Where will Guildford build new homes?

For anybody that has traveled in and out of Guildford mainline station, or has the pleasure of walking, running or cycling along the River Wey towpath from the town centre to Ladymead, will be aware of the changing skyline as the dull, featureless industrial units have been demolished and more stylish housing developments have taken their place.

Apartments in construction along Walnut Tree Close

It seems that times are changing. No longer do we require industrial units for manufacture and warehousing but more homes for those wanting to step up onto the first rung of the property ladder. Both central and local government have recognised this growing need and therefore provided the required planning permission to enable developers to build the apartment blocks suited to the requirements of young home buyers, while also regenerating the local economy.

It was well known that Guildford was unable to meet its responsibility to have a 5 year supply of housing land so realised it had to build more new homes – 12,426 properties are required between 2015 and 2034 so where will these be built?

One significant location has been Walnut Tree Close. It was the ideal location as brownfield sites became available through the demolition of the former industrial units reducing the need to build on green fields or green belt land.

The area has seen a number of new residential developments being built and completed over recent years, to create a new and attractive residential neighbourhood close to the town centre and mainline railway station. Some developments overlook the River Wey providing an idyllic home away from the town centre.

Changing skyline in Walnut Tree Close

The building of apartment blocks has opened up the possibility to rent stylish new apartments all with modern facilities and managed services; and in some cases enable purchasers to qualify for financial assistance through Help to Buy or Shared Ownership schemes, making it easier for them to afford their own home, in a town where affordability was limited yet employment opportunities plentiful.

If you should like to have a chat about any matters discussed in this article or about the Guildford property market in general then please do contact me.

Town or Village Life?

Guildford and the local villages offer a wonderful living environment so does one select a village to live in or the town centre? This will often be a personal preference subject to a property buyer's lifestyle aspirations and their objectives for moving. These might include family and friends; schools; the local infrastructure including public transport; and investment criteria.

The GU1 postcode area includes Guildford Town Centre, Merrow and Burpham where people live to benefit from local schools, shops and leisure facilities.

GU2 is also located close to the town centre but tends to be a little less expensive. It attracts a large student population as it is home to the University of Surrey. Families move to Onslow Village (GU2) because it is a desirable area for those wanting to live close to the town centre or the main line station, to travel up to London for work. This village was designed as a garden suburb, with its own parade of shops and an arboretum comprising trees from all over the world.

Moving out towards the local countryside GU3 comprises villages such as Normandy, Flexford, Puttenham, Worplesdon and the notorious Christmas Pie (named after a family called Christmas and a piece of arable land).

The village named after the Christmas family

Villages closer to town include Burpham and Jacobs Well plus Chilworth and Shalford. The latter two have their own railway stations so are within 10 minutes travelling time of Guildford mainline station.

Finally there is the GU5 postcode area, home to Albury, Bramley and Shere, the beautiful, quintessential English village located between the Guildford and Dorking. The village has historical buildings, a stream with ducks, a small museum, a tearoom, two pubs, as well as St James Church, a 12th century church. These villages all sit on the edge of the Surrey Hills Area of Outstanding Natural Beauty.

The quintessential village of Shere

Which group of residents have gained most financially from the value of their property over the past 20 years? Is it those enjoying town living or those enjoying a quieter, more peaceful existence in the countryside?

The highest average prices paid during the last 12 months were £592,051 (GU3) and £767,163 (GU5) no doubt because these are home to larger properties including some country estates.

There was very little movement in property prices during the last 12 months though GU2 sustained a decrease of £10,932 (2.37%). During the last 5 years the increase in property prices was evenly distributed across all the postcodes at around 17%; but over the last 20 years the highest growth was experienced in the town centre (GU1) where it reached 222.88% and 217% (in both GU2 and GU4) suggesting that perhaps demand for town centre properties does tend to be greater than for property situated out in the country.

If you should like to have a chat about any matters discussed in this article or about the Guildford property market in general then please do contact me.

Family Living at a Reasonable Price

This property offers a substantial amount of rooms for the asking price and is just 10 minutes walk from the town centre.

There are 3 bedrooms upstairs with a fourth bedroom with ensuite on the ground floor ideally suited for a guest, garage with driveway and a substantial kitchen/living area all designed for a young family needing more space in a convenient location.

A Stylish Kitchen in a House Designed for Modern Living

The property is light and airy. It has a stylish kitchen with white cabinets and integral appliances for practical dining and relaxation.

Our friends at Chantries have recently reduced the property asking price so now might be the time to make an enquiry. The listing can be found on Rightmove at:
https://www.rightmove.co.uk/property-for-sale/property-82314215.html

If you would like to have a chat about property prices in Guildford or to discover where and how you can find your next residential or investment property, before it goes onto the portals, call 01483 320207 or email richard.hodgson@newman.uk.com

This document is for information only and should not be relied upon.  All details should be checked and verified with the owner and their professional advisors.  We are not able to offer any legal, financial or tax advice. You should consult your solicitor and financial advisors for this.

Selling Tips - Guide to Staging Your Property

This is the first in a series of guides designed to help you to sell your property at the right price and quickly.

Home Staging
The sale of your home is usually decided within minutes of viewers walking through the front door.

