The average asking price of property in Leighton Buzzard increased by 9.3% or £29,396 compared to a year ago, with particularly good demand from landlords and home-movers in the first few months of the year. This takes the current average asking price to £345,767, compared with £316,371 this time last year.
The rise in asking prices is being aggravated by buyers jumping into action looking to benefit from potential stamp duty savings (especially first-time buyers) or beat impending mortgage interest rate rises later in 2018. Of the numerous Leighton Buzzard buyers starting their property hunting in the usually active spring market this year, many faced paying even more than ever for the property of their dreams, although as I mentioned a few weeks ago, there are more properties for sale in Leighton Buzzard compared to 12 months ago.
Looking at the different sectors of the Leighton Buzzard 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 upward average asking price pressure is in the detached property type sectors.
Now, I must stress this growth in the asking prices of Leighton Buzzard property doesn’t mean the value of Leighton Buzzard property is going up by the same amount ... nothing could be further from the truth. Only time will tell if the current levels of Leighton Buzzard asking prices is a catch-up abnormality after a couple of months of restrained asking price rises in the first few months of 2018, or is it an initial sign that we are in for a better 2018 Leighton Buzzard Property market than all of us were expecting at the start of the year?
I believe these asking prices must be viewed with a pinch of salt, as it will be fascinating to see whether Leighton Buzzard properties actually sell at these higher asking prices. Just because house sellers (be they owner-occupiers or landlords liquidating their assets) are asking for more money it doesn’t mean buyers will be enthusiastic to part with their hard earned cash. Like my Mum and Dad used to say to me all those years ago, “You can ask ... but you might not get”.
Also, Leighton Buzzard homeowners and landlords wanting to sell their property need to be aware of progressively strained buyer mortgage affordability and the more those sellers increase asking prices, the more buyers will hit their maximum on the amount they are able borrow on a mortgage.
However, those Leighton Buzzard buyers who need a mortgage (be they owner-occupier or landlord), will paradoxically benefit from lower mortgage payments before interest rates rise … maybe another reason for the uplift in the number first time buyers and landlords buying? Only time will tell!
The rents paid by Leighton Buzzard tenants are now standing at £761 per calendar month (PCM), a rise of 1.55% year on year and 0.15% lower month on month.
However, this attention-grabbing monthly rent figure masks stark differences in the various different parts of the Leighton Buzzard rental market. Demand in Leighton Buzzard 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 Leighton Buzzard 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 Leighton Buzzard landlords are re-mortgaging their Leighton Buzzard 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 Leighton Buzzard 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 Leighton Buzzard, over the last 12 months and specifically at the lower end of the market where buy to let landlords tend to buy their rental properties. Flats/apartments have risen in value by 3.54% whilst terraced properties have risen by 4.26%.
Some Leighton Buzzard landlords have seen the yields they are achieving remain squeezed.
However, most landlords can start to feel assured that as capital growth in Leighton Buzzard 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, Leighton Buzzard landlords, with the support of a good advice and opinion, should continue to see renting as a good investment vehicle.
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 Leighton Buzzard is currently £830 per month making this a big-ticket item on the monthly budget. I was inquisitive to find out exactly how much Leighton Buzzard 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 Leighton Buzzard 22-year-old (or Millennial) who left home in 2005 then between 2005 and today that Leighton Buzzard Millennial will have shelled out £117,453 in rent.
It’s no wonder local Millennials can’t afford to buy a Leighton Buzzard home given their tremendous debt. This means younger Leighton Buzzard 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 Leighton Buzzard property in 2005 was £688 per month (pm) … if it had risen by inflation, today, that would be £969 pm. As I have already mentioned in the article, today it only stands at £830 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 Leighton Buzzard Millennial tenant would have paid £130,131.
This means that an average 35-year-old Leighton Buzzard Millennial tenant, who has been renting since 2005, is better off by £12,678 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 Leighton Buzzard 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 Leighton Buzzard homes for sale – good news for Leighton Buzzard homeowners.
… and what does this mean for Leighton Buzzard 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”
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 Leighton Buzzard Property Market or many?
I like to keep an eye on the property market in Leighton Buzzard on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Leighton Buzzard, be that a buy-to-let property for a Leighton Buzzard landlord or an owner occupier house for a home owner. So, I thought, how could I scientifically split the Leighton Buzzard 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 Leighton Buzzard 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 Leighton Buzzard, 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 Leighton Buzzard are as follows:
Surprisingly, the best performing price range in Leighton Buzzard is the upper end of the middle market. As I would expect, the upper quartile (the top 25%) is finding things toughest. Interestingly for Leighton Buzzard landlords, the lower market isn’t selling quite 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 Leighton Buzzard’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 Leighton Buzzard landlord investors to bag a bargain?
