Doncaster Property Blog » January 2017

Monthly Archives: January 2017

Market Research

Doncaster’s private renting set to hit 11,871 households by 2021 – Is Buy to Let immoral? (Part 1)

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Can we blame the 55 to 70-year-old Doncaster citizens for the current housing crisis in the town?

Also known as the ‘Baby Boomer Generation’, these Doncaster people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

…Yet some have suggested these Doncaster baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,

but average Doncaster house prices rose by 162.7%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents … it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Doncaster (and UK) property market in the later half of the 20th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Doncaster.

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays … no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you … I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

So, in Part Two next week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).

Property News

Doncaster Property Market Sees An Unpredicted Autumn Boost

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Well, it doesn’t seem like two minutes ago that it was Christmas – and now it’s all over! One cold December morning, after arranging the office’s Christmas cards I thought I would nip out for a quick festive coffee and over-priced mince pie at my favourite local coffee shop Moona Coffee.  I met an old client of mine in the coffee shop and we got talking about the Doncaster property market. I had just completed my research for my next blog article and I would like to share with you the parts of the conversation relating to the Doncaster property market.

He asked me what my thoughts were about the last half of the year in regard to the Doncaster property market and if there were any great buy to let deals around. In reply I said that, in my view, shrugging off the uncertainty of the initial post Brexit vote, I have seen an increase in supply and a rise in the number of properties selling at the lower to middle end of the market, meaning both first time buyers and buy to let landlords have been returning in the last few months – proof the market is beginning to bounce back.

So let’s look at the numbers ..

According to The National Association of Estate Agents and Rightmove, the number of properties on the market dropped by an average of 14.5% between the start of October 2015 and the end of November in 2015.  Move the clock forward, and by the end of November 2016, according to the three main property portals (Rightmove, Zoopla and OnTheMarket), there were a total 992 properties for sale in Doncaster (within 3 miles of the centre of Doncaster to be exact). Interestingly, at the end of November 2015, there were 1,012 properties for sale. So whilst year on year, there is a drop of 2%, it is still above last year’s drop, which is especially significant following the challenges we had this year

When I split it down into bedrooms (note things like building plots and part commercial/part residential etc won’t be in these figures so the numbers below wont exactly match up to those in the above paragraph).

# Properties on the market in Nov 2015 # Properties on the market in Nov 2016 Per cent Change
5+ Bedrooms 82 77 -6%
4 Bedrooms 176 161 -9%
3 Bedrooms 502 512 +2%
2 Bedrooms 227 219 -4%
1 Bedroom 16 221 +31%

.. and when I looked at type of properties  .. it got even more interesting

Type of Property # Properties on the market in Nov 2015 # Properties on the market in Nov 2016 Per cent Change
Detached 241 256 +6%
Semi 381 364 -4%
Terraced 221 252 +14%
Flat 86 81 -6%

As you can see, there has been an uplift in semi-detached properties, which means they are a great choice for first time buyers and landlords. So with a combination of realistic pricing and more properties on the market – both first time buyers and landlords alike might be able to pick up a few bargains!  One place for great Doncaster Buy to let deals is my blog where, irrespective of which agent is selling the property, I publish what I consider is the very best buy to let deal in Doncaster – INSERT URL

 

Doncaster Property News

Doncaster 10% Rental Yield – Too Good To Be True?

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Do you ever look at deal and think this has to be too good to true?

Well this one has certainly caught my eye! It is marketed with 247 Property Services with an asking price of just £45,950 and described as a two bedroom flat in a popular residential area, fully double glazed and with gas central heating. Here’s the best bit… Potential of 10% rental yield!!

Check out the details here https://goo.gl/SlojCF

If you would like my advice on a potential buy to let you’re looking at don’t hesitate contacting me, Frances, on 07896 988366 or call in branch for a coffee.

Doncaster Property News

Doncaster Buy To Let Deal

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I have come across another two bedroom leasehold apartment for sale on Woodfield Plantation in Doncaster – a very popular area for tenants.

It’s a two bedroom first floor apartment for sale with no upper chain TheProperty Hive.  They say it is well presented, offer open plan modern living, has allocated parking and an ideal investment which I strongly agree with. I will also add that Woodfield Plantation has a variety of local amenities, an infant and junior school recently opened, a 5 minute drive to the M18 and in the opposite direction a short drive to the A1.

The Property Hive have put an asking price on this property of £84,950 and knowing this development very well I would say that’s spot on.

