Thursday, 14 September 2017

Margate’s 2,098 Mortgage Time-Bombs?


According to my research, of the 27,308 properties in Margate, 9,714 of those properties have mortgages on them. 75.1% of those mortgaged properties are made up of owner-occupiers and the rest are buy to let landlords (with a mortgage).
… but this is the concerning part .. 2,098 of those Margate mortgages are interest only. My research also shows that, each year between 2017 and 2022, 25 of those households with interest only mortgages will mature, and of those, 6 households a year will either have a shortfall or no way of paying the mortgage off. Now that might not sound a lot – but it is still someone’s home that is potentially at risk.


Theoretically this is an enormous problem for anyone in this situation as their home is at risk of repossession if they don’t have some means to repay these mortgages at the end of the term (the typical term being 25 to 35 years). Banks and Building Societies are under no obligation to lengthen the term of the mortgage and, when deciding whether they are prepared to do so or not, will look at it in the same way as someone coming to them for a new mortgage.
Back in the 1970’s and 1980’s, when endowment mortgages were all the rage, having an endowment meant you were taking out an interest only mortgage and then paying into an endowment policy which would pay the mortgage off (plus hopefully leave some profit) at the end of the 25/35-year term. There were advantages to that type of mortgage as the monthly repayments were lower than with a traditional capital repayment and interest mortgage. Only the interest, rather than any capital, is paid to the mortgage company - but the full debt must be cleared at the end of the 25/35-year term.
Historically plenty of Margate homeowners bought an endowment policy to run alongside their interest only mortgage. However, because the endowment policy was a stock market linked investment plan and the stock market poorly performed between 1999 and 2003 (when the FTSE dropped 49.72%), the endowments of many of these homeowners didn’t cover the shortfall. Indeed, it left them significantly in debt!
Nonetheless, in the mid 2000’s, when the word endowment had become a dirty word, the banks still sold ‘interest only’ mortgages, but this time with no savings plan, endowment or investment product to pay the mortgage off at the end of the term. It was a case of ‘we’ll sort that nearer the time’ as property prices were on the rampage in an upwards direction!
Thankfully, the proportion of interest only mortgages sold started to decline after the Credit Crunch, as you can see looking at the graph below, from a peak of 43.81% of all mortgages to the current 8.71%.

Increasing the length of the mortgage to obtain more time to raise the money has gradually become more difficult since the introduction of stricter lending criteria in 2014, with many mature borrowers considered too old for a mortgage extension.
Margate people who took out interest only mortgages years ago and don’t have a strategy to pay back the mortgage face a ticking time bomb. It would either be a choice of hastily scraping the money together to pay off their mortgage, selling their property or the possibility of repossession (which to be frank is a disturbing prospect).
I want to stress to all existing and future homeowners who use mortgages to go in to them with your eyes open. You must understand, whilst the banks and building societies could do more to help, you too have personal responsibility in understanding what you are signing yourself up to. It’s not just the monthly repayments, but the whole picture in the short and long term. Many of you reading my blog ask why I say these things. I want to share my thoughts and opinions on the real issues affecting the Thanet property market, warts and all. If you want fluffy clouds and rose tinted glasses articles – then my articles are not for you. However, if you want someone to tell you the real story about the Thanet property market, be it good, bad or indifferent, then maybe you should start reading my blog regularly.

For more thoughts on the Thanet Property Market – visit the Thanet Property Blog on http://www.thanetpropertyblog.com/http://www.thanetpropertyblog.com/

Friday, 8 September 2017

Thanet Property Market and Mysterious Politics of the General Election


As the dust starts to settle on the various unread General Election party manifestos, with their ‘bran-bucket’ made up numbers, life goes back to normal as political rhetoric on social media is replaced with pictures of cats and people’s lunch.  Joking aside though, all the political parties promised so much on the housing front in their manifestos, should they be elected at the General Election.  In hindsight, irrespective of which party, they seldom deliver on those promises.

Housing has always been the Cinderella issue at General Elections.  Policing, NHS, Education, Tax and Pensions etc., are always headline grabbing stuff and always seem to go ‘the ball’. However, housing, which affects all our lives, always seems to get left behind and forgotten.
Nonetheless, the way the politicians act on housing can have a fundamental effect on the wellbeing of the UK plc and the nation as a whole.

