I had an interesting chat with a Warsash landlord who owns a few properties in the area this week – He popped his head in to my office whilst he was in Park Gate on some errands. We had never spoken before (because he uses another agent in the suburb to manage his Locks Heath properties) yet, after reading my blog on the Locks Heath Property Market for a while, the landlord wanted to know my thoughts on how the recent interest rate cut would affect the Locks Heath property market.  I would also like to share these thoughts with you…

Well it’s been a few weeks now since interest rates were cut to 0.25% by the Bank of England as the Bank believed Brexit could lead to a materially lower path of growth for the UK, especially for the manufacturing and construction industries.  You see for the country as a whole, the manufacturing and construction industries are still performing well below the pre credit crunch levels of 2008/09, so the British economy remains highly susceptible to an economic shock.  This is especially important in Locks Heath, because even though we have had a number of local success stories in manufacturing and construction, a large number of people are employed in these sectors.  In Locks Heath, Warsash and Whiteley, of the 23,360 people who have a job, 2,145 are in the manufacturing industry and 1,803 in Construction meaning…

9.2% of Locks Heath, Warsash and Whiteley workers are employed in the Manufacturing sector and 7.7% of workers are in Construction.

The other sector of the economy the Bank is worried about, and an equally important one to the Locks Heath economy, is the Financial Services industry.  Financial Services in Locks Heath, Warsash and Whiteley employ 1,289 people, making up 5.5% of the working population.

Together with a cut in interest rates, the Bank also announced an increase in the quantity of money via a new programme of Quantitative Easing to buy £70bn of Government and Private bonds.  Now that won’t do much to the Locks Heath property market directly, but another measure also included in the recent announcement was £100bn of new funding to banks.  This extra £100bn will help the High St banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages.  This should have a huge effect on the Locks Heath property market (as that £100bn would be enough to buy half a million homes in the UK).

It will take until early in the New Year to find out the real direction of the Locks Heath property market and the effects of Brexit on the economy as a whole, the subsequent recent interest rate cuts and the availability of cheap mortgages.  However, something bigger than Brexit and interest rates is the inherent undersupply of housing (something I have spoken about many times in my blog and the specific affect on Locks Heath).  The severe under-supply means that Locks Heath property prices are likely to increase further in the medium to long term, even if there is a dip in the short term.  This only confirms what every homeowner and landlord has known for decades – investing in property is a long term project and as an investment vehicle, it will continue to outstrip other forms of investment due to the high demand for a roof over people’s heads and the low supply of new properties being built.

For more thoughts on the Locks Heath Property Market, please visit the Locks Heath Property Blog www.thelocksheathpropertyblog.co.uk.

Roll the clock back 35 years to 1981, and Mrs. Thatcher was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’.   Haven’t things changed?  The number of homeowners and property investors who said they wish they had hindsight and bought up every house in Locks Heath all those years ago, especially when you consider what has happened to Locks Heath property values, as…

Locks Heath Property Values since 1981 have risen by 942%.

Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Locks Heath are 670.1% higher.   It’s no wonder people can’t afford to buy property anymore and Landlords are attracted by bricks and mortar.  Yet the changes to the Locks Heath property market run much deeper than property value changes as no one could have predicted how the property market has changed in Locks Heath over the last 30 years.

Looking at the Local Authority data for Fareham Borough Council in 1981, 13.8% of Locks Heath people lived in a Council House, whilst today its 8.1%… a drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House.  The private rental sector since 1981 has, as one would have expected, also changed.  The proportion of properties privately rented in the Locks Heath area (i.e. through a private Landlord or a Letting Agency) has almost doubled, rising from 6.8% to 10% of property.

So, let us consider those people who own their own home, surely that has had a massive drop?  In 1981, the proportion of people who lived in the Fareham Borough Council area who owned their own home was 79.3% … and today its … 80%. Not the seismic change most of you were expecting (including myself!).

Homeownership in the 1980’s and 1990’s in Locks Heath did in fact rise, but as I have discussed in previous articles in the ‘Locks Heath Property Blog’, that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent.

… and this is why the buy to let market in Locks Heath is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (like they were in the 1950’s/60’s and 70’s).  The Locks Heath property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.  I see the changes in tax and Landlord and Tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important.  You might need to change your buy to let targets, your methodology to financing or even consider places other than Locks Heath in which to invest your money.  But this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.

Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Locks Heath buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market.  These opportunities will provide a more stable platform for knowledgeable and wise Locks Heath buy to let Landlords to thrive in.

If you want to learn more about the Locks Heath Property Market, feel free to pop in for a coffee at our office for a chat with me, or failing that, visit the Locks Heath Property Blog, where you will find many more articles like this solely on the one topic of the Property Market in Locks Heath www.thelocksheathpropertyblog.co.uk.

