Has owning a home become an unattainable dream for the 1,387 Canterbury 28 year olds?

My parents bought their first house in the late 1950’s and they were in their early 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s.

 

This year alone, 1,387 people in Canterbury will turn 28 and 2,115 in 2017 .. and dare I say 3,198 in 2018 .. year in year out the conveyor belt carries on .. where are the Canterbury youngsters going to live?

 

Ask a Canterbury ‘twenty something’ and they will say they do not expect to buy until they are in their mid thirties - seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’ as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Canterbury people is the large deposit needed to get a mortgage .. or is it?

 

The average price paid for an apartment in Canterbury over the last 12 months has been £189,000 meaning our first time buyer would need to save £9,450 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday; the latest iPhone upgrade or the latest 4K HD television. That amount could soon be saved if these ‘luxuries’ were withheld over a couple of years but attitudes have changed.

 

Official figures, from the Office for National Statistics, show the average male in Canterbury with a full-time job earns £606.80 per week whilst the average female salary is £492.50 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for an apartment.

 

I was reading a report/survey commissioned by Paragon Mortgages from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the rental sector and 24% intended to buy a house in the future, with the proportion of respondents citing the “unaffordability” of housing as the reason for renting privately increasing from 69% to 74%.

 

However, time and time again, in the starter home category of property (i.e. apartments), nine times out of ten the mortgage payments to buy a Canterbury property are cheaper than having to rent in Canterbury. It is the tenant’s perception that they believe they can’t buy, so choose not to. Renting is now a choice. Tenants can upgrade to bigger and better properties and move up the property ladder quicker than their parents or grand parents (albeit they don’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting so, unless that attitude changes, I expect that the private rental sector in Canterbury (and the UK as a whole) is likely to remain a popular choice for the next twenty plus years. With demand for Canterbury rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. I also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed. One such place for advice, comment and opinion is the Canterbury Property Blog www.canterburypropertyblog.com

Canterbury’s ‘Generation Rent’ to grow by 1,221 households by 2021

“The growth of the private rented sector, and the arrival of an investor class of buy to let landlords within it, is an issue that won’t be going away anytime soon, no matter what you read in the Daily Mail”, I said, as I chatted over a coffee with a landlord client of mine at The Sandwich Bar on St Margaret’s Street in the city. Whether you are a landlord of mine (or not as the case maybe), I am always happy to look over any properties you are thinking of buying for buy to let purposes and more so over a coffee!

Some commentators are saying buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘Bad news sells newspapers’? Let me explain why buy to let in Canterbury is only going in one direction – and not the direction the papers say they are going.

According to Sheffield University, buy to let landlords will continue fueling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% whilst the rate of private sector renting will increase to 35% by 2032.  Although in Canterbury homeownership has already dropped below that estimated 2032 national figure, with only 47.6% of properties being occupied by homeowners ... as one would expect because of our high density of rental properties, which interestingly, in Canterbury, currently stands at 30% today.

Therefore, the demand for rental accommodation in Canterbury will grow by 1,221 households in the next five years ... and these are the reasons why, irrespective of the distractions set out in the newspapers

Canterbury property values over the last six years have risen a lot more than average wages/salaries, meaning as homeownership and mortgage availability is dependent on your ability to pay has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%).

Now it’s true the Tory’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy ISA, and Starter Homes Scheme, an initiative offering a 20% discount for first time buyers … but if you are unable to save for the deposit ... none of this means anything to the ‘20 something’s’ of Canterbury ... and they still need a roof over their heads!

Currently, 16,951 people live in private rented accommodation in Canterbury

These are big numbers and a sizeable chunk of the electorate. So whilst it appears Canterbury “Generation Rent” youngsters will continue to rent and to not to buy for the reasons set out above, Canterbury buy-to-let landlords will be lifted by the projections of greater rental demand. Canterbury and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live. You see, with the new rules on tax, more and more landlords will be looking to move away from the previous honeypot of central London, because its higher prices meant lower rental yields. With the new tax rules and central London’s cooling of house price inflation, more and more landlords will look further afield, including Canterbury (interestingly, I have already been chatting to a few central London landlords after they read the Canterbury Property Blog).

