Friday, 23 September 2016

New House Building in Thanet slumps by 30.6% in the last year





Let me speak frankly, even with Brexit and the fact immigration numbers will now be reduced in the coming years, there is an unending and severe shortage of new housing being built in the Thanet area (and the UK as a whole).  Even if there are short term confidence trembles fueled by newspapers hungry for bad news, the ever growing population of Thanet with its high demand for property versus curtailed supply of properties being built, this imbalance of supply/demand and the possibility of even lower interest rates will underpin the property market.

When the Tories were elected in 2015, Mr. Cameron vowed to build 1,000,000 new homes by 2020.  If we as a Country hit those levels of building, most academics stated the UK Housing market would balance itself as the increased supply of property would give a chance for the younger generation to buy their own home as opposed to rent.  However, the up-to-date building figures show that in the first three months of 2016 building starts were down.  Nationally, there were 35,530 house building starts in the first quarter, a long way off the 50,000 a quarter required to hit those ambitious targets.

Looking closer to home, over the last 12 months, new building in the Thanet District Council area has slumped.  In 2014/15, for every one thousand existing households in the area, an additional 3.26 homes were built.  For 2015/16, that figure is now only 2.26 homes built per thousand existing households.  Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand.

To put those numbers into real chimney pots, over the last 12 months, in the Thanet District Council area,

·         80 Private Builders (e.g. New Homes Builders)
·         60 Housing Association
·         Nil Local Authority

These new house building numbers are down to the fact that not enough is being done to fix the broken Thanet housing market.  We are still only seeing 140 new homes being built per year in the Thanet District Council area, when we need 441 a year to even stand still!

I am of the opinion Messer’s Cameron and Osborne focused their attention too much on the demand side of the housing equation, using the Help to Buy scheme and low deposit mortgages to convert the ‘Generation Rent’ i.e. Thanet ‘20 somethings’ who are set to rent for the rest of their lives to ‘Generation Buy’.  On the other side of the coin, I would strongly recommend the new Housing Minster, Gavin Barwell, should concentrate the Government’s efforts on the supply side of the equation.  There needs to be transformations to planning laws, massive scale releases of public land and more investment, as more inventive solutions are needed.

However, ultimately, responsibility has to rest on the shoulders of Theresa May.  Whilst our new PM has many plates to spin, evading on the housing crisis will only come at greater cost later on.  What a legacy it would be if it was Mrs. May who finally got to grips with the persistent and enduring shortage of homes to live in.  The PM has already referenced the ‘need to do far more to get more houses built’ and stop the decline of home ownership.  However, she has also ruled out any changes to the green belt policy – something I will talk about in a future up and coming article.  Hopefully these statistics will raise the alarm bells again and persuade both residents and Councilor’s in the Thanet District Council area that housing needs to be higher on its agenda.

In the meantime, for more thoughts and opinion on the Thanet Property Market, please visit the Thanet Property Blog. www.thanetpropertyblog.com

Friday, 9 September 2016

34.6% Of Thanet Homes Are One Person Households



I was having an interesting chat with a Thanet buy to let landlord the other day when the subject of size of households came up in conversation.  For those of you who read my Brexit article published on the morning after the referendum, one of the reasons on why I thought the Thanet property market would, in the medium to long term, be OK, was the fact that the size of households in the 21st Century was getting smaller – which would create demand for Thanet Property and therefore keep property prices from dropping.

Looking at the stats going back to the early 1960’s, when the average number of people in a home was exactly 3, it has steadily over the years dropped by a fifth to today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the population remained at the same level for the next 50 years and the we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties ( or 105,769 per year) .. When you consider the Country is only building 139,800 properties a year ... it doesn’t leave much for people living longer and immigration. Looking closer to home...

In the Thanet District Council area, the average
number of occupants per household is 2.2 people

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting, a fascinating picture appears.

The vast majority of homeowners who don’t have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone.  People living on their own are more likely to live in a Council house (43%) and the largest households (those with 4 or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy. What surprised me was the even spread of private rented households and how that sector of population are so evenly spread across the occupant range – in fact that sector is the closest to the national average, even though they only represent a sixth of the population.




