Cardiff Property Blog

Local property market information for the serious investor

Cardiff Flats Out Perform Property Market Average by 74%

According to the Land Registry’s latest House Price Index for Cardiff and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.

Values of apartments in Cardiff have increased by 3.24% over the past year, which is proportionally 74% more than the Cardiff average rise of 1.86%. The last time flats/apartments in Cardiff out performed all the other types of property, by such a gulf, was back in the summer of 2003. For comparison, the other property types performed as follows ..

  • Detached homes rose by 1.83%
  • Semi-detached homes rose by 1.09%
  • Terraced/Town-Houses rose by 1.56%

This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Cardiff property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Cardiff on a number of occasions in my Cardiff Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers.

The average property value in Cardiff

now stands at £234,000.

When split down into property types ..

  • Cardiff Apartments at £157,500
  • Cardiff Detached at £385,700
  • Cardiff Semi-Detached at £243,100
  • Cardiff Terraced/Town-House at £198,300

 

So why have Cardiff apartments performed so well, and is it just a Cardiff thing? When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.

So, should Cardiff apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Cardiff house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.

Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.

So, what next for the Cardiff Property market? I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.

I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all. HMS Cardiff Property Market…. “Nice and steady as she goes”, says the Captain

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Should the 34,513 home owning OAP’s of Cardiff be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Cardiff society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Cardiff home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Cardiff homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it)

Looking at the statistics for Cardiff, of the 34,513 Homeowners who are 65 years and older, whilst 16,841 of them described themselves in good or very good health, a sizeable 11,837 home owning OAPs described themselves as in fair health and 5,835 in bad or very bad health.

16.91% of Cardiff home owning OAP’s are in poor health

But if you look at Rightmove for the number of bungalows available, there are 73 available to buy and only 10 available to rent. And I suspect that many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Cardiff downsizers could certainly afford to move but are staying put in bigger family homes because they can’t find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Cardiff population and specialist retirement properties for the ones who aren’t in such good health … we need to build more appropriate houses in Cardiff.

The Government’s Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

… and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Cardiff is … more houses and apartments need to be built in the Cardiff  area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Cardiff property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!

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12,744,582 People use Cardiff Central Train Station a year – How does that affect the Cardiff Property Market?

It might surprise you that it isn’t always the poshest villages around Cardiff or the swankiest Cardiff streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Cardiff, I am frequently confronted with queries about the Cardiff property market, and most days I am asked, “What is the best part of Cardiff and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person – a lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that, in total, 17,506 people jump on a train each and every day from Cardiff Central Train station. Of those, 6,056 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to Bristol is £2,956 a year.

So, if up to £17.9m is being spent on rail season tickets each year from Cardiff Central alone, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Cardiff and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Cardiff buy to let market – providing homes for the tenants of Cardiff…

The bottom line is that property values in Cardiff would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway stations and the people they serve in the city

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.

Overall usage of the station at Cardiff Central has increased over the last 20 years. In 1997, a total of 5,858,915 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 12,744,582 people using the station (that’s 35,013 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Cardiff property. It is also significant for tenants – so if you are a Cardiff buy to let investor looking for a property – the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website.

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Hard Brexit could cause 3,500 properties to be dumped onto the Cardiff Property market

So all cards up in the air! A general election will be on the books, but one thing is for sure … whoever gets the job to deal with Brexit has a hard job on their hands (I’m just glad its not me!) As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Cardiff (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.

Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Cardiff… but nothing could be further from the truth.

Of the 334,551 people who are resident in the Cardiff City Council area, 290,537 were born in the UK, 7,434 were born in EU countries from West Europe and 4,648 were born in EU countries from the former Soviet States in East Europe (the rest coming from other countries around the world).

The rights of these EU citizens living in the Cardiff area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Cardiff will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.

So, what would a hard Brexit do to the Cardiff property market?

Well a hard Brexit could mean the nuclear option when it came to the Cardiff Bay housing market. It could mean that every EU citizen would have to leave the UK.

In the Cardiff City area, 3,500 of the 7,434 Western European EU citizens own their own home and (so they would all need to be sold) and 3,652 of the 4,648 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.

Hard Brexit and mass EU Migration would mean c. 3,500 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Cardiff property values and rents, causing negative equity for thousands of Cardiff homeowners and many buy-to-let landlords would be out of pocket.

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Cardiff (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Cardiff (and the surrounding area) to get work and provide for their families. Many Cardiff people have invested their life savings into buying a buy to let property.

Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK … politics aside – a hard Brexit is in no one’s interests.

 

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12.75 Babies Born for Each New Home Built in the Cardiff City area

As more babies are being born to Cardiff City mothers, I believe this increase will continue to add pressure to the over stretched Cardiff City property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 12.75 babies were born for every new home that was built in the Cardiff City council area in 2016.  I believe this has and will continue to exacerbate the Cardiff City housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Cardiff City rents and Cardiff City property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Cardiff City council area had an average of 54.6 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region its 60 births per 1,000 women aged 15 to 44.

The number of births from Cardiff City women between the ages of 20 to 29 are significantly lower than the national average, but those between 35 and 44 were much higher.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Cardiff City area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing … a huge increase in the need for housing in Cardiff City.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Cardiff City people.

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) … demand for property is simply outstripping supply.

The simple fact is more Cardiff City properties need to be built

… be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of the Cotswolds, but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Cardiff City, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

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Cardiff Bay Rents To Rise Quicker Than Cardiff Bay Property Prices In Next 5 Years

cardiff bay property

The next five years will see an interesting change in the Cardiff Bay property market. My recent research has concluded that the rent private tenants pay in Cardiff Bay will rise faster than Cardiff Bay property prices over the next five years, creating further issues to Cardiff Bay’s growing multitude of renters. In fact, my examination of statistics forecasts that .. 

By 2022, Cardiff Bay rents will increase by 22%, whereas Cardiff Bay property values will only grow by 17%.

Let me explain why I have come to those conclusions:

Over the last five years, property values in Cardiff Bay have risen by 22.4%, whilst rents have only risen by 7.2%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Cardiff Bay tenants will have fewer properties to choose from, which will push rents higher. In fact, talking to fellow property professionals in Cardiff Bay, there appears to be privation and shortage of new rental properties coming on to the Cardiff Bay lettings market.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tory’s have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector. They can’t expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. They didn’t invest in buy to let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords … if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most the Council houses were sold off in the 1980’s!).

With the challenges ahead, with the ‘B’ word (that’s budget if you wondered!), house price inflation will be tempered over the coming five years in Cardiff Bay. As I have discussed in previous articles, the number of properties on the market in Cardiff Bay remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why I believe property values in Cardiff Bay will only be 17% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Cardiff Bay people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Cardiff Bay rental property currently standing at £1,022 per month …

Over the next five years, I predict the average rent

in Cardiff Bay will rise to £1,247 per month

These are interesting times. There is still money to be made in buy to let in Cardiff Bay – Cardiff Bay landlords will just need to be smarter and more savvy with their investments.

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Only 2,606 Properties For Sale in Cardiff

2017 has started with some positive interest in the Cardiff property market.  Taking a snap shot of the Cardiff property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Type of Cardiff Property Number of Properties on the Market 12 months ago Number of Properties on the Market now % change
Detached 602 539 -10%
 
Semi 568 565 -1%
 
Terraced             504 502 -0%
 
Flat 923 881 -5%

 

So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 2,606 properties for sale today compared with 2,718 a year ago, a drop of 4%.

Next, Cardiff asking prices, compared

to the same as a year ago, are 3% lower.

With that in mind, I wanted to look at what property was actually selling for in Cardiff. Taking my information from the Land Registry, the last available six months property transactions for CF11 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

 

Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16
Detached £241,500 (1) £299,500 (2) £125,000 (1) £303,000 (1) £280,000 (1) £292,500 (2)
Semi

Detached

£202,375 (4) £195,990 (5) £294,600 (5) £225,750 (4) £185,000 (1) £304,250 (4)
Terraced £278,960 (20) £197,144 (28) £229,348 (27) £190,608 (30) £197,262 (34) £242,675 (22)
Flat £182,130 (23) £179,695 (41) £139,847 (25) £166,833 (21) £142,043 (23) £130,534 (19)
All £225,399 (48) £190,348 (76) £194,596 (58) £186,209 (56) £176,930 (59) £204,702 (47)

 

So what does all this mean for the property owning folk of Cardiff?