It’s a popular development for buy to lets and we let a few in this area recently for £550cm.  So what is the rental yield, well if we take the annual income from the rent and divide it by the asking price that gives us 7.7%!

Of course when going further in to the figures, remember that most apartment blocks will be subject to ground rent & services charges, so make sure you factor this in, when working everything out in more detail…

This is the link to the property on for more information….

https://goo.gl/RWA4rK

 

If you would like my advice on a potential buy to let you’re looking at don’t hesitate contacting me, Frances, on 07896 988366 or call in branch for a coffee.

Market Research

Doncaster property price rises set to be more restrained in 2017 due to Brexit

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Doncaster property price rises set to be more restrained in 2017 due to Brexit

While Brexit has not yet had a sizeable impact on the Doncaster housing market, my analysis is pointing to the fact that the economic viewpoint still remains uncertain and Doncaster property price growth is likely to be more subdued in 2017 – although that isn’t a bad thing so let me explain.

 

Since the summer, apart from a little wobble of uncertainty a few weeks after the Referendum vote, property values (and the economy), on the whole has outperformed what most people were anticipating. In fact, when I looked at the property prices for our Doncaster Metropolitan Borough Council area, these were the results…

 

October 2016              – rise of 0.77%

September 2016         – rise of 0.15%

August 2016                – drop of 0.03%

July 2016                     – rise of 1.38%

June 2016                    – rise of 1.54%

 

The UK property market continues to perform robustly (because we can’t just look at Doncaster as if in its own little bubble) with annual price growth set to end this year at 6.91% and most Yorkshire and Humber region property market at 4.21%.

 

Talking to fellow agents in London, the significant tidal wave of growth seen from 2013 through to 2015 in the capital has subdued over the last six months. However, as that central London house price wave has started to ripple out, agents are starting to see stronger property growth values in East Anglia and the South East regions outside of London, than what is being seen within the M25. So, fellow Doncaster landlords and homeowners, is this the time to get your surfboards ready for the London wave?

 

Well, we in Doncaster haven’t really been affected by what is happening in the central London property mega bubble (i.e. Kensington, Chelsea, Marylebone, Mayfair etc.). The property market locally is more driven by sentiment, especially the ‘C’ word … confidence. The main forces for a weaker Doncaster Property market relate to economic uncertainty surrounding the Brexit process, which I believe will impact unhelpfully on consumer confidence in the run up to and just after the serving of the Section 50 Notice by the end of Q1 2017.

 

In addition, the influence of reforms to the taxation of landlords is expected to result in a reduced demand from buy to let landlords, which will limit upward pressure on property values. However, on the other side of the coin, demand from tenants has been strong, but this has been counterbalanced by a strong supply of rental properties. In my opinion, there is a slight risk of rents not growing as much in 2017 as they have in 2016, but by 2018 they will rise again to counteract Philip Hammond’s changes to tenant fees.

 

The broader Doncaster rental market looks relatively positive with modest rental growth expected and rents might rise further if landlords begin to sell properties in an effort to offset to the impact of tax rises.

 

So what do I predict will happen to the Doncaster housing market in 2017? In Doncaster the growth of 5.72% for 2016 is set to fall to just 0.2% next year, then up 2.1% in 2018, 3.1% in 2018, 2.4% in 2019, 3.3% in in 2020 and finally 3.4% in 2021.

 

But these predictions do not take into account any effect of a possible snap General Election or further referendum on ratifying any Brexit deal (if that comes to pass in the future).

Doncaster Property News

Another cracking buy to let deal in Doncaster

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Well this weekend has gone by in a blink of an eye so as we start the second week of January I am sharing this property I think would make a great investment.

It’s marketed with Moss Properties and located in Carcroft. A great location for commuters to A1/M62 connecting Doncaster to Leeds, Wakefield, York and beyond; very popular with tenants. The property is semi-detached with two double bedrooms and generous third, appears to be in great condition meaning it would be ready to go upon completion! Not to mention outside being low maintenance another plus for tenants.

More details of the property can be found here… https://goo.gl/OjyZBS

Given the demand for similar properties and condition I would estimate the rent to be £500pcm. Basing the figures on you paying £80,000 the return is 7.5%.

If you would like my advice on a potential buy to let you’re looking at don’t hesitate contacting me, Frances, on 07896 988366 or call in branch for a coffee.

