Doncaster Property Blog » March 2017

Monthly Archives: March 2017

Market Research

Doncaster’s housing affordability hits a ratio of 5.16 to 1

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A Doncaster homeowner emailed me last week, following my article posted in the Doncaster Property Blog about the change in attitude to renting by the youngsters of Doncaster and how they thought it was too expensive for first time buyers to buy in Doncaster.  There can be no doubt that buy to let landlords have played their part in driving up property values in Doncaster (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Doncaster.

In the email, they said they thought the plight of the first-time buyers in Doncaster was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Doncaster going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Doncaster is?  The best measure of the affordability of housing is the ratio of Doncaster Property Prices to Doncaster Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Doncaster property was 4.85 times higher than the average annual wage in Doncaster.)


… but it’s not the only reason.This deterioration in affordability of property in Doncaster over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 3 bed semi in Doncaster for around £100,000 and only need to find £5,000 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising … or not as the case maybe?

I think we as a Country have changed … renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Doncaster), one source of information is the Doncaster Property Blog

Market Research

‘Flipping’ Heck – Doncaster Property Values Rise by £15.18 a day

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Investing in Doncaster buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Doncaster’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Doncaster, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Doncaster property has risen by £27,700 (equivalent to £15.18 a day), taking it to a current average value of £151,000. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

This demonstrates how the Doncaster property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Doncaster landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Doncaster people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Doncaster, then one place for such information would be the Doncaster Property Blog.

Market Research

How The Rented Sector Has Transformed The Property Market In Doncaster

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The Doncaster housing market has gone through a sea change in the past decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Doncaster tenants and Doncaster landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Doncaster population.

In 1981, the population of the Doncaster council area stood at 290,800 and today it stands at 304,800.

Currently, the private rented (B-T-L) sector accounts for 18.2% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.

53.17% Doncaster people owned their own home in 1981
37.02% Doncaster people rented from the Council or Housing Association in 1981
and 9.8% Doncaster rented from a Private Landlord

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of the Doncaster area set to grow to 313,000 by 2037 – it is imperative that Doncaster Metropolitan Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Doncaster landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, Dating Apps and TV with the likes of Netflix. Many Doncaster youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Doncaster, be it B-T-L or B-T-R, has the prospective to play a very positive role.

Market Research

Doncaster First Time Buyers borrow £177.2m in the last 12 months

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Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Doncaster property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 3,688 properties have sold (and completed) in Doncaster, worth £544.3m. Interestingly the number of properties changing hands in Doncaster has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Doncaster buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Doncaster property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …


When looking at the figures for Doncaster itself, first time buyers have borrowed more than £177.2m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Doncaster economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Doncaster, at this moment in time there are 902 properties for sale, compared to 880 properties a year ago. All this will be welcome news amongst Doncaster first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Doncaster property market like this, you might want to visit the Doncaster Property Market Property Blog

Market Research

With 20,060 people in Private Rented Properties in Doncaster – Should you still be investing in Doncaster Buy To Let?

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If I were a buy to let landlord in Doncaster today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Doncaster property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Doncaster property prices do drop, the downside to that is that first time buyers could be attracted back into the Doncaster property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Doncaster landlord, almost a blessing in disguise.

Doncaster has a population of 108,215, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Yields will rise if Doncaster property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Doncaster landlords add to their portfolio. Rental demand in Doncaster is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Doncaster landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my friend’s relations after a family get together. I got chatting with my friend’s nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Doncaster and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a mature person, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 18.5% of Doncaster people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Doncaster – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

For more views and opinions on the Doncaster Property Market – visit the Doncaster Property Market Blog