Want to know where those Leighton Buzzard buy to let bargains are? Follow my Leighton Buzzard Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Leighton Buzzard, 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?
As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Leighton Buzzard 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 Leighton Buzzard home sellers are putting their properties on to the market than a year ago.
At the start of 2007 there were 441 properties for sale in Leighton Buzzard but by May 2008, when the credit crunch was really beginning to bite, that number had risen to 790 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 Leighton Buzzard 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 Leighton Buzzard 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 Leighton Buzzard 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 34% more properties for sale in Leighton Buzzard today than a year ago
There were 213 properties for sale 12 months ago, and today that stands at 285. 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 Leighton Buzzard 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 Leighton Buzzard house sellers and potential house buyers, I do foresee the Leighton Buzzard Property Market will show steady yet sustained improvement during the first half of 2018.
What does this mean for Leighton Buzzard 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 Leighton Buzzard still looks a good investment, providing Leighton Buzzard 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 Leighton Buzzard, 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!
The value of all the homes in Leighton Buzzard has risen by more than 256% in the past two decades, to £4.647bn, meaning its worth more than the stock listed company Melrose Industries, which is worth £4.379bn.
Those Leighton Buzzard homeowners and Buy-to-Let landlords who bought their homes twenty or more years ago have come out on top, adding thousands and thousands of pounds to the value of their own Leighton Buzzard homes as the younger generation in Leighton Buzzard continue to be priced out of the market. This is even more remarkable because, in those twenty years, we had the years of 2008 and 2009 following the global financial crisis, where we saw a short term drop in Leighton Buzzard house prices of between 15% and 20% (depending on the type of property). And although there have been a number of consecutive years of growth in property values recently in Leighton Buzzard it hasn’t been anywhere near the levels seen in the early 2000’s.
Twenty years ago, the total value of Leighton Buzzard property was worth £1.302bn. Over those twenty years, total property values have increased by £3.345bn, meaning today, the total value of all the properties in Leighton Buzzard is worth £4.647bn. Even more remarkable, when you consider the FTSE100 has only risen by 40.84% in the same time frame. Also, when I compared it with inflation, i.e. the UK Retail Price Index, inflation had risen by 72.2% during the same twenty years.
So, what does this all mean for Leighton Buzzard? Well as we enter the unchartered waters of 2018 and beyond, even though property values are already declining in certain parts of the previously over cooked central London property market, the outlook in Leighton Buzzard remains relatively good as over the last five years, the local property market has been a lot more sensible than central London’s.
Leighton Buzzard house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with persistent immigration and population growth. Secondly, with 0.25% interest rates, borrowing has never been so cheap and finally, the simple lack of new house building in Leighton Buzzard. Not even keeping up with current demand, let alone eating into years and years of under investment mean only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Leighton Buzzard has and always will, out ride out the storm.
In the coming weeks, I will look in greater detail at my thoughts for the 2018 Leighton Buzzard Property Market.
Buying and selling a home in Leighton Buzzard or Dunstable isn’t the easiest or cheapest thing you will ever do. Estate Agent fees, Solicitors fees, Survey fees, Mortgage fees, Removal Van … the costs just mount up throughout every step of the move. Last week, a Leighton Buzzard landlord asked me whether the Council Tax Band made a difference to a property’s appeal, be it tenanted or to owner occupiers, when it comes to being sold on the open market and whether extensions or improvements made a difference to the tax banding?
Well, like I said, the first point you should always be aware of is what Council Tax Band your new house or apartment will fall under. Being aware of this before you buy/move will help when planning month by month for life in your home (or investment). But what exactly are Council Tax Bands, and how do they affect landlords/tenants/homebuyers?
How much Council Tax you pay depends on two variables. The first is which Council Tax Band your property is in. A property is placed into a specific band depending upon what the value of the property was in April 1991 – the date when the tax band system was applied. In a nutshell, what your property is worth today has no relevance whatsoever to your banding.
Council Tax Bands have a letter of the alphabet and range from bands A-H.
