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The average asking price of property in Docklands (or E14 to be precise) dropped by 2.6% or £17,777 compared to a year ago, taking the current average asking price to £659,083 compared with £676,860 this time last year.
The overall drop in asking prices is being put down to sellers being more realistic with their pricing and looking to benefit from the impending mortgage interest rate rises later in 2018. This is great news for first, second and third time buyers in Docklands starting their property hunting in the usually active spring market this year facing the opportunity of paying less for the property of their dreams. Even better news is that whilst first time buyers also have to pay less for their property, they also have the bonus of the Chancellor stopping Stamp Duty being paid by first time buyers!
Looking at the different sectors of the Docklands property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts…
  
 

  
Interestingly, when one looks at the percentages, the most movement in average asking price pressure is in the detached property type sector with the semi-detached being the only sector that saw a rise.
Now, I must stress this overall drop in the asking prices of Docklands property doesn’t necessarily mean the value of Docklands property is going down by the same amount.
Only time will tell if the current levels of Docklands asking prices is a correction of optimistic house sellers after a couple of months of enthusiastic asking price rises in the lead up to Christmas, or is it an initial sign that property values are slipping. To judge what is really happening to the Docklands property market, I believe these asking prices must be viewed in conjunction with both the values achieved and the length of time it takes to sell the property.
Also, these figures are averages, so it might also mean less expensive types of Docklands terraced or Docklands apartments, are on the market now, this dragging the average down, compared to a year ago.
One thought I would like to share with the Docklands homeowners and landlords wanting to sell their property, is the fact they need to be aware of the competition of other people selling their homes. One factor that could be contributing to a subdued demand for local property is the progressively strained buyer mortgage affordability (i.e. banks telling people they can only afford so much on a mortgage), meaning more and more buyers are hitting their maximum on the amount they are able to borrow on a mortgage sooner than they thought.
So, what does this all mean, especially for buy to let landlords in Docklands? During these months of flux, there could be some property bargains to be had. Lower asking prices mean you are buying in better yields and potential capital growth at the same time. Many Docklands landlords pick the phone up or email me with Rightmove links, asking my opinion on the BTL potential of property. I don’t charge for that service, so if you don’t want to miss out on such opinion, follow what they do and make contact ... I don’t bite!


The rents paid by Docklands tenants are now standing at £2,066 per calendar month (PCM), a rise of 2.22% year on year and 0.4% higher month on month.
However, this attention-grabbing monthly rent figure masks stark differences in the various different parts of the Docklands rental market.  Demand in Docklands for high quality family homes with two or three bedrooms in good catchment areas for schools remains really robust due to tenants wanting access to the schools.  Other influencing factors that make certain areas popular are the proximity to transport links. However, I have noticed a drop in demand (and thus rents achieved) for property where the landlord hasn’t kept the property fresh; in terms of decoration, carpets, replacement windows and poor heating.
So, what does all this mean for Docklands landlords and tenants?
With the new tax rules for landlords, many believed that the number of rental properties would narrow throughout 2017, as landlords sold up their Buy to let properties and looked to invest their money elsewhere, but evidently this hasn’t happened (yet).  Feasibly Docklands landlords are re-mortgaging their Docklands buy to let properties instead, as they still believe it’s a safer investment than looking, say at the stock market?

However, demand remained strong in 2017 for Docklands private rental properties, meaning the rents being achieved were at a decent level for landlords. Keeping your outgoings low is also an important consideration and so I looked on a well-known financial services comparison site this morning and found a High Street bank offering a 5-year fixed rate for Buy to let landlords with a 40% deposit/equity for 2.17% … I can remember (as I am sure many of my readers of this blog can) when mortgage rates were at 15% - this is cheap money!

