When we have written about London pricing soaring and the rest of us catching up, the London marketplace may have smirked. Now, the boot seems to be on the other foot with active growth and non deterred sellers coming to the market in the majority of regions outside of the Bubble. If we take a snapshot over the last six weeks of activity we can see that the two weeks prior to the Referendum saw a like for like drop in instructions by 8% while interestingly the first two weeks post Brexit saw instructions rise by 6%.
Regionally Estate Agents report that the property market continues to build momentum due to the lack of property coming onto the market. The interesting dynamic here is that prices will likely continue to rise unless the volume of instructions increase. With Mortgage rates remaining low and buyers experiencing a degree of panic that further “suitable” properties will “not” come to the market, the higher prices are being,in the majority of cases, offered.
At Elizabeth Davenport we like to see what the public really feel about the price of there ideal home. Our goal is to generate as much interest as possible and not just to sell, but to find the very best buyer; have a choice if you like. This is not going to happen if you price the buyers of your property out of the equation. If the advertised price isn’t cynical the public will appreciate it and multiple buyers can be found. As I’m sure you can see, this does not occur from demanding a price above that which the property is worth. Our Sold to For Sale ratio reflects this with over 65% of our stock consistently sold.
Brexit has not affected the market place in Coventry and Warwickshire because there is not enough stock for sale. Whilst the demand outweighs the supply the prices will, for many of us, remain too high for comfort. But everyone does need to live somewhere. Possibly not London though.
Having just received a call from BBC Coventry and Warwickshire with a question regarding David Cameron’s legacy and his impact on the property market, I found myself having to look at the same results but from two contradictory angles.
Are dramatic property price increases a positive or a negative? It’s that fundamental. Who is to congratulate and who’s to wave a fist at?
According to data from the Land Registry, average UK house prices have risen from £161,148 in 2009, just before Mr Cameron became Prime Minister, to £206,953 in 2016 – a 28 per cent increase. If you own a home and don’t want to move then could this be irrelevant? Well, not if you want to remortgage and borrow more thus releasing more money into the economy. And what if you want to move? Well, unless you are moving from an area of wealth and high property value to an area not so, then irrelevant it is. The property you purchase will likely have risen proportionally too.
As far as I can see, David Cameron, Britain’s youngest Prime Minister since Lord Liverpool in 1812, has been sturdy if not so Gung Ho as New Labours last elected incumbent. His parties decision to increase Stamp Duty for investment landlords seems flawed but his restructure of traditional stamp duty was welcome.
Now, we must move forward as a country, not just a political party and Theresa May be the right person to do this (See what I did there!) . Until Labour’s leadership creates solidarity within it’s own party I see we have little choice other than hoping that this Governments moral decision making prevails within our new “Brexit” nation. No rash decisions, some cleverly thought through policies and a goal of making everyone who at least lives here now as comfortable and productive as possible.
Stocks & Shares, the Euro Sterling Exchange rate and the global financial markets have reacted as everyone either predicted or expected.
What of property? Where do we stand? We haven’t fallen into the North Sea since Friday last but listening to the media we’ve done almost everything but.
Property at it’s heart has always been a safe investment. We all need homes to live in whether we are lucky enough to own or to rent. The housing shortage in this country has needed addressing for a long time and the governments investment in new homes has not made a dent in this whatsoever. Supply and demand therefore suggests no immediate change to this dynamic. Families will continue to grow and first time buyers will still have a passion to own. Housing will therefore still be needed.
In the short term (after a week or two of head scratching) there is every chance that sellers, worried, perhaps unnecessarily of a potential slow down, will come to the market before a slump. This will create more property for sale. Let’s say that an equivalent amount of buyers don’t buy either for the very same reason. This will create more available property for sale. This could, as the market has needed for a long time, create a cool down where a choice of homes means lower selling prices and demand and supply become equal.
This, surely, would be great news for everyone. More choice and lower prices.
Unlike Brexit, this suggests that everybody wins. As far as England’s Euro 2016 challenge, that would have been a nice result as well!
Miles Shipside, Housing analyst and director of Rightmove, has commented upon the interesting shifts in boroughs throughout London. At the end of March, London has seen the second lowest monthly rise in the last Seven years. I say lowest monthly rise, we are still looking at growth but not to the extent we have been familiar with.
The most exciting analysis of growth is directly relevant to Coventry and it’s own twists and turns. Suburbs of London and neighbouring towns with Train Station improvements have seen dramatic growth over recent months. Rochester in Kent, having spent £26 million on it’s own improved terminal, has seen a mini boom of 20% over the last year. Slough, Gillingham and Gravesend have seen very similar.
A further reason for “abnormal growth” is due to the most obvious and archaic commercial adage of all time. Supply and demand. In a number of these regions the reason for such rapid growth is the lack of property coming onto the market. Coventry and a number of its most desirable areas are seeing multiple buyers for each. We have properties sold whose sellers are desperate for that right property to come to the market to move in to. When it does, the price they have to pay, by default, is a premium.
Very interestingly, if we take this analysis at it’s most simple and if all sellers placed their houses on the market before finding another property (rather than waiting to see what properties appear before marketing), the stock levels of property would increase and the demand therefore wouldn’t be as great. In time the prices would stabilise as sellers and buyers began to match each other in number. Rather than sell high and buy high we would all be selling sensible and buying sensible. I like the sound of that. That’s how solid and sustainable growth occurs. I wonder what Mr Shipside thinks of that.
Well it’s really beginning to happen! Mastery of the much maligned but surprisingly safe 1960’s ring road requires a touch more forethought but otherwise FriarGate is really beginning to take shape. All being well and if politics, procrastination, budget and bloody mindedness don’t interfere the new Train Station development will see 39 sustainable new buildings, including Offices, Residential Accommodation, Hotels, Restaurants and open spaces for families to enjoy. With completion in 2018 we’ve still got awhile to go but it’s clear improvement, throughout the city, is at the forefront of minds and not simply brushed under the table as has appeared in years passed.
With Coventry – London in under an hour and buyers relocating to Coventry from the Capital City, improvement and investment seems set to continue. Let’s not panic though. These buyers are not driving prices upwards like the Oligarch’s in Chelsea and Kensington. They’re a small proportion but certainly a demographic that haven’t been so familiar before. Home owners in Styvechale, Cheylesmore and Earlsdon certainly could take advantage of this affluent new wave though.
Property a 10 minute walk from the Station, whatever you own, whether Apartment, Terrace or Detached, should certainly see above average growth as FriarGate continues to prosper.
Together with Virgin Trains we’ve invested on Platform One & being situated on Greyfriars Green, just a stones throw from the development, we’ve already begun to see a difference.
The Birmingham Children’s Hospital is very close to my heart. We promised a donation from Elizabeth Davenport after running the Coventry Half Marathon. George and I had a great day, completing the course whilst being cheered on by wonderful spectators. The Birmingham Children’s Hospital treats about 250,000 children a year and by the nature of never being good enough, they are a fundraiser in themselves. From a £5 donation for colouring books to £45,000 for a mechanical heart, the hospital genuinely believes that the families who are treated know that the care of their child is the most precious priority. We wanted to raise enough money to be able to buy a Glideaway bed. These enable Mum’s and Dad’s to spent the night next to their little ones at times when they simply couldn’t be apart. By donating from fees earned between Christmas and now, we are really pleased to have succeeded. Thank you all for your instructions. Every one of our clients has helped!
I’d also like to add that George beat me and that I am not at all bitter. I haven’t dwelt on it. Not at all. I haven’t really given it a second thought. I swear he must have jumped a hedge. Or a corner. Maybe both. Yes, that’s it. I feel much better now.
So what do Mr Osborne’s tax changes mean for buy-to-let investors in Coventry after 1st April 2016? Time for a heated debate? Well it would have been nice to have had one at least!
“Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy,” So George Osborne proclaimed in his Autumn Statement, before announcing major policy changes aimed at making buying property to let out less profitable to investors. Noble comments indeed but do we seriously believe that the intention is not to raise money for the treasury? Will this decision slow Buy to Let? Will first time buyers and owner occupiers have more opportunities?
The reigns have been pulled taught at the coal face and beyond into the mine. To purchase an investment property or a second home the buyer will, from April 1st, have to spend 3% more in stamp duty than anybody else. This places a charge of 3% up to £125,000 where owner occupiers pay 0%. Between £125,000 and £250,000 3% is added to the existing 2%. £250,000 to £925,000 adds a further 3% to the existing 5%. Then, once rented, the landlord will also have to suffer a variety of further profit dampening changes. I’m not crying about all of this but I do think the changes are too fast and too hard.
At Elizabeth Davenport we have seen a volume of buyers investing from London. This is where Mr Osbourne’s theorising hits a potential brick wall. His buy to let investors in Shoreditch, Twickenham and Croydon may well decide to look elsewhere where the expenditure is less and the short term returns equally attractive. This may free up potential “1st Time Buyer” opportunities on his doorstep but geographically the investment will just occur elsewhere. My theory is simple at best and wrong at worst. Realistically the volume of buy to let investors from outside of Coventry will grow and there will no change to the volume of first time buyer opportunities whatsoever.
Thinking practically if you wish to purchase a second home or buy to let investment then move fast! Look for chain free properties or tenanted homes. Don’t quibble about a reduction of £2000. On April 2nd it will cost you a lot more than that.
Dear Father Christmas, On behalf of all of the staff at Elizabeth Davenport we’d really like to thank you for your visit and for the wonderful news! Your Elves really brightened up our day when they told us we’d made the Christmas Number One for instructions worth over £120,000 this December. What fantastic news! So many agents seem to have struggled this past month, which in fairness is the norm. In fact, being Number Two for instructions at any price gives us the same illustrious standing as Beiber and Bruno Mars so we can’t complain at that either! I’d also like to thank you for making sure that George received the fantastic camera and equipment he asked for. They’ll certainly be put to good use (He asks for the same thing everything year and you’ve never failed to deliver!). Well, for this year I think it’s time to say goodbye, give my best to Mrs Christmas and Rudolph (tell him I didn’t mind clearing up his mess from the roof!) and we’ll be sure to drop you a line again next year! Kind regards, Mark.
Without further Ado and with the Festive Bells ringing as my pen hits parchment, Elizabeth Davenport are really pleased to welcome Nick “Not just for Christmas” Luntley to our burgeoning office on Warwick Row! Having started his Estate Agency career in 2005, Nick has truly worked his way up through the business. Tea was soon sitting cold and biscuits stale as his desire to become the best Estate Agent possible become reality. Leaving a successful position as Sales Manager of a much respected Coventry Estate agent means a lot to us. St Nick, you’re welcomed with open arms!
2015 has been a very busy year for everyone. Our office has grown dramatically. So, when volumes of business increase, the key is not counting the profit (Scrooge, take note!) but retaining and further improving our customer service levels by employing the right team.
With Rightmove actively marketing the fact that the Christmas period is the busiest for Online viewing, promoting your house now, rather than later can be a positive and genuinely beneficial decision. As the interest in your home grows, decisions to view are made and in the New Year they happen!
Of course no one will want to view over the Christmas weekend, but they’ll be getting excited! So, if you get a knock on the door on Christmas Day it won’t be me. It might be St Nick though!
Did you know that the last Calendar year has seen us sell more houses in excess of £190,000 than any other agent in the Coventry area. We didn’t. Not until we received communication from Rightmove directly expressing there congratulations. Our stock levels are often considerably less than our competitors but from this smaller stock we are selling a higher percentage of homes. We were delighted with this. Selling more from a smaller stock means more client care and better service. Clearly the marketing, photography, office staff and viewing representatives are all doing their job properly too!
However, this success is only is only one half of a very different story! There is a massive market of property that we often don’t get the opportunity to work with. Market research has shown us that the reason our instruction of properties under £185,000 is a lower percentage is due to the publics perception that our agency only deal with “expensive” homes. Will our fees be “higher” than other agencies? We are pleased to tell you, they are not!
Our ethos, when we launched our business, was to provide “every seller with the opportunity to have the very best of service and presentation but with very much an “average” fee”.
Last year one particular month saw us sell a home for £625,000 and another for £75,000. I am pleased to tell you that both sellers received the same level of service, the same quality of brochures and photography, accompanied viewings and full sales progression support. The most interesting point for myself was that the sellers of the Willenhall apartment reviewed our services on Google expressing there satisfaction. They also stated they loved their home above and beyond that expressed by the sellers of the Detached home in Styvechale.
Truly every home is a castle and every seller deserves the best possible service. Nowhere does the legend state that they have to pay the most for it!