Thursday, 10 October 2019

Mending the Broken Thanet Property Market



The long-lasting issue of the Thanet property market are laid bare as the final 2018 property transaction figures have just been published and they continue the post credit crunch trend of less people moving.

29% less of Thanet people are selling their homes annually since the credit crunch, when compared to the post Millennium years of 2000 to 2005 

This is not just an issue of the Thanet housing market slowing down since the credit crunch - the challenge is to split out shorter-term factors such as Brexit and the elections from longer-term structural issues of the UK society, because when these most recent property transaction figures are seen against longer-term trends for Thanet, they suggest more significant issues in the Thanet housing market.

In the late 1990’s, 2,645 properties were sold annually in the Thanet area, then in the same area, the Millennium boom saw transactions rise to 3,672 per annum. Property sales then almost halved to 1,925 per annum in the challenge of the global financial crash and subsequent retrenchment of the mortgage market. Post credit crunch (2012 and beyond) locally, on average, 2,606 properties have sold annually.


So, whilst there was a recovery from 2013 onwards, it was rather uninspiring when compared to the pre-credit crunch years, with a lacklustre performance in property transactions since mid 2010’s.

You might ask why we should be concerned about the number of property transactions and not the change in property values? 

The number of transaction numbers are a far more exact bellwether for the health and potency of the local housing market.

As less people have been selling their homes locally, this is not only bad for the Thanet housing market but for the economy locally, especially when you consider how many allied businesses (builders, decorators, solicitors, removal vans, estate agents, mortgage arrangers and other people) lose out as a result.

Some say the deficiency of supply of property, mainly affordable first-time buyer property, is the chief reason why transaction figures remain stubbornly low. Others suggest the absence of suitable housing stock up the property ladder (particularly bungalows for the older generation), combined with rising demand, is causing a bottleneck in our local housing market.

I know there has been much talk from Westminster about grand home-building programmes, yet we now require them to deliver on these undertakings and even then, it will be a few decades before we see a seismic change in the Thanet property market.

In the short-term, a quicker improvement may come from modifications to stamp duty. First time buyers don’t need to pay Stamp Duty up to a certain level, yet those Stamp Duty concessions could be extended to those mature homeowners looking to downsize. This could liberate a meaningful number of mature family homes occupied principally by these mature generation and the tax lost through Stamp Duty could be replenished by a revaluation of the Council Tax bands?

Council Tax bandings were set in 1991 and the seven bands, the highest band starts at £320,000 (based on 1991 values). It seems irrational to us that upper value band, set in the 1991 revaluations, has not been increased, particularly as house prices in London have risen by over 400 per cent during in the last 25 years.

That would mean higher tax for those who don’t move yet less tax for those that do move – because we believe it would boost a far more liquid Thanet property market.
Just a thought of mending the local property market – what are your thoughts?

Monday, 7 October 2019

How long is the average Ramsgate property on the market for?



If you are either selling or buying a property in Ramsgate, there are a few reasons why it may be taking some time to sell your Ramsgate home or find that perfect place to call your new home. It may e taking longer than you thought to find a buyer for your home because of the current state of the property market or finding that perfect Ramsgate home may be taking too long because of a lack of properties to buy.

So, taking everything into consideration, all of these factors invite an obvious question; how long is too long to persist in the Ramsgate property market?

If you are looking to sell your Ramsgate property, it may have become infuriating when your home has been on the market for longer than you anticipated. Perhaps the property market is purely in a position where it's challenging to get a property sold quickly, or sold at the price you want to achieve for it. If you do live in a Ramsgate home that is towards the upper reaches of the price band, you have to be open to the idea that because it's worth so much more than the average property in Ramsgate and so more than most individuals can afford, you will have to wait longer to get it sold.

Your Ramsgate home might be taking longer to sell because your asking price is simply too high. Even if you are prepared to take a realistic offer, if you have an unrealistic asking price your overpriced Ramsgate property will undoubtedly turn off potential buyers from even being inclined to book a viewing.

