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What Effect Will The Hung Parliament Have On The Property Market?

As I am sure you are more than aware the ‘shock’ result at last weeks general election where the conservative government lost its majority has resulted in a hung parliament. As I write they are trying to put together a coalition with Northern Irelands DUP. So here are some ways that this could effect the property market:

A New Housing Minister

Ealier in the week Alok Sharma, the MP for Reading West, was named the new Housing Minister, replacing Gavin Barwell who lost his seat to Labour in the election.

Uncertainty

The hung parliament will create more uncertainty in an already subdued market. No market enjoys uncertainty and the housing market is no different.

There are a record low numbers of properties coming to the market, in fact some parts of SE18 have dropped to a 1.8% turnover from around 6% just 2 years ago.

Young Peoples Voices

I’ve seen it suggested that a lot of the swing in votes came from young people coming out to vote. Clearly there are many issues that affect peoples voting choice but a wise government should recognise this trend and look to address the difficulty for first time buyers getting on the housing ladder.

Outlook

While a period of uncertainty benefits no one, the low levels of people moving resulting in an increased demand for each property coupled with the ongoing failure to build enough homes to keep up with demand means, in my opinion, that while a correction in prices is possible, particularly in areas of London and the South East which have seen prices outpace wages, it is unlikely that we will see a huge fall in prices – particularly as employment remains high.

If you are thinking of selling or investing in the area and would like to discuss the market drop me an email

What Effect Will The General Election Have On Property?

With the general election taking place this week, housing will be a factor on how many people choose to vote. With this in mind here is a quick bullet list of the main points in the main 3 parties pledges:

Conservatives

  • The conservatives pledge to build 500,000 new homes by 2022 (this comes on top of the million homes they they have promised by 2020).
  • They have also promised to work with councils to build high quality sustainable social housing developments.
  • They have indicated that to protect tenants they will look at how to encourage longer tenancies as standard.
  • A new homeless reduction task force will aim to halve rough sleeping over the course of the parliament .

The full manifesto can be found here.

Labour

  • Labour promise to build over a million news homes and at least 100,000 council or housing association homes a year for affordable rent or sale.
  • They pledge to make 3 year tenancies the norm and cap rent rises to inflation. They will also look at giving the London mayor additional powers.
  • Tenants will also be given additional consumer rights.
  • Labour will suspend the right to buy and only allow sales to continue where proven homes will be replaced.
  • A new national homelessness plan to be set out, starting with 4000 new homes for rough sleepers.

The full manifesto can be found here.

Liberal Democrats

  • The Lib Dems say that they will increase the amount of houses built per year to 300,000, making sure that half a million affordable homes are built by the next parliament
  • Many of these new homes will be built in ‘Garden Cities’ with at least 10 being built in England.
  • They will end the voluntary right to buy.
  • They pledge to introduce a rent to own model where tenants have an increasing stake in the property owning it outright in 30 years.
  • They will help younger people into the rental market with a Help To Rent scheme with government backed tenancy deposit loans for under 30s.
  • Promote longer tenancies of 3 years.
  • They will also scrap the bedroom tax.

The full manifesto can be found here.

Of course what they say now and what really happens are often two different things, there are a few interesting ideas tucked in here, some other points I really cant see how they could make it work.

I am always surprised at the amount of emphasis given to longer tenancies, in my experience if a tenant is paying the rent and looking after the property the landlords really don’t want them to go.

There are big problems with the housing market and in my opinion the biggest is that not enough homes are being built. It’s clear that something drastic needs to change to facilitate the increase in home building which is desperately needed.

Which SE18 Residents Have Seen The Best House Price Inflation?

In December 2016, The ONS (Office for National Statistics) reported that house prices across the UK saw a year-on-year rise of 7.2 per cent. These figures are promising for the property market, and if the trend continues, the average home in the UK will increase in value by £22,000 in the next year. But what’s in store for SE18?

Over the last decade, local prices have seen a rise of 71.8 per cent, equivalent to £14,610 per year. Terraces tell a different story, having seen a rise of £16,790 per year or 86.5 per cent over the period. As the chart shows, all owners have benefitted from price rises, but some more than others.

The hike in house prices indicates good news for current homeowners, but those hoping to take their first steps on the property ladder will need to familiarise themselves with pros and cons of current schemes. There are several government schemes for first-time buyers: Help to Buy, Shared Ownership, ISA’s and Starter Homes.

Local area residents thinking of selling their home will be buoyed by the price increases, especially if they have owned their property for a significant amount of time. If you would like to know how much your home is worth don’t hesitate to give us a call or email me:

How Should You Decorate Your Rental Property?

One of the questions new property investors ask most often is how to decorate a property so that it quickly attracts good tenants. Fortunately, generally speaking it’s best to keep it simple….

Walls

I find that white or a light grey usually does the trick, remember that while to you it is an investment, for your tenant it will be home and so neutral colours and shades work best to help tenants envisage it as their new home.

Tip: Make sure you use the appropriate water resistant paint for bathrooms!

If you do decide to have a feature wall then nothing too wild please! A different shade can add something to the room that most can appreciate however that bright floral pattern is definitely a matter if taste and could put some off!

