Tag: house sale

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The Art of Home Staging: Why It Truly Counts in Selling Your Property

In the competitive real estate market, first impressions matter, and staging a property is not just a luxury but a strategic necessity. Home staging, the process of preparing a residence for sale by showcasing its best features, has evolved into a crucial aspect of the selling process. In this blog post, we’ll explore the reasons why staging a property counts and how it can significantly impact your chances of a successful sale.

1. Enhances Visual Appeal

One of the primary reasons to stage a property is to enhance its visual appeal. Staging allows you to highlight the property’s strengths and create a visually appealing environment that potential buyers can envision themselves living in. From furniture arrangement to decor choices, staging transforms spaces, making them more attractive and inviting.

2. Facilitates Emotional Connection

Buyers often make decisions based on emotions. Staging helps create an emotional connection between the potential buyer and the property. By presenting a well-staged home, you are not just selling a house; you are selling a lifestyle. Thoughtfully arranged furniture and decor can evoke positive emotions, making it easier for buyers to imagine themselves living in the space.

3. Showcases Functionality

Proper staging allows you to showcase the functionality of each room. By arranging furniture in a way that highlights the purpose of each space, potential buyers can easily understand the flow and potential uses of different areas in the home. This clarity can be a deciding factor for buyers who are trying to envision how they would utilize the available space.

4. Sets the Right Tone

Staging helps set the right tone for the property. Whether you’re aiming for a cozy family home, a modern urban apartment, or a luxurious estate, staging enables you to convey a consistent theme throughout the property. This cohesive presentation creates a memorable experience for potential buyers and sets the property apart in their minds.

5. Maximizes Perceived Value

A well-staged property can create a sense of luxury and quality, maximizing the perceived value in the eyes of potential buyers. Thoughtful decor choices and attention to detail can make a property feel more upscale, potentially justifying a higher asking price. Investing in staging can yield returns by influencing buyers to perceive the property as a premium offering.

6. Accelerates the Selling Process

Staged homes tend to sell faster than their non-staged counterparts. The enhanced visual appeal, emotional connection, and perceived value contribute to a more attractive listing. A quicker sale not only reduces the time and effort invested in marketing but also avoids the potential challenges associated with a property lingering on the market.

7. Attracts Online Attention

In today’s digital age, the first encounter many potential buyers have with a property is through online listings. Staged homes photograph well, capturing the attention of online browsers. High-quality images of a beautifully staged property can generate more interest, clicks, and inquiries, ultimately leading to more showings and a higher likelihood of a successful sale.

In conclusion, staging a property is not just a superficial aspect of the selling process; it is a strategic investment that can significantly impact the success of your real estate transaction. From creating an emotional connection to accelerating the selling process, the benefits of staging are multifaceted. So, if you’re considering selling your property, remember that staging isn’t just about making it look good; it’s about making it irresistible to potential buyers.

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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?

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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.

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103% more Sale homes are on the market today than a year ago

More Sale homes are now coming up for sale.

This is excellent news for Sale homebuyers and Sale landlords because as properties are no longer flying off the shelf as they did last year, the number of properties available to buy is beginning to return to long-term averages.

This means there is greater choice for Sale buyers and this will reduce the pressure on Sale house prices and return us to a more normal Sale housing market for buyers (and sellers).

The average UK estate agency now has 25 homes for sale, the highest level of properties on the market since December 2021 (when it was 21 homes for sale). 

However, properties per estate agency brand is not the best judge of the property market.

Let’s look at the actual Sale stats, which tell a slightly different story.

  • Sale Detached Homes – Dec 2021, 25 available and today, 72 available – a rise of 188%
  • Sale Semi-Detached Homes – Dec 2021, 58 available and today, 180 available – a rise of 210%
  • Sale Terraced/Town Houses – Dec 2021, 23 available and today, 66 available – a rise of 187%
  • Sale Apartments – Dec 2021, 106 available and today, 111 available – a rise of 5%

Overall, an increase of 103% – year on year.

(The data for Sale is calculated by looking at all properties and plots for sale within a 2-mile radius of the centre of Sale).

This growth in properties for sale has been seen across all areas of the British Isles. This is important because when there is a more significant availability of homes for sale, this diminishes the increasing pressure on house prices.

So how does a low number of properties for sale make such a huge difference?

Coming into the early spring of 2022, the levels of properties for sale were low (as seen from the low December 2021 stats above). It was ‘Hobson’s choice’ for buyers, so they had to pay top dollar to secure their Sale home.

The value of Sale properties that had their sale agreed upon in the early spring of 2022 (and completed their sale in September 2022) is 14.6% higher than those Sale properties that had a sale agreed upon in the spring of 2021.

The number of properties estate agents have to offer buyers is increasing; this will boost the choice for Sale buyers, meaning we will move into a more balanced Sale housing market. 

Nevertheless, it’s vital that Sale sellers place their properties, when they go onto the market, in line with what Sale homebuyers are prepared to pay, given the current hit to their buying power initiated by higher interest rates.

Sale house prices are not expected to crash in 2023, yet they will be lower than in 2022.

If you are buying and selling in the same property market, it doesn’t matter what happens to property prices.

Also, some might say waiting for Sale house prices to drop will enable them to grab a bargain.

Well, sorry to ‘rain on your parade’, but you should read my recent article that discusses what would happen if Sale first-time buyers waited for Sale house prices to drop. If they waited, because interest rates are rising, the extra mortgage payments would cost them a lot more than the savings made on the purchase price. (Send me a message if you want a copy of it).

What has an effect on the value of your Sale home is the number of properties for sale at any one time compared to the number of buyers. When there is an over-supply of homes for sale, prices go down, and with reduced demand, house prices will go down. So how do the stock levels of properties for sale compare to the past?

If you recall at the start of the article, I stated the average UK estate agency had 25 properties on their books now. In 2018/9, that average was 36 properties for sale (and for added comparison, the long-term average, since records began in 2016, is 49 homes for sale).

As you can see, whilst stock levels have grown, we are a long way off the long-term average.

A great way to determine what will happen to the property market is by measuring that stock level (i.e. the number of properties for sale). Check once a month and see how many properties are for sale. Let me break that down for Sale specifically and how you can judge the market from your sofa.

There are 444 properties and plots for sale in Sale now. To give context, the long-term 16-year average is 984 properties and plots for sale, yet in the credit crunch of 2008, it reached 2,215 properties and plots for sale at one point.

I envisage some component of scarcity to persist in the Sale property market, meaning whilst the house prices that were being achieved in the spring of 2022 won’t be replicated in 2023, it also won’t fall dramatically next year. 

The incentives and impetuses to move home have changed in the last six months and will continue to do so into 2023. 

As I have written before, there are a larger number of mature homeowners in their 60s and 70s downsizing to help with heating bills, whilst the desire for more space means younger families will continue to look for new homes to live in, in 2023. 

If younger 20-somethings can access the Bank of Mum and Dad for mortgage deposits, they will also carry on buying. This is especially true because double-digit rental inflation makes renting quite expensive compared to buying (even with the increased interest rates).

These are my thoughts on the Sale property market this week. Do put in the comments (or send me a message) your thoughts on the matter discussed and any other property-related topic you want some advice and opinion on.

Thank you in advance …

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Could the humble ‘granny annexe’ help solve the Sale housing crisis for mature homeowners?

Most Sale homeowners born before 1960 have been in their homes for more than 25 years.

Yet of all the properties sold in the UK since the first lockdown in the summer of 2020, 50% of those property owners had only been in their homes for six years and four months or less. That means we almost have a two speed housing market.

One market of homeowners in their 20s and 30s who move every four to five years and another property market of homeowners who, when they hit their late 40s, tend to stay put for decades. Yet now those mature homeowners, many of whom are retired and on fixed incomes with pensions, are finding it a lot more challenging to make ends meet with the cost-of-living crisis.

Evidence suggests nationally and locally, a lot of larger houses (property which tends to be owned by mature homeowners) have come onto the market in the last 12 months compared to the previous few years.

There has been a drop of 22.9% of properties priced up to £200,000 on the market in the UK in the last 12 months, yet an increase of 13.3% of properties priced between £500k and £1m.

