What Will Happen to Warrington House Prices in 2022?

Traditionally, if you had not sold your Warrington home by the first week in November, you would normally have to wait for the house sellers to return in the famous Boxing Day rush on the portals (Rightmove, Zoopla etc) to get potential buyers interested.

Yet matters have been different this year as the various lockdowns have caused a surge in house buying right up until when the Christmas edition of the Radio Times goes on sale.

So, the question is, how will 2022 look regarding the Warrington property market?

The last couple of years in the Warrington property market have been different in many ways. So much so, many Warrington homeowners are presently deliberating whether they should put their Warrington home on the market in January or wait until later in the summer.

Speaking to many Warrington buyers and sellers, (and in fact Warrington buy-to-let landlords) in the last couple of weeks in the run-up to Christmas, many were asking the very same question.

What is going to happen to Warrington house prices in 2022?

Some people asking this question are Warrington buyers troubling themselves that they are about to buy their Warrington home just before a potential property crash, yet others are Warrington homeowners wanting to know where the top of the market is before they sell. Even a handful of Warrington landlords unable to either start buying or start selling some of their rental portfolio.

Therefore, let’s see what has happened in 2021 to make a better judgement of what should happen in 2022.

Nobody has a crystal ball that can tell what 2022 holds, however most property experts are not forecasting doom and gloom for the British property market.

Whilst the final numbers won’t be known until Easter 2022, it is estimated that in 2021 one in fifteen privately owned homes in the UK are expected to have changed hands, being the busiest year in the last 14 years. Locally,

2,002 properties have changed hands in the last year in Warrington

Although that is only up to October 2021, so numbers will be much higher once all the final counts are in by March/April.

The pandemic made many Warrington families re-evaluate what they wanted from their Warrington home, with many wanting bigger rooms (and more of them). Many in the press dubbed this ‘the race for space’, meaning the property market was flooded with home buyers, most bringing forward the home move they had planned between now and 2025.

The issue was, there weren’t enough Warrington properties on the market to satisfy every Warrington buyer, meaning Warrington house prices have unsurprisingly been driven up.

The average price of a home today in Warrington is £239,200

Although it is still premature to say what will happen in 2022, most property commentators seem assured that we are not heading towards a house price crash, mainly due to one reason.

There aren’t enough properties on the market in Warrington. Simply supply and demand economics!

The property crash in 2008 was caused by everyone dumping their property on the market.

In January 2007, there were 990 properties for sale in Warrington, 

one year later in January 2008, that had risen to 1,816 properties, 

whilst today, that stands at 169

And I can’t see that changing for 2022.

In 2007, mortgage interest rates were 6.5% to 7.5%, so when the economy started to falter, everyone looked to sell their homes to reduce their outgoings as unemployment rose by over 60% in just a couple of years. This time round most people have mortgage rates of around 2% to 2.5% and unemployment is dropping, meaning they don’t need to sell their Warrington home.

Now of course the stamp duty tax holiday came to an end months ago, and Bank of England base interest rates are expected to rise moderately in the coming year, yet not to the level they were in 2007 (5.75%).

Nonetheless, demand for Warrington homes will still be there. I have even read some reports suggesting that more than 20% of British households are seriously thinking of moving between now and the summer of 2023, and this will support Warrington house prices whilst demand continues to exceed supply.

Warrington house prices will be 4.0% higher by the end of 2022

Another reason why I believe that will be the case is the return to home working. If, as a country, we will need to work from home each winter for the foreseeable future because of new variants, then this will cement the need for people wanting to move home for remote working.

It might be that Warrington buyers are looking for a dedicated office at home or that they feel they now no longer need to be in large built-up areas that are near to their work.

This increase in Warrington house prices is expected to entice even more Warrington house sellers onto the market, which will steady Warrington house prices slightly (as supply increases), yet I still believe there won’t be enough properties coming onto the market to satisfy the colossal demand.

What about the Warrington rental market?

Rents tend to grow in line with tenants’ wages. So, with many people getting decent pay rises and not enough properties being built, many economists are suggesting rents will be 14% to 19% higher by 2027. Even with the house price growth, the numbers for rental investments still look rosy.

