Erewash Landlords invest £320 million in the Erewash Property Market

 

East Midlands property asking prices jumped by more than £4,000 to £177,100 in February according to Rightmove, an increase of 2.3% from January and 4.7% higher than a year ago. After the traditionally quiet months of January and February, the property market has started to warm up, but talking to some Erewash  Estate Agents, they are reporting their lowest ever stocks of quality property for sale. However, asking prices have no relation to what property sells for (ie their REAL value), is the issue a lack of supply?

Putting aside Erewash ’s continual housing supply shortage, (we only built 2,468 properties in the last decade but the population of Erewash  grew by 1,982), this is now, according to some people, being exaggerated by an increase in homes being owned by buy to let investors, who tend to be buying a property as part of a long term pension plan and are more likely to keep it for longer than an owner occupier would. I have also seen unwillingness among homeowners looking to move, to put their own property on the market as they can find few suitable properties to make it worth their while going through the whole moving process.

Talking to some Erewash  landlords only last week, I said that I believe this is the new norm in the Erewash  property market, and is the consequence of over 35 years of not enough homes being built to meet the escalating growth in household numbers, resulting in a lack of quality homes for sale in many popular areas of Erewash .

When one looks at the historic data, in April 2007 there were 705 properties on the market in Ilkeston compared to today’s 327. Should we be worried?  Well in July 2009, there were only 293 properties for sale in Ilkeston  but seven months later in February 2010, this had jumped to 593 properties, for it to drop to 281 properties in April 2014. The number of properties on the market is a cyclical thing in Ilkeston , it always has been and always will be. As we go into the Spring of 2015, the number of new properties coming onto the market will increase ... just as the daffodils will flower.

So are landlords to blame? Well, on one side of the coin, yes they are. If they buy a property to rent out, that means someone can’t buy it to live in. However, it doesn’t matter if someone wants to live in a property if they can’t afford the deposit and upkeep .. and the youngsters of Erewash  still need a roof over their head. So on the other side of the coin, if the Council aren’t building any properties and people can’t afford the large deposit for the mortgage, then Erewash  landlords have stepped in and bought property to rent out to them. Erewash  landlords have bought 3,057 properties over the last decade (investing approximately £320.9million buying those Erewash rental properties), meaning there were at the last count, 12,666 Erewash  properties being privately rented out to tenants. Erewash  tenants are in fact getting a good deal as well, as average rents in Erewash  are 4.5% below where they were seven years ago. That sounds like a win-win situation for everyone to me. Stop blaming landlords and start building more properties in Erewash  .. that is the only answer.

In the meantime, the demand from Erewash  tenants for Erewash  property is only set to rise over the coming years. If you want some advice and opinion on where (or not) to buy, please visit the Erewash  Property Blog where we discuss such matters in greater depth: www.ilkestonpropertyblog.co.uk

Massive drop in Homeownership in Erewash

 

An Englishman’s home is his castle but when it comes to the UK  the ‘Brit’s are still a nation of homeowners ‘(although wasn’t it Napoleon who thought we were all shop keepers!). It is interesting to note that up until the mid to late 1960’s, more people rented their home (albeit mostly from the local council) than owned their own. In fact, I was surprised to read that in 1921, over 75% of homes in England and Wales were privately rented with the remaining 25% being owner occupied. 

It was only after the Second World War, when the Beatles were rocking, that people started to buy instead of rent .. but instead of owning our property outright, we borrowed money from banks and building society’s to buy them and the roots of the growth of the private rental sector can be drawn back to the late 1970’s early 1980’s, when the council houses began to be sold off under the right to buy scheme.

In 2001, 78.2% of households were owner occupied in Erewash, but ten years later, that percentage dropped massively to 72.4%.  But here is the interesting part, when you look at the actual numbers of households, 36,181 households in Erewash were owner occupied in 2001. Ten years later, in 2011, that number (who owned their own home) had only dropped to 35,290 households.

So why big drop in percentages but not in actual properties? An additional 2,468 properties were built in Erewash between 2001 and 2011, but a lot of them were bought as buy to let investments, thus more than doubling the number of private rental properties in Erewash. In fact, the number of properties in Erewash, which were privately rented, jumped from 2,705 in 2001 to 5,762 in 2011!

With the Erewash Council housing waiting lists being in the 5 to 10 year range for a decent property in a decent location. Therefore, with no more council houses being built, and an increasing number of people looking for a roof over their head, private renting is the only option

With every report stating the rental market will continue to grow throughout the rest of this decade and beyond, linked with high demand and limited supply in the Erewash, then if you are considering buying a property for buy to let investment in Erewash, as I don’t sell property (I’m just a letting agent), I am always happy to give you my considered opinion on which property to buy (or not as the case may be).. If you are a landlord, new or old, I am certainly more than happy for you to pick up the phone or visit the Erewash Property Blog where you will find the best buy to let deals on a day by day basis from all the agents in Erewash www.ilkestonpropertyblog.co.uk

 

What properties are actually selling in Heanor?

