Bourne Homeowners Have Made an Annual Profit Of £5,423 Since the Millennium

Bourne Homeowners Have Made an Annual Profit Of £5,423 Since the Millennium

 

As we go full steam ahead into 2019, it’s certain that the Bourne housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Bourne homeowner, having owned their property since the Millennium, has seen its value rise by more than 322%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Bourne property values has come from the growth in Bourne property values, while some of it will have been enhanced by extending, modernising or developing their Bourne home.
Taking a look at the different property types in Bourne, and the profit made by each type, makes interesting reading. However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.

So the ‘real’ value of the profit, after inflation, in Bourne has been £3,310 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Bourne property, property values dropped between 15% and 20% in 18 months … Bourne homeowners over the long term are still better off than those renting.

Moving forward, the question I get asked time and again is what will happen in the future to the Bourne Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium to long term to ensure that this level of house price growth is maintained in Bourne is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come).

Another factor is that whilst Bourne landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Bourne see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Bourne buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Bourne in 2018, most Bourne buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Bourne buy to let landlord, ensure that continues?
Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Bourne whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.

Live in Bourne? About to Retire and Privately Rent? You Could be £3,700 a Year Worse Off!

Live in Bourne? About to Retire and Privately Rent? You Could be £3,700 a Year Worse Off!

You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis … where people aren’t saving enough for their retirement. But it’s not the lack of Bourne peoples’ future pension incomes that are my immediate concern. The fact is that so many of the future retirees in Bourne over the coming decade, who never bought their home in the Millennial years of the 1990’s and 2000’s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.
In Bourne, there are 133 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?
A Bourne retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Bourne is £712 a month – a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet…
The maximum housing benefit for a couple in Bourne is currently £398.88 per month … leaving a significant gap when you consider the average rent in Bourne is £712 per month.
It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more of Bourne people retire and continue to rent from a private landlord. Numerous Bourne private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse.
The average Bourne retiree will need to find £3,757 pa to stay in their privately rented home after retirement
A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.
What does this mean for mature Bourne homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow … yet lets be frank – they aren’t building bungalows in large numbers in Bourne anymore.
And for the Bourne landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Bourne tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings.
For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer.
The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built … but back to reality … that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Bourne’s buy to let landlords!

As 26.5% of Holbeach Property  on the Market is Sold  Are there any bargains because of Brexit?

As 26.5% of Holbeach Property on the Market is Sold Are there any bargains because of Brexit?

Bargains – well yes and no – and let me explain why. To find a bargain you need to know the ‘market’, yet there is not one ‘property market’ in the UK. In fact, the British property market is like a fly’s eye, it looks one whole but in fact it is split into lots of fragmented pieces and the same goes for the Holbeach property market as that too is split into different patches… in fact it can even come down to two streets adjacent to each other, one street selling like hot cakes for top dollar whilst the next street can stick and at comparatively lower prices (i.e. if there is a school catchment boundary or differing postcode).

According to Coutts, property values in ‘Prime London’ have dropped by 14.7% in the last 5 years … yet look closely at those stats and Prime London is considered anything within a 1,500m radius of Kensington High Street above £4.6m – a totally different world to the average property in Holbeach, which is worth just under £190,000 and has risen in value over those same 5 years by 30.7% .. a different world!

I have noticed that the top end of the market above £400,000 in Holbeach and the surrounding areas is proving a little tougher to shift than a few years ago, yet this can’t all be blamed on Brexit, as buyers have long been flinching at overestimated asking prices and excessive stamp duty rates.

In Holbeach, 22.6% of properties for sale have
reduced their asking price in the last 3 months by
an average of 4.3%

A lot less than the reductions that are being seen in central London. In fact, the property market in Holbeach is looking reasonably good with

26.5% of properties on the market in Holbeach being
shown as under offer and Sold subject to contract

…Interesting when compared with the aforementioned London Prime market where only 5.86% of the properties for sale are sold .. some bargains to be had there!

So, where are the bargains in Holbeach? Well, to start with, it’s all about knowing the local Holbeach market. It’s all about comparing and contrasting property, so to start with, check out the property web-portals such as Zoopla and Rightmove to see what’s for sale. The art here is to click on the ‘include Sold stc’ in the filters .. then arrange them in price order. Then you will get a feel for what properties are roughly selling for. Also look at recent sales, so in Rightmove click on ‘House Prices’ on the main menu, on the proceeding drop down menu click on ‘Find Sold House prices’ and now you can type in a street, or even a street plus 0.25miles/0.5miles .. click on ‘List View’ and they are in date order. There is a similar function in Zoopla (feel free to contact me if you need a hand with that).

Then once you have found what you think is a bargain .. view it. Ask the agent why the sellers are moving. By doing your research on the seller, seeing how long it has been on the market, whether they have reduced the asking price (if you ask an agent they have to tell you and by how much) — you could cut a better deal if they are compelled to sell. Push home your advantage i.e. if you are a first-time buyer, don’t have a property to sell, chain free or cash purchaser it can all make a difference.

Looking at the numbers above, some savvy Holbeach landlords and home buyers are taking advantage of the doom and gloom newspaper headlines as property owners’ expectations are probably at the lowest they have ever been since the Credit Crunch, especially if they are in the ‘got to sell’ category instead of the ‘would like to sell’ category.

Like anything in life .. buying a property bargain comes down to putting the hard-work in, doing your homework and jumping at opportunities.

Skegness ‘Home Owning’ Movers and Shakers in 2018

Skegness ‘Home Owning’ Movers and Shakers in 2018

It’s now commonly agreed amongst economists and the general public that the dramatic rise in Skegness property prices of the last six years has come to an end.
Read the National newspapers, and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down – yet in the last 12 months, people have still been moving, buying and selling in Skegness at levels similar to the last six years – something tells me we have a case of ‘bad news selling newspapers’.
So instead, let me share with you what, exactly, is happening in the Skegness property market, and more specifically, who is moving and why in Skegness. The majority of sales in Skegness during the last twelve months were detached properties, selling for an average price of £178,800. Semi-detached properties sold for an average of £143,700, with terraced properties fetching approximately £121,600.
In Skegness, in the homeowner sector in 2018 (i.e. owner occupation), 198 households moved within the tenure (i.e. sold the home they owned and bought another one) and 38 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).
Skegness Home Movers in 2018
Moved from Owner Occupation to Private Rented 72
Moved from Private Rented to Owner Occupation 92
Owner Occupation to Social Housing 10
Straight to Owner Occupation 38
Left Owner Occupation (i.e. Household Ended) 48
Owner Occupation to Owner Occupation 198

skegness 243 graph
What does this mean for Skegness buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 92 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 72 Skegness households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector.

My research has calculated that in 2018, an additional 96 new households in the Skegness private rental sector were created

…and it will continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity for you Skegness property investors. 48 owner occupied households in Skegness sold in last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Skegness housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned … and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner … property is a long game … and if you play the long game, you will always win (although isn’t that true in most aspects of life?).

Bourne ‘Home Owning’ Movers and Shakers in 2018

Bourne ‘Home Owning’ Movers and Shakers in 2018

It’s now commonly agreed amongst economists and the general public that the dramatic rise in Bourne property prices of the last six years has come to an end.
Read the National newspapers, and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down – yet in the last 12 months, people have still been moving, buying and selling in Bourne at levels similar to the last six years – something tells me we have a case of ‘bad news selling newspapers’.
So instead, let me share with you what, exactly, is happening in the Bourne property market, and more specifically, who is moving and why in Bourne. The majority of sales in Bourne during the last twelve months were detached properties, selling for an average price of £276,700. Semi-detached properties sold for an average of £185,300, with terraced properties fetching approximately £176,900.

In Bourne, in the homeowner sector in 2018 (i.e. owner occupation), 180 households moved within the tenure (i.e. sold the home they owned and bought another one) and 35 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).
Bourne Home Movers in 2018
Moved from Owner Occupation to Private Rented 66
Moved from Private Rented to Owner Occupation 84
Owner Occupation to Social Housing 9
Straight to Owner Occupation 35
Left Owner Occupation (i.e. Household Ended) 43
Owner Occupation to Owner Occupation 180

bourne 243 graph

What does this mean for Bourne buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 84 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 66 Bourne households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector.

My research has calculated that in 2018, an additional 87 new households in the Bourne private rental sector were created

…and it will continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity for you Bourne property investors. 43 owner occupied households in Bourne sold in last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Bourne housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned … and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner … property is a long game … and if you play the long game, you will always win (although isn’t that true in most aspects of life?).

Top 25 Most Saleable Streets in Bourne

Top 25 Most Saleable Streets in Bourne

BOURNE HOME OWNERS!!

Top 25 Most Saleable Streets in Bourne

Following on from my last article, if you recall I said that Beech Avenue had the most properties sold in the PE10 Bourne postcode, yet I felt that this information wasn’t telling the whole story, as some roads in Bourne have more properties on them than others. Therefore, I promised that I would compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold) more often than the rest of the locality.

To give some foundation to the article, in 2017 Bourne homeowners had, on average, lived at their existing address for 17 years and 6 months. However, when I looked at the difference between homeowners with and without a mortgage; Bourne homeowners without a mortgage had lived in their Bourne home for an average of 23 years and 9 months compared with 10 years and 1 month for homeowners with a mortgage. Interestingly, Bourne’s South Kesteven Council house tenants have on average resided at their present home for 11 years and 4 months, whilst finally for those who rent from a private landlord, tenants generally have lived in their property for an average of 3 years and 11 months (up from 3 years 5 months only five years ago).

The PE10 street in the top 25 saleable streets with the highest number of households on it is Main Road, which has 196 residential addresses (including surrounding villages). Yet since 1995, only 164 properties have changed hands (some multiple times!) .. which means the street’s saleability or churn rate is 83.7%.

However, the street or road that has the highest saleability or churn rate is Paddington Way … which has 40 households on it, yet since 1995 there have been 113 house sales … a saleability rate of 282.5%.

Therefore, what does this all mean to Bourne homeowners and Bourne landlords? Well these 25 streets are the best performing streets out of the 472 streets in the Bourne (PE10) area so if you live/own a property on those 25 streets … you are sitting on a very saleable street. If you want to find out how saleable your street is .. please drop me a line and we can discuss this further.

http://www.bourneproperty.blog

Beech Avenue, Bourne… …the road where people move the most

Beech Avenue, Bourne… …the road where people move the most

Many folks say moving home is the most stressful thing. Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

We wish we could be instantly transported like in Star Trek “Beam me up Scotty to a blissful moved in state”. Yet the week you move, it’s like an episode from the original 1960’s series Star Trek, when the crew had a transporter accident with an ion-storm sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship and chaos eschews!!!

Star Trek aside, when you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!). Then you put your property on the market with an estate agent, find a buyer for your Bourne property, agree a price for both, then instruct solicitors. The property becomes sold ‘subject to euphuism’ … sorry ‘contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through … phew – stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Bourne people think so.

In the last 12 months, 396 families have sold and moved home in Bourne (PE10)

Yet the question I want raise is … do people on certain streets in the PE10 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the PE10 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Beech Avenue is the winner with an average of 7.96 house sales per year (since 1995) as on the graph below.

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street. As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.
Street Average Value of a Property
On that Street/Road Average Number of
Properties Sold per Year (since 1995)
Beech Avenue £232,361 7.96
Main Road £254,957 7.13
High Street £319,903 6.96
North Road £319,002 6.09
Southfields £211,984 5.65
Stephenson Way £248,328 5.30
Mill Drove £308,608 5.39
Eastgate £145,671 5.13
Austerby £193,184 5.13
The Pollards £154,103 5.00
Foxley Court £152,505 5.09
Paddington Way £192,026 4.91
Viking Way £214,714 4.96
The Causeway £151,391 4.57
Station Road £232,745 4.61
Wakes Close £158,255 4.52
Waterloo Drive £190,703 4.17
Beck Way £154,297 4.30
Hereward Street £123,847 4.13
Northorpe £297,934 4.04
Saxon Way £202,019 4.09
Piccadilly Way £161,703 3.96
Kingsway £173,327 4.00
Tarragon Way £255,258 3.78
Tennyson Drive £227,040 3.65

However, I still felt the information wasn’t telling the whole story … some roads in Bourne have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality.

In the next article, (and I promise I won’t mention Star Trek again), I will answer that question in great depth … and the results should (as they did me) certainly raise an eyebrow. The question is … do you live on one the top 25 Bourne most saleable streets in Bourne (PE10)?

Come back to my Bourne Property Blog for the next article to find out!