So, by 2021, the number of rental properties in Canterbury will rise to 8,397

This prediction in growth of the Canterbury rental market is even on the back of the government clamping down on tax reliefs for landlords. The point is this, gone are the days of making guaranteed returns on BTL property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it  - but not now. You must take a more considered approach to your existing and future portfolio, especially in Canterbury. The balance of capital growth and yield, especially in this low interest rate world we live in, means Canterbury landlords need to do more homework to ensure the investment in property gives the desired returns. One place for Canterbury landlords and homeowners to visit for such information is the Canterbury Property Market Blog.

 … www.canterburypropertyblog.com

£250,000 inheritance - Is buying Canterbury Property still the best place for my windfall?

I had an interesting email from someone in Canterbury a few weeks ago that I want to share with you (don’t worry I asked his permission to share this with you all). In a nutshell, the gentleman lives in Sturry, he is in his mid 60’s and still working. He has a decent pension, so that when he does retire in a couple of years’ time, it will give him a comfortable life. He had recently inherited £250,000 from an elderly aunt. One option he told me was put it into a savings account. The best he could find was a 2 year bond with the Post Office which paid 1.9%; meaning he would get £4,750 in interest a year. One of his other options was to buy a property in Canterbury to rent out and he wanted to know my thoughts on what he should buy, but he had concerns as he didn’t want to take a mortgage out at his time of life. He was also worried about all the tax changes he had read about in the papers for landlords.

Notwithstanding the war on Canterbury landlords being waged by George Osborne, the attraction of bricks and mortar endures for many. As our man is a cash buyer, he would not have to deal with the intricate cut to mortgage interest tax relief that will diminish, or even eradicate, the profits of many Canterbury landlords. It’s true he would face the extra 3% in stamp duty to buy a second property, but with some good negotiation techniques, that could soon be mitigated.

I told him that buying a Canterbury buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £4,750 a year or, as he rightly suggested, invest in property in Canterbury. The average yield (yield being the equivalent of the interest rate on the property) at the moment in Canterbury is 3.74% per annum, meaning our potential F.T.L (First Time Landlord) should be able to, depending on what he bought in the city, earn before costs £9,350 a year. (However, I told him there are plenty of landlords in Canterbury earning half as much again (if not more), if he was willing to consider more specialist investment types of properties – again, if you want to know where – look at my blog or drop me an email).

The bottom line is that the success of investing in Canterbury buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike with a savings account, with property the capital you invested can also go up (and yes, it can go down as well – more of that in second). Property values in Canterbury have risen in the last twelve months by 8.4% meaning, that if our chap had bought a year ago, not only would he have received the £9,350 in rent, but also seen an uplift of £21,000 …meaning his overall return for the year would have been £30,350 (not bad when compared to the Post Office!).

..  but the doom mongers amongst you will say, property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices had bounced back to their ’79 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped in 1988 and did take 13 years to reach back to those ’88 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Land Registry, average property values in Kent currently stand 10.42 below the January 2008 level, and anecdotal evidence suggests that in the nicer parts of Canterbury, we are well above these sorts of levels. Therefore, all this talk of property crashes is unfounded.

… and what would that £250,000 get you in Canterbury? A decent 2 bed terrace in St Dunstans, a lovely 3 bed end terrace in Harbledown or a nice 2 bed apartment in Flagstaff Court, South Canterbury .. in fact, the world is your oyster. But which Oyster? Well, my blog reading friends, if you want to read similar articles like this and what I consider to be the very best of buy to let deals in Canterbury, irrespective of which agent is selling it, then you need to visit the Canterbury Property Blog www.canterburypropertyblog.com

8.4% rise in Canterbury Property Values adds weight to the City’s Housing Crisis

Canterbury’s continuing housing shortage is putting the City’s (and the Country’s) repute as a nation of homeowners ‘under threat’, as the number of houses being built continues to be woefully inadequate in meeting the ever demanding needs of the growing population in the City.   In fact, I was talking to my parents the other day at a family get together; the subject of the Canterbury Property market came up in the conversation (as I am sure it does at many family parties in Canterbury) after the weather and politics. My parents said it used to be that if you went out to work and did the right thing, you would expect that relatively quickly over the course of your career you would be buying a house, you would go on holiday every year, and you would save for a pension.   But now things seem to have changed?

Back in the autumn, George Osborne, used the Autumn Statement to double the housing budget to £2bn a year from April 2018 in an attempt to increase supply and deliver 100,000 new homes each year until 2020.  The Chancellor also introduced a series of initiatives to help get first time buyers on the housing ladder, including the contentious Help to Buy Scheme and extending Right to Buy from not just Council tenants, but to Housing Association tenants as well.