Is it the right time to buy your first property in Warrington?

This rise in Warrington house prices has had many people asking whether 2022 is the right time to buy their first home? Should they buy now before Warrington prices rocket even further or delay in the hope that house prices come back down?

As with any important decision in life, this will mainly depend on your own personal life and your motives for wanting to move.

If the Warrington home that you want to buy is on the market, available and you can afford the mortgage, then delaying could be detrimental. It’s like holding off for the ‘next generation TV’, it then coming out; then just as you are about to buy the TV, the next ‘next generation TV’ gets announced for six months’ time ... and the cycle is constantly in motion – so you end up never buying a TV … just like you will never buy your own home!

Buying property is a long-term game

Sometimes you just have to make your decision, get something bought and start the journey of the next 25 to 35 years of living in your family home whilst paying off your mortgage.

The present low interest rates for first-time buyers means that there are some very low mortgage deals available for those with a decent deposit, making it a good time to buy a Warrington property, especially if you fix the interest rate.

If your deposit is humbler, the Government’s 5% deposit mortgage guarantee scheme will still enable you to buy a property, albeit at a slightly higher interest rate.

Looking at the bigger picture, these are only my opinions. If inflation doesn’t get too out of hand and interest rates don’t go above 2% to 3%, it looks like Warrington house prices will, for 2022 and a few years beyond, continue upwards albeit with a slower trajectory than 2020/21 and probably with a few short, sharp up and down spikes on the way.

The bottom line is, ensure that any Warrington house move that you intend to make is something that you can afford, allow for future rises in interest rates and make plans for as many eventualities as possible. Do that, and you should be just fine.

These are my opinions – what are yours?

If you are a Warrington homeowner or Warrington landlord and think this may affect you - feel free to drop me a line.

In the meantime, what are your thoughts about excess ‘spare bedrooms’? Let me know in the comments.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Warrington People’s Addiction to Their Spare Bedrooms?

The Housing Minister, Chris Pincher, has suggested older homeowners are “rattling around” in their homes as they are too big for them. He implied they are selfish and should sell up and move to a retirement home when he spoke to a committee in the House of Lords. He stated that many British homes are “under-occupied” and could be better used by younger families with children.

He went on to say that the Government will aim to persuade UK housebuilders to build more developments suitable for OAPs, freeing up space in their existing homes, which in turn would open up more homes for first and second-time buyers.

So why is this an issue?

The fundamental problem of the Warrington housing ‘crisis’, is the point that the supply of Warrington homes has not historically met demand, thus increasing property values (and in turn rents), consequently ensuring home ownership becomes an unattainable ambition for the twenty something’s of Warrington.

Call me a pragmatist, but it’s understandable that either demand needs to drop or supply needs to rise to stop this trend getting worse for the generations to come.

Don’t get me wrong, I admire Westminster’s plans to help first-time buyers with their ‘First Homes’ initiative to increase the supply of new homes being built just for first-time buyers. Yet it’s targeted to deliver only 1,500 homes in around 100 locations in the next two years.

To give you an idea of how this a drop in the ocean the Government sponsored the independent Barker Review of Housing Supply Report in 2004, which was tasked at looking at what could be done to level the playing field regarding the housing needs for the UK. The report found that the UK needed 240,000 homes to be built each year just to meet the demand of a growing and aging population. Since 2000, the average number of properties built in the UK each year has only been 177,975 per year. This means we have been around 62,000 homes short per year. Therefore, after 20 years of this annual shortfall we, as a country, have 1,240,500 too few homes – hence the massive uplift in house prices over the last two decades.

Therefore, one option that could resolve the housing crisis is if the Government literally looked closer to home, concentrating on matching households with the appropriately sized home … and this is what the government have shone a light on … people with too many spare bedrooms.

Is having a spare bedroom something that in this day and age is particularly wasteful? Well, let’s look at the numbers for Warrington.

25,032 Warrington homes have one spare bedroom.

