House Prices in Stratford-upon-Avon and Surrounding Villages: A Shakespearean Investment

Introduction

Nestled in the heart of England’s picturesque Warwickshire countryside, Stratford-upon-Avon is a town that needs no introduction. With its rich history, beautiful town center, iconic river, and renowned Royal Shakespeare Theatre, it’s a place that captivates the hearts of both residents and tourists alike. This idyllic setting, coupled with its Shakespearean legacy, has long been a magnet for tourists from all over the world. But what does this mean for house prices in Stratford-upon-Avon and the surrounding villages? Will the town always command healthy property prices? Are tourist attractions a driving force behind the market? Is it a haven for Shakespearean actors, and what does the future hold for investors and holiday lets in the area? Let’s delve into these questions and more.

Tourist Attractions and Their Influence

Stratford-upon-Avon’s status as the birthplace of William Shakespeare makes it a global pilgrimage site for literature enthusiasts. The town’s allure lies not only in its rich history but also in its remarkable attractions. The Shakespeare Birthplace Trust manages several properties associated with the Bard, including his birthplace, Anne Hathaway’s Cottage, and his final residence, New Place. These sites draw tourists year-round, contributing significantly to the local economy.

The charming town center, characterized by Tudor-style architecture, boasts a range of boutique shops, restaurants, and cafes. The picturesque River Avon offers boat cruises, while the adjacent Bancroft Gardens and Recreation Ground provide green spaces for leisure activities. The Royal Shakespeare Theatre, an iconic venue, attracts theatergoers from around the world. All these factors play a pivotal role in keeping Stratford-upon-Avon firmly on the map, and they certainly contribute to the local property market.

Stratford-upon-Avon’s enduring appeal ensures steady demand for housing, which, in turn, has a positive impact on property prices. The town’s status as a hub for culture and history attracts both residents and investors looking for long-term stability. While house prices in the area have experienced fluctuations, they have generally been on an upward trajectory over the years.

Steady Demand and Healthy Property Prices

Tourist attractions are not only a source of income for local businesses but also influence property prices. Homes in proximity to the town center and riverfront tend to command higher prices due to their accessibility to key attractions. This premium is unlikely to wane as long as the town continues to draw visitors seeking a taste of Shakespearean history and culture.

A Haven for Shakespearean Actors

Stratford-upon-Avon is not just a tourist destination; it’s also a thriving hub for the arts. The Royal Shakespeare Company (RSC) calls the town home and attracts talented actors, directors, and theater professionals. Many aspiring and established actors dream of performing on the RSC’s prestigious stages, which has created a community of performers in the area. This, in turn, has contributed to the vibrancy of the local arts scene.

The Future of Property Investment

Looking ahead, Stratford-upon-Avon appears poised for continued growth and investment. The appeal of the town is not solely reliant on tourism; it’s also an attractive place to live, work, and raise a family. With excellent schools, a strong local economy, and a rich cultural scene, it offers a well-rounded lifestyle that appeals to a diverse range of residents.

Investors, both local and international, are eyeing Stratford-upon-Avon as a promising market. The town’s ability to weather economic downturns and maintain property values makes it a secure choice for those looking to invest in property.

Holiday Lets and Their Impact

The rise of platforms like Airbnb has led to an increase in holiday lets in Stratford-upon-Avon and its surrounding villages. While this trend has contributed to higher property prices in some areas, it has also raised concerns among local residents about the availability of affordable housing.

Investors who purchase homes for holiday lets can achieve high rental yields, especially during the peak tourist season. However, this can result in a reduction in the supply of long-term rental properties, potentially driving up rents for residents. Local authorities are exploring ways to strike a balance between tourism and housing needs to ensure the community’s well-being.

Conclusion

Stratford-upon-Avon’s enduring allure, driven by its Shakespearean heritage and exceptional attractions, continues to influence the local property market. While the town commands healthy property prices and attracts investors, it remains an attractive place to live for a diverse range of residents. The influx of tourists and the popularity of holiday lets do play a role in the market, but Stratford’s broader appeal as a cultural and historical gem ensures its lasting desirability for both investors and those looking to call it home. As we peer into the future, Stratford-upon-Avon’s property market seems set to remain a Shakespearean investment worth considering.

What affects the value of a house?

What Really Drives the Value of Your Home: Key Factors to Consider

Introduction

When it comes to determining the value of a house, there are several factors at play that can significantly impact its worth. While some people may believe that the number of bedrooms or the square footage is the primary driver of value, it’s essential to look beyond these surface-level aspects. In this article, we’ll delve into the main factors that contribute to the value of a house, shedding light on what really matters in the real estate market.

