Posted on

Unlocking the Secrets of the Sale Property Market Across Different Price Ranges

As a Sale estate agent, I have witnessed first-hand how the Sale property market operates and the various factors that influence property sales.

One intriguing aspect is the difference in saleability across different price ranges.

In this article, we will delve into the dynamics of selling properties in relation to their price ranges and explore the factors contributing to varying sale rates.

Price Range and Saleability

Sale properties are often categorised into distinct price ranges, such as entry-level, mid-range, and upper-quartile luxury.

Each segment attracts different buyers with varying purchasing power, preferences, and investment goals.

These factors play a crucial role in determining the saleability of properties within each price range.

Entry-Level Sale Properties: Quick Turnaround (up to £300,000)

Entry-level properties, typically affordable homes suitable for Sale first-time buyers or Sale buy-to-let landlords, tend to have a relatively high saleability rate. The demand for these Sale properties is often robust, driven by increasing population, rising interest in homeownership, and government incentives for first-time buyers. Moreover, entry-level properties usually attract Sale buy-to-let landlords, as they tend to offer yields and returns, leading to a quicker sale process.

Mid-Range Sale Properties: Normally a Balanced Market (£300,000 to £525,000)

Mid-range properties occupy a middle ground, appealing to a broader range of buyers with more financial flexibility. Market conditions, location, and property features generally influence the saleability of these properties. In a balanced market, where demand and supply are relatively equal, mid-range properties tend to sell at a moderate pace. Factors such as property condition, amenities, proximity to schools, transportation, and amenities play a vital role in attracting potential buyers.

Upper Quartile Sale Luxury Properties: Normally a Longer Selling Time (£525,000+)

Top-end luxury Sale properties, characterised by their exclusivity, unique features, and high price tags (in the top 25% price-wise – hence the phrase Upper Quartile), often require a longer selling time than other price ranges. The pool of prospective buyers for luxury properties is smaller, requiring individuals with significant financial resources. The selling process involves careful marketing strategies, targeted advertising, and connections with affluent buyers. Patience is critical when dealing with luxury properties, as it may take months to find the right buyer who appreciates the property’s exceptional qualities and is willing to meet the asking price.

So, let us look at the saleability of Sale property by price band.

The following can be seen …

  • Entry-Level Sale Properties – this market is doing rather well, especially the £100k to £150k range.
  • Mid-Range Sale Properties – as expected, things have been a little more challenging in this price range as it is more affected by the current higher mortgage rates, with the best range being £400k to £500k.
  • Upper Quartile Sale Luxury Properties – The higher-end properties, compared to last year, are still holding their own (although let us not forget the actual numbers of houses are lower). Things are tougher in the £1m to £2m range.

However, there are other factors influencing saleability than just the price band.

Property Market Conditions in Sale

The overall state of the Sale property market greatly influences the saleability of properties across all price ranges. In last week’s article, I discussed whether Sale was in the buyers’, sellers’ or balanced market. During a sellers’ market, where demand outweighs supply, all properties sell quickly regardless of their price range. In contrast, in a buyers’ market, where supply exceeds demand, properties may take longer to sell, especially in higher price ranges.

For example, nationally, any property up to £200,000, which is considered the lower quartile of properties (i.e. the bottom 25% of properties by value), have had a saleability rate of 75.3% in 2023, yet last year it was 90.9%.

Looking at the top end of the market nationally, last year, 51.9% of properties over £1m marketed throughout the year had a sale agreed on them. For 2023, it’s been 35.1%.

Location Location Location (in Sale)

The location of a property plays a crucial role in its saleability. Desirable neighbourhoods and housing estates/developments in Sale with excellent amenities, proximity to outstanding primary schools, transportation, and shops often attract more buyers, regardless of the price range. Buyers are willing to pay a premium for properties situated in prime locations.

Property Condition and Features

The condition and features of a Sale property significantly impact its saleability. Well-maintained ten out of ten properties with attractive features, modern amenities, and updated bathrooms and kitchens are more likely to attract potential buyers across all price ranges. Would it also surprise you that properties that need absolute gutting (i.e. one or two out of ten properties) also attract many buyers as they often wish to put their mark on it? Interestingly, properties requiring some moderate renovations or lacking desirable features (i.e. those in the mid-range of four to six out of ten) may experience slower sales or necessitate price adjustments.

Targeted Marketing and Pricing

Effective marketing strategies tailored to each price range can enhance the saleability of properties. Accurate pricing is crucial to attract potential buyers and generate interest. Overpricing will deter buyers, while underpricing may lead to missed opportunities for maximising your returns. A skilled Sale estate agent like ourselves can provide valuable insights into pricing strategies and develop marketing campaigns to target specific buyer segments.

Final Thoughts on the Saleability of Sale Property

Understanding the dynamics of selling properties across different price ranges is essential for buyers and sellers in the Sale property market. Whether you are contemplating a move or planning to stay put until late this year or even 2024, it is worth assessing the saleability of your home in Sale.

As the Sale property market continues to evolve, it is always beneficial to stay informed about the value of your Sale property.

Therefore, I encourage all Sale homeowners to contact our estate agency to comprehensively evaluate their home’s saleability. Our team is ready to provide expert guidance and assist you in making informed decisions about your property.

Don’t hesitate to give us a call today!

Posted on

Is Sale a Buyers’ or Sellers’ Property Market?

A Comprehensive Guide for Sale Homeowners

In the ever-changing world of Sale property, the terms ‘buyers’ market’ and ‘sellers’ market’ are phrases bandied about.

These property market conditions can significantly impact your ability to buy or sell a Sale property, regardless of which side of the fence you find yourself on.

