Doncaster Property Blog » October 2016

Monthly Archives: October 2016

Market Research

525% – Rise in Doncaster Property Prices since 1981

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Roll the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’.   Haven’t things changed.  The number of homeowners and property investors who said they wish they had hindsight and bought up every house in Doncaster all those years ago, especially when you consider what has happened to Doncaster property values, as…

Doncaster Property Values since 1981 have risen by 525%.

Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Doncaster are 253.1% higher.   It’s no wonder people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Doncaster Property market run much deeper than property value changes as no one could have predicted how the property market has changed in Doncaster over the last 30 years.

Looking at the Local Authority data for Doncaster Metropolitan Borough Council in 1981, 37% of Doncaster people lived in a Council House, whilst today its 17.7% … a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House.  The private rental sector since 1981 has, as one would have expected, also changed.

Nationally they’ve almost doubled, however, the proportion of properties privately rented in the Doncaster area (i.e. through a private landlord or a letting agency) may not have doubled, but they have certainly increased rising from 9.8% to 14.8% of property.

So, let us consider those people who own their own home, surely that has had a massive drop?  In 1981, the proportion of people who lived in the Doncaster Metropolitan Borough Council area who owned their own home was 53.1% … and today its … 65.4%. Not the seismic change most of you were expecting (including myself!).

Homeownership in the 1980’s and 1990’s in Doncaster did in fact rise, but as I have discussed in previous articles in the ‘Doncaster Property Market Blog’, that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent.

.. and this is why the buy to let market in Doncaster is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (like they were in the 1950’s/60’s and 70’s).  The Doncaster property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important.  You might need to change your buy to let targets, your methodology to financing or even consider places other than Doncaster in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.

Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Doncaster buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market.  These opportunities will provide a more stable platform for knowledgeable and wise Doncaster buy to let landlords to thrive in.  If you want to learn more about the Doncaster Property Market, feel free to pop in for a coffee at our office for a chat with me

Doncaster Market Research

Doncaster Property Market in 2017 and Beyond

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As the trees turn from green to hues of red and brown, the Doncaster property market has a confident feel to it. With the underlying fundamentals of a continued lack of properties being built, a shortage of properties (both in terms of quantity and quality) coming to the market and the continued low mortgage rate environment, buyer enquiries from first time buyers and buy to landlords is strong and motivation is even stronger, given those inexpensive lending rates and general demand caused by under supply.

Now of course, there are a few potential hurdles coming towards us in the coming months that could affect the Doncaster (and UK) property market. Mrs. May has yet to get her teeth into Brexit negotiations and we don’t know what the US Presidential elections might do to the money markets around the world, meaning that on the run up to Christmas, some savvy buyers may take advantage of the lack of certainty by making cheeky offers, but I don’t believe these will have a huge impact on property values (like the 2008 Credit Crunch).

You see, property ownership, whether it’s for yourself as a homeowner or buy to let landlord, is a long term investment. In fact, focusing on buy to let, a number of landlords who own property in Doncaster have made contact with me recently asking for my thoughts on the future of the buy to let market in Doncaster.  Well, as the Politician Edmund Burke said in the 18th century, “Those who don’t know history are destined to repeat it.” .. in other words, to see the future you must look into the past.

Since the Millennium, the housing market has had everything thrown at it. The recent Brexit, last year’s General Election, the near melt down of the World Economy with the Credit Crunch, The Dot Com boom and bust, the housing market crisis in 2008, the housing boom of 2001 to 2004 .. the list goes on. In fact here is a graph (courtesy of the Land Registry) of average Property values since the Millennium in the Doncaster Metropolitan Borough Council area.

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Even though we had the Dot Com bubble burst in 2000, two years later in January 2002, property values in the Doncaster Metropolitan Borough Council area have risen from £42,200 (in Jan 2000) to £47,200 .. and kept rising to October 2007, when they peaked at £129,000. Then we had the Credit Crunch and property prices continued to fall until April 2009, where they averaged £107,600 .. but look where they are now…  £120,400

The point I am trying to get across is long term future property values are more helpful to landlord investors than the month by month headline grabbing micro movements in the property market.  Look at the graph and you will see the growth in property values is an upward trend BUT, the average darts about as each month goes by.  So don’t watch the property indexes and panic if values drop next month or the month afterwards, because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail, values always dropped slightly around Christmas, but people will always need a roof over their heads, and if they can’t buy and the council aren’t building anymore  .. only buy to let landlords can meet that demand.