Location, Location, Location:

One of the most critical factors influencing a home’s value is its location. The proximity to good schools, shops, public transportation, and even the overall neighborhood can greatly affect the price of a property. Homes in desirable, safe, and well-connected areas tend to command higher prices. A neighborhood with excellent schools, low crime rates, and access to amenities can make a significant difference in a property’s value.

Condition and Quality:

The standard of finishing and the quality of fixtures and fittings in a house play a vital role in determining its value. Well-maintained homes with high-quality materials, modern appliances, and updated systems often have a higher market value. Buyers are willing to pay a premium for a property that requires minimal repairs and upgrades, as it saves them time and money in the long run.

Size and Layout:

While the number of bedrooms and square footage are essential considerations, it’s important to remember that it’s not just about quantity but also quality. A spacious, well-designed layout that maximizes usable space can significantly impact a home’s value. Open floor plans, functional kitchens, and well-proportioned rooms are often preferred by buyers and can command higher prices.

Curb Appeal:

The first impression a house makes is crucial, and that’s where curb appeal comes into play. A well-maintained exterior, attractive landscaping, and a well-kept lawn can boost a property’s value. Potential buyers are more likely to be drawn to a house that looks inviting from the outside.

Upgrades and Renovations:

Homes that have been recently updated or renovated tend to have higher values. Modern kitchens, updated bathrooms, energy-efficient windows, and other renovations can make a house more appealing to buyers and increase its market value. However, it’s essential to consider the cost of renovations and the potential return on investment when making these upgrades.

Market Conditions:

The current state of the property market can also significantly impact a home’s value. In a seller’s market, where demand exceeds supply, home prices tend to rise. In a buyer’s market, where there are more homes available than buyers, prices may stabilise or even decrease.

Historical Sales Data:

Estate Agents in Stratford upon Avon and other areas often rely on historical sales data and comparable properties (comps) in the area to determine a home’s value. This data considers recent sales of similar homes in the same neighborhood, taking into account factors like location, size, condition, and upgrades.

Conclusion:

While the number of bedrooms, square footage, and other physical attributes certainly play a role in a home’s value, it’s clear that there are many other factors to consider. Location, condition, layout, curb appeal, upgrades, market conditions, and historical sales data all contribute to the overall value of a house. When buying or selling a home, it’s essential to take a holistic approach, considering all these factors to make informed decisions and achieve the best possible outcome in the property sales market.

Should we reduce our house price to get a sale?

Should we reduce our house price?

The property market landscape in the UK is experiencing a unique confluence of factors leading to reduced activity and a correction in property prices. A once buoyant market, characterised by competitive bidding wars and soaring house prices, is now treading water in the wake of higher interest rates and fewer potential buyers. In this article, we’ll unpack the current state of affairs, the response of sellers, and the choices facing those keen to make a sale.

The Current Scenario: Higher Interest Rates & Fewer Buyers

Historically, low interest rates have stimulated property demand by making mortgages more affordable. But in recent times, England and Wales have been hit with rising interest rates. As a consequence, securing a mortgage or refinancing has become more expensive. This financial reality, coupled with economic uncertainties, has led to a decline in potential buyers entering the market.

Some Properties Still Find Buyers: The Art of Price Reduction

Despite the broader sluggishness, it’s worth noting that not all properties are languishing on the market. As reported by our Stratford, Kenilworth & Coventry Estate Agents, some sellers, recognizing the changed landscape, have acted proactively by reducing their asking prices. This strategy has often borne fruit, leading to increased interest and faster sales.

However, a price reduction isn’t just about slashing figures arbitrarily. It’s about finding that sweet spot — a price that’s fair, attractive, and reflective of current market conditions.

The Waiting Game: Sellers Holding Out

On the other end of the spectrum, many sellers are playing the waiting game. Their reluctance to adjust their asking price stems from various reasons: an emotional attachment to the property, a belief in its inherent value, or a simple denial of the evolving market dynamics.

But here’s the reality check: while these sellers wait in hope, the market isn’t standing still. Prices, in many areas, are falling. A property that seems fairly priced today might seem overpriced in just a few months. For those holding out, there’s a real risk of “missing the boat.” By the time they come around to reducing their price, the market might have fallen further, making their property even less attractive to potential buyers.

To Sell or Not to Sell? Making a Proactive Decision

The property market is like any other — driven by supply and demand. For motivated sellers, the message is clear: waiting on the sidelines could mean missing out on potential sales. While the thought of reducing an asking price can be unpalatable, it’s a strategic move in a market that’s leaning in favour of buyers.

