Biannual Report Quarter

Transcription

1 Biannual Report Quarter pittis.co.uk

2 4 Residential House Sales Market overview 6 Letting and Investment Market Stick or twist with Buy-to-Let? Longer tenancies The perfect storm for rental prices? 8 Development & New Build The quest for new development sites Creating buyers and building chains Could the New Homes market survive without Help to Buy? 10 Financial Market Mortgage review Competition and innovation Products 12 Arun in the Community Proud to give back The Arun Way What s happening in 2018?

3 003 Message from our Group Managing Director I would describe this as a working market where experience and good advice are essential. David Lench FRICS Managing Director david.lench@arunestates.co.uk For the first half of 2018, Arun Estates known locally to you as either Ward & Partners, Cubitt & West, Douglas Allen, Pittis or Hadleys London has seen a challenging market where the available housing stock has increased as a result of the number of sales reducing. On pages 4 & 5, Aldo Sotgiu explains why a correction in prices is not necessarily a bad thing whilst, later on, Keith Lovell discusses some great mortgage products and innovations now available. One thing of which you can rest assured: property that is well located and realistically priced will always sell in almost any market. The adage location, location, location is as true today as it has always been. new land to be found for development to satisfy demand. He also comments on the continued importance of Help to Buy to assist the New Homes market. Jason Bunning discusses the issues facing the rental market with the overall stock in the marketplace reducing as some landlords decide to sell their rentals. This decision has resulted from various government policies designed to squeeze the privately-rented sector. I would describe this as a working market where experience and good advice are essential. I wish you the very best of luck in whatever your interest may be in the marketplace and, of course, if we can help you in any way please get in touch. Developers are still building and the stock of new builds we have available is 14% higher than this time last year. Jason Willetts discusses the need for

4 004 How is the south-east s property market? Market Overview There is a lot of speculation about the property market, so I am happy to share some thoughts based on our research of over 9,000 homes we have put on the market in the first half of Aldo Sotgiu Managing Director of Operations aldo.sotgiu@arunestates.co.uk New properties onto the market rose marginally and, with current available properties in the south-east region 14% higher than the same time last year*, this is great for buyers as they have a wider choice. Consequently, buyers need even more help and advice to steer them in the right direction for a home that really suits their needs. Whilst most customers start their home buying activities online, finding the right home can become a bit of a lottery so getting advice from an agent that has a good understanding of suitable properties is invaluable to those motivated buyers who might miss out on their dream home, simply by clicking buttons online. *Arun Estates available housing stock Jan-June 2018 How s the market? Property on market and buyer activity Q1-Q Q1-Q Property stock Buyer activity

5 005 South-east prices movement +2.94% +0.90% +2.69% +4.14% +3.16% South-east Sussex Surrey Kent Essex Arun Estates internal Average Price Change SOLD (stc) Jul - Dec 2017 vs. Jan - June 2018 The average sale price in the first 6 months increased by 2.94% and varied considerably, with sale prices in Kent up by over 4% compared to 0.9% in Sussex. Of course, there are lots of factors that affect the individual prices of properties so it s dangerous to apply a one size fits all scenario. Area highlights Wallington Surrey The accepted wisdom is that if you price your property correctly to begin with you stand a much better chance of achieving the best possible sale price, so it is important for sellers not to be drawn into thinking marketing a property at a higher price to start with is going to result in a higher sale price. What s more important is sensible pricing to create as much buyer interest as possible. Higher available housing stocks and similar demand points towards some price correction needed in the market, which isn t necessarily a bad thing. Granted, if you sell your home in a rising market you will get more for it but you will also have to pay more for the next one. Wallington in Surrey saw one of the biggest percentage increases from Q to Q in Land Registry price data at 4.6% moving the average price from 382,989 to 400,563. Epping Essex In short, house price increases are slowing down; the number of available properties is higher and, whilst buyer activity is still strong, some price correction is needed in the market. There are lots of other factors that affect buyer and seller confidence what remains a constant, is people needing somewhere to live. In the same period, Essex s Epping also saw a 3.2% increase of the average property price, changing to 391,699 from 379,483.

