Aug 24, 2016
Let me speak frankly. Even with Brexit and the reality immigration numbers will now potentially reduce in the coming years, there is an unending and severe shortage of new housing being built in the Rotherham area (and the UK as a whole).
Even if there are short term confidence trembles fueled by newspapers hungry for bad news, the ever growing population of Rotherham with its high demand for property versus curtailed supply of properties being built. This imbalance of supply/demand and the possibility of even lower interest rates will underpin the property market.
When the Tories were elected in 2015, Mr. Cameron vowed to build 1,000,000 new homes by 2020. If we as a country hit those levels of building, most academics stated the UK Housing market would balance itself as the increased supply of property would give a chance for the younger generation to buy their own home as opposed to rent. However, the up-to-date building figures show that in the first three months of 2016 building starts were down. Nationally, there were 35,530 house building starts in the first quarter, a long way off the 50,000 a quarter required to hit those ambitious targets.
Looking closer to home,
over the last 12 months, new building in the Rotherham Metropolitan Borough Council area has slumped. In 2014/15, for every one thousand existing households in the area, an additional 6.37 homes were built. For 2015/16, that figure is now only 4.97 homes built per thousand existing households. Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand.
To put those numbers into real chimney pots, over the last 12 months, in the Rotherham Metropolitan Borough Council area,
- 510 Private Builders (e.g. New Homes Builders)
- 40 Housing Association
- 0 Local Authority
These new house building numbers are down to the fact that not enough is being done to fix the broken Rotherham housing market. We are still only seeing 550 new homes being built per year in the area, when we need 788 a year to even stand still!
I am of the opinion Cameron and Osborne focused their attention too much on the demand side of the housing equation, using the Help to Buy scheme and low deposit mortgages to convert the Generation Rent (i.e. Rotherham ‘20 somethings’ who are set to rent for the rest of their lives) to Generation Buy. I would strongly recommend the new Housing Minster, Gavin Barwell, should concentrate the Government’s efforts on the supply side of the equation. There needs to be transformations to planning laws, massive scale releases of public land and more investment, as more inventive solutions are needed.
However, ultimate responsibility has to rest on the shoulders of Theresa May. Whilst our new PM has many plates to spin, evading the housing crisis will only come at greater cost later on. What a legacy it would be if it was Theresa May who finally got to grips with the persistent and enduring shortage of homes to live in. The PM has already stated that “need to do far more to get more houses built” and stop the decline of home ownership. However, she has also ruled out any changes to the green belt policy – something I will talk about in the future.
Hopefully these statistics will raise the alarm bells again and persuade both residents and councillors in Rotherham area that housing needs to be higher on its agenda.
In the meantime, for more thoughts and opinion on property in Rotherham please follow us on Twitter and Facebook.
Aug 15, 2016
The orthodox way of classifying property in the UK is to look at the number of bedrooms rather than its size in square metres (although now we are leaving the EU – I wonder if we can go back to feet and inches?).
It seems that homeowners and tenants are happy to pay for more space. It’s quite obvious, the more bedrooms a house or apartment has, the bigger it is likely to be.
The reason is not only due to the actual additional bedroom space, but the properties with more bedrooms tend to have larger / more reception (living) rooms. However, if you think about it, this isn’t so astonishing given that properties with more bedrooms would typically accommodate more people and therefore require larger reception rooms.
In today’s property market in Rotherham, the homeowners and landlords I talk to are always asking me which attributes and features are likely to make their property comparatively more attractive and which ones may detract from the price. Over time, buyers’ and tenants’ wants and needs have changed.
In Rotherham, location is still the No. 1 factor affecting the value of property, and a property in the best neighbourhoods, such as Scholes Village or Moorgate can command a price nearly 50% higher than a similar house in an ‘average’ area. However, after location, the next characteristic that has a significant influence on the desirability, and thus price, of property is the number of bedrooms and the type (i.e. Detached/ Semi/Terraced/Flat).
In previous articles, I have analysed the Rotherham housing stock into bedrooms and type of property, but never before now have I cross-referenced type against bedrooms. These figures for the Rotherham Metropolitan Borough Council area make fascinating reading. It shows 85.9% of all properties in the area have 3 or more bedrooms
| | Detached | Semi-detached | Terraced (including end-terrace) | Flat |
| 1 bedroom | 25 | 145 | 75 | 222 |
| 2 bedrooms | 409 | 3,057 | 3,356 | 695 |
| 3 bedrooms | 3,667 | 22,606 | 7,506 | 326 |
| 4 bedrooms | 6,093 | 4,280 | 1,327 | 63 |
| 5 or more bedrooms | 1,407 | 1,182 | 228 | 13 |
I was genuinely surprised at the low numbers of one and two bed properties – particularly two bed semis detached houses. This is especially notable as tenants like the smaller one and two bed properties in Rotherham. It might interest the homeowners and landlords of Rotherham, that there has been a change in the numbers of properties on the market and the split in bedrooms on the market over the last 12 months:
- 12 months ago, 38 one bed properties were for sale in Rotherham; today there is 46 – a rise of 21%
- 12 months ago, 280 two bed properties were for sale in Rotherham; today there is 293 – a rise of 5%
- 12 months ago, 501 three bed properties were for sale in Rotherham; today there is 375 – a drop of 25%
- 12 months ago, 145 four bed properties were for sale in Rotherham; today there is 102 – a drop of 30%
- 12 months ago, 44 five + bed properties were for sale in Rotherham; today there is 46 – a rise of 5%
For several years Rotherham buy-to-let investors have been the only buyers at the lower end (starter homes) of the market, as they have been enticed by high tenant demand and attractive returns. Some Rotherham landlords believe their window of opportunity has started to close with the new tax regime for landlords, whilst it already appears to be opening wider for first-time buyers. This is great news for first time buyers.