 

Prices up, prices down, prices stable .. the newspapers are full of good news, bad news and indifferent news about the Brit’s favourite subject after the weather .. the property market. The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way.  At one end of the scale is London, which has seen average prices grow in the last twelve months by a shade under 19% (and again that is an average because some Borough’s  in London have risen by 26%) whilst in the land of Daffodils , by contrast, Wales only saw a 2% increase in property values (although in the Merthyr Valleys they dropped by over 11%).

Well we can’t ignore the rest of the UK, and we can’t forget that the Chancellor’s Stamp Duty reforms have polarised the London property markets above £1,000,000 because at the top end of the market, punitive Stamp Duty charges will dampen demand further. While the Bank of England warned of the growing London property price bubble in the Spring of 2014, even talk of a recovery in some areas was premature. In 2015, irrespective of where you are in the UK, one story will unite the patchwork quilt of markets –  really slow property value growth.

But what about Heanor? Well, we haven’t had the December figures from the Land Registry yet but the last few months’ activity and prices achieved would suggest neither house price growth nor drops.  In fact, most sellers are buyers anyway, so if you need to take less for yours, you won’t have to pay as much for the one you want to buy ... and that is good news for everyone as most move up market when they move. This is even better for landlord investors, as they can bag a bargain as well.

The question you should be asking though is not only is what happening to property prices, but which price band exactly is selling? I like to keep an eye on the property market in Heanor on a daily basis because it enables me to give the best advice and opinion on what (or not ) to buy in Heanor. 

If you look at Heanor and the villages within a one mile radius and split the property market into four equalled sized (into terms of households) price bands. Each price band would have around 25% of the property in Heanor, from the lowest in value (the bottom 25% ) all the way through to the highest 25% (in terms of value).  Over the last two months (63 days to be precise), in the lowest quartile, (those with asking prices under £97k) 52 properties have come onto the market in Heanor  and 17.3% of them (9 properties have a buyer and sold stc. The next quartile, between £97K-£130k of the 55 properties that come on to the market, 18.1% of them (10 properties) have a buyer. The £130k-£225k price range has seen 50 properties come on to the market, and 18% of the properties have a buyer (9 properties). The most expensive 25%, the £225k plus range, has seen 2 of the 34 properties that came on to the market find buyers (5.8%).   Fascinating don’t you think?

The next three months’ activity will be crucial in understanding which way the market will go this year and I honestly believe we will not see any house price growth or drops this side of the election. Election or no election, people will always need a roof over their head and that is why the property market has rode the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. ... there is always a silver lining when it comes to the property market!

Is the Eastwood Property market holding its breath over the General Election?

 

Has apathy has hit the Eastwood housing market as sellers await the outcome of the general election and stricter mortgage regulation suppresses buyer demand? Rightmove reported the number of homes registered for sale per estate agent fell to its lowest level for five years in December, with available stock 10% lower than in the same month a year earlier.

Looking at Eastwood and the whole of NG16, in the summer of 2014, each estate agent in Eastwood had on average 79.1 properties on its books (as there were a total of 871 properties up for sale in Eastwood at the peak in the summer just gone). Our research shows that number plummeted to 61.4 per agent in December.  While the lack of new properties coming onto the market in the later months of 2014 in Eastwood pushed asking prices up slightly from November to December, traditionally a quiet season for the housing market, property sellers will need to work hard in 2015 to complete a sale.

The length of time a property takes to sell has ever so slightly increased over the last few months. Two bedroom properties in Eastwood are now taking 71 days to sell, three bedroom 91 days, four bedrooms 166 days, but here an interesting figure, one beds are taking on average 45 days to find a buyer

2015 will be the year of the selective mover.  With only 246 brand new properties a year being built in Eastwood since the turn of the Millennium, this woefully low and insufficient number of new buildings in the town over the past few decades and a systemic change in the type of properties homeowners want (with families splitting etc so we have too many larger houses and not enough smaller ones), buyers are becoming dissatisfied with, and therefore dismissive of what is up for sale.

The heat has gone out of the Eastwood property market and I anticipate a moderate reduction from the high transaction volumes seen in 2014, but it most certainly isn’t icy cold. That might mean Eastwood landlords could bag a bargain during this period of uncertainty, especially if the financial markets do not like the election outcome. Markets and buyers do not like uncertainty, but savvy Buy to let landlords know buy to let is a long term game, and irrespective of short term apathy, reduction in the quality and quantity of stock for homeowners to buy  or the election result, if people don’t buy property they rent.  The Council aren’t building anymore properties, the council house waiting list is decades, not years for the better type of property .. the only other place to get a roof over your head .. rent a property!  Good old Bricks and Mortar! In fact with less properties coming on the market in Eastwood, that will keep prices quite stable.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. Email me on jeremy.bullock@sprucetree.co.uk