We all got to admit, we all have guilty please of scrolling through Rightmove and ‘checking’ homes out. I have also recently found myself looking through Pinterest and gaining masses of inspiration. Or maybe its just me?
What we do know is homes and the internal space have a huge impact on our lives. For me, amazing spaces have a huge impact on my mood, productivity and overall well being. That is why we should as a nation put more effort into designing our homes with more space, better design to fit our needs (of now, not what we required for a property 50 years ago) and ultimately a space that elevates yours and who you may share this space with, day to day lives.
I hope you enjoy drilling of these properties as much as I do and for anyone that maybe interested my favourite (by a small margin) is the ‘Stylish London Mansion’
…and the three reasons why it will not be thecatastrophic scenario some are predicting
In the last few months, the Blackpool (and UK) property market has resisted and flouted every economist’s prediction. With the economy a shadow of its former self, unemployment set to hit 11.9%, the Government on track to borrow nearly half a trillion pounds to pay for Coronavirus support packages etc., all of this has had no effect on Blackpool homeowner’s enthusiasm or capability to want to move home. It highlights the influence of both the emotional impact of lockdown and the enticing appeal of saving thousands of pounds on your Stamp Duty Tax bill.
For the last few months, the Blackpool property market has been akin to a surfer, riding an unexpectedly large wave. The question is, will the surfer crash down (i.e. the property market) onto the rocks or will it calmly arrive at the beach unscathed? Well looking at house prices firstly …
UK house prices are 4.7% higher than they were 12 months ago according to the Land Registry, whilst in Blackpool they are 3.4% higher
Looking at the data over the country, things overall are looking good for property prices. Yet it must be remembered the Land Registry data is on completed house sales and is always a couple of months behind, so this data is for house sales up to September that were agreed in the spring. Also, it does not take into account the prices being paid today on Blackpool homes (as they will only show in statistics the Spring and Summer of 2021 when the sale completes).
Blackpool house prices will inevitably ease in 2021
Anecdotal evidence over the last few months has suggested buyers are using their Stamp Duty savings on the price they are prepared to pay for the Blackpool home of their dreams, so when the Stamp Duty holiday finishes in Spring 2021, we will see a reduction in the price Blackpool properties sell for, as buyers will now have to hold back some of their cash to pay the Stamp Duty Tax.
Mortgage Approvals at a 13-year high
A better statistic to judge the property market by are the number of mortgage approvals. As the vast majority of house buyers need a mortgage, that is another good place to look at the numbers as they are much more up to date than the Land Registry figures. The Bank of England recently stated 97,500 mortgages were approved last month, up from the long-term average of just over 65,400 per month. This was the highest number of mortgage approvals since September 2007, and a whole third higher than mortgage approvals in February 2020 when we had the Boris Bounce in the property market.
As a country, we are due to smash through 2019’s 524,000 total number of mortgage approvals this month, despite the fact that the property market was closed for nearly three months in the spring. It’s vital to remember, that mortgage approvals do not equate to people moving home, as many of you reading this can attest to … property sales do fall through.
I do have apprehensions that many Blackpool people, buying and selling their Blackpool homes and in a chain, may not be able to realise the move before the Stamp Duty rules change at the end of March 2021, as there is a massive backlog with mortgage lenders, local authorities’ and the searches, chartered surveyors surveying the property and solicitors with the legal work, all combining to slow down the house selling and buying machine.
If you are in chain at the moment, you must constantly be talking to all the parties involved and ensuring everything is focused on getting the sale complete by the end of March. You have a responsibility to get information requested back in hours, not weeks … because if you don’t, you might not get your Blackpool home move through before the end of the Stamp Duty holiday, and without that discount, someone in your chain may pull out of the sale altogether and the chain will break.
The number of people moving home in Blackpool is anticipated todrop sharply after the Stamp Duty holiday ends at the end of March 2021
And that is probably going to be the biggest impact on the Blackpool property market in 2021. Yes, there will be a slight readjustment in the prices paid after March 2021 (as mentioned above) yet, a reduction in the number of people selling their Blackpool home does not inevitably lead to a house price crash.
Yes, there will be a number of people who have to sell in 2021 because they have lost their jobs (i.e. ‘forced sales’). In the last two ‘Property Market Crashes’ of 1988 and 2008, there were a large number of forced sales in a short period of time (because business owners had to sell their home as their business had gone bankrupt because of the Credit Crunch, as well as people who had lost their job), increasing the supply of properties coming to the market in 1988 and 2008.
