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Tuesday 6 February 2018

With Maidstone Annual Property Values 5.9% Higher, This is My 2018 Forecast

 
Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Maidstone property market.

With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 4% in Maidstone, which has contributed to maintain a decent level demand for property in Maidstone in 2017 (interestingly – an impressive 2,204 Maidstone properties were sold in last 12 months), whilst finally, the number of properties for sale in the town has remained limited, thus providing support for Maidstone house prices, meaning …



However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.


In terms of what will happen to Maidstone property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.


Nevertheless, the bottom line is Maidstone homeowners and Maidstone landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Maidstone, they have only risen by 48.1%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.


Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact ... I am sure we can get through this together as well?

Oh, and house prices in Maidstone over the next 12 months? I believe they will end up between 0.2% lower and 1.5% higher, although it will probably be a bumpy ride to get to those sorts of figures.


If you would like to read more articles on my thoughts on the Maidstone property Market – please visit the Maidstone Property Market Blog http://maidstonepropertyblog.blogspot.co.uk

Monday 5 February 2018

On line Estate Agents have been accused of publishing incorrect property sales figures.



Stockbrokers -Jeffries said Purple Bricks sales are just over 51 % of instructions. Purple Bricks state their figures are 78% .


Jeffries called selling with purple Bricks is a" £1000 coin toss”. This is because they charge up front and not on results like traditional high street agents. You pay whether you have sold or not !



Seekers sales are 90 % of instructions and you pay on results !


Wednesday 3 January 2018

Maidstone Apartments are 8.5% more affordable than 10 years ago


My research shows that certain types of Maidstone property are more affordable today than before the 2007 credit crunch.

Roll the clock back to 2007 just before the credit crunch hit which saw Maidstone property values plummet like a lead balloon and the Maidstone property market had reached a peak with the prices for Maidstone property hitting the highest level they had ever reached.  Between 2008 and 2010, Maidstone property values lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.

Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that Maidstone property, especially flats/apartments, are now more affordable than they were before the 2008 credit crunch.

Back in 2007, the average value of a Maidstone flat/apartment stood at £164,258 and today, it stands at £193,036, a rise of £28,778 or 17.5%.

However, between 2007 and today, we have experienced inflation (as measured by the Government’s Consumer Price Index) of 25.97% meaning that in real spending power terms Maidstone apartments are 8.5% more affordable than in 2007. Looking at it another way, if the average Maidstone apartment (valued at £164,258 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £206,916 (instead of the current £193,036).


The point I’m trying to get across is that Maidstone property is more affordable than many people think.  Maidstone first time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.

It really comes down to a choice and if Maidstone first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property – they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.

So why aren’t Maidstone 20 somethings buying their own home?

Back in the 1960’s and 1970’s, renting was considered the poor man’s choice in Maidstone (and the rest of the Country) a huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting - meaning that many people find renting a better option and a lifestyle choice.

Saving the 5% deposit means going without many luxuries in life (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit Maidstone 20 somethings choose to rent.

There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Maidstone will continue to rise.

Therefore, everyone in Maidstone has a responsibility to ensure that an adequate number of quality Maidstone rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the expectations of Maidstone tenants on the finish and specification of their Maidstone rental property.

I have perceived that in the past, what a tenant wanted from their Maidstone rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.

However, Maidstone tenants’ expectations are becoming more discerning as each year goes by.  I have also noticed the length of time a tenant remains in their Maidstone property is becoming longer (and this was backed up recently by stats from a Government Report), although I have noticed a tendency for many Maidstone landlords not to keep the rental payments at the going market rates  - maybe a topic for a future article for my blog?

The bottom line is this … Maidstone landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their Maidstone rental properties over the next five, ten and twenty years -  e.g. decorating, kitchen and bathroom suites etc etc ..

The present-day and future situation of the Maidstone private rental property market is important, and I frequently liaise with Maidstone buy-to-let investors looking to spread their Maidstone rental-portfolios. I also enjoy meeting and working alongside Maidstone first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.


Wednesday 13 December 2017

Maidstone Property Market and Hammond’s Budget Promise to Build 300,000 more homes

I miss the good old days of George Osborne as Chancellor, with his hardhat and hi-vis jacket. He must have visited every new home building site in the UK with his trademark attire! For the last few years, the nearest Philip Hammond got to donning a ‘Bob the Builder’ outfit was at his grandchild’s birthday party. However, with what appears to be a change in focus by the Tories to ensure they get back in power in 2022, they appear to have fallen in love with house building again with the Chancellor’s promise to create 300,000 new households in a year.