Well, with less property on the market than a year ago and asking prices 3% lower, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Cardiff property ladder, have much more price information about the Cardiff property market at their fingertips than ever before.

These Cardiff people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Cardiff estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Cardiff property-market has an unassailable demand for property – there is one saying that always rings true – as long as the property is being marketed at the right price it will sell.

If you want to know if your Cardiff property is being marketed at the right price, send me a web link and I will give you my honest opinion.

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Cardiff’s housing affordability hits a ratio of 7.54 to 1

A Cardiff homeowner emailed me last week, following my article posted in the Cardiff Property Blog about the change in attitude to renting by the youngsters of Cardiff and how they thought it was too expensive for first time buyers to buy in Cardiff.  There can be no doubt that buy to let landlords have played their part in driving up property values in Cardiff (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Cardiff.

In the email, they said they thought the plight of the first-time buyers in Cardiff was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Cardiff going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Cardiff is?  The best measure of the affordability of housing is the ratio of Cardiff Property Prices to Cardiff Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking the table below, for example in 2014, the average value of a Cardiff property was 7.05 times higher than the average annual wage in Cardiff)

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 (EST)
3.18 4.05 5.04 6.26 6.81 6.91 6.35 6.60 7.05 7.54

 

This deterioration in affordability of property in Cardiff over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.

… but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 1 bed apartment in Cardiff for around £120,000 and only need to find £6,000 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising … or not as the case maybe?

I think we as a Country have changed … renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation … because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

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Only 2,606 Properties For Sale in Cardiff

2017 has started with some positive interest in the Cardiff property market.  Taking a snap shot of the Cardiff property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

 

Type of Cardiff Property Number of Properties on the Market 12 months ago Number of Properties on the Market now % change
Detached 602 539 -10%
       
Semi 568 565 -1%
       
Terraced                   504 502 -0%
       
Flat 923 881 -5%

 

So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 2,606 properties for sale today compared with 2,718 a year ago, a drop of 4%.

Next, Cardiff asking prices, compared

to the same as a year ago, are 3% lower.

With that in mind, I wanted to look at what property was actually selling for in Cardiff. Taking my information from the Land Registry, the last available six months property transactions for CF11 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

  Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16
Detached £241,500 (1) £299,500 (2) £125,000 (1) £303,000 (1) £280,000 (1) £292,500 (2)
Semi

Detached

£202,375 (4) £195,990 (5) £294,600 (5) £225,750 (4) £185,000 (1) £304,250 (4)
Terraced £278,960 (20) £197,144 (28) £229,348 (27) £190,608 (30) £197,262 (34) £242,675 (22)
Flat £182,130 (23) £179,695 (41) £139,847 (25) £166,833 (21) £142,043 (23) £130,534 (19)
All £225,399 (48) £190,348 (76) £194,596 (58) £186,209 (56) £176,930 (59) £204,702 (47)

So what does all this mean for the property owning folk of Cardiff?

Well, with less property on the market than a year ago and asking prices 3% lower, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Cardiff property ladder, have much more price information about the Cardiff property market at their fingertips than ever before.

Those Cardiff people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Cardiff estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Cardiff property-market has an unassailable demand for property – there is one saying that always rings true – as long as the property is being marketed at the right price it will sell.

If you want to know if your Cardiff property is being marketed at the right price, send me a web link and I will give you my honest opinion.

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‘Flipping’ Heck – Cardiff Property Values Rise by £23.18 a day

Investing in Cardiff buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Cardiff’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Cardiff, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Cardiff property has risen by £42,300 (equivalent to £23.18 a day), taking it to a current average value of £228,000. Yields range from 6% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

  

This demonstrates how the Cardiff property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Cardiff landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Cardiff people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength.

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