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In this weeks article on the Luton property market we look back at the last 12 months to see how many properties have sold compared to the long-term average, what’s happened to Luton property prices by property type and then we look forward to the short, medium and long term - what affects the new PM and his policies will have on the property market, both locally and Nationally.
The foundations of the Luton Property Market over the summer have continued to be principally sound; yet the existing political macroclimate means that the critical element of consumer confidence has been reduced and that is triggering some potential Luton property buyers and Luton house sellers to falter slightly and hang fire making any firm decisions on property.
With record low interest rates at 0.75%, low unemployment rates of 3.8%, and decent mortgage availability (even those with low deposits - there were 224 mortgage deals available on the day of writing this article where only a 5% deposit was required and 5 main stream lenders that would offer 100% no deposit mortgages), Luton buyers have a lot going in their favour, aside from the perceived political uncertainty.
Interestingly, Rightmove have stated there are more properties for sale today in the Country, than at any time since 2016, and Luton follows that trend. Even with that in mind, property values have remained reasonably stable as The Land Registry has just released its House Price Index for Luton and the surrounding locality and it makes very interesting reading.
Overall, property values in the Luton area are 0.2% lower
than a year ago as the average property value in Luton now stands at £263,800.
When I looked at the types of Luton properties, a slightly different picture appeared ..
- Luton Detached homes rose by 0.2%
- Luton Semi-detached homes rose by 0.4%
- Luton Terraced/Town-House dropped by 0.4%
- Luton Flats/Apartments dropped by 1.2%
and splitting down the types of Luton into property types ..
- Luton Detached £421,700
- Luton Semi-Detached £278,800
- Luton Terraced/Town-House £221,300
- Luton Flats/Apartments £154,100
Yet, Luton Property Market Blog readers will know I always like to measure the health of the Luton property market not only by house prices but transaction levels as well ..
1,876 properties were sold in the last year in Luton,
lower than the 10-year average of 2,255 properties per annum
Considering the uncertainty the Country has been through in the last three years with the ‘B’ word issue, I don’t think that’s too bad and shows the underlying resilience of the Luton property market.
Now looking forward towards the end of the year .. how will Luton house values change under the new Prime Minister?
Luton buy-to-let landlords and Luton first-time buyers seem to be sustaining their preceding activity levels, which is heartening news. It’s quite conceivable that both cohorts are presently profiting from the marginally increased numbers of Luton homes on the market, which not only offers them greater choice, but aids with their negotiations. The suggested Stamp Duty changes made me look at previous Stamp Duty changes in the last decade and their effects have been rather short term.
That means those selling their homes in Luton need to be realistic with their pricing, and, as most sellers also buy a property, what you might lose on your sale you will make up on the purchase.
BoJo, Brexit … to be honest are all short-term distractions from the long-term issues of the UK and Luton property market. Until we start building at least 300,000 properties a year to meet the demand for UK property, demand will always outstrip supply, meaning irrespective of short-term fluctuations that may (or may not) be caused by domestic and world events (including the ‘B’ word’), prices will always in the medium to long term remain stable and increase.
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In this week’s article on the Luton property market, I compare the population of Luton and the density of people living in Luton to nearby towns / cities and other hotspots around the country to decide if we are overcrowded.
Has England’s green and pleasant land all of a sudden become England’s green and overcrowded land?
With the nation’s ever-increasing population and the double whammy that people are now living longer, this means as each year goes by, there is an ever-growing strain on public services and in particular my favourite topic - housing. It’s no wonder some people are saying things are at crisis point when it comes to infrastructure (like roads, schooling etc) and in particular housing. I hear it all the time, people complaining that Luton looks like a building site and, we are packing people in like sardines into our Luton homes. Yet I wanted to find out exactly what the truth was.
Starting with the UK as a whole, there 698 people per square mile whilst in England, there are 1,103 people per square mile and finally in Greater London 14,587 people per square mile … these all sound quite awful numbers, until you drill down and realise a square mile is an awfully big area - there are only 93,600 square miles in the whole of the UK and that includes the wilderness areas of Scotland!
Let’s look at more realistic areas of land ... and I want to look at my favourite - the acre. To those born after the mid 1970’s, an acre is roughly half the size of a football pitch or a square roughly 63 metres by 63 metres and there are just less than 2.5 acres in a hectare.
The population of Luton is 258,018 and the total area of Luton is 12,531 acres, meaning 20.59 people live per acre in Luton
So, how does that compare to neighbouring areas and towns...
As you can see, only just under 21 people live per acre in Luton, interesting when compared to both Greater London, which has density of 23.26 people per acre and London’s most crowded suburb, Pimlico at 92.32 people per acre. Yet even Pimlico is nothing to the Collblanc district in Barcelona, which has 214.8 people living it per acre.
So, is Luton over populated? Yes, it seems that way at school time or rush hour when sitting in traffic that Luton is over populated – yet the stats show - we aren’t.
