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 Hayes in full-time employment is £654.40 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 Hayes 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.

• Also, even in late July, the furlough scheme has kept 1.9 million Britons from their jobs.

• 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.

• 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 Hayes 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 Hayes 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:

1,845 Hillingdon Borough people have come off the dole queue in the last 12 months alone, reducing the unemployment rate by 1.2% to the current 6.8% 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.

Hayes rents are already 3.1% 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 Hayes 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 home ownership 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 Hayes 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 Hayes 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 Hayes 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 Hayes property market. I do not profess to know all the answers, however, I do have my own opinions. Whether you are a Hayes first-time buyer, second-time buyer, homeowner, landlord or tenant and would like to pick my brains on any aspect to do with the Hayes property market, please do not hesitate to drop me a DM, give me a call or send me an email.

Hayes landlords are becoming progressively more self-assured about expanding their rental portfolios; as Hayes rents rise, mortgage interest rates fall and demand for decent Hayes rental properties outstrips supply.

A number of reports nationally would suggest around a third of UK ‘portfolio’ landlords (i.e. landlords with more than one rental property) are actively looking to expand their rental portfolios in the next 12 to 18 months, that would locally mean …

489 Hayes ‘portfolio’ landlords are looking to add to

their rental portfolio by the end of 2022.

The pandemic has had a substantial change to what we want from a home. Many people think that relates just to homeowners, yet nothing could be further from the truth as it also applies to tenants.

Homeowner or tenant, many of us have spent a lot of time away from places of work. Many office workers face the outlook of the combination of working from home as well as at the office, meaning a change in what people look for in their home. People (including tenants) are looking for larger properties, with extra rooms for office space and decent sized gardens or to be closer to outside green space.

So, let’s look at the ‘scores on the doors’ as to why Hayes landlords are on the up …

Hayes house prices are 5.6% higher than 5 years ago.

Because some Hayes first-time buyers are being priced out of the market due to these house price rises, they are being forced back into the rental market. Add the extra demand of the 1 in 10 Hayes house sellers who, in the last 12 months, have had to go into rented accommodation instead of buying, and this has created increased demand, meaning …

Rents today in Hayes are 3.1% higher than a year ago and 12.9% higher than 5 years ago.

The average rent of a Hayes property today is £1,326 pcm.

In previous articles on the Hayes property market, I was talking about the lack of properties to buy – yet that issue is also there in the British rental property market. Now let’s look at the supply of rental properties.

Would it surprise you that the number of private rented homes in the UK has fallen in the last 12 months by just over 2.5%?

Why? One reason has been many ‘accidental’ landlords have used this housing market to sell their property for a good price. That means the supply of available rental properties has decreased. The perfect storm of increased demand and lower supply, and with many Hayes tenants competing for those larger Hayes homes, they may find Hayes rental prices pick up even more over the next year.

What about buy-to-let mortgages for Hayes landlords?

The banks all but withdrew from buy-to-let lending in the first lockdown. Yet, since last summer things have settled down and during 2021 there has been a mortgage price war.

Hayes landlords can borrow 60% of the value of their BTL property on a two-year fixed rate of 1.18% from Platform and even those with a 20% deposit (that’s borrowing 80%) can borrow that money at 2.49% 2-year fixed rate from The Mortgage Works. Those looking to fix for a little longer can get 1.44% from The Mortgage Works and 1.79% at 75% loan to value from Santander.

(It must be noted there are some fees to these mortgages, and you must take advice from a qualified mortgage advisor before deciding which mortgage is best for you).

So, is now the best time to invest in Hayes buy-to-let property?

If you are attracted to invest in Hayes buy-to-let, it’s vital to do your homework first – particularly if you are new to the game.

When estimating the expected rental returns on investment, capital growth and yields, many Hayes landlords look to what has happened with house prices and rental prices, yet past performance does not always deliver a future guaranteed return.

Smart Hayes landlords will speak with agents like myself and others in Hayes, prudently researching the Hayes property market to discover what types of properties are in high demand (and short supply) from tenants.

Whether you are a landlord of ours or not, please feel free to drop me a line via email or social media for no nonsense advice on the important matters to look out for before investing in Hayes buy-to-let.

A recent report by Legal & General stated that since the pandemic, many older homeowners had put their plans to move home ‘on ice’. It said that fewer OAP homeowners are planning to downsize from their large family homes after the pandemic made them realise the actual value of their local community and space.

Historically, many OAPs move home to another part of the country to live near their grown-up children. Yet the pandemic has shown that OAPs can live quite well locally without moving to a strange new town to live near their children. The support networks of their friends in their existing community has emphasised the significance and importance of having friends close by.

Yet this trend isn’t just for OAPs moving away. Many Hayes OAPs who aren’t moving away from Hayes (because their family is still local) are also deciding to stay put longer for the same reasons. Even though they are rattling around their large 3 and 4 bed family homes, they love the space their large Hayes homes offer.

