Lincoln Property Market

What will the stamp duty cuts & interest rate rises mean for Lincoln homeowners & landlords?

Last week the Bank of England increased interest rates to 2.25% and they are expected to be 3.25% by early next year. This increase will make the monthly mortgage payments more expensive for first-time buyers, an issue dubbed by some as the ‘property affordability crunch.’

It will also damage the household budgets of homeowners coming off their fixed-rate mortgages in the next 12 months.

So how many homeowners are coming off their fixed rates in the next year?

Of the 7.97 million homeowners with a mortgage in the UK, 6.1 million of them are on a fixed-rate mortgage at an average rate of 2.04%. Industry statistics show around 1.3 million homeowners are coming off their fixed rate in the next 12 months.

The current crop of fixed-rate mortgage deals available today have already had the recent increase in the base rate ‘priced-in’ for weeks.

The cheapest 5-year fixed rate today for a 65% Loan to Value re-mortgage (i.e. you are borrowing 65% of the value of your home) is a mortgage rate of 3.8% with Royal Bank of Scotland (RBS).

So, what will be the difference in mortgage payments between a 2.04% mortgage and a 3.8% mortgage?

Say an average Lincoln first-time buyer bought their first home in November 2019 on a 25-year mortgage. They had a 3-year fixed-rate mortgage, and let’s assume they fixed it at 2.04% (as mentioned above), meaning their fixed-rate deal finishes next month. They have £260,000 outstanding on their mortgage, and their Lincoln house is worth £400,000. They would have been paying £1,107 per month for the last three years (assuming they took out a 25-year repayment mortgage).

On the RBS deal above, they will have to start paying £1,548 per month from November when they come off their initial rate – a rise of £441 per month in mortgage payments. That’s quite a rise and potential blow to their household budgets.

Yet if they pushed back the repayment term from 22 years to, say, 35 years, that reduces the payment to £1,120 per month – something to consider if you are re-mortgaging in the coming 12 months.

What will the stamp duty changes mean for Lincoln property owners?

PM Liz Truss and Chancellor Kwasi Kwarteng believe that cutting stamp duty will support economic growth by encouraging more people to move home or jump onto the property ladder.

Stamp duty also has other harmful side effects as it decreases labour market elasticity and curtails people from selling up and buying elsewhere, where the jobs are.

Also, stamp duty makes mature homeowners stay put in their large homes rather than downsizing. This reduction in stamp duty will encourage those mature homeowners to move, thus freeing up their large family homes for the younger families that need them.

The Chancellor doubled the zero-rate stamp duty band from £125,000 to £250,000, passing a stamp duty tax saving of up to £2,500 for all English homebuyers.

Also, tax savings are even more significant for first-time buyers, particularly in areas with high house prices, such as London and the Southeast. They can save a maximum of £11,250 in stamp duty – with a new zero-rate band of £425,000, based on a higher £625,000 spend cap (i.e. the house they buy can’t be over £625,000 for them to qualify for the tax relief).

So, what effect will these stamp duty changes have on the Lincoln property market? Looking at recent events in the local property market is the best place to start.

Of the 4,531 transactions in the Lincoln area since June 2021, 3,028 were below £250,000. These would now be tax-free!

Unsurprisingly, most housing transactions in Lincoln were below the £250,000 threshold, yet irrespective of that point, it’s a saving of up to £2,500 for all future Lincoln homebuyers.

Anyone currently buying a house in Lincoln and not yet completed on their purchase (completion is when you have paid the money for your home and collected the keys) will be in line to make this saving.

Lincoln landlords purchasing buy-to-let properties will also save money with the stamp duty cut (but they will still be liable for their second home stamp duty levy of 3%).

Overall, this is a welcome move to help the Lincoln property market.

Yet will the stamp duty threshold rise have the seismic effect that the Rishi Sunak stamp duty holiday did in 2021, where just under 40% more people moved home than the long-term 30-year average?

I am sure the stamp duty cut will somewhat offset the cost of rising mortgage rates mentioned in this article and cushion the blow to the property market.

A blow to what you might ask?

Well, many people judge the property market’s health by house prices.

The average value of a Lincoln property stands at £247,179 and has risen 24.2% in the last five years. Not bad, eh?

But I believe there is a better way to judge the health of the local property market, and that is the number of people moving home (i.e. housing transactions).

You might be asking yourself why we should be more concerned about the number of property transactions and not the change in property values.

Many economists believe the number of property transactions is a far more accurate bellwether for the health and potency of the local housing market. A greater number of people moving home is better for the whole economy (i.e. what these changes are being made for) than a smaller number of transactions, whilst the same can’t be said for higher house prices. 

So what is going to happen to Lincoln house prices?

I believe the growth in Lincoln house prices achieved in 2021/22 is not sustainable into 2023.

In conjunction with the price cap on energy bills, the stamp duty change, the reversal of the rise in National Insurance and the drop in Income Tax will mitigate house price drops. Yet, I foresee a ‘slight’ realignment in the house prices being achieved in 2023, compared to 2022.

The more significant impact these changes will have is the number of people moving home in the next 12 months.

I have been forecasting a 15% to 20% year-on-year drop in Lincoln property transactions in 2023. Following this stamp duty cut and the measures mentioned above, I believe it will be lower, yet around 5% lower.

To conclude, I predict we will have slightly lower house prices and fewer people moving home in Lincoln, but not any way a crash that many thought was on the horizon.

Before I go though, let me share some thoughts on whether stamp duty is a fair tax.

Now, this is almost a topic for a standalone article itself. Some economists believe that removing stamp duty (which raised £14.1bn in tax in 2021) and replacing that lost income to the Exchequer by increasing council tax on more expensive properties would do a lot more than other intended tax cuts to boost economic growth.

According to some commentators, the way UK Government taxes housing is flawed. They suggest instead of taxing an infrequent property transaction particularly harshly (the average stamp duty bill is £10,600), the Government should tax living in a house more, especially those who live in the higher priced properties.

So let us see how viable that could be …

Even if council tax was frozen for bands A to D (the lower priced properties), and the uplift between the more expensive council tax bands was doubled on each step between band D and H (so a typical band E property owner would see their council tax rise from £2,473 to £3,628 per year and a typical band H see a rise of from £3,435 per year to £5,790 per year), such massive increases in council tax would be political suicide for the wealthy Tory voting homeowners and only raise £5.28bn – a long way from the £14.1bn currently raised.

Now, if the £14.1bn tax raise were spread evenly over all council tax bands, the average band D property would need to rise by £490 per year, and even a band A would increase by an extra £382 a year … something that again would be political suicide.

Yes, stamp duty is flawed. It’s just every other option has more significant flaws.

Anyway, these are just my thoughts. Tell me, people of Lincoln, what are your thoughts on the Budget, the stamp duty changes or whether stamp duty is fit for purpose and what you would do if you were the Chancellor to bolster the British property market?

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Lincoln OAPs are Getting Jobs and Downsizing Properties to Beat the Cost-of-Living Crisis.

Lincoln OAP retirees have to make tough choices with the onset of the cost-of-living crisis.

Growing inflation, unpredictable financial markets and the high cost of living mean many former retired Lincoln people are returning to work in what has been dubbed the ‘great unretirement’. Some are even bringing forward their downsizing house move.

Looking at the changing job market, July saw the most significant month-on-month rise in OAPs working since records began in the 1990s when 1 in 23 of all the UK’s OAPs went back into employment.

That now means …

 1,753 Lincoln over 65s are in gainful employment (i.e. 1 in 8 of them).

As a backdrop, the number of working 65-year-olds and above has been increasing since the mid-nineties when 753 Lincoln OAPs were employed. Yet, July’s figures were the largest monthly jump on record by quite a distance.

Looking at the changing property market, I have been speaking to many Lincoln OAP homeowners who are having to bring their downsizing plans forward several years to survive the cost-of-living crisis. The money generated from the downsizing will cover their housekeeping and massive energy bills.

So why would someone want to downsize? Mostly, their homes are too big for their needs as their children have flown the nest decades before. The government classifies a property as under-occupied if it has two or more spare bedrooms.

How big is the under-occupation issue in the UK?

Of the 4.52 million British homes owned by those aged 65 and over, 3.04 million have at least two spare bedrooms (i.e. under-occupied). Looking locally …

6,146 of the 12,571 Lincoln OAPs have two or more

spare bedrooms.

You might ask why this is important.

Well, to start, it’s holding back Lincoln families that need the bedrooms and space these larger houses offer if the older occupants won’t move on. Also, these larger homes cost more to run in terms of energy bills and other things such as building insurance and council tax.

From October, (even with the recent energy bill cap) it will cost on average £354 per month in gas and electricity alone for a large Lincoln 4-bed detached home (where occupants are home all day).

So, why are there so many mature homeowners in their 70s, 80s and even 90s still living in houses that are too large for their day-to-day requirements? There are several reasons for this. One is the obvious emotional attachment to the family home they have often owned since the 1970s and 1980s. The second is to escape the hassle and costs of the house move, and finally, the small number of suitable Lincoln properties for them to buy to attract them to make a move.

The growing energy bills have provoked many of those mature Lincoln homeowners who maybe can’t or do not wish to get a job to re-evaluate their home life strategy. I am seeing an ever-increasing number of mature Lincoln homeowners downsizing (or, as I prefer, rightsizing) to diminish their monthly expenditures.

So how much could mature Lincoln homeowners gain by downsizing?

The numbers are intriguing when looking at the average difference between the sale price and the subsequent purchase price of the average downsizer.

Lincoln downsizers could unlock an average of

£69,600 per household.

Not only will Lincoln homeowners earn this lump of cash for their extended retirement, but they will also save themselves around £171 per month in lower energy bills, buildings insurance and council tax bills.

So, what are the options for mature Lincoln homeowners?

Waiting 12 months to make a move might mean you are putting your Lincoln home on the market as every other OAP homeowner puts their home on the market, meaning the dynamics of the local property market will probably be a lot different. Thus, the equity you release on the downsize could be much lower.

Yet some of you will be worried about finding your next home. Not to worry.

At our agency, we do things differently than many other Lincoln estate agents. We can find you a buyer, then put everything on ice and go and find you a property to buy. We guarantee you won’t be made homeless if you or we can’t find another home for you to move to.

We call it peace of mind! If you would like a chat about this, without any obligation, feel free to call Joanne on 01522 512 513.

Lincoln Tenants’ Spiralling Energy Bills are About to Become Lincoln Landlords’ Problem

As gas and electric bills rocket for Lincoln tenants, Lincoln landlords who do not start to make energy efficiency upgrades face lengthy void periods and will have to discount their rents. This is irrespective of the Government’s plans to change the rules on renting properties with low Energy Performance Certificate (EPC) ratings.

Until six months ago, out of the thousands of tenants I have shown around Lincoln properties in all my years as an agent, I can count the number of tenants who have requested to see the EPC of the rental property on one hand. Now, it’s the first question tenants ask.

The better the EPC rating, the lower the gas and electric bills.

Lincoln tenants are leaving their poor EPC-rated properties which are too expensive to run and moving into higher-rated EPC rental properties.

The average heating bill for the 8,881 Lincoln tenants will rise from £76.40 per month to £198.64 per month.

And their hot water bill will rise by £33.61 per month and lighting by £24.42 per month.

Each Lincoln tenant will have to find an extra £180.26 per month for their gas and electric bills.

To give you an idea of the extent of the money being spent by Lincoln tenants on heating alone (ignoring hot water or lighting), last year it was £8,142,011.90, and by 2023, it will be £21,169,230.95 a year.

Yet these stats don’t tell the whole story.

It is a legal requirement for every rented property to have an EPC which rates a property on its energy performance (like those washing machine or fridge ratings, albeit for a property). A is the best rating, and G is the worst.

Whilst the law states property cannot be rented with an EPC rating lower than an E in England and Wales, there are exceptions to this, meaning Lincoln rental properties are still being let legally with an F and G rating. Although legislation for a minimum E rating EPC requirement in Scotland was scheduled in 2020, it never passed through the Scottish Parliament because of the pandemic. 

Let me show you the average saving in energy bills between the EPC rating of an average Lincoln rental property.

  • A Lincoln rental property with a D rating will cost £38.50 more per month than a C-rated property
  • A Lincoln rental property with an E rating will cost £67.66 more per month than a D-rated property
  • A Lincoln rental property with an F rating will cost £97.16 more per month than an E-rated property

Both Westminster and Holyrood governments now propose introducing a minimum EPC of band C for all new tenancies from 2025 (and 2028 for existing tenancies).

Irrespective of this new potential legislation, those Lincoln landlords with low EPC ratings will now need to seriously consider making those energy efficiency upgrades to ensure their Lincoln rental properties continue to appeal to tenants.

I can see Lincoln rental property’s energy efficiency ratings filtering into rental prices over the winter months.

Lincoln rental properties with low EPC ratings will probably rent for between 4% to 10% less than higher energy proficient properties.

This means Lincoln landlords could have to accept between £30.68 and £76.70 per month less for an average Lincoln property with a low EPC rating compared to a high-rated EPC rental property.

Any Lincoln rental property with a lower EPC rating will also take longer to find a tenant, especially during the winter. This means some Lincoln landlords will have the prospect of void periods early next year.

I have seen more Lincoln rental properties coming onto the market in July and August, so if this trend continues, this will give Lincoln tenants much more choice. With the increased supply of rental properties, I certainly believe some tenants could decide to offer less on Lincoln rental properties with low EPC ratings.

So, what are the options?

I am experienced in reading EPC reports and aware of the most cost-effective way to improve the EPC rating of your Lincoln rental property. Irrespective of whether you are a landlord client of my agency, another Lincoln lettings agency, or you even manage your property yourself – feel free to drop me a message. I will find your EPC on my database and give you 5/10 minutes of my time, over the phone, at no charge, to guide you on the best options. What do you have to lose?

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Why Aren’t Liz and Rishi Courting Lincoln’s Generation Rent?

With the cost-of-living crisis beginning to hit, the 20 and 30-somethings of Lincoln urgently need the help and support of the Government to help them get on the property ladder.

For the last few weeks, we have listened to the debates and hustings of Liz and Rishi. Between them, they have told us how they are going to stop building on the green belt, slash taxes, outbid each other on the number of refugees they are going to deport and push back against WOKE culture wars, but what are they doing for the 20 to 30-somethings of Lincoln?

Dubbed ‘Generation Rent’ by the press, desperate to get on the property ladder, this is an open goal for any candidate to obtain more votes to become the next Prime Minister.

Yet only 16% of the c.200,000 Tory membership is aged 18 to 34 whilst 47% of members are aged between 55 and 74.

Therefore, it’s not a surprise that neither Liz nor Rishi aren’t speaking daily about the cost of petrol for the daily commute, rising childcare fees or the lack of opportunities for first-time buyers to purchase their own properties.

(For balance, 16% of Labour’s members are 18 to 34, 20% for the Lib Dems and 16% for the SNP).

Everyone is feeling the effect on their household budgets with the rise in energy bills. Yet, it is the younger generation (i.e., Generation Rent) that are having to cope with the frenzy of rising energy costs the most.

Whilst increasing energy prices will affect all households across the country, younger (and less affluent) households are more prone to be disproportionately affected than those on the lowest incomes (i.e., Generation Rent).

In the financial year ending in 2020, the least well off 25% of households spent 5.59% on energy compared to 3.9% for the average UK household. With 2023 energy bills set to be triple those figures, energy bills for those in the lower quartile will rise to around 16.8% of their household budget.

And let’s look at the housing element of the ‘Generation Rent’ household budget.

The average rental of a Lincoln property in the summer of 2020 was £596 PCM; by the summer of 2021, it was £651 PCM, and today, it is £697 PCM.

Overall, Lincoln rents are 7.1% higher than a year ago and 16.9% higher than two years ago.

This is the fastest annual rate of rental growth since records began in 2006. This increase in rents isn’t standard. Before 2020, I would have expected to see this level of rent growth over a seven-to-ten-year period – not two years. Good news for Lincoln landlords, yet not so for Lincoln tenants.

Why have rents increased so much in Lincoln?

It comes down to fewer rental properties and existing Lincoln tenants not moving as much.

There are 603 fewer rental properties in Lincoln than five years ago, leaving only 10,702 private rental properties in Lincoln.

9 out of 10 rentals come onto the market because the existing tenant is moving. Yet, because there are fewer Lincoln rental properties and the asking rents for those are much higher than their current home, many Lincoln tenants are not moving, exasperating the issue even further.

Today, I looked on Rightmove, and there were only 511 properties available to rent. I would have expected that to be over double that pre-pandemic.

Neither candidate has been silent on the topic of homeownership for the young.

Rishi Sunak said he would stop building on the greenbelt. This, however, would not help Generation Rent massively.

Liz Truss has pledged to help more renters buy their first home by stating she will ensure tenant’s rental payments could be used as part of mortgage affordability assessments. This is important as the mortgage payments can be 10% to 20% lower than the rental payments.

Tied in with new relaxed mortgage affordability rules announced by the Bank of England in early August, this is undoubtedly a step in the right direction to help Generation Rent.

Truss also plans to scrap the red tape holding back housebuilding and give local populations more say on developments. However, when Boris Johnson suggested something similar a few years ago, the policy was quietly dropped after the Liberal Democrats used this against them resulting in the Tory’s resounding by-election defeat in 2021 in Chesham and Amersham.

So, by the end of the first week of September, we will know who the Prime Minister will be. Whoever gets the job has a gigantic task on their hands. I wish them luck and ask them not to forget the younger generation and their aspiration to be homeowners.

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What’s the Difference Between a Flat and an Apartment in Lincoln?

  • “An apartment is over £100 grand and a flat under”, said my friend.
  • All joking aside, there is no difference, call it what you will, the humble apartment/flat has served Lincoln well over the years.
  • The average sale price of an apartment in Lincoln in 2021 was £156,280, making it an excellent first-time buyer purchase and buy-to-let investment.
  • In this article, I want to look at the apartment/flat in Lincoln and how it could solve the county’s housing crisis.

The word ‘Apartment’ derives from the French word ‘Appartement’, which comes from the Italian form of the word, ‘Appartamento’. The core of that Italian word ‘appartare’ means ‘to separate’, as in ‘separate a building’.

The word comes from Roman times when housing costs were so expensive within the city walls of Rome. Savvy property owners split (or separated) their houses into what we know as apartments or flats today.

The word flat is derived from the Old Scottish/Old English word ‘flet’. The flet is the interior of the home. Some also think the phrase stuck as most flats are on one floor, and so by definition, the accommodation is on the flat (i.e., no stairs inside).

The country has an enduring housing shortage. Not enough homes are being built, and even though the Government is aspiring to build 300,000 new homes annually to match demand and keep costs of housing affordable, less than 250,000 were built in 2019, the best rate in the last decade.

And that is why some say the simple solution to Britain’s housing problem is building more apartments/flats.

The British population has been growing by more than half a million every year for the last twenty years. Yet just over 175,000 homes have been built annually.

One solution is building more apartments – and on the face of it, the facts stack up as they are cheaper to heat, the views are often unique, and they use less land.

To look at what we do as a country with our apartments, it’s important to look at Europe to see how they live so that we can compare the percentages of flats/apartments lived in –

  • Spain 66.1%
  • Switzerland 63.1%
  • Greece 59.2%
  • Germany 56.3%
  • Italy 53.1%
  • EU average 46.2%
  • Sweden 46.7%
  • France 34.0%
  • The United Kingdom 14.8%

Quite a stark difference, isn’t it!

Now let’s look at Lincoln itself.

Of the 45,251 households in Lincoln,
19.3% of them (8,734) are apartments / flats.

Even though only 1.2% of the country has residential property built on it (and an additional 3.5% are gardens), building houses is low-density land use. Is it sustainable in the long term to continue to build that way in Britain, a country with a similar population to France yet having less than half its landmass?

If we continue to build just over 5 in 6 new households as houses, surely eventually, the precious green belt around our towns and cities will have to go. And I know many of you will say use brownfield sites. Of course, there are brownfield sites, yet …

in the whole of the Lincoln City area, there are only 14 brownfield sites, totalling only 51.3 acres, which would only provide 938 houses – so not many!

The country needs a decent supply of homes for its growing and ageing population. Many of you will frown when it has been suggested, even if it’s for environmental reasons alone, most of these should be apartments/flats.

Don’t get me wrong, the love/hate relationship with the apartment/flat and the British is well-founded. Many apartments/flats in Britain are not suitable for happy family living. The high-rise ghetto council blocks built in the 1960s didn’t help with their poor communal areas, lack of maintenance and lifts that didn’t work.

Why do so many more Europeans live in apartments?

In mainland Europe, the apartments are larger. For example, in Germany, they are 974 sq. ft: in Denmark, they are 1,452 sq. ft: in the UK, they are only 793 sq. ft: Also, European apartment/flat owners have more storage areas, higher ceilings, and better communal areas.

It is a vicious cycle. Poorly made small apartments make families side-step them, which makes new home builders construct apartments unsuitable for families, which means the situation worsens. This results in the British property market trying to expand our towns and cities outwards into the countryside with houses, rather than upwards into the sky.

I am not suggesting 20-storey high-rise tower blocks in Lincoln for one second. Looking deeper into the information from Europe, most people live in low-rise three and four-storey purpose-built apartment blocks.

To begin with, these new apartments/flats need to be justly desirable for Lincoln families and be seen as such by the local population. The building materials used, communal spaces, the building’s functionality, and design specifications must not only meet but exceed current building specs on houses, or planning permission should withhold.

The Government could incentivise builders to build apartments/flats instead of houses to improve the supply of quality apartments/flats with tax breaks?  

Things will take decades to change, yet I thought it was appropriate to discuss the matter in such an environment as this.

These are my thoughts, what are yours?

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Lincoln’s ‘Generation Stuck’ and Their £2,883m Tied-up Equity

The predicament of the Lincoln 20 to 30 year olds who rent and their inability to get onto the housing ladder is often discussed in the press.

There are 4.43m properties in the UK that are still in the private rented sector (compared to 2.13m in 2002).

This group of people in their 20s and 30’s, who rent from a private landlord, are often called ‘Generation Rent’.

Yet would it surprise you that since 2017, the number of UK households in the private rented sector has reduced by 260,000 whilst the number of homeowners has increased by 1.1m?

In this article I want to talk about another set of people, not ‘Generation Rent’, but ‘Generation Stuck’.

Generation Stuck are our middle-aged and mature homeowners of Lincoln. They are the generation that could be described as late ‘Baby Boomers’ (born in late 1950s and early 1960s) and the early ‘Gen X’ (born in the mid 1960s to early 1970s).

These 50 to 64 year old people feel stuck in their Lincoln homes, and therefore I have nicknamed them ‘Generation Stuck’. Their inability to move could be holding back those younger Lincoln ‘Generation Renters’.

So, let me look at the numbers involved.

In Lincoln, there are 5,855 households, whose owners are aged between 50 and 64 years old and about to pay their mortgage off on property that is worth £1,449.7m.

There are an additional 5,791 mortgage free Lincoln households, owned by 50 to 64 year olds, worth £1,433.93m, meaning …

Lincoln ‘Baby Boomers’ and Lincoln ‘Gen X’ are sitting on £2,883.7m worth of Lincoln property.

According to the Census, 47.8% of homes occupied by 50 to 64 year olds have two or more spare bedrooms.

This is backed up by the annual English Housing Survey that states nationally, 49% of properties occupied by these ‘Generation Stuck’ are ‘under-occupied’.

Under-occupied is categorised as having at least two spare bedrooms.

Looking at the statistics closer to home

44.7% of Lincoln 50 to 64 year olds have two or more spare bedrooms, making it the 249th highest local authority in the country (out of 348 local authorities).

The rising number of older Lincoln homeowners who want to downsize their Lincoln home are often held back by the lack of suitable housing options for older people and the difficulties of moving.

Lots of over 50 year old Lincoln people cannot move home in the way that they would like, due to a lack of suitable housing options and so can find themselves ‘stuck’ in homes which are no longer suitable for them as they age.

Only 1 in 29 people over the age of 50 move home each year, compared to 1 in 15 for the rest of the population.

Helping mature Lincoln homeowners (Generation Stuck) to downsize their homes at the right time will also allow younger Lincoln people (Generation Rent) to find the Lincoln family homes they need – meaning every generation wins, both young and old.

However, to ensure downsizing works, we need more choices for these “last-time-buyers”.

That means building more bungalows or more ground floor apartments suitable for the middle to older generation.

One way this could be done is by changing the planning rules to force builders to build these types of properties, whilst the other could be the changing of the stamp duty tax breaks for downsizers.

In this way, older Lincoln people will be more able to move into homes which suit their specific needs, improve their quality of life whilst meeting their goals in life, all without them becoming detached from their friends and family locally in the Lincoln area.

These are my thoughts, please let me know yours.

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Will the Cost-of-Living Crisis Mark the End of the Booming Lincoln Property Market?

Lincoln house prices have risen on the back of several things, including changes in how people see their homes and how they live and work (i.e., working from home), a lack of properties on the market and government tax incentives (the stamp duty holiday in 2020).

Yet, the tide could be beginning to turn as the number of houses coming on the market is increasing as supply is starting to catch up with demand – in Q1 2022, 389,811 properties came onto the market in the UK compared to 425,295 in Q2 2022. One would typically expect Q1 to be larger than Q2 in average years.

Yet some commentators are saying one thing that could stifle this growth is the cost-of-living crisis.

I wanted to delve deeper into what was happening in Lincoln instead of reading headlines in the newspapers. Let me start with average incomes.

The average Lincoln household income is £707.90 per week, compared to £581.80 in the West Midlands region and £613.10 nationally.

Roll the clock back twenty years to 2002, and the average Lincoln household income was £416.20.

I wanted to go into greater detail a few weeks ago; I stated that mortgage costs for first-time buyers were much lower today (as a percentage of household income) than in 1989 and 2007. Many of you commented on social media or sent me messages asking what happened to other household bills.

In 1989, 16% of people’s household income went on housing (rent or mortgage) compared to 17.5% in 2021.

Food represented 19% of people’s spending in 1989, compared to 14.4% in 2021. 

Also, gas and electricity were 6% of household income in 1989 compared to 4.81% in 2021.

(Although that was before we saw the recent energy price hikes)

Interestingly, the UK household spent 15% of their monthly income on leisure activities in 2021, compared to 10% in 1989.

Household goods and services (i.e. household appliances, insurance etc.) have risen from 11% in 1989 to 14.9% in 2021.

Before I leave these stats, I had a peek at the 1957 stats (the earliest stats available), and in that year, food represented 33% of the household income and tobacco 6% (today, it’s 2.34%).

So, compared to 1989, the big-ticket items of housing, food and fuel combined have gone down from 41% to 36.7% of the household income, whilst leisure has increased from 10% to 15%.

The fuel element of household bills will rise to around 11% to 12% of household income, and I suspect the leisure budget will be hit the hardest to pay for that. We are seeing food inflation of around 10% to 15%, meaning that food will go from its current 14.4% of household income to around 16% to 17%.

It’s going to be tough, especially for those people in rented accommodation who may not earn near the average wage yet, as they have similar fixed costs for gas, electricity, and food.

Next, let me look at the inflationary effects on housing costs.

A rise in the base rate will, in theory, slow inflation by reducing consumer demand. In the short-term, this increase in the base rate will increase mortgage rates, thus adding fuel to the fire of the cost-of-living crisis by growing mortgage costs.

Those Lincoln homeowners on tracker or variable rate mortgages will instantly increase their mortgage payments.

Encouragingly though, just under 17 out of 20 people are on fixed-rate mortgages, the majority on 5-year fixed rate deals, so their housing costs won’t go up significantly in the short-term.

This will alleviate some of the interest rate effects, making it more challenging and expensive for new borrowers like first-time buyers.

However, as I have explained in previous articles on the Lincoln property market, many Lincoln landlords have been sitting on their hands in the last couple of years as owner-occupiers have outbid each other in buying their next ‘forever home’. If there aren’t going to be so many Lincolns first-time buyers, then I suspect we might see more Lincoln landlords coming out of the woodwork and buying again.

This is especially true as investing in buy-to-let in inflationary times is an excellent hedge to protecting the buying power of your hard-earned savings (drop me a message if you want to read that article).

In conclusion, although the amalgamation of the Lincoln house price rises in the last two years, the increasing interest rate rises, and the continuing cost-of-living crisis, there is no doubt the momentum in the Lincoln housing market will be slower in the next 12 months compared to the last 24 months. Nevertheless, I anticipate Lincoln house price growth will ease (and, in some months, be slightly negative). A better bellwether of the state of the Lincoln property market is the number of people moving house (i.e., the transaction levels).

I expect transaction levels to be lower in the latter part of this year and the first half of 2023, yet they are most likely to stay close to the long-term average. The boom is over, yet it shouldn’t be a bust situation.

What are your thoughts on this? Let me know.

👂 Audio Version – www.walters-move.me/Audio

Are Lincoln’s Millennials to Inherit £215,888 Each from Their Baby Boomer Parents?

The total value of homes owned by Baby Boomers in Lincoln alone is £2,883,700,998, and two-thirds of the Lincoln Millennials are set to inherit all that in the next few decades!

Could this be the answer to the housing crisis?

Could Lincoln Millennials live it up for the next few decades, safe in the knowledge they will get a huge lump sum to pay off their debts and buy a house with what is left?

Before I look at that, which set of people in Lincoln exactly are the Lincoln Millennials or Lincoln Baby Boomers?

Come to that, who are Generation Z, the Silent Generation or Generation X?

All these are phrases used for the separate groups of people in their various life stages of our society.

So, splitting the groups down:

  • Silent Generation: Born 1945 and before (77 years old and above)
  • Baby Boomers: Born 1946 to 1964 (58 years old to 76 years old)
  • Generation X: Born 1965 to 1980 (42 years old to 55 years old)
  • Millennials: Born 1981 to 1995 (27 years old to 41 years old)
  • Generation Z: Born after 1996 (everyone under 26 years old)

Using data from the Census, my research shows there are …

11,646 households in Lincoln owned by Lincoln Baby Boomers and they are worth a combined value of £2,883,700,998.

The generation that will inherit those Lincoln properties will be the millennials.

There are 20,026 millennials in Lincoln.

After looking at the local demographics, homeownership statistics and current life expectancy, around two-thirds of those Lincoln Millennials have parents who own those 11,646 Lincoln properties, meaning each is in line for an inheritance of £215,888.83.

Yet what about Lincoln’s Silent Generation?

There are 10,203 homes in Lincoln owned by the ‘Silent Generation’ and they are worth £2,526,395,439.

Two thirds of the 19,244 Lincoln Generation X will inherit £198,912.49 – still nothing to sniff at yet not quite as much as the millennials!

So, whilst the Lincoln Millennials are less likely to own their own home compared to Generation X and so have done not as well in amassing their assets and savings, they are more likely to benefit from an inheritance boom in the years to come.

This is likely to be very comforting information for those Lincoln Millennials, including some from humbler upbringings who historically would have been unlikely to receive an inheritance.

Nevertheless, inheritance is not the silver bullet that will get the millennials onto the Lincoln housing ladder.

Nor will it deal with the increasing wealth inequalities in British society, as the inheritance they are likely to receive won’t be accessible when they are trying to buy their first Lincoln home.

So, before all you Lincoln Millennials start running up your credit card bills, safe in the knowledge they will be paid for when your parents pass away in 20/30 years, over half of the females and around a third of men are going to have to pay for their nursing home fees.

Remarkably, I recently read 25% of people who must pay for their nursing home fees run out of money, and therefore have to rely on funding from the local authority

Therefore, if you are a Lincoln Millennial, no inheritance will be left for you. It goes without saying, most Lincoln parents want to give some inheritance to their children.

Yet if waiting until you pass away to help your children or even grandchildren with your legacy could be seen as too late, so what are the options?

One solution to help and fix the housing crisis in Lincoln (and the UK as a whole) is if parents and grandparents, where they can, help financially with the deposit for a house whilst their children/grandchildren are in, say, their 20’s and early 30’s.

Buying a Lincoln property is much cheaper than renting – I have shown it many times in these articles.

It’s not a case of not being able to afford the mortgage; the problem is raising the mortgage deposit (of 5% to 10%) for these Lincoln Millennials.

Maybe families should be discussing the distribution of family wealth whilst everyone is alive (in the form of helping the family with house deposits) as opposed to waiting until the end, as it will make a massive difference to everyone in the short and long run.

And a final thought, your legacy will have a more significant impact, and you will be here to see it with your own eyes.

A win-win for everyone.

👂 Audio Version – www.walters-move.me/Audio

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Lincoln Property Prices Have Risen by 394% Since 1995

“Tell me what is happening to the Lincoln property market”, asked the friend of a friend at a recent do I went to in Lincoln (after finding out I was an agent in Lincoln).

I always reply, “It depends if you are buying, selling or both”.

The Lincoln property market is like a seesaw. For the last two years, it has been quite firmly in the realms of a 90% seller’s/10% buyer’s market.

However, unless you are a Lincoln buy-to-let landlord, Lincoln first-time buyer, or executors selling a deceased person’s estate, most home movers are both (i.e. they are both sellers and buyers).

So, what determines where we are on the seesaw of a

seller’s market or a buyer’s market?

It comes down to simple supply and demand economics. i.e. the number of properties on the market versus the number of buyers in the market.

Like when someone sells goods or services, it’s the same with property. So, when we have a low supply of properties on the market and high demand for properties to move into (like we have had for the last two years since the end of lockdown one), house prices go up.

Lincoln house prices are 9.2% higher than a year ago.

The other side of the coin was seen in the Credit Crunch years of 2008/9. Many people wanted to sell their houses in Lincoln, yet the banks weren’t lending, so people couldn’t buy. This meant the supply of property on the market exceeded demand; hence Lincoln house prices dropped by 16% to 19% in 18 months (depending on what type of property you were selling) as we had a 20% seller’s market / 80% buyer’s market.

Whilst demand and supply are the key driving force on the balance of the buyer/seller’s market seesaw, it is not the only influencer of the property market. The price band is also an essential determiner of house prices, albeit over the longer term.

To show this, initially, I will go back to 1995 to ascertain what has happened to average house prices over the long term in Lincoln.

The average Lincoln house price has risen from £39,871 in 1995 to

£197,178 in 2021, a growth of 394.5%.

Interesting, when you compare that against the national figure of 407.2%. Also, looking at where our local authority stands against other areas, we are 178th out of 331 local authorities in England & Wales for house price growth.

It’s called the property ladder for an excellent reason, and the health of the whole Lincoln property market is very dependent on those bottom rungs of that ladder.

Therefore, looking at the data for our local authority, paying particular attention to the lower end (in terms of price), some intriguing data comes to light. It is crucial as the lower end of the property market (in terms of price) is a good bellwether for the whole Lincoln property market.

So, I looked at the following …

Lower 10th Percentile of the Lincoln housing market – i.e., the bottom 10% in terms of the value of properties sold – e.g., small apartments and ex-local authority properties in the less popular areas, which mainly attract buy-to-let landlords.

Lower Quartile of the Lincoln housing market – i.e., the bottom 25% of Lincoln property in terms of their value, e.g., first-time buyer homes and mid-market buy-to-let property.

… and if one looks at our figures for Lincoln and the whole local authority, you can see it’s quite interesting how the three parts (lowest 10% / lowest 25% and overall average) have performed.

  • The average value of a Lincoln property sold in 1995 in the lower 10th percentile (i.e., the bottom 10% of the Lincoln property market) was £24,250, and in 2021, it was £112,000, a growth of 361.9% (compared to the national average of 428.4%).
  • The average value of a Lincoln property sold in 1995 in the lower quartile (i.e., the bottom 25% of the Lincoln property market) was £30,000, and in 2021, it was £138,000, a growth of 360% (compared to the national average of 417.7%).

Some of you might be asking yourself, what do all these different figures mean to Lincoln homeowners, first-time buyers, and landlords? 

As the overall average is above the lower 10th percentile and lower quartile growth figures, the middle to upper market in Lincoln has performed better than the lower end in terms of house price growth since 1995.

The thought I am trying to get across to every Lincoln homeowner/buy-to-let landlord is that there isn’t just ‘one’ Lincoln property market.

There are markets within markets – almost like a fly’s eye. It is essential not to look at just the headlines but delve deeper when considering what is really happening and not to just look at the overall averages.

As we enter the height of the summer, the Lincoln property market seesaw has started to change ever so slightly, changing from the 90% seller’s/10% buyer’s market we have had in the last two years to more of a 70% seller’s/30% buyer’s market.

With that in mind, if you can spot trends before anyone else is aware of them you could find yourself some potential Lincoln property bargains.

👂 Audio Version – walters-move.me/Audio

Lincoln Starter Homes are 35.4% Cheaper Today Than in 1989

Even though the average value of a Lincoln first-time buyer property has risen by 292.8% since 1989 to £180,350, the monthly payments Lincoln first-time buyers must make on their mortgages as a proportion of their take-home pay is 35.4% less today compared to 1989.

Today, according to the Nationwide Building Society …

the average Lincoln first-time buyer only needs to pay out 28.7% of their household take-home pay on their mortgage payments, compared to 44.4% in 1989 (i.e. just over a third less).

You might say 1989 was 33 years ago, a long time ago and not relevant to today. I would agree.

So next, I looked a little closer to home, and in 2007 …

the average Lincoln first-time buyer had to spend 39.3% of their household income on mortgage payments (i.e. 26.9% proportionally cheaper than today).

So why do I say all these things?

Last month, the Bank of England revealed that its Financial Policy Committee would be removing their mortgage market affordability test on people taking out mortgages in August.

The test was introduced in 2014 to ensure the UK didn’t have a repeat of the 2008 Credit Crunch and particularly hit first-time buyers with what they could afford to buy.

This rule change means Lincoln property buyers could soon be able to borrow thousands of pounds more and purchase larger homes.

The decision to withdraw the affordability test certainly raised eyebrows in the press, primarily as the Bank of England has raised interest rates five times in the last six months to try and reduce rising inflation. Yet, as stated in the first part of this article, Lincoln first-time buyers are comfortably paying their mortgages compared to previous years therefore –  everything should be ok with this rule change.

The old rules tested home buyers on mortgage repayments if interest rates rose to 6%/7%, yet the Bank thought that rule was too harsh.

Not all rules have been changed, as the important Bank of England ‘loan to income ratio’ stays put.

The Bank were keen to stress that the mortgage market was not going to turn into a free-for-all as it did in the mid-2000s when the likes of Northern Rock were offering 125% mortgages, and a sixth of all UK mortgages were given without proof of income.

I believe it will have a progressive effect on the Lincoln property market.

Many Lincoln tenants who have been paying rents far more than actual mortgage payments for the same Lincoln home, but have failed affordability assessments regardless, will now be able to get on the property ladder.

The rule change should open the Lincoln property market up a little more and allow house prices to grow in Lincoln.

I advise anyone who has been refused a mortgage on affordability in the past to speak to a mortgage arranger. If you don’t know of one, drop a message to me, and I will give you details of mortgage arrangers you could talk to.

👂 Audio Version – walters-move.me/Audio

31.9% of Lincoln Property Sellers Reduce Their Asking Prices as the Property Market Starts to Return to Equilibrium

The last couple of years of the Lincoln property market has seen some amazing prices being achieved with multiple offers and many properties selling for way over the asking price.

Yet, as I have been writing about the Lincoln property market over the last few weeks, the tide is beginning to turn, and the pendulum swing more towards a balanced Lincoln property market as more homeowners in the Lincoln area (LN1 – LN6) have been reducing their asking prices.

Of the 1,541 properties for sale in the Lincoln area,
491 have been reduced in price in the last 3 months.

This can be broken down as follows…

So why is this important and why is this good news, even for Lincoln house sellers?

Property industry statistics show that 5 out of 6 house sellers will buy another property

and over 80% of those sellers will move up the property ladder.

When you move up the property ladder, that normally means you pay more for the one you want to move to (that’s why it’s called the property ladder).

So, whilst you won’t be getting as much for yours as you might have done earlier in the year, you won’t have to pay as much for the one you want to buy (and the price difference between the two properties will be smaller – meaning you will end up saving money because of these reductions).

Therefore, what is the level of reduction being seen in the Lincoln property market?

The average percentage of the price reduction in the

Lincoln area has been 5.3%.

I must stress house prices/values in Lincoln haven’t dropped 5.3%, just the asking prices of some of the properties on the market.

This is good news for Lincoln first-time buyers and landlords, as they will be more likely to buy a property at a more reasonable price. Whilst, as I explained above, this is also good news for sellers as most of them will end up paying less for the higher priced property they end up buying after selling theirs.

So, what should Lincoln homeowners be aware of if they are selling their home now or in the future?

