Yearly Archives: 2018

Doncaster Property News

Doncaster Homeowners Have Made an Annual Profit Of £3,969 Since the Millennium

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As we go full steam ahead into 2019, it’s certain that the Doncaster housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Doncaster homeowner, having owned their property since the Millennium, has seen its value rise by more than 153%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Doncaster property values has come from the growth in Doncaster property values, while some of it will have been enhanced by extending, modernising or developing their Doncaster home.

Taking a look at the different property types in Doncaster, and the profit made by each type, makes interesting reading..

Average Price
Paid in 2000 in Doncaster
Average Price
Paid in 2018 in Doncaster
Average Total Profit in last 20 years in Doncaster Average Householder Profit per Year in Doncaster Average Annual % Increase in Doncaster
Detached £92,679 £263,821 £171,142 £9,508 10.2%
Semi £41,526 £118,580 £77,054 £4,281 10.4%
Terraced £22,188 £83,250 £61,062 £3,392 15.4%
Apartments £53,078 £87,490 £34,412 £1,912 3.7%
Overall Average £48,562 £119,997 £71,435 £3,969 8.5%

However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.

Total ‘REAL’ Profit
After Inflation in Doncaster
‘Real’ Annual
Profit in Doncaster
Detached £104,482 £5,805
Semi £47,042 £2,613
Terraced £37,278 £2,071
Apartments £21,009 £1,167
Overall
Average
£43,611 £2,423

So the ‘real’ value of the profit, after inflation, in Doncaster has been £2,423 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Doncaster property, property values dropped between 15% and 20% in 18 months … Doncaster homeowners over the long term are still better off than those renting.

Moving forward, the question I get asked time and again is what will happen in the future to the Doncaster Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium to long term to ensure that this level of house price growth is maintained in Doncaster is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come).

Another factor is that whilst Doncaster landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Doncaster see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Doncaster buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Doncaster in 2018, most Doncaster buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Doncaster buy to let landlord, ensure that continues?

Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Doncaster whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.

Doncaster Property News

Live in Doncaster? About to Retire and Privately Rent? You Could be £2,400 a Year Worse Off!

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You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis … where people aren’t saving enough for their retirement. But it’s not the lack of Doncaster peoples’ future pension incomes that are my immediate concern. The fact is that so many of the future retirees in Doncaster over the coming decade, who never bought their home in the Millennial years of the 1990s and 2000s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.

In Doncaster, there are 1,119 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

A Doncaster retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Doncaster is £539 a month – a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet…

The maximum housing benefit for a couple in Doncaster is currently £338.35 per month … leaving a significant gap when you consider the average rent in Doncaster is £539 per month

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more of Doncaster people retire and continue to rent from a private landlord. Numerous Doncaster private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse.

The average Doncaster retiree will need to find £2,408 pa to stay in their privately rented home after retirement

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Doncaster homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow … yet lets be frank – they aren’t building bungalows in large numbers in Doncaster anymore.

And for the Doncaster landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Doncaster tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings.

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer.

The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built … but back to reality … that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Doncaster’s buy to let landlords!

Doncaster Property News

As OAP’s set to rise to 1 in 4 of Doncaster’s population by 2037 – Where are they all going to live?

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With constant advances in technology, medicine and lifestyles, people in the Doncaster area are, on average, living longer than they might have a few decades ago. As Doncaster’s population ages, the problem of how the older generation are accommodated is starting to emerge. We, as a town, have to consider how we supply decent and appropriate accommodation for Doncaster’s growing older generation’s accommodation needs while still offering a lifestyle that is both modern and desirable.

 

In 1997 in Doncaster, around one in every six people (16%) were aged 65 years and over (and the local authority area as a whole), increasing to around one in every five people (19%) in 2017 and it is projected to reach one in every four people (25%) by 2037, meaning..

 

Over the next 19 years, the growth of the over 65 population in Doncaster will grow by 31.6% – a lot more than the overall growth population of Doncaster of 2.4% over the same time frame.

 

In fact, the number of those over 90 is expected to nearly double in our local authority from 2,482 (0.8%) in 2017 to 4,781 (1.5%) by 2037.

And looking at the proportional percentage changes over those years..