Over the last month, the Locks Heath property market has seen some interesting movement in house prices, as property values in the Fareham Borough Council area rose by 1.5%, to leave annual price growth at 13.8%.  These compare well to the national figures where property prices across the UK saw a monthly uplift of 0.42%, meaning the annual property values across the Country are 8.3% higher, this is all despite the constraining factors of Stamp Duty changes in the spring and more recently our friend Brexit.

Looking at the figures for the last 18 months makes even more fascinating reading, whereby house prices are 15.1% higher, again thought provoking when compared to the national average figure of 13.6% higher.

However, it gets more remarkable when we look at how the different sectors of the Locks Heath market are performing.  Over the last 18 months, in the Fareham Borough Council area, the best performing type of property was the semi, which outperformed the area average by 0.5% whilst the worst performing type was the apartment, which under-performed the area average by 1.8%.

Now the difference doesn’t sound that much, but remember two things, this is only over eighteen months and the gap of 2.3% (the difference between the semi at +0.5% and apartments at -1.8%) converts into a few thousand pounds disparity, when you consider the average price paid for a semi-detached property in Locks Heath itself over the last 12 months was £288,400 and the average price paid for a Locks Heath apartment was £163,900 over the same time frame.

I know all the Locks Heath Landlords and homeowners will want to know how each of the property types have performed, so this is what has happened to property prices over the last 18 months in the area:

• Overall Average        +15.1%
• Detached                    +15.2%
• Semi Detached         +15.7%
• Terraced                     +15.4%
• Apartments               +13.0%

So what does all this mean to Locks Heath homeowners and Locks Heath Landlords and what does the future hold?

When I looked at the month-by-month figures for the area you can quite clearly see there is a slight tempering of the Locks Heath property market over these last few months.  I have mentioned in previous articles that the number of properties on the market in Locks Heath has increased this summer, something that hasn’t happened since 2008.  Greater choice for buyers means, using simple supply and demand economics, that top prices won’t be achieved on every Locks Heath property.  You see, some of that growth in Locks Heath property values throughout early 2016 may have come about because of a surge in house purchase activity, an indirect result of the increase in stamp duty on second homes from April, thus providing a temporary boost to prices.

However, it may be possible the recent pattern of robust employment growth, growing real earnings and low borrowing costs will tilt the demand/supply seesaw in favour of sellers and exert upward pressure on prices once again in the quarters ahead.

For more articles like this please visit the Locks Heath Property Blog.

Well it has been a few months since Brexit and as we settle into the Autumn with The Great British Bake Off, Strictly and the Football season the newspapers are returning to their mixed messages of good news, bad news and indifferent news about the Brit’s favourite subject after the weather… the property market.

The thing is, the UK does not have one housing market.  Instead, it is a patchwork of mini property markets all performing in a different way.  At one end of the scale is Kensington and Chelsea, which has seen average prices drop in the last twelve months by 6.2% .  Whilst in our South East region, house prices are 12.3% higher.  But what about Locks Heath?

Property prices in Locks Heath are 12.8% higher than a year ago

and 3.1% higher than last month.

So what does this mean for Locks Heath Landlords and homeowners?  Not that much unless you are buying or selling in reality.  Most sellers are buyers anyway, so if the one you are buying has gone up, yours has gone up.  Everything is relative and what I would say is, if you look hard enough, there are even in this market still some bargains to be had in Locks Heath.

However, the most important question you should be asking though is not only is what happening to property prices, but exactly which price band is selling?  I like to keep an eye on the property market in Locks Heath on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Locks Heath.

If you look at Locks Heath and split the property market into four equal sized price bands each price band would have around 25% of the property in Locks Heath, from the lowest in value band (the bottom 25%) all the way through to the highest 25% band (in terms of value).

Nil to £230k                         22 properties for sale and 11 sold (stc) i.e. 33% sold

£230k to £350k                  22 properties for sale and 32 sold (stc) i.e. 59% sold

£350k to £450k                  30 properties for sale and 24 sold (stc) i.e. 44% sold

£450k +                                 26 properties for sale and 13 sold (stc) i.e. 33% sold

Fascinating don’t you think that it is the middle Locks Heath market that is doing the best?

The next nine months’ activity will be crucial in understanding which way the market will go this year after Brexit.  But, Brexit or no Brexit, people will always need a roof over their head and that is why the property market has ridden the storms of oil crisis’ in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the credit crunch together with the various house price crashes of 1973, 1987 and 2008.

And why?  Because Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash.  There is always a silver lining when it comes to the property market!

For more articles like this please visit the The Locks Heath Property Blog.