Will the young people of Clacton ever own their own home?

I had the most interesting chat with a mature couple (in their early/mid 50’s) from Kings Parade the other day, whilst viewing one of our rental properties. The property wasn’t for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Clacton property market and how they had bought their first property in the town just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you today.

Their son, like many 20 to 30 year olds in Clacton, desperately wants to own his own property and the parents said he had read in the Telegraph recently, when you compare house prices to earnings, the current 20 to 30 something’s generation have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Clacton is huge. There are in fact 4,249 private rental properties in Clacton at the last count, impressive when you consider there are 943 council houses in the town. However, let us not forget 16,099 properties are owner occupied (6,147 with a mortgage).

Let us all be honest, private renting doesn’t have the stigma it had a few decades ago and it might surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.

Looking at the affordability issue, I have proved time and time again, it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years and whilst you could certainly find better properties in better condition in better areas, terraced houses can be bought for as little as the early £100,000’s in the area of Clacton between St Osyth Road and Coppins Road  (meaning a modest deposit of £5,000 would be required).

When it came to affordability, I was able to tell them that when they bought their first house in Clacton in 1988, the ratio of house prices to salary was 7.54 to 1 in Clacton ... and here was the surprise for both of us, today’s ratio is only 6.53 to 1!

I said I believed there had been a cultural attitude change towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit was everything and buying a house was everything. Youngsters today have far much more disposal income today than people had in the Callaghan and Thatcher years, but choose to spend it upgrading their mobile phones every 12 months, the newest tablet or PC, a newest 50” plasma LCD TV and two sun drenched holidays a year, than go without and save for a deposit.

Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they couldn’t ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low ... but now it’s the norm.

So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at c.£5,000 in Clacton as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.

Hence, I cannot see the demand for decent, high quality rental properties ever dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure you by the right property, at the price, in the right location. One source of information on such matters would be the Clacton Property Blog - www.clactonproperty.blogspot.co.uk

7.2% Yield - Regency Lodge, Jameson Road

IDEAL INVESTMENT OPPORTUNITY! Being offered for sale with a tenant in situ, More Estate Agents are delighted to offer this two bedroom apartment located in Jameson Road, Clacton.

Offering 7.2% yield, this apartment is a ready made investment either for the first time landlord or investor. The property itself offers two bedrooms, L-shape lounge/diner, kitchen and bathroom.

The current tenants are two months into a 12 month tenancy at a rental of £575 PCM, therefore you can expect a rental income the moment you complete!

For further details, click the following link.

http://www.rightmove.co.uk/property-for-sale/property-57501485.html

8.3% Yield - Coppins Road, Clacton

Centrally located close to Clacton Town, Seafront and Pier is this one bedroom first floor maisonette being sold with no onward chain through Moving Places.

The property offers lounge, kitchen/diner, modern bathroom suite, double bedroom, gas central heating, double glazed windows and the additional benefit of an approx. 40ft south west facing rear garden. 

I would expect this property to achieve a monthly rental of £475 PCM, therefore based at £68,500 purchase price, this property would return 8.3%.

For further information, click the following link.

http://www.rightmove.co.uk/property-for-sale/property-57457655.html

Clacton House Price Monopoly: How do Prices vary?

Well as the nights have been drawing in, if there is nothing on the telly, the significant other and myself like to play the board game Monopoly. The buying and renting of property, it’s like a busman’s holiday for me! Interestingly, the game was originally invented at the turn of the 20^th Century (in 1903) and the game was initially called ‘The Landlord’s Game’!  Anyway, after a few years in the wilderness, the current owners of the game renamed it in 1935 and so began Monopoly as we know it today.

So whether you are a homeowner or landlord in Clacton, what would a Monopoly board look like today in the town? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Clacton today.

Initially, I have focused on the CO15 postcode only, looking at the Brown Squares on the board, the ‘new’ Old Kent Road in Clacton today would be Morris Avenue, with an average value £57,600 (per property) and Whitechapel Road would be Bentley Avenue, which would be worth £60,380. What about the posh dark blue squares of Park Lane and Mayfair? Again, looking at CO15, Park Lane would be Albany Gardens East at £340,000 and Mayfair would be The Esplande at £392,571. However, look a little further afield from the CO15 postcode, and such roads as Church Lane in Great Holland would claim the Mayfair card at £440,000! Also, I can’t forget the train stations (my favourite squares), and over the last 6 months, the average price that property within a quarter mile of the station sold for was £128,800.

So that got me thinking what you would have had to have paid for a property in Clacton back in 1935, when the game originally came out?

• The average Clacton detached house today is worth £230,650 would have set you back 417 pounds 6 shillings and 3 old pence.
• The average Clacton semi detached house today is worth £176,950 would have set you back 320 pounds 3 shillings and 1 old penny.
• The average Clacton terraced/town house today is worth £149,460 would have set you back 270 8 shillings and 4 old pence.
• The average Clacton apartment is today is worth £117,750 would have set you back 213 pounds and 10 old pence.
• The average Clacton detached house today is worth £230,650 would have set you back 417 Pounds 6 shillings and 3 old pence.

If that sounds like another currency, you must be in your 20’s or 30’s, because it was back in February 1971, that Britain went decimal and hundreds of years of everyday currency was turned into history overnight. On 14th of February of that year, there were 12 pennies to the shilling and 20 shillings to the pound. The following day all that was history and the pound was made up of 100 new pence.

Anyway, I hope you enjoyed this bit of fun, but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis and if you are going to invest in the Clacton property market, you should consider the Clacton property you buy a medium to long term investment, because Buy to let is pretty much what it sounds like – you buy a property in order to rent it out to tenants.

As I reminded a soon to be first time landlord from Holland-on-Sea the other week, Buy to let in Clacton (as in other parts of the Country) is very different from owning your own home. When you become a Clacton landlord, you are in essence running a small business – one with important legal responsibilities. On that note, I want to remind landlords of the recent and future changes in legislation when it comes to buy to let. This year, rules have changed about tenant deposits, carbon monoxide detectors and early in the New Year, landlords will have responsibilities to do immigration checks on all their tenants. Failure to adhere to them will mean a minimum of heavy fines in the thousands or in some cases, prison ... it’s a mine field!  That’s why I write the Clacton Property Blog, where it has an extensive library of articles like this one, where I talk about what is happening in the Clacton property market, what to buy (and sometimes not) in Clacton and everything else that is important to know as a Clacton landlord.

Martello Bay - Two Bedroom House

Blake and Thickbroom have listed this two bedroom terraced house located on the sought after location of Martello May, located a stones throw away from the popular Blue Flag beach.

An extremely popular development, properties in this area never hang around long on the rental market and generally achieve a monthly rental of £700 PCM, therefore offering an approx. 6% return.

Click here for further information!

http://www.rightmove.co.uk/property-for-sale/property-39220557.html

Key Road - 2 Bedroom Terraced House

Sheens Estate Agents have listed this two bedroom mid terraced house located within close proximity to Clacton town centre for £127,500.

The property internally offers lounge, kitchen/diner, two bedrooms and shower room. 

Properties in this area achieve a rental in the region of £625 - £650 PCM, therefore offers 6.1% return!

For further information and pictures, click the following link.

http://www.rightmove.co.uk/property-for-sale/property-57349700.html

Berkeley Road - Three Bedroom Semi Detached House

This three bedroom semi detached house has come to market with Omega Estate Agents for £159,995 located within one mile of Clacton's town centre and mainline station in Berkeley Road.

The property itself offers three bedrooms, two reception rooms, rear garden and off street parking.

Properties in this area and size achieve a rental of £775 - £800 PCM. Based on full asking price this property could return 6%!