Well, everyone in my opinion needs a spare bedroom, especially in the light of lockdown where many of us needed to work from home.

Ok, let’s see who has two or more spare bedrooms.

Of the 70,510 households in Warrington 26,422

have two or more spare bedrooms!

Of all the homes in Warrington, be they owned, privately rented or council house, 37.5% of Warrington homes have two or more spare bedrooms, compared to the national average 45.2%.

Breaking it down by ownership/tenure -

Of the 49,493 owned houses in Warrington, 23,508 have two or more spare bedrooms or as expressed as a percentage,

47.5% of Warrington owned homes have 2 or more spare bedrooms 

(compared to the national average of 53.9%).

Of the 12,230 council houses in Warrington, 1,495 have two or more spare bedrooms, or as expressed as a percentage,

12.2% of Warrington council homes have 2 or more spare bedrooms 

(compared to the national average of 11.6%).

Of the 8,787 private rented houses in Warrington, 1,419 have two or more spare bedrooms or as expressed as a percentage,

16.1% of Warrington private rented homes have 2 or more spare 

bedrooms (compared to the national average of 19.4%).

You can see there is the spare capacity in the Warrington housing market.

The Government hit the social housing sector with their ‘Bedroom tax’ in 2012, (also known as under occupancy charge or spare room subsidy) which meant that in council homes you would receive less in Housing Benefit or Housing Costs Element in a Universal Credit claim if you lived in a housing association or council property and were deemed to have one or more spare bedrooms.

Now it seems the Government have concentrated on the group that makes up the bulk of homeowners with spare bedrooms, the older owner occupiers of large properties, in their 60’s and 70’s, where the kids have flown the nest.

However, there are many explanations why these mature homeowners do not downsize. These people have lived in the same house for 30, 40 even 50 years, and as one matures in life, many people do not want to depart from what they see as the family home. Much time has been invested in making friends in their neighbourhood and it’s nice to have all those rooms in case every grandchild decided to visit, at the same time, and they brought their friends!

But is that a selfish point of view? Are we addicted to our spare bedrooms?

Or should the Government keep its nose out of where people live?

I would ask if the ‘Minister of Superfluously Sizeable Houses’ should be kicking you out of the Warrington home you worked for and have spent much of your life in? And why is it assumed that retired homeowners want to downsize to small little bungalows and apartments? Many love their spacious living rooms and kitchens (which are typically found in bigger houses).

This Government is in a muddle about housing policy.

On one side of the coin, the Government announced an increase in the tax burden on the British public with a rise to its highest level since the early 1950’s to pay for care and the NHS, yet on the other side of the coin, recently cancelling vote losing policies, so that mature people going into care do not need to sell their homes (which, if you think about it, they won’t live in anyway because they are going to long-term care). Whilst at the same time, to muddy the waters, they are suggesting to mature homeowners they have to move out of those same large homes to free it up for younger families? If the Government don’t know what the answer is, who does?

The subject of downsizing is a delicate one to unravel.

We all know mature homeowners and know that if they moved to a smaller Warrington home they would lose all the space they take for granted and would be unable to have the grandchildren over. Remaining in your large Warrington home is not greedy, it’s just the accepted human longing to enjoy a life after 50 plus years of working and paying your dues and taxes. You could say move to a managed retirement home? Yet many are very small and quite expensive.

I have spoken in previous articles in my blog on the Warrington property market that there aren’t enough bungalows being built either. And anyway, why should you have to relocate and wave goodbye to all your neighbours who have become friends and provide a support network?

There is a case made by some that mature downsizers could be given stamp duty tax breaks to get them to downsize, yet I am not sure how this could be policed, and it doesn’t solve the problem of increasing the overall supply of property in the UK.

The real issue isn’t spare bedrooms, it’s the need to change the 

planning rules to increase the number and type of new homes 

being built that will satisfy these mature homeowners with excess 

spare bedrooms to move into.

Big national builders have exploited ham-fisted planning rules since the 1980s, but no political party seems to have the answer. Housing Minister Chris Pincher might say he wants to persuade builders to build more suitable homes for mature people, yet his Government’s actions don’t seem to match his words.

