Are 'would be' Clacton homeowners warming to the idea of renting?

I was reading a report the other day produced by the Halifax, about the UK property market and why more and more of the younger generation seem to be renting rather than buying. I find it fascinating that over the last ten years, the British obsession of buying a house almost as soon as you left school, and the fact that if you rented you were seen as a second class citizen, has turned on its head to a point where the hopes and dreams to own a nice home will be replaced by the ambition simply to live in one.

In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property, constantly upgrading until eventually they carried you out in a box. However, the perceived shame and stigma of renting is no longer the case, as it seems that the British are now beginning to accept a lifetime of renting. This is a very important consideration for both Clacton homeowners and Clacton landlords as it will transform the way the Clacton property ladder looks in the future and I might ask whether or not it will exist at all for some people? The make up of households is one important factor, especially in the Clacton property market. The normal stereotypical married couple, two kids and dog of the 1970’s and 80’s has changed. More and more we have the need for larger houses where two families come together after divorces (+ kids) and need a property to house everyone through to an increase in the number of one person households.

Looking at the data for Clacton, of the 9,210 private rental properties in the Tendring District Council area, 36.92% of those rented properties are one person households (3,401 properties). However, when we compare the number of one person Clacton households who have bought their own property with a mortgage (i.e. therefore they are still in work), of the 45,752 owner occupied households in the area, only 3,024 of those properties are a one person household (i.e. 6.61%). Compared to a decade ago, this explosion in demand for decent high quality rental properties that one person households require has not been met with an increase in supply of such properties.  More and more I believe Clacton landlords need to consider this change in the make up of Clacton households, as I believe this could be an opportunity. As an aside, another interesting stat that raised an eyebrow was that 23.94% of those 9,210 rental properties (2,205 properties) are lone parents households as well. Again, another possible opportunity that Clacton landlords might want to consider in their future investment plans.

It is true that the Governments introduction in 2013 of the Help to Buy scheme, where first time buyers only needed a 5% deposit, changed the perception of peoples’ ability to buy without having to save ten’s of thousands of pounds for a deposit. However, it might surprise you, 95% mortgages were re-introduced within six months of the Credit Crunch in late 2009, so again it comes down to people’s own perception. Many youngsters think they won’t get a mortgage, so don’t even bother trying.

Coming back to the deposit, it’s still a fact that once you start renting it becomes that much harder to save for a deposit, regardless of the size. Interestingly, 7 out of 8 renters polled by the Halifax (86% to be exact) refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit.  This is the crux and the real reason why people aren't buying but renting... and why demand for renting will continue to grow in the future (i.e. good news for landlords). Clacton tenants can upgrade the quality and size of the property they live in for a minimal rent increase. The average rent of a two bed property in Clacton is £663pm, but a three bed is only £98pm more at £761pm, whilst the average four bed rent is £965pm. If you had to make that jump when buying, the monthly mortgage payments would be stratospherically more than that!  Without any social pressure and better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation, as the UK is becoming more like Europe, where renting is ‘the norm’. Who is going to supply all these properties to rent? Landlords! Whether you are an existing landlord looking to grow your portfolio or looking to become a ‘first time landlord’, my thoughts are take advice from as many people as possible. However, as the majority of landlords buy their buy to let properties in the same town they live, you will need specific advice about Clacton itself. One place for such advice and opinion is the Clacton Property Blog www.clactonproperty.blogspot.co.uk

Groom Park - Sold with Tenant in Situ

Connells of Clacton have listed this three bedroom end terraced house located in Groom Park for a Guide Price £130,000 and being sold with a tenant in situ means this property should not be missed!

The current tenant is paying £8,400 per Annum (£700 PCM), therefore based on a purchase price of £130,000 this property offers a return of 6.4%.

For further information, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-53766827.html

One bedroom apartment in Victoria Heights, Clacton

This one bedroom apartment has come to market with Bairstow Eves in Victoria Heights for an asking price of £87,000 and with a potential monthly rental of £500, would make a perfect investment!

Victoria Heights is a gated entry block located directly opposite Clacton Railway Station and with town centre located only 0.3 miles everything required is on your doorstep!

Based on a purchase price of £85,000 and a monthly rental of £500, this apartment offers a potential return of 7% (ground rents and service charges not taken into account).

For further information and pictures, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-50894113.html

7% Return in Saxmundham Way

Sheen Estate Agents have listed this one bedroom ground floor apartment in Parklands Court for £89,995 and with a potential rental of £525 PCM, means this apartment could return you 7%!

Parklands Court is located on Saxmundham Way, which is over to the North West side of Clacton and 1.3 miles from Clacton railway station.

For further information and pictures, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-35595081.html

Two Bedroom Garden Maisonette located in Westridge Way

This two bedroom first floor garden maisonette has come to market with Blake & Thickbroom for £92,500.

Located in this Cul-De-Sac location of Westridge Way in Great Clacton, this home is ideally positioned for Clacton town centre, but positioned in a quiet, popular location. 

With this property offers its own garden & a garage, should this property hit the rental market, it wouldn't hang around long and with a potential monthly rental of £600 PCM, you could expect a return of 8% on your investment (ground rent & services charges would need to be accounted for).

For further information, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-35590536.html

Why are less Clacton people moving House?

During my school years, my parents seemed to move every other year (or it seemed that way). In reality, looking back at the house moves, we actually moved three times before I left home. However, whilst my parents kept the removal van people in business whilst I was at school, from research I have carried out it shows things have changed considerably in Clacton over the last few decades, and interestingly, the trend is getting worse ... for the removal van people at any rate!

In Clacton, there are 22,834 properties. However, after we remove the 2,123 council houses, 4,249 privately rented houses and 256 houses where the occupants live rent free, that leaves us with 16,206 owned properties (be that 100% outright, with a mortgage or shared ownership). This means 71% of the properties in Clacton are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Clacton, over the last 12 months, has only been 1,412. This means on these figures, the homeowners of Clacton are only moving on average every 11.47 years.

These are the reasons. Firstly, the cost of moving house has risen over the last twenty years. Secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels.

This change to a relatively low inflation Clacton property market (i.e. Clacton property values not rising quickly) is significant because the long term consequences of sustained low house price growth is that it eats into mortgage debt more slowly than when property price inflation is higher. Clacton homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in say the 1970’s and 1980’s.

So what does this all mean for Clacton buy to let landlords? Well for the same reasons existing Clacton homeowners aren't moving, less ‘twenty something’s’ are buying their first home as well. Clacton youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. As a society, we expect things instantly, and if it doesn't come easy, doesn't come quick, some youngsters ask if it is really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was... say... a generation ago?

Even though, in real terms, property prices are 5% cheaper than they were ten years ago (when adjusted by inflation), 18.6% of Clacton properties are privately rented (nearly double it was twenty years ago). As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing? For advice and opinion on the Clacton Buy To let property market, one source of information is The Clacton Property Blog www.clactonproperty.blogspot.co.uk

Flatford Drive - 6% Return!

I noticed this three bedroom semi detached house with garage located in Flatford Drive come to market with Sheens for £154,995, and with a potential rental of £750 - £775 PCM, means a return of 6% on your investment!

Internally the property looks in good decorative order and modern kitchen & bathrooms, very minimal work would be required, if any, to rent this home out!

With demand for all types and size of properties in call for, this property certainly wouldn't hang around for long on the rental market!

For further information and pictures, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-53589518.html

Two bedroom Garden apartment in Land Close, Clacton

This two bedroom ground floor apartment with garden has been listed in Land Close, Clacton for £112,000 and would make a perfect investment!

Being located in the popular Peter Bruff Development, access to Primary & Secondary schooling is located within 0.4 miles, along with access to the A133. The additional benefit to this property is the enclosed rear garden, which is a popular request!

With properties similar to this renting for £600 PCM, this means a return of 6.4% on your investment!

Click the link below for further information.

http://www.rightmove.co.uk/property-for-sale/property-35483637.html

Three Bedroom Semi on St Osyth Road, Clacton

This three bedroom semi detached house has been listed with Blake & Thickbroom for £129,950, located in St Osyth Road.

Internally the property requires modernisation, however once the works are completed and carried out to a good standard, a property of this size and location could expect to achieve a rental of £775 PCM.

Should you purchase this property for £125,000 and spend approx £15,000 on the property, you could expect a return of 6.6%!

For further information, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-35070192.html

Family home in Peter Bruff, Clacton

This three bedroom house has just come to market with Connells for £158,000 and with a potential to rent for £795 PCM, would make a perfect investment!

Located in Young Close, a small Cul-de-Sac on the popular Peter Bruff Development and is located only 0.4 miles to local Primary & Secondary schools.

With similar properties renting in the region of £795 PCM, if this home was to be purchased at full asking price, you could expect to achieve a return of 6% on your investment!

For further information, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-50869540.html

Affordability of housing in Clacton

Talking to an elderly relative recently, he reminded me that in his day, you could have bought a property for the same price of what a decent second hand car would sell for today and that his father was buying property for the same price as a decent 50 inch LCD TV!  Now of course, these are only headline prices and we have had wage growth and inflation.  Interestingly, since the Second World War, property values in Clacton doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.

Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people.  It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating  us (although we know what has happened to the Spanish property market over the last few years!).  In the 2000’s, the British situation was different in two regards.  First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.

However, since 2010, the regional pattern has been completely different in the UK.  Compared with  2007 (the last property boom), average property values today in England and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher, whereas in Clacton they are 8.24% higher. The London property market has been like a different country.  Looking specifically at Clacton though, it has continued for first time buyers to get on the housing ladder.  The best measure of the affordability of housing is the ratio of Clacton Property Prices to Clacton Average Wages, (the higher the ratio, the less affordable properties are).  

• 1997       3.20 to 1  (i.e. the average value of a Clacton property was 3.20 times higher than the average annual wage in Clacton)
• 2000       4.43 to 1
• 2002       5.18 to 1
• 2003       6.22 to 1
• 2007       9.13 to 1
• 2009       6.70 to 1
• 2012       7.00 to 1
• Today    7.82 to 1

You  can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in following subsequent years with Clacton house price’s rising but wages not keeping up with them,  the ratio started rise.  This has meant there has been a deterioration in affordability of property in Clacton over the last couple of years.  This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house.  The local Council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.

With fewer people able to save up the deposit required by mortgage lenders, more and more people are looking to rent, this has also resulted in a change in attitudes towards renting over the last decade.  This delay in moving up the property ladder has driven rents up in Clacton over the last few years, as more people are seeking properties to rent.  All these things have combined to make the demand for rental property in Clacton rise.  If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not to buy in Clacton), one source of information is the Clacton Property Blog www.clactonproperty.blogspot.co.uk

Ready made investment in St Osyth Road, Clacton

This three bedroom house has just been listed with Connells for £130,000 and being offered for sale with a sitting tenant, this home make the perfect investment opportunity! 

The current tenant is paying £750 PCM, therefore should this property be purchased at £130,000 then you can expect to receive a return of 6.9%!

For further information, click the link below!

http://www.rightmove.co.uk/property-for-sale/property-50823445.html

Three bedroom Semi on Victory Road, Clacton

This three bedroom semi detached house has recently been added by Bairstow Eves for £150,000 and with a potential rental income of  £750 - £775 PCM, this house would make an ideal investment.

This house benefits from three bedrooms, lounge with separate dining area, ground floor cloakroom & enclosed rear garden. An ideal family home is situated in a perfect position for Clacton Coastal Academy and local primary schools.

If purchased at full asking price, you could expect to achieve a return of 6.2% per annum!

For further information, click the link below.

http://www.rightmove.co.uk/property-for-sale/property-35410845.html

7.2% return on this Great Clacton apartment!

This one bedroom ground floor apartment has recently been listed with Signature Estates for £82,500 and with the potential of achieving £500 PCM, this apartment would make a fantastic investment!

Located in this Cul-De-Sac location in Great Clacton, this apartment is conveniently positioned for all local amenities and even has a doctors surgery and Newsagents positioned at the beginning of the road!

Based on a full asking price purchase and a rental income of £500 PCM, you could expect a return of 7.2%, as with all leasehold properties ground rent & service charges would need to be taken into account.

For further information, click the link below!

http://www.rightmove.co.uk/property-for-sale/property-52911371.html

6.5% return in East Clacton

This three bedroom semi detached house has been listed with Peagrams Estate Agents for £147,000 located in Northbourne Road, which is tucked away at the end of Thoroughgood Road & Vista Road but an ideal position for Clacton railway station & town centre.

From the information provided by the agents, there is potential to reinstate a partition wall in bedroom two, which could add a to the monthly rental, thus meaning an even higher yield!

Dependant on the sizes of the bedrooms as a four bedroom house, you could expect to achieve a rental of £850 - £875, therefore offers a potential of 7.1%!

For further information, click the link below!

http://www.rightmove.co.uk/property-for-sale/property-53188352.html

Fewer people are moving house in Clacton

Well the dust has settled and the General Election seems a distant memory, we can get back to a more normal property market, or that is what the London based ‘Fleet Street’ journalists would lead you to believe.  You see I have been talking to many fellow property professionals in Clacton (solicitors, conveyancers and one the best sources of info – the chap who puts all the estate agent and letting boards up in Clacton, and all of them, every last one of them told me they didn’t see any change over April in business, compared to any other month on the lead up to the Election itself.

I am now of the opinion that maybe in the upmarket areas of Mayfair and Chelsea, the market went into spasm with the prospect of a Labour/SNP pact with their Mansion Tax for properties over £2,000,000, but in little old Clacton and the surrounding villages, there haven’t been any properties sold above £2,000,000 mark in the last seven years and only four above the £1,000,000 mark.

In a nutshell, the General Election in Clacton didn't really have any impact on people’s confidence to buy property.  As I write this article, of 621 properties that have come on to the market in Clacton  since the 2^nd of April, 170 of them have a buyer and are sold subject to contract, that’s nearly one in three (27.38% to be precise).

