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  • The Luton housing market over the last five years has behaved oddly.

 

  • Luton house prices are 23.6% higher than in 2017, even though during those five years, the British economy had the uncertainty of Brexit and the massive fall in GDP during the pandemic.

 

  • Yet, a less observed trend is that the net number of homeowners in Luton has risen by 3,606 households, a jump of 3.7%.

 

  • Why has growth in homeownership happened, and what does it mean for Luton's existing homeowners (and landlords)?

 

With the newspapers full of news about the death of homeownership and the growth in Generation Rent, it must surprise many (as it did with me) that the number of homeowners in Luton has grown.

 

To give some context…

 

the number of homeowners in Luton dropped between 2011 and 2017 by 367 households, yet between 2017 and 2021, that grew by 3,606 households.

 

So, what is behind this growth in homeownership and is it a good thing?

 

Politicians love it when homeownership rises, as they believe owning a house turns individuals into model upright citizens. It was one of the critical reasons for the council house sell-off in the 1980s.

 

Yet the hard data to back this up is unexpectedly slim, whilst other studies hint that homeownership has some harmful costs to the economy, such as reduced entrepreneurial spirit and the disinclination to move home to find work.

 

However, increasing homeownership may be a good foundation for Britain’s economic recovery after the last few years. Homeowners have a greater propensity to live in single-family unit homes like townhouses and semi-detached houses.

 

A greater demand for more single-use homes supports the construction of such dwellings (instead of other types such as small apartment blocks or Homes of Multiple Occupation). This is important because single-family unit homes tend to be better build quality, have more extensive gardens, and have more local amenities.

 

So, what are the sort of numbers I am talking about in Luton?

 

In 2017, there were 46,972 Luton owner-occupied homes.

By 2021, this had grown to 50,578 Luton homes.

 

This means homeownership in Luton has risen from 58.59% of the households in Luton in 2017 to 60.74% in 2021, a proportional increase of 3.7%.

So, what is behind this growth in homeownership?

 

  1. 95% mortgages have been readily available at low-interest rates now for over a decade. In 2017, first-time buyers also got an exemption from stamp duty. This created a perfect storm of demand, which caused the number of Luton first-time buyers to rise.

 

  1. Whilst the rise in homeownership in Luton precedes the pandemic by a couple of years, another factor to the growth relates to the last property market recession of 2008/9 (the Credit Crunch). Between 2009 and 2012, many Luton homeowners found themselves unemployed and still had to pay mortgages at 6% to 8%. Some homes were repossessed or some had to sell their home at a low price to unshackle themselves from their high mortgage costs. This development, nevertheless, took many agonising years to play out, reducing the homeownership until the middle of the last decade.

 

  1. People’s views on the way they live have altered during the lockdowns. In a sphere of stay-at-home instructions and social distancing, the peace of mind of homeownership gives Luton homeowners the security of tenure.

 

  1. Finally, there has been a long-term change in the demographics of the UK. Millennials (currently aged between 26 and 41) are less likely to be homeowners than their Baby Boomer parents were at the same age. Yet, the British millennial generation is now entering its prime home-buying period as they have saved their deposit and are more likely to inherit money from their grandparents. (The average age of a first-time home-buyer in the UK is 33 compared to 26 in the mid-1990s).

 

So, the final question has to be…

 

how much further could homeownership go in Luton?

 

The biggest hurdle could prove to be the supply of available homes.

 

Many 'accidental landlords' have been selling their properties recently, which first-time buyers have bought. Accidental landlords put their own homes up for rent in the early to mid-2010’s because they could not sell. Now they have been motivated to cash in on the higher Luton house prices in the last couple of years, which increased the supply of properties to buy for owner-occupation.

 

Also, the number of houses on the market in the UK available to buy has increased from existing owner-occupiers. In December 2021, there were 355,700 properties for sale yet by March 2022, that had risen to 431,000. This is giving greater confidence to other Luton homeowners too scared to put their homes up for sale because they are concerned they would to not be able to find anything else. Things are starting to change in that regard. 

 

Also, there are signs of a recovery in British new home building as the number of new housing starts in 2021 hit the highest level since the financial crisis of 2007. Yet with a steady increase in Luton landlords returning to the market in the last few months, this tide will turn.

