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The Perks and Pitfalls of Sharing Landlord Duties with a Friend

In this two-minute read, we ask if it’s wise to buy a rental property in Leicester with a buddy.

Purchasing a buy-to-let property with a friend is an appealing prospect – on paper, at least.

But it’s important to carefully weigh up the risks and rewards before taking the plunge.

Here’s a list of the pros and cons of becoming a landlord with a friend.

The pros

  • The role of landlord comes with a plethora of responsibilities. Sharing these duties with a trusted friend will lighten the load.
  • Your co-investor may have a different skill set to you, meaning you can play to your strengths while they play to theirs.
  • Most lenders require larger deposits for buy-to-let mortgages. Splitting your investment means you don’t have to pay as much cash upfront.

The cons

  • You never really know someone until you’ve gone into business with them. If the two of you disagree on how to manage the property, the friendship could suffer.
  • If your tenant falls into arrears, as landlords, you’ll have to stump up the cash. However, if your investor buddy can’t pay their share for whatever reason, you’re liable for the shortfall.
  • You might be on the same page as your friend right now, but people’s circumstances change. Further down the line, your friend may decide that they want to sell up when you don’t, or vice versa.

Tips

If you’re still keen to invest with a friend, here’s how to mitigate some of the risks.

Get a good lawyer 

You need a legally binding agreement that states:

  • How much each party is investing
  • The ownership split
  • Responsibilities regarding bills and maintenance
  • What happens if one or both parties want to sell
  • A dispute resolution mechanism should you disagree on an issue

Get a will

In some cases of co-ownership, if one party dies, the property automatically goes to the other person unless otherwise stated in a will.

Don’t feel pressured

If your friend thinks a formal agreement is unnecessary – they may see it as a sign that you don’t trust them – politely, but firmly, pull out of the deal.

Without the right paperwork in place, you risk getting caught up in a protracted and messy dispute later on.

Going ahead based on a wink and a handshake could cost you the friendship and much more if things don’t turn out according to plan.

For more advice on investing in the buy-to-let market, contact us here at Knightsbridge Estate Agents 

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What You Need to Know Before Buying a Run-Down Property in Leicester

In this two-minute read, we give you a quick checklist to make sure your project is as pain free as possible.

Got your eye on a property that needs some major TLC? Whether a rental investment or a new home, there’s lots to consider when buying a run-down property.

Finances

First things first, is the property mortgageable? Or is it so run-down that no one will lend you money? If it’s the latter, you may have to think of other financing options such as a bridging loan (a short-term loan), cash (if you have the money available), or a joint venture (if you have an investment partner).

And while we’re talking money, before exchanging any contracts, you need to budget, budget, and budget again. A property renovation is costly at the best of times but restoring a dilapidated property can feel like a black hole of endless expense. Make sure you set yourself a sensible budget and have a contingency fund in case of unexpected costs.

Survey

Getting a surveyor to inspect a potential property seems obvious, but when buying a run-down property, you’ll need more than a basic condition survey or HomeBuyer report. To be extra safe and to understand exactly what you’re buying, organise a Building Survey. This will examine the structural make-up of the property and make recommendations for repairs and potential costs. Don’t skimp on this stage of the purchase, as a surveyor can uncover issues you weren’t aware of and save you thousands of pounds.

 

Planning permission

If you’ve got plans to extend your doer-upper, be sure to do your research. Some properties are sold with planning permission while some benefit from permitted development. If your purchase has neither, keep in mind that planning is a time-consuming (and expensive) road to travel. This could hold up your renovation dreams, so you need to get the process started as soon as you exchange.

Top tip: Look at neighbouring properties to see what type of extensions have been given permission in the past.

Quotes and professionals

Whether you’re hiring a contractor to manage the renovation or want to project manage yourself, get the right team on board. Meet different builders, ask lots of questions, and make sure you outline exactly what you want done. Heed professional advice, they know what they’re doing. You may also need an architect’s advice and it might be worth speaking to the local planning department for extra information.

 

To find your dream restoration project speak to us at Knightsbridge Estate Agents

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What’s on you’re all-time feelgood movie list?

In this 90 second read, we share 10 of the best feel-good movies to make staying in this winter a little bit more bearable.

At Knightsbridge Estate Agents we love a good film, and we think the ones that have made it to this list are bound to leave you with a spring in your step and a smile on your face.

In no order.