Focusing on the lower price range nationally, there are 39.4% fewer properties for sale in the price range up to £100k, 27% fewer in the £100k to £150k range and 14.9% fewer in the £150k to £200k range. The range that has seen the highest growth is the £600k to £750k, which has grown by 14.2%.

ooking closer to home in Sale …

there are 18% more properties for sale in the Sale area today, compared to a year ago (396 properties for sale now compared to 336 a year ago).

But it gets much more interesting when you split the increases by bedrooms and property type.

Properties with more bedrooms tend to be more expensive than those with fewer. Also, detached and semi-detached properties are more expensive than terraced/townhouses and apartments.

5-bed Sale properties – an increase of 10%

4-bed Sale properties – an increase of 39%

3-bed Sale properties – an increase of 74%

2-bed Sale properties – a decrease of 12%

1-bed Sale properties – a decrease of 19%

And now, by type …

Sale detached properties – an increase of 5%

Sale semi-detached properties – an increase of 98%

Sale terraced/town house properties – an increase of 38%

Sale apartments – a decrease of 25%

The increase in these larger Sale homes is great news for second or third-time movers, as it releases larger homes for them to bring up their young families.

Yet, the other side is the lack of properties for these mature Sale homeowners to buy.

There are 12.7 million people aged 65 and over in the UK (19% of the total population), yet there are only 2 million bungalows (which represent 7.2% of all UK property).

When it comes to new properties, the figures are even worse.

Of the 173,660 properties built in 2019, only 2,384 were bungalows.

And this is where the annexe could be one part of the solution.

Annexes are buildings often erected in gardens or extended onto an existing property to be used as separate and independent living accommodation.

Generally, the ‘granny annexe’ has been used to keep one’s parents and grandparents nearby whilst retaining their independence. Roll the clock back to the Millennium; annexes were seen as excess accommodation that added little to the saleability or value of property.

Interestingly though, in the last few years, the annexe has had a renaissance and has become a practical, economical and emotional answer for a more flexible group of homeowners.

Lockdown brought working from home to the fore, and the annexe is undoubtedly an excellent solution for many homeowners.

Lockdown saw many people recognise the importance of having their family close by. I have seen several mature Sale homeowners build an annexe extension in the garden, then move into the annexe themselves and give their original property to their children to live in.  Thus helping two families with their accommodation needs and the advantage of shared fuel costs (plus other benefits such as childcare).

Also, as mortgage rates are rising, the annexe could be the salvation for either your first-time buyer child/grandchild who cannot afford to buy their first home because of mortgage affordability rules or who is finding it tough to save a deposit for a mortgage.

The demand is there for annexes. In December 2020, Rightmove reported a year-on-year 89% increase in the number of home buyers and tenants searching for the term ‘annexe’. Demand is high and supply, as seen by these statistics, is low.

Of the 396 properties for sale in the Sale area, only 3 have an annexe.

I believe the lockdown made many of us look at how we live in the UK. Many people are adopting, adapting and changing how they look at housing. With recent planning regulation changes, the rules were relaxed a few years ago, which allowed homeowners to extend their homes without planning permission in an arrangement called ‘Permitted Development’.

If you are a mature/older Sale homeowner or have mature/older parents and want to look at all your options regarding upsizing, downsizing and annexes then, without any obligation, drop me a message and let’s chat through your options.

For everyone else in Sale, what do you think about annexes? And what other solutions could help solve the housing issue in Sale and the UK as a whole?

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House Prices Ought to be Falling – these are the reasons they are not.

Looking at the newspapers with their doom and gloom headlines, you would think that the Sale property market (and the British property market) would be on its knees.

Lets have a look at Sale as an example.

Ring some Sale estate agents for a viewing or free valuation, and if you can get an appointment within a week to ten days, you are doing well!

British properties continue to sell in good numbers.

In July and August 2022, sales have been agreed on an average of 25,476 UK properties per week.

Interesting when compared to the averages of 27,351 sales agreed per week in 2021 and 26,382 sales agreed per week, year to date in 2022.

So why is the Sale property market defying all expectations?

