Should we force the OAPs of Rotherham to downsize?

Should we force the OAPs of Rotherham to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Rotherham society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Rotherham home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Rotherham homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through tax breaks and social acceptance, that it’s a good thing to downsize. But should the Government force OAPs?

Well, one of the biggest reasons OAPs move home is health (or lack of it).

15.98% of Rotherham home owning OAPs are in poor health

Looking at the statistics for Rotherham: there are 12,218 homeowners who are 65+ years old. Whilst 5,882 of them described themselves in good or very good health, a sizeable 4,383 home owning OAPs described themselves as in fair health and 1,953 in bad or very bad health. That’s nearly 16% who are in poor health:

Percentage-OAPs-Health-Rotherham-NOLINE

A lack of retirement homes

In the Rotherham Metropolitan Borough Council area there are no specialist retirement homes that one could buy and only 2,766 homes available to rent from the Council and other specialist providers. Many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Rotherham downsizers could certainly afford to move but are staying put in bigger family homes because they can’t find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Rotherham population and specialist retirement properties for the ones who aren’t in such good health … we need to build more appropriate houses in Rotherham.

The failure of the ambiguous Housing White Paper

The Government’s Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous.

Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers? Who knows – but something surely has to happen. The Housing White Paper may have possibly been a wasted opportunity.

‘Downsize’ is an awful word

Isn’t ‘downsize’ such an awful word? This phrase (and others) feel like our OAPs are lowering and downgrading themselves in their retirement (and let’s be frank – no one likes to be downgraded). I prefer to use the word ‘decent-size’ instead of ‘downsize’.

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration.

My advice to homeowners and property investors

Bramley Wickersley Rotherham-023-2What I would say to all the homeowners and property owning public of Rotherham is this: more houses and apartments need to be built in the Rotherham area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

To those Rotherham property investors who read this blog: whilst this issue gets sorted in the coming decade(s), I would recommend considering doing up older bungalows. It seems that people will pay handsomely for them whether they are for sale or available to rent.

Just a thought!

For more of my expert thoughts regarding the Rotherham property market, please follow me on Facebook and Twitter.

 

How Proximity to Rotherham Central can Impact House Prices

How Proximity to Rotherham Central can Impact House Prices

It might surprise you that it isn’t always the swankiest Rotherham streets or the posh villages in the Rotherham area where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links.

As an agent in Rotherham, I am frequently confronted with queries about our property market. Often people (chiefly by newcomers to the area) ask, “What is the best part of Rotherham area to live in these days?” The answer is obviously different for each person – a lot depends on a variety of different factors (the demographics of their family, their age, schooling requirements and interests etc.) Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that a total of 947 people jump on a train each and every day from Rotherham Central. Of those, 416 are season ticket holders. That’s a lot of money being spent. For example, consider a standard class season ticket to Leeds is £2452 a year. This means up to £1m and possibly more is being spent on rail season tickets each year in our town.

If that much is being spent, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place.

That means demand for middle to upper market properties remains strong in Rotherham and the surrounding area. In turn, these are the type of people whom are happy to invest in the Rotherham buy-to-let market – providing homes for the tenants in our town.

The bottom line is that property values in Rotherham would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it serves in the town

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel. RotherhamCentral

Overall usage of the station at Rotherham has increased over the last 20 years.

In 1997, a total of 356,901 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 689,540 people using the station.

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Rotherham property.

It is also significant for tenants – so if you are a Rotherham buy to let investor looking for a property – the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website.

For the latest thoughts on the Rotherham property market follow me on Twitter or Facebook.

Are you planning to move house this spring?

Are you planning to move house this spring?

If you are planning to sell your Rotherham house this year you may not need to look further than Fenton Board who are helping people ‘spring into action’ during these spring months.

There is no better time to move house than during these months and demand is currently high.

If you are looking for a local estate agent in Rotherham then get in touch with Fenton Board for more information about how to sell your property with them. All their details are included in the promo below. Alternatively, I offer all the readers of this blog my best advice about the property market in our area so please get in touch if you need my help.

Fenton Board Promo Apr 17

A Great Spring Offer for Buy-to-Let Landlords

A Great Spring Offer for Buy-to-Let Landlords

I always like to give my readers the best information about the Rotherham property market and here’s my latest top tip: from April through to June, Bricknells Rentals have reduced the set up costs to £50 + VAT with no hidden extra set up fees.

If you are a prospective buy-to-let landlord this could be the deal for you to reduce your costs as you look to rent your property to tenants in Rotherham. Check out the full details in the promotional image below. You can get in touch with Bricknells Rentals directly or contact me for more information.

Bricknells Rentals Promo Apr 17

Buy-to-let Update: Rotherham rents rise by 16.7% since 2005

Buy-to-let Update: Rotherham rents rise by 16.7% since 2005

The property market here in Rotherham is a very interesting animal and has been particularly fascinating over the last 12 years in the case of Rotherham rents and house prices.

There’s currently much talk of what will happen to the rental property market post-Brexit. To judge that, we must remain rational and methodical by looking what happened in the 2008/9 credit crunch (and what has happened since). From there we can see the possible ramifications for long-term investors in the local property market.

An important yet overlooked measure is the performance of rental income vs house prices (i.e. the resultant yields over time). In Rotherham (as for the rest of Great Britain), notwithstanding a slight drop in 2008 and 2009, property rentals have been gradually increasing.

The income from rentals has been progressively increasing over the last 12 years.

Today rents are 16.7% higher than they were at the beginning of 2005.

In fact, over the last five years, the average growth has been 0.9% per annum. From a landlord’s point of view, this increase in average rental income is not to be sneered at. However, the observant readers will be noting that we are ignoring an important factor – inflation.

Turn the clock back to 2005, and we have a property being rented for say £900 a month and that is still being rented at £900 a month today, in spring of 2017. While the landlord is not getting any less income, this £900 is no longer worth as much due to a bigger rise in inflation during the same period. Total inflation since 2005 has been 38.5%. This means when we compare rents in Rotherham to inflation since 2005, Rotherham landlords are worse off today from their monthly rental income than they were in 2005 by 21.8% in real terms.

Don’t forget property values!

However, rental income is not the only way to generate money from property – property values can also increase.

Although in the short term, cash flows are diminishing, many Rotherham landlords may be content to accept that for a colossal increase in capital value. For example, in Rotherham:

Property values have risen by 23.1% since 2005

This equates to a reasonably salubrious 1.92% per annum increase over the last 12 years. Even more interesting is that this includes the 2008/9 property crash – a fact that will make landlords and investors feel a little better about the information regarding rents after inflation.

Rotherham-property-rent-rise-2005

Moving forward, the prospects of making easy money on buy-to-let in Rotherham have diminished compared to the previous decade. In 2005, making money from buy-to-let was as easy as falling off a log… this is just not the case anymore.

I am often asked to look at my landlord’s rental portfolios so studying and comparing rental prices and house prices is valuable. To ascertain the spread of your investment across multiple properties it’s important to judge whether what you currently have will meet the needs of the investment in the future. It’s the balance of capital growth and yield, whilst diversifying this risk.

If you are investing in the Rotherham property market, do your homework and do it well.

While some yields may look attractive, there are properties in many areas that do not have the solid rudiments in place to sustain them. If you are looking for capital growth, you might be surprised where the hidden gems really are. Take advice and even ask your agent for a portfolio analysis. The majority of agents in Rotherham will be able to give a detailed analysis of past and anticipated investment opportunity (especially the awful effect of inflation) on your portfolio. However, if they can’t help – well, you know where I am! The kettle is on so please get in touch.

You can also follow me on Facebook or Twitter for the latest news about the Rotherham property market and further afield.

Rotherham Rents To Rise More Quickly Than Property Prices In Next 5 Years

Rotherham Rents To Rise More Quickly Than Property Prices In Next 5 Years

The next five years will see an interesting change in the Rotherham property market.

My recent research has concluded that the rent private tenants pay here will rise faster than the property prices over the next five years. This will create further issues for Rotherham’s growing multitude of renters.

My examination of statistics forecasts that:

By 2022, Rotherham rents will increase by 22%,
whereas Rotherham property values will only grow by 16%.

Let me explain why I have come to those conclusions:

Over the last five years, property values in Rotherham have risen by 12.4%, whilst rents have only risen by 7.8%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up. The press have predicted some landlords will reduce their portfolios in the next couple of years but this means Rotherham tenants will have fewer properties to choose from. The result is that rents will be pushed higher. In fact, talking to fellow property professionals in our town, there appears to be a shortage of new rental properties coming on to the Rotherham lettings market.

Property-values-vs-rents-5-years

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Conservative government has changed the way landlords are to be taxed for buy-to-let properties. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector.

They can’t expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords… if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most the council houses were sold off in the 1980s!)

With the challenges ahead, house price inflation will be tempered over the coming five years in Rotherham.

As I have discussed recently, the number of properties on the market in Rotherham remains close to the historic low, which is both good and bad – it keeps house prices relatively stable, yet it impedes choice for buyers.

As a result, I believe property values in Rotherham will only be 16% higher in five years time.

On the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Rotherham people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses (because they have no money), the average rent will rise.

The current the average rent for a Rotherham rental property currently stands at £471 per month.

Over the next five years, I predict the average rent
in Rotherham will rise to £575 per month.

These are interesting times.

There is still money to be made in buy-to-let in Rotherham. Rotherham landlords will just need to be smarter and more savvy with their investments. To help, I’ve put together information on some of the best properties on the local market that could prove to be shrewd investments for buy-to-let landlords – check them out! I’ll be updating this regularly. In addition, free to follow me on Twitter and on Facebook for my latest insights and opinions. Finally, if you would like my personal advice please get in touch. I am always happy to help.

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