To conclude, in the current subdued property market, proactive decisions are more crucial than ever. Sellers must be prepared to adapt, reassess, and, if necessary, reduce their asking prices. By doing so promptly, they stand a better chance of navigating these challenging waters and achieving a successful sale.

Property Prices in Kenilworth – Unravelling the Puzzle

Among the network of picturesque towns and bustling urban centres in England’s heartland, Kenilworth has managed to maintain consistently high house prices, outperforming its neighbours like Warwick, Leamington, Coventry, and even Stratford upon Avon. The reasons behind this intriguing trend are multifaceted, ranging from the unique charm of the town and the amenities on offer to the demographic composition of Kenilworth.

Charming Kenilworth — Delightful shops in Kenilworth

The Irresistible Charm of Kenilworth

Kenilworth’s allure lies in its unique blend of historical charm and contemporary conveniences. The town’s architectural marvels, such as Kenilworth Castle, are treasured pieces of English history that serve as beautiful backdrops to everyday life. The town’s commitment to preserving its heritage and distinctive character often appeals to home buyers who are drawn to its quaint, timeless appeal.

Moreover, Kenilworth’s urban planning has managed to create a harmonious blend of residential and commercial spaces. The vibrant High Street, with its independent shops, restaurants, and cafes, offers a quality of life that rivals larger, busier towns, adding a touch of convenience to the town’s historic charm.

Exceptional Amenities

Another factor contributing to Kenilworth’s property price resilience is its extensive range of local amenities. From an outstanding selection of schools to parks, sporting facilities, and a wealth of cultural experiences, Kenilworth offers a complete package for a variety of lifestyle needs.

The education sector, in particular, has significantly boosted Kenilworth’s appeal among families. With the presence of several well-regarded schools, including Kenilworth School and Sixth Form, the town attracts those prioritising a high-quality education for their children. This demand from families, eager to secure a place in these catchment areas, has consequently driven property prices upwards.

The Demographic Factor

Looking at the demographic composition of Kenilworth, it is clear that this also plays a significant role in the town’s property market trends. The town tends to attract a relatively older population, often with higher disposable income. This demographic, often looking to enjoy a serene retirement or to invest in a second home, tends to have more financial stability and therefore is able to support higher property prices.

It’s also important to note the ‘ripple effect’ that can occur in housing markets. As wealthier individuals move into an area and invest in property, they can often attract similar demographic groups, creating a cycle of rising property prices. This seems to be occurring in Kenilworth, with its reputation as a desirable location encouraging more affluent individuals to move there.

Commuter Convenience

Lastly, Kenilworth’s geographical positioning also plays into its property market strength. Conveniently nestled in the heart of England, it’s a perfect haven for commuters working in larger cities such as Coventry, Birmingham, or even London. The availability of efficient public transport, including the recently re-opened Kenilworth railway station, provides ease of connectivity, adding another layer of attractiveness to the town.

Check the value of your Kenilworth property through one of the quality Kenilworth Estate Agents.

Conclusion

While the high property prices in Kenilworth can be attributed to a variety of factors, the core drivers are the town’s undeniable charm, excellent amenities, favourable demographic, and strategic location. These elements intertwine to create a resilient property market that appears set to remain robust, despite the fluctuating trends seen in its neighbouring towns. As we move into the future, it will be interesting to observe how these factors evolve and continue to influence Kenilworth’s property market.

Coventry Baby Boomers and their 2,575 Spare ‘Spare’ Bedrooms?

An additional 5,002 spare bedrooms have been locked out of the Coventry housing market since 2011 as Britain’s ageing population means the country’s stock of homes is being used more unproductively.

The number of spare bedrooms in Coventry between 2011 and 2021 increased from 126,483 to 131,485.

The number of Coventry households living in properties with at least two spare bedrooms (i.e., spare ‘spare’ bedrooms) increased by 2,575, from 40,626 households to 43,201 households between those ten years.

That means 32.2% of Coventry households

have two or more spare bedrooms.

And this isn’t just a local issue; Britain has 8,902,471 properties with a spare ‘spare’ bedroom (i.e., they have two or more spare bedrooms).

Before I dive deep into the issue of these ‘spare’ spare bedrooms, let me look at the ‘occupancy rating’ of all households in the country.

There are 8.26 million households with one spare bedroom, 6.57million households with no spare bedrooms (i.e., the household’s accommodation has an ideal number of bedrooms), 880,672 households where they are classed as over-crowded under the ‘Bedroom Standard’ by one bedroom and 173,751 households where they are classed as over-crowded under the ‘Bedroom Standard’ by two bedrooms.