 

Age group percentage of the Doncaster Metropolitan Borough Council – 1997 to 2017 and 2017 to 2037
Percentage Change from 1997 to 2017 Percentage Change from 2017 to 2037
Under 16 -13.64% -10.53%
16 to 64 -1.59% -6.45%
65 and Over 18.75% 31.58%

 

Looking at Doncaster and the local authority as a whole, there is a distinct under supply of bungalows and retirement living (i.e. sheltered) accommodation. The majority of sheltered accommodation fit for retirement is in the ex-local authority sector whilst the majority of private sector bungalows were built in the 1960s/70s/80s and are beginning to show their age (although that means there is often an opportunity for Doncaster investors and Doncaster buy to let landlords to buy a tired bungalow, do it up and flip it/rent it out).

In the medium to longer term, we need to build more bungalows and sheltered accommodation and, if we do that, that won’t only be of benefit to the elderly population of Doncaster – it will have a direct knock-on effect to the younger and middle-aged population by unlocking those family homes the older generation homeowners live in.

There have been 17 Housing Ministers since 1997. No one ever seems to stay in the job long enough to create a consensus and direction in Government Policy on the vital issue of the country’s housing shortage, yet the sound bites and White Papers seem only to focus exclusively on first-time buyers when there is an even more severe and disregarded shortage in suitable housing for the older generation.

 

This scantiness affects both mature homeowners trapped in unsuitably big family properties, unable to find smaller bungalows or suitable retirement apartments, whilst the waiting list for Council sheltered accommodation is putting a strain on other aspects of social care. In both circumstances, policy coming (or not coming) out of Government is repressing the supply and type of accommodation mature people desire, need and want, whilst at the same time, increasing the cost (and taxes) for social and NHS care.

 

Maybe we need tax breaks for people to downsize or planning permissions that stipulate bungalows only. Whichever way you look .. there are challenging times ahead for us all.

Doncaster Property News

Doncaster ‘Home Owning’ Movers and Shakers in 2018

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It’s now commonly agreed amongst economists and the general public that the dramatic rise in Doncaster property prices of the last six years has come to an end.

Read the National newspapers, and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down – yet in the last 12 months, people have still been moving, buying and selling in Doncaster at levels similar to the last six years – something tells me we have a case of ‘bad news selling newspapers’.

So instead, let me share with you what, exactly, is happening in the Doncaster property market, and more specifically, who is moving and why in Doncaster. Most of the sales in Doncaster over the past twelve months were semi-detached properties, which on average sold for £124,400. Detached properties had an average sold price of £226,200 and terraced properties averaged at £90,300.

In Doncaster, in the homeowner sector in 2018 (i.e. owner occupation), 1,612 households moved within the tenure (i.e. sold the home they owned and bought another one) and 314 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).

Doncaster Home Movers in 2018
Moved from Owner Occupation to Private Rented 591
Moved from Private Rented to Owner Occupation 750
Owner Occupation to Social Housing 80
Straight to Owner Occupation 314
Left Owner Occupation (i.e. Household Ended) 388
Owner Occupation to Owner Occupation 1,612


What does this mean for Doncaster buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 750 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 591 Doncaster households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector.

My research has calculated that in 2018, an additional 781 new households in the Doncaster private rental sector were created

…and it will continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity for you Doncaster property investors. 388 owner occupied households in Doncaster sold in last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Doncaster housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned … and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner … property is a long game … and if you play the long game, you will always win (although isn’t that true in most aspects of life?).

Doncaster Property News

2 bed, 3 bed or 4 bed homes – Which Sell the Best in Doncaster?

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A few months ago, I wrote an article on the Doncaster Property Blog about the length of time it took to sell a property in Doncaster and the saleability of the different price bands (i.e. whether the lower/middle or upper local property markets were moving slower or quicker than the others). For reference, a few months ago it was taking on average 49 days from the property coming on the market for it to be sold subject to contract (and that was based on every Estate Agent in Doncaster) … and today … 101 days  .. does that surprise you with what is happening in the UK economy?