And for those Hayes OAPs who are wanting to move, the issue is that the choice of properties they could buy to downsize is limited. This scarcity of properties for sale, called the ‘housing crunch’, can be seen by that lack of choice of properties for OAPs to move to.

Only 24 ground floor apartments are for sale in Hayes

In a ‘normal’ Hayes property market, I would expect this to be double or even triple this number.

All these factors combined means these OAP “eternal homeowners” threaten to make the scarcity of properties coming on to the market even worse!

So, why is this an issue for everyone else?

Well, because Hayes OAPs aren’t moving from their large 3 and 4 bed homes to smaller bungalows or ground floor apartments, this is creating a blockage on the housing ladder. Hayes families, in their 30’s and 40’s, are desperate for larger 3 and 4 bed homes for their ever-expanding families. But if the OAP sellers of those family houses aren’t moving, they will remain overcrowded in their existing homes.

Let’s look at the numbers first.

• There are 4.42m UK over-65 property owners, and their properties are worth a combined £1.53 trillion (which covers just under three-quarters of the national debt).

• 71.3% of those aged 65 and over own their home (although 1 in 10 still has a mortgage).

• There are 2,719 Hayes homes occupied by OAPs, representing 17.1% of all the households in Hayes (notable compared to the UK average of 31%).

• 82.6% of those Hayes OAPs are retired, meaning the rest are still working! (The national average is 83.4%).

• The total value of the property in Hayes owned by OAPs is £65.1m.

• 54.6% of Hayes OAPs own their home outright (compared to the national average of 65.8%), and 7.3% of Hayes OAPs own their home, albeit with a mortgage (compared to the national average of 5.5%).

Many Hayes OAP homeowners simply love the house and neighbourhood they live in, often living in their homes for over 25+ years. I talk to many mature Hayes homeowners who say they are afraid to put their home on the market, because they believe (incorrectly) if they find a buyer for their home and can’t find another property to go to … they would be made homeless.

I can only share my opinions on the matter. The one thing I have seen in my years in the property market is that so many Hayes people leave it too late to move home. So, when they do move, they aren’t fit enough to do all the jobs in their new home. Indeed, is it better to move home in your late 60’s/early 70’s, meaning you can still do the little things to make your new house a home, rather than in your late 70’s/early 80’s and find the jobs are much harder to do?

Also, if you are worried about finding your next home, get yourself on the mailing lists of all the Hayes estate agents.  A recent study showed only 1 in 6 buyers were on an agent’s mailing list for the property they bought. Therefore, by being on the mailing list, you will get to know of any suitable properties coming on the market before most others. This is important in this housing market; a property is often sold STC before it hits Rightmove (to a buyer that put themselves on the agent’s mailing list).

By downsizing, you could use the additional funds to top up your pension, take the family on a holiday of a lifetime (once it’s safe to do so of course), or help your children get on the housing ladder themselves with a deposit for their own home.

I fully appreciate many of the 1,684 OAP homeowners in Hayes have many reasons to stay, be that sentimental, friendship, support networks etc. My advice to all of you is to do your homework, put yourselves on the mailing lists of agents (in case the property of your dreams comes up) and do what is best for you. By downsizing, you are giving yourself better options for your quality of life and massive opportunities to spend more time on the things you enjoy like your family, holidays, or even helping others.

The choice, as they say, is yours. If you are a Hayes homeowner and want to ask me anything about what I have said, please drop me a line to discuss the matter further at no cost or obligation

With Rightmove announcing a national drop of 0.3% in average asking prices in August, some are asking if the steam has been let out of the property market. Yet with the gains we have seen in the last 12 months, is this just a minor bump in the road? Alarm bells normally ring when new homeowners coming to the market for the first time are having to lower their initial asking price when compared to the market as a whole. 

So, what is actually happening in the national and local property market to asking prices and the number of properties for sale, and where does that leave Hayes homeowners and Hayes landlords?

1 in 7.4 homes already on the market today have reduced their asking price in the last two weeks

That means new sellers bringing their property to the market for the first time, are having to curtail their initial asking price to remain competitive. Normally, this should ring alarm bells, particularly when this is the first time this has happened in 2021. Therefore, it’s vital to ‘look under the bonnet’ of the figures and see what, exactly, is happening locally.

Average asking prices for Hayes homes are 5% up compared to July

However, that figure hides some interesting anomalies – the average asking price of Hayes detached houses is 17% higher than in July (that doesn’t mean they have risen in value by that much – just the headline asking prices) whilst apartments/flats have only seen the average asking price rise by 3% in the last month.

So, if this is what is happening to Hayes asking prices, what about the number of properties for sale. Looking nationally first…

there are currently just 285,970 properties for sale in the UK, which means 1 in 67 British homeowners are presently on the market – interesting when compared to 2005, it was 1 in 13.5 homeowners on the market.

With such little supply of properties for sale nationally, demand remains robust. Yet the property buyers in the market are being a little more reserved with the offers they are making compared to the Stamp Duty holiday frenzy times seen earlier in the year. They will pay handsomely, and yet top dollar won’t offer the ‘crazy price’ levels some Hayes buyers were offering in the spring – hence the recent reduction in asking prices to a more realistic level.

Looking at the movement in the available properties for sale and to rent in Hayes over the last few months, an interesting picture arises.

Number of Hayes Properties on the Market
	Apr-21	May-21	Jun-21	Jul-21	Aug-21
Hayes Properties for Sale	235	229	234	239	229
Hayes Rental Properties Available	387	372	366	363	371

The number of Hayes properties for sale (and rent) is still at record lows when compared to the 30-year long term average.

The choice for Hayes tenants is limited as well, as many tenants aren’t moving home. With the additional increase in demand from 1 in 10 Hayes homeowners choosing to go into rented accommodation (albeit temporarily) Hayes landlords with exceptional properties are getting decent rents, as discussed in a recent article I wrote about the level of rents in Hayes.

With the current level of Hayes properties for sale being around 40% to 50% below the long-term average (depending on the type of Hayes property you own), it means when a Hayes property is properly priced, given the intense competition, often it comes down to the position of the buyer and not the price they are prepared to pay.

When I say, “position of the buyer”, I mean, do they have a chain, do they have to sell their own property to buy another property?

Many Hayes house sellers are selling their home before they buy. Selling before you buy can be a fruitful approach in a fast-moving property market. That does mean your own purchaser will have to demonstrate a certain amount of patience whilst you wait for the right home to come on to the housing market. 

However, because it is currently taking on average 19 weeks between sale agreed and exchange of contracts, with mortgage providers and solicitors taking their time due to the backlog, this often allows you to potentially play catch-up if it takes a couple weeks to find the right property for you.

Many home sellers are going even further by selling their Hayes home first and then going into transitional rented accommodation. This subsequently puts them in pole position when their forever home comes up for sale as they have no chain. Although this takes a lot of determination and resilience, it does mean you will be in the very best position when the property of your dreams comes up.

The choice they say, as always, is yours!

If you would like a chat about the Hayes property market and the best thing for you and your personal circumstances, do drop me a line. In the meantime, what are your thoughts on the current Hayes property market? Do share in the comments.

Should you sell or should you buy in this most interesting Hayes property market?

I have calculated that at least 38 Hayes house sellers have rented a home to break their house chain in the last 12 months, although at a cost as they face paying many thousands of pounds in rent. 

There are a number of reasons behind this. One is because they cannot find another Hayes property to buy amidst a continuing shortage of new Hayes properties coming to the market. Although, there are others who have achieved such a high price for their home they have decided to cash in and are (hopefully for them) waiting for the Hayes property market drop?

Or will it drop? (More on that later).

Those selling their home have seen the…

average Hayes home rise in value in the last 12 months by £10,900.

Yet, if they have had to go into private renting, they have paid for that privilege in the rent they have had to pay.

The average cost of a six-month rental agreement in Hayes is £7,598, meaning accidental Hayes tenants have pumped £288,740 into the Hayes rental market in the last 12 months.

The unevenness between the number of properties for sale and demand for them is at its widest since the early 2000’s. Whilst we have seen a slight improvement in the number of properties for sale in Hayes, there are still only…

13% more homes up for sale today in Hayes, compared to August last year.

The recent shortage of Hayes property for sale is discouraging some hesitant Hayes homeowners from putting their property on to the housing market, anxious they will not be able to find their next home and will be left renting.

Yet some savvy Hayes homeowners are moving into a rented property as a way to navigate the shortage of properties to buy. If you have someone offering you top dollar for your Hayes home, whilst you will have the hassle of two moves, the increase in value of your Hayes home will more than offset the rent. 

Also, when you come to buy your next Hayes home, you will be chain free and in pole position to buy your ‘forever home’, rather than being overlooked for the home because you are sold stc and burdened with a chain.

Yet this trend has made life tougher for long-term Hayes tenants.

On average there were normally 310 to 370 properties available to rent in Hayes on Rightmove at any one time (pre-pandemic), today there are only 203 available.

To give you an idea of how this has affected the Hayes rental market, with heightened demand and lower supply, demand for rental properties has grown to such an extent…

the average rent in Hayes has grown from £1,266 per month a year ago to £1,293 per month today.

Tenants are suffering from less choice and higher rents in the Hayes property rental market, with few indications it’s going to significantly ease on the run up to Christmas.

So, what is going to happen to the Hayes property market? 

Well, those of you that follow me know I regularly write about the Hayes property market in my property blog. If you would like some recent articles I have written about the future of the local property, either drop me a line and I will send you some links to those posts, send me a DM or contact me by telephone.

In the meantime, please do share your thoughts on the matter in the comments.