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.

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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

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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

With 826 people in Private Rented Properties in Stotfold – Should you still be investing in Stotfold Buy To Let?

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If I were a buy to let landlord in Stotfold 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 Stotfold 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 Stotfold property prices do drop, the downside to that is that first time buyers could be attracted back into the Stotfold property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Stotfold landlord, almost a blessing in disguise.

Stotfold has a population of 9,636, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Table 153 - Stotfold

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Yields will rise if Stotfold 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 Stotfold landlords add to their portfolio. Rental demand in Stotfold is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Stotfold 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 Stotfold 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 40 something, 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 8.6% of Stotfold 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 Stotfold – 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!

 

 

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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Take a look at our latest video – A great investment opportunity in the neighbouring town of Arlesey.  Just come onto the market with Stephens Estate Agents in Stotfold.  Anticipated rental income of £695pcm and a yield of 5%!  Call them before it goes – click here for rightmove advert

24% OF STOTFOLD HOMES ARE ONE PERSON HOUSEHOLDS

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I was having an interesting chat with a Stotfold buy to let landlord the other day when the subject of size of households came up.  Looking at the statistics going back to the early 1960’s, when the average number of people in a home was exactly 3, it has over the years steadily dropped by a fifth to today’s figure of 2.4 people per household.  This doesn’t sound a lot, but if the population remained the same level for the next 50 years and then we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties (or 105,769 per year)….When you consider the country is only building 139,800 properties a year… it doesn’t leave much for people living longer and immigration.  Looking closer to home…….

In the Central Bedfordshire Council area, the average number of occupants per household is 2.3 people.

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting), a fascinating picture appears.  The vast majority of homeowners who do not have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone.  People living on their own are more likely to live in a council house (43%) and the largest households (those with four or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy.

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When we look at the Central Bedfordshire Council figures for all tenures in Stotfold (Owned, Council and Private Rented) a slightly different picture appears…

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It gets even more interesting when we focus on just private rental properties in Stotfold, as it is the rental market in Stotfold that really fascinates me.  When I analysed those Central Bedfordshire Council private rental household composition figures, a slightly different picture appears.  Of the 849 private rental properties in the Stotfold area:

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As you can see, Stotfold is not too dissimilar from the national picture but there is a story to tell.  If you are considering future buy to let purchases in the coming twelve to eighteen months, I would seriously consider looking at two bedroom apartments/houses.  Even with the numbers stated, there are simply not enough two bedroom apartments/houses to meet the demand.

If the property is located in the right part of Stotfold and priced realistically, they will always let and when you come to sell, irrespective of market conditions at the time, they will always be the target of buyers.