Thursday, 17 January 2019

Warrington Homeowners Have Made an Annual Profit Of £5,149 Since the Millennium





As we go full steam ahead into 2019, it’s certain that the Warrington housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Warrington homeowner, having owned their property since the Millennium, has seen its value rise by more than 152%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Warrington property values has come from the growth in Warrington property values, while some of it will have been enhanced by extending, modernising or developing their Warrington home.
Taking a look at the different property types in Warrington, and the profit made by each type, makes interesting reading.. 
 


However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.



So the ‘real’ value of the profit, after inflation, in Warrington has been £3,143 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Warrington property, property values dropped between 15% and 20% in 18 months … Warrington homeowners over the long term are still better off than those renting.

Moving forward, the question I get asked time and again is what will happen in the future to the Warrington Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium to long term to ensure that this level of house price growth is maintained in Warrington is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come).

Another factor is that whilst Warrington landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Warrington see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Warrington buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Warrington in 2018, most Warrington buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Warrington buy to let landlord, ensure that continues?
Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Warrington whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.
If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Friday, 4 January 2019

As OAP’s set to rise to 1 in 4 of Warrington’s population by 2037 – Where are they all going to live?



With constant advances in technology, medicine and lifestyles, people in the Warrington area are, on average, living longer than they might have a few decades ago. As Warrington's population ages, the problem of how the older generation are accommodated is starting to emerge. We, as a town, have to consider how we supply decent and appropriate accommodation for Warrington’s growing older generation’s accommodation needs while still offering a lifestyle that is both modern and desirable.

In 1997 in Warrington, around one in every seven people (14%) were aged 65 years and over (and the local authority area as a whole), increasing to nearly one in every five people (18%) in 2017 and it is projected to reach one in every four people (25%) by 2037, meaning..

Over the next 19 years, the growth of the over 65 population in Warrington will grow by 38.9% - a lot more than the overall growth population of Warrington of 7.6% over the same time frame.

In fact, the number of those over 90 is expected to more than double in our local authority from 1,574 (0.8%) in 2017 to 3,843 (1.7%) by 2037.


And looking at the proportional percentage changes over those years..


Looking at Warrington and the local authority as a whole, there is a distinct under supply of bungalows and retirement living (i.e. sheltered) accommodation. The majority of sheltered accommodation fit for retirement is in the ex-local authority sector whilst the majority of private sector bungalows were built in the 1960s/70s/80s and are beginning to show their age (although that means there is often an opportunity for Warrington investors and Warrington buy to let landlords to buy a tired bungalow, do it up and flip it/rent it out).

In the medium to longer term, we need to build more bungalows and sheltered accommodation and, if we do that, that won’t only be of benefit to the elderly population of Warrington – it will have a direct knock-on effect to the younger and middle-aged population by unlocking those family homes the older generation homeowners live in.  
There have been 17 Housing Ministers since 1997. No one ever seems to stay in the job long enough to create a consensus and direction in Government Policy on the vital issue of the country’s housing shortage, yet the sound bites and White Papers seem only to focus exclusively on first-time buyers when there is an even more severe and disregarded shortage in suitable housing for the older generation.

This scantiness affects both mature homeowners trapped in unsuitably big family properties, unable to find smaller bungalows or suitable retirement apartments, whilst the waiting list for Council sheltered accommodation is putting a strain on other aspects of social care. In both circumstances, policy coming (or not coming) out of Government is repressing the supply and type of accommodation mature people desire, need and want, whilst at the same time, increasing the cost (and taxes) for social and NHS care.

Maybe we need tax breaks for people to downsize or planning permissions that stipulate bungalows only. Whichever way you look .. there are challenging times ahead for us all.

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.



Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.


Thursday, 13 December 2018

Manchester Road, Warrington …the road where people move the most




Many folks say moving home is the most stressful thing. Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

We wish we could be instantly transported like in Star Trek “Beam me up Scotty to a blissful moved in state”.  Yet the week you move, it’s like an episode from the original 1960’s series Star Trek, when the crew had a transporter accident with an ion-storm sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship and chaos eschews!!!

Star Trek aside, when you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!).  Then you put your property on the market with an estate agent, find a buyer for your Warrington property, agree a price for both, then instruct solicitors. The property becomes sold ‘subject to euphuism’ ... sorry ‘contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through … phew - stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Warrington people think so.

In the last 12 months, 258 families have sold and moved home in Warrington (WA1)

Yet the question I want raise is ... do people on certain streets in the WA1 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the WA1 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Manchester Road is the winner with an average of 16.0 house sales per year (since 1995) as on the graph below.
  



And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street.  As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.