Nationally, the number of new homes created has topped 217,344 in the last year, the highest since the financial crash of 2007/8. Looking closer to home: in total there were 1,145 ‘net additional dwellings’ in the last 12 months in the Maidstone Borough Council area, a decent increase of 79% on the 2010 figure.

The figures show that 89% of this additional housing was down to new build properties. In total, there were 1,019 new dwellings built over the last year in Maidstone. In addition, there were 265 additional dwellings created from converting commercial or office buildings into residential property and a further 11 dwellings were added as a result of converting houses into flats.


While these all added to the total housing stock in the Maidstone area, there were 150 demolitions to take into account.

Net additional dwellings in Maidstone in the last 12 months
New build
Conversions
Change of use
Demolitions
Net Additions
1,019
11
265
-150
1,145

I was encouraged to see some of the new households in the Maidstone area had come from a change of use. The planning laws were changed a few years back so that, in certain circumstances, owners of properties didn’t need planning permission to change office space in to residential use.

With the scarcity of building land available locally (or the builders being very slow to build on what they have, for fear of flooding the market), it was pleasing to see the number of developers that had reutilised vacant office space into residential homes in the local council area. Converting offices and shops to residential use will be vital in helping to solve the Maidstone housing crisis especially, as you can see on the graph, that the level of building has hardly been spectacular over the last seven years!

Now we have had the autumn budget, Theresa May and Philip Hammond have set out their stall with housing as their key focus. I was glad to see the Government introducing a variety of changes to improve housing, including more funding for the supply side and an injection of urgency into the planning system.

The biggest question is, just where are the Government going to build all these new houses? Maybe a topic for a future article?

Back to the main point though and the focus on the housing market by the Tory’s is good news for all homeowners and buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants.


Wednesday 22 November 2017

The Maidstone House Price Index - 159.94


I had the most interesting conversation the other day with a local Maidstone accountant, who asked me about my articles on the Maidstone property market. It was quite humbling to be given praise by such a professional, when he commented enthusiastically on the articles I write. He was particularly interested with the graphs, facts and figures contained within them – so much so he recommended his clients read them, as most of them were either Maidstone homeowners, Maidstone landlords and a lot of the time - both. However, one question that kept me on my toes was, “With so many House-Price-Indices, how do you know which one to use and how can you calculate what is exactly happening in Maidstone?

To start with, there are indeed a great number of these Indices, including the Land Registry, Office of National Stats, Halifax, Nationwide and LSL to name but a few. The issue occurs when these different house price indices give diverse pictures of the state of the UK housing market. Whilst some indices measure the average value of every property in the UK (sold or unsold), others measure the average ‘price-paid’ of houses that happen to be sold over a fixed time scale… confusing isn’t it!

A lot of the variance between house price indices occurs because of the distinctive ways in which the numerous indices endeavour to beat these issues. You see, the biggest problem in creating a house-price-index when comparing and contrasting with most other indexes (e.g. inflation where the price a ubiquitous tin of Beans can easily be measured over the months and years), is every home is unique and as Maidstone people are only moving every 14.5 years, it appears the only thing that can be measured is the price of property sold in a given month.
By their very nature, all of the indices are only able to paint a picture of the whole of the UK or, at best, the regional housing market. As I have said many times in my articles on the Maidstone property market, it is important to look to the medium term when considering house price inflation/deflation. Looking at the month-to-month jumps, many indices look like one of those jumpy lie-detector needles you see in the cold war movies! 
I can guarantee you in the coming few months, on a month-by-month basis, one or more of the indices will say property prices will have dropped. Let me tell you, no property market indices are representative of the housing market in the short term. Many indices have shown a drop around the Christmas and New Year months, even the boom years of 2001 to 2007 and 2013 to 2015.

So, back to the question, how do we work out what is happening in the Maidstone Property Market and can there be a Maidstone House Price Index?
To calculate what I consider is a fair and proper House Price Index for Maidstone, I initially needed to decide on a starting place for the index. I have chosen 2008 as far enough away, but still gives us a medium/long term view. Next, I split all the house sales into their types (Detached/Semi/House /Apartment) to give us an indication of what is actually selling by postcode district. So, for example, below is a table for the ME15 postcode district (the sample shows 2008, 2016 and 2017.



Then I look at the actual numbers of properties sold in the ME15 postcode district. Below is the graph with the numbers for the years already mentioned.


Next, I have looked at the prices paid for those types for every year since 2008, again in this example using the sample years of 2008, 2016 and 2017 for the ME15 postcode.


Finally, I amalgamated the same data points for the other postcode districts covered by Maidstone and the surrounding villages, weighted it accordingly, to produce the Maidstone House Price Index ... which after all that work, currently stands at for Q4 2017 at 159.94 (Q4 2008 = 100).