 

Luton’s homeownership could continue to swell for a while yet!

 

P.S. What does this mean to the private rented sector in Luton? Come back next week as I give some fantastic insights every Luton landlord will want to read to ensure they remain profitable in the Luton buy-to-let market.

 

Author 

Taylor Kay

Did you know there are 19,100 Terraced Houses in Luton?

What is the history behind the humble terraced and why are they so popular with Luton homeowners and Luton buy-to-let investors? Read this article to find out more

 

The terraced house is one of the most familiar styles of home in Luton (and the UK as a whole).

 

24.7% of Luton people live in a terraced home, interesting when compared with the national average of 22.7%.

 

So, what is it about the humble terraced/townhouse us Brits love so much? In this article, I look at the history of the terraced house, how it relates to Luton and what the future holds for terraced homes.

 

A terraced house is a property built as part of a continuous row of three (or more) properties in a similar and uniform style.

 

The reason the British call them 'terraced houses' and not 'row houses' came about because 18th century British architects borrowed the phrase 'terrace' from 'terraced gardens’. Terraced gardens were known for their uniform nature (in looks, style and height etc.), so the architects decided to name them the same way as opposed to a ‘row house'. In fact, in most countries, they are called 'row houses'.

 

The terraced house originated in the Low Countries of Europe

 in the late 1500s.

 

Terraced houses were first built en-masse in the UK after the Great Fire of 1666 with the rebuilding of London.

 

They became fashionable for the landed gentry in the early Georgian era with chic and stylish terraces appearing in London's Mayfair and Bath with its Queen Square (the forerunner of the famous Royal Crescent) and were sometimes built around a garden square.

 

However, it wasn’t until the early 1800s that the terraced house turned out to be the solution to the increasing population of the towns as more and more people were attracted to towns and cities for work.

 

The terraced house fell out of favour with the upper-middle classes in the late Victorian age (1870’s onwards) as they wanted more privacy and space. They moved to live in detached houses or semi-detached villas, as the terrace house had started to become associated with the lower-middle and working classes.

 

With all these terraced houses being built, their quality of construction and design dropped as builders tried to squeeze more profit. The biggest issue was that most of the terraced houses built in the early to mid-Victorian age (1840s to 1870s) were made back-to-back with no rear garden, causing unsanitary conditions. Therefore, the Public Health Act of 1875 was introduced to regulate the building of terraced houses with design and standards.

 

These new building standards in the Act improved the terraced house’s ventilation and, more importantly, required the house to have a toilet (frequently built outside). To meet these new building standards, the designs of these new houses created the well-known landscape of ‘grid' streets lined with two-storey terraces serviced by a pedestrian path between them, the name of which is a hotly debated topic. The various names for the pathway include alleyway / jitty / cut/ ginnel / snicket / passageway / ten foot / five foot/ witchel / lonnin / vennel.

 

As a Luton resident, why not say what you call them in the comments?

 

As we entered the 20th Century, the terrace house continued to be popular, albeit with some new architectural additions.

 

The advent of Arts and Craft architecture with stain glass windows, Tudor style cladding, ornate porches, and elaborate chimney stacks.

 

After the First World War and the introduction of the Housing and Town Planning Act 1919 (which made local councils build council houses), the Victorian terraced rapidly became associated with overcrowding and slums (especially those back-to-back terraced houses built before 1875). Many of the back-to-back terraced houses were knocked down between 1930 and 1960 in what is known as the slum clearances.

 

Private builders started building the iconic suburban semi-detached houses with more extensive gardens, and local authorities decided to build high-rise blocks after World War II. Yet after the partial collapse of Ronan Point in 1968, the popularity of high-rise tower blocks waned.

 

Since the early 1990s though, the terraced house has steadily come back into favour as building land prices have increased by 322% in the last 30 years.

 

Many private builders have started to build modern three-storey townhouses in rows of five to seven. This terraced 'townhouse-style' allows three and four bedrooms on a land footprint that would have usually only accommodated a smaller two-bed property.

 

So, let's look at some interesting stats on Luton terraced houses.

