Only 30% of Staines' Rented Properties have Children living in them

Picture: © Copyright Al Menzies, licensed for re-use under CCL*  

A few weeks ago I was asked a fascinating question by a local Councillor who, after reading the Staines Property Blog, emailed me and asked me – “Are Staines Landlords meeting the Challenges of tenanted families bringing up their families in Staines?”

What an interesting question to be asked.

Irrespective of whether you are tenant or a homeowner, to bring up a family, the most important factors are security and stability in the home. A great bellwether of that security and stability in a rented property is whether tenants are constantly being evicted. Apparently many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice for no reason.

Some politicians keep saying we need to deal with the terrible insecurity of Britain’s private rental market by creating longer tenancies of 3 or 5 years instead of the current six months. However, the numbers seem to tell a different story. The average length of residence in private rental homes has risen in the last 5 years from 3.7 years to 4 years (a growth of 8.1%), which in turn has directly affected the number of renters who have children. In fact, the proportion of private rented property that have dependent children in them, has gone from 29.1% in 2003 to 37.4% today.

Looking specifically at the TW18 area of Staines compared to the national figures, of the 1,913 private rental homes in Staines, 573 of these have dependent children in them (or 30%), below the national average of 37.4%.

Even more fascinating are the other tenure types in TW18 Staines…

• 34.5% of Social (Council) Housing in Staines have dependent children
• 41.8% of Staines Owner Occupiers (with a Mortgage) have dependent children
• 7.8% of Owner Occupiers (without a Mortgage) have dependent children

Although, when we look at the length of time these other tenure types have, whilst the average length of a tenancy for the private rented sector is 4 years, it is 11.4 years in social (council) housing, 24.1 years for home owners without a mortgage and 10.4 years of homeowners with mortgages.

Anecdotally I have always known this, but this just proves landlords do not spend their time seeking opportunities to evict a tenant as the average length of tenancy has steadily increased. This noteworthy 8.1% increase in the average length of time tenants stay in a private rented property over the last 5 years, shows tenants are happy to stay longer and start families.

So, as landlords are already meeting tenants’ wants and needs when it comes to the length of tenancy, I find it strange some politicians are calling for fixed term 3 and 5 year tenancies. Such heavy handed regulation could stop landlords renting their property out in the first place, cutting off the supply of much needed rental property, meaning tenants would suffer as rents went up. Also, if such legislation was brought in, tenants would loose their ‘Get Out of Jail card’, as under current rules, they can leave at any time with one or two months’ notice, depending on their contract, not the three or six month tenant notice suggested by some commentators.

Finally, there is an extra piece of good news for Staines tenants. The English Housing Survey notes that those living in private rented housing for a long periods of time generally paid less rent than those who chopped and changed.

*Interesting Facts about Staines Bridge: There has been a bridge here since Roman times - initially a wooden one.  This was replaced by a stone bridge in 1796.  When this began to crack, it was replaced with an iron bridge, which was itself replaced in 1807.  The current bridge was opened in 1832 by King William IV and Queen Adelaide.

Staines' Savers batten down the hatches with Low Interest Rates set to continue into the 2020s

You might ask, what has the plight of the savers in Staines to do with the Staines Property Market … read on and all will be revealed! Every financial wizard is stating that with the decision of the Bank of England’s Monetary Policy Committee in early August to cut the Bank of England base rate to an all time low of 0.25 per cent, savers should prepare themselves for interest rates to stay low well into the early 2020’s.

... And this isn’t some made up story to capture the headlines of newspaper editors. The yield (posh word for interest rate or return) on 10-year Government bonds is currently 0.61 per cent. This indicates that the money markets believe that the Bank of England’s base rate will, on average over the next ten years, be below the 0.61% rate they are buying the 10 year bonds at (because they would loose money if the average was over 0.61%). UK Interest rates are going to be low for a long time.

For those who have saved throughout their working lives and are looking for ways to maximise their savings, putting money into property could prove advantageous. You see,  as a saver, I did a search of the internet and the best savings rate I could find was a 5 year fixed rate at 2.5% a year with Weatherbys Bank. Your £200,000 nest egg would earn you £5,000 a year – not much. However, on the other side of the fence, growth in Staines house prices and princely buy to let yields have made property investment in Staines an appealing option for many. According to my research, the...