For me, it is important that I inform all Lincoln property owners of the real story. This enables them to judge for themselves where they stand in the current Lincoln property market, thus enabling them to make better informed decisions.

You see some Lincoln estate agents will deliberately over inflate the

suggested initial asking price to the house seller because it gives them a bigger

chance to secure the property on that agent’s book, as opposed to a competitor.

This practice is called overvaluing.

Now of course, each Lincoln homeowner wants to get the most for their Lincoln home, yet some estate agents know this and prey on those Lincoln house sellers.

You might ask, what is the problem with that?

Well, you only get one opportunity at hitting the Lincoln property market as a new property. Everybody has access to the internet, social media and the four main property portals (Rightmove, Boomin, On The Market, Zoopla), and your potential buyers will know the property market like the back of their hand.

If you have a 2-bed Lincoln semi that is on the market for a 3-bed Lincoln

semi-detached house price … those Lincoln buyers will ignore you.

Your Lincoln property will stick on the market as your potential buyers keep seeing your property on the portals each week.

These buyers will then start to believe there is something wrong with your property and dismiss it even further. That is until you, as the house seller, reduce your asking price. The issue is that sometimes these buyers will think something is wrong with your home and could bid you down even further, meaning you will get even less than you asked for! (This was backed up by some research done by Which?).

Now according to research by Denton House, the average British house buyer only views around six properties before buying – so please don’t assume viewers will come round your optimistically priced (i.e. overvalued) Lincoln home, thinking they will knock you down – quite the opposite – they just won’t view your home in the first place.

And deep down you know that is true, because I bet you have done

the same yourself when searching for property

So, all I suggest is this … be realistic with your asking price to start with.

Do that and you will sell your Lincoln property at a decent price to a decent buyer … first time, every time (Our current average time to receive an acceptable offer is currently only 42 days, the lowest in Lincoln, versus 189 days for some other Agents) – enabling you to move onto the next chapter of your life.

If you know of anyone currently selling their home in the Lincoln area and finding things difficult, please share this article with them as it could be of interest.

👂 Audio Version – https://bit.ly/3KJkUO5

The Shifting Lincoln Property Market

  • The Lincoln property market is on the verge of a ‘tipping point’.
  • The rate of house price growth has started to ease with a reduction in the number of properties that will sell in Lincoln in the coming 12 to 18 months.
  • Yet, rising interest rates and the cost-of-living issues won’t knock everybody out of the property market and there shouldn’t be a housing bubble for two vital reasons.

The Lincoln property market is on the cusp of a tipping point. It’s a tipping point that will influence Lincoln house prices, the number of properties available to buy, demand for those Lincoln properties and the lives of every homeowner and the property-owning buy-to-let landlords in Lincoln. This shift in the Lincoln property market is a big deal so let me explain.

What are the two vital reasons for this shift in the Lincoln property market?

First, the easy-going Lincoln property market goldmine of the past couple of years will end.

The bonanza of the Lincoln property market for house sellers, which was primarily fuelled by cheap money, is receding and the scales are starting to tip somewhat more in favour toward Lincoln buyers (which is not a bad thing – more of that later).

Secondly, and more significantly, this shift in the Lincoln property market is not a collapse.

Let me enlighten you as to why this is.

One of the key influencing factors of the property market is what people pay on their mortgages. The higher the mortgage interest rate, the higher the mortgage payments.

Mortgage rates are usually 1% to 2% higher than the Bank of England base rate. Therefore, mortgage rates are increasing on the back of higher Bank of England interest rates.

So, whilst we have seen rates rise four times in the last year, the Bank of England base rate stands at only 1%. Compare that with Bank of England base rates in the 1980s (when the average base rate was 12.63%), 1990s (when the average base rate was 8.8%) and the 2000s (when the average base rate was 4.7%). These high base rates (together with high unemployment) contributed to the woes of the UK property market crashes of the early 1990s and 2008.

From the gloomiest economist, the worst-case scenario doesn’t see Bank of England base rates rising past 3%.

This means the prospect of a housing crash is minimal because of the comparatively low unemployment and base rates still at all-time lows.

What are the signs of the shift in the Lincoln property market?

The statistics show a slight shift in the scales between it being a 100% seller’s market for the last two years to more an 80% sellers and 20% buyer’s market and here are the reasons why: –

The number of houses for sale has grown by 17% in six months.

Nationally, the number of properties available to buy has increased by 17.07% in the last six months, rising from 389,558 in January to 456,048 by the end of May. This rise in the number of properties on the market is a crucial component of the housing market puzzle. Let me explain why.

Before Covid, house buyers having more choice of properties to buy in the summer months would have been thought unremarkable. Yet the stark shortage of properties to buy in the last couple of years has caused national house prices to grow by 19.66%. Any growth or reduction in the number of properties for sale is significant (hence a key bellwether).

This means that buyers will have more choice of properties to buy this summer.

The number of properties sold in the UK has dropped 11.4% year to date 2022 vs 2021

When I say sold in this context, I mean the month the house sale price is agreed, and the sold board goes up (not on completion when the keys are handed over).

Looking at the national number of properties sold on a month-by-month basis, things have started to shift since March.

In February 2021, 111,648 houses sold (STC) in the UK compared to 117,734 for the same month in 2022. So almost identical.

Yet, March 2022 saw 15.3% fewer houses sell in the UK than in March 2021 (129,655 in March 2022 compared to 153,023 in March 2021).

April 2022 saw 20.6% fewer houses sold than April 2021 (117,737 compared to 148,228).

So, all doom and gloom? No! Not at all.

The spring months (March and April) of 2021 saw the rush for houses to be sold to beat the Stamp Duty Holiday ending in June 2021, so of course, March and April’s 2022 figures would be lower.

The panic buying of March and April 2021 returned to normal levels in May 2021, meaning the number of houses sold in May 2022 was only 4.3% lower than in 2021 (131,941 in May 2022 vs 137,800 in May 2021).

The number of house price changes has increased by 69% since January.

In January 2022, the number of house price changes was 27,063 and has been increasing steadily each month to 45,792 in May 2022, an increase of 69%. This means Lincoln house sellers must be more realistic with their pricing to get their properties sold.

Take all these things together and you can see that there are signs that the Lincoln property market has started shifting more into buyers’ territory yet is a long way from the traditional idea of a ‘buyer’s market’.

These points can be backed up with the house price data for Lincoln.

In October 2021, Lincoln house prices increased by 3.1% in one month.

Yet last month, for example, Lincoln house prices only rose 1.0%. Not all doom and gloom when you consider…

Lincoln house prices are still 11.5% higher than a year ago.

We have been in fifth gear for the last two years with extra rockets attached. We are certainly not going into reverse gear, more a drop down the gears to fourth!

I know many aspiring Lincoln homeowners are waiting for house prices to fall; however, I do not foresee any large Lincoln house price drops in the next few years. In essence, whilst I do believe the rate of house price growth will slow down, that does not mean it will go into reverse.

Some would ask what increasing interest rates and inflation will do to the Lincoln property market?

As I’ve already discussed in several recent articles on my property blog, if interest rates don’t go above 3.5-4%, this will not be a game-changing issue for the Lincoln property market. Most homeowners are on a reasonably long-term fixed-rate mortgage (typically 5+ years) and will be able to transfer them across to the new house purchase if they want to move.

Now, of course, that won’t help first-time buyers. I agree there will be fewer Lincoln first-time buyers, yet these will be replaced by landlords re-entering the Lincoln property market (as I discussed in a previous article a few weeks ago).

Lincoln house prices will also be further protected by the effect of inflation on house prices (again discussed in a separate article about a month ago).

As the number of properties coming to market has increased, the choice of properties to buy has expanded. This will encourage those potential cash home buyers who have also been waiting on the side-lines (alongside the landlords) to start viewing and making offers. They, too, have not wished to get into a bidding war but patiently waited for the market to ease.  

And it is for those reasons in this article (and my other recent articles mentioned above) I do not see a Lincoln housing bubble on the horizon.

If you would like those other articles, don’t hesitate to contact me, and I will send you the links.

 👂 Audio Version – https://bit.ly/3KJkUO5

What Was the Average Lincoln House Price in 1952?

Well, what a weekend that was. Street parties, gatherings in the park, the bunting, egg & cress sandwiches, union jack flags, cheese & pineapple on cocktail sticks, and let’s not forget the trifle, a great Platinum Jubilee Party. And no decent party is worth its salt without a game or a quiz.

So, if you have post-Jubilee blues, let me ask you, how much was the average Lincoln house worth in 1952?

To start with, let me look at what a property is worth today in Lincoln.

The average price paid for a property in the Lincoln area

in the last 12 months was £236,200.

Now, let’s go back to 1952. Sir Winston Churchill was the Prime Minister, Newcastle won the FA Cup, London was covered in the Great Smog, free prescriptions on the NHS ended (it cost 1 shilling or 5p in new money), and King George IV, at the age of 56 passed away on the 6th February, meaning Princess Elizabeth became the Queen – as for housing …

The average price of a Lincoln home in 1952 was £1,929.

This means Lincoln house prices are 121 times higher since 1952.

Yet over the last 70 years, the country has been subjected to 4.5% per annum inflation.

The 1952 Lincoln home is equivalent to £37,089 today

when adjusted for inflation.

This means Lincoln house prices have increased by 504.8% in real terms since 1952.

So, does that mean house prices are more expensive today compared to 1952?

In 1952, the average annual male wage was £452, 8 shillings and 1 penny, meaning the average Lincoln house was 4.26 times the average value of a wage. Today the average home is 8.85 times the average wage.

Yet let us not forget the average mortgage payment in 1952 was £11 per month. The average Brit earned £34 per month, meaning 32.3% of the household income was going on mortgage payments, whilst nationally today, according to the Nationwide, it stands at 28%.

It’s cheaper, in real terms, to buy a property in 2022 than in 1952.

And that’s the point, something things in ‘real terms’ were more expensive and some cheaper 70 years ago. For example, in 1952, petrol was equivalent to £1.02 per litre, a pint of beer £2, half a dozen eggs £2.20, cheddar cheese £2.40 per 500g, a basic radio £430, a Hoover £530 and a 12-inch TV £1,600.

So back to property, the Queen’s reign has seen some amazing house price rises in the UK, yet that growth hasn’t always been in a constant upward direction, as we have had a couple of dips along the way.

We had a house price crash in 1990, when the average value of a Lincoln property dropped from £58,037 to £48,066 in 1996, only for them to start rising again.

Lincoln saw another house price crash between 2008 and 2009, and the average house price dropped from £173,615 to £148,009 in a year.

So, what else has changed about property and housing since the Queen came onto the throne?

In 1952, only 32% of people owned their own home,

whilst 50% of people rented from a private landlord and 18% rented a council house.

By the time of the Silver Jubilee in 1977, 56% of people owned their own home, with 12% of people privately renting and 32% rented from the council.

Come the Golden Jubilee in 2002, 70% of people owned their own home, with 11% of people privately renting and 19% rented from the council.

Today, 63% of people own their own home, 20% of people

privately rent and 17% rent from the council.

So, to conclude, as we look forward into the 21st century, I am sure the property market will be different again in 70 years.

I hope you enjoyed reading this article and do share it with your friends if you find it interesting.

P.S. for all you Rightmove fans, the average Lincoln terraced home in 1952 was worth £1,386, and a semi in Lincoln could be bought for, on average, £1,594.

The 6 Reasons Lincoln Rental Properties Could Inflation-Proof Your Savings

  • Inflation (and recessions) can be nerve racking for people and their hard-earned savings and wealth.
  • Yet there are six reasons which make investing in private rental properties a potentially wise investment in these changeable times.
  • This article looks at how investing in Lincoln property could help you ‘hedge’ against inflation and protect your savings and wealth against the possible recession.

The cost-of-living predicament is threatening the budgets of many Lincoln households.

Inflation is running at 7.8%, yet the best savings rates in the market are only 2.75% (because of low Bank of England interest rates). This means that the value of people’s savings is falling fast.

To add insult to injury, the possibility of a recession on the horizon could add another nail in the coffin of people’s wealth and savings.

Looking back at the last recession (ignoring the 2020 Covid recession), the Stock Market (FTSE index) dropped 40.1% during the Credit Crunch (2008/9) — scarcely a soothing thought if you worry about a recession looming in the next couple of years.

A recession can have a catastrophic impact on household budgets, as a weaker economy characteristically means that salaries drop, and people get made redundant.

So, why do I suggest Lincoln rental properties will help to protect your

wealth and hedge against inflation?

Lincoln rentals aren’t perfect, yet in many ways, they go a long way to help – let me tell you why.

  1. One of the most significant benefits of investing in residential property is to hedge against inflation. An ‘inflation hedge’ is an investment that defends against the decreased purchasing power of your money that results from the loss of its worth/value due to inflation.

The last time the UK suffered high and persistent inflation was the 1970s.

In 1973, the average British house was worth £9,942. In 1980, that same house was worth £23,287. If the same £9,942 had been invested instead in the stock market in 1973, it would have been worth £19,384 in 1980.

So how did that compare to inflation?

Neither property nor the stock market beat inflation in those seven years (as the goods and services of that £9,942 in 1973 had risen to £25,897 by 1980).

But investing in the stock market between 1973 and 1980, that stock market investor would have lost 25.2% of their investment in ‘real terms’, compared with only 10.1% for property investors.

However, there was the bonus of seven years’ worth of rent!

To give you some idea of what that would be worth in today’s figures (even if the rent didn’t go up during that period) …

The average Lincoln landlord will earn £55,188 in rent over seven years.

  • Rental properties have repetitive, regular monthly income, whilst dividends from the stock market are dependent on there being profits which, in a recession, can be hit and miss.
  • Existing Lincoln landlords know that the rents their rental properties achieve don’t historically decline during recessions in the medium term.

In 2008, Lincoln rents dipped by 5.2%, yet they soon bounced back a year later.

And even if average rents do go down, every rent is fixed at the start of the tenancy. Also, it is infrequent for a tenant to negotiate a reduction in rent mid-tenancy even if average rents did drop.

  • Property prices sometimes fall during recessions.

In the 2008 Credit Crunch recession, Lincoln property values dropped 17.63%.

Dropping from £128,707 at the peak in August 2007 to £106,017 in April 2009 (before they started to rise again).

Yet as I stated above, the Stock Market dropped 40.1% with the Credit Crunch. Also previously, the Stock Market dropped 36% on Black Monday before the early 1990’s recession and 55.3% in 1974.

Which sort of drop would you prefer?

  • (Almost) guaranteed rental payments. Insurance can be taken out for rental payments (you can’t get that on stocks and shares). Also, the government will cover most (or all) of the rent when someone is made redundant and needs to apply for social security.
  • For those Lincoln landlords who take a mortgage, inflation can be a benefit. The first is the effect of inflation on mortgage debt. As Lincoln house prices rise over time, it reduces the loan to value percentage of your mortgage debt and increases your equity. You will receive a lower interest rate when you re-mortgage in the future because of the lower loan to value percentage.

Also, as the equity in your Lincoln rental property increases, assuming you fix your mortgage, your payments stay the same.

Finally, inflation also helps Lincoln buy-to-let landlords because rents tend to increase with inflation. So as rents go up, your fixed-rate buy-to-let mortgage payments stay the same, creating the prospect of more significant profit from your buy-to-let investment.

Yet, there are downsides to renting.

Rent arrears can be a worry though. However, during 2021, landlords who used a letting agent were, according to an investigation from Denton House Research, 272.5% less likely to be in arrears of two months or more.

One of the biggest reasons is the more stringent tenant referencing that letting agents tend to do compared to landlords who do it themselves. At our agency, we like to reference tenants carefully for job security, stability, and any history of non-payment on rents, always liaising with previous landlords/agents to see they were a good tenant.

That is why many tenants with a poor tenancy record are attracted to properties that are not through agents, as they know most (not all) DIY landlords don’t reference their tenants as thoroughly as letting agents do. Solid referencing is not a 100% guarantee you won’t get rent arrears or have your rental property trashed, yet it will go a long way to mitigate it.

One of the things about investing in Lincoln rental properties is that buy-to-let investors have more control over their returns than stock market investors do. Buy-to-let provides long-term stability and constant income to counterweight the massive swings seen in the FTSE stock market.

There is something reassuring about touching and feeling your

investment – the ‘bricks and mortar’.

You must make your own decision when investing in the private rental market in Lincoln. If you’d like to chat over the phone for five or ten minutes to discuss where I would be investing in the Lincoln property market, don’t hesitate to send me a message or pick up the phone.

How are you planning for the spectre of a potential recession?

👂 Audio Version – https://bit.ly/3KJkUO5

Lincoln Property Market to Crash in 2022?

According to some newspapers and pundits, the property market boom could soon be over with the increasing interest rates and inflation.

In this article, I share the 3 fundamental economic reasons why things are different to the last property market crash.

The insider’s way to find out if there will be a property crash.

…and 4 reasons why buy-to-let landlords are coming back into the Lincoln rental market to protect their wealth and hedge against inflation.

With inflation and the cost-of-living crisis, some say this could cause property values to drop, by between 10% and 20% in the next 12 to 18 months.

There can be no doubt that the current Lincoln property market is very interesting.

At the time of writing, there are only 454 properties for sale in Lincoln (the long-term 15-year average is between 880 and 900), meaning house prices have gone up considerably.

According to the Land Registry…

Lincoln property prices have increased by 9.2%

(or £14,900) in the last 12 months.

So, as Robert Kiyosaki says, ‘the best way to predict the future is to look to the past’. I need to look at what caused the last property crash in 2008 and how that compares to today.

  1. Increase in Interest Rates

One reason mentioned as a possible cause of a crash is the rise in the Bank of England interest rates affecting homeowners’ mortgages.

Higher mortgage rates mean homeowners will have to pay a lot more on their mortgage payments, leaving less for other household essentials. In 2007 (and the 1989 property crash), many Lincoln people put their houses up for sale to downsize to try and reduce their mortgage payments.

Yet the newspapers fail to mention that 79% of British people with a mortgage have it on a fixed interest rate

(at an average mortgage rate of 2.03%).

Also, just under 19 out of 20 (93.2%) of all UK house purchases in 2021 fixed their mortgage rate.

So, in the short to medium-term (two to five years), most homeowners won’t see a rise in mortgage payments for many years. Also, 27.8% of all UK house purchases were 100% cash (i.e. no mortgage).

Of the 932,577 house purchases registered since February 2021 in the UK, 259,205 were bought without a mortgage.

Yet some people say this will be a problem when all these homeowners come off their fixed rate. The mortgage lending rules changed in 2014, and every person taking out a mortgage would have been assessed at application as to whether they could afford their mortgage payments at mortgage rates of 5% to 6% rates, not the 2% to 3% they may well be paying now.

No pundit says the Bank of England interest rates will go above 2% with a worst-case scenario of 3%. If the Bank of England did raise interest rates to 3%, homeowners would only be paying 4.5% to 5.5% on their mortgages and thus well within the stress test range made at the time of their mortgage application.

This means the probability of a mass sell-off of Lincoln properties or Lincoln repossessions because of interest rate rises (both of which cause house prices to drop) is much lower.

  1. House Price / Salary Ratio

Another reason being bandied about by some people for another house price crash is the ratio of average house prices compared to average wages.

The higher the ratio, the less affordable property is. In 2000, the UK average house price to average salary ratio was 5.30 (i.e. the average UK house was 5.3 times more than the average UK salary). At its peak just before the last property crash in 2008, the ratio reached 8.64.

The ratio now is 8.85, so some commentators are beginning to think we’re in line for another house price crash. However, I must disagree with them because mortgage rates are much lower today than in 2007. For example…

The average 5-year fixed-rate mortgage in 2007 was 6.19% (just before the property crash), yet today it’s only 1.79%.

So, whilst the house price/salary ratio is the same as the last property crash in 2008, mortgages today are proportionally 71.1% cheaper.

  1. Banks Reckless Lending

Another reason for a property crash in 2008 was the reckless lending practices in the run-up to that crash.

The first example of reckless lending was self-certified mortgages. A self-certified mortgage is when the lender doesn’t require proof of income.

In 2007, 24.6% of new mortgages were self-certified mortgages.

So, when the economy got a little sticky in 2008, the people that didn’t have the income they said they had to pay for their mortgages (because they were self-certified) promptly put their properties on the market.

The banks’ second aspect of reckless lending was how much they lent buyers to buy their homes. Today, banks want first-time buyers to have at least a 10% deposit and ideally more. There are 95% mortgages available now (meaning the first-time buyer only requires a 5% deposit), yet they are challenging to obtain.

Back in 2005/6/7, Northern Rock was allowing first-time buyers to borrow 125% of the value of their home. Yes, first-time buyers got 25% cashback on their mortgage!

In 2007, 9.5% of all mortgages were 95%, and 6.1% of mortgages were 100% to 125%.

Meaning that nearly 1 in 6 mortgages (15.6%) taken out in 2007 had a 95% to 125% mortgage.

When the value of a property goes below what is owed on the mortgage, this is called negative equity. A lot of Lincoln homeowners with negative equity (or who were getting close to negative equity) in 2008 panicked because of the Credit Crunch and put their houses up for sale.

To give you an idea of what happened last year (2021) regarding mortgage lending, only 2.4% of mortgages were 95%, and 0.2% of mortgages were 100%. This is because the mortgage lending rules were tightened in 2014.

So why did Lincoln house prices drop in 2008?

Well, in a nutshell, a lot more Lincoln properties came onto the market at the same time in 2008, flooding the Lincoln property market with properties to sell.

Meanwhile, mortgages became a lot harder to obtain (because it was the Credit Crunch), so we had reduced demand for Lincoln property.

Prices will drop when we have an oversupply and reduced demand for something. Lincoln property prices fell by between 16% and 19% (depending on the property type) between January 2008 and May 2008.

So, what were the numbers of properties for sale in Lincoln during the last housing market crash?

There were 1,222 properties for sale on the market in Lincoln in the summer of 2007 (just before the crash),

whilst a year later, when the Credit Crunch hit, that had jumped to 1,707.

This vast jump in supply and the reduction in demand caused Lincoln house prices to drop in 2008.

Compared with today, there are only 454 properties for sale in Lincoln, whilst the long term 15-year average is between 880 and 900 properties for sale.

So, what is going to happen to the Lincoln property market?

The Lincoln house price explosion since we came out of Lockdown 1 has been caused by a shortage of Lincoln homes for sale (as mentioned above) and increased demand from buyers (the opposite of 2008).

However, there are early signs the discrepancy of supply and demand for Lincoln properties is starting to ease, yet this takes a while before it has any effect on the property market, so it will be some time before it takes effect.

This will mean buyer demand will ease off whilst the number of properties to buy (i.e. supply) increases. This should gradually bring the Lincoln property market back in line with long-term levels, rather than the housing market crash.

My advice is to keep an eye on the number of properties for sale in Lincoln at any one time and only start to worry if it goes beyond the long-term average mentioned above.

But before I go, I need to chat about what inflation and the cost of living will do to the Lincoln property market.

How will inflation and cost of living affect the Lincoln property market?

There is no doubt that cost-of-living increases will have a dampening effect on buyer demand. If people have less money, they won’t be able to afford such high mortgages. This will slow Lincoln house price growth, especially with Lincoln first-time buyers.

Yet, the reduction in first-time buyers is being balanced out by an increase in landlord’s buying, especially at the lower end of the market.

This, in turn, will stabilise the middle to upper Lincoln property market. This means the values of such properties (mainly Lincoln owner-occupiers) will see greater stability and a buyer for their home, should they wish to take the next step on the property ladder.

So why are more Lincoln landlords looking to extend their buy-to-let portfolios, even in these economic circumstances?

I see new and existing buy-to-let Lincoln landlords come back into the market to add rental properties to their portfolios. As the competition with first-time buyers is not so great, they’re not being outbid as much.

Yet, more importantly, residential property is a good hedge against inflation.

Firstly, in the medium term, property values tend to keep up with inflation.

Secondly, inflation benefits both landlords and existing homeowners, with the effect of inflation on mortgage debt. As Lincoln house prices rise over time, it reduces the loan to value percentage of your mortgage debt and increases your equity. When the landlord/homeowner comes to re-mortgage in the future, they will receive a lower interest rate.

Thirdly, as the equity in your Lincoln property increases, your fixed-rate mortgage payments stay the same.

Finally, inflation also helps Lincoln buy-to-let landlords. This is because rents tend to increase with inflation. So as rents go up, your fixed-rate buy-to-let mortgage payments stay the same, creating the prospect of more significant profit from your buy-to-let investment.

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Lincoln Rental Homes Nightmare

  • Lincoln needs 388 additional private rented properties per year to keep up with current and future demand from Lincoln tenants.
  • Yet over the last 5 years, Lincoln has lost 603 private rented homes.
  • What are the 5 reasons the supply of private rental properties in Lincoln are falling? What does this mean for tenants and landlords in Lincoln?

There has been a rise in demand for rental properties and an 8.9% fall in the number of Lincoln private rented properties, which has caused Lincoln rents to rise by 5.6% in the last year, a new all-time high. 

The National Residential Landlords Association asked the respected economics think tank, Capital Economics, to carry out research on the UK rental market. It found that if the current trends in the property market in terms of growth of the population, Brits living longer, the lack of new homes building and the reduction in social housing (aka council housing) then demand for homes in the private rented sector needs to increase by 227,000 homes per year. 

So, based on those numbers, Lincoln needs to have an additional 388 private rented properties per year.

The problem is the number of private rented properties in Lincoln has reduced from 11,306 in 2017 to 10,702 in 2021, a net loss of 603.

So, why has supply of private rented homes in Lincoln reduced?

  1. Section 24 Income Tax

Section 24 was introduced in 2017 to level the playing field on the taxation of property between homeowners and landlords. Section 24 stops landlords from offsetting their buy-to-let mortgage costs against the profits from their rental property. Interestingly, no other kind of UK business is affected by the Section 24 taxation. In other words, whatever other form of business you might be in, be it butcher, baker or candlestick maker, every other business can offset their finance costs against their profits, except buy-to-let.

The issue caused by Section 24 Tax is that some landlords ended up paying more income tax than they really made in profit after paying their buy-to-let mortgages. Meaning on the back of rising Lincoln house prices in the last five years, some Lincoln landlords have sold their buy-to-let investments.

  • 3% More Stamp Duty for Landlords

When someone buys a property, they normally must pay a tax to the Government for the privilege. This tax is called Stamp Duty. Yet landlords must pay an additional 3% stamp duty supplement on top of that when they purchase a Lincoln buy-to-let property. Evidence suggests some Lincoln landlords have decided to hold off or scale back buying additional buy-to-let properties for their portfolio because of the thousands of extra pounds that landlords must pay to buy the rental property.

  • Holiday and AirBnb Lets

Some Lincoln landlords are converting their long-term rental properties into short-term furnished holiday and AirBnB properties. Whilst the hassle, stress and service levels are much higher, these types of properties do tend to make more money and aren’t as heavily taxed as normal lets. When properties convert to short-term lets, it removes another Lincoln property out of the general supply chain of long-term rental properties.

  • Greater Legislation for Rental Properties

With more than 150 pieces of legalisation, and new laws being added each year, the burden on landlords is huge. On the horizon is the Renters Reform Bill which will remove the no fault evictions. Also, all rental properties with an Energy Performance Certificate (EPC) rating of below a ‘C’ will have to be improved (i.e. money spent on them) by the landlord. This could be more than £10,000 per property. Hence, why some Lincoln landlords have been selling their rental properties with low EPC ratings in the last 18 months.

  • Accidental Landlords Selling Up

There are some Lincoln landlords who are classed as ‘Accidental Landlords’. In 2008/9, with a slowing property market and house price values dropping in the order of 16% to 19%, (depending on the type of property) some Lincoln homeowners decided to let their home out as opposed to selling it at a loss. Yet, with the price booms of the last 18 months, many decided to cash in on the higher property prices and sell – again taking another private rental property out of the system.

So, why is demand of private rented homes in Lincoln increasing, even though more people own their home in Lincoln than 5 years ago?

Even with better provision of affordable social housing and higher rates of owner occupation in Lincoln (rising from 53.66% of homes in Lincoln being owner occupied in 2017 to 55.63% in 2021), demand for private rental property continues to outstrip supply.

There are many reasons behind this including …

  1. People are living longer, meaning not so many properties are coming back into the mix to be recycled for the younger generation.
  • Net migration to the UK has continued at just over a quarter of a million people a year since 2017, meaning we need an additional 115,000 households to house them alone.
  • For the last two years, one in six of the owners of properties that have been sold have moved in to rented accommodation instead of buying on because of the lack of properties to buy.

So, what is the outcome of the imbalance between supply and demand on Lincoln rental properties?

Quite simply – Lincoln rents have rocketed. They are 5.6% higher today than the spring of 2020 … and that’s on the back of rents being 10.7% higher in spring 2020, compared to spring 2019.

The severe shortage of housing in the private rented sector is pushing up rents in Lincoln as demand continues to grow. Many Lincoln people are finding it challenging work to find appropriate accommodation at a reasonable rent, and with mounting numbers of tenants predicted to continue, this situation will only get worse unless more houses are built.

My heart goes out to those Lincoln tenants struggling with the cost-of-living crisis only to then be hit by higher rents.

Yet, these higher rents are now enticing new landlords back into the Lincoln buy-to-let market because of the higher returns.

With higher inflation, property investment has been seen in the past a safe harbour to invest one’s money in. With the bonus of rising yields (because of the increase in rents) together with the nervousness of the Bank of England to increase interest rates too much because of the issues in Eastern Europe, this could be the start of a second renaissance in the Lincoln buy-to-let market.

If you have concerns about the issues in legislation and taxation, then the advantage of employing a letting agent, with the choice of property, what you pay for it and how it’s managed, will go a long way to mitigate them.

If you are considering getting into the Lincoln buy-to-let market for the first time or expanding your property portfolio (whether you are a client of mine or not) please do not hesitate to give me a call and we can discuss these matters further.

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Lincoln Homeownership Rockets by 1,806 Homes in the Last 5 Years

  • The Lincoln housing market over the last five years has behaved oddly.
  • Lincoln house prices are 32.9% higher than in 2017, even though during those five years, the British economy had the uncertainty of Brexit and the massive fall in GDP during the pandemic.
  • Yet, a less observed trend is that the net number of homeowners in Lincoln has risen by 1,806 households, a jump of 3.7%.
  • Why has growth in homeownership happened, and what does it mean for Lincoln’s existing homeowners (and landlords)?

With the newspapers full of news about the death of homeownership and the growth in Generation Rent, it must surprise many (as it did with me) that the number of homeowners in Lincoln has grown.

To give some context…

the number of homeowners in Lincoln dropped between 2011 and 2017 by 184 households, yet between 2017 and 2021, that grew by 1,806 households.

So, what is behind this growth in homeownership and is it a good thing?

Politicians love it when homeownership rises, as they believe owning a house turns individuals into model upright citizens. It was one of the critical reasons for the council house sell-off in the 1980s.

Yet the hard data to back this up is unexpectedly slim, whilst other studies hint that homeownership has some harmful costs to the economy, such as reduced entrepreneurial spirit and the disinclination to move home to find work.

However, increasing homeownership may be a good foundation for Britain’s economic recovery after the last few years. Homeowners have a greater propensity to live in single-family unit homes like townhouses and semi-detached houses.

A greater demand for more single-use homes supports the construction of such dwellings (instead of other types such as small apartment blocks or Homes of Multiple Occupation). This is important because single-family unit homes tend to be better build quality, have more extensive gardens, and have more local amenities.

So, what are the sort of numbers I am talking about in Lincoln?

In 2017, there were 23,531 Lincoln owner-occupied homes.

By 2021, this had grown to 25,338 Lincoln homes.

This means homeownership in Lincoln has risen from 53.66% of the households in Lincoln in 2017 to 55.63% in 2021, a proportional increase of 3.7%.

So, what is behind this growth in homeownership?

  1. 95% mortgages have been readily available at low-interest rates now for over a decade. In 2017, first-time buyers also got an exemption from stamp duty. This created a perfect storm of demand, which caused the number of Lincoln first-time buyers to rise.
  • Whilst the rise in homeownership in Lincoln precedes the pandemic by a couple of years, another factor to the growth relates to the last property market recession of 2008/9 (the Credit Crunch). Between 2009 and 2012, many Lincoln homeowners found themselves unemployed and still had to pay mortgages at 6% to 8%. Some homes were repossessed, or some had to sell their home at a low price to unshackle themselves from their high mortgage costs. This development, nevertheless, took many agonising years to play out, reducing the homeownership until the middle of the last decade.
  • People’s views on the way they live have altered during the lockdowns. In a sphere of stay-at-home instructions and social distancing, the peace of mind of homeownership gives Lincoln homeowners the security of tenure.
  • Finally, there has been a long-term change in the demographics of the UK. Millennials (currently aged between 26 and 41) are less likely to be homeowners than their Baby Boomer parents were at the same age. Yet, the British millennial generation is now entering its prime home-buying period as they have saved their deposit and are more likely to inherit money from their grandparents. (The average age of a first-time homebuyer in the UK is 33 compared to 26 in the mid-1990s).

So, the final question must be…

how much further could homeownership go in Lincoln?

The biggest hurdle could prove to be the supply of available homes.

Many ‘accidental landlords’ have been selling their properties recently, which first-time buyers have bought. Accidental landlords put their own homes up for rent in the early to mid-2010’s because they could not sell. Now they have been motivated to cash in on the higher Lincoln house prices in the last couple of years, which increased the supply of properties to buy for owner-occupation.

Also, the number of houses on the market in the UK available to buy has increased from existing owner-occupiers. In December 2021, there were 355,700 properties for sale yet by March 2022, that had risen to 431,000. This is giving greater confidence to other Lincoln homeowners too scared to put their homes up for sale because they are concerned, they would not be able to find anything else. Things are starting to change in that regard. 

Also, there are signs of a recovery in British new home building as the number of new housings starts in 2021 hit the highest level since the fiscal crisis of 2007. Yet with a steady increase in Lincoln landlords returning to the market in the last few months, this tide will turn.

Lincoln’s homeownership could continue to swell for a while yet!

P.S. What does this mean to the private rented sector in Lincoln? Come back next week as I give some fantastic insights every Lincoln landlord will want to read to ensure they remain profitable in the Lincoln buy-to-let market.

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Did you know there are 12,817 Terraced Houses in Lincoln, Why Are They So Popular?

The terraced house is one of the most familiar styles of home in Lincoln (and the UK as a whole).

30.3% of Lincoln people live in a terraced home, interesting when compared with the

national average of 22.7%.

So, what is it about the humble terraced/townhouse us Brits love so much? In this article, I look at the history of the terraced house, how it relates to Lincoln and what the future holds for terraced homes.

A terraced house is a property built as part of a continuous row of three (or more) properties in a similar and uniform style.

The reason the British call them ‘terraced houses’ and not ‘row houses’ came about because 18th century British architects borrowed the phrase ‘terrace’ from ‘terraced gardens’. Terraced gardens were known for their uniform nature (in looks, style and height etc.), so the architects decided to name them the same way as opposed to a ‘row house’. In fact, in most countries, they are called ‘row houses’.

The terraced house originated in the Low Countries of Europe

 in the late 1500s.

Terraced houses were first built en-masse in the UK after the Great Fire of 1666 with the rebuilding of London.

They became fashionable for the landed gentry in the early Georgian era with chic and stylish terraces appearing in London’s Mayfair and Bath with its Queen Square (the forerunner of the famous Royal Crescent) and were sometimes built around a garden square.

However, it wasn’t until the early 1800s that the terraced house turned out to be the solution to the increasing population of the towns as increased people were attracted to towns and cities for work.

The terraced house fell out of favour with the upper-middle classes in the late Victorian age (1870’s onwards) as they wanted more privacy and space. They moved to live in detached houses or semi-detached villas, as the terrace house had started to become associated with the lower-middle and working classes.

With all these terraced houses being built, their quality of construction and design dropped as builders tried to squeeze more profit. The biggest issue was that most of the terraced houses built in the early to mid-Victorian age (1840s to 1870s) were made back-to-back with no rear garden, causing unsanitary conditions. Therefore, the Public Health Act of 1875 was introduced to regulate the building of terraced houses with design and standards.

These new building standards in the Act improved the terraced house’s ventilation and, more importantly, required the house to have a toilet (frequently built outside). To meet these new building standards, the designs of these new houses created the well-known landscape of ‘grid’ streets lined with two-storey terraces serviced by a pedestrian path between them, the name of which is a hotly debated topic. The various names for the pathway include alleyway / jitty / cut/ ginnel / snicket / passageway / ten foot / five foot / witchel / lonnin / vennel.

As a Lincoln resident, why not say what you call them in the comments?

As we entered the 20th Century, the terrace house continued to be popular,

albeit with some new architectural additions.

The advent of Arts and Craft architecture with stain glass windows, Tudor style cladding, ornate porches, and elaborate chimney stacks.

After the First World War and the introduction of the Housing and Town Planning Act 1919 (which made local councils build council houses), the Victorian terraced rapidly became associated with overcrowding and slums (especially those back-to-back terraced houses built before 1875). Many of the back-to-back terraced houses were knocked down between 1930 and 1960 in what is known as the slum clearances.

 Private builders started building the iconic suburban semi-detached houses with more extensive gardens, and local authorities decided to build high-rise blocks after World War II. Yet after the partial collapse of Ronan Point in 1968, the popularity of high-rise tower blocks waned.

Since the early 1990s though, the terraced house has steadily come back into favour as

building land prices have increased by 322% in the last 30 years.

Many private builders have started to build modern three-storey townhouses in rows of five to seven. This terraced ‘townhouse-style’ allows three and four bedrooms on a land footprint that would have usually only accommodated a smaller two-bed property.

So, let’s look at some interesting stats on Lincoln terraced houses.

  • There are 12,817 terraced houses in Lincoln (broken down as 6,778 privately owned terraced houses, 2,005 terraced council houses and 4,034 in the private rented sector)
  • Five percent of terraced houses in Lincoln are in the private rented sector, which is above the national average of 19.1%
  • The most expensive terraced house in Lincoln ever sold was on Eastgate, Lincoln for £805,000 in 2019
  • The cheapest Lincoln terraced house sold in the last two years was on Saville Street, a terraced house for £65,000
  • Terraced houses in Lincoln sell for an average of £163 per square foot

I hope you found that thought-provoking?

So, why is the terraced house, be it a red brick Victorian house or a more modern three-storey townhouse, still popular today in Lincoln?

They are typically well built, cheaper to maintain (especially the older terraced houses), comparatively spacious, and in good locations. Many terraced houses have been improved and extended through the inventive use of rear gardens/yards and converted roof spaces; their unpretentious design remains adaptable enough for 21st century living; what isn’t there to like about them?

These are my thoughts; tell me your thoughts about the humble yet versatile Lincoln terraced house.

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Fifty-one percent drop in Lincoln Council Houses in the last 40 years

  • In 1981, 37.5% of properties in Lincoln were council houses. Today, that figure stands at 18.5%, a proportional drop of 51%.
  • Why has the number of council houses dropped so much in those 40 years?
  • How has that changed the dynamics of the Lincoln property market in those 40 years?

The ability of local authorities to build council houses came into law in July 1919 with the 1919 Housing and Town Planning Act. It was one of the most important pieces of domestic legislature passed after WW1 and was the first time in the UK that a nationally public funded system of providing homes was made for the masses. It was paid for mostly by central government and provided by local authorities (councils) and public utility societies (which in later years became today’s housing associations). 

Between 1919 and 1979, 6.94 million council houses were built.

Just over 1 million council houses were built between 1920 and 1939, whilst 5,804,150 council houses were built between 1946 and 1979. This is compared to 4,533,440 private homes and 260,910 housing association properties in the same period (’46 to ’79).

So, between 1946 and 1979, the council house was the dominate force of British housing. But that all changed in 1979!

Many people believe it was Margaret Thatcher who was the architect of allowing the sitting tenant of a council house to buy their home. Interestingly, council house tenants have been able to buy their council house from as early as the mid 1930s, albeit with little or no discount. Also, as late as 1977, the Labour Housing Minister published a Green Paper extolling the virtues of homeownership and council tenants being able to buy their home at a discount.

But after the General Election of 1979, the new Tory government drafted the Housing Act 1980, which gave the Right to Buy, which became law in the autumn of 1980. Then things really took off!

This new law established a right for most council tenants who had been in their home for three years or more to a discount. The discount started at 33% and increased by 1% for each extra year, up to a maximum of 50%. If the tenant sold the house within the first five years of ownership, a prorated repayment of their discount was required.

Between 1980 and 1989, 970,558 council houses

nationally were sold at a discount.