The Council Tax Band values are:
Band A – up to £40,000
Band B – £40,001 to £52,000
Band C – £52,001 to £68,000
Band D – £68,001 to £88,000
Band E – £88,001 to £120,000
Band F – £120,001 to £160,000
Band G – £160,001 to £320,000
Band H – more than £320,000
So, for example, if a property sold for £110,000 in April 1991 but is now worth £350,000 it will remain in Band E – NOT Band H), as this was the value when the bands were set in 1991. For new homes, the same thing applies: they are valued based on the 1991 market value. This safeguards that all homes and all buyers are treated equally and consistently. The second factor that determines how much Council Tax you pay is what each individual local authority decides each band will pay in Council Tax. (So for example, a householder/tenant in Leeds in a Band E property will pay a different amount in Council Tax each year to someone in Swindon or North London in Band E).
Interestingly, the average current level of Council tax paid by Leighton Buzzard or Dunstable people stands at £1,547 per annum, up from £472 in 1993 (although if it had risen by inflation in those 25 years .. today that should only be £766) … meaning Council Tax has outstripped inflation by 72.34%. So the only way you can change the amount you pay in Council Tax is your banding i.e. you physically move to a higher or lower band.
Contrary to what most people think, extensions and improvements do not change the Council Tax Band and existing householders/tenants only have to pay the same Council Tax as they would have without any extensions and improvements. However, the Valuation Office (The Government’s Property Valuers) do reserve the right to re-value the extended property if the property gets sold. If you are a potential buyer, you should be aware of this review as it could change the amount of Council Tax you pay after the purchase. If a higher band is necessary, the new band will be based on what the extended property would have been expected to sell for in 1991. However, this does not necessarily mean that the banding will jump one band, as this is contingent on the extent of the changes and whether the property falls towards the top or bottom of its existing band. More often than not – it isn’t an issue and the banding stays the same.
In terms of which band the property is in, this can be challenged. In my experience in the Leighton Buzzard & Dunstable property market the only issue is one where there is an anomaly with the banding, when one property is in a different band to all the others in the street. This is much rarer than it used to be, as most such anomalies have been found and rectified. Anyone can check the banding of any property by going to Google and typing in “Check My Council Tax Banding”. I do need to mention a thoughtful warning though. Challenging your Council Tax Band is not something to do on a whim for one simple fact - you cannot request your band to be lowered, only 'reassessed', which means your band could be moved up as well as down. I have even heard of neighbouring properties band’s being increased by someone appealing, although this is the exception. I myself realised a few years ago that of the 58 houses on my road mine was one of only 3 in band E and all the others were Band D. Having realised if reassessed back to band D I could claim a refund stretching back 17 years I approached the Valuation Office. They confirmed that it was more likely all the band D house could be reassess as band E making me very unpopular on my road so my claim stopped there.
If you have any questions don’t hesitate to drop me a line.
Daniel Bourke (Owner Belvoir Dunstable & Leighton Buzzard)
The degree to which young Dunstable & Leighton Buzzard people are locked out of the Dunstable & Leighton Buzzard housing market has been revealed in new statistics.
A Leighton Buzzard landlord was asking me the other week to what effect homeownership rates in Leighton Buzzard in the early to middle aged adult age range had affected the demand for rental property in Leighton Buzzard since the Millennium. I knew anecdotally that it affected both the Dunstable & Leighton Buzzard rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.
As anyone in Leighton Buzzard, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.
In the year 2000, 60.5% of Leighton Buzzard 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 32.3% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Leighton Buzzard person (therefore born in 1962) would have an 89.3% chance of owning his or her own home and a 38 year today in Leighton Buzzard (born in 1980) would only have a 69.6% chance of owning their own home.
Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Dunstable & Leighton Buzzard has reduced from 82.64% to 59.75%
If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Leighton Buzzard. The fact is the figures in Leighton Buzzard show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.
The landlord suggested this deterioration in homeownership in Leighton Buzzard across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.
I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above. Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.
So, what does this mean for the rental market in Leighton Buzzard?
Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Leighton Buzzard landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Dunstable & Leighton Buzzard rental market .. drop me line or pop in next time you are passing my office.
Daniel Bourke (Owner Belvoir Dunstable & Leighton Buzzard)
A little bit of good news this week on the Leighton Buzzard Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. The data shows there were 269 first time buyers in Leighton Buzzard, the largest number since 2006.
I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% ... even 15%. Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49% ... they even did a 3 year fixed rate 100% mortgage for 2.89%!
Interestingly, looking at the other end of the market, the buy-to-let investment in Leighton Buzzard was subdued, with only 55 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Leighton Buzzard – it’s just that the data isn’t available at such a granular level.
In terms of the level of mortgage debt in Leighton Buzzard, looking specifically at the LU7 postcode, you can see there has been a steady rise in borrowing over the last few years.
