The unexpected snap election is drawing closer. Many homeowners in Rotherham have contacted me asking what impact this vote will have on the local property market. The best way to tell the future is to look at the past.
In Rotherham, 12,963 homes are owned without a mortgage and 14,482 homes are owned by a mortgage. This is clearly an important issue to the people of Rotherham, as well as many other voters up and down the country.
What’s going to happen to the property market?
I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election.
Some very interesting information has come to light.
Of the last five general elections (1997, 2001, 2005, 2010 and 2015), only the last two elections had results that were uncertain (2010’s election led to the coalition government and 2015’s vote resulted in an unexpected Tory majority).
Therefore, I decided to compare the number of houses sold and prices achieved in 1997, 2001 and 2005 (when Tony Blair’s New Labour seemed impossible to stop) with the uncertainty of 2010 and 2015.
How have General Elections impacted the number of houses sold in the last 20 years?
Below your can see the number of properties sold and the dates of the general elections:
It is clear, looking at the number of monthly transactions (the blue line), that there is a certain rhythm or seasonality to the housing market. This has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in spring and summer and drops again at the end of the year).
To remove that seasonality, I have introduced the red line.
The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).
How have General Elections impacted the property price of houses in the last 20 years?
Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).
It is quite clear none of the general elections had any effect on the property values.
Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.
What about the rental market?
There are 5,416 private rented properties in Rotherham. What does this all mean for the landlords of these properties?
Well, as I have discussed in previous articles property value growth in Rotherham is expected to be more subdued in the coming few years for reasons other than the general election.
The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Rotherham, making it imperative that landlords in South Yorkshire are realistic with their market rents.
But, in the long term, as the younger generation still choose to rent rather than buy, the prospects are good. Investing in buy-to-let property still looks a good bet – even with the changes in taxation.
If you’d like any more advice about buying or selling a property around a General Election or if you have any further questions about the impact of the current political situation on the property market then please contact me. You can always catch me on Facebook or Twitter if you want the latest information!
More and more babies are being born to mothers in Rotherham! I believe this increase will continue to add pressure to the already overstretched property market.
On the back of eight years of ever increasing birth rates, a significant 4.94 babies were born for every new home that was built in the Rotherham council area in 2016.
I believe this has and will continue to exacerbate the Rotherham housing shortage, meaning demand for housing (both to buy and to rent), has remained high. The high birth rate has meant Rotherham rents and Rotherham property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.
High birth rate levels
The ratio of births to new homes has reached one its highest levels since 1945 (back in the early 1970s the average was only one and a half births for every household built).
Looking at the local birth rates, the latest figures show we in the Rotherham council area had an average of 64.6 births per 1,000 women aged 15 to 44. Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the Yorkshire & Humber region its 61.9 births per 1,000 women aged 15 to 44. Rotherham is well above the national average. (Source: Office of National Statistics)
Looking more closely, the number of births from Rotherham women between the ages of 20 to 29 are significantly higher than the national average, but those between 35 and 44 were much lower.
However, the overall birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Rotherham area, the high levels of net migration into the area over the last 14 years and the growth in single person households, this can only mean one thing…
There’s a huge need for more housing in Rotherham.
An interesting trend is that more and more people are choosing to have children whilst they are tenants because they feel safe in rented accommodation. Renting is becoming a viable and practical choice for Rotherham people.
The planners and politicians in our local authority, central government and people as a whole need to recognise that with individuals living longer, people having more children and relatively high level of divorce rates, demand for property is simply outstripping supply.
The simple fact is more Rotherham properties need to be built
Rotherham needs more properties available to buy and more properties available to rent.
Only 1.1% of the country is built on by houses. Now I am not suggesting we build tower blocks in the middle of the Peak District, but the obsession of not building on any greenbelt land should be carefully re-considered.
Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Rotherham. In what brownfield sites there are, building on them can only work with complementary public investment. Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.
This shouldn’t be a crude attack on our green spaces – we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development. Society in the UK needs to consider the greenbelts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.
This is a difficult time and at the moment no one is proposing a sustainable way forward.
Follow me on Twitter or Facebook for the most up-to-date news on the property here in Rotherham. If you’re a buy-to-let landlord or looking to become a buy-to-let landlord, you may find my ‘featured properties‘ page a helpful place to start – there are some great tips there!
So all cards are up in the air! A general election is scheduled for June to decide who will be leading our country in our Brexit negotiations. There’s a lot of uncertainty but one thing is for sure… whoever gets the job to deal with Brexit has a hard job on their hands (I’m just glad its not me!)
As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Rotherham (and the rest of the UK). Downing Street’s point of view is that, in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.
Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU – otherwise we face the reality of a ‘no deal’ situation. This will be a very ‘hard Brexit’.
You might not think a hard Brexit will affect you in your home in Rotherham… but nothing could be further from the truth.
Of the 255,334 people who live in our area, 1,712 were born in EU countries from Western Europe and 2,755 were born in EU countries from Eastern Europe (the rest coming from other countries around the world).
The rights of these EU citizens living in the Rotherham area are currently not guaranteed and will now be part of the negotiation with Europe. Our EU next door neighbours have had the right to live, to work, to own a business, to possess a property, to access health and education services and to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.
So, what would a hard Brexit do to the Rotherham property market?
A hard Brexit could cause a nuclear reaction when it comes to our property market. Until rights are properly guaranteed there is the possibility that every EU citizen would have to leave the UK.
In Rotherham, 65% of Western European EU citizens own their own home in the UK. If EU citizens had to leave these properties would need to be sold. Additionally, just under 74% of Eastern European EU citizens rent a property, so again all those rental properties would be vacated and come onto the market at the same time.
A hard Brexit leading to mass EU migration could mean 1,500 properties being dumped onto the housing market in a short period of time.
This would lead to a massive drop in Rotherham property values and rents, causing negative equity for thousands of Rotherham homeowners and leaving many buy-to-let landlords out of pocket.
While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.
All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Rotherham (and the UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Rotherham and the surrounding area to get work and provide for their families. Many Rotherham people have also invested their life savings into buying a buy-to-let property.
Much will depend on what is politically realistic.
Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK. It’s been interesting that none of the leading parties have picked up on this in the opening weeks of the General Election conversation.
Politics aside – reaching the end of these two years with ‘no deal’ and a hard Brexit is really in nobody’s interest.
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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:
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
What 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!
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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.
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.
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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.
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