Friday, 16 August 2019

The Margate Monopoly Board


Board games seem a thing of the past for youngsters nowadays with their consoles and mobile phones yet a family favourite in our household that will bring young and old together is Monopoly.

Mayfair is the square everyone wants to buy and whilst it is the most expensive to buy – it offers the greatest returns. Mayfair was the must have London address when the Monopoly board game was made in 1935 when, at the time, it was the most expensive street to buy houses at £400 each. A member of my family asked me what a property today would be worth in Mayfair and how much it would cost to buy them all. Readers will know I like a challenge. My research shows that a typical house in Mayfair today costs on average £2.8m - whilst the total value of all the property in the Mayfair area currently stands at £11.8bn.

The fun part of Monopoly was to build more houses and ultimately a hotel to extract the maximum rent from the other players who landed on the square. That made me think, instead of looking at the average value of a property on the street, what if we looked at the total value of property on the whole street. So, I carried out some research on all the 492 streets in CT9 and calculated the top 20 streets in terms of their total value of all properties on the street... and just for fun, colour coded them as if they were on a Monopoly board…


Mayfair and Park Lane are represented by Canterbury Road and Ramsgate Road. Surprises in the mix include High Street and Harold Road which are rightly in the list because of the sheer size of those streets; because whilst the value of those homes are much lower than the posher streets, the total value of the whole street means they make the top 20 list.


Now of course whilst drawing a comparison between a 1935 board game and the actual total house values on those Margate streets and roads provides a light hearted point of view of the Margate property market, it does present a credible picture of Margate’s most popular streets. Next time I will get back to writing an article with a little more seriousness and deeper issues on the Thanet housing market … but this week, I hope you enjoyed my little bit of fun!

Friday, 9 August 2019

Only 35.7% of Thanet Households are Eco-friendly


Improving the energy efficiency of Britain’s 27.2 million homes, which are responsible for more than a quarter of the country’s CO2 and other greenhouse gas emissions, is seen as key to tackling the issues of climate change, fuel poverty and our country’s energy security. This is particularly important as in June the Government announced they were going to make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retro-fitting to meet these ambitious climate targets.

Researchers at Nottingham Trent University said it would cost on average £17,000 per property to retrofit an average UK home to make it carbon neutral with renewable energy and insulation (if done en masse and not piece meal). That would cost the Country £462.4bn (interesting when the NHS costs £154bn per year). Now of course 22.7m homes are privately owned so that would be the responsibility of the owners, but if we look at publicly owned council housing, that would cost the Government in excess of £76.5bn - HS2 is ‘only’ £56bn!

The benefits of making homes carbon neutral go further than saving the planet, as occupants would have much lower gas and electric bills (which total £31.824bn per year), warmer households and a much-lower strain on the NHS, which currently spends about £848m a year treating conditions that arise from cold housing. Also, local authorities would have to spend a lot less than the £5.2bn a year for ongoing property maintenance by the installation of extra insulation and renewable energy such as ground source heating, wind or solar panels.

To improve efficiency ratings, last year the Government banned landlords from renting property with an energy performance rating of F and G (the lowest ratings), yet I don’t think there is an appetite to force private homeowners to do this work (although you never know in the future??). Homeowners would be unenthusiastic to take on the bother and cost of such building works, yet the Government could offer incentives and grants, which along with the funds saved on their energy bills could make the plan more appealing?

So, what about eco credentials of the properties of Thanet homeowners and landlords?

Every home that has been built, rented out or put on to the market in Thanet since 2007 has had to have an Energy Performance Certificate (E.P.C), giving it a rating between A and G (rather like those stickers you see on fridges and washing machines). A is highest rating (i.e. most efficient and greener) and G is the worst energy performance rating. So, looking at Thanet first, then comparing us to the rest of the UK, this is the result...



