Canterbury’s private renting set to hit 8,397 households by 2021 - Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Canterbury citizens for the current housing crisis in the city?

 

Also known as the ‘Baby Boomer Generation’, these Canterbury people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

 

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

 

...Yet some have suggested these Canterbury baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

 

Between 2001 and today, average earnings rose by 65%,

but average Canterbury house prices rose by 154.3%

 

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents ... it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

 

Like all things in life, we must look to the past, to appreciate where we are now.

 

The three biggest influencing factors on the Canterbury (and UK) property market in the later half of the 20th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory party to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Canterbury.

 

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

 

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays ... no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

 

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you ... I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

 

So, in Part Two next week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).

 

Canterbury property price rises set to be more restrained in 2017 due to Brexit

While Brexit has not yet had a sizeable impact on the Canterbury housing market, my analysis is pointing to the fact that the economic viewpoint still remains uncertain and Canterbury property price growth is likely to be more subdued during 2017 - although that isn’t a bad thing so let me explain.

 

Since the summer, apart from a little wobble of uncertainty a few weeks after the Referendum vote, property values (and the economy), on the whole has outperformed what most people were anticipating. In fact, when I looked at the property prices for our Canterbury City Council area, these were the results...

 

November 2016          - rise of 0.89%

October 2016              - rise of 1.09%

September 2016         - rise of 1.32%

August 2016                - rise of 1.89%

July 2016                     - rise of 1.78%

June 2016                    - drop of 0.59%

 

The UK property market continues to perform robustly (because we can’t just look at Canterbury as if in its own little bubble) with annual price growth set ended last year at 11.35% and most South East region property market at 9.1%.

 

Talking to fellow agents in London, the significant tidal wave of growth seen from 2013 through to 2015 in the capital has subdued over the last six months. However, as that central London house price wave has started to ripple out, agents are starting to see stronger property growth values in East Anglia and the South East regions outside of London, than what is being seen within the M25. So, fellow Canterbury landlords and homeowners, is this the time to get your surfboards ready for the London wave?

 

Well, we in Canterbury haven’t really been affected by what is happening in the central London property mega bubble (i.e. Kensington, Chelsea, Marylebone, Mayfair etc.). The property market locally is more driven by sentiment, especially the ‘C’ word ... confidence. The main forces for a weaker Canterbury Property market relate to economic uncertainty surrounding the Brexit process, which I believe will impact unhelpfully on consumer confidence in the run up to and just after the serving of the Section 50 Notice by the end of Q1 2017.

 

In addition, the influence of reforms to the taxation of landlords is expected to result in a reduced demand from buy to let landlords, which will limit upward pressure on property values. However, on the other side of the coin, demand from tenants has been strong, but this has been counterbalanced by a strong supply of rental properties. In my opinion, there is a slight risk of rents not growing as much in 2017 as they have in 2016, but by 2018 they will rise again to counteract Philip Hammond’s changes to tenant fees.

 

 

The broader Canterbury rental market looks relatively positive with modest rental growth expected and rents might rise further if landlords begin to sell properties in an effort to offset to the impact of tax rises.

 

So what do I predict will happen to the Canterbury housing market during 2017?  In Canterbury, I believe price values are expected to fall by 2.3% in 2017 compared to a rise of 11.35% this year, then pick up to growth of 1.9% in 2018, 3.1% in 2019, then 4.2% in 2020 and 6.5% in 2021.

 

But these predictions do not take into account any effect of a possible snap General Election or further referendum on ratifying any Brexit deal (if that comes to pass in the future).

 

Canterbury OAP’s sitting on £1.51 bn of Property

Canterbury people aged over 65 currently hold more housing wealth in their homes than the annual GDP of the whole of the Isle of Anglesey … and this is a problem for everyone in Canterbury!

 

Many retiree’s want to move but cannot, as there is a shortage of such homes for mature people to downsize into.  Due to the shortage, bungalows command a 10% to 20% premium per square foot over houses of the same size with stairs. To add to the woes, in 2014, just 1% of new builds in the UK were bungalows, according to the National House Building Council - down from 7% in 1996.

 

My research has found that there are 4,369 households in Canterbury owned outright (i.e. no mortgage) by over 65 year olds.  Taking into account the average value of a property in Canterbury, this means £1.51 billion of equity is locked up in these Canterbury homes, compared to the GDP of the whole of the Isle of Anglesey being £797 million of GDP.