  • T. – Steven Spielberg’s extra-terrestrial is an all-time classic that is warming the hearts of children and adults nearly 40 years after its release.
  • UP – This Pixar piece of perfection features one of the most moving love stories told in minutes. The rest of the film is as uplifting as it is entertaining.
  • CHEF – This road movie features excellent food, music, and a story of overcoming the odds and the importance of families and friends.
  • FORREST GUMP – The world certainly needs a lot more of Forrest’s childlike optimism and simple wisdom right now.
  • LITTLE MISS SUNSHINE – Another road movie and another brilliantly warm story about being proud of being different and loving yourself.
  • CINEMA PARADISO – An Italian masterpiece about film lovers, friendship and finding your life’s purpose.
  • THE SHAWSHANK REDEMPTION – Consistently rated as one of the world’s favourite films the ending is pretty much guaranteed to leave you smiling.
  • PADDINGTON 1 AND 2 – Ok so this would make it 11 films on the list but these movies featuring the loveable bear from Peru are feel-good features at their best.
  • GROUNDHOG DAY – Bill Murray is masterful in this classic that teaches us to find the magic in everyday life.
  • LA LA LAND – This easy-going musical will get you smiling and your feet tapping at the same time.

Others worth mentioning include Planes, Trains and Automobiles, The Goonies, Toy Story and the School of Rock.

What movies would you recommend to help your neighbours in Leicester feel good during this winter?

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Mortgage Fees: Everything You Need to Know

In this three-minute read, we give you the lowdown on mortgage fees.

When it comes to finding the best mortgage deal, there’s one question savvy home buyers should ask themselves.

And it’s not: “Which deal is offering the lowest interest rate?”.

While interest rates are obviously important, mortgage hunters should ask: “Which deal represents the best value overall?”.

That’s because many of the ultra-low interest rate deals available right now come with fees.

For some homebuyers, a zero-fee product with a slightly higher interest rate will represent better value in the long term. (It all depends on the size of your deposit and the amount you wish to borrow.)

So, before you sign on the dotted line, weigh up all your options and seek independent advice.

Here’s a handy guide to the different types of mortgage fees to help you with your research.

 The Big Ones (If you’re not careful, these fees can set you back thousands)

 Arrangement Fee or Product Fee

This fee covers the setting up of the mortgage and usually ranges from £399 to £1,500 – although we’ve seen it hit £1,999.

Most lenders will let you roll this fee into your mortgage, which is handy if you’re cash-strapped after covering the rest of your moving costs.

However, doing this means you pay interest on the fee, increasing the overall amount you pay in the long run.

 Higher Lending Charge (HLC)

In the old days, this was called a Mortgage Indemnity Guarantee. Lenders apply HLCs to high loan to value mortgages (i.e. those where the deposit is small, in comparison to the size of the loan).

The way lenders calculate HLCs can vary, but the crux of the matter is if you’re borrowing a more significant sum, this fee can be thousands.

 Smaller Fees (these can range from £50 up to several hundred quid)

 Booking Fee

You pay this when you complete and submit your mortgage application. It shows the lender that you’re committed to the deal as it’s non-refundable (even if the mortgage doesn’t go ahead).

 Valuation Fee

This covers the checks carried out by your lender to ensure that you’re not paying over the odds for your property.

It’s not a detailed search for structural, safety, or boundary-related issues. You need to instruct your own surveyor to do this.

 CHAPS Fee

Also known by the rather quaint term ‘Telegraphic Transfer Fee’, this covers the cost of your lender sending funds to your solicitor.

 Buildings Insurance Fee

Buildings insurance is a condition of all mortgages, and your lender will encourage you to go with their recommended provider. If you opt to go with a different insurer, expect to pay a small fee.

Don’t let this fee deter you from shopping around as there’s a huge variation in buildings insurance premiums.

 Early Repayment Fee

If you repay the entire balance of your mortgage early, you could incur a fee.

 Exit Fee

Even when you’ve paid your mortgage off, there could be a little surprise waiting in the form of a fee to close the mortgage account.

 

 

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Carbon Monoxide Poisoning: A Shocking Statistic That Leicester Landlords Should Know

In this three-minute read, we examine the dangers posed by carbon monoxide.

We recently read a statistic about private landlords that left us scratching our heads.

A whopping 56% of private renters say they live in a property that doesn’t have a carbon monoxide alarm*.

Can such a high percentage of landlords really be ignoring safety advice and flouting regulations on carbon monoxide alarms?

By law, landlords must have:

  • At least one smoke alarm installed on every storey of their rental property which is used as living accommodation, and
  • a carbon monoxide alarm in any room used as living accommodation where solid fuel is used – after that, the landlord must make sure the alarms are in working order at the start of each new tenancy.

Many experts also recommend having an alarm near a gas appliance (such as a boiler), although this is not a legal requirement.

These rules are there for a good reason – carbon monoxide poisoning can cause severe illness and even death. There’s no excuse for complacency.

 How is it made?

Carbon monoxide is a by-product of burning fossil fuels. When fuels like gas, oil, charcoal, wood, or coal fail to burn properly (a process called incomplete combustion, caused by a lack of oxygen), carbon monoxide is produced.

Exposure to it is hazardous to humans and animals.

 Detecting it

You can’t see, smell or taste it; hence its nickname, the Silent Killer. To keep safe, you need to ensure carbon monoxide alarms and fuel-burning appliances are in good working order.

Good ventilation is crucial, too. Blocked flues and chimneys are problematic, as are poorly fitted flues.

Other warning signs include:

  • Black or brown stain marks around heaters and fireplaces.
  • Pilot lights on gas appliances that extinguish regularly or burn yellow (they should burn blue).
  • Flames that burn yellow or orange.
  • Excessive condensation in a room where there is a device that burns fossil fuels.
  • Excessive soot.

Symptoms

Signs of carbon monoxide exposure include vertigo, tiredness, nausea, headaches, chest pains, and blurred vision. The affected person may slip into a coma and then die. The NHS says 60 people die from carbon monoxide exposure every year.

 Keeping your tenants and property safe

Landlords should:

  • Brush up on the regulations and install carbon monoxide alarms where required.
  • Ensure working fireplaces are serviced and swept by a competent person.
  • Have gas appliances regularly serviced by a qualified engineer.
  • Check any carbon monoxide alarms in the property are working when the tenant moves in (note this in the check-in inventory).
  • Ask tenants to test carbon monoxide alarms regularly.
  • Test carbon monoxide alarms during mid-tenancy inspections.
  • Endeavour to avoid cowboy builders who could bodge boiler and flue installations.

 For more advice about keeping your tenants safe and staying on the right side of the law, contact us here at Knightsbridge Professional Lettings

 

*According to a survey by property software company Plentific.
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News

Oadby Light Switch On Is Back!

😆 We are excited to see this event back for 2021 🎄 Oadby Festive Light Switch On 🤶

Join us in Oadby Town centre for the Annual Light switch on where we will be raising money for Leicester Children’s Holidays by having the big man himself  🤶 in our Grotto.

When: Saturday 20th November 2pm – 7pm (light switch on 6pm)

Where: The Parade, Oadby, LE2 5BB

Over 40 stalls, live performances and much more.

 

 

 

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Are Leicester House Prices Set to Fall this Autumn?

The stamp duty tax holiday is over, furlough finished at the end of September, unemployment is due to rise and inflation is rife … is this the end of the post lockdown Leicester property boom?

Surely, we are heading for house price correction?

Forecasting what will happen in the Leicester property market this Autumn may not be as simple as it first appears.

It’s true the Leicester property market is starting to settle down after an all-time number of property deals were completed in June.

More Leicester people will have moved home in 2021 than in any year since 2007, with an estimated 1.5 million home buyers nationally having bought a property.

Roll the clock back to last Christmas, and the Government’s Office for Budget Responsibility projected that national house prices would drop between 6% and 8%.

By Christmas, the price of the average home in Leicester will be about £258,400 up 3.8% on last Christmas.

Let us not forget there were so many ambiguities at the start of 2021. We were about to start a 5-month lockdown, hospitals were bursting at the seams with patients, the vaccines hadn’t started, 4 in 10 employers had furloughed their staff and we had just had Brexit … things didn’t look good.

Yet, nothing could be further from the truth 10 months later – the Leicester property market has been on fire. But after a heated summer in the Leicester property market, things certainly can’t carry on as they have been since the end of lockdown.

So, where are we with the Leicester property market as it stands? Taking reference from historical data on the website The Advisory (I would certainly recommend you check it out)…

60% of properties on the market today in Leicester are sold subject to contract (stc).

How does this compare to October 2019 and October 2017?

In October 2017, 42% of Leicester properties were sold stc,  whilst in October 2019, 45% of properties were sold stc.

Yet how does that compare to the national picture?

In 2017, 39.72% of the country’s properties for sale were sold stc whilst in 2019, that figure was 38.11%.

Now I love a good league table, so then decided to compare our locality to the rest of the country

So, I chose to look at the LE3 postcode specifically. For information, there are 2,234 postcode districts in the country.

 

The 2021 sold stats put LE3 in at 728th place in the country, 492nd in 2017 and 180th in 2019.

 As we enter the last 3 months of the year, there are not so many uncertainties as there were at the start of 2021. On the good news front, 49 million Brits have had at least one jab (45m two jabs) and the UK will be the world’s fastest growing advanced economy this year according to the IMF.

Conversely, the furlough scheme ended at the end of September and with energy prices going through the roof, a real shortage of homes for sale (as I have discussed a number of times in recent blogs) and rising inflation on the back of a shortage of raw materials and trained staff, forecasting this and what will happen to Leicester house prices might not be as easy as it seems.

Post stamp duty holiday, it is now recognised that the majority of the demand for people moving home is focused by a profound unhappiness and frustration with the homes we live in, revealed during the first lockdown in 2020.

Buyers (and tenants – so take note Leicester buy-to-let landlords) want space … in fact, three types of space … and they will pay handsomely for them!

  • Office space (be that bedroom or study)
  • Outside space (gardens or proximity to green areas)
  • Broadband with ‘outa-space’ download speeds

And whilst there is a shortage of properties coming on to the market, demand and supply economics mean…

Leicester house prices should remain relatively stable going into 2022.

The number of properties coming onto the market in Leicester is slowly improving, yet not enough to diminish house values.

Also, don’t forget Leicester first-time buyers still have stamp duty relief all to themselves again and mortgages are cheap. At the beginning of the 2020 lockdown (spring 2020), mortgage providers removed their higher risk 5% deposit mortgages for fear of a housing market crash. Currently, the vast majority of these low 5% deposit mortgages are back, together with the Governments own 5% deposit mortgages.

 

Yet many Leicester homeowners are concerned about inflation and its effect on their mortgage payments.

Inflation is important because if inflation gets too high, the Bank of England will need to raise interest rates to reduce inflation. Because mortgages payments are based on the bank of England interest rate, higher mortgage payments will affect what people can afford. Normally the higher the mortgage rate, the less likely house prices are to increase (and in fact if interest rates are too high, house prices will fall).

Whilst I can’t give you advice, with the Bank of England base rate at a 300-year historic low of 0.1%, I’m still surprised that nearly 3 in 10 Leicester homeowners with mortgages are not on a fixed rate mortgage. There has never been a better time to get a fixed rate mortgage, as there are deals out there with interest rates as low as 1%. This means even if interest rates do go up in the short term, you will be protected from higher mortgage costs. Anyway, back to inflation.

Inflation did rise quite quickly and steeply in 2008/9 but came back down within a year.

This was because of a shortage of staff and raw materials during the Credit Crunch of 2008/9, the very same issues we’re experiencing at the moment in Q4 2021. The type of inflation (yes, there are types of inflation!) in 2008/9 was called ‘push inflation’. Whilst inflation is not great, ‘push inflation’ could be described the better type of inflation (as long as is it doesn’t go on for too long).

The economic crippling hyper-inflation seen in the 1970s was ‘pull inflation’. The circumstances that create ‘pull inflation’ are not being experienced at the moment in the UK. This is good news because ‘pull inflation’ is bad inflation, which in turn would create massive problems to the UK economy as a whole.

Therefore, whilst inflation will probably rise to 4-5% by Christmas, I don’t believe the Bank of England will raise interest rates substantially as the message we are hearing from them is they see this as a short-term blip.

 

Opportunities for Leicester buy-to-let landlords?

Ultra-low mortgage rates and a booming rental market is encouraging more Leicester buy-to-let landlords to expand their rental portfolios, yet their strategy is changing. Yields are increasing as there is a shortage of rental properties, driving up rents. Also, there are Leicester landlords looking to exit the rental market, often because they want to liquidate their portfolio for retirement. These portfolios don’t make it onto Rightmove and get sold ‘off market’.

Therefore, if you are a serious Leicester buy-to-let landlord and you’re looking to expand your own portfolio, it’s really important to put yourselves on the mailing list of estate agents and also build up great one-to-one relationships with the same agents to ensure that you’re at the front of the queue for these off-market rental portfolios and not at the back.

To conclude, nobody knows the answer to what will happen to the property market in Leicester as we go into 2022. There are many factors that could affect the market in a positive and negative way, yet buying property is always a long-term investment (be it for yourself or to rent), so if you need any advice or opinion on what you should do, drop us a line or pop into the office and we can discuss the options you have over a cup of coffee.