Now that does all sound rather good, but the Country is only building 137,490 properties a year (split down 114,250 built by private builders, 21,560 built by Housing Associations and a paltry 1,680 council houses).    If you look at the graph (courtesy of ONS), you will see nationally, the last time the country was building 230,000 houses a year was in the 1960’s.

 

How George is going to almost double house building overnight, I don’t know, because using the analogy of a greengrocers; if people want to buy more apples (i.e. houses) in a greengrocers’ shop, giving them more money (i.e. with the Help to Buy scheme) when there's not enough apples in the first place doesn't really help.

Looking at the Canterbury house building figures, in the local authority area as a whole, only 260 properties were built in the last 12 months, split down into 250 privately built properties and 10 housing association with not one council house being built.   This is simply not enough and the shortage of supply has meant Canterbury property values have continued to rise, meaning they are 8.4% higher than 12 months ago, rising 0.7% in the last month alone.

I was taught at school (all those years ago!), that it is all about supply and demand, this economics game.   The demand for Canterbury property has been particularly strong for properties in the good areas of the City and it is my considered opinion that it is likely to continue this year, driven by growing demand among buyers (both Canterbury homebuyers and Canterbury landlords alike). You see Canterbury’s economy is quite varied, meaning activity is expected to remain relatively strong into the early summer of 2016, especially as some Canterbury buy to let landlords try to complete purchases ahead of the introduction of new stamp duty rules in April.

.. and of supply, well we have spoken about the lack of new building in the City holding things back, but there is another issue relating to supply.   Of the existing properties already built, the concern is the number of properties on the market and for sale.   The number of properties for sale last month in Canterbury was 289, whilst 6 months ago, that figure was 315, whilst three years ago it stood at 487… a massive drop!

With demand for Canterbury property rising, minimal new homes being built and less properties coming onto the market, that can only mean one thing ... now is a good time to be a homeowner or landlord in Canterbury.   For more articles like this, please visit the Canterbury Property Market Blog www.canterburypropertyblog.com

 

 

4,380 Canterbury Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?

There I was, out with friends at Howletts Wild Animal Park last weekend, when a smart gentleman approached me. ‘Hello’, he said, ‘You are the person writes that Property Blog in the Canterbury Times aren’t you? We have met before at the Business Networking event in Canterbury a few months ago’. I did then recognise him and, whilst I won't mention his name, he runs a small but perfectly formed well known independent retailers in the city ... It’s amazing who you see when out walking! Anyway, I was at a loose end for five or ten minutes as the other half was sorting things with our friends, so we had a chat.

He wanted to know my thoughts on the future of the Canterbury property market, and I would now like to share with you that conversation, my Canterbury property Blog reading friends. People are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the city have a choice to what type of roof they have ... they rent from the Council, they can rent from a private landlord or finally they can get a mortgage and buy one. In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries, i.e. mobile phones, ipads, brand new car, two overseas holidays a year etc etc etc) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently fewer Canterbury youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering ... and I want to share them with you.

Roll the clock back 20 years and Canterbury was a different place. There were 16,057 households in Canterbury and 9,029 of those were owner occupied. Move to the present, and with all the building in the city, the total number of households has increased by 23.6% to 19,850 and quite surprising (to me at least), the number of owner-occupiers has only increased to 9,236 (although as a proportion, it is 46.5% compared to 56.2% twenty years ago).

However, it’s rented sector that is truly fascinating … twenty years ago, only 1,575 properties were privately rented in Canterbury ... and now its 5,955, a rise of 4,380.

 

The twentysomethings of Canterbury housing difficulties haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 3,119 to 2,661 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Canterbury and those who educate themselves and treat it as a business will survive and prosper.

 

The best way Canterbury landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, Canterbury tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Canterbury (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

 

... And just as the other half had sorted lunch arrangements with our friends, he asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand it is hard to imagine Canterbury property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the the housing market should return to balance. For more in-depth thoughts on the Canterbury Property Market, which have a library of similar articles like this, all on the Canterbury Property Market, please visit my blog – www.canterburypropertyblog.com

Landlords Information Evening - Monday 21st March 2016 - Canterbury

Running from 17.30hrs until 20.30hrs on Monday 21st March 2016, is a really good Landlords information evening in conjunction with the National Landlords Association (NLA). The evening is chaired by Marion Money of the NLA and various guest speakers deliver relevant and useful information regarding the rental market. The event is open to all and free to attend.