As a Sale estate agent, I will provide you with a detailed analysis of the Sale property market to find out if we are in a buyers’ or sellers’ market and offer valuable tips to navigate through them successfully.

Additionally, I will shed light on a lesser-known market condition called a ‘balanced market’. So, let’s delve into the nuances of these markets and equip you with the knowledge to make informed decisions on buying and selling in Sale.

What is a Sale Buyers’ Market?

A ‘buyers’ market’ occurs when the number of Sale homes available for sale exceeds the number of potential buyers. In this scenario, buyers hold the advantage, as they have more choices and can take their time to make decisions. They may even negotiate with sellers to secure more favourable prices. This is an ideal market for Sale buyers as attractive deals are plentiful, while sellers face the challenge of standing out in a sea of properties for sale.

What is a Sale Sellers’ Market?

Conversely, a sellers’ market arises when there is a higher demand for homes than available inventory. This creates a power shift in favour of sellers, who can benefit from increased competition among buyers. In a seller’s market, Sale properties tend to sell quickly and sellers often receive multiple offers, driving up property prices. This market can be challenging for Sale buyers, as they may face bidding wars and have limited negotiating power.

Introducing a Balanced Market.

Apart from the buyers’ and sellers’ markets, a balanced property market exists where the number of people looking to sell property matches the number of potential buyers. In a balanced market, equilibrium is achieved, leading to stable prices and a reasonable timeframe for property sales. This market condition offers a fair playing field for both buyers and sellers, creating a more harmonious real estate environment.

Understanding the Dynamics: Supply and Demand of Sale Property.

At the core of these property market conditions lies the principle of supply and demand.

Sale home buyers have the upper hand when the supply of Sale homes surpasses the demand. Conversely, when demand outpaces supply, Sale house sellers hold the advantage. Recognising which property market you are in is crucial for making informed decisions, regardless of whether you are a buyer or a seller.

What Kind of Property Market is Sale in?

The best way anyone can judge the market is to analyse the percentage of properties marked as “Sold STC” (Sold Subject to Contract) and “Under Offer” in relation to the total stock of properties on the market.

E.g. if there are 500 properties on the market (both available and sold stc/under offer) and 200 are sold stc/under offer … 200 as a percentage of 500 is 40%.

Everyone can do this by searching the property portals (e.g. Rightmove, Zoopla and OnTheMarket) by searching for Sale and calculating it by asking for the results with sold stc/under offer and without sold stc/under offer.

The designated property market states are as follows:

  • 0% to 20%: Extreme Buyers’ Market
  • 21% to 29%: Buyers’ Market
  • 30% to 40%: Balanced Market
  • 41% to 49%: Sellers’ Market
  • 50% to 59%: Hot Sellers’ Market
  • 60%+: Extreme Sellers’ Market

This methodology is widely used by many professional property traders, corporate asset managers and developer part exchange providers to quickly assess the temperature of any local market. It offers a reliable and efficient measurement of market heat, enabling informed individuals to select the right strategies and stay ahead of the market to achieve superior results.

The statistics have been sourced from website ‘The Advisory’, which have calculated the market state stats for many years. I wanted to share them back to the summer of 2018, so you can see for yourself.

What are the Statistics for Sale for the Last 5 Years?

 Jun-18Jun-19Jun-20Jun-21Jun-22Dec-22Mar-23May-23Jun-23
M3362%56%50%79%82%68%63%68%67%

You can quite clearly see Sale went into an extreme sellers’ market during 2021 and 2022 and is still at levels higher than pre pandemic.

Now of course this could all change, so let me explain both extremes for either market.

Tips for Sale Home Sellers in a Buyers’ Market

Selling a Sale property in a buyers’ market can be daunting, but you can improve your chances of success with the right approach. Here are some valuable tips for Sale home sellers:

  1. Be realistic with your asking price: If the Sale property market becomes a buyers’ market, home sellers will need to understand the challenging market conditions and set a competitive price from the beginning. Overpricing will deter potential Sale buyers from even viewing and lead to your home being on the market for months. People will start to think there will be something wrong with your home and dismiss it even more.
  2. Present your Sale home at its best: In a competitive buyers’ market, making your property stand out is vital. Consider staging your home and completing any necessary repairs to make it more appealing to home buyers.
  3. Maximise your exposure: Effective marketing is crucial, particularly in a buyers’ market. Collaborate closely with a reputable local Sale agent with extensive area knowledge and a strong marketing team to ensure maximum visibility for your property. Gone are the days of just putting the property on Rightmove and hoping.
  4. Be prepared to negotiate on more than the pound notes: Price is not the only factor in negotiations. Buyers may also be open to discussing terms and conditions like what you are leaving regarding fixtures and fittings, so be flexible and willing to find common ground.

Tips for Buyers in a Sale Seller’s Market

If you find yourself navigating a sellers’ market as a Sale buyer, these tips will help you improve your chances of securing the right property:

  1. Define your necessities: Clearly understand your property needs and prioritise them. Be prepared to compromise on certain aspects to increase your chances of finding a suitable property.
  2. Be friendly: Build a positive rapport and relationship with the home sellers on the viewing. This can really work in your favour. First impressions can make a difference.
  3. Act quickly: In a seller’s market, hesitation can lead to missed opportunities. If you come across a Sale property that meets your criteria, schedule a viewing promptly and be prepared to make an offer if it resonates with you.
  4. Make fair offers: While everyone wants a great deal, offering a reasonable price shows respect to sellers and increases the likelihood of your offer being considered. Silly low offers are often dismissed in competitive markets and can sometimes offend.
  5. Practice patience: Although speed is essential, exercising patience is equally vital. Rushing into a decision can result in regret. The right property will come along, so balancing acting swiftly and making informed choices is critical.