When we look at the Thanet District Council figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears...

1 person households in Thanet
2 person households in Thanet
3 person households In Thanet
4 person households in Thanet
5+ person households in Thanet
34.69%
34.56%
14.31%
10.55%
5.89%


But it gets even more interesting when we focus on just private rental properties in Thanet, as it is the rental market in Thanet that really fascinates me. When I analysed those Thanet District Council private rental household composition figures, a slightly different picture appears. Of the 13,072 Private rental properties in the Thanet District Council area,

·         37.8% of Private Rental Properties are 1 person Households
·         27.4% of Private Rental Properties are 2 person Households
·         16.8% of Private Rental Properties are 3 person Households
·         10.8% of Private Rental Properties are 4 person Households
·         7.1% of Private Rental Properties are 5+ person Households


As you can see, Thanet is not too dissimilar from the national picture but there is story to tell. If you are considering future buy to let purchases in the coming 12 to 18 months, I would seriously consider looking at 1,2  bed apartments/houses. Even with the numbers stated, there are simply not enough 1,2 bed apartments/houses to meet the demand. They have to be in the right part of Thanet and priced realistically, but they will always let and when you need to sell, irrespective of market conditions at the time, will always be the target of buyers.

Tuesday, 6 September 2016

The Ramsgate Love Affair with its 4,700 Terraced Houses








Call me old fashioned, but I do like the terraced house.   In fact, I have done some research that I hope you will find of interest my Ramsgate property market blog reading friends!

In architecture terms, a terraced or townhouse is a style of housing in use since the late 1600’s in the UK, where a row of symmetrical / identical houses share their side walls. The first terraced houses were actually built by a French man, Monsieur Barbon around St. Paul’s Cathedral within the rebuilding process after the Great Fire of London in 1666.  Interestingly, it was the French that invented the terraced house around 1610-15 in the Le Marais district of Paris with its planned squares and properties with identical facades. However, it was the 1730’s in the UK, that the terraced/townhouse came into its own in London and of course in Bath with the impressive Royal Crescent.

However, we are in Ramsgate, not Bath, so the majority of our Ramsgate terraced houses were built in the Victorian era.  Built on the back of the Industrial Revolution, with people flooding into the towns and cities for work in Victorian times, the terraced house offered decent livable accommodation away from the slums. An interesting fact is that the majority of Victorian Ramsgate terraced houses are based on standard design of a ‘posh’ front room, a back room (where the family lived day to day) and scullery off that.  Off the scullery, a door to a rear yard, whilst upstairs, three bedrooms (the third straight off the second).  Interestingly, the law was changed in 1875 with the Public Health Act and each house had to have 108ft of livable space per main room, running water, it’s own outside toilet and rear access to allow the toilet waste to be collected (they didn’t have public sewers in those days in Ramsgate – well not at least where these ‘workers’ terraced houses were built).

It was the 1960’s and 70’s where inside toilets and bathrooms were installed (often in that third bedroom or an extension off the scullery) and gas central heating in the 1980’s and replacement Upvc double glazing ever since.

Looking at the make up of all the properties in Ramsgate, some very interesting numbers appear.  Of the 14,335 properties in CT11 …

1,528 are Detached properties (10.6%)
3,474 are Semi Detached properties (24.2%)
4,753 are Terraced / Town House properties (33.1%)
4,575 are Apartment/ Flat’s (31.9%)

And quite noteworthy, there are 5 mobile homes, representing 0.03% of all property in Ramsgate. 

When it comes to values, the average price paid for a Ramsgate terraced house in 1995 was £37,240 and the latest set of figures released by the land Registry states that today that figure stands at £185,680, a rise of 399% - that’s not bad at all is it.

But then a lot of buy to let landlords and first time buyers I speak to think the Victorian terraced house is expensive to maintain.  I recently read a report from English Heritage that stated maintaining a typical Victorian terraced house over thirty years is around sixty percent cheaper than building and maintaining a modern house- which is quite fascinating don’t you think!

Don’t dismiss the humble terraced house – especially in Ramsgate!