Baldock Buy-to-Let Return / Yields – 1.7% to 6.3% a year

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The mind-set and tactics you employ to buy your first Baldock buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise. When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget (because as my parents always used to tell me – you get what you pay for in this world!).

Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite. Inexpensive Baldock properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.

This means, if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Baldock buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.

To give you an idea of the sort of returns in Baldock…

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Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Baldock area.

As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield – and are doing so by buying cheaper properties.

However, before everyone in Baldock starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Baldock buy to let property to buy.  Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too. Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Baldock landlords who are looking for capital growth, an altered investment strategy may be required.

In Baldock, for example, over the last 20 years, this is how the average price paid for the four different types of Baldock property have changed…

  • Baldock Detached Properties have increased in value by 274.1%
  • Baldock Semi-Detached Properties have increased in value by 267.3%
  • Baldock Terraced Properties have increased in value by 293.8%
  • Baldock Apartments have increased in value by 280.8%

It is very much a balancing act of yield, capital growth and void periods when buying in Baldock. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to drop in and let’s have a chat. What have you got to lose? 30 minutes and my tea making skills are legendary!

Baldock House Prices Outstrip Wage Growth by 21.13% since 2007

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I recently read a report by the Yorkshire Building Society that 54% of the country has seen wages (salaries) rise faster than property prices in the last 10 years. The report said that in the Midlands and North, salaries had outperformed property prices since 2007, whilst in other parts of the UK, especially in the South, the opposite has happened and property prices have outperformed salaries quite noticeably.

As regular readers of my blog know, I always like to find out what has actually happened locally in Baldock. To talk of North and South is not specific enough for me. Therefore, to start, I looked at what has happened to salaries locally since 2007. Looking at the Office of National Statistics (ONS) data for North Hertfordshire District Council, some interesting figures came out:

 

188 North Hertfordshire table

 

 

188 North Hertfordshire Graph

Salaries in North Hertfordshire have risen by 25.96% since 2007 (although it’s been a bit of a roller coaster ride to get there!) – interesting when you compare that with what has happened to salaries regionally (an increase of 18.65%) and nationally, an increase of 17.61%.

Next, I needed to find what had happened to property prices locally over the same time frame of 2007 and today. Net property values in North Hertfordshire are 47.09% higher than they were in late 2007 (not forgetting they did dip in 2008 and 2009). Therefore…

Property values in the Baldock area have increased at a higher rate than wages to the tune of 21.13% … meaning, Baldock is in line with the regional trend

 

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All this is important, as the relationship between salaries and property values is the basis on how affordable property is to first (and second, third etc.) time buyers. It is also vitally relevant for Baldock landlords as they need to be aware of this when making their buy-to-let plans for the future. If more Baldock people are buying, then demand for Baldock rental properties will drop (and vice versa).

As I have discussed in a few articles in my blog recently, this issue of ‘property-affordability’ is a great bellwether to the future direction of the Baldock property market. Now of course, it isn’t as simple as comparing salaries and property prices, as that measurement disregards issues such as low mortgage rates and the diminishing proportion of disposable income that is spent on mortgage repayments.

On the face of it, the change between 2007 and 2017 in terms of the ‘property-affordability’ hasn’t been that great. However, look back another 10 years to 1997, and that tells a completely different story. Nationally, the affordability of property more than halved between 1997 and today. In 1997, house prices were on average 3.5 times workers’ annual wages, whereas in 2016 workers could typically expect to spend around 7.7 times annual wages on purchasing a home.

The issue of a lack of home ownership has its roots in the 1980’s and 1990’s. It’s quite hard as a tenant to pay your rent and save money for a deposit simultaneously, meaning for many Baldock people, home ownership isn’t a realistic goal. Earlier in the year, the Tories released proposals to combat the country’s ‘broken’ housing market, setting out plans to make renting more affordable, while increasing the security of rental deals and threatening to bring tougher legal action to cases involving bad landlords.