Looking at the market in Ramsgate compared to a year ago makes very interesting reading…




When it comes to the average length of time on the market, it’s the detached homes in Ramsgate that appear to be taking longer to sell, yet the length of time Ramsgate terraced homes and apartments seem to be on the market has dropped. Semi-detached homes have remained the same.



The overall average length of time a Ramsgate property remains on the market has dropped by 3.3%, from 90 days a year to 87 days today 
 
The question that remains is, if you are having no luck selling should you leave your Ramsgate property on the market or not? This is basically down to your personal circumstances - a big decider has to be if you are moving up market or downsizing.

Buyers will compare your Ramsgate property to all the other homes on the market using the portals such as Rightmove, On the Market and Zoopla and even if your asking price is realistic, if your marketing (brochures, pictures, even video walk through) isn’t top dollar, they will dismiss your property.

Remember, the average buyer only views 4.5 properties before they buy and on average, each buyer will only spend just over 25 minutes viewing each home … 
 
The more properties that are on the market, the greater the choice for buyers (yet more competition for house sellers), so we wanted to look at how many homes were for sale in Ramsgate now, compared to 12 months ago.

As you can see, there are some big differences between the property types in Ramsgate.




As for buying a Ramsgate property, searching for that dream house can take time as you have to consider the needs of your spouse, children, schooling, etc., what you can realistically afford and whether your current location can accommodate you until you find that perfect Ramsgate home.

Don’t forget that upwards of 10% of homes do not make it to the portals (the portals are Rightmove, Zoopla and On the Market), so don’t just rely on the portals to let you know what is coming on the market. The number of times I speak to disappointed buyers who missed out because other buyers registered directly with the agent for property, whilst they relied on the portals.

When it comes to buying a Ramsgate home, and so you do not make any decisions you will regret later on, taking your time is always the more practical option. The amount of money that is involved in buying a home and all the costs connected with it means that you should not rush into buying or selling without due consideration.

Tuesday, 1 October 2019

76.3% of Thanet OAP’s own their own home … and they are worth £1,109.1m

Yes, that number is staggering isn’t it ….

Of the 8,836 households in Thanet where the head of the household is 65 years or older, an astounding 6,738 (or 76.3%) of those are owned, which is just above the national average of 74.1%, which sounds great – yet nothing could be further from the truth.

I chat with many Thanet pensioners who would like to move but cannot, as there is a scarcity of such properties for Thanet mature people to downsize into. Due to their scarcity and high demand, Thanet bungalows on average get a 12% to 22% premium per square metre premium over two storey properties. To add insult to injury, a recent NHBC reported that only 1% of new builds in the Country were single storey bungalows (compared to 7% in the mid 1990’s).

Thanet OAP’s are sitting on £1,109.1m of equity in these Thanet homes

In a survey conducted a couple of years ago by YouGov, they established that just over one third of homeowning people aged 65 and over in the Country were looking to downsize into a smaller home. Yet, the Tory’s over the last nine years have appeared to target all their attention on first-time buyers with stratagems such as Starter Homes to safeguard the youngsters of the UK not becoming perpetual members of ‘Generation Rent’. Equally though, this doesn’t address the long-lasting under-supply of suitable retirement housing essential to the needs of the Thanet’s hastily ageing population.

Lamentably, the Thanet’s housing stock is tragically unprepared for this demographic shift to the 'overextended middle age’, and this has created a new 'Generation Confined’ quandary where older people cannot move.

Also, those older Thanet retirees’ who do live in the limited number of Thanet bungalows are finding it difficult to live on their own, as they are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.

Meaning those older Thanet retirees can't leave their Thanet bungalows, younger Thanet retirees in their larger 2 storey family houses can't buy those Thanet bungalows (occupied by the older retirees) and those Thanet people in the 30’s and 40’s can't buy those larger 2 storey family houses (occupied by the younger retirees) they need to for their growing families ... it’s like everyone is waiting for everyone because of the bottleneck at the top.

For those wanting to see the complete stats for Thanet as whole …

Thanet’s (and the rest of the UK’s) property prices have soared over the last 50 years because the number of properties built has not kept up with demand. With restrictive planning regulations, migration, people living longer and excessive divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year since the Millennium to just stand still.
At the turn of the Millennium, the Country was constructing on average 180,000 to 190,000 households a year, that figure dropped in the five years after the Credit Crunch to 135,000 and 145,000 households a year. Although we built 217,000 last year, we still have all those 19 years to make up for.
The answer …. allow more land for starter homes, bungalows and sheltered accommodation because land prices are stifling the property market as the large building firms are more likely to focus on traditional houses and apartments than bungalows (because they make more money from them).
My thoughts for the savvy Thanet property investors – until the Government change the planning rules and allow more land to be built on – Bungalows, especially ones that need some TLC after someone has passed away bungalows are a great bet for flipping and even potential rental returns for future property investment as more and more OAP’s will be renting in the decades to come?

Friday, 27 September 2019

The leasehold and ground rents scandal of Thanet

Freehold or Leasehold .. which is best? 

Well, when buying a property in the UK there are two main types of ownership – freehold and leasehold and, when boiled down, they mean the following...

Freehold : The person who owns the freehold of a property owns the property and the land it stands on.

Leasehold : As a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property from the freeholder for a number of years, decades or in some Victorian terraced houses, for centuries.

All apartments have to be sold as leasehold properties because of the very nature that you have a neighbour above or below you (so both of you can’t own the land) with the length of the lease being over 100 years (even more sometimes).

However, with some apartments – particularly Victorian and Edwardian houses converted into numerous apartments – which are sold on the basis that the leasehold apartment owner also owns part of the freehold (with other leaseholders in the same building), having what is known as 'share of freehold'. Similarly, the Government also brought in legislation a number of years ago for more modern apartment blocks built in the 20th century where it allowed leaseholders to club together and have the right to purchase the freehold together.

Now we must stress, there is nothing wrong with leasehold – it’s been a useful type of home-ownership since Norman times, it’s just that with a leasehold comes a potential extra responsibility. If there are four apartments in a block, who pays for the leaking roof when all benefit from a watertight roof? Who pays for the bad foundations, when all benefit from good foundations? Who pays for building insurances? .. the list goes on – so clauses are added to the leasehold agreement to ensure everyone is protected and pays their fair share of the joint costs of the building with service charges and a nominal ground rent (ground rent is a nominal rent, commonly quite low, often in the region of £50 per year to the freeholder of the property).

Whilst houses tend to be sold as freehold as it's a more unambiguous set-up, given there is only one property on the land. Contentiously however, in the last 10 to 15 years this has not always been the case with new-builds as some new homes’ builders have sold the leasehold to the buyer and retained the freehold. There is nothing wrong with that, it’s just in some cases (not all) they also added some oppressive clauses to the lease of the property they were selling, which could be the next PPI scandal - albeit for property.

Government reports have emerged recently that suggest 12,000 leaseholders in the UK are facing ground rents – which they pay to the freeholder – that double in cost, usually every 10 years, but occasionally more frequently.

Builders started to add clauses into leasehold property sales with ground rent being set at £300 and £400 a year, yet it doubled every ten years. Though unwary first-time buyers were habitually told that their 500 and 999-year leases were practically freehold, the clauses inescapably meant that the ground rent would spiral to ridiculous levels meaning the average ground rent would be £23,750 a year by 2070 and £379,900 a year by 2130, making the properties practically unsellable today, with owners often left unable to re-mortgage too.

So, how many people are affected by this in our local area?

Well, using Government data, our research suggests that in Thanet 8 householders have bought a detached house, semi-detached house or town house (which would normally be freehold) as leasehold. Not all these have onerous lease clauses, yet some do. I know it doesn’t sound a lot, yet that is potentially 8 lives ruined with houses they can’t sell - making them prisoners in their own property.

