Be you a homeowner or landlord, if you are planning to sell your Thurrock property in the short term, it is crucial, especially with the rise in the number of properties on the market, that you realistically price your property when you bring it to the market ... with the increase in choice of properties, the balance of power during negotiation generally sways towards the buyer. Given that everyone now has access to property details, including historic stats for how much property have sold for, they will be more astute during the offer and negotiation stages of a purchase.
Sunday, September 17, 2017
The tightrope of being a Thurrock buy-to-let landlord is a balancing act many do well at. Talking to several Thurrock landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.
During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Thurrock landlords as average Thurrock rents have been on a downward trend recently. So look at the figures here...
Rents in Thurrock on average for new tenants moving in have risen 1.5% for the month, taking overall annual Thurrock rents 1.6% higher for the year
However, several Thurrock landlords have expressed their apprehensions about a slowing of the housing market in Thurrock. I think this negativity may be exaggerated.
Before we get the Champagne out, the other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Thurrock as well as the Thurrock buy-to-let landlords). I believe the Thurrock property market has been trying to find some level of equilibrium since the New Year. According to the Land Registry…
Property Values in Thurrock are 7.74% higher than they were 12 months ago, rising by 2.5% last month alone!
Yet, I would take those figures with a pinch of salt as they reflect the sales of Thurrock properties that took place in early Spring 2017 and now are only exchanging and completing during the summer months.
The reality is the number of properties that are on the market in Grays today has risen by 13.9% since the New Year and that will have a dampening effect on property values. As tenants have had less choice, buyers now have more choice ... and that will temper Thurrock property prices as we head towards 2018.
However, even with this uplift in the number of properties for sale in Thurrock, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,101 properties for sale in Grays compared to the current level of 360 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).
Compared to 2008, today’s lower supply of Thurrock properties for sale will keep prices relatively high...and they will continue to stay at these levels for the medium to long term.
Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.
Some final thought’s before I go – to all the Thurrock homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving ... most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)
To all the Thurrock landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Thurrock Property Blog ... http://southockendonproperty.blogspot.co.uk/
Saturday, September 16, 2017
There can be nothing better suited to the internet than property, and hits to property websites far outnumber those of any other industry. The ability to be able to search in the comfort of your own home, usually without having to provide any personal details, is certainly attractive and has transformed the way the public begins to look for their new home.
So will the internet replace traditional estate agency? It would certainly seem not. Ultimately property search portals are regarded by buyers as a supercharged local property newspaper, with a fairly comprehensive selection of homes on offer.
As many sellers have discovered, the benefits of using an estate agent far outweigh the simple ability to source a buyer. In some ways, finding the buyer is the easy bit! The internet certainly helps the agent to do this, which in turn frees up time to be more proactive in helping those buyers identified as being particularly motivated. At the same time, buyers who are “just browsing” need not feel neglected as the internet will keep them happy for hours on end, and might even prompt them to take a more positive step towards moving.
The internet cannot advise on detailed property matters in context, cannot interpret the market, cannot provide strategic marketing advice, cannot negotiate, cannot hold a chain of related sales together, cannot chase solicitors, cannot understand a survey, cannot accompany buyers round property, cannot encourage buyers to view unexpected properties, cannot prompt a buying decision, and cannot provide reassurance when things go wrong. Apart from these, we find it really useful!
Needless to say, if you’d like to speak to a real live expert in these things, you know who to call! 01708 851 999
Monday, September 11, 2017
This ideal investment property has just come on the market £160.000 with M&P Estates Ltd South Ockednon branch (01708 851999).
PS Don't forget this is a leasehold property so there will be management fees and ground rent to pay.
The property is a one bedroom top floor flat and has recently been redecorated, in addition, it has a lovely modern fitted kitchen and bathroom. So it would be one of those off the shelf ready to rent investment opportunities.
So let's just have a quick look at the figures to justify its inclusion in today's property blog. Buying the property at £160.000 and taking into account properties of this size, location and calibre rent out at £750 per calendar month the rental yield would,therefore be a healthy 5.6%.