Average Yield over the last five years for

Staines Buy to let property has been 5.7% a year

… and average Property Values in over the same period have risen by 30.4%.

Using these averages, the Staines landlord’s property would be worth £260,800 and he would also have received £57,000 in rent – making the total return £317,800. Meanwhile, whilst our Staines savers, using the average savings rates for the last 5 years, even if they had reinvested the interest,  would have turned their £200,000 into £221,184.

There are, of course, risks as well as benefits with buying to let. As my blog readers know, I tell it like it is and you need to be aware,  that  investing in buy to let means locking up capital in a property that may fall  as well as rise in value.  Another option for that nest egg would be stock market income based investment funds, which are paying around 5%, especially if you put your funds into a tax free Stocks and Shares ISA. Whilst you can only add £15,240 a year into an ISA, you would however have the ability to sell up quickly if you wanted / needed to ...         One last thought… The other side of the coin is that you cannot buy an unloved ‘stock market income based investment fund’ and set about renovating it and adding value yourself. The investment fund isn’t something that you can touch and feel, isn’t something tangible, isn’t something physical, isn’t something concrete, it isn’t bricks and mortar ... and that, of course, is why the love affair between the British and their property continues to endure – I for one cannot see that changing! If you are considering becoming a new buy to let landlord in Staines, do pop into our office on the High Street for a chat, we are always happy to offer free advice over a cup of tea or coffee.

924% Rise in Staines' Property Prices since 1981

Roll out the Lino statue, Staines High Street - Photograph by Jim Linwood

Roll the clock back 35 years to 1981:   Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’.   Haven’t things changed? As homeowners and property investors, don’t we all wish, with hindsight, we had bought up every house in Staines all those years ago?   Especially when you consider what has happened to Staines property values:

since 1981 Staines Property Values have risen by 942%

Not bad when you consider that inflation over the same period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Staines are 670.1% higher.  Little wonder then, that today many people can’t afford to buy property and investors continue to be attracted by bricks and mortar and the prospect of becoming landlords. Yet the changes to the Staines Property market run much deeper than simply an increase in property values.

Looking at the Local Authority data for Spelthorne Borough Council in 1981, 20.2% of Staines people lived in a council house, whilst today its 12.4% ... a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House. The private rental sector since 1981 has also changed significantly.

Nationally it has almost doubled and whilst the proportion of properties privately rented in the Staines area (i.e. through a private landlord or a letting agency) may not have doubled, there has been a significant increase: from 9.6% to 12.7% of property.

And of those owning their own home – have those numbers changed too? In 1981, the proportion of people who lived in the Spelthorne Borough Council area who owned their own home was 70.1% … and today it’ s … 72.6%.

Homeownership in the 1980s and 1990s in Staines did rise, as I have discussed in previous articles in the ‘Staines Property Market Blog’, that was because nearly every council tenant was buying their council house. The net result is the younger generation of today has no choice but to rent privately as there are virtually no council houses available. And this is why the buy to let market in Staines is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (as they were in the 1950s, 60s and 70s). Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Staines buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise Staines buy to let landlords to thrive in. If you want to have a chat about the Staines Property Market, feel free to pop into our office for a chat, we are always happy to offer a cup of coffee.

Ashford - Buy To Let Deal of the Week - 15 11 2016

The perfect Buy to Let, a larger than average two bed at a competitive price.

Close to Ashford High Street and the Station reinforcing its value as a Buy To Let.  Also needs no updating - buy and off you go, ready to rent.

New to the market yesterday with SJ Smith in Ashford at just £250,000,  this property wont be around for long.   

Check it out at: http://www.rightmove.co.uk/property-to-rent/property-58629887.html 

What will the 0.25% Interest Rate do the the Staines Property Market?

Recently I had an interesting chat with a landlord from Chertsey Lane who owns a few properties in the town. He popped his head in to my office as his wife was shopping in the area. We had never spoken before (because he uses another agent in the town to manage his Staines properties) yet after reading my blog on the Staines Property Market for awhile, he wanted to know my thoughts on how the recent interest rate cut would affect the Staines property market and I would also like to share these thoughts with you…… Well it’s been quite a few weeks now since interest rates were cut to 0.25% by the Bank of England as the Bank believed Brexit could lead to a materially lower path of growth for the UK, especially for the manufacturing and construction industries. You see for the country as a whole, the manufacturing and construction industries are still performing well below the pre credit crunch levels of 2008/09, so in the Bank's view, the economy remains susceptible to an economic shock. This holds true in Staines too, with a number of local success stories in manufacturing and construction, a considerable number of people are employed in these sectors. In Staines, of the 13,757 people who have a job, 708 are in the manufacturing industry and 991 in construction meaning  5.1% of Staines workers are employed in the Manufacturing sector and 7.2% are in Constructio The other sector of the economy the Bank is worried about, and an equally important one to the Staines economy, is the Financial Services industry. Financial Services in Staines employ 558 people, making up 4.1% of the Staines working population. Together with a cut in interest rates, the Bank also announced an increase in the quantity of money via a new programme of Quantitative Easing to buy £70bn of Government and Private bonds. Now that won’t do much to the Staines property market directly, but another measure also included in the recent announcement was £100bn of new funding to banks. This extra £100bn will help the High St banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages .. which will have a significant effect on the Staines property market (as that £100bn would be enough to buy half a million homes in the UK). It will take until early in the New Year to establish the real direction of the Staines property market and the effects of Brexit on the economy as a whole, the subsequent recent interest rate cuts and the availability of cheap mortgages. However, something bigger than Brexit and interest rates is the inherent under supply of housing (something I have spoken about many times in my blog and its specific effect on Staines). The severe under supply means that Staines property prices are likely to increase further in the medium to long term, even if there is a dip in the short term. This only confirms what every homeowner and landlord has known for decades .. investing in property is a long term project and as an investment vehicle, it will continue to outstrip other forms of investment due to the high demand for a roof over people’s heads and the low supply of new properties being built.

Nearly 80% of Staines Properties have 3 or more Bedrooms

The orthodox way of classifying property in the UK is to look at the number of bedrooms rather than its size in square metres. Both homeowners and tenants are happy to pay for more space. It’s obvious, the more bedrooms a house or apartment has, the bigger it is likely to be. The reason being not only the actual additional bedroom space, but the properties with more bedrooms tend to have larger / more reception (living) rooms. However, if you think about it, this isn’t so astonishing given that properties with more bedrooms would typically accommodate more people and therefore require larger reception rooms.

In today’s Staines property market, the Staines homeowners and Staines landlords I talk to are always asking me which attributes and features are likely to make their property comparatively more attractive and which ones may detract. Over time, buyers’ and tenants’ needs and desires have changed. In Staines, location is still the No. 1 factor affecting the value of property, and a property in the best neighbourhoods, say Laleham Village can command a price up to 50% higher than a similar house in an ‘average’ area. However, after location, the next characteristic that has a significant influence on the desirability, and thus price, of property is the number of bedrooms and the type (i.e. Detached/ Semi/Terraced/Flat).

In previous articles, I have analysed the Staines housing stock into bedrooms and type of property, but I have never cross-referenced type against bedrooms. These figures for the Spelthorne Borough Council area make fascinating reading. It shows that nearly 80% ,  78.9% to be precise,  of all properties in the area have 3 or more bedrooms: 

I was genuinely surprised at the low numbers of one and two bed properties, especially 2 bed semi- detached houses. The change in the numbers of properties on the market and the split in bedrooms on the market over the last 12 months also makes interesting reading:

·       12 months ago, 8 one bed properties were for sale in Staines, today 9, a rise of 13%

·       12 months ago, 27 two bed properties were for sale in Staines, today 32, a rise of 19%

·       12 months ago, 34 three bed properties were for sale in Staines, today 41, a rise of 21%

·       12 months ago, 18 four bed properties were for sale in Staines, today 24, a rise of 33%

·       12 months ago, 5 five + bed properties were for sale in Staines, today 11, a rise of 120%

Overall an increase of 28.5% in the numbers of properties on the market in Staines, which can only be good news for Staines first time buyers and Staines buy to let landlords looking for a bargain,  particularly as post Brexit  property prices have stopped rising at the silly rates they were 12 to 18 months ago.

 Written 27/10/16