6.82 Babies born for each new home built in the Stotfold area

166 - Biggleswade

As more babies are being born to Stotfold and  Central Bedfordshire mothers, I believe this increase will continue to add pressure to the over stretched Stotfold property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 6.82 babies were born for every new home that was built in the Central Bedfordshire Council area in 2016.  I believe this has and will continue to exacerbate the Stotfold housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Stotfold rents and Stotfold property prices have remained resilient, even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Central Bedfordshire Council area had an average of 66.7 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region its 67.6 births per 1,000 women aged 15 to 44.

166 - National Graph JPEG (fixed graph) - to be used to add weight to your local graph

The number of births  from Stotfold  and Central Bedfordshire women between the ages of 20 to 29  are close to the National average, but those between 35 and 44 were much higher.

 However overall, the birth rate is  still increasing and when  that fact is  combined  with the ever-increasing life  expectancy in the Stotfold area, the high levels of net migration into the area over the last 14  years (which I talked about in the previous articles)  and the  higher predominance of single person households … this can only mean one thing … a huge increase in the need for housing in Stotfold.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Stotfold people.

The planners and politicians of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) … demand for property is simply outstripping supply.  The simple fact is more Stotfold properties need to be built, be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of the  Stotfold Nature Reserve , but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there are not  hundreds of acres of brownfield sites in Stotfold, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and are not financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times

What will the General Election do to 3,077 Stotfold Homeowners?

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In Stotfold, of the 3,978 households, 1,171 homes are owned without a mortgage and 1,906 homes are owned with a mortgage. Many homeowners have made contact me with asking what the General Election will do the Stotfold property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections:

168 Graph One

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

I then wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line):

168 Graph Two

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

Finally, what does this mean for the landlords of the 388 private rented properties in Stotfold?  As I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Stotfold will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Stotfold, making it imperative that Stotfold landlords are realistic with their market rents. However, in the long term, as the younger generation still choose to rent rather than buy the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.  If you want to find out more about the Stotfold property market or need some advice please feel free to pop into the office, phone us on 01462 894565 or e-mail us at: lettings@satchells.co.uk.

 

39 Properties For Sale in Stotfold … is this a good time to sell?

image12017 has started with some positive interest in the Stotfold property market.  Taking a snap shot of the Stotfold 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   twelve  months ago:

Stotfold 159 Table 1

When we add in building plots and other types of properties that do  not   fit into the four main categories, that means there are 39 properties for sale today compared with 15 a year ago, a rise of 160%.

Secondly, Stotfold asking prices, compared
to the same as a year ago, are 3.96% higher..

With that in mind, I wanted to look at what property was actually selling for in Stotfold. Taking my information from the Land Registry, the last available six months property transactions for SG5 4 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 March 2017 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.

Stotfold 159 Table 2

What does all this mean for the property
 owning folk of Stotfold?

With more property on the market than a year ago and asking prices 3.69% 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 Stotfold property ladder have much more price information about the Stotfold property market at their fingertips than ever before.

Stotfold 159 Graph.png

Those Stotfold 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 Stotfold 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 will not waste their time asking for a brochure. They will not   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 Stotfold 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 Stotfold property is being marketed at the right price, send me a web link and I will give you my honest opinion.

Stotfold’s ‘Generation Trapped’ and the £702.5m legacy

Generation Trapped Pic 3

I have previously written an article on the plight of the Stotfold 20 something’s often referred to by the press as ‘Generation Rent’.  Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Stotfold homeowners and Stotfold landlords alike, is our mature members of the population of Stotfold.  Currently OAP’s (65+ yrs in age) in Stotfold are sitting on £282.9m of residential property.  However, what about the ‘Baby Boomers’, the 50yr to 64yr old Stotfold people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger generation renters.

