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.