This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off with mature mortgaged homeowners in their 50’s and 60’s finally paying off their mortgage.
So, what does all this mean for the Leighton Buzzard Property Market? Well, the stats paint a picture, but they don’t inform us of the whole story. The upper end of the Leighton Buzzard property market has been weighed down by the indecision around the Brexit negotiations and rise in stamp duty in 2014, when made it considerably more expensive to buy a home costing more than £1m. The middle part of the Leighton Buzzard property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Leighton Buzzard property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.
If you are in the market and selling now and want to ensure you get your Leighton Buzzard property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Leighton Buzzard home isn’t worth as much as you thought, but Leighton Buzzard buyers are now unbelievably discerning.
So, if you are thinking of selling your Leighton Buzzard property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Leighton Buzzard agents, will freely give that advice to you at no cost or commitment to you.
Daniel Bourke (Owner Belvoir Dunstable & Leighton Buzzard)
As our families grow bigger the need for more space, be that bedrooms or reception rooms, has grown with it. Also, as our older generation lives longer and nursing home bills continue to rise quicker than a rocket on the 5th of November (the average nursing home bill in the area being £669 per week) many families are bringing two households into one larger one.
So, should you move somewhere larger, or extend your Dunstable or Leighton Buzzard property to make it large enough for you and your family? In some circumstances the choice has been made for you. If you live in an apartment with no garden, there isn’t much of an opportunity of making it larger. But if you have a house with a garden or an attic with sufficient headroom, extending your home becomes a real prospect.
Even if it makes more sense to extend or move, the choice hangs on a number of different dynamics – your future plans, money (both saved and access to finance), in what way you are emotionally attached to your home, the particular area of Dunstable or Leighton Buzzard you live in and finally, the type/style of house you prefer.
Interestingly, the average British home is 968 sq.ft, which as you can see from the table, is in the middle of developed nations when it comes to the size of a property. Of the 1.11m homes sold in 2016 in England and Wales, the average floor area of the houses was 1,119 sq.ft – that’s about an eighth the size of an Olympic sized swimming pool. Apartments averaged 530 sq.ft that’s just over ten times bigger than an average garden shed. Looking at apartments and houses together, the average size of properties sold in England and Wales 968 sq.ft – are slightly smaller than the European average, and much smaller than households in the US.
So back to the question in hand.. extending does mean you will have a lot of inconvenience whilst the work is being carried out. The location of your Dunstable or Leighton Buzzard property, the quality of construction, what type of room(s) you want to add, your plot, neighbouring building lines, planning regulations and the overall demand for your type of Dunstable and Leighton Buzzard home, will make a vast difference to the financial repercussions of extending versus moving.
A medium-sized 270 sq.ft single storey extension (say around 17ft x 16ft) will add on average £73,125 to the value of a property in Dunstable or Leighton Buzzard
It’s important to note the end result of the extension needs to be a sensible and realistic home. A two bed semi-detached house extended to a four bedrooms with no lawn or driveway, or a home with outsized reception rooms downstairs and miniscule bedrooms upstairs, could be problematic if and when you come to sell your home in the future. Irrespective of whether your strategy is to live in your extended home for a long time, you will want to side-step outlaying a lot of money on costly building work that will make it tougher to sell.
In terms of what it would cost to build an extension, you can expect to pay on average between £140 to £200 per sq.ft, depending whether the extension is a single or double storey extension and other factors including finish and type of extension (note – I have seen it cost a lot more than these figures – so please speak with a builder) … So taking a mid line figure, that same 270 sq.ft extension on your Leighton Buzzard home would cost on average £55,080.
However, moving means there are substantial costs incurred - Estate Agency fees, Removal Van, Survey Fees, Legal fees and Stamp Duty on the property you are buying. Neither option is the obvious choice and comparing the costs of extending your Leighton Buzzard home to that of moving is not a stress-free undertaking.
How realistic each option is will probably come down to one thing .. your mortgage provider. You will need a considerable sum of equity in your Dunstable or Leighton Buzzard home before you can think of increasing your mortgage more, because most lenders will require you to have at least 10% to 20% equity left in your property after the extension or move has been done.
The best advice I can give .. don’t assume anything …. get advice and opinion from builders, mortgage brokers, architects, mortgage people and of course… an agent. Look at your options and make an educated decision with all the superficial and objective facts in front of you.
Daniel Bourke (Owner Belvoir Dunstable & Leighton Buzzard)
Daniel Bourke is the owner of Belvoir Lettings Dunstable and in his previous career in Architecture he was an Associate in a leading London Architectural practice