GeorgeHartshorn, Author at Property Market News

The Fear of Moving Home

Current market conditions for property sales are giving mixed signals. High demand from buyers but little to choose from is still providing upward pressure on prices. At the same time there is a reluctance amongst some sellers to ‘take the plunge’ and list their property for sale.

Q. But what is there to be afraid of?

Conversations with potential sellers show that there is a pattern here, generally the reluctance is due to fear of not being able to find a suitable onward property. The reason: there’s not much available at the moment!!

This catch 22 scenario is not uncommon in the housing market and is certainly not a new phenomenon, after all who wants to sell and then be left homeless or forced to go into rented.

In reality this ‘doomsday’ scenario’ is not a realistic pitfall. The advantage of the English & Welsh property market is the flexibility of the system. Until exchange of contracts there is no legal obligation to go through with the sale and no possibility of being forced to move. This ‘flexibility’ of course has plenty of downsides including gazumping (when another buying outbids the original buyer), gazundering (when a buyer reduces their offer at the last moment), withdrawal, fallthrough, etc.

In Scotland by contrast, once an offer is accepted, the buyer is contractually obliged to go through with the transaction, as is the seller. So one can understand a reluctance of Scottish sellers to go on sale if they haven’t found somewhere to go. But in England out system provides that flexibility and choice right to the finish line, meaning if a seller can’t find somewhere to move to then ultimately they don’t have to go through with the sale. So the reality is that there is no risk in going on sale.

Q. But isn’t it expensive to go on the market? We don’t want to waste money unnecessarily?

If you use a traditional estate agent there’s no cost either as fees are only charged upon completion of sale.

For further advice on selling or buying in this ever changing market speak to one of our property agents who will be delighted to help.

Caution – but Business as Usual

What an amazing week that has been in the property market!

The new government has decided to redesign the wheel and completely change the economic policy of the Boris Johnson government. Whatever your political point of view, the actions taken clearly haven’t gone down well with the markets and seem to fly in the face of the priorities of the Bank of England.

The turmoil created has left many homebuyers and owners wondering what the future may hold for mortgage rates and payments, especially those that are hoping to buy in the next 1-2 years or whose fixed rate deals are coming to an end during that same period.

Kenilworth may perhaps be less vulnerable to the potential issues, with an older population and probably a higher percentage of property owners who are mortgage free or with much lower loan to value borrowing. However there are still a proportion of first time buyers in Kenilworth, there are also a volume of rental properties which will be mortgaged on buy to let deals.

And what will happen to prices through all of this? The million dollar question. The cost of home ownership is set to increase, so demand may be dampened to a certain extent whilst rents will also increase as landlords pass on the additional costs to their tenants. However, there is still a shortage of supply as the number of new homes being built continues to fall short of the targets set, so it is unlikely that prices will fall much, if at all, though they will probably fall in real terms as inflation outstrips any price increases over the next few months.

If you are buying then now could be a good time to find bargains so keep your eye on the market for motivated sales and deals to be had. Shrewd buyers will realise that the next few months could be a fantastic time to purchase before the market recovers and heads north again as it inevitably will.

Faltering New Build Sales Add Pressure to Resale Market

Recent research by Warwick estates has found that over the last decade New Build Sales have fallen significantly. In 2011 there were 68,677 sales, but by 2021 that number dropped to 41,634. This represents a fall of 39% at a time when government promised additional new housing stock and the availability of resale properties also fell significantly.

New build sales also fell year-on-year by -46%, as there were 76,764 in 2020. Whilst this could be attributed to some extent to lockdown and Covid, the development sector was in large part exempt from the lockdown rules so the figures are still nonetheless very disappointing.

With falling stock levels of new build properties, buyers are being forced in turn to look at the resale property sector instead. This at the same time as availability of resale properties is at a critically low level, demand outstripping supply significantly.

What does all of this mean for the typical homeowner or the typical buyer? Likely a continued upward pressure on prices, despite the underlying economic conditions and increases in interest rates.

A potential buyer asked me the other day “Do you think house prices will fall back again soon?” With demand massively outflanking supply my straight, honest answer was “No. not any time soon.” Only a fall in the availability of finance would apply the brakes at the moment and there is no sign at present of this happening, despite the interest rate rises.

If you would like a professional opinion on the current value of your own home, speak to one of our experts. We’d be delighted to help.

What Was The Average Coventry House Price in 1952?

Well, what a weekend that was. Street parties, gatherings in the park, the purple bunting, egg and cress sandwiches, union jack flags, cheese and pineapple on cocktail sticks, and let’s not forget the trifle – the Platinum Jubilee Party. And no decent party is worth its salt without a game or a quiz.

So, if you have post-Jubilee blues, let me ask you, how much was the average Coventry house worth in 1952?

To start with, let me look at what a property is worth today in Coventry.

The average price paid for a property in the Coventry area

in the last 12 months was £245,380.

Now, let’s go back to 1952. Sir Winston Churchill was the Prime Minister, Newcastle won the FA Cup, London was covered in the Great Smog, free prescriptions on the NHS ended (it cost 1 shilling or 5p in new money), and King George IV, at the age of 56 passed away on the 6^th February, meaning Princess Elizabeth became the Queen – as for housing …

The average price of a Coventry home in 1952 was £2,004.

This means Coventry house prices are 121 times higher since 1952.

Yet over the last 70 years, the country has been subjected to 4.5% per annum inflation.

The 1952 Coventry home is equivalent to £38,530 today

when adjusted for inflation.

This means Coventry house prices have increased by 504.8% in real terms since 1952.

So, does that mean house prices are more expensive today compared to 1952?

In 1952, the average annual male wage was £452, 8 shillings and 1 pence, meaning the average Coventry house was 4.43 times the average value of a wage. Today the average home is 8.85 times the average wage.

Yet let us not forget the average mortgage payment in 1952 was £11 per month. The average Brit earned £34 per month, meaning 32.3% of the household income was going on mortgage payments, whilst nationally today, according to the Nationwide, it stands at 28%.

It’s cheaper, in real terms, to buy a property in 2022 than in 1952.

And that’s the point, something things in ‘real terms’ (real terms being true spending power of the money after taking into account wages, costs and inflation) were more expensive and some cheaper 70 years ago. For example, in 1952, petrol was equivalent (in today’s inflation-adjusted prices) to £1.02 per litre, a pint of beer £2, half a dozen eggs £2.20, cheddar cheese £2.40 per 500g, a basic radio £430, a Hoover £530 and a 12-inch TV £1,600.

So back to property, the Queen’s reign has seen some amazing house price rises in the UK, yet that growth hasn’t always been in a constant upward direction, as we have had a couple of dips along the way.

We had a house price crash in 1990, when the average value of a Coventry property dropped from £60,293 to £49,934 in 1996, only for them to start rising again.

Coventry saw another house price crash between 2008 and 2009, and the average house price dropped from £180,363 to £153,762 in a year.

So, what else has changed about property and housing since the Queen came onto the throne?

In 1952, only 32% of people owned their own home, whilst 50% of people rented from a private landlord and 18% rented a council house.

By the time of the Silver Jubilee in 1977, 56% of people owned their own home, with 12% of people privately renting and 32% rented from the council.

Come the Golden Jubilee in 2002, 70% of people owned their own home, with 11% of people privately renting and 19% rented from the council.

Today, 63% of people own their own home, 20% of people

privately rent and 17% rent from the council.

So to conclude, as we look forward into the 21^st century, I am sure the property market will be totally different again in 70 years.

I hope you enjoyed reading this article and do share it with your friends if you find it interesting.

P.S. for all you Rightmove fans, the average Coventry terraced home in 1952 was worth £1,592, and a semi in Coventry could be bought for, on average, £2,060.

The Cost of Trading Up in a Rising Market

House prices have been significantly on the rise in the last couple of years. In some parts of Warwickshire prices have risen around 30% during the pandemic, defying all of the doom mongers’ predictions when Covid first struck.

But what do these big price changes mean for you as a homeowner? Do you check your property value on a regular basis or have sleepless nights about it?