One policy that comes to mind is Margaret Thatcher’s Council House sell off in the 1980’s, when around 1.4m council houses went from public ownership to private ownership.  It was a great vote winner at the time (it helped her win three General Elections in a row) but it has meant the current generation of 20 somethings in Thanet (and elsewhere in the Country) don’t have that option of going into a council house.  This has been a huge contributing factor in the rise of the private renting and buy to let in Thanet over the last 15 years.

Nevertheless, looking back to the start of the Millennium, Labour set the national target for new house building at 200,000 new homes a year (and at one point that increased to 240,000 under Gordon Brown for a couple of years).  In terms of what was actually built, the figures did rise in the mid Noughties from 186,000 properties built in 2004 to an impressive 224,000 in 2007 (the highest since the early 1980’s) as the economy grew.

Then the Credit Crunch hit.  It is interesting, that the 2010 Cameron/Clegg government did things a little differently.  The fallout of the Credit Crunch meant a lot less homes were built, so instead of tackling that head on, the coalition side-stepped the target of the number of new homes to build and offered a £400m fund to help kick start the housing market (a figure that was a drop in the ocean when you consider an average UK property was worth around £230,000 in 2010).  The number of new houses being completed dipped from 146,800 in 2011 to 135,500 the subsequent year.

So, one might ask exactly how many new homes do we need to build per year?  It is commonly accepted that not enough new properties are being built to meet the rising need for homes to live in.  A report by the Government in 2016, showed that on average 210,000 net additional households will be formed each year) up to 2039 (through increased birth rates, immigration, people living longer, lifestyle (i.e. divorce) and people living by themselves more than 30 years ago).  In 2016, only 140,600 homes were built ... simply not enough!

Looking at the numbers locally in Thanet and the surrounding area, it is obvious to me, that we as an area, are not pulling our weight either when it comes to building new homes. In the 12 months up to the end of Q1 2017, only 100 properties were built in the Thanet District Council area.  Go back to 2007, no figures were submitted by the Council, 10 years before that in 1997, 210 new homes and further back to 1988, 340 new homes were built.

Who knows if Teresa May’s Government will last the five years?  She will think she has bigger fish to fry with Brexit to get bogged down with housing issues.  But let me leave you with one final thought.

The conceivable rewards in providing a place to live for the public on a massive house building programme can be enormous, as previous Tory PM’s have found out.  Winston Churchill in 1951, asked his Minister for Housing (Harold Macmillan) if he could guarantee the construction of 300,000 new properties a year, he was notoriously told: “It is a gamble—it will make or mar your political career, but every humble home will bless your name if you succeed.”

Isn’t it interesting, that the Tories remained in power until 1964!  Mrs May will have to work out if she wants to be the heiress to Harold Macmillan or David Cameron?

Thursday, 7 September 2017

Supply and Demand Issues mean Thanet Property Values Rise by 8.4% in the Last 12 Months

The most recent set of data from the Land Registry has stated that property values in Thanet and the surrounding area were 8.48% higher than 12 months ago and 25.95% higher than January 2015.

Despite the uncertainty over Brexit as Thanet (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 Thanet property market can also be seen from those two sides of the story.

Looking at the supply issues of the Thanet 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 in areas such as Sandwich bay, Birchington and Acol.

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 Thanet 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 Thanet 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 Thanet to the current 8.48%, from the heady days of 15.74% annual increases seen in late 2014, it can be argued the headline rate of Thanet 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 Thanet (and the UK).

For more thoughts on the Thanet Property Market, please visit the Thanet Property Market Blog

Friday, 1 September 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 Ramsgate property was £3,033, 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 Ramsgate 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 Ramsgate 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 Ramsgate property goes up for starter homes and that enables other Ramsgate 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 Ramsgate property is currently standing at £228,720 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, Ramsgate 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 Ramsgate 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 Ramsgate 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 Ramsgate - a bit of light hearted fun albeit on serious topic.

