Local property market information for the serious investor

Month: December 2016

Cardiff Bay Property Market – Q4 Update

Doom and Gloom for Cardiff Bay Property Market?

Well, hasn’t 2016 been eventful. The ups and downs of Brexit, the Queen’s 90th, Andy Murray winning Wimbledon, Trump, Bake Off to Channel 4 and something close to the hearts of every buy to let landlord and homeowner in Cardiff Bay … the Cardiff Bay property market.

So, let’s look at the headlines for the Cardiff Bay property market…

In the last month, Cardiff Bay property values dropped by 0.45%, leaving them, year on year 5.59% higher, whilst interestingly, Cardiff Bay asking prices are down 1.8% month on month. All three statistics go to show the Cardiff Bay property market has recovered well after the summer lull, which was worsened by the uncertainty surrounding the EU vote back in June. Irrespective of all the issues, the average value of a Cardiff Bay home now stands at £196,500.

Generally, Cardiff Bay asking prices continue to hold up well, as asking prices are 3.2% higher year on year. At this time of year, asking prices tend to drop on the run up to Christmas and locally, they have dropped by 1.8% this month (November 2016), although this compares well with last year’s drop in Cardiff Bay asking prices, as we saw asking prices drop by 3.7% in November 2015.

Now it’s true to say, after chatting with fellow property professionals in Cardiff Bay, all of us have seen the number of property sales fall slightly, suggesting a slowing market, but it is very early days and it could be the time of year. Also, the numbers are limited, so it’s interesting to take note from a recent survey by the Royal Institution of Chartered Surveyors, stating new buyer enquiries and new instructions are falling at the same rate, suggesting that there will not be a downward pressure on property values.

Looking at the figures for the UK (as we can’t just look at Cardiff Bay in isolation), property values are generally rising slower than a few years ago, but on a positive note, there’s still growth across the UK. You see, slowing property value growth isn’t solely Brexit related, but after a number years of double digit rises in property values, affordability has weakened and cooling price growth is widely seen to be a natural correction of the market.

On the other hand, interest rates being at a record low of 0.25% are helping the property market. The cut in interest rates in the late summer was the medicine for the post-Brexit worry and will, as a consequence, ensure that the UK economy continues to be underpinned by buoyant property prices.

So, what will happen in 2017 in the Cardiff Bay property market?

Some say until we know what type of exit the UK will make from the EU it is hard to evaluate the outcome. Although, I believe, the whole Brexit issue is a sideshow to the main issue in the UK (and Cardiff Bay) housing market as a whole. As I have mentioned time and time again over the last few months, the biggest issue is demand outstripping supply when it comes to the number of households required to house us all. Cardiff Bay has an ever-growing population: with immigration (we still have at least two years of free movement from EU members into the UK), people living longer and the fact we need thousands of additional households as the country has nearly 115,000 divorces a year (where one household becomes two households).  These are interesting times ahead!

Continue Reading

Penarth Semi Detached House Prices rise by 339% in 20 years

The semi-detached house with its bay windows and net curtains has long been ridiculed as an emblem of safe, lacklustre and desperately uncool suburban life; the homes of the likes of Hyacinth Bucket in Keeping up Appearances and more latterly Alan Partridge – but they could have the last laugh – having enjoyed one of the highest price growths of any property type in Penarth, up by an average 339% increase in the last twenty years.

The semi can now laugh in the face of its posher detached counterpart, which saw a rise of only 283% in the same 20-year period. Looking at smaller properties, flats/apartments only rose 187%, whilst terraced houses did better at 360% (although they were starting from a lower base and demand from buy to let landlords has had a big part in driving the values on that type of house (i.e. the price a buy to let landlord is prepared to pay is driven by the rent the landlord can achieve).

 

In 1996 the average value of a Penarth semi stood at £69,000,

today it stands at £303,100

Such is the attractiveness of semis, which are cheaper than detached houses but have most of the same benefits for families. Semi-detached houses were built in their hundreds of thousands by the Victorians and Edwardians between the wars and through to the present day. Interestingly in the late 19th Century and early 20th century – they often weren’t referred to as semi-detached – but as villas!

So whilst Europeans live on top of each other in apartments us British chose, in the late Victorian and early Edwardian times, suburban comfort, being near … but not too near, the neighbours! I once heard someone say the semi-detached house was a peculiar crossbreed that doesn’t stand on its own — it is inseparable from its neighbour — yet somehow still embodies a dream of suburban independence.

Over one in four houses in Penarth is a semi-detached house

There are 3,214 semi-detached properties in Penarth and they represent 26.18% of all the households in Penarth. Penarth has such a mix of semi-detached properties with the older classic bay fronted semis to more modern ones built in the last couple of decades. Especially with the older ones, the semi offered a hall to provided separation between the reception rooms and privacy for their occupants. Also the downstairs offered larger rooms to accommodate dining tables, whilst upstairs, bedrooms were smaller, yet cosy.

However, probably the most overlooked aspect of popularity for semis is the garden. The front garden, designed to separate the house from the world, and the back garden designed for private relaxation. The semi in the suburbs was relaxing, well presented, plumbed and enhanced by a garden so that when a window was opened the air had a chance of being genuinely fresh… and it’s for all those reasons why 93 semi-detached houses have been sold in Penarth in the last 12 months alone.  Still as popular today as they were with the Victorians all those years ago – some things just stand the test of time!

Continue Reading