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
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 email@example.com
… 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
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 firstname.lastname@example.org
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
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 email@example.com or call me at the office on 01522 525555.