SIDCUP PROPERTY NEWS - JUNE 2018

SIDCUP
P R O P E R T Y M A R K E T N E W S
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JUNE 2018
£1,061 PCM – THE AVERAGE SIDCUP
RENT
Tom Ferguson
Sales Expert
Paul Long
Director & Author of
The Sidcup Property News
David Dirkx
Lettings Expert
The rents paid by Sidcup tenants are now standing
at £1,061 per calendar month (PCM), a rise of
2.32% year on year and 0.52% higher month on
month.
However, this attention-grabbing monthly rent
figure masks stark differences in the various
different parts of the Sidcup rental market.
Demand in Sidcup 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 Sidcup 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 Sidcup landlords are re-mortgaging their
Sidcup 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
Sidcup 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 Sidcup, 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 1.5% whilst terraced properties have risen
by 2.7%.
Some Sidcup landlords have seen the yields they
are achieving remain squeezed.
However, most landlords can start to feel assured
that as capital growth in Sidcup 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 longterm
option, even with the challenges of the new
tax regime, Sidcup landlords, with the support of a
good advice and opinion, should continue to see
renting as a good investment vehicle.
Bringing you the latest news and information on the Sidcup property market

SIDCUP MILLENNIALS HAVE SPENT
£135,072 ON RENT BY THE AGE OF 35
The Millennials were born between the mid 1980’s and late 1990’s thus making them
between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters
who grew up with the newest tech and computers and who are huge aficionados of
music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as
Generation Rent, many Millennials have discovered that renting is a good choice for their
shelter and accommodation needs without the hassle that comes from buying a home.
Nonetheless, that is not the only reason they don’t buy property. When they should be
concentrating on their profession, putting down roots and starting a family, Millennials
are still going through the pressure and strain of student loan liabilities whilst, at the
same time, finding it tough to pay rent.
The hot topic at the moment is the cost of renting, as both political parties have seen
mileage in wooing these Millennial Generation Renters. The average rent in Sidcup is
currently £1,004 per month making this a big-ticket item on the monthly budget. I was
inquisitive to find out exactly how much Sidcup Millennials will spend on rent by the time
they reach their mid 30’s. The average age people leave home in the UK is 22; so looking
at a Sidcup 22-year-old (or Millennial) who left home in 2005 then between 2005 and
today that Sidcup Millennial will have shelled out £135,072 in rent.
It’s no wonder local Millennials can’t afford to buy a Sidcup home given their tremendous
debt. This means younger Sidcup Millennials will probably carry on renting for the
foreseeable future, simply because the prospect of buying a home is not yet achievable
… that is until you look more deeply at the numbers …
Looking at the chart above, the average rent of a Sidcup property in 2005 was £739 per
month (pm) … if it had risen by inflation, today, that would be £1,041 pm. As I have
already mentioned in the article, today it stands at £1,004 per month. Looking over the
last 12 years, adding up all the differences between what the average actual rent was
compared to what it should have been if rent had gone up by inflation, the average
Sidcup Millennial tenant would have paid £139,777.
This means that an average 35-year-old Sidcup Millennial tenant, who has been renting
since 2005, is better off by £4,706 when comparing the actual rent paid compared to
what it would have been if it had risen by inflation.
In fact, if you recall I mentioned in an article a few weeks ago, the older Sidcup
Millennials are starting to use those savings and are gradually shifting towards home
ownership. They are finally catching up with the British homeownership dream as Bank
of Mum and Dad help with the deposit. Also, the scrapping of Stamp Duty from the
Government starts to kick in together with the realisation that if the 5% mortgage deposit
can be scrapped together (yes, 95% first time buyer mortgages have been available
since 2009), it is still a lot cheaper to buy than rent, meaning this will unquestionably
drive demand for Sidcup homes for sale – good news for Sidcup homeowners.
… and what does this mean for Sidcup landlords?
Well the vast majority of younger Millennials are still renters and I foresee this to be the
case for at least the next ten to fifteen years. Landlords will need to keep improving their
properties to ensure they get the best tenants and they will see a much higher rent
achieved. Millennials will pay top dollar for a top dollar property. It is important to do
things correctly as making money won’t be as easy as it has been over the last twenty
years. With a greater number of properties on the market .. comes greater choice. Don’t
buy the first thing you see, buy with your head as well as your heart … because as I
promised a few weeks ago, the first rule of Buy To Let Investment ….. “You are not going
to live in the property yourself”
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Current Average Asking Prices in Sidcup
1
BED
FLAT
£216,667
2
BED
FLAT
£270,749
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£352,268
3
BED
HOUSE
£435,363
4
BED
HOUSE
£636,251
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk

SIDCUP PROPERTY MARKET – WHICH
HOUSES ARE ACTUALLY SELLING?
Beast from the East, Russia, Facebook, Brexit, Trump, House
prices up, House prices down … the Press is full of column
inches on Brit’s favourite subjects of politics, scandal, weather
and not forgetting (and I appreciate the irony of this!) the
property market. As an agent belonging a national group of
letting and estate agents, talking to my fellow property
professionals from around the UK, the one thing that is
immediately apparent is the UK does not have one property
market. It is a hodgepodge patchwork (almost like a fly’s eye) of
lots of small property markets all performing in different ways.
… And that made me think … is there just one Sidcup Property
Market or many?
I like to keep an eye on the property market in Sidcup on a daily
basis because it enables me to give the best advice and
opinion on what (or not) to buy in Sidcup, be that a buy-to-let
property for a Sidcup landlord or an owner occupier house for a
home owner. So, I thought, how could I scientifically split the
Sidcup housing market into segments, so I could see which
part of the market was performing the best and the worst.
I decided the best way was to split the Sidcup property market
into four equal size price bands (into terms of households for
sale). Each price band would have around 25% of the property
in Sidcup, from the lowest in value (the Lowest Quartile or 25%)
all the way through to the highest 25% in terms of value, the
Upper Quartile. Looking at the market, I have calculated .
So, having split the Sidcup Property Market approximately into
four equal sizes, the results in terms what price band has sold
(subject to contract or stc) the most is quite enlightening –
The best performing price range in Sidcup is the middle market.
As I would expect, the upper quartile (the top 25%) is finding
things toughest. Interestingly for Sidcup landlords, the lower
market is also selling well, meaning there are plenty of Sidcup
landlords buying properties to add to their buy to let portfolios.
Even though the number of first time buyers did increase in
2017, it was from a low base and the vast majority of 20
something’s cannot buy, so need a roof over their head (hence
the need to rent somewhere).
It is a fact that British (and Sidcup’s) housing markets have
ridden the storms of Oil crisis in the 1970’s, the 1980’s
depression, Black Monday in the 1990’s, and latterly the Credit
Crunch together with the various house price crashes of 1973,
1987 and 2008. No matter what happens to us Brexit or
anything else … unless the Government starts to build
hundreds of thousands extra houses each year, demand will
always outstrip supply … so maybe a time for Sidcup landlord
investors to bag a bargain?
Want to know where those Sidcup buy to let bargains are?
Follow my Sidcup Property Blog or drop me an email because
irrespective of which agent you use, myself or any of the other
excellent agents in Sidcup, many local landlords ask me my
thoughts, opinion and advice on what (and not) to buy locally …
and I wouldn’t want you to miss out on those thoughts …
would you?
Current Average Asking Rents in Sidcup
1
BED
FLAT
£1,086pcm
2
BED
FLAT
£1,230pcm
data from zoopla.co.uk using current properties being marketed
2
BED
HOUSE
£1,173pcm
3
BED
HOUSE
£1,415pcm
4
BED
HOUSE
£1,450pcm
For more Sidcup Property News visit: www.sidcuppropertyblog.co.uk