Auction – 2 bed Gainsborough Drive Salisbury £115k starting price.

Don’t often see auctions but this one caught my eye. These normal sell for £160-165k so factoring in refurb costs of £20k, this could be a cheap little purchase. rental wise expect to receive £720 pcm therfore a yield of 6.4% is possible. Call Clive Emson to book a viewing.

https://www.cliveemson.co.uk/properties/202/154/

Extra Funding Is Required for Affordable Homes in Salisbury

In my blog about the Salisbury Property Market I mostly only talk about two of the three main sectors of the local property market, the ‘private rented sector’ and the ‘owner occupier sector’. However, as I often stress when talking to my clients, one cannot forget the third sector, that being the ‘social housing sector’ (or council housing as some people call it).

In previous articles, I have spoken at length about the crisis in supply of property in Salisbury (i.e. not enough property is being built), but in this article I want to talk about the other crisis – that of affordability. It is not just about the pure number of houses being built but also the equilibrium of tenure (ownership vs rented) and therein, the affordability of housing, which needs to be considered carefully for an efficient and effectual housing market.

An efficient and effectual housing market is in everyone’s interests, including Salisbury homeowners and Salisbury landlords, so let me explain ..

An average of only 618 Affordable Homes per year have been built by Wiltshire Council in the last 9 years

The requirement for the provision of subsidised housing has been recognised since Victorian times. Even though private rents have not kept up with inflation since 2005 (meaning tenants are better off) it’s still a fact there are substantial numbers of low-income households in Salisbury devoid of the money to allow them a decent standard of housing.

Usually, property in the social housing sector has had rents set at around half the going market rate and affordable shared home ownership has been the main source of new affordable housing yet, irrespective of the tenure, the local authority is simply not coming up with the numbers required. If the local authority isn’t building or finding these affordable homes, these Salisbury tenants still need housing, and some tenants at the lower end of the market are falling foul of rogue landlords. Not good news for tenants and the vast majority of law abiding and decent Salisbury landlords who are tarnished by the actions of those few rogue landlords, especially as I believe everyone has the right to a safe and decent home.

Be it Tory’s, Labour, SNP, Lib Dems, Greens etc, everyone needs to put party politics aside and start building enough homes and ensure that housing is affordable. Even though 2017 was one of the best years for new home building in the last decade (217,000 home built in 2017) overall new home building has been in decline for many years from the heady days of the early 1970s, when an average of 350,000 new homes were being built a year.  As you can see from the graph, we simply aren’t building enough ‘affordable’ homes in the area.

The blame cannot all be placed at the feet of the local authority as Council budgets nationally, according to Full-Fact, are 26% lower than they have been since 2010.

So, what does this mean for Salisbury homeowners? Well, an undersupply of affordable homes will artificially keep rents and property prices high. That might sound good in the short term, but a large proportion of my Salisbury landlords find their children are also priced out of the housing market. Also, whilst your Salisbury home might be slightly higher in value, due to this lack of supply of homes at the bottom end of the market, as most people move up the market when they do move, the one you want to buy will be priced even higher.

Problems at the lower end of the property market will affect the middle and upper parts. There is no getting away from the fact that the Salisbury housing market is all interlinked .. it’s not called the Property ‘Ladder’ for nothing!

Sarum Close -if the price is right…? Rental Property salisbury £215k

Everyone loves a bargain so why not offer on the slow moving property with Jordans. Its been on the market since September 2017. At £195k it would make a reasonable return of around 4.8%. The last 2 bed that sold down this road (July 2017) made £185k.

http://www.rightmove.co.uk/property-for-sale/property-71825186.html

Previous sales> http://www.rightmove.co.uk/house-prices/SP2/Sarum-Close.html

Salisbury Property Market – Asking Prices Up 2.2% in the Last 12 Months

The average asking price of property in Salisbury increased by 2.2% or £7,187 compared to a year ago, with particularly good demand from landlords and home-movers in the first few months of the year. This takes the current average asking price to £338,504, compared with £331,317 this time last year.

The rise in asking prices is being aggravated by buyers jumping into action looking to benefit from potential stamp duty savings (especially first-time buyers) or beat impending mortgage interest rate rises later in 2018. Of the numerous Salisbury buyers starting their property hunting in the usually active spring market this year, many face paying even more than ever for the property of their dreams, although as I mentioned a few weeks ago, there are more properties for sale in Salisbury compared to 12 months ago.

Looking at the different sectors of the Salisbury property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts …

Interestingly, when one looks at the percentages, the most upward average asking price pressure is in the detached property type sectors, with both first-time-buyer and second-time-buyer properties at new Salisbury asking price highs.

Now, I must stress this growth in the asking prices of Salisbury property doesn’t mean the value of Salisbury property is going up by the same amount … nothing could be further from the truth.  Only time will tell if the current levels of Salisbury asking prices is a catch-up abnormality after a couple of months of restrained asking price rises in the first few months of 2018, or is it an initial sign that we are in for a better 2018 Salisbury Property market than all of us were expecting at the start of the year?

I believe these asking prices must be viewed with a pinch of salt, as it will be fascinating to see whether Salisbury properties actually sell at these higher asking prices. Just because house sellers (be they owner-occupiers or landlords liquidating their assets) are asking for more money it doesn’t mean buyers will be enthusiastic to part with their hard earned cash. Like my Mum and Dad used to say to me all those years ago, “You can ask … but you might not get”.

Also, Salisbury homeowners and landlords wanting to sell their property need to be aware of progressively strained buyer mortgage affordability and the more those sellers increase asking prices, the more buyers will hit their maximum on the amount they are able borrow on a mortgage.

However, those Salisbury buyers who need a mortgage (be they owner-occupier or landlord), will paradoxically benefit from lower mortgage payments before interest rates rise … maybe another reason for the uplift in the number first time buyers and landlords buying? Only time will tell!

3 bed New Build Salisbury possible BTL £289,995

Its not often I feature a new Build because the yields don’t always stack up. However, when you get a 10 year guarantee then there’s not going to be a huge amount of maintenance that you have to pay for. I only post gross yields but the net yield is the one to watch on new properties. Rental wise, I suspect £950-1000 pcm so gross yield of around 4.1% with the net being very similar. Persimmonds show homes are the pace to start but call me if you need my opinion. http://www.rightmove.co.uk/property-for-sale/property-54218181.html

Salisbury property Market Update

I was speaking to a Property Journalist about the downturn in the Salisbury Property Market since the nerve agent poisoning and asked him to do me a favour and investigate it for me. I knew the market was suffering but I was staggered at the actual numbers involved. Click the link to see what he said.

https://youtu.be/lMQX84IIzD8

2 Bed in Harnham – £245,000 (Near SDH)

If you are not a BTL investor then it may not interest you that we sold a 3 bed on this road for £255k in May 16 showing that prices are still rising. If you are investing, then why not with this top location property, on the right side of town for the hospital this property will rent quickly at around £825 pcm giving a yield on the low side of 4%. I would suggest this is a little low but the capital growth is worth looking at. I’m sure Carter & May will love to show you round! http://www.rightmove.co.uk/property-for-sale/property-54191058.html

£768 pcm – The Average Salisbury Rent

The rents paid by Salisbury tenants are now standing at £768 per calendar month (PCM), a rise of 3.4% year on year and 0.7% higher month on month.

However, this attention-grabbing monthly rent figure masks stark differences in the various different parts of the Salisbury rental market.  Demand in Salisbury for high quality family homes with two or three bedrooms in good catchment areas for schools remains really robust due to tenants wanting access to the schools.  Other influencing factors that make certain areas popular are the proximity to transport links. However, I have noticed a drop in demand (and thus rents achieved) for property where the landlord hasn’t kept the property fresh; in terms of decoration, carpets, replacement windows and poor heating.

So, what does all this mean for Salisbury landlords and tenants?

With the new tax rules for landlords, many believed that the number of rental properties would narrow throughout 2017, as landlords sold up their Buy to let properties and looked to invest their money elsewhere, but evidently this hasn’t happened (yet).  Feasibly Salisbury landlords are re-mortgaging their Salisbury buy to let properties instead, as they still believe it’s a safer investment than looking, say at the stock market?

However, demand remained strong in 2017 for Salisbury private rental properties, meaning the rents being achieved were at a decent level for landlords. Keeping your outgoings low is also an important consideration and so I looked on a well-known financial services comparison site this morning and found a High Street bank offering a 5-year fixed rate for Buy to let landlords with a 40% deposit/equity for 2.17% … I can remember (as I am sure many of my readers of this blog can) when mortgage rates were at 15% – this is cheap money!

Looking at property values in Salisbury, over the last 12 months and specifically at the lower of the market where buy to let landlords tend to buy their rental properties.  Flats/apartments have risen in value by 1.74% whilst terraced properties have risen by 7.67%.

Some Salisbury landlords have seen the yields they are achieving remain squeezed.

However, most landlords can start to feel assured that as capital growth in Salisbury remains at a more realistic figure (good for long term stability in the property market) and long-term rents are on the rise, the overall corresponding annual return on investment (Annual ROI being annual capital + annual yield) has stabilised in all areas and is now starting to grow.

With additional people seeing renting as a long-term option, even with the challenges of the new tax regime, Salisbury landlords, with the support of a good advice and opinion, should continue to see renting as a good investment vehicle.

Woodville Road Salisbury BTL or Keeper £220,000

Another BTL or Keeper property -no denying its good value – previous prices here

Certainly rentable at £875-900 giving a respectable yield of 4.9% gross – clearly needs a redec but that’s only £2000 ish. Get your wallet over to Connells and book a viewing. http://www.rightmove.co.uk/property-for-sale/property-70747664.html