6 006 Has the penny dropped on the investor market? Stick or twist with Buy-to-Let? It will come as no surprise that buy-to-let landlords of all kinds accidental and professional are starting to consider, in the face of seemingly neverending new legislation and regulation, leaving the buy-to-let arena. We see signs of this growing but would advise some caution at this stage. Jason Bunning Senior Director of Lettings Have rents risen in the last 5 years? Yes generally above historically low inflation levels, but mostly affordable and reflective of a very buoyant marketplace. With fewer properties within the private rented sector and consistent demand, this level of growth is likely to gain pace in the short to medium term. 786 Arun avg. rental June % Arun avg. rental June 2018 There are a number of factors to consider. Tenant numbers are over 10% up and only likely to increase as Nil Deposit Schemes become more widespread, allowing people to rent without a hefty lump sum. In addition, the tenant fee ban for agents likely to come into force early next year will make it even easier to rent. Against a backdrop of contracting available rental stock, the law of supply and demand could lead to greater rental yields for those that hold their nerve. With few better investments out there currently and the punitive costs of re-entering the market posed by the Stamp Duty surcharge, cashing in at this stage could be a costly mistake to rectify. Longer tenancies Somewhat against the odds, the Arun Managed portfolio has grown by 13% over the last 12 months, helped in part by our drive to offer longer tenancies. More stability and security for landlords and the peace of mind for tenants, particularly those with families, allowing them to put down some roots, is something that we are very comfortable with and the government is keen to encourage. Indeed, there is a consultation being put forward following on from the chancellor s hint in last November s budget that longer tenancies could be encouraged with tax incentives, which would be very welcome relief!

7 Average rental prices in the south of England Area Average rent 1. Greater London 1, South-east 1, South-west Wales West Midlands East of England East Midlands North-west Yorkshire & Humberside 628 TM Source: Home Let, Rental Index May 2018 THE RENTAL INDEX The perfect storm for rental prices? +13% Overall, rental levels remain stable as they have been for the last few years, however, there are storm clouds on the horizon. Traditionally, landlords have been reluctant to raise rents, preferring to keep a long-term tenant happy however, the pressure to cover rising costs is overwhelming. In addition to those measures already implemented, in spring next year a tenant fee ban is likely to come into force for letting agents, with many seeing landlords picking up the costs of the administration that still needs to be carried out and these costs being passed on in increased rent. For Arun landlords, however, our 2-year management fee freeze should provide them with some much needed help, stability and reassurance. Arun s Managed portfolio has increased, despite changes in the marketplace, June June specialist offices supported by our network of 109 high-street branches +10% Customers A growing number of tenants seek to make home with us. Less than 4% We proactively help struggling tenants, so rent arrears across our Managed portfolio are at record lows of 3.91%. Arun stats: Jan-June 2017 & Jan-June 2018

8 008 The quest for new development sites The quest for new development sites Across our operating region, which consists of around 57 local authorities, we have seen a number loosening their grip on green belt land. They are now being forced to consider the release of tracts of green belt due to their inability to demonstrate a 5-year land supply, in the face of an evergrowing demand for new housing. Jason Willetts Land & New Homes Director jason.willetts@arunestates.co.uk The preference still remains to utilise brownfield, previously developed land, but this is becoming more scarce, due to pressures on available land, and a shortage in the supply of new housing. Brighton and Hove City Council have, over the last two years, released several urban fringe sites for development. Facts of Success. New Reservation: +14% Up 14% on the same period to last year. New Land Sales arranged: 34.7 million delivering 381 plots Meanwhile, the recent embargo by Wealden Council on new planning applications for housing, caused by high nitrogen levels in the Ashdown Forest, has further exacerbated the supply problem. Creating buyers and building chains With footfall lower than last year, another feature of the current market is the number of customers approaching us, either without having yet sold their existing property, or having not even put it on the market. While it would be easy to dismiss these as unmotivated buyers, we have maintained and indeed improved the sales rates across many of our developments by use of Make Your Move, building loyalty to the developments this is we re the developer would contribute towards moving costs. This is a trend we believe will continue for the remainder of the year. Q , Arun New Homes stats

9 009 Area highlights Crawley Sussex 90% RESERVED OR SOLD (PHASE 1) Could the New Homes market survive without Help to Buy? In a climate where sales are generally harder to come by, the positive benefits of Help to Buy more than outweigh the extra time generally involved in progressing sales through to exchange of contracts. This is reflected in the statistical evidence coming out of some of our major schemes, which clearly indicates that Help to Buy is still underpinning certain sectors of the market. This is particularly true of apartment schemes. In one case, no less than 79% of all reservations we processed involved Help to Buy, whereas with housing schemes, this typically drops to around a third. 79% Unsurprisingly, on a particular scheme of apartments, offering Help to Buy had an uptake of 79% Arun New Homes acquired land for this 218-apartment / 6-floor landmark site for Crest Nicholson PLC, conveniently located in Crawley town centre. It was introduced from a state-of-the-art remote marketing suite adjoining our high-street branch, with a successful off-plan campaign prior to the show home launch in May Whitfield Kent 90% RESERVED OR SOLD Richmond Park, by Halsbury Homes, is an urban expansion in Whitfield with Phase 1 being 90, 2-, 3-, 4- & 5-bedroom properties. The successful first phase is now over 90% sold/reserved since launch, and with the next phase due to launch imminently.

10 0010 Financial view of 2018 so far and looking forward UK base % rates 18% 16% 14% 12% 10% 8% 6% Keith Lovell Financial Services Managing Director keith.lovell@mortgagemattersdirect.co.uk Mortgage Review 4% 2% 0 March 1979 April 1985 May 1993 June 2000 July 2007 August 2014 The UK mortgage market is in an interesting place right now. The dead cert rate rise that had been discussed hasn t arrived yet. As a result, we remain at the incredibly low rate of 0.5%, which is where we have been since March 2009 except for a brief period at 0.25% between August 2016 and November 2017 (seen in graph above). It is unclear if this will last for too long as, during the latest Bank of England Monetary Committee announcement (21/06/2018), rates were held by a vote of 6 to 3, however, the Bank s chief economist, Andy Haldane, voted for a 0.25% increase; this could prove significant in the coming months, so watch this space. The Bank also cut this year s growth forecast down from 1.8% to 1.4%, and went on to explain that they saw this adjustment to be a result of the bad weather caused by the Beast from the East which, in their opinion, had caused a temporary soft period in the economy. Despite the above words of caution, with both inflation and interest rates running at historically low levels, there has been an increase in confidence and investment from UK mortgage lenders, resulting in a surge of new products and innovation. A day doesn t pass without some mention of Robo Advice or FinTech (short for Financial Technology), both have become buzz words and we need to ensure they don t become the Emperor s New Clothes.

11 0011 Competition and Innovation This surge in competition can be seen, with many IT companies coming into the mortgage sector and making huge promises of a more efficient path for the customer through both the mortgage and property transaction processes. If these promises can be delivered we will see the time taken to purchase a mortgage and/or property being significantly reduced and simplified. Indeed, many companies are talking about a single generic application that would be acceptable to a whole range of lenders a single document which could return a list of those lenders that would lend the required amount and the rates and costings they would offer now, that s technology at its best. Products The energy and competition around the UK lending market should bode well for the consumer. With many new and emerging lenders taking on the established players, we are seeing some exciting changes, many of which are beginning to filter through to the customer. We are seeing 90% lending, with rates from as low as 1.84%, meaning the Bank of Mum & Dad can take a rest from feeling responsible for finding a 15 or 20% deposit in order to help their children onto the first rung of the property ladder. What s more, at the time of writing, 95% lending is making a strong return. Both these mean that the prospect of owning your own home is closer than it has been for some time. for those with a 40% equity/deposit in or for their home. Not to be outdone, many lenders are looking into treating their more mature borrowers fairly and we are seeing a real change in attitude to lending past retirement (Later Life Lending), and a desire to really help those customers who have interest-only mortgages with little or no means of paying off the outstanding mortgage. This is a very innovative and exciting space right now. One that is very much overdue. If you are looking for advice, please contact me or one of my team on Competitive long-term fixed rates are making a welcome return and many borrowers aren t just looking at the lowest 2-year fixed, but taking the time to consider their future needs and make informed decisions on how long they might like to enjoy payment stability. Again, we are seeing rates from as low as 2.49% for 10-year fixed rates YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE Source: Mortgage Brain Classic - Figures correct at 02 Jul 2018

12 0012 Arun in the community Proud to give back For Arun Estates and our trading brands of Ward & Partners, Cubitt & West, Douglas Allen, Pittis and Hadleys London, helping others is core to our company values. We are proud that through our company s success and our Chairman Paul Rooney s personal generosity, we have been able to make a significant contribution both to charitable organisations and to individual families million since 2010 The Arun Way In addition to our charitable activities at national and regional level, we also place great emphasis on encouraging and supporting local fundraising initiatives by individual branches and members of staff and we re proud to say that in 2017 we achieved, as a collective team, our highest ever annual fundraising total. 111, , , ,

13 0013 What s happening in 2018? However, records are there to be broken, so this year, we aim to do even better! We are delighted to confirm that as a company, we are continuing to work with our principal charity partners, Action Medical Research for Children, who through vital medical research are saving and changing children s lives. Over the past year, our fundraising efforts have been specifically aimed at helping to fund the development of a new vaccine to protect children from meningitis. Each of our operational areas also have their own local charity that they continue to support through a wide range of activities from marathons, Colour and Glitter Runs and parachute jumps for the more energetic (and/or foolhardy!), to bake-offs, quiz nights, raffles and other gentler pursuits. As a company, the real jewel in our charity crown is the Arun Cup, our own football tournament, to be held at the Gallagher Stadium in Maidstone. Teams from Douglas Allen, Cubitt & West and Ward & Partners will all be competing against each to see who can bring home the silverware this year and raise more much-needed funds. incorporating:

14 Over 100 branches across the south-east Essex Greater London Surrey Kent Hampshire West Sussex East Sussex Isle of Wight London DOUGLAS ALLEN: Chingford East Ham Walthamstow Wanstead HADLEYS: Beckenham Bromley Chislehurst Orpington Penge Petts Wood West Wickham Essex DOUGLAS ALLEN: Barkingside Basildon Billericay Brentwood Chadwell Heath Chigwell Epping Hornchurch Ilford Loughton Wickford Woodford Green

15 Sussex CUBITT & WEST: Arundel: Ashington: Billingshurst: Bognor: Brighton: Fiveways: Lewes Road: Patcham: Saltdean: Western Road: Woodingdean: Chichester: Crawley: Crowborough: East Grinstead: Haywards Heath: Horsham: Lewes: Peacehaven: Pulborough: Rustington: Southwater: Southwick: Uckfield: West Worthing: Worthing: Surrey CUBITT & WEST: Banstead: Caterham: Cranleigh: Dorking: Horley: Leatherhead: Purley: Redhill: Reigate: Shirley: Sutton: Wallington: Hampshire CUBITT & WEST: Emsworth: Fareham: Havant: Petersfield: Portsmouth: Southsea: Waterlooville: Kent WARD & PARTNERS: Ashford: Barnehurst: Bearsted: Birchington: Broadstairs: Canterbury: Chatham: Cliftonville: Dartford: Deal: Dover: Eynsford: Faversham: Folkestone: Gillingham: Gravesend: Headcorn: Herne Bay: Hythe: Kings Hill: Larkfield: Loose: Maidstone: Meopham: New Ash Green: New Romney: Paddock Wood: Rainham: Ramsgate: Rochester: Sheerness: Sittingbourne: Snodland: Staplehurst: Strood: Tenterden: Tonbridge: Tunbridge Wells: Walderslade: Welling: West Kingsdown: Whitstable: Isle of Wight PITTIS: Cowes: Freshwater: Newport: Ryde: Sandown: Shanklin: Ventnor:

16 Helping you move forwards Residential Sales Contacts : t : e : sales@arunestates.co.uk Lettings Contacts : t : e : lettings@arunestates.co.uk Mortgages Contacts : t : e : enquiries@mortgagemattersdirect.co.uk Conveyancing Contacts : t : Recruitment Contacts : t : e : recruitment@arunestates.co.uk Head Office Contacts : t : e : head.office@arunestates.co.uk Corporate Business Contacts : t : e : corporate.biz@arunestates.co.uk Land & New Homes Contacts : t : e : lnh@arunestates.co.uk Arun Estates incorporating: All are trading names of Arun Estate Agencies Limited. Registered Office: St. Leonard's House, North Street, Horsham, West Sussex RH12 1RJ. Registered No England. VAT No: