SIDCUP PROPERTY NEWS - FEBRUARY 2018

SIDCUP
P R O P E R T Y M A R K E T N E W S
BOUGHT TO YOU BY
020 8300 6761 | www.sidcuppropertyblog.co.uk
FEBRUARY 2018
WITH SIDCUP ANNUAL PROPERTY VALUES
4.3% HIGHER, THIS IS MY 2018 FORECAST
Tom Ferguson
Sales Expert
Paul Long
Director & Author of
The Sidcup Property News
David Dirkx
Lettings Expert
Looking at the newspapers between Christmas
and New Year, it seemed that this year’s sport in
the column inches was to predict the future of the
British housing market. So to go along with that
these are my thoughts on the Sidcup property
market.
With the average 5-year fixed rate mortgage at
1.98% (down from 3.47% in 2014) and 2-year
fixed rate at 1.47% (down from 2.37% in 2014),
mortgage interest rates offered by lenders are at
an all-time low (even with the slight increase on
the Bank of England base rate a few months ago).
Added to this, there has been a low
unemployment rate of 4.6% in Sidcup, which has
contributed to maintain a decent level demand for
property in Sidcup in 2017 (interestingly – an
impressive 582 Sidcup properties were sold in
last 12 months), whilst finally, the number of
properties for sale in the town has remained
limited, thus providing support for Sidcup house
prices, meaning …
Sidcup Property Values are 4.3% higher
than a year ago
However, moving into 2018, there will be greater
pressures on people’s incomes as inflation starts
to eat into real wage packet growth, which will
wield a snowballing strain on consumer
confidence. Interestingly though, information from
the website Rightmove suggested over a third of
property it had on its books in October and
November had their asking prices reduced, the
highest percentage of asking price reductions in
the same time frame, over five years. Still, a lot of
that could have been house-sellers being overly
optimistic with their initial pricing.
In terms of what will happen to Sidcup property
values in the next 12 months, a lot will be
contingent on the type of Brexit we have and the
impact on the whole of the UK economy. A lot of
people will talk about the Central London
property market in the coming year, and if the
banking and finance sectors are negatively
affected with a poor Brexit deal, then the London
market is likely to see more of an impact.
Nevertheless, the bottom line is Sidcup
homeowners and Sidcup landlords should be
aware of what happens in the rollercoaster
housing market of Central London, but not panic
if prices do drop suddenly in 2018. Over the last 8
years, the Central London house prices have
grown by 89.6%, whilst in Sidcup, they have risen
by similar figure of 75.2%. So if we do see a
correction in the Capital, of say 5% to 10%, it will
only take us back to Sidcup house prices that
were being achieved only 12 to 18 months ago …
and nobody was complaining or worrying then!
Hindsight is always better than foresight and
predicting anything economic is all well and good
when you know what is around the corner. At
least we have the Brexit divorce settlement sorted
and, as the UK economy and the UK housing
market are intertwined, it all depends on how we
deal as a Country with the Brexit issue. However,
we have been through the global financial crisis
reasonably intact … I am sure we can get through
this together as well?
Oh, and house prices in Sidcup over the next 12
months? I believe they will end up between 0.6%
higher and 2% higher, although it will probably be
a bumpy ride to get to those sorts of figures.
Bringing you the latest news and information on the Sidcup property market

DESPITE PROPERTY VALUES RISING – SIDCUP APARTMENTS
ARE JUST AS AFFORDABLE AS 10 YEARS AGO
My research shows that certain types of Sidcup property are just as
affordable today as they were before the 2007 credit crunch.
Roll the clock back to 2007 just before the credit crunch hit which saw
Sidcup property values plummet like a lead balloon and the Sidcup property
market had reached a peak with the prices for Sidcup property hitting the
highest level they had ever reached. Between 2008 and 2010, Sidcup
property values lay in the doldrums and only started to rise in 2011, albeit
quite slowly to begin with.
