May 3, 2018
No.13 on my countdown of the top 20 streets in Cardiff based on their turnover and popularity is Wyncliffe Gardens in Pentwyn.
Watch my video to find out more
May 3, 2018
No.13 on my countdown of the top 20 streets in Cardiff based on their turnover and popularity is Wyncliffe Gardens in Pentwyn.
Watch my video to find out more
April 17, 2018
As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Cardiff and the surrounding area to keep up with demand for homes to live in (be that tenants or homebuyers), it’s good to know more Cardiff home sellers are putting their properties on to the market than a year ago.
At the start of 2007 there were 4,211 properties for sale in Cardiff but by February 2008, when the credit crunch was really beginning to bite, that number had risen to 8,500 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.
Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) … prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Cardiff property between the end of 2007 and Spring 2009.
However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Cardiff property prices have remained robust. A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties. Nevertheless, if you had asked me a couple of years ago, I would have said we were beginning to see there was in fact NOT enough properties coming on to the market for sale … meaning in certain sectors of the Cardiff property market, house prices were overheating because of this lack of supply.
So, it is pleasing to note, looking at the recent numbers …
There are 2% more properties for sale in Cardiff today than a year ago
There were 2,525 properties for sale 12 months ago, and today that stands at 2,574. It doesn’t sound a lot, yet this is a small step in the right direction to a more stable property market.
Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Cardiff say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Cardiff house sellers and potential house buyers, I do foresee the Cardiff Property Market will show steady yet sustained improvement during the first half of 2018.
What does this mean for Cardiff landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true that demand amongst FTB’s is increasing, albeit from a low base. Even with the new landlord tax rules, buy to let in Cardiff still looks a good investment, providing Cardiff landlords with a good income at a time of low interest rates and a roller coaster stock market.
If you are thinking of investing in bricks and mortar in Cardiff, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years. With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … and don’t forget the first rule of Buy To Let Investment …..
I will tell you that 1st rule in a couple of weeks!
April 10, 2018
As I am sure you are aware, one the best things about my job as an agent is helping Cardiff landlords with their strategic portfolio management. Gone are the days of making money by buying any old Cardiff property to rent out or sell on. Nowadays, property investment is both an art and science. The art is your gut reaction to a property, but with the power of the internet and the way the Cardiff property market has gone in the last 11 years, science must also play its part on a property’s future viability for investment.
Many metrics most property professionals (including myself) use when deciding the viability of a rental property is what properties are selling for, the average rent, the yield and an average value per square foot.
However, another metric I like to use is the average rent per square foot. The reason being is that is a great way to judge a property from the point of view of the tenant … what space they get for their money. Now of course, location (location, location in a Phil and Kirstie style) has a huge influencing factor when it comes to rents (and hence rent per square foot). Like people buying a property, tenants also have that balancing act between better/worse location, more vs. less money and size of accommodation (bigger and more rooms equalling more money) and where they live (location) verses making ends meet.
Interestingly, I know there are a lot of you in Cardiff who like to see my statistics on the Cardiff property market, so before I talk about the rental figures per square foot, I wanted to share the £ per square foot on the values. In Cardiff, the current AVERAGE figures are being achieved (and I must stress, these are average figures, so there will an enormous range in these figures), but on average, properties in Cardiff, split down by type are achieving …
So, the rental figures:
The extent of space you get for your rent is replicated in the space you get for your money when buying a property. The average size of rental property in the Cardiff area is 813.1 sq ft (interesting when compared to the national average of 792.1 sq ft)
This means the average rent per square foot currently being
achieved on a Cardiff rental property is £19.18 per sq ft per annum
So, what we can deduce from this? Well the devil is always in detail!
Whilst I was able to quote the average overall figure and the fact my research showed it was quite clear from data that there is relationship between the average £ per sq ft figures on property values and average £ per sq ft on rental figures as a property grows in size. However, something quite intriguing happens to those figures, in terms of what the property will sell for and what it will rent for, when we change and increase the size of the property.
My research showed that doubling the size of any Cardiff property doesn’t mean you will double the value of it … in either value or rent. This is because the marginal value increases diminish as the size of the property increases. In layman’s terms … Subject to a few assumptions, double the size of the house doesn’t mean double the value … what really happens is a doubling of the size gives only an approximately 40% to 65% uplift in value, but here comes the even more fascinating part … when it came to the rental figures, double the size of the house meant only 20% to 45% in increase in rent.
In a future article, I will be discussing the actual added value an extension can bring … but in the meantime, in an overall and sweeping statement, most of the time it makes sense to extend if you are going to live in the property as long as the extension is proportionate to the property, but if you are going to rent it out … possibly not.
March 27, 2018
Harrison Drive in St Mellons is number 14 on my countdown of the top 20 streets in Cardiff based on turnover and popularity.
Watch the video for more info
March 17, 2018
The degree to which young Cardiff Bay people are locked out of the Cardiff Bay housing market has been revealed in new statistics.
A Cardiff Bay landlord was asking me the other week to what effect homeownership rates in Cardiff Bay in the early to middle aged adult age range had affected the demand for rental property in Cardiff Bay since the Millennium. I knew anecdotally that it affected the Cardiff Bay rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.
As anyone in Cardiff Bay, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.
In the year 2000, 45.6% of Cardiff Bay 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 24.3% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Cardiff Bay person (therefore born in 1962) would have a 67.4% chance of owning his or her own home and a 38 year today in Cardiff Bay (born in 1980) would only have a 52.5% chance of owning their own home.
Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Cardiff Bay has reduced from 62.32% to 45.06%
If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Cardiff Bay. The fact is the figures in Cardiff Bay show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.
The landlord suggested this deterioration in homeownership in Cardiff Bay across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above. Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.
So, what does this mean for the rental market in Cardiff Bay?
Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Cardiff Bay landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Cardiff Bay rental market .. drop me line or pop in next time you are passing my office.
March 4, 2018
That got your attention … didn’t it!
But before we start, what is Generation X, let alone Generation Z, Millennials, Baby Boomers … these are phrases banded around about the different life stages (or subcomponents) of our society. But when terminologies like this are used as often and habitually as these phrases (i.e. Gen X this, Millennial that etc.), it appears particularly vital we have some practical idea of what these terms actually mean. The fact is that everyone uses these phrases, but often, like myself, they are not exactly sure where the lines are drawn …until now…
So, for clarity …
Generation Z: Born after 1996
Millennials: Born 1977 to 1995
Generation X: Born 1965 to 1976
Baby Boomers: Born 1946 to 1964
Silent Generation: Born 1945 and before
My research shows there are 34,513 households in Cardiff owned by Cardiff Baby Boomers (born 1946 to 1964) and Cardiff’s Silent Generation (born 1945 and before). It also shows there are 67,635 Generation X’s of Cardiff (Cardiff people born between 1965 to 1976). Looking at demographics, homeownership statistics and current life expectancy, around two-thirds of those Cardiff 67,635 Generation X’s have parents and grandparents who own those 34,513 Cardiff properties.
… and they will profit from one of the biggest inheritance explosions of any post-war generation to the tune of £8.366bn of Cardiff property or £185,452 each but they will have to wait until their early 60’s to get it!
The Millennials are also in line for a big inheritance windfall.
There are 81,364 Millennials in Cardiff and my research shows around two thirds of them are set to inherit the 39,886 Cardiff Generation X’s properties. Those Generation X’s Cardiff homes are worth £9.669bn meaning, on average, each Millennial will inherit £178,159; but not until at least 2040 to 2060!
While the Cardiff Millennials have done far less well in amassing their own savings and assets, they are more likely to take advantage of an inheritance boom in the years to come. This will probably be very welcome news for those Cardiff Millennials, including some from poorer upbringings who in the past would have been unlikely to receive gifts and legacies.
However, inheritance is not the magic weapon that will get the Millennials on to the Cardiff housing ladder or tackle growing wealth cracks in UK society, as the inheritance is unlikely to be made available when they are trying to buy their first home…but before all you Cardiff Millennials start running up debts, over 50% of females and around 35% of men are going to have to pay for nursing home care. Interestingly, I read recently that a quarter of people who have to pay for their care, run out of money.
So, if you are a Cardiff Millennial there potentially will be nothing left for you.
Of course, most parents want to give their children an inheritance, the consideration that what you have worked genuinely hard for over your working life won’t go to your children to help them through their lives is a really awful one … maybe that is why I am seeing a lot of Cardiff grandparents doing something meaningful, and helping their grandchildren, the Millennials, with the deposit for their first house.
One solution to the housing crisis in Cardiff (and the UK as a whole) is if grandparents, where they are able to, help financially with the deposit for a house. Buying is cheaper than renting – we have proved it many times in these articles … so, it’s not a case of not affording the mortgage, the issue is raising the 5% to 10% mortgage deposit for these Millennials.
Maybe families should be distributing a part of the family wealth now (in the form of helping with house deposits) as opposed to waiting to the end… it will make so much more of a difference to everyone in the long run.
Just a thought?
February 7, 2018
Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Cardiff property market.
With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 5.6% in Cardiff, which has contributed to maintain a decent level demand for property in Cardiff in 2017 (interestingly – an impressive 724 Cardiff properties were sold in last 12 months), whilst finally, the number of properties for sale in the city has remained limited, thus providing support for Cardiff house prices, meaning …
Cardiff Property Values are 5.4% higher than a year ago
However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.
In terms of what will happen to Cardiff property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.
Nevertheless, the bottom line is Cardiff homeowners and Cardiff landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Cardiff, they have only risen by 32.8%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.
Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact … I am sure we can get through this together as well?