The ‘Bedroom Standard’ allocates a separate bedroom to each of these groups (according the Office of National Statistics):

adult couple
any remaining adult (aged 21 years or over)
two adolescents (aged 10 to 20 years) of the same sex
one adolescent (aged 10 to 20 years) and one child (aged 9 years or under) of the same sex
two children (aged 9 years or under) regardless of sex
any remaining child (aged 9 years or under)

So, with this serious overcrowding, why is this under-occupation happening and is there a better use for these homes?

Britain has an ageing population. Just over 1 in 5 (18.6%) of Britain’s population are aged 65 years or older,

compared with 1 in 6 (16.4%) a decade ago.

In the last ten years, many of Britain’s baby boomer generation (currently aged 59 years to 77 years of age) have entered retirement. Most of these extra bedrooms are in homes owned by these baby boomers, who are probably still living in the original family homes they bought in the 1980s or 1990s to raise their children, yet still live there years after their children left home.

And it will get worse throughout the 2020s as the number of Brits living in homes greater than their needs will grow further as the demographics of the British population shift.

There are 68,247,855 bedrooms in England & Wales, and even if nobody shared a room, there would be enough for every one of the 59,597,542 of us to have a bedroom and still have 8,650,313 spare bedrooms! They are very unequally distributed between households.

What’s the answer?

Some on the left suggest we forcibly make these older mature Coventry homeowners people move to smaller homes. Yet, it’s their property; they paid the mortgage on it for years (especially when mortgage interest rates were 15% and above), and thus, it’s their choice if they want to move or not.

Some of the difficulties are that downsizing in Coventry often needs to make financial sense for mature homeowners.

Most mature Coventry homeowners live in average-priced homes and suitable bungalows, even though they are smaller, often cost as much, if not more, than their large family home.

This issue will slowly worsen in the coming twenty years, so what are the options?

There is a necessity to motivate builders to build suitable properties for these mature homeowners to move into and to change the dynamics of the available properties to buy. For example, there are only 2 million bungalows in the UK, and we only built just over 1,800 new bungalows in 2020, yet seven in ten UK people (c. 10.7 million) aged over 65 want to live in a bungalow.

Secondly, there needs to be reform of the taxation rules on housing. Taxation works on the carrot or stick method.

The ‘stick’ could make it less attractive to stay in larger houses by increasing the higher council tax rates in the higher council tax bands. The ‘carrot’ could incentivise mature homeowners to downsize with allowances on stamp duty or inheritance tax, thus making a move easier.

However, the cost-of-living crisis and heightened energy bills could be doing the Government’s job for them.

The number of larger Coventry homes owned by mature homeowners, often for 25 years plus, has been snowballing in the last six months.

This is good news for younger families that can afford to jump from their smaller homes, yet many can’t afford to make the jump for the same reasons why mature homeowners are moving home.

For example, of the 181,195 properties put on the market in the UK in November and December 2022, 56.9% were under £350,000. However, of the properties sold in the UK since Christmas 2022, 66.3% of them have been £350,000 or less.

This means those homeowners in the middle to upper levels of the Coventry property market need to be very realistic with this pricing as the supply of the mid/high range properties is outstripping the demand.

Whilst it is not a good distribution of housing if you have some people in overcrowded households and others with spare bedrooms, everyone should be able to choose how to live.

Many Coventry homeowners delay downsizing because they prefer to grow old in their family home rather than downsize. However, I often see mature homeowners downsizing too late when say, they have had a fall, are unable to manage the basics of gardening or cleaning, or the home becomes a physical hazard.

This downsizing phase will continue to grow, peaking in the mid-2030s.

The issue is, I cannot see builders or the Government building hundreds of thousands of bungalows in the next decade.

So maybe, you should consider making a move in the next few years, when you will have a better choice of bungalows to move to and you are able to put your stamp on it when you are in your 70’s and before you are unable to in your mid/late 80s?

If mature homeowners have large properties earned from working hard and paying taxes, then quite frankly, that is nobody else’s business and no one should force you out!! You might want that extra space for children and grandchildren to come and stay or as office space, a television room or a hobby room. Yet please, I must stress these are only suggestions.

These are my thoughts – what are yours?

59% More Coventry Homes are on the Market Today Than a Year Ago

More Coventry homes are now coming up for sale. This is excellent news for Coventry homebuyers and Coventry landlords because as properties are no longer flying off the shelf as they did last year, the number of properties available to buy is beginning to return to long-term averages.

This means there is greater choice for Coventry buyers and this will reduce the pressure on Coventry house prices and return us to a more normal Coventry housing market for buyers (and sellers).