One final note for Rotherham landlords – all is not lost! You can still pick up bargains, you just need to be a lot more savvy and do your homework… one source of such information is this blog but you could also follow us on Twitter and Facebook for up-to-date insights into the Rotherham property market.
Aug 11, 2016
Even the most optimistic person in Britain has to admit the Brexit vote will, in one shape or another, affect the UK Property market.
Excluding central London which is another world, most commentators are saying prices will be affected by around 5%. So looking at the commentators’ thoughts in more detail, property values in Rotherham will be 5% lower than they would have been if we hadn’t voted to leave the EU.
As the average value of a property in the Rotherham Metropolitan Borough Council area is £121,700, this means property values are set to drop for the average Rotherham property by £6,100. Batten down the hatches, soup kitchens and mega recession here we come… it’s going to get rough…
…but before we all go into panic mode in Rotherham… the devil is always in the detail.
Look at the statement again. I have highlighted the relevant part: “Property values in Rotherham will be 5% lower than they would have been if we hadn’t voted to leave the EU”
Property values today, according to the Land Registry are 2.3% higher than a year ago in the Rotherham Metropolitan Borough Council area. The 12 months before that they rose by 1.54% and the 12 months before that, they rose by 3.5%. If we hadn’t voted to leave, I believe on these figures, we could have safely assumed Rotherham House prices would have been 2% higher by the summer of 2017.
… and that’s the point, we won’t see a house price crash in Rotherham, it’s just that house prices in a years time will be 3% lower than they are now (ie 2% less the 5% lower figure because of Brexit).
Let’s look at the historic figures and how that compares to today’s figures for the Rotherham Metropolitan Borough Council area and Rotherham as a whole.
Average Value of a property 20 years ago: £40,800
Average Value of a property 10 years ago: £120,200
Average Value of a property 2 years ago: £117,200
Average Value of a property 1 year ago: £119,000
Average Value of a property today: £121,700
Projected Value of a property in 12 months’ time: £118,100
Therefore, I believe the average value of a Rotherham property will be around £3,600 lower in 12 months’ time than today. As you can see below, this isn’t a significant change.
In 12 months time this is my considered opinion of where Rotherham property values will be. Looking at the historic prices, even if I (and many other property market commentators) are wrong and they drop 10% from TODAY’S figure, in the grand scheme of things, we have been through a lot in the last 20 to 30 years and Rotherham house prices have always bounced back.
Whilst the UK’s vote for Brexit has created an uncertainty in the Rotherham housing market, there is no need to panic and prospective buyers should merely use common sense about their purchases. I always say to people to be prudent and if you are taking out a mortgage, at some stage during the life of that mortgage, circumstances will be difficult. We won’t have a 2008 Credit crunch fire sale of properties because after the Mortgage Market Review which took place in the Spring of 2013, mortgage borrowers are not as highly leveraged this time around. As a result of this, with any luck there will not be too many distressed sales, which cause widespread price reductions.
…and Rotherham landlords? They have recently been thrashed by Osborne’s tax changes, but yields could rise if Rotherham house prices fall/stablise and rents grow, and this might also make it easier to obtain mortgages, as the income would cover more of the interest cost. If prices were to level or come down that could help Rotherham landlords add to their portfolio, as rental demand for Rotherham property is expected to stay strong as more people find it more and more difficult to obtain mortgages.
For more thoughts and insights into the Rotherham Property Market you can visit our Facebook page or follow us on Twitter.
Aug 10, 2016
I had a homeowner from Whiston email me the other day. She said she had been following this blog for a while and wanted to pick my brain on when is the best time of the year to sell a property.
Trying to calculate the best time to put your Rotherham property on the market can often seem something akin to witchcraft and, whilst I would agree that there are particular times of the year that can prove more productive than others, there are plenty of factors that need to be taken into consideration.
Even if you are putting your property on the market, you don’t know how long it will take to find a buyer – no crystal ball to help with that one. At the moment, the latest set of figures for all 16 estate agents in Rotherham, show the average length of time it takes to find a buyer for any Rotherham property is as follows:
Detached: 227 days
Semi: 223 days
Terraced: 191 days
Flat: 413 days
Overall average: 231 days
If we roll the clock back to January 2016, the overall average time it took to find a buyer (again using data from all of the 16 Rotherham Estate Agents) was 265 days.
So, on the face of it, things have improved between winter and summer over the last year.
In fact, when I looked at the data going back to 2009, and every Spring since then, the average length of time it takes to sell a property drops between January and the Summer months. For example:
Winter 2009 – 242 days Summer 2009 – 236 days
and in more recent years:
Winter 2013 – 322 days Summer 2013 – 303 days
Winter 2014 – 300 days Summer 2014 – 280 days
Winter 2015 – 271 days Summer 2015 – 239 days
You can see this information in the bar chart below:
Coming back to the present, even if you placed your property on the market today in Rotherham, if it takes you on average thirty three weeks to find a buyer you can also expect solicitors and the chain to take an additional eight and twelve weeks after that before you move.
Therefore, it comes down to personal choice as to when you place your property on the market.
Children can often impact the decision. On one side you might delay putting that for sale board in your front garden so you can move in the summer school holidays, but on the other side, you might want to move sooner to be in the catchment area of a preferred school, in plenty of time for the next academic year.
There are times of the year when it’s better to sell, and times when waiting a little longer can pay off in the long run.
In a nutshell, I would say this is the way of the seasons…
Spring: Customarily the number of house-buyers blossoms after the winter
Summer: Sellers may miss out on house-buyers being on holiday
Autumn: The enthusiasm for buying homes returns
Winter: Interest diminishes as festive period looms
What this means to buyers and landlord investors is that they can often pick up a bargain in later months of the year as there is less competition from owner occupiers. So, whilst there are better months to achieve a quicker sale, the only piece of advice I can give to every home owner and landlord in Rotherham is to do the right thing for yourself. Do your homework and buy (and sell) with both your head as well as your heart.
For more thoughts on the Rotherham Property Market you can visit our Facebook page or follow us on Twitter.
Aug 3, 2016
Call me old fashioned, but I do like the terraced house. In fact, I have done some research that I hope you will find of interest my Rotherham Property Blog reading friends!
In architectural terms, a terraced or townhouse is a style of housing, in use since the late 1600s in the UK, where a row of symmetrical / identical houses share their side walls. The first terraced houses were actually built by a French man, Monsieur Barbon around St. Paul’s Cathedral within the rebuilding process after the Great Fire of London in 1666. Interestingly, it was the French that invented the terraced house around 1610-15 in the Le Marais district of Paris with its planned squares and properties with identical facades. However, it was the 1730s in the UK, that the terraced/townhouse came into its own in London. The impressive Royal Crescent in Bath was built at a similar time.
However, we are in Rotherham not Bath.
The majority of our Rotherham terraced houses were built in the Victorian era. Built on the back of the Industrial Revolution, with people flooding into the towns and cities for work in Victorian times, the terraced house offered decent livable accommodation away from the slums. An interesting fact is that the majority of Victorian Rotherham terraced houses are based on standard design of a ‘posh’ front room, a back room (where the family lived day to day) and scullery off that. Off the scullery is a door to a rear yard, whilst upstairs there is usually three bedrooms (the third straight off the second). Interestingly, the law was changed in 1875 with the Public Health Act and each house had to have 108ft of livable space per main room, running water, it’s own outside toilet and rear access to allow the toilet waste to be collected (they didn’t have public sewers in those days in Rotherham – well not at least where these ‘workers’ terraced houses were built).
It was not until the 1960s and 70s when inside toilets and bathrooms were installed (often in that third bedroom or an extension off the scullery). Gas central heating was added in the 1980s and replacement uPVC double glazing has been added ever since.
Looking at the make up of all the properties in Rotherham, some very interesting numbers appear. Of the 47,601 properties in Rotherham:
- 7,916 are Detached properties (16.6%)
- 23,312 are Semi Detached properties (48.6%)
- 9,303 are Terraced / Town House properties (19.5%)
- 7,246 are Apartment / Flats (15.2%)
And quite noteworthy, there are 4 mobile homes, representing 0.01% of all property in Rotherham.
When it comes to values, the average price paid for a Rotherham terraced house in 1995 was £25,980 and the latest set of figures released by the land Registry states that today that figure stands at £71,410, a rise of 175% – that’s not bad at all is it. But then a lot of buy-to-let landlords and first time buyers I speak to think the Victorian terraced house is expensive to maintain.
However, I recently read a report from English Heritage that stated maintaining a typical Victorian terraced house over thirty years is around 60% cheaper than building and maintaining a modern house – quite fascinating don’t you think?!
Don’t dismiss the humble terraced house – especially in Rotherham!
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over the last 12 months, new building in the Rotherham Metropolitan Borough Council area has slumped. In 2014/15, for every one thousand existing households in the area, an additional 6.37 homes were built. For 2015/16, that figure is now only 4.97 homes built per thousand existing households. Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand.