This is all great news for Baldock tenants and decent law-abiding Baldock landlords (and indirectly owner occupier homeowners). Whatever has happened to salaries or property prices in Baldock in the last 10 (or 20) years … the demand for decent high-quality rental property keeps growing. If you want a chat about where the Baldock property market is going – please read my other blog posts on http://www.baldockpropertyblog.co.uk  or drop me note via email, like many Baldock landlords are doing.

 

Great one bedroom investment opportunity in Baldock

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Available for sale through Country Propeties in Baldock at £165,000, this property seems like an ideal investment opportunity!   Less than half a mile from the mainline station to London and in a quiet development with allocated off road parking.  Anticipated annual yield of 4.7%.

Take a look at the advert here and call Country Properties to view ASAP!

 

Baldock’s New 3 Speed Property Market

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“What’s happening to the Baldock Property Market” is a question I am asked repeatedly.  Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Baldock property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the town.

For ease, I have named them the …

  1. lower’ Baldock Property Market.
  2. lower to middle’ Baldock Property Market.
  3. ‘middle’ Baldock Property Market.

 

The ‘lower’ and ‘lower to middle’ sectors of the Baldock property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Baldock property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Baldock property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

  1. lower’ Baldock housing market – the bottom 10% (in terms of value) of properties sold
  2. lower to middle’ Baldock housing market – lower Quartile (or lowest 25% in terms of value) of properties sold
  3. middle’ Baldock housing market – which is the median in terms of value

 

If one looks at the figures for North Hertfordshire District Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.

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You can quite clearly see that it is the ‘lower to middle’ market that has performed the best.

You might ask, what do all these different figures mean to homeowners and landlords alike?  Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘middle’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘lower to middle’ market percentage uplift), to the ‘middle’ 1995 housing market figure, the 2017 figure of £361,822, would have been £400,229 instead – quite a difference you must agree?

 

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Now, I have specifically not mentioned the upper reaches of the Baldock housing market for several reasons.  Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Baldock’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Baldock property market – looking at the stats for the up-market Baldock property market from Land Registry, only 24 properties in Baldock (and a 5 mile radius around it) have sold for £1,500,000 or more since 1997.

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Baldock Property Market, but many Baldock “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market. If you want to be kept informed of those buy to let bargains, have a look at my blog http://www.baldockpropertyblog.co.uk  it’s free to do so and I’m sure you wouldn’t want to miss out – would you?

I would love to know if you have spotted any micro-property markets in Baldock.

Council House Waiting List in Baldock Drops by 30.8% in last 3 years

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Should you buy or rent a house?  Buying your own home can be expensive but could save you money over the years.  Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, with more flexibility if you need to move.

Yet, there is a third way that many people seem to forget, yet it plays an important role in the housing of Baldock people.  Collectively known as social housing, it is affordable housing, which is let by either North Hertfordshire District Council or a Housing Association to those considered to be in specific need, at rents below those characteristic in the private rental market.

In Baldock, there are 737 social housing households, which represent 16.85% of all the households in Baldock.  There are a further 2,161 families in the North Hertfordshire District Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2013, when it stood at 3,124 families, so today’s numbers represent a drop of 30.8%.

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Nevertheless, this doesn’t necessarily mean that more families are being supplied with their own council house or Housing Association property.  Six years ago, Westminster gave local authorities the permission to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.

Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants.  In the North Hertfordshire District Council area, the average rent in 1998 for a council house / housing association property was £200.94 a month.  Whilst we have no up to date figures, because of the ‘Large Scale Voluntary Transfer’ of all or most of the local authority’s stock was transferred to a Private Registered Provider sector, so the average rent is no longer applicable.  Therefore, using the average rent increase for England of 108% (England’s average rent being £183.08 a month in 1998 and £381.03 a month today) we can guesstimate an average of approximately £415.

When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005.  Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.

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What does this all mean for the homeowners, landlords and tenants of Baldock?

Rents in the private rental sector in Baldock will increase sharply during the next five years.  Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a seventy year low.  The government crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise.  This makes buy to let investment a good choice of investment again (irrespective of the increased fees and taxation laid at the door of landlords).  It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.

Interesting times ahead for the Baldock property market!

 

Baldock First Time Buyers Mortgages taking 33.9% of their Wages

Baldock 171 graphic v1I had an interesting chat the other day with a Baldock resident. He told he was a Baldock homeowner, retired and mortgage free.  He stated how unaffordable Baldock’s rising property prices were and that he worried how the younger generation of Baldock could ever afford to buy? He went on to ask if it was right for landlords to make money on the inability of others to buy property and if, by buying a buy to let property, Baldock landlords are denying the younger generation the ability to in fact buy their own home.

Whilst doing my research for my many blog posts on the Baldock Property Market, I know that a third of 25 to 30 year old’s still live at home. It is no wonder people are kicking out against buy to let landlords; as they are the greedy bad people who are cashing in on a social woe. In fact, most people believe the high increases in Baldock’s (and the rest of the UK’s) house prices are the very reason owning a home is outside the grasp of these younger would-be property owners.

However, the numbers tell a different story. Looking of the age of first time buyers since 1990, the statistics could be seen to pour cold water on the idea that younger people are being priced out of the housing market. In 1990, when data was first published, the average age of a first time buyer was 33, today it’s 31.

171 - fixed Graph showing Average Age of First time buyers

Nevertheless, the average age doesn’t tell the whole story. In the early 1990’s, 26.7% of first-time buyers were under 25, while in the last five years just 14.9% were. In the early 1990’s, four out of ten first time buyers were 25 to 34 years of age and now its six out of ten first time buyers.

171 - fixed graph Age Distribution of First Time Buyers in UK since 1990

Although, there are also indications of how in-affordable housing is, the house price-to-earnings ratio has almost doubled for first-time buyers in the past 30 years. In 1983, the average Baldock home cost a first-time buyer (or buyers in the case of joint mortgages) the equivalent of 2.8 times their total annual earnings, whilst today, that has escalated to 5.4 times their income.

Again, those figures don’t tell the whole story. Back in 1983, the mortgage payments as percentage of mean take home pay for a Baldock first time buyer was 29.4%. In 1989, that had risen to 75.9%. Today, it’s 33.9% … and no that’s not a typo .. 33.9% is the correct figure.

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So, to answer the gentleman’s questions about the younger generation of Baldock being able to afford to buy and if it was right for landlords to make money on the inability of others to buy property? It isn’t all to do with affordability as the numbers show.

What of the landlords? Some say the government should sort the housing problem out themselves, but according to my calculations, £18bn a year would need to be spent for the next 20 or so years to meet current demand for households. That would be the equivalent of raising income tax by 4p in the Pound. I don’t think UK tax payers would swallow that.

If the Government haven’t got the money, who else will house these people? Private sector landlords and thankfully they have taken up the slack over the last 15 years.

Some say there is a tendency to equate property ownership with national prosperity, but this isn’t necessarily the case. The youngsters of Baldock are buying houses, but buying later in life. Also, many Baldock youngsters are actively choosing to rent for the long term, as it gives them flexibility – something our 21st Century society craves more than ever.

579 Baldock Landlords – Is This a Legal Tax Loop-Hole?

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In November 2015, George Osborne disclosed plans to restrain the buy-to-let (BTL) market, implying its growing attractiveness was leaving aspiring first time buyers contesting with landlords for the restricted number of properties on the market.  One of things he brought in was that tax relief on BTL mortgages would be capped, starting in April 2017.  Before April 2017, a private landlord could claim tax relief from their interest on their BTL mortgage at the rate they paid income tax – (i.e. 20% basic / 40% higher rate and 45% additional rate).