The good news is the Government is on the case and serious about sorting this issue out as they have proposed a ban on the future sale of houses as leasehold, as well as cutting ground rents to zero. Yet stern questions remain about the future of homeowners in existing leaseholds. Westminster wants the builders to set up compensation plans, and we will say many (not all) have stepped up to the mark and started to sort this, although some campaigners have said the schemes are not fit for purpose, let’s hope they are wrong.

Wednesday, 25 September 2019

Are Thanet Builder's Constructing the Wrong Type of Property?


The British housing market has never been so newsworthy. Every other day, there is an article in the newspaper or online about impending house price drops, house price rises, building on green belt, mortgage rates up/down, first time buyer affordability and the woes of being a buy to let landlord, to mention but a few.  As a nation, we have a strong national desire to be homeowners.
The English Housing Survey stated the proportion of owner occupied households increased steadily from 52% in the early 1980s to 2003 when it reached its peak of 71%. Since then, owner occupation gradually declined to 63% in 2014, yet in fact increased to 64% in 2017 and has stayed there since.

One of the main motives of home ownership is the prospective tax-free capital appreciation that can be obtained. It’s no wonder the phrase ‘as safe as houses’ is popular in the English language, as many homeowners use home-ownership as a nest egg or even a pension pot, as savings rates are at extraordinarily low levels.

Yet even with the news that home-ownership is on the rise, the biggest seismic shift to the Thanet property market is the growth of the rental market, which has more than doubled in the last 15/20 years. So how can the social housing sector (Council Housing) remain roughly at the same level since the millennium, home-ownership slightly grow, yet the private rental sector be so huge? Well it comes down to the fact that many more homes have been built in Thanet in the last 15/20 years, and a lot of them have been bought for buy to let, or Thanet homeowners with second hand starter homes have also sold them to buy to let landlords and they have bought larger brand new homes.

Yet the question we wanted to ask is ... are we building the right sort of homes, especially when it comes to the number of bedrooms? Whilst the data doesn’t exist for Thanet, the country’s stats are available and it makes fascinating reading...

Stats for local authority from the Census

Looking at the graph in 2008, 59% of new homes built were one and two beds, yet last year that had dropped to 35%.

The Housing Minster said recently he was concerned that new homebuilders were building the wrong types of homes in the wrong places at the wrong prices. Many (not all) tenants are tenants because they can’t afford the deposit and as there is a direct coloration between the rent’s landlords charge and tenant’s earnings (i.e. as earnings go up, rents go up and vice versa), and earnings for the last seven years have been subdued, the property tenants have been able to afford in Thanet are the smaller one and two bed properties. Yet a lot of these tenants are now having families (with the need for larger property with three, even four bedrooms).

Looking at the stats for Thanet, it can be seen the vast majority of homeowners live in the larger properties with more bedrooms, whilst private rental tenants are in the smaller properties (with less bedrooms).

Stats for Bedrooms for UK – English Housing Survey
Our concern is - will young families and professionals be able to afford to live and work in Thanet, especially as the local authorities are unable to build council housing (aka Social Housing)?
One symptom of all these issues mentioned above is the massive growth in multi-family households (i.e. households containing two or more families), which have increased by 42% in under a decade. Now of course many will be because of older couples moving in with their adult children yet many are unrelated families sharing a house, something that simply shouldn’t be happening in 2019.
If we don’t increase the supply of the ‘right’ sort of homes, what will their living conditions be like?

Whilst we are still a country of homeowners and even though there has been a slight growth in numbers, the long term trend is downwards if we don’t build enough of the ‘right’ new homes, in the ‘right’ location and the ‘right’ price, Thanet people will continue to increasingly rent ... which is only good news for Thanet buy to let landlords.

Friday, 20 September 2019

What’s the biggest street in Margate (CT9)?