Oh, and house prices in Cardiff over the next 12 months? I believe they will end up between 0.2% higher and 1.6% higher, although it will probably be a bumpy ride to get to those sorts of figures.
February 1, 2018
Average Total Profit
Overall Cardiff Bay Average
January 15, 2018
Talk to many Cardiff 20 something’s, where home ownership has looked but a vague dream, many of them have been vexatious towards the Baby Boomer generation and their pushover ‘easy go lucky’ walk through life; jealous of their free university education with grants, their eye watering property windfalls, their golden final salary pensions and their free bus passes.
If you had bought a property in Cardiff for say £20,000 in first quarter of 1977, today it would be worth £253,628, a windfall increase of 1168.14%.
But to blame the 60 and 70 year olds of Cardiff for that sort of rise seems a little unfair, with the value of the homes rising like rocket, I don’t believe they can be censured or made liable for that. A few weeks ago, I discussed in my blog the number of people in the Cardiff area who have two or more spare bedrooms (meaning they are under-occupying the house). I see many mature members of Cardiff society, rattling around in large 4/5 bed houses where the kids have flown the nest years ago … but should they be blamed?
We are all just human, and the mature members of UK society have just reacted to the inducements of our property and tax system. The mature generations who joined the property market party in the 1970’s and 1980’s were able to take out huge mortgages, protected in the knowledge that inflation would corrode the real value of the mortgage, while wage gains would boost their ability to repay.
Neither do I directly blame the multitude of Cardiff buy to let landlords, buying up their 10th or 11th property to add to their buy to let empire. They too, are humbly reacting to the peculiar historic inducements of the UK property market.
So, who is to blame?
Well, hyperinflation in the 1970’s meant the real value of people’s mortgages was whipped out (as mentioned above). Margaret Thatcher and Nigel Lawson are also good people to blame with Maggie selling off millions of council houses and Nigel Lawson’s delayed ending of the MIRAS tax relief in 1987; meaning he too can get his share of indignation. The Blair/Brown combo doubled stamp duty in 1997 and again in 2000, which, as a tax on property transactions, precludes a more efficient distribution of the current housing stock. The Government has had plenty of opportunity to change the draconian stamp duty rules to incentivise those mature Cardiff house movers to downsize.
However, I have started to see over the last few years a change in Government policy towards housing. The new breed of Cardiff buy to let landlords that have come about since the Millennium, have had their wings clipped over the last couple of years, with the introduction of new tax rules (meaning it is slightly more difficult to make money out of property unless you have all the national information and Cardiff property trends to hand).
It’s easy to think the only reason that hundreds of first time buyers have been priced out of the Cardiff housing market is because of these landlords. Yet, I believe landlords have been undervalued with the Cardiff homes they provide for Cardiff people. With first time buyers struggling to save for a deposit, if it weren’t for those landlords buying up those homes over the last 10/15 years, we would have a bigger housing crisis than we have today. Since the global financial crisis of 2008/9, local councils have had to cut services, so certainly didn’t have enough money to build new homes … homes that were provided to Cardiff by these buy to let landlords.
One side of the argument is that 1,871 homes are being bought up by buy to let landlords each year in the Cardiff City Council area when otherwise they might have become available to other buyers, the other side of the argument is the current national average deposit is £51,800, which is, by far, the greatest barrier to those wanting to buy their first home. Those homes bought by local buy to let landlords are not left idle, as they equate to 13,096 of new homes for local people, most of whom who see renting as a better option because of the choice, the simplicity and the flexibility which renting brings.
In the 60’s/70’/80’s, the traditional thoughts that you were a failure unless you owned your own home have now all but disappeared, because if you ask many young people, they would probably say renting was the perfect option for them at certain times of their life.
January 5, 2018
I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result.
Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector.
Interestingly I was chatting with a self-managed landlord from Cyncoed, when I was out socially over the festive period, who didn’t realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).
If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Cyncoed landlord popped into my offices in the New Year, and I checked all his paperwork and ensured he was on the right side of the law going forward – and I offer the same to any landlord in the Cardiff area if you want me to cast my eye over your buy to let matters (and at no cost – ok just bring in some chocolates for the girls in the office!)
But what of all these extra properties being dumped onto the market in Cardiff? When I looked at the records the number of properties on the market in Cardiff now, as opposed to a year ago, the numbers tell an interesting story …
|1st Jan 2017||1st Jan 2018|
Overall, Cardiff doesn’t match the national trend, with the number of properties on the market actually dropping by 4% in the last year. It was particularly interesting to see the number of flats increase by 12%, yet the number of semis on the market drop by 19%.
However, speaking with my team and other property professionals in the city, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Cardiff Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Cardiff landlords who have been releasing their monies from their Cardiff buy to let properties – as is the nature of all investments!
Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.
Nevertheless, some Cardiff landlords will want to release the equity held in their Cardiff buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in. However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Cardiff area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids).