Many landlords have been asking me my thoughts on the Doncaster property market recently, and in particular, what is happening to property values. My calculations show property values in Doncaster quite interestingly grew in the month of September by 0.3%. When one looks at the annual growth, Doncaster values are 0.8% higher (when comparing Sept 14 to Sept 15), impressive when you consider the annual growth of property values dropped to -0.4% per annum in June. On the other hand, there are signs that the fundamental growth of property values in Doncaster has now peaked, despite those average property values being below levels recorded in 2007 (just before the 2008 crash).
The Council of Mortgage Lenders (CML) latest snapshot of the buy to let mortgage market shows us that buy to let landlords haven’t been put off by the Chancellors announcements on the way buy to let’s are taxed.
Well my Doncaster Property Blog reading friends, as seems to be all the rage with Jeremy Corbyn asking the PM questions emailed in to him at Prime Minster Question Times, I to wish to answer a question emailed into me from a potential Doncaster landlord last week. Nice chap, lives in Bessacarr, and it turns out, after having a coffee with him, he works in IT, has a spare bit of cash (now the kids have flown the nest) and wanted to buy his first buy to let property.
His main question was … Do I buy a freehold house or a leasehold flat in Doncaster?
I had the most interesting chat with a local Doncaster landlord the other day about my thoughts on the Doncaster property market. The subject of the affordability of renting in Doncaster came up in conversation and how that would affect tenant demand. Everyone wants a roof over their head, and since the Second World War, owning one’s home has been an aspiration of many Brits. However, with rents at record highs, many are struggling to save enough for a house deposit.
The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years. In my article today, I want to talk about what it has done for the Doncaster Property market.
Before we look at Doncaster though, let us look at some interesting figures for the country as a whole. Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home. It might surprise people that only 5.07% of EU migrants managed to secure a council house. However, 676,091 (69.62%) of them went into the private rental sector. This increase in population from the EU has, no doubt, added great stress to the UK housing market.
Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that is affected the most. Indeed, I have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants. In 2001, 3.68 million rented a property from a landlord in the UK. Ten years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a landlord, there were actually an additional 4.14 million people who became tenants and were not EU migrants, but predominately British!
As a landlord, it is really important to gauge the potential demand for your rental property, especially if you are a landlord who buys property in areas popular with the Eastern European EU migrants. To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number (which EU members are able to obtain).
In Doncaster, migration has risen over the last few years. For example, in 2007 there were 2,522 migrant national Insurance cards (NIC) issued and the year after in 2008, 2,038 NIC cards were issued. However, in 2014, this had increased to 2,768 NIC’s. However, if the pattern of other migrations since WW2 continues, over time there will be an increasing demand for owner occupied property, which may affect the market in certain areas of high migrant concentration. On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.
In essence, migration has affected the Doncaster property market; it couldn’t fail to because of the additional 19,430 working age migrants that have moved into the Doncaster area since 2005. However, it has not been the main influence on the market. Property values in Doncaster today are 13.76% lower than they were in 2005. According to the Office of National Statistics, rents for tenants in Yorkshire have only grown on average by 0.95% a year since 2005 …. I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the Doncaster property market. This was backed up by the then Home Secretary Theresa May back in 2012 – more than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20 year period.
One of the key factors that determine the price of anything is the demand and supply of the item that is being bought and sold. When it comes to property, demand can change overnight, but it takes years and years to build new properties, thus increasing the supply.
Even though the housing market is in an upbeat state in many parts of the UK, getting on the property ladder is still challenging for many and regarded as unattainable by some. However, that goal has become even worse recently in Doncaster as the number of houses available to buy is at an 8 year all time low.
If you were born in the early 1970’s or late 1960’s, if you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year) and £231.90 a week for a couple (£12,118 a year) as long as your partner has paid their stamp (although there are certain get of jail cards if they haven’t).
Those of you who regularly read my articles on the Doncaster Property Blog will know I like to keep abreast of the Doncaster property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.
I was having a chat with a Doncaster property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property. Anecdotally, I have always known this to be true, a good school creates good demand and good demand does affect house prices. So, I asked my colleagues on the front line, who take the phone calls from people putting themselves on our mailing list and they confirmed that most people cite location as their number one factor.