Well my recent articles about Margate’s most moved street in the last 3 years and the Monopoly board article (the one where I listed the most valuable streets) caused quite a lot of interest locally, so I decided to see what else I could find out about the CT9 postcode area, and I have been able find out the biggest streets in the Margate (CT9) postcode area.

Don’t worry, I will get back to some hard-hitting articles about the lack of new homes being built in Margate, the trials and tribulations of being a Margate buy-to-let landlord and the future of the Margate property market .. yet in this article because of the previous positive comments, I wanted to give you what you, the Margate homeowners and Margate landlords asked about and wanted!

The biggest street in CT9, when it comes to the number of houses on it is Canterbury Road, with 625 homes. In second place is Ramsgate Road with 497 homes and in third is Northdown Road with 493 homes.

Not surprisingly, the most valuable street of the top 20 biggest streets is Canterbury Road at £133.6m with an average value of £214,000 per property.

The street with the greatest number of movers in the last 3 years is also Canterbury Road, yet its saleability rate was only 15.7%, with Harold Road having the highest saleability rate of 19.1%.

The full breakdown can be found in this chart below.

Yet, did you really think I wouldn’t get at all serious ..

The basic rudiments of the Thanet property market remain principally healthy in many parts of Thanet, yet the existing political environment means that the vital element of confidence has been diminished slightly in certain parts, and that is triggering a minority of potential property purchasers and house-sellers to vacillate, yet with unemployment at an all-time low, a record number of people with a job, ultra-low interest rates and decent mortgage availability (with the Banks and Building Societies tending to drop mortgage rates instead of increasing them), those Thanet first time buyers (and especially Thanet buy-to-let landlords) who have adjourned their next house purchase because of perceived political uncertainty should be reminded that talking to many of my fellow Thanet agents they have more homes on their books than at any time for the last three or four years, so there is a greater choice of Thanet properties to call your next home/BTL investment with a potential of securing a great property deal in the next month or so.

Irrespective of what happens with Brexit, Thanet people will still need a roof over their heads and as I have mentioned on a number of occasions, I have proved beyond doubt we aren’t building enough homes both locally in Thanet and nationally. If supply is limited and demand increases (as the population grows and we get older), prices in the medium to long term can only go in one direction. Upwards!

So, whatever happens with BoJo and Brexit – why wait, because once we get over that hurdle, there will just be another hurdle and another hurdle and by which time – we will be in 2029 and you would have missed the boat. We survived the Global Financial Crash, 3-day week in 1970s’, hyperinflation etc etc … yet the choice is yours.

How Many Thanet Homeowners Have Paid Off Their Mortgage?

The Government’s Annual Housing Survey is 50 years old this year. It has taken a snap shot of the UK’s property market every year since 1969 and in the recently published report for 2018, it wasn’t a surprise that owner occupation is still the most predominant tenure, yet now more people own their home without a mortgage rather than having a mortgage as the number people buying their first home (obviously with a mortgage) has declined since the Millennium. The report also shows homeowners (mortgaged and owned outright) are, on average, older than renters and between the homeowners themselves, those who are mortgage free are older than those with a mortgage.

Looking at the most recent of data for Thanet, I wanted to see how we compared to the national picture. Therefore, focusing on the main 4 tenures of owned outright, owned with a mortgage, social housing ( i.e. Council Housing and Housing Association) and private rented, this is what I found out...

Looking at the stats, you can see that homeownership in Thanet and council area as a whole (both owned and owned with a mortgage combined) is lower in the 25yo to 34yo age range compared to 35yo to 49yo, yet roll the clock back to the 1980s and opposite was the case.

So how many local homeowners have paid off their mortgage?

53.6% of Thanet homeowners are mortgage free, yet of the 11,362 households that are owned by 50yo to 64yo in Thanet, 51.5% of those people still have a mortgage.