Floors

This will to a degree depend on the type of tenant that you are trying to attract but you can’t go too far wrong if you laminate the areas most likely to wear, such as hallways and kitchens.

Hard wearing carpet works best in living areas, ensuring that you choose a colour that won’t show every stain or spillage.

Finishing Touches

Adding a shower over the bath can really add to a property’s desirability as many people do prefer the option of a quick shower, particularly in the mornings. Fortunately this is usually simple and relatively cheap to do.

Ensuring that the kitchen is up to standard can help in attracting the best tenants. This doesn’t need to be a full refurb but simply new doors on the units, and if necessary a new work surface, can really make all the difference.

The most important thing throughout is to put your own tastes completely to one side and remember that it’s about what will appeal to your target tenants.

Are you getting your property ready to let? Drop me an email and I’ll be more than happy to give a second opinion:

Do Terraced Houses Off Plumstead High Street Make Good Investments?

I was speaking to someone who lives just off Riverdale Road at the weekend, having lived there since the late 90’s they are now looking to make their first buy to let investment, and wondered if the area between Plumstead high street and Winns Common would make a good place to buy.

As they know the area well and both like and feel comfortable with investing there they just wanted to know whether or not the figures stacked up. They were predominantly interested in terraced houses as that is the type of property they live in and they knew some of their neighbours who rented.

House price growth in this area has, like most of SE18, been high over the last decade and there are some great examples of people who have had a good return on properties that they have bought. For example a 2 bed terrace on Riverdale Road itself which was purchased in 2007 for just £193,000 and sold recently for £310,000 – an increase of over 60%.

A 3 bed on Sladedale Road purchased in 2007 for £200,000 sold for £300,000 giving the seller – a 50% return.

Best of the bunch though was a 3 bed on Lakedale Road which was purchased for £190,000 in 2012 recently sold for £460,000 – a whopping increase of 142% in just 5 years! From the photos this was a very well turned out property which just goes to show what a bit of time and effort can achieve.

With rental figures for the area around £1125pcm for a 2 bed and £1375pcm for a 3 bed, yields around the 4.2% mark should be available, and as terraced houses, particularly 3 beds, often let to families there is a good chance of your tenants staying longer too.

If you are thinking of investing in the area why not get in touch:

Additional Licensing Coming To Greenwich This October…. Time To Act Now

As many of you will know following on from this consultation, last month Greenwich Council decided to implement additional licensing for HMOs throughout the borough. The new rules will come into effect on 1st October this year.

So what is changing?

Currently both Bexley and Greenwich boroughs operate the mandatory licensing scheme which also applies throughout the whole of England and Wales

Mandatory licensing applies only to certain types of HMOs and means you will need an HMO licence if your property:

  • Is three of more storeys high (a storey includes basement, loft conversion and any storey comprising business premises);
  • Contains five or more people in two or more households; and
  • Contains shared facilities such as a kitchen, bathroom or toilet.

Additional licensing means that smaller HMOs in the Greenwich borough will now also need to be licensed. This includes house or flat shares occupied by 3 or more people who are not related.

Licensing fees are also set to rise from the current £144.23 per bedsit or room to £377. Which according to London Property Licensing is the second highest in London.

There are proposals by the council to grant a 50% discount for early applications so it really could pay to act sooner rather than later.

If you are still unsure if this will effect you I would recommend visiting this article on the London Property Licensing site and if you would like further assistance take a look at their license application service. There are a lot of things to consider when applying for a licence and it makes sense to get it right first time. Fortunately we have one of the leading experts on property licensing based right here in the Greenwich Borough.

If you decide to do things yourself then the Royal Borough Of Greenwich website is here.

If you are going to be affected by this change or are thinking of investing in the area and would like to chat drop me an email at

How old are people when they buy their first home in SE18?

Our friends in the U.S have been chasing the ‘American Dream’ for some time now, yet we Brits don’t really have a moniker for ‘making it’ in the UK. If we were to coin our version of the ‘British Dream’, we imagine it would be celebrated every time someone took their first steps on the property ladder. First-time buyers play a pivotal role in the UK housing market and represent a key driver of demand. Their average age has been steadily rising over the last few decades as property has become less affordable in some parts of the country. However, schemes like shared ownership and Help-to-buy have helped younger people get on the ladder, putting downward pressure on average ages of first-time buyers.

So what’s the scoop in SE18? We’ve used data from ResiAnalytics which uses affordability measures to calculate the average age of first-time buyers in the local market. The data shows that the average age of a first-time buyer here is 31.1. This is lower than the regional figure of 32, while the national average is 30. The average price of a home in SE18 is £371,000, an if you take 10% as a reasonable figure for a deposit for a first home, that means buyers need to stump up around £37,100. Add into the mix average gross earnings of residents in the area, which sit at £32,415, and you can start to see why the picture in our area looks like it does. If you’re thinking of purchasing your first property, drop us a line today.

Is It Still Worth Buying Or Investing In Woolwich or Plumstead?