Doncaster Property News

7.3% Rental Yield Doncaster

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Over the Christmas period I have been monitoring what properties have been coming to market so that I can deliver to you a good buy to let deal and I came across a two bedroom mid terraced advertised with W H Brown at £90,000. The property is on Bramham Road in Cantley and is described as; chain free, spacious rooms and open plan kitchen/diner.

Cantley is a sought after area due to the schools close by and a couple with in 1 mile of this property are rated ‘good’ by ofsted are Bessacarr Primary School and Hatchell Wood Primary School.

The rent for a property like this one I would estimate at £550pcm which at a purchase price of £90,000 gives you a 7.3% rental yield.

You will find full details of the property here http://www.rightmove.co.uk/property-for-sale/property-46097826.html

If you would like my advice on a potential buy to let you’re looking at don’t hesitate contacting me, Frances, on 07896 988366 or call in branch for a coffee.

Market Research

Doncaster OAP’s sitting on £1.6 bn of Property

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Doncaster OAP’s sitting on £1.6 bn of Property

 

Doncaster people aged over 65 currently hold more housing wealth in their homes than the annual GDP of the whole of the Isle of Anglesey … and this is a problem for everyone in Doncaster!

 

Many retiree’s want to move but cannot, as there is a shortage of such homes for mature people to downsize into.  Due to the shortage, bungalows command a 10% to 20% premium per square foot over houses of the same size with stairs. To add to the woes, in 2014, just 1% of new builds in the UK were bungalows, according to the National House Building Council – down from 7% in 1996.

 

My research has found that there are 11,010 households in Doncaster owned outright (i.e. no mortgage) by over 65 year olds.  Taking into account the average value of a property in Doncaster, this means £1.6 billion of equity is locked up in these Doncaster homes, compared to the GDP of the whole of the Isle of Anglesey being £797 million of GDP.

 

A recent survey by YouGov, found that 36% of people aged over 65 in the UK are looking to downsize into a smaller home.  However, the Government seems to focus all its attention on first-time buyers with strategies such as Starter Homes to ensure the youngsters of the UK don’t become permanent members of ‘Generation Rent’.  Conversely, this overlooks the chronic under-supply of appropriate retirement housing essential to the needs of the Doncaster’s rapidly ageing population. Regrettably, the Doncaster’s housing stock is woefully unprepared for this demographic shift to the ‘stretched middle age’, and this has created a new ‘Generation Trapped’ dilemma where older people cannot move.

 

Some OAP’s who are finding it difficult to live on their own, are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.  So, older retirees can’t leave bungalows, younger retirees can’t buy bungalows and younger people can’t buy family houses.

 

Interestingly, adding insult to injury, the problem will only get worse, as in the 50 year old to 64 year old homeownership age range there are an additional 8,456 Doncaster households that are mortgage free and a further 7,169 Doncaster households who will be completing their mortgage responsibility.  With Government projections showing the proportion of over 65’s will rise by over a third from the current 17.7% to 24.3% of the population in the next 20 years … this can only add greater pressure to the Doncaster Property market.

 

House prices have rocketed over the last 40 years because the supply of property has not kept up with demand. With migration, people living longer and high divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year to just stand still.  In the 1990’s and early 2000’s, the Country was building on average 180,000 to 190,000 households a year, but since the Credit Crunch (2009), that has only been between 130,000 and 145,000 households a year.

 

The solution …. release more land for starter homes, bungalows and sheltered accommodation because land prices are killing the housing market as the large firms dominating the construction industry are more likely to focus on traditional houses and apartments.  My opinion – until the Government change the planning rules and allow more land to be built on – Bungalows could be a decent bet for future investment as they continue to attract ever growing premiums?

 

 

Uncategorised

Doncaster Buy to Let Leasehold – 2017

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Happy new year to all of our subscribers!

Here is your first of many buy to let deals of 2017. This delightful ground floor apartment is advertised with Moss Properties at £90,000 on the very popular Wakelam Drive. This street and surrounding streets are indeed sought after due to its location and local amenities offered not to mention the close proximity of the M18 motorway.

This apartment is leasehold so you will need to take this in to account for accurate figures but with a rental income of £550pcm and purchase price of £90,000 that provides approximately 7.3% rental yield!

For further details on the property please see link http://www.rightmove.co.uk/property-for-sale/property-63809303.html

If you’re looking for your first investment for 2017 or to extend your portfolio and looking for advise on a property you’re interested in please email me direct on frances@mosspm.co.uk or contact me on 07896 988366. Remember you’re always welcome to pop in branch for a coffee and a chat.