Torbay Property News

News and views of property in English Riviera

Torbay Buy-To-Let Predictions up to 2037

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On several occasions over the last few months, in my Torbay Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time I felt that in some parts of the UK rents had actually dropped for the first time in over eight years. Recent research backs up this prediction.

Rents in Torbay for new tenancies only grew by 1.8% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in Torbay, an interesting pattern emerges ..

  • 2016 – Rental Inflation in Torbay was 3.2%
  • 2015 – Rental Inflation in Torbay was 13.6%
  • 2014 – Rental Inflation in Torbay was 6.6%

The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).

On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of Torbay property prices has compounded this. Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.

The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.

Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations) the simple fact is, we aren’t building enough properties for us to live in. Both in Torbay, the South West and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again.

Look at the projections by the Office of National Statistics.

Population Estimates for Torbay Council over the next 20 years

Population Estimates for Torbay Council Over the Next 20 Years

2016 (actual)2021202620312036
133,929137,051140,488143,772146,819

 

Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Torbay, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants. Simply put rents must go up!

The fact is that I see this as a short-term blip and rents will continue to grow in the coming years. With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.

What should you ask when buying a Torbay property?

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Going through the process of buying a house for the first time (or let’s face it – anytime ) can be very exciting but also more than a little daunting.

If you have the correct facts, or can ask the right questions, it will stand you in good stead and help you to make an informed decision. It may also give you the information that you need to negotiate on the price as well as making you feel more confident in a process that you are unsure of.

Harrison Murray Estate Agency and the Nottingham Estate Agency have some advice and tips surrounding issues buyers need guidance on, may have never thought of, or even dared to ask in the first place. These are examples of sound advice and apply to purchasing in any part of the UK, including Torbay.

What is the position of the sellers? It is vital to know if the sellers are serious or toe-dippers. If they are in a hurry to sell then it may be easier to negotiate with them.

1 What is included in the sale?

Through your agent, try to ensure the sellers have an inventory that sets out their intentions surrounding fixtures and fittings – from curtain poles and carpets to garden ornaments.

2 Does the Torbay property have its own private drainage, and who will be responsible in the event of environmental damage or spillage onto private land?

3 Is the house listed and/or does it stand in a conservation area? This is important to know if you are planning an extension or even want to paint the outside of the property a particular colour in the future.

4 Which way does the house face? It may seem trivial but if you like early morning and evening sun, an east/west facing house might suit – but a south facing garden may appeal more to those with green fingers.

5 What is your legal right of way? Check to see if the house has a shared driveway and what the implications are, as well as where the boundaries of the property lie.

6 What are the neighbours like? Visit the property at different times of the day to try and monitor what’s happening at nearby houses – barking dogs,  trampolines or hot tubs in the back garden could signal noise.

7 What is the minimum a seller will accept and what offers have they had so far?
You maybe in a better position to buy – especially as a first time buyer – so they may consider a lower offer if it means the sale will go through quicker!

8 When do the sellers have to move out? Have they found another home? This information will help you plan the timings of your move or discount the property if the move will take far longer than you hoped.

It may also be worth finding out if any decorating has taken place recently and if so why? Most people will re-paint a room to freshen it up, but others may do so to hide cracks or cover damp.

It is best to ask the right questions in the beginning rather than find out that your dream home turns into a complete nightmare or a money pit! Being aware of any potential problems gives you the opportunity to prepare for any ‘hidden’ costs or safeguard your purchase at the point of sale – not finding out about them when it is too late.

Finally – happy house hunting and best of luck with your future purchase!

 

 

 

Adapted from original article: http://www.propertyreporter.co.uk/property/what-should-you-ask-when-buying-a-property.html

62.1 miles – The average distance people go to escape living in Torbay

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“How far do Torbay people go to move to a new house?” This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Torbay Property Market!

For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!

Using statistics for the 12 months up to the middle of Autumn 2016, 450 households moved out of Torquay (TQ1), moving an average distance of 62.11 miles – the equivalent of moving from Torquay to Padstow (as the crow flies). The greatest distance travelled was 494 miles – that’s the same as 19 marathons (when someone moved to Kinloss in Scotland).

Considering there were 603 property sales in TQ1 in the year and countless tenant moves, the numbers seems consistent – once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbour-hood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.

I then turned my attention to people moving into Torbay. Using the same statistics for the 12 months up to the middle of Autumn 2016, 509 households moved into Torquay (TQ1), moving an average distance of 73.44 miles – the equivalent of moving from Bournemouth to Torquay (again as the crow flies). The greatest distance travelled was 375 miles – that’s more than 14 marathons (when someone moved from Glasgow to Torquay).

I have looked at the data of every person moving into Torbay and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Torbay. As you can see, there are a high proportion of people moving from London and the East.

So, what does all this mean for the landlords and homeowners of Torbay?

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”. I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily. Many say knowledge is power and whilst I do enjoy writing my blog on the Torbay property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.

Buy To Let Property of The Week | Leys Road, Torquay

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** NOW SOLD STC (To an investor!) **

Property: Leys Road, Chelston, Torquay
Property Type: 3 bedroom, terrace
Price: £170,000
Estimated Rental Income: £800/pcm
Agent: Absolute Sales and Lettings

20 things that will help you sell your Torbay home in 2017

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A home buyers wishlist has been revealed. If you’re planning on selling your Torbay home this year, then this list will give you a good idea as to what buyers are looking for in 2017.

Though be honest I think that most people looking to rent a property are looking for most of these t00! A friend of mine recently contacted me about rental properties and interestingly their requirements contained many of the same features as those on the buyer’s list!

The latest study, first reported by Mirror.co.uk,  certainly throws up a few surprises for example it shows that building a conservatory could actually hurt your chances – and good broadband is now more than three times as important as good schools, while period features no longer have Brits clamouring to buy. 

“We found that many potential buyers are prioritising efficiency, security and connectivity over aesthetic features,” said Matt Sanders from, Gocompare.com home insurance, who carried out the research.

“This suggests that modern buyers are buying with their heads rather than their hearts and that investing in things like a new boiler, additional electrical sockets or modernising your home’s insulation could be a smarter investment than traditional selling points such as period features or conservatories.”

The research also found that past trends – including open-plan kitchens and living areas and period features – are no longer in our top 20 ‘must-have’ features.

“It is surprising to see previous must-haves such as good schools and conservatories fail to make the top 20,” Saunders said.

“However, our research shows that buyers are becoming more financially savvy and are willing to make compromises on the finer details of a property to keep costs down and avoid expensive work in the future.”

The top 20 property must-haves for 2017

  1. Central heating – 69% of buyers
  2. Double glazing – 68% of buyers
  3. A garden – 65% of buyers
  4. Secure doors and windows – 61% of buyers
  5. Driveway or dedicated parking space – 54% of buyers
  6. Plenty of electrical sockets – 54% of buyers
  7. Local shops and amenities – 50% of buyers
  8. A good, reliable broadband connection strong enough to stream TV and films – 49% of buyers
  9. Friendly neighbours – 47% of buyers
  10. At least 2 toilets- 46% of buyers
  11. A bath – 46% of buyers
  12. A good energy efficiency rating – 46% of buyers
  13. A new boiler/central heating system – 45% of buyers
  14. A reliable, clear mobile phone signal – 44% of buyers
  15. A shower cubicle – 40% of buyers
  16. A garage – 39% of buyers
  17. Cavity wall insulation – 38% of buyers
  18. A land line telephone – 38% of buyers
  19. A living room big enough for a large, flat screen television – 37% of buyers
  20. A dining room – 35% of buyers

(First reported by: Mirror Online)

About this blog

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This blog follows the buy-to-let market in Torbay. You’ll find tips, guidance, and analysis that relates specifically to Torbay and you’ll also find properties from all the estate agents in the town on here that may make decent investments. I operate Ridgewater Residential Lettings in Torbay and if you’re thinking of buying a property to let in Torbay, I’m happy to offer a second opinion.

How to get the Torbay property you want… (Before someone else does!)

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We know it’s tough at the moment with more and more people looking to rent, and less and less properties coming onto the rental market. If you’re looking to rent a property then you need to know how to get the one you want before anyone else does so here at Torbay Property News we’ve come up with our Top Ten Tips on how to get THAT property!

How many times have you rung an agent after seeing your ideal home in the paper only to be told: “Sorry, that one was taken yesterday”. Gone yesterday? The paper only came out half an hour ago!

The secret is…

Don’t wait for the paper, get ahead of the game! Here’s how:

Rule 1. Find an agent that’s on facebook or twitter – these agents often put properties on facebook and tweet about them first, sometimes just to say a property MAY be coming up in a few days time – We do! This can give you a days head start on all the other people looking for the perfect property.

Rule 2. Get on an agents HOT LIST – good agents will want to take your details and may well have a small list of serious people that are desperate to move…YOU NEED TO BE ON THAT LIST!

Rule 3. Befriend your agent – we all want to help someone we know so ring regularly, pop into their office just to say “Hi, I’m still looking”… Low and Behold – if anything comes up they’ll think of you first! (P.S. we love cakes and coffee from the Coffee House across the road!)

Rule 4. Get on the internet: http://www.rightmove.co.uk   is the best but other great ones are www.radarhomes.co.uk , www.zoopla.co.uk and www.primelocation.com . These sites let you save a search so any new properties that are added will come straight to your email!

Rule 5. If you see a property you like on a website, DON’T just send an email to the agent – DO ring them! It’s not unusual for agents to get 20 to 30 emails a day about properties on the internet and you could be at the back of a very long queue! Get on the phone first thing and jump ahead of all the ‘emailers’!

Rule 6. Be prepared. If you find something you like and go for a viewing, take some cash with you – if it’s the property for you, show you’re serious and put down a deposit there and then, before the next person does!

Rule 7. Are you the ‘perfect tenant’? Let the agent know who you are, where you work, how long you’ve been there, where you live at the moment, how much your current landlord will miss you!  If you know you don’t have the best credit history in the world – get a guarantor arranged (this is someone that will guarantee the rent to the agent if you don’t pay!) It’s usually a relative so be nice to mum and dad, take them out for Sunday lunch and drop it into conversation!

Rule 8. If you email an agent or leave a message  – Make sure you leave the right number!! It might sound obvious but you wouldn’t believe the number of mobile numbers we get… with a digit missing!!

Rule 9. If you see a property you like – ring the right agent! All the time we hear “I’ve just seen one of your properties on Park Street on Zoopla”. Our reply: “Really sorry but we don’t have a property on Park street!!”.

Remember: There’s more than ONE agent on property search websites!

Rule 10 – Don’t wait for the paper, it’s out of date before it goes to print!

Slowing Torquay Property Market? Yes and No!

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My thoughts to the landlords and homeowners of Torquay…

The tightrope of being a Torquay buy-to-let landlord is a balancing act many do well at. Talking to several Torquay landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Torquay landlords as average Torquay rents have been on a downward trend recently. So look at the figures here…

Rents in Torquay on average for new tenants moving in have risen 2.9% for the month, taking overall annual Torquay rents 2.4% higher for the year

However, several Torquay landlords have expressed their apprehensions about a slowing of the housing market in Torquay. I think this negativity may be exaggerated.

Before we get the Champagne out, the other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Torquay as well as the Torquay buy-to-let landlords).  I believe the Torquay property market has been trying to find some level of equilibrium since the New Year.  According to the Land Registry…

Property Values in Torquay are 1.17% higher than they were 12 months ago, even with a drop of 1.21% last month

Yet, I would take those figures with a pinch of salt as they reflect the sales of Torquay properties that took place in early Spring 2017 and now are only exchanging and completing during the summer months.

The reality is the number of properties that are on the market in Torquay today has risen by 11.23% since the New Year and that will have a dampening effect on property values. As tenants have had less choice, buyers now have more choice … and that will temper Torquay property prices as we head towards 2018.

Be you a homeowner or landlord, if you are planning to sell your Torquay property in the short term, it is crucial, especially with the rise in the number of properties on the market, that you realistically price your property when you bring it to the market … with the increase in choice of properties, the balance of power during negotiation generally sways towards the buyer. Given that everyone now has access to property details, including historic stats for how much property have sold for, they will be more astute during the offer and negotiation stages of a purchase.

However, even with this uplift in the number of properties for sale in Torquay, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 1,990 properties for sale compared to the current level of 1,040 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Torquay properties for sale will keep prices relatively high…and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

 

Some final thought’s before I go – to all the Torquay homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving … most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)

To all the Torquay landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Torbay Property News Blog

Supply and Demand Issues Mean Torquay Property Values Rise by 1.1% in the Last 12 Months

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The most recent set of data from the Land Registry has stated that property values in Torquay and the surrounding area were 1.17% higher than 12 months ago and 11.39% higher than January 2015.

Despite the uncertainty over Brexit as Torquay (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Torquay property market can also be seen from those two sides of the story.

Looking at the supply issues of the Torquay property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.

The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – it’s one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages as Shaldon and Collaton St Mary.

The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Torquay badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.

Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.

The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Torquay saw in property values was just 18.47% in the 2008/9 credit crunch.  

Despite the slowdown in the rate of annual property value growth in Torquay to the current 1.17%, from the heady days of 11.1% annual increases seen in late 2015, it can be argued the headline rate of Torquay property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Torquay (and the UK).