Well, a number of Doncaster landlords and homeowners, who are looking to sell in the coming months, contacted me following that article to enquire what difference the type of property (i.e. Detached/Semi/Terraced/Apartment) made to saleability and also the saleability of property by the number of bedrooms. As I have said before, whether you are a Doncaster landlord looking to liquidate your buy to let investment or a homeowner looking to sell your home; finding a buyer and selling your property can take an annoyingly long time… but anything you can do to mitigate that is helpful to everyone.

So, I did some research on the whole of the Doncaster property market .. and these were my findings …  to start with by type (i.e. Detached/Semi/Terraced/Apartment)….

As you can see, the star players are the semi-detached and terraced/town house variants of Doncaster property, whilst apartments seem to be sticking in Doncaster.

Next I looked at what the number of bedrooms does to the saleability of Doncaster property..

… and as you can see the one bed properties seem to be taking the longest time to sell ..and to answer the question in the title .. it’s four bed properties!

So, what does this mean for Doncaster buy-to-let landlords and homeowners?

There is no doubt that there is a profusion of properties on the market in Doncaster compared to 18 months ago … it’s not because more houses are coming on to the market, it’s because they are also taking a little longer to sell. This makes it slightly more a buyer’s market than the seller’s market we had back in 2014/5/6. Therefore, in some sectors of the Doncaster property market, it is much tougher to sell, especially if you want to sell your Doncaster home fast.

Therefore, to conclude, on the run up to the New Year, if you are looking to buy and plan to stay in the buy to let market a long time, perhaps take a look at the Doncaster properties that are sticking as there could be some bargains to be had there? Want to know where they are .. drop me a line and I will tell you a nifty little trick to find all the properties that are sticking.

Doncaster Property News

The £5,210,772 Ticking Time Bomb for Doncaster Landlords

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I just love looking over and keeping up to date the 108 pieces of legislation that govern the rental of residential property in the UK

                                                                                                                                                   …No Doncaster Landlord, ever

If you are one of the 3,283 Doncaster landlord’s that manages your own property, would it surprise you to know that there are 108 separate pieces of legislation that govern the rental of private houses to tenants. Oh, and on top of the 108 pieces of law, there are further 300+ regulations in the mix. Whilst Doncaster landlords may once have preferred to manage their Doncaster buy-to-let properties themselves to boost their profits, many Doncaster landlords are starting to see this as a false economy.

In the last four years, an additional 1,263 landlords in Doncaster have converted from self-managed to having their property managed by a letting agent in Doncaster, taking the total number of properties under management in Doncaster to 5,136 (out of a total of 8,419 private rental properties in Doncaster).

Now, don’t get me wrong, self-managing your Doncaster rental property can be a very fulfilling experience, allowing you, as a Doncaster landlord, to build a deep relationship with your tenant and your emergency 24 hour plumber, builder (happy to do small jobs at a drop of a hat), decorators, first name terms with their deposit provider, lawyer and EPC provider to name but a few. (Wow!)

Also, did you know if your tenants deposit isn’t registered, or doesn’t continue to be registered after the end the periodic tenancy upon renewal … you could be fined up to three times your deposit? With the average rental deposit in Doncaster being £529, each self-managed landlord in Doncaster could be fined £1,587 per tenancy if the deposit isn’t currently registered. Therefore…

…if every deposit of every Doncaster self-managed landlord’s property wasn’t registered, the total fines would amount to £5,210,772

Now of course, I am not suggesting for one minute all the self-managed landlords of Doncaster haven’t registered their deposits, yet almost on a daily basis, I come across horror stories to that effect. Another two (but by no means all) hot issues that the Courts are cracking down on, are doing immigration ‘Right To Rent’ checks on all tenants (yes all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot serve the section 21 Notice, meaning the tenant cannot be served notice to vacate the property.

To many, it’s really a case of DIY or getting a qualified professional in … as those additional Doncaster landlords mentioned above have done since 2014. You might say, “Of course you are going to say all this – you are a Letting Agent”. Well the choice really comes down to your time and your knowledge. If a Doncaster landlord is not equipped, or able, to devote time keeping up-to-date of legislation and law nor doesn’t want to be bothered 24/7/365 about a blown light bulb, dripping taps, have that confrontational conversation with their tenants about missing rental payments, or arbitrate arguments and disagreements between your tenant and the neighbours, it is perhaps better to pass this accountability/responsibility onto a letting agent.

One thing I would say is all letting agents aren’t the same. Would it surprise you to know that letting agents aren’t regulated?

Doncaster landlords that do use a letting agent should not forget that passing over management to a letting agent doesn’t mean they can disregard legislation and they are still responsible for deposit/rent repayment legal directives, civil fines or action if the letting agent makes a mistake. Therefore, it’s important to pick a respectable letting agent from the start.

Nevertheless, for those Doncaster landlords that see their job as a professional landlord and want to be intricately involved in the day to day administration of their rental properties, it can be worthy pursuit.

If you are a self-managed landlord in Doncaster, and want to know if your paperwork is in order please feel free to drop me a line and I am more than happy to do an ‘MOT’ on it to ensure you are the right side of the law.

Doncaster Property News

Doncaster First Time Buyers Need 5.1 Times Annual Salary to Get on Housing Ladder

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What is it to be British? Our stubbornness, long-suffering stoicism, our vexation at injustice, our obsession with football and rugby, we are weather obsessed external awkward noncommittal modest people whilst underneath seething like a volcano because someone jumped the queue….. and our No.1 obsession is with the property ladder.

This ‘love affair’ with owning our own home has been both good and bad for the UK as a whole; giving people financial freedom in their later years whilst also reducing the quantity (and quality) of housing provision whilst adding the extra pressure of a ‘them and us’ society. Strong words I know .. but let me explain more.

I honestly believe that most Governments since the end of the 1970’s, Conservative and Labour, have attempted to nourish our addiction to home ownership (to keep the housing market on track) with the Council House Right to Buy sell off in the 1980’s, tax relief of mortgages, relaxation of the mortgage rules in the late 1990’s/early 2000’s and most recently, the Help to Buy scheme.

But the Brits haven’t always had this obsession.

Roll the clock back 100 years and, in 1918, just under a quarter of all Brits owned their own homes and the other 77% rented. Go back 50 years to 1968, and only 46% of people owned their own home, the rest rented. This homeownership thing is quite a recent phenomenon.

According to my research, anyone looking to get a foot onto the property ladder as a first-time buyer in Doncaster today, AS A SINGLE PERSON, would need to spend 5.1 times their earnings on a Doncaster first time buyer property.

 

Using the numbers from the Office of National Statistics (ONS), the average value of a first-time buyer property in Doncaster today is £91,000, compared to £85,000 in 2007. If we divide those property values by the average annual earnings of first time buyers – in 2007, that was £14,802 pa and that has risen to £17,765 pa .. giving us the ratio of 5.1 to 1.

However, what must be remembered is that these are raw statistics from the ONS and don’t take into account other factors, like most people buy their first home as a couple. Also, mortgage rates are at an all-time low and who can remember mortgage rates of 15%+ in the 1990’s, meaning borrowing today is relatively cheap. Also, 95% Loan to Value first time buyer mortgages have been available since the end of 2009  (i.e. you only need to save a 5% deposit) and first time buyer rates of 2.19% fixed for 5 years can be obtained (correct at time of writing this article)… it is cheaper to buy than rent .. fact!

I believe there has been a mind-set change to owning a home. Home ownership was the goal of the youngsters in the latter half of the 20th century. Britain is changing to a more European model of homeownership, where people rent in early to mid-life, wait to inherit the money from their parents when in their 50’s and then buy.. thus continuing the circle – albeit in a different way to the last Century.

This means the demand for privately rented accommodation will, in the long term, only continue to grow. If you would like to know more about where the hot spots are for that growth in Doncaster, then one place would be my property blog INSERT URL HERE or if you want to drop me an email or telephone call, feel free to pick my brain on the best places to buy (and not to buy) in Doncaster to ensure your rental investment gets you want you want. The choice is yours!

Doncaster Property News

How Would a Hard Brexit Affect Doncaster House Prices?

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I have been asked a number of times recently what a hard Brexit would mean to the Doncaster property market. To be frank, I have been holding off giving my thoughts, as I did not want to add fuel to the stories being banded around in the national press. However, it’s obviously a topic that you as Doncaster buy to let landlords and Doncaster homeowners are interested in … so I am going to try and give you what I consider a fair and unbiased piece on what would happen if a hard Brexit takes place in March 2019.