In Stotfold, there are 672 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off.  That property is worth, in today’s prices, £255.2m. There are an additional 433 mortgage free Stotfold households, owned by 50yr to 64yr olds, worth £164.4m in today’s prices, meaning…

Stotfold 156 Graph

Stotfold Baby Boomers and Stotfold OAP’s are sitting

on £702.5m worth of Stotfold Property

These Stotfold Baby Boomers and OAP’s are sitting on 1,850 Stotfold properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to de-clutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Stotfold (and the country) homeowners to downsize at the right time will also enable younger Stotfold people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Stotfold and the Planning Dept. should play their part, as should landlords and property investors to ensure Stotfold’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities.

 

Great buy-to-let investment opportunity in Arlesey

This property has gone onto the market with Express Estate Agency.  A good size flat in a location just round the corner from the station – an ideal purchase for an investor with a potential yield of 5.1%.  View ASAP before it goes.   Take a look at the advert here

12 properties a year need to be bought in Stotfold to satisfy tenant demand

Shefford image

The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, three 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 are the 20 and 30 something’s not 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 Stotfold (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 Stotfold property ladder.

Credit crunch

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 Stotfold. Whilst these are important factors and barriers to homeownership, I also believe there has been a generational change in attitudes towards home ownership in Stotfold (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Stotfold population choose to be tenants as it better suits their plans and lifestyle. Local Government in Stotfold (including the planners – especially the planners), land owners and landlords need an adaptable Stotfold residential property sector that allows the diverse choices of these Stotfold 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 826 Stotfold tenants in their 237 private rental properties, 317 tenants have no plans to ever buy a property – good news for the landlords of those 91 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

Does that mean the other third will be buying in Stotfold in the next 12 months?

155 Stotfold

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.

The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Stotfold, we will in fact need an additional 99 private rental properties over the next eight years (or 12 a year) … meaning the number of private rented properties in Stotfold is projected to rise to an eye watering 336 households.

Has the rental sector in our town changed forever?

People

The Stotfold housing market has gone through a sea change in the past decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Stotfold tenants and Stotfold 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 Stotfold population.

In 1981, the population of Central Bedfordshire stood at 211,700 and today it stands at 274,000.

Graph 157 Biggleswade

Currently, the private rented (B-T-L) sector accounts for 8.3% 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 homeownership, a different story is told.

64.03% Stotfold people owned their own home in 1981

26.28% Stotfold people rented from the Council or Housing Association in 1981

 and 9.44% Stotfold 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 Central Bedfordshire set to grow to 349,266 by 2037 – it is imperative that Central Bedfordshire 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 (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, 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 home builders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Stotfold 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 Stotfold 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 Stotfold and Central Bedfordshire, be it B-T-L or B-T-R, has the prospective to play a very positive role.

27 Stotfold Households Occupied by OAP Renters

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Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Stotfold, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Stotfold?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Stotfold at age 65 (years) is 18.8 years for males and 20.7 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Stotfold.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Stotfold?  Of the 892 households in Stotfold, whose head of the household is 65 or over, not surprisingly 745 of households were owned (83.52%) and 94 (10.53%) were in social housing.  However, the figure that fascinated me was the 27 (3.03%) households that were in privately rented properties.

Stotfold 152 Graph image

Anecdotal evidence, by talking to both my team and other Stotfold property professionals is that this figure is rising.  More and more Stotfold OAP’s are selling their large Stotfold homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Stotfold OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings’ are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.

Stotfold landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

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Stotfold first time buyers borrow £11.1m in last 12 months

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Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Stotfold property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 232 properties have sold (and completed) in Stotfold, worth £80.9m.  Interestingly the number of properties changing hands in Stotfold has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Stotfold buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Stotfold property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

154-graph

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Stotfold itself, first time buyers have borrowed more than £11.1m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Stotfold economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Stotfold, at this moment in time there are 82 properties for sale, compared to 41 properties a year ago. All this will be welcome news amongst Stotfold first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Stotfold property market like this, you might want to visit the Stotfold Property Market Property Blog:

www.stotfoldpropertyblog.co.uk