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Monthly Archives: September 2017

Doncaster

Slowing Doncaster Property Market? Yes and No!

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My thoughts to the landlords and homeowners of Doncaster…

The tightrope of being a Doncaster buy-to-let landlord is a balancing act many do well at. Talking to several Doncaster landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Doncaster landlords as average Doncaster rents have been on a downward trend recently. So look at the figures here…

Rents in Doncaster on average for new tenants moving in have risen 1.6% for the month, taking overall annual Doncaster rents 1.1% higher for the year

However, several Doncaster landlords have expressed their apprehensions about a slowing of the housing market in Doncaster. I think this negativity may be exaggerated.

The other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Doncaster as well as the Doncaster buy-to-let landlords).  I believe the Doncaster property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry…

Property Values in Doncaster are 2.21% higher than they were 12 months ago, rising by 2.5% last month alone!

The reality is the number of properties that are on the market in Doncaster today has dropped, albeit only by 1.1% since New Year, but even that can have an interesting effect on short-term property values. As tenants have had less choice, buyers also have less choice.

Be you a homeowner or landlord, if you are planning to sell your Doncaster property in the short-term, it is crucial, that whilst you allow room for negotiation, you must still realistically price your property when you bring it to the market. Given that everyone now has access to property details, including historic stats for how much property has sold for, buyers will be more astute during the offer and negotiation stages of a purchase.

Even with this short-term decrease in the number of properties for sale in Doncaster, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,657 properties for sale compared to the current level of 892.

Compared to 2008, today’s lower supply of Doncaster properties for sale will keep prices relatively high…and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought’s before I go – to all the Doncaster homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving … most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)

To all the Doncaster landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Doncaster Property Blog.

Doncaster

Doncaster’s New 3 Speed Property Market

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“What’s happening to the Doncaster Property Market” is a question I am asked repeatedly.  Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Doncaster property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the town.

For ease, I have named them the …

  1. lower’ Doncaster Property Market.
  2. lower to middle’ Doncaster Property Market.
  3. ‘middle’ Doncaster Property Market.

The ‘lower’ and ‘lower to middle’ sectors of the Doncaster property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Doncaster property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Doncaster property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

  1. lower’ Doncaster housing market – the bottom 10% (in terms of value) of properties sold
  2. lower to middle’ Doncaster housing market – lower Quartile (or lowest 25% in terms of value) of properties sold
  3. middle’ Doncaster housing market – which is the median in terms of value

…. and if one looks at the figures for Doncaster Metropolitan Borough Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.



You can see that it is the ‘lower’ market that has performed the best.

You might ask, what do all these different figures mean to homeowners and landlords alike?  Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘middle’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘lower’ market percentage uplift), to the ‘middle’ 1995 housing market figure, the 2017 figure of £138,850, would have been £142,536 instead – a bit of a difference you must agree?

Now, I have specifically not mentioned the upper reaches of the Doncaster housing market for several reasons.  Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Doncaster’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Doncaster property market – looking at the stats for the up-market Doncaster property market from Land Registry, only 11 properties in Doncaster (and a 5 mile radius around it) have sold for £1,000,000 or more since 1997.

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Doncaster Property Market, but many Doncaster “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market. If you want to be kept informed of those buy to let bargains, have a look at my Blog .. it’s free to do so and I’m sure you wouldn’t want to miss out – would you?

I would love to know if you have spotted any micro-property markets in Doncaster.