Cardiff Property Blog

Local property market information for the serious investor

Cardiff Property Market and Mysterious Politics of the General Election

As the dust starts to settle on the various unread General Election party manifestos, with their ‘bran-bucket’ made up numbers, life goes back to normal as political rhetoric on social media is replaced with pictures of cats and people’s lunch.  Joking aside though, all the political parties promised so much on the housing front in their manifestos, should they be elected at the General Election.  In hindsight, irrespective of which party, they seldom deliver on those promises.

Housing has always been the Cinderella issue at General Elections.  Policing, NHS, Education, Tax and Pensions etc., are always headline grabbing stuff and always seem to go ‘the ball’. However, housing, which affects all our lives, always seems to get left behind and forgotten.

Nonetheless, the way the politicians act on housing can have a fundamental effect on the wellbeing of the UK plc and the nation as a whole.

One policy that comes to mind is Margaret Thatcher’s Council House sell off in the 1980’s, when around 1.4m council houses went from public ownership to private ownership.  It was a great vote winner at the time (it helped her win three General Elections in a row) but it has meant the current generation of 20 somethings in Cardiff (and elsewhere in the Country) don’t have that option of going into a council house.  This has been a huge contributing factor in the rise of the private renting and buy to let in Cardiff over the last 15 years.

Nevertheless, looking back to the start of the Millennium, Labour set the national target for new house building at 200,000 new homes a year (and at one point that increased to 240,000 under Gordon Brown for a couple of years).  In terms of what was actually built, the figures did rise in the mid Noughties from 186,000 properties built in 2004 to an impressive 224,000 in 2007 (the highest since the early 1980’s) as the economy grew.

Then the Credit Crunch hit.  It is interesting, that the 2010 Cameron/Clegg government did things a little differently.  The fallout of the Credit Crunch meant a lot less homes were built, so instead of tackling that head on, the coalition side-stepped the target of the number of new homes to build and offered a £400m fund to help kick start the housing market (a figure that was a drop in the ocean when you consider an average UK property was worth around £230,000 in 2010).  The number of new houses being completed dipped from 146,800 in 2011 to 135,500 the subsequent year.

So, one might ask exactly how many new homes do we need to build per year?  It is commonly accepted that not enough new properties are being built to meet the rising need for homes to live in.  A report by the Government in 2016, showed that on average 210,000 net additional households will be formed each year) up to 2039 (through increased birth rates, immigration, people living longer, lifestyle (i.e. divorce) and people living by themselves more than 30 years ago).  In 2016, only 140,600 homes were built … simply not enough!

Looking at the numbers locally in Cardiff and the surrounding area, it is obvious to me, that we as an area, are not pulling our weight either when it comes to building new homes. In the 12 months up to the end of Q1 2017, only 363 properties were built in the Cardiff City Council area.  Go back to 2007, that figure was 1,509, 10 years before that in 1997, 1,152 new homes and further back to 1988, 1,160 new homes were built.

Who knows if Teresa May’s Government will last the five years?  She will think she has bigger fish to fry with Brexit to get bogged down with housing issues.  But let me leave you with one final thought.

The conceivable rewards in providing a place to live for the public on a massive house building programme can be enormous, as previous Tory PM’s have found out.  Winston Churchill in 1951, asked his Minister for Housing (Harold Macmillan) if he could guarantee the construction of 300,000 new properties a year, he was notoriously told: “It is a gamble—it will make or mar your political career, but every humble home will bless your name if you succeed.”

Isn’t it interesting, that the Tories remained in power until 1964!  Mrs May will have to work out if she wants to be the heiress to Harold Macmillan or David Cameron?


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No 20 – Pearl Street

No 20 on the countdown of the to 20 streets in Cardiff based on turnover and popularity.

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Top 20 Streets in Cardiff

Over the next few weeks I will be counting down the top 20 streets in Cardiff based on the turnover and popularity.

Make sure you stay tuned to see if your street makes it into the top 20 or even bags the number 1 spot!


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36.1 miles – The average distance people go to escape living in Cardiff Bay

Doom and Gloom for Cardiff Bay Property Market?

How far do Cardiff Bay people go to move to a new house?” This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Cardiff Bay Property Market!

For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!

Using statistics for the 12 months up to the middle of Autumn 2016, 335 households moved out of Cardiff Bay (CF10), moving an average distance of 36.06 miles – the equivalent of moving from Cardiff Bay to Swansea (as the crow flies).  The greatest distance travelled was 243 miles – that’s more than 9 marathons (when someone moved to Beamish).

Considering there were 236 property sales in CF10 in the year and countless tenant moves, the numbers seems consistent – once you find a city you like, you tend to want to settle down and if you do move, you might only move to a different neighbour-hood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.

I then turned my attention to people moving into Cardiff Bay. Using the same statistics for the 12 months up to the middle of Autumn 2016, 339 households moved into Cardiff Bay (CF10), moving an average distance of 77.66 miles – the equivalent of moving from Aberystwyth to Cardiff Bay (again as the crow flies). The greatest distance travelled was 398 miles – that’s more than 15 marathons (when someone moved from Aberdeen to Cardiff Bay).

I have looked at the data of every person moving into Cardiff Bay and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Cardiff Bay. As you can see, there are a high proportion of people moving from London and the East.

So, what does all this mean for the landlords and homeowners of Cardiff Bay?

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”. I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily. Many say knowledge is power and whilst I do enjoy writing my blog on the Cardiff Bay property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.


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79% of Cardiff Bay Properties are Leasehold

Doom and Gloom for Cardiff Bay Property Market?

There are 23.36 million properties in England and Wales with 64% being owner occupied and 36% being rented either from a private landlord, local authority or housing association.

Over nine out of ten of those English and Welsh owner-occupied properties are a whole house or bungalow. Now, most people would assume they would be freehold – however, of those renting nearly half of rental properties, 44% to be precise, lived in other leasehold apartments and flats.

It might be wise to quickly explain the difference between freehold and leasehold. When someone owns the freehold of a property they own it outright, including the land it is built on, whilst with a leasehold property the leaseholder owns the property for the length of their lease agreement. Leaseholders must pay the person who owns land (the freeholder) ground rent and other fees. When the leasehold ends, ownership returns to the freeholder although the leaseholder can extend the lease or they can buy the freeholder out, but there are rules and regulations with regards doing that.

Therefore, it would be safe to assume that houses are freehold and flats are leasehold .. wouldn’t it? Not necessarily! Most houses are freehold but some might be leasehold – usually through shared-ownership schemes – but more and more new homes builders are selling houses on a leasehold as well. The protection of the law afforded to leaseholders who own a flat is massive, but sadly lacking to leasehold houses sold privately.

Looking specifically at the figures for Cardiff Bay, at the last count in CF10 there were 9,573 properties. Since 1995, 8,696 properties in CF10 have changed hands and have been sold. Looking further at those 8,696 transactions in CF10 since 1995, using data from Land Registry and solicitors practice My-Home-Move, 78.99% have been leasehold (higher than the national average of 15%).

However, I am concerned about a few new homes builders selling new houses (not flats – houses) as leasehold. There has been a growing (yet small) trend for new-build houses to be sold as leasehold in recent years. While not all house builders use this model, those that do maintain it helps make developments financially viable.

The issue comes when builders sell the freehold separately to an investment company without informing the lease holder  – which they are legally allowed to do without telling the leaseholder. In England and Wales, the “right of first refusal” to buy the freehold is written in law to leaseholders of flats i.e. the freeholder must offer it to the leaseholders of all the flats of the building first), but not leaseholders of houses.

.. and this is the point I am trying to get across. If you are buying a new home and it’s a house (i.e. not a flat) – please check very carefully indeed whether its freehold or leasehold. If it is a leasehold, whilst you do have rights, they are not as strong as for those people buying a leasehold flat. I appreciate I am only talking about a very small percentage of the property market, but potentially this could end up costing thousands of pounds to those affected.


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What will the General Election do to 2,029 Cardiff Bay Homeowners?

In Cardiff Bay (or CF10 to be precise), of the 7,261 households, 682 homes are owned without a mortgage and 1,347 homes are owned by a mortgage. Many homeowners have made contact me with asking what the General Election will do the Cardiff Bay property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.


So finally, what does this mean for the landlords of the 3,741 private rented properties in Cardiff Bay? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Cardiff Bay will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Cardiff Bay, making it imperative that Cardiff Bay landlords are realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy … the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.

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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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