What would Brexit mean to the 180,300 Warrington Property owners?

I don’t know about you, but I find if you read the Daily Mail, there are only three topics that make the blood of ‘Middle England’ boil.

Bureaucracy from Brussels. House Prices. The late Princess of Wales.

If we as a country were to unshackle ourselves from chains of Brussels, could we inadvertently affect the second topic and make UK house values drop?

If you read all the newspapers, the Brexit debate seems to be focused solely on central London. Many commentators have said the Brexit would mean central London would have a lower standing in the world, meaning fewer people would be employed in Central London. That implies lower wages, fewer jobs etc… in Central London.

But we are in Warrington, not Marylebone, Mayfair or any part of Zone 1 London.

On the run up to the vote on 23^rd June I predict:

In Camp 

The ‘in’ camp will start to scare homeowners with forecasts of negative equity.

Out Camp 

The ‘out’ camp will appeal to the 20 something market, which have been priced out of the property market with the prospect of a new era of inexpensive housing.

That is, should the fears become real of central London estate agents and developers, who believe the bottom will fall out of the market if we do leave. The only reasons the Mayfair, Knightsbridge, and Kensington property of central London are attractive to foreign buyers are political and economic steadiness, an open and honest legal system and a lively cultural life.

None of that is threatened by Brexit.

...But again, we are in Warrington and central London is 203 miles away.

We are hometown to the Warrington Wolves, Ian Brown and Chris Evans. While the central London property market exploded after 2009, that explosion really, and honestly, didn’t affect the Warrington property market.

So, putting central London aside, what would an ‘in’ or ‘out’ vote really mean for the 180,300 property owners of Warrington?

Initially, over the coming months, on the run up to referendum, I believe it will be like the run up to last year’s General Election. With the short-term uncertainty in the country, quite often, big decisions are put on ice and people are less likely to make big money purchases i.e. buy a property.

However, in the four months up to last year’s Election, property values in Warrington decreased by only 0.3%... not bad for a country that thought it would get a hung parliament!

That argument doesn’t hold much weight with me.

Post vote, should the UK opt to leave Brussels, there would be a much more noteworthy impact. I believe that a vote to stay in the EU would see the Warrington property market return to a status quo very quickly, but the contrasting result could lead to some changes.

The principal menace to the Warrington (and UK) housing market could be variation (in an upwards direction) in interest rates, theoretically seeing the cost of mortgages grow swiftly, pricing many out of the market…

But, two thirds of landlords buy without a mortgage, so that won’t affect them.

According to the Bank of England, 80.33% of all new mortgages taken out in 2015 were fixed rate. Looking at all mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but 56% don’t, so if you aren’t on a fixed rate ... talk to your mortgage broker now, because they can only go in one direction!

In reality, if I really knew the future, I wouldn’t be a letting/estate agent in Warrington, but a City Whiz Kid in London earning millions.

However, I suspect whatever decision the electorate of Warrington and the country as a whole makes, over the long term it won’t have a major effect on the Warrington property market. We have seen off

-          the ‘end of the world’ credit crunch of 2008/9 and subsequent property crash

-          the 1988 Nigel Lawson induced post dual-MIRAS property crash

-          the 1979 Winter of Discontent property crash

-          the 1974 oil crisis that stimulated another property crash...

Hell, we can even go back nearly a century with the 1926 post General Strike slump in property prices...

  

  

Today, property prices are 217.35% higher than 21 years ago in Warrington and are 3.22% higher than 12 months ago.

So, make your own decision on 23rd of June 2016 safe in knowledge that whatever the result, there might be some short term volatility in the Warrington property market, but in the long term (and property investment is a long term strategy) there aren’t enough houses in Warrington to live in either to buy or rent… Until the Government allow more properties to be built – the Warrington property market will be just fine. Even if it has a little blip in the summer, there could be some property bargains on the run up to Christmas to be had!

For more advice and opinion on the Warrington property market, even where those buy to let bargains could be found now - visit the WarringtonProperty Blog.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Warrington Property Market together with regular postings on what I consider the best buy to let deals in Warrington, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! email me on manoj@hamletwarrington.co.uk If you are in the area feel free to pop into the office we are based on 6 Bankside, Crosfield St, WA1 1UP 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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Website, http://www.hamlethomeswarrington.co.uk/

Rents remain stable on Wellfield Street, Warrington

Since I have been writing these blogs and articles, I get a lot of questions from landlords around Warrington asking me where I think the next hot property deal will be.

The thing is: Warrington has a lot of opportunity for landlords. Unlike what most of my landlords think, I don’t have a crystal ball!

It all comes down to doing the right research.

I do spend a lot of time researching, looking for patterns in the market and understanding my local town.

A landlord I know has owned a few properties on Wellfield Street for the last twenty years. She came in to our office to discuss the rise and fall of property prices on the street and how this has affected her yield over the years.

In 1996, when she purchased her first property on Wellfield Street, the average value of a terraced house on that road was £35,250 which had a sharp rise to £52,750 by 2002. This rise in value continued, with average values being £74,600 in 2004 and £93,700 in 2006.

  

At the height of the property boom in this area, a terraced house on Wellfield Street had an average value of £162,700. This soon dropped in 2010 to £86,500, with the average value increasing to around £95,357 this year.

When she told me of the rents she had achieved on the street, they seem fairly stable over twenty years. In 2002-2003 the average rent was £350 per month, which is now between £450 and £550, dependant on the property’s accommodation. Therefore, a landlord could expect a respectable annual yield of around 7% on Wellfield Street at the moment.

If you would like some advice with your potential investment, please come and see us in our offices. I can guide you with how I do my research. I will also share some of my tools that I use for research.

You have nothing to lose and everything to gain.

So pop in for a friendly chat and meet my team at 6 Bankside, Crosfield St, Warrington, WA1 1UP.  There’s plenty of free parking available, in the mean time if you have any questions about the Warrington property market, email me on manoj@hamletwarrington.co.uk I look forward to chatting to you.

Only a handful of Council Houses in Warrington left – Opportunity or Problem?

The ‘Right to Buy’ scheme was a policy introduced by Maggie Thatcher in 1980. It gave secure council tenants the legal right to buy the council home they were living in – with huge discounts. The heyday of council Right to Buys was when 1,719,368 homes in the country were sold in this manner between October 1980 and April 1998. However, in 1997, Tony Blair reduced the discount available to tenants of council houses, so the numbers of properties being bought under the Right to Buy declined.

So what does this mean for Warrington homeowners and landlords?

Looking at the figures for our local authority, whilst the number of Right to Buys have dwindled over the last few years to an average of only 213 Right to Buy sales per year, one must look further back in time.

Looking at the overall figures, 12,760 council properties were bought by council tenants in the Warrington Council area between 1980 and 1998. Big numbers by any measure, but even more important to the whole Warrington property market – every Warrington homeowner, Warrington landlord and even Warrington aspiring first time buyers. Especially when you consider these 12,760 properties make up a colossal 7.08% of all the privately owned properties in our area, as in our local authority area, there are only 180,300 privately owned properties. 

Warrington first time buyers and landlords can now buy these ex-council properties second hand, as those original 80s and 90s tenants, now homeowners, have more than passed the time of any claw back of the discount they received. The council discount was repayable if the first owner sold within a stipulated time period - usually 5 years.

What’s the difference between ex-council houses and all the new builds?

Yes, the modern stuff being built in Warrington is lovely – but some landlords purchase buy to let property solely based on where they would choose to live themselves, instead of choosing with a business head and choosing where a tenant would want to live.

Remember the first rule of buy to let property: You aren’t going to live in the property yourself.

What an ex-council property may lack in kerb appeal can be more than made up for in other ways.  Tenants are often more worried about how close the property is to a particular school or family member for child care.  

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is made up for by the higher yields – and those built between the wars or just after are really well built. Tenant demand for such properties is good. Since Warrington property values are so expensive, a lot of people can’t get mortgages to buy, so will reconcile by renting (meaning there is a good demand for that sort of property to rent).

The very fact the council were forced to sell these Warrington properties in the 80s and 90s means that today’s younger generation who would have normally got a council house to live in, now cannot as too many were sold ten or twenty years ago. 

So, Warrington landlords:

Don’t dismiss ex-council houses and apartments – but remember the first rule of buy to let.

However, those very same Warrington landlords should go in with their eyes open and take lots of advice. Not all ex-council properties are the same and, even though they have good demand and high yields, they can also give you other headaches and issues when it comes to the running of the rental property.

One source of advice as ever is the Warrington Property Blog www.warringtonpropertyblog.co.uk or call me, Manoj Patel, on 01925 235 338. If you see any properties on Rightmove, Zoopla or any other portals then feel free to email me a link at manoj@hamletwarrington.co.uk for a second opinion.

Warrington Property Market Review

Time now for a quick round-up of what has been happening in the sales and lettings market in the Warrington area throughout January - March 2016. (Figures are obtained from Rightmove and do not include private lets.):

You can see from the rental figures above that it’s 1, 2, 3 and 4 beds that are most in demand – with 3 beds being the most popular by some margin. If we look back at this time last year, it was the 4 bedrooms that were the most popular. If you look at sales, it seems 2, 3 & 4 beds are what people want to buy. Again, it is 3 beds that win the race.

So, as an investment, what should you buy?

Well, demand is there to rent anything up to 4 bedrooms, but there are already a high number of potential private purchasers chasing those same properties (3 bedroom houses), so this will inevitably increase pressure on availability and start to drive prices up. 2 beds are in a lot less demand by buyers, yet these are often prized by renters. Our experience here tells us that 2 beds will always find a rental market and they will always rent out quickly, but there will be more churn (turnover of tenants). These will command a slightly higher yield than 3 beds.

However, for families wishing to rent, 3 beds are a must. In the catchment area of great schools (particularly secondary), they will always be in high demand and with less churn. It is these properties that tend to offer better scope for capital growth in the long term, whilst providing a steady yield of around 7-10% in the Warrington property market today.


If you are thinking of getting into the Warrington property market and don't know where to start, speak to us for impartial advice and guidance to get the best return on your investment. For more information about other potential investment properties that we could introduce you to, or to ask about our thoughts on your own investment choices, call us now on 01925 235 338 or pop along and speak to us in person at our office at 6 Bankside, Crosfield Street, you can always email me on manoj@hamletwarrington.co.uk