So, for example, let’s say we have a Baldock landlord, a high rate tax payer who has a BTL investment where the rent is £900 a month and the mortgage is £600 per month.  In the tax year just gone (2016/17), assuming no other costs or allowable items, the figures are below:

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  • Annual rental income £10,800.
  • Taxable rental income would be £3,600 after tax relief from mortgage relief

This means they would pay £1,440 in income tax on the rental income.  Assuming no other changes, the landlord would have income tax liabilities (at the time of writing July 2017) in the tax years of:

  • (2017/18) £1,800
  • (2018/19) £2,160
  • (2019/20) £2,520
  • (2020/21) £2,880

Landlords who are higher rate tax payers are going to have be a lot smarter with their BTL investments and ensure they are maximising their rental properties full rental capability.  However, there is another option for landlords.

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The Baldock landlords who own the 579 rental properties

in the town could set up a Limited Company and sell their

property personally to that Limited Company

In fact, looking at the numbers from Companies House, many landlords are doing this. In the UK, there are 93,262 BTL companies, and since the announcement in November 2015, the numbers have seen a massive rise.

  • Q2 2015 / Q3 2015 – 4,193 BTL limited companies set up
  • Q4 2015 / Q1 2016 – 5,403 BTL limited companies set up
  • Q2 2016 / Q3 2016 – 3,007 BTL limited companies set up
  • Q4 2016 / Q1 2017 – 7,149 BTL limited companies set up

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By selling their buy to let investments to their own limited company, owned 100% by them, these landlords could then offset the costs of running their BTL’s as an ‘allowable expense’ – effectively writing off the cost of 100% of their mortgage outgoings, wear and tear and upkeep, letting agent’s fees etc.

I am undeniably seeing more Baldock landlords approach me for my thoughts on setting up a BTL limited company, so should you make the change to a limited company?

I have done some extensive research with Companies House and in the fifteen months between 1st January 2016 – 31st March 2017, 67 BTL companies have been set up in the SG postcode alone.

Well, if you are looking to hold your BTL investments for a long time, it could be very favourable to take the short-term pain of putting your BTL’s in a limited company for a long-term gain.  You see, there are huge tax advantages to swapping property ownership into a limited company but there are some big costs that go with the privilege.

As the law sees the new limited company as a separate entity to yourself, you are legally selling your BTL property to your limited company, just like you would be selling it on the open market.  Your limited company would have to pay stamp duty on the purchase and if you (as an individual) made a profit from the original purchase price, there could be a capital gains tax liability of 18% to 28%.  The mortgage might need to be redeemed and renegotiated too and this could come with exit charges.

On a more positive note, what I have seen by incorporating (setting up the limited company) is landlords can roll up all their little BTL mortgages into one big loan, often meaning they obtain a lower interest rate and the ability to advance new purchase capital.  Finally, if the tax liability is too high to swap to a limited company, some savvy BTL investors are leaving their existing portfolios in their personal name whilst purchasing any new investment through a limited company, just an idea, not advice!

It is vital that landlords get the very best guidance and information from tax consultants with the right qualifications, experience and insurance.  Whatever you do, always get the opinions from these tax consultants in writing and you shouldn’t hurry into making any hasty decisions.  The modifications to BTL tax relief are being progressively eased in over the next three years so there is no need to be unnerved and rush into any decisions before finding out the specifics as they relate precisely to your personal situation.  With decent tax planning from a tax consultant and good rental / BTL portfolio management (which I can help you with), you can keep yourself the right side of the line!

For more information about the Baldock property market or for any advice please give us a call on 01462 894565 or pop into the office for a chat.

40.1 miles – The average distance people go to escape living in Baldock

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“How far do Baldock people go to move to a new house?”  This was an intriguing question asked by one of my clients the other week.  Readers of my property blog will know I love a challenge, especially when it comes to talking about the Baldock property market.

 For the majority, the response is not very far.  It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county.  Until now, it’s been hard to say how many homeowners and tenants moved from and to relatively far away to buy or rent their new home.  However, I carried out some research and requested some statistics from the Royal Mail and what came back was fascinating.

Using statistics for the 12 months up to the middle of Autumn 2016, 192 households moved out of Baldock and the average distance was 40.08 miles, the equivalent of moving from Baldock to Brackley as the crow flies.  The greatest distance travelled was 448 miles, that’s almost 17 marathons, when someone moved to Bangor in Northern Ireland.