This in turn pushed Blackpool house prices down as the property market was flooded with lots of property to sell in a short period of time. Yet this time, we have had the cushion/parachute of Bounce Back Loans, Furlough and Mortgage Holidays over the last 9 months.
Also, another important factor about the last property market crashes were the levels of interest rates and the amount borrowed.
Interest Rates are the key to the futureof the Blackpool property market
In 1988, mortgage interest rates were an eye watering 11.5% and 6% in 2008, meaning mortgages were much more expensive compared to the 0.1% rate we have today. Also, with 77.2% of mortgagees with fixed rate mortgages, and only 1 in 21 mortgages owing more than 90% of the value of their home (and 1 in 303 mortgagees owing more than 95% of the value of their home), negative equity should not be so much an issue like it was in 1988.
This means most Blackpool homeowners are in a much better place toweather the storm of 2021, than they were in 1988 and 2008
I foresee many Blackpool sellers will simply wait until activity in the Blackpool property market picks up again before placing their property on to the market. This means fewer properties will be placed on to the market for sale in the later part of 2021, meaning Blackpool house prices will tend to hold up. The people that will be affected by less properties coming onto the market will be estate agents, solicitors and home removals people.
I also believe there will be ‘interesting investment opportunities’ to be had for Blackpool buy to let in the latter half of 2021 with the potential changes in Capital Gains Tax regulations, although those won’t go on the open market, so do keep your ear to the ground and build relationships with all the letting agents in Blackpool so you get to hear of the property portfolios coming up for sale (as they tend to sell ‘off market’). Again, if that’s something that interests you – do drop me a line.
So, where is the Blackpool property market heading in 2021?
Well, the Blackpool property market (aka our “surfer”) has seen a house price growth of 5.9% since 2009 … and this has been fuelled on the back of …
Ultra-low interest rates mean money is cheap to borrow and so mortgage payments are low. With the Bank of England pumping £150bn into the economy in November with Quantitative Easing (QE) to add to the £725bn they have already spent on QE since 2009 – interest rates will continue to stay low for some time.
There has been an increase in the demand for housing with annual net migration of 214,400 since 2009 (meaning 96,700 additional households per year have been required since 2009 just to house those people – a total of 1,063,700 households).
The average age of death has risen by 2.1 years since 2008 in the UK. People living longer delays property from being released back onto the property ladder. For every extra year of life the average Brit lives, an extra 290,850 households are required in the UK.
None of these things have changed because of Covid.
As a country, we have only built on average 165,100 homes a year since 2009. Supply and demand shows that whilst we will probably have a turbulent choppy ride on the 2021 wave (because of the economy) our surfer (aka the property market), with long term demand for housing outstripping supply since the 1980’s, will continue to ride the wave (probably not as large as it has been in 2020) as the ultimate long-term outlook for the property market in Blackpool looks good.
All this means demand for decent, private rented Blackpool property will be good as long as the property ticks all the boxes of the tenants. If you are a Blackpool landlord, whether you are a client of mine or not, feel free to drop me a line to pick my brain on the future of the buy to let market in Blackpool.
What will happen to the value of your Thornton-Cleveleys home next year?
What will a no deal Brexit on the horizon, the end of the stamp duty holiday in March, mortgage payment holidays coming to an end, unemployment set to rise after furlough and ongoing on/off coronavirus restrictions do to the Thornton-Cleveleys property market and the value of your Thornton-Cleveleys home?
In the late spring of 2020, every man and his dog were forecasting impending doom on the British property market. Drops of 10% were considered optimistic as we all held our breath after lockdown was relaxed. Yet, the property market didn’t listen to the forecasters. UK property values today are 2.5% higher than they were a year ago, and more locally,
Thornton-Cleveleys house prices are 4.6% higher thana year ago.
So, what exactly is going to happen to the Thornton-Cleveleys property market in 2021?
Well, with the end of furlough and 1.7m people still on the furlough scheme at the start of October, a number of economists are saying that unfortunately many of those furloughed will become unemployed. Unemployment currently stands at 4.5% in Q3 2020 (compared to 3.8% in Q3 2019). The Government’s independent Office for Budget Responsibility believes the unemployment rate will peak at 9.7% in early 2021, and then return to pre-coronavirus levels in 2022. In the past recessions of the early 1980’s, early 1990’s and Credit Crunch of 2009, when unemployment went up, the property market went down.
Yet, in this recession, the link between unemployment and property values may not be so direct.
So why is the link between unemployment and house prices potentially broken? It comes down to interest rates.
The reason Thornton-Cleveleys house prices have gone up by 187.95% since the middle of the 1990’s isn’t because the labour market has got so much sturdier, nor that the economy has outperformed every G8 country, or that the UK has had less boom and bust economic cycles than the previous decades. Instead, it’s because of the fundamental and underlying decline in the Bank of England (BoE) interest rates.
High BoE interest rates equal high mortgage payments which holds everything back regarding the property market. In the 1980’s, the average BoE interest rate was just over 11%, making mortgage payments very expensive and keeping property prices dampened. In the 1990’s, the average BoE interest rate was a little over 6%, in the 2000’s just over 4%. However, in the 2010’s, it had been a really low 0.5%. Now with interest rates down to 0.1% because of coronavirus and the BoE threatening negative interest rates, there appears little threat of an eruption in mortgage repayment costs.
With mortgage payments at an all-time low of just under 30% homeowners’ disposable income (compared to 48% in 2007), those middle-aged people lucky enough to still be in a job (who are mainly made up of workers whom are spending a lot more time working from home), they could be more inclined to dedicate more of their monthly income to mortgage payments than they did pre-coronavirus for a bigger garden or a move out of the big cities?
So, if unemployment isn’t going to make a huge difference to the Thornton-Cleveleys property market, what is?
Most commentators believe a no deal Brexit will have hardly any short-term effect on the property market (apart from certain upmarket parts of central London).
The stamp duty holiday ends at the end of March 2021 and that certainly will reduce the number of Thornton-Cleveleys people moving (as many moved their plans forward to beat the deadline) meaning there will be less Thornton-Cleveleys people moving in 2021, yet that will curtail the supply of property for sale and hence keep Thornton-Cleveleys property prices higher.
Next, the Help to Buy scheme (started in 2013 and where the Government underwrites part of the mortgage for the first time buyer, meaning they can obtain a 95% mortgage) ends in April next year, yet the Tories indicated at their conference last month they would probably create ‘Help to Buy – Part 2’.
The bottom line is in the early 1980’s and 1990’s recessions, when interest rates were over 15%, obviously homeowners couldn’t afford to keep up the mortgage payments when made redundant or on lower wages, so many handed in their keys to the banks and got their homes repossessed, thus exacerbating the issue with falling property values.
However, with interest rates so low, this will not be the case. I envisage that UK property prices will be between 4% to 5% higher by December and Thornton-Cleveleys values just behind that at 2% to 3% higher, before levelling out in 2021 (although we might see a modest dip in certain sectors and types of Thornton-Cleveleys homes depending on location and condition).
My advice to Thornton-Cleveleys buy to let landlords is to wait on the subs bench until April 2021. Something tells me there will be some Thornton-Cleveleys landlords who will be looking to exit the rental market after having their fingers burnt after the eviction ban has been lifted.
I also suspect those Thornton-Cleveleys first time buyers, eager (and able) to break free the rental-rat-race will want to take up the anticipated ‘Help to Buy – Part 2’ scheme, particularly if the BoE base rate stays low. The other winners in 2021 will be low mortgage/equity rich households upsizing to the countryside or leafy suburbs to test out their boss’s promise of ‘flexible-working’.
Yet the losers will be the 18yo to 29yo renters … most likely to be made redundant and least likely to buy a home.
My advice to the Government for this cohort is to not ignore them once the country is out of this coronavirus situation. It’s all very good keeping the Home Counties Tory voting Baby Boomers happy with green belt policies and other policies to keep their property values higher, yet as the Generation X and Millennials get older and take over as the largest demographic to keep happy (for the polls), the hitherto inconceivable action of the Government levying Capital Gains Tax on your main home may come to fruition.
I mean, we have £400bn to pay back because of coronavirus … it has to be repaid and it has to come from somewhere. Those denied real access to buying their own home in the last 10 years, because of massive house price gains over the last 25 years, could vent their anger via the ballot box — if not at the 2024 General Election, maybe in 2029, when they realise that the futile housing policies of both Labour and Tories of the last 23 years have left them with enduring financial diffidence.
Maybe we should all look to the grocer’s daughter from Lincolnshire who in 1979 set out a bold vision of home ownership for everybody. Whichever political party truly picks up the batten and reframes it for the current 2020’s generation and comes up with the goods, will be the ultimate winner in this game.