I hope you found that of interest and over the coming months and seasons, I shall refer back to Maidstone House Price Index in my Maidstone Property Blog www.maidstonepropertyblog.blogspot.co.uk  to give you a flavour of what is really happening in the Maidstone Property Market.

** If you are a vendor looking to sell or a Landlord looking to rent.  If you are a buyer looking to purchase a home or you are looking to rent a property you need to talk to us. **

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Monday 6 November 2017

Maidstone Property Market - But to Let


I see many new and experienced Buy- to -Let Landlords .They come from all walks of life. Some have just one property others many more. One of our landlords has 24 but he started with just one ! 

Our landlords often think of themselves as simply typical landlords but there are so many different types. There are portfolio landlords with a great wealth of experience, we have new landlords who have had some cash to invest. There are’ accidental landlords ‘ who have inherited a property or have moved elsewhere, couldn’t sell and now decided to keep their property as part of their pension scheme.

I have worked in the lettings business for many years and it is important for me to understand the individual needs of each type of landlord as it can change how they want to let their property-the approach to maintenance and the type of tenant required.

As an Independent Family Firm we can tailor what we do to achieve that perfect relationship and get the most from your investment. Many of our clients have been with us for many years .

We produce a fortnightly blog on the Maidstone Property Market – please subscribe by visiting http://maidstonepropertyblog.blogspot.co.uk/ 

Thinking of Selling please visit our web site ww.seekershomes.co.uk and download our selling guide

Now some important Information :                       

MONDAY NOVEMBER 20 TH
                                                                             
BUY-TO-LET SEMINAR

SPEAKER : CHRIS WATKINS PROPERTY JOURNALIST

THE PAST, PRESENT AND FUTURE OF THE MAIDSTONE PROPERTY MARKET

5.30 pm for 6pm VILLAGE HOTEL MAIDSTONE ( JUNCT 6 M20)

See you there !

Friday 27 October 2017

Maidstone Home Owners Are Only Moving Every 14.5 Years

As I mentioned in a previous article, the average house price in Maidstone is 9.68 times the average annual Maidstone salary. This is higher than the last peak of 2008, when the ratio was 8.47. A number of City commentators anticipated that in the ambiguity that trailed the Brexit vote, UK (and hence Maidstone) property prices might drop like a stone. The point is - they haven’t.

Now it’s true the market for Maidstone’s swankiest and poshest properties looks a little fragile (although they are selling if they are realistically priced) and overall, Maidstone property price growth has slowed, but the lower to middle Maidstone property market appears to be quite strong.


Scratch under the surface though, and a different long-term picture is emerging away from what is happening to property prices. Maidstone people are moving home less often than they once did. Data from the Office of National Statistics shows that the number of properties sold in 2016 is again much lower than it was in the Noughties. My statistics show…


Even though we are not anywhere near the post credit crunch (2008 and 2009) low levels of property sales, the torpor of the Maidstone housing market following the 2016 Brexit vote has seen the number of property sales in Maidstone and the surrounding local authority area level off to what appears to be the start of a new long term trend (compared the Noughties).

Interestingly, it was the 1980’s that saw the highest levels of people moving home. Nationally, everyone was moving on average every decade. Even though it was during the Labour administration of the late 1970’s where the right to buy one’s council house started, it was the Housing Act of 1980 that that really got council tenants moving, as Thatcher’s Tory government financially encouraged council tenants to buy their council-rented homes - for which countless then sold them on for a profit and moved elsewhere. The housing market was awash with money as banks were allowed to offer mortgages as well as the existing building societies, meaning it made it simpler for Brits to borrow even more money on mortgages and to climb up the housing ladder.

But coming back to today, looking at the property sales figures in the Maidstone area since 2010/11, a new trend of number of property sales appears to have started. Interestingly, this has been mirrored nationally. The reasons behind this are complex, but a good place to start is the growth rate of real UK household disposable income, which has fallen from 5.01% a year in 2000 to 1.68% in 2016. Also, things have deteriorated since the country voted to leave the EU as consumer price inflation has risen to 2.7% per annum, meaning inflation has eaten away at the real value of wages (as they have only grown by 1.1% in the same time frame).

With meagre real income growth, it has become more difficult for homeowners to accumulate the savings needed to climb up the housing ladder as the level of saving has also dropped from 4.26% of household income to -1.11% (i.e. people are eating into their savings).

Next week I will be discussing how these (and other issues) has meant the level of Maidstone people moving home has slumped to once every 14.5 years.