Latest News For Investors

Month: March 2017

Update On The Exeter Property Market

The Exeter housing market has gone through a sea change in the last 30+ years with the sector evolving as a key trend, for both Exeter tenants and Exeter landlords. A few weeks ago, the Government released a White Paper on housing. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Exeter population.

The private rented sector accounts for 21.2% of households in Exeter, interesting when you consider that was only 11.49% of Exeter households rented from a Private Landlord back in 1981

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Exeter set to grow to 144,000 by 2037 (from its current 127,300) – it is imperative that Exeter City Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

The average monthly rent for an

Exeter property is £816 per month

Many Exeter youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Investing in Exeter buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from a High St Building Society is an uninspiring 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Exeter’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Exeter, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return.

Over the last 5 years, an average Exeter property

has risen by £54,050 (equivalent to £29.62 a day),

Taking that average Exeter property to a current average value of £282,800.

Yields for Exeter landlords range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

2017 will be an interesting year for everyone in Exeter, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Exeter property market like this, please come and speak to our experienced team at Northwood, 85 South Street or call the office on 01392 435 130. For property news updates please log onto my blog

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Exeter First Time Buyers borrow £119m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Exeter property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 2,476 properties have sold (and completed) in Exeter, worth £667.5m. Interestingly the number of properties changing hands in Exeter has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Exeter buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Exeter property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Exeter itself, first time buyers have borrowed more than £119m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Exeter economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Exeter market, at this moment in time there are an impressive 705 properties for sale, (so lots of choice). All this will be welcome news amongst Exeter first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Exeter property market like this, call the property experts on 01392 435 130.

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