Street
Average Value of a Property
On that Street/Road
Average Number of
Properties Sold per Year (since 1995)
Manchester Road
£176,335
16.00
Padgate Lane
£140,096
11.39
Hume Street
£92,775
8.35
Cliftonville Road
£116,150
7.22
Whitchurch Close
£229,749
6.43
Algernon Street
£94,265
6.30
Ludlow Close
£160,464
6.17
Willis Street
£107,205
5.26
Holywell Drive
£154,056
5.30
Dalton Bank
£91,471
5.04
Berkshire Drive
£157,641
4.48
Wellington Street
£97,996
3.78
Riverside Close
£122,957
3.91
Fairclough Avenue
£86,613
3.57
Marsh House Lane
£105,448
3.57
Hillock Lane
£181,451
3.65
Oakland Street
£123,791
3.39
Thorneycroft Drive
£139,884
3.52
Palmyra Square North
£150,966
3.39
Delery Drive
£147,070
3.26
Gorsey Lane
£98,791
3.30
Dutton Court
£105,213
2.96
Edward Gardens
£309,522
3.13
Kerridge Drive
£160,136
3.04
Poulton Crescent
£174,054
3.00

However, I still felt the information wasn’t telling the whole story … some roads in Warrington have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality.

In the next article, (and I promise I won’t mention Star Trek again), I will answer that question in great depth ... and the results should (as they did me) certainly raise an eyebrow. The question is ... do you live on one the top 25 Warrington most saleable streets in Warrington (WA1)?  

Come back to my Warrington Property Blog for the next article to find out!

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.


Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.





Thursday, 22 November 2018

The £6,218,153 Ticking Time Bomb for Warrington Landlords





I just love looking over and keeping up to date the 108 pieces of legislation that govern the rental of residential property in the UK  
...No Warrington Landlord, ever
 
If you are one of the 3,194 Warrington landlord’s that manages your own property, would it surprise you to know that there are 108 separate pieces of legislation that govern the rental of private houses to tenants. Oh, and on top of the 108 pieces of law, there are further 300+ regulations in the mix. Whilst Warrington landlords may once have preferred to manage their Warrington buy-to-let properties themselves to boost their profits, many Warrington landlords are starting to see this as a false economy.

In the last four years, an additional 1,228 landlords in Warrington have converted from self-managed to having their property managed by a letting agent in Warrington, taking the total number of properties under management in Warrington to 4,995 (out of a total of 8,189 private rental properties in Warrington).

Now, don’t get me wrong, self-managing your Warrington rental property can be a very fulfilling experience, allowing you, as a Warrington landlord, to build a deep relationship with your tenant and your emergency 24 hour plumber, builder (happy to do small jobs at a drop of a hat), decorators, first name terms with their deposit provider, lawyer and EPC provider to name but a few. (Wow!)

Also, did you know if your tenants deposit isn’t registered, or doesn’t continue to be registered after the end the periodic tenancy upon renewal ... you could be fined up to three times your deposit? With the average rental deposit in Warrington being £649, each self-managed landlord in Warrington could be fined £1,947 per tenancy if the deposit isn’t currently registered. Therefore...

...if every deposit of every Warrington self-managed landlord’s property wasn’t registered, the total fines would amount to £6,218,153

Now of course, I am not suggesting for one minute all the self-managed landlords of Warrington haven’t registered their deposits, yet almost on a daily basis, I come across horror stories to that effect. Another two (but by no means all) hot issues that the Courts are cracking down on, are doing immigration ‘Right To Rent’ checks on all tenants (yes all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot serve the section 21 Notice, meaning the tenant cannot be served notice to vacate the property.

To many, it’s really a case of DIY or getting a qualified professional in … as those additional Warrington landlords mentioned above have done since 2014. You might say, “Of course you are going to say all this – you are a Letting Agent”. Well the choice really comes down to your time and your knowledge. If a Warrington landlord is not equipped, or able, to devote time keeping up-to-date of legislation and law nor doesn’t want to be bothered 24/7/365 about a blown light bulb, dripping taps, have that confrontational conversation with their tenants about missing rental payments, or arbitrate arguments and disagreements between your tenant and the neighbours, it is perhaps better to pass this accountability/responsibility onto a letting agent.

One thing I would say is all letting agents aren’t the same. Would it surprise you to know that letting agents aren’t regulated?

Warrington landlords that do use a letting agent should not forget that passing over management to a letting agent doesn’t mean they can disregard legislation and they are still responsible for deposit/rent repayment legal directives, civil fines or action if the letting agent makes a mistake. Therefore, it’s important to pick a respectable letting agent from the start.

Nevertheless, for those Warrington landlords that see their job as a professional landlord and want to be intricately involved in the day to day administration of their rental properties, it can be worthy pursuit.

If you are a self-managed landlord in Warrington, and want to know if your paperwork is in order please feel free to drop me a line and I am more than happy to do an ‘MOT’ on it to ensure you are the right side of the law.


If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Thursday, 8 November 2018

Warrington House Prices vs Warrington Rents since 2006




The Warrington housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Warrington, the market has certainly changed for both buyers and sellers alike (be they Warrington buy to let landlords, Warrington first time buyers or Warrington owner occupiers looking to make the move up the Warrington property ladder).