Click here for more information.

http://www.rightmove.co.uk/property-for-sale/property-54366173.html

The Clacton Property Market and £1,300,000,000,000,000,000 in loose change

The 5^th of March 2009 was the date Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8^th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Now as we deck the halls with bows of holly nobody expected that, over six years later, rates would still be at that low level.

In the summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Clacton, so I can not profess to know what will happen to interest rates. However, what I do know, speaking to my Clacton friends and Clacton landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Clacton landlords have been investing some of that cash into Clacton bricks and mortar, as they search for a low risk investment opportunity.

Buying a Clacton buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, Clacton house prices have been extraordinarily robust, increasing by over 2148% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

.. and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

..  but before you go out and buy any old Clacton property, plenty of landlords still get it wrong. You have to be aware of your legal responsibilities when it comes to tenant safety, tenants deposits, energy certificates and in the new year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that’s why many agents use a letting agent to manage their property for them.

Next, you have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Clacton and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner on centrally located Victory Road in Clacton .. a decent three bed semi-detached house that has been divided into 2 apartments, the top floor apartment being 46 sq metres inside (495 sq ft in old money) sold in October 2009 for £118,500. In the summer, it only obtained £73,500, a drop of 37.97% or 7.93% a year - a very disappointing result.

Oxford Crescent with 6.4% Return!

An ideal buy to let investment, this three bedroom semi detached house located in Oxford Crescent has been listed with Omega and is being offered with no onward chain.

Positioned just 0.2 miles to Clacton railway station, this home is ideally positioned for all local amenities and primary & secondary schools.

This property would achieve a monthly rental of £725 - £750; therefore based on purchase price of £140,000 this home shouldn't be missed!

Click here for further information!

http://www.rightmove.co.uk/property-for-sale/property-57282107.html

6.9% Yield on Marigold Avenue

Sheens have listed this four bedroom terraced house located in Marigold Avenue for £155,000.

The property itself is offered in immaculate decorative order and conveniently situated within a half mile of Bockings Elm local shopping amenities.

Four bedroom properties of this size and condition would achieve a rental figure of £895 - £925, therefore based on the rental figure of £895 PCM, and purchase price of £155,000; this property would return 6.9%!

For more information and images, click the following link.

http://www.rightmove.co.uk/property-for-sale/property-38962242.html

What does 2016 have in store for the Clacton Property Market?

Clacton house prices up or Clacton house prices down? ... and if so, by how much? Those of you who read the Clacton Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 16,099 Clacton homeowners and landlords.

The average Clacton property is 7.9% higher today than it was a year ago, which doesn't sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Clacton landlords in my blog, but I believe the real issue in the Clacton property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Clacton in 2016?

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn't go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in January 2012, 1,234 properties were for sale in Clacton .. today that figure is 796. On the face of it, this means there is less choice for Clacton buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Clacton house sellers.

Everything isn't all doom and gloom though ... again back in January 2012, the average property in Clacton took 157 days to find a buyer .. latest figures state this has dropped to 115 days .. a drop of 27% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Clacton is the 3 bed, which only takes 98 days to find a buyer (on average) compared to the 1 bed, which takes 137 days. It just goes to show, even though the average has dropped since 2012, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Clacton in 2016?  I am going to suggest they will rise between 6.5% and 7.5% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Clacton property market .. visit the Clacton Property Blog www.clactonproperty.blogspot.co.uk

6% Yield on Trunette Road

Sheens Estate Agents have added this three bedroom semi detached house located on Trunette Road, Clacton for £160,000.

The property itself is located on the 'Lake Walk' development, just 0.8 miles from Clacton railway station and within 500 yards of local shopping facilities, and standing just 0.6 miles to local schooling, this property makes an ideal family home. 

Properties in this location generally achieve a rental figure of £775 - £795 PCM, therefore based at £160,000 purchase price and rental figure of £795 PCM, this home would offer a 6% yield!

For further information and pictures, click the following link.

http://www.rightmove.co.uk/property-for-sale/property-38810433.html