Understanding the dynamics of buyers’ and sellers’ markets is essential for both buyers and sellers in the Sale property market.

By grasping the nuances of each market condition and applying the appropriate strategies, you can maximise your chances of achieving your Sale property goals. Whether you find yourself in a buyer’s market, seller’s market, or a balanced market, adapting your approach and working closely with an experienced local agent will significantly enhance your chances of success in the ever-changing world of real estate.

But let me leave you with this one last thought. Regardless of whether it’s a buyer’s or seller’s market, it’s important to recognise the interconnected nature of these market conditions.

A significant statistic to consider is that 81% of sellers are also buyers.

This means that as you gain an advantage as a seller in a hot market, you may face challenges when transitioning to the buyer’s side.

Conversely, in a buyers’ market where you have the upper hand as a buyer, you might encounter difficulties when selling your own property.

It’s crucial to understand this dynamic and plan accordingly, as the dynamics of the Sale property market are often a delicate balance between gaining and losing, and this holds true for both buyers and sellers.

These are my thoughts, do share yours in the comments or by reply.

Posted on

Sale House Prices Have Risen by 5.63% Since Christmas

Since Christmas, Sale first-time buyers and savvy Sale buy-to-let landlords have been more active than expected in the Sale property market.

Rents in the Sale area have soared in the last two years, with the average Sale rent increasing to £1,118 a month, an increase of 21.9%.

Because of these growing Sale rents, it has made homeownership more cost-effective for younger Sale buyers and more lucrative for Sale landlords.

On the back of this, house prices are rising in Sale.

But how can I say house prices are rising when the Land Registry and other indices from the banks state they are falling?

The Land Registry figures published this month will be from sales completed (i.e. keys and monies handed over in February 2023). Yet, as everyone knows, it takes on average, 19 weeks from agreeing on a sale to a completed sale in the UK, so those Land Registry house price figures are from house sales agreed upon in September or October 2022.

If only there were a more up-to-date way of calculating what is happening to house prices.

Well, there is!

By measuring what houses sell for at the sale agreed date by their square footage.

The measure of £/sq. ft is not a particular great way to judge the value of an individual property. However, when looking at a national and regional level, its accuracy is excellent (98% accurate on a national level and around 95% accurate on a regional level).

The average price per square foot at sale agreed matches the Land Registry and Nationwide House Price Index to a very high tolerance/accuracy level, albeit 7 or 8 months before the Land Registry/Nationwide publish their data.

So by tracking the regional £/sq. ft figures for the North West, it will give us an excellent idea of what is happening to Sale house prices now.

The top of the property market was in June 2022 when the average £/sq. ft achieved for all house sales agreed in the North West was £244.75/sq. ft.

By December 2022, this had dropped to £232.76/sq. ft, a drop of 5.15% (for the North West homes sold stc in December ’22).

By this April, the average £/sq. ft achieved for all house sales agreed in the North West had risen by 5.63% to £246.65/sq. ft.

Let’s put it another way.

House prices in the North West area (including Sale) are 5.63% higher than at Christmas.

Just for interest, these are the £/sq.ft figures split down by property type:

  • Detached North West homes – £325.50/sq. ft
  • Semi-Detached North West homes – £262.23/sq. ft
  • Town Houses/Terraced North West homes – £201.51/sq. ft
  • Apartments/Flats North West – £223.84/sq. ft

Before I move on to what the future holds, as a good comparison, currently Sale houses are selling for an average of £361/sq. ft.

There are several issues which could upset the ‘apple cart’.

One is the recent Bank of England base rate rise.

The recent decision by the Bank of England (BoE) to raise the Base Rate by 0.25% has only led to a negligible increase of 0.04% in average rates for two-year and five-year mortgages.

This rise in BoE interest rates is primarily attributed to their forecast that inflation will not decrease as quickly as initially anticipated.

Consequently, the underlying costs of lenders’ fixed-rate deals, known as swap rates, have risen slightly, resulting in an adjustment of lenders’ mortgage rates, but not that much.

To provide some perspective, current average mortgage rates (late May) are like those observed at the beginning of April, with some rate fluctuations in those seven weeks.

I also have concerns about the cost of living persisting among many Sale households, which may continue to impact sentiment and activity in the property market.

Additionally, the gradual impact of higher interest rates on those existing homeowners should not be underestimated. There are millions of homeowners whose existing sub 1% to 1.5% interest fixed mortgages are set to end in the coming three years.

Some of those Sale homeowners would rather sell up and trade down market to reduce their mortgage outgoings than cut their household budgets regarding entertainment, holidays, etc.

However, as I have explained before in my Sale Property Blog, my message to those homeowners is to speak with a qualified mortgage arranger. You will be amazed how extending the term of your mortgage will reduce your monthly payments, enabling you to stay in your existing Sale home. Of course, you must weigh the pros and cons by talking to a qualified mortgage arranger.  

Yet, if lots of Sale homes get put on the market in the coming year or so (i.e. what happened in 2008), then we will have too much supply and probably not enough demand – meaning Sale house prices will drop again.

The consistent rise in Sale house prices over the past few years can be primarily attributed to a shortage of supply of properties to buy. The opposite will be the case if we get an excess supply of many homes on the market.

So that is what could go wrong in the Sale property market; what about the potential good news?

Contrary to expectations back in late 2022, I stated a few weeks ago, Sale first-time buyers in 2023 have been more active in the housing market despite prevailing uncertainty.

