Salisbury Property Values 4.3% higher than year ago – What’s the PLAN to fix the Salisbury Property Market?

It’s been nearly 18 months since Sajid Javid, the Tory Government’s Housing Minister published the White Paper “Fixing the Broken UK Housing Market”, meanwhile Salisbury property values continue to rise at 4.3% (year on year for the council area) and the number of new homes being constructed locally bumps along at a snail’s pace, creating a potential perfect storm for those looking to buy and sell.

The White Paper is important for the UK and Salisbury people, as it will ensure we have long-term stability and longevity in property market as whole. Salisbury home-owners and Salisbury landlords need to be aware of these issues in the report to ensure they don’t lose out and ensure the local housing market is fit for purpose. The White Paper wanted more homes to be built in the next couple of decades, so it might seem counter-intuitive for existing home-owners and landlords to encourage more homes to be built and a change in the direction of housing provision – as this would appear to have a negative effect on their own property.

Yet the country needs a diversified and fluid property market to allow the economy as whole to grow and flourish … which in turn will be a greater influence on whether prices go up or down in the long term. I am sure every homeowner or landlord in Salisbury doesn’t want another housing crisis like we had in 1974, 1988 and most recently in 2008.

Now, as Sajid Javid has moved on to the Home Secretary role, the 17th Housing Minister in 20 years (poisoned chalice or journeyman’s cabinet post) James Brokenshire has been given the task of making this White Paper come alive. The White Paper had a well-defined notion of what the issues were.

The first of the four points brought up was to give local authorities powers to speed up house building and ensure developers complete new homes on time. Secondly, statutory methods demanding local authorities and builders build at higher densities (i.e. more houses per hectare) where appropriate. The other two points were incentives for smaller builders to take a larger share of the new homes market and help for people renting.

However, lets go back to the two initial points of planning and density.

(1) Planning

For planning to work, we need a robust Planning Dept. Looking at data from the Local Government’s Association, in Wiltshire, the council is below the regional average, only spending £32.57 per person for the Planning Authority, compared the regional average of £37.42 per head – which will mean the planning department will be hard pressed to meet those targets.

Also, 96% of planning applications are decided within the statutory 8-week initial period, above the regional average of 82% (see the graph below).  I am slightly disappointed and also pleased with the numbers for our local authority when it comes to the planning and the budget allowed by our Politician to this vital service.

(2) Density of Population

1.4 people live in every hectare (or 2.471 acres) in Wiltshire

It won’t surprise you that 247,262 of 470,981 Wiltshire residents live in the urban conurbations of the authority, giving a density of 13.1 people per hectare (again – much lower than I initially thought), whilst the villages have a density of 0.7 people per hectare.

I would agree with the Governments’ ambition to make more efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing needs, ensuring that the density and form of development reflect the character, accessibility and infrastructure.

It’s all very good building lots of houses – but we need the infrastructure to go with it.

Talking to a lot of Salisbury people, their biggest fear of all this building is a lack of infrastructure for those extra houses (the extra roads, doctors surgeries, schools etc.). I know most Salisbury homeowners and landlords want more houses to be built to house their family and friends … but irrespective of the density … it’s the infrastructure that goes with the housing that is just as important … and this is where I think the White Paper failed to go as far as I feel it should have done.

Interesting times ahead I believe!

 

Carnival House, Salisbury – £149,950

If you’re looking for a cracking investment purchase, look no further!

This two bedroom flat, situated on Jubilee Close, is well presented throughout and benefits from off-road parking. We have previously rented a number of flats within the block, and all have rented exceptionally well.

I would estimate a rental value of £750pcm, giving you a fantastic yield of 6%

Give Carter & May a call to arrange your viewing! http://www.rightmove.co.uk/property-for-sale/property-54952170.html

Green Lane, Old Sarum – £192,950

 

Situated i

Situated within the increasingly popular area of Old Sarum is this two bedroom property advertised with Oliver Chandler.

Accommodation is well presented and briefly comprises Lounge/Diner, Kitchen, two Bedrooms and Shower Room.

This property would make a fantastic first buy or investment purchase. I would estimate a rental value of between £750pcm and £795pcm, giving you between 4.6% and 4.9%

 

Contact Oliver Chandler for your viewing. http://www.rightmove.co.uk/property-for-sale/property-65826121.html

Nearly Three Babies Born for Every New Home Built in the Past Five Years in Wiltshire

Nearly 3.1 babies have been born for every new home that has been built in Wiltshire since 2012, deepening the Salisbury housing shortage.

This discovery is an important foundation for my concerns about the future of the Salisbury property market – when you consider the battle that todays twenty and thirty somethings face in order to buy their first home and get on the Salisbury property ladder. This is particularly ironic as these Salisbury youngsters’ are being born in an age when the number of new babies born to new homes was far lower.

This will mean the babies being born now, who will become the next generation’s first-time buyers will come up against even bigger competition from a greater number of their peers unless we move to long term fixes to the housing market, instead of the short term fixes that successive Governments have done since the 1980’s.

Looking at the most up to date data for the area covered by Wiltshire Council, the numbers of properties-built versus the number of babies born together with the corresponding ratio of the two metrics …

It can be seen that in 2016, 2.55 babies had been born in Wiltshire for every home that had been built in the five years to the end of 2016 (the most up to date data). Interestingly, that ratio nationally was 2.9 babies to every home built in the ‘50s and 2.4 in the ‘70s. I have seen the unaudited 2017 statistics and the picture isn’t any better! (I will share those when they are released later in the year).

Our children, and their children, will be placed in an unprecedented and unbelievably difficult position when wanting to buy their first home unless decisive action is taken. You see it doesn’t help that with life expectancy growing year on year, this too is also placing excessive pressure on homes to live in availability, with normal population growth nationally (the number of babies born less the number of people passing away) accumulative by two people for every one home that was built since the start of this decade.

Owning one’s home is a measure many Brits to aspire to. The only long-term measure that will help is the building of more new homes on a scale not seen since the 50’s and 60’s, which means we would need to aim to at least double the number of homes we build annually.

In the meantime, what does this mean for Salisbury landlords and homeowners? Well the demand for rental properties in Salisbury in the short term will remain high and until the rate of building grows substantially, this means rents will remain strong and correspondingly, property values will remain robust.

 

Boscombe Heights, Amesbury – £150,000

Offered for sale with Simon Colligan is this fantastic two bedroom flat situated in the increasingly popular town of Amesbury. We have rented a number of properties within this block, and all have proved popular with those working at Boscombe down and the surrounding area.

Accomodation briefly comprises Living Room, Dining Room, two Bedrooms and Bathroom. The block also benefits from off-road parking and the amenities of Amesbury within close proximity.

This particular flat was rented in 2016 at a figure of £725pcm, which would provide you with a fantastic yield of 5.8%. I would estimate a rental value of £750pcm in the current market, giving you a yield of 6%.

Give Simon Colligan a ring to book your viewing! http://www.rightmove.co.uk/property-for-sale/property-73637315.html

 

How Affordable is Property for Average Working Families in Salisbury?

The simple fact is we are not building enough properties. If the supply of new properties is limited and demand continues to soar with heightened divorce rates, i.e. one household becoming two, people living longer and continued immigration, this means the values of those existing properties continues to remain high and out of reach for a lot of people, especially the blue collar working families of Salisbury.

Looking at some recent statistics released by the Government, the ratio of the lower quartile house prices to lower quartile gross annual salaries in Wiltshire Council has hit 9.75 to 1.

What does that mean exactly and why does it matter to Salisbury landlords and homeowners?

If we ordered every property in the Wiltshire Council area by the value of those properties, the average value of the lower quartile properties (i.e. lowest 25%) would be £194,995. If we then did the same, and ordered everyone’s salary in the same council area, the average of the lowest quartile (lowest 25%), the average salary of the lowest 25% is £19,998 pa, thus dividing one with the other, we get the ratio of 9.75 to 1.

Assuming there is one wage earner in the house, the chances of a Salisbury working family being able to afford to buy their own home, when it’s just under ten times their annual salary, is very slim indeed. The existing affordability crisis of people wanting to buy their own home is the unavoidable outcome of the decade on decade failure to build enough homes to keep up with demand. Nevertheless, improving affordability is not a case of just constructing more homes. Wiltshire Council needs to ensure more properties are not only built, but built in the right locations and of the right type and at the right price to ensure the needs of these lower income working families are met, because at the moment, they presently have few options apart from the private rental sector.

Looking at the historic nature of the ratio, it can clearly be seen in the graph below that this has been an issue since the mid 2000’s.  Previous figures from the late 90’s to mid 2000’s (Salisbury District Council) were significantly lower.

However, if one looks at the historic data, those on the bottom rung of the ladder (those in the lower quartile of wage earners) used to be housed by the local authority instead of buying. However, the vast majority of council houses were sold off in the 1980’s, meaning there are much fewer council houses today to house this generation.

Many of the lower quartile working class families were given a lifeline to buy their own homes in middle 2000’s, with 100% mortgages, but the with the credit crunch in 2009, that rug (of 100% mortgages) was rudely pulled from under their feet. You see it is cheaper to buy than rent … it’s the finding of the 5% deposit that is the challenging issue for these Salisbury working class families. So unless the Government allow 100% mortgages back, the fact is, demand for rental properties will outstrip supply.

In the long term, to alleviate that, I would suggest the Salisbury community hold their local politicians at Wiltshire Council to account for the actions they could take to ensure the affordability of housing and the extent to which they work with private developers and housing associations and aggressively use the planning tools at their disposal to safeguard the local community getting the new households we need. Wiltshire Council could make certain parcels of residential building land for private rented development only, eliminating the opportunity of the land being bought to develop large executive homes, which do not solve the current problem.

Yet in the short term, all this means is demand for rental properties will continue to grow, keeping Salisbury house prices high and Salisbury rents high.