 

  • There are 19,100 terraced houses in Luton (broken down as 12,166 privately owned terraced houses, 2,617 terraced council houses and 4,317 in the private rented sector)

 

  • 6% of terraced houses in Luton are in the private rented sector, which is above the national average of 19.1%

 

  • The most expensive terraced house in Luton ever sold was on Summer Street, Slip End, Luton for £500,000 in 2020

 

  • The cheapest Luton terraced house sold in the last two years was at The Ridings, a one-bed terraced house for £102,500

 

  • Terraced houses in Luton sell for an average of £267 per square foot

 

 

I hope you found that thought-provoking?

 

So, why is the terraced house, be it a red brick Victorian house or a more modern three-storey townhouse, still popular today in Luton?

 

They are typically well built, cheaper to maintain (especially the older terraced houses), comparatively spacious, and in good locations. Many terraced houses have been improved and extended through the inventive use of rear gardens/yards and converted roof spaces; their unpretentious design remains adaptable enough for 21st century living; what isn't there to like about them?

 

These are my thoughts; tell me your thoughts about the humble yet versatile Luton terraced house.

 

Author

Taylor Kay

  • In 1981, 22.5% of properties in Luton were council houses. Today, that figure stands at 10.7%, a proportional drop of 52%.

 

  • Why has the number of council houses dropped so much in those 40 years?

 

  • How has that changed the dynamics of the Luton property market in those 40 years?

 

The ability of local authorities to build council houses came into law in July 1919 with the 1919 Housing and Town Planning Act. It was one of the most important pieces of domestic legislature passed after WW1 and was the first time in the UK that a nationally public funded system of providing homes was made for the masses. It was paid for mostly by central government and provided by local authorities (councils) and public utility societies (which in later years became today’s housing associations). 

 

Between 1919 and 1979, 6.94 million council houses were built.

 

Just over 1 million council houses were built between 1920 and 1939, whilst 5,804,150 council houses were built between 1946 and 1979. This is compared to 4,533,440 private homes and 260,910 housing association properties in the same time frame (’46 to ’79).

 

So, between 1946 and 1979, the council house was the dominate force of British housing. But that all changed in 1979!

 

Many people believe it was Margaret Thatcher who was the architect of allowing the sitting tenant of a council house to buy their home. Interestingly, council house tenants have been able to buy their council house from as early as the mid 1930s, albeit with little or no discount. Also, as late as 1977, the Labour Housing Minster published a Green Paper extolling the virtues of homeownership and council tenants being able to buy their home at a discount.

 

But after the General Election of 1979, the new Tory government drafted the Housing Act 1980, which gave the Right to Buy, which became law in the autumn of 1980. Then things really took off!

This new law established a right for most council tenants who had been in their home for three years or more to a discount. The discount started at 33% and increased by 1% for each extra year, up to a maximum of 50%. If the tenant sold the house within the first five years of ownership, a prorated repayment of their discount was required.

 

Between 1980 and 1989, 970,558 council houses

nationally were sold at a discount.

 

Yet the issue was, when a council house was sold, it took that house out of the council’s portfolio for future generations. From the start, there were limitations on local authorities’ use of monies from the council house sales as most of it had to be given to central government in London, meaning only 390,560 new council houses were built between 1980 and 1989. Looking at the numbers locally …

 

in 1981, there were 12,575 council houses

in Luton, today it’s 7,973.

 

No wonder the country has a housing crisis … yet as my regular readers know - the devil is in the detail … and that devil is the humble housing association. 

 

The Tory General Election Manifesto in 1979 had proposed the rights for both council house and housing association tenants to buy their own house under the Right to Buy scheme. The Conservatives argued housing associations, who obtained government funding, should be subject to the same Right to Buy proposals as councils. The Government won the vote in the Commons, yet lost the vote in the Lords, meaning housing association tenants could not buy their homes at a large discount.

 

At the time, there were only 400,000 housing association properties in the country, so the Government were not that worried. But the significance of housing associations developed in the 1980s and beyond as they were allowed to borrow money from the private sector.

 

Between 1949 and 1979, the average number of housing association properties built annually was 8,524. Since 1979 to today, it has been 25,062 per year (and 31,606 per year in the 2010s).