I attribute this trend to the rising rental costs, which have made homeownership in Sale comparatively more cost-effective.

This, in turn, has attracted new Sale landlords into the market to invest. I am aware some highly geared (i.e. they have high percentage mortgages on their buy-to-let properties) Sale landlords have been battered with the section 24 taxation changes from a few years ago.

Yet, there are lots of new landlords coming into the buy-to-let market. They had their fingers burned on crypto and the stock market and are now looking for another investment vehicle for their savings.

The simple fact is the UK doesn’t build enough homes to satisfy the demand, meaning in the medium to long term, rents and house prices go up.

Buy-to-let is an excellent hedge against inflation (do ask me for my article from late last year about that).

The British housing market, which experienced a surge during the pandemic due to the demand for more space, has yet to experience the anticipated decline that some commentators predicted last year. The resilience of the UK economy, the strength of the labour market and the expected decrease in inflation throughout the remainder of the year are all factors that only add strength to the Sale property market.

Tell me your thoughts on the matter – I would love to know them.

Posted on

6-Step Guide to Selling Your Home

As a trusted estate agent with years of experience in the property market, we understand that selling your home can be a daunting task. That’s why we’ve put together a simple, 6-step guide to help you navigate the process with ease.

Step 1: Determine Your Home’s Value

Setting the right price for your property is crucial to a successful sale.

Many homeowners start by using online valuation tools on the portals, which can provide a fair indication of the current market value of your home based on recent sales in the area.

However, these tools are computer-generated valuations and cannot consider such things as your décor, any improvements you have made, or which side of the street you are on (for example one side of your street might have North facing gardens with no views and the other South facing with open views).

We recommend inviting two or three high street estate agents to provide a more accurate valuation. Be sure to ask each local estate agent how they arrived at their valuation, and don’t be swayed by an agent who promises an unrealistically high price.

Step 2: Choose the Right Estate Agent

When choosing an estate agent, it’s important to consider your needs and preferences. If you’re short on time and prefer a more hands-off approach, a traditional high street agency may be the best choice. They will take care of marketing your home and screen viewings (to reduce time wasters) on your behalf. However, if you’re comfortable doing some of the work yourself, an online estate agent may be a more affordable option. However, keep in mind that online agents often require payment regardless of whether your property sells or not.

Step 3: Get Your Home Market-Ready

Before putting your home on the market, it’s important to ensure that it’s in the best possible condition. This means decluttering, depersonalising, and making any necessary repairs or improvements. If you need any guidance on that, do pick up the phone.

Step 4: Market Your Property

Marketing is key to attracting potential buyers for your home, so it’s important to make sure your property is visible across all relevant channels. Your agent should take care of this for you, but it’s worth asking them about their marketing strategy to ensure it aligns with your expectations.

Step 5: Conduct Viewings

Once your property is on the market, you’ll need to conduct viewings for potential buyers. Either the estate agent will take care of this on your behalf, or you can do them yourself. Make sure to prepare your home for viewing and be ready to answer any questions potential buyers may have.

Step 6: Negotiate the Sale

Once you’ve received an offer on your property, it’s time to negotiate the sale. Your agent will handle this on your behalf, but it’s important to be clear about your expectations and preferences. Remember, the goal is to achieve a fair price for your property that satisfies both you and the buyer.

If you’re thinking of selling your home, why not take advantage of our free valuation service?

Our expert team can provide you with an accurate assessment of your property’s value and guide you through the selling process from start to finish. Contact us today to book your no-obligation valuation and take the first step towards a successful house move.

Posted on

Overcoming Bad Credit to Secure a Mortgage in Sale

As a Sale estate agent, I know that obtaining a mortgage can be a daunting process, especially if you have a bad credit history.

However, I’m here to tell you that securing a mortgage is not impossible, even if your credit score is less than perfect.

Bad credit mortgages are becoming increasingly available, as lenders recognise that not everyone has a perfect credit rating.

This means that even if you have had financial difficulties in the past, there may still be options available to you.

One option is to seek the help of a specialist mortgage broker, who can advise you on the best lenders and products for your individual circumstances. They may also be able to help you to improve your credit rating, by offering guidance on how to pay off debts, for example.

Another option is to consider a guarantor mortgage, where a family member or friend agrees to guarantee your mortgage payments. This can help to reassure lenders that you are a reliable borrower, even if your credit history is less than perfect.

It’s worth noting that bad credit mortgages may come with higher interest rates and fees, as lenders consider you to be a higher-risk borrower. However, if you can make your payments on time and demonstrate that you are a responsible borrower, you may be able to re-mortgage in the future at a more competitive rate.

If you are struggling to obtain a mortgage due to bad credit, it’s important to seek advice from a reputable source.

Don’t be disheartened by your credit history – with the right guidance, you may still be able to achieve your dream of homeownership in Sale.

At Swithenbank Estate Agents we understand that everyone’s situation is different, and we’re here to help you navigate the complex world of mortgages. Get in touch with us today to find out more about how we can help you overcome bad credit and secure your dream home in Sale.

James

PS The law says I must put this disclaimer on any post when I talk about mortgages. I do apologise – yet the law is the law!

Your property may be repossessed if you do not keep up repayments on your Mortgage. The content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors our agency works with to confirm the most accurate up to date information. This is of course not tailored advice to each individual reader, and as such does not constitute financial advice. All the advisors working with us are fully qualified to provide mortgage advice and are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Phew!

Posted on

7 Top Tips for Buy-To-Let in Sale

If you’re considering investing in buy-to-let property in Sale, it’s important to understand the Sale property market and know what to look for in a potential investment.

Here are some top tips to help you get started on your buy-to-let journey in Sale.

One. Research the Sale Market

Before investing in buy-to-let property in Sale, it’s crucial to research the property market. Look at the rental demand, average rental prices, and property prices in the area. You should also consider the location of the property and whether it is in a desirable area for renters. A lot of this information is published in my Sale property blog posts.

Two. Choose the Sale Right Property

When choosing a property to invest in, think about the type of tenant you want to attract. For example, if you’re targeting young professionals, look for properties that are close to transport links and local amenities. If you’re targeting families, look for properties with multiple bedrooms, close to good schools, and a garden.

Three. Calculate Your Costs

When investing in buy-to-let property in Sale, it’s important to calculate all your costs. This includes the purchase price, stamp duty, legal fees, and any renovation costs. You should also factor in ongoing costs such as mortgage payments, tax, insurance, and maintenance costs.

Four. Consider Your Financing Options

There are several financing options available for buy-to-let investors in Sale. You can use a traditional mortgage, a specialist buy-to-let mortgage, or even cash if you have the funds available. It’s important to research each option and choose the one that best suits your financial situation.

Five. Choose a Good Sale Letting Agent

A good letting agent can make all the difference when it comes to managing your buy-to-let investment in Sale. They can help you find tenants, manage the property, and deal with any issues that may arise. It’s important to choose a reputable letting agent with experience in the local market.

Six. Stay on Top of Regulations

As a buy-to-let investor in Sale, you need to be aware of the 170+ laws and regulations that apply to your property. This includes the safety regulations for gas and electrical appliances, as well as the legal requirements for tenancy agreements and deposits. It’s important to stay on top of these regulations to avoid any legal issues.

Seven. Expect the Unexpected

It’s important to be prepared for the unexpected when investing in buy-to-let property in Sale. This could include unexpected repairs or difficult tenants. It’s vital to have a contingency plan in place and to set aside some funds for unexpected expenses.

Investing in buy-to-let property in Sale can be a great way to generate passive income and build long-term wealth. However, it’s important to research the local Sale market, choose the right property, and stay on top of regulations to ensure a successful investment.

If you would like the weekly articles on the Sale property market to be sent to you via email, do send me your email address, otherwise follow me on social media.

PS Let me know in the comments if you have an 8th tip for other Sale landlords.

Posted on

50% of Sale house sellers in 2022 had only been in their old home on average 6 years and 2 weeks

The share of Brits moving each year has been declining since the late 1980s (when at one stage, people moved every eight years), yet since the pandemic’s beginning, something has appeared to upset that trend.

Newspaper stories and social media posts painted a picture of homeowners moving from the city centres to its suburbs, from the suburbs to the towns and countryside around the UK. Areas like the Cotswolds and coastal towns around the country got swamped by the ‘race for space’, significantly affecting housing markets (including Sale).

But how many Brits moved? And how long had they been in their homes before they moved?

In Great Britain, there are 28.3 million households, of which 19.3 million are owner-occupied and 4.43m owned by private buy-to-let landlords.

There is £7,035 trillion of residential property in private hands.

Eight years before the initial lockdown in 2020, an average of 79,646 properties were sold each month in the UK, meaning just under a million UK households move home annually.

Therefore, in those 8 years, the average British homeowner moved every 20 years and 4 months.

So, what uplift was there in people moving home after the first lockdown in 2020?

In 2021 and early 2022, an average of 102,021 people moved home monthly, taking the average move time to once every 16 years. So even though there was an uplift in people moving home, it was nothing like the 1980s.

It shows that in the 21st Century, once you have succeeded in buying a property you can call home, there isn’t much enthusiasm to move again.

What is happening in the Sale property market now?

We love our homes in Sale, but most of us (including myself) still want to ‘better our lives’ with a larger house, better area etc., which typically requires us to climb up the Sale property ladder.

Yet, with Sale house prices having risen by 496.8% in the last 25 years, the cost of going up the next rung on the Sale property ladder has become prohibitive.

Everyone remembers back to the 1980s, when we had an upbeat booming property market as a backdrop, and British homeowners moved home every eight years; so now, with the average move time in the mid to late teens (in years), this equates to each homeowner only moving around three to four times in their adult lifetime.

Or could it be something else?

We all know the phrase, “lies, damn lies and statistics”.

The home moving statistics above hide some great details about the British property market.

When British homeowners get into their 50s, 60s and beyond, their inclination to move home drops like the proverbial stone.

The average time a homeowner without a mortgage moves home is 24 years and 27 weeks (and just over 7 out of 10 outright homeowners, i.e. without a mortgage, are 65 or older). 

Homeowners with a mortgage tend to be younger to middle-aged.

Homeowners with a mortgage move on average every 10 years and 11 weeks.

So, whilst I cannot determine which house seller has a mortgage and which doesn’t, I can look at how quickly people move home in Sale. 

Therefore, I have taken a look at the last 50 property sales in Sale and found some interesting results.

The average Sale homeowner had only been in their home on average 13 years and 47 weeks before they sold.

Yet the devil is in the detail.

There appears to be a two-speed Sale property market …

50% of Sale house sellers in 2022 had only been in their old home on average 6 years and 2 weeks.

Then, let’s split the findings into quarters.

  • Top 25% fastest Sale homeowners in 2022 moved on average after 3 years & 21 weeks
  • The following 25% of fastest Sale homeowners in 2022 moved on average after 8 years & 24 weeks
  • The next 25% of Sale homeowners in 2022 moved on average after 16 years & 26 weeks
  • Whilst the 25% slowest Sale homeowners in 2022 moved on average after 26 years & 36 weeks

When looking at the properties that fall into the slower time bands (i.e., the ones that don’t move/sell so often), they tend to be the larger properties where the homeowners have lived often for 30 or 40 years.

Maybe, the one lesson from these statistics is that once homeowners get into their 60’s and 70’s, their tendency and inclination to move home declines significantly.

This means the homes on the lower rungs of the Sale property ladder are selling quickly (as younger aged homeowners occupy them) … yet once Sale people tend to get older, their tendency to move diminishes.

This obstructs the younger generation of Sale homeowners from wanting to buy the bigger Sale properties these mature Sale homeowners live in.

What is holding the older generation back from selling and downsizing to free up family homes for families that desperately need them? Some will be apathy, and some will be wanting to hold on to the homes they brought their families up in, yet the bottom line is …

as a country, we must reconsider how we can encourage (not force) older homeowners to sell their large homes to release them to the younger families that desperately need them.

Some recent articles I have written suggested tax breaks, yet the government doesn’t have the money to give massive tax breaks.

One thing I do know we, as a country, have seen (and will continue to see) a lot of demographic change together with an increasingly ageing population, so it’s not just about how many households we build but whether we are constructing the right kind of homes for the older generation?

Thought-provoking times are ahead for the Sale property market!

If you have a Sale property to sell in the coming months or years and want to know how this and other factors will affect you and your property … without obligation, don’t hesitate to call me.

Posted on

Is Buy-to-Let in Sale Still Worth the Risk?

Over the last five years, life has become a little trickier for Sale landlords, with changes to their taxation status, mortgage interest relief and an additional 3% stamp duty for a buy-to-let property, and has made lots of Sale landlords ask themselves:

‘Is buy-to-let in Sale still worth the risk?’

Regarding taxation, in 2016, the Government added a 3% supplement in stamp duty on all buy-to-let properties. Then, in 2017, the Government started to reduce mortgage interest by stopping landlords from deducting the interest they paid on their mortgage before paying tax on the rental profits and replacing it with a flat rate tax credit based on 20% of the interest they spent on their mortgage.

There would be no effect if a Sale landlord were a basic rate 20% taxpayer. Yet Sale landlords who were higher-rate (40%) or top-rate taxpayers (45%) saw an effect as their tax relief was cut in half.

So, is buy-to-let in Sale still an advisable investment?

The response to this question is much more significant than the issue of taxation.

To a large degree, as with all investments, it depends on why you are investing and what your final objective is. Let me expand.

The rewards of Sale buy-to-let.

You can earn money two ways with buy-to-let.

The first is the rental income from the property.

The average rent achieved in Sale is £1,186 pcm, a rise of 11.1% in the last 12 months.

This rent is expressed as a yield and is described as a percentage figure that’s calculated using the annual rental income and dividing it by the value of the buy-to-let property.

Landlords and buy-to-let investors use rental yield to judge and measure the value of their rental investments and portfolios. E.g. rent is £1,000 per calendar month (pcm), which means the annual rent is 12 x £1,000 = £12,000. If the property is worth £180,000, the rental yield is £12,000 divided by £180,000, which, when expressed as a yield percentage, is 6.67%.

The average yield in Sale is 3.7%.

Some areas in Sale can easily achieve a 5.2% to 6.7% yield, sometimes even more, depending on your choice of property and type of tenancy you wish to have.

If yield is your number one focus, the highest average yield in the UK can be found in Bradford City Centre, where it is 12%, Hyson Green and Radford in Nottingham at 9.6% and Pontypridd at 8.7%, while other areas in the UK can be as low as 2.2%.

So indeed, is the best strategy to go for high-yielding properties?

The problem with pursuing high-yielding Sale buy-to-let properties is that you usually must compromise on the property’s capital growth to attain that high yield.

The second way to earn money with buy-to-let is capital growth as your Sale property increases in value.

M33 property values are 32% higher than 3 years ago.

A reasonable return in anyone’s books.

Of course, this all depends on the rent coming in, yet you can buy landlord insurance to cover against loss of rental income, tenant damage and legal costs.

Interestingly, using Government data and Industry data, Denton House Research found that in the first lockdown landlords who managed their rental properties themselves were 272.5% more likely to be in arrears of 2 months or more (compared to those who utilised the services of a letting agent to manage their property).

The drawbacks of Sale buy-to-let.

Your tax bill is higher today than a few years ago, but isn’t everyone’s?

If Sale property prices fall, the capital you invested will reduce, yet if it sat in the bank, it would decline in value anyway.

Being a landlord is a big responsibility, with over 170 pieces of legislation and orders to comply with. That’s where a suitable letting agent can help you with your rental property to ensure you remain compliant.

I recommend Sale landlords consider all options to maximise their rental income whilst reducing their outgoings concerning their rental property.

Rents are rising in Sale (as mentioned above), and many Sale landlords appreciate the demand-led increases in their rent. And let me ask you, why shouldn’t they, as they have been exposed to many legislative and taxation changes over the last five years?

Ok, last point and the elephant in the room.

Will there be a house price crash, and should Sale landlords wait for it?

A house price crash conjures up a big event that makes house prices go down, and it certainly happened like that in 1988 with the removal of dual-MIRAS tax relief on mortgages and the Credit Crunch in 2008. Yet this time, it’s different.

As there is more normality and balance in the Sale property market at the moment (compared to 2021/early 2022), the price that is being paid today on most houses in Sale is not as extreme or as extravagant as what was being paid in 2021/early2022 (when people were outbidding each other).

Therefore, if you were to look at the house price indexes going into the spring and summer of 2023, then there will be a reduction. The doom-mongers and newspaper editors will call that a house price crash, yet I see it as the market easing back to normality.