After the weather and football, the British obsession on the UK property market is without comparison to any other country in the world. I swear The Daily Mail has the state of the country’s property market on its standard weekly rotation of front-page stories! Like I have said before on my blog, there are better economic indexes and statistics to judge the economy (and more importantly) the property market. If you recall, I said the number of transactions was just as important, if not more, as a bellwether of the state of the property market.

Worries that the Brexit referendum would lead to a fast crash in Doncaster (and national) property values were unfounded, although the growth of property values in Doncaster has reduced since the referendum in the summer of 2016.

Now, it’s true the Doncaster property market is seeing less people sell and move and the property values are rising at a slower rate in 2018 compared to the heady days of the first half of this decade (2010 to 2015), but before we all start panicking, let’s ask ourselves, what exactly has happened in the last couple of years since the Brexit vote?

Doncaster house prices have risen by 3.01% since the

EU Referendum…

 …and yes, in 2018 we are on track (and again this is projected) to finish on 4,839 property transactions (i.e. the number of people selling their home) … which is less than 2017 … but still higher than the long term 12 year average of 3,866 transactions in the local council area.

 

So, it appears the EU vote hasn’t caused many major issues so far, however, if there was a large economic jolt, that could be a different game, yet how likely is that?

The property market is mostly influenced by interest rates and salaries.

A hard Brexit would subdue wage growth to some degree, yet the level of the change will depend on the undetermined type of Brexit deal (or no deal). If trade barriers are imposed on a hard Brexit, imports will become more expensive, inflation will rise and growth will fall, although at least we are not in the Euro, meaning this could be tempered by the exchange rate of the Pound against the Euro. In plain language, a hard Brexit will be worse for house prices than a deal.

So why did the Governor of the Bank of England suggest a disorderly hard Brexit would affect house prices by up to 35%?

I mean it was only nine years ago we went through the global financial crisis with the credit crunch. Nationally, in most locations including Doncaster, property values dropped in value by 16% to 19% over an 18-month period. Look at the graph and if we had a similar percentage drop, it would only take us back to the property value levels we were achieving in 2015.

And let’s not forget that the Bank of England introduced some measures to ensure we didn’t have another bubble in any future property market. One of the biggest factors of the 2009 property crash was the level of irresponsible lending by the banks. The Bank of England Mortgage Market Review of 2014 forced Banks to lend on how much borrowers had left after regular expenditure, rather than on their income. Income multipliers that were 8 or 9 times income pre-credit crunch were significantly curtailed (meaning a Bank could only offer a small number of residential mortgages above 4.5 times income), and that Banks had to assess whether the borrower could afford the mortgage if interest rates at the time of lending rose by three percentage points over the first five years of the loan … meaning all the major possible stumbling blocks have been mostly weeded out of the system.

So, what next?

A lot of Doncaster homeowners might wait until 2019 to move, meaning less choice for buyers, especially in the desirable areas of Doncaster. For Doncaster landlords, Doncaster tenants are also likely to hang off moving until next year, although I suspect (as we had this on the run up to the 2015 General Election when it was thought Labour might get into Government), during the lull, there could be some Doncaster buy to let bargains to be had from people having to move (Brexit or No Brexit) or the usual panic selling at times of uncertainty.

Brexit, No Brexit, Hard Brexit … in the whole scheme of things, it will be another footnote to history in a decade. We have survived the Oil Crisis, 20%+ Hyperinflation in the 1970’s, Mass Unemployment in the 1980s, Interest Rates of 15% in 1990’s, the Global Financial Crash in 2009 … whatever happens, happens. People still need houses and a roof over their head. If property values drop, it is only a paper drop in value … because you lose when you actually sell. Long term, we aren’t building enough homes, and so, as I always say, property is a long game no matter what happens – the property market will always come good.

Growth in UK property values as well as in Doncaster seems fated to slow over the next five to ten years, whatever sort of Brexit takes place.

Doncaster Property News

Doncaster Property Market: Is Sell to Rent the new Buy to Let?

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It doesn’t seem two minutes ago that it was 90 degrees Fahrenheit in the shade (32 degrees Celsius for my younger readers), hosepipe bans looked likely and it was simply too hot to sleep at night, yet early indications were, that as the temperatures soared, the Doncaster property market appeared to be cooling ever so slightly.

2.54% less people moved home in the Doncaster area in the first part of 2018, when compared to the average number of people moving home (in the same time frame) between 2014 and 2017

The average number of households who sold and moved locally between 2014 and 2017 in the winter and spring months was 318 homes a month.. yet in the same time frame in 2018, 310 (on average) sold and moved.

So, Doncaster doesn’t seem to have been hit by the same issues affecting the rest of England where the average number of people moving home in the first part of 2018 is 11.99% less than between 2014 and 2017. So what is the issue? Many have cited Brexit as the issue – but I think it’s deeper than that.

Brexit seems to be the “go to excuse” for everything at the moment – my neighbour even blamed it for the potholes! Anyway a few weeks ago, I was out for a family get together in another part of the UK when one of my extended family said that they were planning on buying their first home this autumn most of those present said they were stupid to do so because of Brexit. Nonetheless, half an hour later, another distant cousin said to the same family crowd that they were planning to sell their home; to which most said they were also daft to do so because of Brexit.

Both sides of the argument can’t be right! So, what exactly is happening?

Well if you have been reading my blog on the Doncaster property market over the last few months, I have been discussing the threats and opportunities of the current state of fluidity in the Doncaster property market, including the issue of OAPs staying in homes that are too big for them as their children have flown the nest, interest rates, inflation, lack of new homes being built and the long term attitude to homeownership.. yet I have noticed a new trend in the last few months.. the emergence of the ‘sell to renter’.

Sell to Renter?

I have seen a subtle, yet noticeable number of Doncaster homeowners that have been selling their Doncaster homes, renting and wagering that, in the next few years, the Doncaster property market will tumble by more than what they spend on their short-term rental home, before they buy another Doncaster home in a couple of years i.e. a ‘sell to renter’. This type of ‘sell to renter’ is mostly predominant at the middle to upper end of the Doncaster property market – so I’m not too sure if it will catch on in the main ‘core’ market?

So, what does this all mean for Doncaster homeowners and Doncaster Buy To Let landlords?

Well, in the short term, demand for middle to upper market Doncaster rental properties could increase as these ‘sell to renters’ demand such properties. I would however give a note of caution to Doncaster landlords buying in this sector of the Doncaster property market as yields in this sector can be quite low. However, for homeowners of middle to upper market Doncaster properties, you might have less people wanting to buy your type of property, as some buyers are turning to renting?

Like I have always said, Doncaster properties are selling if they are realistically priced (realistic for the market – not a rose-tinted version where someone will pay 10% over the odds because everyone has access to the market stats with the likes of Rightmove and Zoopla!).

P.S Notice the spike in the graph, where the number of property sales jumped to 567 in the month of March 2016? That was all the Doncaster buy to let landlords snapping up buy to let properties before the stamp duty rules changed!

Doncaster Property News

Doncaster House Prices vs Doncaster Rents since 2006

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The Doncaster housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Doncaster, the market has certainly changed for both buyers and sellers alike (be they Doncaster buy to let landlords, Doncaster first time buyers or Doncaster owner occupiers looking to make the move up the Doncaster property ladder).

Doncaster house values are 1.63% higher than a year ago, and the rents Doncaster tenants have to pay are 1.4% higher than a year ago

When we compare little old Doncaster to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back…

Since 2006, Doncaster house values are 7.57% higher, yet the rents Doncaster tenants have had to pay for their Doncaster rental property are 18.7% higher

…which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Doncaster tenants are 23.3% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Doncaster house values (in red) in the years of 2008 and 2009 … yet as Doncaster property values started to rise after the summer of 2009, see how Doncaster rents dipped 6/12 months later (the yellow bars)…. Fascinating!

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Doncaster property.

However, maybe an even more interesting point is for the long-term Doncaster buy to let landlords. The performance of Doncaster rental income vs Doncaster house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Doncaster landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long-term health of your Doncaster buys to let portfolio. More and more I am sitting down with both Doncaster landlords of mine and landlords of other agents who might not be trained in these skills – to carry out an MOT style check on their Doncaster portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check-up, drop me a line – what have you got to lose? 30 minutes of time against the peace of mind – the choice is yours.