Wednesday, 30 August 2017

Thanet Buy-To-Let Predictions up to 2037



On several occasions over the last few months, in my Thanet 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 Thanet for new tenancies fell by 0.4% 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 Thanet, an interesting pattern emerges...

⦁    2016 - Rental Inflation in Thanet was 5.1%
⦁    2015 - Rental Inflation in Thanet was 9.4%
⦁    2014 - Rental Inflation in Thanet was 3.2%

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 Thanet 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 Thanet, the South 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 Thanet District Council over the next 20 years
2016 (actual)    2021    2026    2031    2036
126,268    133,559    140,408    146,503    152,045

Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Thanet, 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.

Thursday, 27 July 2017

Council House Waiting List in Margate Drops by 75.4% in last 3 years






Should you buy or rent a house? Buying your own home can be expensive but could save you money over the years. Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, with more flexibility if you need to move.

Yet, there is third way that many people seem to forget, yet it plays an important role in the housing of Margate people. Collectively known as social housing, it is affordable housing, which is let by either Thanet District Council or a housing association to those considered to be in specific need, at rents below those characteristic in the private rental market.

In Margate, there are 3,455 social housing households, which represent 12.65% of all the households in Margate. There are a further 1,518 families in the Thanet District Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2013, when it stood at 6,176 families, so today’s numbers represent a drop of 75.4%.

Nevertheless, this doesn't necessarily mean that more families are being supplied with their own council house or housing association property. Six years ago, Westminster gave local authorities the authority to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.

Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the Thanet District Council area, the average rent in 1998 for a council house/housing association property was £200.76 a month, whilst today its £356.33, a rise of 77% in 19 years.

When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.

So, what does this all mean for the homeowners, landlords and tenants of Margate?

Rents in the private rental sector in Margate will increase sharply during the next five years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low. The government crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the 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 again (irrespective of the increased fees and taxation laid at the door of landlords).  It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.

Interesting times ahead for the Margate Property Market!

Friday, 7 July 2017

Thanet First Time Buyers Mortgages taking 38.6% of their Wages

I received a very interesting letter the other day from a Thanet resident. He declared he was a Thanet homeowner, retired and mortgage free. He stated how unaffordable Thanet’s rising property prices were and that he worried how the younger generation of Thanet could ever afford to buy? He went on to ask if it was right for landlords to make money on the inability of others to buy property and if, by buying a buy to let property, Thanet landlords are denying the younger generation the ability to in fact buy their own home.
Whilst doing my research for my many blog posts on the Thanet Property Market, I know that a third of 25 to 30 year olds still live at home. It’s no wonder people are kicking out against buy to let landlords; as they are the greedy bad people who are cashing in on a social woe. In fact, most people believe the high increases in Thanet’s (and the rest of the UK’s) house prices are the very reason owning a home is outside the grasp of these younger would-be property owners.

However, the numbers tell a different story. Looking of the age of first time buyers since 1990, the statistics could be seen to pour cold water on the idea that younger people are being priced out of the housing market. In 1990, when data was first published, the average age of a first time buyer was 33, today it’s 31.

Nevertheless, the average age doesn't tell the whole story. In the early 1990’s, 26.7% of first-time buyers were under 25, while in the last five years just 14.9% were. In the early 1990’s, four out of ten first time buyers were 25 to 34 years of age and now its six out of ten first time buyers.

Although, there are also indications of how un-affordable housing is, the house price-to-earnings ratio has almost doubled for first-time buyers in the past 30 years. In 1983, the average Thanet home cost a first-time buyer (or buyers in the case of joint mortgages) the equivalent of 3.0 times their total annual earnings, whilst today, that has escalated to 6.1 times their income.


