New House Building in Staines slumps by 18.8% in the Last Year 

Even with Brexit and a potential reduction in immigration numbers, there is a severe shortage of new housing being built in the Staines area (and, of course, in the UK as a whole). And even if there are short term confidence trembles fuelled by newspapers hungry for bad news, the ever growing population of Staines and the imbalance of supply/demand and the possibility of even lower interest rates will continue to underpin the Staines 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 were able to hit those levels of building, most academics felt 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 homes. 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 Spelthorne Borough Council area has slumped. In 2014/15, for every one thousand existing households in the area, an additional 6.85 homes were built. For 2015/16, that figure is now only 5.56 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 convert those numbers into real chimney pots, over the last 12 months, in the Spelthorne Borough Council area the following properties have been built:

• 200 by Private Builders (e.g. New Homes Builders)
• 30  by Housing Associations
• None by the Local Authority

So we are still only seeing 230 new homes being built per year in the Spelthorne Borough Council area, when we need at least 295 a year just to stand still!

It seems to me that Messrs 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 try to convert the ‘Generation Rent’(i.e. Staines ‘20 somethings’ who are set to rent for the rest of their lives) to ‘Generation Buy’. In my view, the new Housing Minster, Gavin Barwell, needs to 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, ignoring the housing crisis will come at great cost later on. What a legacy it would be if it was Mrs. May who finally got to grips with the enduring shortage of homes in this country. 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 article. Hopefully these statistics will raise alarm bells and persuade both residents and Councillors in the Spelthorne Borough Council area that housing needs to be higher on its agenda.

3.25% drop in Surrey Property Transactions

In this post credit crunch world of interest and annuity rates so low a limbo dancer would smart, the growth of buy to let since 2009 has been phenomenal. So much so, there has been an evolution in the purchase of property in the UK from that of just buying the roof over one’s head to that of a buy to let investment where it is seen as a standalone financial asset to fund current and future (ie pensions) investment. So recently, a few days before the release of latest Land Registry data of property transactions, quite a few market commenters were anticipating a huge increase in the number of properties sold in January as the 1st of April 2016 stamp duty deadline got closer. However, looking at January's set of data released by The Land Registry, it seems there has been a drop in the number of completed property sales in the Surrey County Council area. Year on year, completed property sales in January fell by 3.25% to 1,311 compared with 1,355 in January 2015. Nationally, the number is similar, as the number of completed house sales fell by 5% in January 2016 compared with January 2015. Some might say this counters the reports that there was a rush by landlords to buy ‘buy to let’ property ahead of the 1st April 2016 deadline. So what happened to the stampede to buy that so many predicted? Looking at Staines specifically: in the TW18 postcode in January 2016, 37 properties changed hands, whilst 49 properties did so in January 2015. It’s even more interesting when you look at the average price paid: in January 2016, it was £397,175 yet in January 2015, the average price paid was £341,437.  Is the buy to let dream over for Staines landlords?  .. but as ever, the devil is in the detail. The 3% stamp duty surcharge for buy to let landlords was announced in the Autumn Statement on the 25th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks. In addition the Land Registry only gets notified upon completion of the sale, so their data always lags behind reality. We also need to factor in that sales progression stands still for the last two weeks of December whilst we all enjoy Christmas. So if there was a rush in the last few days of November/early December in the Staines property market, we would possibly see the results in the February figures, but more probably in March’s (released in July). So why all the doom and gloom? Simple .. bad news sells newspapers and gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped (month on month) by 0.5%; in the South East region they dropped 0.4%, whilst in Surrey they rose by 0.8%. The year on year figures tell a completely different story to that. Written July 2016

