There is no doubt that Coronavirus will affect the Rotherham property market, but just
how?
The ensuing economic challenges are going to impact the Rotherham (and UK) property
market, yet no one knows the real answer. The newspapers eulogise different opinions, but
that’s all they are – opinions and everybody’s got a different opinion. The truth of the
matter is we don’t know and won’t know for another few months at least, if not more?
There have been some outstanding Government supportive measures both for tenants,
landlords, home buyers and sellers (including a pause on evictions for tenants, and for
landlords and homeowners, mortgage payment deferments and stamp duty reductions to
make buying a home cheaper), and whilst these are only temporary, they have done their
job, meaning there is a good level of activity in the Rotherham property market.
A lot of that is pent-up demand from a couple of years of uncertainty because of Brexit.
Also, we had the General Election in late 2019, so there have been so many reasons for
people to sit on their hands. At the beginning of 2020, it was like a water hose ready to
burst with the Boris Bounce in January and February. Then, just as things were beginning to
get going in the Rotherham property market, we had everything freeze up for months
during lockdown. So, since lockdown has been lifted …
the Rotherham property market is open once again for business
and there is unquestionably some impressive activity both in
how?
The ensuing economic challenges are going to impact the Rotherham (and UK) property
market, yet no one knows the real answer. The newspapers eulogise different opinions, but
that’s all they are – opinions and everybody’s got a different opinion. The truth of the
matter is we don’t know and won’t know for another few months at least, if not more?
There have been some outstanding Government supportive measures both for tenants,
landlords, home buyers and sellers (including a pause on evictions for tenants, and for
landlords and homeowners, mortgage payment deferments and stamp duty reductions to
make buying a home cheaper), and whilst these are only temporary, they have done their
job, meaning there is a good level of activity in the Rotherham property market.
A lot of that is pent-up demand from a couple of years of uncertainty because of Brexit.
Also, we had the General Election in late 2019, so there have been so many reasons for
people to sit on their hands. At the beginning of 2020, it was like a water hose ready to
burst with the Boris Bounce in January and February. Then, just as things were beginning to
get going in the Rotherham property market, we had everything freeze up for months
during lockdown. So, since lockdown has been lifted …
the Rotherham property market is open once again for business
and there is unquestionably some impressive activity both in
the sales and rental market
So, back to the original question and where are we going? I think what we will see is a subtle
change to where people want to live because of the pandemic. People working from home
has shown that the need to be in the big cities has reduced and as employees have realised,
they can work very efficiently from home, plus they are happier and have a better work/life
balance. Their employers are also happy as they get more work out of their staff and can
reduce their costly office footprint in the cities. The same goes for Rotherham tenants as
they are wanting more from their rental homes. Three trends we have noticed is there is
greater demand for properties with gardens, greater demand for Rotherham landlords who
will accept pets (as they now can have them as they work from home) and finally, tenants
willingness to pay top dollar for ‘top of the range’ properties, whilst more basic and uncared
for properties without all the ‘bells and whistles’ need to go for a discount. There certainly
has been a flight to quality.
Yet, what worries me is the fundamental future uncertainty in 2021 and beyond. What will
things look like say in spring 2021 when the Stamp Duty reductions are phased out? Any
property sold needs to have completed by the end of March 2021 to take advantage of the
tax holiday, meaning you need to have sold your Rotherham property by November 2020 at
the very latest to ensure your property purchase and sale deal goes through in time (as it is
change to where people want to live because of the pandemic. People working from home
has shown that the need to be in the big cities has reduced and as employees have realised,
they can work very efficiently from home, plus they are happier and have a better work/life
balance. Their employers are also happy as they get more work out of their staff and can
reduce their costly office footprint in the cities. The same goes for Rotherham tenants as
they are wanting more from their rental homes. Three trends we have noticed is there is
greater demand for properties with gardens, greater demand for Rotherham landlords who
will accept pets (as they now can have them as they work from home) and finally, tenants
willingness to pay top dollar for ‘top of the range’ properties, whilst more basic and uncared
for properties without all the ‘bells and whistles’ need to go for a discount. There certainly
has been a flight to quality.
Yet, what worries me is the fundamental future uncertainty in 2021 and beyond. What will
things look like say in spring 2021 when the Stamp Duty reductions are phased out? Any
property sold needs to have completed by the end of March 2021 to take advantage of the
tax holiday, meaning you need to have sold your Rotherham property by November 2020 at
the very latest to ensure your property purchase and sale deal goes through in time (as it is
taking on average up to 17 weeks between sale agreed and completion). This is where the
difference between a great solicitor, brilliant estate agent and awesome mortgage broker
compared to average ones will show. Good ones, when all three are working together for
you, can get the sale through in 6 to 8 weeks, not the national average of 17 weeks,
meaning if you are cutting it fine, you might not be able to take advantage of the tax savings
in the Spring. Give me a call if you want to know who the best of the best in Rotherham are
to ensure you don’t lose out on those tax savings.
difference between a great solicitor, brilliant estate agent and awesome mortgage broker
compared to average ones will show. Good ones, when all three are working together for
you, can get the sale through in 6 to 8 weeks, not the national average of 17 weeks,
meaning if you are cutting it fine, you might not be able to take advantage of the tax savings
in the Spring. Give me a call if you want to know who the best of the best in Rotherham are
to ensure you don’t lose out on those tax savings.
