SIDCUP PROPERTY NEWS - JANUARY 2017

SIDCUP
PROPERTY MARKET NEWS
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JANUARY 2017
What happened to the Sidcup
Property Market in 2016?
Tom Ferguson
Sales Expert
Paul Long
Director & Author of
The Sidcup Property News
David Dirkx
Lettings Expert
Well, wasn’t 2016 been eventful. The ups and downs of Brexit,
the Queen’s 90th, Andy Murray winning Wimbledon, Trump,
Bake Off to Channel 4 and something close to the hearts of
every buy to let landlord and homeowner in Sidcup ... the
Sidcup property market.
So, let’s look at the headlines for the Sidcup property market
during 2106...
In November, Sidcup property values rose by 1.01%, leaving
them, year on year 16.1% higher, whilst interestingly, Sidcup
asking prices are down 0.3% month on month. All three
statistics go to show the Sidcup property market has recovered
well after the summer lull, which was worsened by the
uncertainty surrounding the EU vote back in June. Irrespective
of all the issues, the average value of a Sidcup home now
stands at £399,100.
Generally, Sidcup asking prices continue to hold up well, as
asking prices are 3.9% higher year on year. At this time of year,
asking prices tend to drop on the run up to Christmas and
locally, they have dropped by 0.3% this month (November
2016), although this compares well with last year’s drop in
Sidcup asking prices, as we saw asking prices drop by 1.6% in
November 2015.
Now it’s true to say, after chatting with fellow property
professionals in Sidcup, all of us have seen the number of
property sales fall slightly, suggesting a slowing market, but it is
very early days and it could be the time of year. Also, the
numbers are limited, so it’s interesting to take note from a recent
survey by the Royal Institution of Chartered Surveyors, stating
new buyer enquiries and new instructions are falling at the same
rate, suggesting that there will not be a downward pressure on
property values.
Looking at the figures for the UK (as we can’t just look at Sidcup
in isolation), property values are generally rising slower than a
few years ago, but on a positive note, there's still growth across
the UK. You see, slowing property value growth isn't solely
Brexit related, but after a number years of double digit rises in
property values, affordability has weakened and cooling price
growth is widely seen to be a natural correction of the market.
On the other hand, interest rates being at a record low of 0.25%
are helping the property market. The cut in interest rates in the
late summer was the medicine for the post-Brexit worry and will,
as a consequence, ensure that the UK economy continues to
be underpinned by buoyant property prices.
So, what will happen in 2017 in the Sidcup property
market?
Some say until we know what type of exit the UK will make from
the EU it is hard to evaluate the outcome. Although, I believe, the
whole Brexit issue is a sideshow to the main issue in the UK
(and Sidcup) housing market as a whole. As I have mentioned
time and time again over the last few months, the biggest issue
is demand outstripping supply when it comes to the number of
households required to house us all. Sidcup has an evergrowing
population: with immigration (we still have at least two
years of free movement from EU members into the UK), people
living longer and the fact we need thousands of additional
households as the country has nearly 115,000 divorces a year
(where one household becomes two households). These are
interesting times ahead!
Bringing you the latest news and information on the Sidcup property market