A massive driver behind landlords and home buyers ‘waiting for a house price crash’ is that they fear they have ‘missed the boat’ when it comes to buying/investing.

There is always newspaper (and now social media) attention when house prices explode. This means people quickly feel pressure to enter the ‘property market’, as everyone is making money, yet they aren’t.

The problem is that during the previous boom phases (the late 1980s and early/mid-2000s), house prices increased quicker than some people could save money for their deposit (for a house purchase). They saw their friends and acquaintances snapping up buy-to-let deals and they were missing out on the spoils of house price growth. As a result, many of these excluded house buyers judged that a house price correction was foreseeable, inevitable, and sometimes even needed. Not with any rational economic argument, but classic FOMO (Fear of Missing Out).  

Yet a ‘house price crash’ isn’t the silver bullet that many think it will be.

‘House price crashes’ virtually never drop house prices to reasonable levels, and in fact, they have a lot of additional effects that make house buying even harder.

Investing in buy-to-let is a long-term investment. Remember what I said at the start. It would help if you decided why you’re getting into buy-to-let investment and when you will get out (and what you want to get out of it). Buy-to-let has advantages and disadvantages, but it is something tangible and something that investors can understand.

The UK needs to build more houses, so the demand for rental properties will only continue to grow.

The heady days of the early 2000s, when anybody could make money from any property, though, have gone. With increased legislation and taxation, you need the advice of a great agent to guide you on what to buy (and not to buy) for an excellent yield, incredible capital growth or a balance of the two. That agent should be able to find you a great tenant who will pay the rent on time and look after the property to ensure that when they leave, your investment is returned to you in the best condition possible.

If you would like to pick my brain, whether you are considering becoming a landlord in Sale, an existing landlord (irrespective of which agent you use) or even a self-managed landlord, do not hesitate to pick up the phone to me.

I will tell you what you need to hear, not necessarily what you want to hear.

Posted on

Sale Baby Boomers and their 37,905 Spare ‘Spare’ Bedrooms

An additional 1,890 spare bedrooms have been locked out of the Trafford housing market since 2011 as Britain’s ageing population means the country’s stock of homes is being used more unproductively.

The number of spare bedrooms in Trafford between 2011 and 2021 increased from 106,761 to 108,651.

The number of Trafford households living in properties with at least two spare bedrooms (i.e. spare ‘spare’ bedrooms) increased slightly by 977, from 36,928 households to 37,905 households between those ten years.

That means 39.4% of Trafford households have two or more spare bedrooms.

And this isn’t just a local issue; Britain has 8,902,471 properties with a spare ‘spare’ bedroom (i.e. they have two or more spare bedrooms).

Before I dive deep into the issue of these ‘spare’ spare bedrooms, let me look at the ‘occupancy rating’ of all households in the country.

 There are 8.26 million households with one spare bedroom, 6.57million households with no spare bedrooms (i.e. the household’s accommodation has an ideal number of bedrooms), 880,672 households where they are classed as over-crowded under the ‘Bedroom Standard’ by one bedroom and 173,751 households where they are classed as over-crowded under the ‘Bedroom Standard’ by two bedrooms.

The ‘Bedroom Standard’ allocates a separate bedroom to each of these groups (according the Office of National Statistics):

  • adult couple
  • any remaining adult (aged 21 years or over)
  • two adolescents (aged 10 to 20 years) of the same sex
  • one adolescent (aged 10 to 20 years) and one child (aged 9 years or under) of the same sex
  • two children (aged 9 years or under) regardless of sex
  • any remaining child (aged 9 years or under)

So, with this serious overcrowding, why is this under-occupation happening and is there a better use for these homes?

Britain has an ageing population. Just over 1 in 5 (18.6%) of Britain’s population are aged 65 years or older, compared with 1 in 6 (16.4%) a decade ago.

In the last ten years, many of Britain’s baby boomer generation (currently aged 59 years to 77 years of age) have entered retirement. Most of these extra bedrooms are in homes owned by these baby boomers, who are probably still living in the original family homes they bought in the 1980s or 1990s to raise their children, yet still live there years after their children left home.

And it will get worse throughout the 2020s as the number of Brits living in homes greater than their needs will grow further as the demographics of the British population shift.

There are 68,247,855 bedrooms in England & Wales, and even if nobody shared a room, there would be enough for every one of the 59,597,542 of us to have a bedroom and still have 8,650,313 spare bedrooms! They are very unequally distributed between households.

What’s the answer?

Some on the left suggest we forcibly make these older mature Sale homeowners people move to smaller homes. Yet, it’s their property; they paid the mortgage on it for years (especially when mortgage interest rates were 15% and above), and thus, it’s their choice if they want to move or not.

Some of the difficulties are that downsizing in Sale often needs to make financial sense for mature homeowners.

Most mature Sale homeowners live in average-priced homes and suitable bungalows, even though they are smaller, often cost as much, if not more, than their large family home.

This issue will slowly worsen in the coming twenty years, so what are the options?

There is a necessity to motivate builders to build suitable properties for these mature homeowners to move into and to change the dynamics of the available properties to buy. For example, there are only 2 million bungalows in the UK, and we only built just over 1,800 new bungalows in 2020, yet seven in ten UK people (c. 10.7 million) aged over 65 want to live in a bungalow.

Secondly, there needs to be reform of the taxation rules on housing. Taxation works on the carrot or stick method.

The ‘stick’ could make it less attractive to stay in larger houses by increasing the higher council tax rates in the higher council tax bands. The ‘carrot’ could incentivise mature homeowners to downsize with allowances on stamp duty or inheritance tax, thus making a move easier.

