Local property market information for the serious investor

Month: October 2016

7.8% of Edgware People live in Shared Households

136imageI had an interesting chat the other day with an Edgware landlord. He said he had been chatting with an architect friend of his who said back in the mid 2000’s, the developments he was asked to draw were a balance of one and two bed properties, compared to today where the majority of the buildings he is designing are more towards two and sometimes three bedrooms. Now of course, this was all anecdotal but it made me think if similar things were happening in the Edgware property market?

This is a really important point as I explained to this landlord, as knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in Edgware, Edgware property prices, Edgware yields and Edgware rents.

In 2001, there were 126,900 households with a population of 314,600 in the Barnet Council area. By 2011, that had grown to 135,900 households and a population of 356,400.

.. meaning, between 2001 and 2011, whilst the number of households in the Barnet Council area grew by 7.07%, the population grew by 13.30%

Nothing surprising there then. But, as my readers will know, there is always a but! My analysis of the 2011 Census results, using the most recent in-depth data on household formation (eg ‘one person households’, ‘couples/ family households’ or ‘couple + other adults households and multi -adult households’), has displayed a sudden and unexpected break with the trends of the whole of the 20th Century. There has been a seismic change in household formation in Edgware between 2001 and 2011.

Between 2001 and 2011, the population of Edgware grew, as did the number of Edgware properties (because of new home building). However, the growth rate of new properties built in Edgware was much lower than expected though, but still the population has grown by what was expected, meaning the average household size was larger than anticipated in Edgware. In fact, average household size (ie the number of people in each property) in 2011 was almost exactly the same as in 2001, the first time for at least 100 years it had not fallen between censuses. (Since 1911, household size has decreased by around 20% every decade).

Looking at figures specifically for Edgware (HA8) itself,

  • One person households – 25.0%
  • Couples/family households – 67.2%
  • Couple + other adults/multi-adult households – 7.8%

This decline was reflected in large scale shifts in the mix of household types. In particular, there were far more “couple + other adults households and multi -adult households” than expected (7.8% is quite a lot of households). It can be put down to two things; increased international migration and changes to household formation. A particularly important reason for the difference can probably be attributed to the evidence that migrants initially form fewer households (ie two couples share one property) than those who have lived in the UK all their lives. Also, changes to household f136chartormation patterns amongst the rest of the population, including adult children living longer with their parents and more young adults living in shared accommodation (as can be seen in the growth of HMO properties (Homes of Multiple Occupation).

So, what does all this mean for Edgware Homeowners and Landlords? Quite a lot in fact. There has been a subtle shift to slightly larger households in the last decade, meaning smart landlords might be tempted to buy slightly larger properties to rent out – again good news for homeowners who will get top dollar for their home as they sell on. But now with Brexit, household formation might swing the other way in the next decade? Who knows? Watch this space!
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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House Prices in Edgware rise by more than 17% in the last 18 months

135-main-imageOver the last month, the Edgware property market has seen some interesting movement in house prices, as property values in the Barnet London Borough Council area rose by 1.9% in the last month, to leave annual price growth at 15.3%. These compare well to the national figures where property prices across the UK saw a monthly uplift of 0.42%, meaning the annual property values across the Country are 8.3% higher, this is all despite the constraining factors of Stamp Duty changes in the spring and more recently our friend Brexit.

Looking at the figures for the last 18 months makes even more fascinating reading, whereby house prices are 17.6% higher, again thought provoking when compared to the national average figure of 13.6% higher.

However, it gets more remarkable when we look at how the different sectors of the Edgware market are performing. Over the last 18 months, in the Barnet London Borough Council area, the best performing type of property was the semi, which outperformed the area average by 0.41% whilst the worst performing type was the detached, which under-performed the area average by 1.41%.

Now the difference doesn’t sound that much, but remember two things, this is only over eighteen months and the gap of 1.8% (the difference between the semi at +0.41% and detached at -1.41%) converts into a few thousand pounds disparity, when you consider the average price paid for a semi-detached property in Edgware itself over the last 12 months was £569,100 and the average price paid for a Edgware detached property was £778,400 over the same time frame.

I know all the Edgware landlords and homeowners will want to know how each of the property types have performed, so this is what has happened to property prices over the last 18 months in the area…

  • Overall Average         +17.6%
  • Detached                    +15.9%
  • Semi Detached +18.0%
  • Terraced                    +18.0%
  • Apartments +17.4%

So what does all this mean to Edgware homeowners and Edgware landlords and what does the future hold?

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When I looked at the month-by-month figures for the area, you can quite clearly see there is a slight tempering of the Edgware property market over these last few months. I have mentioned in previous articles that the number of properties on the market in Edgware has increased this summer, something that hasn’t happened since 2008. Greater choice for buyers means, using simple supply and demand economics, that top prices won’t be achieved on every Edgware property. You see, some of that growth in Edgware property values throughout early 2016 may have come about because of a surge in house purchase activity, an indirect result of the increase in stamp duty on second homes from April, thus providing a temporary boost to prices.

However, it may be possible the recent pattern of robust employment growth, growing real earnings and low borrowing costs will tilt the demand/supply seesaw in favour of sellers and exert upward pressure on prices once again in the quarters ahead.

…And Edgware property values, assuming that everything goes well with Brexit, I believe in twelve months’ time we should see values in the order of 6% to 10% higher.

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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Edgware Property Market in 2017 and Beyond

2017-beyond

As the trees turn from green to hues of red and brown, the Edgware property market has a confident feel to it. With the underlying fundamentals of a continued lack of properties being built, a shortage of properties (both in terms of quantity and quality) coming to the market and the continued low mortgage rate environment, buyer enquiries from first time buyers and buy to landlords is strong and motivation is even stronger, given those inexpensive lending rates and general demand caused by under supply.

Now of course, there are a few potential hurdles coming towards us in the coming months that could affect the Edgware (and UK) property market. Mrs. May has yet to get her teeth into Brexit negotiations and we don’t know what the US Presidential elections might do to the money markets around the world, meaning that on the run up to Christmas, some savvy buyers may take advantage of the lack of certainty by making cheeky offers, but I don’t believe these will have a huge impact on property values (like the 2008 Credit Crunch).

You see, property ownership, whether it’s for yourself as a homeowner or buy to let landlord, is a long term investment. In fact, focusing on buy to let, a number of landlords who own property in Edgware have made contact with me recently asking for my thoughts on the future of the buy to let market in Edgware.  Well, as the Politician Edmund Burke said in the 18th century, “Those who don’t know history are destined to repeat it.” .. in other words, to see the future you must look into the past.

Since the Millennium, the housing market has had everything thrown at it. The recent Brexit, last year’s General Election, the near melt down of the World Economy with the Credit Crunch, The Dot Com boom and bust, the housing market crisis in 2008, the housing boom of 2001 to 2004 .. the list goes on. In fact here is a graph (courtesy of the Land Registry) of average Property values since the Millennium in the Barnet Council area.

INSERT GRAPH HERE

Even though we had the Dot Com bubble burst in 2000, two years later in January 2002, property values in the Barnet Council area have risen from £153,700 (in Jan 2000) to £203,200 .. and kept rising to March 2008, when they peaked at £335,900. Then we had the Credit Crunch and property prices continued to fall until April 2009, where they averaged £286,600 .. but look where they are now…  £542,400.

The point I am trying to get across is long term future property values are more helpful to landlord investors than the month by month headline grabbing micro movements in the property market.  Look at the graph and you will see the growth in property values is an upward trend BUT, the average darts about as each month goes by.  So don’t watch the property indexes and panic if values drop next month or the month afterwards, because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail, values always dropped slightly around Christmas, but people will always need a roof over their heads, and if they can’t buy and the council aren’t building anymore  .. only buy to let landlords can meet that demand.

barnet-134

Edgware landlords are being hit in the pocket with the new up and coming taxation rules and yes we might have a bumpy ride on the run up to Christmas (because of the points raised earlier), Brexit or no Brexit, but the trend will be a slow and steady upward momentum of property values, demand for rental properties and yields in the Edgware property market into 2017 and beyond.

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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1,442% – Rise in Edgware Property Prices since 1981

Roll the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’.   Haven’t things changed.  The number of homeowners and property investors who said they wish they had hindsight and bought up every house in Edgware all those years ago, especially when you consider what has happened to Edgware property values, as…

Edgware Property Values since 1981 have risen by 1,442%.

Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Edgware are 1,170.1% higher.   It’s no wonder people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Edgware Property market run much deeper than property value changes as no one could have predicted how the property market has changed in Edgware over the last 30 years.

Looking at the Local Authority data for London Borough of Barnet in 1981, 21.3% of Edgware people lived in a Council House, whilst today its 14.2% … a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House.  The private rental sector since 1981 has, as one would have expected, also changed.

Nationally they’ve almost doubled, however, the proportion of properties privately rented in the Edgware area (i.e. through a private landlord or a letting agency) may not have doubled, but there has been an increase, rising from 16.4% to 25.6% of property.

So, let us consider those people who own their own home, surely that has had a massive drop?  In 1981, the proportion of people who lived in the London Borough of Barnet area who owned their own home was 62.2% … and today its … 57.6%. Not the seismic change most of you were expecting (including myself!).

Homeownership in the 19edgware-rise-graph80’s and 1990’s in Edgware did in fact rise, but as I have discussed in previous articles in the ‘Edgware Property Market Blog’, that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent.

.. and this is why the buy to let market in Edgware is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (like they were in the 1950’s/60’s and 70’s).  The Edgware property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important.  You might need to change your buy to let targets, your methodology to financing or even consider places other than Edgware in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.

Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Edgware buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market.  These opportunities will provide a more stable platform for knowledgeable and wise Edgware buy to let landlords to thrive in.  If you want to learn more about the Edgware Property Market, feel free to pop in for a coffee at our office for a chat with me, or failing that, visit the Edgware Property Blog, where you will find many more articles like this solely on the one topic of the Property Market in Edgware 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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