£7,400 Boost for Staines' First Time Buyers

There’s a whole legion of wannabe Staines first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Staines landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Staines buy to let landlords has dropped away, in the interim, it offers Staines first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete more quickly. Looking at the average value of an apartment in Staines currently standing at £249,800, that means if our Staines FTB went up against a Staines landlord, the landlord would have to pay an additional £7,494 in stamp duty. Early anecdotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Staines properties to reflect the extra stamp duty.   Since 2011/12, the Staines property market has performed very well indeed. Over the last 12 months, £200,206,494 has been spent buying 558 Staines properties. Figures from the Land Registry have just been released and month on month in our council area property values are 0.8% higher, year on year 10.7% higher. Whilst still healthy, clearly these figures are nowhere near the heady days of 2000 (June to be exact), when Staines property prices rose by 28.5% in 12 months. So as property values in Staines (and the UK as whole) start to stabilise and come back to some kind of balance, we are beginning to see savvy landlords view the Staines property market in a different light. Even with the Spring Stamp Duty rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords take advice on what or not to buy and what to pay, meaning Staines landlords are being much more calculating with their Staines BTL purchases. We are also seeing a variance between relatively high sale price expectations on the part of vendors and a much softer reality when it comes to offers from purchasers as well as actual sale prices achieved, continue…. this in part reflects amplified uncertainty about the short term economic outlook (eg Brexit, Issues in the Far East etc). Now I know a lot of Staines landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Staines investors will return for the right Staines property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Staines FTBs could and should, make hay whilst the sun shines, plug the gap and grab a bargain! Written July 2016

60.3% of Staines Voters voted to leave the EU - What now for the 9563 Staines Landlords and Homeowners?

It’s 5.50am and David Dimbleby has just announced the UK will be leaving the EU as the final votes are counted. As most of the polls suggested a Remain Vote, it came as a surprise to most people, including the City. The Pound has dropped 6% this morning after the City Whiz kids got their predictions wrong and MPs from the Remain camp are using words like “challenging times ahead”. 34,135 voted to Leave, 22, 747 voted to Remain,  77.9% turnout - great turnout, Well done,  Spelthorne! .. And now the votes have been cast.. What next for the 7905 Staines homeowners,  especially the 4023 of those Staines homeowners with a mortgage? During the campaign, the Chancellor suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best; it focused on the abrupt and hasty increase in UK interest rates, which  would raise the cost of mortgages, and therefore potentially lower demand for property, causing a drop in property prices. … and I would say, yes .. that is likely, it will probably happen. Staines Property Values Staines property values may well  drop in the coming 12 to 18 months – but by 18%? - I am sorry I find that  overly pessimistic and believe that figure was overblown rhetoric to try to persuade homeowners and landlords to vote in a particular way. Since the last In / Out EU Referendum in June 1975, property values in Staines have risen by 2183.6% That isn’t a typo - and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9) .. they are still up 10.14%. Another Credit Crunch? Notwithstanding the Credit Crunch, the worst global economic outlook since the 1930s and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train. Now the same Credit Crunch doom-mongers and Sooth-Sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying… because we Brits love our Bricks and Mortar.. and of course we will always need a roof over our head. However, as mentioned previously, if the value of the pound drops, in the past UK Interest Rates have risen to reverse that drop. But  whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricier... it will make British exports cheaper! And of course, that is great for the economy. Interest Rates … And what of interest rates? Since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels. So what if interest rates rise... end of the world? Interest rates in the 1986/88 property boom were on average 9.25%, in the 1990s they were on average around 6.5% and uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) .. 4.5%. Many of you reading this who are in their 50s and older will remember interest rates at 15%. But I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing? .. Because whilst property values might drop in the country, they will bounce back. It’s only a paper loss... because it only becomes real if you sell. And if you have to sell, again as most people move up market when they sell, whilst your property might have dropped by 5% or 10%, the one you want to buy would have dropped by the same 5% to 10%... and here is the best part – (and work your sums out) you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) than the one you are selling. The Staines landlords of the 4,701 Staines buy to let properties have nothing to fear, nor do the 11,612 tenants living in their properties. Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of evidence, panic. Even if we pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property building level. Britain is building 139,600 properties a year, but, according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year just to stand still. As the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person demand is only going up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact. So, what will happen next? Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and we survived! And the value of your Staines property? It might have a short term wobble… but in the long term -it’s safe as houses regardless. Written 23rd June 2016

The Staines Property Market and Euro 2016

Just in case you're not lucky enough to be jetting off to France for the UEFA Euro 2016 football tournament, I thought we’d have a bit of fun looking at the different nationalities that have made their home in Staines. I was hoping it would give me a good idea of who best to soak up the atmosphere with. On a more serious note, I thought it would also be interesting to see how EU migration has affected our property market. During my research some interesting numbers appeared. Going into Euro 2016, France were 3/1 favourites, then Germany at 7/2, third Spain at 11/2, then England at 9/1, Italy 16/1, Poland 50/1, Romania and Wales at 100/1, Ireland at 150/1 and Northern Ireland 500/1. Don’t forget Leicester were 5000/1 at the start of last season! Of the 95,598 residents in Spelthorne, the Home Nations will of course find the biggest bodies of support: 79,435 of the residents are from England, 972 from Wales, 359 from Northern Ireland and 1,087 from Ireland; I can’t help feeling sorry for the 1,343 Scots who didn’t get into the finals! Mainland Europeans make up 3.6% of the population in Spelthorne. Of that 3.6%, 1.68% are from Western Europe and EU residents from Eastern Europe - i.e. the Accession Countries to the EU between 2003 to 2007 (Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia, Slovenia, Bulgaria and Roumania) make up 1.92% of the population of the Spelthorne Constituency. Broken down into the relevant football teams, Spelthorne has … 217 French 404 Germans 269 Italians 163 Spanish 972 Poles 155 Romanians But what does this have to do with the Staines property market? Quite a lot in fact. Many of the Europeans were economic migrants, especially those from Eastern Europe. And this EU migration has served to fill gaps in skills and labour supply during the growth periods of the mid 2000’s. Subsequently over the last five years in Staines, EU migrants have done little to displace native workers but consistently take the jobs us Brits often turn our noses up at. And of course as there is no preferential treatment for council housing for EU migrants, so they have in fact increased demand for private rented accommodation in Staines. This has meant, as demand for housing in Staines has remained strong, Staines landlords have continued to buy properties to rent out. Therefore, the value of every homeowner’s property in Staines has been kept high because of the demand from these Staines landlords buying starter homes to rent out, allowing existing homeowners to move up the property ladder – benefiting everyone in the chain. Despite strong demand, rents have remained reasonable for tenants: in Staines, rents are only 20.1% higher than they were in 2005, not bad when you consider we have had 38.52% inflation in the UK economy as a whole over the same 11 year period. So EU migration has meant existing homeowners, landlords and the economy as a whole in Staines (and the rest of the UK) have benefited from better economic conditions and property prices have remained buoyant. No bad thing for Staines’ landlords. Now, I wonder who will win the footy?  Back to the TV! Written in June 2016

Landlords Set their Sights on Cheaper Buy-To-Let Properties

The latest research shows landlords are looking to invest in cheaper properties to reduce the impact of the recent stamp duty rate rises on second homes. The impact of the 3 percent stamp duty hike on second homes is starting to be felt as investors set their sights on cheaper properties. According to the latest data from Countryside, landlords are changing their investment habits in an attempt to offset  the increasing purchase costs. The research found the average price paid by a buy-to-let investor fell 8.3 percent month-on-month in April. The average price paid by a landlord was just £178,000, down from £194,000 in March. There was also a fall year-on-year on, with the average investment property costing £188,000 in April 2015. The biggest price reduction was seen in London, where the average price paid by an investor in April fell to £365,000, down from £436,000 in March. Although house prices in London have risen by 13.9 percent over the last year, it is clear landlords now feel lower priced properties represent a better investment. Cheaper areas steal London’s thunder In their search for lower priced properties, landlords are turning their attentions away from the buy-to-let market in the capital and towards more up-and-coming regions.  The number of enquiries is mirrored by eMoov’s national property index, which records the change in supply and demand for the most populated locations across the UK. The index monitors the total number of properties sold in comparison to the number on sale. It found that prime Central London and the North East had the least demand for property over the past three months. The top spots in the index were dominated by London’s outer boroughs and commuter belt areas. However, areas where house prices are lower, like Ipswich, Durham and Aberdeen, also experienced a significant increase in demand. Fewer landlords purchase homes Following a spike in activity in the first three months of the year, there was an expected lull in April as landlords reassessed their investment strategies. From January to March this year there was a 61 percent rise in the number of landlords buying properties when compared to the same period last year.  Many of the sales that would have normally completed in April were rushed through in March to avoid the 3 percent rise in purchasing costs. This resulted in around half the number of landlords buying a property in April 2016 than in April 2015. However, there was good news for first-time buyers and the first indications that the changes made to the buy-to-let sector could be having an effect. The number of sales to first time buyers rose by 19 percent in April 2016 when compared to figures for the same month last year. Rental prices have increased The good news for landlords who are still looking to invest in buy-to-let property is that rents are continuing to rise. Average rents increased by 2 percent over the last year, leaving the average monthly UK rent at £932.  Although the growth of rental prices has slowed since 2015 due to affordability constraints and the number of rental properties that are available, the rental market continues to grow. This is particularly the case in high demand areas like the London commuter belt. How can we help? Stamp duty rates on second homes might have increased but demand and rental prices of properties in the London commuter belt remains high, making Staines one of the UK’s buy-to-let hotspots.  Written in May 2016

£330,000 - Is Staines the best place for my windfall?

Dancing Fountains with Five Swimmers Sculpture, Staines -upon-Thames © Copyright Sean Davis and licensed for reuse under this Creative Commons Licence I had an interesting email from someone in Staines a few weeks ago that I want to share with you (don’t worry, I asked his permission). In a nutshell, the gentleman lives in Egham, is in his mid 60s and still working. He has a decent pension, so already comfortably off when he retires in a couple of years’ time. He has recently inherited £330,000 from an elderly aunt. One option was to put it into a savings account. The best he could find was a 2 year bond with the Post Office which paid 1.9%: meaning he would get £6,270 in interest a year. One of his other options was to buy a property in Staines to rent out and he wanted to know my thoughts on what he should buy, but he had concerns as he didn’t want to take a mortgage out at his time of life. He was also worried about all the tax changes he had read about in the papers for landlords. Notwithstanding the war on Staines landlords being waged by George Osborne, the attraction of bricks and mortar endures for many. As our man is a cash buyer, he would not have to deal with the cut to mortgage interest tax relief that could diminish, the profits of many Staines landlords. It’s true he would face the extra 3% in stamp duty to buy a second property, but with some good negotiation techniques, that could potentially be mitigated. I told him that buying a Staines buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £6,270 a year OR, as he rightly suggested, invest in property in Staines. The average yield (yield being the equivalent of the interest rate on the property) at the moment in Staines is 3.82% per annum, meaning our potential F.T.L (First Time Landlord) should be able to earn, depending on what he bought, £12,606 a year (before costs). However, I told him, there are plenty of landlords in Staines earning half as much again if not more. The bottom line is that the success of investing in Staines buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike with a savings account, with property, the capital you invested can also go up (and yes, it can go down as well – more of that in second). Property values in Staines have risen in the last twelve months by 8%, meaning, that if our chap had bought a year ago, not only would he have received the £12,606 in rent, but also seen an uplift of £26,400 …meaning his overall return for the year would have been £39,006 (not bad when compared to the Post Office!). But you might say, property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices had bounced back to their ’79 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped in 1988 and did take 13 years to reach back to those ’88 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Land Registry, average property values in the area currently stand 25.27% above the January 2008 level, and anecdotal evidence suggests that in the nicer parts of Staines, we are well above these sorts of levels.  No guesses as to where I would put my money! And looking at what has come onto the market in Staines in the last two weeks, £330,000 would buy you a very spacious two bed flat, a two bed mid-terrace or a charming two bed cottage, all within a stone's throw of the station, so Staines could very definitely be your Buy To Let Oyster! Written April 2016