So why not give the agent a call and see if you can make an offer on this one and increase that all important rental yield.
PS Don't forget this is a leasehold property so there will be management fees and ground rent to pay.
Friday, September 8, 2017
First impressions are not only important when selling your home, they are absolutely critical. When people come to view a property for the first time, they are unlikely to be scrutinising the unseen. They are simply trying to get a feel for the property. They will be bombarded with mostly visual impressions, many of which you can positively influence.
For example, if your kitchen is looking tired, it can easily be spruced up with new cabinet doors. Even just replacing the handles can look good, or you could even go further and fit a new worktop. Kitchen flooring which may have passed its best is also usually quite inexpensive to replace due to the relatively small surface area.
Bathrooms can look almost as good as the day they were fitted with a bit of work on the grouting. Hack out any discoloured grout between the tiles or sealant around the wash basins, baths and showers, and replace with new. It’s inexpensive, effective, and looks good. Do make sure you polish any chrome as well, using lime scale remover if necessary.
Do declutter. Buyers want to imagine themselves living there, so don’t distract them with too much of your own stuff, although a cosy home can be more appealing than a clinical one!
Outside, flowerbeds can instantly be given a new lease of life with a generous helping of shredded tree bark compost. Freshly-mown lawns with neat edges look great, as do paths which have recently been weeded. Patio areas are more appealing when they have been jet-washed, but also when they look like they are enjoyed regularly - so it’s worth having your garden furniture out rather than packed away. The same applies to children’s play equipment if you are selling a family home.
The key is a neat, but lived-in look, which will appeal to the heart as well as the head!
PS Hope you all have a great weekend
Monday, September 4, 2017
The most recent set of data from the Land Registry has stated that property values in Thurrock and the surrounding area were 7.74% higher than 12 months ago and 33.67% higher than January 2015.
Despite the uncertainty over Brexit as Thurrock (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Thurrock property market can also be seen from those two sides of the story.
Looking at the supply issues of the Thurrock property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.
The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages as Bulphan, Fobbing and Orsett.
The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Thurrock badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.
Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.
The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Thurrock saw in property values was just 18.25% in the 2008/9 credit crunch.
Despite the slowdown in the rate of annual property value growth in Thurrock to the current 7.74%, from the heady days of 17.33% annual increases seen in late 2015, it can be argued the headline rate of Thurrock property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Thurrock (and the UK).
Thursday, August 31, 2017
August is a tricky time to comment on the property market. The market is usually understandably subdued during prime holiday season, but this is often a self-fulfilling prophesy.
This is because those sellers who would have liked to have entered the market during the summer delay doing so, in the belief that the hottest spring buyers have probably found somewhere by now, or are on holiday.
This is one of the greatest faux-pas a seller can make. Serious buyers are serious buyers, and they will probably put their house-hunting activities way ahead of any holiday plans for this year at least. Spring 2017 was hardly deluged with fresh stock and many buyers remain active. This is one of the reasons that prices have generally been upheld during this apparently quieter period, with the average house price now being reported by the Land Registry as £223,257, a respectable 4.9% annual increase.
Interestingly, Rightmove is reporting a slowdown in asking prices at just 3.1% against this time last year. While this may not bode well for prices actually being achieved in the autumn, it does reflect a more realistic response by sellers to the confusing economic and political forces at play.
Indeed, many London commuter-town estate agents are reporting price reductions in 35%-44% of their stock. Provincial towns are doing much better than this with eg Salford and Edinburgh experiencing reductions in just 11% of their stock. Price reductions do of course often result in sales for frustrated sellers, but it remains to be seen whether a further reduction may be required. The very strict mortgage qualification criteria currently in place are certainly not helping matters.
Fortunately, holiday season or not, we have continued to see impressive sales over the summer, with minimal price reductions. Proactivity is the key, and it’s our secret weapon against those of our competitors who allow a perceived holiday season slowdown to hinder their clients’ onward move.
