Thursday, 22 June 2017

Are Warrington First Time Buyers Being Squeezed Out Of The Housing Market?



I received a very interesting letter the other day from a Warrington resident. He declared he was a Warrington homeowner, retired and mortgage free. He stated how unaffordable Warrington’s rising property prices were and that he worried how the younger generation of Warrington could ever afford to buy.

He went on to ask if it was right for landlords to make money on the inability of others to buy property and if, by buying a buy to let property, Warrington landlords are denying the younger generation the ability to in fact buy their own home.

Whilst doing my research for my many blog posts on the Warrington Property Market, I know that a third of 25 to 30 year olds still live at home. It’s no wonder people are kicking out against buy to let landlords; as they are the greedy bad people who are cashing in on a social woe.

In fact, most people believe the high increases in Warrington’s (and the rest of the UK’s) house prices are the very reason owning a home is outside the grasp of these younger would-be property owners.

What do the numbers say?

However, the numbers tell a different story. Looking of the age of first time buyers since 1990, the statistics could be seen to pour cold water on the idea that younger people are being priced out of the housing market. In 1990, when data was first published, the average age of a first time buyer was 33, today it’s 31.

Nevertheless, the average age doesn't tell the whole story. In the early 1990s, 26.7% of first-time buyers were under 25. In the last five years, just 14.9% were. In the early 1990s, four out of ten first time buyers were 25 to 34 years of age and now its six out of ten first time buyers.

Although, there are also indications of how un-affordable housing is, the house price-to-earnings ratio has almost doubled for first-time buyers in the past 30 years. In 1983, the average Warrington home cost a first-time buyer (or buyers in the case of joint mortgages) the equivalent of 2.4 times their total annual earnings, whilst today, that has escalated to 3.8 times their income (although let’s not forget, it was at 4.6 times their income for Warrington first time buyers in 2007).

Again, those figures don’t tell the whole story. Back in 1983, the mortgage payments as percentage of mean take home pay for a Warrington first time buyer was 25.0%. In 1989, that had risen to 41.6%. Today, it’s 23.8% … and no, that’s not a typo. 23.8% is the correct figure.

So, what is the answer to the gentleman’s questions?

It isn’t all to do with affordability, as the numbers show.

What of the landlords? Some say the government should sort the housing problem out themselves, but according to my calculations, £18bn a year would need to be spent for the next 20 or so years to meet current demand for households. That would be the equivalent of raising income tax by 4p in the pound. I don’t think UK tax payers would swallow that.

So, if the Government haven’t got the money… who else will house these people? Private Sector Landlords. Thankfully they have taken up the slack over the last 15 years.

Some say there is a tendency to equate property ownership with national prosperity, but this isn’t necessarily the case. The youngsters of Warrington are buying houses, but buying later in life. Also, many Warrington youngsters are actively choosing to rent for the long term, as it gives them flexibility – something our 21st Century society craves more than ever. 

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then 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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

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Thursday, 15 June 2017

Ask Andy – ‘Help! My Warrington landlord won’t carry out repairs!’



Question:

‘Hi Andy,
I’ve reported some repairs to my landlord and they are refusing to do them, saying they are my responsibility as a tenant. I thought all repairs in a rented property had to be done through the landlord?
What should I do?
Thanks,
Jane’

Andy’s Answer:

Hi Jane,
Without knowing the specific repairs to which you refer, it’s a bit difficult to give a definitive answer. However, there are certain repairs/maintenance issues which are a tenant’s responsibility. It’s defined as keeping the property in a ‘tenant like manner’.
Hopefully I can clear up the issue that you have at the moment.
Firstly, both your and the landlord’s responsibilities should be written out in the tenancy agreement which you should have signed before you moved in.

What maintenance is a landlord’s responsibility?

Some examples of what the landlord is expected to repair and keep in good working order includes:

·         The structure and exterior of the property (including drains, gutters, external pipes, roof, external walls and foundations, etc.)

·         The installations in the property for the supply of gas, electricity, water and sanitation (this includes basins, sinks and other sanitary ware)

·         The installation for hot water and heating in the property

So this covers the vast majority of repairs which might occur throughout a tenancy. More major things such as rebuilding or reinstating the property if destroyed by fire or flood are not expected of the landlord – touch wood they never happen.

What maintenance is a tenant’s responsibility?

As a tenant, you’re expected to keep the property in a ‘tenant like manner’.  This means a few things. It means that landlords are not expected to repair or maintain items which tenants have broken through negligence or misuse, or if the property is not being kept in a tenant like manner.

