Local property market information for the serious investor

Category: Property market research

Where will Cardiff Property Prices be by 2021?

cardiff bay

I was having lunch the other day with a local Cardiff solicitor friend of mine, when the subject of property came up. He asked me my thoughts on the Cardiff property market for the next five years.  Property prices are both a British national obsession and a key driver of the British consumer economy.  So what will happen next in the property market? So here is what I told him, and now wish, my blog reading friends, to share with you.

Before I can predict what will happen over the next five years to Cardiff house prices, firstly I need to look at what has happened over the last five years.  One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth – key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy to let landlords have an appetite to continue purchasing buy to let property.

When the Tory’s came to power in May 2010, the total number of people who were unemployed in Cardiff stood at 2,458 (or 5.32% of the working age population in Cardiff parliamentary constituency). Last month, this had dropped to 1,440 people (or 3.05% of the working age population).

As the Cardiff job market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).  That is why, even with the turbulence of the last few years, property values in the Cardiff area are 10.63% higher today than they were five years ago.

Many home occupiers have held back moving house over the past seven to eight years following the credit crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market. With a more stable economy in the City, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Cardiff.

I forecast that the value of the average home in Cardiff will increase by 16.2% by 2021

16.2% might sound optimistic to some, but according to Land Registry, values are currently rising in Cardiff at 2.8% year on year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole.

However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Cardiff housing market.  The number of properties for sale in Cardiff is lower than it was five years ago, restricting choice for buyers (yet the other side of the coin is that that keeps prices higher). Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy to let taxation rules which are being introduced between 2017 and 2021 (although choosing the right sort of property / portfolio mix in Cardiff will, I believe, mitigate those issues with the next taxation rules).

I am telling the landlords I speak to, that with interest rates at their current level 0.5%, the cash in your Building Society Passbook is going to grow so slowly that it might as well be kept under their bed. Property prices, by contrast, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation.

So my final thought …  property is a long term investment, it has its’ up and downs, but it has always outperformed, in the long term, most investments. Those in their 40’s and 50’s in Cardiff would be mad not to include property in their long term financial calculations. Just make sure you buy the right property, at the price in the right location.

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Will the young people of Cardiff Bay ever own their own home?

I had the most interesting chat with a mature couple (in their early/mid 50’s) from Llandough the other day, whilst viewing one of our rental properties. The property wasn’t for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that isn’t the norm, but in this case the parents were going to act as guarantor. We got chatting about the Cardiff Bay property market and how they had bought their first property in the area just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the highlights of that conversation with you today.

Their son, like many 20 to 30 year olds in Cardiff Bay, desperately wants to own his own property and the parents said he had read in the Telegraph recently, when you compare house prices to earnings, the current 20 to 30 something’s generation have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Cardiff Bay is huge. There are in fact 30,042 private rental properties in Cardiff Bay at the last count, impressive when you consider there are 13,354 council houses in the area. However, let us not forget 80,965 properties are owner occupied (44,069 with a mortgage).

Let us all be honest, private renting doesn’t have the stigma it had a few decades ago and it might surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.

Looking at the affordability issue, I have proved time and time again, it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years and whilst you could certainly find better properties in better condition in better areas, terraced houses can be bought for as little as the mid £130,000’s in the Ferry Road area of Cardiff Bay (meaning a modest deposit of £6,500 would be required).

When it came to affordability, I was able to tell them that when they bought their first house in Cardiff Bay in 1988, the ratio of house prices to salary was 4.26 to 1 in Cardiff Bay … and here was the surprise for both of us, today’s ratio is only 4.87 to 1!

I said I believed there had been a cultural attitude change towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit was everything and buying a house was everything. Youngsters today have far much more disposal income today than people had in the Callaghan and Thatcher years, but choose to spend it upgrading their mobile phones every 12 months, the newest tablet or PC, a newest 50” plasma LCD TV and two sun drenched holidays a year, than go without and save for a deposit.

Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they couldn’t ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low … but now it’s the norm.

So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at c.£6,500 in Cardiff Bay as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.

Hence, I cannot see the demand for decent, high quality rental properties ever dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure you by the right property, at the price, in the right location.

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Doom and Gloom for Cardiff Bay Property Market?

Doom and Gloom for Cardiff Bay Property Market?

One of my landlords rang me last week from Cardiff Pointe, after he had spoken to a friend of his. They were discussing the Cardiff Bay property market and neither of them could make their mind up if it was time to either sell or buy property. If you read the newspapers and the landlord forums on the internet, there is a good slice of doom and gloom, especially with changes in the taxation towards landlords, the new rent smart wales legislation and the general uncertainty in the world economic situation.


I would admit, there are certain landlords in Cardiff Bay who have over exposed themselves in the last few years with high percentage loan to value mortgages. Those mortgages, with their current (yet artificially low) interest rates, will start to suffer, as their modest monthly positive cash flow/profit, i.e. income (rent) less costs (mortgage, fees, tax), will become negative when the tax and mortgage rates rise throughout 2017 and beyond.


It appears to me these landlords seem to have treated the Cardiff Bay Buy to Let market as a sure bet and have not approached this as a business and, as a result, they will suffer as they thought “Buy a house – rent it out so it covers the mortgage and make a few quid on top”.  These are the people who will be thinking twice. I see opportunity everywhere and won’t be stopping, I’m here to stay. It’s going to be an exciting new year.


Gone are the days when you could buy any old house in Cardiff Bay and it would make money.  Yes, in the past, anything in Cardiff Bay that had four walls and a roof would make you money because since WW2, property prices doubled every seven years years… it was like printing money – but not anymore.


True, since January 1997, the average price paid for a flat/apartment in the CF10 area has risen from £53,445 to today’s current average of £152,480 in the town, an impressive rise of 185% and terraced/town house have risen in the same time frame, from £58,280 to £192,250, an even better rise of 230%. However, look back to 2005, and in that year, the average flat was selling for £183,763, meaning our Cardiff Bay landlord would have seen a drop of 17% and the terraced owner would have seen a drop of 7%, as they were selling for on average £206,667 … which isn’t good for people who bought in 2005, but it gets even worse when you take into inflation.


Since 2005, then inflation, i.e. the cost of living, has increased by 33.4%. That means to retain its value, Cardiff Bay terraced property bought for £206,667 in 2005 needs to be worth £275,628 today. Therefore, our landlord has seen the ‘real’ value of his property drop by 40.4% (i.e. -7% less 33.4% inflation).


The reality is, since around the early 2000’s, we haven’t seen anything like the capital growth in property we have seen in the later decades of the 20th Century and it’s not predicted to grow at the rates it has previously done either. So it is high time anyone considering investing in property stopped believing the hype and did some serious research using independent investment expertise. You can still make money by buying the right Cardiff Bay property at the right price and finding the right tenant. Think about it, properties in real terms are 40.4% lower than ten years ago, so investing in Cardiff Bay property is not only about the potential capital growth, but also about the yield (the return from the rent). It’s also about having a balanced property portfolio that will match what you want from your investment.

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Buy to let Advice – Freehold v Leasehold

Hi Everyone! You might remember a few weeks ago I wrote a blog about whether to buy a freehold property in the Cardiff Suburbs or a leasehold property in Cardiff Bay. Well earlier this week I had just finished a valuation in one of the Cardiff Bay apartment blocks and seeing as it was such a nice day I thought I would do a quick vlog on the topic.

As always feel free to contact me for advice if you are looking to buy in Cardiff Bay I am always happy to help and will give you my honest opinion You can email me at kategwinnutt@northwooduk.com or call me on 02920 301141.

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Doom and Gloom for Cardiff Bay Property Market?

Doom and Gloom for Cardiff Bay Property Market?

One of my landlords rang me last week from Cardiff Pointe, after he had spoken to a friend of his. Over Christmas, they were discussing the Cardiff Bay property market and neither of them could make their mind up if it was time to either sell or buy property.

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Landlords! Are you aware of Rent Smart Wales?

rent smart wales

Hi Everyone! A few landlords have recently been asking me for some information on the new Welsh Legislation called Rent Smart Wales so I have done a quick video with a brief guide.

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Cardiff Bay Buy to Let – Freehold or Leasehold Flat?

cardiff bay property

Well my Cardiff Bay Property Blog reading friends, I to wish to answer a question emailed into me from a potential Cardiff Bay landlord last week. Nice chap, lives in Lisvane, and it turns out, after having a coffee with him, he works in IT, has a spare bit of cash (now the kids have flown the nest) and wanted to buy his first buy to let property.

His main question was … Do I buy a freehold house in the Cardiff Suburbs or a leasehold flat in Cardiff Bay?

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Cardiff vs Newport – Clash of the Property Market Titans

Many landlords have been asking me my thoughts on the Cardiff property market recently, and in particular, what is happening to property values. My calculations show property values in Cardiff quite interestingly grew in the month of September by 0.2%. When one looks at the annual growth, Cardiff values are 3.7% higher (when comparing Sept 14 to Sept 15). However, there are signs that the fundamental growth of property values in Cardiff has now peaked, despite those average property values being below levels recorded in 2007 (just before the 2008 crash).

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