The Bournemouth Property Market, The Beatles, Sweden and 50 year mortgages

50 years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. […]

How far do Bournemouth people go to move to a new house?” This was an intriguing question asked by one of my clients the other week. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Bournemouth Property Market!

 For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!  […]

Bournemouth rents rise by 19.6% since 2005

The Bournemouth Property Market is a very interesting animal and has been particularly fascinating over the last 12 years when we consider what has happened to Bournemouth rents and house prices.

There’s currently much talk of what will happen to the rental property market following Brexit. To judge that, I believe we must look what happened in the 2008/9 credit crunch (and what has happened since) to judge rationale and methodically, the possible ramifications for long-term investors in the Bournemouth property market. You see, an important, yet overlooked measure is the performance of rental income vs house prices (i.e. the resultant yields over time). In Bournemouth (as for the rest of Great Britain), notwithstanding a slight drop in 2008 and 2009, property rentals have been gradually increasing.

The income from rentals has been progressively increasing over the last 12 years. Today, they are 19.6% higher than they were at the beginning of 2005. In fact, over the last five years, the average growth has been 1.7% per annum. From a landlord’s point of view, increase in average rental income is not to be sneered at. However, the observant readers will be noting that we are ignoring an important factor – our friend inflation.

Turn the clock back to 2005, and we have a property being rented for say £900 a month and that is still being rented at £900 a month today, in Spring of 2017. While the landlord is not getting any less income, this £900 is no longer worth as much. Let me explain, in 2005, £900 may have bought a two-week 4* holiday in Italy. Yet, holidays have increased in line with inflation (which has been 38.5% since 2005), so our holiday would cost today £1,246 (£900 + 38.5% inflation = £1,246). Therefore, the landlord could no longer afford the same holiday, even though having the same amount in pound notes from their rental property.

This means when we compare rents in Bournemouth to inflation since 2005, Bournemouth landlords are worse off today, when they receive their monthly rental income, than they were in 2005 by 18.9% in real terms (rents increased by 19.6% since 2005, less the 38.5% inflation since 2005 – net affect 18.9% drop)

However, rental income is not the only way to generate money from property as property values can increase. Although in the short term, cash flows are diminishing, many Bournemouth landlords may be content to accept that for a colossal increase in capital value.  […]

2017 has started with some positive interest in the Bournemouth property market.  Taking a snap shot of the Bournemouth property market for the first quarter of 2017, the picture […]

You may have heard people talk about property yield but what does this mean?

It is a way of measuring the rental potential of a property and is the amount […]

Letting Agent Fee Ban: How it will affect the landlord and the tenant?

At Amber Properties, one of the big issues that landlords are talking about at the moment is […]

When letting your property, you naturally want your property to look its best, but how far should you go in terms of presentation?

Firstly, aim to understand how your property […]

How could my property stay void for 60 days, that is what I cannot understand?  Three of the biggest lettings agents in the Bournemouth and Poole area were unable […]

It’s all about the service when it comes to buying and selling your home, and that applies just as much to the burgeoning rental market. Getting that service right […]

2016 saw a number of Government and economy led changes which affect the ultimate financial position for existing and would-be landlords.

So, what can we expect in 2017? The implications […]