Would it surprise you that there are 23% fewer properties for sale today in Hayes than the post Credit Crunch years 13 years ago? Property values are much higher than a decade ago and the property market at the moment in Hayes is on fire. In all my years as an agent, I have never seen it like it is at the moment. Many people are saying it’s reminiscent of 1988 when dual-MIRAS relief was abolished by Nigel Lawson, as people are paying top dollar for property, because they are buying property like there is no tomorrow.

56.5% of properties on the market in Hayes are sold stc

In a ‘normal property market’, that figure would be between 30% to 40%. There is no rhyme or reason behind it because it’s not as if we are going to run out of property to sell (unlike the panic buying of loo rolls last year in the supermarkets). With such a buoyant Hayes property market, being adept to state what your Hayes property is worth is exceptionally problematic.

This is further exacerbated by the lower-than-average properties on the market at the moment. To give you an idea of the issue…

there are 325 properties for sale in Hayes today, compared to 421 in 2008.

When there aren’t many properties on the market, some estate agents, to gain your instruction, will value your Hayes property by giving you an over inflated suggestion for the asking price. Why do they do that when the considered wisdom is estate agents only get paid once they sell it?

Well would it surprise you that many (not all) estate agents pay their employees a bonus to put your property onto the market and then pay a further bonus when they get you to reduce the asking price? Some estate agents know the fastest way to get your property to market is to be optimistic on the asking price to secure your property for sale, then work on you to reduce your asking price after it has been sitting on the market for a few months.

Nothing wrong with that you might say, I want to get the most for my Hayes home (and it is indeed the job of the estate agent to get the best price for their client). If I believe it is worth testing the market at a slightly higher asking price, I will suggest that, yet will always explain my thinking and if we have over cooked the asking price, we can swiftly realign it after a couple of weeks.  

Yet because many estate agents are disposed to suggest over inflated asking prices to the house seller just to secure their business (i.e. overvaluing) but not manage the property for month and months … this in turn causes Hayes properties to sit on the market and not sell.

In the best property market for 20 years, 22% of properties for sale in Hayes have been on the market for 6 months or more. Overvaluing is widespread among Hayes estate agents.

Most Hayes homeowners will ask three or four estate agents to value their Hayes home and take the middle figure when they want to sell. Yet, if all (or most) of your Hayes estate agents are over optimistic and they all give you a ‘gilded lily’ price to secure your instruction to sell your home (i.e. overvalue), then that middle figure will be too much.  Most Hayes estate agents know they don’t win the business (i.e. secure the listing) if they tell the homeowner what they don’t want to hear.

So, what is the risk of overvaluing?

There is a potential massive cost to putting your Hayes home on the market at too high an asking price. Your estate agent will tell you that your Hayes home is worth a certain figure and then lock you in to a 16-week sole agency agreement (sometimes longer) which you cannot get out of early. If you are getting around two or three viewings a week, and the pictures and marketing material are half decent, then your pricing is about right, meaning in this market you should be sold (subject to contract) within a month to six weeks.

Yet, if your Hayes home has an over optimistic asking price (i.e. it is overpriced), you might only have a handful of viewings in a month and no offers. As the weeks and months go by, your overpriced Hayes home makes similar homes to yours (i.e. your competition) look really good value for money. That’s when you will get the price reduction call from the agent.

How many times have you seen a property that has been on the market a while and you have wondered what’s wrong with it? Also, to add insult to injury, the portals tell you how long a property has been on the market, adding weight to that argument. 

The longer your property stays on the market, the desirability of your Hayes home drops.

You will end up selling your Hayes home but only after a handful of price reductions, yet at what cost? Firstly, in those lost months, you would have missed out on many properties that you fell in love with yet couldn’t buy because your home was languishing on the market with no interest (this is backed up by consumer champion Which, who said that if you have to reduce your asking price by 5% or more, it adds an extra 64 days to the sales process).

Secondly, you will end up selling your Hayes property for less than if you had placed the property on the market at a realistic asking price from day one (again backed up by Which). This is because buyers think there is something wrong with it, so as the homeowner gets fed up, they accept a lower offer to get their property sold.

Finally, because you take less for your property, your choice of the next property to buy will also be curtailed, meaning your dream home move might be more of a nightmare?

The best advice I can give you is to search the portals, make sure you look at properties that are also sold stc (which can normally be found by clicking on the filter section of the search on the portal). Then ask a couple of straight-talking trusted friends to do the same and compare your property to the competition that is both on the market and sold (stc).

Compare their locations, number and size of the rooms and size of plot and ask them where they see your property against those. Carry out the same exercise yourself (of course you will be slightly biased) and take a bellwether from all those figures. Then ask a number of Hayes agents to value your property and if you feel any are being overly optimistic challenge how they get to their figure and get them to qualify their belief in that figure – is their valuation realistically achievable in the market at the time? As we all know markets change and property prices go up and down and ultimately a property is only worth what a buyer will pay for it – this all requires careful consideration.

I can assure you most of the estate agents in Hayes are decent people, who want to do the best for you. All I ask is you do your homework and look at the sale of your Hayes property through the eyes of a cold-blooded buyer.

If you would like to chat about selling your Hayes home do give me a call.

So is it a good idea to rent in between moving home, to be chain-free?

Moving home is said to be the third most stressful thing you can do, so if you can do anything to reduce that stress, so much the better? When buying your next Hayes home, being chain-free can certainly reduce your stress and offers many advantages over other buyers (and some disadvantages).

So, what is a chain? A property chain is made when there is a line of home buyers and home sellers linked through their property transactions e.g. a Hayes first-time buyer purchases a property, the sellers of that property then buy another property, and those sellers then buy another property, so on and so forth. Each home sale and purchase are reliant upon the success of every property in the so called ‘chain’. This means if there is one hiccup on one of the properties, every sale and purchase along the whole chain would collapse. No wonder everyone is on tenterhooks when there is a long chain involved.

Yet Hayes buyers who sell their home before searching for a new Hayes home considerably reduce their stress levels because they are not needing all the ducks to ‘line up in a row’ on the sale of their home in order to buy their new Hayes home.

Being chain-free puts Hayes home buyers in an enhanced position to negotiate with home sellers and they in turn may be more enthusiastic to accepting a lower offer.

Sounds brilliant this chain-free life doesn’t it? Everyone is a chain-free buyer once … when they are a first-time buyer and if they are lucky enough to have an additional home to move into. The other option is selling your Hayes home and moving into rented accommodation, but that will end up costing quite a few thousand pounds (in what many perceive as wasted money) together with the added cost of employing the services of home removers twice (with all the hassle that entails doubled!). However, that is what many Hayes homeowners are doing.  

32.1% of all the properties on the market today in Hayes

are being sold without a chain.

I can’t disagree, moving home twice in a short period will be stressful and rent could be perceived as ‘wasted money’, but I have to recommend you look at the bigger picture. It is one of the sturdiest sellers’ markets in a generation, meaning you should get top dollar for your Hayes home, knowing that many buyers are keen to complete before the stamp duty holiday ends in the autumn.

Then by waiting for the return of stamp duty and for the full roll out on the immunisation programme to give more Hayes homeowners the peace of mind to place their Hayes home on to the property market, for Hayes house prices to cool and the number of properties for sale to increase. Then you could pounce in and buy, with more Hayes homes to choose from and at more realistic asking prices.

So, does the type of Hayes property that is being sold make any difference?

• 31.9% of detached houses in Hayes are being sold chain-free
• 25.5% of semi-detached houses in Hayes are being sold chain-free
• 30.7% of town house/terraced houses in Hayes are being sold chain-free
• 36.9% of apartments/flats in Hayes are being sold chain-free
• 53.8% of bungalows in Hayes are being sold chain-free

Of course, these aren’t all Hayes homeowners going into rented accommodation hoping to bag a bargain next year. Many of the bungalows are being sold because their homeowner has either moved into sheltered accommodation or sadly passed on and there are Hayes landlords selling their Hayes buy-to-let rental investments.

And don’t get me wrong, there are also risks involved with this type of home buying strategy. Moving into rented accommodation means you are out of the Hayes property market. Property values could dip in the next 12 months, yet they still could continue to rise – you are taking a gamble on a dip in the market and it could go wrong.

Like most things in life, it depends on your own personal circumstances, where you are in your life, your attitude to risk and your belief on what will (or won’t) happen to property values in Hayes in the next 12 to 18 months.

If you would like a chat about your potential choices for your home move, then drop me a line.

A look back at the Hayes housing market over the last decade

With all of us completing the Census, a couple of weeks ago, it made me realise profoundly that mine and my family’s life, which from our own point of view seems unique and delightful, makes us all into a series of statistics for the Census gatherers to pore over. To digest and regurgitate facts, figures and trends for those who are interested in the ever-changing social circumstances of these islands.

However, the information from the Census is vital to improving our lives – Governments can plan the future with the information it provides and we in turn can wonder about the lives of our past generations with the information provided therein historically if we so wish. 

Whilst the information from this Census won’t be published until March 2023, let us have a look at what has been happening in the Hayes property market since the last time we completed the Census in 2011.

Just to remind you, 2011 saw the wedding of Prince William and Kate Middleton, Mr Cameron was the PM, there was the last flight of the Space Shuttle and Game of Thrones premiered.

Whilst in the Hayes property market…

• The average price paid for a Hayes detached home in the last 12 months has been £567,900. The average value of a Hayes detached home has risen by 57.5% in the last 10 years or £167,600

• The average price paid for a Hayes semi-detached home in the last 12 months has been £428,400. The average value of a Hayes semi-detached home has risen by 50.3% in the last 10 years or £142,300

• The average price paid for a Hayes town house/terraced home in the last 12 months has been £392,400. The average value of a Hayes town house/terraced home has risen by 42.2% in the last 10 years or £133,300

• The average price paid for an apartment/flat in the last 12 months has been £225,200. The average value of a Hayes apartment/flat has risen by 27.3% in the last 10 years or £55,900

New properties built in Hayes…

Irrespective of any dip in Hayes house prices or transactions when the Stamp Duty Holiday ends in the autumn, this is a trend that looks set to continue, with no sign that supply of new homes is anywhere near to keeping pace with demand for households.

There have only been 1,004 new properties built in Hayes in the last 10 years, that’s just over 8 a month. That means the population in Hayes has risen by 4.65 people for every new home built over that decade.

Nationally, the Country has only built just over 180k homes a year over the last decade, 120k less than the national target of 300k. In the meantime, the population has grown by more than 4 million.

When looking locally at the size of new build property in Hayes, the average property is just around 750 sq. ft., which is 14% smaller than a decade ago.

Rents in Hayes…

Whether you are a winner or loser in terms of rental values depends on whether you are a Hayes landlord or a Hayes tenant.

The average rent for a property in Hayes currently stands at £1,255 per month, whilst a decade ago, it was £988 per month

This means private rents have increased by £2.22 a month for the past ten years. Interesting, when compared to the national average of 98p a month whilst in London, on average rents have grown by £4.64 a month.

The next 10 years of the Hayes Property Market…

The next ten years will also be just as fascinating. To try and predict would be a fool’s game.

For example, who would have believed what the Hayes property market has done in the last 12 months since the start of Lockdown 1.0. The number of transactions (i.e. people moving) in turn with UK house prices having risen so much in the last year … all during a worldwide pandemic and at a time of such mayhem and havoc in the UK and world economy, is nothing short of remarkable … the question is – is it sustainable?

Read these articles in the coming months and years and I will share with you what is happening to the value of your Hayes property, be you a Hayes homeowner or Hayes landlord.

Has there ever been a better time for Hayes home sellers?

The Hayes property market, for people looking to sell, is at its sturdiest for at least the last five years with home buyers jumping on to the Hayes property ladder with abandon.

Hayes house prices are anticipated to rise throughout 2021 after the stamp duty cut (and subsequent extension until the autumn) and the newly revealed 95% mortgages for Hayes first-time buyers (and Hayes homeowners with minimal equity).

In addition, the continued low interest rates and the demand for larger homes because of lockdown means the Hayes property market should remain bullish for a while. There is a surge in potential buyers putting themselves on mailing lists with Hayes estate agents making the biggest disparity between supply and demand for Hayes property for many years.

Fears of a cliff edge for the Hayes housing market at the end of March have dispersed, somewhat due to the stamp duty tax deadline extension, but also because the elevated level of buyer demand caused by the three lockdowns has continued to swell since the start of 2021 meaning that today …

47% of Hayes properties on the market are Sold (STC)

Interesting, when utilising data from theadvisory.co.uk website, the Hayes average for the last five years has only been 33%, meaning there has been an uplift of 42.9% in the proportion of Hayes properties sold (stc) compared to that five-year average.

Yet what can’t be forgotten is that 9 out of 20 Hayes house sellers are also Hayes house buyers as well, so whilst they do indeed achieve a higher price for their Hayes property, they also have to pay more for the Hayes property they want to buy.

So, how much will Hayes house prices rise by? 

Like all things in life, it’s all about demand and supply. I have discussed the demand, yet what about the supply of properties for sale?

There are 11% more Hayes properties for sale today compared to 3 years ago

Nationally, in most UK towns and cities, the number of properties that are for sale today compared to the same pre-Easter property markets of 2015 to 2019 are lower by around 10% to 20%, yet in Hayes the opposite is true. With the easing of lockdown roadmap and faster rollout of the vaccine, this is persuading more Hayes homeowners (especially those older Hayes homeowners who have had their jabs) to start to make the first steps towards moving home in 2021 and placing their property on the market for sale.

This will mean there will be more Hayes properties available for sale in the conventionally busier post Easter market in the coming weeks and months which should cause more equilibrium and help keep Hayes property prices in check.