Hopefully not. However, if you decide to move home then the price increases will undoubtedly have an impact on your moving decisions at that point. If you need to downsize then congratulations. You will be able to cash in on your property’s increase in value and should be able to comfortably purchase a smaller home and walk away with a tidy margin at the end of the process.

But what if you are upsizing or perhaps you are a first time buyer? For sure, first time buyers will have lost out. They will need to have a bigger deposit saved up, trying to save as fast as the market is rising is a tough ask.

For the large numbers of growing families who need to upsize, price increases are also not such good news. It may feel good to look at the latest Zoopla Index and see your property value grow, but if the larger property that you desire down the road is going up in value at the same percentage rate then it is getting further and further out of reach as time goes by.

With high demand and low stock levels remaining as the 2 big underlying fundamentals to market demand, upward pressure on prices is likely to remain in place for the foreseeable future. In other words the longer you hold off on that upsize, the tougher it will be to finance when you do decide to take the plunge, so right now, the wait and see approach is costing you money!

Book a valuation today and get the ball rolling on your next home move. Speak to one of our experts, we’ll be delighted to help!

Landlords – Are you ready for tighter regulation?

Just as you thought it was safe and the government couldn’t bring in any further red tape for Landlords, think again!

With ever increasing regulation, the burden on buy to let property investors seems to be never ending and increasingly arduous. Are you a Landlord worried by regulation and concerned whether your property will shape up in the coming months and years?

One major piece of legislation that looms on the horizon is the minimum EPC requirements for all privately rented residential property. Currently a property must have an Energy rating of A-E. However the government is proposing to change this to A-C by 2025. This would represent a major shift and leave a large proportion of the current rented stock and landlords out in the cold and unable to let their properties, in just 3 years time.

To put this requirement into perspective, some new build properties are only scoring a Grade C so if you have a Victorian or Edwardian property, the task of bringing this up to a C in order to comply with the regulations is considerable, and in many instances will be impossible or simply not viable.

There will be exemptions to the rules of course. Listed properties will not need to comply and if you can prove that the work is not ‘financially viable’ then you may also be exempt, but this will not be an easy thing to prove.

It is conceivable that government will back down on this between now and 2025, however this is a major part of their strategy towards net zero and without schemes like this working, they have little chance of meeting those goals, so it would seem that there may be some small concessions but tighter regulation is definitely coming and now is the time to start preparing if you are (or want to be) a landlord.

For further information on the current landlord responsibilities and future legislation speak to our Lettings Manager Carol, who will be delighted to assist.

PROPERTY PRICES SET TO RISE IN 2022

Just 2 weeks into the new year and a pattern is already emerging for the year ahead. Rightmove have just reported the busiest start to the year ever in terms of new enquiries, yet at the same time reported the lowest stock levels ever.

For those of us who did GCSE Economics, one thinks of the Demand vs Supply graph and the inevitable move up the graph this leads to in terms of price. For those of you who were lucky enough to avoid studying Economics at school then simply picture a shop full of eager buyers and just a few items left on the shelf, the inevitable rush this would create and the shop owner effectively being able to ‘name her price’. It’s not rocket science.

The current shortage of property for sale seems to be exacerbating the problem, with some homeowners (who need to move) scared to go on sale for fear of not being able to find somewhere to move to. Understandable but not logical.

February, March and April are traditionally the 3 busiest months of the year for the sale market, and the signs are there that new stock will be coming available very soon. All 3 of our branches are currently busy with valuations and the pipeline of new property is building up.

Do you need or want to move in 2022? If so the best properties will likely be coming to market over the next few weeks. Will you be ready and able to pounce when the RIGHT property becomes available or will you miss out yet again because your own home wasn’t sold or wasn’t even on sale?

Elizabeth Davenport can offer you a no sale/no fee option so if you market with us there is no risk of being out of pocket. If you can’t find somewhere suitable to move to then you simply stay put and there’s no charge. Invite our expert valuer to visit your home today and get free advice on your property value and the current market conditions. We’d love to help.

2022 – What next for the property market?

Following the new year celebrations, you may be wondering what lies in store for property prices. Perhaps you are thinking of moving this year or looking at your investment portfolio and looking for some pointers as to where prices might go in 2022?