As we ramp up further for what we expect will be a particularly strong autumn market, we’d be pleased to hear from you if you have any plans, however tentative, about a possible move. We offer straight-talking good advice, and never forget that our role is to help you maximize current market conditions – to your significant advantage!
Tuesday, August 29, 2017
You have decided to sell, but the thought of packing your home up can be daunting, especially if you have lived in the same property for many years.
It is well known that a property sells more readily when it looks and feels like a home, rather than just bricks and mortar, so it could be argued that you shouldn’t start packing until you have actually found a buyer.
However, many people find that much of the stress of moving can be reduced if they start to prepare for the move early in the sale process and there are additional benefits. For example, whilst a property certainly needs to look lived in, an overly cluttered house can be off-putting. It is important that the buyer can see themselves living there, not just you!
On the other hand, it would not be a good idea to have packing boxes scattered around the house. This could look like you are just about to move out and are therefore desperate to find a buyer.
A reasonable compromise is to take advantage of having time on your side and start to pack things which are either cluttering or otherwise unseen. This would include surplus children’s toys, photographs, books and clothes as well as the content of cupboards which can be packed into boxes and then stored in those cupboards.
Garages and sheds can usually do with a good tidy. Charity shops are a great way of lightening your load whilst making your storage areas neat, which in turn reflects well on your property overall. Garage or car-boot sales can be a lucrative alternative.
Once you have exchanged contracts then you can really go to work on your packing, and it doesn’t matter what your property looks like during the time immediately prior to completion. But hopefully your advance planning will by this time have paid dividends!
PS Hope you all had a great Bank Holiday Weekend!
Monday, August 21, 2017
We are often asked by our clients whether they should withdraw their property from the market once an acceptable offer has been made. There are a number of angles on this subject which should be considered in the context of each specific set of circumstances.
Firstly, from an ethical perspective, it could be argued that once you have agreed to sell to someone, you have given them your word, and leaving the property on the market could be regarded as a suggestion that you would renege if a “better” buyer came along. This can encourage gazumping (where a higher offer is accepted over the original one).
Some vendors would not have a problem with this. However, in practical terms it is often the case that once the original buyer falls away in favour of the new, higher, buyer, the new buyer feels the pressure is off, and they regret having offered more than the market price. Their offer is subsequently reduced (gazundering). This practice often serves to frustrate the vendor and even risks the sale. The first offer is usually the best offer!
However, there is no point in taking your property off the market if your buyer is not in a strong buying position or has a linked transaction. This latter situation reduces the saleability of your home to the saleability of any linked properties, over which you have no control.
So our advice is generally only to remove your property from the market, perhaps for a fixed period of time (say three weeks to keep the pressure on the buyer to perform) until you have confirmation from the buyer’s solicitor that they have no linked sale, and that they have their mortgage agreed in principle with sufficient deposit available.
As always, we’re here to help and happy to advise on any property-related issue.
Thursday, August 17, 2017
“How far do South Ockendon people go to move to a new house?” This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the South Ockendon Property Market!
For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!
Using statistics for the 12 months up to the middle of Autumn 2016, 280 households moved out of South Ockendon (RM15), moving an average distance of 32.36 miles - the equivalent of moving from South Ockendon to St Albans (as the crow flies). The greatest distance travelled was 433 miles – that’s more than 16.5 marathons (when someone moved to the Isle of Mull).
Considering there were 502 property sales in RM15 in the year and countless tenant moves, the numbers seems consistent – once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbour-hood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.
I then turned my attention to people moving into South Ockendon. Using the same statistics for the 12 months up to the middle of Autumn 2016, 258 households moved into South Ockendon (RM15), moving an average distance of 19.15 miles - the equivalent of moving from Maidstone to South Ockendon (again as the crow flies). The greatest distance travelled was 322 miles – that’s more than 12 marathons (when someone moved from Peebles in Scotland to South Ockendon).
I have looked at the data of every person moving into South Ockendon and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into South Ockendon. As you can see, there are a high proportion of people moving from the Greater London areas.
So, what does all this mean for the landlords and homeowners of South Ockendon?
is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.
The estate and lettings industry loves the mantra “location, location, location”. I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily. Many say knowledge is power and whilst I do enjoy writing my blog on the South Ockendon property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.
Monday, August 14, 2017
There are 23.36 million properties in England and Wales with 64% being owner occupied and 36% being 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 doing that.
Therefore, it would be safe to assume that houses are freehold and flats are leasehold .. wouldn’t it? Not necessarily! Most houses are freehold but some might be leasehold - usually through shared-ownership schemes – but more and more new homes builders are selling houses on a leasehold as well. The protection of the law afforded to leaseholders who own a flat is massive, but sadly lacking to leasehold houses sold privately.
Looking specifically at the figures for South Ockendon, at the last count in RM15 there were 11,711 properties. Since 1995, 10,533 properties in RM15 have changed hands and have been sold. Looking further at those 10,533 transactions in RM15 since 1995, using data from Land Registry and solicitors practice My-Home-Move, 15.63% have been leasehold (higher than the national average of 15%).
However, I am concerned about a few new homes builders selling new houses (not flats - houses) as leasehold. There has been a growing (yet small) trend for new-build houses to be sold as leasehold in recent years. While not all house builders use this model, those that do maintain it helps make developments financially viable.
The issue comes when builders sell the freehold separately to an investment company without informing the lease holder – which they are legally allowed to do without telling the leaseholder. In England and Wales, the "right of first refusal" to buy the freehold is written in law to leaseholders of flats i.e. the freeholder must offer it to the leaseholders of all the flats of the building first), but not leaseholders of houses.
.. and this is the point I am trying to get across. If you are buying a new home and it’s a house (i.e. not a flat) – please check very carefully indeed whether its freehold or leasehold. If it is a leasehold, whilst you do have rights, they are not as strong as for those people buying a leasehold flat. I appreciate I am only talking about a very small percentage of the property market, but potentially this could end up costing thousands of pounds to those affected.
PS Another sunny Monday morning!!
Thursday, August 10, 2017
Our last article considered some of the dangers associated with pricing your home in relation to other properties available for sale (ie those remaining unsold). This time we’ll consider pricing in relation to properties which have actually sold.
When considering what asking price to quote, common sense dictates that the price of other homes which have sold locally could be a good indicator of the price you should be quoting. However, your research could well prompt you to price your property at a level which could under- or over-estimate your optimum sale price.
Irrespective of national trends, the property market is very sensitive to imbalances in supply and demand even on a street by street basis. When there are many qualified buyers all seeking a rarely-available house in a popular street the price goes up. If fate dictates that the following week five such houses become available in the same street, the price will inevitably fall.
Likewise there can be situations where a property is sold at a record price to an individual who particularly wanted a specific property for personal reasons. Conversely a situation could arise where a desperate seller, who might otherwise suffer repossession, agrees a sale at a very low figure for a quick sale.
Only the estate agent involved in any of these transactions knows how the individual circumstances of sale can affect value. So a word of caution – leave the science of valuation to an experienced local estate agent who is highly active in the market and has a good track record of achieving swift sales at or close to his/her suggested asking price. Time for a chat? We’re here to help.
PS To all our blog readers, if there is a subject that you would like us to cover, please drop me an email at email@example.com
Monday, August 7, 2017
If you’re thinking of moving, beware of the latest ploy being used by some a number of desperate agents.
It works like this. The agent advertises a surprisingly low commission to entice you, as a prospective seller, to invite that agent to your home with a view to listing your property with them. They might even offer to throw in the VAT, conveyancing and EPC costs! Smell a rat?
The “deal” is that in return for the low fixed fee you are required to pay the agent’s fees up front. This is totally contrary to the concept of having an agent who is 100% on your side and fully motivated to sell your home, as quickly as possible and for the highest price the market will pay. What better way to support a lazy agent!