Yet the issue was, when a council house was sold, it took that house out of the council’s portfolio for future generations. From the start, there were limitations on local authorities’ use of monies from the council house sales as most of it had to be given to central government in London, meaning only 390,560 new council houses were built between 1980 and 1989, a loss of 579,998 properties. Looking at the numbers locally …

in 1981, there were 10,726 council houses

in Lincoln, today it’s 7,381.

No wonder the country has a housing crisis … yet as my regular readers know – the devil is in the detail … and that devil is the humble housing association. 

The Tory General Election Manifesto in 1979 had proposed the rights for both council house and housing association tenants to buy their own house under the Right to Buy scheme. The Conservatives argued housing associations, who obtained government funding, should be subject to the same Right to Buy proposals as councils. The Government won the vote in the Commons, yet lost the vote in the Lords, meaning housing association tenants could not buy their homes at a large discount.

At the time, there were only 400,000 housing association properties in the country, so the Government were not that worried. But the significance of housing associations developed in the 1980s and beyond as they were allowed to borrow money from the private sector.

Between 1949 and 1979, the average number of housing association properties built annually was 8,524. Since 1979 to today, it has been 25,062 per year (and 31,606 per year in the 2010s).

Also, the Government encouraged councils to transfer their remaining council houses to housing association schemes from 1986. The advantage to these ‘stock transfers’ was the Government allowed housing associations to access private funding to improve their existing properties and buy new ones (good news for existing tenants complaining that the local authority never upgraded their homes).

Moreover, the Tory Government liked stock transfers, as it allowed them to dismantle council housing from the inside. Interestingly, Labour expanded the ‘Stock Transfer’ process in 1997 and further reduced the eligibility for council tenants’ Right to Buy, meaning the number of council tenants exercising their Right to Buy declined considerably.

Meaning today, even though the provision of council housing has dropped like the proverbial stone … 

the number of housing association properties in Lincoln

has increased from 243 in 1981 to 1,348.

So, how has this changed the dynamic of the Lincoln property market in the last 40 years?

Would it surprise you to learn that the number of people who own their own Lincoln home today is remarkably like what it was 20 years ago before the property boom started? It’s just that even though we’ve had a large drop in the number of council houses and an increase in the number of housing association properties, the number of people owning their own home has remained the same (in some areas of Lincoln this has actually increased), the significant issue is the growth of the private rented sector.

It’s as if people who used to rent from the council

now rent from a private landlord.

The question is, is it right for private individuals to make money from tenants who rent from them as opposed to the local authority? Or are private landlords providing better types, choices, and quality of accommodation for these tenants, albeit at a higher rental rate than if they rented a council house?

I really do believe if it weren’t for the growth of the buy-to-let landlord, which began in the early 2000s, we would have an even bigger housing crisis on our hands than the one we have currently.

Both local and central government have had their hands tied behind their backs since 2008 with a lack of funding, and it’s the humble private landlord who has stepped up and supplied more than 2.3million additional rental properties since 2001, housing nearly 5,520,000 Brits. These landlords have saved the day since the big council house sell off in the 1980s!

What are your thoughts on this matter?

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Why does it take 114 days to get the keys when you buy a Lincoln house?

  • 2,504 properties have sold in the Lincoln area in the last 12 months.
  •  It only takes 55 days to sell a Lincoln home, so why does it take 114 days from the sold board going up to the buyer getting the keys?
  •  With a shortage of solicitors and a sub-standard conveyancing system, this article discusses what Lincoln house sellers (and buyers) can do to speed up the house buying process.

Nationally, the average length of time it takes from agreeing the sale of a property to the keys being handed over is 111 days (down from 117 days last year), yet in Lincoln, we are above the national average at 114 days.

So why does it take just over 16 weeks, when all that is required is the lawyers to look at some paperwork and get a mortgage? Also, what can Lincoln homebuyers and sellers do to speed this up?

The legal process to buy and sell a UK property is called conveyancing. The conveyancing system itself hasn’t really changed in hundreds of years. After the housing market was reopened after the first lockdown in the spring of 2020, the property market returned with a bang, helped on with the stamp duty holiday.

In 2021, the number of properties selling in Lincoln in some months went up massively, e.g., by 96% in June 2021 and by 65% in March 2021. Many conveyancers and solicitors had to sort the legal paperwork out for upwards of 120 to 150 properties each at any one time.

This glut of sold properties caused by the pandemic that needed

legal work to be sorted exacerbated a problem already present

in the conveyancing industry.

For years, conveyancers have complained of overwork and underpay. Conveyancing is seen as the Cinderella of the legal profession. This workload was the straw that broke the camel’s back, making many conveyancers leave the profession and go into better paid legal work like corporate work.

Also, the legal process of conveyancing has built-in inefficiencies, and the conveyancing profession has been relatively slow to innovate. However, there are some excellent tech solutions that are being slowly rolled out across the industry to make the process more efficient and effective.

What can Lincoln home buyers and sellers do

to speed up their property sale?

If you are buying or selling your Lincoln property as we speak, you won’t be able to wait for the conveyancing profession to be revamped, yet you can be as pre-emptive as possible to get your Lincoln house sale through earlier.

In a nutshell, make sure you have all the paperwork sorted on your Lincoln home before you put your home on the market. Next, get the ball rolling on your mortgage. If you receive some paperwork, read it, check it, sign it and send it back in a day, do not leave it a week; finally, always communicate frequently with your estate agent and conveyancer.

When you instruct a solicitor, most will request money to start the ball rolling for searches and disbursements. They won’t lift a finger until that is paid.

You will have to prove who you are in the conveyancing process, so your conveyancer will ask you to show them proof of ID and address. If you are buying, they will need to prove you have the funds/deposit to buy the home (and if your deposit is coming from family/friends, then they are required to write a letter to that effect).

How can the house buying and selling process be improved?

A couple of years ago, the Government set up the Home Buying and Selling Group to find the answer to this problem. Chaired by the well-known property guru Kate Faulkner, it is looking at an amalgamated Seller’s Information Pack (SIPs) and an IT-based single platform to share and communicate that SIP between buyers, sellers, their conveyancers, the estate agent, mortgage providers and brokers and finally surveyors.

The advantage of the SIP is that it can be created before the buyer has been found, meaning property buyers would be more knowledgeable when making an offer. Also, once the sale has been agreed upon, the SIP could be sent straightaway electronically to the buyers’ legal team (from the seller’s legal team) to start the procedure of asking for searches and raising inquiries.

The bottom line is the conveyancing process is not fit for purpose

in the 21st century and change is on the horizon.

So, before the SIP becomes mandatory, there are things everyone can do to ensure they get the home of their dreams quicker.

At my agency, I recommend the seller, us as the agent and the conveyancer start to liaise with each other to get the key information on the property being sold as quickly as possible. Then once a buyer is found, I believe it is vital we, as the agent, regularly communicate with all the stakeholders in the chain to ensure everyone is playing their part to expedite the sale.

In the future, utilising technology and every agent/conveyancer preparing information upfront with the SIP will drastically reduce the time it takes between agreeing a sale and the keys/monies handed over.

The conveyancing process will have to change to meet the needs of the 21st century, but how long that will take is the big question.

If you would like to chat with me about how we do things differently to ensure your property not only gets the best price and how we do all we can, as agents, to expedite a smooth sale for your Lincoln property, do not hesitate to pick up the phone to me or drop me a line at the office.

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1 in 4 Lincoln Homeowners Unable to Sell

  • The average time to find a buyer for a Lincoln property reduced from 86 days in 2020 to 56 days in 2021.
  • Yet still, just under 1 in 4 Lincoln homeowners are on the market after 12 weeks.
  • Why are so many Lincoln homes still on the market after all that time, and what does it mean for the Lincoln property market?

You would have needed to have been living in a cave since the end of Lockdown No.1, not to realise the property market has been on fire in Lincoln (and the UK as a whole) for the last 18/20 months.

It has been very much a seller’s market, especially in 2021. Yet as we enter the second quarter of 2022, I have noticed a slight rebalancing of the Lincoln property market, more towards buyers, something that is good news for everyone (sellers and buyers) locally.

In 2020, it took on average 86 days from the average Lincoln

property appearing on the property portals (i.e. Rightmove, Zoopla etc.)

to the property going sold (STC).

Interesting when compared to the national average of 72 days in 2020. Yet, last year, this was reduced to 56 days in Lincoln (51 days nationally).

So, what’s the issue with the Lincoln property market being on fire?

Well, that was last year, and things have changed slightly since.

Of the properties for sale in Lincoln, 23.1% of houses

have been on the market for more than 12 weeks.

That doesn’t sound a lot, yet that is an eternity in this market!

So, why are there so many properties on the market in Lincoln still for sale after all this time … it usually comes down to one thing … the practice of ‘overvaluing’.

So, before I explain what overvaluing is, let me give you some background.

Many agents (not just ourselves), in 2021, were achieving top prices for Lincoln property with multiple offers becoming the standard. The property they were selling was only available to buy for days before the owner obtained multiple offers that were not only at a satisfactory level, yet more than they ever dreamed likely.

Although this was great news for Lincoln homeowners, this caused fewer homes to come on to the market in the last six months in Lincoln, as people were afraid to put their home on the market without having a property to buy.

With fewer properties coming onto the market, some estate agents have become increasingly desperate to get a larger slice of this smaller property market. It has seen an unwelcome side of the estate agency profession, the estate agency practice of ‘overvaluing’.

While ‘overvaluing’ is nothing new, the custom has been generally limited to a small number of estate agents. Yet now, it’s become more prevalent and creates uncountable distress and pressure for some Lincoln homeowners.

Many Lincoln homeowners want to sell quickly to get the property of their dreams. Yet, in many cases, when they do put their property on to the market, they don’t sell quickly enough because of this ‘overvaluing’ (even with the fantastic current property market conditions).

To give you an idea of the issue …

63.9% of Lincoln homes put on the market

in the last 30 days have not sold.

There are hundreds of Lincoln families having their dreams dashed by ‘overvaluing.’

Therefore, let me look at exactly what overvaluing is, why it’s on the rise and most importantly, the harm overvaluing causes to homeowners like yourself.

You would think the most important thing in estate agency is all about finding the best buyer for your home, at the best price, who can make the move with the least amount of hassle.

To us it is, and to many other Lincoln estate agents, it is as well. Yet, to some agents, sales aren’t the essential objective. Instead, it is having a vigorous catalogue of properties to sell to generate more future leads.

Deprived of an endless number of new properties for sale, the enquiries estate agents receive will significantly drop, leaving them high and dry without any buyer (or seller) leads, the lifeblood of estate agents.

Therefore, some (not all), but some estate agents will feed on a homeowner’s appetite to get the highest possible price for their Lincoln home by giving them an over-inflated suggested asking price to market their property at (i.e. ‘overvaluing’).

If one estate agent can get you an extra £30,000 for your

Lincoln home, you will take it, won’t you?

The suggestion of pushing the asking price of your Lincoln home for 10%, 15% even 20% could be seen by many as a temptation too good to miss. Yet once you are on the market, the agent is trained to slowly get you to reduce your asking price over a lengthy sole agency agreement.

The problem is that the home of your dreams might have sold by the time you reduced your price in 3 months. Also, Which reports in 2017 and 2019 proved you ended up getting less for your home when it did eventually sell (which means you lose money) and finally, the agents know homeowners perceive it’s a hassle to swap agents (which it isn’t).

But estate agents only get paid when they sell the house;

why do they overvalue?

Would it surprise you that some estate agency chains pay their staff a commission when they put the property on to the market, not when it sells? So, their team overinflate their suggested asking prices to get that commission.

Over the last 18 months, with the rising property market, there has undoubtedly been a valid reason for pushing the envelope on the asking price. Yet, if every house like yours is on the market or sold subject to contract at £300,000 to £320,000, yours isn’t going to achieve £355,000, let alone £375,000 – even in this market.

With 63.9% of Lincoln homes still for sale after a month, the market is starting to level out and if you are keen to sell, then let me give you some advice.

Research has shown that if the asking price is initially set too high, it will be

ignored by people surfing Rightmove and Zoopla.

(Come on, be honest – you have done that yourself haven’t you?)

When the property is eventually reduced because it has the stigma of being on the property market too long (begging the question from potential buyers that there may be a problem with the property itself hence no interest?), often when it does eventually sell, it will sell for less than what it would have done if it were priced correctly from day one (as per the two reports from Which in 2017 and 2019).

Of course, on the other hand, setting the asking price below its market value means potentially leaving money on the table needlessly – hence the need for a good agent.

Putting your Lincoln home or buy-to-let investment up for sale at the right price from the beginning is the key to selling within the best time frame and for the best price to a serious and motivated buyer.

Ask a handful of estate agents to value your home, ask them to back up any valuation of your Lincoln home with cold hard comparables of similar properties to yours.

Find your comparables by searching ALL the property portals (i.e. Rightmove, Zoopla, Boomin, OnTheMarket).

If you only take away one thing from this article, when you search the portals for comparables, make sure you include under offer/sold STC properties, as that will triple the comparable evidence.

Thus, by doing your homework and then working with a dependable, trustworthy, and experienced Lincoln estate agent, who will help to ensure that your Lincoln property is put on the market to get you, the homeowner, the best price from day one without over cooking it so you don’t lose out, you will be just fine.

These are my thoughts, let me know if you have any yourself.

How Will Rising Inflation Affect the Lincoln Property Market in 2022?

The UK is currently experiencing its highest inflation rate since the early 1990s. This increase in prices has primally come about by the combination of an increase in demand for goods and services from consumers following lockdown last year together with global supply chain disruptions.

Most economists weren’t too concerned about this increase in the inflation rate as the very same thing happened in the early 1990s following the Credit Crunch with a similar rise in demand and supply chain issues. Thankfully, back in the early 1990s, inflation returned to lower levels quite quickly. However, the situation in Eastern Europe now could change matters.

So, let me look at all the factors and what it means for the Lincoln property market.

The crisis in Eastern Europe has sparked even further rises in crude oil (which diesel and petrol are made from), gas and grain prices as pressure on supply chains around the world increases.

In my previous articles, I suggested UK inflation would rise to around 7% in the spring and drop back to 5% in the autumn and as we entered 2023, be approximately 3% to 4%.

Yet, with these issues, inflation could rise to 8% to 9% by late spring and still be around 6% to 7% in autumn, well above the Bank of England’s target of 2%.

With Lincoln wages rising at only 3% to 4% and inflation at 7%+,

Lincoln household incomes, in real terms, will fall.

This is because ‘real’ UK household incomes characteristically have been the most consistent lead indicator of growth (or a drop) in house prices. This is because growing inflation erodes the value of money you earn, which reduces its buying power. When the cash in your pocket has a lower spending power, people tend to spend less when they buy (and rent) a home (and vice versa).

Next month, Income Tax thresholds will be frozen, and National Insurance contributions are increasing. Collectively, all these issues will create a drop of around 2% to 2.5% in the real disposable income of Britain’s households in 2022 (real disposable income – somebody’s take-home wages after tax and then the effects of inflation are considered).

Will Lincoln people be more anxious to spend their money?

With less money in people’s pockets, people’s inclination to spend the money they do have could also be curtailed. People’s savings are at an all-time high, yet many will decide to sit on the cash, instead of spending it, especially as consumer confidence has dropped to minus 26 on the GfK index (whatever that means – but in all seriousness though – more on that below).

All this can only mean there is going to be a house price crash.

It’s all doom and gloom! …Or is it?

My heart goes out to people caught up in the awful humanitarian crisis in Eastern Europe. Yet, I respectfully need to put that to one side for just a moment for the purpose of this article.

This blog is about the Lincoln property market, and Lincoln people want to know what will happen to the Lincoln property market.

In the first half of the article, I looked at the impending fall in real disposable incomes of 2% to 2.5% in 2022. I appreciate it’s going to be tough for many families in Lincoln. Yet, it is always important to consider what has happened in previous times.

  • 1982 – a drop of 2.3% in real disposable income
  • 1992 – a drop of 3.7% in real disposable income
  • 2008 – a drop of 5.8% in real disposable income

Yes, it’s going to be tough, yet we got through 1982, 1992 and 2008 – and so we shall in 2022/23.

Next, the price of petrol is extremely high compared to a year ago.

The average price of unleaded petrol is £1.51/litre today, quite a jump from the £1.21/litre a year ago. But here is an interesting fact, petrol was a lot more expensive (in real terms) in 2011 than today. In TODAY’s money, a litre of unleaded petrol in 2011 would be the equivalent of £1.79/litre. We have some way to go before we get to those levels – and again, the Lincoln economy (and property market) kicked on quite nicely after 2011.

What are Lincoln people spending

on their rent and mortgages?

Housing costs – owner occupiers were spending on average 17.3% of their household income on mortgages in 2015, yet in 2021 this had risen, albeit to 17.7% – not a huge increase.

Council house (social) tenants have seen a drop in their rent from 29.2% in 2015 to 26.7% in 2021, whilst private tenants from 36.4% in 2015 to 31.2% in 2021.

Interesting that private tenants are proportionally 14.29% better off in 2021 than in 2015.

How we spend our money – the average UK home spent 4.2% of their household income on energy in 2021, and that is due to rise to 6.3% after April (and probably 7% in October). Yet, as a country, we spend 9% of our income on restaurants and hotels and 8% on recreation and culture. As with all aspects of life, it will mean choices, and maybe we will have to forego some luxuries?

Just before I move on from this aspect of the article, again I appreciate I am talking in averages. Many people with low incomes suffer from fuel poverty and they will find the increases in energy prices hard – my thoughts go out to you.

Interest rates – higher inflation is generally brought under control using higher interest rates,

meaning mortgage payments will be higher.

First, 79% of homeowners with a mortgage are on a fixed rate, so any rise won’t be instantaneous. Yet, there will be a bizarre side effect from the issues in Eastern Europe. Surprisingly, though the current situation in Eastern Europe, by its very nature, will bring greater UK inflation, it may also probably defer the Bank of England raising interest rates too high. This means mortgage rates won’t increase as much as the bank won’t want to exacerbate any pressures to the UK economy in 2023/24 caused by the conflict.

The stock market had priced an interest rate rise to 2% by the end of 2022. I suspect this will now be no more than 1.25% to 1.50% by Christmas, slowly going up in quarters of one per cent every few months, just like todays 0.25% increase. The crisis in Eastern Europe might even come to be seen as a defence for higher inflation throughout 2022, all meaning everyone’s mortgage will be less.

Next, looking at Consumer Confidence Indexes – these indexes are fickle things. I prefer to look at the Organisation for Economic Co-operation and Development Consumer Confidence Index as it has a larger sample range and a longer period to compare against. Looking at the data from the mid 1970s, the drop in consumer confidence is big, yet nothing like the drops seen in the Oil Crisis of the mid 1970s, Recession of the early 1980s, ERM crisis of 1992 and the Global Financial Crisis of 2008/09. Also, when compared to the other main economies of the world (G7), the UK has always bounced back much more quickly from recessions when it comes to consumer confidence.

What about house prices in Lincoln in 2022/23?

Increasing energy prices, rising inflation, an increase of sanctions, and a probable drop in consumer confidence and spending in the aftermath of the conflict will knock the post-pandemic recovery globally, which will lead to a recession around the world, including the UK.

A recession is when a country’s GDP drops in two consecutive quarters. For the last three hundred years, there has been a direct link between British house prices and GDP – (i.e. when GDP drops, UK house prices fall). Yet in 2020, the British GDP dropped by nearly 12%, yet house prices went the other way. 

But let’s look at what would happen if Lincoln house prices did drop by the same extent they did in the Global Financial Crisis of 2008/09.

House prices in Lincoln dropped by 17.1% in the Global Financial Crisis, the biggest drop in house prices over 16 months ever recorded in the UK.

The average value of a property in Lincoln

today is £175,410.

Meaning if Lincoln’s house prices dropped by the same percentage in the next 16 months, an average home locally would only be worth £145,414.

On the face of it, not good – until you realise that it would only take us back to Lincoln house prices being achieved in June 2018 – and nobody was complaining about those.

Yes, that will mean if they do drop in price, the 7.4% of Lincoln homeowners who have moved home since June 2018 would lose out if they sold after that price crash. But how many people move home after only being in their home for a few years? Not many!

The simple fact is that 92.6% of Lincoln homeowners will be better off

when they move if house prices crash.

And all this assumes there will be a crash.

The simple fact is, the circumstances of 2009 that caused the property crash are entirely different to 2022 (no lending by the banks, higher interest rates and increasing unemployment compared to today’s increased lending, ultra-low interest rates and low unemployment environment).

I do believe with all that’s happening in the world we might see a rebalancing of the Lincoln property market later in 2022 and could see the odd month with little negative growth in house prices, yet it will be nothing like 2009.

The expected fall in household spending could be counterbalanced by UK businesses’ plans to invest more in their businesses (with last year’s tax breaks on investing), which will create even more jobs.

Who knows what the future holds? These are just my opinions – what are yours?

👂 Audio Version – http://ow.ly/9fvS50IlZ7P

1 in 17 homes are sitting empty in the Lincoln Area.

• 2,784 homes in the Lincoln area are empty, which represents 1 in 17 homes.

• 491 of those have been empty for more than six months and are worth £86million.

• Why are those properties standing empty and deteriorating and why could that become an issue for the whole of Lincoln?

A couple of weeks ago was National Empty Homes Week, so I thought I would find out how many homes are empty in the Lincoln area – the numbers surprised me, so I wanted to share my thoughts about them with you.

The latest Government statistics show that 491 properties
in Lincoln have been empty for more than six months.

Homes that are left empty for an extended period can affect our locality and occasionally invite anti-social behaviour.

With a shortage of housing in the Lincoln area, these empty homes must be brought back into use to generate much-needed housing for local people.

As you can see in the first bullet point, some homes are only empty for a brief period of time. Yet, those local properties that stand empty for more than six months and then deteriorate become a problem for our local community.

I appreciate there can be many genuine explanations why a property may be left empty for a long time. However, with council house waiting lists at high levels and the shortage of both properties to buy and rent in Lincoln, we must ask what is being done about this at Government level and how this could affect the Lincoln property market?

The collective value of these 491 long-term (6 months or more)
empty houses in Lincoln are worth £86million.

This impacts the Lincoln housing market with a lack of properties coming onto the market for sale and rent. This results in house prices being pushed up, making it less affordable for first-time buyers to get on the first step of the housing ladder.

It’s a real shame that many local properties are empty for over six months when there is an increasing demand for accommodation, at a time when there’s such a competitive housing market.

So, one might ask if this issue of long-term empty properties is a new problem? Well, not really.

There were 458 homes long-term empty in Lincoln in 2010.

I know our local authority likes to work with property owners of empty homes to bring them back into housing stock as it helps with the housing shortage, even with the help of grants if improvement work is needed for the empty home. Yet, they could use enforcement action where a homeowner is incapable or unwilling to bring their property back into use.

So, what is the Government doing nationally? Homeowners are charged a 50% premium on top of their Council Tax if their home has been empty for two years or more. This can rise to a 300% premium if the property has been empty for ten years or more.

However, the bigger question is, why are all these homes
in the Lincoln area being left empty?

The real answer is – they are not.

A handful of the properties belong to the local authority and are in poor condition because the tenant trashed the property.

Probate (where the person’s estate is put in order and passed onto the beneficiaries of the will) takes between six and twelve months. Most of these long-term properties are being modernised and renovated, whilst other Lincoln properties are part of a deceased estate. In other circumstances, some Lincoln homes have been left empty after the owner has been placed into a care home, yet there is no Power of Attorney to put the home onto the market.

There is no ‘one fix all’ to the empty home syndrome in Lincoln.

Empty properties in Lincoln are not an issue that will sort the housing crisis we are suffering from.

The simple fact is the population is growing faster than the number of houses being built. We need to build more homes.

Whether that means council properties, housing association homes, private landlords or even owner-occupation housing the masses – that’s a massive question we could all talk about, day in day out until the cows come home.

So, tell me, what are your thoughts on the matter?

Lincoln Household Heating Bills Set to Rise to £66,885,718 in 2022

The energy bills of every Lincoln resident will rise in April as the price cap increases to account for the global increase in the cost of gas. Those not on the gas mains will still be hit as the UK uses gas to make 45% of its electricity.

So, what can Lincoln residents do to reduce their energy consumption and ultimately save money?

First, let’s look at the scale of the costs.

Considering the increase in energy prices from April, the combined energy bills for the whole of Lincoln come to…

• £66,885,718 for central heating.
• £13,410,980 for hot water.
• £7,288,165 for lighting.

There are extra energy costs for washing, fridges, etc., yet I wanted to focus just on the home as this is a property blog.

Everyone’s bills will be around 50% more expensive in 2022 than in 2021, but it’s not too late for Lincoln people to take some quick steps to cut their energy bills and, at the same time, cut our carbon footprint.

Just over a quarter of the UK’s carbon comes from heating and lighting

our 27.6 million homes, and each UK home produces

4.39 tonnes of carbon dioxide a year.

Upgrading the energy efficiency of UK homes is seen as a vital step to attempting to mitigate the issues of climate change, fuel poverty and our nation’s energy security.

So, what are some quick wins for Lincoln residents to reduce the energy bills on their homes, and how will energy efficiency play a more significant part in the value of Lincoln homes in the future?

  1. By turning down the thermostat by 1 degree, the average annual saving would be £105.91 per home and each homes carbon dioxide would be reduced by an eighth of a tonne (it all adds up!).
  2. Replacing your bulbs when you can with energy-efficient bulbs will, on average, reduce your lighting costs from £172 per year to £103 per year.
  3. What time does your heating come on and off? Could it come on later and go off earlier?
  4. Smart meters (which are installed for free) are estimated to help lower UK homes electricity use by nearly 3% and gas use by 2% … again it’s all margin gains.

These are just a handful of ideas. Check out the internet for others as it’s fascinating how much energy we use for overfull kettles, chargers left on and tech on standby etc.

Yet, these things will only scratch the surface… many of us will need to go further, especially Lincoln landlords, to retrofit our properties to make them more energy efficient.

This is particularly important as in June the Government announced they would make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retrofitting to meet these ambitious climate targets.

In 2018, the Government required private landlords to improve the energy rating of their rental properties by prohibiting the rental of any property with an Energy Performance Certificate (EPC) rating of F and G (the lowest ratings). Yet from 2025, that will be increased to C for all new tenancies and 2028 for all existing tenancies (more on these EPCs below).

I don’t believe there is an appetite to mandate private homeowners to do this work, though you never know in the future.

So, how do you find out about your
Lincoln home’s eco-credentials?

Since 2007, every new home that has been built, rented out or put on to the market in Lincoln has had to have an EPC, giving it a rating between A and G (rather like those stickers you see on fridges and washing machines).

A is the highest rating (i.e., best energy efficient and greener), and G is the worst efficiency rating.

41.5% of Lincoln homes are in that eco-friendly A to C energy performance band rating, compared to the national average of 40.1%

So, what next? Well, the Government will attempt to make the green revolution as painless as possible with technology.

In the future, we might have hydrogen central heating instead of mains gas; or have solar panels for electricity, all triple glazed windows and even ground source heating – sounds fanciful? Well, who would have thought some of the most wanted cars would be electric 20 years ago?

There is no doubt that the energy efficiency of our homes will rise in the coming years as the cost of fuel increases and people’s opinion on going green changes.

You don’t need to spend thousands of pounds to find out what you can do to make your property greener and cost less. Look at your EPC and it will tell you what slight changes you can make to improve your Lincoln home’s energy efficiency rating and ultimately save yourself money. If you want to find the EPC rating of your Lincoln home, go to epcregister.com.

If you need an EPC, drop me a line as I know some great local energy assessors that can easily do an EPC on your property at a price that won’t cost the earth!

Why Are There So Few Lincoln Homes For Sale?

There are 406 properties for sale today in Lincoln; roll the clock back exactly a year, and the figure was 686 – there’s been a drop of 41%. This drop is being dubbed ‘for sale board crunch’.

The ‘for sale board crunch’ has left many prospective Lincoln home buyers stressing to find the right Lincoln property as the number of properties available to buy has dropped significantly.

I am sure you know people looking for their next Lincoln home, but when they see it on the portals (Rightmove, Zoopla, Boomin, OnTheMarket etc.) the properties are gone within days.

With demand at an all-time high, many Lincoln home buyers are in a state of misery as Lincoln house prices have grown in the last few years, forcing many of them to review their plans.

They are victims of the ‘for sale board crunch’ in the Lincoln property market, the likes of which have not been seen since 2007.

Normally when there has been excess demand in the residential sales market, that frothiness has been taken care of by people moving into rented accommodation. However, the number of Lincoln properties available to rent is at a 15-year low.

So why is the Lincoln property market this way?

Demand for Lincoln homes has exceeded the number of properties for sale since the General Election in December 2019. After years of long-drawn-out Brexit negotiations, homeowners and buyers were more confident about their move. Many Lincoln people who put their home move on hold in 2018/19 had more confidence to return to the market.

The first lockdown in the spring of 2020 did nothing to quell this pent-up urge, and since the late spring of 2020, the Lincoln property market has been on fire! The lockdown changed what homeowners are looking for in their Lincoln home. Proximity to public transport dropped down the wish list for buyers, and demand for apartments dropped. Whilst properties with larger gardens and rooms that could double up as home offices tended to be at the top of most Lincoln buyers’ wish lists.

Around 36% more Lincoln properties have sold in the

last 18 months than the long-term 20-year average.

Looking at the supply side of the equation, in the last five years, an average of 204,410 new homes per year have been added to the number of properties available in the UK. Also, 239,600 properties came back into the market when they became available after their owners had sadly passed away. Yet still, that isn’t enough. The country needs at least 300,000 new dwellings to keep pace with demand.

There is also another problem that has become known with the cladding issue of apartments. Just over three-quarters of million apartments have issues with cladding. Whilst these are being sorted out (which will take many years), they are essentially unsaleable unless a fire safety expert on these buildings’ signs them as safe.

These cladding issues prevent these apartments from coming onto the market (thus reducing the supply of properties to buy). It also precludes their owners from moving up the property ladder from their apartment to a house. Also, many first-time buyers who can save a bigger deposit or be gifted cash from the Bank of Mum and Dad are skipping the apartment as their first home and going straight for a house, thus intensifying the lack of larger properties for sale.

So, how long does it take to sell a Lincoln property now?

Lincoln Apartments – 85 days

Lincoln Terraced/Town House – 22 days

Lincoln Semi-Detached – 22 days

Lincoln Detached – 59 days

This means it is a seller’s market in Lincoln, empowering them to push up their asking prices in high demand areas. However, most sellers are also buyers, which means the advantage they have on selling their property is turned on its head when they come to buy.

Many Lincoln sellers prefer to find their future Lincoln home before putting their current home on the market. That is making the lack of properties on the market seem even harsher than it may otherwise be.  

The ‘for sale board crunch’ would be somewhat eased if Lincoln sellers put their property onto the market whilst they were hunting for their next ‘forever home’.

However, not all Lincoln homeowners are doing so, partially because they (wrongly) believe they will be made homeless if they find a buyer and can’t find another property to buy (remember, you are not legally committed to moving until exchange of contracts).

A big issue will be finding a suitable Lincoln home. We very much have a chicken and egg scenario. Some homeowners are waiting for the right property to come onto the market before they put their home on the market. This will probably mean that that Lincoln property will sell even before the photographs have been taken of your home.  

Yet, many Lincoln homeowners are worried if they put their house on the market and it sells, they won’t be able to find another suitable home and thus be homeless.

Classic chicken and egg – so what do you do first?

There is another way of doing this. It’s a technique estate agents used to use before the internet, and it’s called ‘chain building’. Many Lincoln homeowners are contacting me to move home yet don’t want to be made homeless. What we do is slowly build a group of people in a chain over many months. It requires a lot of patience to build a chain downwards and upwards around you.  

There is no cost to this and no legal commitment to go through. It can take six, even twelve months to build a chain of people who are prepared to wait for the chain to form.

Yet, everyone normally gets their next ‘forever home’

by playing this long game.

Because if you don’t play the long game, build relationships with Lincoln estate agents (who can build these chains) and only rely on waiting for properties to appear on Rightmove, Boomin, OnTheMarket or Zoopla, you will be sorely disappointed.  

According to national research from Denton House Research, 7 out of 8 people who viewed a house through an estate agent in 2021 were not on the mailing list of that agent before they viewed it.

That means all these Lincoln properties, built on a chain builder (as above), will sell yet won’t appear on Rightmove or Zoopla, meaning you will miss out. 

You must get yourself on the mailing list of our estate agency (and other agents if they do this chain building) so you don’t miss out on your next forever home in Lincoln. 

If you would like a chat about anything mentioned in this article, feel free to drop me a message or call me.

2,069 Lincoln Landlords Could Be Hit With £14k Bills and Red Tape in Tory ‘Levelling Up’ Plans

Are these proposed changes another nail in the buy-to-let coffin for Lincoln landlords?

On the face of it, yes, it could be seen as another attack on the humble Lincoln landlord, having to spend money on their properties and get tangled up with red tape on a register and then having no-fault evictions removed.

Yet, as always, the devil is in the detail…

This ‘Levelling Up Bill’ is a White Paper. White Papers are policy documents created by the existing Government that set out their future proposals for legislation. Many White Papers don’t even make it to the House of Commons to be debated on, and even then, it needs to be voted on by both Houses of Parliament before becoming law. Any changes are at least two or three years away, and that’s assuming it gets debated and subsequently approved.

Many have said the White Paper is supposed to lay out how to resolve the problem of rebalancing the UK economy that is suffering from the highest level of regional inequality than any G8 country. This is a gargantuan challenge…

yet the Levelling Up White Paper reads very much like a

shopping list of great ideas without the means to pay for it.

One of the 12 points in the White Paper was focusing on housing, with a plan to introduce a new minimum standard for rental properties, a landlord register and the removal of no-fault evictions (as an aside, there was also a mention of a possible reintroduction of Home Information Packs – remember those from 2009!).

So, what does this mean for the landlords of the 8,881 private rental properties in Lincoln?

Sub Standard Rental Properties

The proposed changes will mean rental homes in the private sector will have to meet two specific standards that the existing 8,915 social housing homes in Lincoln currently need to meet.

The first being called the ‘Decent Homes Standard’ (DHS) and the second, the Housing, Health and Safety Rating System (HHSRS) evaluation.

Looking at data from the Government, there are 2,069 private rental properties in Lincoln that are considered substandard under these two measures and each one would cost between £11,000 and £14,000 to bring up to the prescribed standard. That means…

the estimated total cost to improve the 2,069 Lincoln properties,

that are considered substandard, could be as high as £28,969,822.

All of that would have to come out of the pockets of Lincoln landlords!

Yet both systems of standards (DHS & HHSRS) have been slated by many (even by the Government itself).

The DHS criteria for the standard are as follows:

  1. It must meet the current statutory minimum standard for housing
  2. It must be in a reasonable state of repair
  3. It must have reasonably modern facilities and services
  4. It must provide a reasonable degree of thermal comfort

Note how the word ‘reasonable’ is used in three of the four points of the DHS. Reasonable is an arbitrary and a very much subjective point of view. It screams loopholes and get out clauses to me.

Looking at the HHSRS, the Government announced just before the pandemic in June 2019 that the HHSRS would be revamped after it was found to be ‘complicated and inefficient to use’.

Putting aside how one measures the standards, it is a simple fact that there are many Lincoln rental properties that are substandard. I believe it right the Government have an ambition to halve the number of sub-standard private rentals by 2030. However, would it surprise you that…

in 2006, 46.7% of private rented homes in the UK were classed as

substandard and today that has reduced, without any legislation, to 23.3%.

One must ask if new legislation is now required?

Also, if you recall in an article I wrote recently (drop me line if you would like me to send it to you), Lincoln landlords will be faced with bringing their properties up to an energy rating (EPC) of C between 2026 and 2028 in legislation already announced.

Most of the works to meet that EPC rating requirement will be the same works to meet this new DHS and HHSRS. Also, in that article, I discussed how the Government have suggested that certain allowances will be made for landlords on rental properties that can’t be improved.

So, I think Lincoln landlords should sit tight and let the Government shine more light on this in the coming months before any knee jerk reactions are made.

Landlord Register

To be honest, there are several city/borough registers around the UK for landlords. Experience has shown they seem to add an extra level of bureaucracy and red tape. The register would be for every Lincoln buy-to-let landlord and rogue landlords would be struck off whilst allowing tenants new redress rights. Another reason to employ the services of a letting agent to sort!

End of No-fault Evictions

Again, I spoke about this a few weeks ago with the proposed removal of Section 21 to evict a tenant (again, if you want a copy, drop me a line). If you recall, I stated that no-fault evictions were removed in Scotland over four years ago and the apocalyptic suggestions it would kill the rental market for Scottish landlords was not forthcoming. Now of course, the Scots strengthened the other grounds to evict a tenant. If the Government strengthen the Section 8 legislation, again, I cannot see this being an issue south of the border. Again, time will tell once the Government put more meat on the bones of the White Paper.

Conclusion

Many of the announcements made in the Levelling Up White Paper are re-hashed proposed legislation that has been on the books for the last couple of years.

This White Paper is not another nail in the coffin of buy-to-let

in Lincoln.

Yet, many commentators have cautioned that more landlords with substandard homes will sell up because of these proposed changes, warning the sell up would add to the private rental sector’s shortage of homes, thus pushing up rents.

If that was true, that would increase rental returns on Lincoln buy-to-let and attract more Lincoln landlords into the sector, wouldn’t it?

But if you don’t agree other Lincoln landlords will buy these rental properties that other landlords are selling, who will buy their Lincoln properties from them? It will be Lincoln renters, who are now able to buy because the price has come down, meaning equilibrium should return to the market.

This is all theoretical and there are shortages/gluts in specific locations. Let us not forget it was 12/18 months ago that rents were dropped by double digit percentage points in the space of a couple of months in the big cities. Those rent drops weren’t anything to do with landlords buying up City Centre rental properties, but demand plummeted with 20 something tenants moving back in with their parents during the first lockdown and the months that followed. Yet, now rents have bounced back to pre-pandemic levels (and more) with the return of tenants to the cities.

In a nutshell, if Lincoln landlords do end up selling in their droves (which they won’t),

yet if they do, those Lincoln properties will

still exist.

Few of them will be left empty because most of them will be bought by other Lincoln landlords as they will be attracted to the sector as inflation takes hold whilst others will be bought by first-time buyers.

What goes around, comes around. So, let’s see what happens in the coming months. In the meantime, if you’re a Lincoln landlord and you want to discuss anything in this article, please either drop me a line or send me an email.

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10,203 Lincoln OAP Homeowners Could Be Forced To Sell Their Homes As Their Energy Bills Rise

The wholesale gas price has tripled in 2021. Even if you aren’t on gas at home, half the UK’s electricity comes from burning gas so, this affects everyone. Even though domestic bills have been protected from the majority of this with the Government’s price cap, energy bills will rise by at least 50% in April. This means the average energy bill will rise by £60 per month in the spring, thus producing a potential cost of living crisis.

Why have gas and electric bills increased so much?

The cost of gas (and indirectly electricity) rose during 2021 due to a number of reasons, and the troubles are worldwide rather than exclusively affecting the UK.

To start with, the winter of 2020 was very cold in Central Europe, which increased demand for gas and used up many European countries’ stored gas supplies, whilst demand for gas also swelled in China and the Far East. On the supply side, many European countries rely on Russia for its gas, yet Russia’s supply of gas was lower than expected.

When will gas and electric prices rise?

The Government have an energy price which is the maximum amount your gas and electricity supplier can charge you. The energy price cap is set by Ofgem every six months, and the next review is this February. Any increases could only be introduced from the 1st of April 2022.

The existing energy price cap is £1,277 (for an average UK home), which was set in the summer of 2021 (and that was a 12% rise on the previous cap). Analysts believe without Government intervention, the February increase will be around 50% on that, meaning the cap will increase to just over £2,000 per annum.

That means there will be a lot of Lincoln people that cannot afford the increase in energy prices.

Some have suggested the Government should remove VAT from gas and electricity bills for a year, yet that would only save them around £100 a year – but it’s still £100!

Lincoln OAP’s will be one of the hardest hit by these gas

and electricity hikes

 For those pensioners who reached state pension age after 2016, their state pension will rise in April by £5.55 per week or £288.60 a year. Considering their energy bills will rise by at least £720 a year, together with the underlying inflation for goods and services rising at 5.4% on top, this will mean many OAP homeowners will have to make a difficult choice.

So, what is the scale of the problem in Lincoln?

1 in 6.88 people in Lincoln is an OAP

Of the 94,042 population of Lincoln, 13,664 of them are 65 years or older, and of those, 10,203 own their own home.

However, as I have discussed several times in the Lincoln Property Blog, many of those older Lincoln homeowners are still in their original family homes even though their children have flown the nest.

They are living in large 3- and 4-bedroom homes with lots of rooms that require heating, even though they are not being used. To give you an idea of the difference of costs:

  • The average Lincoln one/two-bedroom home’s energy bills will rise from £795 per year to £1,435 per year.
  • The average Lincoln three-bedroom home’s energy bills will rise from £1,163 per year to £2,104 per year.
  • The average Lincoln four-bedroom home’s energy bills will rise from £1,638 per year to £2,936 per year.

Therefore, I predict there will be an uplift in the number of mature homeowners in Lincoln moving forward their downsizing plans throughout 2022/3 as they look to reduce their outgoings. The downsizing will also reduce other outgoings like their council tax and building insurance premiums.

Of course, many mature homeowners will make other choices. This could be a great time to look at other forms of heating like ground source heating and solar panels to reduce one’s dependence on energy from the National Grid.

You could ask a local Energy Assessor to perform an energy audit on your home by tasking them for an Energy Performance Certificate. If you need to know the name of a decent Lincoln Energy Assessor, drop me a line or pick up the phone.

So, if downsizing is an option, what will that mean

for you and the local Lincoln property market?

A big issue will be finding a suitable home to move to. We very much have a chicken and egg scenario now as waiting for the right property to come on to the market, before you put your home on the market, will probably mean that your ideal property will sell even before the photographs have been taken of your home.

Yet, many Lincoln homeowners are worried if they put their house on the market and it sells, they won’t be able to find another suitable home and thus be homeless? Classic chicken and egg – so what do you do first?

There is a third way of doing this … good old fashioned ‘chain building’. I have many mature Lincoln homeowners that are contacting me to move home, yet don’t want to be made homeless. What we do is slowly build a group of people in a chain over many months. It requires a lot of patience to build a chain downwards and upwards around you.

There is no cost to this and no legal commitment to go through. It can take six, even twelve months to build a chain of people who are prepared to wait for the chain to form … yet by playing the long game, everyone gets their next ‘forever home’.

The long-term advantage to everyone else is that a new supply of larger homes will be put onto the market in Lincoln. Yet, if you are going to rely on waiting for these properties to appear on Rightmove or Zoopla, you will be sorely disappointed.

According to national research from Denton House Research, 7 out of 8 people who viewed a house through an estate agent in 2021 were not on the mailing list of that agent before they viewed it. That means all these properties built on a chain builder (as above), will be sold and won’t appear on Rightmove or Zoopla, meaning you will miss out.

You have to get yourself on the mailing list of our estate agency (and other agents if they do this chain building) so you don’t miss out on your next forever home in Lincoln.

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Lincoln Homeowners Pocketed £166k Each in the Last 20 Years

Since 2001, UK average house prices have risen by an astonishing 187.2% across the UK, while in London the figure is 247.6%.

Looking back at the people that bought in those first few years of the new Millennium, few of those buying or selling property in 2001 could have forecast the massive financial impact that their decision then would have on the rest of their lives.

In those years, there have been winners and losers, where some Lincoln buyers have made hundreds of thousands of pounds and Lincoln renters have paid out tens of thousands of pounds and yet been unable to buy their first home – but life is often not as simple as that, so in this article I wanted to discuss the matter further.

The average house price in Lincoln has increased by 230.8% to £239,100 in the last 20 years, a profit of £166,820.

Now of course these are average prices and don’t take inflation into consideration.

Yet even when adjusted for inflation, Lincoln house prices have still risen by 158.7% in the last 20 years.

Characteristically, the longer a homeowner has owned their Lincoln property, the larger the gain when they sell. Yet most of these profits are never seen by Lincoln homeowners. It has never been money in the bank unless you sell up and downsize or move somewhere cheaper. Instead, these gains are re-invested back into the housing market when they buy their next home.

So, whether the gains are banked or tied up in their bricks and mortar, it looks like all the Lincoln homeowners are in the driving seat.

What about all the Lincoln first-time buyers, priced out of the market and unable to get on to the property ladder?

Are the young of Lincoln losing out again?

Reading the newspapers you would think so, yet nothing could be further from the truth. In fact…

It’s 26.7% cheaper today to buy a house

in Lincoln compared to 2007

That isn’t a typo!

In 2002, 22.2% of a first-time buyer’s household income went on the mortgage payments. Today, that figure stands at 28.4%, yet in 2007, it was 39.3% … hence why it’s cheaper today!

Of course, for most young Lincoln potential first-time buyers, the other largest barrier to home ownership is the matter of raising an adequate deposit.

Rising rents (and future energy prices) won’t help and will in fact make this problem worse, giving ambitious Lincoln first-time buyers not much left at the end of the month to save a deposit for their first home.

With soaring Lincoln house prices, this means the amount Lincoln renters need to save for their deposit is growing year on year.

For these annoyed renters, there is the unpleasant irony that if they could only get on the Lincoln housing ladder, they would find themselves better off. They would spend a lower proportion of their monthly take home pay on keeping a roof over their heads.

Some people in the press have suggested the older generation, with all the equity tied up in their homes over the last 20 years, should release some of the money and give it to their children or grandchildren to help them on the ladder maybe?

Reports in the press have also described many homeowners in their 60’s (and older) changing their plans to move home. Many were planning to downsize to release the tied-up equity in their home. That equity would either be used to invest in the bank to produce an income for them and/or to help their children (sometimes even grandchildren) on to the property ladder.

Yet with the interest paid by banks and building societies on any lump sum being very low, to many mature homeowners it hardly seems worthwhile making the move to downsize. This means many younger would-be first-time buyers are missing out on help from the Bank of Mum and Dad (or the Bank of Grandad and Grandma) with their deposit.

However, the problems caused by low interest rates could also be their saviour.

Many older homeowners have turned to Equity Release, thus allowing them to get hold of a share of the equity amassed in their property, in exchange for a tax-free lump sum of cash.

Cash that could be used to help with

deposits for their children/grandchildren?

The mature homeowner then stays in their larger family home and helps their family buy a property.

Whilst I am not a mortgage adviser (and you must take proper advice from a qualified mortgage broker), equity release mortgages don’t have end dates and the interest payments are rolled up (until you pass away). This means that there aren’t any monthly payments.

The interest rate you pay is normally fixed for the mortgage and because interest rates are so low, that means the debt shouldn’t balloon up. And should you decide to sell in a few years’ time, you just pay back the capital, redemption fee and the small amount of interest accrued.

Now of course, that does mean there will be less for 

your offspring to inherit when you pass away.

Equity release mortgages though have had some bad press recently. In the past they were unregulated and pricey. Yet today, there is more protection for borrowers.

One answer to the growing interest debt is to pay part or all of the monthly mortgage interest charged, yet you must have the income for that.

You also need to take advice on how the equity release will affect your liability for nursing home fees and inheritance tax. Also, if only one person in your home is the owner of the property, if that homeowner dies, the partner who is not on the mortgage (because only owners can go on a mortgage) won’t have any rights to stay in the family home.

Finally, if you are planning to move, don’t just compare the interest rate, but the redemption charge for early repayment – some of them can be very high.

My advice – take professional advice and speak to your family and involve them. Yes, we have all built up some amazing equity in our Lincoln homes, and yes, there is potential to help the younger generations with that wealth. Just go in with eyes open and know all the facts, all the pros and all the cons – then decide what is best for you with all that information to hand.

What are your thoughts, as a mature Lincoln homeowner or a first-time buyer, on this? It would be good to hear from you.

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The 7 Things Lincoln Home Sellers Should (& Shouldn’t) Do in 2022.

Did you know 4,743 Lincoln homeowners are considering selling their Lincoln home between now and the summer of 2023?

Reports in the press suggest 1 in 5 homeowners are considering moving home in the next 18 months.

This will change the dynamics of selling your home in Lincoln, meaning there are certain matters that you, as a Lincoln homeowner, should do before placing your property on the market to ensure you get the best price, reduce the hassle and even more importantly, when you do sell, ensure the move actually takes place. Why is this important?

1 in 3 Lincoln house sales fall through between sale agreed

and the keys being handed over

Also, nationally, the average length of time a property is taking from sale agreed to key hand over is 19 weeks … and the longer the sale takes, the greater the propensity for the sale to fall through.

So, if you are thinking of selling your Lincoln home, here are SEVEN things you should consider (plus some tips for those Lincoln homeowners currently on the market) …

1.   Get your ducks in a row

Although it may seem apparent, having everything in place for the time you come onto the Lincoln housing market can really take weeks off the time between sale agreed and key handover and even avert the house sale collapsing. 

For example, if you have had any building works done on your house, ensure you have the relevant paperwork now. That could be ensuring you have the Completion Certificate from the local authority for that extension you had a few years ago. Yes, you had planning permission, but are you aware you need a Completion Certificate from Lincoln City Council as well?

If you haven’t got the required building regulations or planning consent for any work (including changing your windows), that can really harm the price you achieve for your Lincoln home, or it could even finish the deal altogether.

Also, if your Lincoln home is old (say 150 years plus) or even listed, you should think about spending a few hundred pounds and get a survey done on your own house, especially if you have been in the house for more than 10 years.

This will highlight any issues that need to be rectified (and be shown to potential buyers) in case they start to nit-pick. If you need recommendation of a good Lincoln chartered surveyor – drop me a line.

2.   Carpet ‘photo’ bombing

First impressions are everything, and you only get to make a first impression twice.

Yes, I said twice, once with the photographs and the second time when the potential buyers view your Lincoln home.

They say a picture speaks a thousand words, so ensure your agent photographs the best rooms from the best angles. The most important photograph is the front shot of your Lincoln home, so always ask to see the photographs before your property goes live on to the market to make sure they show your property in the best light possible.

The second ‘first impression’ is when viewers view your home. Often the thing that lets the side down here is your carpets. If your carpets are more than 10 years old, then seriously consider replacing them with something inexpensive with some decent underlay or give them a good professional clean.

In this Facebook world, your Lincoln home needs to look as good as it can to appeal to as many Lincoln buyers as possible.

3.   Make it a potential home for your buyer, not a shrine to you

There was a house in the East Midlands called “Disaldu” (as in “This will Do”) that had been on the market for four years with six estate agents. As soon as it changed its name, it sold in a week. Be careful about over personalising your Lincoln property as that could be off-putting to possible home buyers. 

Try not to be too daring with styles and colour schemes in your bathroom and kitchens, as your buyer won’t want to spend another £25,000 changing your neon pink kitchen units to something a bit more mainstream.

Lincoln homebuyers often hate to change something which has just been finished but is not to their personal taste. Now I am not talking about magnolia everywhere as there is room for some flare, yet be aware it’s a fine balance between your personal tastes and making your home attractive and selling it in the largest mainstream market possible.

Finally in this section, is your Lincoln home cluttered or untidy? Many people won’t be able to see past the jumbled house and overflowing bookcases. If you are unsure, drop me a message and I can pop round your Lincoln home when I am passing for 5 minutes if you want an impartial opinion.

4.   Highlight the potential of your Lincoln home – but not too much

If you were considering extending your Lincoln home with a garden room, loft conversion or extension, then getting a local architect technician to draw you up some outline plans to demonstrate the development potential of your property could be worth spending a few hundred pounds on.

Yet at the same time, be careful not to extend to make your Lincoln house more sellable. I have seen a handful of Lincoln homes be over-developed (i.e. almost over extended), making the house too big for its plot. It’s all about balancing the house with the size of the plot. Again, if you are uncertain in any way, drop me a line and I can give you some impartial advice (even if you aren’t moving for another 12 / 18 months).

5.   Don’t let your garden grow on you

Since the lockdown began in spring 2020, our gardens have become one of our most cherished features. Lincoln homes with decent sized gardens have attracted a premium. However,

over-fussy and poorly planned gardens can also be detrimental to the value of your Lincoln home, rather than add value to it.

6.   Offices, offices, offices

Working from home could be here to stay for a few years. With this new age of homeworking, even if you don’t work from home, maybe set up a study area. It might even be worth investing in one of those office pods for your garden.

7.   Make sure the price is right

The bottom line is, if a Lincoln property isn’t selling it probably means the asking price is too high. Yes, even in a market such as this …

29.4% of Lincoln properties have been

on the market more than 3 months

Putting your Lincoln home up for sale at too high an asking price is one of the most harmful things you can do as a seller. This approach regularly costs homeowners between 3% and 5% of their potential price agreed.

If you decrease your asking price at a later date in order to achieve a sale on your Lincoln house, you probably won’t get what you might have done if it had been realistically priced from the beginning.

I am aware of a modern 4-bed detached property in Lincoln which, in the summer just gone, began with an asking price of £420,000 yet ended up selling for only £365,500. It should have achieved £374,000 with a £379,950 initial asking price (even worse, they missed out on the property of their dreams because that one, being realistically priced, sold before they dropped their own price).

The sturdiest and most important property market response is always in the first couple of weeks of exposure. Many Lincoln homeowners waste this optimum sales time by being too hopeful on their asking price.

If you are on the market in Lincoln and believe you should reduce your asking price, be courageous with your reduction. Make one substantial change of at least 5%, not a series of salami price changes of a 1% here or 2% there.

So, if you are currently on the market and feel you aren’t getting anywhere, and think it could be your asking price, then again, drop me a line.

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So, What Will Happen to Lincoln House Prices in 2022?

Traditionally, if you had not sold your Lincoln home by the first week in November, you would normally have to wait for the house sellers to return in the famous Boxing Day rush on the portals (Rightmove, Zoopla etc) to get potential buyers interested.

Yet matters have been different this year as the various lockdowns have caused a surge in house buying right up until when the Christmas edition of the Radio Times goes on sale.

So, the question is, how will 2022 look regarding the Lincoln property market?

The last couple of years in the Lincoln property market have been different in many ways.

So much so, many Lincoln homeowners are presently deliberating whether they should put their Lincoln home on the market in January or wait until later in the summer.

Speaking to many Lincoln buyers and sellers, (and in fact Lincoln buy-to-let landlords) in the run-up to Christmas, many were asking the very same question.

 What is going to happen to Lincoln house prices in 2022?

Some people asking this question are Lincoln buyers troubling themselves that they are about to buy their Lincoln home just before a potential property crash? yet others are wanting to know where the top of the market is before they sell. This is leaving a handful of Lincoln landlords unable to start buying or start selling some of their rental portfolio.

Therefore, let’s see what has happened in 2021 to make a better judgement of what should happen in 2022.

Nobody has a crystal ball that can tell what 2022 holds, however most property experts are not forecasting doom and gloom for the British property market.

Whilst the final numbers won’t be known until Easter 2022, it is estimated that in 2021 one in fifteen privately owned homes in the UK are expected to have changed hands, being the busiest year in the last 14 years. Locally,

2,090 properties have changed hands in the last year in Lincoln

Although that is only up to October 2021, so numbers will be much higher once all the final counts are in by March/April.

The pandemic made many families re-evaluate what they wanted from their home, with many wanting bigger rooms (and more of them). Many in the press dubbed this ‘the race for space’, meaning the property market was flooded with home buyers, most bringing forward the home move they had planned between now and 2025.

The issue was, there weren’t enough Lincoln properties on the market to satisfy every Lincoln buyer, meaning Lincoln house prices have unsurprisingly been driven up.

The average price of a home today in Lincoln is £232,880

Although it is still premature to say what will happen in 2022, most property commentators seem assured that we are not heading towards a house price crash, due to one reason.

There aren’t enough properties on the market in Lincoln. Simply supply and demands economics!

The property crash in 2008 was caused by everyone dumping their property on the market.

In January 2007, there were 1,222 properties for sale in Lincoln, one year later in January 2008, that had risen to 1,614 properties, whilst today, that stands at 428

And I can’t see that changing for 2022.

In 2007, mortgage interest rates were 6.5% to 7.5%, so when the economy started to falter, everyone looked to sell their homes to reduce their outgoings as unemployment rose by over 60% in just a couple of years. This time round most people have mortgage rates of around 2% to 2.5% and unemployment is dropping, meaning they don’t need to sell their Lincoln home.

Now of course the stamp duty holiday ended months ago, and Bank of England base interest rates are expected to rise moderately in the coming year, yet not to the level they were in 2007 (5.75%).

Nonetheless, demand for Lincoln homes will still be there. I have even read some reports suggesting that more than 20% of British households are seriously thinking of moving between now and the summer of 2023, and this will support Lincoln house prices whilst demand continues to exceed supply.

Lincoln house prices may be 4.3% higher by the end of 2022

Another reason I believe that will be the case is the return to home working. If, as a country, we will need to work from home each winter for the near future because of new variants, then this will cement the need for people wanting to move home for remote working.

It might be that Lincoln buyers are looking for a dedicated office at home or that they feel they now no longer need to be in large built-up areas that are near to their work.

This increase in Lincoln house prices is expected to entice even more house sellers onto the market, which will steady house prices slightly (as supply increases), yet I still believe there won’t be enough properties coming onto the market to satisfy the colossal demand.

What about the Lincoln rental market?

Rents tend to grow in line with tenants’ wages. So, with many people getting decent pay rises and not enough properties being built, many economists are suggesting rents will be 14% to 19% higher by 2027. Even with the house price growth, the numbers for rental investments still look rosy.

Is it the right time to buy your first property in Lincoln?

This rise in Lincoln house prices has had many people asking whether 2022 is the right time to buy their first home? Should they buy now before Lincoln prices rocket even further or delay in the hope that house prices come back down?

As with any major decision in life, this will depend on your own personal life and your motives for wanting to move.

If the Lincoln home that you want to buy is on the market, available and you can afford the mortgage, then delaying could be detrimental. It’s like holding off for the ‘next generation TV’, it then coming out; then just as you are about to buy the TV, the next ‘next generation TV’ gets announced for six months’ time, and the cycle is constantly in motion – so you end up never buying a TV, just like you will never buy your own home!

Buying property is a long-term game

Sometimes you just must make your decision, get something bought and start the journey of the next 25 to 35 years of living in your family home whilst paying off your mortgage.

The present low interest rates for first-time buyers means that there are some very low mortgage deals available for those with a decent deposit, making it a suitable time to buy a Lincoln property, especially if you fix the interest rate.

If your deposit is humbler, the Government’s 5% deposit mortgage guarantee scheme will still enable you to buy a property, albeit at a slightly higher interest rate.

Looking at the bigger picture, these are only my opinions. If inflation doesn’t get too out of hand and interest rates don’t go above 2% to 3%, it looks like Lincoln house prices will, for 2022 and a few years beyond, continue upwards albeit with a slower trajectory than 2020/21 and with a few short, sharp up and down spikes on the way.

The bottom line is, ensure that any Lincoln house move that you intend to make is something that you can afford, allow for future rises in interest rates and make plans for as many eventualities as possible. Do that, and you should be just fine.

These are my opinions – what are yours?

 Audio Version – http://ow.ly/L5X650HhzW5

In the meantime, despite whatever Boris may do, I wish you a Merry Christmas and hopefully a Prosperous New Year.!

Are Lincoln People Addiction to their Spare Bedrooms?

The Housing Minister, Chris Pincher, has suggested older homeowners are “rattling around” in their homes as they are too big for them. He implied they are selfish and should sell up and move to a retirement home when he spoke to a committee in the House of Lords. He stated that many British homes are “under-occupied” and could be better used by younger families with children.

He went on to say that the Government will aim to persuade UK housebuilders to build more developments suitable for OAPs, freeing up space in their existing homes, which in turn would open up more homes for first and second-time buyers.

So why is this an issue?

The fundamental problem of the Lincoln housing ‘crisis’, is the point that the supply of Lincoln homes has not historically met demand, thus increasing property values (and in turn rents), consequently ensuring home ownership becomes an unattainable ambition for the twenty something’s of Lincoln.

Call me a pragmatist, but it’s understandable that either demand needs to drop, or supply needs to rise to stop this trend getting worse for the generations to come.

Don’t get me wrong, I admire Westminster’s plans to help first-time buyers with their ‘First Homes’ initiative to increase the supply of new homes being built just for first-time buyers. Yet it’s targeted to deliver only 1,500 homes in around one hundred locations in the next two years.

To give you an idea of how this a drop in the ocean, the Government sponsored the independent Barker Review of Housing Supply Report in 2004 which was tasked at looking at what could be done to level the playing field regarding the housing needs for the UK. The report found that the UK needed 240,000 homes to be built each year just to meet the demand of a growing and aging population. Since 2000, the average number of properties built in the UK each year has only been 177,975 per year.

This means we have been around 62,000 homes short per year. Therefore, after 20 years of this annual shortfall we, as a country, have 1,240,500 too few homes – hence the massive uplift in house prices over the last two decades.

Therefore, one option that could resolve the housing crisis is if the Government literally looked closer to home, concentrating on matching households with the appropriately sized home … and this is what the government have shone a light on … people with too many spare bedrooms.

Is having a spare bedroom something that in this day and age is particularly wasteful? Well, let’s look at the numbers for Lincoln.

15,447 Lincoln homes have one spare bedroom.

Well, everyone in my opinion needs a spare bedroom, especially in the light of lockdown where many of us needed to work from home.

Ok, let’s see who has two or more spare bedrooms.

Of the 42,368 households in Lincoln 13,661 have two or more spare bedrooms!

Of all the homes in Lincoln, be they owned, privately rented or council house, 32.2% of Lincoln homes have two or more spare bedrooms, compared to the national average 45.2%.

Breaking it down by ownership/tenure –

Of the 23,951 owned houses in Lincoln, 11,126 have two or more spare bedrooms or as expressed as a percentage,

46.5% of Lincoln owned homes have 2 or more spare bedrooms (compared to the national average of 53.9%).

Of the 8,915 council houses in Lincoln, 703 have two or more spare bedrooms, or as expressed as a percentage,

7.9% of Lincoln council homes have 2 or more spare bedrooms (compared to the national average of 11.6%).

Of the 9,502 private rented houses in Lincoln, 1,832 have two or more spare bedrooms or as expressed as a percentage,

19.3% of Lincoln private rented homes have 2 or more spare bedrooms (compared to the national average of 19.4%).

You can see there is the spare capacity in the Lincoln housing market.

The Government hit the social housing sector with their ‘Bedroom tax’ in 2012, (also known as under occupancy charge or spare room subsidy) which meant that in council homes you would receive less in Housing Benefit or Housing Costs Element in a Universal Credit claim if you lived in a housing association or council property and were deemed to have one or more spare bedrooms.

Now it seems the Government have concentrated on the group that makes up the bulk of homeowners with spare bedrooms, the older owner occupiers of large properties, in their 60’s and 70’s, where the kids have flown the nest.

However, there are many explanations why these mature homeowners do not downsize. These people have lived in the same house for 30, 40 even 50 years, and as one matures in life, many people do not want to depart from what they see as the family home. Much time has been invested in making friends in their neighbourhood and it’s nice to have all those rooms in case every grandchild decided to visit, at the same time, and they brought their friends!

But is that a selfish point of view? Are we addicted to our spare bedrooms?

Or should the Government keep its nose out of where people live?

I would ask if the ‘Minister of Superfluously Sizeable Houses’ should be kicking you out of the Lincoln home you worked for and have spent much of your life in? And why is it assumed that retired homeowners want to downsize to small little bungalows and apartments? Many love their spacious living rooms and kitchens (which are typically found in bigger houses).

This Government is in a muddle about housing policy.

On one side of the coin, the Government announced an increase in the tax burden on the British public with a rise to its highest level since the early 1950’s to pay for care and the NHS, yet on the other side of the coin, recently cancelling vote losing policies, so that mature people going into care do not need to sell their homes (which if you think about it, they won’t live in anyway because they are going to long-term care). Whilst at the same time, to muddy the waters, they are suggesting to mature homeowners they have to move out of those same large homes to free it up for younger families? If the Government don’t know what the answer is, who does?

The subject of downsizing is a delicate one to unravel.

We all know that mature homeowners, if they moved to a smaller Lincoln home, would lose all the space they take for granted and would be unable to have the grandchildren over. Remaining in your large Lincoln home is not greedy, it’s just the accepted human longing to enjoy a life after 50 plus years of working and paying your dues and taxes. You could say move to a managed retirement home? Yet many are very small and quite expensive.

I have spoken in previous articles in my blog on the Lincoln property market that there aren’t enough bungalows being built either. And anyway, why should you have to relocate and wave goodbye to all your neighbours who have become friends and provide a support network?

There is a case made by some that mature downsizers could be given stamp duty tax breaks to get them to downsize, yet I am not sure how this could be policed, and it doesn’t solve the problem of increasing the overall supply of property in the UK.

The real issue isn’t spare bedrooms, it’s the need to change the planning rules to increase the number and type of new homes being built that will satisfy these mature homeowners with excess spare bedrooms to move into.

Big national builders have exploited ham-fisted planning rules since the 1980s, but no political party seems to have the answer. Housing Minister Chris Pincher might say he wants to persuade builders to build more suitable homes for mature people, yet his government’s actions don’t seem to match his words.

In the Queen’s Speech this spring, the Government announced a proposed new planning system, which would create “simpler, faster procedures for producing local development plans, approving major schemes, assessing environmental impacts and negotiating affordable housing and infrastructure contributions”, or in layman’s terms, allowing more building to take place.

However, word coming out of Government is those plans could be cancelled following the Conservatives’ surprise defeat in the Chesham & Amersham by-election to the Liberal Democrats in the summer, which was blamed by some Conservative MPs on the new proposed planning laws.

So, whilst the Government decide what to do, what can mature Lincoln homeowners do if they feel they do want to downsize?

The biggest fear many mature Lincoln homeowners have is they will sell their large Lincoln home but be unable to find anything to buy – thus making themselves homeless.

In this current Lincoln housing market, the issue isn’t selling your Lincoln home, but ensuring you find the right home to move into. Feel free to drop me a line to discuss how we can potentially sell your own Lincoln property, tell the buyer to wait, then we will go and find a home for you to move into in your chosen area of Lincoln.

Of course, all this takes time and patience, yet this is what old school estate agents did before the internet and the property portals. There is no extra charge for this and even if we find you a buyer, and for whatever reason the move doesn’t go ahead, there will be no charge.

If you are a Lincoln homeowner or landlord and think this may affect you – feel free to drop me a line.

In the meantime, what are your thoughts about excess ‘spare bedrooms’? Let me know in the comments.

👂 – Audio Version http://ow.ly/qq7W50He79c

Should Lincoln Landlords Be Worried About New Rental EPC Regulations?

Everyone should be doing their bit to help reduce the UK’s carbon footprint on the globe – yet the question is, is that burden being put too much on the shoulders of Lincoln landlords with potential bills of £7,600+ in the next four years?

The background – the UK has obligated itself to a legally binding target to be carbon neutral by 2050. One of the biggest producers of greenhouse gasses is residential homes.

To hit that carbon-neutral target (as one-fifth of the UK’s carbon output comes from residential property), every UK home will need to achieve a minimum grade of ‘C’ on their Energy Performance Certificate (EPC) by 2035. Each EPC has a rating between ‘A’ and ‘G’ – ‘A’ being the best energy rating and ‘G’ the worst – like an energy rating on a fridge or washing machine.

All UK rental properties have required an EPC. Yet, from April 2020, the Minimum Energy Efficiency Standards (MEES) regulations have required all private rental properties (including rental renewals) to have a minimum EPC rating of ‘E’ or above.

Yet new legislation being discussed by the Government’s Climate Change Committee has suggested that landlords should play their part and increase the energy efficiency of their private rented homes. Sounds fair until you dive into the details.

The Government is muting the idea that all new tenancies (i.e. when a new tenant moves in) in private rented properties should be at an EPC rating of ‘C’ or above by 2025 (and all existing tenancies by 2028). The issue is…

66.5% of all private rented properties in Lincoln have an EPC rating of ‘D’ or below.

The problem is some Lincoln landlords will find it awfully expensive, neigh impossible, to improve the energy efficiency of their Lincoln rented properties, especially those Lincoln landlords who hold older housing stock such as terraced properties built in the 1800s. These Victorian terraced houses never perform well on EPC ratings as they have solid walls.

Now, of course, you can improve the EPC rating of a terraced house by improving roof insulation, boiler replacement, solar heating, and high-grade uPVC windows. Yet, with some terraced houses, there will come the point where you will be unable to get to the haloed ‘C’ rating without installing external or internal wall insulation, sometimes even floor insulation.

With wall insulation costing between £5k and £15k and floor insulation around £5k…

the bill to improve all Lincoln’s private rented

properties will be a minimum of £47,918,080.

But before I talk about what the options are for Lincoln landlords, here’s the weird part of EPC’s. An EPC rating is calculated on the cost of running a property and not the carbon output or energy efficiency, despite its name.

My advice to Lincoln landlords – although it’s correct to create a future strategy, all I can say at this point is ‘more haste less speed’. These rule changes are only a discussion paper, and it remains open for consultation by any member of the British public until 30th December 2021. That means the Government’s strategies and tactics may change.

Given that 57% of private rented properties are below a ‘C’ EPC grade, it is hard to believe the Government could achieve this without making big cash grants available.

For example, there is presently a cap of £3,500 for energy improvements that Lincoln landlords must spend to get it to the existing EPC ‘E’ target grade on private rented homes (i.e. if you have a privately rented home at an ‘F’ or ‘G’ EPC rating, you only need to spend a maximum of £3,500 as a landlord on improving your EPC rating and still being legal even if those £3,500 don’t get you to the current ‘E’ rating minimum). So, if the current rules allow an exemption to the EPC renting rules, if a Lincoln landlord can’t improve their Lincoln property enough, conceivably, could this be extended?

So, what are Lincoln landlord’s options?

One thing you could do is put your head in the sand and hope it all goes away!

Another thing some savvy Lincoln landlords do (be they my client, clients of other letting agents in Lincoln or even self-managing landlords) is to sit down and plan a strategy for their Lincoln rental portfolio. I print off all the EPCs of their rental portfolio, look at the recommendations, then discuss a plan to ensure they are covered whatever the Government decides to make the new EPC rules. Like all things in life, plan for the worse and hope for the best.

If your agent isn’t offering that service, please drop me a line because I would hate for you to miss out on the advice and opinion that so many Lincoln landlords have already had from me. The choice is yours.

With Lincoln Tenants Deposits Totalling £7,371,230, how will ‘Lifetime Deposits’ Change the Lincoln Rental Market?

The Government’s scheduled publication of their White Paper for the Renter’s Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Lincoln landlords and Lincoln tenants?

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

The average deposit for a Lincoln rented

home stands at £830.

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn’t need to save for an additional new deposit every time, they move home.

Now, of course, it’s vital that any new ‘deposit scheme’ does not dissuade Lincoln landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it.  

So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new Lincoln landlord is protected by a whole deposit, even if the deposit on the old Lincoln home comes into dispute.

This will be critical and central to Lincoln landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a Lincoln landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

The deposits Lincoln tenants have had to save for certainly raises the cost of renting a Lincoln home.

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Lincoln renters. To give you an idea of the level of deposits held for Lincoln rental properties…

The total of all the tenants’

deposits in Lincoln are £7,371,230.

Yet the other side of the argument contends that if the Lincoln tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitor and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Lincoln landlords with a decent level of protection against unpaid rent or damage to the property? When you consider…

The total value of all the privately rented properties

in Lincoln is £1,997,336,900.

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Lincoln landlord is vital.

So, what are my thoughts on ‘Lifetime Deposits’?

It is my opinion the common need for Lincoln tenants to stump up a ‘two-fold deposit’ is not helping many Lincoln renters when it comes to moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century.

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week’s rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e., before Q4 2024). 

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn’t pay the rent?

Of course, a handful of Lincoln landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced. 

However, this will reduce the supply and availability of Lincoln rental properties,

meaning rents will rise (classic textbook supply and demand),

thus, landlords return, and yields will rise.

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Lincoln will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30’s.

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Lincoln and enjoy those higher yields and returns. Isn’t it interesting that things mostly always go full circle?

Is the Lincoln Property Market Running Out of Steam?

In recent articles on the Lincoln property market, I have been talking a lot about house prices over the last 12 months and 5 years in Lincoln.  

When it comes to newspapers talking about the property market, the headline most people look at is what is happening to house prices.

However, as 2 in 3 (65.1%) of Lincoln home sellers are also home buyers, the price is almost irrelevant. Let me explain.

If your property has gone down in value – the one you want to buy has also gone down in value – so you are no better or worse off (and if you are moving up market – which most people do when they move home – in a suppressed property market the gap between what yours is worth and what you will buy gets lower … meaning you will be better off).

Many property commentators (including myself) consider a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying).

Let’s look at the numbers for Lincoln.

The average number of properties sold in Q1 (Jan/Feb/March) between 2008 and 2020 was 110 properties per month, whilst Q1 in 2021 saw 124 properties sell on average per month (boosted by the March stats where an eye watering 149 homes sold). This meant …

12.4% more houses sold in the Lincoln area in Q1 2021

than the 14-year average

The average number of properties in Q2 (April/May/June) between 2008 and 2020 was 121 properties per month, whilst Q2 in 2021 saw only 93 properties sell on average per month, meaning …

23.6% less houses sold in the Lincoln area in Q2 2021

than the 14-year average

Finally, whilst the exact stats for Q3 2021 for our local authority won’t be published by the Land Registry for a couple of months, I can make certain calculated assumptions from the national data published by HMRC. The number of property sales for our local authority area in Q3 (July/August/September) between 2008 and 2020 was on average 129 properties per month. However, using the HMRC data, I calculate there will only be 93 properties sold on average per month in Q3 2021. This means …

27.9% less houses sold in the Lincoln area in Q3 2021

than the 14-year average

One of the two main drivers of activity in the housing market in the latter half of 2020 (meaning Q1 figures were better than the long-term average) was the battle for space, with many Lincoln buyers seeking larger properties to work from home. The second was the short-lived tax relief measures such as the cut to Stamp Duty Tax meaning property prices were at an all-time high.

But what also might surprise you is the number of people buying for the first time.

1 in 4 mortgages since lockdown have been

for first-time buyers (25.12%)

Lincoln first-time buyers, buoyed by parental help with their deposits, the Government’s 5% deposit mortgage and ultra-low borrowing costs, have also helped to push house price growth since the start of 2021. In fact, if you split down house price growth between second time (third time etc) buyers and first-time buyers, the national annual house price inflation for first-time buyers is 9.2% compared to 8.1% for the second or third etc buyers. 

Yet, the Q2 and Q3 2021 Lincoln property market was worse than the long-term Lincoln average (in terms of property transactions)

The question is – should we be worried?

The UK economy continues to deliver a benevolent framework to the British housing market. 

The labour market has outstripped expectations with the millions expected to join the dole queue at the end of furlough failing to materialise and with the number of job vacancies on the rise.

Of course (and I mentioned a lot in my recent posts), the Bank of England is projected to increase interest rates to dampen inflation in the coming months, with further small rises predicted over 2022, so I do expect the demand for property to cool off as mortgage borrowing costs increase. 

Normally such rises in mortgage costs would mean less property would sell, yet nothing over the last couple of years has been normal.

Many Lincoln property homeowners have held back putting their property on the market in the last 6 months because they were afraid, they would sell their own home but not find another to buy – thus making them homeless (nothing could be further from the truth – yet that is what a lot of people incorrectly believe).

If the Lincoln property market slows and interest rates rise, mortgage costs will still be incredibly low by historical standards.

Also, if the obstacle of raising the 5% deposit can be overcome by first-time buyers plus a confidence that existing homeowners won’t be made homeless because of a cooling property market, many more people could be tempted to enter the property market by placing their property for sale first …

… thus, opening the market to more buyers – which in turn will drive up transaction numbers back to their normal 14-year average. However, raising a deposit is likely to remain the primary obstacle for many.

If you are a Lincoln homeowner or first-time buyer and want my thoughts on the future, then please do drop me a line.

2022 is going to be an interesting year ahead for the Lincoln property market – only time will tell if this will be a brief respite or is it running out of steam?

Please tell me your thoughts on what you think will happen.

AUDIO VERSION – http://ow.ly/ol9u50GORHn

BASE RATE RISE?

The base rate of interest is set to rise in the ‘coming months’ as the Bank of England acts to control the UK economy.

The Bank voted to keep the base rate at its historic low of 0.1% in November, but with inflation 3.1% and predicted to rise to as much as 5% in the first half of 2022, a rise is likely.

Any rise will impact mortgage borrowing costs, although with an estimated 80% of borrowers on fixed rate deals, no significant adjustment to the housing market is anticipated in the short term.

Compared to the Global Financial Crisis in 2008/09, when the base rate was often more than 5%, the rate by the end of 2022 is expected to be a maximum of 1%.

Raising the base rate encourages people to save, not spend. This should slow the increase in prices of household goods.

How far would you go to help your child get on in the world?

Many Lincoln parents move area to ensure their child gets into the best primary school, or to fund their university costs. Many of you reading this have even helped your children with the deposit for their first home from savings.

However, I have come across many Lincoln people in their 50’s and 60’s who have good jobs and incomes, yet don’t have the savings to give to their children to help them buy their first home. It doesn’t help when you consider…

the average value of a Lincoln home has risen by 16% in the last 5 years, from £192,650 to £223,450.

I am therefore seeing increasing numbers of parents who are willing to re-mortgage their own Lincoln home or start a new mortgage (when they own their Lincoln home outright) — to get their children onto the Lincoln property ladder.

So, whilst the Government is trying to turn Britain’s 20 and 30 somethings from ‘Generation Rent’ into ‘Generation Buy’, the Bank of Mum and Dad are mortgaging their retirement to pay for it all. Yet it need not be cost prohibitive borrowing the deposit as you still have access to interest only mortgages.

With an interest only mortgage, your monthly mortgage payment covers only the interest on your mortgage, not any of the original capital borrowed. This means your mortgage payments will be lower than on a repayment mortgage, remembering though at the end of the term you will still owe the original amount you borrowed from the mortgage provider.

1 in 14 new mortgages are interest only and 1 in 5.5 existing mortgages are interest only mortgages, they are extremely popular.

Anyway, many Lincoln homeowners might be worried about having that level of debt in their golden years. However, many plan to pay off the mortgage when they downsize as they get into their 60’s and 70’s.

I talk to many Lincoln homeowners, who are asset rich but cash poor and desire to help their children onto the Lincoln property ladder. Their attitude is their children will inherit their property when they pass away, so it seems practical to give them that money to work harder for them earlier in their life when they need it to buy their first home.

Can you get a mortgage, even if you are retired?

A lot is dependent upon your age and financial position. The mortgage companies will see if you have adequate funds for your retirement and emergencies plus leaving enough equity in the property to enable you to downsize in the future. Like all things, you need to take advice from a qualified mortgage arranger.

So, that then begs the question, is there enough equity in Lincoln homes to borrow against?

In the late 1980s and again in the early 2000s, many Brits saw their homes as a cash machine. Numerous homeowners re-mortgaging at the end of their mortgage’s preliminary term (usually after the initial 2, 3 or 5 years), but when doing so increased their mortgage to enable them to buy a nice car or fancy holiday. Yet, by increasing the borrowing, it created negative equity in the early 1990s and stopped many homeowners moving home between 2009 and 2013 because of their lack of equity.

Therefore, I must ask, have we borrowed too much this time round?

Looking at Lincoln and the specific postcodes LN1 to LN6 combined…

In 2016, the average Lincoln homeowner had a mortgage of £79,687 and today it is £92,343, a rise of £12,656.

Looking at these numbers, one might think we are again over-extending ourselves, yet as regular readers of my blog about the Lincoln property market will know – I like to drill down and look at all the figures.

Initially, I was worried about these stats, until I considered the equity Lincoln people have amassed over the same 5 years.

In 2016, the average equity held in a Lincoln homeowner’s property (whilst still having a mortgage) was £112,963, yet today that stands at £131,107, a rise of £18,144.

Even though mortgages have increased, Lincoln homeowner’s equity has risen even more, meaning as we stand today, mortgaged and owned-outright properties, there is…

£16,670,851,431 of equity held in all Lincoln homes.

Whilst the total value of mortgages has increased slightly since 2016, as a percentage, this has gone down meaning Lincoln homeowners and Lincoln landlords have increased their equity in the last five years.

It can quite clearly be seen that the financial insecurity sparked by the Credit Crunch crisis of 2008/9 has created a generation of Lincoln homeowners and landlords who are savers and improvers rather than movers and excessive borrowers, using excess cash to invest in their property and pay down debt or to excessively borrow on their equity growth.

Only 16.35% of the total value of Lincoln property

is borrowed money with a mortgage.

