6.82 Babies born for each new home built in the Biggleswade area

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As more babies are being born to Biggleswade and Central Bedfordshire mothers, I believe this increase will continue to add pressure to the over stretched Biggleswade property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 6.82 babies were born for every new home that was built in the Central Bedfordshire Council area in 2016.  I believe this has and will continue to exacerbate the Biggleswade housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Biggleswade rents and Biggleswade property prices have remained resilient, even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Central Bedfordshire Council area had an average of 66.7 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region its 67.6 births per 1,000 women aged 15 to 44.

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The number of births from Biggleswade and Central Bedfordshire women between the ages of 20 to 29 are close to the national average, but those between 35 and 44 were much higher.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Biggleswade area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles), and the higher predominance of single person households … this can only mean one thing … a huge increase in the need for housing in Biggleswade.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Biggleswade people.

The planners and politicians of our local authority, central government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) … demand for property is simply outstripping supply.

The simple fact is more Biggleswade properties need to be built, be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of Old Warden Park or Stod Fold Water Mill, but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Biggleswade, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

 

992,082 People use Biggleswade Train Station a year…..

Biggleswade station

How does that affect the Biggleswade Property Market?

It might surprise you that it isn’t always the poshest villages around Biggleswade or the swankiest Biggleswade streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Biggleswade, I am frequently confronted with queries about the Biggleswade property market, and most days I am asked, “What is the best part of Biggleswade and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person – a lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that, in total, 1,359 people jump on a train each and every day from Biggleswade Train station. Of those, 598 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £5,656 a year.

So, if up to £3.38m is being spent on rail season tickets each year from Biggleswade, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Biggleswade and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Biggleswade buy to let market – providing homes for the tenants of Biggleswade…

The bottom line is that property values in Biggleswade would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it serves in the town

This isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.

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Overall usage of the station at Biggleswade has increased over the last 20 years. In 1997, a total of 408,877 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 992,082 people using the station (that’s 2,718 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Biggleswade property. It is also significant for tenants – so if you are a Biggleswade buy to let investor looking for a property – the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website.

For more thoughts on the Biggleswade Property market or for any advice please pop into our office for a cup of tea, or give us a call on 01462 894565.

 

What will the General Election do to 7,034 Biggleswade Homeowners?

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In Biggleswade, of the 10,005 households, 3,131 homes are owned without a mortgage and 3,903 homes are owned by a mortgage.  Many homeowners have made contact me with asking what the General Election will do the Biggleswade property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections:

168 Graph One

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

I then wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line):

168 Graph Two

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

So finally, what does this mean for the landlords of the 1,330 private rented properties in Biggleswade? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Biggleswade will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Biggleswade, making it imperative that Biggleswade landlords are realistic with their market rents. However, in the long term, as the younger generation still choose to rent rather than buy the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet. If you want to find out more about the Biggleswade property market or need some advice please pop into the office, call us on 01767 313488 or e-mail us at: lettings@satchells.co.uk.

Biggleswade rents to rise quicker than Biggleswade property prices in the next 5 years

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The next five years will see an interesting change in the Biggleswade property market. My recent research has concluded that the rent private tenants pay in Biggleswade will rise faster than Biggleswade property prices over the next five years, creating further issues to Biggleswade’s growing multitude of renters. In fact, my examination of statistics forecasts that ……

 By 2022, Biggleswade rents will increase by 24%, whereas Biggleswade property values will only grow by 19%.

Biggleswade 160 graph

Let me explain why I have come to those conclusions:

Over the last five years, property values in Biggleswade have risen by 39.3%, whilst rents have only risen by 15.2%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Biggleswade tenants will have fewer properties to choose from, which will push rents higher. In fact, talking to fellow property professionals in Biggleswade, there appears to be privation and shortage of new rental properties coming on to the Biggleswade lettings market.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tories have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector. They cannot expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. They did not invest in buy to let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords … if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most of the Council houses were sold off in the 1980’s!).

With the challenges ahead, with the ‘B’ word (that’s budget if you wondered!), house price inflation will be tempered over the coming five years in Biggleswade. As I have discussed in previous articles, the number of properties on the market in Biggleswade remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why I believe property values in Biggleswade will only be 19% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Biggleswade people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Biggleswade rental property currently standing at £896 per month …

Over the next five years, I predict the average rent in

Biggleswade will rise to £1,100 per month

These are interesting times. There is still money to be made in buy to let in Biggleswade – Biggleswade landlords will just need to be smarter and more savvy with their investments. If you are looking for such advice and opinion to help you meet those investment goals, please contact us on 01462 894565 or e-mail: lettings@satchells.co.uk.

‘Flipping’ Heck – Biggleswade Property Values Rise by £44.31 a day

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Investing in Biggleswade buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Biggleswade’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’.

Capital growth, also known as capital appreciation, has been strong in recent times in Biggleswade, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.

Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Biggleswade property has risen by £80,860 (equivalent to £44.31 a day), taking it to a current average value of £310,838. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …..

One Biggleswade investor paid £240,000 for a two bedroom bungalow on Dells Lane in September 2014.

Click here to see the property advert

Some shots of the property before the work was completed:

It appears some cosmetic and re-modelling work was done to the property and it was resold a few months ago (December 2016) for £395,000 56.25% return before costs (or compound annual return equivalent of 22.04% AER

Some shots of the property after the work was completed:

Click here to see the property advert 

As my article mentioned a few weeks ago, more and more Biggleswade people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Biggleswade, then one place for such information would be the Biggleswade Property Blog.

Biggleswade’s ‘Generation Trapped’ and the £1.08bn legacy

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Last week, I wrote an article on the plight of the Biggleswade 20 something’s often referred to by the press as ‘Generation Rent’. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Biggleswade homeowners and Biggleswade landlords alike, is our mature members of the population of Biggleswade.  Currently OAP’s (65+ yrs in age) in Biggleswade are sitting on £605.5m of residential property.  However, what about the ‘Baby Boomers’, the 50yr to 64yr old Biggleswade people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger generation renters.

In Biggleswade, there are 775 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off.  That property is worth, in today’s prices, £240.8m. There are an additional 497 mortgage free Biggleswade households, owned by 50yr to 64yr olds, worth £154.5m in today’s prices, meaning…

Biggleswade 156 graph

Biggleswade Baby Boomers and Biggleswade OAP’s are sitting

on £1.08bn worth of Biggleswade Property

These Biggleswade Baby Boomers and OAP’s are sitting on 3,220 Biggleswade properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Biggleswade (and the Country) homeowners to downsize at the right time will also enable younger Biggleswade people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Biggleswade and the Planning Dept. should play their part, as should landlords and property investors to ensure Biggleswade’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities.

‘Generation Rent (Forever)’ – 1,091 Biggleswade Tenants have no intention of ever buying a property to call home

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The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Biggleswade (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Biggleswade property ladder.

However, I would say there has been something else at play other than the issue of raising a deposit – having sufficient income and rising property prices in Biggleswade. Whilst these are important factors and barriers to home ownership, I also believe there has been a generational change in attitudes towards home ownership in Biggleswade (and in fact the rest of the country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Biggleswade population choose to be tenants as it better suits their plans and lifestyle. Local Government in Biggleswade (including the planners – especially the planners), land owners and landlords need an adaptable Biggleswade residential property sector that allows the diverse choices of these Biggleswade 20 and 30 year old’s to be met.

This means, if we applied the same percentages to the current 2,805 Biggleswade tenants in their 1,330 private rental properties, 1,077 tenants have no plans to ever buy a property – good news for the landlords of those 511 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

Does that mean the other third will be buying in Biggleswade in the next 12 months?

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Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.

The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Biggleswade, we will in fact need an additional 384 private rental properties over the next eight years (or 48 a year) … meaning the number of private rented properties in Biggleswade is projected to rise to an eye watering 1,355 households.

With 2,843 people in Private Rented Properties in Biggleswade- Should you still be investing in BiggleswadeBuy To Let?

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If I were a buy to let landlord in Biggleswade today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Biggleswade property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Biggleswade property prices do drop, the downside to that is that first time buyers could be attracted back into the Biggleswade property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Biggleswade landlord, almost a blessing in disguise.

Biggleswade has a population of 23,981, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

153 Table Biggleswade

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Yields will rise if Biggleswade property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Biggleswade landlords add to their portfolio. Rental demand in Biggleswade is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Biggleswade landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

At a recent family get together I got chatting with my wife’s nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Biggleswade and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 40 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 11.9% of Biggleswade people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Biggleswade– because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

 

120 Properties For Sale in Biggleswade … is this a good time to sell?

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2017 has started with some positive interest in the Biggleswade property market.  Taking a snap shot of the Biggleswade property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Biggleswade 159 table

When we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 120 properties for sale today compared with 102 a year ago, a rise of 26%.

 Secondly, Biggleswade asking prices, compared to the same as a year ago, are 2% higher.

With that in mind, I wanted to look at what property was actually selling for in Biggleswade. Taking my information from the Land Registry, the last available six months property transactions for SG18 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

Biggleswade 159 table2

So what does all this mean for the property owning folk of Biggleswade?

Biggleswade 159 graph

Well, with more property on the market than a year ago and asking prices 2% higher, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Biggleswade property ladder, have much more price information about the Biggleswade property market at their fingertips than ever before.

Those Biggleswade people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Biggleswade estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Biggleswade property-market has an unassailable demand for property – there is one saying that always rings true – as long as the property is being marketed at the right price it will sell.

 If you want to know if your Biggleswade property is being marketed at the right price, send me a web link and I will give you my honest opinion.

Biggleswade property of the day – modern apartment on Kings Reach!

Take a look at our video about a great investment opportunity in Biggleswade.  Thomas Morris are selling this “almost new” apartment for £210,000 and must be worth consideration – act quickly, call Thomas Morris now!  You can see their rightmove advert here