Tag: Baldock property market

Baldock Buy-To-Let Predictions up to 2037

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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On several occasions over the last few months, in my Baldock Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time I felt that in some parts of the UK rents had actually dropped for the first time in over eight years. Recent research backs up this prediction.

Rents in Baldock for new tenancies only grew by 0.7% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in Baldock, an interesting pattern emerges ..

  • 2016 – Rental Inflation in Baldock was 4.3%
  • 2015 – Rental Inflation in Baldock was 6.4%
  • 2014 – Rental Inflation in Baldock was 0.7%

The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).

On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of Baldock property prices has compounded this.  Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.

The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.

Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations) the simple fact is, we aren’t building enough properties for us to live in. Both in Baldock, the East and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again. Look at the projections by the Office of National Statistics.

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Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Baldock, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants. Simply put rents must go up!

The fact is that I see this as a short-term blip and rents will continue to grow in the coming years.  With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.

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I’m off on annual leave now for a couple of weeks – hoping for some more settled UK sunshine!  Will be back to blogging again mid-August.

In the meantime for any more information about the Baldock property market and lettings please do call us on 01462 894565 or pop into the Letchworth office for a chat.

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

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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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

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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.

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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?

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Investors, Landlord in Baldock?, Landlords, Looking to invest in Baldock?

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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.

Almost a Quarter of Baldock Properties are Leasehold

by Andrew Wilson, posted in Baldock lettings, Baldock property blog, Baldock property market, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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There are 23.36 million properties in England and Wales with 64% being owner occupied and 36% being rented either from a private landlord, local authority or  Housing  Association.

Over nine out of ten of those English and Welsh owner-occupied properties are a whole house or bungalow. Now, most people would assume they would be freehold – however, of those renting nearly half of rental properties, 44% to be precise, lived in other leasehold apartments and flats.

It might be wise to quickly explain the difference between freehold and leasehold. When someone owns the freehold of a property they own it outright, including the land it is built on, whilst with a leasehold property the leaseholder owns the property for the length of their lease agreement. Leaseholders must pay the person who owns land (the freeholder) ground rent and other fees. When the leasehold ends, ownership returns to the freeholder although the leaseholder can extend the lease or they can buy the freeholder out, but there are rules and regulations with regards doing that.

Therefore, it would be safe to assume that houses are freehold and flats are leasehold .. wouldn’t it? Not necessarily! Most houses are freehold but some might be leasehold – usually through shared-ownership schemes – but more and more new homes builders are selling houses on a leasehold as well. The protection of the law afforded to leaseholders who own a flat is massive, but sadly lacking to leasehold houses sold privately.

Looking specifically at the figures for Baldock, at the last count in SG7 there were 5,797 properties. Since 1995, 5,730 properties in SG7 have changed hands and have been sold. Looking further at those 5,730 transactions in SG7 since 1995, using data from Land Registry 22.16% have been leasehold (higher than the national average of 15%).

Baldock 169 Graph

However, I am concerned about a few new homes builders selling new houses (not flats – houses) as leasehold. There has been a growing (yet small) trend for new-build houses to be sold as leasehold in recent years. While not all house builders use this model, those that do maintain it helps make developments financially viable.

The issue comes when builders sell the freehold separately to an investment company without informing the leaseholder  – which they are legally allowed to do without telling the leaseholder. In England and Wales, the “right of first refusal” to buy the freehold is written in law to leaseholders of flats i.e. the freeholder must offer it to the leaseholders of all the flats of the building first), but not leaseholders of houses.

This is the point I am trying to get across. If you are buying a new home and it’s a house (i.e. not a flat) – please check very carefully indeed whether its freehold or leasehold. If it is a leasehold, whilst you do have rights, they are not as strong as for those people buying a leasehold flat. I appreciate I am only talking about a very small percentage of the property market, but potentially this could end up costing thousands of pounds to those affected.

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

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Investors, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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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

by Andrew Wilson, posted in Baldock landlords, Baldock lettings, Baldock property blog, Baldock property market, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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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?

by Andrew Wilson, posted in Baldock property blog, Baldock property market, Investors, Landlord in Baldock?, Looking to invest in Baldock?, Property market update

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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!

 

658,208 People use Baldock Train Station a year……

by Andrew Wilson, posted in Baldock landlords, Baldock lettings, Baldock property market, Buy-to-let, Landlords, Lettings, Property market update

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How does that affect the Baldock Property Market?

 

It might surprise you that it isn’t always the poshest villages around Baldock or the swankiest Baldock streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Baldock, I am frequently confronted with queries about the Baldock property market and most days, chiefly from newcomers, I am asked “What is the best part of Baldock and its villages to live in these days?”.  Now the answer is different for each person. A lot depends on 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, in total, 902 people jump on a train each and every day from Baldock Train station. Of those, 336 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £5,432 a year.

If up to £1.82m is being spent on rail season tickets each year from Baldock, 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 Baldock and the surrounding area and so, in turn, these are the type of people who are happy to invest in the Baldock buy to let market, providing homes for the tenants of Baldock.

The bottom line is that property values in Baldock 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

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.

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Overall usage of the station at Baldock has increased over the last 20 years. In 1997, a total of 229,353 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 658,208 people using the station (that’s 1,803 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Baldock property. It is also significant for tenants – so if you are a Baldock 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 more thoughts on the Baldock Property market and for any advice please pop into the office or give us a call on 01462 894565.

What will the General Election do to 5,604 Baldock Homeowners?

by Andrew Wilson, posted in Baldock landlords, Baldock lettings, Baldock property market, Buy-to-let, Landlords, Lettings, Property market update

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In Baldock, of the 5,604 households, 1,792 homes are owned without a mortgage and 2,034 homes are owned by a mortgage. Many homeowners have made contact me with asking what the General Election will do the Baldock property market?  The best way to tell the future is to look at the past.

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), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015,  in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections:

168 Graph One

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality 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).

I then 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):

168 Graph Two

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.

Finally, what does this mean for the landlords of the 767 private rented properties in Baldock? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Baldock will 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 Baldock, making it imperative that Baldock landlords are realistic with their market rents.  However, in the long term, as the younger generation still choose to rent rather than buy the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.  If you want to find out more about the Baldock property market or for any advice, please either pop into the office, call us on 01462 894565 or e-mail: lettings@satchells.co.uk.