industry as a whole had benefited from banning fees to renters in Scotland. It found that any negative side-effects of clarifying the ban on fees to renters in Scotland have been minimal for letting agencies, landlords and renters, and the sector remains healthy.”
“Many industry insiders had predicted that abolishing fees would impact on rents for tenants, but our research show that this hasn’t been the case. The evidence showed that landlords in Scotland were no more likely to have increased rents since 2012 than landlords elsewhere in the UK. It found that where rents had risen more in Scotland than in other comparable parts of the UK in 2013, it was explained by economic factors and not related to the clarification of the law on letting fees”
Only yesterday Shelter were quoting this research from December 2013 to say rents never went up following the tenant fee ban in Q4 2012. I have read that research and I agree with that research, but it was published three years ago, only 12 months after the ban was put into place.
I find it strange they don’t seem to mention what has happened to rents in Scotland in 2014, 2015 and 2016 because that tells us a completely different story!
What really happened in Scotland to rents?
I have carried out my research up to the end of Q3 2016 and this is the evidence I have found…
In Scotland, rents have risen, according the CityLets Index by 15.3% between Q4 2012 and today
(CityLets are the equivalent of Rightmove North of the Border – which means that they have plenty of comparable evidence to back up their numbers).
When I compared the same time frame, using Office of National Statistics figures for the English Regions between 2012 and 2016, this is what has happened to rental prices:
|North East||2.1% increase|
|North West||2.4% increase|
|Yorkshire and The Humber||3.2% increase|
|East Midlands||5.9% increase|
|West Midlands||5.5% increase|
|East of England||7.0% increase|
|South West||5.8% increase|
|South East||8.2% increase|
Are you really telling me the Scottish economy has outstripped London’s over the last 4 years? Is anyone suggesting Scottish wages and the Scottish economy have boomed to such an extent in the last 4 years they are now the powerhouse of the UK? because if they had, Nicola Sturgeon would have driven down the A1 within a blink of an eye, to demand immediate Independence.
So, what will happen in the Bexhill-On-Sea Rental Market in the short term?
Well nothing will happen in the next 12 to 18 months … it is business as usual!
and the long term?
Rents will increase as the fees tenants have previously paid will be passed onto Landlords in the coming few years. Not immediately …but they will.
As a responsible letting agent, I have a business to run. It takes, according to ARLA, (Association of Residential Letting Agents) on average 17 hours work by a letting agent to move a tenant into a property. We need to complete a whole host of checks prescribed by the Government; including a Right to Rent check, Money Laundering checks, Legionella Risk Assessments, Gas Safety checks, Affordability Checks, Credit Checks, Smoke Alarm checks, Construction (Design & Management) Regulations 2007 checks, compliance with the Landlord and Tenant Act, registering the deposit so the tenants deposit is safe and carry out references to ensure the tenant has been a responsible tenant in previous rented properties.
All of which the vast majority of lettings agents take very seriously and are expected to know inside out making us the experts in our field. Yes, there are some awful agents who ruin the reputation for others, but isn’t that the case in most professions?
However, business is business and no landlord, no tenant and no letting agent does work for free.
I, along with every other Bexhill-On-Sea letting agent should consider passing some of that cost onto my landlords in the future. Now of course, landlords would also be able to offset higher letting charges against tax, but I wouldn’t want them out of pocket, even after the extra tax relief.
So, what does this all mean for the future?
The current application fee for a single person at my lettings agency, Redwell Estates, is £150 and for a couple £250 meaning on average, the fee is around £200 per property.
I am part of a group of 500+ Letting Agents, and recently we had to poll to find the average length of tenancy in our respective agencies. The Government says its 4 years, whilst the actual figure was nearer one year and eleven months, so let’s round that up to two years.
That means £200 needs to found in additional fees to the landlord, on average, every two years.
In Actual Pound Notes
In 2005, the average rent of a Bexhill Property was £726 per month and today it is £891 per month, a rise of only 22.6% (against an inflation rate (RPI) of 38.5%).
Using the UK average management rates of 10%, this means the landlord will be paying £1069 per annum in management fees.
If the landlord is expected to cover the cost of that additional £200 every two years, rents will only need to rise by an additional 2% a year after 2018, on top of what they have annually grown by in the last 5 years.
So, if that were to happen in Bexhill-On-Sea, average rents would rise to £1092 per month by 2022 (see the red line on the graph) and so the landlord would pay £1310 per annum in management fees which would go towards covering the additional costs without having to raise the level of fees.
but is that bad news for Bexhill-On-Sea Tenants?
Quite the opposite. If the average rent Bexhill-On-Sea tenants pay had risen in line with inflation since 2005, that £726 per month would have risen today to an average of £1006 per month. (Remember, the average today is only £891 per month). Even if inflation remains at 2% per year for the next six years, the average rent would be £1092 per month by 2022 meaning even if landlords increase their rents to cover the costs tenants are still much better off.
The banning of letting fees is good news for landlords, tenants and agents.
It removes the need for tenants to find lump sums of money when they move. That will mean tenants will have greater freedom to move home and still be better off in real terms compared to if rents had increased in line with inflation.
Landlords will be happy as their yield and return will increase with greater rents whilst not paying significantly more in fees to their lettings agency. Letting Agents who used to charge fair application fees won’t be penalised as the rent rises will compensate them for any losses.
And finally, to those Letting Agents that charged the silly high application fees … well that’s their problem. At least I know I can offer the same, if not a better service to both my landlords and tenants in the future considering this announcement from Phillip Hammond.
The Bexhill Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual after the summer break.
The challenge every Bexhill property buyer has faced over the last few years is a lack of choice – there simply hasn’t been much to choose from when buying a property (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Bexhill, the market is likely to see upward pressure on property values continue.
For example, in the last few months, TN39 has seen an average of 112 new properties coming on to the market, not bad when you consider for some months last year it was as low as the late 70’s. With the average Bexhill property value hitting a record high, reaching almost £273,600 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller’ average property figure, but there is a glimmer of hope that the Bexhill’s supply crisis may be starting to ease.
As I write this article, 3.79% of Bexhill properties are up for sale. In terms of actual chimney pots, that equates to 682 properties on the market in Bexhill (within 3 miles of the centre of Bexhill) – which, when compared to only a year ago when that figure stood at 585, is a serious increase in the number of properties available to buy. Split down into the type of property; it makes even more fascinating reading …
I had an interesting chat the other day with a Bexhill landlord. He said he had been chatting with an architect friend of his who said back in the mid 2000’s, the developments he was asked to draw were a balance of one and two bedroom properties, compared to today where the majority of the buildings he is designing are more towards two and sometimes three bedrooms.
There is a really important point as I explained to this landlord, as knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in Bexhill, Bexhill property prices, Bexhill yields and Bexhill rents.
In 2001, there were 38,100 households with a population of 85,400 in the Rother District Council area. By 2011, that had grown to 40,900 households and a population of 90,100.
This means, between 2001 and 2011, whilst the number of households in the Rother District Council area grew by 7.25%, the population grew by 6.04%