I haven’t had much time to put together this weeks blog so thought I would answer one of the most common questions I am being asked and by linking out to other sites.…

With Crossrail coming ever closer and with regeneration work well underway I am often asked by both home hunters and investors if they have missed the boat when it comes to buying in the area. If you are a regular reader of the blog then you will probably already know my answer to this one!

However, I’ll say it again anyway – while it was the announcement of Crossrail which enabled the investment to come into the area, there is so much more to SE18 than just the new station. So below to illustrate the point I have linked to some of the many articles published on the regeneration taking place:

‘London Loves Business’ names Woolwich as one of it’s 10 places to buy: [Where to buy property in 2017 | News | LondonlovesBusiness.com], siting Crossrail and regeneration;

Here is a local newspaper report on the £31m entertainment district with theatres and studio, for which plans were recently unveiled: [Glimpse into the future: Our reporter explores Royal Arsenal site in Woolwich set for huge transformation (From News Shopper)];

‘Homes and Property’ recently wrote this article on the arts hub: [Woolwich riverside set to rival London’s Southbank Centre: £40m proposal for major arts hub near new Crossrail station tipped to boost local house prices | Homes and Property] and how it could boost local house prices;

Architect David Adjaye gives his opinion on the creative quarter: [Woolwich Creative Quarter: renowned architect David Adjaye says London’s cultural scene is vital to communities not just tourism | Homes and Property]

And these are all just recent articles in addition to all the other regeneration projects taking place in the area.

In spite of all that is going on check out this piece from City AM which identifies Woolwich as being the cheapest place to buy along the London Marathon Route: [London Marathon house price map: The average property along the route now costs almost £700,000 | City A.M.]

With all that is happening if you would like a chat about investing in the area I will be more than happy to give you an honest opinion: 

How Many New Homes Have Been Built In The Local Area?

New housing is a hotly debated subject in the UK. Despite the recent uptick in building rates, demand continues to outstrip supply and more a ordable homes need to be built. The situation has improved over the last few years; the number of new homes started and nished in the UK is at a nine- year high. However, forecasts show that England alone needs to build 50 per cent more homes to keep up with demand, so the issue is far from resolved. The pressure is mounting on the government to nd a solution.

156,140 new homes were registered for construction in 2015, the highest it has been in eight years. This was half a per cent higher than the previous year and 45 per cent higher than 2009.

From 2014 to 2015, private sector starts increased by seven per cent, while Housing Association starts rose by ve per cent. That means that since the credit crunch in 2008, the UK housing stock has grown by around ve percent, which is no small feat.

We conservatively estimate there have been 443 new build starts in SE18 in 2015–16. Over the same period, there have been an estimated 696 new properties completed, an increase of 59 per cent from the preceding 12 months. There are approximately 271 more properties under construction in 2015–6 than five years ago — a 158 per cent increase. To reach these figures, we’ve applied a proportional amount of the government’s district-level house building figures to SE18 to estimate levels of new stock in the local area and with all the regeneration taking place we would expect the true figures to be considerably higher.

Despite all this building, the issue facing aspiring home owners is that demand for housing is still far greater than the current supply. When new build properties come on to the market they tend to be for a premium. However, there are several schemes to help buyers purchase new build homes at discounted prices. One of these is Discounted Sales, a scheme available from some councils that allows you to buy a new home at a reduced rate.

The low homes to people ratio is good news for buy-to-let landlords. With 62.6 per cent of residents in SE18 renting property, potential investors can be optimistic at their chances of nding tenants if they decide to purchase a rental property. Rental demand is high, which means void periods should be minimal.

If you would like to have a chat about new build possibilities, any other property that has taken your fancy, or you would like to sell or let your home, don’t hesitate to get in touch with us. We’d love to hear from you.

What Size Flat Should I Purchase As A Buy To Let In SE18?

One of the most common questions I get asked from landlords looking to buy in the area is whether to buy a one or two bedroom flat to rent out to tenants.

As one of the main considerations for landlords is monthly income, particularly now with the new tax regulations just round the corner, comparing the yield can give a good indication of which property to purchase.

The average asking price of a one bed apartment/flat in SE18 is currently £349,811 with an asking rental figure of £1146pcm this would give a yield of 3.93%.

As you can probably tell from these figures they include the new higher end developments such as Royal Arsenal Riverside, if we removed these developments and dealt only with the remaining properties the average sales figure comes to £230,713 and the rental £954 giving an improved yield of 4.96%.

Doing the same for two beds the average asking price is currently £499,031 and at a mean rental of £1432 a yield of 3.44% will be achievable. Again after taking off the higher priced developments the asking sales figures would point to £272,665 being the average figure for two beds with a rent of £1181 per month giving a yield around the 5.19% mark.

So as you can see if your primary consideration is yield then the older properties tend to edge it by quite a margin and existing two bed properties slightly outperform their one bed counterparts, but the margins are quite small so I wouldn’t rule out either size and would instead place more emphasis on finding the best deal currently available.

If you’d like to discuss investing in the area why not send me an email

All Avenues offer Estate Agency and Lettings Services in Woolwich and Plumstead SE18, Thamesmead SE28, Abbey Wood SE2, Erith DA8/DA18 and throughout the Bexley and Greenwich Boroughs

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