The agent will of course tell you that buyers come from the internet nowadays. They’ll tell you that their use of technology enables them to achieve cost savings, which they pass on to their clients. Nonsense. Technology frees up time so that expert negotiators can do more of what they do best – sell, negotiate, nurture and facilitate property transactions by helping people move.
Don’t be fooled. It really isn’t a matter of simply uploading your property to Rightmove and waiting for a buyer to materialize. That’s not how a good agent gets you the best price. If anything, finding a buyer is the easy bit. Negotiating a great price with the right buyer, and having the skills and resources to manage linked transactions is a whole different story.
But it gets worse. During your meeting, the agent may then try to sell you other services, such as accompanied viewings, negotiation, sales progression support, a for sale board, etc each for an additional fee. These costs add up and remember are paid up front. So sellers can end up paying, in advance, the same if not higher levels of commission than they would have paid with a regular agent, who would have only charged on results! Some online agents ever try to get you to sign a credit agreement to cover their costs! So you now have an unexpected loan agreement as well. What a sham - especially if they have no incentive to perform!
Of course, if you want the reassurance of working with one of the most respected and successful agents in the Thurrock area, proven to deliver results, where personal values are sharpened with a contemporary approach, then please feel free to contact me on 01708 851999 No pressure, - just straight talking good advice – and, we only charge when we deliver the results you need!
Saturday, August 5, 2017
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 today, they had never had it so good!
Trust one of my cousin’s children to have gained some financial/economics qualifications before going to Law School, as they debated with me the genuine economic predicament of Millennials and how a combination of student debt, unemployment, global proliferation, EU migration and rising house values is reducing the salaries and outlook of masses of the UK’s younger generation, causing an unparalleled disparity of wealth between the generations. So of course I asked why that was?
They said Millennials were paying the price for the UK’s most spectacular bookkeeping catastrophe to date (bigger than the Bank bailout after the Credit Crunch). Back in the 1950’s and 1960’s, nobody predicted us Brit’s would live as long as we do today, and in such abundant numbers. The OAP pensions that were promised in the past (be that Government State Pension or Company Final Salary Schemes) which appeared to be nothing fancy at the time, are now burdensomely over-lavish, and that is hurting the Millennials of today and will do so for years to come.
Bringing it back to property, the young 2nd cousin once removed ‘soon to be’ lawyer, stated that baby boomers born between 1945 and 1965 have been big recipients of the vast rising house prices over the 1970’s/80’s/90’s and 2000’s. Add to that their decent pensions, meaning cumulatively, their wealth has grown exponentially through no skill of their own.
This disparity of wealth between the older and younger generations could have unparalleled consequences for the living standards of younger Millennials…. So Grays – do we have a problem??
Well Grays Property Blog readers, you know I like a challenge. I can’t disagree with some of what the younger family member said, but there are always two sides to every story, so I thought I would do some homework on the matter ..
Since 1990, the average value of a property in Grays has risen from £73,300 to its current level of £301,800. As there are a total of 12,093 homeowners aged over 50 in Grays; that means there has been a £2.76bn windfall for those Grays homeowners fortunate enough to own their own homes during the property boom of the 1990s and early 2000’s.
I must admit that the growth in property values in the 1990’s and 2000’s certainly helped many of Grays’s baby boomers. The figures do appear to put into reverse gear the perceived wisdom that each generation gets wealthier than the previous one … and so with all this wealth, the figures do back up the youngsters argument that Millennials are being priced out of home ownership.
Or do they? Are they?
Friday, July 28, 2017
50 years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. In the same year Sweden switched from driving on the left-hand side to the right-hand side of the road. The average value of a South Ockendon property was £3,688, interest rates were at 5.5% and The Beatles released one of my favourite albums – their Sgt Peppers album ... but what the hell has that to do with the South Ockendon property market today?? Quite a lot actually ... so with my CD Player turned up loud - let me explain my friends!