The value of the average Rotherham home
currently stands at £141,300
currently stands at £141,300
So, what is going to happen to the Rotherham property market? It really depends on the
economy as a whole and of course the property market is a large part of that. I know one
thing that buy to let landlords and home buyers don’t like is ambiguity and the British
housing market has always lived and breathed on emotion and sentiment. People will only
buy and sell property (and borrow the money to make those transactions happen) when
they feel good. Are all these things like Stamp Duty holidays just putting off the inevitable?
Are we heading for the mother of all property crashes?
Well, let me put sentiment and opinion aside for a second and look at the simple facts.
economy as a whole and of course the property market is a large part of that. I know one
thing that buy to let landlords and home buyers don’t like is ambiguity and the British
housing market has always lived and breathed on emotion and sentiment. People will only
buy and sell property (and borrow the money to make those transactions happen) when
they feel good. Are all these things like Stamp Duty holidays just putting off the inevitable?
Are we heading for the mother of all property crashes?
Well, let me put sentiment and opinion aside for a second and look at the simple facts.
We have an increasing population,
yet we don’t build enough houses
yet we don’t build enough houses
Since 1995, we have built on average 150,200 properties per year. The Barker Report said
2004 the country needed 240,000 per year to satisfy annual demand for new homes and
whilst the number of new homes built in the UK last year rose 1% to a 13-year high, only
161,000 homes were built. That means over the last 25 years, with the difference between
actual homes built and the targets set out in the Barker Report, we have an inbuilt shortage
of 2,245,000 fewer homes, meaning.
2004 the country needed 240,000 per year to satisfy annual demand for new homes and
whilst the number of new homes built in the UK last year rose 1% to a 13-year high, only
161,000 homes were built. That means over the last 25 years, with the difference between
actual homes built and the targets set out in the Barker Report, we have an inbuilt shortage
of 2,245,000 fewer homes, meaning.
Since the Millennium, property values in
Rotherham have increased by 169.4%
Rotherham have increased by 169.4%
Other factors have contributed to that. The average age of a person leaving their parents’
home in the UK is 24.4 years and that has been dropping for a few years meaning more
homes are required. People are also living longer (in 2000 the average person lived until
77.7 years and now it’s 81.1 years – doesn’t sound a lot until one considers for each
additional year the average person lives in the UK, we need an additional 356,500 homes).
Finally, we have got immigration. In the year ending March 2019, 612,000 people moved to
the UK (immigration) and 385,000 people left the UK (emigration) – meaning a net increase
of 227,000 people (or a requirement of c.100,000 homes to house them in one year alone).
All those factors in themselves mean …
home in the UK is 24.4 years and that has been dropping for a few years meaning more
homes are required. People are also living longer (in 2000 the average person lived until
77.7 years and now it’s 81.1 years – doesn’t sound a lot until one considers for each
additional year the average person lives in the UK, we need an additional 356,500 homes).
Finally, we have got immigration. In the year ending March 2019, 612,000 people moved to
the UK (immigration) and 385,000 people left the UK (emigration) – meaning a net increase
of 227,000 people (or a requirement of c.100,000 homes to house them in one year alone).
All those factors in themselves mean …
we have more demand for Rotherham property than we have
supply and that’s not going to change any time soon.
supply and that’s not going to change any time soon.
Property markets are driven (like all markets) by supply and demand so I believe Rotherham
property values can only rise in the long term. The question is whether Rotherham people
will have the sentiment and confidence to borrow money on a mortgage and invest in
Rotherham property, yet at the moment with ultra-low interest rates, borrowing money to
buy a home has never been so cheap and if you are in it for the long-term (which you should
be with property) then I think it’s good news.
One piece of good news is that mortgage lenders are willing to lend up to 90 per cent loan
to value mortgages for first time buyers (and in some rare cases 95 per cent), albeit with a
lot of strings attached … yet this is a good sign as the banks and building societies wouldn’t
be lending at these levels if they were too scared.
Investing in property, be it for yourself to live in or buy to let is a long-term game. We might
see an uplift in prices in the short term because of the demand mentioned above, then
again, we might see a dip in 2021 … yet again for the reasons mentioned above – until we
start to build new homes to the scale of 300,000+ a year (something that has never been
achieved since 1969), the long-term picture appears to be good. Be you a Rotherham
landlord, Rotherham house seller or Rotherham buyer, you have to be a lot more strategic
and thoughtful about what you are going to do. If you would like to pick my brains, drop me
a message on social media or pick up the phone.
So those are my thoughts, tell me your thoughts for the future of the Rotherham property
market?
property values can only rise in the long term. The question is whether Rotherham people
will have the sentiment and confidence to borrow money on a mortgage and invest in
Rotherham property, yet at the moment with ultra-low interest rates, borrowing money to
buy a home has never been so cheap and if you are in it for the long-term (which you should
be with property) then I think it’s good news.
One piece of good news is that mortgage lenders are willing to lend up to 90 per cent loan
to value mortgages for first time buyers (and in some rare cases 95 per cent), albeit with a
lot of strings attached … yet this is a good sign as the banks and building societies wouldn’t
be lending at these levels if they were too scared.
Investing in property, be it for yourself to live in or buy to let is a long-term game. We might
see an uplift in prices in the short term because of the demand mentioned above, then
again, we might see a dip in 2021 … yet again for the reasons mentioned above – until we
start to build new homes to the scale of 300,000+ a year (something that has never been
achieved since 1969), the long-term picture appears to be good. Be you a Rotherham
landlord, Rotherham house seller or Rotherham buyer, you have to be a lot more strategic
and thoughtful about what you are going to do. If you would like to pick my brains, drop me
a message on social media or pick up the phone.
So those are my thoughts, tell me your thoughts for the future of the Rotherham property
market?