This event will be covering such issues as Article 4 Direction, Right to Rent plus an all important update on Private Rented Sector Legislation and Regulations


It's a great opportunity to hear from a number of guest speakers, plus network with other landlords and suppliers.


The address of the venue is: Darwin Conference Suite, Darwin College, University of Kent, Canterbury CT2 7NY.

Private Renting in Canterbury increases by 160% in 20 years

You find me in a reflective mood today as I want to talk about the future of investing in property in Canterbury. The truth is that we have got fat and lethargic, with many people having mistaken the ever rising Canterbury (and in fact the whole of the UK) property market since the 1960’s as the eternal gift that kept giving as property prices constantly rose and doubled every five to seven years.

 

The days of making money from property

as easy as falling off a log, like taking candy

from a baby, are sadly over my Canterbury Property Blog

reading friends

 

Whilst George Osborne has decided now is the time to milk the ‘Golden Cow’ of UK’s private landlords, with changes in taxation for buy to let property, many pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable and safe return on property with these changes. You see, I have always seen investing in the Canterbury buy to let market (as I would anywhere in the UK), as I might see Mother Nature, creating some truly wonderful stunning warm weather but at the same time, she will bite, creating catastrophic situations such as snowstorms and hurricanes.  You need to study the market, take advice and opinions from many people and then decide what the proverbial property weather will be … remember, tenants will always want a roof over their head and I don’t see the HM Government building the millions of houses required to house them?

 

Nobody knows the future, and yes people can predict but I wouldn’t be afraid of this change .. because as a famous French proverb says, (I told you I was in a reflective mood today), ‘the more things change, the more they stay the same’.  I mean, no one could have predicted how the property market has changed in Canterbury over the last couple of decades? Looking specifically at the Canterbury Parliamentary Constituency, twenty years ago, 26,512 households (meaning 68.33% of property) was owned and only 3,103 households were privately rented (meaning 8% of property was rented out by private landlords). Roll the clocks on twenty years and the change has been seismic …. Now 27,121 of properties in the Constituency are home-owners (a drop to only 62.96% being owner occupied) and the jump in private renting has been out of this world, as 8,959 properties are now privately rented proportionally 20.8%). (NB Neighbouring Constituencies show similar changes as well)

 

Who would have predicted in 1995 the private rental sector

in Canterbury would have grown by 160% in the proceeding 20 years?

 

Also, if you had asked someone in 1995 to predict what would happen to property values over the proceeding 20 years (i.e. between 1995 and 2015), they might have predicted similar growth to the growth experienced over the previous 20 years (i.e. between 1975 and 1995), which was a very impressive 351.55%. Yes, property values in Canterbury have increased over the last 20 years (between 1995 and 2015), but by a more modest 240.77% (and most of that can be attributed to house price growth between 2000 and 2006.)

 

The property market is constantly changing and buy to let for too long has been heavily dependent solely 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 doom-mongers and see it as bringing many opportunities. You might need to change your buy to let benchmarks, your approach to financing or even consider places other than Canterbury 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.

 

The advice I give to my landlords, and you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Canterbury 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 Canterbury buy to let landlords to thrive in. If you want to learn more about the Canterbury Property Market, feel free to pop in for a coffee at our office for a chat with me, or failing that, visit the Canterbury Property Blog, where you will find many more articles like this ..solely on the one topic of the Property Market in Canterbury …. www.canterburypropertyblog.com

Doom and Gloom for Canterbury Property Market?

One of my landlords from Rough Common rang me today, after he had spoken to a friend of his. Over the weekend, they were discussing the Canterbury property market and neither of them could make their mind up if it was time to either sell or buy property. If you read the newspapers and the landlord forums on the internet, there is a good slice of doom and gloom, especially with changes in the taxation towards landlords, the new legislation on checking tenants and the general uncertainty in the world economic situation.

I would admit, there are certain landlords in Canterbury who have over exposed themselves in the last few years with high percentage loan to value mortgages. Those mortgages, with their current (yet artificially low) interest rates, will start to suffer, as their modest monthly positive cash flow/profit, i.e. income (rent) less costs (mortgage, fees, tax); will become negative when the tax and mortgage rates rise throughout 2017 and beyond.

It appears to me these landlords seem to have treated the Canterbury Buy to Let market as a sure bet and have not approached this as a business and, as a result, they will suffer as they thought "Buy a house - rent it out so it covers the mortgage and make a few quid on top".  These are the people who will be thinking twice. I see opportunity everywhere and won't be stopping, I’m here to stay. It’s going to be an exciting new year.

Gone are the days when you could buy any old house in Canterbury and it would make money.  Yes, in the past, anything in Canterbury that had four walls and a roof would make you money because since WW2, property prices doubled every seven years … it was like printing money – but not anymore.

True, since January 1997, the average price paid for a Canterbury flat/apartment has risen from £50,990 to today’s current average of £201,867 in the city, an impressive rise of 296% and terraced/town house have risen in the same time frame, from £65,679 to £252,147, an similar rise of 284%. However, look back to 2005, and in that year, the average flat was selling for £152,071, meaning our Canterbury landlord would have seen a modest rise of 33% and the terraced owner would have seen an increase of 43%, as they were selling for on average £176,885 ... not bad until you consider inflation.

Since 2005, then inflation, i.e. the cost of living, has increased by 33.4%. That means to retain its value, Canterbury terraced property bought for £176,885 in 2005 needs to be worth £235,909 today. Therefore, our landlord has seen the ‘real’ value of his property only increase by 9.6% (i.e. 43% less 33.4% inflation).

The reality is, since around 2004/2005 we haven’t seen anything like the capital growth in property we have seen in the past and it’s not predicted to grow at the rates it has previously done either. So it is high time anyone considering investing in property stopped believing the hype and did some serious research using independent investment expertise. You can still make money by buying the right Canterbury property at the right price and finding the right tenant. However, remember, investing in Canterbury property is not only about capital growth, but also about the yield (the return from the rent). It’s also about having a balanced property portfolio that will match what you want from your investment – and what is a ‘balanced property portfolio’? Well we discuss such matters on the Canterbury Property Blog ... if you haven’t been, then it might be worth a few minutes of your time?  www.canterburypropertyblog.com

34.7% of Canterbury tenants in the private rented sector are on Housing Benefit

“What does the ideal Canterbury tenant look like?”, asked one of my landlords from Harbledown the other day, to which he carried on before I could reply, “Let me guess, a professional couple, both in their 30’s, flawlessly tidy, pays their rent early, doesn’t complain or fuss, who has no plans to move and cheerfully accepts annual rent rises”.

Before I can answer that question properly, I have always believed all a landlord wants (and expects) of their tenants is to pay their rent on time and look after the property as if it were their own. In return, the landlord should provide a property that is warm, clean, modern and damp free and sort any issues (such as repairs) quickly and without fuss. 

Back to the tenants – tenants tend to fall into several groups ... 20 something professionals; young and middle aged families; corporate tenants (i.e. their employer finds their employee a house to live in); students; older singles/couples and housing benefit claimants – and they come with different needs and wants. So choosing who best suits your Canterbury property – and steering clear of bad tenants – is a big factor in making property investment a success.

One topic that I am often asked is should they, as a landlord, accept tenants on housing benefit?

It might interest the landlords of Canterbury that of the 10,665 private rented properties in the local council area, 34.7% of the tenants of those properties are on some form of housing benefit.

(3,709 properties to be exact). I know many landlords have suffered late rent payments with tenants on benefits, especially since 2008, when local authorities started paying housing benefit to tenants rather than directly to the landlords, but you can’t ignore the fact that housing benefit tenants make up a significant proportion of the Canterbury rental population. My opinion is that the final choice of accepting such tenants has to be the landlords but you can’t tar every tenant with the same brush (I will always give you a balanced opinion if ever asked).

Interestingly, it might surprise some readers of the Canterbury Property Blog, when we compare Canterbury to the national picture, Canterbury’s Housing benefit claimants are lower, as nationally a higher proportion of private tenants claim the benefit. Nationally, 39.2% of the tenants of the 3,891,467 rental properties in Great Britain claim some form of housing benefit (i.e. 1,526,915 properties).

Now, let us look at the occupations of Canterbury tenants, which makes even more fascinating reading. Of the 10,665 privately rented properties in the Canterbury area, 7,681 head tenants (the head tenant being classified as the head of the household) are in employment (the other 2,984 rental property head tenants either being retired, long term sick, students or job seekers).

Splitting those 7,681 head tenants down into their relevant professions, 3,076 of them are Managers, Directors, Senior Officials, Professional or Technical Professions, 551 in Administrative and secretarial occupations, 857 in Skilled Trades, 823 in the Caring, Leisure and other service occupations, 886 Sales and Customer Service Occupations, 421 Process, Plant and Machine Operatives and finally, 1,067 in Elementary Occupations.

The one thing I have always known anecdotally, but until I did my research, never had anything to back it up with, was the high proportion of professionals and skilled trades renting property in Canterbury – intriguing! Maybe in future articles, I will look deeper into the corporate tenant market, young and middle aged families, students and older persons rental markets.... but in the meantime, if you want more news, views and commentary about the Canterbury property market, there are many similar articles like this on the Canterbury Property Blog www.canterburypropertyblog.com .

Are the streets of Canterbury paved with gold?

Whilst I sometimes ‘harp on’ about the merits of the Canterbury property market and why it’s such a great place to invest, it’s a real (and pleasant) surprise to get another endorsement by none other than the property correspondent at The Times, Ruth Bloomfield!

Whilst I would love to say that it was my ‘eagle eyes’ that spotted this ground breaking revelation, I am delighted to say that it was one of my blog readers, (whom may I also add is one of our long established Canterbury Landlords) who brought the article to my attention.

In the recent article (Friday 12th February) Ruth Bloomfield looks further afield than London and offer her ‘top tips’ for growth, based upon various pieces of research that she has been studying.

One piece of research, from JLL, first of all looks at Manchester, predicting property prices will increase by 5.5% this year. The researcher, Adam Challis also points out that Manchester is the ‘out and out’ second economic city of the UK. This it may be, but at 5.5% growth I’m not too sure that many investment Landlords are going to get very excited at such a prospect! Interesting to note that Mr Challis, then takes a punt at Southampton, where again he has ‘high hopes’ and again, will rise by 5.5%. We then get another ‘drum roll’ as we head back up North to Liverpool and (wait for it)…….. it’s a growth of 5%. I know what you’re thinking…..”does it get any better than this, because these figures don’t quite excite me”.

Ruth Bloomfield then takes a look at further research that’s been made by the esteemed agent Savills, who recommends focusing on the 20 key cities and they say that the ones to watch are the ‘southern university cities. Now it gets interesting I hear you say! Quite rightly they first pick up on the two main University cities in the UK, i.e. Cambridge and Oxford, whose property values have increased by 10.4% and 9.3% respectively. What is of further interest, the lovely lady from Savills, Sophie Chick (what a great name!) then starts to look further afield and she tips Canterbury as “within commuter distance of London, a beautiful city and, comparatively, excellent value, with average property prices of  £269,000.00”. This is further endorsed with a property value growth of 8.6% in the past 12 months.

So there you have it! Great city, great place to invest in. That’s being said, rest assured that despite what others maybe telling you, the streets of Canterbury are not ‘paved with gold’….. tread with care and if you need any advice, give me a call!

Canterbury Landlords count the cost of a Tory Election win

Can you remember 10.05pm on Thursday, 7th May 2015 ... with the shock news that BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Tyler Hill and Fordwich exhaled a huge sigh of relief, as Canterbury landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about as the Tory’s were always considered to be a political party that accepted the importance of the rental market, supported its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.

Since May though, George Osborne announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages, some people have started to question that loyalty. However, things could have been a lot worse for Canterbury landlords as previous ideas of making landlord’s pay more tax was the idea (which was seriously considered) of increasing Capital Gains Tax rates to the landlord’s own income tax levels. If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non-starter for almost everyone.

However, I will admit the loss of mortgage higher rate tax relief will make a number of properties not stack up financially. The new rules are likely to slow demand in the Canterbury housing market, which is in fact good news for the other landlords, as there is less competition from 'amateur' landlords offering too much.

Just a thought, but making Canterbury landlords think twice and

run their numbers more cautiously is not such a bad thing.

 

So looking at the numbers, the December figures have just been released and they show a growth of property values in Canterbury of 0.5% over the month of November. That figure doesn’t surprise me due to the time of year. It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months, property values in Canterbury have risen by 7.7%, not bad when you consider inflation is running at -0.1%.

