Harrogate Apartments are 8.3% more affordable than 10 years ago

My research shows that certain types of Harrogate property are more affordable today than before the 2007 credit crunch.

Roll the clock back to 2007 just before the credit crunch hit which saw Harrogate property values plummet like a lead balloon and the Harrogate property market had reached a peak with the prices for Harrogate property hitting the highest level they had ever reached.  Between 2008 and 2010, Harrogate property values lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.

Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that Harrogate property, especially flats/apartments, are now more affordable than they were before the 2008 credit crunch.

Back in 2007, the average value of a Harrogate flat/apartment stood at £224,424 and today, it stands at £264,129, a rise of £39,705 or 17.7%.

However, between 2007 and today, we have experienced inflation (as measured by the Government’s Consumer Price Index) of 25.97% meaning that in real spending power terms Harrogate apartments are 8.3% more affordable than in 2007. Looking at it another way, if the average Harrogate apartment (valued at £224,424 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £282,707 (instead of the current £264,129).

Harrogate property prices

The point I’m trying to get across is that Harrogate property is more affordable than many people think.  Harrogate first time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.

It really comes down to a choice and if Harrogate first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property – they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.

So why aren’t Harrogate 20 somethings buying their own home?

Back in the 1960’s and 1970’s, renting was considered the poor man’s choice in Harrogate (and the rest of the Country) a huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting – meaning that many people find renting a better option and a lifestyle choice.

Saving the 5% deposit means going without many luxuries in life (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit.  Harrogate 20 somethings choose to rent.

There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Harrogate will continue to rise.

Therefore, everyone in Harrogate has a responsibility to ensure that an adequate number of quality Harrogate rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the expectations of Harrogate tenants on the finish and specification of their Harrogate rental property.

I have perceived that in the past, what a tenant wanted from their Harrogate rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.

However, Harrogate tenants’ expectations are becoming more discerning as each year goes by.  I have also noticed the length of time a tenant remains in their Harrogate property is becoming longer (and this was backed up recently by stats from a Government Report), although I have noticed a tendency for many Harrogate landlords not to keep the rental payments at the going market rates  – maybe a topic for a future article for my blog?

The bottom line is this … Harrogate landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their Harrogate rental properties over the next five, ten and twenty years –  e.g. decorating, kitchen and bathroom suites etc etc ..

The present-day and future situation of the Harrogate private rental property market is important, and I frequently liaise with Harrogate buy-to-let investors looking to spread their Harrogate rental-portfolios. I also enjoy meeting and working alongside Harrogate first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.

Notes …

Value of Apartments from ZPG and Land Registry

Inflation from Office of National Statistics

2.57% of Harrogate District is Built on … So Building Plot Dilemma or Not?

Well, the fallout from the recent Budget is still continuing. I was chatting to a couple of movers and shakers from the Harrogate area the other day, when one said, “There isn’t enough land to build all these 300,000 houses Philip Hammond wants to build each year”.

…and if you read the Daily Mail, you would be forgiven for thinking the country was at bursting point … or is it?

It was 60 years ago the first satellite was launched (Sputnik). All the Superpowers have used them to take high definition pictures of each other for decades, but now satellites and their high-powered cameras are being used for more peaceful purposes. The European Environment Agency (EEA) have been taking high definition pictures of the UK from outer-space to give us a focused picture of what every corner of the Country really looks like … and the findings will come as a surprise.

As my blog readers know, I always like to ask the important questions relating to the Harrogate property market. If you are a Harrogate landlord or Harrogate homeowner, this knowledge will enable you to make a more considered opinion on your direction and future in the Harrogate property market. Like every aspect of all economic life, it’s all about supply and demand, because over the last twenty or so years, there has been an imbalance in the British (and Harrogate) housing market, with demand outstripping supply, meaning the average value of a property in Harrogate has risen by 637.56%, taking an average value from £69,800 in 1995 to £284,700 today.

Using the information from the EEA and data crunched by Sheffield University with their Corine-Land Cover project, I posed them a few questions about the local area, interesting questions I would like to share with you…

  1. What proportion of the whole of Harrogate is built on?

2.57%

That surprised you, didn’t it! In the study, land classified as ‘urban fabric’ defined has land which has between 50% and 100% of the land surface is built on, (meaning up to a half might be gardens or small parks, but the majority is built on).

