Local W4 market information for homeowners, Landlords & Investors.

Month: August 2016

New House Building in Chiswick slumps by 26.3% in the last year

Let me speak frankly, even with Brexit and the fact immigration numbers will now be reduced in the coming years, there is an unending and severe shortage of new housing being built in the Chiswick area (and the UK as a whole). Even if there are short term confidence trembles fueled by newspapers hungry for bad news, the ever growing population of Chiswick with its high demand for property versus curtailed supply of properties being built, this imbalance of supply/demand and the possibility of even lower interest rates will underpin the property market.

 

When the Tories were elected in 2015, Mr. Cameron vowed to build 1,000,000 new homes by 2020. If we as a Country hit those levels of building, most academics stated the UK Housing market would balance itself as the increased supply of property would give a chance for the younger generation to buy their own home as opposed to rent. However, the up-to-date building figures show that in the first three months of 2016 building starts were down. Nationally, there were 35,530 house building starts in the first quarter, a long way off the 50,000 a quarter required to hit those ambitious targets.

 

Looking closer to home, over the last 12 months, new building in the London Borough of Hounslow area has slumped. In 2014/15, for every one thousand existing households in the area, an additional 8.36 homes were built. For 2015/16, that figure is now only 6.16 homes built per thousand existing households. Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand.

 

To put those numbers into real chimney pots, over the last 12 months, in the London Borough of Hounslow area,

 

  • 460 Private Builders (e.g. New Homes Builders)
  • 100 Housing Association
  • 90 Local Authority

 

These new house building numbers are down to the fact that not enough is being done to fix the broken Chiswick housing market. We are still only seeing 650 new homes being built per year in the London Borough of Hounslow area, when we need at least 751 a year to even stand still!

 

I am of the opinion Messer’s Cameron and Osborne focused their attention too much on the demand side of the housing equation, using the Help to Buy scheme and low deposit mortgages to convert the ‘Generation Rent’ i.e. Chiswick ‘20 somethings’ who are set to rent for the rest of their lives to ‘Generation Buy’. On the other side of the coin, I would strongly recommend the new Housing Minster, Gavin Barwell, should concentrate the Government’s efforts on the supply side of the equation. There needs to be transformations to planning laws, massive scale releases of public land and more investment, as more inventive solutions are needed.

 

However, ultimately, responsibility has to rest on the shoulders of Theresa May. Whilst our new PM has many plates to spin, evading on the housing crisis will only come at greater cost later on. What a legacy it would be if it was Mrs. May who finally got to grips with the persistent and enduring shortage of homes to live in. The PM has already referenced the ‘need to do far more to get more houses built’ and stop the decline of home ownership. However, she has also ruled out any changes to the green belt policy – something I will talk about in a future up and coming article. Hopefully these statistics will raise the alarm bells again and persuade both residents and Councilor’s in the London Borough of Hounslow area that housing needs to be higher on its agenda.

 

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63.1% of Chiswick Properties have 3 or more bedrooms – Problem or Opportunity?

The orthodox way of classifying property in the UK is to look at the number of bedrooms rather than its size in square metres (although now we are leaving the EU – I wonder if we can go back to feet and inches?). It seems that homeowners and tenants are happy to pay for more space. It’s quite obvious, the more bedrooms a house or apartment has, the bigger it is likely to be. The reason being not only the actual additional bedroom space, but the properties with more bedrooms tend to have larger / more reception (living) rooms. However, if you think about it, this isn’t so astonishing given that properties with more bedrooms would typically accommodate more people and therefore require larger reception rooms.

In today’s Chiswick property market, the Chiswick homeowners and Chiswick landlords I talk to are always asking me which attributes and features are likely to make their property comparatively more attractive and which ones may detract from the price. Over time, buyers’ and tenants’ wants and needs have changed. In Chiswick, location is still the No. 1 factor affecting the value of property, and a property in the best neighbourhoods, say Grove Park or Bedford Park can command a price nearly 50% higher than a similar house in an ‘average’ area. However, after location, the next characteristic that has a significant influence on the desirability, and thus price, of property is the number of bedrooms and the type (i.e. Detached/ Semi/Terraced/Flat).

In previous articles, I have analysed the Chiswick housing stock into bedrooms and type of property, but never before now have I cross-referenced type against bedrooms. These figures for the Hounslow London Borough Council area make fascinating reading. It shows 63.1% of all properties in the area have 3 or more bedrooms

  Detached Semi-detached Terraced (including end-terrace) Flat
1 bedroom 92 236 149 2,343
2 bedrooms 593 2,181 3,313 12,661
3 bedrooms 1,423 11,585 7,814 3,357
4 bedrooms 853 4,494 2,852 409
5 or more bedrooms 669 2,614 753 142

I was genuinely surprised at the low numbers of one and two bed properties, especially 2 bed semis detached houses, especially as tenants like the smaller one and two bed properties in Chiswick. You see, it might interest the homeowners and landlords of Chiswick, that there has been a change in the numbers of properties on the market and the split in bedrooms on the market over the last 12 months

  • 12 months ago, 112 one bed properties were for sale in Chiswick, today 154, a rise of 38%
  • 12 months ago, 217 two bed properties were for sale in Chiswick, today 347, a rise of 60%
  • 12 months ago, 144 three bed properties were for sale in Chiswick, today 152, a rise of 6%
  • 12 months ago, 96 four bed properties were for sale in Chiswick, today 120, a rise of 25%
  • 12 months ago, 75 five + bed properties were for sale in Chiswick, today 80, a rise of 7%

It can quite clearly be seen more Chiswick properties have become available, which can only be good news for Chiswick first time buyers and Chiswick buy to let landlords looking for a bargain (especially post Brexit) as property prices have stopped rising at the silly rates they were 12/18 months ago.

For several years Chiswick buy-to-let investors have been the only buyers at the lower end (starter homes) of the market, as they have been enticed by high tenant demand and attractive returns. Some Chiswick landlords believe their window of opportunity has started to close with the new tax regime for landlords, whilst it already appears to be opening wider for first-time buyers. This is great news for first time buyers … but one final note for Chiswick landlords … all is not lost … you can still pick up bargains, you just need to be a lot more savvy and do your homework.

 

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27.3% Of Chiswick Homes Are One Person Households

I was having an interesting chat with a Chiswick buy to let landlord the other day when the subject of size of households came up in conversation. For those of you who read my Brexit article published on the morning after the referendum, one of the reasons on why I thought the Chiswick property market would, in the medium to long term, be OK, was the fact that the size of households in the 21st Century was getting smaller – which would create demand for Chiswick Property and therefore keep property prices from dropping.

Looking at the stats going back to the early 1960’s, when the average number of people in a home was exactly 3, it has steadily over the years dropped by a fifth to today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the population remained at the same level for the next 50 years and the we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties ( or 105,769 per year) .. When you consider the Country is only building 139,800 properties a year … it doesn’t leave much for people living longer and immigration. Looking closer to home…

In the Hounslow London Borough Council area, the average

number of occupants per household is 2.7 people

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting, a fascinating picture appears.

The vast majority of homeowners who don’t have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone. People living on their own are more likely to live in a Council house (43%) and the largest households (those with 4 or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy. What surprised me

was the even spread of private rented households and how that sector of population are so evenly spread across the occupant range – in fact that sector is the closest to the national average, even though they only represent a sixth of the population.

When we look at the Hounslow London Borough Council figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears…

But it gets even more interesting when we focus on just private rental properties in Chiswick, as it is the rental market in Chiswick that really fascinates me. When I analysed those Hounslow London Borough Council private rental household composition figures, a slightly different picture appears. Of the 21,099 Private rental properties in the Hounslow London Borough Council area,

19.7% of Private Rental Properties are 1 person Households
28.6% of Private Rental Properties are 2 person Households
21.2% of Private Rental Properties are 3 person Households
15.9% of Private Rental Properties are 4 person Households
14.4% of Private Rental Properties are 5+ person Households

As you can see, Chiswick is not too dissimilar from the national picture but there is a story to tell. If you are considering future buy to let purchases in the coming 12 to 18 months, I would seriously consider looking at 2-3 bed apartments/houses. Even with the numbers stated, there are simply not enough 2-3 bed apartments/houses to meet the demand. They have to be in the right part of Chiswick and priced realistically, but they will always let and when you need to sell, irrespective of market conditions at the time, will always be the target of buyers.

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13,700 People Live In Every Square Mile Of Chiswick– Is Chiswick Over Crowded?

Chiswick is already in the clutches of a population crisis that has now started to affect the quality of life of those living in Chiswick. There are simply not enough homes in Chiswick to house the greater number of people wanting to live in the borough. The burden on public services is almost at breaking point with many parents unable to send their child to their first choice of primary or secondary school and the chances of getting a decent Dentist or GP Doctor Surgery next to nil.

 

Well that’s what the papers would say.. but let’s look at real numbers, and in particular my specialist subject of Chiswick Property, with the housing issue in Chiswick. To start with, the UK has roughly 1,065 people per square mile – the second highest in Europe. The total area of Chiswick itself is 2.550 square miles and there are 44,018 Chiswick residents, meaning …

17,200 people live in each square mile of Hounslow, it’s no wonder we appear to be bursting at the seams!

 

… but yet again, newspapers, politicians and property market bloggers quote big numbers to sell more newspapers, get elected or get people to read their blog (I recognise the irony!). A square mile is enormous, so the numbers look correspondingly large (and headline grabbing). Most people reading this will know what an ‘acre’ is, but those younger readers who don’t, it is an imperial unit of measurement for land and it is approximately 63 metres square.