 

A recent survey by YouGov, found that 36% of people aged over 65 in the UK are looking to downsize into a smaller home.  However, the Government seems to focus all its attention on first-time buyers with strategies such as Starter Homes to ensure the youngsters of the UK don’t become permanent members of ‘Generation Rent’.  Conversely, this overlooks the chronic under-supply of appropriate retirement housing essential to the needs of the Canterbury’s rapidly ageing population. Regrettably, the Canterbury’s housing stock is woefully unprepared for this demographic shift to the 'stretched middle age’, and this has created a new 'Generation Trapped’ dilemma where older people cannot move.

 

Some OAP’s who are finding it difficult to live on their own, are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.  So, older retirees can't leave bungalows, younger retirees can't buy bungalows and younger people can't buy family houses.

 

Interestingly, adding insult to injury, the problem will only get worse, as in the 50 year old to 64 year old homeownership age range there are an additional 2,617 Canterbury households that are mortgage free and a further 2,189 Canterbury households who will be completing their mortgage responsibility.  With Government projections showing the proportion of over 65’s will rise by over a third from the current 17.7% to 24.3% of the population in the next 20 years ... this can only add greater pressure to the Canterbury Property market.

 

House prices have rocketed over the last 40 years because the supply of property has not kept up with demand. With migration, people living longer and high divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year to just stand still.  In the 1990’s and early 2000’s, the Country was building on average 180,000 to 190,000 households a year, but since the Credit Crunch (2009), that has only been between 130,000 and 145,000 households a year.

 

The solution …. release more land for starter homes, bungalows and sheltered accommodation because land prices are killing the housing market as the large firms dominating the construction industry are more likely to focus on traditional houses and apartments.  My opinion – until the Government change the planning rules and allow more land to be built on – Bungalows could be a decent bet for future investment as they continue to attract ever growing premiums?

Canterbury Property Market – Update 2017

Well, wasn’t 2016 eventful. The ups and downs of Brexit, the Queen’s 90th, Andy Murray winning Wimbledon, Trump, Bake Off to Channel 4 and something close to the hearts of every buy to let landlord and homeowner in Canterbury ... the Canterbury property market.

 

So, let’s look at the headlines for the Canterbury property market...

 

In the last month, Canterbury property values rose by 0.81%, leaving them, year on year 9.9% higher, whilst interestingly, Canterbury asking prices are down 2.0% month on month. All three statistics go to show the Canterbury property market has recovered well after the summer lull, which was worsened by the uncertainty surrounding the EU vote back in June. Irrespective of all the issues, the average value of a Canterbury home now stands at £346,400.

 

Generally, Canterbury asking prices continue to hold up well, as asking prices are 4.7% higher year on year. Asking prices tend to drop on the run up to Christmas and locally, they dropped by 2.0% last month (December 2016), although this still compares well with last year’s drop in Canterbury asking prices, as we saw asking prices drop by 1.1% in December 2015.

 

Now it’s true to say, after chatting with fellow property professionals in Canterbury, all of us have seen the number of property sales fall slightly, suggesting a slowing market, but it is very early days and it could be the time of year. Also, the numbers are limited, so it’s interesting to take note from a recent survey by the Royal Institution of Chartered Surveyors, stating new buyer enquiries and new instructions are falling at the same rate, suggesting that there will not be a downward pressure on property values.

 

Looking at the figures for the UK (as we can’t just look at Canterbury in isolation), property values are generally rising slower than a few years ago, but on a positive note, there's still growth across the UK. You see, slowing property value growth isn't solely Brexit related, but after a number years of double digit rises in property values, affordability has weakened and cooling price growth is widely seen to be a natural correction of the market.

 

On the other hand, interest rates being at a record low of 0.25% are helping the property market. The cut in interest rates in the late summer was the medicine for the post-Brexit worry and will, as a consequence, ensure that the UK economy continues to be underpinned by buoyant property prices.

 

 So, what will happen in 2017 in the Canterbury property market?

 

Some say until we know what type of exit the UK will make from the EU it is hard to evaluate the outcome. Although, I believe, the whole Brexit issue is a sideshow to the main issue in the UK (and Canterbury) housing market as a whole. As I have mentioned time and time again over the last few months, the biggest issue is demand outstripping supply when it comes to the number of households required to house us all. Canterbury has an ever-growing population: with immigration (we still have at least two years of free movement from EU members into the UK), people living longer and the fact we need thousands of additional households as the country has nearly 115,000 divorces a year (where one household becomes two households).  These are interesting times ahead! 

 

£15m paid in Stamp Duty by Canterbury Residents

“A pound saved is worth two pounds earned . . . after taxes” is what my Grandfather used to say. He loved his irony, yet was always a wise man, and it is tax I want to talk about today, in particular, property taxation .. Stamp Duty in fact.

 

Apart from some minor exemptions, Stamp Duty is paid by anyone buying a property over £125,000 in the UK. It presently raises £10.68bn a year for the HM Treasury (interesting when compared with £27.6bn in fuel duty, £10.69bn in alcohol duty and £9.48bn in tobacco duty).

 

In the latest set of data from HMRC, in the MP constituency that covers Canterbury, property buyers paid £15m stamp duty in one year alone – a lot of money in anyone’s eyes (although not as much as the £232m in income tax that all of us in the same area paid last year).

 

However, as you may know, George Osborne introduced an additional tax for landlords and from 1st April 2016 they had to pay an additional 3% stamp duty surcharge on top of the normal stamp duty rate when purchasing a buy to let property. There were tales of woe and Armageddon with a report by Deutsche Bank suggesting that the new surcharge could see house prices fall by as much as 20%.

 

HMRC data released in the Summer for Quarter 2 (Q2) of 2016 did seem to back up those fears as they published some worrying figures; only one in seven properties purchased was a second home or buy-to-let (in real numbers, only 30,300 of the 207,900 properties in Q2 were bought by landlords).

 

In previous articles, I spoke about the slump of property transactions after the 1st of April (as landlords rushed through their property purchases in March to beat the April deadline). In Q2 of 2016, £1.976bn was raised in Stamp Duty from Residential Property. Of that £1.976bn, £652m was paid by buy to let landlords (£424m in normal stamp duty and £228m in the additional 3% surcharge).

 

However, looking at Q3, the numbers have improved significantly. Of the 235,000 property sales, nearly one in four of them (56,100 to be precise) were bought by buy to let landlords and of the £2.208bn in stamp duty, £864m was paid in ‘normal’ stamp duty by BTL landlords and an impressive £442m paid by those same landlords in the additional stamp duty surcharge.

 

The statistics suggest buy to let investors have thankfully not been deterred by the stamp duty surcharge introduced in April this year. The figures also show that 65.4% of "buy to let" purchases cost less than £250,000, 23.7% of properties were in the £250k to £500k range and 10.9% (or 6,100 additional properties) of buy to let properties bought cost over £500k – interestingly nearly one in four (22.2%) of £500k properties purchased in Q3 were buy to let properties.

 

 

It just goes to back up what I stated a few weeks ago when I suggested that many investors had rushed to make purchases before 31st March, making figures in the following months (Q2) artificially low when the 3% supplement was introduced, but in Q3 the number of buy to let properties purchased increased by 85%.

 

It just goes to show you shouldn’t believe everything you read in the newspapers! I can assure you the Canterbury property market is doing just fine. For more thoughts on the Canterbury Property Market like this .. visit the Canterbury Property Market Blog www.canterburypropertyblog.com.

Average Rent Paid by Tenants in Canterbury rise to £1,246 per month

Back in the Spring, there was a surge in Canterbury landlords buying Buy-to-Let property in Canterbury as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in CT1.

Jan 2016 – 47 properties sold

Feb 2016 – 56 properties sold

March 2016 – 84 properties sold

April 2016 – 24 properties sold

May 2016 – 23 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Canterbury - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of Buy-to-Let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

.. but it’s not all bad news for tenants. Whilst average rents in Canterbury since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Canterbury tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

 

Year	Average Rent in Canterbury per month
2005	1016
2006	1039
2007	1062
2008	1098
2009	1114
2010	1099
2011	1126
2012	1151
2013	1168
2014	1185
2015	1212
2016	1246

 

 

I found it particularly interesting looking at the rent rises over the last five years in Canterbury, as it was five years ago we started to see the very early green shoots of growth of the Canterbury economy.  As a whole, following the Credit crunch (2011), rents in Canterbury have risen by an average of 2.4% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Canterbury professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

For more thoughts and opinions on the Canterbury Property Market, if you are a Canterbury Homeowner or Canterbury landlord, please visit the Canterbury Property Blog www.canterburypropertyblog.com .

Canterbury Property Values increase by 1.75% ... good or bad news?

“How's the Canterbury housing market doing?” asked an upbeat Canterbury landlord last week.  “Quite strange”, I replied. Our landlord was perplexed! Let me explain...

 

Even the Brexit vote has not hindered Canterbury’s steady rise in property value, as Canterbury property values went up 1.75% last month alone, leaving Canterbury values 9.6% higher than a year ago. An increase in demand from buyers and an uninspiring level of supply (i.e. the number of properties on the market) has driven up the value of the Canterbury’s housing.

 

...And that is where the issue is. With Brexit, the coalition of the 2010-15, a double-dip recession and post credit crunch fallout – I was perplexed that the Canterbury property market (and values) has remained so strong, still 14.75% higher than 20 months ago. That is until you start to consider the real reasons why we find ourselves in such a great place.

 

The Canterbury (and the UK) housing market is built on the foundations of basic economic rules that any GCSE Economics student should understand. However, at a time when, as a country, we seem eager to uncouple ourselves from all manner of proven facts, anything is up for grabs.

 

Even the wary RICS said throughout the UK, most of its Chartered Surveyors anticipated house prices to increase in the next six months, which seems contradictory given economic cautions from Mr Hammond and HM Treasury. Even though inflation will rise to around 2% to 3% in 2017 and perhaps a little more in 2018 because of Sterling’s devaluation, together with a high probability of a decelerating GDP and a slight rise in unemployment, how can the RICS and most of my landlords be so confident about the value of our homes?

 

Well, look at from where we are starting. Nationally, a base of low unemployment, low inflation and preposterously low interest rates, while in Canterbury, the local economy is doing quite well for itself. Confidence also plays a part. Confidence can supersede basic economic facts for a short time at least, which is why actual property market changes tend to be more exaggerated, as confidence can turn both positive and negative very quickly. The fact is, there is a long-term relationship between property values, wages and unemployment. For example, looking at the graph below, you can quite clearly see the ratio of property values to earnings is nowhere near as high as it reached in 2008 and currently is in the middle of the range for the last 30 years. As a country, we are in a good place.

 

By April 2017, Article 50 will be invoked. This will bring additional political tomfooleries and economic ups and downs. With both purchasers and vendors predisposed by the 24-hour news cycle, which let’s face it, gets more haphazard by the day, it is likely to prove a challenging couple of years … and yes, Canterbury property values might drop slightly in 2017, but based on what we know of the UK plc now, the UK and Canterbury property values are not projected to move that much over 2017 or 2018.  Going into the next two years, we are in much better financial shape as a country compared to the last two crashes of 1987 and 2008.

 

But, on the other side of the coin, what we also know is that we don't know much about the form of our economic future or indeed many other facets of our lives. Confidence will continue to be the key player in the Canterbury housing market for a while longer - yet this may spur some much-needed second-hand market activity? Now, where is my crystal ball?

Canterbury Housing Crisis? Only 2.1% of Canterbury Homes Are For Sale

The Canterbury Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual as we head towards Christmas.

 

The challenge every Canterbury property buyer has faced over the last few years is a lack of choice – there simply hasn't been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Canterbury, the market is likely to see upward pressure on property values continue.

 

For example, last month CT2 saw 71 new properties coming on to the market, not bad when you consider for the last year the average has been predominantly in the 40 to 60 range. With the average Canterbury property value hitting a record high, reaching almost £331,000 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller' average property figure.

 

As I write this article, 2.1% of Canterbury properties are up for sale. In terms of actual chimney pots, that equates to 320 properties on the market in Canterbury (within 2 miles of the centre of Canterbury) – which, when compared to only a year ago when that figure stood at 317, is a slight increase in the number of properties available to buy. Split down into the type of property, it makes even more fascinating reading...

 

• Detached Properties in Canterbury  - 59 on the market a year ago compared to 41 on the market now – a decrease of 31%

• Semi Detached Properties in Canterbury - 55 on the market a year ago compared to 73 on the market now - an increase of 33%

• Terraced Properties in Canterbury - 54 on the market a year ago compared to 63 on the market now - an increase of 17% 

• Flats / Apartments Properties in Canterbury  - 132 on the market a year ago compared to 114 on the market now – a decrease of 14%

 

This is evidence of strength in the Canterbury housing market that many didn't expect. Many believed that the Canterbury property market wasn't going to be strong enough post Brexit - as what was a sellers' market before the Brexit vote and Buyers' market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

 

However, all this will mean property values won't continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This won't be down to Brexit but a re-balancing of the Canterbury Property Market – which is good news for everyone.

 

For more thoughts on the Canterbury Property Market, please visit the Canterbury Property Blog www.canterburypropertyblog.com

Private Renting set to grow by 2,500 Canterbury households by 2025

I was having a most interesting chat the other day with a Canterbury landlord when we were looking at a property. We got talking about the Canterbury Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Canterbury.

 

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

 

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Canterbury? The fact is, as a country, we are facing a precarious rental shortage and need to get Canterbury building in a way that benefits a cross-section of Canterbury society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

 

Of the 19,900 households in Canterbury, currently 17,000 tenants live in 6,000 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Canterbury needs to rise by 2,500 (i.e. 42.8%) .. taking the total number of rented properties in the city to 8,500.

 

That means Canterbury landlords need to buy around 300 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 7,300 people will want to live in all those 'additional' Canterbury rental properties – so why is the government penalising landlords?

 

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Canterbury house prices, the majority of new Canterbury households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Canterbury society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.

Trump and the UK Housing Market

Whilst I don't like the man - the American people have spoken.

.. but this isn't the end of the world for the UK or its Property market!

Cancel the Nuclear Shelter off Amazon and just take a deep breath for a second.

There are questions about the level of competence of Mr Trump but before you all go and panic ... don't forget that Reagan was also regarded as grossly incompetent — by the world's media and the High Brow Washington establishment .. but not by Republican voters in 1980 (and re-elected in 1984) ..

The upper-class Washington types depicted Reagan as some sort of B-rated cowboy film star who was all 'yeaa-haw' and a loose cannon, who might be just tolerable as the governor of California, but who was definitely not sophisticated enough to comprehend, let alone conduct, foreign policy of the US Presidency.If memory serves me well - on most things (not all) - he did a pretty good job

There are plenty of other factors, closer to home, that we need to be concerned about than the President of the US and the effect of the UK Housing Market

.. just my opinion ............

House Prices in Canterbury rise by more than 12% in the last 18 months

Over the last month, the Canterbury property market has seen some interesting movement in house prices, as property values in the Canterbury City Council area rose by 1.6% in the last month, to leave annual price growth at 8.2%. These compare well to the national figures where property prices across the UK saw a monthly uplift of 0.42%, meaning the annual property values across the country are 8.3% higher, this is all despite the constraining factors of Stamp Duty changes in the spring and more recently our friend Brexit.

Looking at the figures for the last 18 months makes even more fascinating reading, whereby house prices are 12.5% higher, again thought provoking when compared to the national average figure of 13.6% higher.

However, it gets more remarkable when we look at how the different sectors of the Canterbury market are performing. Over the last 18 months, in the Canterbury City Council area, the best performing type of property was the semi, which outperformed the area average by 0.61% whilst the worst performing type was the apartment, which under-performed the area average 0.84%.

Now the difference doesn’t sound that much, but remember two things, this is only over eighteen months and secondly, the gap of 1.4% (the difference between the semi at +0.61% and apartments at -0.84%) converts into a few thousand pounds’ disparity, when you consider the average price paid for a semi-detached property in Canterbury itself over the last 12 months was £260,800 and the average price paid for a Canterbury apartment was £200,600 over the same time frame.

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

 

• Overall Average                 +12.5%
• Detached                           +12.6%
• Semi Detached                   +13.1%
• Terraced                            +12.4%
• Apartments                        +11.5%

 

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

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

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

...And Canterbury property values, assuming that everything goes well with Brexit, I believe in twelve months’ time we should see values in the order of 4% to 7% higher.