Friday, July 31, 2015

Character property in central Bingham for £135,000

This property is close to Bingham town centre, has loads of character and is for sale with Frank Innes for £135,000.

It would be easy to let and should achieve £550 pcm, but you may need to consider fitting a shower. Click on the details for a better look...

Thursday, July 30, 2015

Bingham Homeowners move on average every 15 years?

In Bingham, there are 3,889 properties. However, after we remove the 444 council houses, 414 privately rented houses and 22 houses where the occupants live rent free, that leaves us with 3,009 owned properties (be that 100% outright, with a mortgage or shared ownership). This means 77.4% of the properties in Bingham are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Bingham, over the last 12 months, has only been 196. This means on these figures, the homeowners of Bingham are only moving on average every 15.35 years.

These are the reasons. Firstly, the cost of moving house has risen over the last twenty years. Secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970s and 1980s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels.

This change to a relatively low inflation Bingham property market (i.e. Bingham property values not rising quickly) is significant because the long term consequences of sustained low house price growth is that it eats into mortgage debt more slowly than when property price inflation is higher. Bingham homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in say the 1970s and 1980s.

So what does this all mean for Bingham buy to let landlords? Well for the same reasons existing Bingham homeowners aren’t moving, less ‘twenty somethings’ are buying their first home as well. Bingham youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. 

I also believe UK society has changed, with the youngsters wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. As a society, we expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was... say... a generation ago?

Even though, in real terms, property prices are 5% cheaper than they were ten years ago (when adjusted by inflation), 10.6% of Bingham properties are privately rented (nearly double it was twenty years ago). As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing?

For advice and opinion on the Bingham Buy To let property market please feel free to pop into our office on the Market Place.

Wednesday, July 29, 2015

Great family home in Bingham - could make a sound investment for any landlord

This lovely family home in Bingham is situated on a popular residential estate, within walking distance of the town centre and close to good schools. 

With benefits such as a garage and a child-friendly garden, it would let quickly and easily and could provide a return of 5% on your investment.

On the market for sale with Richard Watkinson, with an asking price of £179,950, see full details here:

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Friday, July 24, 2015

Bingham Property Market – Bricks and Mortar!

The Land Registry have just released their latest set of figures for the Bingham Property market. It makes interesting reading, as average property values in Bingham rose by 0.1% in May. This leaves average property values 4% higher than 12 months ago, meaning the annual rate of growth in the town fell to its lowest level since February 2014. When we compare Bingham against the regional picture, East Midlands property values rose by 0.2%, leaving them 2.9% higher than a year ago.

Obviously this is a far cry from the price rises we were experiencing in Bingham throughout 2014. At one point (April 2014 to be exact) property values were rising by 5.6% a year. All the same, even with the tempering of the Bingham property values in 2015, property values are still higher. This is good news for local homeowners who had been affected by the downturn after 2007 and still find themselves in negative equity.

However, the thing that concerns me is that the average number of properties changing hands (ie selling) has dropped substantially over the last 12 months in the town. In April 2014, 28 properties sold in Bingham but in April 2015, that figure dropped to 14.  

I have been in the Bingham property market for quite a while now and the one thing I have noticed over the last few years has been the subtle change in the traditional seasonality of the Bingham property market. It has been particularly noticeable this year in that the normal post Easter flood of properties coming onto the market was not seen. This has made an imbalance between supply and demand, with less houses coming onto the market there is simply not as much choice of properties to buy in Bingham and with the population of Bingham ever increasing, this will generally strengthen house price growth for the foreseeable future.

So what does all this mean for Bingham landlords or those considering dipping their toe into the buy to let market for the first time? For many people, buy to let looks a good investment, providing landlords with a decent income at a time of low interest rates and stock market unpredictability.

However, if you are thinking of investing in bricks and mortar in Bingham, it is important to do things correctly. As an investment to provide you with income, for those with enough savings to raise a big deposit, buy to let looks particularly good, especially compared to low savings rates and stock market yo-yo’s. I must also remind readers, landlords have two opportunities to make money from property, not only is there the rent (income), but with the property market bouncing back over the last few years, property value increases has spurred on more investors to buy property in the hope of its value continuing to rise.

Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must rise and you need to know your property can stand that test. I saw some Bingham landlords struggling in the mid noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having to make up a shortfall in the mortgage payments of £100 per month in 2007.

Its true many landlords were thrown a life raft when the base rate dropped to 0.5% in March 2009. Whilst interest rates have remained there since, mark my words, they will rise again in the future. However, even with the potential for costs to rise, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and thus rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Bingham property market.

If you are planning on investing in the Bingham property market, or just want to know more, things to consider for a successful buy to let investment, please feel free to pop in and see me at our office in Bingham on the Market Place or call 01949 714101

Friday, July 17, 2015

Burton Joyce, a popular option when working in Nottingham.

This Large 2 bed semi is on the market for sale with Lesley Greaves Estate Agents for £185,000. Burton Joyce is a popular Nottingham Suburb with a good primary school.

So often the accommodation available on the rental market is modern properties that do not offer the same large rooms that a property like this has. The interior is finished well so it has the modern style with the space tenants are looking for which would mean the property would let quickly. 

I believe this would let for £800 pcm giving a potential return of 5.1% if purchased for the asking price.

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Thursday, July 16, 2015

Affordability of housing in Bingham

Talking to an elderly relative recently, he reminded me that in his day, you could have bought a property for the same price of what a decent second hand car would sell for today. His father was buying property for the same price as a decent 50 inch LCD TV!  Now of course, these are only headline prices and we have had wage growth and inflation.  Interestingly, since the Second World War, property values in Bingham doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.

Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin have made housing unaffordable for other people.  