So, 35.7% of Thanet homes are in that eco-friendly A to C energy performance banding ratings, which is proportionally 3.86% lower than the national average.
So, what next? Well the Government will endeavour to make the green revolution as painless as possible with technology developments like LED light bulbs, for example, saving greenhouse gases without people noticing. In the future we might have hydrogen central heating instead of mains gas, all have solar panels for electricity, all triple glazed windows and even ground sourced heating ... sounds pie-in-the-sky? Well who would have thought some of the most wanted cars would be electric and hybrid 10 years ago, built by the likes of Tesla?
There is no doubt that the energy efficiency of a property will rise in the coming years as the cost of fuel and people’s opinion on going green changes. You don’t need to spend £17,000 to find out what you can do to make your property greener. Look at your E.P.C and it will tell you what small changes you can make to improve your Thanet home’s energy efficiency rating and ultimately save yourself money.


If you want to find your E.P.C rating of your Thanet home, go to www.epcregsiter.com 

Friday, 21 June 2019

Thanet Council House Waiting List Drops by 52.7% since 2011


In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is only 1 in 12, whilst according to Shelter 65% of families on the Council House waiting lists had been on those lists for more than a year and 27% had been waiting for more than five years. 

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live – or is that an out-dated point of view? To look at this objectively, let’s take a step back.
After WW2, both Tory and Labour governments were building council houses in massive numbers, yet it might surprise you to know that more Council houses were built per year under Tory Governments than Labour ones between the years 1945 and 1970.  
Everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour Manifestos of the late 1950’s (although they lost to the Tory’s). Mrs Thatcher’s idea was based on massive discounts and 100% mortgages for those buying … but this was the real issue that has come back to bite us all these years later! Half the proceeds of the property sales went back to Westminster and the other half went back to the local authority – but the Councils half could only be spent on reducing their debt – not to be spent on building more Council houses.. hence why we have a shortage of council houses.
In 2011, Central Government gave local authorities the power to limit people’s entitlement for social housing (aka Council Housing), hence removing those people that did not have an association or link to the locality.


Today, in Thanet, the Council House Waiting List has dropped by 52.7% since 2011, meaning...


2,423 families are waiting for a Council House
in Thanet


Interestingly though, if our local Council House Waiting List had changed by the same amount as the national one, the waiting list figure would be 3,129 instead, because nationally Council House waiting lists are only 38.6% lower than 2011.

So where are these Thanet families all living and what does this mean for Thanet homeowners and Thanet Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list. This is important as more and more tenants are stopping longer in the Private Rented Sector - the average length of time of a tenant stays in the same property is now 4 years. Renting is becoming a choice for many, as the years of this Millennium roll on. So much so, would it surprise you to know that renting a house can be more expensive than buying it as we have these ultra-low mortgage rates and 95% mortgages freely available?

Rents in the Rental Sector in Thanet will increase steadily during the next five to ten years. Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low. The government campaign against buy to let landlords together with the increased taxation and the banning of tenant fees to agents will restrict supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment vehicle again (irrespective of the increased fees and taxation laid at the door of landlords).  

..and for home owners (and landlords) Thanet property values will remain strong and stable in the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Thanet buyers will have to pay decent money for any property they wish to buy (especially ones in good locations and presented well).

Interesting times ahead for the Thanet Property Market!

Friday, 7 June 2019

Ramsgate Property Market - Do We Have the Right Sort of Ramsgate Homes For the 21st Century?


Would it surprise you to know that in some parts of Thanet, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply? Theoretically, in Thanet there are more than enough bedrooms for everyone - it’s just they are disproportionately spread among the population, with some better-off and more mature households living in large Ramsgate homes with many spare bedrooms, and some younger Ramsgate families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Thanet doesn’t have enough housing full stop (otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying), but up until now it hasn't been clear that Ramsgate actually also has the wrong types of properties. 

We're not building the smaller homes that are needed for the starter homes and we aren’t building enough bungalows for the older generations, so they can be released from their larger Thanet homes, thus allowing those growing Thanet families to move up the ladder.  

Looking at the stats for Ramsgate, and CT11 in particular...


When I compared Ramsgate (CT11) with the regional stats of the CT postcode, the locality has proportionally 49.0% more terraced/town houses, yet 57.3% less detached. Looking nationally, Ramsgate (CT11) has proportionally 48.4% more terraced/town houses and quite surprisingly, proportionally 58.1% less detached homes.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Ramsgate over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or the apartments that have been built were of the larger (and posher) variety, even though demand for households (as life styles have changed in the 21st Century) have been more towards the lower to middle sized households.

The builders do want to build, but there's a deficiency of building land in Ramsgate, and if there's a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% - that isn’t a typo) is built on in this country as a whole with homes - we need the planners to release more land (and then force/encourage builders to build on it - not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning. 

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money to cut the grass verges, let alone spend billions on new homes in Ramsgate. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

So, what does this mean for Thanet homeowners and Thanet landlords?

Changing the dynamics of the Thanet, regional and national property market will only change in decades, not years.  The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building where the average has been just under 170,000 households a year. 

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.

Tuesday, 28 May 2019

8% more homes for sale in Margate than a year ago


One of the key factors of the health of the Margate property market is the number of properties for sale at any one time. The issue with housing is that when demand goes up, unlike with a chocolate bar factory, who can add a couple of hours overtime to increase supply/production to satisfy demand, it takes a good 18 months to two years from planning permission to someone moving into a home.  I have talked at length (and proved) in previous articles that we are still not building enough homes in the long term in the Margate area.. yet for the short term, a good indicator is the number of properties for sale and how long they have been on the market.

How long a property has been on the market is important as a guide to how the property market is performing – potential buyers can always find this information on the Rightmove and Zoopla listings (if you don’t know where – drop me an email or message and I can let you know).

So, let’s have a look at what is happening in Margate, both in terms of the number of properties for sale and how long they have been on the market compared to a year ago, then discuss what that means for the current state of play of the Margate property market. So to start, let’s look at the number of properties for sale in Margate compared to a year ago.

Interestingly, you can see there has been a proportional increase of 30% in apartments on the market in Margate, yet only a 1% increase in detached property .. overall in the last year there are 8% more properties on the market in Margate, compared to a year ago. Now, let’s look how long they have been on the market...
Interesting to see that the biggest jump in the number of days on the market is detached houses, from 122 days to 157 days .. demand and supply working again. Also, the length of time an average Margate property has been on the market has increased by 18% in the last year.
So what does this all mean for Margate Buy To let landlords and Margate homeowners looking to buy and sell?  Well, if you are thinking of selling, as the number of properties on the market has increased and the length of time Margate properties are on the market has also increased – you have to be mindful that realistic pricing is the key to get the property sold. If you are a buyer, that means you find yourself in a better position to negotiate a good deal on your Margate property purchase. 
There is an argument to suggest that property buyers see excessive days on the market as an indication that the seller is becoming desperate to sell because the property hasn’t sold. Buyers are also mindful to believe that there might be something wrong with the home, a defect that caused other buyers to pass it up. This can concern them when they view the property – if they view it at all, as that possible and perhaps made-up defect is on their minds, even if it is sub-consciously.
 Normally, both assumptions are wrong. A property can loiter on the market for several reasons. The most common reason for a property sticking on the market is overvaluing or overpricing. In an effort to get the property on the market, some estate agents may have deluded the seller into believing the property was worth more than the property market will bear. Don’t get me wrong, if you don’t ask, you don’t get and homeowners naturally want to get the best price for their home, and so test the market. Yet, if you aren’t getting a steady stream of viewers after a few weeks, then that testing can back fire. You see, by setting the asking price too high to see if they can find someone to pay that inflated price, then finding there is nobody in the market that will pay the price, here lies the biggest trap for house sellers on keeping the inflated asking prices for too long. 
Sellers can also get stuck on an asking price and they are willing to wait out the market until it catches up to what they want for their property – yet we aren’t in that type of property market at the moment. Consumer champion Which said that if you have to reduce your asking price by 5% or more, it adds an extra 64 days to the sales process meaning you might lose the property of your dreams.
Also, I have seen countless times, house sellers insist on an inflated asking price, reduce 12 weeks later, yet buyers think there is something wrong with it so the homeowner gets fed up and accepts a lower offer to get the property sold, whereas if the house seller had gone onto the market at the right asking price, they would get much nearer to what they deserve for their property.
So, if you are looking for a bargain to buy – all the Portals (Rightmove, Zoopla and On The Market) allow you to search and sort by the length of time on the market as well as the asking price.. who knows – there could be a bargain waiting for you!

Friday, 17 May 2019

Unemployment - the Secret Driver of the Thanet Property Market?


If you have been reading my articles on the Thanet property market recently, you will see that in the three years since the referendum of the ‘B’ word (that word is banned in our household), we have proved beyond doubt that it (whose name shall remain nameless) has had no effect on the Thanet property market (or the UK as a whole).
So one might ask, what does affect the property market locally? Well many things on the demand side include wages, job security, interest rates, availability of mortgages, confidence in the economy, inflation, speculative demand ... the list goes on. Yet as my blog readers will note, I like to delve deeper into the numbers and I have found an interesting correlation between unemployment and the number of properties sold (i.e. transactions).

Why transaction levels and not house prices? Well just looking at Thanet house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying - meaning to judge the health of a property market is very one dimensional. Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners - a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

Looking at Thanet’s figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels.


Property transactions in Thanet dropped by 58.79%, whilst unemployment in Thanet rose by 27.41% during the 2007 to 2009 Global Financial Crash


There is clearly a relationship between conditions in the Thanet job market and the number of people who move home ... interesting don’t you think?


Now I am not saying unemployment is the only factor influencing the Thanet property - but it has to be said there is a link.

As a country (and indeed here in Thanet) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of the religion of following house prices (and I appreciate the irony of me writing these articles on Thanet - feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Thanet home. Now of course, I am not dismissing the current levels of Thanet house prices - we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically under-performed.  
So the next time you are considering a house move or buying a buy to let property in Thanet ... don’t make your judgement on house price growth alone.


Friday, 10 May 2019

Thanet House Prices Up 0.2% in a Year - What does that mean for local Landlords and Homeowners?



The balancing act of being a Thanet Buy To Let landlord is something many do well at. Talking to numerous Thanet landlords, they are very aware of their tenants’ capability to pay the rent and their own need to raise rents on their rental properties.  Despite the ‘perceived ‘dark clouds of Brexit, evidence suggests many landlords feel more confident than they were in the Summer and Autumn of 2018 about aiming to push rents higher on their Thanet Buy To Let properties.


Looking at the data for the last 7 years, this shows that throughout the Summer months, the rents new tenants have had to pay on move in have increased at a higher rate than during the colder months of Winter.  This is because the Summer months are normally a time when renters like to move, meaning demand increases for rental properties yet supply remains pretty ridged.


Yet the Winter stats buck that trend and this is great news.

Rents in Thanet on average for new tenants moving in have risen 2.4% for the month, taking overall annual Thanet rents 2.7% higher for the year.

However, several Thanet landlords have expressed their apprehension about a slowing of the housing market in Thanet and I believe, based on this new evidence, they may be overstated. Before we get the bubbly out though, the other part of investing in property is what is happening to capital values (which will also be of interest to all the homeowners in Thanet as well as the Thanet Buy To let landlords). I believe the Thanet property market has been trying to find some form of balance since the New Year. According to the Land Registry….

Property Values in Thanet are 0.2% higher than they were 12 months ago.

Yet, these figures reflect the sales of Thanet properties that took place in the early Spring of 2018 and only exchanged and completed during the Summer / early Autumn months of last year.

The reality is the number of properties that are on the market in Thanet today has risen by 19% since the Spring.

and that will have a dampening effect on the property market.  As tenants have had less choice, buyers now have more choice .. and that will temper Thanet property prices as we head into the middle of 2019.

Be you a Thanet landlord or Thanet homeowner, if you are preparing to sell your Thanet property in 2019, it’s important, especially with the rise in the number of properties on the market, that you are pricing your property realistically when you bring it to the market. With the likes of Rightmove, Zoopla and OnTheMarket on everybody’s mobile phones and laptops, buyers have access to every property on the market and they will compare and contrast your home with other properties like yours – and will more than likely dismiss your property rather than view it. To all the Thanet homeowners that aren’t planning to sell though – 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. Look at the deal as a whole, the difference between what you sell yours for and what you buy at. Finally, all the Thanet landlords – keep your eye’s peeled – I have a feeling there may be some decent Thanet buy to let deals to be had in the coming months.