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”
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”
There are 23.4 million properties in England and Wales with 64% being owner occupied and 36% being in rented either from a private landlord, local authority or housing association.
Over nine out of ten of those English and Welsh owner-occupied properties are a whole house or bungalow. Now, most people would assume they would be freehold – however, of those renting, nearly half of rental properties, 44% to be precise, lived in other leasehold apartments and flats.
It might be wise to quickly explain the difference between freehold and leasehold. When someone owns the freehold of a property they own it outright, including the land it is built on, whilst with a leasehold property the leaseholder owns the property for the length of their lease agreement. Leaseholders must pay the person who owns land (the freeholder) ground rent and other fees. When the leasehold ends, ownership returns to the freeholder although the leaseholder can extend the lease or they can buy the freeholder out, but there are rules and regulations with regards to doing that.
According to the Land Registry’s latest House Price Index for Bexhill and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.
Values of apartments in Bexhill have increased by 8.22% over the past year, which is proportionally 20% more than the Bexhill average rise of 6.85%. The last time flats/apartments in Bexhill out performed all the other types of property, by such a gulf, was back in winter 2002/spring of 2003. For comparison, the other property types performed as follows…
- Detached homes rose by 6.38%
- Semi-detached homes rose by 6.35%
- Terraced/Town-Houses rose by 6.24%
This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Bexhill property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Bexhill on a number of occasions in my Bexhill Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers.
The average property value in Bexhill now stands at £272,900.
When split down into property types…
- Bexhill Apartments at £170,400
- Bexhill Detached at £381,400
- Bexhill Semi-Detached at £250,600
- Bexhill Terraced/Town-House at £212,000
So why have Bexhill apartments performed so well, and is it just a Bexhill thing? When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.
So, should Bexhill apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Bexhill house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.
Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.
So, what next for the Bexhill Property market? I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.
I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all. HMS Bexhill Property Market…. “Nice and steady as she goes”, says the Captain
A Bexhill homeowner emailed me last week, following my article posted in the Bexhill Property Blog about the change in attitude to renting by the youngsters of Bexhill and how they thought it was too expensive for first time buyers to buy in Bexhill. There can be no doubt that buy to let landlords have played their part in driving up property values in Bexhill (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Bexhill.
In the email, they said they thought the plight of the first-time buyers in Bexhill was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Bexhill going against all the buy to let landlords.
They continued by asking if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation. The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment. So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?
So, let’s look at how affordable Bexhill is? The best measure of the affordability of housing is the ratio of Bexhill Property Prices to Bexhill Average Wages, (the higher the ratio, the less affordable properties are). (i.e. looking at the table below, for example in 2014, the average value of a Bexhill property was 11.82 times higher than the average annual wage in Bexhill).
This deterioration in affordability of property in Bexhill over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.
… but it’s not the only reason.
A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV. Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash). The BoE don’t need to meddle there! Also, the Tories have certainly done lots to level the playing field in favour of first time buyers. For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket. Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).
It’s easy to look at the headlines and blame landlords. First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 2 bed apartment in Bexhill for around £125,000 and only need to find £6,250 deposit. Yes, a lot of money, but first time buyers need to decide what is important to them.
I think we as a Country have changed … renting is returning to be the norm. So my opinion is, landlords have it tough. Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners. Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.
If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Bexhill), one source of information is the Bexhill Property Blog at www.bexhillpropertyblog.com
The Bexhill housing market has gone through a sea change in the past decades with the Buy-to-Let (BTL) sector evolving as a key trend, for both Bexhill tenants and Bexhill landlords.
A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Bexhill population.
In 1981, the population of Rother stood at 76,500 and today it stands at 92,900
Currently, the private rented sector accounts for 17.3% of households in the town. The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for home ownership, a different story is told.
71.8% Bexhill people owned their own home in 1981 whilst 16.13% Bexhill people rented from the Council or Housing Association in 1981 and 12.07% Bexhill rented from a Private Landlord
The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Rother set to grow to 109,000 by 2037 – it is imperative that Rother District Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.
One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (BTR) sector (instead of the BTL sector). These include allowing local authorities to proactively plan for BTR schemes, and making it simpler for BTR developers to offer inexpensive private rented homes.
To do this, the government will invent a distinct affordable housing class for BTR, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.
Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Bexhill landlords need to be aware of as there will be greater competition for tenants.
Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, dating apps and TV with the likes of Netflix. Many Bexhill youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.
Private rented housing in Bexhill and Rother, be it BTL or BTR, has the prospective to play a very positive role.
Old Town image courtesy of Sharon Webster
2017 has started with some positive interest in the Bexhill property market. Taking a snap shot of the Bexhill property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.
Let us first consider the number of properties for sale, compared to 12 months ago:
So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 581 properties for sale today compared with 526 a year ago, a rise of 10%.
Next, Bexhill asking prices, compared to the same as a year ago, are 5% higher.
With that in mind, I wanted to look at what property was actually selling for in Bexhill. Taking my information from the Land Registry, the last available six months property transactions for TN39 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.
So what does all this mean for the property owning folk of Bexhill?
Well, with more property on the market than a year ago and asking prices 5% higher, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Bexhill property ladder, have much more price information about the Bexhill property market at their fingertips than ever before.
Those Bexhill people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Bexhill estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.
Whilst the Bexhill property-market has an unassailable demand for property – there is one saying that always rings true – as long as the property is being marketed at the right price it will sell.
If you want to know if your Bexhill property is being marketed at the right price, send me a web link and I will give you my honest opinion.
Investing in Bexhill buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.
However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Bexhill’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.
I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Bexhill, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases. Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Bexhill property has risen by £54,600 (equivalent to £29.92 a day), taking it to a current average value of £280,900. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).
However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly). I have seen several investors recently who have made decent returns from this strategy. For example:
- One Bexhill Investor paid £160,000 for a 3 bed terrace on Windsor Road in December 2014. It appears some cosmetic work was done to the property and it was resold a few months ago (November 2016) for £225,000 … 40.63% return before costs (or compound annual return equivalent of 19.24% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=61778042&sale=4689049&country=england
- Another Bexhill Investor flipped a 2 bed terrace on Sidley Street, paying £133,000 in March 2015 and selling it again after some doing some cosmetic works, sold it for £169,500 a few months ago (November 2016) … 26.97% return before costs (or equivalent 15.30% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=56840608&sale=89139900&country=england
This demonstrates how the Bexhill property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Bexhill landlords and investors to become particularly wealthy.
As my article mentioned a few weeks ago, more and more Bexhill people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to go from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Bexhill, then one place for such information would be the Bexhill Property Blog at www.bexhillpropertyblog.com
If I were a buy-to-let landlord in Bexhill today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy-to-let. To add insult to injury, Brexit has caused a tempering of the Bexhill property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Bexhill property prices do drop, the downside to that is that first time buyers could be attracted back into the Bexhill property market; meaning less demand for renting which means meaning achieved rents could go down.
Yet, before we all run for the hills, all these things could be serendipitous to every Bexhill landlord, almost a blessing in disguise.
Bexhill has a population of 41,203, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …
|Bexhill – Accommodation Type and the Number of Occupiers|
|Owned outright – Bexhill||Owned with a mortgage – Bexhill||Shared ownership (part owned and part rented) – Bexhill||Social rented (aka Council Housing) – Bexhill||Private rented – Bexhill||Living rent free – Bexhill|
Yields will rise if Bexhill property prices fall, which will also make it easier to obtain a buy-to-let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Bexhill landlords add to their portfolio. Rental demand in Bexhill is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Bexhill landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.
I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner. Both are in their mid/late twenties, both have decent jobs in Bexhill and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a home owner and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.
So, as 17.9% of Bexhill people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Bexhill – because what else are you going to invest in? Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!
For more views and opinions on the Bexhill Property Market – visit the Bexhill Property Market Blog at www.bexhillpropertyblog.com