Local property market information for the serious investor

Month: September 2016

What is really happening in the Edgware Property Market?

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Well its been a few months since Brexit and as we settle into the Autumn with Great British Bake Off, Strictly and the Football season … the newspapers are returning to their mixed messages of good news, bad news and indifferent news about the Brit’s favourite subject after the weather … the property market.

The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way. At one end of scale is Kensington and Chelsea, which has seen average prices drop in the last twelve months by 6.2% whilst London as a whole, house prices are 12.6% higher. But what about Edgware?

Property prices in Edgware are 10.9% higher than a year ago

and 0.6% higher than last month.

So what does this mean for Edgware landlords and homeowners? Not that much unless you are buying or selling in reality. Most sellers are buyers anyway, so if the one you are buying has gone up, yours has gone up.  Everything is relative and what I would say is, if you look hard enough, there are even in this market, there are still some bargains to be had in Edgware.

However, the most important question you should be asking though is not only is what happening to property prices, but exactly which price band is selling? I likegraph133 to keep an eye on the property market in Edgware on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Edgware.

If you look at Edgware and split the property market into four equalled sized price bands. Each price band would have around 25% of the property in Edgware, from the lowest in value band (the bottom 25%) all the way through to the highest 25% band (in terms of value).

  • Nil to £400k 82 properties for sale and 82 sold (stc) i.e. 48% sold
  • £400k to £500k 82 properties for sale and 46 sold (stc) i.e. 29% sold
  • £500k to £700k 87 properties for sale and 57 sold (stc) i.e. 39% sold
  • £700k + 90 properties for sale and 37 sold (stc) i.e. 29% sold

Fascinating don’t you think that it is the lower Edgware market that is doing the best?

The next nine months’ activity will be crucial in understanding which way the market will go this year after Brexit … but, Brexit or no Brexit, people will always need a roof over their head and that is why the property market has ridden the storms of oil crisis’ in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the credit crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. … there is always a silver lining when it comes to the property market!

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Blog – http://www.benjaminstevens.co.uk/edgware-property-blog

Facebook – https://www.facebook.com/BenjaminStevensEstateAgents

Twitter – https://twitter.com/BenjamStevensEA

Website – http://www.benjaminstevens.co.uk

 

 

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The 6,169 Edgware Savers batten down the hatches with low interest rates set to continue into the 2020’s

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You might ask, what has the plight of the Edgware savers to do with the Edgware Property Market … everything in fact.  Read the newspapers, and every financial wizard is stating that with the decision of the Bank of England’s Monetary Policy Committee in early August to cut the Bank of England base rate to an all time low of 0.25 per cent, savers should prepare themselves for interest rates to stay low well into the early 2020’s.

… And this isn’t some made up story to capture the headlines of newspaper editors. The yield (posh word for interest rate or return) on 10-year Government bonds is currently 0.61 per cent. This indicates that the money markets believe that the Bank of England’s base rate will, on average over the next ten years, be below the 0.61% rate they are buying the 10 year bonds at (because they would loose money if the average was over 0.61%). UK Interest rates are going to be low for a long time.

For those who have saved throughout their working lives and are looking for ways to maximise their savings, tying their money into property could prove advantageous. You see as a saver, I did a search of the internet and the best savings rate I could find was a 5 year fixed rate at 2.5% a year with Weatherbys Bank. Your £200,000 nest egg would earn you £5,000 a year – not much. However, on the other side of the fence, growth in Edgware house prices and princely buy to let yields have made property investment in Edgware an appealing option for many. According to my research, the…

Average Yield over the last five years for

Edgware Buy to let property has been 5.7% a year

… and average Property Values in over the same period have risen by 35.64%.

Using these averages, the Edgware landlord’s property would be worth £271,280 and they would have received a total of £57,000 in rent – making the total return £328,280. Meanwhile, whilst our 6,169 Edgware (HA8 to be exact!) Saver’s, using the average savings rates for the last 5 years, even if they had reinvested the interest, their £200,000 would only be £221,184.

There are risks as well as benefits to buy to let though. As my blog readers know, I tell it like it is and investing in buy to let means locking up capital in a property that may fall in value. Another option would be stock market income based investment funds, which are paying around 5%, especially if put your nest egg into a tax free Stocks and Shares ISA. Althoughsavings you can only add £15,240 a year into an ISA, but you would also have the ability to sell up quickly if you want … but one last thought…

 

The other side of the coin is that you cannot buy an unloved ‘stock market income based investment fund’ and set about renovating it and adding value yourself. The investment fund isn’t something that you can touch and feel, isn’t something tangible, isn’t something physical, isn’t something concrete, it isn’t bricks and mortar … and that is why my fellow Edgware homeowners and Edgware landlords is why the love affair of the British and Property will continue.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT- the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Blog – http://www.benjaminstevens.co.uk/edgware-property-blog

Facebook – https://www.facebook.com/BenjaminStevensEstateAgents

Twitter – https://twitter.com/BenjamStevensEA

Website – http://www.benjaminstevens.co.uk

 

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What will the 0.25% Interest Rate do to the Edgware Property Market?

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I had an interesting chat with a Penshurst Gardens landlord who owns a few properties in the district. He popped his head in to my office as his wife was shopping in the area (and let’s be honest talking about the Edgware Property Market is a lot more interesting than clothes shopping!). We had never spoken before (because he uses another agent in the district to manage his Edgware properties) yet after reading my blog on the Edgware Property Market for awhile, the landlord wanted to know my thoughts on how the recent interest rate cut would affect the Edgware property market and I would also like to share these thoughts with you……

Well it’s been a few weeks now since interest rates were cut to 0.25% by the Bank of England as the Bank believed Brexit could lead to a materially lower path of growth for the UK, especially for the manufacturing and construction industries. You see for the country as a whole, the manufacturing and construction industries are still performing well below the pre credit crunch levels of 2008/09, so the British economy remains highly susceptible to an economic shock. This is especially important in Edgware, because even though we have had a number of local success stories in manufacturing and construction, a large number of people are employed in these sectors. In the HA8 postcode area, of the 30,387 people who have a job, 1,034 are in the manufacturing industry and 3,000 in Construction meaning

3.4% of HA8 workers are employed in the Manufacturing

sector and 9.9% of HA8 workers are in Construction

The other sector of the economy the Bank is worried about, and an equally important one to the Edgware economy, is the Financial Services industry. Financial Services in the HA8 postcode area employ 1,559 people, making up 5.1% of the working population.

Together with a cut in interest rates, the Bank also announced an increase in the quantity of money via a new programme of Quantitative Easing to buy £70bn of Government and Private bonds. Now that won’t do much to the Edgware property market directly, but another measure also included in the recent announcement was £100bn of new funding to banks. This extra £100bn will help the High St banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages .. which will have a huge effect on the Edgware property market (as that £100bn would be enough to buy half a million homes in the UK).

It will take until early in the New Year to find out the real direction of the Edgware property market and the effects of Brexit on the economy as a whole, the subsequent recent interest rate cuts and the availability of cheap mortgages. However, something bigger than Brexit and interest rates is the inherent undersupply of housing (something I have spoken about many times in my blog and the specific affect on Edgware). The severe undersupply means that Edgware property prices are likely to increase further in the medium to long term, even if there is a dip in the short term. This only confirms what every homeowner and landlord has known for decades .. investing in property is a long term project and as an investment vehicle, it will continue to outstrip other forms of investment due to the high demand for a roof over people’s heads and the low supply of new properties being built.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT- the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Blog – http://www.benjaminstevens.co.uk/edgware-property-blog

Facebook – https://www.facebook.com/BenjaminStevensEstateAgents

Twitter – https://twitter.com/BenjamStevensEA

Website – http://www.benjaminstevens.co.uk

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50.1% of Edgware Rented Property have Children living in them

A few weeks ago I was asked a fascinating question by a local Councillor who, after reading the Edgware Property Blog, emailed me and asked me – “Are Edgware Landlords meeting the Challenges of tenanted families bringing up their families in Edgware?”

What interesting question to be asked.

Irrespective of whether you are tenant or a homeowner, to bring up a family, the most important factors are security and stability in the home. A great bellwether of that security and stability in a rented property is whether tenants are constantly being evicted. Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice for no reason.

Some “left leaning Politian’s” keep saying we need to deal with the terrible insecurity of Britain’s private rental market by creating longer tenancies of 3 or 5 years instead of the current six months. However, the numbers seem to be telling a different story. The average length of residence in private rental homes has risen in the last 5 years from 3.7 years to 4 years (a growth of 8.1%), which in turn has directly affected the number of renters who have children. In fact, the proportion of private rented property that have dependent children in them, has gone from 29.1% in 2003 to 37.4% today.

Looking specifically at the HA8 area including Edgware compared to the National figures, of the 5,265 private rental homes in Edgware, 2,639 of these have dependent children in them (or 50.1%), which is interestingly (although expected) above the National average of already stated 37.4%.

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Even more fascinating are the other tenure types in HA8 Edgware…

• 43.8% of Social (Council) Housing in Edgware have dependent children
• 47.7% of Edgware Owner Occupiers (with a Mortgage) have dependent children
• 12.9% of Owner Occupiers (without a Mortgage) have dependent children

Although, when we look at the length of time these other tenure types have, whilst the average length of a tenancy for the private rented sector is 4 years, it is 11.4 years in social (council) housing, 24.1 years for home owners without a mortgage and 10.4 years of homeowners with mortgages.

Anecdotally I have always known this, but this just proves landlords do not spend their time seeking opportunities to evict a tenant as the average length of tenancy has steadily increased. This noteworthy 8.1% increase in the average length of time tenants stay in a private rented property over the last 5 years, shows tenants are happy to stay longer and start families.

So, as landlords are already meeting tenants’ wants and needs when it comes to the length of tenancy, I find it strange some politicians are calling for fixed term 3 and 5 year tenancies. Such heavy handed regulation could stop landlords renting their property out in the first place, cutting off the supply of much needed rental property, meaning tenants would suffer as rents went up. Also, if such legislation was brought in, tenants would loose their ‘Get Out of Jail card’, as under current rules, they can leave at anytime with one months notice not the three or six month tenant notice suggested by some commenters.

Finally, there is an extra piece of good news for Edgware tenants. The English Housing Survey notes that those living in private rented housing for a long periods of time generally paid less rent than those who chopped and changed. for all the latest on the Edgware property market visit www.edgwarepropertyblog.com

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT- the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Blog – http://www.benjaminstevens.co.uk/edgware-property-blog
Facebook – https://www.facebook.com/BenjaminStevensEstateAgents
Twitter – https://twitter.com/BenjamStevensEA
Website – http://www.benjaminstevens.co.uk/

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17,700 People Live In Every Sq. Mile Of Edgware – Is Edgware Over Crowded?

Edgware is already in the clutches of a population crisis that has now started to affect the quality of life of those living in Edgware. There are simply not enough homes in Edgware to house the greater number of people wanting to live in the borough. The burden on public services is almost at breaking point with many parents unable to send their child to their first choice of primary or secondary school and the chances of getting a decent Dentist or GP Doctor Surgery next to nil.

Well that’s what the papers would say.. but let’s look at real numbers, and in particular my specialist subject of Edgware Property, with the housing issue in Edgware. To start with, the UK has roughly 1,065 people per square mile – the second highest in Europe. The total area of Edgware itself is 3.75 square miles and there are 66,378 Edgware residents, meaning …

17,702 people live in each square mile of Edgware, it’s no wonder we appear to be bursting at the seams!

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… but yet again, newspapers, politicians and property market bloggers quote big numbers to sell more newspapers, get elected or get people to read their blog (I recognise the irony!). A square mile is enormous, so the numbers look correspondingly large (and headline grabbing). Most people reading this will know what an ‘acre’ is, but those younger readers who don’t, it is an imperial unit of measurement for land and it is approximately 63 metres square.

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In Edgware, only 25.22 people live in every acre of Edgware … not as headline grabbing, but a lot closer to home and relative to everyday life, and if I am being honest, a figure that doesn’t seem that bad.

Yet, the issue at hand is, we need more homes building. In 2007, Tony Blair set a target that 240,000 homes a year needed to be built to keep up with the population growth, whilst the Tory’s new target since 2010 was a more modest 200,000 a year. However, since 2010, as a country, we have only been building between 140,000 and 150,000 houses a year. So where are we going to build these homes .. because we have no space! Or do we?

Well, let me tell you this fascinating piece of information I found out recently in an official Government report. Looking specifically at England (as it is the most densely populated country of the Union), all the 20 million English homes cover only 1.1% of its land mass. That is not a typo, only one point one per cent (1.1%) of land in England is covered by residential property. In more detail, of all the land in the Country –

• Residential Houses and Flats 1.1%
• Gardens 4.3%
• Shops and Offices 0.7%
• Highways (Roads and Paths) 2.3%
• Railways 0.1%
• Water (Rivers /Reservoirs) 2.6%
• Industry, Military and other uses 1.4%

.. leaving 88.5% as Open Countryside (and if you think about it, add to that the gardens, which are green spaces, and the country is 92.8% greenspace)

As a country, we have plenty of space to build more homes for the younger generation and the five million more homes needed in the next 20 years would use only 0.25% of the country’s land. Now I am not advocating building massive housing estates and 20 storey concrete and glass behemoth apartment blocks next to local beauty spots such as Edgwarebury or Childs Hill Parks, but with some clever planning and joined up thinking, we really do need to think outside the box when it comes to how we are going to build and house our children and our children’s children in the coming 50 years in Edgware. If anyone has their own ideas, I would love to hear from you.

In the meantime, if you would like to read other articles about Edgware Property Market, please visit the Edgware Property Market Blog www.edgwarepropertyblog.com

 

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT- the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Blog – http://www.benjaminstevens.co.uk/edgware-property-blog
Facebook – https://www.facebook.com/BenjaminStevensEstateAgents
Twitter – https://twitter.com/BenjamStevensEA
Website – http://www.benjaminstevens.co.uk/

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