There are also regular odd jobs that might arise during occupation of a property which the tenant must deal with. Some examples include:

·         Changing light bulbs
·         Changing batteries in smoke detectors
·         Topping up a boiler when required
·         Bleeding radiators
·         Unblocking toilets and sinks
·         Keeping the grass cut and sweeping up leaves
·         Taking care of pests
·         Wiping excess moisture away from windows (condensation)

I’ve found that the most common argument over responsibility is condensation issues. As condensation is caused by lifestyle (drying clothes indoors, not opening windows, etc) then it is a tenant’s responsibility, however many people do not know the difference between condensation and damp (of which damp is a landlord’s responsibility).

What does ‘tenant like manner’ mean?

The term ‘tenant like manner’ relates to a court case (Warren v Keen 1953). Its definition here is used as the meaning today:

‘The tenant must take proper care of the premises. He must, if he is going away for the winter, turn off the water and empty the boiler. He must clean the chimneys when necessary and also the windows. He must mend the electric light when it fuses. He must unstop the sink when it is blocked by his waste. In short, he must do the little jobs around the place which a reasonable tenant would do. In addition, he must not, of course, damage the house wilfully or negligently… but apart from such things, if the house falls into disrepair through fair wear and tear or lapse of time, or for any reason not caused by him, the tenant is not liable to repair it.’

I’ve always found that a good rule of thumb is that if you owned the house, would you call in a contractor to resolve the issue? If the answer is no, it’s most likely your responsibility as a tenant to manage.

I hope this has answered your question.

However if you have any further questions, feel free to drop me an email or give me a call. Email me on andy@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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News. 



Thursday, 8 June 2017

How far do Warrington residents travel to move house?

  

This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Warrington Property Market!

For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home.

However, me being me, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!

Moved Out of Warrington

Using statistics for the 12 months up to the middle of Autumn 2016, 392 households moved out of Warrington (WA4), moving an average distance of 38.64 miles - the equivalent of moving from Warrington to Blackpool (as the crow flies).  The greatest distance travelled was 363 miles – that’s more than 13.5 marathons (when someone moved to Thurso in Scotland).
 Considering there were 727 property sales in WA4 in the year and countless tenant moves, the numbers seem consistent. It makes sense, once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbourhood, better transport links or to be closer to the school you want to get your children into… but the likelihood is you won’t travel far.

Moved into Warrington

I then turned my attention to people moving into Warrington.

Using the same statistics for the 12 months up to the middle of Autumn 2016, 522 households moved into Warrington (WA4), moving an average distance of 37.55 miles - the equivalent of moving from Huddersfield to Warrington (again as the crow flies). The greatest distance travelled was 291 miles – that’s more than 11 marathons (when someone moved from Kinloss in Scotland to Warrington).

I have looked at the data of every person moving into Warrington and these have been plotted on a map of the UK. Looking at the map, it shows exactly where most people come from, when moving into Warrington. As you can see, there are a high proportion of people moving from London and the South.

So, what does all this mean for the landlords and homeowners of Warrington?

When an agent markets a property for sale or let, it is vital to know the tenant or property buyer well. The properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc. a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”.

I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily.

Many say knowledge is power.

While I do enjoy writing my blog on the Warrington property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then 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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.


Thursday, 1 June 2017

How will the General Election affect the 48,923 Warrington Homeowners?

Of the 70,510 households in Warrington, 21,192 homes are owned without a mortgage and 27,731 homes are owned with a mortgage. Many homeowners have made contact me with asking what the General Election will do the Warrington 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 afterwards. 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 VS the last knife edge uncertain votes of 2010 and 2015 – especially in terms of the number of houses sold and the prices achieved.

Number of Houses Bought/Sold

Look at the first graph below comparing the number of properties sold and the dates of the General Elections.

  


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 seasonality hasn’t changed since 1995 – 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 number of properties sold.

Property Prices

Next, I 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 with what happened to property values (pink line).


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.

So, what does this mean for the landlords of the 8,189 private rented properties in Warrington?

Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Warrington 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 Warrington, making it imperative that Warrington landlords are realistic with their market rents.

In the long term, as the younger generation still choose to rent rather than buy, investing in buy to let still looks a good beteven with the changes in taxation.

If you want to read more about the Warrington property market – then why not visit the Warrington Property Market Blog for more information?  You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email over the property details or pop into my office for a chat, or even 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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 25 May 2017

Warrington Flats Out-Perform Property Market Average by 33%



According to the Land Registry's latest House Price Index for Warrington and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.

The values of apartments in Warrington have increased by 10.14% over the past year, which is 33% more than the average rise in Warrington of 7.65%. The last time flats/apartments in Warrington out-performed all the other types of property by such a gulf, was back in the spring of 2003.

How do other types of property compare?

For comparison, the other property types performed as follows:

·         Detached homes rose by 8.2%
·         Semi-detached homes rose by 7.24%
·         Terraced/Town-Houses rose by 6.8%

This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Warrington property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Warrington on a number of occasions in my Warrington Property Blog and whilst it isn’t as bad as it was 12 months ago, choice is quite limited for buyers.

