Local property market information for the serious investor

Month: August 2018

BUSHEY PRIZED COMMUNITY SPOT SHUT DOWN EARLIER THIS YEAR. LOCAL RESIDENTS STILL FEAR FOR ITS FUTURE.

A local focal point and well know community spot, The Bushey Country Club was shut down earlier this year in April by the local council. The reasoning for closure was due to a prolonged period of financial loss. The closure of the Hertsmere Borough Council run estate, which boasted a 9 hole golf course, driving range, restaurant, gym and function rooms, caused much opposition by the local community in Bushey.

 

It has now been announced that a new business will be moving into the empty Country Club site. A Wedding and Events management company will operate in the premises from the autumn while permanent options for the site are reviewed. Local residents still worry about plans for a future housing development on the site.

 

In July 2018 it was announced by The Executive at the council that the events management company will move to the site for the next “two to five years”. The company will allow other events at the site and also maintain responsibility for the golf course. However crucially, the golf course will remain closed.

 

Benjamin Stevens Sales Negotiator from the Bushey office, Robert Conway, finds the closure and the changes being made to Country Club upsetting, both for the community of Bushey, and for himself personally.

 

“Bushey Country Club was a real hub of the community and is sorely missed. My understanding was that after the closure, the land would be open to the public. I live very close to the course and every night I am there with my dog Amber. It’s a beautiful walk with a lake on the far side, you really felt you could be in the middle of the country.”

 

 

Robert, along with many other local residents in Bushey worry that despite this new announcement, the council will look to sell the land off for housing development in the future.  This could be a catastrophic burden on all the local services in the area.

 

Robert continues “Personally I would be really upset to see it go if the land is eventually sold off, as it’s a place of natural beauty and a centre point for the area.”

 

Bushey has a strong supportive community with beautiful landmarks. It’s what attracts so many people to the area.

 

If you have views on this subject, please comment on our blog, or the Benjamin Stevens website, Facebook or Twitter page.

 

 

 

 

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‘Taxing’ Time for the 2,799 Edgware Buy To Let Landlords

Over the last twenty years, there has been a shift in the way the Edgware (and the UK’s) property market works. In the 1960’s, 70’s, 80’s and 90’s, a large majority of twenty somethings saved up their 5% deposit, went without life’s luxuries of going out and holidays etc., for a couple of years and then bought their first home with their hard earned savings.

By 2000, 41% of Edgware 25 to 29 years owned their own home (compared to 46% Nationally (and 57.3% of Edgware 30 to 34 year olds in 2000 owned their own home – again compared to 64.2% nationally) whilst the remaining youngsters mostly rented from the Council and in some rare cases, privately rented.

Now it’s 2018, and those levels of homeownership have slipped dramatically and now only 21.9% of Edgware 25 to 29 year olds own their own home and 38.5% of Edgware 30 to 34 year olds own their own home (interestingly mirroring the National picture of 24.5% for the younger age cohort and 64.2% for the older 30 to 34 year cohort).

 

There was concern in Government since the late Noughties that this shift from homeownership to private renting wasn’t good for the well-being of the Country and things needed to change, to make it a more level playing field for first time buyers. House prices needed to be more realistic and there needed to be a carrot and stick for both landlords and first time buyers.

In the 1980’s and 1990’s, interest rates were the weapon of choice of Government to cool or heat up the UK housing market – and it did work – up to a point. It’s just interest rates also affected so many other sectors of the UK economy (and not always a in good way). The policy of interest rates to control the economy is called ‘Monetary Policy’. Monetary policy is primarily concerned with the management of interest rates (and the supply of money) and is carried out by the Bank of England (under direction from the Government).

It’s just in this post Credit Crunch, Brexit environment, the use of higher interest rates wouldn’t directly affect landlords (as around two thirds of buy to let properties are bought without a mortgage). Therefore, an increase in interest rates would have hardly any effect on landlords and hit the first time buyers – the people the Government would be trying to help!

Also, given muted growth of real income (i.e. real income being the growth salaries after inflation) in the past few years, an uplift in interest rates (from their ultra-low 0.5% current levels) would have a massive effect on Brit’s household disposable income. Yet, over 90% of new mortgages in 2018 being taken are fixed rate and with such low rates, it has made buying a property comparatively attractive.

Instead, over the last 8 years, the Government has encouraged first time buyers and clipped the wings of landlords with another type of economic policy – Fiscal Policy (Fiscal Policy is the collective term for the taxing (and spending) actions of the Government).  First time buyers have had the Help to Buy Scheme, Stamp Duty Exemption and contributions to their deposit by HMRC. On the other side the coin, landlords have had the way they are able to offset the tax relief of their mortgage payments against income change (for the worse), an increase in Stamp Duty (for the worse) and they will be hit with additional costs as the Government will be phasing out fees to tenants in the next 12 to 18 months.

So, what does this all mean for the 2,799 Edgware landlords?

The days of making money in Edgware buy to let with your eyes closed are long gone. There are going to be testing times for Edgware landlords, yet there is still a defined opportunity for those Edgware landlords who are willing to do their homework and take guidance from specialists and experts.

It’s all about looking at your Edgware portfolio (or getting a property professional to do so) and ascertaining if your current portfolio, mortgage and gearing are designed to hit what you want from the investment (because that is what it is – an investment) in terms of income now and income in the future, capital growth and when you plan to dispose of your assets.

I have seen many Edgware landlords (both who use me and my competitors) to manage their rental property or find them tenants – and on many occasions recently, I have told them to SELL – yes sell some of their portfolio to either reduce mortgage debt or buy other types of property that match what they want in the short and long-term from their investments. I know that sounds strange – but my role isn’t just to collect the rent  .. it’s also to give strategic advice and opinion on the landlord’s portfolio to help them meet their current and future investment goals.

The opportunities will appear in the Edgware property market for Edgware landlords from gentler growth in property values linked with a restrained Edgware property market, meaning if you put in the time, there will be deals and great bargains to have. Many landlords in Edgware (both clients and non-clients) send me Rightmove links each week, asking my opinion on the suitability of the investment. Some are exceptional – whilst others are duds. The bottom line is, private renting will continue to outgrow first time buyers in the next 5 to 10 years and as we aren’t building enough homes in the UK, which means rents can only go in one direction – upwards!

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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Benjamin Stevens Estate Agents Presents: A Taste of Edgware

There are many attractions that drive people to come and set up home in the area of Edgware. In one small town we have fantastic travel links, including London Underground, and buses, as well as being situated on top of several major road links, including the M1, A1 and A41. People also flock to the area for the great choice of schools and community feel.

 

Not only is Edgware an eclectic place to live and work but it has a flavour for every taste along Station Road and beyond. What’s more is that a large proportion of these eateries are independently owned!

 

There are (at least) three great places to pick up some hosomaki and sushi rolls, so warm up those fingers, get those chopsticks ready, and head over to Thai Edge, Sushi Mania or Hadar.

 

 

 

 

 

 

There are two Italian restaurants in Amaretto and Mascalzone to enjoy a bowl of pasta or great pizza, and a glass (or two) of vino.

 

The Kitchen, on the corner, will hit the mark for a bit of sophistication, but if you want to go back to basics and treat yourself to a great portion of fish and chips, then head straight to The Green Man.

 

If it’s a great Turkish wrap, hummus and falafel that you fancy, look no further than Izgara which has been a longstanding fixture on Station Road for many years.

 

For kosher restaurants Sami’s and also Aviv and Met Su Yan (both situated just off Station Road) are but a few of the wide selection. There’s also the Halal Chinese restaurant, Weng Wah.

 

Finally (we say finally, but actually the list could go on and on), there’s Baskin Robbins and Creams for ice cream, and of course Nando’s which is currently undergoing a refurb.

 

Here at Benjamin Stevens and Frederick George, our teams are constantly testing all the local eateries on a daily basis. Whether its half price sushi every Thursday from Thai Edge, amazing salads and the best coffee around, from Baristas or just our favourite breakfast rolls from Greggs – we’ve selflessly tried them all!

 

So apart from being the leading property specialists in the area, more importantly we can tell you the very best places for breakfast, lunch or dinner. Edgware is our life and we are happy to share that experience to ‘Edgwarians’ old and new.

 

If there’s any other little food gems in the area we’ve missed off the list, please share with us as we can always do with another lunch!!

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What Will Happen to Edgware Property Values Now Interest Rates have Risen?

The current average value of a property in Edgware currently stands at £507,400 so what will the recent increase in the base rates to 0.75% do to the local property market (especially property values). In many of my articles, I talk about what is happening to property values over the short term (i.e. the last 12 months or the last 5 years), but to answer this question we need to go back over 40 years, to 1975.

The average value of an Edgware property in 1975 was £24,564

However, since 1975, we have experienced in the UK, inflation of 807.5%.

Back in 1975, the average salary was £2,291 and average car was £1,840. A loaf of bread was 16p, milk was 28p a pint and a 2lb bag of sugar was 30p. Inflation has increased prices, so comparing like for like, we need to change these prices into today’s money. In real spending power terms, an average value of an Edgware house in 1975, expressed in terms of today’s prices is £222,948.

That means in real terms, property costs a lot more today, than in the mid 1970’s, but has it always been that way? Looking at the important dates of the UK property market, you can see from this table, the last two property boom years of 1989 and 2007, show that there was a significant uplift in the cost/value of property (when calculated in today’s prices).

Edgware House Prices adjusted for Retail Prices.
1975 1979 1982 1989 1997 2007 2009 Today
£206,244 £241,989 £202,185 £359,261 £225,751 £589,632 £480,594 £507,400
Office for National Statistics Retail Price Index was applied to convert nominal property values to current values

Before we move on, hold onto the thought that you can quite clearly see from the table, in real terms, properties are cheaper today in Edgware than they were in 2007!

So, it made me wonder if there was a link between house prices, inflation and other external economic factors, such as interest rates? Interest rates have a strong influence on inflation and property values, principally because changes in the interest rate affect the cost of mortgage payments for homeowners and they affect the flow of foreign currency in (or out) of an economy, thus changing the exchange rate and prices we can sell our goods and services abroad and prices we pay on imports.

So how exactly do interest rates affect property values?

When interest rates rise, it has a substantial effect on increasing the monthly cost of mortgages. Higher mortgage payments will discourage prospective homebuyers or people looking to move up market (meaning their mortgage payments go up) – thus making it comparatively cheaper to rent.

Furthermore, the high cost of mortgage payments sometimes also pushes some existing home owners to sell, meaning there is an increase in house sellers and a decline in house purchasers, and as the law of economics state, when supply is increased and demand falls, (house) prices fall. Another fallout of a rise in mortgage payments is a rise in repossessions. Interestingly, repossessions in the UK rose from 15,000 per annum in the late 1980’s to over 75,000 per annum in the early 1990’s, meaning even more properties came onto the market, exasperating the issue of over supply – pushing property values even lower.

 

High interest rates caused property values to fall in mid 1970’s, early 1980’s and most recently, the early 1990’s (who can remember the 15% mortgage rate!) Conversely though, the drop in property values in 2008/2009 – was not due to interest rates, but due to the credit crunch and global recession.

So, what will happen now interest rates have risen?

It is vital to remember that interest rates are not the only factor affecting property values. It is also possible that when interest rates increase (which they will from the current 0.5%), property values can also continue to rise (it happened throughout the mid to late 1980’s and again between the boom years of 2002 and 2007). When confidence in the economy is good, and we as a Country experience a period of rising real incomes (i.e. after inflation), then the British in the past have continued to buy bricks and mortar, notwithstanding the rise in interest rates.

Another important factor on property values is the supply of housing. A big reason in the current level of Edgware house prices is due to the shortage of supply, which has kept property values higher than I would have expected. An additional factor is whether homeowners have a variable or fixed rate mortgage. 90.6% of new mortgages taken in the last Quarter were at a fixed rate, and 66.2% of all mortgaged homeowners are on fixed-rate mortgages, therefore, they will not notice the effects of higher interest rate payments until they re-mortgage in a few year’s time, meaning there is frequently a time-lag between higher interest rates and the effect on property values. Another factor on mortgages is the ability to get one in the first place. Back in 2014, mortgage providers were told to be stricter on their lending criteria when arranging mortgages following the footloose days of 125% loan to value mortgages with the Northern Rock.  These new rules are a lot more rigorous on borrowers’ ability to repay the payments (although it makes me laugh, when with starter homes it nearer is always cheaper to buy then rent!).

I think the final point is this … affordability is the key. Look at the graph (the red bars) and you will see in REAL HOUSE PRICE terms – it’s cheaper to buy a home today than it was in 2007, yet why aren’t we seeing people buying property at the levels we were seeing in the 2000’s before the credit crunch? Again, looking at the reasons why, I will talk about in future articles.

In conclusion, interest rates are important – but nowhere near as important on the Edgware (and British) property market than they were 15 or 20 years ago.

So, before I go, one final thought – how do we measure the success of the Edgware property market? Well I believe one measure that is a good bellwether is the number of property transactions, as that could show a more truthful picture of the health of the property market than property values. Maybe I should talk about that in an up and coming article?

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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New Home Building in Edgware and Barnet Borough over the last 10 years

Should you, as a landlord for buy to let or for personal occupation, buy a brand-new home?

 

Well, let’s start by looking at the numbers …

 

Over the last 10 years, 5,887 new homes have been built in the Barnet area

 

That is a lot of bricks and mortar! Roll the clock back twenty years in the Edgware property market, and there were two distinct camps of property buyers – folks who would only contemplate living in period character properties with their original fireplaces and beams, and those people who preferred the low maintenance of a new home. Old period homes were ridiculed as money pits by new-home aficionados, while new-home owners were accused of buying boring boxes, all vanilla, all the same, homogenous and bland.

 

However, it’s not as black and white as that anymore – or not as I see it in Edgware. New homebuilders are now trying to change their cookie-cutter uniform rows of suburban boxes into developments that are as individual as the families that love in them, thus increasing their appeal. Nonetheless, whether you choose a stone cottage, archetypal Victorian semi or terrace, 1970’s/80’s functional home or a untouched new home, whatever home you buy, it can result in supplementary costs that are often not taken into math’s when buying by potential homeowners or buy to let landlords.

 

So looking at the numbers in greater detail, let’s see what type of new homes people have been buying in Edgware and the wider local authority area ..

 

Number of New Homes Built in Our Local Authority in the last Decade New Homes Built in Our Local Authority in the last Decade as a Percentage New Homes Built Nationally in the last Decade as a Percentage
Detached 127 2.2% 29.2%
Semi 259 4.4% 21.9%
Terraced 437 7.4% 26.6%
Flat 5,064 86.0% 22.3%

 

I thought the mix of what was built/bought locally over the last 10 years when compared to the national figures was fascinating … it’s interesting (but not surprising) to see a greater proportion of flats built locally and fewer detached homes being built, when compared to the national averages. This is because of the nature of the Edgware area, its position in the country, the availability of building land, planning restrictions by London Borough of Barnet Council and the price of building land.

 

So, should you buy a new home (because a lot of people locally have over the last ten years)?

 

Well if you are considering new, take care when buying one, as often the show home isn’t the actual property you end up buying. It’s like visiting the car showroom and falling in love with the model in the showroom (which is spec’d up to an inch of its life) – only to get the base model when handed the keys. Look out for things like curtain rails, tv aerials (or lack of them), kitchen appliances, carpets and curtains … and outside – make sure you aren’t unwittingly buying a square piece of earth instead of the manicured landscaped gardens.

 

New homes are a lot more efficient on energy consumption compared to the old drafty, high fuel bill Victorian semis, as their owners can testify. Older properties will have maintenance issues, with 100yo brickwork and roofs that might need replacement and extra insulation, rotten wooden windows and a dodgy central heating boiler (all sounding rather a strain on your bank balance if you weren’t aware). The point I am trying to get across is open your eyes and don’t assume .. ask questions and get a surveyor to make a detailed inspection of the property so you know what you are getting yourself into.

 

Next, I also wanted to break down the new home stats to each individual year in our local area to see if there was a pattern to when people bought a new home. As you can see, there was a drop in new homes selling in the Credit Crunch years (2008 to 2010) and since then; the general trend has been better! Looking at the much larger second hand housing market in Edgware over the same 10 years, the coloration between the new homes market and second market has been quite strong – which shows the new home builders don’t make (or break) the Edgware housing market – just follow it (although with the planned building locally in the next 10/20 years – who knows if that will continue to be the case?).

 

So, should you buy brand-new or second hand? If price is your sole motivator, then new homes are always CHEAPER when the economy is bad. However, in normal and good housing market conditions, you will pay a ‘new build premium’. The Royal Institute of Chartered Surveyors admits that this can be as high as 10% extra, when compared to a similar second hand property – so be aware of that (it’s like paying extra for a new car and losing a bit (or a lot) of money as soon as you drive off the forecourt). Although, it’s not always about pure pound notes.

 

Older houses are bigger (more room) yet take more money to heat. Older houses have bigger gardens (to enjoy) – but you will spend more time tending to them. Older houses are in more established areas (with more facilities), whilst everyone is starting afresh on new homes. It all comes down to personal opinion. One final thought though, at least with new homes there is no gazumping or no upward chain to ruin any sale completion dates …

 

The choice as they say … is yours!

 

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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