I think that things are starting to change in the way people in Clacton (in fact the whole of the country as I talk to other agents around the UK) buy and sell property.  Back in the 1970’s, 80’s and 90’s, the norm was to buy a terraced house as soon as you left home and do it up.  Meanwhile, property prices had gone up, so you traded up to a 2 bed semi, then a 3 bed semi and repeated the process, until you found yourself in a large 4 bed detached house with a large mortgage. 

Looking into this a little deeper like I have said in previous articles Clacton people’s attitude to home ownership itself has changed over the last ten years.  The pressure for youngsters to buy when young has gone as renting, not buying, is considered the norm for 20 something’s. This isn't just a Clacton thing, but, a national thing, as I have noticed that people buy property by trading up (or down) because they need to, not because ‘it’s what people do’.  This does means there are a lot less properties on the market compared to the last decade.

A by-product of less people moving is less people selling their property. My research shows there are a lot fewer properties each month selling in Clacton compared to the last decade.  For example, in February 2015, only 117 properties were sold in Clacton. Compare this to February 2002, and 130 properties sold and the same month in 2004, 132 properties.  I repeated the exercise on different sets of years, (comparing the same month to allow for seasonal variations) and the results were identical if not greater.  So what does this all mean?  Demand for Clacton property isn't flying away, but with fewer properties for sale, it means property prices are proving reasonably stable too. Stable, consistent and steady growth of property values in Clacton, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late 2000’s might just be the thing that the Clacton property market needs in the long term.

6.2% in Salvia Close, Clacton

This two bedroom house has recently been listed with Blake & Thickbroom for £129,995 and with a potential monthly rent of £675, this property would make a fantastic return!

The property itself is in good order internally, therefore would literally turn around straight away.

With a monthly rental of £675, this home offers a potential of 6.2% based on being purchased at full asking price!

Click the link below for more information.

http://www.rightmove.co.uk/property-for-sale/property-35332890.html

Sold with Tenants in Situ - Page Road, Clacton on Sea

We have recently listed this four bedroom semi detached house in Page Road for £159,995 and being sold with tenants in situ is THE ideal investment!!

With the current tenants paying £850 PCM until November 2015 this home could return you 6.3% on your investment.

For further information, click the link below!

http://www.moreestateagents.co.uk/properties/3843164/property#ad-image-0

Clacton Buy to Let - Bedrooms?

Last week, a landlord from Clacton emailed me to ask, after reading the Clacton Property Blog, if he should extend his terraced house making an extra bedroom in the loft. He had a builder friend who owed him a favour, and thought a good way would be get an ‘inexpensive’ extension.

Having more useable space is generally thought to be consistent with better quality accommodation and homeowners and tenants are prepared to pay for it. If you added a bedroom to a two bed terraced to make a three bed terraced, it will add 10% to the value of the property.  Turn a three bed terraced into a four bed terraced and 9% will be added to the value. Looking at semi detached properties, and turn a two into a three bed and 12% will be added to the value, whilst making a three bed semi into four bed will add 9% in value.

However, before you rush off to the planning department there are some important considerations, whether you are a homeowner or landlord.  What would be the cost of making that extra bedroom? The average value of a terraced house in Clacton is currently £142,700 whilst the average value of a semi detached house is £168,900, meaning to make money the cost of the extension would need to be less than £13,556 on the terraced property and £17,734 on the semi detached house. Talking to a number of trades people in the town, most are booking up into the New Year. Also, no matter how good a friend he was, I know of no builders that would charge as little as that. Maybe the builder was just thinking of a bit of pointing work on the chimney!

Well, that got me thinking about how bedrooms affected rental prices and rent-ability as well.   Interestingly below, you will see that whilst bedrooms do have an effect on the rent that can be achieved and the rent-ability of the property – the difference does not warrant the expense, hassle and trouble of extending.

•  28.8% of the one bed properties on the market to rent in Clacton have a tenant with an average rent of £523 per month
• 42.5% of the two bed properties on the market to rent in Clacton have a tenant with an average rent of £651 per month
• 47.6% of the three bed properties on the market to rent in Clacton have a tenant with an average rent of £785 per month
• 50% of the four bed properties on the market to rent in Clacton have a tenant with an average rent of £1,055 per month

No, if you want to increase the value of your property, be you a Clacton landlord or homeowner, there are things that cost a lot less than building extra bedrooms. Spruce up the exterior, emulsion all the rooms, install fresh carpets and curtains. For homeowners, a matter of a few hundred pounds will add thousands whilst for landlords, these things can add an extra 10% to the rent that you can achieve. 

For more advice and opinion on the Clacton Property Market, visit the Clacton Property Blog www.clactonproperty.blogspot.com