Doncaster landlords are being hit in the pocket with the new up and coming taxation rules and yes we might have a bumpy ride on the run up to Christmas (because of the points raised earlier), Brexit or no Brexit, but the trend will be a slow and steady upward momentum of property values, demand for rental properties and yields in the Doncaster property market into 2017 and beyond.

Property News

What is really happening in the Doncaster Property Market?

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Well its been a few months since Brexit and as we settle into the Autumn with Great British Bake Off, Strictly and the Football season … the newspapers are returning to their mixed messages of good news, bad news and indifferent news about the Brit’s favourite subject after the weather … the property market.

The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way. At one end of scale is Kensington and Chelsea, which has seen average prices drop in the last twelve months by 6.2% whilst in our Yorkshire and the Humber region, house prices are 5.5% higher. But what about Doncaster?

Property prices in Doncaster are 1.1% higher than a year ago and are the same as last month.

So what does this mean for Doncaster landlords and homeowners? Not that much unless you are buying or selling in reality. Most sellers are buyers anyway, so if the one you are buying has gone remained static, yours has gone remained static.  Everything is relative and what I would say is, if you look hard enough, there are even in this market, there are still some bargains to be had in Doncaster.

However, the most important question you should be asking though is not only is what happening to property prices, but exactly which price band is selling? I like to keep an eye on the property market in Doncaster on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Doncaster.

If you look at Doncaster and split the property market into four equalled sized price bands. Each price band would have around 25% of the property in Doncaster, from the lowest in value band (the bottom 25%) all the way through to the highest 25% band (in terms of value).

  • Nil to £90k 468 properties for sale and 155 sold (stc) i.e. 24% sold
  • £90k to £130k 450 properties for sale and 224 sold (stc) i.e. 33% sold
  • £130k to £200k 420 properties for sale and 199 sold (stc) i.e. 32% sold
  • £200k + 400 properties for sale and 106 sold (stc) i.e. 20% sold

Fascinating don’t you think that it is the middle Doncaster market that is doing the best?

The next nine months’ activity will be crucial in understanding which way the market will go this year after Brexit … but, Brexit or no Brexit, people will always need a roof over their head and that is why the property market has ridden the storms of oil crisis’ in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the credit crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. … there is always a silver lining when it comes to the property market!

Uncategorised

Doncaster Housing Crisis? Only 2.7% of Doncaster Homes Are For Sale

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The Doncaster Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual after the summer break.

 

The challenge every Doncaster property buyer has faced over the last few years is a lack of choice – there simply hasn’t been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Doncaster, the market is likely to see upward pressure on property values continue.

 

For example, in the last month or so DN4 has seen an average of 182 new properties coming on to the market, not bad when you consider for the last year the numbers have been as low as the 100 to 110 range. With the average Doncaster property value hitting a record high, reaching almost £150,500 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller’ average property figure.

 

As I write this article, 2.72% of Doncaster properties are up for sale. In terms of actual chimney pots, that equates to 1,015 properties on the market in Doncaster (within 3 miles of the centre of Doncaster) – which, when compared to only a year ago when that figure stood at 1,076, is a slight decrease in the number of properties available to buy. Split down into the type of property, it makes even more fascinating reading…

 

  • Detached Properties in Doncaster – 241 on the market a year ago compared to 251 on the market now – an increase of 4%
  • Semi Detached Properties in Doncaster – 420 on the market a year ago compared to 395 on the market now – a decrease of 6%
  • Terraced Properties in Doncaster – 226 on the market a year ago compared to 252 on the market now – an increase of 12%
  • Flats / Apartments Properties in Doncaster – 102 on the market a year ago compared to 80 on the market now – a decrease of 22%

 

This is evidence of strength in the Doncaster housing market that many didn’t expect. Many believed that the Doncaster property market wasn’t going to be strong enough post Brexit – as what was a sellers’ market before the Brexit vote and Buyers’ market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

 

However, all this will mean property values won’t continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This won’t be down to Brexit but a re-balancing of the Doncaster Property Market – which is good news for everyone.

 

For more thoughts on the Doncaster Property Market, please visit the Doncaster Property Blog http://www.doncasterpropertyblog.co.uk/

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