£14.49bn – The total value of all Stoke on Trent Property Market

“How much would it cost to buy all the properties in Stoke on Trent?”

This fascinating question was posed by the 13-year-old son of one of my Stoke on Trent landlords when they both popped into my offices before the Christmas break (doesn’t that seem an age away now!). I thought to myself, that over the Christmas break, I would sit down and calculate what the total value of all the properties in Stoke on Trent are worth … and just for fun, work out how much they have gone up in value since his son was born back in the autumn of 2003.

 In the last 13 years, since the autumn of 2003, the total value of Stoke on Trent property has increased by 80% or £6.44 billion to a total of £14.49 billion. Interesting, when you consider the FTSE100 has only risen by 72.4% and inflation (i.e. the UK Retail Price Index) rose by 35.5% during the same 13 years.

When I delved deeper into the numbers, the average price currently being paid by Stoke on Trent households stands at £114,196.… but you know me, I wasn’t going to stop there, so I split the property market down into individual property types in Stoke on Trent; the average numbers come out like this ..

Stoke on Trent Property Market
Average Value of a Detached Property	Average Value of a Semi-Detached Property	Average Value of a Terraced/Town House Property	Average Value of an Apartment
£184,879	£134,528	£83,223	£89,000

 ... yet it got even more fascinating when I multiplied the total number of each type of property by the average value. Even though detached houses are more expensive, when you compare them with the much cheaper semi-detached houses, you can quite clearly see detached properties are no match in terms of total pound note value of the semi-detached houses.

Total Value of all the Stoke on Trent Detached Properties	Total Value of all the Stoke on Trent Semi-Detached Properties	Total Value of all the Stoke on Trent Terraced/Town House Properties	Total Value of all the Stoke on Trent Apartments
£3,588,131,632	£7,172,629,376	£2,612,786,085	£1,116,238,000

 So, what does this all mean for Stoke on Trent?  Well as we enter the unchartered waters of 2017 and beyond, even though property values are already declining in certain parts of the previously over cooked Central London property market, the outlook in Stoke on Trent remains relatively good as over the last five years, the local property market was a lot more sensible than central London’s.

Stoke on Trent house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with continued immigration and population growth.  Secondly, with 0.25 per cent interest rates, borrowing has never been so cheap and finally the simple lack of new house building in Stoke on Trent not keeping up with current demand, let alone eating into years and years of under investment – means only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Stoke on Trent has always, and will always, ride out the storm.

In the coming weeks, I will look in greater detail at my thoughts for the 2017 Stoke on Trent Property Market

Possible 10% gross yield! Another one in Stoke-on-Trent

I was out doing an early morning viewing and spotted another potential investment property for sale on Stanier Street ST4 3LJ. This is a traditional two bedroom two reception room terrace property. It is currently going for auction with a guide price of £50,000. The property will need some cosmetic work but will achieve in the region of £425pcm which if you manage to buy at £50,000 will be a healthy 10% yield.

http://www.rightmove.co.uk/property-for-sale/property-64161608.html

£60m a year black hole in the Stoke on Trent Property Market - Is Buy to Let Immoral? (Part 2)

 An Englishman’s Home is His Castle as Maggie Thatcher lauded - everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Stoke on Trent buy to let properties as an investment. Stoke on Trent first time buyers were in competition with Stoke on Trent landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Stoke on Trent landlords fanning the flames of the Stoke on Trent housing crisis bonfire?

I believe that the landlords of the 16,020 Stoke on Trent rental properties are not exploitive and are in fact, making many positive contributions to Stoke on Trent and the people of Stoke on Trent. Like I have said before, Stoke on Trent (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Stoke on Trent …

For Stoke on Trent to meet its obligation on the building of new homes, Stoke on Trent would need to build 1,016 households each year. Yet, we are missing that figure by around 424 households a year.

For the Government to buy the land and build those additional 424 households, it would need to spend £60,980,611 a year in Stoke on Trent alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Stoke on Trent families or Stoke on Trent people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.

So only you, the reader, can decide if buy to let is immoral, but first let me ask this question - if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

Investment property in Newcastle under Lyme

If you are looking for a great BTL property in the right location then this could be it, we always let properties on West Street,  Newcastle under Lyme really easily as it is such a popular location. 

This one looks to be in good condition and appears to have UPVC double glazing throughout and UPVC doors front and back. There is a small garden to the rear of the property, two reception rooms, two bedrooms and the bathroom is located on the first floor. Property looks in good decorative order and ready to flip straight on the rental market. Should achieve £475pcm giving 6% yield at full asking price however this property has been on the market since September so maybe a deal to be done.

http://www.rightmove.co.uk/property-for-sale/property-56304898.html

Investment property in Chesterton, Newcastle under Lyme

Whilst out and about this morning I drove past another potentially great investment property on Chestnut Grove, Chesterton which has just gone on the market for £79,950. This looks to be just what the rental market is looking for. The property has three bedrooms a family bathroom on first floor, cloakroom on ground floor, two reception rooms and a lobby area off the kitchen which looking at the floor plan could make a nice sized kitchen diner.

There is driveway parking and a garden too. Some cosmetic work is required before it is put on the rental market – but with an estimated rental income of £495 pcm you are looking at a gross 7.4% yield (and that’s if you pay full asking price) this is definitely one to have a look at!

http://www.rightmove.co.uk/property-for-sale/property-62847044.html

Stoke on Trent’s private renting set to hit 22,588 households by 2021 - Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Stoke on Trent citizens for the current housing crisis in the city?

Also known as the ‘Baby Boomer Generation’, these Stoke on Trent people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

...Yet some have suggested these Stoke on Trent baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,

but average Stoke on Trent house prices rose by 158.7%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents ... it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Stoke on Trent (and UK) property market in the later half of the 20^th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Stoke on Trent.

 To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

 So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays ... no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you ... I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

So, in Part Two later in the week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).

Stoke on Trent Property Market Sees An Unpredicted Autumn Boost of 15%

Well, it doesn’t seem like two minutes ago that it was Christmas – and now it’s all over! One cold December morning, after arranging the office’s Christmas cards I thought I would nip out for a quick festive coffee and mince pie at my favourite local coffee shop Tsp.  I met an old client of mine in the coffee shop and we got talking about the Stoke on Trent property market. I had just completed my research for my next blog article and I would like to share with you the parts of the conversation relating to the Stoke on Trent property market.

He asked me what my thoughts were about the last half of the year in regard to the Stoke on Trent property market and if there were any great buy to let deals around. In reply I said that, in my view, shrugging off the uncertainty of the initial post Brexit vote, I have seen an increase in supply and a rise in the number of properties selling at the lower to middle end of the market, meaning both first time buyers and buy to let landlords have been returning in the last few months – proof the market is beginning to bounce back.

So let’s look at the numbers ..

In November 2016, according to the three main property portals (Rightmove, Zoopla and OnTheMarket) there were a total of 315 properties for sale in ST1. In November 2015, there were only 275 properties for sale, a rise of 15%.

When I split it down into bedrooms (note things like building plots and part commercial/part residential etc won’t be in these figures so the numbers below wont exactly match up to those in the above paragraph).

	# Properties on the market in Nov 2015	# Properties on the market in Nov 2016	Per cent Change
5+ Bedrooms	2	6	+200%
4 Bedrooms	36	46	+28%
3 Bedrooms	99	93	-6%
2 Bedrooms	118	149	+26%
1 Bedroom	14	17	+21%

.. and when I looked at type of properties  .. it got even more interesting

Type of Property	# Properties on the market in Nov 2015	# Properties on the market in Nov 2016	Per cent Change
Detached	30	34	+13%
Semi	72	44	-39%
Terraced	96	138	+44%
Flat	30	31	+3%

As the number of ST1 properties put up for sale has risen by 15%, homeowners have become more realistic about how much their homes are worth. This increase in homeowners wanting to sell suggests there is renewed confidence in the Stoke on Trent property market and there are also signs that people are being more realistic about pricing their property.

 
As you can see, there has been a significant uplift in terraced properties, which means they are a great choice for first time buyers and landlords. So with a combination of realistic pricing and more properties on the market – both first time buyers and landlords alike might be able to pick up a few bargains!