135 per cent increase in privately rented homes in past 30 years.

You know how I do like figures and stats about the property market! So I was very excited to see that Martin & Co has released a special edition Market Intelligence Report, celebrating 30 years in the private rental sector. I have picked out the bits relevant to us in Mid Sussex to share with you.

The report documents the evolution of the property market since Martin & Co’s beginnings in 1986, including regional data from around the UK.

The research reveals that the Southern Home Counties, which include all of us in our Mid Sussex towns and villages, found a 150% increase properties became privately rented in the last 30 years. House prices grew 787%, and rents in the Southern Home Counties were an average of £862pcm.

The average age of a tenant was 33.9 years, showcasing the normalisation of renting in mature, working adults.

In 1986, just 10% of UK houses were in the private rental sector. Today that number has almost doubled. 19% of property is now being rented from a private landlord, showcasing the incredible rise of buy-to-let since Thatcher’s government.

In 1981 just 20 local authorities had more than 15% of its properties in the private rental sector. In 2011, that number was 169 local authorities, predicted to grow again by the next census in 2021.

National findings from the whole of England and Wales showed that house prices grew a staggering 768%, compared with a 342% increase in FTSE shares – well over double the rate of increase.

In 1986, the average buyer spent £4,000 on their deposit. This has increased to £50,000 today, more than double the average salary of £25,600.

Borrowers now need to earn £60,000 to afford a mortgage, compared with £13,000 30 years ago. The average UK house price is £285,000. 

The property market today is strongly weighted towards renting, especially for younger people. A dramatic decrease in the number of houses being built (just 152,000 from a required 250,000) means that demand and prices far outstrip supply, forcing the majority of the UK workforce into renting. In fact, anyone earning lower than £50,000-£60,000 a year are essentially priced out of the buying market, so there is now a greater proportion of older people who own their houses outright or with a mortgage. This explains the extraordinary 346% increase of 35-44 year-olds in privately rented accommodation in 30 years. Read the full report by clicking this link. Read the full report here

Perfect BTL in Burgess Hill.

This 1 bedroom flat in Burgess Hill would make a perfect home for any tenant wanting to be close to the town centre and less than a mile from the railway station. On the market with local agent Mansell McTaggart you can view the details by clicking here.

http://www.rightmove.co.uk/property-for-sale/property-52740952.html

The property is located in a prime position near St John’s Park, and with American Express coming back to Burgess Hill, 1 bedroom flats are in high demand. A conservative rental estimate of £735 pcm would give an impressive gross yield of 5.8%. Even when you take into account the service charges and ground rent of £945 combined, the yield still comes out at a healthy 5.2%.

If you are considering a buy to let investment you are welcome to call in to my Martin & Co office on Keymer Road or email me for local property advice.

Haywards Heath’s ‘Generation Rent’ to grow by 470 households by 2021.

Some commentators are saying buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘Bad news sells newspapers’? Let me explain why buy to let in Haywards Heath is only going in one direction – and not the direction the papers say they are going.

According to Sheffield University, buy to let landlords will continue fueling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of home ownership nationally will fall to 50% (today it is 71.7% in Haywards Heath) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Haywards Heath it stands at 15.8% today).

Therefore, the demand for rental accommodation in Haywards Heath will grow by 470 households in the next five years, and these are the reasons why, irrespective of the distractions set out in the newspapers

      

Haywards Heath property values over the last six years have risen a lot more than average wages/salaries, meaning as home ownership and mortgage availability is dependent on your ability to pay has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%).

Now it’s true the Tory’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy Isa, and Starter Homes Scheme, an initiative offering a 20% discount for first time buyers. But if you are unable to save for the deposit none of this means anything to the ‘20 something’s’ of Haywards Heath and they still need a roof over their heads!

Currently, 5,022 people live in private rented accommodation in Haywards Heath

These are big numbers and a sizeable chunk of the electorate. So whilst it appears Haywards Heath “Generation Rent” youngsters will continue to rent and to not to buy for the reasons set out above, Haywards Heath buy-to-let landlords will be lifted by the projections of greater rental demand. Haywards Heath and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a desirable place to live.

So, by 2021, the number of rental properties in Haywards Heath will rise to 3,233

This prediction in growth of the Haywards Heath rental market is even on the back of the government clamping down on tax reliefs for landlords. The point is this, gone are the days of making guaranteed returns on BTL property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it  - but not now. You must take a more considered approach to your existing and future portfolio, especially in Haywards Heath. The balance of capital growth and yield, especially in this low interest rate world we live in, means Haywards Heath landlords need to do more homework to ensure the investment in property gives the desired returns.

Burgess Hill Town Centre offering good potential yields.

Afternoon all, and happy Friday! I was just having a look to see what properties have come up for sale in the last week that would be suitable for buying to let, and I came across this little gem. This apartment is on Mill Road in Burgess Hill, and less than half a mile to the station and high street. 

http://www.rightmove.co.uk/property-for-sale/property-39797940.html

The only small area of concern with this particular property is the bathroom, the suite looks a little dated, but nothing really to worry about.

The selling agents are Duffy and Company and they have put this property on the market with an asking price of £182,950. When you look at the potential rental amount that you would be looking to achieve on this which would be around the £795 pcm mark. You could be looking at an annual yield of 5.2%. This is of course before you take into account any service charges or ground rent, but the beauty of this one is that they are very low at less than £600 per annum. With the length of the lease still being over 900 years I would suggest this would make a sound BTL investment.

If you would like any advice on buy to let, please do not hesitate to contact me, I'm always happy to answer any questions you may have. 01444 242059

868 Burgess Hill Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?

There I was, walking down to the post office the other day, when a smart gentleman approached me. ‘Hello’, he said, ‘You are the person writes that Property Blog aren’t you? We have met before at that Network XPRESS business expo in Burgess Hill last month’. I did then recognise him and, whilst I won’t mention his name, he runs a small well known independent retailer in the town.

He wanted to know my thoughts on the future of the Burgess Hill property market, and I would now like to share with you that conversation, my Burgess Hill property Blog reading friends. People are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the town have a choice to what type of roof they have, they rent from the Council, they can rent from a private landlord or finally they can get a mortgage and buy one. In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently fewer Burgess Hill youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering and I want to share them with you.

Roll the clock back 20 years and Burgess Hill was a different place. There were 10,255 households in Burgess Hill and 8,367 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 20.16% to 12,322 and quite surprising (to me at least), the number of owner-occupiers has increased to 9,582 (although as a proportion, it is only 77.7% compared to 81.5% twenty years ago).

However, it is the rented sector that is truly fascinating; twenty years ago only 404 properties were privately rented in Burgess Hill, now its 1272, a rise of 868.

The twenty-somethings of Burgess Hill housing difficulties haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 425 to 67 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Burgess Hill and those who educate themselves and treat it as a business will survive and prosper.

The best way Burgess Hill landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, Burgess Hill tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Burgess Hill (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

He also asked, ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand it is hard to imagine Burgess Hill property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the housing market should return to balance. For more in-depth thoughts on the Burgess Hill Property Market, please visit my blog – www.midsussexproperty.blogspot.co.uk