Wednesday, 31 May 2017

Hard Brexit will cause 2,500 properties to dumped onto the Grantham Property market

By not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Grantham (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.

Putting aside the Politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU, otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Grantham .. but nothing could be further from the truth.

Of the 132,493 people who are resident in the South Kesteven District Council area, 123,479 were born in the UK, 2,435 were born in EU countries from West Europe and 2,403 were born in EU countries from the former Soviet states in East Europe (the rest coming from other countries around the world).

The rights of these EU citizens living in the Grantham area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Grantham will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.

So, what would a hard Brexit do to the Grantham property market?

Well a hard Brexit could mean the nuclear option when it came to the Grantham housing market. It could mean that every EU citizen would have to leave the UK.

In the South Kesteven District area, 1,627 of 2,435 Western European EU citizens own their own home and (so they would all need to be sold) and 1,670 of 2,403 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.

Hard Brexit and mass EU Migration would mean c. 2,500 properties being dumped onto the housing market in a short period of time, meaning there would be massive drop in Grantham property values and rents, causing negative equity for thousands of Grantham homeowners and many buy to let landlords would be out of pocket.

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Grantham (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Grantham (and the surrounding area) to get work and provide for their families. Many Grantham people have invested their life savings into buying a buy to let property.

 Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK .. politics aside – a hard Brexit is in no one’s interests.

Friday, 26 May 2017

Should the 4,833 Home Owning OAP’s of Grantham be forced to Downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Grantham society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Grantham home owning mature members of our society, ‘Generation Trapped’.

So, should we force OAP Grantham homeowners to downsize?

Well the original article, I suggested that we (society) should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize, but the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it)

Looking at the statistics for Grantham, of the 4,833 Homeowners whom are 65 years and older, whilst 2,650 of them described themselves in good or very good health, a sizeable 1,676 home owning OAPs described themselves as in fair health and 507 in bad or very bad health.

10.49% of Grantham home owning OAP’s are in poor health

But of you look at the figures for whole of South Kesteven District Council (not just Grantham), as whole, there are only 471 specialist retirement homes that one could buy (if they were in fact for sale) and 374 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldnt feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority would be Grantham downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is  .. there simply aren’t enough bungalows for the healthy members of the Grantham population and specialist retirement properties for the ones who aren’t in such good health .. we need to build more houses in Grantham.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people whom are retired) would be the wrong thing to do. Instead of the stick – the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

.. and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, like they are having downgrade themselves their retirement (and let’s be frank – no one likes to be downgraded).

So, what I suggest all the homeowners and property owning public of Grantham? The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. More houses and apartments needs to be built, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Grantham property investor readers whilst this issue gets sorted in the coming decade(s)  – Maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought?

Wednesday, 17 May 2017

1,308,536 People use Grantham Train Station a year - How does that affect the Grantham Property Market?

It might surprise you that it isn’t always the poshest villages around Grantham or the swankiest Grantham streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location.  

As an agent in Grantham, I am frequently confronted with queries about the Grantham property market, and most days I am asked, “What is the best part of Grantham and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person. A lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state in total, 1,797 people jump on a train each and every day from Grantham Train station. Of those, 655 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £7,020 a year.

So, if up to £4.59m is being spent on rail season tickets each year from Grantham, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Grantham and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Grantham buy to let market – providing homes for the tenants of Grantham…

Bottom line is property values in Grantham would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of railway station and the people it serves in the town

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.  

Overall usage of the station at Grantham has increased over the last 20 years. In 1997, a total of 607,467 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 1,308,536 people using the station (that’s 3,594 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Grantham property. It is also significant for tenants, so if you are a Grantham buy to let investor looking for a property, the distance to and from the railway station is sometimes enormously significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out a property’s (which they are considering to let or buy) proximity to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website. 

For more thoughts on the Grantham Property market – please visit the Grantham Property Blog