However, regular readers of the Canterbury Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but what types of property are actually selling in Canterbury?  Looking at all the properties sold, as recorded by the Land Registry, within 2 miles of the centre of Canterbury in September 2015 (this data always runs a couple of months behind the house price data) compared to September 2007 (a couple of months before the credit crunch started to bite and the subsequent property crash).

	Sept 2007	Sept 2015	Difference
Detached in Canterbury	3	12	+300%
Semis in Canterbury	18	20	+11%
Terraced Houses in Canterbury	26	24	-8%
Apartments / Flats in Canterbury	52	17	-67%

 

Now I have mentioned in previous articles that the numbers of properties selling in the city has certainly dropped post 2008, but what amazed me were the drop in the number of terraces and apartments selling in Canterbury compared to the sales of detached and semi’s properties, which have increased considerably.

Less properties are selling than last decade in Canterbury

and the types of properties selling have changed ...

interesting times ahead for the Canterbury Property market!

 

Therefore, all I can say to the landlords of Canterbury is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price. One place for such advice and opinion on the Canterbury Property market is the Canterbury Property Blog www.canterburypropertyblog.com

Where will Canterbury Property Prices be by 2021?

I was having lunch the other day at Café Rouge on Long Market in Canterbury, with a local Canterbury solicitor friend of mine, when the subject of property came up. He asked me my thoughts on the Canterbury property market for the next five years.  Property prices are both a British national obsession and a key driver of the British consumer economy.  So what will happen next in the property market? So here is what I told him, and now wish, my blog reading friends, to share with you.

Before I can predict what will happen over the next five years to Canterbury house prices, firstly I need to look at what has happen over the last five years.  One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth – key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy to let landlords have an appetite to continue purchasing buy to let property.

When the Tory’s came to power in May 2010, the total number of people who were unemployed in City stood at 1,507 (or 3.1% of the working age population in Canterbury parliamentary constituency). Last month, this had dropped to 676 people (or 1.3% of the working age population).

As the Canterbury job market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).  That is why, even with the turbulence of the last few years, property values in the Canterbury area are 18.0% higher today than they were five years ago.

Many home occupiers have held back moving house over the past seven to eight years following the Credit Crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market. With a more stable economy in the City, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Canterbury.

I forecast that the value of the average home

in Canterbury will increase by 22.4% by 2021

 

22.4% might sound optimistic to some, but according to Land Registry, values are currently rising in Canterbury at 8.2% year on year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole.

However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Canterbury housing market.  The number of properties for sale in Canterbury is lower than it was five years ago, restricting choice for buyers (yet the other side of the coin is that that keeps prices higher). Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy to let taxation rules which are being introduced between 2017 and 2021 (although choosing the right sort of property / portfolio mix in Canterbury will, I believe, mitigate those issues with the next taxation rules).

I am telling the landlords I speak to, that with interest rates at their current level 0.5%, the cash in your Building Society Passbook is going to grow so slowly that it might as well be kept under their bed. Property prices, by contrast, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation.

So my final thought ...  property is a long term investment, it has its ‘up and downs’ but it has always outperformed, in the long term, most investments. Those in their 40’s and 50’s in Canterbury would be mad not to include property in their long term financial calculations. Just make sure you buy the right property, at the price in the right location. One source of information on such matters would be the Canterbury Property Blog ... www.canterburypropertyblog.com

What does 2016 have in store for the Canterbury Property Market?

Canterbury house prices up or Canterbury house prices down? ... and if so, by how much? Those of you who read the Canterbury Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 9,236 Canterbury homeowners and landlords.

The average Canterbury property is 8.2% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (i.e. consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (i.e. salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few months ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Canterbury landlords in my blog, but I believe the real issue in the Canterbury property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Canterbury in 2016?

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in February 2011, 443 properties were for sale in Canterbury .. today that figure is 273. On the face of it, this means there is less choice for Canterbury buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Canterbury house sellers.

Everything isn’t all doom and gloom though ... again back in February 2011, the average property in Canterbury took 115 days to find a buyer .. latest figures state this has dropped to 89 days .. a drop of 23% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Canterbury is the 4 bed, which only takes 70 days to find a buyer (on average) compared to the 2 bed, which takes 104 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Canterbury in 2016?  I am going to suggest they will rise between 7% and 8% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Canterbury property market, visit the Canterbury Property Blog – www.canterburypropertyblog.com