It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating  us.  In the 2000’s, the British situation was different in two regards.  First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.
However, since 2010, the regional pattern has been completely different in the UK.  Compared with  2007 (the last property boom), average property values today in England and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher, whereas in Bingham they are 6.18 % lower. The London property market has been like a different country. 

The best measure of the affordability of housing is the ratio of Bingham Property Prices to Bingham Average Wages, (the higher the ratio, the less affordable properties are).  

·         1997       3.16 to 1   (i.e. the average value of a Bingham property was 3.16 times higher than the average annual wage in Bingham)
·         2000       3.58 to 1
·         2002       4.09 to 1
·         2003       4.86 to 1
·         2007       6.16 to 1
·         2009       5.37 to 1
·         2012       5.50 to 1
·         Today     6.14 to 1

You  can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in subsequent years with Bingham house prices rising but wages not keeping up with them, the ratio started to rise.  This has meant there has been a deterioration in affordability of property in Bingham over the last couple of years.  

This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house.  The local council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.

With fewer people able to save up the deposit required by mortgage lenders, more and more people are looking to rent; this has also resulted in a change in attitudes towards renting over the last decade.  This delay in moving up the property ladder has driven rents up in Bingham over the last few years, as more people are seeking properties to rent.  

All these things have combined to make the demand for rental property in Bingham rise.  If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not) to buy in Bingham, please feel free to pop into our office on the Market Place in Bingham or give me a call.

Friday, July 10, 2015

Bingham - Property Investment needing refurbishment

A great opportunity to add capital! Just come onto the market with Rex Gooding This property is for sale for £129,950. Looking at the pictures it requires updating inside but the rooms are large and with modernisation it could achieve £ 595.00 pcm

Thursday, July 9, 2015

Fewer people are moving house in Bingham

Talking to other agents and people involved in the property industry around Bingham every last one of them told me they didn’t see any change over April in business, compared to any other month on the lead up to the Election itself.

In a nutshell, the General Election in Bingham didn’t really have any impact on people’s confidence to buy property.  As I write this article, of 54 properties that have come on to the market in Bingham  since the 2nd of April, 18 of them have a buyer and are sold subject to contract, that’s one in three (33.33% to be precise).

I think that things are starting to change in the way people in Bingham (in fact the whole of the country as I talk to other agents around the UK) buy and sell property.  Back in the 1970’s, 80’s and 90’s, the norm was to buy a terraced house as soon as you left home and do it up.  Meanwhile, property prices had gone up, so you traded up to a 2 bed semi, then a 3 bed semi and repeated the process, until you found yourself in a large 4 bed detached house with a large mortgage. 

A by-product of less people moving is less people selling their property. My research shows there are a lot fewer properties each month selling in Bingham compared to the last decade.  For example, in February 2015, only 14 properties were sold in Bingham. Compare this to February 2002, and 17 properties sold and the same month in 2003, 22 properties.  

I repeated the exercise on different sets of years, (comparing the same month to allow for seasonal variations) and the results were identical if not greater.  So what does this all mean?  

Demand for Bingham property isn’t flying away, but with fewer properties for sale, it means property prices are proving reasonably stable too. Stable, consistent and steady growth of property values in Bingham, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late2000’s might just be the thing that the Bingham property market needs in the long term.

If you are considering investing in property please pop into see me at out office on the Market Place in Bingham or give me a call on 01949 714101.

Thursday, July 2, 2015

Bingham Buy To Let – Supply and Demand

Following on from my recent article about the state of the Bingham property market and in particular what had happened to the rents Bingham tenants have had to pay since the Credit Crunch, if you recall, I said rents in Bingham are still 4.86% lower than they were in 2008. 

A Bingham landlord has since rung me after reading the Bingham Property Blog, wanting to know more of the story of what was happening to current rents in the town. He was looking to increase the rent but keen to be fair to his tenants he needed to know hoe the current rental market was performing.

The Bingham rental market is all about supply and demand. On the supply side, 16 rental properties have come up for let in the last 31 days in Bingham. It sounds a lot until you consider there are 414 rental properties in Bingham, that means only 3.86% of the rental stock of properties in Bingham are coming onto the market each month (it is normally around 5%).  One reason for this lack of new rental properties coming on the market is the fact that tenants seem to be staying in properties longer.

With this lack of supply, newer tenants have to pay more to secure the property they want. And this is the crux of the matter they want. Older properties in Bingham, that haven’t been maintained, still retain their wood chip wallpaper from the 1970’s and thread bare carpets have seen their rents drop. 

Tenants want either modern properties with all the mod cons or older style properties that have been presented to an exceptional standard – and they are prepared to pay for the privilege. Rents for top quality properties in Bingham have risen by 0.4% in the last month. Any properties, old or modern, put on the market in good or excellent condition will rent in a matter of days.   

Interestingly, looking at Bingham property values, the Land Registry have just released their latest set of data on property values. Throughout April 2015 (the latest set of data), property values rose in Bingham, with 0.8% growth, meaning they are now 4.9% higher than they were a year ago.  When one looks at the regional picture, the East Midlands average property values rose by 1.4% in the last month. The difference doesn’t concern me, as the regional and local property values always even themselves out over the months. 

Looking forward, after considering all the statistics and talking to other property professionals, I expect property values in Bingham to rise by 3% to 5% over the coming 12 months, following the Conservative victory.  In a forthcoming article, I will discuss how the number of properties changing hands each month has dropped considerably in the last 10 to 15 years in the town. 

Each rental property must be assessed on its own merits so I am visiting the property with the landlord to see how it compares to other rental properties. For more in depth thoughts and opinions like this on the Bingham Property market give me a call on 01949 714101 or pop into our office on the Market Place in Bingham.