Category Archives: Property News

Doncaster Property News

Unemployment – the Secret Driver of the Doncaster Property Market?

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If you have been reading my articles on the Doncaster property market recently, you will see that in the three years since the referendum of the ‘B’ word (that word is banned in our household), we have proved beyond doubt that it (whose name shall remain nameless) has had no effect on the Doncaster property market (or the UK as a whole).

So one might ask, what does affect the property market locally? Well many things on the demand side include wages, job security, interest rates, availability of mortgages, confidence in the economy, inflation, speculative demand … the list goes on. Yet as my blog readers will note, I like to delve deeper into the numbers and I have found an interesting correlation between unemployment and the number of properties sold (i.e. transactions).

Why transaction levels and not house prices? Well just looking at Doncaster house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying – meaning to judge the health of a property market is very one dimensional. Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners – a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

Looking at Doncaster’s figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels.

Property transactions in Doncaster dropped by 58.68%, whilst unemployment in Doncaster rose by 56.0% during the 2007 to 2009 Global Financial Crash

There is clearly a relationship between conditions in the Doncaster job market and the number of people who move home … interesting don’t you think?

Year Unemployment % Rate
in Doncaster
Number of Properties
Sold in Doncaster
2004 4.8 6269
2005 5.9 5260
2006 5.9 6073
2007 6.3 6246
2008 8.2 3258
2009 9.7 2581
2010 10.1 2594
2011 11.9 2741
2012 10.6 2684
2013 9.0 3406
2014 8.3 4140
2015 6.4 4283
2016 6.0 4191
2017 5.6 4678
2018 5.6 4637

Now I am not saying unemployment is the only factor influencing the Doncaster property – but it has to be said there is a link.

As a country (and indeed here in Doncaster) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of the religion of following house prices (and I appreciate the irony of me writing these articles on Doncaster – feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Doncaster home. Now of course, I am not dismissing the current levels of Doncaster house prices – we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically underperformed.

So the next time you are considering a house move or buying a buy to let property in Doncaster … don’t make your judgment on house price growth alone.

Doncaster Property News

Doncaster House Prices Fall 0.7% in a Year

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What does that mean for local Landlords and Homeowners?

The balancing act of being a Doncaster Buy To Let landlord is something many do well at. Talking to numerous Doncaster landlords, they are very aware of their tenants’ capability to pay the rent and their own need to raise rents on their rental properties.  Despite the ‘perceived ‘dark clouds of Brexit, evidence suggests many landlords feel more confident than they were in the Summer and Autumn of 2018 about aiming to push rents higher on their Doncaster Buy To Let properties.

Looking at the data for the last 7 years, this shows that throughout the Summer months, the rents new tenants have had to pay on move in have increased at a higher rate than during the colder months of Winter.  This is because the Summer months are normally a time when renters like to move, meaning demand increases for rental properties yet supply remains pretty ridged.

Yet the Winter stats buck that trend and this is great news.

Rents in Doncaster on average for new tenants moving in have risen 1.9% for the month, taking overall annual Doncaster rents 2.1% higher for the year

However, several Doncaster landlords have expressed their apprehension about a slowing of the housing market in Doncaster and I believe, based on this new evidence, they may be overstated.  Before we get the bubbly out though, the other part of investing in property is what is happening to 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 form of balance since the New Year.   According to the Land Registry….

Property Values in Doncaster are 0.7% lower than they were 12 months ago

Yet, these figures reflect the sales of Doncaster properties that took place in the late Summer of 2018 and only exchanged and completed during the Autumn / early Winter months of last year.

The reality is the number of properties that are on the market in Doncaster today has risen by 14% since the Summer

and that will have a dampening effect on the property market.  As tenants have had less choice, buyers now have more choice .. and that will temper Doncaster property prices as we head into the middle of 2019.

Be you a Doncaster landlord or Doncaster homeowner, if you are preparing to sell your Doncaster property in 2019, it’s important, especially with the rise in the number of properties on the market, that you are pricing your property realistically when you bring it to the market.  With the likes of Rightmove, Zoopla and OnTheMarket on everybody’s mobile phones and laptops, buyers have access to every property on the market and they will compare and contrast your home with other properties like yours – and will more than likely dismiss your property rather than view it.