Yet, if the proposals were adopted in full, some Thornton-Cleveleys landlords would pay £6,000 less Capital Gains Tax than they would currently
The government borrowed £394bn this financial year (April ‘20 to April ‘21). This figure does not include the cost of November lockdowns and support measures, which means the final bill will probably be over half a trillion pounds, these billions will ultimately need to be paid back to cover the cost of Coronavirus.
The Office of Tax Simplification (OTS) published a report for tax reform and, as was predicted by many in the press, the Government Dept suggested the Chancellor contemplate readjusting current Capital Gains Tax (CGT) rates with a person’s own Income Tax rates. This would mean increasing the rate of CGT for selling a buy to let property from 28% to 40% for high-rate taxpayers and 45% for additional rate taxpayers. To add salt to the wound, the OTS is suggesting cutting the £12,300 annual CGT allowance.
This has meant many Thornton-Cleveleys buy to let landlords contacting me in the last few weeks, wondering if this is the time to exit the Thornton-Cleveleys buy to let property market, especially as they have been hit by growing levels of rental legislation and higher taxes.
With tax bills about to go through the roof, is this the time to
leave the Thornton-Cleveleys buy to let property market?
Yet, like all things, the devil is in the detail as Thornton-Cleveleys 2nd homeowners and Thornton-Cleveleys landlords may well finish up having lower CGT tax bills with these new taxation proposals, even though the CGT restructurings are being introduced to raise the much-needed cash for the Government.
Apart from the suggested cut of the annual CGT allowance and increase in the CGT percentage rates, the OTS report also proposed reintroducing rebasing and indexation. In layman’s terms, the OTS are suggesting all gains made before 2000 would not be taxable (rebasing) and any capital gains would be calibrated to account for inflation.
So, what would that actually look like for a Thornton-Cleveleys landlord? Let us assume we have a Thornton-Cleveleys landlord who bought a Thornton-Cleveleys buy to let property in 2000.
Under the current CGT rules
The average value of a Thornton-Cleveleys property in 2000 was £62,000
Today, that same Thornton-Cleveleys property has increased in value to £169,900
Meaning a profit of £107,900
As our Thornton-Cleveleys landlord is a high-rate taxpayer (earning £60,000 a year), their CGT bill would, after the annual allowance be £26,768
Under the new proposed CGT rules
Under the new proposals, the CGT payable (assuming the CGT rate of 40% and a lower annual allowance of £5,000), the same Thornton-Cleveleys landlord would only pay £20,448 – a saving of just over £6,000.
And the savings don’t stop there. Remember, under the new OTS proposals, all capital gains made before 2000 would also be tax-free.
However, let us not forget the responsibility of the OTS is to report on tax simplification opportunities, not to set Government taxation policy. None of us have a crystal ball on what Rishi Sunak will do with CGT on buy to let property or second homes. Although, as time has always taught us with investments, often the worse thing to do is to make impulsive decisions on what MAY happen.
You have to remember, CGT only gets charged when you sell or transfer your investments, and most people use their rental investments to provide them with income. If you did sell up, the best 90-day building society accounts are obtaining 0.8% pa, the stock market is a rollercoaster (good luck with that) and Government 10-year bonds are paying a princely 0.324% pa … where else are you going to invest to get the income Thornton-Cleveleys property investments provide?
Property is an asset you can touch, feel and ultimately understand. Maybe, this is the time (if you haven’t already) to take portfolio advice on your Thornton-Cleveleys buy to let investments? Many Thornton-Cleveleys landlords do so, whether they use our agency, another Thornton-Cleveleys agency or you manage your property yourself. The service is free of charge, we don’t need to meet face to face as we can do it over Zoom and it’s all without obligation. I promise to tell you what you need to hear – not what you want to hear … what do you have to lose?
Looking back at the Blackpool property market for 2020, it can certainly be seen as a frenetic game of two halves, albeit with a very long half time in the spring. Between the General Election in mid-December and Christmas, many Blackpool agents saw an unusually higher uplift in activity in the property market just as we were getting ready for Christmas 2019. Yet once the New Year festivities were out of the way, that pre-Christmas uplift in the local property market was nothing when compared to the bang on Monday 6th January 2020 with the fabled ‘Boris Bounce’ of the Blackpool property market. January, February and most of March were amazing months, with the pent-up demand for people wanting to move following the Brexit uncertainty of 2018/9 in the first few months of 2020.
The pandemic hit mid-March, and the Blackpool property market was put on ice for nearly three months (as was almost everyone else’s lives). Yet at the end of spring, the property market was one of the first sectors of the economy to be re-opened. Every economist predicted house price drops in the order of 10% in the best-case scenario and 25% in the worst, yet nothing could be further from the truth.
When the lockdown restrictions were lifted from the property market, those three months allowed Blackpool homeowners to re-evaluate their relationships with their homes. The true worth of an extra bedroom (for an office) became priceless, as people working from home were having to take calls and work from the dining room table. Blackpool properties with gardens and/or close to green spaces all of a sudden became even more desirable. More fuel was put on the fire of the Blackpool property market with the introduction of the Stamp Duty Holiday, meaning buyers could save thousands of pounds in tax if they moved before the end of March 2021. This stoked the local property market and now…
Property values in Blackpool are set at 0.5% higher today compared to a year ago.
The fallout of that increased demand for a new home meant those Blackpool properties on the market coming out of lockdown in early summer with those extra rooms and gardens were snapped up in days for ‘full’ price. Blackpool buyers were having to spend their Stamp Duty savings on paying top dollar for the home of their dreams. Yet the increased number of properties coming onto the market in the late summer quenched a lot of that demand and the prices being achieved became a little more reasonable and realistic. This increased the number of properties sold (stc), so much so, that nationally, almost two thirds more homes have been sold (stc) than would be expected at this time of year!
However, as we all know, just because a property is sold (stc), it doesn’t mean the property is actually sold. The number of people who have moved home in the last 12 months in Blackpool, is as you would expect, much lower. Over the last 10 years, on average 1,362 Blackpool homes have changed hands per year, compared to only 695 Blackpool homes in the last 12 months.
So, what is a Blackpool property worth today? Drilling down to the four types of homes locally, some interesting numbers appear. Looking at the table, you can see what the average property types are worth locally, and within each type, the average price paid in the last 12 months. (So, if the average price paid for the last 12 months is higher than the overall average, that means more higher priced property in that type has sold in the last year compared to the overall average – and vice versa)
Average Overall Value Today
Average Price Paid in the Last Year
Blackpool Detached
£248,560
£207,820
Blackpool Semi-Detached
£141,280
£134,400
Blackpool Town House / Terraced
£101,100
£90,530
Blackpool Apartments/ Flats
£94,440
£67,350
Of course, these are the overall average values. To give you an idea what Blackpool properties are selling for by their square footage, these are those average values…
Average Value per sq. ft(internal)
Blackpool Detached
£160.38
Blackpool Semi-Detached
£139.05
Blackpool Town House / Terraced
£110.58
Blackpool Apartments/ Flats
£129.20
So, what about 2021? Well normally when the Country’s GDP drops like a stone (as it did in the Summer of 2020), the property market follows in unison. Yet as the economy went south, the house price growth and activity in the property market went north. This would appear to be a quite remarkable outcome given that economic framework, but it is gradually becoming clear that, as far as the Blackpool property market is concerned, people’s time in lockdown has been spent reflecting on what they really wanted from their home and has meant that the normal rules of the game simply do not apply … for now.
With the banks reducing the number of low deposit mortgages (i.e. deposit of 10% and below) since Covid-19 hit in the spring, this has meant that the number of Blackpool first-time buyers has been decreasing quickly, meaning many of those would-be Blackpool buyers wanting to make the first step on the Blackpool property ladder are having to stay in the Blackpool rental sector.
This has caused demand to grow amongst Blackpool renters for larger homes to ride out Covid, as they hunker down for the long haul to wait for normality to return to the property market. This has caused…
Blackpool rents to rise from £482 to the current £507 per month over the last 12 months, an increase of 5.2%.
Interestingly, the opposite is happening in Central London, where the rents tenants are having to pay has dropped by 3.8% in the last 12 months, as demand has dropped like a stone. It appears Central London tenants are looking to move out to the suburbs, in search of bigger homes, gardens and green open spaces. For example, the average rent for a 1-bed apartment in St. John’s Wood currently stands at a very reasonable £1,817 per month whilst a 2-bed apartment in Kensington and Chelsea is currently at an average bargain rent of £3,715 per month (yes, they might be low compared to last year, yet for us in Blackpool, that still seems like a lot of money!). Also, there has been further downward pressure on Central London rents, as many Airbnb landlords have dumped their short-term holiday let properties onto the long-term rental market as the tourism in the capital has dwindled because of the pandemic.
This has been the sharpest drop in Central London rents since the summer of 2009, when the property market was still stumbling from the Credit Crunch.
This means there is a reverse of the trend of the 2010’s (2010 to 2018 to be exact), when initially the London property market was shooting up whilst the rest of the country was in the doldrums. Then, when the rest of the UK did start to rise slowly in 2013, London kicked on even further like a rocket … yet now it appears the opposite is happening.
Getting back to Blackpool, according to the Land Registry property values currently stand 0.5% higher than a year ago, this is split down as follows:
Detached Blackpool homes 0.2% lower
Semi-detached Blackpool homes 1.4% higher
Townhouse / Terraced Blackpool homes 0.1% higher
Blackpool Apartments / Flats 1.6% lower
Yet, do remember, these figures do NOT take into account the prices paid by desperate Blackpool buyers this summer, often paying top dollar to secure the property. This will only filter through in the figures released in the spring.
So, why are the banks curtailing the number of low deposit mortgages, meaning that first-time buyers must find a much larger down payment before they are able to buy their first Blackpool property?
The reason is the banks are fearful of a house price crash in 2021 (although if you recall I wrote about that a few weeks ago and the reasons why that is less likely to happen). They too are afraid of the frothy nature of the property market since the end of the first lockdown in late spring. The bank is lending its own money to buyers and no mortgage lender wants to be holding an enormous amount of these types of high percentage mortgages if house prices fall in 2021, because the bank would be saddled with negative equity and repossession on their hands (and we all know what that did to the housing market in the late 1980’s and early 1990’s as repossessions rocketed).
This can quite clearly be seen in the pricing and availability of low deposit mortgages. As the Bank of England has reduced its base rate to 0.1%, in the last 12 months 10% deposit mortgages rates have actually increased from 2% to 2.8%. Also, when lenders have been offering 10% mortgages throughout the summer, borrowers have had only a 24-hour window to commit before the lender withdraws the mortgage product from the market because of over subscription. As with all economics, if demand is greater than supply, the price goes up. That extra 0.8% doesn’t sound a lot until you realise a first-time buyer would have to pay an additional £167 per month in interest payments on a 10% deposit mortgage, assuming they borrowed £250,000.
However, it’s not all doom and gloom for first-time buyers as there are embryonic signs that the 10% deposit mortgage market could gradually be returning to normal, as I have recently heard some lenders are taking up to a week for their 10% deposit mortgage offers to run out. Fingers crossed!
So, what does this all mean for Blackpool landlords? Those Blackpool landlords with properties with gardens and larger rooms will be seeing increased demand. The ability to have pets in the rental property is also an advantage, and depending on the property, can add a decent premium to the rent that can be charged.
One final thought though for all homebuyers in Blackpool, be aware it’s going to be very challenging to get your house purchase through in time to meet the 31st March 2021 stamp duty holiday cut off if you are starting the process in November. Make sure your lender and solicitor have the capacity to meet that deadline and when you are asked for information, you drop everything to provide it. The odd day delay here and there will mean the difference between you getting the keys for your new Blackpool home before the end of March 2021 and saving thousands of pounds in Stamp Duty Tax … or feeling a fool from the 1st of April 2021 and having to pay the tax!
With the banks reducing the number of low deposit mortgages (i.e. deposit of 10% and below) since Covid-19 hit in the spring, this has meant that the number of Blackpool first-time buyers has been decreasing quickly, meaning many of those would-be Blackpool buyers wanting to make the first step on the Blackpool property ladder are having to stay in the Blackpool rental sector.
This has caused demand to grow amongst Blackpool renters for larger homes to ride out Covid, as they hunker down for the long haul to wait for normality to return to the property market. This has caused…
Blackpool rents to rise from £482 to the current £507 per month over the last 12 months, an increase of 5.2%.
Interestingly, the opposite is happening in Central London, where the rents tenants are having to pay has dropped by 3.8% in the last 12 months, as demand has dropped like a stone. It appears Central London tenants are looking to move out to the suburbs, in search of bigger homes, gardens and green open spaces. For example, the average rent for a 1-bed apartment in St. John’s Wood currently stands at a very reasonable £1,817 per month whilst a 2-bed apartment in Kensington and Chelsea is currently at an average bargain rent of £3,715 per month (yes, they might be low compared to last year, yet for us in Blackpool, that still seems like a lot of money!). Also, there has been further downward pressure on Central London rents, as many Airbnb landlords have dumped their short-term holiday let properties onto the long-term rental market as the tourism in the capital has dwindled because of the pandemic.
This has been the sharpest drop in Central London rents since the summer of 2009, when the property market was still stumbling from the Credit Crunch.
This means there is a reverse of the trend of the 2010’s (2010 to 2018 to be exact), when initially the London property market was shooting up whilst the rest of the country was in the doldrums. Then, when the rest of the UK did start to rise slowly in 2013, London kicked on even further like a rocket … yet now it appears the opposite is happening.
Getting back to Blackpool, according to the Land Registry property values currently stand 0.5% higher than a year ago, this is split down as follows:
Detached Blackpool homes 0.2% lower
Semi-detached Blackpool homes 1.4% higher
Townhouse / Terraced Blackpool homes 0.1% higher
Blackpool Apartments / Flats 1.6% lower
Yet, do remember, these figures do NOT take into account the prices paid by desperate Blackpool buyers this summer, often paying top dollar to secure the property. This will only filter through in the figures released in the spring.
So, why are the banks curtailing the number of low deposit mortgages, meaning that first-time buyers must find a much larger down payment before they are able to buy their first Blackpool property?
The reason is the banks are fearful of a house price crash in 2021 (although if you recall I wrote about that a few weeks ago and the reasons why that is less likely to happen). They too are afraid of the frothy nature of the property market since the end of the first lockdown in late spring. The bank is lending its own money to buyers and no mortgage lender wants to be holding an enormous amount of these types of high percentage mortgages if house prices fall in 2021, because the bank would be saddled with negative equity and repossession on their hands (and we all know what that did to the housing market in the late 1980’s and early 1990’s as repossessions rocketed).
This can quite clearly be seen in the pricing and availability of low deposit mortgages. As the Bank of England has reduced its base rate to 0.1%, in the last 12 months 10% deposit mortgages rates have actually increased from 2% to 2.8%. Also, when lenders have been offering 10% mortgages throughout the summer, borrowers have had only a 24-hour window to commit before the lender withdraws the mortgage product from the market because of over subscription. As with all economics, if demand is greater than supply, the price goes up. That extra 0.8% doesn’t sound a lot until you realise a first-time buyer would have to pay an additional £167 per month in interest payments on a 10% deposit mortgage, assuming they borrowed £250,000.
However, it’s not all doom and gloom for first-time buyers as there are embryonic signs that the 10% deposit mortgage market could gradually be returning to normal, as I have recently heard some lenders are taking up to a week for their 10% deposit mortgage offers to run out. Fingers crossed!
So, what does this all mean for Blackpool landlords? Those Blackpool landlords with properties with gardens and larger rooms will be seeing increased demand. The ability to have pets in the rental property is also an advantage, and depending on the property, can add a decent premium to the rent that can be charged.
One final thought though for all homebuyers in Blackpool, be aware it’s going to be very challenging to get your house purchase through in time to meet the 31st March 2021 stamp duty holiday cut off if you are starting the process in November. Make sure your lender and solicitor have the capacity to meet that deadline and when you are asked for information, you drop everything to provide it. The odd day delay here and there will mean the difference between you getting the keys for your new Blackpool home before the end of March 2021 and saving thousands of pounds in Stamp Duty Tax … or feeling a fool from the 1st of April 2021 and having to pay the tax!
Are you one of the 1 in 10 Landlords that are actively growing your Property Portfolio in the growing rental Market? If so, this is Great Blackpool Buy to Let investment for many reasons, some of the highlights include:
High rental demand area – we typically Let family houses within 3 days in this areas
£650 PCM expected rent
Capital growth area, due to being popular location, close to main schools, good transport links
Opportunity to add value, to your investment
My video on this investment below:
Full details of property which is listed with Tiger Estates is below:
Seems straight forward and something that surely should be taken for granted? As a Letting Agent, dealing with Tenants and Landlords on a daily basis, I can assure you this isn’t the case. I still come across Landlords who feel like they are doing ‘Tenants a favour by renting their Property’. This is not the right mindset at all! Renting Property isn’t a Property Business it is a Hospitality Business. As Landlords we need to aim to deliver great customer service to our Tenants, provide them with great properties and remember at all times, the product we offer is someones Home. Ultimately, these actions will lead to longer term tenants and better returns on your Investments. Watch my video below:
1. Communication Method
Be clear from the on-set of Tenant moving-in, what is your preferred method of contact. Provide Tenant with a second form of contact incase you are not available. There is nothing worse for a Tenant when they cant get in touch with someone in case of Emergency. If you dont have a back-up person to manage your property, this is something you need to have in place ASAP, I would also recommend you keep a spare key for the property with this person. Be responsive to any queries, Tenants are Customers and Customers now expect responses in real time. It is also useful to build a brief guide, with main queries Tenants will have. For example, days bins go out, how to use the boiler, where the stop tap is, fusebox location etc.
2. Get stuff done, when promised
Always set clear expectations, when an issue will be resolved by. Ensure that items are done when promised. For example, if you arrange a contractor and he says the work is going to be done on Wednesday, I would follow up with contractor for confirmation work is done and touch base with Tenant to makesure they are happy with the works carried out, this doesnt cost anything but will make the Tenant feel valued and will lead to increased goodwill.
3. Periodically check-in with your Tenant
As a Landlord, you may only touch base with your Tenant when there is a problem and on these occasions (even though they may be in frequent) you may feel frustrated that you having to bother with it. However, when you haven’t heard from your Tenant in a while, doesn’t mean everything is OK (they may just not be anything urgent) and by simply messaging or calling your Tenant you may resolve any outstanding issues that maybe bothering the Tenant. Remember, the most common cause for Tenants moving on the Fylde Coast is maintenance issues! Keep your investment well maintained and retain your ‘customers’ for longer. Change of Tenancies is costly.
4. Use Apps
I highly recommend using technology wherever possible, to automate menial tasks, keep on track of items and being more organised and efficient. For a self-managing Landlord, you could really benefit from these three FREE apps.
Asana – task management software, scheduling periodic check-ins/inspections with your tenants, organising refurbs, maintenance jobs, scheduling reminders for compliance certificates etc.
Google Drive – great software thats accessible from your phone, PC and anywhere int he world. I would recommend using it for storing your Property/Tenancy related documents, such as Tenancy Agreements, ID, Compliance certificates etc.
WhatsApp – great method of communicating with Tenants and Contractors. In our Letting Agency we really push this form of communication, as communication preferences change (especially as shown by Meninialls), most Tenants would prefer to message instead of calling. I would recommend when new Tenants move-in to send them a message via WhatsApp so when they need to contact you they can save your details and you are certain they have your details.
I hope you found this useful, if you have any suggestions on this topic please let me know and I would be really interested to know which software you find useful in managing your Property Business.
Are you thinking of Investing in Property and want to educate yourself? Are you a Landlord currently and want to be a better Landlord, grow your Portfolio and make a better return on your Property?
My Property Journey on reflection started in my early teens, when I recall purchasing the local Gazette on Thursday so I can go through the Property Supplement and review Properties and identify great investments. I know, probably not something typical of a 14 year old boy. From a young age, I had seen my immigrant father struggle to provide for our family and we growing up we always lived in crammed spaces. This is the main motivating factor, in my interest of making money and property since an early age and the driving force in me building my business and growing my Property Portfolio.
I purchased my first Property in 2011 at the age of 23. It was a buy to let 3 bedroom house on Manchester Road, Blackpool. Purchase price was £72 000 (no stamp duty applicable). My Dads good friend, guided me a lot, he advised me to purchase the property, secured solicitor, arranged the bank manager for borrowing, instructed the Agent along with support in other areas. If I be honest, yes I didn’t have a clue what was going on. Nicola (the Tenant) moved into the property in March 2012 and is still a current Tenant, yayyyy. There is a reason why I have managed to retain Nicola for this long and hopefully continue to rent to her long time ahead and I will cover that in a future post.
Fast track nearly 9 years later and my current portfolio consists of:
6 Houses – Buy to Let
4 mixed-commercial – retail premises with flats above
2 houses – Used as AirBNB
2 properties in the Pipeline
Clear strategy to add 26 more properties in to the Portfolio within the next 5 years. For me it isn’t just about owning a Propety, its about a great product that I am proud of. Before I have been guilty of purchasing Property just because I was able to at that moment and I thought it was a good investment. I am now a lot more disciplined and any future Investments will have to fit into the remit of my Property Investment Strategy.
Above are the areas that will make you more money from Property, deliver better homes to Tenants and make you a better Landlord. I will be covering these topics over the coming weeks and look forward to sharing with you.
The Blackpool Property Blog 