Thursday, 25 February 2016
“What does the ideal Grantham tenant look like?”, asked one of my landlords from Barrowby the other day, to which he carried on before I could reply, “Let me guess, a professional couple, both in their 30’s, flawlessly tidy, pays their rent early, doesn’t complain or fuss, who has no plans to move and cheerfully accepts annual rent rises”.
Before I can answer that question properly, I have always believed all a landlord wants (and expects) of their tenants is to pay their rent on time and look after the property as if it were their own. In return, the landlord should provide a property that is warm, clean, modern and damp free and sort any issues (such as repairs) quickly and without fuss.
Wednesday, 24 February 2016
2,156 Grantham Homes bought by private landlords in the last 20 years –Is this the end for first time buyers?
There I was, out with the family at Belton House last weekend, when a smart gentleman approached me. ͚Hello͛, he
said, ͚You are the person writes that Property Blog aren͛t you? We have met before at that Business Networking
event in Grantham a few months ago͛. I did then recognise him and, whilst I wont mention his name, he runs a small
but perfectly formed well known independent retailers in the town ... It͛s amazing who you see when out walking!
Anyway, I was at a loose end for five or ten minutes as the other half was sorting things with the family, so we had a
Friday, 19 February 2016
Can you remember 10.05pm on Thursday, 7th May 2015 ... with the shock news that BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Manthorpe and Gonerby exhaled a huge sigh of relief, as Grantham landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about as the Tory’s were always considered to be a political party that accepted the importance of the rental market, supported its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.
Sunday, 14 February 2016
Grantham house prices up or Grantham house prices down? ... and if so, by how much? Those of you who read the Grantham Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 11,169 Grantham homeowners and landlords.
The average Grantham property is 5% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).
Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Grantham landlords in my blog, but I believe the real issue in the Grantham property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year. All I can say is .. good luck George hitting those numbers!
Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Grantham in 2016?
Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in October 2011, 711 properties were for sale in Grantham .. today that figure is 295. On the face of it, this means there is less choice for Grantham buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Grantham house sellers.
Everything isn’t all doom and gloom though ... again back in October 2011, the average property in Grantham took 134 days to find a buyer .. latest figures state this has dropped to 89 days .. a drop of 34% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Grantham is the 3 bed, which only takes 68 days to find a buyer (on average) compared to the 1 bed, which takes 109 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!
So, back to the question everyone is asking .... What will happen to property values in Grantham in 2016? I am going to suggest they will rise between 3.5% and 4.5% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Grantham property market .. visit the Grantham Property Blog
Sunday, 7 February 2016
“Who would want to move to Grantham in weather like this?”, was what one landlord said to me as we shook hands outside his property, the other afternoon. It was windy, cold, it had been raining most of the day and it was the last appointment of the day at 4.45pm. I will admit, as I had been out of the office all day, I was looking forward to getting home, putting the fire on, and watching telly with a big mug of tea.. but this landlord lived in neighbouring Newark and this was the earliest he could do.
It turned out he had been self-managing the property himself over the last few years, but was worried with all the new legislation that had been introduced recently. He was particularly concerned about the up and coming ‘Right to Rent’ legislation, so as his tenant had handed in their notice recently, on this new tenancy he called us for our opinion.
For those Grantham landlords that don’t know, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the 'Right to Rent' rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.
Our landlord from Newark wanted to know how much of a real issue was ‘Right to Rent’ in Grantham. I was able to tell him, the last available figures (from a couple of years ago) show that 31 people (whom were registered as Non-UK Born Short-term Residents) moved into private rented accommodation in the South Kesteven District Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £93,000 to the landlords of the town.
It doesn’t sound a lot when you think there are 41,998 residents in Grantham, and of those, 37,851 people (or 90.13%) were born in the UK. But Grantham is a cosmopolitan town as the country of birth of the residents in Grantham can be split down as follows:
· UK 90.13%
· Ireland 0.43%
· Europe 6.36%
· Africa 0.84%
· Middle East and Asia 1.71%
· Americas and Caribbean 0.37%
· Australia and Pacific region 0.13%
However, it must also be recognised that landlords, by checking up on tenants, could potentially be accused of discrimination under the Equality Act. This is a real minefield for landlords, especially when you consider that not all of the 2,669 Europeans in the area necessarily have the right to live in the UK either.
In a nutshell, Grantham landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include ....
· UK Passport
· EEA Passport/Identity card
· Travel document or Permanent Residence Card showing indefinite leave to remain
· Paperwork from Home Office stating their Immigration status
· Certificate of registration or naturalisation as a British citizen.
I hope the new law will target dishonest landlords who repeatedly fail to carry out Right to Rent checks by making it a criminal offence. This means they could face imprisonment for failing to check on their tenants. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.
So what did our landlord do?
Well after our chat, he asked us to find a tenant and manage the property for him - he had been reading the Grantham Property Blog for a while and because of the knowledge we impart to the landlords of Grantham, we obviously know what we are talking about. Even better news for him, even though this would cost him agency fees, I was able to get him an additional £50 per month for his property (when we found him a tenant one week later). Now, together with the peace of mind we will keep him the right side of the law and put a stop to midnight phone calls complaining about dripping taps, it was a win-win situation for everyone.
Tuesday, 2 February 2016
I had the most interesting chat with a mature couple (in their early/mid 50’s) from Great Gonerby the other day, whilst viewing a property. The property wasn’t for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Grantham property market and how they had bought their first property in the town just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you today.
Their son, like many 20 to 30 year olds in Grantham, desperately wants to own his own property and the parents said he had read in the Telegraph recently, when you compare house prices to earnings, the current 20 to 30 something’s generation have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Grantham is huge. There are in fact 3,375 private rental properties in Grantham at the last count, impressive when you consider there are 2,433 council houses in the town. However, let us not forget 11,169 properties are owner occupied (6,224 with a mortgage).
Let us all be honest, private renting doesn’t have the stigma it had a few decades ago and it might surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.
Looking at the affordability issue, I have proved time and time again, it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years and whilst you could certainly find better properties in better condition in better areas, terraced houses can be bought for as little as the mid £60,000’s in the Earlsfield area of Grantham (meaning a modest deposit of £3,000 would be required).
When it came to affordability, I was able to tell them that when they bought their first house in Grantham in 1988, the ratio of house prices to salary was 5.08 to 1 in Grantham ... and here was the surprise for both of us, today’s ratio is only 4.96 to 1!
I said I believed there had been a cultural attitude change towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit was everything and buying a house was everything. Youngsters today have far much more disposal income today than people had in the Callaghan and Thatcher years, but choose to spend it upgrading their mobile phones every 12 months, the newest tablet or PC, a newest 50” plasma LCD TV and two sun drenched holidays a year, than go without and save for a deposit.
Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they couldn’t ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low ... but now it’s the norm.
So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at c.£3,000 in Grantham as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.
Hence, I cannot see the demand for decent, high quality rental properties ever dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure you by the right property, at the price, in the right location. One source of information on such matters would be the Grantham Property Blog