 

Also, the Government encouraged councils to transfer their remaining council houses to housing association schemes from 1986. The advantage to these ‘stock transfers’ was the Government allowed housing associations to access private funding to improve their existing properties and buy new ones (good news for existing tenants complaining that the local authority never upgraded their homes).

 

Moreover, the Tory Government liked stock transfers, as it allowed them to dismantle council housing from the inside. Interestingly, Labour expanded the ‘Stock Transfer’ process in 1997 and further reduced the eligibility for council tenants’ Right to Buy, meaning the number of council tenants exercising their Right to Buy declined considerably.

 

Meaning today, even though the provision of council housing has dropped like the proverbial

stone … 

 

the number of housing association properties in Luton

has increased from 1,087 in 1981 to 3,742.

 

So, how has this changed the dynamic of the Luton property market in the last 40 years?

 

Would it surprise you to learn that the number of people who own their own Luton home today is very similar to what it was 20 years ago before the property boom started? It’s just that even though we’ve had a large drop in the number of council houses and an increase in the number of housing association properties, the number of people owning their own home has remained relatively the same (in some areas of Luton this has actually increased), the significant issue is the growth of the private rented sector.

 

It's almost as if people who used to rent from the council

now rent from a private landlord.

 

The question is, is it right for private individuals to make money from tenants who rent from them as opposed to the local authority? Or are private landlords providing better types, choices and quality of accommodation for these tenants, albeit at a higher rental rate than if they rented a council house?

 

I really do believe if it wasn’t for the growth of the buy-to-let landlord, which began in the early 2000s, we would have an even bigger housing crisis on our hands than the one we have currently.

 

Both local and central government have had their hands tied behind their backs since 2008 with a lack of funding, and it’s the humble private landlord who has stepped up and supplied in excess of 2.3million additional rental properties since 2001, housing nearly 5,520,000 Brits. These landlords have saved the day since the big council house sell off in the 1980s!

 

What are your thoughts on this matter?

 

Author

Taylor Kay

  • 1,582 properties have sold in the Luton area in the last 12 months.

 

  • It only takes 41 days to sell a Luton home, so why does it take 128 days from the sold board going up to the buyer getting the keys?

 

  • With a shortage of solicitors and a sub-standard conveyancing system, this article discusses what Luton house sellers (and buyers) can do to speed up the house buying process.

 

Nationally, the average length of time it takes from agreeing the sale of a property to the keys being handed over is 111 days (down from 117 days last year), yet in Luton, we are above the national average at 128 days.

 

So why does it take just over 18 weeks, when all that is required is the lawyers to look at some paperwork and get a mortgage? Also, what can Luton homebuyers and sellers do to speed this up? 

 

The legal process to buy and sell a UK property is called conveyancing. The conveyancing system itself hasn’t really changed in hundreds of years. After the housing market was reopened after the first lockdown in the spring of 2020, the property market returned with a bang, helped on with the stamp duty holiday.

 

In 2021, the number of properties selling in Luton in some months went up massively, e.g., by 96% June 2021 and by 65% in March 2021. Many conveyancers and solicitors had to sort the legal paperwork out for upwards of 120 to 150 properties each at any one time.

 

This glut of sold properties caused by the pandemic that needed legal work to be sorted exacerbated a problem already present in the conveyancing industry.

 

For years conveyancers have complained of overwork and underpay. Conveyancing is seen as the Cinderella of the legal profession. This workload was the straw that broke the camel’s back, making many conveyancers leave the profession and go into better paid legal work like corporate work.

 

Also, the legal process of conveyancing has built-in inefficiencies, and the conveyancing profession has been relatively slow to innovate. However, there are some excellent tech solutions that are being slowly rolled out across the industry to make the process more efficient and effective.

 

What can Luton home buyers and sellers do to speed up their property sale?

 

If you are buying or selling your Luton property as we speak, you won’t be able to wait for the conveyancing profession to be revamped, yet you can be as pre-emptive as possible to get your Luton house sale through earlier.

 

In a nutshell, ensure you have all the paperwork sorted on your Luton home before you put your home on the market. Next, get the ball rolling on your mortgage. If you receive some paperwork, read it, check it, sign it and send it back in a day, do not leave it a week; finally, always communicate frequently with your estate agent and conveyancer.

