Tuesday, 26 July 2016
93% of Canterbury Homeowners are over 35 - The affect of their Brexit vote on the Canterbury Property Market
Well it’s been nearly 5 weeks since the Referendum vote and we have had a chance to reflect on the momentous decision that the British public took.
In case you weren’t aware, the residents of the Canterbury City Council area went with the National mood and voted as follows ….
Canterbury City Council Remain Votes 40,169 (49% of the vote)
Canterbury City Council Leave Votes 41,879 (51% of the vote)
Canterbury City Council Turnout 75%
I have been reading there is some evidence to indicate younger voters were vastly more likely to vote Remain than their parents and grandparents and, whilst the polling industry's techniques may have been widely criticised, following them getting both the 2010 General Election and the recent Brexit vote wrong, anecdotally, many surveys seem to suggest there was a relationship between age and likelihood to support leaving the EU.
Interestingly, the average age of a Canterbury resident is 40 years old, which is above the national average of 39.3, which might go someway to back up the way Canterbury voted? What I do know is that putting aside whether you were a remain or leave voter, the vote to leave has, and will, create uncertainty and the last thing the British property market needs is uncertainty (because as with previous episodes of uncertainty in the UK economy – UK house prices have tended to go down).
Interestingly, when we look at the Homeownership rates in the Canterbury City Council area, of the 40,605 properties that are owned in the Canterbury City Council area (Owned being owned outright, owned with a mortgage or shared ownership), the age range paints a noteworthy picture.
Age 35 to 49 homeowners 10,079 or 24.8% (Nationally 29.2%)
Age 50 to 64 homeowners 12,734 or 31.4% (Nationally 30.7%)
Aged 65+ homeowners 14,967 or 36.8% (Nationally 30.5%)
So, looking at these figures, and the high proportion of older homeowners, you might think all the Canterbury City Council area homeowners would vote Remain to keep house prices stable and younger people would vote out so house prices come down- so they could afford to buy?
But there's a risk in oversimplifying this. The sample of the polling firms are in the thousands whilst the country voted in its millions. Other demographic influences have been at play in the way people voted, as early evidence is starting to suggest that class, level of education, the levels of immigration and ethnic diversity had an influence on the way the various parts of the UK voted.
So what I suggest is this – Don’t assume everyone over the age of 50 voted ‘Leave’ and don’t assume most 20 somethings backed ‘Remain’; because many didn't!
Tuesday, 19 July 2016
Canterbury faces a predicament. The population is growing and the provision of new housing isn’t keeping up. With the average age of a Canterbury person being 40.0 years (the South East average is also 40.0 years old compared to the national average of 39.4 years of age), the population of Canterbury is growing at an alarming rate. This is due to an amalgamation of longer life expectancy, a fairly high birth rate (compared to previous decades) and high net immigration, all of which contribute to housing shortages and burgeoning house prices.
My colleagues and myself work closely with Durham University and they have kindly produced some statistics specifically for the Canterbury City Council area. Known as the UK’s leading authority for such statistics, their population projections make some startling reading…
For the Canterbury City Council area ... these are the statistics and future forecasts
2016 population 160,477
2021 population 165,977
2026 population 172,863
2031 population 180,324
2036 population 185,833
The normal ratio of people to property is 2 to 1 in the UK, which therefore means...
We need just over 12,600 additional new properties to be built
in the Canterbury City Council area over the next 20 years.
Whilst focusing on population growth does not tackle the housing crisis in the short term in Canterbury, it has a fundamental role to play in long-term housing development and strategy in the City. The rise of Canterbury property values over the last six years since the credit crunch are primarily a result of a lack of properties coming onto the market, a lack of new properties being built in the City and rising demand (especially from landlords looking to buy property to rent them out to the growing number of people wanting to live in Canterbury but can’t buy or rent from the Council).
Although many are talking about the need to improve supply (i.e. the building of new properties), the issue of accumulative demand from population growth is often overlooked. Nationally, the proportion of 25-34 year olds who own their own home has dropped dramatically from 66.7% in 1987 to 43.8% in 2014, whilst 78.2% of over 65s own their own home. Longer life expectancies mean houses remain in the same hands for longer.
The swift population growth over the last thirty years provides more competition for the young than for the mature population. It might surprise some people that 98% of all the land in the UK is either industrial, commercial or agricultural, with only 2% being used for housing, which means one could propose expanding supply to meet an expanding population by building on green belt – that most politicians haven’t got the stomach to tackle, especially in the Tory’ strongholds of the South of England, where the demand is the greatest. People mention ‘brown field’ sites, but recent research suggests there aren’t as many sites to build on, especially in Canterbury that could accommodate 12,600 properties in the next 20 years.
In the short to medium term, demand for a roof over of one’s head will continue to grow in Canterbury (and the country as a whole). In the short term, that demand can only be met from the private rental sector (which is good news for homeowners and landlords alike as that keeps house prices higher).
In the long term though, local and national Government and the UK population as a whole, need to realise these additional millions of people over the next 20 years need to live somewhere. Only once this issue starts to get addressed, in terms of extra properties being built in a sustainable and environmentally friendly way, can we all help create a socially ecological prosperous future for everyone. For more thoughts on the Canterbury Property market, please visit the Canterbury Property Market Blog www.canterburypropertyblog.com.
Wednesday, 13 July 2016
I had a homeowner from Rough Common email me the other day. She said that she had been following my blog (the Canterbury Property Blog) for a while and wanted to pick my brain on when is the best time of the year to sell a property. Trying to calculate the best time to put your Canterbury property on the market can often seem something akin to witchcraft and, whilst I would agree that there are particular times of the year that can prove more productive than others, there are plenty of factors that need to be taken into consideration.
Even if you are putting your property on the market, you don’t know how long it will take to find a buyer - no crystal ball to help with that one. At the moment, the latest set of figures for all 27 estate agents in Canterbury, show the average length of time it takes to find a buyer for any Canterbury property is as follows….
Detached 84 days
Semi 81 days
Terraced 102 days
Flat 160 days
Overall average 124 days
If we roll the clock back to January 2016, the overall average time it took to find a buyer (again using data from all of the 27 Canterbury Estate Agents) was 118 days.
So, on the face of it, things haven’t vastly improved over the last six months or so. But, when I looked at the data going back to 2008, and every Spring since then, the average length of time it takes to sell a property usually drops between January and the Summer months, for it to rise on the run up to Christmas. For example ..
Winter 2008 - 151 days Summer 2008 - 121 days
and in more recent times …
Winter 2013 - 138 days Summer 2013 - 128 days
Winter 2014 - 141 days Summer 2014 - 111 days
Winter 2015 - 118 days Summer 2015 - 103 days
Coming back to the present, even if you placed your property on the market today in Canterbury, if it takes you on average a little under eighteen weeks to find a buyer, then you can expect solicitors and the chain to take an additional eight and twelve weeks after that, before you move. It comes down to personal choice as to when you place your property on the market. Children often affect the decision. On one side you might delay putting that for sale board in your front garden so you can move in the summer school holidays, but on the other side, you might want to move sooner to be in the catchment area of a preferred school, in plenty of time for the next academic year?
There are times of the year when it's better to sell, and times when waiting a little longer can pay off in the long run. In a nutshell, I would say this is the way of the seasons ..
WHEN TO MARKET?
Spring: Customarily there are more house-buyers as the Daffodils show themselves
Summer: Sellers may miss out on house-buyers being on holiday
Autumn: The enthusiasm for buying homes returns
Winter: Interest diminishes as festive period looms
What this means to buyers and landlord investors is that they often pick up a bargain in later months of the year, as there is less competition from owner occupiers. So, whilst there are better months to achieve a quicker sale, the only piece of advice I can give to every home owner and landlord in Canterbury, is do the right thing for yourself, do your homework and buy (and sell) with both your head, as well as your heart.
For more thoughts on the Canterbury Property Market – visit the Canterbury Property Market Blog www.canterburypropertyblog.com
Tuesday, 5 July 2016
Canterbury house prices since the Millennium have risen by 164.75%, whilst average salaries in Canterbury have only grown by 51.27% over the same time frame. This has served to push home-ownership further out of reach for many Canterbury people as they have to battle against raising considerable deposits and meet sterner lending criteria, as a result of new mortgage regulations introduced in 2014/5. The private rental market in Canterbury has grown throughout the last twenty years with buy-to-let investors purchasing a high proportion of newly built residential properties that were built and designed for the owner occupier sales markets. For example, in the Canterbury Constituency, roll the clock back 20 years and there were 38,802 properties in the Constituency, whilst the most recent set of figures show there are 43,070 properties - a growth of 4,268 properties.
However, anecdotal evidence suggests that a large majority of those 4,268 were bought by Canterbury buy-to-let landlords, as over the same 20-year time frame, the number of rental properties has grown from 3,103 to 8,959 in the constituency - a rise of 5,856 properties.
Nevertheless, some say this historic growth of the Canterbury rental market might start to change with the new tax rules for landlords introduced by Mr. Osborne over the last seven or eight months. Yet the numbers tell another story. Across the board, mortgage borrowing climbed to a 9 year zenith in March this year as the British property markets traditional Easter rush corresponded with landlords hurrying to beat George Osborne’s new stamp duty changes – buy-to-let landlords borrowed £7.1bn in March 2016 (the latest set of figures released) which was 163% up on the £2.7bn borrowed in the previous March.
You see, from my point of view, I don’t think things will get worse in the buy-to-let market in Canterbury and these are the reasons why I believe that:
Firstly, what else are Canterbury landlords going to invest in if it isn’t property - the stock market? Since the Millennium, the stock market has risen by an unimpressive total of 5.54%, quite different to the 164.75% rise in Canterbury property prices?
Secondly, its true the 3% stamp duty is the first blow on top of a number of other tax changes to be phased in between 2017 and 2021, such as landlords facing a constraint in their ability to offset mortgage interest and, if sizable numbers of landlords do take the decision to sell their portfolios, this will lead to a substantial amount of second hand properties being put up for sale. Yet that might not be a bad thing, as I have mentioned in previous articles there is a serous shortage of properties to buy at the moment in Canterbury: the stock of property for sale being at a six year all time low.
.. Thirdly, if there are fewer rental properties in Canterbury, as supply drops and demand remains the same (although ask any letting agent in Canterbury and they will say demand is constantly rising) this will create a squeeze in the Canterbury rental market and as a result rents will rise. In fact, I predict even if landlords don’t sell up, Canterbury rents will rise as Canterbury landlords seek to compensate for increased costs, which means more landlords will be attracted back.