Evidently, we are never going to have an even spread of population as can be seen from the figures in the table, and the remote nature of some parts of the Country would not be able to withstand high densities of new people without enormous infrastructure investment.
Yet could we accommodate a much larger population in the UK (and Luton) although there would be trade-offs? Look back at the 17th and 18th century and certain sectors of society were warning about population growth. The population of the UK in 1801 was 10.5 million and even with the growth of the population since then, only 1.2% of the UK is currently built on for housing purposes.
The question, it seems to me, is not can we manage but how
would a larger Luton population change our way of life,
both for better and possibly worse?
The planners have a responsibility to ensure Luton provides its fair share of new homes to accommodate this population growth in the coming years. The local authority has a responsibility towards adequate provision of the infrastructure of roads, hospitals and schools etc., to match the growth in housing. This is not a political topic and I hope once the ‘B’ word is finally sorted we can get on with addressing the shortage of affordable new homes for future generations.
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In this week’s article, I talk about the recent Government permanent relaxation of the planning permission regulations with regard to extensions and how it could affect the Luton property market. I also talk about how office blocks and shops are being converted into homes and the possible effect on landlords and homeowners in Luton
The need for more homes has always been one of the biggest issues with regard to the Country’s housing crisis. One of the main reasons for families wanting to move home is the need for more accommodation as their families grow and so in 2013 and 2015, the planning permission rules were relaxed to try an alleviate this issue.
Initially in 2013, Nick Clegg, as Deputy Prime Mister, brought in temporary planning rules to allow larger single storey rear extensions without the requirement of a full planning application. The temporary rules allowed terraced and semi-detached homes to be extended by just over 19ft, whilst detached houses were able to add even bigger extensions of up to 24ft. Since those rules were relaxed six years ago, 109,320 people have taken advantage of the temporary rules (aka “permitted development size guidelines”).
Homeowners wanting to extend within these permitted development guidelines, must still inform the local authority of the extension beforehand, and local authority officials still need to then notify the neighbours. If the neighbours object, the local authority could still stop the extension being built, but only if it is likely to damage the character or enjoyment of the neighbourhood. The planning process exists for a reason and whilst these relaxed planning rules are popular with property owners, it does mean local authorities have little chance to deliberate the impact of these extensions on their locality. However, 22,779 permitted developments had been refused in the same time frame meaning, 17.2% of permitted development planning applications have been refused since 2013.
Now these temporary rules have been made permanent recently as the Government believe these measures will help households extend their properties without fighting through the time-consuming red tape of obtaining planning permission. The government believes this is part of a package of planning reforms to build more households, build them better, quicker and make the housing market work, meaning families can grow without being forced to sell and move… or does it?
The average size of a property
in Luton is 796 sq.ft
.. internally (911 sq.ft externally), whilst to the national average 929 sq.ft internally (1,081 sq.ft externally). Interesting when compared to the average size of a new homes built nationally which is 12.1% lower at 818 sq.ft internally (927 sq.ft externally).
These relaxed rules are only for single-storey extensions though, when most growing families don’t need an extra downstairs reception room, they need an additional upstairs bedroom. This means if families do want an extra bedroom upstairs, they will still have to go through the rigmarole of submitting a full planning permission. Although, many Luton people have used these rules in the last 6 years to build a decent size granny-annex – there are other options less explored out there.
There was a second (less advertised) temporary change the Government made to planning rules in 2015, that has also been made permanent recently, many may have missed it, yet it has a bigger potential impact on the housing market. The new rules make permanent the removal of planning rules to allow office blocks and shops to be converted into residential homes without a full planning application being made. Since 2013, 11,090 office blocks and 1,750 shops have been converted into residential households. This doesn’t sound a lot, but in 2017 alone, converted shops and office blocks provided 37,000 new households alone in the Country (or 17% of the new household created in 2017).
Over the next decade, more and more office blocks and shops will be converted into residential properties … and this will slowly change the dynamic of the housing market and the high street … and I’m not sure whether that will be for the good or bad ... only time will tell?
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In this weeks’ article on the Luton property market I talk about the stressfulness of moving home and what Luton homeowners, Luton landlords, Luton tenants and Luton buyers can do to mitigate and lower their stress levels when moving home in Luton. I then look at the last 36 months Luton property sales and see which streets and roads in Luton have moved to the most.
Lots of people say moving home is one of the top ten most stressful events in your life. Fortunately, there is a way to mitigate your stress. In a nutshell, start as early as you can, plan ahead and do everything you can to make it easy on yourself, your family and even the family pet. As an agent in Luton, my team and myself have been helping homeowners, landlords, buyers and tenants move, sell and let their Luton homes for many years. So I thought I would share some top tips for making your move as stress free as possible – then find out which streets in Luton have moved the most in the last 3 years.