Looking at property values in Docklands, over the last 12 months and specifically at the lower of the market where buy to let landlords tend to buy their rental properties.  Flats/apartments have risen in value by 3.75% whilst terraced properties have risen by 3.06%.
Some Docklands landlords have seen the yields they are achieving remain squeezed.
However, most landlords can start to feel assured that as capital growth in Docklands remains at a more realistic figure (good for long term stability in the property market) and long-term rents are on the rise, the overall corresponding annual return on investment (Annual ROI being annual capital + annual yield) has stabilised in all areas and is now starting to grow.
With additional people seeing renting as a long-term option, even with the challenges of the new tax regime, Docklands landlords, with the support of a good advice and opinion, should continue to see renting as a good investment vehicle.

Beast from the East, Russia, Facebook, Brexit, Trump, House prices up, House prices down ... the Press is full of column inches on Brit’s favourite subjects of politics, scandal, weather and not forgetting (and I appreciate the irony of this!)the property market. As an agent belonging a national group of letting and estate agents, talking to my fellow property professionals from around the UK, the one thing that is immediately apparent is the UK does not have one property market. It is a hodgepodge patchwork (almost like a fly’s eye) of lots of small property markets all performing in different ways.  
… And that made me think … is there just one Docklands Property Market or many?
I like to keep an eye on the property market in Docklands on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Docklands, be that a buy-to-let property for a Docklands landlord or an owner occupier house for a home owner.  So, I thought, how could I scientifically split the Docklands housing market into segments, so I could see which part of the market was performing the best and the worst.
I decided the best way was to split the Docklands property market into four equal size price bands (into terms of households for sale). Each price band would have around 25% of the property in Docklands, from the lowest in value (the Lowest Quartile or 25%) all the way through to the highest 25% in terms of value, the Upper Quartile.  Looking at the market, I have calculated that these are the price bands in Docklands are as follows:
·         Lowest Quartile (lowest 25% in terms of value) … Up to £425,000
·         Lower/Middle Quartile (25% to 50% Quartile in terms of value)...  £425,000 to £550,000
·         Middle/Upper Quartile (50% to 75% Quartile in terms of value) ... £550,000 to £700,000
·         Upper Quartile (highest 25% in terms of value) ... £700,000 Upwards
So, having split the Docklands Property Market approximately into four equal sizes, the results in terms what price band has sold (subject to contract or stc) the most is quite enlightening -
Docklands 
Available
Sold STC
% Sold
Up to £425,000
1129
423
27.3%
£425,000 to £550,000
1246
290
18.9%
£550,000 to £700,000
1066
172
13.9%
£700,000 Upwards
1080
133
11.0%
The best performing price range in Docklands is the lower market. As I would expect, the upper quartile (the top 25%) is finding things toughest. Interestingly for Docklands landlords, the lower end of the middle market isn’t selling as well as other sectors, so maybe there could be some bargains out there for buy to let investment? Even though the number of first time buyers did increase in 2017, it was from a low base and the vast majority of 20 something’s cannot buy, so need a roof over their head (hence the need to rent somewhere).
It is a fact that British (and Docklands’s) housing markets have ridden the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008. No matter what happens to us Brexit or anything else ... unless the Government starts to build hundreds of thousands extra houses each year, demand will always outstrip supply … so maybe a time for Docklands landlord investors to bag a bargain?

 
Want to know where those Docklands buy to let bargains are?  Follow my Docklands Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Docklands, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts ... would you?



The Millennials were born between the mid 1980’s and late 1990’s thus making them between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters who grew up with the newest tech and computers and who are huge aficionados of music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as Generation Rent, many Millennials have discovered that renting is a good choice for their shelter and accommodation needs without the hassle that comes from buying a home. Nonetheless, that is not the only reason they don’t buy property. When they should be concentrating on their profession, putting down roots and starting a family, Millennials are still going through the pressure and strain of student loan liabilities whilst, at the same time, finding it tough to pay rent.

The hot topic at the moment is the cost of renting, as both political parties have seen mileage in wooing these Millennial Generation Renters. The average rent in Docklands is currently £2,032 per month making this a big-ticket item on the monthly budget. I was inquisitive to find out exactly how much Docklands Millennials will spend on rent by the time they reach their mid 30’s. The average age people leave home in the UK is 22; so looking at a Docklands 22-year-old (or Millennial) who left home in 2005 then between 2005 and today that Docklands Millennial will have shelled out £273,372 in rent.

It’s no wonder local Millennials can’t afford to buy a Docklands home given their tremendous debt. This means younger Docklands Millennials will probably carry on renting for the foreseeable future, simply because the prospect of buying a home is not yet achievable.. that is until you look more deeply at the numbers…



Looking at the chart above, the average rent of a Docklands property in 2005 was £1,496 per month (pm) … if it had risen by inflation, today, that would be £2,107 pm. As I have already mentioned in the article, today it only stands at £2,032 per month. Looking over the last 12 years, adding up all the differences between what the average actual rent was compared to what it should have been if rent had gone up by inflation, the average Docklands Millennial tenant would have paid £282,959.


This means that an average 35-year-old Docklands Millennial tenant, who has been renting since 2005, is better off by £9,587 when comparing the actual rent paid compared to what it would have been if it had risen by inflation. In a nutshell, tenants have done well due to the sub-inflation growth in rents.

In fact, if you recall I mentioned in an article a few weeks ago, the older Docklands Millennials are starting to use those savings and are gradually shifting towards home ownership. They are finally catching up with the British homeownership dream as Bank of Mum and Dad help with the deposit. Also, the scrapping of Stamp Duty from the Government starts to kick in together with the realisation that if the 5% mortgage deposit can be scrapped together (yes, 95% first time buyer mortgages have been available since 2009), it is still a lot cheaper to buy than rent, meaning this will unquestionably drive demand for Docklands homes for sale – good news for Docklands homeowners.

… and what does this mean for Docklands landlords?

Well the vast majority of younger Millennials are still renters and I foresee this to be the case for at least the next ten to fifteen years. Landlords will need to keep improving their properties to ensure they get the best tenants and they will see a much higher rent achieved. Millennials will pay top dollar for a top dollar property. It is important to do things correctly as making money won’t be as easy as it has been over the last twenty years. With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … because as I promised a few weeks ago, the first rule of Buy To Let Investment ….. “You are not going to live in the property yourself”



As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Docklands and the surrounding area to keep up with demand for homes to live in (be that tenants or homebuyers), it’s good to know more Docklands home sellers are putting their properties on to the market than a year ago.
At the start of 2007 there were 1,413 properties for sale in Docklands but by May 2008, when the credit crunch was really beginning to bite, that number had risen to 3,095 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.
Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) … prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Docklands property between the end of 2007 and Spring 2009.
However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Docklands property prices have remained robust.  A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties. Nevertheless, if you had asked me a couple of years ago, I would have said we were beginning to see there was in fact NOT enough properties coming on to the market for sale … meaning in certain sectors of the Docklands property market, house prices were overheating because of this lack of supply.
So, it is pleasing to note, looking at the recent numbers …
There are 20% more properties for sale in Docklands today than a year ago
There were 1,911 properties for sale 12 months ago, and today that stands at 2,298. Definitely a step in the right direction to a more stable property market.
Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Docklands say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Docklands house sellers and potential house buyers, I do foresee the Docklands Property Market will show steady yet sustained improvement during the first half of 2018.
What does this mean for Docklands landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true that demand amongst FTB’s is increasing, albeit from a low base. Even with the new landlord tax rules, buy to let in Docklands still looks a good investment, providing Docklands landlords with a good income at a time of low interest rates and a roller coaster stock market.
If you are thinking of investing in bricks and mortar in Docklands, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … and don’t forget the first rule of Buy To Let Investment …..

I will tell you that 1st rule in a couple of weeks!
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