Local property market information for the serious investor

Category: Property deals

With Cardiff Annual Property Values 5.4% Higher, This is My 2018 Forecast

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.


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£498.63pm – The Profit made by every Cardiff Bay Property Owner over the last 20 years

As we go headlong into 2018, I believe UK interest rates will stay low, even with the additional 0.25% increase that is expected in May or June. That rise will add just over £20 to the typical £160,000 tracker mortgage, although with 57.1% of all borrowers on fixed rates, it will probably go undetected by most buy-to-let landlords and homeowners. I forecast that we won’t see any more interest rate rises due to the fragile nature of the British economy and the Brexit challenge. Even though mortgages will remain inexpensive, with retail price inflation outstripping salary rises, it will still very much feel like a heavy weight to some Cardiff Bay households.

Now it’s certain the Cardiff Bay housing market in 2017 was a little more subdued than 2016 and that will continue into 2018. Property ownership is a medium to long-term investment so looking at that long-term time frame; the average Cardiff Bay homeowner who bought their property 20 years ago has seen its value rise by more than 209%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The majority of that historic gain in Cardiff Bay property values has come from property market growth, although some of that will have been added by homeowners modernising, extending or developing their Cardiff Bay home.

Taking a look at the different property types in Cardiff Bay and the profit made by each type, it makes interesting reading..

Average Price
Paid in 1998 in Cardiff Bay

Average Price
Paid in 2018 in Cardiff Bay

Average Total Profit
in last 20 years in Cardiff Bay

Average Profit
per Month in Cardiff Bay over the last 20 years
















Overall Cardiff Bay Average





However, I want to put aside all that historic growth and profit and looking forward to what will happen in the future. I want to look at the factors that could affect future Cardiff Bay (and the Country’s) house price growth/profit; one important factor has to be the building of new homes both locally and in the country as a whole. This has picked up in 2017 with 217,350 homes coming on to the UK housing ladder in the last year (a 15% increase on the previous year’s figures of 189,690. However, Philip Hammond has set a target of 300,000 a year, so still plenty to go!

Another factor that will affect property prices is my prediction that the balance of power between Cardiff Bay buy-to-let landlords and Cardiff Bay first-time buyers should tip more towards the local first-time buyers in 2018.

The Council of Mortgage Lenders expects the number of buy to let mortgages to drop by 34% from levels seen in 2015. This is because of taxes being increased recently on buy-to-let and harder lending criteria for buy to let mortgages, which means I foresee a gradual move in the balance of power in favour of first-time buyers rather than buy-to-let landlords. First time buyers will also be helped by The Chancellor eradicating Stamp Duty for all properties up to £300,000 bought by first-time buyers in the recent budget. 

This means Cardiff Bay buy-to-let landlords will have to work smarter in the future to continue to make decent returns (profits) from their Cardiff Bay buy-to-let investment. Even with the tempering of house price inflation in Cardiff Bay in 2017, most Cardiff Bay buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Cardiff Bay buy to let landlord ensure that continues?

Since the 1990’s, making money from investing in buy-to-let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be as easy. Over the last ten years, I have seen the role of the forward thinking letting agents evolve from a ‘rent collector’ and basic property management to a more holistic role, or as I call it, ‘landlord portfolio strategic leadership’. Thankfully, along with myself, there are a handful of letting agents in Cardiff Bay whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – or whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.

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No. 15 Kings Road

Take a look at the latest street on my countdown of the top 20 streets in Cardiff based on their turnover and popularity. I am on the very popular Kings Road, watch the video for more info


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One in 28 rental properties in the Cardiff Bay area will be illegal in 2018

As the winter months draw in and the temperature starts to drop, keeping one’s home warm is vital. Yet, with the price of gas and electricity rising quicker than a Saturn V rocket and gas, oil and electricity taking on average 4.4% of a typical Brit’s pay packet (and for those Brit’s with the lowest 10% of incomes, that rockets to an eye watering 9.7%), whether you are a tenant or homeowner, keeping your energy costs as low as possible is vital for the household budget and the environment as a whole.

For the last 10 years, every private rental property must have an Energy-Performance-Certificate (EPC) rating.  The property is given an energy rating, very similar to those on washing machines and fridges with the rainbow coloured graph, of between A to G (A being the most efficient and G the worst). New legislation comes in to force next spring (2018) for English and Welsh private landlords making it illegal to let a property that does not meet a certain energy rating. After the 1st of April next year, any new tenant moving into a private rented property or an existing tenant renewing their tenancy must have property with an energy performance rating of E or above on the property’s EPC and the new law will apply for all prevailing tenancies in the spring of 2020. After April 2018, if a landlord lets a property in the ‘F’ and ‘G’ ratings (i.e. those properties with the worst energy ratings) Trading Standards could fine the landlord up to £4,000.

Personally, I have grave apprehensions that many Cardiff Bay landlords may be totally unaware that their Cardiff Bay rental properties could fall below these new legal minimum requirements for energy efficiency benchmarks. Whilst some households may require substantial works to get their Cardiff Bay property from an F/G rating to an E rating or above, my experience is most properties may only need some minor work to lift them from illegal to legal. By planning and acting now, it will mitigate the need to find tradespeople in the spring when every other Cardiff Bay landlord will be panicking and paying top dollar for work to comply.

Whilst there is money and effort involved in upgrading the energy efficiency of rental property, a property that is energy efficient will have greater appeal to tenants and other buy-to-let landlords/investors and this will enable you to obtain higher rents and sale price (when you come to sell your investment).

So, how many properties are there in the area that are F and G rated .. well quite a few in fact. Looking at the whole of the City of Cardiff Council area, of the 31,220 privately rented properties, there are ..

862 rental properties in the F banding

242 rental properties in the G banding

That means just over one in 28 rental properties in the Cardiff Bay and surrounding area has an Energy Performance Certificate (EPC) rating of F or G. From April next year it will be illegal to rent out those homes rated F and G homes with a new tenancy.

Talking with the Energy Assessors that carry out our EPC’s, they tell me most of a building’s heat is lost through draughty windows/doors or poor insulation in the roof and walls. So why not look at your EPC and see what the assessor suggested to improve the efficiency of your property? I can find the EPC of every rental property in Cardiff Bay, so irrespective of whether you are a client of mine or not, don’t hesitate to contact me via email (or phone) if you need some guidance on finding out the EPC rating or need a trustworthy contractor that can help you out?

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Cardiff Homeowners Are Only Moving Every 15.5 Years (Part 2)

In the credit crunch of 2008/9 the rate of home moving plunged to its lowest level ever. In 2009 the rate at which a typical house would change hands slumped to only once every 20 years. The biggest reason being that confidence was low and many homeowners didn’t want to sell their home as Cardiff property prices plunged after the onset of the financial crisis in 2008. However, since 2009, the rate of home moving has increased (see the table and graph below), meaning today:

The average period of time between home moves in

Cardiff is now 15.5 years.

This is an increase of 30.64 per cent between the credit crunch fallout year of 2009 and today, but still it is a 38.02 per cent drop in moves by homeowners, compared to 15 years ago (The Noughties).

Average Length of Time (In Years) between Home Moves in the Cardiff City Council Area
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
19.91 15.90 13.28 15.42 14.40 12.99 10.93 9.55 10.14 10.59 13.64
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
10.49 11.02 20.10 20.12 20.82 20.82 21.44 18.19 14.80 15.66 15.40

So why aren’t Cardiff homeowners moving as much as they did in the Noughties?

The causes of the current state of play are numerous. In last weeks article I talked about how ‘real’ incomes and savings had been dropping. Another issue is the long-term failure in the number of properties being built. Only a few weeks ago in the blog, I was discussing the draconian planning rules meaning house builders struggle to locate building land to actually build on.

Back in the 1960’s and 1970’s, as a country, we were building on average 300,000 and 350,000 households a year. The Barker Review a few years ago said that for the UK to stand still and keep up with housing demand (through immigration, people living longer, a just under 50% increase in the number of households with a single person since the 1980’s and family makeup (i.e. divorce makes one household now two)) we needed to build 240,000 households a year. Over the last few years, we have only been building between 135,000 and 150,000 households a year.

Finally, as the UK Population gets older, there is no getting away from the fact that a maturing population is a less mobile one.

So, what does this mean for Cardiff homeowners and landlords?

Well, if Cardiff people are less inclined to move or find it hard to sell a property or acquire a new one, they are probably less likely to move to an improved job or a more prosperous part of the UK.

Many of the older generation in Cardiff are stuck in property that is simply too big for their needs. The fact is that, in Cardiff, nearly five out of every ten (or 48.0 per cent) owned houses has two or more spare bedrooms; or to be more exact …

40,778 of the 84,901 owned households in the Cardiff City area have two or more spare bedrooms.

So, as their children and grandchildren struggle to move up the housing ladder, with those young families bursting at the seams in homes too small for them i.e. overcrowding, we have a severe case of under-occupation with the older generation – grandparents staying put in their bigger homes, with a profusion of spare bedrooms.

Regrettably, I cannot see how the rate of properties being sold will rise any time soon. Many commentators have suggested the Government should give tax breaks to allow the older generation to downsize, yet in a recent White Paper on housing published just weeks before the General Election, there was no reference of any thoughtful and detailed policies to inspire or support them to do so.

This means that there could be an opportunity for Cardiff buy to let landlords to secure larger properties to rent out, as the demand for them will surely grow over the coming years. As for homeowners; well those in the lower and middle Cardiff market will find it a balanced sellers/buyers market, but will find it slightly more a buyers market in the upper price bands.

Interesting times ahead!

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No 18 Velindre Road

Here is number 18 on my countdown of the top 20 streets in Cardiff based on their turnover and popularity, I am in Whitchurch on Velindre Road


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No. 19 Rhymney St


Number 19 on the countdown of my top 20 streets in Cardiff is Rhymney Street in the heart of Cathays. It has an average price £177,442 and has had 280 transactions since 1995.

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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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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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Cardiff First Time Buyers borrow £219.1m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Cardiff property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 4,560 properties have sold (and completed) in Cardiff, worth £989.4m. Interestingly the number of properties changing hands in Cardiff has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Cardiff buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Cardiff property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Cardiff itself, first time buyers have borrowed more than £219.1m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Cardiff economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Cardiff market, at this moment in time there are an impressive 2,517 properties for sale, (so lots of choice). All this will be welcome news amongst Cardiff first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.

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