The first tip is to plan ahead and write a list; because whilst it is taking between 15 and 20 weeks at the moment from finding a buyer to moving, those few weeks will fly by in no time as day to day life carries on. Next, get yourself a decent home removal company as they are worth their weight in gold on moving day – and if you need to know a good one in Luton - drop me a line and I will let you know who my clients are raving about.
Next, a cluttered Luton home doesn’t sell or let well, so maybe consider decluttering before you market the property. It will sell/let better and when it comes to the move – the job will be so much easier. Know where you plan to put all your important documents (like Passports and Bank PIN etc). Tell your utility providers and it is a good idea to create electronic copies of significant documents by scanning and saving them onto a USB stick and don’t forget to get your mail redirected.
On the day of moving home stress levels will be high and I know you will want to get everything packed away and have the tea on by 5.30pm! Those who have moved many times know that isn’t the case. Be realistic, as it’s doubtful you are going to unpack all your boxes in your new home by the end of the first day.
Make sure to keep your ‘Moving Day Survival Equipment’ close by, change of clothes, wash equipment, cold bottles of water, biscuits, kettle, tea/coffee/milk, crisps (even G&T??) to keep your spirits, morale and energy up – you will be fine.. but it will take a few days to completely unpack and get your new Luton home the way you would like it to be. As long as you have your bed set up and made by the end of moving day - you can have the rest of the weekend to get ship shape.
So, which street or road in Luton (LU2 to be more precise) has put themselves through one of the most stressful moments in their life over the last 3 years? Which street has seen the most home moves and experienced the trials of moving home.
Hitchin Road comes in at the top spot, with 65 home movers in the last 36 months with a total property value of £14,552,000 sold, interestingly there are 696 properties on the road … so have a look at the top 20 and see if your street is in the Top 20!
… but before you go, if you do need any help or guidance about moving home or advice about the current state of the Luton property market, then feel free to drop me a line or read the other articles in my blog on the Luton Property market.
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In this week’s article on the Luton property market we talk about the affordability of buying a home in Luton since 1997 and how these changes have meant the demand for private rental properties in Luton will continue to grow for the foreseeable future.
Looking back at the 75th Anniversary of the D-Day landing a few months ago, it reminded me of the huge changes that have happened to Luton and more specifically the Luton property market since WW2. Back in 1946, the average wage in Luton was just over £5 a week and to buy an average car would cost you just under £600, yet this is a property blog, so...
The average value of a Luton property in 1946 was £1,002
In fact, in those 75 years, the average Luton house had doubled in price by 1961, then again in 1971, 1975, 1980, 1988, 2000 and 2006. Now a lot of those increases (especially in the 1970’s) were caused by hyperinflation, yet since the start of the 21st Century inflation has been kept low and since the Credit Crunch (2008/9), whilst property values have been rising, they haven’t been at the rates experienced in the latter half of the 20th Century.
Now what a property sells for is irrelevant, its whether someone can afford it.
Increases in Luton property values have produced huge increases in equity for many Luton homeowners and Luton buy to let landlords, yet on the other side of the coin also making housing unaffordable for other people. The best measure of the affordability of housing is the ratio of Luton property values to Luton average earnings (i.e. salary/wages). The ratio works on the basis the higher the ratio, the less affordable properties are.
In 1997, the average value of a Luton property was 2.5 times higher than the average annual wage in Luton, in 2007 it peaked at 6.5, yet two years later it had dropped to 5.3 and since then has slowly risen to 8.4 times higher!
It can be seen that even though property in Luton became more affordable after the 2007/8 property crash (i.e. the ratio dropped), in subsequent years, with house values rising but earnings/salaries not keeping up, the ratio started to rise. This has meant there has been a decline in affordability of property in Luton over the last five years - so for those on particularly low incomes or with little capital, it unfortunately means that buying a Luton home will never become an option.
Therefore, the demand for private rented properties in Luton will continue to grow as many young Luton people are deciding to rent instead of buy their own house (knowing when their parents pass away, the equity built up in their parents property will be passed down - and then they can buy in their 50’s and 60’s - just like it happens in Germany).
Yet, that is many decades away and with fewer Luton people wanting or able to save up the 5% deposit required by mortgage lenders, more and more people are looking to rent. Tie this in with the subtle shift in attitudes towards renting since the Millennium and less people jumping the on the bottom rung of the property ladder, this has driven rents and demand up in Luton over the last few years. Yet (and it’s an important proviso) the type, location and demands of Luton tenants has changed over that same time frame meaning you can’t just make money from buy to let as easily as falling off a log like you did in the early 2000’s.
If you are an existing landlord with us (or even another agent in Luton) or someone thinking of becoming a first time Luton landlord looking for advice and opinion and what (or not to buy in Luton), one source of information is the Luton Property Blog https://www.venture-residential.co.uk/blog - or drop me an email or phone call and let’s start a conversation - I don’t bite and I don’t do hard sell ... and maybe, just maybe, I could help you get better returns from your property portfolio.