Warrington house values are 4.25% higher than a year ago, and the rents Warrington tenants have to pay are 1.1% higher than a year ago

When we compare little old Warrington to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Warrington house values are 23.24% higher, yet the rents Warrington tenants have had to pay for their Warrington rental property are 14.9% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Warrington tenants are 27.1% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Warrington house values (in red) in the years of 2008 and 2009 ... yet as Warrington property values started to rise after the summer of 2009, see how Warrington rents dipped 6/12 months later (the yellow bars)…. Fascinating!



So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Warrington property.

However, maybe an even more interesting point is for the long-term Warrington buy to let landlords. The performance of Warrington rental income vs Warrington house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Warrington landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Warrington buy to let portfolio. More and more I am sitting down with both Warrington landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Warrington portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.



Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.


Tuesday, 16 October 2018

How Would a Hard Brexit Affect Warrington House Prices?



I have been asked a number of times recently what a hard Brexit would mean to the Warrington property market. To be frank, I have been holding off giving my thoughts, as I did not want to add fuel to the stories being banded around in the national press. However, it’s obviously a topic that you as Warrington buy to let landlords and Warrington homeowners are interested in ... so I am going to try and give you what I consider a fair and unbiased piece on what would happen if a hard Brexit takes place in March 2019.

After the weather and football, the British obsession on the UK property market is without comparison to any other country in the world. I swear The Daily Mail has the state of the country’s property market on its standard weekly rotation of front-page stories! Like I have said before on my blog, there are better economic indexes and statistics to judge the economy (and more importantly) the property market. If you recall, I said the number of transactions was just as important, if not more, as a bellwether of the state of the property market.

Worries that the Brexit referendum would lead to a fast crash in Warrington (and national) property values were unfounded, although the growth of property values in Warrington has reduced since the referendum in the summer of 2016.

Now, it’s true the Warrington property market is seeing less people sell and move and the property values are rising at a slower rate in 2018 compared to the heady days of the first half of this decade (2010 to 2015), but before we all start panicking, let’s ask ourselves, what exactly has happened in the last couple of years since the Brexit vote?

Warrington house prices have risen by 8.73% since the
EU Referendum...

...and yes, in 2018 we are on track (and again this is projected) to finish on 3,231 property transactions (i.e. the number of people selling their home) ... which is less than 2017 ... but still higher than the long term 12 year average of 3,002 transactions in the local council area.





So, it appears the EU vote hasn’t caused many major issues so far, however, if there was a large economic jolt, that could be a different game, yet how likely is that?

The property market is mostly influenced by interest rates and salaries.

A hard Brexit would subdue wage growth to some degree, yet the level of the change will depend on the undetermined type of Brexit deal (or no deal). If trade barriers are imposed on a hard Brexit, imports will become more expensive, inflation will rise and growth will fall, although at least we are not in the Euro, meaning this could be tempered by the exchange rate of the Pound against the Euro. In plain language, a hard Brexit will be worse for house prices than a deal.

So why did the Governor of the Bank of England suggest a disorderly hard Brexit would affect house prices by up to 35%?

I mean it was only nine years ago we went through the global financial crisis with the credit crunch. Nationally, in most locations including Warrington, property values dropped in value by 16% to 19% over an 18-month period. Look at the graph and if we had a similar percentage drop, it would only take us back to the property value levels we were achieving in 2015.

And let’s not forget that the Bank of England introduced some measures to ensure we didn’t have another bubble in any future property market. One of the biggest factors of the 2009 property crash was the level of irresponsible lending by the banks. The Bank of England Mortgage Market Review of 2014 forced Banks to lend on how much borrowers had left after regular expenditure, rather than on their income. Income multipliers that were 8 or 9 times income pre-credit crunch were significantly curtailed (meaning a Bank could only offer a small number of residential mortgages above 4.5 times income), and that Banks had to assess whether the borrower could afford the mortgage if interest rates at the time of lending rose by three percentage points over the first five years of the loan ... meaning all the major possible stumbling blocks have been mostly weeded out of the system.

So, what next?

A lot of Warrington homeowners might wait until 2019 to move, meaning less choice for buyers, especially in the desirable areas of Warrington. For Warrington landlords, Warrington tenants are also likely to hang off moving until next year, although I suspect (as we had this on the run up to the 2015 General Election when it was thought Labour might get into Government), during the lull, there could be some Warrington buy to let bargains to be had from people having to move (Brexit or No Brexit) or the usual panic selling at times of uncertainty.

Brexit, No Brexit, Hard Brexit … in the whole scheme of things, it will be another footnote to history in a decade. We have survived the Oil Crisis, 20%+ Hyperinflation in the 1970’s, Mass Unemployment in the 1980s, Interest Rates of 15% in 1990’s, the Global Financial Crash in 2009 ... whatever happens, happens. People still need houses and a roof over their head. If property values drop, it is only a paper drop in value ... because you lose when you actually sell. Long term, we aren’t building enough homes, and so, as I always say, property is a long game no matter what happens - the property market will always come good.

Growth in UK property values as well as in Warrington seems fated to slow over the next five to ten years, whatever sort of Brexit takes place.

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.



Email me on manoj@hamletwarrington.co.uk or call on 01925 235338. If you are in the area, feel free to pop into the office – we are based on G5, Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.