Nevertheless, even though property values have now passed those 2007
peaks, my research indicates that Sidcup property, especially
flats/apartments, are now just as affordable as they were before the 2008
credit crunch (in real terms).
Back in 2007, the average value of a Sidcup flat/apartment stood at
£192,547 and today, it stands at £242,021, a rise of £49,474 or 25.7%.
However, between 2007 and today, we have experienced inflation (as
measured by the Government’s Consumer Price Index) of 25.97% meaning
that in real spending power terms Sidcup apartments are 0.3% more
affordable than in 2007. Looking at it another way, if the average Sidcup
apartment (valued at £192,547 in 2007) had risen by 25.97% inflation over
those 10 years, today it would be worth £242,551 (instead of the current
£242,021 )… Not much different in real terms.
The point I’m trying to get across is that Sidcup property is more affordable
than many people think. Sidcup first time buyers can get on the ladder as
95% mortgages have been readily available to first-time buyers since 2010.
It really comes down to a choice and if Sidcup first-time buyers can get over
the hurdle of saving the 5% deposit for the mortgage on the property – they
will be on to a winner, especially with these ultralow mortgage interest rates,
a mortgage can be between 10% and 30% cheaper per month than the
rental payments on the same house.
So why aren’t Sidcup 20 somethings buying their own home?
Back in the 1960’s and 1970’s, renting was considered the poor man’s
choice in Sidcup (and the rest of the Country) a huge stigma was attached to
renting. However, over the last 10 years as a country, we have done a
complete U-turn in our attitude towards renting – meaning that many people
find renting a better option and a lifestyle choice.
Saving the 5% deposit means going without many luxuries in life (such as
holidays, every satellite movie and sports channel, socialising or the latest
mobile phone – even if only in the short term) therefore instead of saving
every last pound to put towards a mortgage deposit Sidcup 20 somethings
choose to rent.
There is no denying the simple fact that over the next 10 to 15 years, the
people who choose to rent instead of buy in Sidcup will continue to rise.
60 Second
Online Property Valuation
Curious to know how
much your property
would sell or rent for
but not quite ready for a
visit.
Find out online instantly
using our FREE online
valuation tool.
Sales
Valuation
Click here to get a
FREE instant valuation
visit valuation.drewery.co.uk
Therefore, everyone in Sidcup has a responsibility to ensure that an
adequate number of quality Sidcup rental properties are safeguarded to meet
those future demands. Interestingly, what I have noticed though over the last
few years are the expectations of Sidcup tenants on the finish and
specification of their Sidcup rental property.
I have perceived that in the past, what a tenant wanted from their Sidcup
rental property was moderately unassuming because renting a property was
only a short-term choice to fill the gap before jumping on the property ladder.
Before the millennium, wood chip wall paper and twenty-year-old kitchen
and bathroom suites were considered the norm.
However, Sidcup tenants’ expectations are becoming more discerning as
each year goes by. I have also noticed the length of time a tenant remains in
their Sidcup property is becoming longer (and this was backed up recently
by stats from a Government Report), although I have noticed a tendency for
many Sidcup landlords not to keep the rental payments at the going market
rates – maybe a topic for a future article for my blog?
The bottom line is this … Sidcup landlords will need to be more conscious of
tenants needs and wants and consider their financial planning for future
enhancements to their Sidcup rental properties over the next five, ten and
twenty years – e.g. decorating, kitchen and bathroom suites etc etc ..
The present-day and future situation of the Sidcup private rental property
market is important, and I frequently liaise with Sidcup buy-to-let investors
looking to spread their Sidcup rental-portfolios. I also enjoy meeting and
working alongside Sidcup first time landlords, to ensure they can navigate
through the minefield of rental voids, the important balance of capital growth
and yield and ensuring the property is returned back to you in the future in
the best possible condition.
Current Average Asking Prices in Sidcup
1
BED
FLAT
£251,991
2
BED
FLAT
£318,515
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£365,173
3
BED
HOUSE
£439,711
4
BED
HOUSE
£574,072
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk

YOUNGSTERS UNABLE TO BUY THEIR FIRST HOME IN SIDCUP
– ARE THE BABY BOOMERS AND LANDLORDS TO BLAME? NO!