First impressions count, so do all you can to maximise the impact on potential buyers. Below are suggestions to create that wow factor and therefore help you to prepare your house for sale to improve your ability to achieve your asking price.

A property industry trade body claims 85 per cent of agents believes a ‘staged’ property sells three times faster than a non-staged home.

The Home Staging Association says research for a new report shows that staging costs of £500 to £5,000 will produce higher sale prices.

“Seventy per cent of agents stated home staging increased the offer value by one to 10 per cent, with 16 per cent reporting a seven to 10 per cent rise in offer value” it says.

“In addition 77 per cent of developers saw a return in their investment, reporting that the sale of the property paid for the cost of staging, highlighting how professional staging often is the best choice financially for homeowners” it continues.

The association’s research suggests that 74 per cent of agents consider the reception room as the most important to be staged for a sale, with another 10 per cent choosing the kitchen,
and a further 10 per cent stating the master bedroom.

Example of a cluttered house

Declutter

Declutter all rooms and remove any personal items so that the buyer can imagine themselves living there by taking away any distraction from the room itself.  Make sure to pay close attention to detail in the kitchen and bathrooms, as this can make or break a potential sale. Both rooms set the mood for the rest of the home.

Buyers are often looking for more room and how their personal items will look in the house, so pack away anything that creates visual clutter such as ornaments, toys, or excess pieces of furniture to create a feeling of space and order.

Finish DIY projects
Unfinished DIY jobs could be used as a potential bargaining tool to negotiate a lower price. Most buyers will be looking to just move in, and will be reluctant to spend time or money completing your unfinished projects.

Redecorate where necessary
A neutrally decorated, well-presented house can add great value to your asking price. Invest in fresh paint to clean up scuff marks, or to lighten up rooms currently painted in a vivid colour which may not be to a buyers taste.

Neutral colours create a more soothing environment and allow the buyer to imagine their own style in the home.  If redecorating, grey or white walls & grey carpets tend to be popular now so likely to appeal to the mass market.

You need to be able to stand out from the competition on property portals so use brightly coloured soft furnishing, accessories & artwork in photographs to ensure your property jumps off the page!

Clean, clean and clean again
A sparkling, sweet-smelling home creates a good impression. Clean all bathrooms, the kitchen, polish windows, dust all surfaces, hoover the floors and make sure animal and cigarette odours are eradicated by removing cigarette butts and feeding bowls. Ideally pets should be removed too as some viewers may be allergic to cats and dogs.

Define the space
If you have 3 bedrooms they must be presented as 3 bedrooms, not 2 bedrooms and a box room. If you have a lounge and a separate dining area they need to be presented as such rather than a lounge and children’s playroom.

Furniture Placement
Minimal furniture will show off the space in each room, while allowing the buyer to imagine their own furniture in the property. Place living room furniture around the natural focal point in the room, such as a fireplace or feature wall.

Presentation
Try to see your property through the eyes of a potential buyer. Take photographs of each room and then look at them objectively. It will become obvious what needs to change, whether it be de-cluttering or re-positioning furniture. During viewings turn the lights on and display vases of flowers, bowls of fresh fruit and scented candles.

Lighting
Lamps, lamps, lamps! Every room should at least have one lamp in it to create mood lighting. This creates a homely feel and the perfect vibe for selling your home.

Kerb Appeal
Buyers will form an opinion within the first 5 seconds of entering a property so ensure the exterior of the property looks well maintained and welcoming. Tidy the garden, remove weeds, mow the lawn, hide the dust bins and park cars elsewhere. Add colour with plant pots or hanging baskets. Repaint the front door if necessary.

Hallways and Entrances
If a room is dark or lacking interest add a mirror. It will completely transform a space. Not only does a mirror reflect light, it mirrors the room, making it feel double the size. Allow potential viewers to literally ‘see’ themselves in the house by placing a mirror in the hallway. Tidy away all coats, shoes and bags to ensure it is clutter free.

Set the table
A set table helps to capture the imagination of the view. They can then see themselves holding dinner parties or sitting down with friends & family. It also looks fantastic in the photos.

Mentally move out
This is the most important thing you can do. You have decided to move on so do all you can to achieve a quick and profitable sale. Don’t worry if the presentation of your house is not to your taste as you’ll soon be moving on and can look forward to creating a space to suit you in your new home!

Don’t see staging your property for sale as an upfront cost. It is an investment. Spend a little to make a lot in the sale, You should achieve not only a quicker sale, but a higher sale price.

Example of property staged to sell

Next tips ... photography - make it professional

A Property for Cricket Fans

This property is unique being situated almost on the boundary of the local cricket ground, home to Surrey county matches and the annual beer festival. It is close to Dapdune Wharf too.  Just a 10 minute walk into the town centre one can visit shops, restaurants, pubs and the local mainline railway station without the need to have a car.

It was formerly the home of the groundsman but sadly his position was terminated and so the property has been left empty for several years.

A property for cricket fans

Comprising 3 bedrooms, bathroom, kitchen, dining area and lounge it has the potential for extension, as well as modernisation, as it sits on a corner plot, in order to make it into a lovely family home.

Romans are acting on behalf of Guildford BC as their agent and further details can be found at:
https://www.rightmove.co.uk/property-for-sale/property-78861638.html

If you would like to have a chat about property prices in Guildford or to discover where and how you can find your next residential or investment property, before it goes onto the portals, call 01483 320207 or email richard.hodgson@newman.uk.com

This document is for information only and should not be relied upon.  All details should be checked and verified with the owner and their professional advisors. We are not able to 
offer any legal, financial or tax advice. You should consult your solicitor and financial advisors for this.

An Oasis in Abbotswood

This property is a gem occupying a position to the far end of the Abbotswood Estate.

Situated within a short distance of highly regarded schools including George Abbot, it is ideally suited to a family requiring space to enjoy live comfortably. The property is within easy reach of the A3 to London and Portsmouth; and just one mile to the local railway station, at London Road.

The garden is landscaped and goes all the way down to the border with the local nature reserve. The main feature of the garden is the swimming pool, ideal for keeping cool and relaxed in this current warm weather. There are other leisure facilities nearby at Stoke Park and The Spectrum Leisure Complex.

The property is light and airy having been decorated in light tones. There are four good sized bedrooms including one en-suite. The property comes with a double garage and plenty of parking space on the drive way.

Keep cool in the swimming pool at this property in Abbotswood

Most importantly the property is now priced to sell at £850,000, comparing favourably with other properties on the Abbotswood Estate.

The property is on the market with our friends at Gascoigne Pees, in Guildford High Street. Further details are available at:
https://www.rightmove.co.uk/property-for-sale/property-73122890.html

If you would like to have a chat about property prices in Guildford or to discover where and how you can find your next residential or investment property, before it goes onto the portals, call 01483 320207 or email richard.hodgson@newman.uk.com


This document is for information only and should not be relied upon.  All details should be checked and verified with the owner and their professional advisors. We are not able to offer any legal, financial or tax advice. You should consult your solicitor and financial advisors for this.

Burpham or Merrow?

Guildford is a market town surrounded by an area of outstanding natural beauty so property owners have the luxury of country living but with local access to a shopping and business centre within the vicinity.

Two of the most attractive areas in Guildford are Burpham or Merrow so I am often asked by buyers which village would I recommend. This is a difficult question to answer because both locations offer a good quality of life providing a high standard of housing and excellent schools, shops plus local leisure facilities and transport links.

These areas are separated by the Guildford to London railway line via Cobham.

The village of Merrow is located in the north-east of Guildford, 2 miles (3.2 km) from Guildford town centre and situated on the edge of the ridge of hills that form the North Downs. Merrow can trace its origins back many hundreds of years when its name literally meant 'fat', "probably referring to the high fertility of the land". The village grew up around a crossroads at which the A25 road between Guildford and Leatherhead and the original road (Merrow Street), which would have enabled local citizens to travel from Burpham to Dorking, used to intersect.

The oldest houses in the village can still be seen along these two roads, together with St John's Church and the Horse and Groom, a 17th-century coaching inn next door.

Merrow remained a relatively small settlement right up until the 1950s, when the Bushy Hill estate was built. This development of several hundred houses was originally all council-owned, but since the 1980s, many homes have passed into private ownership.

Further expansion occurred in the mid-1980s when the Merrow Park development was built, completely surrounding the old houses on Merrow Street. Comprising several hundred houses and flats, Merrow Park is often considered a suburb in its own right as it has its own shops, school and doctor's surgery.

There are several exclusive roads in Merrow comprising Fairway, Levylsdene and Longmead all leading up to Guildford Golf Club and the North Downs beyond.

The median pricing for houses in Merrow is £500,000 though this might have increased slightly in the past year with houses on the Linden development, at Redland Close, having sold for up to £1.6m.

Merrow has experienced excellent capital growth over the last 20 years with most houses more than tripling in value, at around 365%.

Burpham is home to the largest secondary school in Guildford, George Abbot School, a parade of small shops, and the nationally recognised, Sutherland Memorial Park used for sporting and leisure pursuits.

Similarly to Merrow, Burpham has a mix of housing especially in the Weylea Farm and Weybrook Farm developments built more or less at the same time as Merrow Park. The jewel in the crown is Abbotswood, a conservation area located close to Stoke Park and built as a garden suburb in the Arts and Crafts Style by the notable architect Alfred Claude Burlingham.

The median price for property in Burpham is lower than Merrow, at £325,000. This reflects the many lower-priced starter homes and flats situated in the Weybrook and Weylea housing estates.

One of the reasons why Burpham tends to be a popular place to live for families is that it lies within the catchment area for George Abbott School so there is always a healthy demand for 3/4 bed houses. Burpham has experienced a capital growth over the last 20 years of 380% so achieving a higher capital growth than Merrow.

In conclusion it is therefore difficult to favour one area over the other but if you are a keen golfer then Merrow has to be your preference being the home to the Guildford Golf Club. From there you can walk onto the North Downs and over to Newlands Corner, the beauty spot made famous by Agatha Christie, when she mysteriously disappeared from there in 1926 to then be discovered in a Harrogate spa.

If you should like to chat about any matters discussed in this article or about the Guildford property market in general then please do contact me.

University Challenge

At this time of the year students have returned home from University, at the end of yet another academic year. Now is the busiest time of the year for landlords wanting to prepare their properties for the new group of students moving in for the next academic year.

Students are becoming more particular about the standard of their accommodation but are unable to afford to pay a premium unless Mum and Dad can help. One wonders how long Councils can afford to hold back on charging students Council Tax too. On the other hand landlords are suffering financially due to their loss of tax relief on mortgages and a propensity towards greater licensing and regulation, creating additional expense.

So it seems both students and landlords are facing a growing financial challenge.

Guildford is the home to the University of Surrey, University of Law, the ACM and Guildford College so has a substantial student population all wanting accommodation. The financial contribution they make is an essential key component to the wealth of the town. For example, in 2013/14 the University of Surrey generated more than £1.5 billion for the UK economy, with over £1.1 billion for  the county of Surrey.

The University created 17,500 jobs of which 10,000 were in the Borough of Guildford alone. The University hosts a range of events and activities that are open to the public, particularly in the arts, and has a range of programmes through which it connects with local schools and colleges. It owns the Surrey Sports Park, a world-class facility open to all and home to a range of local sports clubs and teams.

It is responsible for ensuring that all first year students have access to campus accommodation. There are over 5,500 rooms available on campus, at a range of rents from £71pw (budget rooms at Hazel Farm) to £225pw (studio) all inclusive. These rates compare favourably with market rental pricing.

The university has been building new student accommodation at its Manor Park campus since 2005 and is constructing its second phase of around 1,100 rooms, due for completion this year, to provide further accommodation. This will take the total rooms at Manor Park to around 3,000, but the university has planning permission for 4,000 rooms at the site and says it is therefore "examining the possibility" of building more rooms.

While this may seem encouraging the University is caught in a cleft stick because in order to raise funds, it has to attract more students. Over the last 5 years the full-time student population has grown from 13,500 to well over 16,000. According to its corporate strategy, the university plans to increase student numbers to 18,000 by 2022, and 23,000 by 2027, to place additional pressure on Guildford's housing market.

Second and third year undergraduates, in general, will always be encouraged to find their own accommodation within the Guildford private housing sector.

This means that landlords are buying up property in areas like Bellfields and Park Barn, once designed to house the local working population working on lower incomes. Other areas in prime spots close to both the University and town centre include Guildford Park Road, Woodbridge Road, Worplesdon Road and Westborough. These areas tend to offer comparatively low cost housing so for example, there are currently 136 3+ bed houses for sale in these areas, with prices starting from £300,000 for a 3 bed/2 rec property in Groom Walk, Slyfield, to a 5 bed detached house in Ridgemount, located just behind the university for £897,000. The median asking price for a 3 bed property in these areas is £450,000.

There are also 284 3+ bed rental properties, for family rental in the University catchment area, with a median rental of £2,300. Landlords will typically rent out properties by the room at a average room rental of £650 pcm so having converted a couple of reception rooms into bedrooms, or gone up into the loft or down into the basement to create a 5 bed rental property they can now charge £3,250, compared to the £2,300 for the family house to make an additional £950 per month. This obviously makes economic sense for them to do so, if planning to invest in the property for the long term.

However a recent report called "At The Limit - Student Housing Crisis" stated that over a 5 year period students have had to move further out to the fringes of Guildford town, including Merrow and Burpham, with markedly more students living in Woking due to this continuing issue of lack of property and excess demand leading to increasing rents. This explains why students tend to start their search for next year's accommodation as early as November in the previous year, so that they have a better opportunity to secure better quality homes at a reasonable price.

This issue will never go away if universities need more students to attract funds to finance further education to create skills to enable the working population to compete in the 21st century workplace.

The only solution might be for larger corporate housing developers to build student blocks to be leased back to the university, to provide accommodation for all students, whatever their year. Secondly, technology may help as it now allows for universities to deliver remote learning so that students will not necessarily have to live away from home in order to learn.

Artificial intelligence might also reduce the need to accommodate so many students and university staff in one locality, as it takes over some of the lower skilled roles; and also delivers educational content on demand. The University is currently working with 5G network architects and technicians to make this a reality.

Having considered these challenges Guildford still remains a wealthier and a more pleasant place to live in, for having resources such the University in the town but what price is the local housing sector having to pay to achieve this?

If you should like to have a chat about any matters discussed in this article or about the Guildford property market in general then please do contact me.

A Charming Home in the Centre of Town

This clean and bright Victorian property, is just a stone's throw from the High Street.

It has been extended into both the attic and basement to create a third and forth bedroom to provide additional accommodation. There are two reception rooms. There is a cloakroom downstairs and the bathroom is situated on the first floor.

Victorian property modernised to a very high standard

The property has been completely modernised over recent years to include a kitchen with bi-fold doors leading out to the well kept rear garden where one can enjoy quiet Summer evenings after a long day at work.

The property is located between both railway stations so convenient for those working out of town. 

Our friends at Chantries are marketing the property. Further details are available at https://www.rightmove.co.uk/property-for-sale/property-81450806.html 

If you would like a chat about property prices in Guildford or want to discover where you will find your next residential or investment property in Guildford call 01483 320207 or email richard.hodgson@newman.uk.com

Large family home overlooking The Chantries

This property has huge potential to be extended (subject to planning) to become a large family home having been in the same ownership for the last 50 years.