The average UK estate agency now has 25 homes for sale, the highest level of properties on the market since December 2021

(when it was 21 homes for sale).

However, properties per estate agency brand is not the best judge of the property market.

Let’s look at the actual Coventry stats, which tell a slightly different story.

Coventry Detached Homes – Dec 2021, 207 available and today, 319 available – an increase of 54%
Coventry Semi-Detached Homes – Dec 2021, 256 available and today, 514 available – an increase of 101%
Coventry Terraced/Town Houses – Dec 2021, 198 available and today, 386 available – an increase of 95%
Coventry Apartments – Dec 2021, 256 available and today, 259 available – an increase of 36%

Overall, an increase of 59% – year on year.

(The data for Coventry is calculated by looking at all properties and plots for sale within a 5-mile radius of the centre of Coventry).

This growth in properties for sale has been seen across all areas of the British Isles. This is important because when there is a more significant availability of homes for sale, this diminishes the increasing pressure on house prices.

So how does a low number of properties for sale make such a huge difference?

Coming into the early spring of 2022, the levels of properties for sale were low (as seen from the low December 2021 stats above). It was ‘Hobson’s choice’ for buyers, so they had to pay top dollar to secure their Coventry home.

The value of Coventry properties that had their sale agreed upon in the early spring of 2022 (and completed their sale in September 2022) are 15.3% higher than those Coventry properties that had a sale agreed upon in the spring of 2021.

The number of properties estate agents have to offer buyers is increasing; this will boost the choice for Coventry buyers, meaning we will move into a more balanced Coventry housing market.

Nevertheless, it’s vital that Coventry sellers place their properties, when they go onto the market, in line with what Coventry homebuyers are prepared to pay, given the current hit to their buying power initiated by higher interest rates.

Coventry house prices are not expected to crash in 2023,

yet they will be lower than in 2022.

If you are buying and selling in the same property market, it doesn’t matter what happens to property prices.

Also, some might say waiting for Coventry house prices to drop will enable them to grab a bargain.

Well, sorry to ‘rain on your parade’, but you should read my recent article that discusses what would happen if Coventry first-time buyers waited for Coventry house prices to drop. If they waited, because interest rates are rising, the extra mortgage payments would cost them a lot more than the savings made on the purchase price. (Send me a message if you want a copy of it).

What has an effect on the value of your Coventry home is the number of properties for sale at any one time compared to the number of buyers. When there is an over-supply of homes for sale, prices go down, and with reduced demand, house prices will go down. So how do the stock levels of properties for sale compare to the past?

If you recall at the start of the article, I stated the average UK estate agency had 25 properties on their books now. In 2018/9, that average was 36 properties for sale (and for added comparison, the long-term average, since records began in 2016, is 49 homes for sale).

As you can see, whilst stock levels have grown, we are a long way off the long-term average.

A great way to determine what will happen to the property market is by measuring that stock level (i.e., the number of properties for sale). Check once a month and see how many properties are for sale. Let me break that down for Coventry specifically and how you can judge the market from your sofa.

There are 1,572 properties and plots for sale in Coventry now. To give context, the long-term 16-year average is 2,200 properties and plots for sale, yet in the credit crunch of 2008, it reached 3,631 properties and plots for sale at one point.

I envisage some component of scarcity to persist in the Coventry property market, meaning whilst the house prices that were being achieved in the spring of 2022 won’t be replicated in 2023, it also won’t fall dramatically next year.

The incentives and impetuses to move home have changed in the last six months and will continue to do so into 2023.

As I have written before, there are a larger number of mature homeowners in their 60s and 70s downsizing to help with heating bills, whilst the desire for more space means younger families will continue to look for new homes to live in, in 2023.

If younger 20-somethings can access the Bank of Mum and Dad for mortgage deposits, they will also carry on buying. This is especially true because double-digit rental inflation makes renting quite expensive compared to buying (even with the increased interest rates).

These are my thoughts on the Coventry property market this week. Do put in the comments (or send me a message) your thoughts on the matter discussed and any other property-related topic you want some advice and opinion on.

Thank you in advance…

Coventry Tenants face further rent hikes, as the number of available rental homes drops by 58%?

For tenants, especially over the last 12 months, it has become progressively more challenging to find a Coventry rental home, thus making the rent they must pay go up. This state of affairs in the property market isn’t showing an indication of getting any easier either, making for a hard time for Coventry renters.

So, what is the reason behind the Coventry rental property shortage, and what does this mean for existing Coventry landlords or those potential investors considering buying a Coventry buy-to-let property soon?

Several different components are making the perfect storm in the UK property market.

Firstly, the number of households in the UK.

The UK has not been building enough homes for the last 20 years. I appreciate that parts of Coventry seem like one huge building site, yet as a country, we are woefully undersupplied with property to live in. This has meant house prices continue to rise due to demand.

The government have known about this issue for decades. The Barker Review of Housing Supply published in 2004 stated that the UK had experienced a long-term upward trend of 2.4% in real house prices since the mid-1970s because of a lack of house building. The report stated that 240,000 houses needed to be built each year to keep up with demand.

The average number of houses built since the mid-1970s has been around

165,000 per year, meaning the UK is short of 3,375,000 houses

(i.e. 45 years multiplied by 75,000 missing homes per year).

Several years ago, the government set a target to build 300,000 new homes each year to address this issue.

However, in 2019/20, the actual number of homes delivered stood at just 243,770. In 2020/21, the number of properties built dropped to only 216,000 new homes. In a nutshell, there are fewer available homes to buy, meaning fewer available homes to rent.

Secondly, Coventry tenants are staying in their rental homes longer.

A Coventry first-time buyer’s average house deposit is £37,159

(the UK average deposit is £53,935).

The average rent of a Coventry property in November 2022 is £1,091 per calendar month (up from £879 per calendar month in February 2020) – quite a rise!

These numbers translate into Coventry renters not being able to pay the rent and be able to save for a deposit, or if they are saving, it is taking a lot longer to save for a deposit due to the cost-of-living crisis and higher rent costs.

Also, many Coventry tenants have decided to stay in their existing rental homes because of the rent rises. Many landlords are less inclined to raise the rent on an existing property when they have a decent tenant who keeps the property in good condition and pays rent on time. Anecdotal evidence also suggests that rent arrears in those properties are dropping as tenants know if they don’t pay the rent, the chances are they will have trouble finding another property, and if they do, they will have to pay a lot for their next rental home.

For Coventry landlords, this is all positive news – tenants are staying for longer in their Coventry rental properties, arrears are lower, and void periods are less likely. When it comes to the market there is less competition (because of the decrease in the availability of Coventry rental properties) so this makes the investment an even better bet.

Thirdly, landlords are selling up on the back of recently increased house prices.

It would be difficult for Coventry buy-to-let landlords to ignore the rising property prices in recent years.

The average property value in Coventry in the summer of 2022

was 12.8% higher than in the summer of 2021.

For some Coventry buy-to-let landlords, especially those who were classified as ‘accidental landlords’ (an accidental landlord is a landlord who never chose to become a landlord, it was just after the Credit Crunch of 2008/9, they found themselves unable to sell their property, so they temporarily let their own property out), they chose to ‘cash in’ on the higher house prices. This would have also contributed to the lack of available Coventry homes for rent.

Yet everything isn’t all sweetness and light for Coventry landlords.

Landlords have a few costs to consider before investing in buy-to-let, including everything from regular refurbishment costs, buildings insurance, letting agents’ fees, income tax, and, not forgetting, stamp duty.

Talking of costs, one issue some Coventry landlords are facing is their failure to plan financially for the recent mortgage interest rate rises. Some Coventry landlords may have become complacent to the ultra-low Bank of England base rates we have had since 2008 and, therefore, may need to sell their rental property, which, if bought by a first-time buyer, will remove another property from the Private Rented Sector.

Another hurdle to jump is the proposed new regulations requiring better energy efficiency for rental properties. It is proposed all new tenancies must have at least a minimum of a ‘C’ rating for their EPC (Energy Performance Certificate) from 2025 (and 2028 for all existing tenancies).

Therefore, as a buy-to-let Coventry landlord, it is wise to do your research to make sure the buy-to-let opportunity is correct for your rental portfolio, particularly when it comes to weathering any impending financial storms.

Landlords need to consider the returns from their

Coventry buy-to-let investments.

Landlords can earn money from their buy-to-let investments in two ways. One is the property’s capital growth, and the other is the rental return (often expressed as a yield). In 96% of buy-to-let investments, there is an inverse relationship between capital growth and yield (i.e. properties that tend to go up in value quicker will have lower yields 96% of the time – and vice versa).

Getting the best balance of yield and capital growth depends on your current and future needs from your Coventry buy-to-let investment.

If you would like me to review your portfolio and ascertain if your existing portfolio will match your current and future needs for the investment – whether you are a client or not, feel free to drop me a line, and we can have a no-obligation chat and possibly organise a review.

What does all this mean for the Coventry rental market?

The continued shortage of Coventry rental properties means it will be more difficult than ever to find a Coventry property to rent, and so rents will continue to grow.

Unlike in Scotland, England and Wales do not have rent controls, with Westminster ruling out the possibility of introducing rent control here to deal with the cost-of-living crisis.

You would think rent controls would be a no-brainer, yet economists from around the world have proved for the last 75 years that rent controls might help tenants in the short term, yet ultimately it drives landlords to sell their investments in the long term, thus reducing the stock of available properties to rent out (not great for future tenants).

Therefore, it is highly likely that Coventry rents

will continue to rise for tenants.

Landlords who persevere with their Coventry buy-to-let properties or become a Coventry buy-to-let landlord are set to benefit because they have an asset in very high demand.

The housing shortage, not to mention the other issues discussed above that are affecting the supply of rental properties, is unlikely to be fixed anytime soon!

In conclusion, the Coventry rental market is a constantly changing picture. What is known is that the supply of rental properties is far from what is needed, which can only be to the benefit of buy-to-let investors rather than of tenants renting.

I see buy-to-let as a long-term investment. Everyone reading this knows that the real value in your buy-to-let investment is playing the long game, allowing your Coventry buy-to-let investment to grow over time. Like the crypto or stock market, getting sucked in by get-rich-quick schemes that are selling ‘apparent quick wins’ in property investment is very easy.

I regularly highlight the best buy-to-let deals for Coventry landlords with all the estate agents (not just my own). You don’t need to be a client of mine either to receive that information. Drop me a line or call (without any cost or obligation) if you are interested in making your first Coventry buy-to-let investment or considering adding to your existing Coventry portfolio.

Could the humble ‘granny annexe’ help solve the Coventry housing crisis for mature homeowners?

Most Coventry homeowners born before 1960 have been in their homes for more than 25 years.

Yet of all the properties sold in the UK since the first lockdown in the summer of 2020, 50% of those property owners had only been in their homes for six years and four months or less. That means we almost have a two speed housing market.

One market of homeowners in their 20s and 30s who move every four to five years and another property market of homeowners who, when they hit their late 40s, tend to stay put for decades. Yet now those mature homeowners, many of whom are retired and on fixed incomes with pensions, are finding it a lot more challenging to make ends meet with the cost-of-living crisis.

Evidence suggests nationally and locally, a lot of larger houses (property which tends to be owned by mature homeowners) have come onto the market in the last 12 months compared to the previous few years.

There has been a drop of 22.9% of properties priced up to £200,000 on the market in the UK in the last 12 months, yet an increase of 13.3% of properties priced between £500k and £1m. Focusing on the lower price range nationally, there are 39.4% fewer properties for sale in the price range up to £100k, 27% fewer in the £100k to £150k range and 14.9% fewer in the £150k to £200k range. The range that has seen the highest growth is the £600k to £750k, which has grown by 14.2%.

Looking closer to home in Coventry…

there are 20% more properties for sale in the Coventry area today compared to a year ago.

(1,317 properties for sale now compared to 1,102 a year ago).

But it gets much more interesting when you split the increases by bedrooms and property type.

Properties with more bedrooms tend to be more expensive than those with fewer. Also, detached and semi-detached properties are more expensive than terraced/townhouses and apartments.

5-bed Coventry properties – an increase of 27%

4-bed Coventry properties – an increase of 14%

3-bed Coventry properties – an increase of 39%

2-bed Coventry properties – an increase of 8%

1-bed Coventry properties – a decrease of 27%

And now, by type…

Coventry detached properties – an increase of 24%

Coventry semi-detached properties – an increase of 51%

Coventry terraced/town house properties – an increase of 45%

Coventry apartments – a decrease of 25%

The increase in these larger Coventry homes is great news for second or third-time movers, as it releases larger homes for them to bring up their young families.

Yet, the other side is the lack of properties for these mature Coventry homeowners to buy.

There are 12.7 million people aged 65 and over in the UK (19% of the total population), yet there are only 2 million bungalows (which represent 7.2% of all UK property).

When it comes to new properties, the figures are even worse.

Of the 173,660 properties built in 2019, only 2,384 were bungalows.

And this is where the annexe could be one part of the solution.

Annexes are buildings often erected in gardens or extended onto an existing property to be used as separate and independent living accommodation.

Generally, the ‘granny annexe’ has been used to keep one’s parents and grandparents nearby whilst retaining their independence. Roll the clock back to the Millennium, annexes were seen as excess accommodation that added little to the saleability or value of property.

Interestingly though, in the last few years, the annexe has had a renaissance and has become a practical, economical and emotional answer for a more flexible group of homeowners.

Lockdown brought working from home to the fore, and the annexe is undoubtedly an excellent solution for many homeowners.

Lockdown saw many people recognise the importance of having their family close by. I have seen several mature Coventry homeowners build an annexe extension in the garden, then move into the annexe themselves and give their original property to their children to live in. Thus helping two families with their accommodation needs and the advantage of shared fuel costs (plus other benefits such as childcare).

Also, as mortgage rates are rising, the annexe could be the salvation for either your first-time buyer child/grandchild who cannot afford to buy their first home because of mortgage affordability rules or who is finding it tough to save a deposit for a mortgage.

The demand is there for annexes. In December 2020, Rightmove reported a year-on-year 89% increase in the number of home buyers and tenants searching for the term ‘annexe’. Demand is high and supply, as seen by these statistics, is low.

Of the 1,317 properties for sale in the Coventry area, only 14 have an annexe.

I believe the lockdown made many of us look at how we live in the UK. Many people are adopting, adapting and changing how they look at housing. With recent planning regulation changes, the rules were relaxed a few years ago, which allowed homeowners to extend their homes without planning permission in an arrangement called ‘Permitted Development’.

If you are a mature/older Coventry homeowner or have mature/older parents and want to look at all your options regarding upsizing, downsizing and annexes, then without any obligation, drop me a message and let’s chat through your options.

For everyone else in Coventry, what do you think about annexes? And what other solutions could help solve the housing issue in Coventry and the UK as a whole?

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.

Coventry’s ‘Generation Stuck’ and Their £7,764m Tied-up Equity

The predicament of the Coventry 20 to 30 year olds who rent and their inability to get onto the housing ladder is often discussed in the press.

There are 4.43m properties in the UK that are still in the private rented sector (compared to 2.13m in 2002).

This group of people in their 20s and 30’s, who rent from a private landlord, are often called ‘Generation Rent’.

Yet would it surprise you that since 2017, the number of UK households in the private rented sector has reduced by 260,000 whilst the number of homeowners has increased by 1.1m?

In this article I want to talk about another set of people,

not ‘Generation Rent’, but ‘Generation Stuck’.

Generation Stuck are our middle-aged and mature homeowners of Coventry. They are the generation that could be described as late ‘Baby Boomers’ (born in late 1950s and early 1960s) and the early ‘Gen X’ (born in the mid 1960s to early 1970s).

These 50 to 64 year old Coventry people feel stuck in their homes, and therefore I have nicknamed them ‘Generation Stuck’. Their inability to move could be holding back those younger Coventry ‘Generation Renters’.

So, let me look at the numbers involved.

In Coventry, there are 18,517 households, whose owners are aged between 50 and 64 years old and are about to pay their mortgage off on property that is worth £3,660.63m.

There are an additional 20,757 mortgage free Coventry households, owned by 50 to 64 year olds, worth £4,1033.45m, meaning …

Coventry ‘Baby Boomers’ and Coventry ‘Gen X ‘are sitting on £7,764.1m worth of Coventry property.

According to the Census, 47.8% of homes occupied by 50 to 64 year olds have two or more spare bedrooms.

This is backed up by the annual English Housing Survey that states nationally, 49% of properties occupied by these ‘Generation Stuck’ are ‘under-occupied’.

Under-occupied is categorised as having at least two spare bedrooms.

Looking at the statistics closer to home …

41.2% of Coventry 50 to 64 year olds have two or more spare bedrooms, making it the 277^th highest local authority in the country

(out of 348 local authorities).

The rising number of older Coventry homeowners who want to downsize their Coventry home are often held back by the lack of suitable housing options for older people and the difficulties of moving.

Lots of over 50 year old Coventry people cannot move home in the way that they would like, due to a lack of suitable housing options and so can find themselves ‘stuck’ in homes which are no longer suitable for them as they age.

Only 1 in 29 people over the age of 50 move home each year compared to 1 in 15 for the rest of the population.

Helping mature Coventry homeowners (Generation Stuck) to downsize their homes at the right time will also allow younger Coventry people (Generation Rent) to find the Coventry family homes they need – meaning every generation wins, both young and old.

However, to ensure downsizing works, we need more choices for these “last-time-buyers”.

That means building more bungalows or more ground floor apartments suitable for the middle to older generation.

One way this could be done is by changing the planning rules to force builders to build these types of properties, whilst the other could be the changing of the stamp duty tax breaks for downsizers.

In this way, older Coventry people will be more able to move into homes which suit their specific needs, improve their quality of life whilst meeting their goals in life, all without them becoming detached from their friends and family locally in the Coventry area.

These are my thoughts, please let me know yours.