We are continuing our countdown of the Top 30 Most Saleable Streets in SO31, PO14 & PO15.
Here we are at Number 26 on the list – Is it your street?
For more articles about the local property market please visit The Locks Heath Property Blog at www.thelocksheathpropertyblog.co.uk.
The value of all the homes in Locks Heath has risen by more than 247% in the past two decades, to £5.267bn, meaning its worth more than the stock listed company Marks and Spencer Group, which is worth £4.874bn.
Those Locks Heath homeowners and Buy-to-Let landlords who bought their homes twenty or more years ago have come out on top, adding thousands and thousands of pounds to the value of their own Locks Heath homes as the younger generation in Locks Heath continue to be priced out of the market. This is even more remarkable because, in those twenty years, we had the years of 2008 and 2009 following the global financial crisis, where we saw a short term drop in Locks Heath house prices of between 15% and 20% (depending on the type of property). And although there have been a number of consecutive years of growth in property values recently in Locks Heath it hasn’t been anywhere near the levels seen in the early 2000’s.
Twenty years ago, the total value of Locks Heath property was worth £1.514bn. Over those twenty years total property values have increased by £3.753bn, meaning today the total value of all the properties in Locks Heath is worth £5.267bn. Even more remarkable, when you consider the FTSE100 has only risen by 40.84% in the same time frame. Also, when I compared it with inflation, i.e. the UK Retail Price Index, inflation had risen by 72.2% during the same twenty years.
So, what does this all mean for Locks Heath? Well as we enter the unchartered waters of 2018 and beyond, even though property values are already declining in certain parts of the previously over cooked central London property market, the outlook in Locks Heath remains relatively good as over the last five years, the local property market has been a lot more sensible than central London’s.
Locks Heath house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with persistent immigration and population growth. Secondly, with 0.25% interest rates, borrowing has never been so cheap and finally, the simple lack of new house building in Locks Heath. Not even keeping up with current demand, let alone eating into years and years of under investment mean only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Locks Heath has and always will, out ride out the storm.
We are continuing our countdown of the Top 30 Most Saleable Streets in SO31, PO14 and PO15.
Here we are at Number 27 on the list – Is it your street?
For more articles about the local property market please visit the Locks Heath Property Blog at http://www.thelocksheathpropertyblog.co.uk.
We are continuing our countdown the Top 30 Most Saleable Streets in SO31, PO14 & PO15.
Here we are at Number 28 on the list – Is it your street this week?
For more articles about the local property market please visit the Locks Heath Property Blog at http://www.thelocksheathpropertyblog.co.uk.
Music:
Say Good Night by Joakim Karud https://soundcloud.com/joakimkarud
Creative Commons — Attribution-ShareAlike 3.0 Unported— CC BY-SA 3.0 http://creativecommons.org/licenses/b…
Music promoted by Audio Library https://youtu.be/SZkVShypKgM
As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Locks Heath and the surrounding areas to keep up with demand for homes to live in (be that Tenants or homebuyers), it’s good to know more Locks Heath home sellers are putting their properties on to the market than a year ago.
At the start of 2007 there were 586 properties for sale in Locks Heath but by April 2008, when the credit crunch was really beginning to bite, that number had risen to 977 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.
Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Locks Heath property between the end of 2007 and Spring 2009.
However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Locks Heath property prices have remained robust. A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties. Nevertheless, if you had asked me a couple of years ago, I would have said we were beginning to see there was in fact NOT enough properties coming on to the market for sale… meaning in certain sectors of the Locks Heath property market, house prices were overheating because of this lack of supply.
So, it is pleasing to note, looking at the recent numbers…
There are 12% more properties for sale in Locks Heath today than a year ago
There were 357 properties for sale 12 months ago, and today that stands at 399. It doesn’t sound a lot, yet this is a small step in the right direction to a more stable property market.
Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Park Gate say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTBs buying their first home, however, with the heightened levels of confidence being demonstrated by both Locks Heath house sellers and potential house buyers, I do foresee the Locks Heath Property Market will show steady yet sustained improvement during the first half of 2018.
What does this mean for Locks Heath Landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best Tenants. It is true that demand amongst FTBs is increasing, albeit from a low base. Even with the new Landlord tax rules, buy to let in Locks Heath still looks a good investment, providing Locks Heath Landlords with a good income at a time of low interest rates and a roller coaster stock market.
If you are thinking of investing in bricks and mortar in Locks Heath, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years. With a greater number of properties on the market comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart and don’t forget the first rule of Buy To Let Investment …..
I will tell you that 1st rule in a couple of weeks!
We are continuing our countdown the Top 30 Most Saleable Streets in SO31, PO14 & PO15.
Here we are at Number 29 on the list – Is it your street this week?
For more articles about the local property market please visit the Locks Heath Property Blog at http://www.thelocksheathpropertyblog.co.uk.
Music:
Say Good Night by Joakim Karud https://soundcloud.com/joakimkarud
Creative Commons — Attribution-ShareAlike 3.0 Unported— CC BY-SA 3.0 http://creativecommons.org/licenses/b…
Music promoted by Audio Library https://youtu.be/SZkVShypKgM
As our families grow bigger the need for more space, be that bedrooms or reception rooms, has grown with it. Also, as our older generation lives longer and nursing home bills continue to rise quicker than a rocket on the 5th of November (the average nursing home bill in the area being £715 per week) many families are bringing two households into one larger one.
So, should you move somewhere larger or extend your Locks Heath property to make it large enough for you and your family? In some circumstances the choice has been made for you. If you live in an apartment with no garden, there isn’t much of an opportunity of making it larger. But if you have a house with a garden or an attic with sufficient headroom, extending your home becomes a real prospect.