Average rent paid by tenants in
Sidcup rise to £1,106 per month
Back in the Spring, there was a surge in Sidcup landlords
buying buy to let property in Sidcup as they tried to beat
George Osborne’s new stamp duty changes which kicked in
on the 1st April 2016. To give you an idea of the sort of
numbers we are talking about, below are the combined
property statistics for sales either side of the deadline in
DA14 and DA15.
Jan 2016 – 60 properties sold
Feb 2016 – 72 properties sold
March 2016 – 97 properties sold
April 2016 – 47 properties sold
May 2016 – 75 properties sold
Normally, the number of sales in the Spring months is very
similar, irrespective of the month. However, as one can see,
this year was a completely different picture as landlords
moved their purchases forward to beat the stamp duty
increase. You would think that even with a basic knowledge
of supply and demand economics, rents would be affected
in a downwards direction?
However, there appears to be no apparent effect on the
levels of rent being asked in Sidcup – and more importantly
achieved – and this direction of rents is not likely to inverse
any time soon, particularly as legislation planned for 2017
might reduce rental stock and push property values ever
upward. The decline of buy to let mortgage interest tax relief
will make some properties lossmaking, forcing landlords to
pass on costs to tenants in the form of higher rents just to
stay afloat. Even those who can still operate may be
deterred from making further investments, reducing rental
stock at a time of severe property shortage.
.. but it’s not all bad news for tenants. Whilst average rents in
Sidcup since 2005 have increased by 33.3%, inflation has
been 38.5% over the same time frame, meaning Sidcup
tenants are 5.2% better off in real terms when it comes to
their rent (which is a sizeable chunk of most people’s
monthly household budgets)
I found it particularly interesting looking at the rent rises over
the last five years in Sidcup, as it was five years ago we
started to see the very early green shoots of growth of the
Sidcup economy. As a whole, following the Credit crunch
(2011), rents in Sidcup have risen by an average of 3.6% a
year – fascinating don’t you think?
The view I am trying to portray is that while renting is often
portrayed as the unfavorable alternative to home ownership,
many young Sidcup professionals like renting as it gives
them adaptability with their life. Rents will continue to rise
which is good news for landlords as buy to let is an
investment but, as can be seen from the statistics, tenants
have also had a good deal with below inflation increases in
rents in the past. It’s a win-win situation for everyone
although on a very personal note, it’s imperative in the future
that tenants are not thwarted from saving for a deposit by
excessive rental hikes – there has to be a balance.
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Current Average Asking Prices in Sidcup
1
BED
FLAT
£234,583
2
BED
FLAT
£280,102
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£366,363
3
BED
HOUSE
£435,089
4
BED
HOUSE
£548,693
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk

Sidcup first time buyers are paying
19.3% more than 12 months ago
Figures just released by the Bank of England, show that for the
first half of 2016, £128.73bn was lent by UK banks to buy UK
property – impressive when you consider only £106.7bn was
lent in the first half of 2015. Even more interesting, was that
most of the difference was in Q2, as £68.12bn was lent by UK
banks in new mortgages for house purchase, which is the
highest it has been for two years. Looking locally, in Sidcup last
quarter, £437.1m was loaned on DA14 properties alone!
Even though the Bank won’t be releasing the Q3 figures until
December 2016, as I discussed a few weeks ago, HMRC have
published their own preliminary data to suggest Q3 will be even
better, with a massive growth of buy-to-let landlords to the
housing market in that time frame. Fascinating, as it seems to
fly in the face of the popular narrative – that the uncertainty
surrounding Brexit would negatively impact buyer sentiment.
And it’s not just buy-to-let landlords that seem to be flourishing.
I am finding that first-time buyers are also a lot more confident
too. Low, and now negative, inflation has had a tangible impact
on household finances and first-time buyers feel more secure in
their jobs. Couple with a low interest rate environment and you
have all the ingredients for a strengthening property market. To
back that up with numbers, of the £68.12bn of mortgages lent
in the Quarter (Q2), £14.9bn was lent to first-time buyers (the
highest proportion of that overall lending for over two years at
21.99%).
When I looked at the data for Bexley London Borough Council
area, the average price paid by first-time buyers (FTB’S) was
£286,603, which is a rise of 1.66% from last month and a rise of
19.35% to twelve months ago. The Land Registry then
categorise the remaining buyers into cash buyers or those
buying with a mortgage. The average price paid by cash buyers
was £305,639, a rise of 1.58% from last month and a rise of
19.19% to twelve months ago, whilst buyers with mortgages
(but not FTB’s), the average price paid by them was £323,427, a
rise of 1.68% from last month and a rise of 19.48% to twelve
months ago.
What surprised me with these figures was how close the
property prices, values and percentages were to each other. It
just goes to show the combination of low mortgage rates and a
stable job market will continue to have a positive effect on the
Sidcup and UK market. And that is why, while there is
undoubtedly more cautiousness in the market at present than a
year or so ago (among borrowers and mortgage companies
alike) – mortgage rates are so competitive that they are inducing
people to commit to a home purchase.
It seems the great Brexit uncertainty was over hyped, and
house price growth as well as mortgage approvals, could pick
up pace into 2017.
Current Average Asking Rents in Sidcup
1
BED
FLAT
£923pcm
2
BED
FLAT
£1,105pcm
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£1,200pcm
3
BED
HOUSE
£1,419pcm
4
BED
HOUSE
£1,567pcm
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk