Saturday, 27 August 2016

111 days to find a buyer for your Grantham Property

I had a homeowner from Barrowby Gate email me the other day. She said she had been following my blog (the Grantham Property Market Blog) for a while and wanted to pick my brain on when is the best time of the year to sell a property. Trying to calculate the best time to put your Grantham property on the market can often seem something akin to witchcraft and, whilst I would agree that there are particular times of the year that can prove more productive than others, there are plenty of factors that need to be taken into consideration.

Even if you are putting your property on the market, you don’t know how long it will take to find a buyer - no crystal ball to help with that one. At the moment, the latest set of figures for all 15 estate agents in Grantham, show the average length of time it takes to find a buyer for any Grantham property is as follows ..

Detached                    116 days
Semi                              76 days
Terraced                     100 days
Flat                              150 days
Overall average          111 days

If we roll the clock back to January 2016, the overall average time it took to find a buyer (again using data from all of the 15 Grantham Estate Agents) was 150 days.

So, on the face of it, things have vastly improved over the last six months or so. Well, when I looked at the data going back to 2009, and every Spring since then, the average length of time it takes to sell a property drops between January and the Summer months, for it to rise on the run up to Christmas. For example ..

Winter 2009 - 263 days          Summer 2009  - 237 days

and in more recent times …

Winter 2013 - 192 days          Summer 2013  - 189 days
Winter 2014 - 171 days          Summer 2014  - 138 days
Winter 2015 - 151 days          Summer 2015  - 135 days

Coming back to the present, even if you placed your property on the market today in Grantham, if it takes
you on average nearly 16 weeks to find a buyer, then you can expect solicitors and the chain to take an additional eight and twelve weeks after that, before you move. It comes down to personal choice as to when you place your property on the market. Children often affect the decision. On one side you might delay putting that for sale board in your front garden so you can move in the summer school holidays, but on the other side, you might want to move sooner to be in the catchment area of a preferred school, in plenty of time for the next academic year?

There are times of the year when it's better to sell, and times when waiting a little longer can pay off in the long run. In a nutshell, I would say this is the way of the seasons ..

Spring: Customarily there are more house-buyers as the Daffodils show themselves
Summer: Sellers may miss out on house-buyers being on holiday
Autumn: The enthusiasm for buying homes returns
Winter: Interest diminishes as festive period looms 

What this means to buyers and landlord investors is that they often pick up a bargain in later months of the year, as there is less competition from owner occupiers. So, whilst there are better months to achieve a quicker sale, the only piece of advice I can give to every home  owner and landlord in Grantham, is do the right thing for yourself, do your homework and buy (and sell) with both your head as well as your heart

Monday, 22 August 2016

137% increase in Property Values in Grantham since the Millennium

Grantham house prices since the Millennium have risen by 137.38%, whilst average salaries in Grantham have only grown by 51.27% over the same time frame. This has served to push homeownership further out of reach for many Grantham people as they have to battle against raising considerable deposits and meet sterner lending criteria, as a result of new mortgage regulations introduced in 2014/5.  The private rental market in Granatham has grown throughout the last twenty years with buy-to-let investors purchasing a high proportion of newly built residential properties that were built and designed for the owner occupier sales markets.  For example, in the Grantham and Stamford Constituency, roll the clock back 20 years and there were 36,625 properties in the Constituency, whilst the most recent set of figures show there are 44,858 properties - a growth of 8,233 properties.

However, anecdotal evidence suggests that quite a number of those 8,233 were bought by Grantham buy-to-let landlords, as over the same 20-year time frame, the number of rental properties has grown from 5,544 to 7,151 in the Constituency - a rise of 1,607 properties.

Nevertheless, some say this historic growth of the Grantham rental market might start to change with the new tax rules for landlords introduced by Mr. Osborne over the last seven or eight months. Yet the numbers tell another story. Across the board, mortgage borrowing climbed to a 9 year zenith in March this year as the British property markets traditional Easter rush corresponded with landlords hurrying to beat George Osborne’s new stamp duty changes – buy-to-let landlords borrowed £7.1bn in March 2016 (the latest set of figures released) which was 163% up on the £2.7bn borrowed in the previous March.

You see, from my point of view, I don’t think things will get worse in the buy-to-let market in Grantham and these are the reasons why I believe that:

Firstly, what else are Grantham landlords going to invest in if it isn’t property - the stock market? Since the Millennium, the stock market has risen by an unimpressive total of 5.54%, quite different to the 137.38% rise in Grantham property prices?

Secondly, its true the 3% stamp duty is the first blow on top of a number of other tax changes to be phased in between 2017 and 2021, such as landlords facing a constraint in their ability to offset mortgage interest and, if sizeable numbers of landlords do take the decision to sell their portfolios, this will lead to a substantial amount of second hand properties being put up for sale. Yet that might not be a bad thing, as I have mentioned in previous articles there is a serous shortage of properties to buy at the moment in Grantham: the stock of property for sale being at a six year all time low.

.. Thirdly, if there are fewer rental properties in Grantham, as supply drops and demand remains the same (although ask any letting agent in Grantham and they will say demand is constantly rising) this will create a squeeze in the Grantham rental market and as a result rents will rise. In fact, I predict even if landlords don’t sell up, Grantham rents will rise as Grantham landlords seek to compensate for increased costs, which means more landlords will be attracted back.


Wednesday, 17 August 2016

Asking Prices of Grantham Property down 7% in the last year

I had an interesting question the other day from a homeowner in Manthorpe who asked me the difference between asking prices and values and why it mattered. When it comes to selling property, there must be agreement between the purchaser (buyer) and seller (vendor) for a property sale to take place. The value a buyer applies to a property can massively differ from the value a seller or mortgage company places upon it. The seller, the buyer and the mortgage company must find an agreeable value to assign to a property so the sale can proceed.

In many of my articles about the Grantham property market, I talk about values, i.e. what property in Grantham actually sells for, but I haven’t spoken about asking prices for while. Now asking prices are important as they are one of the four key matters a potential buyer will judge your property on (the others being location, bedrooms and type). Price yourself too high and you will put off buyers. So let’s take a look at the Grantham numbers.

Over the last 12 months asking prices (i.e. the price advertised in the paper and on Rightmove) in Grantham have decreased by 7%, taking the average asking price in Grantham to £175,400 (down from £188,000 twelve months ago).

Interestingly though, when we look at, say semi-detached and terraced property, a slightly different picture appears. Twelve months ago, the average asking price for a semi-detached house in Grantham was £131,700 and today its £137,900 (a rise of 5%); whilst over the same 12-month period, the average asking price of a terraced property was £129,500 a year ago, and today its £127,400 (a drop of 2%).

However, my research shows that the supply of property for sale in Grantham is beginning to increase. In December 2015, there were 295 on the market in Grantham today there are 325 properties on the market (up 10%). This will mean homeowners looking to sell will need to be conscious of how their property compares against others on the Grantham property market. The Grantham property market still has substantial momentum and sufficient demand remains. This noteworthy increase in supply since Christmas is currently providing more choice for buyers.

… And here is the second point to make. Asking prices are one thing, but what a property sells for (i.e. value) is a completely different matter. These are the average prices achieved (i.e. what they sold for or the average value) for property in Grantham over the last 12 months...

·      Overall Average          £187,300
·      Semi-detached           £143,200
·      Terraced                      £122,400

You can quite clearly see, there is a difference between what people are asking for property and what it is selling for. The underlying fundamentals of low interest mortgages and tight supply remain prevalent in the Grantham property market however, the number one lesson has to be this ... if you want to sell, be realistic with your pricing.

Sunday, 14 August 2016

42.6% of Grantham Tenants are White Collar Middle Class

With Grantham youngsters not able to buy their own property, my research would suggests the progressively important role the private rented sector has been playing in housing people in need of a roof over their head, especially at a time of increasing affordability problems for first time buyers and growing difficulties faced by social housing providers (local authorities and housing associations) in their ability to secure funding from Westminster and then compete against the likes of the Bovis’s and David Wilson’s of this world to buy highly priced building land.

Renting isn’t like it was in the 1960’s and 70’s, where tenants couldn’t wait to leave their rack-rent landlords, charging sky-high rents for properties with Second World War wood chip wallpaper, no central heating and drafty windows. Since 1997 with the introduction of buy to let mortgages and a new breed of Grantham landlord, the private rented sector in Grantham has offered increasingly high quality accommodation for younger Grantham households.

So whilst I knew in my own mind that the type and class of tenant has improved over the last 20 years, I had nothing to back that up ... until now. According to some detailed statistics from Durham University just released, for the South Kesteven District Council area, the current situation regarding social status of tenants shows some very interesting points. Using the well known Demographic ABC1 grade classifications which refers to the social grade definitions (which describe, measure and classify people of different social grade and income and earnings levels, for market research, social commentary, lifestyle statistics, and statistical research and analysis) this is what I found out.

Of the 11,939 tenants who live in a private rented property in the South Kesteven District Council area, 15.49% (or 1,849) of those tenants are classified in the AB category (AB Category being Higher and intermediate managerial / administrative / professional occupations), compared to 25.97% owner occupiers who own their property without a mortgage or 3.11% who rent their property from the local authority. Fascinating don’t you think?

Looking at the C1’s (C1’s being the Supervisory, clerical and junior managerial / administrative / professional occupations), of the already mentioned 11,939 tenants in the area, an impressive 3,240 of them are considered to be in the C1 category (or 27.14%). Again, when compared with the owner occupiers who own their property without a mortgage, that figure stands at 29.70%   and 16.31% who rent their property from the local authority.  So, if we use the conventional measurements recorded by the white-collar “ABC1” i.e. middle class ….

This means 42.63% of tenants are considered middle class in Grantham

I could go through all of the social categories through to ‘E’, but I humbly don’t want to bore you with too many numbers. The fact is that private tenants are moving up the social ladder and whilst back in the 1960’s and 70’s, the private rented sector in Grantham (and the rest of the UK) has customarily been viewed as a temporary tenure for 20 somethings before they bought a property, the increase in renting in Grantham, which I have talked about many times in the Grantham Property Market Blog may be a reflection of increasing difficulty for this group in accessing other tenures, but may also be a reflection that people nowadays choose to rent long term instead?

Grantham Landlords need to be aware that tenants now demand more from their properties, the agent and their landlord and whilst affordability for first-time buyers and tighter controls on lending may mean that potential first-time buyers are in the private rented sector for longer, they will still pay ‘top dollar’ rent for a ‘top dollar’ property.

For more articles like this ...please visit the Grantham Property Market Blog I

Tuesday, 9 August 2016

10.41% slump in Lincolnshire and Grantham Property Transactions

In this post credit crunch world of sub terrain low interest and annuity rates so low a limbo dancer would smart, the growth of buy to let since 2009 has been phenomenal. So much so, there has been an evolution in purchase of property in the UK from that of just buying the roof over one’s head to that of a buy to let investment where it is seen as a standalone financial asset to fund current and future (ie pensions) investment. So recently, a few days before the release of latest Land Registry data of property transactions, quite a few market commenters were anticipating a huge increase in the number of properties sold in January as the 1st of April 2016 stamp duty deadline got closer.   

Looking at the most recent set of data from The Land Registry, it seems there has been a drop in the number of completed property sales in the Lincolnshire County Council area. Year on year, completed property sales in January (the latest set of data released) fell by 10.41% to 800 compared with 893 in January 2015. Nationally, the number is similar, as the number of completed house sales fell by 5% in January 2016 compared with January 2015. Some might say this counters the reports that there was a rush by landlords to buy ‘buy to let’ property ahead of the 1st April 2016 deadline but where was the stampede that many expected?