Talk to many Sidcup 20 something’s, where home ownership has
looked but a vague dream, many of them have been vexatious towards
the Baby Boomer generation and their pushover ‘easy go lucky’ walk
through life; jealous of their free university education with grants, their
eye watering property windfalls, their golden final salary pensions and
their free bus passes.
If you had bought a property in Sidcup for say £19,000 in first quarter of
1977, today it would be worth £444,443, a windfall increase of
2239.17%.
But to blame the 60 and 70 year olds of Sidcup for that sort of rise
seems a little unfair, with the value of the homes rising like rocket, I
don’t believe they can be censured or made liable for that. A few
weeks ago, I discussed in my blog the number of people in the Sidcup
area who have two or more spare bedrooms (meaning they are underoccupying
the house). I see many mature members of Sidcup society,
rattling around in large 4/5 bed houses where the kids have flown the
nest years ago … but should they be blamed?
We are all just human, and the mature members of UK society have just
reacted to the inducements of our property and tax system. The mature
generations who joined the property market party in the 1970’s and
wings clipped over the last couple of years, with the introduction of new
tax rules (meaning it is slightly more difficult to make money out of
property unless you have all the national information and Sidcup
property trends to hand).
It’s easy to think the only reason that hundreds of first time buyers have
been priced out of the Sidcup housing market is because of these
landlords. Yet, I believe landlords have been undervalued with the
Sidcup homes they provide for Sidcup people. With first time buyers
struggling to save for a deposit, if it weren’t for those landlords buying
up those homes over the last 10/15 years, we would have a bigger
housing crisis than we have today. Since the global financial crisis of
2008/9, local councils have had to cut services, so certainly didn’t have
enough money to build new homes … homes that were provided to
Sidcup by these buy to let landlords.
1980’s were able to take out huge mortgages, protected in the
knowledge that inflation would corrode the real value of the mortgage,
while wage gains would boost their ability to repay.
Neither do I directly blame the multitude of Sidcup buy to let landlords,
buying up their 10th or 11th property to add to their buy to let empire.
They too, are humbly reacting to the peculiar historic inducements of
the UK property market.
So, who is to blame?
Well, hyperinflation in the 1970’s meant the real value of people’s
mortgages was whipped out (as mentioned above). Margaret Thatcher
and Nigel Lawson are also good people to blame with Maggie selling
off millions of council houses and Nigel Lawson’s delayed ending of the
MIRAS tax relief in 1987; meaning he too can get his share of
indignation. The Blair/Brown combo doubled stamp duty in 1997 and
again in 2000, which, as a tax on property transactions, precludes a
more efficient distribution of the current housing stock. The
Government has had plenty of opportunity to change the draconian
stamp duty rules to incentivise those mature Sidcup house movers to
downsize.
However, I have started to see over the last few years a change in
Government policy towards housing. The new breed of Sidcup buy to
let landlords that have come about since the Millennium, have had their
One side of the argument is that 536 homes are being bought up by
buy to let landlords each year in the Bexley London Borough Council
area when otherwise they might have become available to other buyers,
the other side of the argument is the current national average deposit is
£51,800, which is, by far, the greatest barrier to those wanting to buy
their first home. Those homes bought by local buy to let landlords are
not left idle, as they equate to 3,753 of new homes for local people,
most of whom who see renting as a better option because of the
choice, the simplicity and the flexibility which renting brings.
In the 60’s/70’/80’s, the traditional thoughts that you were a failure
unless you owned your own home have now all but disappeared,
because if you ask many young people, they would probably say
renting was the perfect option for them at certain times of their life.
Current Average Asking Rents in Sidcup
1
BED
FLAT
£905pcm
2
BED
FLAT
£1,115pcm
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£1,229pcm
3
BED
HOUSE
£1,522pcm
4
BED
HOUSE
£1,850pcm
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk