Local property market information for the serious investor

Month: March 2017

‘Flipping’ Heck – Edgware Property Values Rise by £76.79 a day

Investing in Edgware buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Edgware’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Edgware, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) o
f the property, this is your yield, or annual return. So, over the last 5 years, an average Edgware property has risen by £140,250 (equivalent to £76.79 a day), taking it to a current average value of £511,300. Yields range from 3% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

This demonstrates how the Edgware property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Edgware landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Edgware people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Edgware, then one place for such information would be the Edgware Property Blog.

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 at 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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How The Rented Sector Has Transformed The Property Market In Edgware

The Edgware housing market has gone through a sea change in the past decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Edgware tenants and Edgware landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Edgware population.

In 1981, the population of Barnet stood at 295,200

and today it stands at 379,700.

Currently, the private rented (B-T-L) sector accounts for 25.5% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.

62.23% Edgware people owned their own home in 1981

21.33% Edgware people rented from the Council or Housing Association in 1981

and 16.45% Edgware rented from a Private Landlord

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Barnet set to grow to 487,000 by 2037 – it is imperative that Barnet London Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Edgware landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, Dating Apps and TV with the likes of Netflix. Many Edgware youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Edgware and Barnet, be it B-T-L or B-T-R, has the prospective to play a very positive role.

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 at 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’s ‘Generation Trapped’ and the £6.76bn legacy

Last week, I wrote an article on the plight of the Edgware 20 something’s often referred to by the press as ‘Generation Rent’. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Edgware homeowners and Edgware landlords alike, as I discussed a couple of months ago, is our mature members of the population of Edgware. In that previous article, I stated that the current OAP’s (65+ yrs in age) in Edgware (or HA8 to be precise), were sitting on £2.60bn of residential property … however, I didn’t talk in depth about the ‘Baby Boomers’, the 50yr to 64yr old Edgware people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger Generation Renters.

In Edgware (HA8), there are 4,516 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off. That property is worth, in today’s prices, £2.33bn. There are an additional 3,544 mortgage free Edgware households, owned by 50yr to 64yr olds, worth £1.82bn in today’s prices, meaning…

Edgware Baby Boomers and Edgware OAP’s are sitting

on £6.76bn worth of Edgware Property

These Edgware Baby Boomers and OAP’s are sitting on 13,102 Edgware properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

 

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Edgware (and the Country) homeowners to downsize at the right time will also enable younger Edgware people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Edgware and the Planning Dept. should play their part, as should landlords and property investors to ensure Edgware’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities.

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 at 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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‘Generation Rent (Forever)’ – 6,185 Edgware Tenants have no intention of ever buying a property to call home

 

The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working weeks, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Edgware (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, perceived the need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Edgware property ladder.

However, I would say there has been something else at play, other than the issue of raising a deposit – having sufficient income and rising property prices in Edgware. Whilst these are important factors and barriers to homeownership, I also believe there has been a generational change in attitudes towards home ownership in Edgware (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Edgware population choose to be tenants as it better suits their plans and lifestyle. Local Government in Edgware (including the planners – especially the planners), land owners and landlords need an adaptable Edgware residential property sector that allows the diverse choices of these Edgware 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 16,106 Edgware tenants in their 4,905 private rental properties, 6,185 tenants have no plans to ever buy a property – good news for the landlords of those 1,884 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

But does that mean the other third will be buying in Edgware in the next 12 months?

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Edgware, we will in fact need an additional 2,102 private rental properties over the next eight years (or 263 a year) … meaning the number of private rented properties in Edgware is projected to rise to an eye watering 7,007 households.

For more insight and thoughts like this on the Edgware Property Market – please visit the Edgware Property Blog

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 at 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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With 16,106 people in Private Rented Properties in Edgware – should you still be investing in Edgware Buy To Let?

If I were a buy to let landlord in Edgware today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Edgware property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Edgware property prices do drop, the downside to that is that first time buyers could be attracted back into the Edgware property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Edgware landlord, almost a blessing in disguise.

Edgware has a population of 66,001, so when I looked at the number of people who live in private rented accommodation, the numbers astounded me …

 

Edgware – Accommodation Type and the Number of Occupiers
Owned outright – Edgware Owned with a mortgage – Edgware Shared ownership (part owned and part rented) – Edgware Social rented (aka Council Housing) –  Edgware Private rented – Edgware Living rent free – Edgware
13,887 23,443 557 11,147 16,106 861
21.0% 35.5% 0.8% 16.9% 24.4% 1.3%

 

Yields will rise if Edgware property prices fall, which will also make it easier to obtain a buy to let mortgage as the income would cover more of the interest cost. If property values were to level off or come down that could help Edgware landlords add to their portfolio. Rental demand in Edgware is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Edgware landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Edgware and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 40 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 24.4% of Edgware people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Edgware – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

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 at 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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