However, the cost-of-living crisis and heightened energy bills could be doing the Government’s job for them.

The number of larger Sale homes owned by mature homeowners, often for 25 years plus, has been snowballing in the last six months.

This is good news for younger families that can afford to jump from their smaller homes, yet many can’t afford to make the jump for the same reasons why mature homeowners are moving home.

For example, of the 181,195 properties put on the market in the UK in November and December 2022, 56.9% were under £350,000. However, of the properties sold in the UK since Christmas 2022, 66.3% of them have been £350,000 or less.

This means those homeowners in the middle to upper levels of the Sale property market need to be very realistic with this pricing as the supply of the mid/high range properties is outstripping the demand.

Whilst it is not a good distribution of housing if you have some people in overcrowded households and others with spare bedrooms, everyone should be able to choose how to live.

Many Sale homeowners delay downsizing because they prefer to grow old in their family home rather than downsize. However, I often see mature homeowners downsizing too late when say, they have had a fall, are unable to manage the basics of gardening or cleaning, or the home becomes a physical hazard.

This downsizing phase will continue to grow, peaking in the mid-2030s.

The issue is, I cannot see builders or the Government building hundreds of thousands of bungalows in the next decade.

So maybe, you should consider making a move in the next few years, when you will have a better choice of bungalows to move to and you are able to put your stamp on it when you are in your 70’s and before you are unable to in your mid/late 80s?

If mature homeowners have large properties earned from working hard and paying taxes, then quite frankly, that is nobody else’s business and no one should force you out!! You might want that extra space for children and grandchildren to come and stay or as office space, a television room or a hobby room. Yet please, I must stress these are only suggestions.

These are my thoughts; what are yours?

Posted on

Sale Property Market Holding up Despite Doom and Gloom in the Newspapers

The Sale housing market over the last three months is now becoming more ‘normal’ after the last couple of years of insane demand when the lockdowns started a race for space!

Even with the blackening economic doom-mongers forecasting a harsh slowdown in the British property market, the number of people buying and selling their homes is still very good for the time of year.

Whilst many homeowners are reducing their asking prices, it is not the 20% (some even said 30%) drop some property commentators and newspaper journalists had predicted.

Looking at the stats for Sale for the last three months since the disastrous Truss mini budget – they make good reading.

Of the 400 Sale properties that have sold (stc) between late September and the start of January, the average length of time it took to achieve a sale was 33 days.

Interesting when you split it down by price, in Sale:

  • Under £100k – 112 days
  • £100k to £200k – 57 days
  • £200k to £300k – 37 days
  • £300k to £400k – 27 days
  • £400k to £500k – 25 days
  • £500k to £1m – 26 days
  • £1m and above – 29 days

And by type:

  • Sale Apartment/Flat – 56 days
  • Sale Terraced/Townhouse – 28 days
  • Sale Semi-Detached – 26 days
  • Sale Detached – 27 days

The latest sold price data from the Land Registry shows that Sale house prices currently remain 12% higher than they were 12 months ago; the rate of growth has dropped significantly.

Sale house prices only rose by 0.9% in December; thus we are seeing the first sign that the property market is starting to cool.

With interest rates now at 4% and further increases likely, that will undoubtedly spur ongoing cooling in Sale property values yet it’s doubtful we will see the Sale property market go into the deep freeze that many doom-mongers were predicting.

As I said in recent articles on the Sale property market, we will see a 5% to 10% reduction in Sale house prices over the next 12 to 18 months.

That will only take us back to the prices achieved in mid/late 2021 or early 2022 (depending on the property type).

Landlords have experienced double-digit rent growth in the last 12/18 months with a shortage of rental properties coming onto the market. I cannot see this changing in the short term, so I expect rents to be a further 10% higher by Christmas 2023.

Last week I stated it is not always wise to only focus on house prices but also take reference from the number of property transactions completed that feeds the fire of the British property market.

For example, in March 2021, 135,670 properties sold, yet a month later, it dropped to 87,600. A couple of months later, it rose again in June 2021 to 165,290 homes sold (for it to drop to 64,000 in July).

Whilst this is good news for estate agents and removals companies, it can skew the property market and put undue pressure on the property market (pressure which could cause a housing crash if not put under check).

Like most things, slow, steady and consistent is the preferred option for the property market. Throughout 2022, the number of properties selling in the UK had been a steady average of 68,832 per month, ranging from a low of 61,800 in January 2022 to 72,200 in July 2022.

This consistency will continue into 2023 and a return to a more

‘normal’ housing market.

One final thing I have noticed about the Sale property market in the last six months is the number of larger properties coming onto the market that last sold over 25 years ago.

Homeowners in their 20s, 30s and early 40s tend to move every five or six years, yet when they reach their late 40s and 50s, they tend to stay put for longer. These properties only tend to come on the market when people pass away or must be sold for nursing home fees etc.

These mature homeowners are downsizing for several reasons. Their children have flown the nest and they are rattling around in homes with accommodation they don’t need. Many are being driven to sell their large homes in light of mounting energy bills, high inflation and never-ending maintenance costs that larger properties demand.

The second reason is that the recent rises in Sale house prices has meant the money released to downsize has grown, meaning if these mature homeowners sell up and cash in to more manageable properties, the amount of money released is quite impressive.

In conclusion, 2023 is going to be a more ‘normal’ year, akin to the 2016 to 2019 years. Sale homeowners need to be realistic with their pricing, yet as over eight out of ten sellers buy another home, the one you buy will be lower.

If you are considering selling your Sale home in 2023 and would like a chat about your options, feel free to drop me a line or call the office.