As most people bought their first house in their early to mid 20’s back in the 1980’s, this shows that a lot of Thanet people must have re-mortgaged in the past and extended their borrowings (otherwise they should have paid their mortgage off now).

The other thing that concerns me is the 6.5% of the Thanet over 75yo homeowners that have a mortgage.

If you amalgamate the national historic ranges going back to 1977 (see the graph below “UK Households with a Mortgage by Age – 1977 to 2018” and note the age bands are slightly different to the recent local stats because they were carried out under different government departments), you will see the number of people who own a property with a mortgage has been dropping since the Millennium, yet nationally the number of people who own a property has remained roughly the same, even with the growth of the private rented sector.

Reports in the industry suggest that in the next ten years that will increase, as nearly 1 in 5 homeowners will be still paying off their mortgage after retirement. One of the reasons behind that will be the legacy of interest-only loans and delayed first-time buying as we become more and more like Germany in our house ownership models, where people naturally rent their homes until their 50’s and then buy when they inherit money from their parents.

In the meantime, demand for Thanet rental properties will only increase … so good news for Thanet Buy to Let landlords and indirectly Thanet homeowners as well.

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.

Wednesday, 8 May 2019

New Home Building in Thanet 2018 slips to 50.4% below the post Millennium average


Nationally, the number of new homes created in 2018 was 222,194, the highest since 1989. Yet since 2002, the average number of properties built in the UK has only been 146,700 per year. You would think, seeing all the new homes sites around, you could ask are we building too many houses, especially off the back of those impressive 2018 build figures? However, to keep up with the ever-growing population, lifestyles and people living longer, official reports state the Country actually needs 240,000 new homes built every year to just stand still.
It is estimated, by the Chartered Institute of Housing, that the current national backlog of new homes required is in the order of 4.7 million (i.e. because of the bottled-up household formation by younger adults living with parents, shared housing and unaffordability). As a Country, we cannot meet all these needs immediately and it will take time to build up an effectual plan to address these issues. 
Looking closer to home, you will also see from the graph below the long-term trend of new homes building (the yellow dotted line) has been going in a downward direction. In fact, the 2018 new homes build stats for Thanet are 50.4% below the post Millennium average.


The cure is simple: we need more homes… yet who is going to build (and pay) for them. Some Thanet people will say why can’t the local authority build most of them?

In 2018, 238 new dwellings were created in the Thanet Council area and of those 238; interestingly 47 were Council and Housing Association homes.

So, if our local authority had a more ambitious annual target of say an additional 500 homes on top of those figures, where could they be built and how would they be paid for? Of course, there are the normal apprehensions about infrastructure issues such as roads, schools, hospital capacity and doctors’ surgeries but our local authority has a Local Plan and that has the locations of where they envisage the new housing will be built (and the infrastructure that goes with it).

The Tories lifted the cap on what local authorities could borrow to build Council houses in late 2018 meaning Councils could borrow more money to build more Council houses. Let’s say we built those 500 homes a year for the next 5 years in Thanet, that would cost the local authority £375 million to build, which would produce in total £17.4 million in rent. At current interest rates, the interest would be £9.5m per year leaving a surplus of £7.9m for property maintenance and management – meaning the Council houses pay for themselves! 

Therefore, what does all this mean for Thanet homeowners and Thanet buy-to-let landlords?

Well, the chances of our local authority getting the full funding for an extra 500 homes a year is slim as there is only so much money to borrow. If every UK local authority got funding for 500 additional homes a year for the next 5 years, an impressive 867,500 homes would be built in those 5 years but that would require the councils to borrow £130.1bn – and Central Government doesn’t have that kind of money for Councils to borrow (more like £10bn to £15bn).

The 4.7million long term housing shortage means house prices will remain strong in the long term (despite blips like Brexit etc). Demand for private rental properties will continue to grow and if you read my recent article on rents, this can only be good news for Thanet landlords. This attention on the housing crisis by the Government is good news for all Thanet homeowners and Thanet buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants and stability on house prices.