The Unfairness of the Bexhill Baby Boomer’s £3,403,330,000 Windfall? (Part 1)

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)”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill Property Market and Mysterious Politics of the General Election

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”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill Flats Out Perform Property Market Average by 20%

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

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill’s housing affordability hits a ratio of 11.29 to 1

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).

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (EST)
5.31 6.46 6.89 9.55 9.96 10.48 10.59 9.72 11.82 11.29

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

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

How The Rented Sector Has Transformed The Property Market In Bexhill

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

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

‘Generation Rent (Forever)’ – 2,832 Bexhill Tenants have no intention of ever buying a property to call home

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).

Continue reading “‘Generation Rent (Forever)’ – 2,832 Bexhill Tenants have no intention of ever buying a property to call home”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill Unemployment Drops to 4.2% and its effect on the Bexhill Property Market

It was late May 2016, The Right Hon. Member for Tatton, Mr George Osborne, published an official HM Treasury analysis stating UK house prices would be lower by at least 10% (and up to 18%) by the middle of 2018 compared with what is expected if the UK remained in the European Union. So, eight months on from the Referendum, are we beginning to show signs of that prophecy? The simple answer is yes and no.

Good barometers of the housing market are the share prices of the big UK builders. Much was made of Barratt’s share price dropping by 42.5% in the two weeks after Brexit, along with Taylor Wimpey’s equally eye watering drop in the same two weeks by 37.9%. Looking at the most recent set of data from the Land Registry, property values in Bexhill are 0.23% down month on month (and the month before that, they had barely grown with an increase of only 0.63%) – so is this the time to panic and run for the hills?

Doom and Gloom then? Well, let me consider the other side of the coin.

Continue reading “Bexhill Unemployment Drops to 4.2% and its effect on the Bexhill Property Market”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Private renting in Bexhill set to hit 4,919 households by 2021 – Is Buy to Let Immoral? (Part 1)

Can we blame the 55 to 70-year-old Bexhill citizens for the current housing crisis in the town?

Also known as the ‘Baby Boomer Generation’, these Bexhill people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

Yet some have suggested these Bexhill baby boomers have and are making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%, but average Bexhill house prices rose by 121.3%

Continue reading “Private renting in Bexhill set to hit 4,919 households by 2021 – Is Buy to Let Immoral? (Part 1)”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill OAP’s sitting on £2.85 billion worth of Property

Bexhill people aged over 65 currently hold more housing wealth in their homes than the annual GDP of the whole of Powys, and this is a problem for everyone in Bexhill!

Many retiree’s want to move but cannot, as there is a shortage of such homes for mature people to downsize into.  Due to the shortage, bungalows command a 10% to 20% premium per square foot over houses of the same size with stairs. To add to the woes, in 2014, just 1% of new builds in the UK were bungalows, according to the National House Building Council – down from 7% in 1996.

My research has found that there are 9,909 households in Bexhill owned outright (i.e. no mortgage) by over 65 year olds.  Taking into account the average value of a property in Bexhill, this means £2.85 billion of equity is locked up in these Bexhill homes, compared to the GDP of the whole of Powys being £1.9 billion of GDP.

A recent survey by YouGov, found that 36% of people aged over 65 in the UK are looking to downsize into a smaller home.  However, the Government seems to focus all its attention on first-time buyers with strategies such as Starter Homes to ensure the youngsters of the UK don’t become permanent members of ‘Generation Rent’.  Conversely, this overlooks the chronic under-supply of appropriate retirement housing essential to the needs of the Bexhill’s rapidly ageing population. Regrettably, the Bexhill’s housing stock is woefully unprepared for this demographic shift to the ‘stretched middle age’, and this has created a new ‘Generation Trapped’ dilemma where older people cannot move.

Some OAP’s who are finding it difficult to live on their own, are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.  So, older retirees can’t leave bungalows, younger retirees can’t buy bungalows and younger people can’t buy family houses.

Continue reading “Bexhill OAP’s sitting on £2.85 billion worth of Property”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram

Bexhill First Time Buyers Are Paying 12.6% More Than 12 Months Ago

Figures just released by the Bank of England, show that for the first half of 2016, £128.73bn was lent by UK banks to buy UK property – impressive when you consider only £106.7bn was lent in the first half of 2015. Even more interesting, was that most of the difference was in Q2, as £68.12bn was lent by UK banks in new mortgages for house purchase, which is the highest it has been for two years. Looking locally, in Bexhill last quarter, £310.6m was loaned on TN39 properties alone!

Even though the Bank won’t be releasing the Q3 figures until December 2016, as I discussed a few weeks ago, HMRC have published their own preliminary data to suggest Q3 will be even better, with a massive growth of buy-to-let landlords to the housing market in that time frame. Fascinating, as it seems to fly in the face of the popular narrative – that the uncertainty surrounding Brexit would negatively impact buyer sentiment.

And it’s not just buy-to-let landlords that seem to be flourishing. I am finding that first-time buyers are also a lot more confident too. Low, and now negative, inflation has had a tangible impact on household finances and first-time buyers feel more secure in their jobs. Coupled with a low interest rate environment and you have all the ingredients for a strengthening property market. To back that up with numbers, of the £68.12bn of mortgages lent in the Quarter (Q2), £14.9bn was lent to first-time buyers (the highest proportion of that overall lending for over two years at 21.99%).

Continue reading “Bexhill First Time Buyers Are Paying 12.6% More Than 12 Months Ago”

Facebooktwittergoogle_pluslinkedinyoutubeinstagram