What type of property in Southend sells the best?

 

Knowing how saleable a property is half the battle when deciding what (or not) to buy for your next property investment. Why? 

 Well because one day, you may need to sell that property. If you go into the purchase with open eyes, you know most of the risks and can barter the price accordingly if you have to. Bearing this in mind, last week, a couple from Brentwood popped into our offices to ask about investing in property. Their concern was if we have another property slump (and we will because that is what has happened to the British property market ever since the 1950’s), if they did need to sell, what type of property would be easier to sell. 

Now everything sells, even during a slump, but I did some research and followed up their query – I was actually quite surprised with the results.

A good guide to judge the saleability of property is the number of properties for sale, compared to the numbers that are sold, subject to contract. Now I carried out this comparison last week, 

so the numbers will be marginally different today, but of the 84,183 households in Southend there are 1,660 properties on the market for sale. Of those 1,660 properties, 647 properties are fully available on the open market waiting for a buyer and 1013 have buyers and are sold subject to contract. That means 31% of property on the market has a buyer in Southend (interestingly in Westcliff 55% of properties on the market have a buyer and in Southend 57%).

However, delve deeper, and in Southend today, 58% of detached houses on the market have a buyer and great news for semi-detached property owners, as 69% of them have buyers.  Terraced houses fair even better, with 247 of the 340 on the market now have buyers (making 72%). The properties that appear to be sticking though are apartments at a comparatively lower 55% and bungalows at 57%. 

I am always giving advice to my existing and new landlords in Southend on what to buy (or not as the case may be).  Having this detail of information at my fingertips, allows me to spot trends in the local market, which then enables to me to give the very best advice to my clients. I don't charge for that advice as I have plenty of opportunity to earn money by finding the best tenants for my landlords in the years to come on the investments I have advised on. 

Just who are Westcliff on sea Tenants?

 

Speaking to a Bank Manager the other day in Westcliff, we got talking about the state of the Southend  property market and whether we, as a Country, are turning more and more to the European style of property ownership, where it is the norm to rent as a opposed to automatically buying once you have a job etc.

Even though a recent report by the Halifax stated homeownership remains a goal for 85% of twenty to forty five year olds, there is information emerging that attitudes in the UK towards renting your own home as opposed to owning it have softened, showing more and more, that renting is being seen as a life style choice. In fact it is recognised in learned circles that the cycle of renting is also repeated by the fact that people who grow up primarily in rented accommodation are themselves more likely to rent than buy.

Many people think that the UK should lose its fixation with homeownership and that people would be happier as a result. If this pattern were to continue, then this would suggest that the people entering the housing market are less likely to want to own a home, and are more likely to remain  ‘Renters for Life’, irrespective of changing market conditions, leading to a longer term shift in the home ownership make-up of the country.

The biggest barrier often mentioned to buying a house is the claim that they are not buying property at the moment because of a lack of sufficient wages and by the high level of deposits but like we said a few weeks ago, in Southend on sea, a single person on the average Southend  salary of £25,487p.a., assuming they had a ‘reasonable’ credit history, they would be showered with lenders offering them a 95% mortgage - a ‘reasonable’ credit history means no loan defaults, and no County Court Judgements. Just because you missed just one credit card payment won’t mean you have messed up your credit score and your ability to get a mortgage - and they would only need to find £9,500 as a deposit to buy a decent two bed semi-detached house in Westcliff on sea. It comes down to the perceived capability of the youngsters in Southend to buy nowadays.

Interestingly, when I looked at the Westcliff  figures, the average Southend  tenant has an older profile than the England and Welsh average, I know we have a large number of mature tenants at our agency, but I always thought that was the exception to the rule. Obviously not! - Good news for landlords as they make excellent tenants!

So what does all this mean for Southend landlords and future local landlords? I honestly believe there is a difference between the hope and perceived capability of the younger generation to buy a home. Although homeownership is seen as advantageous by a majority, many tenants admitted in the Halifax report they are not taking the steps they need to purchase their own home.

As the local authority aren’t building any properties in Southend, people still need to live somewhere, and that is why, as I mentioned a few weeks ago in the Leigh Property Blog, the demand for rental properties will only continue to steadily rise in the coming decade.

If want to know where the Southend Property market is heading and where you should or shouldn’t buy, maybe the one place you should visit is the Leigh Property Blog or you can call into our office on the London road for a chat.

Leigh on sea Property Market – What is really happening?

I had an interesting conversation with a local Leigh accountant the other day. He is quite an observant chap (I know this because I have known him for a few years .. but I suppose you have to be, to be an accountant!). Anyway, he mentioned a few things he had noticed recently in Leigh, one that Leigh property prices had gone up in the last few years but nowhere near the growth levels that were being achieved in central London, and secondly, that he thought the number of for sale boards in Leigh (and more importantly ones with sold slips on them) had increased over the last couple of years.

The rate of house price inflation in Leigh continues to slow with growth of 10.4% in the 12 months to February compared to 11% just under six months ago, according to the latest Land Registry data. However, there is considerable local variation with house price growth ranging from 7.7% in just over the last 12 months.

Whilst Leigh hasn't seen the +20% per year in house price growth of London over the last couple of years,  Canterbury has seen  a sharp uplift in the number of properties sold throughout  2014 as base line demand for housing grows, which suggests there is substance to the recent pick-up in house price growth in the City. Since the Second World War in the UK, when the number of properties sold has grown, property values grew soon after. The 16.9% uplift in property transactions in Leigh in 2014, compared to 2013, indicates the most significant recovery in house market activity in Leigh (outside London) since 2007.

When you compare Leigh with London, you could be looking at two different area's, In London, its mid / late teens house price to earnings ratios are impacting demand (i.e. the average property value is often 15 or 17 times the average wage in London .. in fact in Knightsbridge the ratio can be 30 to 1).  However, the number of people wanting to sell has dropped considerably, meaning that falling sales volumes combined with a general slowdown in activity in the run up to the General Election are resulting in lower mortgage approvals for home purchase.

Transactions are a great indicator for house prices. The acceleration in house price growth in London in the last two years was preceded by three years of rising transactions. A similar pattern is being registered in the Leigh area, as pent up demand returns to the market supported by low mortgage rates and an improving economic outlook.

But before you get the champagne out, while the uplift in activity is welcome news, the number of Leigh property sales in 2014 are still 23.1% lower than the level seen in 2007 and property values are 3.2% above the 2007 levels. The ongoing housing recovery is far from broad based and remains focused on middle to higher value areas within Canterbury where households have equity and find it easier to access mortgage finance. If you want to know more about the Leigh Property Market please visit the Property Blog www.leighpropertyblog.com or send me an email to property@penneckestates.com