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Leicester Homeowners to be Made Homeless?

The number of properties for sale in Leicester has fallen by 31% since this time two years ago (October 2019). One of the reasons is that many Leicester buyers feel overwhelmed and fearful they will be made homeless if they sell their home and can’t buy another. So, I have decided to look again at the facts and give them to you in greater detail in this article.

My research has found the number of Leicester properties for sale started to decline last autumn (2020).

Nationally, the same story is being written as the average UK estate agency office now has around 16 properties on their books to buy, compared to 43 a couple of years ago.

So why is this an issue?  Many Leicester homeowners are wanting to move home and are worried they will put their current home on the market, it sells quickly and then be unable to find another home to buy – thus they believe they will then be making themselves homeless.

The fact is that most Leicester home buyers need to sell before they can buy their next home, meaning they need to place their property on to the Leicester property market before they can buy their next home.

Yet because of the low supply of properties for sale and the current high demand, there is an imbalance in the Leicester property market. This means some Leicester house sellers are nervous to put a ‘for sale’ board outside their house.

 

So, if Leicester homeowners do sell, will they be made homeless if they can’t find their next ‘forever home’?

The answer is quite simply … NO!

Leicester properties are coming on to the market all the time, yet the buyers have got to be in the game, in it to win it so to speak. If you keep looking at properties, without even having your property on the market, let alone sold (subject to contract), then you will fall into a self-fulfilling prophecy of not being able to buy another home and will always be chasing your tail.

And it’s those magic words of “subject to contract” that are your get out of jail card.

The average time taken from agreeing a sale to it being legally binding (i.e. exchange of contracts) is about 19 weeks.

During those 19 weeks, you are ‘sold subject to contract’, which means you have four or five months to find your new home and the likelihood of not finding your next forever home is very small.

And even if you can’t find anywhere, you will never be homeless as the sale is not legally binding until you exchange contracts, so you can withdraw from the sale up to that point, without penalty.

One final word of advice to all Leicester home movers.

 

Around 6 in 7 Leicester homebuyers could have missed their ‘forever home’ in 2020/21

Let me explain, in a study of various UK estate agents, 84.8% of homebuyers were not on the estate agent’s mailing list before they contacted the agent to view the home according to Denton House Research.

Yes, 6 out of 7 buyers (84.8%) waited until the property came on to the market on one of the portals (e.g. Rightmove, Zoopla or On The Market) before asking to view it. But would it surprise you that depending on the location and type, up to one in five houses don’t actually make it on to the portals for sale.

This means if the homebuyer hadn’t registered themselves on the agents mailing list, they would’ve missed out on their ‘forever home’, because they would not have known the property was for sale until it was too late.

Quite simply, if you are serious about moving home in Leicester, get yourself on the mailing lists of all the agents in Leicester.

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Wages rising by 8.3% pa – how will this affect the Leicester property market?

Wages rising by 8.3% pa – how will this affect the Leicester property market?

As they struggle to meet demand, Argos have had to increase the wages of their HGV drivers from £11.41 an hour to £15 an hour – a rise of 31.2% meaning their pay goes from £27k to £35k. Care home providers are offering signing-on bonuses of many thousands of pounds to entice nursing staff away from their competitors, and new homes contractors say labour costs are growing as the housing boom pushes up demand for bricklayers and joiners. Restaurant chains, coffee shops, blue-collar workers in factories and warehouses are seeing wages rise at an extraordinary rate.

 

The average wage for a worker in Leicester in full-time employment is £481.60 per week (before tax).

We can all argue over the reasons behind it; some suggest the ‘B’ word (ending in ..xit), whilst others put it down to the pandemic and some the demographic changes of UK population.

So, before I look at what it could do to the Leicester property market, let me look at why wages are rising. You will note all the above inflation wage increases are in blue-collar industries.

(Blue-collar workers refers to any worker who engages in physical or manual labour, such as building, hospitality, maintenance etc., whilst white-collar workers are those classed in the professions and service industries).

 What are the reasons for these wage increases?

 

  1. In the past, the demand for inexpensive ‘blue-collar’ labour has been fed by a steady supply of Eastern European workers since 2004. Yet with the ‘B’ word, that has now ended.
  2. Also, even in late July, the furlough scheme has kept 1.9 million Britons from their jobs.
  3. Fewer ‘Generation Z’ (those in their late teens to mid 20’s) who normally would work in the hospitality industry are not working at the same rate they used to, when compared to before the pandemic.
  4. And finally, fewer ‘Baby Boomers’ (those born before 1965) are working since the end of the first lockdown.

 

How could these wage increases affect the Leicester property market?

 White-collar wages, since the turn of the millennium, have risen in real terms yet blue-collar wages have remained stagnant (although they started to pick up slowly just before the pandemic).

So, if all blue-collar workers are now seeing a substantial increase in their real wages since the pandemic what will this mean, especially for the Leicester property market? It would mean the following …

  1. Continued reduction in unemployment
  2. Growth in consumer spending
  3. Rents will continue to rise in the short term
  4. Rise in homeownership in the medium term

Starting with unemployment:

1,850 Leicester people have come off the dole queue in the last 12 months alone, reducing the unemployment rate by 1.2% to the current 7.6% in our local authority area.

 If wages continue to grow for everyone, that means unemployment will continue to reduce.

Secondly, these pay rises will start to burn holes in people pockets. We should assume those people with the extra cash will spend it. In fact, it is a recognised trait in economics that blue-collar workers tend to spend a lot more of any increase in disposable income (when compared to white-collar workers). This would give a boost to the retail, hospitality, leisure and travel industries very quickly.

Leicester rents are already 11.2% higher than 12 months ago,

and if wages continue to grow, then rents will increase even further. This is because rents in the private sector tend to rise in line with wages rather than with property prices.

This is excellent news for Leicester buy-to-let landlords.

Next, if wages for blue-collar workers continue to grow, I believe we will finally see a long-term growth in homeownership again. In 2008, 68% of people owned their own home, yet that had been slowly reducing over the 2010s to 63% in 2018. Yet since 2018, this has increased slightly to 65%.

The Brits who had the biggest problem jumping on to the property ladder were not just the 20 somethings, but also middle-aged blue-collar workers. With blue-collar wages stagnant over the last two decades, and accelerating house prices, it was much tougher for them to save up a deposit for a mortgage.

Yet with the recent Government-backed 5% deposit mortgages and more disposable income (because of the wage rises), some might decide not to spend the extra on going out and holidays and buy their first home instead (because most people want to own the place where they live – if they can afford it, they will buy).

Overall, if this increase in blue-collar wages is across the board, then this could be one of the greatest things to happen to the Leicester property market in a long time.

It is certainly long overdue. Since the millennium, wages at the bottom end of the pay scale (i.e. blue-collar workers) have deteriorated, while the professional white-collar middle classes have done much better. The disparities between both classes/workers are both imbalanced and harmful to the economy and society as a whole.

But what is the real story behind the headlines?

One school of thought is that some fear these wage increases will fuel hyperinflation (and in turn, interest rates will have to rise to counter that).

As I have mentioned many times in my articles on the Leicester property market, the last thing we need is a rise in interest rates (as mortgage rates will increase accordingly). A rise in interest rates will put a massive brake on the Leicester property market – which is not good for anyone.

Also, we have to remember a few things …

there are still 1.9m people on furlough (which stops at the end of September).

Not all of those people will go back to their original jobs, meaning they will need to find a new job, so the pay pressures could just as easily diminish as employment bottlenecks clear.

Also, the 8.3% wage increase is based on a year-on-year figure (i.e. a snapshot of now versus a year ago) and therefore the headline figures have been profoundly distorted by the large numbers of blue-collar workers on furlough in 2020 (i.e. they were on 80% pay). The Office for National Statistics have gone on record saying that, accounting for some of the distortions caused by the pandemic, real wages for blue-collar workers are more likely 3.5% up.

Finally, as with all things, the devil is in the detail. The newspaper headlines reporting the over inflated pay rises this spring are true. However, in truth (of course we all know bad news sells newspapers) these wage rises were focused on professions with specialist skills. For example, whilst wages for HGV lorry drivers have risen by double digits, pay rates for courier drivers have remained stagnant. At the same time, wage growth for white-collar jobs is almost at zero for yet another year.

To conclude, there are interesting times ahead for everyone involved in the Leicester property market. I do not profess to know all the answers, however, I do have my own opinions. Whether you are a Leicester first-time buyer, second-time buyer, homeowner, landlord or tenant and would like to pick my brains on any aspect to do with the Leicester property market, please do not hesitate to drop me a DM, give me a call or send me an email.

 

 

 

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Only 1 in 20 Leicester Properties are Bungalows, Despite an Ageing Population. Why?

Only 1 in 20 Leicester Properties are Bungalows, Despite an Ageing Population. Why?

The bungalow is a building that has represented a more leisurely, gentler way of life since the early 1900’s. Bungalows have been sold as an aspiration for those about to retire, saving them the annoyance of having to climb stairs. With an ageing population, one would think they would be building more bungalows, yet nothing could be further from the truth. In fact, this could be one of the main issues that is holding back many mature homeowners moving home thus creating a bottleneck in the Leicester property market for the younger families who are being held back and unable to move into the larger homes they so need to grow their families.

So, before I answer that question, let me share this fascinating fact about bungalows. The word ‘bungalow’ originated in India, not the UK. The name is derived from the Hindi word ‘baṅglā’ or the Gujarati word ‘baṅglo’, both of which seem to refer to a home occupied by a Bengali person. The colonial English started to use it for themselves in the late 1600s to describe the same sort of basic lodgings that sailors and staff of the invading East India Company used.

Anyway, back to the here and now in Leicester.

There are 8,393 bungalows in Leicester.

When you consider there are 167,921 properties in Leicester, that means only 5.00% of property in Leicester are bungalows.

To give you an idea of the age demographic of Leicester homeowners, there are 43,124 Leicester homeowners aged 65 years old (and over) and 53,310 Leicester homeowners aged between 50 and 64 years of age.

You can see demand for bungalows is only expected to grow.  Yet new homes builders are having to deal with soaring land prices, meaning to get a profit from the site they are under pressure to build more vertically than horizontally as with bungalows (as bungalows take up so much more land).

The last available data is from 2018 and only 1.6% new builds in the UK were bungalows, interesting when it was just over 7% in the middle of the 1990s. As British people are living longer, those existing Leicester bungalow homeowners will be living in them longer, thus creating even more of a bottleneck in the Leicester property market.

So, what is the answer?

Well with building land in Leicester at a shortage, maybe new homes builders should be forced under planning rules to reserve ground floor apartments to be set aside for older people to encourage them to move out of larger houses. I would challenge the long-held point of view that building more bungalows in Leicester is the pre-eminent way to urge growing numbers of mature ‘last-time buyers’ to move out of their under-occupied Leicester homes and free up their large homes (where their children have flown the nest) for younger Leicester families to grow.

With the new Planning Regulations due to be in place in a couple of years, local authorities could require builders to set aside a share of homes for mature residents, as they are already obligated to subsidise local community facilities or low-cost social housing in return for obtaining their planning permission to build in the first place.

Another option would be to convert all those empty shops in our town and city centres up and down the country into residential use. There is no need for planning permission to change offices to residential property and the Government are considering the same for shops (although I have heard of some horror stories of those office to residential developments making rabbit hutches look spacious) – so again, it comes down to the planning laws and making them fit for purpose.

There are no doubt consequences of not designing our housing stock for the 21st Century and beyond for older people.

 

The population of Leicester is set to grow by 82,118 to 514,317 by 2040.

As the UK population gets older in the coming decades, as life expectancy is set to grow from 81 years 2 months to 83 years 3 months by 2040, I fully appreciate the need for more Leicester homes to be built for families, yet one must ask if the planning authorities are focusing too much on new housing for the younger generation when they, in fact, should be encouraging new homes, builders, to develop larger, ground floor two-bedroom homes and decent accessible transport links.

These are my thoughts, what are yours the good people of Leicester?

 

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As the Tokyo Olympics Kick Off, Let’s Support Leicester’s Grassroots Sports Clubs

In this three-minute read, we look at where three GB Olympic stars started their sporting journey.

Eleven thousand elite athletes will converge in Tokyo next week for the 32nd Summer Olympic Games. Each of them will have put in tens of thousands of hours in practice and shed blood, sweat, and tears to get there. But as you marvel at the rippling abs and razor-sharp mental strength of these sporting Titans, pause to consider where their careers started.

Most will trace their success back to a local sporting club that introduced them to the joys of competition and fostered their prodigious talent.

In the UK, there are 151,000 sports clubs. The majority get by on shoestring budgets and the goodwill of volunteers; many are the lifeblood of communities.

In Leicester, we’re lucky to have Aylestone Park Football Club on our doorstep.

So, as we cheer on Team GB, let’s also pay credit to the grassroots clubs nurturing the Olympians of tomorrow.

Here are three Olympic stars who got their start at a local club.

Jade Jones

At the age of eight, Jade attended a Taekwondo taster session at the Flint Pavilion Leisure Centre in her North Wales hometown. She was quickly hooked on the sport and became a star performer at Flint Taekwondo Club.

Jade has gone on to win national and European titles and took gold in London and Rio. Look out for her at Tokyo, where she’s pushing for her third title.

And if you ever visit Flint, you’ll notice that the leisure centre has a new name: the Jade Jones Pavilion.

 

Shirley Robertson

Scottish sailor Shirley Robertson won gold in Sydney and Athens. These victories made her the first woman to win consecutive gold medals in different Olympic sailing events.

Shirley learned to sail in a homemade dinghy at the Loch Ard Sailing Club, located in the Loch Lomond and Trossachs National Park. (Surely, one of the most picturesque sailing venues in the UK.) After several years away from competition, Shirley recently hinted at a return. She’s eyeing up Paris 2024.

 

Sir Bradley Wiggins

Sir Bradley was 12 when he joined the Archer Road Club – so named because its original members met above a cycle shop in Archer Road, Westbourne Grove, London. Heavy traffic in West London later saw the club move its road racing activities to Hillingdon Cycle Circuit.During his career, Sir Bradley won five gold, one silver and two bronze Olympic medals.

 

 

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£478,662 – ‘Wood’ You Pay That For a Leicester Semi-Detached House?

The value of an average Leicester semi-detached house has increased in value by £13,976 in the last 12 months, an increase in value of 6.19%.

Yet the costs of building a Leicester home have shot up even more in the last 12 months, meaning the price of Leicester new homes and any building works you do to your Leicester home in the coming months and years could be a lot higher.

The British house building profession is experiencing a building materials supply problem. Everything from cement to bricks, timber and roof tiles, plastic guttering, copper wire and pipe to insulation, even kitchen sinks have become scarce – and when people can find them, they are costly.

For example, looking at the timber industry, three-quarters of the UK’s building timber comes from abroad, so lockdowns around Europe put a restraint on the timber processing industries of Sweden, Lithuania and Latvia throughout 2020. In addition, building material supply chains were interrupted due to the application lockdowns imposed by their Governments, resulting in many sawmills in those countries restricting shift work to comply with their country’s social distancing rules. Some mills even stopped all work for eight weeks last year, meaning they were incapable of cutting, milling or treating timber, causing their existing stocks of building wood to run dry.

Yet, whilst we were all in lockdown, everyone started doing DIY projects, so the public demand for building timber in the UK remained high, giving little opportunity for UK sawmills (let alone North-eastern Europe) to catch up and restock to the levels previously held before the pandemic.

Building timber costs 112% more than a year ago, steel RSJ’s are a lot more expensive because iron ore has gone up 120.1% whilst aluminium is up 56.8%, and copper is up 59.7%.

 All the blame cannot be laid at the feet of the virus and lockdown. The ‘B’ word caused issues with supply at the start of the year. Building materials are a worldwide supply chain issue; this spring’s Suez boat crisis, when many boats were diverted around Africa (as the length of time the blockage was going to last was unknown), exacerbated the problem. All this has combined to make the cost of sending a 40ft container from China to Tilbury Docks £7,576 today, compared to £1,195 just before the crisis. Also, supplies of sand and cement are particularly low with massive demand from the large £98bn High Speed (HS2) rail project. All this combined is affecting many building projects, big and small, across the UK.

If an average Leicester semi-detached house had risen by the price of building timber in the last 12 months, today it would be worth £478,662, not the current £239,760.

RSJ (steel joists) take twenty weeks to arrive, compared with the typical five weeks, whilst plasterboard is being rationed with weeks of delays for the ‘good stuff’ and MDF wood, usually takes seven days to arrive; now it takes over a month. Roof battens need to be ordered a month in advance, whilst pre-lockdown they were commonly held in stock by every building merchant.

Demand for building materials has increased so quickly because many British homeowners are driving the explosion. Those people in safe jobs with little opportunity to spend money on foreign holidays and fancy restaurants decided to invest in their property and gardens. According to the Bank of England, this craving for home improvement has particularly exploded since the mature generation have started to be double jabbed (their savings accounts having increased by £180bn during the pandemic).

As I have explained in previous articles, these increases in the price of raw materials will fuel inflation, possibly affecting interest rates upward. An increase in interest rates will make a material difference to the value of Leicester property. To what extent? Please read my previous articles on the Leicester property market.

Please do share your stories of issues with builders and building materials over the last 15 months in the comments. I appreciate any stories you can provide to help others in Leicester.