The front and rear lawns have been well maintained and the property looks fresh and clean though in need of modernisation.

Family property with views over The Chantries 

Located in a peaceful, rural surroundings it overlooks The Chantries yet is within a reasonable walking distance of the town centre so one will have ample parking at home without the need to drive into town. This will make it an ideal home for someone who therefore commutes up to London.

The property is being marketed by our friends at Knight Frank and with the asking price recently reduced by £100,000 will sell quickly.

Further details are available at https://www.rightmove.co.uk/property-for-sale/property-81869795.html 

If you would like a chat about property prices in Guildford or want to discover where you will find your next residential or investment property in Guildford call 01483 320207 or email richard.hodgson@newman.uk.com

A Country Home in Charlotteville

This delightful property, built in 1869 is situated in an area of historic interest and just a 10 miinute walk from the cobble High Street. It has been tastefully modernised and decorated throughout so is ready to move into right away.

The front and rear lawns have been well maintained and the property looks fresh and clean.

Light and airy kitchen with doors leading out into the garden

Relax in the garden after a long day at work

There are two bedrooms and most importantly for a property of this age a bathroom upstairs. The property includes a workshop/shed out in the garden. This is well stocked with shrubs and therefore a delightful place to relax in the Summer evenings.

The property is being marketed by our friends at Seymours, in Guildford. Further details are available at https://www.rightmove.co.uk/property-for-sale/property-72554134.html 

If you would like a chat about property prices in Guildford or want to discover where you will find your next residential or investment property in Guildford call 01483 320207 or email richard.hodgson@newman.uk.com

Post-BREXIT Buyers Gain the Upper Hand

Once upon a time the nation enjoyed a relationship with Europe as a member of the European Union. Like most marriages it had its ups and downs but on the whole the United Kingdom has benefited from the additional trade, skilled labour and freedom created by encouraging free movement of services and labour across former borders.

Then came along Mr Cameron, the Prime Minister with the idea that the country should have the opportunity to say whether it wanted to remain as a member of the European Union, or leave.

At the time of calling the referendum the Guildford property market seemed healthy with local residents enjoying the benefit of seeing their homes increasing in value. Not only was it possible to determine what price their property was worth but one could be fairly confident that having withstood the 2007-8 financial crash, property prices were likely to rise as the property market faced increasing demand but limited supply of property stock.

The question now is where has the decision to consider leaving Europe left the local property market?

Speak to any estate agent in town and they will state categorically that BREXIT has caused uncertainty so people are not selling. The fact that builders are currently busy extending homes across the town might support this statement as people have decided to stay rather than move.

Estate agents cannot blame the market. If it is not BREXIT there will no doubt be another cause to blame. People still need to move. It seems that around 80% of people will move locally so this would suggest the local housing market will always remain buoyant. Perhaps there are too many agents chasing business in the market now that online agents operate alongside the traditional bricks and mortar agents in the current sluggish market.

The referendum took place 23 June, 2016 so we have had 3 years to reflect on what the decision to leave the EU has done to the Guildford property market and your property value. For those who need a reminder the voting in Guildford was exit 43.8% and remain 56.2%.

Data from the Land Registry, suggests that the national average house price has increased from £212,887 to £228,903 which is an increase of 7.5%. The comparable figures for Guildford confirm an increase of 6.4%, from £420,033 to £447,211 suggesting that prices have shown a slightly smaller than national increase. The increase in value for detached properties, compared to other property types, in Guildford has been the highest in the 3 years since BREXIT, at 9%.

The significant factor seems to be, not the price at which properties are selling, but the reduction in the number of transactions taking place. There were 1919 sales, in 2016, but this figure reduced to 1760 in 2018. This 9% fall does seem to support the local estate agents' view that the market has slowed.

While this fall in transactions might seem significant the continuing increase in house prices though relatively low, suggests that Guildford does not have cause for worry. Local property owners, it seems, will always be certain to experience an affluent housing market.

However house buyers may just have the upper hand when negotiating a house purchase, as sellers are currently experience lower viewings and offers while the market remains uncertain, so may be more motivated to accept lower offers. With low interest rates and a smaller market for lenders to compete in, buyers will have access to a more competitive funding market which in turn might help to stimulate the market.

If you should like to have a chat about any matters discussed in this article or about the Guildford property market in general then please do contact me.

First BREXIT, now a lower interest rate ... what is your exit plan?

After much conjecture and rumour we now know that the Bank of England has decided to half the base rate down to just 0.25%, after a period of 7 years in order to bolster the economy following the decision to BREXIT. This will inevitably benefit some mortgage payers and offer little, or no hope, to savers relying upon their nest egg for financial support during their retirement.

Figures produced by the Council for Mortgage Lenders suggest that the amount left to pay on each home loan in the UK is £116,000 and there are 11.1m households paying a mortgage. The calculation that will interest these mortgage payers is that yesterday's 0.25% interest rate cut will save them just £22 on a monthly mortgage bill of £779. The Office for National Statistics (ONS) calculated this figure based upon a typically priced home of £211,000 after paying a 20% deposit. The Bank of England has also put additional measures into place to ensure the banks pass this lower rate on to their customers.