To all the Doncaster homeowners that aren’t planning to sell though – 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.  Look at the deal as a whole, the difference between what you sell yours for and what you buy at.  Finally, all the Doncaster landlords – keep your eye’s peeled – I have a feeling there may be some decent Doncaster buy to let deals to be had in the coming months.

Doncaster Property News

New Home Building in Doncaster 2018 rises to 54.4% above the post Millennium average

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Nationally, the number of new homes created in 2018 was 222,194, the highest since 1989. Yet since 2002, the average number of properties built in the UK has only been 146,700 per year. You would think, seeing all the new homes sites around, you could ask are we building too many houses, especially off the back of those impressive 2018 build figures? However, to keep up with the ever-growing population, lifestyles and people living longer, official reports state the Country actually needs 240,000 new homes built every year to just stand still.

It is estimated, by the Chartered Institute of Housing, that the current national backlog of new homes required is in the order of 4.7 million (i.e. because of the bottled-up household formation by younger adults living with parents, shared housing and unaffordability). As a Country, we cannot meet all these needs immediately and it will take time to build up an effectual plan to address these issues.

Looking closer to home, you will also see from the graph below the long-term trend of new homes building (the yellow dotted line) has been going in a slight upward direction. In fact, the 2018 new homes build stats for Doncaster are 54.4% above the post Millennium average. (You will see some years are negative, this is because more houses were demolished than built).

But, we still need more homes… yet who is going to build (and pay) for them. Some Doncaster people will say why can’t the local authority build most of them?

In 2018, 1,208 new dwellings were created in the Doncaster Council area and of those 1,208; interestingly 196 were Council and Housing Association homes

So, if our local authority had a more ambitious annual target of say an additional 500 homes on top of those figures, where could they be built and how would they be paid for? Of course, there are the normal apprehensions about infrastructure issues such as roads, schools, hospital capacity and doctors’ surgeries but our local authority has a Local Plan and that has the locations of where they envisage the new housing will be built (and the infrastructure that goes with it).

The Tories lifted the cap on what local authorities could borrow to build Council houses in late 2018 meaning Councils could borrow more money to build more Council houses. Let’s say we built those 500 homes a year for the next 5 years in Doncaster, that would cost the local authority £375 million to build, which would produce in total £17.4 million in rent. At current interest rates, the interest would be £9.5m per year leaving a surplus of £7.9m for property maintenance and management – meaning the Council houses pay for themselves!

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

Well, the chances of our local authority getting the full funding for an extra 500 homes a year is slim as there is only so much money to borrow. If every UK local authority got funding for 500 additional homes a year for the next 5 years, an impressive 867,500 homes would be built in those 5 years but that would require the councils to borrow £130.1bn – and Central Government doesn’t have that kind of money for Councils to borrow (more like £10bn to £15bn).

The 4.7million long term housing shortage means house prices will remain strong in the long term (despite blips like Brexit etc). Demand for private rental properties will continue to grow and if you read my recent article on Doncaster rents, this can only be good news for Doncaster landlords. This attention on the housing crisis by the Government is good news for all Doncaster homeowners and Doncaster buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants and stability on house prices.

Doncaster Property News

Doncaster Buy To Let Annual Returns Hit 10.34% in Last 10 Years

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Many Doncaster people ponder the best places to invest their hard-earned savings and the best piece of advice I can give you is to do your homework and speak to lots of people. It depends on your attitude to risk versus reward. Normally, the lower the risk, the lower the reward whilst a higher risk is normally associated with the possibility of higher returns, yet nothing is guaranteed. At the same time, higher risk also means higher possible losses on your investment – yet if one looks at the bigger picture, the biggest threat to investing, predominantly when the investment is made in the short term, isn’t risk but actually volatility.

So where should you invest? Building society, the stock market, gold or property are options. This article isn’t designed to give you advice – just show you how different investments have performed over the last decade.

Let me start with the humble semi-detached house in Doncaster … which in 2009 was worth £98,600 … so assuming I bought that property for that figure, then I looked at what if I had invested the same amount of money in a building society, into gold and finally the stock market…

  Savings Account Gold Stock Market Doncaster Semi Detached House
2009 capital £98,600 £98,600 £98,600 £98,600
2019 capital £98,600 £125,100 £128,400 £130,900
2019 capital & interest/rent £122,800 £125,100 £171,600 £202,200

Putting your money into the stock market (FTSE100) would have brought a return of 30.2% on your capital over those 10 years and an average of 3.79% a year in dividends (making an overall increase of 74%).

Gold doesn’t earn interest – yet it has increased in value by 26.9% over the same 10 years whilst putting your money in the building society, the money hasn’t increased in value, but would have earned you interest of 24.46% or the equivalent of 2.21% per year.

Investing in an average semi-detached house in Doncaster over the last 10 years has seen the capital increase by 33% (an equivalent of 2.89% per annum) and the income (i.e. the rent) has provided a return, based on the original purchase price, of 105.07% or the annual equivalent of 7.45% … meaning the overall return, based on the original purchase price of an average semi-detached property in Doncaster, is 10.34% per annum.

Notwithstanding No.11 Downing Street’s grab at the profits of buy to let landlords by hitting the buy to let sector with several fiscal punishments with a 3% stamp duty level, a decrease in high rate tax relief for landlords and an increase in rate of CGT on residential property profits, the facts remain that ‘bricks and mortar’ is still one of the preeminent and most constant investments available.

The bottom line is, the buy to let investment remains the mainstay of the British property market, serving to support aspiring homeowners as they work to conquer the, sometimes difficult, financial obstacles of home ownership. With Central Government over the last 30 years only paying lip service to address the lack of new homes being built or tackling the affordability on a consequential scale, it is highly probable this will continue for the next 5/10/15 years as there will always be a call for a respectable, and above all, honest buy to let landlords delivering decent housing to those that need it.

Doncaster Property News

Which Doncaster Properties are Selling the Best?

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Moving home is said to be the third most stressful life event, following a member of your family dying or getting divorced. So it is always best to keep your stress levels down by investigating and doing your homework on both the particular area of Doncaster (or nearby conurbations) where you live (i.e. where you are selling) and where you want to search for your next Doncaster home. Being mindful of how fast (or slow) the different aspects of the Doncaster property market is moving is key.. because it could save you much heartache and many thousands of pounds.

You see, if you know you are selling a property in a sluggish price range and buying in a faster moving price range in Doncaster then putting your property on the market first is vital, otherwise you will always find the one you want to buy tends to sell before your property sells – there is nothing worse than pondering over a property only to find that someone else has bought it. Being primed with all the knowledge is key. On the other side of the coin, if you are selling in a fast moving market and buying in a sluggish market .. you can probably get a better deal on the one you are buying.

For buy to let landlords in Doncaster, this evidence is particularly critical as purchasing a high-demand property in a well-liked area of Doncaster will safeguard a surfeit of availability of tenants, as well as respectable house price growth.

Being an agent in Doncaster, I like to keep an eye on the Doncaster property market on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Doncaster; be that a buy to let property for a landlord or an owner occupier house.  So, I thought, how could I scientifically split the Doncaster housing market into sections, so I could analyse which part of the Doncaster property market was doing the best (or the worst).

I took the decision that the preeminent way was to fragment the Doncaster property market into roughly four uniform size price bands (in terms of properties for sale). Each price band would have roughly around 25% of the property in Doncaster available for sale .. then add up all the sold (stc) properties and see which sector of the Doncaster property market was performing best? … And these were the results ..

  # Properties For Sale # Properties Sold (stc)
up to £90,000 469 307
£90,000 to £140,000 569 426
£140,000 to £230,000 554 487
£230,000 upwards 469 172

The best performing price range in Doncaster is the middle to upper market £140,000 to £230,000 where 46.8% of all property in that price range has a buyer and is sold stc.

It’s not unexpected that the upper end of the property market (the top 25%) in Doncaster is finding things a little tougher compared to the others. Remarkably for Doncaster landlords, the lower market is doing reasonably well, but it’s not the best, so maybe there could be some property deals out there for buy to let investment? Even though the number of first time buyers in 2018 did increase over the 2017 levels, it was from a low starting point and the large majority of 20 to 30yo’s don’t want to or can’t buy their first home and the local authority has no money to build Council houses meaning an increase in demand as private landlords take up the slack – because everyone needs a roof over their head!

If you would like to pick my brains on the Doncaster Property Market – pop in for a coffee or drop me a line on social media or email.

Doncaster Property News

What Has Happened to the Doncaster Property Market Since the Last Property Market Crash?

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A handful of Doncaster landlords and homeowners have been asking me what would happen if we had another property crash like we did in 2008/9?

The UK property crash in 2008/9 caused property prices in the UK to drop by an average of 18.37% in a period of 16 months.

On the run up to the Parliamentary vote on Brexit scheduled for March, a number of people asked what a no-deal Brexit would do to the property market and if there would be a crash as a result. I have discussed in a previous article on the chances of that (slim but always a possibility) … but assuming it happens, it is my opinion the outcome of a no-deal Brexit would be no worse than the country’s 2008/9 credit crunch property crash, the late 1988 property crash, the 1974 property crash, 1951 property crash … I could go on. The British economy would bounce back from the shock of a no-deal Brexit with lower property values and a continued low interest rate environment (together with an additional round of Quantitative Easing) and that would mean we would see a similar bounce back as savvy buyers saw it as a fantastic buying opportunity.

So, let me explain the reasons I believe this…

Many said after the Brexit vote in June 2016, we were due a property crash – but we all know what happened afterwards.

Initially, let’s see what would happen if we did have a crash, how quickly it would bounce back and then finally discuss how the chances of a crash are actually quite minimal.

Therefore, to start, I have initially split down the types of property in Doncaster (Det/Semi etc.) and in the red column put the average value of that Doncaster property type in 2009. Next in the orange column what those average values are today in 2019.

Doncaster Property Market

The likely effects of a Property Crash and Recovery

  Average Value in 2009 Average Value in 2019 Assumed Average Value by Q2 2020  (if Property Crash) Assumed Value in 2024/5
Detached £178,200 £255,200 £208,300 £253,300
Semi Detached £98,600 £130,900 £106,900 £124,400
Terraced £75,000 £99,800 £81,500 £95,000
Apartment £88,300 £114,900 £93,800 £107,900

Now, assuming we had a property crash like we did in 2008, when average property values dropped nationally by 18.37%, I applied a similar drop to the current 2019 Doncaster figures (i.e. the green column) to see what would happen to property values by the middle 2020 (because the last crash only took 13/14 months).

…and finally, what would subsequently happen to those same property prices if we had a repeat of the 2009 to 2014 property market bounce back.

Of course, these are all assumptions and we can’t factor in such things as China going pop on all its debt … yet either way, the chance of such a crash coming from internal UK factors are much slimmer than in another of the four property crashes we have experienced in the last 80 years. Why, you might ask?

The seven reasons I believe are these …

  1. The new Bank of England mortgage rules on lending 2014 to stop reckless lending that fuelled that last crash.
  2. Low inflation.
  3. Low mortgage rates (the average Brit’s fixed rate mortgage is currently 2.26% and the variable rate mortgage of 3.07%).
  4. Wage rises are forecast to continue to outgrow inflation.
  5. Unemployment figures dropping to 4% (down from 8.4% in 2011).
  6. The high percentage (67.7%) of all British mortgages being on a fixed rate.
  7. And notwithstanding the distractions of Brexit over the last few years, it cannot be denied that the British economy has slowly and steadily been heading in the right direction for a number of years, built on some decent foundations of a steady housing market (unlike the 1988 and 2008 crashes when the housing market got overheated very quickly on the run up to the crashes).

So as the circumstances are much different to the last two crashes, the chances of a crash are much slimmer. Yet if we do have a crash, for the very same 7 reasons above why the chances of a crash are unlikely, those 7 reasons would definitely contribute to making the ensuing recession neither too long nor substantial in scale.

One final thought for the homeowners of Doncaster. Most people when they move home, move up market, meaning in a decreasing market you will actually be the winner, as a 10% drop on yours would be much smaller in £notes than a 10% drop on a bigger property … think about it.

One final thought for the new and existing buy to let landlords of Doncaster. Well, the questions I seem to be asked on an almost daily basis by landlords are: –

  • “Should I sell my property in Doncaster?”
  • “Is the time right to buy another buy to let property in Doncaster and if not Doncaster, where?”
  • “Are there any property bargains out there in Doncaster to be had?”

Many other Doncaster landlords, who are with us and many who are with other Doncaster letting agents, all like to pop in for a coffee, pick up the phone or email us to discuss the Doncaster property market, how Doncaster compares with its closest rivals (Rotherham, Scunthorpe and Pontefract), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight-talking opinion. I look forward to hearing from you.

Doncaster Property News

Home Ownership among Doncaster young people has dropped by more than a third in 20 years

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The proportion of 25 to 34-year olds who own their home in Doncaster has dropped by more than a third in the last 20 years, so what does this mean for all the existing Doncaster landlords and homeowners together with all those youngsters considering buying their first home?

Well, looking at the numbers in greater detail, in Doncaster there has been a 36.0% proportional drop in the number of 25 to 34-year olds owning their own home between 1999 and 2019 .. and a corresponding, yet smaller drop of 18.1% of 35 to 44-year olds owning their own home over the same time frame.

So, if you were born in the late 1980’s or early 1990’s, the dream of owning a home in Doncaster has reduced dramatically over the past 20 years as young adults’ wages and salaries are now much lower in relation to Doncaster house prices. Nationally, average property values have grown by 186.9%, whilst average incomes have only risen by 44.8%, yet that doesn’t allow for inflation. However, whilst not over the same 20 years (it’s close enough though), the Institute of Fiscal Studies said recently the average British home was just over 2.5 times higher in 2015/6 than in 1995/6 after allowing for inflation; yet the average household income (after tax) of 25 to 34-year olds grew by only 22% in ‘real-terms’ over those 20 years.

Yet, even though property prices are at record highs, on the other side of the coin, the monthly cost of mortgage payments has actually fallen because interest rates have remained low. In 1999, the average mortgage rate paid by UK homeowners was 6.54% whilst today it’s more than halved to 2.64% – a drop of 59.4%. Many of you reading this will remember the 15% mortgage rates of 1992!

The fact is, mortgage repayments take up a considerably smaller proportion of take home pay, on average, than they did before the Credit Crunch or in the late 1980’s. Although the risk that mortgage rates will increase if the Bank of England put up interest rates might leave some homeowners in a difficult position – hence I might suggest (if you haven’t already) you seriously consider fixing your mortgage rate (remember to take advice from a professional before you do).

Yet look at the data in even greater detail and you will see, going back

to the 1960’s, we weren’t always the huge homeowning nation we always thought we were.

Today, 18.4% more 35 to 44-year olds and 51.3% more 45 to 54-year olds own their own home compared to 1969, and if you look at the graph, move the clock back to the early 1960’s and you will see the numbers are even starker. So as the younger generation in Doncaster has seen homeownership drop in the medium term, they will in fact end up inheriting the homes of their parents. We are turning into a more European (especially German) model of homeownership, where people buy their first home in their 50’s instead of their 20’s.

My message to first time buyers of Doncaster is go and get some mortgage advice!  The cost of renting smaller starter homes is between 20% and 25% more than the mortgage payments would be. 95% mortgages (meaning a 5% deposit is required) have been available since late 2009 and some banks even do 100% mortgages (i.e. no deposit) .. I suggest that you don’t assume you can’t get a mortgage – for the sake of a 45 minute chat with a mortgage adviser – you get a straight answer and all the information you need.

Therefore, what does this mean for homeowners and landlords of Doncaster? Well, for many tenants, renting is a positive choice and as we aren’t building enough homes to meet current demand, let alone eating into the lack of building over the last 35 years, demand will outstrip supply, home values will, over the medium to long term, rise above inflation – meaning it will be a good overall investment as demand for rental properties increases. Good news for Doncaster landlords and Doncaster homeowners alike.

The single biggest issue in the Country (and Doncaster) today is that we aren’t building enough homes. I know it seems the local area is covered with building sites – yet looking at the actual numbers – we still aren’t building enough homes to live in. Residential property only takes up 1.2% of all the land in the Country – and whilst I’m not suggesting we build housing estates on National Trust land or cut down forests, until we realize that we aren’t building enough .. this issue will only continue to get worse.

Homeownership in Doncaster by Age – 1969 to today

 

25-34 35-44 45-54 55-64 65+
1969 47.2% 47.0% 47.5% 46.6% 44.0%
1979 56.0% 63.3% 51.6% 55.4% 42.8%
1989 53.7% 74.6% 76.8% 71.5% 51.0%
1999 54.3% 73.1% 78.0% 77.2% 67.3%
2009 40.8% 64.6% 75.1% 76.3% 75.5%
2019 31.6% 58.2% 69.7% 74.1% 73.6%
Doncaster Property News

Doncaster Property Market vs London Property Market

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Anyone would think that national news, especially when it comes to talking about the property market, is just focused on London centric. In fact, over the last 5 years, the London property market has really manipulated the UK on averages to such an extent that many lenders like the Halifax and Nationwide publish two indices, a national one without London and one with.

Now it’s true the London property market has undergone some quite acute property price falls. In the upmarket areas of Mayfair and Kensington, the Land Registry have reported values are 11.3% lower than a year ago, yet in the UK as a whole they are 1.3% higher. Yet look around the different areas and regions of the UK and Northern Ireland, property values are up 5.8% year on year, whilst over the same time frame, the East Midlands is 3.9% up and Yorkshire is 3.7% up. So, what exactly is happening locally in Doncaster and what should Doncaster landlords and homeowners really be concerned about?

Well, to start with, as I have been saying for a while now, property is a long game, and making decisions on the short-term fluctuations is something that could cause a nervous breakdown.

I wanted to look at how Doncaster had performed over the long term, when compared to London and the UK as a whole.  Yet it is hard to compare differing locations when the average value of a property in Doncaster differs greatly to one in the capital.  I decided if I wanted to compare like for like, I needed to see what would happen if I had spent £100 on property in London in 1979 and what would that £100 be worth today, and then do the same exercise for the UK. So, looking over the last 40 years …

Anyone would think that national news, especially when it comes to talking about the property market, is just focused on London centric. In fact, over the last 5 years, the London property market has really manipulated the UK on averages to such an extent that many lenders like the Halifax and Nationwide publish two indices, a national one without London and one with.

Now it’s true the London property market has undergone some quite acute property price falls. In the upmarket areas of Mayfair and Kensington, the Land Registry have reported values are 11.3% lower than a year ago, yet in the UK as a whole they are 1.3% higher. Yet look around the different areas and regions of the UK and Northern Ireland, property values are up 5.8% year on year, whilst over the same time frame, the East Midlands is 3.9% up and Yorkshire is 3.7% up. So, what exactly is happening locally in Doncaster and what should Doncaster landlords and homeowners really be concerned about?

Well, to start with, as I have been saying for a while now, property is a long game, and making decisions on the short-term fluctuations is something that could cause a nervous breakdown.

I wanted to look at how Doncaster had performed over the long term, when compared to London and the UK as a whole.  Yet it is hard to compare differing locations when the average value of a property in Doncaster differs greatly to one in the capital.  I decided if I wanted to compare like for like, I needed to see what would happen if I had spent £100 on property in London in 1979 and what would that £100 be worth today, and then do the same exercise for the UK. So, looking over the last 40 years …

So, what does all this mean for Doncaster

homeowners and landlords?

