Torbay Property News

News and views of property in English Riviera

Council House Waiting List in Torquay Drops by 69.9% in last 7 years

July 28, 2017 By Neil Tozer

 

Should you buy or rent a house? Buying your own home can be expensive but could save you money over the years. Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, with more flexibility if you need to move.

Yet, there is third way that many people seem to forget, yet it plays an important role in the housing of Torquay people. Collectively known as social housing, it is affordable housing, which is let by either Torbay Council or a housing association to those considered to be in specific need, at rents below those characteristic in the private rental market.

In Torquay, there are 2,089 social housing households, which represent 9.19% of all the households in Torquay. There are a further 2,017 families in the Torbay Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2009, when it stood at 6,493 families, so today’s numbers represent a drop of 68.9%.

Nevertheless, this doesn’t necessarily mean that more families are being supplied with their own council house or housing association property. Six years ago, Westminster gave local authorities the authority to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.

Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the Torbay Council area, the average rent in 1998 for a council house/housing association property was £196.69 a month. Whilst we have no up to date figures, because of the ‘Large Scale Voluntary Transfer’ of all or most of the local authority’s stock was transferred to a Private Registered Provider sector, so the average rent is no longer applicable. Therefore, using the average rent increase for England of 108% (England’s average rent being £183.08 a month in 1998 and £381.03 a month today) we can guesstimate an average of approximately £410.

When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.

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

Rents in the private rental sector in Torquay will increase sharply during the next five years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low. The government crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment again (irrespective of the increased fees and taxation laid at the door of landlords).  It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.

Interesting times ahead for the Torquay Property Market!

Filed Under: Advice, Local Interest Tagged With: Brixham, buy-to-let, devon, expert advice, investment, landlords, letting, letting agent, Paignton, property, Property of the week, property sales, rental, Ridgewater, tenants, torbay, Torbay Property News, Torquay

The Torquay Property Market, The Beatles, Sweden and 50 Year Mortgages

July 14, 2017 By Neil Tozer

50 years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. In the same year Sweden switched from driving on the left-hand side to the right-hand side of the road. The average value of a Torquay property was £3,130, interest rates were at 5.5% and The Beatles released one of my favourite albums – their Sgt Peppers album … but what the hell has that to do with the Torquay property market today?? Quite a lot actually … so with my CD Player turned up loud – let me explain my friends!

 

I have been doing some research on the current attitude of Torquay first-time buyers. First-time buyers are so important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent (good news for landlords). If they buy, demand for Torquay property goes up for starter homes and that enables other Torquay homeowners to move up the property ladder.

First-time buyers are the lifeblood of the property market. They are, however the most susceptible to interest rate rises and the affordability of mortgages. With that in mind, let us see what is happening to them…

The average value of a Torquay property is currently standing at £236,019 and UK interest rates at 0.25%. As each year goes by, it appears the age of the everlasting mortgage has started to emerge, prompted by these first-time buyers, eager to get a foot on the housing ladder. I was reading a report a few days ago where some mortgage companies confessed that the battle to gain big returns from the property market has led to mortgages that will take considerably longer than the customary 25 years to pay off.

Over the last few years, it has been commonplace for first-time buyer mortgages to be 30 and 35 years in length as the ‘Bank of Mum and Dad’ have been helping with the deposit (Beatles Sgt Pepper song – “With a Little Help from My Friends”). Now, some high street banks are offering mortgage terms of 40 years. This means first-time buyers could be paying until their mid 60’s – I can hear that other great track from the same album "When I'm Sixty-Four" ringing in my ears! So, a 50-year mortgage does not seem as far-fetched now as it would have been back in the 1970’s. After all life expectancy for a male then was exactly 69 years and today its 79 years and 5 months!

Over the last ten years, Torquay property prices have continued to rise more than wages, therefore, first-time buyers are looking for bigger loans. If this development continues, the only way repayments can remain reasonable is by increasing the term of the loan. However, some commenters have said there are worries the mortgage companies are lending money over such a long term, they threaten leaving some first-time buyers with a generation of debt if the house price bubble bursts. Interestingly, when I looked at what had happened to average property values in Torquay over the last 50 years, there have been bubbles. First-time buyers should take heart, since as a county we have always recovered from it a few years later.

What if interest rates rise? Well looking at historic UK interest rates, the current rate of 0.25% is at a 300-year low. Mortgages will never be cheaper. I would however, seriously consider fixing the rate to cushion any future potential interest rate rises (since they can only go in one direction when they do change). If Torquay first-time buyers see buying a home as a long-term decision, based on the last 50 years, they should be just fine!

Before I go, a final thought for property buyers in Sweden, the land of Volvo and Abba. As Swedish property prices are so high, Swedish Regulators announced last year limits on the length of Swedish mortgage terms. They don’t bother with 50-year mortgages (On and On and On – Abba).

No, our Volvo-loving Swedish friend’s average mortgage length is 140 years (this is not a typo). Although such mortgages have had their Waterloo (Abba), regulators have significantly reduced the maximum term of a Swedish mortgage to 105 years. Either way, that’s a lot of Money, Money, Money (Abba again – Sorry!)  to pay back!

Now I will leave you in peace as I listen to the 1980’s Madness song ‘Our House’. My apologies to all the Beatles and Abba fans in Torquay – a bit of light hearted fun albeit on serious topic.

Filed Under: Advice Tagged With: Brixham, buy-to-let, devon, expert advice, investment, landlords, letting, letting agent, Paignton, property, property sales, rental, Ridgewater, tenants, torbay, Torbay Property News, Torquay

Torbay Buy-To-Let Predictions up to 2037

July 7, 2017 By Neil Tozer

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.

Filed Under: Advice Tagged With: Brixham, devon, expert advice, investment, landlords, letting agent, Paignton, property, property sales, Ridgewater, tenants, torbay, Torbay Property News, Torquay

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

May 22, 2017 By Neil Tozer

** 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

Filed Under: Buy To Let Property of The Week Tagged With: devon, expert advice, investment, landlords, letting, letting agent, property, Property of the week, property sales, rental, Ridgewater, tenants, Torbay Property News, Torquay

About this blog

May 17, 2017 By Neil Tozer

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.

Filed Under: About the Blog Tagged With: devon, expert advice, investment, landlords, letting, letting agent, Paignton, property, rental, Ridgewater, tenants, Torbay Property News, Torquay

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

May 17, 2017 By Neil Tozer

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!

Filed Under: Advice Tagged With: Brixham, buy-to-let, devon, expert advice, investment, landlords, letting, letting agent, Paignton, property, rental, Ridgewater, tenants, torbay, Torbay Property News, Torquay

Slowing Torquay Property Market? Yes and No!

January 20, 2017 By Neil Tozer

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

Filed Under: Local Interest Tagged With: Brixham, devon, expert advice, investment, landlords, letting, letting agent, Paignton, property, rental, Ridgewater, tenants, torbay, Torbay Property News, Torquay

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

January 6, 2017 By Neil Tozer

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).

Filed Under: Local Interest Tagged With: Brixham, devon, expert advice, investment, landlords, letting, Paignton, property, property sales, rental, Ridgewater, tenants, Torbay Property News, Torquay

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About the Author

Hi and thank you for visiting this blog. I have been in the Torbay Property market since 2008, owning and running with my excellent colleagues, the Ridgewater Sales & Lettings in St Marychurch, Torquay as well as Preston, Paignton. I have always shared my thoughts on the local property market in Torbay with my landlords, but now I want to share with everyone in the town. On this blog, I will talk about what is happening in the town’s property market itself, even looking at specific streets or housing estates. At other times, I will post what I consider decent buy to let deals. Some will be on the market with me (as I also sell property), but others will be on the market with other agents in Torbay. I like to look at the whole of market and give you, what I consider the best investment opportunities. If you see a potential deal, and want a second opinion, without hesitation, email the Rightmove link to [email protected] .

I will always give you my honest opinion on the property and its investment potential. (both good and bad) .

Neil

Neil Tozer

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