 

In Chiswick, only 24.59 people live in every acre of Chiswick… not as headline grabbing, but a lot closer to home and relative to everyday life, and if I am being honest, a figure that doesn’t seem that bad.

 

Yet, the issue at hand is, we need more homes building. In 2007, Tony Blair set a target that 240,000 homes a year needed to be built to keep up with the population growth, whilst the Tory’s new target since 2010 was a more modest 200,000 a year. However, since 2010, as a country, we have only been building between 140,000 and 150,000 houses a year. So where are we going to build these homes .. because we have no space! Or do we?

 

Well, let me tell you this fascinating piece of information I found out recently in an official Government report. Looking specifically at England (as it is the most densely populated country of the Union), all the 20 million English homes cover only 1.1% of its land mass. That is not a typo, only one point one per cent (1.1%) of land in England is covered by residential property. In more detail, of all the land in the Country –

 

  • Residential Houses and Flats 1.1%
  • Gardens 4.3%
  • Shops and Offices 0.7%
  • Highways (Roads and Paths) 2.3%
  • Railways 0.1%
  • Water (Rivers /Reservoirs) 2.6%
  • Industry, Military and other uses 1.4%

 

.. leaving 88.5% as Open Countryside (and if you think about it, add to that the gardens, which are green spaces, and the country is 92.8% greenspace)

 

 

 

As a country,

we have plenty of space to build more homes for the younger generation and the five million more homes needed in the next 20 years would use only 0.25% of the country’s land. Now I am not advocating building massive housing estates and 20 storey concrete and glass behemoth apartment blocks next to local beauty spots such as Duke’s Meadows, but with some clever planning and joined up thinking, we really do need to think outside the box when it comes to how we are going to build and house our children and our children’s children in the coming 50 years in Chiswick. If anyone has their own ideas, I would love to hear from you.

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87.8 % of Chiswick Homeowners are over 35 – The affect of their Brexit vote on the Chiswick Property Market

Well it’s been a number of weeks since the Referendum vote and we have had a chance to reflect on the momentous decision that the British public took. Many of you read the article I wrote on the morning of the results. I had gone to bed the night before with a draft of my Remain article nicely all but finished, to be presented, at just after 5am, with the declaration by the BBC saying we were leaving the EU. I don’t think any of us were expecting that.

If you want to read a copy of that original Post Brexit blog post, please visit the month of June to find it. In this article I would like to take my thoughts on from that initial article and now start to see the clearer picture as the dust settles on the UK, but more importantly, the Chiswick Property Market.

In case you weren’t aware, the residents of the Hounslow Council area went with the National mood and voted as follows ..

Hounslow Council Remain Votes 58,755 (51.1% of the vote)

Hounslow Council Leave Votes 56,321 (48.9% of the vote)

Hounslow Council Turnout 69.7%

I have been reading there is some evidence to indicate younger voters were vastly more likely to vote Remain than their parents and grandparents and, whilst the polling industry’s techniques may have been widely criticised, following them getting both the 2010 General Election and the recent Brexit vote wrong, anecdotally, many surveys seem to suggest there was a relationship between age and likelihood to support leaving the EU.

Interestingly, the average age of a Chiswick resident is 35.2 years old, which is below the national average of 39.3, which might go someway to back up the way Chiswick voted? What I do know is that putting aside whether you were a remain or leave voter, the vote to leave has, and will, create uncertainty and the last thing the British property market needs is uncertainty (because as with previous episodes of uncertainty in the UK economy – UK house prices have tended to go down).

Interestingly, when we look at the Homeownership rates in the Hounslow Council area, of the 49,804 properties that are owned in the Hounslow Council area (Owned being owned outright, owned with a mortgage or shared ownership), the age range paints a noteworthy picture.

Age 16 to 34 homeowners 6,043 or 12.1 (Nationally 9.6%)

Age 35 to 49 homeowners 16,774 or 33.7% (Nationally 29.2%)

Age 50 to 64 homeowners 15,459 or 31.0% (Nationally 30.7%)

Aged 65+ homeowners 11,528 or 23.1% (Nationally 30.5%)

So, looking at these figures, and the high proportion of older homeowners, you might think all the Hounslow Council area homeowners would vote Remain to keep house prices stable and younger people would vote out so house prices come down- so they could afford to buy?

But there’s a risk in oversimplifying this. The sample of the polling firms are in the thousands whilst the country voted in its millions. Other demographic influences have been at play in the way people voted, as early evidence is starting to suggest that class, level of education, the levels of immigration and ethnic diversity had an influence on the way the various parts of the UK voted.

So what I suggest is this – Don’t assume everyone over the age of 50 voted ‘Leave’ and don’t assume most 20 somethings backed ‘Remain’; because many didn’t!

Please read my original article in the Chiswick Property Blog and you can make your own mind up.

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