It is because there is an absolute shortage of properties to buy on the books of Sale estate agents, meaning Sale house prices are being kept buoyant (as demand exceeds supply).

Today, there are 356 properties available to buy in Sale. Roll the clock back to October 2007, the month before the last house price crash, and it was 1,918.

That’s 81% fewer properties to buy today in Sale than the month before the property crash.

Notwithstanding suggestions that the Bank of England’s higher interest rates would peter out British house price growth, the continued limited supply of properties coming onto the market has helped Sale house prices climb.

Sale house prices are 13.2% higher today than a year ago.

Nevertheless, there is evidence that the insane demand for property has started to ease, and supply is increasing, which means that the direction of the Sale housing market will begin to change in the coming months.

This can be seen in several ways.

Back in January and February (2022), 8,094 UK properties per week were reducing their asking prices, whilst this July and August that had risen to an average of 13,115 UK properties per week. This is significant as some ‘optimistic’ homeowners who placed their properties on the market in the spring and early summer have had to reduce their ‘optimistic’ asking prices to attract buyers.

Also, the number of UK house sales falling through (i.e., when the sale is agreed yet the sale falls through before the legal paperwork is completed) is starting to creep upwards from an average of 5,558 properties a week in the spring of 2022 to 6,854 per week in July and August 2022.

Sale house prices have risen over recent times; the latest figures are based on what was selling in the late winter/early spring of this year and subsequently completing the sale in the early summer.

The prices obtained by the estate agents on properties achieving a sale in Sale today (i.e. in the autumn of 2022) are slightly lower than what was obtained nine months ago. This means the house statistics published in early spring 2023 will slightly reduce. Nothing to worry about – I want to give you a heads up and not to be concerned. The simple fact is …

we are returning to a more normal Sale housing market this autumn, compared to the crazy last 30 months since the end of lockdown one.

With UK inflation standing at 9.9%, this brings an interesting scenario for Sale property values.

Reducing ‘real’ wages will hit first-time buyers and existing homeowners’ disposable income, while the same high inflation will make the Bank of England increase interest rates.

These things will significantly reduce homebuyers’ capacity to afford their mortgages as the fewer people who can take out a mortgage; the fewer buyers will buy homes.

The Bank of England base rate currently stands at 1.75%, yet forecasts suggest it could end the year between 2.75% and 3%. Yet let us not forget the long-term average over the last 50 years has been between 7.1% and 7.2%, and many mature Sale homeowners will remember Bank of England Base Rates of 17% in 1979, so these sorts of increases are still off a low base.

During these autumn months though, the lack of properties on the market and available to buy still support Sale house prices. The newspapers compete for attention and use clickbait titles to generate more interest in the publications.

The simple fact is that unless something seismically happens in the world to change things materially, the Sale and British property markets will continue to harden slowly and will face some different challenges compared to the last 30 months, but fundamentally Sale house prices will remain broadly neutral over the next 12 to 18 months.

These are my thoughts; what are yours?

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Lymm’s ‘Generation Stuck’ and Their £934m Tied-up Equity

The predicament of the Lymm 20 to 30 year olds who rent and their inability to get onto the housing ladder is often discussed in the press.

There are 4.43m properties in the UK that are still in the private rented sector (compared to 2.13m in 2002).

This group of people in their 20s and 30’s, who rent from a private landlord, are often called ‘Generation Rent’.

Yet would it surprise you that since 2017, the number of UK households in the private rented sector has reduced by 260,000 whilst the number of homeowners has increased by 1.1m?

In this article I want to talk about another set of people, not ‘Generation Rent’, but ‘Generation Stuck’.

Generation Stuck are our middle-aged and mature homeowners of Lymm. They are the generation that could be described as late ‘Baby Boomers’ (born in late 1950s and early 1960s) and the early ‘Gen X’ (born in the mid 1960s to early 1970s).

These 50 to 64 year old people feel stuck in their Lymm homes, and therefore I have nicknamed them ‘Generation Stuck’. Their inability to move could be holding back those younger Lymm ‘Generation Renters’.

So, let me look at the numbers involved.

In Lymm, there are 904 households, whose owners are aged between 50 and 64 years old and about to pay their mortgage off on property that is worth £440.42m.

There are an additional 1,015 mortgage free Lymm households, owned by 50 to 64 year olds, worth £494.50m, meaning …

Lymm ‘Baby Boomers’ and Lymm ‘Gen X ‘are sitting on £934.9m worth of Lymm property.

According to the Census, 47.8% of homes occupied by 50 to 64 year olds have two or more spare bedrooms.

This is backed up by the annual English Housing Survey that states nationally, 49% of properties occupied by these ‘Generation Stuck’ are ‘under-occupied’.

Under-occupied is categorised as having at least two spare bedrooms.

Looking at the statistics closer to home

52.7% of Warrington 50 to 64 year olds have two or more spare bedrooms, making it the 124th highest local authority in the country (out of 348 local authorities).

The rising number of older Lymm homeowners who want to downsize their Lymm home are often held back by the lack of suitable housing options for older people and the difficulties of moving.

Lots of over 50 year old Lymm people cannot move home in the way that they would like, due to a lack of suitable housing options and so can find themselves ‘stuck’ in homes which are no longer suitable for them as they age.

Only 1 in 29 people over the age of 50 move home each year, compared to 1 in 15 for the rest of the population.

Helping mature Lymm homeowners (Generation Stuck) to downsize their homes at the right time will also allow younger Lymm people (Generation Rent) to find the Lymm family homes they need – meaning every generation wins, both young and old.

However, to ensure downsizing works, we need more choices for these “last-time-buyers”.

That means building more bungalows or more ground floor apartments suitable for the middle to older generation.

One way this could be done is by changing the planning rules to force builders to build these types of properties, whilst the other could be the changing of the stamp duty tax breaks for downsizers.

In this way, older Lymm people will be more able to move into homes which suit their specific needs, improve their quality of life whilst meeting their goals in life, all without them becoming detached from their friends and family locally in the Lymm area.

These are my thoughts, please let me know yours.

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Lymm Starter Homes are 25.8% Cheaper Today Than in 1989

Even though the average value of a Lymm first-time buyer property has risen by 361.4% since 1989 to £355,430, the monthly payments Lymm first-time buyers must make on their mortgages as a proportion of their take-home pay is 25.8% less today compared to 1989.

Today, according to the Nationwide Building Society…

the average Lymm first-time buyer only needs to pay out 24.5% of their household take-home pay on their mortgage payments, compared to 33.0% in 1989 (i.e., just over a quarter less).

You might say 1989 was 33 years ago, a long time ago and not relevant to today. I would agree.

So next, I looked a little closer to home, and in 2007…

the average Lymm first-time buyer had to spend 37.9% of their household income on mortgage payments (i.e., 35.4% proportionally cheaper than today).

So why do I say all these things?

Last month, the Bank of England revealed that its Financial Policy Committee would be removing their mortgage market affordability test on people taking out mortgages in August.

The test was introduced in 2014 to ensure the UK didn’t have a repeat of the 2008 Credit Crunch and particularly hit first-time buyers with what they could afford to buy.

This rule change means Lymm property buyers could soon be able to borrow thousands of pounds more and purchase larger homes.

The decision to withdraw the affordability test certainly raised eyebrows in the press, primarily as the Bank of England has raised interest rates five times in the last six months to try and reduce rising inflation. Yet, as stated in the first part of this article, Lymm first-time buyers are comfortably paying their mortgages compared to previous years – therefore everything should be ok with this rule change.

The old rules tested home buyers on mortgage repayments if interest rates rose to 6%/7%, yet the Bank thought that rule was too harsh.

Not all rules have been changed, as the important Bank of England ‘loan to income ratio’ stays put.

The Bank were keen to stress that the mortgage market was not going to turn into a free-for-all, as it did in the mid-2000s when the likes of Northern Rock were offering 125% mortgages, and a sixth of all UK mortgages were given without proof of income.

I believe it will have a progressive effect on the Lymm property market.

Many Lymm tenants who have been paying rents far more than actual mortgage payments for the same Lymm home, but have failed affordability assessments regardless, will now be able to get on the property ladder.

The rule change should open the Lymm property market up a little more and allow house prices to grow in Lymm.

I advise anyone who has been refused a mortgage on affordability in the past to speak to a mortgage arranger. If you don’t know of one, drop a message to me, and I will give you details of mortgage arrangers you could talk to.

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71.9% of Sale Properties Were Bought With a Mortgage in the Last Ten Years

Could the high levels of mortgages that Sale people take out cause another property crash?

Many Sale homeowners and landlords have been contacting me recently and asking what will happen to the Sale (and the UK) property market? More specifically, will we have a repeat of the 2008/9 Credit Crunch property crash?

High mortgage payments were one of the critical catalysts to Sale house prices dropping by between 16% and 19% (depending on the type of property) in just over one year in Sale.

To answer that question, let me look at the mortgage numbers locally to see where we stand in the Sale area.

25,584 of the 35,572 property sales in the last decade in Trafford were made with a mortgage.

71.9% of our local authority area house purchases have been made with a mortgage (meaning 28.1% are made with 100% cash).

Interesting, when compared with the national average of 67.4% of house purchases with a mortgage over the last decade.

However, what is thought-provoking is the number of house purchasers buying with a mortgage has steadily been decreasing over the last decade.

Between 2012 and 2017, the percentage of people buying with a mortgage was 72.7%, yet over the last five years in Trafford, that has fallen to 71.6%.

The issue is that most people need a mortgage to buy their home.

However, it’s not the amount of mortgage that is the issue, more the level of monthly payments. So, if you fix your mortgage rate, then your payments are fixed (a good idea especially as interest rates are on the rise).

In the last quarter, just under nineteen out of twenty (94.35%) of new borrowers that took out a mortgage had a fixed-rate mortgage at an average interest rate of 1.84%.

That’s good news for recent buyers as most of their payments won’t rise even though Bank of England interest rates have risen over the last few months. Yet it’s essential to see what existing homeowners with mortgages have done with their mortgage rates (i.e. fixed or not) as they form the bulk of the property market.

This is because in 2008/9 (the last crash), many people were unable to afford their high monthly mortgage payments when they were made redundant because interest rates were much higher. This meant many Sale homeowners ‘dumped’ their houses onto the market, all in one go in 2008, because they couldn’t afford their high mortgage payments.

Also, the banks could not lend money for mortgages as easily because of the Credit Crunch, meaning fewer people could get a mortgage, so the demand for Sale houses dropped as well.

In a nutshell, the number of Sale properties on the market almost doubled overnight in 2008, yet demand plummeted as mortgages were hard to come by. High supply and low demand meant Sale house prices nosedived in 2008/9.

Going into the Credit Crunch, one in six (60.4%) homeowners with a mortgage had a fixed rate at an average of 5.76%. By 2013, this had dropped to one in three people (33.29%) having a fixed-rate mortgage at an average of 3.34%.

Yet today, just under 17 out of 20 homeowners with a mortgage have a fixed rate at an average of 1.97%.

Whilst the country might owe collectively £1,630.5 billion in mortgages, irrespective of increasing rates, most homeowners have protected themselves with a low fixed interest rate.

Also, the overall ratio of mortgage debt in the UK, compared to the value of the homes the mortgages are lent on, is also low compared to the year before the last property crash. This ratio is called the Loan to Value ratio (LTV). The higher the LTV, the less equity the homeowner has in the property.

In 2007 (the year before the crash), only 49.4% of people had a mortgage less than 75% of the house’s value (i.e. they had an LTV of less than 75%). Today that stands at 60.9%, which means more people have more equity in their property.

Another thought on why the country is in a better position is only 4.22% of mortgages have a 90% or higher LTV (compared to 16.28% just before the crash in 2007).

1 in 6 people were vulnerable to negative equity in the last property crash, whilst today that would only be 1 in 25.

This means if we do have another property market correction for any other reason … the number of people in negative equity will be much smaller, so it won’t affect the property market as much.

So, in conclusion, as we have fewer people with high LTV mortgages and fixed rates that are a third of what they were in the Credit Crunch, we are, as a country, in a better position to weather any storm.

If you would like any advice or opinion on the Sale property market, be it buying or selling or anything to do with investing in the Sale buy-to-let property market, don’t hesitate to drop me a line. 

Posted on

71.9% of Sale Properties Were Bought With a Mortgage in the Last Ten Years

Could the high levels of mortgages that Sale people take out cause another property crash?

Many Sale homeowners and landlords have been contacting me recently and asking what will happen to the Sale (and the UK) property market? More specifically, will we have a repeat of the 2008/9 Credit Crunch property crash?

High mortgage payments were one of the critical catalysts to Sale house prices dropping by between 16% and 19% (depending on the type of property) in just over one year in Sale.

To answer that question, let me look at the mortgage numbers locally to see where we stand in the Sale area.

25,584 of the 35,572 property sales in the last decade in Trafford were made with a mortgage.

71.9% of our local authority area house purchases have been made with a mortgage (meaning 28.1% are made with 100% cash).

Interesting, when compared with the national average of 67.4% of house purchases with a mortgage over the last decade.

However, what is thought-provoking is the number of house purchasers buying with a mortgage has steadily been decreasing over the last decade.

Between 2012 and 2017, the percentage of people buying with a mortgage was 72.7%, yet over the last five years in Trafford, that has fallen to 71.6%.

The issue is that most people need a mortgage to buy their home.

However, it’s not the amount of mortgage that is the issue, more the level of monthly payments. So, if you fix your mortgage rate, then your payments are fixed (a good idea especially as interest rates are on the rise).

In the last quarter, just under nineteen out of twenty (94.35%) of new borrowers that took out a mortgage had a fixed-rate mortgage at an average interest rate of 1.84%.

That’s good news for recent buyers as most of their payments won’t rise even though Bank of England interest rates have risen over the last few months. Yet it’s essential to see what existing homeowners with mortgages have done with their mortgage rates (i.e. fixed or not) as they form the bulk of the property market.

This is because in 2008/9 (the last crash), many people were unable to afford their high monthly mortgage payments when they were made redundant because interest rates were much higher. This meant many Sale homeowners ‘dumped’ their houses onto the market, all in one go in 2008, because they couldn’t afford their high mortgage payments.

Also, the banks could not lend money for mortgages as easily because of the Credit Crunch, meaning fewer people could get a mortgage, so the demand for Sale houses dropped as well.

In a nutshell, the number of Sale properties on the market almost doubled overnight in 2008, yet demand plummeted as mortgages were hard to come by. High supply and low demand meant Sale house prices nosedived in 2008/9.

Going into the Credit Crunch, one in six (60.4%) homeowners with a mortgage had a fixed rate at an average of 5.76%. By 2013, this had dropped to one in three people (33.29%) having a fixed-rate mortgage at an average of 3.34%.

Yet today, just under 17 out of 20 homeowners with a mortgage have a fixed rate at an average of 1.97%.

Whilst the country might owe collectively £1,630.5 billion in mortgages, irrespective of increasing rates, most homeowners have protected themselves with a low fixed interest rate.

Also, the overall ratio of mortgage debt in the UK, compared to the value of the homes the mortgages are lent on, is also low compared to the year before the last property crash. This ratio is called the Loan to Value ratio (LTV). The higher the LTV, the less equity the homeowner has in the property.

In 2007 (the year before the crash), only 49.4% of people had a mortgage less than 75% of the house’s value (i.e. they had an LTV of less than 75%). Today that stands at 60.9%, which means more people have more equity in their property.

Another thought on why the country is in a better position is only 4.22% of mortgages have a 90% or higher LTV (compared to 16.28% just before the crash in 2007).

1 in 6 people were vulnerable to negative equity in the last property crash, whilst today that would only be 1 in 25.

This means if we do have another property market correction for any other reason … the number of people in negative equity will be much smaller, so it won’t affect the property market as much.

So, in conclusion, as we have fewer people with high LTV mortgages and fixed rates that are a third of what they were in the Credit Crunch, we are, as a country, in a better position to weather any storm.

If you would like any advice or opinion on the Sale property market, be it buying or selling or anything to do with investing in the Sale buy-to-let property market, don’t hesitate to drop me a line.