The average property value in Warrington now stands at £201,200.

When split down into property types:

·         Warrington Apartments at £125,300
·         Warrington Detached Homes at £320,800
·         Warrington Semi-Detached Homes at £176,100
·         Warrington Terraced/Town-Houses at £126,500

Is it just a Warrington thing?

So why have Warrington apartments performed so well? Is it just a Warrington thing?

When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.

So, should Warrington apartment owners be getting out the champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Warrington house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.

Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016. That’s not bad as we have had autumn, winter and now spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.

So, what next for the Warrington Property market?

I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.

I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all.

HMS Warrington Property Market, “Nice and steady as she goes”, says the Captain.

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email over the property details or pop into my office for a chat, or even 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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.


Thursday, 18 May 2017

Should you be buying your next investment property in Warrington?

About two years ago, I wrote an article comparing Warrington, Widnes and Runcorn’s property markets to see which town’s property market would give an investor the best return on their investment. If you remember reading that article, I looked at the average property prices and the average rents in each town.

Two years ago, the research showed that Warrington was the safest of the three towns showing a yield of 5.7%, compared with Widnes’ of 4.5% and Runcorn’s 5.1%.

I thought I would re-visit my old research and see what changes have happened over the last two years. Although I compared Warrington against Widnes and Runcorn, today I will just be looking at Warrington and Runcorn (two bedroom terraced houses in particular).

How do the two towns stack up?

I decided to look at two bedroom terraced houses is because this is the most popular rental property in Warrington –  this two up two down property investment strategy has been a strategy that has lasted the test of time. Providing you purchase at the right price and do your due diligence (or ask us to do it for you) you cannot go far wrong.

The average two bedroom terraced house in Runcorn comes in at £87,881 with an average rent of £501pcm, giving you a very strong yield of 6.8%.

Let’s take a look at Warrington. The average two bedroom terraced house In Warrington is £94,380 with an average rent of £560, giving us an even stronger yield of 7.1%.
It still goes to show, our town of Warrington is a good and safe place to invest in property. As always, this is a decision that you should not take lightly – both towns have their merits. These are only averages, so if you buy wisely and are in a position to move quickly, you could pick yourself up a property producing yields of 8%+ in either town.

As I always say, the trick is knowing WHAT and WHERE to buy – or even more important, what NOT to buy!

You can always keep an eye on my blog for any properties I feel will make a good buy to let opportunity, or if you are after a second opinion then email over the property details or pop into my office for a chat, or even 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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

Thursday, 11 May 2017

Ask Andy - My Landlord Won't Issue Another Tenancy!!

''Dear Andy,

I have a twelve month tenancy agreement and my landlord had said she won't issue a new one, it runs out in three weeks.  Is she right that my old tenancy will continue as it is? Please advise, I don't want to leave.

Thanks,
Pete.”



Andy’s  Answer:

Hi Pete,

All assured shorthold tenancies automatically become periodic at the end of the fixed term period, as long as the tenant(s) continue to live in the property, so you needn’t worry about leaving unless you want to give notice and move.

Should the landlord create another fixed term tenancy, this may give you more peace of mind. A renewal ties you in for another six, twelve, etc months (as stated in the tenancy).

What are the disadvantages of renewing tenancies?

About two years ago I renewed a tenancy for a tenant after speaking to the landlord. It’s worth mentioning that this tenant wanted the security of having the property for at least another 12 months.

Three months into the renewal I received an email from the tenant – to cut a long story short, his mother became unwell and needed constant care back home. This would mean he would no longer need the property. Unfortunately, he was now liable for the full 12 months.
 
Now the tenant had a few options: he could pay the full 12 months and leave the property, or we as the agent would find a new tenant – however, all costs would be charged to this current tenant and rent would still need to be paid until a suitable tenant was found (the landlord can not incur any more costs).

If this tenant did not request to be tied in for another 12 months, all they would have needed to do is given one months notice.

Now, if the landlord wanted the property back for whatever reason he/she cannot issue a Section 21 Notice (two month’s notice) to get their property back until after the fourth month of a six month fixed term tenancy, or the tenth month in a twelve month fixed term tenancy.

So I really see no major advantage of renewing a tenancy.

At Hamlet Homes I advise all my tenants and landlords to allow the AST to roll into periodic once the fixed term comes to an end.

Some agents will do renewals of tenancies (but that’s only because they charge a renewal fee).

I hope I have put your fears to bed.

If you are a tenant and have a question, feel free to drop me an email or give me a call, my details are at the bottom of this article.

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

Email me on andy@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 6 Bankside, Crosfield St, WA1 1UP. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.