Again, those figures don’t tell the whole story. Back in 1983, the mortgage payments as percentage of mean take home pay for a Thanet first time buyer was 31.2%. In 1989, that had risen to 78.6%. Today, it’s 38.6% … and no that’s not a typo .. 38.6% is the correct figure.
So, to answer the gentleman’s questions about the younger generation of Thanet being able to afford to buy and if it was right for landlords to make money on the inability of others to buy property? It isn’t all to do with affordability as the numbers show.
And what of the landlords? Some say the government should sort the housing problem out themselves, but according to my calculations, £18bn a year would need to be spent for the next 20 or so years to meet current demand for households. That would be the equivalent of raising income tax by 4p in the Pound. I don’t think UK tax payers would swallow that.
So, if the Government haven’t got the money… who else will house these people? Private Sector Landlords and thankfully they have taken up the slack over the last 15 years.
Some say there is a tendency to equate property ownership with national prosperity, but this isn’t necessarily the case. The youngsters of Thanet are buying houses, but buying later in life. Also, many Thanet youngsters are actively choosing to rent for the long term, as it gives them flexibility – something our 21st Century society craves more than ever.  
END

Friday, 30 June 2017

1 in 11 Margate Properties are Leasehold



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 Margate, at the last count in CT9 there were 22,053 properties. Since 1995, 18,994 properties in CT9 have changed hands and have been sold. Looking further at those 18,994 transactions in CT9 since 1995, using data from Land Registry and solicitors practice My-Home-Move, 8.93% have been leasehold (lower 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.

For more information please visit our blog www.thanetpropertyblog.com

END


Friday, 16 June 2017

Should the 19,963 home owning OAP’s of Thanet 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 Margate 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 Thanet home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Thanet homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should 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 Thanet, of the 19,963 homeowners who are 65 years and older, whilst 10,065 of them described themselves in good or very good health, a sizeable 7,127 home owning OAPs described themselves as in fair health and 2,771 in bad or very bad health.

13.88% of Thanet home owning OAP’s are in poor health

But if you look at the figures for the whole of Thanet District Council, there are only 972 specialist retirement homes that one could buy (if they were in fact for sale) and 717 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 wouldn’t 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’ Thanet 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 older members of the Thanet population and specialist retirement properties for the ones who aren’t in such good health ... we need to build more appropriate houses in Thanet.

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 who are retired) would be the wrong thing to do. Instead of the stick – maybe 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, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Thanet is ... more houses and apartments need to be built in the Thanet area, 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 Thanet 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!

END

Wednesday, 14 June 2017

1,203,074 People use Ramsgate Train Station a year - How does that affect the Ramsgate Property Market?


It might surprise you that it isn’t always the poshest villages around Ramsgate or the swankiest Ramsgate 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 Ramsgate, I am frequently confronted with queries about the Ramsgate property market, and most days I am asked, “What is the best part of Ramsgate 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 that, in total, 1,653 people jump on a train each and every day from Ramsgate Train station. Of those, 986 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £5,324 a year.

So, if up to £5.25m is being spent on rail season tickets each year from Ramsgate, 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 Ramsgate and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Ramsgate buy to let market – providing homes for the tenants of Ramsgate…

The bottom line is that property values in Ramsgate would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the 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 Ramsgate has increased over the last 20 years. In 1997, a total of 580,470 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 1,203,074 people using the station (that’s 3,305 people a day).



The juxtaposition of the property and the train station has an important effect on the value and saleability of a Ramsgate property. It is also significant for tenants - so if you are a Ramsgate buy to let investor looking for a property - the distance to and from the railway station can be extremely significant.
One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property 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 Ramsgate Property market – please visit the www.ThanetPropertyBlog.com

End

Friday, 2 June 2017

Hard Brexit could cause 2,000 properties to be dumped onto the Thanet Property market



So all cards up in the air! A general election on the books, but one thing is for sure ... whoever gets the job to deal with Brexit has a hard job on their hands (I'm just glad its not me!) As it currently stands, 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 Thanet (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 Thanet ... but nothing could be further from the truth.

Of the 131,755 people who are resident in the Thanet District Council area, 120,568 were born in the UK, 2,515 were born in EU countries from West Europe and 3,017 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 Thanet 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 Thanet 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 Thanet property market?

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

In the Thanet District area, 1,532 of the 2,515 Western European EU citizens own their own home and (so they would all need to be sold) and 2,484 of the 3,017 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. 2,000 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Thanet property values and rents, causing negative equity for thousands of Thanet 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 Thanet (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 Thanet (and the surrounding area) to get work and provide for their families. Many Thanet 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.