  1. How much land is intensively built on locally?

Of that amount mentioned above, how much of it is high-density urban fabric? (i.e. where 80% to 100% is built on – still leaving 20% for gardens) Less than 0.1% – again I bet that surprised you!

  1. So how is the land used locally?

Industry 0.34%

Sports Facilities 1.51%

Arable Land 31.78%

Pastures 37.91%

…the rest being made up of various other minor types such as forests and waterways, etc.

Harrogate and the surrounding areas are greener than you think! In fact, I read that property covers less of the UK than the land revealed when the tide goes out. The assumption that vast bands of our local area have been concreted over doesn’t stand up to inspection. However, the effect of housing undoubtedly spreads beyond its actual footprint, in terms of noise, pollution and roads.

Now I am not suggesting for one second we concrete over every inch of the locality, but the bottom line is we, as a country, are growing at a quicker rate than the households we are building. I appreciate the emotional effect of housing is greater than other land use types because most of us spend the vast majority of our time surrounded by it. As Brits, we live our lives driving along roads, walking on footpaths and working and living in buildings meaning we tend, as a result, to considerably overemphasise how much of it there is.

The bottom line is Harrogate people and the local authorities are going to have to put their weight into building more homes for people to live in. There is going to have to be some give and take on both sides, otherwise house prices will continue to rise exponentially in the future and Harrogate youngsters won’t be able to buy their own Harrogate home, meaning Harrogate rents and demand for private rented accommodation in Harrogate can (and will) also grow exponentially.

Notes

House Price Growth – Land Registry for your local authority

Numbers from Dr Alasdair Rae from the Urban Studies and Planning Department at the University of Sheffield

Harrogate Property Market and Hammond’s Budget Promise to Build 300,000 more homes

 I miss the good old days of George Osborne as Chancellor, with his hardhat and hi-vis jacket. He must have visited every new home building site in the UK with his trademark attire! For the last few years, the nearest Philip Hammond got to donning a ‘Bob the Builder’ outfit was at his grandchild’s birthday party. However, with what appears to be a change in focus by the Tories to ensure they get back in power in 2022, they appear to have fallen in love with house building again with the Chancellor’s promise to create 300,000 new households in a year.

Nationally, the number of new homes created has topped 217,344 in the last year, the highest since the financial crash of 2007/8. Looking closer to home: in total there were 325 ‘net additional dwellings’ in the last 12 months in the Harrogate Borough Council area, a decrease of 27% on the 2010 figure.

The figures show that 66% of this additional housing was down to new build properties. In total, there were 216 new dwellings built over the last year in Harrogate. In addition, there were 112 additional dwellings created from converting commercial or office buildings into residential property and a further 22 dwellings were added as a result of converting houses into flats.

While these all added to the total housing stock in the Harrogate area, there were 25 demolitions to take into account.

 

Net additional dwellings in Harrogate in the last 12 months
New build Conversions Change of use Demolitions Net Additions
216 22 112 -25 325

 

I was encouraged to see some of the new households in the Harrogate area had come from a change of use. The planning laws were changed a few years back so that, in certain circumstances, owners of properties didn’t need planning permission to change office space in to residential use.

With the scarcity of building land available locally (or the builders being very slow to build on what they have, for fear of flooding the market), it was pleasing to see the number of developers that had reutilised vacant office space into residential homes in the local council area. Converting offices and shops to residential use will be vital in helping to solve the Harrogate housing crisis especially, as you can see on the graph, that the level of building has hardly been spectacular over the last seven years!

Now we have had the autumn budget, Theresa May and Philip Hammond have set out their stall with housing as their key focus. I was glad to see the Government introducing a variety of changes to improve housing, including more funding for the supply side and an injection of urgency into the planning system.

The biggest question is, just where are the Government going to build all these new houses? Maybe a topic for a future article?

Back to the main point though and the focus on the housing market by the Tory’s is good news for all homeowners and buy to let landlords, as it will encourage more fluidity in the market in the longer term, sharing the wealth and benefits of homeownership for all. However, in the short term, demand still outstrips supply for homes and that will mean continued upward pressures on rents for tenants.

 NOTES

  • ‘Net additional dwellings’ is the primary and most comprehensive measure of housing supply. The figures are based on local authority estimates of gains and losses of housing in their area during the year.
  • Buildings Numbers from Dept. of Communities and Local Govt (ONS Table 122 and 123)

 

2010 2011 2012 2013 2014 2015 2016 2017
447 254 204 109 163 331 257 325

 

Harrogate Rents Set to Rise to £840 pm in Next 5 Years

It’s now been a good 12/18 months since annual rental price inflation in Harrogate peaked at 2.3%. Since then we have seen increasingly more humble rent increases. In fact, in certain parts of the Harrogate rental market over the autumn, the rental market saw some slight falls in rents. So, could this be the earliest indication that the trend of high rent increases seen over the last few years, may now be starting to buck that trend?

Well, possibly in the short term, but in the coming few years, it is my opinion Harrogate rents will regain their upward trend and continue to increase as demand for Harrogate rental property will outstrip supply, and this is why.

The only counterbalance to that improved rental growth would be to meaningfully increase rental stock (i.e. the number of rental properties in Harrogate). However, because of the Government’s new taxes on landlords being introduced between 2017 and 2021, that means buy-to-let has (and will) be less attractive in the short term for certain types of landlords (meaning less new properties will be bought to let out).

Interestingly, countless market experts assumed at the start of 2017, that the number of rental properties would in fact drop throughout the year. The assumption being as the new tax rules for landlords started to kick in, landlords looked to kick their tenants out, sell up and invest their capital elsewhere. (Although ironically that would lower supply of rental properties, decreasing the supply, meaning rents would increase again!).

Anecdotal evidence suggests, confirmed by my discussions with fellow property, accountancy and banking professionals in Harrogate, that Harrogate landlords are (instead of selling up on masse), actually either (1) re-mortgaging their Harrogate buy-to-let properties instead or (2) converting their rental portfolios into limited companies to side step the new taxation rules.

The sentiment of many Harrogate landlords is that property has always weathered the many stock market crashes and runs in the last 50 years. There is something inheritably understandable about bricks and mortar – compared to the voodoo magic of the stock market and other exotic investment vehicles like debentures and crypto-currency (e.g. BitCoin).

Remarkably, there is some good news for tenants, as Tory’s recently published the draft Tenants’ Fee Bill, which is designed to prohibit the charging of tenants lettings fees on set up of the tenancy. However, looking at evidence in Scotland, I expect rents to rise to compensate landlords, thus hammering faithful tenants looking for long-term tenancy agreements the hardest. This growth will be on top of any usual organic rent growth.  It really is swings and roundabouts!

So, what does this all mean for landlords and tenants in Harrogate? In my considered opinion,

Rents in Harrogate over the next 5 years will rise by 8.9%, taking the average rent for a Harrogate property from £772 per month to £840 per month.

To put all that into perspective though, rents in Harrogate over the last 12 years have risen by 19.4%. In fact, that rise won’t be a straight-line growth either, because I have to take into account the national and local Harrogate economy, demand and supply of rental property, interest rates, Brexit and other external factors. Please see the graph for my projections

Rental graph

In the past, making money from Harrogate buy-to-let property was as easy as falling off a log. But with these new tax rules, new rental regulations and the overall changing dynamics of the Harrogate property market, as a Harrogate landlord, you are going to need work smarter and have every piece of information, advice and opinion to hand on the Harrogate, Regional and National property market’s, to enable you to continue to make money.

One place for that information is the Harrogate Property Market blog https://harrogatehomes.property

 

 

How to Avoid The 10 Most Common House Selling Mistakes Tip No 2 – Photos

Tip No. 2 Photos 

The startling fact is that you can have an amazing property, but if you’ve got terrible photos your home will be left languishing on the market.

Why? Because people like to window shop. If they like the display, they’re drawn in. If not, they walk on by. It’s no different with property.

When somebody searches online they get screens of listings, each showing a small profile picture. This is normally a shot of the front of the house.

If you have a dull, lifeless picture with grey skies, a car blocking the front entrance and a wheelie bin next to the front door…. Well, let’s just say it won’t get people flocking to take a further look. 

2.7 seconds. That is the average amount of time that someone will spend on each house as they skim through the listings. You have only one chance to make a first impression and grab their attention.

Once they’ve clicked onto your listing to look further, now’s your chance to shine! 60% of the decision making process of whether to view a house is based on your photos!

You can have a great house and a brilliant description, but if your photos let you down you’re fighting an uphill battle.

People like to see lots of photos, but not too many. As a guide, you should have a minimum of 6 and a maximum of 15 in landscape format. 

These should include:

  1. Front view (taken at an angle with no obstructions)
  2. Garden Front & Rear
  3. Living Room
  4. Kitchen
  5. Bathroom
  6. Master Bedroom
  7. + Any other great feature room, e.g.bedrooms, dining room, games room,conservatory, fireplace etc.

Here are top tips for taking amazing photos that sell:

  • Make sure the sun is shining when you do your exterior shots
  • Open all curtains and let in lots of natural light for interior shots
  • Clear away any personal items, particularly in kitchens and bathrooms. Nobody wants to see your toothbrush or deodorant!
  • Use a wide angle SLR camera to capture the full width of a room. Anything less will make the room look small
  • Take pictures from the corner of the room
  • Take lots and lots and lots of pictures. You can choose the best ones later.

Supporting St Michael’s Hospice

 

10 things to get right when putting your house on the market – Tip one

Get Your Valuation Right

 – Or You’re Done For! Rightmove statistics show that when a property is listed for sale it gets double the number of enquiries during the first 14 days. This is because it’s new to market and people looking in your area, those who’ve set up search alerts, will instantly cast their eyes over your home. If you use a cheap online agent, without the benefit of local knowledge, you’ve a real risk of your house being undervalued. They’ll brag about getting a quick sale, but this could cost you thousands in lost potential income that will be lost forever. You’ll suffer a similar fate from an over-valuation.

Struggling agents with commission driven sales reps often promise 10 – 15% more than your house is really worth. They know full well that most vendors will drop the price later. This could leave you stuck in your home for many months more than you need to be. Worse still, you may end up having to drastically lower your price to make up for lost ground. You could end up losing thousands compared to the price you could have achieved if you’d marketed your home at the right price on day 1.

We strive to get you a fast sale at the best possible price. Our Branch Managers won’t promise you the earth and fail to deliver. Because they know your local market inside out, you’ll have the benefit of their expert local knowledge and a valuation that you can trust. Not only that, you’ll be given all of our research data, including our exclusive access to recent sales and off market listings. So you can be confident that your valuation is based on real facts and not fiction.

All of which means that when your property is ready for its big debut, you can be sure that it is perfectly positioned to achieve a fast sale at the very best possible price.

How might the ban on Letting Agent Fees affect Landlords and Tenants?

Tom Lawrence, Branch Director at EweMove.com

The ban on letting agent fees is a hot topic among Landlords and Letting agents at the moment, as no-one really knows yet what the impact will be.

What we do know is that some Letting agents make up to as much as 40% of their income from charging tenants fees, and the average is around 18-20%

With such an impact the only option some lettings agents will have is to charge Landlords more, who may then pass that back to tenants through increased rents. Not an ideal outcome and ‘back to square one’ some might argue.

This is a big issue for all concerned.

Except that is, the Landlords of Ewemove and our tenants.

Ever since launch we have not charged tenants a fee to apply for a rental property or any fees throughout their tenancy, yet still manage to charge a fair fee, for the work we do in finding tenants, to the Landlord.

What does this mean in practice? It means that due to the way we fairly treat tenants at both the start of a tenancy and throughout their tenancy, we achieve an average of 50 months for every tenancy we manage, which means we have happy Tenants and happy Landlords, who are not losing money through void periods and additional tenant find costs.

For the Landlord, recommendations speak for themselves, and our growing portfolio of rental properties and Landlords have almost all come from other landlords recommending our services. A fantastic accolade in itself.

There is a way to avoid the fear and uncertainty of the proposed regulations to ban Letting agents charging tenants fees.

Have your properties managed by Ewemove Harrogate, Ripon & Boroughbridge!

We’re always happy to provide any help or advice to any current or prospective Landlord.

If you’d like a copy of our 99 Tips for Letting Property, just get in touch at harrogate@ewemove.com or call 01423 606506.