 

When you instruct a solicitor, most will request money to start the ball rolling for searches and disbursements. They won’t lift a finger until that is paid.

 

You will have to prove who you are in the conveyancing process, so your conveyancer will ask you to show them proof of ID and address. If you are buying, they will need to prove you have the funds/deposit to buy the home (and if your deposit is coming from family/friends, then they are required to write a letter to that effect).

 

How can the house buying and selling process be improved?

 

A couple of years ago, the Government set up the Home Buying and Selling Group to find the answer to this problem. Chaired by the well-known property guru Kate Faulkner, it is looking at an amalgamated Seller’s Information Pack (SIPs) and an IT-based single platform to share and communicate that SIP between buyers, sellers, their conveyancers, the estate agent, mortgage providers and brokers and finally surveyors.

 

The advantage of the SIP is that it can be created before the buyer has been found, meaning property buyers would be more knowledgeable when making an offer. Also, once the sale has been agreed upon, the SIP could be sent straightaway electronically to the buyers’ legal team (from the seller’s legal team) to start the procedure of asking for searches and raising inquiries.

 

The bottom line is the conveyancing process is not fit for purpose in the 21st century and change is on the horizon.

 

So, before the SIP becomes mandatory, there are things everyone can do to ensure they get the home of their dreams quicker.

 

At my agency, I recommend the seller, us as the agent and the conveyancer start to liaise with each other to get the key information on the property being sold as quickly as possible. Then once a buyer is found, I believe it is vital we, as the agent, regularly communicate with all the stakeholders in the chain to ensure everyone is playing their part to expedite the sale.

 

In the future, utilising technology and every agent/conveyancer preparing information upfront with the SIP will drastically reduce the time it takes between agreeing a sale and the keys/monies handed over.

 

The conveyancing process will have to change to meet the needs of the 21st century, but how long that will take is the big question.

 

If you would like to chat with me about how we do things differently to ensure your property not only gets the best price and how we do all we can, as agents, to expedite a smooth sale for your Luton property, do not hesitate to pick up the phone to me or drop me a line at the office.

 Author

Taylor Kay

  • The average time to find a buyer for a Luton property reduced from 55 days in 2020 to 41 days in 2021.

 

  • Yet still, just over 1 in 3 Luton homeowners are on the market after 12 weeks.

 

  • Why are so many Luton homes still on the market after all that time, and what does it mean for the Luton property market?

 

You would have needed to have been living in a cave since the end of Lockdown No.1, not to realise the property market has been on fire in Luton (and the UK as a whole) for the last 18/20 months.

 

It has been very much a seller’s market, especially in 2021. Yet as we enter the second quarter of 2022, I have noticed a slight rebalancing of the Luton property market, more towards buyers, something that is good news for everyone (sellers and buyers) locally.

 

In 2020, it took on average 55 days from the average Luton property appearing on the property portals (i.e. Rightmove, Zoopla etc.) to the property going sold (STC).

 

Interesting when compared to the national average of 72 days in 2020. Yet, last year, this was reduced to 41 days in Luton (51 days nationally).

 

So, what's the issue with the Luton property market being on fire?

 

Well, that was last year, and things have changed slightly since.

 

Of the properties for sale in Luton, 33.7% of houses

have been on the market for more than 12 weeks.

 

That doesn't sound a lot, yet that is an eternity in this market!

 

So, why are there so many properties on the market in Luton still for sale after all this time … it usually comes down to one thing … the practice of 'overvaluing'.

So before I explain what overvaluing is, let me give you some background.

 

Many agents (not just ourselves), in 2021, were achieving top prices for Luton property with multiple offers becoming the standard. The property they were selling was only available to buy for days before the owner obtained multiple offers that were not only at a satisfactory level, yet more than they ever dreamed likely.

Although this was great news for Luton homeowners, this caused fewer homes to come on to the market in the last six months in Luton, as people were afraid to put their home on the market without having a property to buy.  

With fewer properties coming onto the market, some estate agents have become more and more desperate to get a larger slice of this smaller property market. It has seen an unwelcome side of the estate agency profession, the estate agency practice of ‘overvaluing’.

While ‘overvaluing’ is nothing new, the custom has been generally limited to a small number of estate agents. Yet now, it's become more prevalent and creates uncountable distress and pressure for some Luton homeowners.

Many Luton homeowners want to sell quickly to get the property of their dreams. Yet, in many cases, when they do put their property on to the market, they don’t sell quickly enough because of this ‘overvaluing’ (even with the fantastic current property market conditions).

To give you an idea of the issue …

70% of Luton homes put on the market

in the last 30 days have not sold.

There are hundreds of Luton families having their dreams dashed by 'overvaluing.'

Therefore, let me look at exactly what overvaluing is, why it’s on the rise and most importantly, the harm overvaluing causes to homeowners like yourself.

You would think the most important thing in estate agency is all about finding the best buyer for your home, at the best price, who can make the move with the least amount of hassle.

To us it is, and to many other Luton estate agents, it is as well. Yet, to some agents, sales aren’t the essential objective. Instead, it is having a vigorous catalogue of properties to sell to generate more future leads.

Deprived of an endless number of new properties for sale, the enquiries estate agents receive will significantly drop, leaving them high and dry without any buyer (or seller) leads, the lifeblood of estate agents.

Therefore, some (not all), but some estate agents will feed on a homeowner’s appetite to get the highest possible price for their Luton home by giving them an over-inflated suggested asking price to market their property at (i.e. ‘overvaluing’).

If one estate agent can get you an extra £30,000 for your

Luton home, you will take it, won’t you?

 

The suggestion of pushing the asking price of your Luton home for 10%, 15% even 20% could be seen by many as a temptation too good to miss. Yet once you are on the market, the agent is trained to slowly get you to reduce your asking price over a lengthy sole agency agreement.

The problem is that the home of your dreams might have sold by the time you reduced your price in 3 months. Also, Which reports in 2017 and 2019 proved you ended up getting less for your home when it did eventually sell (which means you lose money) and finally, the agents know homeowners perceive it’s a hassle to swap agents (which it isn’t).

But estate agents only get paid when they sell the house;

why do they overvalue?

Would it surprise you that some estate agency chains pay their staff a commission when they put the property on to the market, not when it sells? So, their team overinflate their suggested asking prices to get that commission.

Over the last 18 months, with the rising property market, there has undoubtedly been a valid reason for pushing the envelope on the asking price. Yet, if every house like yours is on the market or sold subject to contract at £300,000 to £320,000, yours isn’t going to achieve £355,000, let alone £375,000 – even in this market.

With 70% of Luton homes still for sale after a month, the market is starting to level out and if you are keen to sell, then let me give you some advice.

Research has shown that if the asking price is initially set too high, it will be ignored by people surfing Rightmove and Zoopla.

 

(Come on, be honest – you have done that yourself haven’t you?)

 

When the property is eventually reduced because it has the stigma of being on the property market too long (begging the question from potential buyers that there may be a problem with the property itself hence no interest?), often when it does eventually sell, it will sell for less than what it would have done if it were priced correctly from day one (as per the two reports from Which in 2017 and 2019).

 

Of course, on the other hand, setting the asking price below its market value means potentially leaving money on the table needlessly – hence the need for a good agent.

 

Putting your Luton home or buy-to-let investment up for sale at the right price from the beginning is the key to selling within the best time frame and for the best price to a serious and motivated buyer.

Ask a handful of estate agents to value your home, ask them to back up any valuation of your Luton home with cold hard comparables of similar properties to yours.

 

Find your comparables by searching ALL the property portals (i.e. Rightmove, Zoopla, Boomin, OnTheMarket).

 

If you only take away one thing from this article, when you search the portals for comparables, make sure you include under offer/sold STC properties, as that will triple the comparable evidence. 

 

Thus, by doing your homework and then working with a dependable, trustworthy and experienced Luton estate agent, who will help to ensure that your Luton property is put on the market to get you, the homeowner, the best price from day one without over cooking it so you don’t lose out, you will be just fine.

 

These are my thoughts, let me know if you have any yourself.

 

NAEA The Property Ombudsman TSI Client Money Protect Rightmove Zoopla OnTheMarket