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Considering there were 177 property sales in SG7 in the year and countless tenant moves, the numbers seem consistent.  Once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbourhood, a better transport links or to be closer to the school you want to get your children into.  The likelihood is however is that you won’t travel far.

I then turned my attention to people moving into Baldock.  Using the same statistics for the 12 months up to the middle of Autumn 2016, 202 households moved into Baldock and the average distance was 28.82 miles, the equivalent of moving from Amersham to Baldock, again as the crow flies.  The greatest distance travelled again was 496 miles, that’s the same as 19 marathons when someone moved from Garlogie in Scotland to Baldock.

I have looked at the data of every person moving into Baldock and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Baldock.  As you can see, there are a high proportion of people moving from London and from the South West.

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So, what does all this mean for the landlords and homeowners of Baldock?

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting / selling fit those tenants / buyers, so they almost sell themselves.  These days that means not only knowing how many bedrooms, reception rooms a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”.  I say it might be helpful to factor in where and how far people are moving from, so the property can be sold or let more easily.  Many say knowledge is power and whilst I do enjoy writing my blog on the Baldock property market, I also use the information to help my clients buy, let and sell well.  So for example, the information gained from this article will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our client’s properties sale-ability or rent-ability.

For more information on the Baldock property market, call us on 01462 894565 or pop in for a cuppa

6.52 Babies Born for Each New Home Built in the Baldock area

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As more babies are being born to Baldock and North Hertfordshire mothers, I believe this increase will continue to add pressure to the over stretched Baldock property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 6.52 babies were born for every new home that was built in the North Hertfordshire Council area in 2016.  I believe this has and will continue to exacerbate the Baldock housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Baldock rents and Baldock 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.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s 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 North Hertfordshire Council area had an average of 63.8 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 region its 64.7 births per 1,000 women aged 15 to 44.

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The number of births from Baldock and North Hertfordshire women between the ages of 20 to 29 are close to the national average, but those between 35 and 44 were much higher.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Baldock area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles), and the higher predominance of single person households, this can only mean one thing, a huge increase in the need for housing in Baldock.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Baldock people.

The planners and politicians of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) demand for property is simply outstripping supply.

The simple fact is more Baldock properties need to be built, be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of Ivel Springs or Weston Hills, but the obsession of not building on any green belt 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 Baldock, and 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.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but 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 look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

 

Should the 1,677 home owning OAP’s of Baldock be forced to downsize?

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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 Baldock 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 Baldock home owning mature members of our society, ‘Generation Trapped’).

Should we force OAP Baldock homeowners to downsize?

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

One of the biggest reasons OAP’s move home is health (or lack of it).  Looking at the statistics for Baldock, of the 1,677 homeowners who are 65 years and older, whilst 1,062 of them described themselves in good or very good health, a sizeable 484 home owning OAPs described themselves as in fair health and 131 in bad or very bad health.

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7.81% of Baldock home owning OAP’s are in poor health

If you look at the figures for the whole of North Hertfordshire District Council (not just Baldock), there are only 818 specialist retirement homes that one could buy (if they were in fact for sale) and 956 homes available to rent from the Council and other specialist providers (again, you would be waiting for dead man’s shoes to get your foot in the door) and 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’ Baldock down-sizers 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 Baldock population and specialist retirement properties for the ones who aren’t in such good health … we need to build more appropriate houses in Baldock.

The government’s housing White Paper, published recently, could have solved so many problems with the UK housing market, including the issue of homing our ageing 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 down-sizers.  Who knows, but something has to happen?

Come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’ as the other phrase feels like they are lowering themselves as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration.  What I would say to all the homeowners and property owning public of Baldock is more houses and apartments need to be built in the Baldock area, especially more specialist retirement properties and bungalows.  The government had a golden opportunity with the White Paper and were sadly found lacking.

A message to my Baldock property investor readers, whilst this issue gets sorted in the coming decade(s), maybe seriously consider doing up older bungalows as people will pay handsomely for them be that for sale or even rent?  Just a thought!