Local property market information for the serious investor

Month: July 2016

The Cardiff Bay Love Affair with its 900 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 Cardiff Bay 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 Cardiff Bay, not Bath, so the majority of our Cardiff Bay 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 Cardiff Bay 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 Cardiff Bay – 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 Cardiff Bay, some very interesting numbers appear.  Of the 8,275 properties in CF10 …

124 are Detached properties (1.5%)

361 are Semi Detached properties (4.3%)

924 are Terraced / Town House properties (11.1%)

6,865 are Apartment/ Flat’s (82.9%)

And quite noteworthy, there are 1 mobile homes, representing 0.01% of all property in Cardiff Bay.

When it comes to values, the average price paid for a Cardiff Bay terraced house in 1996 was £54,500 and the latest set of figures released by the land Registry states that today that figure stands at £221,800, a rise of 307% – 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 Cardiff Bay!

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33% Of Cardiff Bay Homes Are One Person Households

I was having an interesting chat with a Cardiff Bay 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 Cardiff Bay 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 Cardiff Bay 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 City of Cardiff Council area, the average

number of occupants per household is 2.3 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.

Uk Tenure graph

When we look at the City of Cardiff Council figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears…

1 person households in Cardiff Bay 2 person households in Cardiff Bay 3 person households In Cardiff Bay 4 person households in Cardiff Bay 5+ person households in Cardiff Bay
33.07% 31.71% 14.99% 12.54% 7.69%

But it gets even more interesting when we focus on just private rental properties in Cardiff Bay, as it is the rental market in Cardiff Bay that really fascinates me. When I analysed those City of Cardiff Council private rental household composition figures, a slightly different picture appears. Of the 28,972 Private rental properties in the City of Cardiff Council area,

  • 4% of Private Rental Properties are 1 person Households
  • 2% of Private Rental Properties are 2 person Households
  • 2% of Private Rental Properties are 3 person Households
  • 9% of Private Rental Properties are 4 person Households
  • 9% of Private Rental Properties are 5+ person Households

As you can see, Cardiff Bay 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 one or two bed apartments. Even with the numbers stated, there are simply not enough to meet the demand. They have to be in the right part of Cardiff Bay 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.

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Cardiff Property Post Brexit

Cardiff Property Post Brexit

Hi Everyone,

Hope you are all enjoying the lovely sunshine today – lets hope it is hear to stay!

So we are now a few weeks post Brexit so what now for the Cardiff Property Market?

 

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£5,400 boost to Cardiff Bay First time buyers

Doom and Gloom for Cardiff Bay Property Market?

There’s a whole legion of wannabe Cardiff Bay 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 Cardiff Bay 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 Cardiff Bay buy to let landlords has dropped away, in the interim, it offers Cardiff Bay 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 quicker.

Looking at the average value of an apartment in Cardiff Bay currently standing at £180,300, that means if our Cardiff Bay FTB went up against a Cardiff Bay landlord, the landlord would have to pay an additional £5,409 in stamp duty. Early antidotal evidence from fellow property professionals in the area is suggesting landlords are reducing their offers slightly on Cardiff Bay properties to reflect the extra stamp duty.

Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Cardiff Bay property market as a whole.

Since 2011/12, the Cardiff Bay property market has performed very well indeed. Over the last 12 months, £161,322,920 has been spent buying 874 Cardiff Bay properties.  Figures from the Land Registry have just been released and month on month in our council area, property values are 1% higher, yet 5.6% higher year on year. These figures are nowhere near the heady days of 2003 (May to be exact), when Cardiff Bay property prices rose by 29% in 12 months.

So as property values in Cardiff Bay (and the UK as whole) start to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Cardiff Bay property market in a different light. Even with the Spring 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, after reading the Cardiff Bay Property Market Blog take advice on what or not to buy and what to pay, meaning Cardiff Bay landlords are being more calculated with their Cardiff Bay BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Cardiff Bay, 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 Cardiff Bay landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Cardiff Bay investors will return for the right Cardiff Bay property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Cardiff Bay FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!

 

 

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