In the Queen’s Speech this spring, the Government announced a proposed new planning system, which would create “simpler, faster procedures for producing local development plans, approving major schemes, assessing environmental impacts and negotiating affordable housing and infrastructure contributions”, or in layman’s terms, allowing more building to take place.

However, word coming out of Government is those plans could be cancelled following the Conservatives’ surprise defeat in the Chesham & Amersham by-election to the Liberal Democrats in the summer, which was blamed by some Conservative MPs on the new proposed planning laws.

So, whilst the Government decide what to do, what can mature Warrington homeowners do if they feel they do want to downsize?

The biggest fear many mature Warrington homeowners have is they 

will sell their large Warrington home but be unable to find anything 

to buy – thus making themselves homeless.

In this current Warrington housing market, the issue isn’t selling your Warrington home, but ensuring you find the right home to move into. Feel free to drop me a line to discuss how we can potentially sell your own Warrington property, tell the buyer to wait, then we will go and find a home for you to move into in your chosen area of Warrington.

Of course, all this takes time and patience, yet this is what old school estate agents did before the internet and the property portals. There is no extra charge for this and even if we find you a buyer, and for whatever reason the move doesn’t go ahead, there will be no charge.

If you are a Warrington homeowner or Warrington landlord and think this may affect you - feel free to drop me a line.

In the meantime, what are your thoughts about excess ‘spare bedrooms’? Let me know in the comments.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

10 Tips for Buy-to-Let Success

Buying a property and letting it out can be very rewarding. Not only do you receive a rental income, but the property itself should also increase in value over time.

The property you are renting out is an investment, but you must make sure that it is looked after and well maintained.

Of course, you may also be busy with a job and family, and while buying to let is a business, it may not always be the first priority in your life.

That’s why we have put together our 10 Tips for Buy-to-Let Success guide. These tips are based on our many years of experience of helping landlords run successful businesses.

If you would like help and advice on the rental market in Warrington, email us at manoj@hamletwarrington.co.uk or call 01925 235 338.

1. Choose Your property Wisely

You may want to invest your money and start getting a return as quickly as possible, but first, you must do your homework and consider the type of property you want and what sort of tenant you need. You might be thinking about students, but what if there isn’t a market for students in the area?

Top tip Speak to the professionals. We know the Warrington market locally and can advise you accordingly.

2. Decide how Much Involvement You Want

Decide what sort of landlord you want to be. Will you be hands-on and do a lot of the maintenance work yourself, or do you want to get tradespeople in to do the work for you?

Top Tip If you’re relying on tradespeople, ask around and develop a list of trusted contacts to be used when required.

3. Will You Manage the Property?

There are quite a few things you need to do including getting gas and electric certificates, collecting rent, dealing with maintenance and other issues, even managing the process of eviction should it come to that.

So, are you able to do much of this management yourself, or do you need an experienced lettings manager to take the strain?

Top Tip We can help you find a tenant, sort the contracts and look after the management – if you want us to!

4. Understand the Potential Net Returns

You may have money in the bank to invest in property. You may also have the desire to be a landlord and are thinking of the potential returns. But, have you actually done the maths?

Sit down with a pen and paper and do some research into all the other costs, for example:

• Landlords Insurance
• Servicing and gas and electric safety certificates
• EPC certificate
• Costs of repairs and maintenance
• Tax
• Void Periods
• Tenant Acquisition
• Utility Bills
• Management Fees

This is to name but a few!

Top Tip Make sure you can afford it. This might sound silly, but if the returns aren’t as great as you think, and the additional costs rack up, you could be in for a surprise.

5. Be Aware that Property Prices can go Up and Down!

Property is a sound investment most of the time. We would definitely recommend being a buy-to-let landlord, particularly in Warrington, but you should be aware that property markets can go down as well as up.

Top Tip Be in it for the long run. Be patient as markets can fluctuate but a good landlord knows this and sticks with it.

6. Always get Insurance

We firmly advise that you need Landlords Insurance and Buildings Insurance and maybe even Contents Insurance too. It’s better to be safe than sorry and should anything untoward happen, you will know that you are covered.

Top Tip Speak with an experienced insurance broker. They will go through the level of cover you need and why.

7. Be Efficient and Keep Records of Everything

A buy-to-let property is best when it has a paying tenant of course. When it is empty, it costs you money. Landlords who can move quickly when they need to find a tenant are the ones who have successful businesses.

Top Tip Make sure your paperwork is organised and in order. Keep a list of preferred suppliers including plumbers and electricians so that any work can be done quickly.

8. Choose the Right Lettings Agent

A good lettings agent will advise you on which area to look at when acquiring a property, and will know the sorts of rent you could expect to get. They’ll be able to recommend tradespeople, and be able to sort the contracts out. It’s worth doing your research and getting the right team in place.

Top Tip Seek recommendations from other landlords who have used an agent in your area.

9. Don’t Fall in Love with the Property

This is an interesting one. There’s a difference between liking a property and loving it. If you love it, you may well not see it as a business and it is a business that has to make money.

Top Tip You won’t be living in the property, but you can put your stamp on it in some way, perhaps the garden design for example.

10. Plan for the Future

While you have a property to rent out, ask yourself what your future plans look like:

• What’s your long-term goal for the property?
• Do you know whether you want to sell it eventually?
• Do you want to keep it and live in it at some point?

Top Tip Set your goals right at the start. That way, you will know what to do and when to make the right decisions.

We have years of experience in helping buy-to-let landlords and we can help you. Please get in touch. Email us at manoj@hamletwarrington.co.uk or call us on 01925 235 338.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Should Warrington Landlords be worried about these new rental regulations?

Everyone should be doing their bit to help reduce the UK’s carbon footprint on the globe – yet the question is, is that burden being put too much on the shoulders of Warrington landlords with potential bills of £7,600+ in the next four years?

The background - the UK has obligated itself to a legally binding target to be carbon neutral by 2050. One of the biggest producers of greenhouse gasses is residential homes.

To hit that carbon-neutral target (as one-fifth of the UK's carbon output comes from residential property), every UK home will need to achieve a minimum grade of ‘C’ on their Energy Performance Certificate (EPC) by 2035. Each EPC has a rating between ‘A’ and ‘G’ - 'A' being the best energy rating and 'G' the worst – like an energy rating on a fridge or washing machine.

All UK rental properties have required an EPC. Yet, from April 2020, the Minimum Energy Efficiency Standards (MEES) regulations have required all private rental properties (including rental renewals) to have a minimum EPC rating of ‘E’ or above.

Yet new legislation being discussed by the Government’s Climate Change Committee has suggested that landlords should play their part and increase the energy efficiency of their private rented homes. Sounds fair until you dive into the details.

The Government is muting the idea that all new tenancies (i.e. when a new tenant moves in) in private rented properties should be at an EPC rating of 'C' or above by 2025 (and all existing tenancies by 2028). The issue is …

53.67% of all private rented properties in Warrington

have an EPC rating of ‘D’ or below.

The problem is some Warrington landlords will find it very expensive, neigh impossible, to improve the energy efficiency of their Warrington rented properties, especially those Warrington landlords who hold older housing stock such as terraced properties built in the 1800s. These Victorian terraced houses never perform well on EPC ratings as they have solid walls.

Now, of course, you can improve the EPC rating of a terraced house by improving roof insulation, boiler replacement, solar heating, and high-grade uPVC windows. Yet, with some terraced houses, there will come the point where you will be unable to get to the haloed 'C' rating without installing external or internal wall insulation, sometimes even floor insulation.

With wall insulation costing between £5k and £15k and floor insulation around £5k …

the bill to improve all Warrington’s private rented

properties will be a minimum of £36,099,000.

But before I talk about what the options are for Warrington landlords, here’s the weird part of EPC’s. An EPC rating is calculated on the cost of running a property and not the carbon output or energy efficiency, despite its name.

My advice to Warrington landlords - although it’s correct to create a future strategy, all I can say at this point is 'more haste less speed'. These rule changes are only a discussion paper, and it remains open for consultation by any member of the British public until 30th December 2021. That means the Government's strategies and tactics may change.

Given that 57% of private rented properties are below a ‘C’ EPC 

grade, it is hard to believe the Government could achieve this 

without making big cash grants available.

For example, there is presently a cap of £3,500 for energy improvements that Warrington landlords have to spend to get it to the existing EPC ‘E’ target grade on private rented homes (i.e. if you have a privately rented home at an 'F' or 'G' EPC rating, you only need to spend a maximum of £3,500 as a landlord on improving your EPC rating and still being legal even if those £3,500 don't get you to the current 'E' rating minimum). So, if the current rules allow an exemption to the EPC renting rules, if a Warrington landlord can’t improve their Warrington property enough, conceivably, could this be extended?

So, what are Warrington landlord’s options?

One thing you could do is put your head in the sand and hope it all goes away!

Another thing some savvy Warrington landlords do (be they my client, clients of other letting agents in Warrington or even self-managing landlords) is to sit down and plan a strategy for their Warrington rental portfolio. I print off all the EPC’s of their rental portfolio, look at the recommendations, then discuss a plan to ensure they are covered whatever the Government decides to make the new EPC rules. Like all things in life, plan for the worse and hope for the best.

If your agent isn't offering that service, please drop me a line because I would hate for you to miss out on the advice and opinion that so many Warrington landlords have already had from me. The choice is yours.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Warrington House Prices - The Effect of Rising Inflation

House prices tend to rise with inflation, so with the UK annual inflation hitting 4.2% last week, that’s good news, isn’t it? Yes and no – let me explain what it means for Warrington homeowners.

The year-on-year cost of living rose by 4.2% in October, its highest rate in almost a decade. The jump in prices (inflation), pushed mainly by increasing fuel and energy costs, places further pressure on Warrington household budgets.

So, what will this rise in inflation mean to Warrington house prices?

Let me look at the downsides first. The first is the effect inflation has on the true spending power or value of your hard-earned money.

The mid-1970s to mid-1980s was a time of high inflation in the UK, so I think that is an excellent place to start.

The average house in Warrington in 1974 was worth £10,823,

and by 1984 it had risen to £31,634

So, Warrington property prices had risen by 192.3% in the decade 1974 to 1984.

Good news for everyone, then? Well, as always, the devil is in the detail.

Inflation over the same decade rose by 224.2%, meaning your Warrington house was worthless in real terms (i.e. spending power terms).

If that same Warrington home had gone up by the inflation rate seen 

between 1974 and 1984, the house would have been worth

£35,091 in 1984

That doesn't sound a lot (the difference between £31,634 and £35,091), until you apply that difference to today’s prices; that's a loss of £26,411 in today’s money.

The second is the effect of interest rates.

When inflation rises, the usual weapon of choice to reduce inflation is to increase interest rates. Homebuyers tend not to borrow as much on their mortgage when borrowing money becomes more expensive due to higher interest rates.

When interest rates get high (they were over 15% in 1992) Warrington homebuyers may not even want to borrow any money at all (staying put in their existing home). This would mean fewer Warrington home buyers wanting to buy (decreased demand). However, at the same time, more Warrington houses would be coming onto the market (because existing Warrington homeowners would want to sell and downsize because they have high mortgage payments), meaning higher supply … low demand and high supply does drive house prices in a downward direction.

So, does that mean you should hold off buying a Warrington home?

Although Warrington house prices did not keep up fully with inflation in the late 1970s and early 1980s, they did a pretty good job (and much better than keeping money in a savings account). You must remember your house is not a pure investment, it's a place you and your family live in. It's a place you call home. So don't worry if it doesn't keep up with inflation in the medium term as your four walls offer a lot more than just a simple investment.

Ok, so let’s look at what does happen when inflation effects property.

When your Warrington house price rises because of inflation, it increases the value of your house, not by the cost/value of your deposit. So, if inflation increases the value of your Warrington home by, say half (50%), it may triple, quadruple, or even quintuple the value of your deposit/equity.

For example, if you buy a Warrington property for £500,000 with a £50,000 deposit and inflation increases the price/value by 50% to £750,000, that means your equity in the property quintuples from £50,000 to £300,000. It also means you go from (in this scenario) owning 10% equity (£50k of £500k) in your home to 40% after inflation (£300k of £750k).

Even better if you take out a fixed-rate mortgage because you would be making a fixed monthly mortgage payment that dropped in real spending power ‘inflation adjusted’ pounds over the time of the fixed rate. You might ask why? Well, you are paying less for the mortgage than you did when you took it out (i.e. inflation erodes the actual value of money, meaning your mortgage debt diminishes in real value terms in line with inflation).

So, holding off moving home could cost you a lot of money.

What does this all mean for existing Warrington homeowners?

It’s challenging to forecast with any certainty what will happen with UK inflation and interest rates. I believe we will see inflation hover between 3% and 5% in 2022, with it returning to more normal levels of around 2% in 2023 (although I am no economist!).

We know the Bank of England base rate is just 0.1%, meaning it’s unlikely to get any lower. I have spoken about this in previous articles on the Warrington property market and said the money markets have already priced in an interest rate rise to 0.75% to 1% by the summer of 2022.

So, if you haven’t already, you need to seriously consider taking advantage of these low mortgage rates (can you believe 21% of Warrington homeowners aren’t on a fixed-rate mortgage). The bottom line is, irrespective of what is happening to inflation and Warrington house prices, being able to afford the monthly payments on your Warrington home is what counts for everyone.

Next, if you are worried about the spending power of the equity tied up in your Warrington home, you will have built up a decent buffer if you have been in your house, for example…

The average value of a Warrington house has risen by 19.7% in the last 

five years, yet inflation has only been 11.3%

This means the equity in ‘real spending power terms’ has increased by 8.4% in the last five years.

One final thought for any Warrington homeowners thinking of selling and not buying another home, inflation could eat into the real spending power terms of your equity in your Warrington home – so now might be the best time to sell your home to get maximum bang for your bucks. Then invest the money in other pure investments that consistently tend to beat inflation, such as gold, commodities, or Real Estate Investment Trusts? Again, I am giving you my opinion here, not financial advice. You must take independent advice from someone qualified in these matters and make your own decisions.

If you would like a chat about anything in this article, do drop me a line.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

Property Market Update: What’s Been Happening In The UK Property Market – November 2021

The UK property market has seen a drop in sales, but prices continue to rise. Meanwhile, the happiest place to live in Britain has been named in a survey, and one mortgage lender has launched an extraordinary new fixed-term product.

These are just some of the headlines this month in November’s UK property market update. Read on to find out more.

House Sales Fall 52% In One Month, But Prices Continue To Rise

Figures released by HMRC have shown a significant 52% drop in property transactions across the UK for October, following the end of the government’s stamp duty holiday.

There were just under 77,000 transactions completed as buyers rushed to get their purchases completed before the 30th September. This made it the slowest October since 2012 and signalled a 28% drop in transactions from the same month last year.

Despite the slowdown in sales, prices continued to rise across the UK, with Halifax reporting a 0.9% increase in average property prices, which was the fourth consecutive month they’ve risen. Their data also confirms that the average property price in the UK has crept above £270,000 for the first time, while fellow lender Nationwide also reported an increase of 0.7% on the average price.

40-Year Fixed Rate Mortgage Launched

In a very rare move, one lender has recently launched a fixed-rate mortgage for up to 40 years.

Specialist lender Kensington Mortgages has taken the highly unusual step as they seek to capitalise on growing uncertainty among buyers and homeowners who are anticipating an increase in interest rates.

Although some lenders already offer a 10-year fixed term mortgage, Kensington’s new deal will allow borrowers to sign up for anything from 11 to 40 years.

The interest rate will vary depending on the size of your deposit and the length of the mortgage term, but for those fixing between 36 and 40 years, the rate currently starts at 3.34%.

The Bank of England’s interest rate is currently at a record low of 0.1%, but an increase is expected in the coming months, which will make the prospect of a 40-year fixed term deal attractive to many homeowners.

Rent Increases Hit 13-Year High In Major Cities

Increased demand for rental properties in major cities across the UK has led to the cost of rent reaching its highest point for 13 years.

Some cities have seen demand double in their central zones, squeezing would-be renters out of town and forcing prices up.

According to leading property portal, Zoopla, average rents across the UK have risen by 6% in the past 12 months, with the South West seeing a 9% increase as demand for properties has continued to outstrip supply.

It’s a similar picture across the UK, with only London failing to see the same kind of increases, although prices have still risen 1.6% in the year to September, but they’re 5% lower than they were pre-pandemic.

Britain’s Home-Selling Hotspots Revealed

Research from leading property website Rightmove has revealed the country’s 6 top hotspots for sellers.

Grays in Essex and Mangotsfield, Bristol share the number one spot, with 84% of the homes listed for sale on the website already sold subject to contract.

Following closely behind, Eastleigh in Hampshire and Redditch in Worcestershire both have 83% of properties sold subject to contract, while Yeovil in Somerset and Hythe in Kent complete the top 6, with 82% of properties sold STC.

Perhaps rather tellingly, none of the top 6 are city-centre locations as an increase in remote working since the pandemic has led to employees having more options when it comes to where they live, and buyers are increasingly looking for more bang for their buck.

Britain’s Happiest Place To Live Revealed

Leading property portal Rightmove has released the results of their annual ‘Happy at Home Index’, which reveals that Hexham is the happiest place to live in Britain.

The market town in Northumberland scored highest overall based on factors like the friendliness of neighbours, its sense of belonging, the quality of local amenities, and the availability of open space.

It’s a return to the top spot for the North East town, which was also number 1 in 2019’s survey.

Richmond upon Thames was the happiest place to live in London for the 7th year in a row. The affluent borough in the southwest of the capital, where average house prices are just under £1.2m, came second overall in the standings.

Harrogate in Yorkshire rounded off the top 3, while 2020’s winner, St Ives in Cornwall came 8th.

Hamlet Homes Warrington are your local property experts for the Warrington area. Call us on 01925 235 338 or email manoj@hamletwarrington.co.uk to find out how we can help you buy a new home or sell your property.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page

With Warrington Tenants Deposits Totalling £6,960,650, How Will ‘Lifetime Deposits’ Change the Warrington Rental Market?

The Government’s scheduled publication of their White Paper for the Renter's Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Warrington landlords and tenants?

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

The average deposit for a Warrington rented

home stands at £850.

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn't need to save for an additional new deposit every time they move home.

Now, of course, it's vital that any new ‘deposit scheme’ does not dissuade Warrington landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it. 

 

So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new Warrington landlord is protected by a whole deposit, even if the deposit on the old Warrington home comes into dispute.

This will be critical and central to Warrington landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a Warrington landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

The deposits Warrington tenants have had to save for certainly raises the cost of renting a home.

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Warrington renters. To give you an idea of the level of deposits held for Warrington rental properties …

The total of all the tenants’

deposits in Warrington is £6,960,650.

Yet the other side of the argument contends that if the Warrington tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitors and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Warrington landlords with a decent level of protection against unpaid rent or damage to the property? When you consider …

The total value of all the privately rented properties

in Warrington is £1,884,493,625.

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Warrington landlord is vital.

So, what are my thoughts on ‘Lifetime Deposits’?

It is my opinion the common need for Warrington tenants to stump up a ‘two-fold deposit’ is not helping many Warrington renters when moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century.

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week's rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024).

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn't pay the rent?

Of course, a handful of Warrington landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced.

However, this will reduce the supply and availability of Warrington 

rental properties, meaning rents will rise (classic textbook supply and 

demand), thus, landlords return and yields will rise.

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Warrington will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30s.

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Warrington and enjoy those higher yields and returns. Isn't it interesting that things mostly always go full circle?

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page