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…

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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.

Great town centre property in Biggleswade – rental yield of around 5.7%

This property has gone onto the market with Wilson Peacock in Biggleswade.  Its in a good town centre location and the asking price £105,000, means a potential rental yield of around 5.7%!  View ASAP before it goes.  Take a look at the advert here

Fantastic luxury apartment in converted country house in Broom

Taylors in Biggleswade are marketing this luxury two bedroom apartment in a superb country house in fantastic grounds.  At £210,000 this does seem like a great opportunity to secure a rental property to provide an immediate and good return of around 5%.  Don’t delay  – take a look at the advert here and contact Taylors ASAP!

 

Biggleswade property of the day…..

Taylors in Biggleswade have just brought this two bedroom house to the market for £220,000 in the centre of town, round the corner from the mainline station.  Take a look at our video and Taylors advert and call them quick – likely to go soon!

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 

26% OF BIGGLESWADE HOMES ARE ONE PERSON HOUSEHOLDS

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I was having an interesting chat with a Biggleswade buy to let landlord the other day when the subject of size of households came up.  Looking at the statistics going back to the early 1960’s, when the average number of people in a home was exactly 3, it has over the years steadily dropped by a fifth to today’s figure of 2.4 people per household.  This doesn’t sound a lot, but if the population remained the same level for the next 50 years and then we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties (or 105,769 per year)….When you consider the country is only building 139,800 properties a year… it doesn’t leave much for people living longer and immigration.  Looking closer to home…….

In the Central Bedfordshire Council area, the average number of occupants per household is 2.3 people.

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting), a fascinating picture appears.  The vast majority of homeowners who do not have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone.  People living on their own are more likely to live in a council house (43%) and the largest households (those with four or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy.

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When we look at the Biggleswade figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears…

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It gets even more interesting when we focus on just private rental properties in Biggleswade, as it is the rental market in Biggleswade that really fascinates me.  When I analysed the Biggleswade private rental household composition figures, a slightly different picture appears.  Of the 1,417 private rental properties in Biggleswade:

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As you can see, Biggleswade is not too dissimilar from the national picture but there is a story to tell.  If you are considering future buy to let purchases in the coming twelve to eighteen months, I would seriously consider looking at two bedroom apartments/houses.  Even with the numbers stated, there are simply not enough two bedroom apartments/houses to meet the demand.

If the property is located in the right part of Biggleswade and priced realistically, they will always let and when you come to sell, irrespective of market conditions at the time, they will always be the target of buyers.