Well what happens in London does have an impact, but there are other issues that will have a bigger impact on the local property market. The simple fact is over the last 40 years, we have had 392.9% inflation, yet looking at a typical Doncaster terraced house,

A Doncaster terraced house has jumped in

value from an average of £9,257 to £99,600

since 1979 – a rise of 654.2%

Property has in the long term been a good bet. Yes, we might have some short-term blips and as long as you play the long game – you will always win. In the short term, my concern isn’t over monthly up or down property values, Brexit or another General Election. With property values still rising faster than salaries in many parts of the country, what really matters is how much of householder’s take home pay goes into housing costs as opposed to other spending items. If housing gets too expensive – other things will suffer, like holidays and the nice things in life to spend your money on. Only time will tell!

P.S. Wonder what that Doncaster terraced would be worth if it had gone by London house prices? Here’s your answer – £144,957.

Doncaster Property News

As 34.9% of Doncaster Property on the Market is Sold

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Are there any bargains because of Brexit?

Bargains – well yes and no – and let me explain why. To find a bargain you need to know the ‘market’, yet there is not one ‘property market’ in the UK. In fact, the British property market is like a fly’s eye, it looks one whole but in fact it is split into lots of fragmented pieces and the same goes for the Doncaster property market as that too is split into different patches… in fact it can even come down to two streets adjacent to each other, one street selling like hot cakes for top dollar whilst the next street can stick and at comparatively lower prices (i.e. if there is a school catchment boundary or differing postcode).

According to Coutts, property values in ‘Prime London’ have dropped by 14.7% in the last 5 years … yet look closely at those stats and Prime London is considered anything within a 1,500m radius of Kensington High Street above £4.6m – a totally different world to the average property in Doncaster, which is worth just under £160,000 and has risen in value over those same 5 years by 20.4%  .. a different world!

I have noticed that the top end of the market above £500,000 in Doncaster and the surrounding areas is proving a little tougher to shift than a few years ago, yet this can’t all be blamed on Brexit, as buyers have long been flinching at overestimated asking prices and excessive stamp duty rates.

In Doncaster, 17.4% of properties for sale have

reduced their asking price in the last 3 months by

an average of 5.9%

A lot less than the reductions that are being seen in central London. In fact, the property market in Doncaster is looking reasonably good with

34.9% of properties on the market in Doncaster being

shown as under offer and Sold subject to contract

…Interesting when compared with the aforementioned London Prime market where only 5.86% of the properties for sale are sold .. some bargains to be had there!

So, where are the bargains in Doncaster? Well, to start with, it’s all about knowing the local Doncaster market. It’s all about comparing and contrasting property, so to start with, check out the property web-portals such as Zoopla and Rightmove to see what’s for sale. The art here is to click on the ‘include Sold stc’ in the filters .. then arrange them in price order. Then you will get a feel for what properties are roughly selling for. Also look at recent sales, so in Rightmove click on ‘House Prices’ on the main menu, on the proceeding drop down menu click on ‘Find Sold House prices’ and now you can type in a street, or even a street plus 0.25miles/0.5miles .. click on ‘List View’ and they are in date order. There is a similar function in Zoopla (feel free to contact me if you need a hand with that).

Then once you have found what you think is a bargain .. view it. Ask the agent why the sellers are moving.  By doing your research on the seller, seeing how long it has been on the market, whether they have reduced the asking price (if you ask an agent they have to tell you and by how much)  — you could cut a better deal if they are compelled to sell. Push home your advantage i.e. if you are a first-time buyer, don’t have a property to sell, chain free or cash purchaser it can all make a difference.

Looking at the numbers above, some savvy Doncaster landlords and home buyers are taking advantage of the doom and gloom newspaper headlines as property owners’ expectations are probably at the lowest they have ever been since the Credit Crunch, especially if they are in the ‘got to sell’ category instead of the ‘would like to sell’ category.

Like anything in life .. buying a property bargain comes down to putting the hard-work in, doing your homework and jumping at opportunities.

Doncaster Property News

How Did Brexit Affect the Doncaster Property Market in 2018 – and its Future for 2019?

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A few weeks ago, I suggested property values in Doncaster would be between -0.4% and 0.6% different by the end of the year. It might surprise some people that Brexit hasn’t had the effect on the Doncaster property market that most feared at the start of 2018.

The basis of this point of view can clearly be seen in the number of property transactions (i.e. the number of property sold) that have taken place locally since 2008. The most recent property recession was the Credit Crunch years of 2008/2009/2010.

In property recessions, the headline most people look at is the average value of property. Yet, as most people that sell also go on to buy, for most home movers, if your property has gone down in value, the one you want to buy has also gone down in value so you are no better or worse off. If you are moving up market – which most people do when they move home – in a repressed market, the gap between what yours is worth and what you will buy gets lower … meaning you will be better off.

Yet, most property commentators, including myself, suggest (and I have mentioned this before in some of my other blog articles) a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying). So, I decided to look at the 2018 statistics, and compare them with the Credit Crunch years (2008 to 2010) and the boom years (2014 to 2017). The results can be seen in the table below.

The Average Number of Properties Sold Per Month Over the Last 10 Years in Doncaster
2008 to 2010 2014 to 2017 2018
Jan 195 264 297
Feb 218 289 277
March 248 411 384
April 223 307 358
May 249 346 373
June 266 429 424
July 266 396 327
Aug 224 387 400
Sept 212 361 312
Oct 232 392 385
Nov 220 374 396
Dec 258 442 420

Then, I looked at the average quarterly figures for those chosen date ranges … and created this graph …

In that 2008 to 2010 property Credit Crunch recession, the average number of properties sold in the Doncaster area were 234 per month. Interesting when we compare that to the boom years of 2014 to 2017, when an average of 366 properties changed hands monthly … yet in the ‘supposed’ doom laden year of 2018, an impressive average of 363 properties changed hands monthly … meaning 2018 compared to the boom years of 2014 to 2017 saw a drop of 1.0% – yet still 54.9% higher than the Credit Crunch years of 2008 to 2010.

The simple fact is, the fundamental problems of the Doncaster property market are that there haven’t been enough new homes being built since the 1980’s (and I don’t say that lightly with all the new homes sites dotted around the locality). Also, the cost of buying your first home remaining relatively high compared to wages and to add insult to injury, all those issues are armor-plated by the tougher mortgage rules which were introduced in 2014 and the current mortgage market conditions.

It is these issues which will ultimately determine and form the rather unexciting, yet still vital, long term outlook for the Doncaster (and national) housing market, as I feel the Brexit issue over the last few years has been the ‘current passing diversion’ for us to worry about. Assuming something can be sorted with Brexit, in the long term property values in Doncaster will be constrained by earnings increases with long term house price rises of no more than 2.5% to 4% a year.

Fundamentally, the question I am asked by many Doncaster buy to let landlords and Doncaster homebuyers is … “should I wait to buy or not?”

As a Doncaster homebuyer, one shouldn’t be thinking of what is happening in Westminster, Brussels, Irish Backstop, China or Trump and more of your own personal circumstances. Do you want to move to get your child in ‘that’ school or do you need an extra bedroom for your third child? For lots of people, the response is a resounding yes – and in fact, I feel many people have held back, so once we know what is finally happening with Brexit and the future of it, there could a be a release of that pent-up demand to move home as people humbly just want to get on with their lives.

There is little to be lost in postponing a house purchase until there is better clarity on the situation. If it isn’t Brexit it will something else – so just get on with your lives and start living. We got through the global financial crisis/Credit Crunch in ‘08/’09, Black Wednesday in ’92 where mortgage interest rates went from 8.5% to 15% in one day, we got through the worst stock market crash with Black Monday in ’87, hyperinflation, power shortages, petrol quadrupling in price in less than a year and a 3 day week in the ‘70’s … need I go on?

Doncaster Landlords? Well, where else are you going to invest your money? Like I said earlier in the article, we aren’t building enough homes to keep up with demand … so as demand outstrips supply, house values will continue to grow. Putting the money in the building society will only get you 1% to 2% if you are lucky. In the short term though, there could be some bargains to be had from shortsighted panicking sellers and in the long term … well, the same reasons I gave to homeowners also apply to you.