Local property market information for the serious investor

Category: Property deals

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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2 Bed Maisonette in Canton

Hi Everyone,

I hope you are all tucked away from storm Doris today!

On my daily browse on Zoopla this morning this lovely 2 bed maisonette in Canton attracted my attention. It looks in a great condition and could make an easy rental that is ready for tenants to move in to straight away. Located in the heart of Canton it is close to the local amenities of Cowbridge Road.

The other thing I like about this property is that it has an allocaed parking space which is within the gated development. It has just come on the market with Allen and Harris for £135,000 which seems like a fair price to me!

http://www.zoopla.co.uk/for-sale/details/43051991

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With 7,012 people in Private Rented Properties in Cardiff Bay – Should you still be investing in Cardiff Bay Buy To Let?

If I were a buy to let landlord in Cardiff Bay today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Cardiff Bay property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Cardiff Bay property prices do drop, the downside to that is that first time buyers could be attracted back into the Cardiff Bay property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Cardiff Bay landlord, almost a blessing in disguise.

Cardiff Bay has a population of 13,464, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …

Cardiff Bay – Accommodation Type and the Number of Occupiers
Owned outright – Cardiff Bay Owned with a mortgage – Cardiff Bay Shared ownership (part owned and part rented) – Cardiff Bay Social rented (aka Council Housing) –  Cardiff Bay Private rented – Cardiff Bay Living rent free – Cardiff Bay
1,131 2,329 109 2,602 7,012 281
8.4% 17.3% 0.8% 19.3% 52.1% 2.1%

Yields will rise if Cardiff Bay property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Cardiff Bay landlords add to their portfolio. Rental demand in Cardiff Bay is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Cardiff Bay landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Cardiff Bay and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as a 40 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 52.1% of Cardiff Bay people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Cardiff Bay – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

 

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Two bed in St Mellons with driveway parking

Morning All!

This one caught my attention this morning and might make you a lovely investment. Yes it is on the outskirts of Cardiff but is still a very popular area particularly as it is just minutes from away from the A48 and is easily accessible to both Newport and Cardiff.

It has just come on the market with Allen and Harris for £145,000, now this does seem a little high for 2 beds in the area but the property looks in good condition and has a large rear garden and driveway parking.

I think you could easily achieve a market rent in the region of £650 so based on the current asking price you would be looking at a yield of just over 5%

http://www.zoopla.co.uk/for-sale/details/42870813

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Two bed in the heart of Cardiff City

It’s all about location,location, location with this property!

Located in the heart of the city centre I think this will make a great investment as it is very popular with prospective tenants. The added bonus with this block is that it evens come with an allocated parking space! There are two decent sized bedrooms and an ensuite so would appeal to sharers as well as a couple.

It has just come on the market at a very fair price of £180,000 with Peter Alan and so I think you need to act quickly if you want a chance of snapping this up.

http://www.zoopla.co.uk/for-sale/details/42871553

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£5m a year black hole in the Cardiff Property Market – Is Buy to Let Immoral? (Part 2)

An Englishman’s Home is His Castle as Maggie Thatcher lauded – everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Cardiff Bay buy to let properties as an investment. Cardiff Bay first time buyers were in competition with Cardiff Bay landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Cardiff Bay landlords fanning the flames of the Cardiff Bay housing crisis bonfire?

I believe that the landlords of the 3,741 Cardiff Bay rental properties are not exploitive and are in fact, making many positive contributions to Cardiff Bay and the people of Cardiff Bay. Like I have said before, Cardiff Bay (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Cardiff Bay …

For Cardiff Bay to meet its obligation on the building of new homes, Cardiff Bay would need to build 63 households each year. Yet, we are missing that figure by around 26 households a year.

For the Government to buy the land and build those additional 26 households, it would need to spend £5,118,929 a year in Cardiff Bay alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Cardiff Bay families or Cardiff Bay people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.

So only you, the reader, can decide if buy to let is immoral, but first let me ask this question – if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

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Spacious One bed in Celestia Development

This one bed in the Celestia Development caught my eye this morning and looks like a ready made investment. The property looks in a good condition and is a generous size for a one bedroom apartment so would attract both a single person and a couple. The development is located close to Mermaid Quay while also within walking distance to the City centre so will suit the city workers that love the lifestyle the Bay has to offer.

You should be achieving a market rent in the region of around £650pcm so based on the asking price of £120,000 which will give you a yield of 6.5% – definitely something to consider. It is on the market with Taylors and would be worth a look.

http://www.zoopla.co.uk/for-sale/details/42725373

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