If that’s the case then you’re not alone. After a very busy year in 2021 for property sales, things cooled off a little at the end of the year. Does this mean that without any Stamp Duty holiday, 2022 will be much quieter?

Our office opened for 2 days between Christmas and New Year and if the activity during those 2 days was anything to go by, then the market ‘bears’ will be disappointed I’m afraid and the market ‘bulls’ will be excited going into New Year and Spring.

Demand remains high for all of the properties on our books. The fact remains that many workers need to move this year due to changes of jobs and large numbers of sales each year are also due to forced circumstances, so the ‘wait and see’ gang are just a very small portion of the market place.

The main unknown for the year ahead will be supply, but if things remain similar to the last few years then demand will outstrip supply again and that will only create further upward pressure on property prices. Interest rates may go up a little but still remain historically low, so the cost of borrowing and the availability of mortgage funds remain strong factors in all of this.

Ultimately the market looks strong going into 2022 and property remains a strong investment prospect for the foreseeable future. If you would like further advice for the year ahead on your property then call our office and speak to a professional. We’re here to help.

Does the Presentation really affect the Value?

In a boom market, where everything that goes on sale seems to sell instantly with multiple offers and buyers clamouring to purchase, we sometimes get asked the question: Does the presentation really matter that much? Surely the property will sell anyway is this market?

That may be the case, however a large percentage of potential buyers will still be turned off by clutter or a lack of cleanliness, or ancient wallpaper, or pet smells. And if a substantial portion of your market is frightened off then you are effectively reducing demand and therefore value.

The good news is that it doesn’t necessarily require a large budget to bring a property back to life and give it that extra curb appeal again. Simply cleaning, tidying and decluttering can make a world of difference.

Excess furniture and clutter should be packed away or put into storage, childrens’ toys cleared away, any peeling paintwork should be touched up. In bathrooms it’s essential to replace mouldy sealant and revive any dirty grouting. Kitchens need to be ultra-clean and free from grease and grime. Broken cupboard doors must be fixed and dirty carpets should be cleaned or replaced. Bad smells (from dogs or other pets) must be eradicated, they’re a real turn-off for buyers.

Lawns should be cut, hedges trimmed, borders weeded. A few nice potted plants and hanging baskets will really freshen things up. The driveway or front path should be freshly swept and a new front doormat saying “Welcome” will create an inviting first impression.

And if you simply don’t have time to do all of this then you should pay someone to do it for you. It will be well worth the investment. A clean and well presented property will always sell before a similar property that’s messy and untidy. Put quite simply, a better presented property is worth more money.

For further expert advice about selling or renting your property, call one of our experts today and we’ll be happy to chat.

Will a Heat Pump add value to your home?

The government will offer landlords and other homeowners grants of £5,000 from April next year to install heat pumps and other low carbon systems.

The first thing to say is that you’re not going to be forced to remove your gas boiler any time soon, or even in the future. Having just installed a brand new one at my own house just last year this came as a big relief following yesterdays announcement.

Heat Pumps aren’t a new technology, they have been around for many years, however uptake has been very slow due to the burdensome costs of installation. Ground source heat pumps are only practical if you have plenty of land on your property so most people would be looking at air source heat pumps. These typically look like a large air conditioning unit stuck on the side of the house, so again for practical reasons many people have discounted them, especially perhaps if they live in an apartment or a terraced property.

As uptake increases with the implementation of the grants over the next few years, home owners and buyers will become more familiar with this type of heating system, perhaps starting to see them as adding value to the property. Or perhaps not?

At present, the vast majority of homes in the UK either use gas boilers (or modern electric heaters to a much lesser extent) and this is what the majority of buyers expect to find and see value in. With the cost of an air source heat pump ranging up to around £18,000 compared to a gas boiler system at around £5,000 it will take a big shift in price and lots of encouragement from the government to make heat pumps main stream.

So for now, spending the £18,000 on a new Kitchen and Bathroom will add a lot more value to your home. Let’s hope as time goes by, costs come down and we can all work towards a carbon free housing stock and economy.