Looking even closer to home, in the NG31 postcode in January 2016, 44 properties changed hands, whilst 65 properties did so in January 2015. It’s even more interesting when you look at the average price paid, in January 2016, it was £159,500 yet in January 2015, the average price paid was £153,887.

Is the buy to let dream over for Grantham landlords?

.. but as ever my Grantham Property Blog readers, the devil is in the detail. The 3% stamp duty surcharge for buy to let landlords was announced in the Autumn Statement on the 25th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks, as the Land Registry only get notified upon completion of the sale. We also need to factor in that Solicitors seem to have the last two weeks of December off anyway.

So if there was a rush in the last few days of November/early December in the Grantham property market, we would only see the results of that in the February figures (released in June) and more probably March’s (released in July).

So why all the doom and gloom? Simple .. bad news sells newspapers and gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped (month on month) by 0.5%; in the East Midlands region they dropped 0.3%, whilst in Lincolnshire they rose by 0.5%. The year on year figures tell a completely different story to that.

It just goes to show you should look deeper into something before making a judgment! For more thought provoking commentary on the Grantham property market – please visit the Grantham Property Blog  

Thursday, 4 August 2016

1,551 South Kesteven Properties lie empty– An injustice for the 2,914 people on the South Kesteven Council House Waiting List?

Easy problems should have easy solutions  - shouldn’t they?

Problems like Grantham’s housing crisis, where we have a rudimentary numerical problem of too few homes for too many people ... the answer is clearly to build more property in Grantham - but that, unfortunately for those desperately seeking to purchase or let a property, takes a lot of time and huge amounts of money. So what of other solutions?

Whilst at a dinner with friends recently, the subject of property was mentioned (as I am sure it does at most dinner parties up and down the country). Normally someone always mentions empty properties as the solution to the problem. On the face of it, it seems so obvious. Now quite interestingly, I had recently done some research on this topic, which I want to share with you (as I did with those at the dinner table).

The most recent set of figures from 2015 state there are 1,551 empty homes in the South Kesteven District Council area. So it begs the question ... why not put them back onto the system and help ease the Grantham housing crisis? Whilst they stand empty, 2,914 South Kesteven households (not people – households) are on the Council House Waiting List for council houses. Surely, we can undoubtedly all agree that property left empty for years and years isn’t morally right with the burgeoning Council House Waiting List, not to also mention the issue of homelessness.

But a different story emerges when you look deeper into the numbers. Of those 1,551 homes lying empty, only 479 properties were empty for more than six months. The local authority has to report a property being empty, even if its for a week. So many of the Grantham properties are either awaiting new homeowners or, in the case of rental properties, new tenants. Also most certainly, some properties are being refurbished and renovated, while others properties have homeowners who are anxious to sell but cannot find a buyer.

And this is where its gets even more interesting. Of the 479 long-term vacant properties (those empty more than six months), 73 belong to the council. However, before we all go Council-bashing, anecdotal evidence suggests these empty council houses are habitually in need of so much restoration that it’s not worth the Council’s while to do and are in the roughest parts of the council estates, they are properties that even the Council find difficult to fill.

The fact is that the number of genuinely long term empty properties is only a tiny drop in the ocean of the 57,344 properties in the area covered by South Kesteven District Council and, even if every one of those empty homes were filled with happy cheerful tenants tomorrow, it would only meet a small fraction of Grantham housing needs.

So what does this mean for all the homeowners and landlords of Grantham? Well it means with demand being so high, especially for rental properties, the certainty of the rental market growing is an inevitability because young people cannot buy and councils don’t have the money to build new council houses. This in turn bolsters property prices as landlords continue to buy at the lower end of the market (starter homes, etc), which in turn sustains the rest of the market as those sellers move up the property ladder, releasing others in turn to buy on again.

These are interesting times in the Grantham property market!