This is great news for every Lincoln homeowner and Lincoln landlord because irrespective of whether the ‘Post Lockdown Bounce’ is short or long-lived, it shows the Lincoln property market is in a better state to ride out any storm that it might encounter than ever before because less people will be in negative equity or have prohibitively high mortgages.

Before I finish, I fully appreciate money and inheritance is a sensitive subject for many families.

My message to all the Lincoln parents is, just because your children aren’t talking about the subject, it doesn’t mean it’s not on their mind.

The lead must come from you, as a Lincoln parent to ensure the wealth held in your bricks and mortar can be used to your family’s advantage, when they need it most.

If you do, your children will thank you for it and they may even do the same for their children, then, they will do the same for their children’s children … creating a legacy that will go on for generations.

Audio Version – https://lincolnpropertypodcast.buzzsprout.com/1870157/9498795

Lincoln Homeowners to Face Post-Lockdown Mortgage Rate Rise of £600 a Year

With grocery, energy and other household prices/costs rising and hitting everyone’s back pocket, inflation (rising prices) may feel like an unimportant issue when it comes to the cost of keeping a roof over your head.

Yet nothing could be further from the truth for many Lincoln homeowners and Lincoln landlords.

Because inflation over the long-term is bad for the economy, the normal weapon of choice to reduce inflation is to increase interest rates. The Bank of England oversees interest rates.

Should inflation continue to rise, there will come a point later in the year when the Bank of England will need to raise its Base Rate from its 300-year record low of 0.1% and continue to do so with a series of further increases in 2022.

When interest rates go up, the cost of mortgages go up. When the cost of mortgages goes up, that hits the affordability of what people can borrow to buy their homes (and landlords to finance their buy-to-let properties). In essence…

could it be the end of the Lincoln house price boom?

The danger of a base rate rise by the Bank of England on the back of a rise in inflation over the last few months has alarmed banks and building societies into increasing the mortgage rates for both home buyers and landlords.

In the last week alone, lenders have increased the rates of their mortgages, some mortgages by more than one whole percentage point. That doesn’t sound a lot, until you punch the numbers into a calculator.

Lincoln property buyers (be they landlords or homebuyers) have

relished months of cut-price cheap mortgages rates.

Mortgage lenders have played the big game in the last 12 to 16 months to capture the mortgage business of over million Brits that have moved home since the end of Lockdown plus the many millions of re-mortgages, with the cheapest mortgage rates falling below 1%.

Yet, the money markets have already priced into their calculations that the Bank of England will increase the base to 0.25% by December, up from the existing 0.1%. They also anticipate a further two quarter point rise in the Spring of 2022, meaning they believe the base rate will be 0.75% by the end of summer 2022.

So why is this an issue for the homeowners of Lincoln? Looking at the combined totals of the LN1 and LN6 postcode districts

29,515 Lincoln property owners have mortgages

totalling £2.72bn (up from £2.31bn in 2013).

Yet, 6,198 of those Lincoln homeowners with mortgages are on variable rate mortgages, with their mortgage payments rising and falling based on how the Bank of England interest rate shifts. That will cause instant pain if mortgage providers pass on increased mortgage repayment costs. So how much will that be?

The average size of mortgage for a

Lincoln homeowner is £92,342.96.

If the base rate were to rise to 0.75%, the average Lincoln homeowner (with a variable rate mortgage) would be £50 per month worse off (£600 per year).

The mortgage price war the banks and building societies have been fighting recently has resulted in falls in the month-on-month average mortgage rates available to borrowers. The economy is awash with cash looking for a home (mainly down to the Government’s and the Bank of England’s intervention to keep the UK economy going during lockdown). This has meant, mortgages have been available at less than 1%.

However, with reports of a potential Bank of England interest rate rise happening soon, those Lincoln homeowners who are on a variable rate mortgage are probably going to be the first who would feel the influence of any Base Rate increase.

If the Bank of England Base Rate rose to 3%, the average annual mortgage

payment of those Lincoln homeowners on variable rate mortgages

would rise by £2,770 per year.

This could mean homeowners with variable rate mortgages would be spending half their salary on their mortgage should interest rates get up to these levels.

Now the Bank of England won’t increase rates by that amount over night, as that would spook the market. They will probably increase every few months by a quarter of one percent each time.

Thankfully, over the last 4 or 5 years, over 90% of new mortgages have been fixed rate, yet they are only fixed for a certain length of time. If you have less than one or two years left on your mortgage, you seriously need to take advice now from a qualified mortgage broker, as any penalty to change might now be smaller compared to the mortgage rates you might be paying when your deal finishes in the next 12 to 24 months. Again, I am not giving you advice in this article – just making a suggestion.

A further message to the 1 in 5 of Lincoln homeowners on a variable rate, so, please take some advice from a qualified mortgage advisor as well. Mortgage rates can’t get any lower and all the signs are showing they will be going up. The mortgage market is still extremely competitive, there is opportunity for borrowers to lock in ultra-low mortgage rates before any likely Base Rate increases filter through.

Will an interest rate hike crash the Lincoln

housing market like the early 1990s?

The early 1990s saw repossessions go through the roof, as homeowners defaulted on their mortgage payments because of the increased mortgage rates. Also, in the run up to the Credit Crunch in 2008, Northern Rock were lending 125% of the value of the property (we all know what happened to them!). Other banks were recklessly lending 8 or 9 times a person’s income, without the person having to prove that income. Both scenarios were significant contributory factors in the housing market crash.

Thankfully in 2014, the Bank of England, implemented the recommendations of its own Mortgage Market Review. The Mortgage Market Review forced banks and building societies to stress test mortgage borrowers against potential increases of the base rate of up to 3%.

Thankfully, even the most hardened monetary doom-mongers aren’t contemplating base rates of those levels (although I won’t apologise for highlighting what it could cost earlier in the article).

Fundamentally, as we go into 2022, the housing market is built on decent foundations, unlike 2007 with the poor lending practices by the lenders. Yet the increase in base rates will have another influence.

The psychological factor of a perceived increase in mortgage costs, might be enough to cool the enthusiasm and excitement of many buyers to pay top dollar for their next Lincoln home, and that might not be a bad thing. If I am being frank, we could do with something that takes a bit of fizz out of the Lincoln housing market.

Many Lincoln homeowners have been put off placing their house on the market because they are scared, they won’t be able to find another home. A slight increase in Base Rates will take the frothiness out of the Lincoln property market and return it to some form of normality. I would even go as far as to say house prices might ease back ever so slightly in the coming 12 to 18 months.

So dont be alarmed if house prices in Lincoln do drift slightly over the

coming years like they did in the mid 1990s.

It’s just the property market settling down and coming back into some form of equilibrium, which is good for everyone.

My final thoughts,

The mortgage lenders have already priced in the potential Bank of England Rate rises, so even if rates do rise, let’s not panic. And even if they did rise to 3%, that would still leave them at levels that look exceedingly cheap at any other time in history. Many homeowners in their 50’s and 60’s can remember mortgage rates of 15% in 1992, so take advice from your family. (Interestingly, the 50-year Bank of England Base Rate average is 7.2%).

Buying your Lincoln home is a long-term venture. It is a huge financial decision that can give you peace of mind and a superb place to live.

But it is not an investment. I am not saying you should avoid homeownership, however, if you are considering buying because you think you are making a clever investment choice, think again.

The idea that your Lincoln family home can be an investment too comes from the fact that, historically Lincoln property prices have risen. We all have stories of someone in the family, somewhere in the UK, who bought a house for £500 many years ago, for it to be worth 300%, 500%, or even 1000% more today!

If you read some of my past articles on the Lincoln property market, I have proven many times over, there are much better ways to invest your money, for example, buying buy-to-let properties or stocks and shares.

But if you want to bring your family up in a home that is yours, the bottom line is this. Even if interest rates rise to 3% (if not a little more), you will still be able to get on the property ladder with a small deposit (using the Government’s 5% deposit mortgages) and you will still find it’s cheaper to buy than rent.

If you would like to chat to me about anything in this article, do drop me a line. In the meantime, please do give me your thoughts on the matters raised in the article. I would love to know.

Thanks in advance.

Are Lincoln House Prices Set to Fall this Autumn?

The stamp duty tax holiday is over, furlough finished at the end of September, unemployment is due to rise, and inflation is rife … is this the end of the post lockdown Lincoln property boom?

Surely, we are heading for house price correction?

Forecasting what will happen in the Lincoln property market this Autumn may not be as simple as it first appears.

It’s true the Lincoln property market is starting to settle down after an all-time number of property deals were completed in June.

More Lincoln people will have moved home in 2021 than in any year since 2007, with an estimated 1.5 million home buyers nationally having bought a property.

Roll the clock back to last Christmas, and the Government’s Office for Budget Responsibility, projected that national house prices would drop between 6% and 8%.

By Christmas, the price of the average home in Lincoln will be about £236,500 up 7.7% on last Christmas.

Let us not forget there were so many ambiguities at the start of 2021. We were about to start a 5-month lockdown, hospitals were bursting at the seams with patients, the vaccines hadn’t started, 4 in 10 employers had furloughed their staff and we had just had Brexit … things didn’t look good.

Yet, nothing could be further from the truth 10 months later – the Lincoln property market has been on fire. But after a heated summer in the Lincoln property market, things certainly can’t carry on as they have been since the end of lockdown.

So, where are we with the Lincoln property market as it stands? Taking reference from historical data on the website The Advisory (I would certainly recommend you check it out)

65% of properties on the market today in Lincoln are sold subject to contract (sstc).

How does this compare to October 2019 and October 2017?

In October 2017, 39% of Lincoln properties were sold sstc,

 whilst in October 2019, 34% of properties were sold sstc.

Yet how does that compare to the national picture?

In 2017, 39.72% of the country’s properties for sale were sold sstc whilst in 2019, that figure was 38.11%.

Now I love a good league table, so then decided to compare our locality to the rest of the country

So, I chose to look at the LN3 postcode specifically. For information, there are 2,234 postcode districts in the country.

The 2021 sold stats put LN3 in at 533rd place in the country, 1,750th in 2017 and 909th in 2019 

… meaning we have improved from both the 2017 and 2019 figures.

As we enter the last 3 months of the year, there are not so many uncertainties as there were at the start of 2021. On the good news front, 49 million Brits have had at least one jab (45m two jabs) and the UK will be the world’s fastest growing advanced economy this year according to the IMF.

Conversely, the furlough scheme ended at the end of September and with energy prices going through the roof, a real shortage of homes for sale (as I have discussed several times in recent blogs) and rising inflation on the back of a shortage of raw materials and trained staff, forecasting this and what will happen to Lincoln house prices might not be as easy as it seems.

Post stamp duty holiday, it is now recognised that the majority of the demand for people moving home is focused by a profound unhappiness and frustration with the homes we live in, revealed during the first lockdown in 2020.

Buyers (and tenants – so take note Lincoln buy-to-let landlords) want space … in fact, three types of space … and they will pay handsomely for them!

  • Office space (be that bedroom or study)
  • Outside space (gardens or proximity to green areas)
  • Broadband with ‘outa-space’ download speeds

And whilst there is a shortage of properties coming on to the market, demand and supply economics mean…

Lincoln house prices should remain relatively stable going into 2022.

The number of properties coming onto the market in Lincoln is slowly improving, yet not enough to diminish house values.

Also, don’t forget Lincoln first-time buyers still have stamp duty relief all to themselves again and mortgages are cheap. At the beginning of the 2020 lockdown (spring 2020), mortgage providers removed their higher risk 5% deposit mortgages for fear of a housing market crash. Currently, the vast majority of these low 5% deposit mortgages are back, together with the Governments own 5% deposit mortgages.

Yet many Lincoln homeowners are concerned about inflation

and its effect on their mortgage payments.

Inflation is important because if inflation gets too high, the Bank of England will need to raise interest rates to reduce inflation. Because mortgages payments are based on the bank of England interest rate, higher mortgage payments will affect what people can afford. Normally the higher the mortgage rate, the less likely house prices are to increase (and in fact if interest rates are too high, house prices will fall).

Whilst I can’t give you advice, with the Bank of England base rate at a 300-year historic low of 0.1%, I’m still surprised that nearly 3 in 10 Lincoln homeowners with mortgages are not on a fixed rate mortgage. There has never been a better time to get a fixed rate mortgage, as there are deals out there with interest rates as low as 1%. This means even if interest rates do go up in the short term, you will be protected from higher mortgage costs. Anyway, back to inflation.

Inflation did rise quite quickly and steeply in 2008/9

but came back down within a year.

This was because of a shortage of staff and raw materials during the Credit Crunch of 2008/9, the very same issues we’re experiencing at the moment in Q4 2021. The type of inflation (yes, there are types of inflation!) in 2008/9 was called ‘push inflation’. Whilst inflation is not great, ‘push inflation’ could be described the better type of inflation (as long as is it doesn’t go on for too long).

The economic crippling hyper-inflation seen in the 1970s was ‘pull inflation’. The circumstances that create ‘pull inflation’ are not being experienced at the moment in the UK. This is good news because ‘pull inflation’ is bad inflation, which in turn would create massive problems to the UK economy as a whole.

Therefore, whilst inflation will probably rise to 4-5% by Christmas, I don’t believe the Bank of England will raise interest rates substantially as the message we are hearing from them is they see this as a short-term blip.

Opportunities for Lincoln buy-to-let landlords?

Ultra-low mortgage rates and a booming rental market is encouraging more Lincoln buy-to-let landlords to expand their rental portfolios, yet their strategy is changing. Yields are increasing as there is a shortage of rental properties, driving up rents. Also, there are Lincoln landlords looking to exit the rental market, often because they want to liquidate their portfolio for retirement. These portfolios don’t make it onto Rightmove and get sold ‘off market’.

Therefore, if you are a serious Lincoln buy-to-let landlord and you’re looking to expand your own portfolio, it’s really important to put yourselves on the mailing list of estate agents and also build up great one-to-one relationships with the same agents to ensure that you’re at the front of the queue for these off market rental portfolios and not at the back.

To conclude, nobody knows the answer to what will happen to the property market in Lincoln as we go into 2022. There are many factors that could affect the market in a positive and negative way, yet buying property is always a long-term investment (be it for yourself or to rent), so if you need any advice or opinion on what you should do, drop me a line or pop into the office and we can discuss the options you have over a cup of coffee.

#lincolnproperty #lincolndevelopments #waltersproperty #lincolnshireproperty #modernmethodauction #propertyinvestment #callwalterstoday #lincolninvestments #thewaltersway #MovesyoutoMovewithWalters

Audio Version

Buyer Demand Swells

The property market continues to ride the wave as we head into autumn. Buyer demand per property is more than double pre-pandemic levels (Rightmove).

Rightmove report a 14% increase in new listings at the start of September*, but the number of available properties for sale remains low and competition for properties remains strong.

37% of properties sold for above their initial asking price in August, with an estimated 19 buyers per available property currently on the market (Propertymark).

First-time buyers, cash buyers or those buyers who are already sold subject to contract are in the best position to benefit from current market conditions.

Lincoln Buy-to-Let Market on the Rise as Returns Rise by 38.1% in 5 Years

Lincoln landlords are becoming progressively more self-assured about expanding their rental portfolios; as Lincoln rents rise, mortgage interest rates fall and demand for decent Lincoln rental properties outstrips supply.

Several reports nationally would suggest around a third of UK ‘portfolio’ landlords (i.e. landlords with more than one rental property) are actively looking to expand their rental portfolios in the next 12 to 18 months, which would locally mean …

1,181 Lincoln ‘portfolio’ landlords are looking to add to

their rental portfolio by the end of 2022.

The pandemic has had a substantial change to what we want from a home. Many people think that relates just to homeowners, yet nothing could be further from the truth as it also applies to tenants.

Homeowner or tenant, many of us have spent a lot of time away from places of work. Many office workers face the outlook of the combination of working from home as well as at the office, meaning a change in what people look for in their home. People (including tenants) are looking for larger properties, with extra rooms for office space and decent sized gardens or to be closer to outside green space.

So, let’s look at the ‘scores on the doors’ as to why Lincoln landlords are on the up …

Lincoln house prices are 24.4% higher than 5 years ago.

Because some Lincoln first-time buyers are being priced out of the market due to these house price rises, they are being forced back into the rental market. Add the extra demand of the 1 in 10 Lincoln house sellers who, in the last 12 months, have had to go into rented accommodation instead of buying, and this has created increased demand, meaning …

Rents today in Lincoln are 10.8% higher than a year ago

and 13.7% higher than 5 years ago.

The average rent of a Lincoln property today is £696 pcm.

In previous articles on the Lincoln property market, I was talking about the lack of properties to buy – yet that issue is also there in the British rental property market. Now let’s look at the supply of rental properties.

Would it surprise you that the number of private rented homes in the UK has fallen in the last 12 months by just over 2.5%?

Why? One reason has been many ‘accidental’ landlords have used this housing market to sell their property for a good price. That means the supply of available rental properties has decreased. The perfect storm of increased demand and lower supply, and with many Lincoln tenants competing for those larger Lincoln homes, they may find Lincoln rental prices pick up even more over the next year.

What about buy-to-let mortgages for Lincoln landlords?

The banks all but withdrew from buy-to-let lending in the first lockdown. Yet, since last summer things have settled down and during 2021 there has been a mortgage price war.

Lincoln landlords can borrow 60% of the value of their BTL property on a two-year fixed rate of 1.18% from Platform and even those with a 20% deposit (that’s borrowing 80%) can borrow that money at 2.49% 2-year fixed rate from The Mortgage Works. Those looking to fix for a little longer can get 1.44% from The Mortgage Works and 1.79% at 75% loan to value from Santander.

(It must be noted there are some fees to these mortgages, and you must take advice from a qualified mortgage advisor before deciding which mortgage is best for you).

So, is now the best time to invest in Lincoln buy-to-let property?

If you are attracted to invest in Lincoln buy-to-let, it’s vital to do your homework first – particularly if you are new to the game.

When estimating the expected rental returns on investment, capital growth and yields, many Lincoln landlords look to what has happened with house prices and rental prices, yet past performance does not always deliver a future guaranteed return.

Smart Lincoln landlords will speak with agents like myself and others in Lincoln, prudently researching the Lincoln property market to discover what types of properties are in high demand (and short supply) from tenants.

Whether you are a landlord of ours or not, please feel free to drop me a line via email or social media for no nonsense advice on the important matters to look out for before investing in Lincoln buy-to-let.

Why Are More Lincoln OAP Homeowners Deciding Not to Move Home?

A recent report by Legal & General stated that since the pandemic, many older homeowners had put their plans to move home ‘on ice’. It said that fewer OAP homeowners are planning to downsize from their large family homes after the pandemic made them realise the actual value of their local community and space.

Historically, many OAPs move home to another part of the country to live near their grown-up children. Yet the pandemic has shown that OAPs can live quite well locally without moving to a strange new town to live near their children. The support networks of their friends in their existing community have emphasised the significance and importance of having friends close by.

Yet this trend isn’t just for OAPs moving away. Many Lincoln OAPs who aren’t moving away from Lincoln (because their family is still local) are also deciding to stay put longer for the same reasons. Even though they are rattling around their large 3 and 4 bed detached family homes, they love the space their large Lincoln homes offer.

And for those Lincoln OAPs who are wanting to move, the issue is that the choice of properties they could buy to downsize is limited. This scarcity of properties for sale, called the ‘housing crunch’, can be seen by that lack of choice of properties for OAPs to move to.

Only 126 bungalows are for sale

within a 5-mile radius of Lincoln

In a ‘normal’ Lincoln property market, I would expect this to be double or even triple this number.

All these factors combined means these OAP “eternal homeowners” threaten to make the scarcity of properties coming on to the market even worse!

So, why is this an issue for everyone else?

Well, because Lincoln OAPs aren’t moving from their large 3 and 4 bed detached homes to smaller bungalows or ground floor apartments, this is creating a blockage on the housing ladder. Lincoln families, in their 30’s and 40’s, are desperate for larger 3 and 4 bed detached homes for their ever-expanding families. But if the OAP sellers of those family houses aren’t moving, they will remain overcrowded in their existing homes.

Let’s look at the numbers first.

  • There are 4.42m UK over-65 property owners, and their properties are worth a combined £1.53 trillion (which covers just under three-quarters of the national debt).
  • 71.3% of those aged 65 and over own their home (although 1 in 10 still has a mortgage).
  • There are 9,777 Lincoln homes occupied by OAPs, representing 23.1% of all the households in Lincoln (notable compared to the UK average of 31%).
  • 86.9% of those Lincoln OAPs are retired, meaning the rest are still working! (The national average is 83.4%).
  • The total value of the property in Lincoln owned by OAPs is £1.55bn.
  • 63.9% of Lincoln OAPs own their home outright (compared to the national average of 65.8%), and 5.4% of Lincoln OAPs own their home, albeit with a mortgage (compared to the national average of 5.5%).

Many Lincoln OAP homeowners simply love the house and neighbourhood they live in, often living in their homes for over 25+ years. I talk to many mature Lincoln homeowners who say they are afraid to put their home on the market, because they believe (incorrectly) if they find a buyer for their home and can’t find another property to go to … they would be made homeless.

I can only share my opinions on the matter. The one thing I have seen in my years in the property market is that so many Lincoln people leave it too late to move home. So, when they do move, they aren’t fit enough to do all the jobs in their new home. Indeed, is it better to move home in your late 60’s/early 70’s, meaning you can still do the little things to make your new house a home, rather than in your late 70’s/early 80’s and find the jobs are much harder to do?

Also, if you are worried about finding your next home, get yourself on the mailing lists of all the Lincoln estate agents.  A recent study showed only 1 in 6 buyers were on an agent’s mailing list for the property they bought. Therefore, by being on the mailing list, you will get to know of any suitable properties coming on the market before most others. This is important in this housing market; a property is often sold STC before it hits Rightmove (to a buyer that put themselves on the agent’s mailing list).

By downsizing, you could use the additional funds to top up your pension, take the family on a holiday of a lifetime (once it’s safe to do so of course), or help your children get on the housing ladder themselves with a deposit for their own home.

I fully appreciate many of the 6,770 OAP homeowners in Lincoln have many reasons to stay, be that sentimental, friendship, support networks etc. My advice to all of you is to do your homework, put yourselves on the mailing lists of agents (in case the property of your dreams comes up) and do what is best for you. By downsizing, you are giving yourself better options for your quality of life and massive opportunities to spend more time on the things you enjoy like your family, holidays, or even helping others.

The choice, as they say, is yours.

If you are a Lincoln homeowner and want to ask me anything about what I have said, please drop me a line to discuss the matter further at no cost or obligation.

Lincoln Homes Asking Prices Down 1%

With Rightmove announcing a national drop of 0.3% in average asking prices in August, some are asking if the steam has been let out of the property market. Yet with the gains we have seen in the last 12 months, is this just a minor bump in the road? Alarm bells normally ring when new homeowners coming to the market for the first time are having to lower their initial asking price when compared to the market as a whole.

So, what is actually happening in the national and local property market to asking prices and the number of properties for sale, and where does that leave Lincoln homeowners and Lincoln landlords?

1 in 7.4 homes already on the market today have reduced

their asking price in the last two weeks

That means new sellers bringing their property to the market for the first time, are having to curtail their initial asking price to remain competitive. Normally, this should ring alarm bells, particularly when this is the first time this has happened in 2021. Therefore, it’s vital to ‘look under the bonnet’ of the figures and see what, exactly, is happening locally.

Average asking prices for Lincoln homes

are 1% down compared to July

However, that figure hides some interesting anomalies – the average asking price of Lincoln semi-detached houses are 1% lower than in July (that doesn’t mean they have dropped in value by that much – just the headline asking prices) whilst apartments/flats have seen the average asking price rise by 3% in the last month.

So, if this is what is happening to Lincoln asking prices, what about the number of properties for sale. Looking nationally first…

there are currently just 285,970 properties for sale in the UK,

which means 1 in 67 British homeowners are presently on the market

interesting when compared to 2005, it was 1 in 13.5 homeowners on the market.

With such little supply of properties for sale nationally, demand remains robust. Yet the property buyers in the market are being a little more reserved with the offers they are making compared to the Stamp Duty holiday frenzy times seen earlier in the year. They will pay handsomely, and yet top dollar won’t offer the ‘crazy price’ levels some Lincoln buyers were offering in the spring – hence the recent reduction in asking prices to a more realistic level.

Looking at the movement in the available properties for sale and to rent in Lincoln over the last few months, an interesting picture arises.

The number of Lincoln properties for sale (and rent) is still at record lows when compared to the 30-year long term average.

The choice for Lincoln tenants is limited as well, as many tenants aren’t moving home. With the additional increase in demand from 1 in 10 Lincoln homeowners choosing to go into rented accommodation (albeit temporarily) Lincoln landlords with exceptional properties are getting decent rents, as discussed in a recent article I wrote about the level of rents in Lincoln.

With the current level of Lincoln properties for sale being around 40% to 50% below the long-term average (depending on the type of Lincoln property you own), it means when a Lincoln property is properly priced, given the intense competition, often it comes down to the position of the buyer and not the price they are prepared to pay.

When I say, “position of the buyer”, I mean, do they have a chain, do they have to sell their own property to buy another property?

Many Lincoln house sellers are selling their home before they buy. Selling before you buy can be a fruitful approach in a fast-moving property market. That does mean your own purchaser will have to demonstrate a certain amount of patience whilst you wait for the right home to come on to the housing market.

However, because it is currently taking on average 19 weeks between sale agreed and exchange of contracts, with mortgage providers and solicitors taking their time due to the backlog, this often allows you to potentially play catch-up if it takes a couple weeks to find the right property for you.

Many home sellers are going even further by selling their Lincoln home first and then going into transitional rented accommodation. This subsequently puts them in pole position when their forever home comes up for sale as they have no chain. Although this takes a lot of determination and resilience, it does mean you will be in the very best position when the property of your dreams comes up.

The choice they say, as always, is yours!

If you would like a chat about the Lincoln property market and the best thing for you and your personal circumstances, do drop me a line. In the meantime, what are your thoughts on the current Lincoln property market? Do share in the comments.

Lincoln Homeowners Have Turned to the Rental Market to Cash in by £13,100 Each

Should you sell or should you buy in this most interesting Lincoln property market?

I have calculated that at least 220 Lincoln house sellers have rented a home to break their house chain in the last 12 months, although at a cost as they face paying many thousands of pounds in rent. 

There are several reasons behind this. One is because they cannot find another Lincoln property to buy amidst a continuing shortage of new Lincoln properties coming to the market. Although, there are others who have achieved such a high price for their home they have decided to cash in and are (hopefully for them) waiting for the Lincoln property market drop?

Or will it drop? (More on that later).

Those selling their home have seen the…

average Lincoln home rise in value in the

last 12 months by £13,100.

Yet, if they have had to go into private renting, they have paid for that privilege in the rent they have had to pay.

The average cost of a six-month rental agreement in Lincoln is £3,809, meaning accidental Lincoln tenants have pumped £837,998 into the Lincoln rental market in the last 12 months.

The unevenness between the number of properties for sale and demand for them is at its widest since the early 2000’s. Whilst we have seen a slight improvement in the number of properties for sale in Lincoln, there are still…

34% fewer homes up for sale today in Lincoln,

compared to August last year.

This serious shortage of Lincoln property for sale is discouraging some hesitant Lincoln homeowners from putting their property on to the housing market, anxious they will not be able to find their next home and will be left renting.

Yet some savvy Lincoln homeowners are moving into a rented property as a way to navigate the shortage of properties to buy. If you have someone offering you top dollar for your Lincoln home, whilst you will have the hassle of two moves, the increase in value of your Lincoln home will more than offset the rent. 

Also, when you come to buy your next Lincoln home, you will be chain free and in pole position to buy your ‘forever home’, rather than being overlooked for the home because you are sold stc and burdened with a chain.

Yet this trend has made life tougher for long-term Lincoln tenants.

On average there were normally 1,200 to 1,500 properties available

to rent in Lincoln on Rightmove at any one time (pre-pandemic),

today there are only 606 available.

To give you an idea of how this has affected the Lincoln rental market, with heightened demand and lower supply, demand for rental properties has grown to such an extent…

the average rent in Lincoln has grown from £635 per month a year

ago to £685 per month today.

Tenants are suffering from less choice and higher rents in the Lincoln property rental market, with few indications it’s going to significantly ease on the run up to Christmas.

So, what is going to happen to the Lincoln property market? 

Well, those of you that follow me know I regularly write about the Lincoln property market in my property blog. If you would like some recent articles I have written about the future of the local property, either drop me a line and I will send you some links to those posts, send me a DM or contact me by telephone.

In the meantime, please do share your thoughts on the matter in the comments.

Students in the private rental sector

435,430 first time students have a confirmed place at university in the UK in 2021, this is 5% higher than results day in 2020.

During university, 29% of students live in the private rental sector. Dataloft estimate that 570,000 students will be living in the private rental sector during the next academic year.

In the UK, excluding London, students in the private rental sector spend an average of £508 on their share of rent a month and a total household rent of £1,313.

In London students in the private rental sector spend an average £1,007 on their share of rent, and a total household rent of £2,026.

Source: Dataloft Rental Market Analytics, HESA

How Many Days Does It Take to Sell a Lincolnshire Home?

Whether you are a Lincoln homeowner, first-time buyer, or landlord; the last 15 months has been a roller coaster ride when it comes to the Lincoln property market.

With 213,120 UK house buyers and 58,580 UK tenants moving home in June, the summer has been manic for many people. Meaning some Lincoln homeowners are asking if they should be staying put? Or should they wait for the best home to come onto the market before putting their home up for sale or find a buyer but be unable to find a property – it’s all rather confusing.

Then we have some Lincoln landlords who are asking themselves if they should buy another property investment (and some even wondering if they should sell and cash in on the boom) and then finally, with 95% mortgages back, first-time buyers are asking if they should look to take the plunge and buy their first home or wait.

In this article, I hope I can help you with the decisions you might want to make and to navigate this unusual post lockdown housing market. Let me start with some stats to show you what is happening at the moment in Lincoln.

The average time it takes to sell a Lincoln property in

this housing market is 43 days.

Interesting when compared with nearby Washingborough at 54 days, Nettleham at 45 days, Skellingthorpe at 82 days and Branston at 41 days.

Look back five years, it took 97 days on average to sell a Lincoln home – the local property market is now certainly ‘cooking on gas’!

The property market has certainly solidified a little over the last few weeks. The Stamp Duty holiday rush has seen its run and the pent-up post-Brexit and more importantly post-lockdown demand has receded and although I am still observing competing offers on most Lincoln properties, I can certainly get a feeling of a small shift in the balance-of-power between the seller and buyer.

Many people have put their house hunting on hold as they go on their first holiday since 2019, be that glamping in Cornwall or having days out on a ‘staycation’. That means between now and mid-September, depending on what type of property you are looking for, many buyers could well discover that there are fewer competitors for their next home than there might be.

Also, July and August are notoriously barren months for estate agents putting new properties up for sale. Yet since the typical ‘seasonal property market’ is so out of kilter because of the pandemic, many agents are taking on a decent number of particularly good properties now, which is not something that characteristically would have happened in the summer months.

The important thing is not to wait for the property to hit the portals (i.e. Rightmove etc). Yet research shows, nearly 5 out of 6 people who bought their home were not on the agents mailing list before they viewed the home they eventually bought. That’s OK in a normal property market as you can wait until it hits Rightmove or Zoopla, yet these are unprecedented times and if you are not on an agent’s mailing list – you will miss out on properties.

If you don’t put yourself on the agent’s mailing lists, you will

end up losing out on the property of your dreams.

So, the question is should you put your Lincoln home on the market first or wait for the right property to come along?

Roll the clock back a few years and it was standard practice for people to wait for their dream home to come onto the market, then put theirs on and hope that it would sell in time. This housing market is different and only those who are in a position to proceed (cash buyers or those sold subject to contract) will be considered as serious buyers.

Yet, nobody wants to be homeless if they do sell.

Estate agents are returning back to their old skills from the 1980s and 1990s by chain building. By starting at the bottom of the chain of the smaller house and building up a chain, waiting for everybody to find their next homes, nobody needs be made homeless.

This is not an issue because most house sales are taking on average between 20 and 25 weeks and as long as everybody communicates with each other and everyone knows where they are, then normally things go through, albeit slower. Can you believe it – estate agents really are earning their money with this!

So what Lincoln homes are selling the fastest?

Lincoln landlords, there are some bargains to be had on some apartments with that length of time on the market? Again, do your homework or even consider picking up the phone to me for a chat.

So, there you have it. The lessons I hope you have now learnt from this are to put yourself on agent’s mailing lists, talk to agents about your requirements so you get the heads up first when a property is coming on to the market (don’t just do everything over a computer screen) and once you have found a property be a little bit more patient with how long it takes to build a chain and then get the property through to an exchange and completion so you get the keys to your forever home.

Whether you are a Lincoln homeowner, Lincoln landlord or first-time buyer and would like some advice and opinion on your circumstances in the current Lincoln property market, please don’t hesitate to either pick up the phone or drop me a message.

To everyone else, what are your thoughts on the Lincoln property market?

Only 1 in 19 Lincoln Properties are Bungalows, Despite an Ageing Population. Why?

The bungalow is a building that has represented a more leisurely, gentler way of life since the early 1900’s. Bungalows have been sold as an aspiration for those about to retire, saving them the annoyance of having to climb stairs. With an ageing population, one would think they would be building more bungalows, yet nothing could be further from the truth. In fact, this could be one of the main issues that is holding back many mature homeowners moving home thus creating a bottleneck in the Lincoln property market for the younger families who are being held back and unable to move into the larger homes they so need to grow their families.

So, before I answer that question, let me share this fascinating fact about bungalows. The word ‘bungalow’ originated in India, not the UK. The name is derived from the Hindi word ‘baṅglā’ or the Gujarati word ‘baṅglo’, both of which seem to refer to a home occupied by a Bengali person. The colonial English started to use it for themselves in the late 1600s to describe the same sort of basic lodgings that sailors and staff of the invading East India Company used.

Anyway, back to the here and now in Lincoln.

There are 2,270 bungalows in Lincoln.

When you consider there are 42,368 properties in Lincoln, that

means only 5.36% of property in Lincoln are bungalows.

To give you an idea of the age demographic of Lincoln homeowners, there are 10,203 Lincoln homeowners aged 65 years old (and over) and 11,646 Lincoln homeowners aged between 50 and 64 years of age.

You can see demand for bungalows is only expected to grow.  Yet new homes builders are having to deal with soaring land prices, meaning to get a profit from the site they are under pressure to build more vertically than horizontally as with bungalows (as bungalows take up so much more land).

The last available data is from 2018 and only 1.6% new builds in the UK were bungalows, interesting when it was just over 7% in the middle of the 1990s. As British people are living longer, those existing Lincoln bungalow homeowners will be living in them longer, thus creating even more of a bottleneck in the Lincoln property market.

So, what is the answer?

Well with building land in Lincoln at a shortage, maybe new homes builders should be forced under planning rules to reserve ground floor apartments to be set aside for older people to encourage them to move out of larger houses. I would challenge the long-held point of view that building more bungalows in Lincoln is the pre-eminent way to urge growing numbers of mature ‘last-time buyers’ to move out of their under-occupied Lincoln homes and free up their large homes (where their children have flown the nest) for younger Lincoln families to grow.

With the new Planning Regulations due to be in place in a couple of years, local authorities could require builders to set aside a share of homes for mature residents, as they are already obligated to subsidise local community facilities or low-cost social housing in return for obtaining their planning permission to build in the first place.

Another option would be to convert all those empty shops in our town and city centres up and down the country into residential use. There is no need for planning permission to change offices to residential property and the Government are considering the same for shops (although I have heard of some horror stories of those office to residential developments making rabbit hutches look spacious) – so again, it comes down to the planning laws and making them fit for purpose.

There are no doubt consequences of not designing our housing stock for the 21st Century and beyond for older people.

The population of Lincoln is set to grow by 17,868 to 111,910 by 2040.

As the UK population gets older in the coming decades, as life expectancy is set to grow from 81 years 2 months to 83 years 3 months by 2040, I fully appreciate the need for more Lincoln homes to be built for families, yet one must ask if the planning authorities are focusing too much on new housing for the younger generation, when they in fact should be encouraging new homes builders to develop larger, ground floor two-bedroom homes and decent accessible transport links.

These are my thoughts, what are yours the good people of Lincoln?

Lincoln’s Love (and Hate) Affair with the Semi-Detached House

The Semi-Detached House – the icon of middle-class aspiration, the pinnacle of liberalism yet at the same time compromised individuality, the ‘semi’ as it is colloquially termed is, for many Lincoln homeowners, the highpoint of modern domestic bliss.

Britain’s gift to architecture is the humble ‘Semi-Detached House’. This type of property has been exported around the world with – the ‘Doppel Haus’ in Germany, the ‘Duplex’ in the USA, Canada and Australia. 

For those young, hip, and trendy people living in your converted warehouses with strobe lighting and exposed brickwork, it might surprise you the semi is the dream home of an immense number of Lincoln people. In fact, it is the most common dwelling type in the British Isles, with 8,060,657 semi-detached homes occupied by Brits alone (representing 31.68% of all occupied property) compared to 23.81% detached, 25.49% terraced and 19.02% flats.

In Lincoln alone, there are 13,124 semi-detached houses meaning …

30.0% of properties in Lincoln are semi-detached.

So, when did the semi-detached house first come into play? Many people think the semi-detached boom started with mass swathes of the suburban mock Tudor Bay fronted semis being built between the first and second world wars. The fact is that it was actually rich landowners in the post Great Plague (1665+) years wished to house their farm labourers as inexpensively as possible, yet making their grand estates look as imposing as possible.

And that’s the point of a semi-detached house. Only half the property is yours, yet you ‘feel’ like you own it all.

The next phase of the semi-detached story, and a phase that really pushed home the point, were many of the late Georgian houses built around the Kensington Gardens area in West London. Many upper-middle class Georgians were wanting something more than the classic Georgian terraced house yet couldn’t afford a large, detached home. Therefore, architects took the humble semi-detached house to the next stage of its evolution by masquerading the building itself as one home by slipping its two front doors down opposite sides of the building, making it look like one home from the front, to complete the impression of total ownership.

By Victorian times, semi-detached houses fell out fashion as the railways were building many of them for their railway workers and they became associated with the lower working classes, but speculative builders continued building semi-detached homes for the new lower middle class, which is the reason why ultimately the country is full of semi-detached homes today.

The semi-detached house was saved from the annals of history by the Bedford Park development in Ealing (London). Referred to as the world’s first ‘garden suburb’ and started in the 1870’s, the architect of Bedford Park used influences of the ‘Aesthetic Movement’, the precursor to the ‘Arts and Craft Movement’ to make the buildings look more pleasing on the eye. The architect also took reference from the style of properties from British history such as Queen Ann to be seen in such features as a sweep of steps leading to a carved stone door, rows of painted sash windows in boxes set flush with the brickwork and bright coloured brickwork with limestone stone quoins emphasising the building’s corner.

As the car enabled people to commute to work from further away, people wanted to get out of the big cities, thus giving rise to the interwar semi, with its mock Tudor fronted, rosemary tiled roof, oak beamed, herringbone brickwork and the leaded and stained-glass windowpanes that we all recognise. It was Bedford Park that gave the green light for architects up and down the country to use old styles of building design to make their semi-detached houses look the part.

And now, in more modern times, the semi-detached house has gone from strength to strength.

7,650 of Lincoln semi-detached houses have changed hands since 1995, many upwards of 5 times (and a handful even more).

The semi continues to appeal, both to big national builders and smaller Lincoln developers, and most importantly to home buyers. The advantage of semi-detached houses over town houses/terraced houses or apartments is they afford access to their (typically bigger) gardens without having to pass through the house, and they have natural sunlight on three sides of the property, are easily extendable and quite often have a driveway.

And that’s at the heart of what a semi-detached house is all about, the schism or divide of the semi reveals the tension at the heart of owning your home, which on one side of the coin is a commodity/way to make money and on the other side, a vision to have your own castle, a piece of ground to call your own. It articulates both the craving for personal freedom and the inevitability of socio-economic life. What do I mean by that?

We may dream of owning a castle in many acres, with a drawbridge and moat, yet real life means we can only afford half a building plot sliced out by a volume national builder next to the A158.

I just love a semi-detached house! Style and substance combined.

What are your thoughts? Share your stories and opinions on the humble semi-detached house.

The Average British tenant moves every 4yr 3mth.

Moving home is the ultimate double-edged sword. Of course, you get to enjoy new neighbourhood, perhaps a bigger home, and all the excitement that comes with making your Lincoln home your own.

Yet to get that point, there is the weeks and weeks of changing utility suppliers, weeks of packing and several sleepless nights wondering if you have done the right thing.

Would it surprise you that on average 1,164,970 homeowners move home every single year in the UK, yet only 703,000 private tenants move home each year?

So, it appears that homeowners move home more often than tenants, until you realise that there are 18.14 million owner occupied homes and 5.62m private rented homes in the UK

Meaning every private rented home changes hands every 4.25 years what every owner occupier home changes on average every 15.5 years.

Nevertheless, we were surprised to learn the average British tenant moves home every 4 years and 3 months.

We at Walters’ Property understand the stresses and strains of finding and then moving into your new Lincoln home, yet with our help and guidance we will make it as smooth as possible, both from the tenants and landlords’ point of view.

#Boston #UKpropertymarket #UKproperty #freevaluation #valuemyhome #houseprices 

#thewaltersway #movesyoutomovewithwalters

Lincoln Home Moves Hit Record High in June

as 184.7% more people sell in June compared to the Lincoln area 10-year average

June 2021 was the busiest month ever for UK estate agents, home removal companies and conveyancers since monthly records began, as HMRC logged 213,120 residential transactions in June, a jump of more than 216% nationally on the same month last year (when the housing market had just reopened after the initial lockdown).

The cause of this was all the homebuyers trying to complete their property purchases before the approaching Stamp Duty Holiday deadline finished at the end of June. This was important as house buyers had until 30th June to complete their sale to save up to £15,000 in Stamp Duty Tax.

Many property market commentators believed the property market would slump after the Stamp Duty Holiday finished. Yet, I haven’t observed many property sales falling through or renegotiations because the buyer had to pay the extra Stamp Duty, and talking to other property professionals around the UK, neither have they.

Let’s not forget that the Stamp Duty Holiday isn’t totally over as it is a tapering off until 30th September. This means homes and apartments sold under £250,000 will still profit from the Stamp Duty Holiday.

So, what sort of property transaction numbers are we talking about here in Lincoln?

An average of 163 properties a month in the Lincoln area have sold in the last 12 months, compared to the 10-year rolling average of 277 properties sold per month.

 The best month ever before this June was March 2016, when there was a rush by Lincoln buy-to-let landlords to secure a property before the introduction of a 3% Stamp Duty surcharge for second homes. In March 2016, 635 Lincoln properties changed hands.

My calculations show 790 Lincoln households sold in June 2021, 184.7% more than the long-term average.

So, what has driven this? The Stamp Duty changes caused some Lincoln people to bring their home moves forward from 2022/3 to take advantage of the tax savings. Yet the most significant thing, talking to many Lincoln homebuyers and sellers, is the pandemic has changed the way people live. Working from home and needing additional office space has meant many Lincoln families (and others from out of the area) are seeking larger properties with more extensive gardens and better access to the countryside. I really can’t see this social trend changing for a long time. I believe this means Lincoln property prices in the medium term will not be markedly different over the next couple of years yet…

Don’t be alarmed to see volatile short-term changes in the run-up to Christmas (both up and down) with Lincoln house prices.

I have always been a believer in the medium-term (i.e. over a couple of years) house price trends instead of the monthly trends, which can sometimes be like a yo-yo. I have always said the best bellwether to the health of the Lincoln property market is the number of property transactions rather than the house prices.

Finally, I can only see this continuing as Banks scrabble to give money away in the form of cheap mortgages. A few weeks HSBC and TSB launched a 0.94% two-year fixed rate deal for those wishing to borrow 60% or less. More recently, the Nationwide Building Society launched a 0.99% five-year fixed-rate mortgage deal (again on a maximum of 60% loan to value basis).

If you would like a chat about the Lincoln property market, your options and where you stand in the Lincoln property market – please do not hesitate to give me a call.

In the meantime, I would love your thoughts on this.

Has the pandemic made you move home earlier?

What do you think will happen in the coming years to property in Lincoln? Share your views.

#Lincoln #ForSale #ukhousing #housing #property #propertymarket #ukproperty #freevaluation #valuemyhome #Estateagents #houseprices #thewaltersway

Why Savvy Lincoln Buy-to-Let Landlords Don’t Use 10-Year Mortgages.

And the reason you shouldn’t either

I know of many Lincoln buy-to-let landlords who fell into property investing by accident. Many didn’t want to sell their family home when the Lincoln housing market crashed in the Credit Crunch of 2009/10, yet still needed to move (often for work). They thought they would keep their Lincoln family home in case they ever moved back to Lincoln. Yet by keeping it, it couldn’t remain empty (there was still a mortgage to pay on it), so they ended up renting their home out.

And that was the start of many Lincoln buy-to-let landlord’s journeys!

Many of you Lincoln landlords reading this have had your fair share of problems, from tenants doing a midnight flit, rent arrears and troublesome tenants, yet also had your rewards.

The average Lincoln landlord in the last ten years has seen their investment rise by an average of £78,800 and has earned in rent (before costs) £95,760.

Many of you reading this have started to learn about investing and creating a property portfolio by buying additional Lincoln homes to rent. The average Lincoln buy-to-let landlord now owns 3.38 properties that generate an impressive passive monthly income with the bonus of growing their household net-worth through growth in the value of their buy-to-let portfolio.

With the average Lincoln buy-to-let landlord in the 56-to-58-year age range, one thing I learned about savvy buy-to-let investing, the shrewd Lincoln landlords tend to want longer-term mortgages.

Taking longer-term mortgages reduces the risk to the landlord.

It sounds counterintuitive, yet it comes down to leverage. Let me explain that whilst leverage is formidable in buy-to-let, it is also quite risky.

Before I explain why some readers might not know what leverage is and how it relates to mortgages and buy-to-let, two-thirds of landlords are debt-free, yet those landlords who have come into the property investment game in the last 10 or 20 years have had to use borrowed money (mortgages) to finance their deals. Therefore, by putting down a small amount of say 20% and borrowing the other 80%, if you calculated your return on an investment base only the money that you put into the deal, then that is what is called leverage (i.e. using borrowed money as a funding source when investing in property and generate greater returns on borrowed money).

You would think, as, say a typical 55-year-old Lincoln landlord, you would want to be only taking a mortgage out for however long you intend to work (say ten years at most) – meaning your portfolio would be all bought and paid for by the time you retire. Yet the clever buy-to-let Lincoln landlords I talk to don’t see their portfolio as having to be paid off (and mortgage-free) by the time they retire. They have understood how to utilise and administer their mortgage debt rationally to enhance their returns without taking on unwarranted risk.

By taking a short-term mortgage of say ten years, compared to a 25-year mortgage, during those ten years, your monthly mortgage payments will be particularly high (because the longer the mortgage term, the smaller the monthly payments will be).

Also, you can pay off a 25-year mortgage in 10 years, but you cannot pay off a 10-year mortgage in 25 years.

Longer mortgage terms mean lower monthly mortgage payments, which in turn means greater cash flow and more elasticity within your rental portfolio. Now to some Lincoln landlords, possessing their rental properties debt-free is particularly important. Yet, I would still seriously consider taking the 25-year buy-to-let mortgage and make additional payments every month to help you to pay the mortgage off early.

Therefore, as an example, if you have a bad couple of months without any rent coming in or unexpected bills, you can return to making the mandatory lower monthly mortgage payments without getting your property repossessed.

So, by taking on the longer-term mortgage, you decrease your risk because it has the lower required payments.

Let me give you an example – if our Lincoln landlord wanted to buy a Lincoln terraced house property for say £162,500 and put down a 25% deposit of £40,625, the best buy-to-let deal I found online on the day of writing this article was a 1.79% Santander 5-year fixed-rate buy-to-let mortgage.

Looking at the mortgage payments per month when comparing the mortgage terms; on the 10-year mortgage, the mortgage payment would be £1,119.78 per month. Therefore, our landlord would have to top up from personal savings to make up the monthly mortgage payments. Whilst if they choose the 25-year mortgage, the mortgage payment would be £514.79 per month. This would mean our landlord would be in profit from day one.

Some might say though the longer term means more interest payments, as it’s 25 years and not 10 years. Yet, at today’s low interest rates, that would only mean an additional £20,065 in interest payments spread over 15 years – not much in the grand scheme of things.

 10-year Mortgage25-year Mortgage
25% Deposit Required£40,625£40,625
75% Mortgage Borrowed£121,875£121,875
Annual Interest Rate1.97%1.97%
Mortgage Length (in years)1025
Mortgage Payment per Month£1,119.78£514.79
Sum of Mortgage Payments£134,373£154,438
Interest Cost£12,498£32,563

Therefore, by taking the longer-term mortgage, as a savvy Lincoln landlord, you are ‘cash flow positive’, meaning you can build a reserve fund for every one of your rental properties to enable you to deal with any unforeseen voids and repairs.

The best way to deal with a buy-to-let property is to see it as a small mini-business, and as with all businesses, you need to grow your income and reduce your expenses whilst in the background provide a decent rate of return for your investment.

The greater the amount of mortgage debt you carry, the greater your monthly mortgage payments, and the simple fact is, the shorter the mortgage term, the higher the monthly mortgage payments. So, if you take on a sensible level of mortgage debt and be ‘cash flow positive’, you can profit from much better returns without taking on excessive risk.

These are my thoughts – please share yours.

P.S. Before I go, I have to say this to cover my proverbial. My comments are only a very brief commentary on the issues raised and should not be relied on as financial advice and that no liability is accepted for such reliance, and that anyone needing such advice should consult a qualified financial adviser or other authorised person.

£323,520 – ‘Wood’ You Pay That for a Lincoln Terraced House?

The value of an average Lincoln terraced house has increased in value by £13,185 in the last 12 months, an increase in value of 8.64%.

Yet the costs of building a Lincoln home have shot up even more in the last 12 months, meaning the price of Lincoln new homes and any building works you do to your Lincoln home in the coming months and years could be a lot higher.

The British house building profession is experiencing a building materials supply problem. Everything from cement to bricks, timber and roof tiles, plastic guttering, copper wire and pipe to insulation, even kitchen sinks have become scarce – and when people can find them, they are costly.

For example, looking at the timber industry, three-quarters of the UK’s building timber comes from abroad, so lockdowns around Europe put a restraint on the timber processing industries of Sweden, Lithuania, and Latvia throughout 2020. In addition, building material supply chains were interrupted due to the application lockdowns imposed by their governments, resulting in many sawmills in those countries restricting shift work to comply with their country’s social distancing rules. Some mills even stopped all work for eight weeks last year, meaning they were incapable of cutting, milling or treating timber, causing their existing stocks of building wood to run dry.

Yet, whilst we were all in lockdown, everyone started doing DIY projects, so the public demand for building timber in the UK remained high, giving little opportunity for UK sawmills (let alone North-eastern Europe) to catch up and restock to the levels previously held before the pandemic.

Building timber costs 112% more than a year ago, steel RSJ’s are a lot more expensive because iron ore has gone up 120.1% whilst aluminium is up 56.8%, and copper is up 59.7%.

All the blame cannot be laid at the feet of the virus and lockdown. The ‘B’ word caused issues with supply at the start of the year. Building materials are a worldwide supply chain issue; this spring’s Suez boat crisis, when many boats were diverted around Africa (as the length of time the blockage was going to last was unknown), exacerbated the problem. All this has combined to make the cost of sending a 40ft container from China to Tilbury Docks £7,576 today, compared to £1,195 just before the crisis. Also, supplies of sand and cement are particularly low with massive demand from the large £98bn High Speed (HS2) rail project. All this combined is affecting many building projects, big and small, across the UK.

If an average Lincoln terraced house had risen by the price of building timber in the last 12 months, today it would be worth £323,520, not the current £165,789.

RSJ (steel joists) take twenty weeks to arrive, compared with the typical five weeks, whilst plasterboard is being rationed with weeks of delays for the ‘good stuff’ and MDF wood, usually takes seven days to arrive; now it takes over a month. Roof battens need to be ordered a month in advance, whilst pre-lockdown they were commonly held in stock by every building merchant.

Demand for building materials has increased so quickly because many British homeowners are driving the explosion. Those people in safe jobs with little opportunity to spend money on foreign holidays and fancy restaurants decided to invest in their property and gardens. According to the Bank of England, this craving for home improvement has particularly exploded since the mature generation have started to be double jabbed (their savings accounts having increased by £180bn during the pandemic).

As I have explained in previous articles, these increases in the price of raw materials will fuel inflation, affecting interest rates upward. An increase in interest rates will make a material difference to the value of Lincoln property. To what extent? Please read my previous articles on the Lincoln property market.

Please do share your stories of issues with builders and building materials over the last 15 months in the comments. I appreciate any stories you can provide to help others in Lincoln.

Is Lincoln Heading Towards a House Price Crash?

Lincoln house prices rose by 1.4% last month, according to the Land Registry.

This means the annual rate of house price growth in Lincoln has increased to 7.1%.

Looking at the national figures, many people were concerned the UK property market was overheating as spring saw annual growth of 9.9%, the highest rate of house price growth documented since June 2007 (when national house prices were rising by 10.8% p.a.). It was only a matter of a few months later the Credit Crunch hit, and the average value of a UK home plummeted from £190,032 to £154,452 in 18 months, a drop of 18.7%.

Government economic measures such as the Furlough Scheme and the Stamp Duty Holiday have so far shielded the Lincoln property market from the worst economic recession since 1709.

So, the question is, can this growth in Lincoln house prices

continue, or is this the start of a house price crash?

One thing is for sure, looking at the number of For Sale boards going up and turning to sold just as quick, shows this market is not maintainable for the long term. Most of the Lincoln people looking to move home have brought forward their home-moves from 2022/3 to this year because of the Stamp Duty Holiday and the lifestyle choice of wanting a bigger garden/office space at home.

Nonetheless, the doom-mongers in the press say there will be a second wave of house sellers that will flood the Lincoln property market in the autumn and winter when furlough ends. They believe many of the 3.4m people still on furlough will be made redundant when furlough finishes at the end of September 2021 forcing them to move home.

This was the catalyst for the house price slump in 2008/9 mentioned above, when many Lincoln homeowners dumped their homes onto the Lincoln housing market.

After all, many Lincoln homeowners lost their jobs and had

mortgages paying 6% to 7% in interest payments.

However, the devil is always in the detail. The industry groups with the highest take-up rates of furlough are the hospitality (public houses) sector, where 70% of staff are furloughed. 65% of hotel staff are furloughed, and 44% people in the creative arts and entertainment industry are furloughed. Most employees in these sectors are in their 20’s and early 30’s and are tenants, not homeowners. This is going to be more of an issue for landlords than homeowners.

And of those furloughed homeowners who do unfortunately get made redundant later in the year, looking at the last four most recent house price crashes, buyers were wrestling with significant declines in mortgage affordability. For example, back in 1988, average mortgage rates were 13.9% before that crash and in 2007 (the Credit Crunch crash) 6.5%. Whilst today, they are under 2%, meaning the mortgages are a lot more affordable, and most Lincoln homeowners who get made redundant will be able to ride out the storm better.

But surely, if Lincoln house prices are rising, won’t

Lincoln homes become unaffordable?

Well, with low-interest rates, this means Lincoln homes are still relatively affordable. In 1989, the house price to earnings ratio was 5.4 to 1 (i.e. the average house was 5.4 times the average UK salary), whilst today that stands at 8.8 to 1. It’s no wonder some people are concerned there will be a house price crash (as there was in 2008 when that ratio hit 7.5 to 1).

However, it doesn’t matter what the house price to earnings ratio is ….

it is what percentage of your income is required to pay your mortgage.

In 1989, 74.6% of your income was required to service an 80% loan to value mortgage on an average UK home (i.e. you borrowed 80% of the value of your house on a mortgage). In the 1990s that percentage dropped yet rose steadily over the next decade and a half, so by the time we got to 2008, that was an equally eye-watering figure of 61.6% of your income to service an 80% mortgage.

Today, it’s only 35.9% of your income to service an 80% mortgage because of low interest rates.

So, if the issue is not the affordability of houses, what is the problem for Lincoln homeowners?

Interest rates!

Bank of England interest rates will affect what people pay on their mortgage (higher interest rates normally mean higher mortgage payments). Interest rates are used to reduce inflation, so if inflation rises, interest rates also rise to bring inflation back under control.

UK inflation has just gone through the 2% barrier, and I believe by the end of this year or early next, it will touch 4% or 5%. In normal circumstances, this would trigger the Government (or now the Bank of England) to raise interest rates. Yet, we had a similar scenario in the late 1980s/early 1990s with a spike in inflation to 8.5% due to a shortage of raw materials and labour, but this was soon sorted out, and inflation dropped quite quickly thereafter.

In the coming year, a shortage of raw materials might be an issue. If there is a shortage of raw materials (supply problems are being found in key items such as timber, concrete, aggregates and steel), this will fuel construction and manufacturing costs upwards.

Next, will there be a shortage of labour? Some say it won’t be an issue (as unemployment will be higher), yet there are certain sectors of the economy that have an imbalance of trained staff of specialised jobs or people not wanting work in that type of job in the first place.

For example, many hospitality and dining establishments are reporting a shortage of staff because they were often filled with hard-working European migrants. I have read reports of London restaurants advertising for chefs and waiting staff, who would have received 1000+ enquiries for such jobs pre-pandemic to only be receiving applications that could be counted on two hands this summer. The hospitality and dining sector was hit harder than most, having to stop trading during the three lockdowns and working under firm restrictions. This led to the majority of staff being placed on furlough (as mentioned above, 7 in 10 are still on furlough), which has prompted some to ride out the pandemic in their own country.

The question is – will they return? If not, to entice them back restaurants will have to increase the wages they pay to attract the staff, which in turn will mean they will have to put their prices up (i.e. inflation). If businesses have to put their wages up and the cost of raw materials continues to rise, prices for everything will rise, and at this point, higher interest rates will kick in.

But how will increased interest rates affect the

Lincoln property market?

Thankfully, 91% of all new mortgages being written are fixed interest rate mortgages and 78% of all existing UK mortgages are fixed-rate (compared to 32.8% in the credit crunch) … meaning we won’t have so many houses being dumped on the housing market like we did in the Credit Crunch, because on a fixed rate mortgage if interest rates rise – mortgages don’t follow suit.

And that’s the key … unemployment combined with high-interest rates caused many Lincoln homeowners to put their property on to the market in 2008/9. Tied in with curtailed demand for property, because it was really difficult to get a mortgage (that’s why it was called the Credit Crunch) … we had an oversupply and subdued demand of Lincoln homes – causing house prices to drop by 16% to 19% depending on what type of property you owned.

So, a good bellwether and indicator on what will (or will not) happen to Lincoln property prices is the number of properties for sale at any one time.

There are only 566 properties available to buy in Lincoln today, low when compared to the 14-year average of 976 properties for sale in the city, whilst at the height of the Credit Crunch, there were 1,684 properties for sale at one point in Lincoln.

As we look to the future, if you want a crystal ball of what will happen to the Lincoln property market … you won’t go that far wrong by getting yourself on the property portals and seeing how many properties are for sale.

These are my thoughts … what are yours?

Lincoln Buy-to-Let Landlords Owed £1,615,303 in Unpaid Rent.

Rogues or Saviours?

There is no getting away from the fact that the rise in the number of buy-to-let properties in Lincoln has been nothing short of astonishing over the last twenty years. As a result, many in the press have said Britain is a broken nation, with many twenty and thirty-somethings unable to buy their first home. The press has named this group ‘Generation Rent.’

Lincoln landlords have been accused of scooping up all the smaller Lincoln properties for their buy-to-let property empires. Others blamed the Government (of both persuasions) for pouring petrol on the buy-to-let fire for giving landlords an unfair advantage with the way buy-to-let has been taxed in the past. Many have said these landlords have priced out Lincoln’s ‘Generation Rent’. Many say they are rogues, and you can see why there is little sympathy for landlords, especially as…

Lincoln landlords receive £87,708,756 a year in rent – easy money or what?

So, as we come out of lockdown, I want to make a stand for Lincoln landlords and talk about the magnificent work they have been doing during the pandemic.

Since lockdown, it has been (almost) illegal to evict a tenant from private rented property. Yet, in the last few weeks, this ‘ban on evictions’ has begun to be eased, making some commentators forecast a ‘tsunami of homelessness’ as landlords ready themselves to kick out the tenants who cannot pay their rent.

You might say they can afford it, yet I need to highlight an often-untold story in the massive numbers of Lincoln landlords who have co-operated with their Lincoln tenants to evade eviction.

The personal finances of some Lincoln landlords and tenants have been ruthlessly strained during the last 16 months — something that is going to have ramifications on the back pockets of both landlords and tenants, as well as the attraction of being a buy-to-let landlord (more of that later).

799 Lincoln tenants are in arrears with their rent

to the tune of £1,615,303.

That’s money these landlords need to pay their mortgages with and even to live off themselves.

The eviction ban was imposed in March 2020 and the Government has expected private landlords to stand the cost of their tenant’s rent if they could no longer pay. It was estimated over 1 in 5 landlords with mortgages had requested a mortgage payment holiday in 2020. Thankfully, that now stands at 1 in 100 as most Lincoln landlords with shortfalls in rent have been using their own personal savings to cover the mortgage payments.

I have seen so many landlords giving their Lincoln tenants rent breaks and discounts to help them through these times. However, most landlords I talk to acknowledge that it is better to have a tenant paying something rather than a tenant paying nothing, hoping that total rent will start flowing as the economy recovers.

Going into the pandemic, 1 in 25 Lincoln tenants were in arrears, yet that now stands at 1 in 11.

So, are we going to see lots of evictions? I would go as far as to rebuff the idea that we will see a rush to the courts of landlords to obtain possession orders now the eviction ban has been lifted. I have always viewed evictions as a last resort.  

Before the pandemic, it took about 12 months for courts to hear rental repossession cases, so this backlog will be nearer two years (if not more). Nonetheless, the threat of a County Court Judgement (CCJ) often makes tenants pay up as it will demolish their credit rating, making it particularly challenging for them to rent another home.

I feel for those Lincoln tenants under furlough or reduced hours as they have the quandary of wanting to reduce their outgoings by moving to a cheaper rental property, yet whose rental deposits will be sacrificed to cover their rent arrears. However, some have said that because house prices have exploded during the last 16 months, Lincoln landlords should write off their tenants’ arrears as a goodwill gesture.

The issue is, 1,424 Lincoln landlords only have a sole property for rent, so the arrears would have to be funded by their personal savings.

For them, the pandemic experience could be the incentive to sell up for good.

A National Residential Landlords Association survey found around a third of all landlords were now more likely to sell their buy-to-let properties altogether or sell some of them. This would mean fewer properties for tenants to rent, thus driving up the rent.

According to government and industry data, evidence suggests that a tenant who rents a property directly through a landlord and not through a letting agent is between two and three times more likely to go into arrears of 2 months or more. Is this because tenants know that private landlords who advertise directly for tenants on Gumtree and other platforms don’t carry out the checks letting agents do on them?

Many of those landlords are switching the management of their property to an agent, and for those landlords sticking with self-management of their property, there is circumstantial evidence they are starting to become a lot pickier when starting new tenancies. Even though illegal, spurning tenants on benefits is woefully all too common. I also worry there could be a stigma about renting properties to self-employed people because of the erratic nature of their income.

Looking into the future, I envisage a growth in the use of ‘rent guarantor contracts’, whereby the tenant is called upon to provide a 3rd party person to pay the rent if the tenant doesn’t. These are common for student lets and those on certain benefits, and it wouldn’t surprise me if these are used more often for self-employed tenants and regular professional lets.

That is why I believe Lincoln landlords should be celebrated … most of them have been saviours. These are my thoughts – what are yours?

How Eco-friendly are Lincoln Homes?

And how new Gov’t rules will mean draughty low-eco Lincoln homes will drop in value

‘It’s Not Easy Being Green’, was the song that Kermit sang on Sesame Street.

Yet now being green is a normal way of life for most of us. Walking or cycling places instead of taking the car, recycling and even shunning meat are some of the things most Lincoln households are trying to do their ‘bit’ for going green.

Our conduct may have improved but when it comes to our Lincoln homes, there is still a long way to go. It is estimated around a fifth of carbon emissions come from home energy usage (nearly three quarters from heating and lighting). The country is releasing 37% less carbon into the atmosphere than in 1990, yet we have legally binding targets to hit 100% by 2050 — and the Committee on Climate Change has stated the UK will need to eradicate greenhouse gas emissions from homes to meet that target.

Landlords were hit first because since April 2018, the Minimum Energy Efficiency Standards (MEES) regulations with regards to eco-friendliness of the rental properties have required all rental properties to have a minimum Energy Performance Certificate (EPC) rating of ‘E’ or above otherwise it is illegal to let out a property, bar a couple of exceptions. This has meant Lincoln landlords have had to spend many thousands of pounds to improve their rental property’s EPC rating (an EPC rating ofA’ being the best eco rating through to a ‘G’ for the worst – just like washing machine or fridge ratings).

But new Government plans could hit Lincoln homeowners in the pocket as well.

The Government is planning to force banks and building societies to penalise people wanting a mortgage of draughty low-eco homes with an energy performance certificate (EPC) rating of D or lower. For those properties not hitting the correct level of EPC rating, it is suggested some form of levy will be placed on the mortgage provider, who in turn will pass that on to the home buyers in the form of higher mortgage payments. Some are describing this charge as an ‘eco-mortgage levy’.

Just over 6 in 10 (62.6%) homes in Lincoln would be hit by this ‘eco-mortgage levy’, thus potentially reducing the value of those homes

Interesting when you compare this with the national average of 60.6%.

In real numbers, 32,854 homeowners and landlords in our local authority area would either struggle to get a mortgage from a bank or building society or it would cost them more because they were a ‘D’ rating on their EPC or below.

Looking at the stats broken down for Lincoln

  • 43 properties are classified as A on the EPC register
  • 3,487 properties are classified as B on the EPC register
  • 11,764 properties are classified as C on the EPC register
  • 15,398 properties are classified as D on the EPC register
  • 5,780 properties are classified as E on the EPC register
  • 1,186 properties are classified as F on the EPC register
  • 252 properties are classified as G on the EPC register

So, what can Lincoln homeowners and landlords do to improve their EPC rating?

Well surprisingly, it need not cost a lot to improve the EPC rating of your Lincoln home. One of the most inexpensive ways to help improve your Lincoln home’s energy efficiency is low energy light bulbs with an estimated cost of just under £40 per UK property. Other efficiencies can be gained by insulating your hot water cylinder, draught proofing any single glazed windows, increasing your loft insulation, and upgrading your central heating controls, all of which can be done for a total of around £750 to £850 per property.

If you want to know the EPC rating of your home, either google the phrase ‘EPC register’ or send me a message and I will find out for you.

Finally, as Kermit famously also said, “Life’s like a movie. Write your own ending”. If you are a Lincoln homeowner or Lincoln landlord, why not look at your property’s EPC rating and look at the recommendations. You are going to have to spend the money sometime, so why not do it now and enjoy lower energy bills and when you come to sell, you won’t be penalised .. a win-win situation for you and the planet?

Your Great-Great Lincoln Grandfather Would Have Only Paid £269 8s 9½d for his Lincoln Home in 1871

Would it surprise you even more when I said the ratio of house prices to wages are still lower today when compared to 1871?  Yes, you read that correctly, as a proportion of average wages British house prices are 17.6% proportionally cheaper today than they were in 1871.

I wish to talk about the last 150 years of the British property market and later in the article, the Lincoln property market. I will also touch on why, before the 1900s, buying a home in Lincoln was considerably more expensive than today and why that changed.

So, let’s look at some interesting stats to get us started :

– In 1871, each house was occupied by an average of 5.33 people (i.e. for every 100 houses, 533 people lived in them), whilst today that stands at 2.39 people per house.

– In 1871, there were 4.5 million properties in the UK, whilst today that stands at 27.9 million

– In 1871, the weekly average wage was 13s 8½d (68p) whilst today it is £585.50

– In 1871, only 20% of people owned their own home, whilst today its stands at 65%

I stated in the first part of the article it was more expensive to buy in the latter parts of the 19th Century than today. It may only be of historical interest, but back in 1871, the ratio of average house prices to average wages was 10.5 to 1 (i.e. the average house was worth ten and half times the average person’s wage), whilst today it stands at 8.8 to 1.

Interestingly, for the next 45 years, that ratio went on a downward trend relative to wages and only stopped falling after WW1, where the average house was worth only 2.2 times the average wage. This made houses more affordable and set the foundations for the homeowning passion we Brits have today.

So why did this happen, what can we learn from it and what does it mean for Lincoln homeowners and Lincoln landlords?

There are three significant drivers that made property a lot more affordable between 1871 and 1911: the Victorians built more property, made them smaller and people’s wages rose significantly.

– In the 40 years between 1871 and 1911, the number of properties in the UK rose from 4.5 million to 8.9 million. To give you some perspective, there were 18 million properties in the UK in 1981. If the UK had grown by the same rate between 1981 and today that was experienced between 1871 and 1911, there would be 35.6 million households in the UK (and not the 27.9 million mentioned above).

– In 1871, the average plot size of a property was 0.23 acres, yet by 1911, that was down to 0.06 acres (or a plot of 72ft by 40ft). This came about from building smaller types of property (i.e. a change away from larger Georgian detached houses towards the infamous rows of Victorian terraces), and a downshift in the average size of houses within each category.

– The average value of property dropped by 26% between 1871 and 1911, whilst wages rose by 85% over the same period.

So, by 1911, the average Lincoln property had dropped in value from £269 in 1871 to £200.

N.B. – you might have noticed I wrote £269 in a slightly different way in the title of the article. Up to 1971, a pound was split not into 100 pence but 240 pence. There were 12 pence in a shilling and 20 shillings (or 240 pence) in a pound. It was expressed in the form £ s d and spoken as “pounds, shillings and pence”. I dropped that into the title as it’s the 50th anniversary this year of when the UK decimalised its currency (younger readers – do google the story – it’s a fascinating topic).

So back to the property market and at the end of WW1, four in five people still rented, virtually all from private landlords. Politicians were concerned about the poor living standards of people’s homes, and this led to the ‘homes fit for heroes’ 1919 Housing Act which delivered subsidies for local councils to build council houses. The average value of a Lincoln property in 1922 was £315.

The 1930s – By 1930, the average value of a Lincoln property stood at £397. With the country building a third of a million houses per annum, interest rates fixed at 2% and hardly any planning regulations, supply of property was outstripping demand, so the average Lincoln home dropped ever so slightly in value to £367 by 1938.

The 1940s – With the bombing of many towns and cities and housebuilding being stopped because of the war, this created a perfect storm to increase house prices after the war. By 1947, the average Lincoln home had risen in value to £1,228 because just as food was rationed during and after the war, so were building materials. Builders could spend no more than £350 on building materials for a new home (and that lasted until 1954).

The 1950s – The ’50s were all about building council houses – a quarter of a million of them each year. By 1959, the average Lincoln home had risen steadily to £1,704.

The 1960s – This decade saw even more houses being built in the UK, with an average of a third of a million houses a year being built. Lincoln is full of 1960’s council houses and now even more owner-occupied housing, meaning by the end of the decade Britain had as many homeowners as renters. The average Lincoln house had risen in value to £3,126 by 1969.

The 1970s – We experienced the first boom and bust housing bubble in the early 1970s with house prices rising by over 30% a year in the early years of the decade (so the current 10% a year is child’s play!) but prices dropped in 1974. They recovered quickly in the following years, not because of increased demand but due to hyperinflation, making the average Lincoln house price rise to £15,894 by 1980.

The 1980s – This was the decade of council tenants being able to buy their own homes, although few people know it was an idea from Labour. They decided against the idea, but it was seized upon by the Tories, who made it the cornerstone of their 1979 election manifesto. The property market helped improve the economy, and by 1988, Lincoln property values increased to £33,246 (only to drop by 32% a couple of years later).

The 1990s – The housing market crash of the early 1990s was painful for all, exacerbated by mortgage interest rates being raised to 15% on Black Wednesday (16 September 1992) and left there for 12 months. Unemployment went from 1.5m to 3m for the second time in ten years, and many of those homeowners who had taken out large mortgages in the late 1980s housing boom could no longer afford the repayments because of the high interest rates, meaning repossessions went through the roof. The crash also made builders nervous, and they only built 150,000 houses on average a year in this decade. Yet, by the mid-1990s, things started to improve. So much so, the average Lincoln home was worth £62,322 by the turn of the millennium.

The 2000s – The decade of cheap mortgages and the rise of buy-to-let, together with a severe drop in the number of new homes being built, contributed to the UK’s third big housing bubble since WW2. The average Lincoln house price more than doubled to £166,894 by 2008, before the Credit Crunch brought the boom to an end, and a year later (2009), the average Lincoln property had dropped to £148,235.

The 2010s – The property market started to come back to life in the early 2010s with property values steadily rising throughout the decade, yet builders were only building around 135,000 new homes a year. It also might surprise you that by 2015/6, the number of homeowners was starting to rise quite significantly, meaning today, as we enter the 2020s decade, the average value of a Lincoln property now stands at £212,235.

So, now we are back to 2021.

Yes, your Great-Great-Grandfather might have been able to buy their Lincoln house for a shade over £269 in 1871. Taking inflation into account since 1871, that same Lincoln house today would be £32,455.92 yet if his wages had increased by inflation at the same rate, the average wage today would be £81.91 per week, not the current £585.50 per week.

I appreciate there are plenty of other factors involved with this topic, such as the cost of renting, raising a deposit, changing lifestyles and the biggest point, the cost of borrowing money on a mortgage.

All this begs the question, what does the future hold for the Lincoln property market?

It’s obvious since the mid-1980s, house prices have sustained a period of impressive growth (even withstanding a couple of property crashes). The Bank of England has gone on record to say that much of the rise in average house values, comparative to wages, between 1985 and now can be seen because of a sustained, dramatic, and consistently unexpected decline in real interest rates and additionally concludes that: ‘An unexpected and persistent increase in the medium-term real interest rates will generate a fall in real house prices.’

Cheap mortgages and a lack of building have created this situation. So as long as interest rates don’t go back to their long-term average of the 5% to 7% range, or the Government decides to increase building new homes to half a million a year (from the current 240,000 per year) … things will carry on as they are in the medium to long-term.

These are my thoughts … I would love to hear any stories of your family buying property in the late 19th Century or early 20th Century and what they paid for it, together with the affordability of Lincoln property and the future of it.

Demand v Supply

Now is a great time to sell your home as there is a huge shortage of properties available for sale, and house prices are higher than ever.


Housing market demand is up 28.6% yet listed properties to buy are down 20.8% (YTD vs 2020, Zoopla). This is putting upward pressure on house prices, with Nationwide reporting a 10.9% annual increase.


68% of homeowners surveyed at the end of April who were either moving home or considering a move, said this would have been the case even if the stamp duty holiday had not been extended (Nationwide).


As the race for space continues, housing market demand is likely to be maintained, despite the stamp duty deadline.

Source: Dataloft, Zoopla, Nationwide

All the signs are that the Lincoln housing market is sat on good foundations, yet one key hazard could still scupper the market

Will the Lincoln Property Market Continue to Boom?

All the signs are that the Lincoln housing market is sat on good foundations, yet one key hazard could still scupper the market.

‘UK Property Prices Rising at Record Levels’ is the headline of many newspapers. In the last few weeks, the Halifax reported they had grown by 6.5% in the last 12 months, whilst the Nationwide said 7.1% and not to be outdone, the Government’s own Land Registry said 8.6%. Nothing new there then you might think, don’t UK house prices always increase?

Actually, they don’t, as many Lincoln homeowners will remember 2009, when they dropped by 19%. Also, some more mature Lincoln homeowners will remember the early 1990’s where house prices dropped just over 40% over 4 years (after the 1989 property crash). So, the increase in UK house prices over the last 12 months has mystified all the forecasts made by most economists as…

house prices were forecast to drop during the pandemic because during the previous six UK recessions experienced since WW2, house prices have always fallen sharply in real terms.

Yet 2020 was different with house price growth increasing at its highest rate since 2014 as the substantial Government support programmes (including Bounce Back Loans, grants and furlough) has mollified the hit to household incomes. Add to that the pent-up demand from the Boris Bounce, all the people working from home wanting an extra room for an office and therefore needing to move, plus the stamp duty tax holiday, with the cherry on the cake of 0.1% Bank of England interest rates keeping borrowing affordable. This has meant…

Lincoln property values are 3.9% higher than a year ago.

Yet the affordability of property is a big issue going forward. By the time of the height of the last property boom in 2008, the national ratio of average property values to earnings had risen from 5.1 in 2000 to 8.8 (i.e. the average house price was 8.8 times the size of the UK’s average person’s annual earnings). We then had the property crash in the proceeding years, and the ratio dropped to around late six’s/early sevens. However, over the last few years, the ratio has been steadily rising and now with the recent growth in demand for property (the five reasons mentioned in the previous paragraph), the ratio has now smashed past nine. Looking locally…

the ratio of average property values to earnings in Lincoln as a comparison was 2.5 in 2000, rising to 5.7 in 2008, dropping to 5.0 the year later when the Credit Crunch hit, and now currently stands at 5.6.

So, are we heading for another house price crash? Maybe, maybe not – because the House Price to Earnings ratio only tells us part of the story. Another indicator of the property market is mortgage affordability, which measures the proportion of mortgage payments to average incomes. For all mortgage holders, in 2015, this stood at 24.13% and today it is only just above the national long-term average of 25%, demonstrating that property is still affordable.

Yet, the life blood of the property market are first-time buyers. The long-term average percentage of income which goes on mortgage payments for first-time buyers is 33%. Just before the 1989 property market crash, this stood at 54%. Whilst just before the 2008 property crash, it reached 49%. Today, it stands at 31.7% (and the reason it’s so low even with record high property prices is low interest rates, because when mortgage interest rates are low, this permits people to afford larger mortgages, which enables them to bid up house prices).

If you are a Lincoln homeowner, Lincoln first-time buyer or Lincoln landlord and thinking of buying or selling a Lincoln property in the next few years, then this article will be of interest.”

Will Lincoln House Prices Fall in 2022?

As 1 in 6 Lincoln homes are selling within a fortnight of coming to market.

One of the most astounding things that has happened in the last 12 months was something that did not happen. Even after the country saw the deepest recession since the Great Freeze of 1709 with GDP dropping 28% in one quarter, one would have expected a large fall in Lincoln house prices would follow. Yet…

Lincoln house prices are 3.9% higher than 12 months ago.

Even though buying and selling Lincoln property was put on ice for the first time in the history of the Lincoln property market last spring due to the Covid 19 outbreak, as the Lincoln property market wobbled on the edge of deep recession, it stepped back in early summer and now it is rocketing upwards as…

15.8% of Lincoln homes are selling within a fortnight of coming to market.

Some commentators have suggested the end of the Stamp Duty holiday together with the ending of the furlough scheme on the 30th September 2021 could be the catalyst for a drop in house prices. Even the Government’s own regulator of finances expects UK house prices to fall around a couple of percentage points in 2022 whilst some others have predicted around a 5% drop as unemployment levels increase post furlough.

However, other property market forecasters believe that property values in 2022 won’t drop against the background of robust British economic recovery in Q3 and Q4 of 2021.

What do I think will happen to the Lincoln property market in the next 12 months?

On the positive side, what I do know is the Stamp Duty holiday enabled Lincoln homebuyers to spend those tax savings on the price paid for their Lincoln home and that certainly accounts for some of the uplift in house prices mentioned above.

Also, the historically low interest rates that have supported Lincoln homebuyers’ affordability for the last 13 years since the Credit Crunch has continued. Secondly, with people spending many months working from home, this has seemed to have polarised people’s inclination to make lifestyle changes. Finally, the Government has recently introduced 5% deposit mortgages for first-time buyers. All these factors will fuel demand and hence may cause house prices to rise.

On a more cautious note, I do not believe these very sturdy Lincoln house value rises of the past year will persist at these levels for the next 12 months. With buyers having to use many thousands of pounds on Stamp Duty, the price they pay for their Lincoln home will be curtailed, meaning property values by definition will ease. 

The simple fact is the British economy has yet to feel the full effect of its largest recession since 1709, and we must remain considerate about the long-term effects of the economy (and unemployment levels) on the property market.

These are interesting times for the Lincoln property market. If the price you want to achieve for your Lincoln home is the most important thing, now as opposed to 2022 might be a good time to consider placing your property on the market.

Don’t forget, you can still put your Lincoln property on the market, find a buyer and then go and see what is available to buy. Many buyers will wait for you to find a property, yet if they can’t/won’t – you won’t be made homeless. English property law means you can still come away from the sale and you won’t be forced to sell. If you would like to know a bit more about that or any aspect of buying or selling property in Lincoln, drop me a message or call me.

Lincoln Property Market: Is it Time to Stamp Out Stamp Duty?

Most people pay Stamp Duty Tax when they buy a property, house, apartment or other land and buildings over a particular price in the UK. The Chancellor, Rishi Sunak (quickly followed suit by the Welsh and Scottish Governments), announced last July that Stamp Duty was partially being suspended on all English property transactions up to £500,000 (£250,000 in Wales and Scotland) – a Stamp Duty Holiday.

That meant only 1 in 8 English buyers would pay any Stamp Duty Tax on their home purchase (if it was over £500,000), saving any buyer up to £15,000 in tax on the purchase. The problem is the property needs to have been purchased and bought by the 31st March 2021. Complete the transaction a day later, and those buyers will have to pay Stamp Duty.

The issue is local authorities are snowed under with local search requests, mortgage companies and conveyancing staff are working from home, so property transactions are taking much, much longer. This means many Lincoln (and UK) buyers who have currently sold (subject to contract) will miss out on the stamp duty saving.

Most (not all) estate agents have been warning the buyers and sellers in their property chains that some deals might not make the 31st March 2021 deadline and pleasingly, most people aren’t moving because of the Stamp Duty Holiday (they are moving because they need extra space because of the pandemic). However, it only takes one person in the chain not to be ‘singing off the same hymn sheet’ for the whole chain to collapse … so keep in touch with your estate agent.

A campaign by one of the national newspapers and an online petition to extend the stamp duty holiday has meant the topic could be debated in Parliament in the next few weeks, after 100,000 home buyers and sellers signed that petition, asking for an additional six-month Stamp Duty Holiday. The home buyers and sellers are worried the property market will collapse after March 31st when the Stamp Duty Holiday is removed.

The last time British home buyers were conscious of upcoming Stamp Duty changes, it distorted the number of properties sold. The bigger question though is, did it change the overall number of people moving home?

In November 2015, the then Chancellor, George Osborne, announced in his Autumn Statement that buy to let landlords would have to pay an additional 3% in Stamp Duty (over and above owner occupiers) for all property bought after the 1st April 2016. As shown in the graph below, this caused a surge in property buying (which we have seen since this summer with the Stamp Duty Holiday), with many Lincoln buy to let landlords completing their property purchase in March 2016, as they dashed to complete their property purchase before the tax increase.

In the 3 years of 2015/6/7, the average number of Lincoln properties sold (transactions) per month was 143 per month, yet in the month before stamp duty was changed in March 2016, transactions rose to 277, an uplift of 93.6% from the average or an extra 134 transactions in that month alone. Yet, look at the months of April and May, the property transactions numbers slumped, meaning in those two months combined, there were 62 less transactions.

So, if the Stamp Duty Holiday isn’t extended, what will that mean for the UK and Lincoln property market?

London and the South East seem to be particularly exposed to the removal of the Stamp Duty Tax break because it has such a high proportion of property priced between £300,000 and £500,000. These areas benefit from the highest tax savings relative to house price.

Yet, with the average value of a Lincoln home at £214,600, the stamp duty cost if the sale is delayed after the 31st March 2021 is £1,792 – a figure that shouldn’t break the bank

So, if the Stamp Duty Holiday isn’t extended – it might not be such the nightmare scenario as some people believe.

My advice to all buyers and sellers is to be constantly talking to your estate agent, your solicitor and your mortgage broker. With your estate agent to ascertain if they have asked every person (or asked the other agents in the chain to ask the question), “What if we don’t meet the stamp duty deadline?” With your mortgage broker and solicitor to give them all the information they need to ensure there are no delays with any information they request from you.

One final thought, some mortgage providers allow insurance policies to be purchased by your solicitor in case your searches (from the local authority aren’t back in time) … the cost of those will be much lower than the cost of the stamp duty … again, speak with your solicitor.  Irrespective of whether you are a client of mine or not, if you would like a chat about anything mentioned in this article, don’t hesitate to contact me.

2,313 Lincoln Homeowners to be ‘Unchained’ From Toxic Leasehold Agreements in Biggest Shake-up of Property Law in Decades

When William the Conqueror invaded our fair shores in 1066, like all good kings, he needed to buy loyalty and raise cash to build his castles and armies. He did this by feudal law system and granted all the faithful nobles and aristocrats with land. In return, the nobles and aristocrats would give the King money and the promise of men for his army (this payment of money and men was called a ‘Fief’ in Latin, which when translated into English it becomes the word ‘Fee’… as in ‘to pay’).

These nobles and aristocrats would then rent the land to peasants in return for more money (making sure they made a profit of course) and the promise to enlist themselves and their peasants into the Kings Army (when requested during times of war). The more entrepreneurial peasants would then ‘sublet’ some of their land to poorer peasants to farm and so on and so forth.

The nobles and aristocrats owned the land, which could be passed on to their family (free from a fee i.e. freehold), while the peasants had the leasehold because, whilst they paid to use the land (i.e. they ‘leased it’ which is French for ‘paid for it’), they could never own it. Thus, Freehold and Leasehold were born (you will be pleased to know that in 1660 the Tenures Abolition Act removed the need of Freeholders to provide Armies for the Crown!).

4.3 million properties in the UK are leasehold

… and 2,313 properties in Lincoln are leasehold. By definition, even when you have the leasehold, you don’t own the property (the freeholder does). Leasehold simply grants the leaseholder the right to live in a property for 99 to 999 years. Apart from a handful of properties in the USA and Australia, England and Wales are the only countries of the world adhering to this feudal system style tenure. In Europe you own your apartment/flat by using a different type of tenure called Commonhold.

The average price paid for leasehold properties in
Lincoln over the last year is £155,414.

The two biggest issues with leasehold are firstly, as each year goes by and the length of lease dwindles, so does the value of the property (particularly when it gets below 80 years). The second is the payment of ‘ground rent’ – an annual payment to the freeholder.

Looking at the first point on the length of lease, the Government brought in the Leasehold Reform Act 1967, which allowed tenants of such leasehold property to extend their lease by upwards of 50 years. However, this was awfully expensive and as such only kicked the can down the road for half a century (when the owner would have to negotiate again to extend another 50 years – costing them more money, time, and effort).

Ground rents on most older apartments are quite minimal and unobtrusive. The reason it has become an issue recently was the fact some (not all) new homes builders in the last decade started selling houses as leasehold with ground rents. The issue wasn’t the fact the property was sold as leasehold nor that it had a ground rent, it was that the ground rent increased at astronomical rates.

Many Lincoln homeowners of leasehold houses are presently subject to ground rents that double every 10 years.

That’s okay if the ground rent is £200 a year today, yet by 2121, that would be £204,800 a year in ground rent, meaning the value of their property would almost be worthless in 100 years’ time. One might say it allows for inflation, yet to give you an example to compare this against, if a Lincoln leasehold property in 1921 had a ground rent of £200 per annum, and it increased in line with inflation over the last 100 years, today that ground rent would be £9,864 a year.

This is important because the majority of leasehold properties sold in Lincoln during the last 12 months were apartments, selling for an average price of £154,007.

So, without reforms, the value of these Lincoln homes will slowly dwindle over the coming decades. That is why the Government reforms announced recently will tackle the problem in two parts.

Firstly, ground rents for new property will effectively stop under new plans to overhaul British Property Law. Under the new regulations, it will be made easier (and cheaper) for leaseholders to buy the freehold of their property and take control by allowing them the right to extend the lease of their property to a maximum term of 990 years with no ground rent.

Secondly, in the summer, the Government will create a working group to prepare the property market for the transition to a different type of tenure. Last summer the Law Commission urged Westminster to adopt and adapt a better system of leasehold ownership – Commonhold. Commonhold rules allow residents in a block of apartments to own their own apartment, whilst jointly owning the land the block is sitting on plus the communal areas with the other apartment owners.

These potential leasehold rule changes will make no difference to those buying and selling second-hand Lincoln leasehold property.

Yet, if you are buying a brand-new leasehold property, most builders are not selling them with ground rent (although do check with your solicitor). The only people that need to take any action on this now are people who are extending their lease. If you are thinking of extending the lease of your Lincoln property before you sell to protect its value, your purchaser may prefer to buy on the existing terms and extend under the new (and better) ones later (meaning you lose out).

Like all things – it’s all about talking to your agent and negotiating the best deal for all parties. Should you have any questions or concerns, feel free to pick up the phone, message me or email me and let’s chat things through.

Rental market accelerates

  • Tenant demand is rising substantially. For agents in the lettings market, the busy season is approaching.
  • Analysis of tenancy start dates based on data from the past 5 years indicates the market starts to accelerate in June, with nearly one third of all tenancies starting between July and the end of September.
  • The demand for rental properties increased significantly in the three months to April according to RICS, however new instructions remain low, supporting rental price growth.
  • Affordability, outside space and broadband are priorities for renters. 87% of tenants are keen to know running costs and 79% broadband speed; information is not always included in property marketing. (Dataloft, Property Academy 2020).

Supply & Demand

  • Rental values are significantly higher across all regions of the UK, except London, than they were a year ago. Excluding the capital, the average monthly rent is £853, up 6.2%.
  • A shortage of supply and growing demand is helping support rental values. New instructions were 9% lower in the first three months of 2021 compared to 2020.
  • Although London has seen an uptick in rents agreed in 2021, oversupply in the market has seen values fall by over 5% year-on-year.
  • Across the UK as a whole, annual growth is currently 2.9%. This is on par with projections for growth over the next year (RICS). Source: Dataloft, HomeLet, April 2020

Average mortgage rate remains historically low

The cost of borrowing remains historically low according to new data released by the Bank of England, the average mortgage rate just 2.09%.

This rate has remained unchanged since the start of 2021, with gross mortgage lending in March hitting its highest ever monthly total at £35.6 billion.

Mortgage approvals remain over 20% higher than the long term (5 year average), as interest in moving home continues.

The UK base rate has now remained at 0.1% for over a year. With inflation remaining significantly below target and the economy still in recovery there is little evidence this will change imminently.

Make your move

  • If you’re considering making a move, now is the time to act. Demand for property is soaring.
  • Spring sunshine, the extension to the Stamp Duty holiday and the relaxation of restrictions has continued to support buyer demand.
  • Properties sold faster in the first two weeks of April than ever previously recorded according to Rightmove, 23% of properties sold in March ‘sale agreed’ within just one week.
  • The number of homes for sale across the UK is at a record low, a shortage of properties underpinning price growth across the market, now at its strongest since October 2014.

The 2020 Review of the Lincoln Property Market

“In this week’s article on the Lincoln property market, I review what has happened to Lincoln house prices and what is likely to happen in 2021.

Looking back at the Lincoln property market for 2020, it can certainly be seen as a frenetic game of two halves, albeit with a very long half time in the spring. Between the General Election in mid-December and Christmas, many Lincoln agents saw an unusually higher uplift in activity in the property market just as we were getting ready for Christmas 2019. Yet once the New Year festivities were out of the way, that pre-Christmas uplift in the local property market was nothing when compared to the bang on Monday 6th January 2020 with the fabled ‘Boris Bounce’ of the Lincoln property market.

January, February and most of March were amazing months, with the pent up demand from people wanting to move from the Brexit uncertainty of 2018/9 being released in the first few months of 2020.

The pandemic hit mid-March, and the Lincoln property market was put on ice for nearly three months (as was almost everyone else’s lives). Yet at the end of spring, the property market was one of the first sectors of the economy to be re-opened. Every economist predicted house price drops in the order of 10% in the best-case scenario and 25% in the worst yet nothing could be further from the truth.

When the lockdown restrictions were lifted from the property market, those three months allowed Lincoln homeowners to re-evaluate their relationships with their homes. The true worth of an extra bedroom (for an office) became priceless, as people working from home were having to take calls and work from the dining room table. Lincoln properties with gardens and/or close to green spaces all of a sudden became even more desirable. More fuel was put on the fire of the Lincoln property market with the introduction of the Stamp Duty Holiday, meaning buyers could save thousands of pounds in tax if they moved before the end of March 2021. This stoked the local property market and now …

Property values in Lincoln are set at 1.4% higher today compared to a year ago.

The fallout of that increased demand for a new home meant those Lincoln properties on the market coming out of lockdown in early summer with those extra rooms and gardens were snapped up in days for ‘full’ price. Lincoln buyers were having to spend their Stamp Duty savings on paying top dollar for the home of their dreams. Yet the increased number of properties coming onto the market in the late Summer quenched a lot of that demand and the prices being achieved became a little more reasonable and realistic. This increased the number of properties sold (stc), so much so that, nationally, almost two thirds more homes have been sold (stc) than would be expected at this time of year!

However, as we all know, just because a property is sold (stc), it doesn’t mean the property is actually sold. The number of people who have moved home in the last 12 months in Lincoln, is as you would expect, much lower.

Over the last 10 years, on average 3,316 Lincoln homes have changed hands per year, compared to only 1,434 Lincoln homes in the last 12 months.

So, what is a Lincoln property worth today?

Drilling down to the four types of homes locally, some interesting numbers appear. Looking at the table, you can see what the average property types are worth locally, and within each type, the average price paid in the last 12 months. (So, if the average price paid for the last 12 months is higher than the overall average, that means more higher-priced property in that type has sold in the last year compared to the overall average – and vice versa). 

 Average Overall Value TodayAverage Price Paid in the Last Year
Lincoln Detached£292,160£277,110
Lincoln Semi-Detached£184,700£184,000
Lincoln Town House/Terraced£152,860£140,460
Lincoln Apartments/Flats£157,280£126,880

Of course, these are overall average values. To give you an idea what Lincoln properties are selling for by their square footage, these are those averages …

Average Value per sq. ft. (internal)
Lincoln Detached£182.16
Lincoln Semi-Detached£183.34
Lincoln Town House/Terraced£158.11
Lincoln Apartments/Flats£175.75

So, what about 2021?

Well normally when the country’s GDP drops like a stone (as it did in the Summer of 2020), the property market follows in unison. Yet as the economy went south, the house price growth and activity in the property market went north. This would appear to be a quite remarkable outcome given that economic framework, but it is gradually becoming clear that, as far as the Lincoln property market is concerned, people’s time in lockdown has been spent reflecting on what they really wanted from their home and has meant that the normal rules of the game simply do not apply…. for now.

I’d love to know your thoughts on how you’ve found the market this year – post me a comment in the box below

I’d also like to take the opportunity to thank one of my readers and supporters of my blogs, who is a property business owner and local landlord, who has kindly allowed me to use a photograph he took of Lincoln Cathedral. Its a great photo I’m sure you will agree.

Michael Hollamby – Author The Lincoln Property Blog

As Lincoln First-time Buyers are Being Locked Out of the Lincoln Property Market – Rents Have Risen By 5.7%

With the banks reducing the number of low deposit mortgages (i.e. deposit of 10% and below) since Covid-19 hit in the spring, this has meant that the number of Lincoln first-time buyers has been decreasing quickly, meaning many of those would-be Lincoln buyers wanting to make the first step on the Lincoln property ladder will stay in the Lincoln rental sector.

This has caused demand to grow amongst Lincoln renters for larger homes to ride out Covid, as they hunker down for the long haul to wait for normality to return to the property market. This has caused

Lincoln rents to rise from £546 to the current £577 per month over the last 12 months, an increase of 5.7%.

Interestingly, the opposite is happening in Central London, where the rents tenants are having to pay have dropped by 3.8% in the last 12 months, as demand has dropped like a stone. It appears Central London tenants are looking to move out to the suburbs, in search of bigger homes, gardens and green open spaces. For example, the average rent for a 1-bed apartment in St. John’s Wood currently stands at a very reasonable £1,817 per month whilst a 2-bed apartment in Kensington and Chelsea is currently at an average bargain rent of £3,715 per month (yes, they might be low compared to last year, yet for us in Lincoln, that still seems like a lot of money!). Also, there has been further downward pressure on Central London rents, as many Airbnb landlords have dumped their short-term holiday let properties onto the long-term rental market as the tourism in the capital has dwindled because of the pandemic.

This has been the sharpest drop in Central London rents since the summer of 2009, when the property market was still stumbling from the Credit Crunch.

This means there is a reverse of the trend of the 2010’s (2010 to 2018 to be exact), when initially the London property market was shooting up whilst the rest of the country was in the doldrums. Then, when the rest of the UK did start to rise slowly in 2013, London kicked on even further like a rocket … yet now it appears the opposite is happening. Getting back to Lincoln, according to the Land Registry property values currently stand 1.4% higher than a year ago; this is split down as follows:

Detached Lincoln homes 1.8% higher

Semi-detached Lincoln homes 2.4% higher

Townhouse/terraced Lincoln homes 0.9% higher

Lincoln apartments/flats 1.5% lower

Yet, do remember, these figures do NOT take into account the prices paid by desperate Lincoln buyers this summer, often paying top dollar to secure the property. This will only filter through in the figures released in the spring.

So, why are the banks curtailing the number of low deposit mortgages, meaning that first-time buyers must find a much larger down payment before they are able to buy their first Lincoln property?

The reason is the banks are fearful of a house price crash in 2021 (although if you recall I wrote about that a few weeks ago and the reasons why that is less likely to happen). They too are afraid of the frothy nature of the property market since the end of the first lockdown in late spring. The bank is lending its own money to buyers and no mortgage lender wants to be holding an enormous amount of these types of high percentage mortgages if house prices fall in 2021, because the bank would be saddled with negative equity and repossession on their hands (and we all know what that did to the housing market in the late 1980’s and early 1990’s as repossessions rocketed).

This can quite clearly be seen in the pricing and availability of low deposit mortgages. As the Bank of England has reduced its base rate to 0.1%, in the last 12 months 10% deposit mortgages rates have actually increased from 2% to 2.8%. Also, when lenders have been offering 10% mortgages throughout the summer, borrowers have had only a 24-hour window to commit before the lender withdraws the mortgage product from the market because of oversubscription. As with all economics, if demand is greater than supply, the price goes up. That extra 0.8% doesn’t sound a lot until you realise a first-time buyer would have to pay an additional £167 per month in interest payments on a 10% deposit mortgage, assuming they borrowed £250,000.

However, it’s not all doom and gloom for first-time buyers as there are embryonic signs that the 10% deposit mortgage market could gradually be returning to normal, as I have recently heard some lenders taking up to a week for their 10% deposit mortgage offers to run out. Fingers crossed!

So, what does all this mean for Lincoln landlords?

Those Lincoln landlords with properties with gardens and larger rooms will be seeing increased demand. The ability to have pets in the rental property is also an advantage, and depending on the property, can add a decent premium to the rent that can be charged.

One final thought though for all homebuyers in Lincoln, be aware it’s going to be very challenging to get your house purchase through in time to meet the 31st March 2021 stamp duty holiday cut off if you are starting the process in November. Make sure your lender and solicitor have the capacity to meet that deadline and when you are asked for information, you drop everything to provide it. The odd days’ delay here and there will mean the difference between you getting the keys for your new Lincoln home before the end of March 2021 and saving thousands of pounds in Stamp Duty Tax … or feeling a fool from the 1st April 2021 and having to pay the tax!

Michael Hollamby – Author of the Lincoln Property Blog

Each Lincoln landlord could be hit by a £22,530 bill

With the second lockdown starting on the 5th November 2020, does this mean Lincoln landlords can wave goodbye to their Lincoln buy-to-let investment and see it go up in smoke on the bonfire of buy-to-let dreams.

With many Lincoln tenants at risk of losing their jobs after the furlough scheme ends next March and as the reverberations of the coronavirus recession hit this winter, what does this all mean for Lincoln landlords and what can they do to mitigate the risks?

Since the spring, most Lincoln tenants and buy-to-let landlords have been protected from the coronavirus crisis thanks to the banks with their mortgage payment holidays and job support schemes.

Before the second lockdown was announced on the 31st October, it was expected, that as the furlough and mortgage payment holidays were due to finish on Halloween, there would be some serious fallout from those schemes finishing. One silver lining from the lockdown (if you can call it that) is that mortgage payment holidays and furlough have been extended, yet does all that just kick the can down the road?

The question is, what can Lincoln landlords do to mitigate the financial risk on their Lincoln buy-to-let investment? 

Help Your Lincoln Tenants Get the Financial Support They Are Entitled To 

Billions of pounds are being spent by the Government to help those people whose income has been hit by coronavirus. The better Lincoln letting agents and self-managing landlords are supporting, guiding and helping those Lincoln tenants in financial difficulty to gain a better understanding of the Universal Credit (UC) processes, systems and payment levels, to enable their tenants to pay the rent and ultimately indirectly, help their Lincoln landlord. Also, if you are a Lincoln tenant, and that support isn’t given when you ask, don’t forget Lincoln City Council do hold special cash reserves for discretionary housing payments, which can be utilised to close the gap in rent between what UC pays and your current rental commitments. Also, the Government’s Money Advice Service and Citizens Advice are a good online resource for you to find out what you are entitled to.

Adopting, Adapting & Improving Your Lincoln Buy-to-Let Property

Demand for gardens or office space means Lincoln landlords will need to think outside the box. Those Lincoln homes with tenants sharing (e.g. HMO’s and shared houses) might need to price their pre-coronavirus 4 bed sharing house to say maybe a 3 bed sharing house plus a work/office room and, if you haven’t already, installing a top of the range, fast and dependable internet connection could be the thing that swings it. Outdoor space and gardens are really high on Lincoln housebound tenant’s wish lists, in fact I have come across some Lincoln tenants demanding that new rental properties have a landscaped garden or those that bought a dog or cat for company during the first lockdown, are looking for their Lincoln landlords to relax their ‘no pets policy’.

Hold On to Your Good Lincoln Tenants

Those Lincoln buy-to-let landlords with decent tenants, who find themselves in financial dire straits should consider attempting to keep them, even if their own monetary circumstances mean they have to decrease their rent somewhat over the short term. Now of course, I would expect tenants need to prove their circumstances, yet if their plight was real, surely it would be a wise choice to reduce the rent by perhaps £50 a month and support your tenants? You know they are taking great care of your Lincoln rental property and rather than risk the issue of advertising your empty buy-to-let property  – particularly when there is no assurance you will achieve your existing rent and ultimately risk drawn-out void periods with no rent coming in at all. What I would suggest therefore,  in such circumstances, is that you create a new Assured Shorthold Tenancy agreement with a longer term with your existing tenant at a lower rent – a temporary measure but with peace of mind for both parties which can then be reviewed once that tenancy is up for renewal.

Carry out Firmer Checks on Your Prospective Lincoln Tenants 

Many private Lincoln landlords and a few slipshod Lincoln letting agents tenant checks are somewhat lacking in their depth. Trust me, there is tenant referencing … and then there is ‘proper’ forensic tenant referencing. As certain parts of the British economy have been hit harder than others, Lincoln landlords must consider when choosing their new tenants, the type of work they do or who their employer may be, to enable them to decide on their future capacity to meet their rental commitments.

Rent Guarantee Insurance for Your Lincoln Rental 

There are still insurance companies offering landlord rent guarantee insurance if your tenants become unable to pay the rent. Many insurance firms removed these insurance products in the first lockdown, yet some have returned to the insurance market although insurance premiums have gone up in price. Remember to check the small print of the insurance, although you will get a lower insurance premium if you can show stringent tenant referencing (as per the previous point). 

The Nuclear Option – Eviction

Lincoln landlords need to be conscious that, should their tenancy run into trouble, the Government have changed the rules when it comes to eviction during the coronavirus pandemic. Going into the first lockdown, there was already a backlog in the courts and now, just before going into the second lockdown, bailiffs have been instructed not to enter rental properties in high risk Tier-2 and Tier-3 Covid-19 areas.

Eviction really does have to be the very last option. Negotiation or arbitration will nearly always deliver quicker and improved outcomes for both parties. Lincoln landlords who do come to mutually agreeable arrangements with their tenants by briefly reducing the rent, or allowing payment holidays with legally enforceable pay back schedules should ensure they get the agreed terms in writing and run by a solicitor or their agent (feel free to drop me a note if you need advice).

However, if eviction is required, it doesn’t mean the tenant gets off ‘scot free’. Evicted tenants, depending on their circumstances, will either be placed temporarily into an inexpensive B&B, asked to move in with family or given one of the local authorities temporary accommodation properties, with the goal to then move them into long term council accommodation (as the chances of obtaining private rented accommodation would be slim with agent’s heightened reference checks – more of that at the end).

The Potential Cost of Evicting a Problem Lincoln Tenant

The average rent for a Lincoln property currently stands at £577 per calendar month.

Thankfully, evictions are very rare. Last year before lockdown, tenants from 201.4 rental properties were evicted each working day in the UK … but if yours was one of those, that is still a potentially large cost.

Working on the basis that most evictions from the first rent not being paid, through to eviction, refurbishment of the kitchen, bathroom, carpets and décor (because often these do need sorting/replacing) were taking on average between eight to nine months before coronavirus hit, (plus the mortgage payments), this means a Lincoln landlord could be hit by a £22,530 bill, broken down as follows:

Missing rent (8½ months)£4,905
New kitchen£3,543
Bathroom£2,657
Carpets£2,040
Redecorate£2,085
Agents fees£515
Legal fees & court fees£3,500
Mortgage payments£3,286
Total£22,530

What that would be now is anyone’s guess – yet it could be a lot more.

This is why it is so important to get the best tenant from day one. Many Lincoln tenants, who know they wouldn’t pass the references of letting agents, are attracted to those private landlords who don’t use a letting agency, as they know their referencing checks are not as strict and may be a softer touch. That’s not to say going with a letting agent is a guarantee you won’t need to evict; it just means the chances are much, much smaller. Like anything in life – it’s a choice.

Whether you are a Lincoln landlord who uses a letting agent or not and feels their reference checks are not to the standard or level you might hope or if you want a chat about the best rental guarantee insurance, then give me a call … what have you got to lose?

As always feel free to contact me through the comments box below or call me directly on 07487683696

Michael Hollamby – Author Lincoln Property Blog

What will happen to the value of your Lincoln home in 2021?

What will a no deal Brexit on the horizon, the end of the stamp duty holiday in March, mortgage payment holidays coming to an end, unemployment set to rise after furlough and ongoing on/off coronavirus restrictions do to the Lincoln property market and the value of your Lincoln home?

In the late spring of 2020, every man and his dog were forecasting impending doom on the British property market. Drops of 10% were considered optimistic as we all held our breath  after lockdown was relaxed. Yet, the property market didn’t listen to the forecasters. UK property values today are 2.5% higher than they were a year ago, and more locally, Lincoln house prices are only 1.4% higher than a year ago

So, what exactly is going to happen to the Lincoln property market in 2021?

Well, with the end of furlough and 1.7m people still on the furlough scheme at the start of October, a number of economists are saying that unfortunately many of those furloughed will become unemployed.

Unemployment currently stands at 4.5% in Q3 2020 (compared to 3.8% in Q3 2019). The Government’s independent Office for Budget Responsibility believes the unemployment rate will peak at 9.7% in early 2021, and then return to pre-coronavirus  levels in 2022. In the past recessions of the early 1980’s, early 1990’s and Credit Crunch of 2009, when unemployment went up, the property market went down.

Yet, in this recession, the link between unemployment and property values may not be so direct.

So why is the link between unemployment and house prices potentially broken? It comes down to interest rates.

The reason Lincoln house prices have gone up by 343.73% since the middle of the 1990’s isn’t because the labour market has got so much sturdier, nor that the economy has outperformed every G8 country, or that the UK has had less boom and bust economic cycles than the previous decades. Instead, it’s because of the fundamental and underlying decline in the Bank of England (BoE) interest rates.

High BoE interest rates equal high mortgage payments which holds everything back regarding the property market. In the 1980’s, the average BoE interest rate was just over 11%, making mortgage payments very expensive and keeping property prices dampened. In the 1990’s, the average BoE interest rate was a little over 6%, in the 2000’s just over 4%. However, in the 2010’s, it had been a really low 0.5%. Now with interest rates down to 0.1% because of coronavirus and the BoE threatening negative interest rates, there appears little threat of an eruption in mortgage repayment costs.

With mortgage payments at an all-time low of just under 30% homeowners’ disposable income (compared to 48% in 2007), those middle-aged people lucky enough to still be in a job (who are mainly made up of workers whom are spending a lot more time working from home), they could be more inclined to dedicate more of their monthly income to mortgage payments than they did pre-coronavirus for a bigger garden or a move out of the big cities?

So, if unemployment isn’t going to make a huge difference to the Lincoln property market, what is?

Most commentators believe a no deal Brexit will have hardly any short-term effect on the property market (apart from certain upmarket parts of central London).

The stamp duty holiday ends at the end of March 2021 and that certainly will reduce the number of Lincoln people moving (as many moved their plans forward to beat the deadline) meaning there will be less Lincoln people moving in 2021, yet that will curtail the supply of property for sale and hence keep Lincoln property prices higher.

Next, the Help to Buy scheme, (started in 2013 and where the Government underwrites part of the mortgage for the first time buyer, meaning they can obtain a 95% mortgage) ends in April next year, yet the Tories indicated at their conference last month they would probably create ‘Help to Buy – Part 2’.

The bottom line is in the early 1980’s and 1990’s recessions, when interest rates were over 15%, obviously home owners couldn’t afford to keep up the mortgage payments when made redundant or on reduced wages, so many handed in their keys to the bank and homes got repossessed, thus exacerbating the issue with falling property values.

However, with interest rates so low, this will not be the case. I envisage that UK property prices will be between 4% to 5% higher by December and Lincoln values just behind that at 2% to 3% higher, before levelling out in 2021 (although we might see a modest dip in certain sectors and types of Lincoln homes depending on location and condition).

My advice to Lincoln buy to let landlords is to wait on the subs bench until April 2021. Something tells me there will be some Lincoln landlords who will be looking to exit the rental market after having their fingers burnt after the eviction ban has been lifted.

I also suspect those Lincoln first time buyers, eager (and able) to break free the rental-rat-race will want to take up the anticipated ‘Help to Buy – Part 2’ scheme, particularly if the BoE base rate stays low. The other winners in 2021 will be low mortgage/equity rich households upsizing to the countryside or leafy suburbs to test out their boss’s promise of ‘flexible-working’.

Yet the losers will be the 18yo to 29yo renters … most likely to be made redundant and least likely to buy a home.

My advice to the Government for this cohort is to not ignore them once the country is out of this coronavirus situation. It’s all very good keeping the Home Counties Tory voting Baby Boomers happy with green belt policies and other policies to keep their property values higher, yet as the Generation X and Millennials get older and take over as the largest demographic to keep happy (for the polls), the hitherto inconceivable action of the Government levying Capital Gains Tax on your main home may come to fruition.

I mean, we have £400bn to pay back because of coronavirus … it has to be repaid and it has to come from somewhere. Those denied real access to buying their own home in the last 10 years, because of massive house price gains over the last 25 years, could vent their anger via the ballot box — if not at the 2024 General Election, maybe in 2029, when they realise that the futile housing policies of both Labour and Tories of the last 23 years have left them with enduring financial diffidence.

Maybe we should all look to the grocer’s daughter from Lincolnshire who in 1979 set out a bold vision of home ownership for everybody. Whichever political party truly picks up the batten and reframes it for the current 2020’s generation and comes up with the goods, will be the ultimate winner in this game.

As always, I’d love to hear what your thoughts or concerns over next year are- get in touch by adding a comment below.

Michael Hollamby

Lincoln homebuyers have saved £453,690 thanks to the Stamp Duty Holiday – yet many could miss out

Lincoln homebuyers and Lincoln landlords purchasing residential property have saved £453,690 since the Chancellor reduced Stamp Duty on 8th July 2020, yet many more Lincoln homebuyers could miss out.

My analysis of properties sold in Lincoln from the Land Registry between the introduction of the Stamp Duty holiday on 8th July 2020 and 14th August 2020 (which is the most up to date sales data), reveals that many Lincoln homeowners have saved a considerable amount of money in Stamp Duty. According to my research…

since the stamp duty holiday was launched, 130 Lincoln homeowners have saved on average £3,490 each.

That’s a total Lincoln property value of £35,073,845.

Mind you, it’s not all good news as I estimate 286 Lincoln homebuyers risk missing out on the stamp duty savings (worth as much as £15,000 each) due to solicitors/conveyancers and mortgage lenders struggling with demand and failing to hit the 31st March 2021 deadline.

The short-term tax relief, together with the easing of lockdown restrictions, has seen demand for Lincoln property soar this summer as Lincoln property buyers race to move home.

Chancellor Rishi Sunak introduced a stamp duty holiday in the summer, with the stamp duty holiday due to end on 31st March 2021. Yet, I fear the combined pent-up demand caused by…

  • the post Boris Bounce
  • people wanting to leave their metropolitan city centres for homes in the countryside
  • property with gardens
  • property with extra rooms for working from home
  • the stamp duty savings

…has created a backlog in the Lincoln property market.

I know 31st March 2021 seems an age away, however nothing could be further from the truth. The average Lincoln property sale was taking 19 weeks between the offer price being agreed and the keys/monies handed over BEFORE THE POST-LOCKDOWN. So, with as many as 40% to 50% more Lincoln homeowners in that same sales pipeline of agreeing the offer and the legal and finance to be sorted as we speak, solicitors/conveyancers and mortgage lenders are really struggling with demand for their services, meaning the average time will increase.

Hence, I believe as many as 286 Lincoln movers could miss out on the £998,110 stamp duty tax savings.

There is time left to sell and legally complete your Lincoln property sale before the 31st March stamp duty deadline if you put the property on the market now with a realistic asking price, a decent marketing plan and razor sharp reflexes when it comes to the legal and mortgage work.

Yet with 40% to 50% more home movers in the system, those looking to sell their Lincoln home should be very suspicious of agents being too optimistic on their initial asking price (many estate agents get a commission to put a property on the market, meaning they over-egg the pudding on the suggested asking price to flatter you, only to badger you to reduce the asking price weeks later).

Those wasted weeks at an inflated asking price will mean the difference between you securing a buyer and you then buying your next Lincoln home with or without the Stamp Duty savings, which are up to £15,000 per home move.

And whilst many Lincoln buyers seem ready, willing and able to pay top dollar prices for Lincoln properties that match their changed post-lockdown home needs, speaking privately to many Lincoln agents, some Lincoln homeowners’ price expectations for their Lincoln homes are now becoming too optimistic, meaning they will undoubtedly lose out.

We also can’t forget as many as 1 in 5 mortgage surveys are being down valued by the surveyor, meaning unless all parties are willing to negotiate, the sale falls through and the homeowner has to go back to ‘Square One’.

My best piece of advice for those currently sold and in the sales systems with lawyers and mortgage brokers is to speak to your solicitor and mortgage broker every single week and ask if there is anything you need to do to ensure the sale proceeds smoothly and expediently.

Also, if you are asked for any information from your solicitor or mortgage broker in-between times, drop everything and respond quickly to their request. The odd day here and there will make all the difference.

As always, I’m here to offer any advice if you are thinking of moving or are in the process yourself already and need some no obligation advice.

Simply make a comment below or drop me an email at michael@walterslincoln.co.uk

Michael Hollamby

Lincoln’s ‘Generation Rent’ to Become ‘Generation Buy’?

Boris Johnson has attracted both praise and horror in equal measure with a new plan for 95% mortgages to help beleaguered first time buyers to get on the property ladder, but would that expose UK taxpayers to too much risk? In this article I discuss the implications of what that would mean both nationally and locally in Lincoln.

With the Lincoln property market taking off due to the stamp duty holiday introduced in the summer, Boris Johnson announced at the recent Tory Conference a plan to offer first time buyers long-term low interest rate 95% mortgages (meaning they would only need to raise a 5% deposit). Yet when someone borrows more than 75%, the banks normally take out insurance in case the buyer defaults and the bank lose money if the property gets repossessed.

When the economy is good, the risk is low – so the insurance premiums are also low for the banks – meaning they are happy to lend high percentage loans. Yet, nobody could deny we are entering a period of uncertainty in the coming 12/18 months, meaning the insurance premiums for the banks have gone through the roof.

Mortgage companies have avoided riskier high percentage first time buyer mortgages since the start of the Coronavirus predicament. At the end of February 2020, there were just under 400 95% loan-to-value mortgage products accessible for first time buyers, yet today that figure stands at just 26.

Another reason for removing the number of 95% mortgages was that the demand for lower percentage loans exploded after lockdown was lifted, and with many mortgage staff still working from home, the banks and building societies focused their attention on getting those (less risky) mortgages sorted first. Therefore, they removed the higher percentage loans from their books, so they weren’t swamped with too much work … so, one must ask, should the Government take on the risk from mortgage providers in the form of a guarantee from the Government — sparking concern among economists the Government is already burdened with debt – does it need anymore?

Yet taxpayers have been funding a similar scheme for years. The Help to Buy scheme, which allows first time buyers to buy a home with a 5% deposit (and the Government guaranteeing between 20% to 40% of the loan) has been in operation since 2013. Taxpayers are already guaranteeing £16.049bn of loans for 224,133 first time buyers, and when we look closer to home locally, since 2013 …

108 first time buyers in Lincoln have used the Help to Buy scheme to help buy their home, relying on the Government to guarantee them on average £35,588

That means in Lincoln alone, £3,843,504 is at risk if those Lincoln homeowners’ default on those pre-existing Help to Buy Loans … yet the default rate is quite low.

So, should the Prime Minister be playing with the housing market? Ought he instead allow open market forces to be applied to the property market, allowing it to find its own normal and leave the mortgage providers to decide on mortgages based on risk, because all the Prime Minister will potentially achieve is a synthetic rise in property values?

Some in fact have argued it would be better to spend that

public money on delivering affordable rental properties?

However, isn’t it better in the long run for the country as a whole that British people own their home rather than rent because the Government will have rent to pay for those tenants when they retire if they are on the basic (low) state pension?

Personally, I don’t disagree with the initiative, yet all I am querying is, what are the Lincoln first time buyers going to be able to buy? The Lincoln property market is already quite drawn-out, as ultra-low interest rates have augmented the gap between the first home and the second home, the second home to the third and so on and so forth, so is this initiative fashioning a massive demand that will inflate property prices up the Lincoln property ladder still further and ultimately lead to even more frustration down the line?

However, could this be the very thing that saves the Lincoln property market in 2021?

Firstly, with the stamp duty holiday due to finish by the end of March, there are suspicions the property market will stall. And secondly, the very popular Help to Buy scheme mentioned above also finishes at the end of March 2021. This boost instead of fuelling house price inflation could stabilise the property market.

In fact, the Government are hoping the property market will help power us out of recession. The early signs are good as the Lincoln housing market has exploded as a result of the stamp duty holiday introduced in the summer. It certainly needs to as the country’s GDP only grew by 2.1% in August, down from 6.4% in July, 9.1% in June and 2.7% in May.

As a country, our GDP is still 9.2% below the levels seen pre-Covid. With the property market doing well, the country remains on course to leave recession in Q3, yet with the impending triple peril of rising unemployment (after furlough), further lockdown restrictions and a messy end to the Brexit transition period does this mean we are potentially in for an interesting ride?

Only time will tell if ‘Generation Buy’ will help save the property market, the economy and ultimately Boris? In the meantime, I think it will be a safe bet that people still need homes to live in … and irrespective of what happens to the property market, with that simple fact, the winners in all of this will be Lincoln buy to let landlords.

Tell me your thoughts on this …

Michael Hollamby

Lincoln landlords – are you footing the government’s tax bill?

For the last thirty years, the Government have passed the responsibility of housing the masses from local authorities (i.e. council housing) to the estimated 1.5 million British buy-to-let landlords.

However, since 2015/16, Lincoln landlords have faced increasing tax burdens as each year goes by, with the removal of mortgage interest rate relief on income tax (Section 24), the introduction of the 3% surcharge on stamp duty, and the reduction of the letting relief on capital gains tax. 

My research has calculated the total income tax contribution by 3,416 Lincoln private landlords in the tax year 2015/16 was £8,915,158

However, the eradication of higher rate mortgage interest relief (also known as Section 24) announced in 2015 by George Osborne has been estimated to add a further £1.9 billion nationally to landlord’s tax liability. Whilst raising money from landlords is an easy target, and the tax receipts attractive, it does make the landlords financial burden even heavier.

And by 2021/2, when the full extent of the Section 24 relief kicks in, that income tax liability will rise to £13,016,130 for those Lincoln landlords

This doesn’t even take into account additional liabilities such as Capital Gains Tax, the 3% additional duty on top of the prevailing Stamp Duty Land Tax and VAT.

Ambiguity and a lack of certainty is the foe of all investment, which has been seen with Brexit. With the pent-up demand released with the ‘Boris Bounce’, the last thing we need as a ‘collective’ property industry is for the Government to see landlords as a constant cash cow. This current government must acknowledge the value the majority of private landlords offer by housing in excess of 9.45 million people in the country.

Westminster needs to take a balanced approach to the significant issues of possession, especially with the recent changes relating to section 21 evictions, taxation and all rental properties needing to be at least an ‘E’ energy efficiency rating, to connect the value the private rented sector offers the country by effectively housing over a fifth of the population and avoid unintentional consequences by making renting a private rented property harder for the tenant, because, it’s not financially viable to buy (or retain) a buy-to-let property with the way things are going against the landlord.

I would love to know your thoughts on this.

If you are a Lincoln landlord, how are you finding things at the moment?

Michael Hollamby

Lincoln 2nd & 3rd time buyers finding it tougher to move up the Lincoln property ladder

Post lockdown, the need for Lincoln families who want bigger homes has meant Lincoln homebuyers must now pay considerably more to trade up to that larger home…

One thing that has come out of lockdown has been the inexorable movement of Lincoln households wanting to upsize to a larger home. Often considered to be first time buyer properties, the smaller 1st step on the property ladder one and two bedroom properties are selling quite well, yet demand for those properties on the 2nd and 3rd step rungs on the Lincoln property ladder (i.e. the three or four bedroom homes) has been even greater.

This demand has been driven by Lincoln buyers looking for more living space, especially those looking for an area or room to work from home (be that a bedroom, reception room or even an outbuilding converted into a study).

The average asking price of a 3 bed Lincoln home is £206,000, whilst for a 4 bed Lincoln home it stands at £307,700

As you can see, quite a jump for an extra bedroom! The heightened contest for 2nd and 3rd step Lincoln homes for that extra bedroom has pushed demand to a record in October for those looking to take the next step up the ladder. Historically, as a family and its household income grow, the need for more space has permanently been the No.1 reason for moving home, yet now there is a new need for additional space to facilitate people working from home. This means not only do we have growing families wanting larger Lincoln homes, there are also the people needing the same larger homes for space for a home office. Therefore, looking at the current stats, as you can see, the Lincoln property market is doing quite well…

50.3% of all 3 bed and 41.7% of all 4 bed homes in Lincoln are sold (subject to contract)

Roll the clock back to pre-Covid and ask any Lincoln homeowner who had enough bedrooms for their children if they wanted an additional bedroom, and most homeowners would say that was very much a ‘nice to have’, yet not a ‘must have’. With us all being cooped-up over the spring this year, demand for additional rooms is at a high, with those presently looking for their next larger Lincoln home are probably going to find that only offers close to (if not sometimes over) the asking price will be accepted.

Even though no properties sold during lockdown, putting the Lincoln (and UK) property market on hold for many months, many more people buying their next Lincoln home will have more than made up for it since lockdown was lifted as the portals have stated if the UK property market remains at its existing trajectory, then the number of properties sold YTD by the end of October 2020 will be greater than YTD October 2019.

Yet all these properties sold are causing another issue. Just because a property becomes Sold Subject to Contract (SSTC) doesn’t mean the property is actually “sold”. Before going into Covid, it was taking approximately 19 weeks between agreeing a sale price (and instructing lawyers) to completing the sale. Yet, because we are nationally running at 140% to 150% of properties SSTC (than where we normally are at this time of year), many of my estate agents colleagues are having to manage expectations with buyers and sellers, and tell them that the date they are going to move will take a little longer.

The elephant in the room is that the temporary stamp duty holiday ends on the 31st March 2021

It sounds an age away, yet trust me, nothing could be further from the truth.  Adding an extra month for the additional homes in the bottleneck means even if the sale of your Lincoln home was agreed today, that would take us to the 3rd week in March … that’s cutting it very close for the stamp duty holiday.

It is so fundamental for buyers and sellers of Lincoln homes to work meticulously with their estate agent, solicitor and mortgage lender. For example, there are less staff in the local authorities to do the local searches, bank staff are working from home meaning mortgages are taking much longer to get approved, and conveyancer/solicitors are snowed under with work. Therefore, if you get a document that needs filling in, are asked to provide documents, pay disbursements or questions need answering, do it immediately and without delay. A day here and day there will snowball and could mean you miss the Stamp Duty holiday … and that could cost you thousands and thousands of pounds.

The bottom line is that we haven’t seen this sort of pressure on the UK property market since 1987, when dual-MIRAS was abolished. Now, as we are slowly starting to come out of Covid, with many legal and banking staff working remotely or still on furlough, the perfect storm has occurred with unprecedented demand from buyers looking to move post lockdown. The best advice I can give is, as soon as you put your property onto the market, find a solicitor that has the capacity to work with you, then instruct that solicitor to start work immediately to prepare the paperwork, so once you have a buyer, things can move more smoothy and quickly. The last thing you want is to lose out on saving thousands of pounds by missing the stamp duty holiday by a whisker.

As always, feel free to comment or share your thoughts

Michael Hollamby

Why are some banks reining in over-enthusiastic Lincoln homebuyers and buy-to-let investors?

The Lincoln property market is an enigma and chock-full of contradictions.

Notwithstanding an economic recession and forecasts of property values dropping, nobody seems to have informed the Lincoln homeowners selling their homes and those Lincoln people looking to buy them. As I have discussed in many recent articles on the locality, the Lincoln property market is booming and property values in some sections of the market are rising, yet amidst enthusiastic reports of gazumping, there are disgruntled and malcontent grumbles about mortgage company surveyors down valuing property on survey.

However, before we talk about the banks and surveyors, let’s look at what is happening in the Lincoln property market now.

Land Registry figures published last week showed unyielding evidence for what everyone in the property industry had been saying since the market reopened after a seven-week lockdown on May 13: property prices are rising.

The average value of a Lincoln home rose by 3.9%in the year to June to £211,900

Many expect the statistics to show more rises following the Stamp Duty Holiday announced in July, which unbridled a burst of buying activity in the Lincoln property market. In many (not all) sectors some properties have been going for over the asking price whilst some have been going to sealed bids.

Some newspapers have even suggested a small minority of homeowners are ‘backdoor-gazumping’, which is genteelly being referred to by estate agents as ‘retuning the asking price’ – as in, the homeowner removing the property from the market, ‘retuning the asking price’ in an upward direction, then placing it back onto the market.

Conceivably enthused by these stories, some house sellers and estate agents might be getting a little carried away and placing overambitious asking prices on homes they are selling. Customarily a property with too high an asking price wouldn’t sell – yet some over-enthusiastic Lincoln buyers are paying over the odds for certain types of properties.

So, let’s look at what is happening to the Lincoln property market (Lincoln plus 3 miles) by house type and the number of bedrooms…

 Number of Lincoln properties
on the market
…and of those –
how many are Sold STC
% Sold STC
compared to those for sale
Detached House60427044.7%
Semi Det House47925653.4%
Terraced/Town House55828150.4%
Apartment2609135.0%
Bungalows44719944.5%

And when we look at the number of bedrooms …

Number of Lincoln properties
on the market
…and of those –
how many are Sold STC
% sold STC
compared to those for sale
Studio/1 bed973233.0%
2 beds59529549.6%
3 beds99650150.3%
4 beds52321841.7%
5+ beds1455336.6%

As you can see, the best performing type of property in Lincoln is the semi-detached house and the best-selling properties when it comes to bedrooms are 3 beds.

These are quite impressive figures for the Lincoln property market, yet some of the banks are having none of it

They are looking apprehensively into 2021 when furlough/the new job support scheme ends, meaning it’s quite tough for all buyers borrowing high percentage mortgages (i.e. more than 80% to 85% of the value of the property in a mortgage). 

It is even tougher for self-employed buyers (whose income is less than assured) to get those high percentage mortgages – and finally, the banks are most certainly concerned with high percentage mortgage buyers who pay over-inflated prices for property using the bank’s money… hence the down valuing (Definition of Down valuing : the buyer and seller agree a sale price, then the mortgage is applied for with the buyer’s bank and the bank’s surveyor states the purchase price the buyer is paying is too much).

One small note to Lincoln landlords – I am also hearing that some overzealous Lincoln buy to let landlords who are over-egging the potential rental figures on their buy-to-let purchase in order to obtain the mortgage, are also being reined in by the banks.

Now this is not a huge issue (e.Surv – a nationwide surveying firm only reported a 4% increase in surveyors having to down value property in Q2 2020 compared to Q1), yet should you be lucky enough to have multiple offers on your home, ask the agent what the overall buying position of the buyers are. You need to specifically ask what percentage loan the buyer is taking on and the position of the buyer in the chain (they have to find this out anyway by law and you have a right to know that information as the property seller if you ask).

The bottom line is the highest bidder might not be the best buyer for you.

It’s true, average property prices are rising nationally, yet this does not mean you should pay over the odds for your next Lincoln property.

If you would like a chat about any aspect of the Lincoln property market – please do send me a message or pick up the phone – 01522 512513

Michael Hollamby

Long live the planning permission rule changes

The 1st July 1948 heralded a new dawn in how property was built, as the Town & Country Planning Act 1947 came into force, meaning no property could be built without the say so of the local authority. Boris Johnson announced a substantial change to that, by in effect, ending planning permission.

The decision of what gets built, and what doesn’t, will be removed from the City of Lincoln Council and replaced by Westminster governed ‘Zoning Commissions’. The anticipated reform will give presumptive building rights to any piece of land outside areas of outstanding natural beauty, green belt and national parks, although in the press release there was mention of protection for the countryside.

The principles of the planning rule changes are a departure away from looking at each planning application as a standalone application to a ‘zone-system’ of planning. Land will be divided into three classes: 1st for growth, 2nd for protection and 3rd for renewal. Anyone applying for planning permission to develop homes, offices and shops on land zoned for growth, will automatically be granted planning permission; whilst land zoned for renewal planning permission will be granted in principle while Government officers perform checks. Local authorities have until 2024 to designate areas for the three classes and once agreed, planning departments will have little or no say over individual applications that fit the rules.

Interestingly, these changes come on top of new planning regulations coming into force this September which gives implied rights to demolish any office building and replace with a block of flats, and the right to build extra floors/storeys on your home.

The Housing Secretary has specified the motive behind the changes to the planning system is not to make planning permissions easier to get (although 88% of planning applications are approved by local authority’s already). Instead, they have been done to make the planning process quicker, less expensive and less likely to be held up by special ‘interest’ groups.

96% of planning permissions in the City of Lincoln Council were approved last year, compared to the national average of 88%

Noteworthy, the planning rules were changed in 2016 to turn disused shops and office space into residential homes (called ‘permitted development’ rights), yet the regulations announced by Boris will took that right even further. This is important because in 2019, there were 241,340 new households created in the country, yet 29,260 of those households came from turning disused shops and office space into residential homes (i.e. the planning permission rule changes made in 2016).

My concern is that the planning rule changes do not make shop or redundant space into the new 21st Century ghettos. An RICS report in 2018 showed a massive difference between the conversion of office blocks with planning permission and those without (i.e. permitted development). What was interesting is that only 1 in 5 properties met the national space standards, a non-legally binding suggestion on the minimum size of home, minimum dimensions of bedrooms, natural light, storage & floor to ceiling height, whilst 3 in 4 of office block conversions that did obtain planning permission met the standard.

These planning changes cannot be a charter for cowboy builders or developers, otherwise your children or grandchildren could end up renting one of these sub-standard homes, thus stealing human dignity from thousands of youngsters who will end up renting these homes.

So, what does this all mean to Lincoln homeowners and Lincoln landlords? If you have been reading my articles you will know that one of the most important factors holding back the Lincoln property market is the lack of new properties being constructed and when they are, the lack of infrastructure surrounding them.

Since 1995, only 10,621 properties have been built in LN1 to LN5

Yet, these new planning changes will also introduce a new method of taking a lot more money off landowners and builders, as the Government will take a larger share of uplift in land value (i.e. the increase in value from farmland to building land) to finance infrastructure around the development. This would mean new housing developments would come with upgraded roads, GP surgeries, primary schools and shops that these new communities need to be viable. Also, communities will be asked to decide on their own standards on style and design for new developments in their area, allowing residents a greater say on the development in their locality.

Like all things, the devil is in the detail. All of us in Lincoln cannot deny that we need to build more homes to keep up with the ever-growing population and the fact that people are living longer. This new planning system should lead to more housebuilding, which in turn would increase the supply of property for those trying to get on the property ladder. Also, in the proposed legislation is the new ‘First Homes’ scheme, which would allow key workers, first time buyers and people who live or work in the Lincoln area to purchase their new home at 30% less than its market value and when they come to sell it, that 30% discount would be passed on to the new buyer (if they also met the criteria).

With regard to what can be built and where, Lincoln people will have a say upfront (i.e. between now and 2024 when the zoning rules are drawn up) and hopefully we can construct the Lincoln homes we are proud of for our children and for Lincoln generations to come. 

Please do let me have your thoughts on this matter. Comment in the box below

Michael Hollamby

The price is right!

Getting your initial asking price right is key to getting sold and moved before the end of the stamp duty exemption

Cast your minds back and see if you remember when on th 8th of July 2020, the Chancellor announced the first £500,000 of any property bought was exempt from Stamp Duty until 31st March 2021. This also included buy to let landlords (although they would still need to pay the additional 3% stamp duty level for second properties).

Talking to many of you Lincoln homeowners, I know lots of you have brought forward your home moving plans to take advantage of this tax cut. Also, many Lincoln portfolio landlords are looking to save paying the tax by bringing their portfolio purchases forward.  Yet how do you ensure you sell and buy your Lincoln property whilst the tax cut applies (a saving of up to £15,000 of stamp duty on your next Lincoln home?).

The biggest issue whenever you are selling your Lincoln property is the properties that you are in competition with. Plenty of Lincoln homeowners have jumped onto the stamp duty holiday bandwagon since the announcement and there are 6% more properties for sale in Lincoln than there were during lockdown. The number of properties for sale in Lincoln can split down into type…

  • Detached Lincoln homes – down 3%
  • Semi-detached Lincoln homes – no change
  • Terraced / Town houses Lincoln homes – up 12%
  • Apartments in Lincoln – up 9%

So, now you know what you are up against, what do you need to know?

The most important factor is the time issue.

It currently takes on average 18 weeks between a sale price being agreed and the keys being handed over, meaning you need to have found a buyer before the end of November or early December to enable you to complete the sale by the 31st March 2021. That means you really need to have placed your property on the market by the end of September and early/mid-October at the very latest to take advantage of the stamp duty holiday.

Don’t get me wrong though, you could put your Lincoln property on the market after that date, yet the price you will be able to achieve for your property could be affected.

There are 1,190 properties on the market in Lincoln, of which 551 have sales agreed on them

Talking of price, or more specifically the asking price. There is a window of opportunity for Lincoln homeowners to take advantage of this stamp duty tax cut, yet don’t let local estate agents curry favour with you by tempting you with a high initial asking price to win the right to put their for sale board outside your Lincoln home.

A Which report stated in 2017 that many estate agents routinely over inflated the asking prices of the properties they brought to market. One might ask why this is an issue for Lincoln property sellers, as surely, they can just reduce their asking price at a later date? The excellent report proved that those estate agents who on the face of it appear to be doing you some kindness by endeavouring to get more for your home with a suggested higher asking price, the property often ended up selling for much less than similar properties that were realistically priced properties from day one and also, they ultimately took longer to sell!

This Which report compared the original asking price with final selling prices for 370,000 properties to ascertain how many estate agents had reduced the initial asking price of properties in order to sell them. Which found that 70,300 (19%) of all 370,000 properties sold had to be reduced by at least 5% in order to get the property sold, whilst the other 81% (299,700) had no or very minimal reductions to get them sold.

Of the 299,700 sold properties that weren’t reduced or reduced by less than 5%, the average initial asking price was £261,000, yet they eventually sold for an average sale price of £260,000. For those 70,300 homes whose asking prices were reduced by over 5%, whilst the average listing price was £266,000, their eventual sale price was only £241,000, a loss of £20,000 each. Even worse, those properties with the heavy price reductions (5% or more) took an average of nine weeks and one day longer to sell (when compared to the other properties with no or minimal reductions).

What that means is by over inflating your initial asking price of your Lincoln home, it will cost those Lincoln homeowners an extra nine weeks to find a buyer and they will lose out on the final sale price by some considerable margin (meaning you will also probably lose out on the stamp duty holiday).

Assuming your asking is price is realistic, you aren’t out of the woods yet. Other things that will help you get the best price for your Lincoln home in the best possible time (and thus save you money with the stamp duty holiday) are…

  • Everyone searches on the portals for their next home. Photos are therefore very important (a picture speaks a thousand words). If the weather isn’t good on the day of the photoshoot, ask the agent to revisit when the sun is out (and even tell them to hold off marketing the property until those pictures are perfect) … as you only get one go at being ‘new to the market’, with all the excitement and interest that causes.
  • Employ the services of a solicitor at the same time as instructing the estate agent. Bringing together the legal paperwork of the property you are selling. By doing so, you will save weeks between the sale agreed and completion. Also, solicitors will be really busy, juggling many property transactions at the same time in the next 200+ days. Anything you can do to get a head start on others can only help your cause.
  • Kerb side appeal. Look at your property from across the road. Does the front door need painting? Could a tonne of gravel spruce up your driveway? Maybe adding some hanging baskets and planted pots will help to make a home stand out for the best reasons?

The final piece of advice I can give you is if you are planning to sell your Lincoln home, make sure your Lincoln estate agent can show you proof of similar Lincoln properties and what they actually sold for to back up their suggested asking price. If the asking price isn’t realistic, the chances are you end up losing many thousands of pounds and wasting everyone’s time.

If you would like to chat about selling your Lincoln home, please do – usual contact details folks – 01522 512513 or email me at michael@walterslincs.co.uk

Michael Hollamby

3 Reasons that will make you want to stop being a Lincoln Buy to Let Landlord

… and the six reasons that will make you want to become one!

The buy-to-let market in Lincoln is about to enter a challenging 12 to 24 months. Yet by looking back at the last recession and what is happening now, there are vital lessons all Lincoln landlords can learn to protect themselves, and in fact create opportunities for themselves both in the short term and ultimately the longer term.

For the purposes of this article, I would like to split these and look at the challenges and then the opportunities.

So, let’s consider the challenges ahead for Lincoln landlords …

Overall, the impending rise in unemployment stands to encumber tenants’ ability to pay their rent, the rents being achieved and the possible Capital Gains Tax changes might mean an increase in tax paid by Lincoln landlords when they come to sell their Lincoln buy-to-let properties.

Lets look at these three points in greater detail. Firstly looking at your Lincoln tenants ability to pay the rent; the Furlough Scheme certainly did help soften the blow, helping out 8.9 million people in May (out of 30.5 million who were eligible for it) and at the last count in early August, this thankfully had reduced to 5.3 million people (meaning 15.86% of workers are still on furlough). However, it cannot be denied the economic fallout from Coronavirus has already placed some tenants under economic strain. As the Furlough Scheme finishes at the end of October, commentators are suggesting the number of tenants either incapable of paying their rent, or requesting a reduction in their rent, is predicted to increase as we go into autumn and early winter.

The ultimate sanction against non-payment of rent is legal proceedings although guidance from the Government has recommended that landlords and tenants should work together and deplete all possible options before starting eviction proceedings. Yet many Lincoln landlords are feeling the pressure as many mortgage payment holidays will be coming to a close at the end of September. Some Lincoln landlords can indisputably see that their tenants are finding it tough and they are willing to work with them, but they can only make allowances go so far.  Landlords aren’t running a charity and I would stress to any tenant that finds themselves being made unemployed in the months to come to apply for Universal Credit as soon as possible, which should help with their rental payments. With regard to the eviction process, the Government have changed the rules a number of times in the last few months, so if you want an update, don’t hesitate to contact me, whether you are client or not – I am just happy to help.

Secondly, it’s interesting that in central London, there has been a glut of Airbnb properties coming onto the market because of lack of tourists to rent them on a short-term let. A greater supply of rental properties has meant a downward pressure on rents in London of 2.1%. I don’t think this is so much of an issue in Lincoln as

Lincoln rents are 2.38% higher year on year

Thirdly, there is talk that the Chancellor, Rishi Sunak, is looking at changing the Capital Gains Taxation rules.  As property is the biggest asset that most people own, this is also reason for concern for Lincoln buy-to-let landlords. Currently, Capital Gains Tax on sales of buy-to-let property is levied at 18% for basic income tax rate payers and 28% for higher rate income taxpayers. There is talk the capital gains made on the landlord selling their buy-to-let property could be taxed at the landlord’s income tax rate.

Yet before you all start selling your Lincoln portfolios before November’s budget, any changes in Capital Gains Tax would be immediate. That means to ensure you didn’t come foul of the potential rise in the tax, you would have to have to sell your Lincoln portfolio at a ‘fire sale price’ in days and have a solicitor that could do the conveyancing in 3 weeks (whilst it is taking 19 weeks on average for buyers to sort their legal work out) and the buyer be a cash buyer because banks are taking months, not weeks to sort finance. This is just something we are going to have to take on the chin!

Let us now consider the opportunities ahead for you Lincoln landlords …

As the country officially entered its first recession since 2009, uncertainty in any markets (be it property or stocks and shares etc.) causes investors to vacillate over whether or not to take the jump. Nevertheless, there are numerous indicators that appear to show this is, indeed, a good time either to become a buy-to-let Lincoln landlord or expand one’s property empire and buy more property … let me explain.

Firstly, assets (such as gold and stocks and shares) are great, yet if they aren’t producing income and cash – that doesn’t pay for your day-to-day living. Gold doesn’t create any income and many FTSE companies won’t be paying dividends for a while. Government Bonds are currently earning their investors 0.2% (no – that isn’t a typo) and the best savings accounts are achieving 1.1% with a 120-day notice period, so where are you going to invest your hard-earned money?

The average Lincoln buy-to-let property will earn a monthly return of 4.53%

Of course, deciding on the right Lincoln property is crucial to get a good rental income and return. I have seen so many Lincoln first-time landlords buy with their heart and not their head. Buying your own home is more heart than head but buy-to-let is a completely different kettle of fish. There is the inverse relationship between income (rent) and capital growth (how much it will go up in value in the future) i.e. as one goes up, the other tends to go down – so getting the balance for your needs is vital. Again, I can advise on that for you.

Secondly, with the stamp duty holiday and the pent up demand for people wanting to move home in Lincoln (discussed many times recently in this blog), the Lincoln property market is certainly very buoyant at the moment, yet even the most optimistic agents say it cannot last. Whether the market goes pop or has a slow and steady puncture, the market will cool in 2021. The recession will mean some people are less able to afford a mortgage. This means that if Lincoln property values do ease off in 2021, you may be able to get a great buy-to-let deal if you are planning on becoming a Lincoln landlord or expand your property empire as an existing landlord.

Also, if the property market does find property prices realign to a new normal in 2021/2, house sellers may find it difficult to get a good price on their Lincoln home during a recession, meaning many house sellers may be more agreeable to sell their property at a lower price.

Third, if people aren’t buying, they still need a roof over their head and the council aren’t building any council houses, meaning the private sector will need to take up the slack.

Rightmove reported tenant demand grew by a third in

May 2020 when compared to the same month in 2019

Therefore, if you are still unsure about becoming a Lincoln landlord, knowing that more Lincoln people want to rent should help you feel more comfortable as the risk of ‘running out’ of renters interested in your Lincoln property is minimal. Yet again, please don’t go buying any old Lincoln property, as it’s fundamental that you make a good investment from the start in order to see a good return on your investment.

If Lincoln property values do fall in 2021 (as in 2009),

tenant demand for Lincoln property will only go up

Fourth, the Government reduced Stamp Duty with the sole aim to benefit the property market. The purchase needs to complete by the end of March 2021, which means you will need to have bought the property by November at the latest (as obtaining finance and legal work is taking at least 19 weeks). A word to the wise though, that whilst the saving in Stamp Duty delivers some up-front saving for those buying a buy a let property, don’t get carried away and use that saving in the purchase price you pay. Certain sectors of the Lincoln property market are seeing some very inflated prices, meaning if you go into battle for a show home quality semi-detached house within a stone’s throw of the best school, you will be fighting against buyers who want it for themselves and are prepared to pay top dollar for it, meaning some landlords could end up paying more for a property. My advice, if you want to save on the Stamp Duty, there are bargains to be had – you just have to know what you are looking for (again, as mentioned in point 1 – I am here to help on that whether you are a client of mine or not). The other option would be ‘just hold back’ until after 31 March 2021, when Lincoln property prices could ease.

Fifth, reports that the mortgage lenders are imposing stricter conditions are true, yet even during Covid, many lenders are seeing buy-to-let landlords as a safer option to lend their money to. In June alone, the number of buy-to-let mortgage products rose by 19.2% (to just over 1,700) meaning if you have a decent deposit of 30% upwards, you are likely to find something that fits your needs (at the time of writing this article, the Birmingham Midshires had a buy-to-let 5-year fixed rate mortgage at 1.94% and Santander at 2.04% … this is cheap money in anyone’s language). Mortgage rates are ever becoming more economical, which is a great motivation for anyone wanting to get a foot on the Lincoln buy-to-let property ladder.

Finally, words cannot portray the feeling of being able to see and touch one’s investment like the sensation of bricks and mortar. Buy-to-let investment has to be seen as a long-term investment yet, for many, that is a source of financial security. Of course property values might go south next year (but they might not!) whereas there may be intervals where it’s more problematic to sell because property values will be too low, as is normally the situation throughout a recession, there will also be times where Lincoln landlords will make a nice profit when selling their buy-to-let homes. Like all things in life – it’s all about the timing.

Lincoln property values are 204% higher than 20 years ago

If you’re looking to invest but are not interested in stocks and shares (and you understand that your money may be tied up for a while) then the Lincoln buy-to-let market could be for you.

To conclude, buying the right Lincoln property at the right price to start with, presenting the property in the best way to get the best tenant, fully checking out and referencing the tenant to ensure they have a good track record of being a good tenant that doesn’t trash the property and has always paid the rent on time in the past and then finally, managing the property to ensure your property complies with the 200+ legislations and regulations of rental property, so you can sleep well at night … all to ensure the property is returned at the end of the tenancy to you in good order is what nirvana looks like.

Of course, buy-to-let does come with some risks and challenges, but it’s all about mitigating those risks. Also, there is no denying that buy-to-let also comes with a lot of opportunities as well. If you are a landlord with another agent or even a Lincoln landlord that manages the property themselves, feel free to drop me a message, email or pick up the phone and let’s chat about your personal goals when it comes to buy-to-let … because what have you got to lose? Surely 15/20 minutes of your time to get great insight and inside track is worth it?

Remember, the choice is yours!

As always, feel free to comment or give me a call if I can help – 01522 525555

The 5067 trapped landlords of Lincoln

Going into lockdown in March, the Government proclaimed a ban on tenant evictions, pledging that no tenant in a private rented home, who had lost their wages due to Covid-19 would be kicked out of their private rented home until the late summer.

Fast forward to August and the press were being briefed as late as Wednesday 19th August that this freeze in evictions in England and Wales would cease on the 23rd August. That was until just after 4pm Friday 21st August when Mr Jenrick, the Housing Minister, announced that the eviction ban would be extended for a further four weeks and also buy to let landlords must now give their tenants six months notice to gain possession.

Hard to swallow for all the 5,067 Lincoln landlords

I know many Lincoln landlords became landlords between 2000 and 2009 because they preferred bricks and mortar to investing in the stock market or gilts/bonds market. All they were looking for was a small pension income to top up their meagre state pension. Official estimates suggest there are 1.8m to 2.1m landlords in the UK, the vast majority doing the right thing by their tenants, many of whom have helped their Lincoln tenants in financial trouble during Covid-19 by acquiescing to short-term rent reductions or rent-payment holidays.

Also, many Lincoln landlords have mortgages (in fact, if we added all the UK buy to let landlord’s mortgages, they would add up to £216.65 billion). The Government and the Bank of England have applied political influence on the mortgage companies to be a little more flexible and sympathetic on landlord’s mortgage interest payments, yet the mortgage interest is still adding up. The issue is, some tenants are in arrears with their rent, meaning landlords aren’t receiving their rent, which means many buy to let mortgages aren’t being paid either.

So, how many tenants are in arrears?

The National Residential Landlords Association stated that just 3% of landlords recently surveyed reported tenants are in arrears. This was backed up recently when Goodlord stated …

3.72% of tenancies in the UK are in arrears

These are only slightly above the pre-Covid arrears levels, yet still a strain for the landlords involved. Also, the two-month notice period of the section 21 Notice has been extended to six months, meaning it will be March before any tenants are made to leave, even if the notice was issued now.

So, does this leave Lincoln landlords trapped?

With regard to the arrears, only 1 in 17 landlords rent their property through a limited company, meaning the rest (i.e. the vast majority) rent their property as a person, thus giving themselves unlimited personal liability should their rental portfolio fail (i.e. the mortgage company could make a claim on the landlords own assets, including their main residence, if the property was repossessed and the shortfall wasn’t made up). Also, if the building society’s and Banks turn against the Government advice and are too lenient with landlords with buy to let mortgages, there could be situations where the rental properties are repossessed, meaning the tenant will be made homeless.

I am particularly concerned about the fate of the

1,424 self-managing Lincoln landlords (i.e. they don’t use an agent)

They should seriously consider taking out rent guarantee insurance to protect themselves against any potential defaulting tenants (so many don’t). Reasonably priced rent guarantee insurance products, even on existing tenancies are still available to landlords via agents, even in these Covid-19 times (whether you are a client of mine or not do not hesitate to pick up the phone and have a chat or send me an email). Whilst the policies aren’t inexpensive – they do give you peace of mind with the rental payments.

One thing that this does also remind me of is the 2008 Credit Crunch. There were an awful lot of Lincoln homeowners who were unable to sell their home in 2008/9, so they converted their Lincoln property into a buy to let investment. There are going to be an awful lot of Lincoln landlords who will also want to sell in the next six to nine months, yet are unable to do so until the middle of next year without having to take a hit on the value of their home. For those Lincoln landlords that can relate to that, maybe we should chat to consider your options so you can mitigate any losses?

It seems Lincoln landlords have been used to saving the Government from a PR disaster of homeless tenants on the streets at Christmas, the least we should do in the country is stop disparaging landlords and lift them up from their pariah status.

Lincoln landlords are housing 21,063 Lincoln

people in private rented accommodation…

… and so it is my opinion that the contributions made by these Lincoln landlords should be recognised. My fear is always of a danger of a widening schism between the landlords and tenants. Truth be told, both need each other, and I hope the Government extend help to landlords as they have with tenants, otherwise the Government won’t have any homes to house the British people if all the landlords decide to sell up. It is especially important that the supply of private properties doesn’t drop in Lincoln going forward when you consider…

Lincoln needs an additional 3,806 private rental homes by 2029

In the meantime, the Government have bigger fish to fry sorting out the economy as a whole, so if you are a self-managing landlord or even a landlord with another agent in Lincoln, feel free to pick up the phone or make contact with me and we can discuss your options without any obligation.

There is no need to feel trapped, there are options for you and it is better to consider them now – set the foundations and motions going in the right direction promptly before it becomes a bigger issue in the future.

Get in touch by calling me on 01522 525555 or email me on michael@northwoodlincs.co.uk

Are Lincoln Millennials moving back in with Mum and Dad?

Roll the clock back 20 years and any self-respecting late 20/early 30 something would never say on their first date that they lived with their mum and dad.

It was seen as a sign of immaturity being tied to your mother’s apron strings as a failure to leave the family home. Yet over these last two decades, the age of leaving home has been increasing steadily from 20 years and 11 months in the late 1990’s to 22 years and 7 months today.

However, as with all the stats, the devil is in the detail. Although the age of leaving home has only risen by 8% between 1997 and today, those that didn’t leave home in their early 20’s tended to stay much, much longer.

In 1997, 11.26% of 25 to 34 year olds still lived at home with their parents,

yet last year that had risen to 15.74%, an increase of 391,000

‘stay at home’ Millennials

However, before we deride these Millennials for still being tied to their mother’s apron strings, I would say those very same Millennials (the mid 20’s to 30-year olds) have been pragmatic, being attracted to sacrificing independence in order to achieve their long-term life goals as they have seen rents rise and an inability to save for the mortgage deposit. All of this has seen the first-time buyer levels in this millennial age range rise for the last three years … so good news for everyone!

However, is all that about to change?

Just as mum and dads in Lincoln had thought their late 20 something/early 30 something offspring had flown the nest, Covid-19 has blown some Lincoln ‘chickadees’ back into the nest. Back in March, the lockdown saw many Millennials flee the big UK cities, with their constrained and poky shared HMO’s and flat shares, swapping their city centre private rented home for their parents’ Lincoln home.

Yet with lockdown lessening, it isn’t just remote workers who are unenthusiastic and disinclined to return to the big cities (fearful of a second lockdown) — many of these Coronavirus blow-ins are deciding to stay put too! A recent YouGov poll asked Millennials of private rented homes what their plans were and 1 in 6 tenants planned to hand their notice in on their rented home and fly back to the nest of mum and dad. The advantages are quite plain, especially as it could enable them to save for a deposit to buy their future home.

There are 42,368 households in Lincoln, made up of 14,298

single person households and 24,399 family households

(the remainder being made up of shared houses etc.)

Yet how many of those Lincoln family households had non-dependent children before Covid-19?

3,335 Lincoln households have children

that haven’t flown the nest

That’s 13.67% of Lincoln families whose kids are still to leave home … and it’s only going to get worse!

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

It will mean that Lincoln parents and their children will get to know each other better, build stronger relationships and it will enable their children, if they are wise, to save for their deposit for their first home purchase – who knows maybe in Lincoln, as working from home could become the norm.

Also, with remote working, many tenants are looking for properties with bigger gardens which could translate into greater demand for property with bigger gardens? It will also change the property needs of those Lincoln parents and potentially could mean instead of those parents moving down market, they could end up staying longer or moving up market?

Now of course these polls could be a load of hot air? What I do know is that this thing has not played out yet and only time will tell if this will make a concrete change to the way people live, rent and buy property.

These are interesting times and thank you for reading this. Do let me know your thoughts on this matter.

Michael Hollamby – Operations Manager – Northwood & Walters, Lincoln

The Lincoln Property Market Post Lockdown – the first 100 days

With only around 1 in 6 Lincoln house sellers actually selling their home in the last month, Lincoln sellers and buyers will need to continue to be pragmatic if the surprisingly strong current levels of activity in the Lincoln property market are to be sustained.



To start, we had the once in a lifetime event of the credit crunch in 2008, we then had another once in a lifetime event with the Brexit vote in 2016 and now the mother of all ‘once in a lifetime’ events, Coronavirus in 2020 – three once in a lifetime events in the space of 3 Olympic Games!
 
The doom-mongers forecast that the British property market would drop like a lead balloon  on the scale of the 1989 housing crash, where property values dropped by 30.87% in a couple of years, but would be nothing compared to the tsunami that was Covid.

Yet in the first 100 days of the property market coming out of lockdown, behavioural and economic changes mean that many Lincoln homebuyers are now even more dedicated to moving home and the Lincoln property market is doing quite well.
 
Going into lockdown, the effect on activity in the Lincoln property market during those two months was expectable and predictable as it was placed in suspended animation during April and May. When the Lincoln property market re-opened in mid-May, nobody predicted what happened next. Of course, many of us in the property industry estimated some release of pent-up demand from the Boris Bounce, yet nobody anticipated such a ricochet in activity in the Lincoln property market.
 
This is particularly interesting when one considers GDP dropped by 20.4% in Q2 2020 (fascinating when compared to notable historic times when it dropped by 13.8% in WW2 and 16.7% in WW1), yet amidst the largest contraction in the UK economy ever in a single quarter, what wasn’t expected was an increase of potential property buyers and sellers wanting to move post-lockdown.
 
Some have cited this boost to the property market on a number of factors.

Firstly, we have had the Stamp Duty Holiday, others have pointed at the never seen before 0.1% Bank of England base rates making mortgages cheap, then we had the furlough scheme which protected so many jobs and finally, the pent-up demand from the Boris Bounce.
 
Yet, when one actually talks with Lincoln buyers and sellers, whilst all of them cite one or two of the above reasons, all of them mention and talk about how the lockdown has made them re-evaluate and reconsider how they want to live, their work-life balance and where they want to live. This is also reflected with tenants changing their requirements when looking for a property to rent.
 
Demand for apartments in the centre of Lincoln has eased off, whilst demand for property with a good-sized garden or other outside space has increased. One question we get asked all the time is also the broadband speeds, although they are quite decent in Lincoln (the average broadband in our local Council area being 57.6Mbps download and 9.7 Mbps upload).
 
So, with record numbers of Lincoln properties coming on to the market – is it boom time for Lincoln homeowners? 


Of the 350 properties that have come onto the market in Lincoln over the last month, only 60 of them have agreed a sale – a percentage of only 17.1%

That means around 5 out of 6 Lincoln people that have placed their property onto the market have not found a buyer yet.
 
Yes, the Lincoln property market is good, yet the number of people who have placed their property on the market has also gone up. Lincoln estate agents have never been so busy putting property on the market and I feel sorry for the chap who is putting up all the for-sale boards – his wife hasn’t seen him in daylight for weeks!
 
But that does mean you are in competition with so many other properties on the market (the number of properties coming on to the market typically at this time of the year is about a third to half less). The Stamp Duty boost ends in March 2021, so that means you need to have found a buyer by November at the very latest. By overegging your asking price, to test the market, might mean you will lose out on this hiatus and could end up missing the boat!
 
The prices being achieved for the Lincoln properties that have been selling have been fair and realistic and have stood up much better than many were originally predicting.
 
Yet as the country looks forward, given the ambiguous nature of the outlook for the British economy and the possibility that Covid-19 may be with us for a little while yet, I must implore Lincoln property sellers to be realistic with their asking price so a greater number of you who want to make the move, are able to do so.

If you would like to know more about the current market or would like some free and impartial advice – drop me a line at michael@walterslincoln.co.uk or call me at the office on 01522 525555.

Michael Hollamby
Operations Manager
 

 

 

 

567 Lincoln Movers in Covid Limbo

Are you a Lincoln homeowner trapped in the COVID19 market lockdown?

Lincoln families house moves on hold

An immediate fallout of the Coronavirus pandemic is that it has placed many Lincoln families’ house moves on hold. Government guidelines state all home buyers and home sellers who are in the process of selling their Lincoln home and moving to a new home must adapt to these temporary arrangements, adjusting their usual practices, agreeing on different dates to the house move after the removal of the stay at home actions we are all adopting. In essence, putting the home move ‘on ice’ during the lockdown.

However, where the home being moved into is vacant, Government guidance states that you can continue with this transaction although you must observe the Government guidance on home removals. There are also exceptions allowed where existing accommodation becomes unfit to live in (e.g. flood or fire) or occurrences of domestic violence. Thankfully, the Government has asked mortgage companies to extend the expiry date of any mortgage offer and the Law Society has implemented a standard legal process for delaying completion dates.

So, what does all this mean for the people of Lincoln?  

This means the home moves of 567 Lincoln families have been put on hold since the coronavirus restrictions brought the UK housing market mainly to a halt in late March.

These are Lincoln properties where a sale was agreed between October 2019 and February 2020. During the time between sale agreed and completion, the properties are classified as sold subject to contract.  Interestingly, it has been taking upwards of 14 to 19 weeks from agreeing a sale to the move-in over the last few years. This means typically, these 567 property transactions mentioned above would have completed between April and June/July 2020, yet have now been placed on hold after the Government asked buyers and sellers to delay house moves where possible.

The value of Lincoln property sold, subject to contract, amounts to £123,436,000

The pandemic hit just as the Lincoln market had been experiencing the Boris Bounce following his General Election landslide in December. It appears talking to my team and other agents in Lincoln, just about every buyer and seller is happy to wait until the restrictions are lifted because they had been holding back their house move because of Brexit. Interestingly, many of the Lincoln homeowners in limbo mentioned above are moving up the property ladder, and whilst being ‘in limbo’, it has made them realise more than ever that the homes they are moving from are too small for their needs and they are keen to crack on with the sale once restrictions are lifted.

Finally, we cannot forget the tenants of Lincoln.

Currently there are 73 families looking to make that move, yet unable to as tenants are under the same restrictions as homebuyers.  

This means they too cannot do a physical viewing nor can they move home during a lockdown unless the existing accommodation becomes unfit to live in e.g. flood or fire or occurrences of domestic violence or the person moving is an essential worker. That doesn’t mean tenants cannot view the property and prepare the paperwork in advance. In fact, many agents think the first Friday after lockdown will be the busiest ever moving day in the history of the UK as there will be a huge pent up demand to move on that date.

If you have any questions or opinions then get in touch. Email mshollamby@northwooduk.uk.

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