What will the General Election do to 3,364 Shefford Homeowners?

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In Shefford, of the 4,816 households, 1,495 homes are owned without a mortgage and 1,869 homes are owned with a mortgage. Many homeowners have made contact me with asking what the General Election will do the Shefford property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections:

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It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

I then wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line):

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It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

Finally, what does this mean for the landlords of the 388 private rented properties in Shefford?  As I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Shefford will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Shefford, making it imperative that Shefford landlords are realistic with their market rents.  However, in the long term, as the younger generation still choose to rent rather than buy the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.  If you want to find out more about the Shefford property market please feel free to pop into the office, call us on 01462 894565 or e-mail us at: lettings@satchells.co.uk.

 

Flipping’ heck! Shefford property values rise by £50.15 a day

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Investing in Shefford buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property , the fact that you can touch the bricks and mortar. It is this factor that attracts many of Shefford’s landlords, they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’.

Capital growth, also known as capital appreciation, has been strong in recent times in Shefford, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.

Rental income is what the tenant pays you and   hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Shefford property has risen by £91,526 (equivalent to £50.15 a day), taking it to a current average value of £356,900.

Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

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However, something I have not   spoken of before is the more specialist area of flipping property to make money.   Flipping – buying a property, carrying out some minor cosmetics and re selling it quickly.

I have seen several investors recently who have made decent returns from this strategy. For example …..

One Shefford buyer paid £345,000 for a four  bedroom house  in Hoo Road, Meppershall  in April  2016.

Some shots of the property before the work was completed:

Some shots of the property after the work was completed:

Some cosmetic work was done to the property and it has recently been resold  for £390,000 – 13.04% return before costs .

As my article mentioned a few weeks ago, more and more Shefford people maybe giving  up on owning their own home and instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Shefford, then please continue to visit our blog and contact us for any further advice.

Modern apartment in Shefford – great rental potential!

This property has gone onto the market with Country Properties in Shefford.  Priced sensibly at £191,000, making it an ideal purchase for an investor with a potential yield pushing 5.3%.  View ASAP before it goes.  Take a look at their advert here and give them a call quick!

Shefford First Time Buyers borrow £3.2m in the last 12 months

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Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Shefford property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 235 properties have sold (and completed) in Shefford, worth £75.5m. Interestingly the number of properties changing hands in Shefford has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Shefford buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Shefford property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

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When looking at the figures for Shefford itself, first time buyers have borrowed more than £3.2m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Shefford economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Shefford, at this moment in time there are 47 properties for sale, compared to 35 properties a year ago. All this will be welcome news amongst Shefford first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.

Property of the week – Shefford. High specification two bedroom apartment….

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Take a look at our latest property of the week video in which we look at a luxury two bedroom apartment in a popular “River View” development.  This apartment will appeal to investors and first/second time buyers alike and at £199,950 the potential rental yield is around 5%.    Call Satchells on 01462 813235 to view ASAP!

Investment property of the week -Shefford

A high specification one bedroom apartment which for a landlord investing is well worth considering. For more information please visit our website at www.satchells.com or contact our Shefford office on 01462 813235. Click this link to see video in YouTube: https://youtu.be/J5n2gsNHCgk

Immaculate “nearly new” three bedroom house in Shefford

Harrow Way

Our Satchells sales team in Shefford are advertising this attractive and “nearly new” three bedroom property for sale at £289,950.  This a property a tenant can literally move their furniture into – rental yield of around 4%.  Take a look at the advert here  and call our sales team on 01462 813235.

Superb top floor flat in Shefford with great rental potential!

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Our Satchells sales team in Shefford have just started marketing what looks like a fantastic one bedroom top floor apartment in a sought after development.  At £175,000 and with potential rental yields of around 5% this is a must see for investors!  Call the Satchells team on 01462 813235.  Take a look at the advert here

“Nearly New” three bedroom house in Shefford

Plough Lane

Country Properties in Shefford have just started marketing this immaculate, “nearly new” three bedroom house for £295,000.  Ready for a tenant to just move in and with a rental potential of around £12,000 p.a., well worth considering!

Excellent investment opportunity – 5% yield!

St Francis Court

At £150,000 this two bedroom flat just brought to the market by Sheridan’s in Shefford seems like an ideal opportunity for a landlord investing.  These flats are very popular on the rental market as they are in a great town centre location.  We would anticipate rental income around £7,800 p.a.  Take a look at the advert here and give Sheridan’s a call!