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

Does cheap mean a quality service? - Not in my book.

Recently I've done some valuations that I thought were in the bag due to the level of service we provide as well as the professional photographs we take.  When it came to the crunch the client decided to go for an agent that takes it's own photographs (crooked and grainy), doesn't do a proper floor plan (if at all) and also doesn't do accompanied viewings (at any time). 

Don't forget that your property is probably the single biggest asset you will sell and as such you want to show it off in the best light possible which should include professional photographs, a floor plan (including the garden and any parking), excellent web presence and accompanied viewings by the agent.

Personally I would be happy to pay a slightly higher fee if it meant that my property got shown off to its best potential and which would ultimately mean I achieve a better price than a cheaper agent might get me.  Most people selling a property think that all agents are the same and that no matter who they give the property to they will get the same price but that is simply not true.  Recently we have achieved some fantastic prices (most at asking price or over) due to how we present the property to the public and most of the 'open houses' we have done have been well over subscribed.

My advice to anyone selling a property is to not under sell yourself or your property for the sake of a cheap fee as the agent providing a better quality of service will easily make that difference back for you and in many cases more!

Rents Paid By Tenants In Leigh on sea On The Rise

With Easter just gone and considering we are a quarter of the way through 2015, I was talking to landlord from Southend the other day about what is happening to the level of rents that are being achieved in the Leigh on sea property market.

In terms of rents in Leigh on sea, it appears that rents being achieved for new rentals (ie when the tenant moves out and new tenant moves in) have risen in the order of 3.8% in the last 12 months on top of the range modern properties, yet remained static for older Victorian terraced houses and converted apartments. However, landlords with existing sitting tenants, irrespective of age are not increasing their rents, as most landlords prefer to keep their existing tenant paying the same rent and have the peace of mind that their tenant remains, paying the rent (thus reducing the risk of a void period).

It must be remembered rents dropped by 2% over 2008/9, due to oversupply in the rental market in 2009.) A lot of the people who couldn’t sell their property in Leigh on sea in 2008/9 when the Credit Crunch hit in 2008, decided to let their house out instead of selling at a loss. In fact, the number of houses on the market in Leigh on sea dropped by 62.6% between October 2008 and March 2010, a lot of which came on to the rental market in Leigh on sea. However, looking at the longer term though, tenants have had it good  because since the turn of the Millennium, average wages have grown by 46%, but rents outside London have only grown by 36% rental growth over this period

I told the landlord that there is a lack of new rental properties in Leigh on sea coming on the market, in fact according to the Office of National Statistics, there are only 37 new rental properties are coming to the market each month in Leigh on sea but the population of Leigh on sea is rising by 91 people a month – something will have to give soon! This is compounded by the fact a number of landlords are looking to sell their rental properties in the coming months, as the property market in Leigh on sea has improved. This further compounded as tenants in existing rental properties appear to be staying in properties for longer periods of time.

Looking at the rents charged in Leigh on sea, historic evidence in the UK suggests private market rents have moved in line with general inflation. Government figures only go back as far as the year 2000, but looking at other countries with similar housing markets (America, Australia, Ireland and Holland) the fact is rents paid by tenants tend to rise in line or just ahead of inflation.

As short term wage growth in Leigh on sea has eased off recently, rising by only 1.3% in the last 12 months, taking average salaries in Leigh on sea to £38,338pa, with the tax breaks announced by The Chancellor in the Budget, I believe, even though rents have kept pace with inflation in the past, renting as an option has become more affordable, and is increasingly seen as a lifestyle choice. With returning economic growth and expected increases in the rate of growth of wages, above inflation rental growth could rise.

WHAT WILL GENERAL ELECTION RESULT DO TO THE LEIGH PROPERTY MARKET?

After the shock of the Conservatives returning to power with a majority at Westminster, all the potential issues and possible uncertainties of a hung parliament has lifted the cloud from the Leigh property market. Talking to other Leigh agents, surveyors and solicitors in the area over the last few days, there are signs this has started a new impetus in the Leigh property market after a subdued six months, when an amalgamation of tougher lending conditions, a natural correction after the strong recovery in Leigh property prices in 2014, and political uncertainty ahead of the General Election slowed demand.
Against the back drop of Labour’s election promises of rent controls and three year tenancies, some Leigh buy to let landlords were waiting to see how these new policies would be implemented before they committed themselves to buying more property for their buy to let portfolio. Now that uncertainty has been removed, the long term picture is very positive.
So, with all that uncertainty now removed, where next for the Leigh property market? Well with inflation at zero and with the Money markets happy David Cameron is still at No.10, the Bank of England have no reason to raise interest rates until 2016 at the earliest. As mortgage rates are at their lowest levels since 2010, landlords with large deposits will now be wooed by the mortgage companies in the coming months with low rates.
You see over the past couple of years, Leigh landlords have benefited from a booming Leigh job market. Unemployment in Leigh area has dropped to 1.9%, as a year ago, 1,303 people were claiming unemployment benefit in the Leigh and Southend Parliamentary Constituency compared to today’s 912. With more jobs and better pay, as the level of rents is directly linked to tenant’s wages, there has been an increase in the rental prices tenants are willing to pay for good quality Leigh properties.
Some landlords might be nervous about Tory’s plans for the housing market over the next five years in terms of tenant demand for their rental properties. One plan is for Housing Association tenants to have the right to buy their property. These kind of tenants were never in the private rented sector and will actually increase the supply of properties in the housing stock in decades to come. The Government ‘Help to Buy Scheme’ has only helped to buy 259 Leigh (and Southend) properties since April 2013. Considering 1,057 properties have changed hands in the last year alone in Leigh (and Southend) , I don’t think it has made a huge difference to our local property market.
The biggest matter, when it comes to tenant demand of rental property going forward, comes from the shift in the mindset and attitudes towards renting itself. Twenty years ago you were seen as a second class citizen if you rented a property. Nowadays it is considered the norm. In Leigh, as in the rest of the UK (apart from Central London), renting continues to offer good value for money for tenants and therefore will continue to grow in this decade .. meaning everyone is a winner
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For more news and views on the Leigh property market .. visit the Leigh Property Blog .. www.leighpropertyblog.com

SS9 (Leigh-On-Sea) area guide

 

Postcode district:SS9

Postcode district name: Leigh-On-Sea

Location:The SS9 postcode district lies within or includes part of the following towns, counties, localities, electoral wards and stations: Belfairs, Blenheim Park, Chalkwell, Eastwood, Eastwood Park, Essex, Leigh, Leigh-On-Sea, Lodge, Rochford, Southend-On-Sea, St James, St Laurence, Victoria, West Leigh.

History:Leigh-on-Sea was, for most of the middle ages, a small fishing village. It was not until the 16th century that the town became a large and prosperous port. Leigh was often used by the navy to protect the Thames from the French, Spanish, and Dutch Navies. With the change of shipping lanes and the port silting up, the town once again became fishing village.

Present day:Today there are about 20,000 people living in the town. Leigh has a very popular beach since it is located a short distance from London. The town is also well known for shell fish.

The average property value for postcode SS9 is around £240,300. One of the most expensive streets to live on is Forest View Drive which has an average value of £755,900. One of the less expensive streets is Mansell Close with an average value of £84,500.

Amenities:There is a selection of pubs on London Road such as The Elms, The Harry, and Retro. Belfairs Swimming Centre is located on Eaton Road. There are many traditional English Restaurants on Broadway West including Popular Café, Avalons, and Terracotta Leigh On Sea. The area of old Leigh has a variety of craft shops, pubs, wharfs, and cockle sheds that stretch along the shore line and high street.

How Can You Find a Good Property Deal in Leigh on sea?

The subject of a lack of Leigh property bargains over the last couple of years has always been near the top of most local landlord’s thoughts.  I have built up and extensive database of every property sale in Leigh on sea since the late 1990’s so am able to give an objective and unbiased opinion on what (and more importantly what does not) make a good property deal/buy to let investment. 

Knowing what is happening and what has happened to the property market in the towns or comparing them with neighbouring towns and cities such as Southend, Benfleet or Hadleigh, enables me to spot any trends or opportunities for local buy to let landlords. 

One bargain I spotted last year was a three bedroom semi-detached house on London road in leigh on sea. It came onto the market in July 2012 and eventually was reduced to £229,995 selling in the summer of 2013 for £220,000.  A matter of a few months later the property came back onto the market for £245,000.  Comparing the before and after photographs in classic “Homes Under the Hammer” style, and all the owner appeared to have done was replace some carpets, redecorated with emulsion, bought a few hundred pounds worth of tiles and new worktops for the kitchen.  It sold almost straightaway for the asking price of £245,000 which is a rise of 11% in around 18 months.  Even more interesting when you consider that, during the same time period, property values in this area only rose by 4.5%.

Nowadays, I post my “deals” on the Leigh Property Blog so everyone has a chance to spot any Leigh on sea buy to let bargains.  As I don’t sell houses I can give an objective and unbiased opinion on what does or does not make a good investment and I look forward to posting deals on a regular basis on the blog for consideration. 

Whether you are a landlord of ours or not, or someone of investing in the rental market for the first time, please drop by our offices of for any advice or opinion