I have been doing some research on the current attitude of South Ockendon first-time buyers. First-time buyers are so important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent (good news for landlords). If they buy, demand for South Ockendon property goes up for starter homes and that enables other South Ockendon homeowners to move up the property ladder.
First-time buyers are the lifeblood of the property market. They are, however the most susceptible to interest rate rises and the affordability of mortgages. With that in mind, let us see what is happening to them…
The average value of a South Ockendon property is currently standing at £278,117 and UK interest rates at 0.25%. As each year goes by, it appears the age of the everlasting mortgage has started to emerge, prompted by these first-time buyers, eager to get a foot on the housing ladder. I was reading a report a few days ago where some mortgage companies confessed that the battle to gain big returns from the property market has led to mortgages that will take considerably longer than the customary 25 years to pay off.
Over the last few years, it has been commonplace for first-time buyer mortgages to be 30 and 35 years in length as the ‘Bank of Mum and Dad’ have been helping with the deposit (Beatles Sgt Pepper song - “With a Little Help from My Friends”). Now, some high street banks are offering mortgage terms of 40 years. This means first-time buyers could be paying until their mid 60’s - I can hear that other great track from the same album "When I'm Sixty-Four" ringing in my ears! So, a 50-year mortgage does not seem as far-fetched now as it would have been back in the 1970’s. After all life expectancy for a male then was exactly 69 years and today its 79 years and 5 months!
Over the last ten years, South Ockendon property prices have continued to rise more than wages, therefore, first-time buyers are looking for bigger loans. If this development continues, the only way repayments can remain reasonable is by increasing the term of the loan.
However, some commenters have said there are worries the mortgage companies are lending money over such a long term, they threaten leaving some first-time buyers with a generation of debt if the house price bubble bursts. Interestingly, when I looked at what had happened to average property values in South Ockendon over the last 50 years, there have been bubbles. First-time buyers should take heart, since as a county we have always recovered from it a few years later.
What if interest rates rise? Well looking at historic UK interest rates, the current rate of 0.25% is at a 300-year low. Mortgages will never be cheaper. I would however, seriously consider fixing the rate to cushion any future potential interest rate rises (since they can only go in one direction when they do change). If South Ockendon first-time buyers see buying a home as a long-term decision, based on the last 50 years, they should be just fine!
Before I go, a final thought for property buyers in Sweden, the land of Volvo and Abba. As Swedish property prices are so high, Swedish Regulators announced last year limits on the length of Swedish mortgage terms. They don’t bother with 50-year mortgages (On and On and On – Abba).
No, our Volvo-loving Swedish friend’s average mortgage length is 140 years (this is not a typo). Although such mortgages have had their Waterloo (Abba), regulators have significantly reduced the maximum term of a Swedish mortgage to 105 years. Either way, that’s a lot of Money, Money, Money (Abba again – Sorry!) to pay back!
Now I will leave you in peace as I listen to the 1980’s Madness song ‘Our House’. My apologies to all the Beatles and Abba fans in South Ockendon - a bit of light hearted fun albeit on serious topic.
PS Enjoy your weekend w ever the weather will bring!!
Thursday, July 27, 2017
When considering the value of a property prior to putting it on the market, many vendors understandably look at the asking price of other properties currently on the market locally, and draw pricing conclusions based on this research.
Whilst this is not an unreasonable way of determining value, there are some traps for which to look out.
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. An unsold property is invariably one that is overpriced. If it had been priced correctly then it would have sold, but in the event the market has rejected it and it will probably only sell if the price is reduced. So if you have a similar property and you price it at about the same level as the unsold property, then the chances are that yours will remain unsold as well.
We know that purchasers buy by comparison. So your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
Additionally, if you feel that your property is slightly better than a neighbouring property for sale (as you are bound to, as you chose the décor and it has your own possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price.
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions which always point to offering better value than that offered by competing properties available locally.
We’re experts in this field. If you’d like to know how your own property compares to others currently available then please feel free to contact us on 01708 851999 for a free and intelligent consultation without obligation.
Wednesday, July 19, 2017
When the weather is good, there’s no beating the great British summer. It’s the time for enjoying barbecues, outdoor entertaining, children splashing in the paddling pool and balmy evenings.
However, because there is never any guarantee of really hot weather, British households tend not to have air conditioning, unlike some other countries where sweltering summers are generally guaranteed. So when things hot up, we tend to revert to our manual air-conditioning system – we open the windows!
The problem is that we often forget to close them again, or we deliberately leave them open night and day, providing a perfect opportunity for burglars and opportunists to pounce. Indeed, insurance companies report a 21% increase in claims following an unforced entry during the summer months. Small easily-snatched items such as handbags, car keys, mobile phones and jewellery are among the most popular thefts; lucrative for the thief and really, really, annoying to lose. Burglars can be in and out of a property in seconds, often whilst unsuspecting occupants are in the garden or watching television in another room.
To add insult to injury, insurance companies will not usually honour a claim for such theft unless the homeowner has “taken reasonable steps to prevent loss or damage”. An open window is an invitation to a burglar and hardly demonstrates the reasonable care demanded by insurers.
There are obvious yet often overlooked ways of avoiding the anxiety of a summer theft, such as:
· Never leave front doors or windows open or unlocked when you are at the back of your property or in the garden.
· Never leave valuables on windowsills.
· Use restrictors on windows so they can only be opened part-way.
· Regularly review your home insurance needs.
· Support your local Neighbourhood Watch scheme.
Buying, selling, renting or staying put, may we wish you a happy and secure summer!
Tuesday, July 18, 2017
On several occasions over the last few months, in my South Ockendon Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time I felt that in some parts of the UK rents had actually dropped for the first time in over eight years. Recent research backs up this prediction.
Rents in South Ockendon for new tenancies only grew by 0.7% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in South Ockendon, an interesting pattern emerges ..
· 2016 - Rental Inflation in South Ockendon was 4.3%
· 2015 - Rental Inflation in South Ockendon was 6.4%
· 2014 - Rental Inflation in South Ockendon was 0.7%
The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).
On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of South Ockendon property prices has compounded this. Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.
The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.
Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations) the simple fact is, we aren’t building enough properties for us to live in. Both in South Ockendon, the East and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again. Look at the projections by the Office of National Statistics.
Population Estimates for Thurrock Borough Council over the next 20 years
Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in South Ockendon, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants. Simply put rents must go up!
The fact is that I see this as a short-term blip and rents will continue to grow in the coming years. With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.
Saturday, July 15, 2017
A covenant is a term you might hear when discussing a property during the conveyancing process. Covenants are a form of legal obligation that is binding on the owner of a property and passes from owner to owner whenever the property is sold. They form part of the deeds of a property and are recorded at HM Land Registry.
A covenant is usually established by the builder or original owner of a property and seeks to ensure that certain things happen or do not happen. For example, a covenant might be an obligation to paint the house regularly. A restrictive covenant would prevent you from painting it purple! These types of covenant might exist in for example an exclusive development of homes where the developer and indeed other residents wish to maintain a certain standard of the whole street in perpetuity.
Some covenants are more severe in their restrictions. For example, you may be prevented from parking a caravan or trade vehicle on your drive or not “trading” from your property, which could be difficult to define in practice. Flats often have a covenant stating that you must not create noise or in other ways be a nuisance to your neighbours, any of whom could file an injunction against you through the courts if you are in breach.
Of course, many of the covenants relating to older properties are unlikely to be problematic, unless of course you wish to graze sheep, display charms on a Sunday, or keep a horse inside your house! There have been examples where you are not permitted to change the name of a house or grow a certain type of plant in the garden but these are rare.
Your solicitor will advise if any covenants affecting a property you are buying is especially onerous but as with all these issues they need to be seen in a realistic context and it’s up to you to make the decision as to whether any covenant is acceptable or not, as it will be almost impossible to remove.