Those on bank rate tracker mortgages will see an immediate affect because their loans vary according to the interest rate that goes up or down in direct relation to the Bank of England's decision to increase or decrease the bank rate. One in five mortgage holders have this type of loan.

The Bank's intention is to reduce savings to encourage consumers and businesses to make purchases and investments to boost the state of the economy. However, those who save their money to generate an additional income, rather than spend are the people to suffer. The current average interest rate on an easy access savings account is 0.65%. If savings are to reflect the reduction in base rate the interest paid on these accounts will fall to 0.4%.

So, for example, if a person has saved £10,000 in such an account, they will receive a measly £40 a year in gross interest, which is £25 less than before the cut. How can you live on that and what can you do to improve your financial returns?

No doubt there are many people in this situation especially here in Guildford where young couples bought their property in the 1970's and now in 2016 their mortgages are paid off; the family has flown from the nest and while they rattle around in their large house are wondering how to seek a high rate of return on their investments. 

One answer is to downsize and therefore take equity from their properties but no doubt this is the money that is sitting in their easy access savings account earning little interest. Secondly, they may have allocated their funds to property for their children helping them onto the first rung of the property ladder, when ordinarily this may not have been achievable without their parent's investment.

It is the combination of low savings rates and the lack of affordability in housing for first time buyers here in London and the South East, that is driving the housing market at present. In this case the answer to low savings rates may well lie in property and making it your investment vehicle.

It is a well-known fact that property typically doubles every 10 years. For those in Guildford it definitely has! My parents purchased a 3 bedroom linked detached house in Guildford in 1962 for £2,000. A similar house in the same street, sold last year for £520,000 which is considerably more.

Realising that this was the best and proven way to invest my savings I educated myself with the UK's leading property investors and became a member of a property mastermind group, sharing opportunities with, and providing support to, other property investors.

So if you are considering an investment decision or would like to have a chat in general about the Guildford property market please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk

56.2% of Guildford voters vote to remain in the EU – what now for the 45,670 Guildford Landlords & Homeowners?

It’s 5.50am as I start to type this article and David Dimbleby has just announced the UK will be leaving the EU as the final votes are counted. 

As most polls suggested a Remain Vote, this came as a surprise to many people, including the City. The Pound has dropped 6% this morning after the City Whiz kids got their predictions wrong and MP’s from the Remain camp are using words like “challenging times ahead”.

.. and now the vote has been made, what next for the 45,670 Guildford  homeowners especially the 18,944 with a mortgage?

The Chancellor in the campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.… and I would say, yes .. that will probably happen. 

Guildford  Property Values
Guildford property values will probably drop in the coming 12 to 18 months – but by 18%? I am sorry but I find that a little pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way. 

The iconic Guildhall clock

But the UK property market is quite a monster. Since the last In/Out EU Referendum in June 1975, property values in Guildford have risen by 1894.7%. (This isn’t a typo) and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9) they are still up 10.14% higher.

Another Credit Crunch?
And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930's and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train.

Now the same Credit Crunch doom-mongers and sooth-sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying… because us Brit’s love our bricks and mortar and we do need a roof over our head.

However, as mentioned previously, if the value of the pound drops, in the past UK interest rates have risen to reverse that drop. Whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricier, it will make British exports cheaper which is great for the economy.

And what of interest rates?
Since 2009, interest rates have been at 0.5% to which many people have become accustomed to. So what if interest rates were to rise? Would this be the end of the world? 

Interest rates in the 1986/88 property boom were on average 9.25%; in the 1990’s they were on average around 6.5%; and during the uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) 4.5%. Many of you reading this, in your 50’s and older will no doubt remember interest rates at 15%.

However I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing.

So while property values might drop in the country, they will bounce back. It’s only a paper loss. It only becomes real if you sell. And even if you do have to sell, again, as most people move up market when they sell, your property might have dropped by 5% or 10% but then the one you want to buy will also have dropped by the same 5% to 10%. This is the best part – you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) more than the one you are selling. 

For example, if you are selling a 3 bed house to upgrade to a four bed, in Guildford, the average asking price for a 3 bed is currently £538,589 and £814,264 for a 4 bed. If prices did fall by 10% then the new house would be £81,426 cheaper and while you might realise £53,858 less for the current property the overall transaction (excluding all sales and purchase costs) to upgrade would be £27,568 cheaper.

The landlords of the 8,522 Guildford buy to let properties also have nothing to fear and neither do the 21,766 tenants living in their properties.

Buy to let is a long term investment. However there may be some buy to let bargains in the coming months as some people, irrespective of evidence, decide to panic. Even if we did decide to pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property construction level. 

Britain is building 139,600 properties a year, but according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year to even stand still. 

As the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person, demand is only going to go up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.

So, what will happen next?
Well, there are many challenges ahead, it would seem. The country has spoken and we are now in unchartered waters – but we have previously endured a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and still we survived! 

And the value of your Guildford  property? It might have a short term wobble… but in the long term - it’s as safe as houses regardless.

So if you are considering an investment decision or would like to have a chat in general about the Guildford property market please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk

Should you invest in a 2 bed flat or house?

Many investors approach me wondering whether they should purchase a flat or house if their investment fund is limited. Some might therefore be surprised by the answer.

So what type of property would make a better investment if an investor wants to hold for the long term and therefore rent out to prospective tenants? The first question I ask them is what are they looking for from the investment - capital growth or a great yield? Answering this question will help an investor to figure out which properties to buy.

When considering 2 bedroom properties, figures for the last 10 years state that houses have risen in value by as much as 80%, in Guildford. Flats have risen but by a lower 67% so 2 bed houses have achieved a higher capital gain over this period to suggest they potentially make a better long term investment.

Typical two bed flats in Guildford

The average asking price for a 2 bedroom flat today is £334,950 but for just £15,000 more a 2 bedroom house can be purchased so it would appear wise to invest in a house.

The rentals for both types of 2 bedroom properties are also similar. A 2 bed flat is on average £1,275 pcm while a house is just £20 more at £1,295 pcm. A flat may however be slightly less financially attractive because the investor will need to consider the cost of the management fees to be deducted from the monthly rental income.

A typical 2 bed house in Guildford

The gross yield is therefore 4.6% and 4.4% respectively so as there is little difference between these figures this suggests that the investment decision may not be made on a financial basis.

The decision may be based upon market demand and perhaps the investor's preference towards tenant type. A flat will be more desirable possibly to young professionals starting out on the property market and because they are young may prefer a social life to having to spend time maintaining the property and a garden. There is a more plentiful supply of flats in the Guildford property market than houses too.

Houses may appeal more to couples, possibly with a child, because they will have the benefit of more space and a garden plus more privacy. They might also enjoy the pleasure of maintaining their property and the occasional DIY, at the expense of having a social life. 

As regards the investor it would appear that there is little to choose between both types of property. However investing in flats might now be the answer as there is not only more demand for them but with the advent of AirBnB, requests for short term accommodation particularly in flats, is on the increase. 

The potential rental income could therefore be significantly greater in this instance as the investor can charge more for short stays than they can for longer term tenancies. However there is a lot of specialist knowledge required to operate an AirBnB business so an investor would be wise to research this market place and the factors that they need to consider when operating short term holiday lets. 

So if you are considering such an investment decision or would like to have a chat in general about the Guildford property market please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk

How to invest in property with no money of your own

Offer a pot of gold! That is, an opportunity to make money.

Having spoken to many investors and property landlords in Guildford one challenge that they all face is that, from time to time, one will always runs out of money. Nobody has a bottomless money pit from which to extract more money for further investments however wealthy they might be.

So rather than stop investing and do nothing, how does one deal with this issue so that you can continue to profit from future property purchases?

Believe it or not, there are many people who do have funds to invest but their challenge is either a lack of time or insufficient knowledge to invest in property successfully. In that case how do we locate these individuals and what do we do to enable them to invest in us instead?

The answer is to form a joint venture. This may set up to fund investments or to leverage other people's skills and time.

There are a number of ways in which you can operate a joint venture. For example, you could work with a vendor to help sell their property in return for a fee or share of the profit that you generate for them. You could acquire funds in return for paying a fixed percentage interest rate over a period of time (like a loan); you could share a profit 50:50; or form a company to purchase a property, having a shares in the business.

In the instance where the investor offers a loan they are unlikely to have an interest in the property as they are using it only as a vehicle to enable them to earn a higher rate of interest on their money than they would otherwise do by leaving it in the bank. They have little risk as their loan interest will be paid whatever profits are made from the property venture. They would receive the loan amount back upon the property investor selling or refinancing the property.

If the investor becomes a joint venture partner they would have a shared risk and profit so are dependent upon the property investment being successful. Typically a Deed of Trust is taken out to protect their financial interest. The share percentage offered is subject to negotiation.

When setting up a joint venture it is wise to have a business plan to agree the deal with your jv partner. This will cover the nature of the project, the funds required and for how long, a cashflow and profit statement plus details of the exit routes available to the investor. 

The business plan should show examples of projects that you have successfully completed in the past, including photos and video plus the figures to show how you made money, to demonstrate your experience. This document should be submitted to a number of investors so you can attract several funding options so you can proceed with your project without delay and more importantly, without running out of money. It is always wise to have a contingency fund too.

So how do you find your investors? Well, as stated above, there are many people looking for a profitable home for their savings, inheritance, redundancy, windfall and even funds borrowed on the basis of equity in their own home.

Firstly, you need to speak with as many people as is possible, even if this is outside your comfort zone. Having acquired your business cards you should network in property and business groups. in addition to approaching everybody in your family and on your contact list. When meeting with professionals, including accountants, architects and solicitors ask if they have clients keen to invest in profitable ventures too. The most important question you can ask is "Who do you know who wants a better return on their money?".

Do not enter a venture unless you like and trust the person involved.

A legal agreement should always be written up by a solicitor. There should be a Heads of Terms to detail both party's requirements and responsibilities. There may be a Deed of Trust to protect the investor too. This puts their name of the property registration to provide them with further protection. As stated above an investor could have shares in the company through which the property is purchased and if not, possibly a first charge on the property to provide them with total security. Finally one should always complete due diligence, including taking out references, on the other party to satisfy the investor that their money will be invested wisely.

By having access to an investor's funds in advance of a project you are ready to go as soon as required.

Finally, some deals will face challenges. If so, it is always wise to be open and honest with the investor, keeping them updated at all times especially if an issue does need to be flagged up so that both parties can work on a solution to the problem. Very often, if you have sourced sufficient funds, there may be another investor waiting in the wings ready to take over the funding of your project, in the event the initial investor has to be paid off early.

Please note that I am offering my own opinion and not financial advice.

Secondly, when looking for a joint venture partner you should always ensure that when promoting any offer for an investment you are always talking with a person of high net worth, as defined under PS13/3 to comply with FCA regulations.

So if you are looking for a golden opportunity to invest for a higher rate of return please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk

Investors need to know the "price of the bedroom"

The "price of the bedroom" represents the capital gain to he achieved when creating an additional bedroom. This may be created by splitting an existing large room; converting a garage into a bedroom; using the loft area to accommodate a bedroom; or by building an extension to include another  bedroom.

So why is this figure so important and what does it represent?

In simple terms an investor acquires a property, then adds the bedroom as suggested above, allowing them to resell the property for a higher price. The aim is to therefore make a profit once all legal and building costs required to complete this task, have been deducted.

Realising that there is a substantial demand for family houses in our  investment area, especially in certain high performing school catchment areas, research was carried out to review the average price for both 3 and 4 bedroom houses in the area, to determine how much an additional bedroom could add to the price of a typical 3 bedroom house.

The average asking price for a typical 3 bedroom property is currently £334,950 and £440,950 for a 4 bedroom house, therefore providing a difference of up to £106,000. This is the potential price of a bedroom. 

The trick is to purchase a property that is in pristine condition and can therefore be moved into right away. Why spend on a house "in need of modernisation" if there is limited capital gain to be achieved even though a considerable sum of money has been spent on it? It is far better to invest in a project to increase value.

If a large room with two windows is not available to split into two separate rooms then a loft extension is an economical way to add an ensuite bedroom to provide the price uplift required. This is our preferred option especially as properties in our investment area do lend themselves towards loft extensions as the roofs tend to have steep pitches with excellent headroom.

Once the property has been revalued we are able to mortgage it, having first used a bridge to fund the initial purchase. This then leaves two options - to sell to make a quick, capital gain; or to hold and therefore generate an income from the property. The decision on which approach we take will very much depend upon our financial priority at the time.

If we do decide to hold, this offers another opportunity. It enables us to offer the property to a family unable to afford a deposit or to obtain a mortgage but who will be able to do so sometime during the next 5-7 years.

How do we do this? Well read our next blog article to discover how.

Bad debt or good debt?

People often come to me concerned that the return on their savings is so small now that interest rates are at an all-time low. They are therefore challenged to find a home for their money where they will attract a higher rate of interest.

When I ask, "Well, have you considered 'property' as the home for your money?" they tend to retort, "Does that only work when you have lots of money?"

This is because we are all brought up to believe that you need a 20% deposit to buy a house and then a mortgage to fund the remainder of the purchase price. Yes, this does apply when buying your own residential property. However investment properties are different.

Firstly, the mortgage on your own home is considered to be "bad" debt. This means that you have to pay the amount owed on the mortgage out of your own hard-earned income over a period of (say) 25 years when hopefully your finances will be in order at all times. Sadly, many property owners will go through a period of their life when times will not always be financially sound for them. For example, it's a sad fact but at least one in three people get divorced. Many people will be made redundant at some point in their working life too. So unless, there is a safety net there may not always be sufficient income to cover mortgage payments every month for the 25 year term.

When debt is used to fund property investments it is considered to be "good" debt. "Why is that?", do I hear you ask. If your property investment is a rental property, your tenants are paying for your mortgage. This debt is called "good" debt because you are investing in an income-producing asset. Once your tenants have paid their rent to cover the cost of your monthly mortgage payment plus utility and Council tax bills (if you pay for these) any remaining money is profit, having allowed a percentage of this income to cover professional fees, maintenance, insurance and tax.

Investment property is therefore an income-producing asset, while the purchase of a residential property provides accommodation but no profit (unless you rent out a spare room).

The second concern that people often have is that you need vast sums of money to be able to invest in property. The answer to this is two-fold. In the first instance you should not invest too much cash in one property but use this investment to afford a number of properties in order to spread your risk and secondly, to make your money work harder for you.

The second answer is that few people will have hundreds of thousands of pounds lying around in their bank account and if they do, they are surely not receiving sufficient interest at today's rates to make this a practical thing to do. This means that all property investors, however wealthy they may have been, will eventually run out of personal funds to invest unless they are educated, professional investors who therefore know how to work round this challenge.

I am developing my expertise in property investment. I have done this by becoming a student on a 12 month Property Mastermind course to become educated and to grow my network of property investors and specialists.

This experience has enabled me to offer both friends and personal contacts golden opportunities to produce an effective means to enable them to achieve their goal to generate a higher rate of return without necessarily having to become educated in property investment themselves. These returns have far-outweighed those earned by leaving their money in the bank and they have had the pleasure of sharing in the success of a number of property ventures.

Want to achieve the same? Then watch this video No money, No problem.

Still excited? Call me to arrange a chat over a cuppa coffee to see what I can achieve for you.