Even if it makes more sense to extend or move, the choice hangs on a number of different dynamics – your future plans, money (both saved and access to finance), in what way you are emotionally attached to your home, the particular area of Locks Heath you live in and finally, the type/style of house you prefer.
Interestingly the average British home is 968 sq.ft, which as you can see from the table, is in the middle of developed nations when it comes to the size of a property. Of the 1.11m homes sold in 2016 in England and Wales, the average floor area of the houses was 1,119 sq.ft – that’s about an eighth the size of an Olympic sized swimming pool. Apartments averaged 530 sq.ft that’s just over ten times bigger than an average garden shed. Looking at apartments and houses together, the average size of properties sold in England and Wales 968 sq.ft – are slightly smaller than the European average, and much smaller than households in the US.
So back to the question in hand… extending does mean you will have a lot of inconvenience whilst the work is being carried out. The location of your Locks Heath property, the quality of construction, what type of room(s) you want to add, your plot, neighbouring building lines, planning regulations and the overall demand for your type of Locks Heath home, will make a vast difference to the financial repercussions of extending versus moving.
A medium-sized 270 sq.ft single storey extension (say around 17ft x 16ft) will add on average £71,400 to the value of a property in Locks Heath
It’s important to note the end result of the extension needs to be a sensible and realistic home. A two bed semi-detached house extended to a four bedrooms with no lawn or driveway, or a home with out-sized reception rooms downstairs and minuscule bedrooms upstairs, could be problematic if and when you come to sell your home in the future. Irrespective of whether your strategy is to live in your extended home for a long time, you will want to side-step outlaying a lot of money on costly building work that will make it tougher to sell.
In terms of what it would cost to build an extension, you can expect to pay on average between £140 to £200 per sq.ft, depending whether the extension is a single or double storey extension and other factors including finish and type of extension (note – I have seen it cost a lot more than these figures – so please speak with a builder). So taking a mid-line figure, that same 270 sq.ft extension on your Locks Heath home would cost on average £55,080.
However, moving means there are substantial costs incurred – Estate Agency fees, Removal Van, Survey Fees, Legal fees and Stamp Duty on the property you are buying. Neither option is the obvious choice and comparing the costs of extending your Locks Heath home to that of moving is not a stress-free undertaking.
How realistic each option is will probably come down to one thing – your mortgage provider. You will need a considerable sum of equity in your Locks Heath home before you can think of increasing your mortgage more, because most lenders will require you to have at least 10% to 20% equity left in your property after the extension or move has been done.
The best advice I can give is don’t assume anything. Get advice and opinion from builders, mortgage brokers, architects, mortgage people and of course… an agent. Look at your options and make an educated decision with all the superficial and objective facts in front of you.
We are counting down the Top 30 Most Saleable Streets in SO31, PO14 & PO15.
Here we start with Number 30 on the list – Oak Coppice Road in Whiteley.
For more articles about the local property market please visit the Locks Heath Property Blog at http://www.thelocksheathpropertyblog.co.uk.
For help with the sale or letting of your property please contact us on 01489 885500.
Music:
Say Good Night by Joakim Karud https://soundcloud.com/joakimkarud
Creative Commons — Attribution-ShareAlike 3.0 Unported— CC BY-SA 3.0 http://creativecommons.org/licenses/b…
Music promoted by Audio Library https://youtu.be/SZkVShypKgM
According to the National House Building Council (NHBC), more than 26,142 new homes were registered to be built in the South East last year, on par with 2016 levels of 26,147 dwellings. Great news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.
So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on… homework I want to share with the homeowners and Landlords of Locks Heath.
You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/Tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.
So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Locks Heath and Fareham Borough Council area’s property market when it to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading.
On this second graph, one can see the percentage difference in average price paid between new and existing…
Yet possibly nothing is ever that easy, as there are issues with these statistics.
Whilst, the overall average for the whole Fareham Borough Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 18.9%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.
One would have to have a mirror image second-hand Locks Heath home and a duplicate new build right next door to each other, then calculate out which Locks Heath house buyers or Locks Heath buy to let Landlords would pay more for. Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay… but then again, it’s like new cars versus cars that have a few hundred miles on the clock… there is always a difference on the forecourt because things are never wholly equal.
What I do know is that my statistics of the Locks Heath property market show that new build Locks Heath apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build Locks Heath detached houses and second-hand Locks Heath detached houses.
However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market. So, if you want to buy new and the only consideration is money… try buying in a tougher challenging property market.
The degree to which young Locks Heath people are locked out of the Locks Heath housing market has been revealed in new statistics.
A Locks Heath landlord was asking me the other week to what effect homeownership rates in Locks Heath in the early to middle aged adult age range had affected the demand for rental property in Locks Heath since the Millennium. I knew anecdotally that it affected the Locks Heath rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats… so this is what I found out for the landlord, and I’d like to share them with you as well.
As anyone in Locks Heath, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.
In the year 2000, 65.6% of Locks Heath 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 35.0% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Locks Heath person (therefore born in 1962) would have a 96.8% chance of owning his or her own home and a 38 year today in Locks Heath (born in 1980) would only have a 75.4% chance of owning their own home.
Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Locks Heath has reduced from 89.54% to 64.75%
If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Locks Heath. The fact is the figures in Locks Heath show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.
The Landlord suggested this deterioration in homeownership in Locks Heath across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.
I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above. Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.
So, what does this mean for the rental market in Locks Heath?
Only one thing… with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own… through the private Landlord sector. Now with the new tax rules and up and coming licensing rules, Locks Heath Landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Locks Heath rental market drop me line or pop in next time you are passing my office.
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