These are interesting times for the Hayes property market. If you are a Hayes homeowner or landlord looking to buy or let your Hayes property in the coming weeks or months, don’t hesitate to drop me a line to discuss what all the points raised in this article mean to you.

Yet higher mortgage rates could see Hayes buyers paying a lot more each month for the privilege

Being a Hayes first-time buyer in the last 12 months has not been an easy thing. Just before lockdown there were 400 ‘5% deposit mortgage’ deals and first-time buyers were able shop around to get the best deal. When the first lockdown hit, 5% deposit mortgages disappeared, meaning that as many Hayes would-be first-time buyers were about to buy their first Hayes home in 2020, the rug was pulled from under their feet.

Today, you can count on two hands the number of mortgage deals which allow a 5% deposit. Even worse, the number of hoops one has to jump through to get a 5% deposit mortgage is very high (plus you have to pay handsomely for the privilege, with mortgage rates of at least 4.15%).

In putting down a 5% deposit, you borrow the remaining 95% as a mortgage. These 95% mortgages (or Loan to Value) were very popular with Hayes first-time buyers before the Credit Crunch. Nearly 1 in 6 mortgages were 90% to 95%+ Loan to Value mortgages in 2007 (15.5%), yet as the Global Financial Crisis hit in 2008/9 that dropped to only 1 in 63 mortgages being in 90% to 95%+ range in 2010 – meaning many Hayes first-time buyers were unable to buy their first Hayes home between 2010 and 2015.

Yet in the recent Budget, Rishi Sunak has vowed to back the building societies and banks so that they can offer more of these higher 95% Loan to Value mortgage deals.

Many people have said this will mean there will a Hayes house price boom – especially as Stamp Duty is extended until September

This scheme is nothing new as a practically identical scheme was launched by George Osborne in the 2013 Budget with his Help to Buy Scheme. Nearly 1 in 5 houses sold in the year after that budget used this scheme, yet Osborne’s was only for first-time buyers and it was only for brand new homes (not second-hand homes). Whilst there’s no doubt this caused an increase in house purchases, many commentators said it was a backdoor method to keep the country’s new homes builders afloat.

The big difference with this new 2021 scheme is that it’s available for Hayes second-hand homes as well and is open to all Hayes owner occupiers moving home

Yet, what will the banks mortgage interest rate charge be?

Although no building societies or banks have yet publicised what mortgage rates they will charge, all the High Street lenders including NatWest, Santander, HSBC, Virgin Money, Barclays and Lloyds have stated they intend to offer these 95% LTV mortgages.

Under the Government’s mortgage guarantee to the banks, Westminster will guarantee 20% of any mortgage offered at 95% Loan to Value. In principle, that means that building societies/banks should be able to offer the low mortgage rates as those available to people wanting to borrow 75% loan to value.

At the moment the average five-year fixed rate mortgage is 3.6% with a 10% deposit, but if you have a 25% deposit, you can fix it for five years at 1.63%

However, don’t forget though that the banks will be charged a ‘still to be decided’ amount to use the Government guarantee. On the last Help to Buy Scheme, it was rumoured they were charged 0.9% of the mortgage borrowed, so this cost would have to be passed on to the first-time buyer. I would suspect the eventual rates Hayes first-time buyers will have to pay will be somewhere in the region of 3%.

This new 95% mortgage/5% deposit scheme is only going to work if the banks and building societies have sensible mortgage rates as it needs to help those Hayes first-time buyers it was intended to benefit, who are finding it hard work to get on the first rung of the Hayes housing ladder.

It all comes down to how anxious the banks and building societies feel about the true long-term effect of the pandemic once the furlough scheme ends in the autumn. Only time will tell.

Yet, to give you an idea of the difference the mortgage rates scheme will make on a typical Hayes terraced/town house…

The average price paid for a Hayes apartment in the last 12 months was £225,200

Assuming a 35-year repayment mortgage and borrowing that amount on each scenario:

• At the current best 95% LTV mortgage rate (i.e. 5% deposit) of 4.15% mentioned at the start of the article, that would cost £1,018 per month in mortgage payments

• At the current average 90% LTV mortgage rate (i.e. 10% deposit) of 3.6% mentioned in the middle of the article, that would cost £944 per month in mortgage payments

• At the best 75% LTV mortgage rate (i.e. 25% deposit) of 1.63% mentioned at the start of the article, that would cost £704 per month in mortgage payments

As you can see, quite a difference.

I have to applaud Rishi Sunak for this initiative, yet will it be ‘fields of clover forever’ for the Hayes property market with the new scheme? No, it won’t.

It will be a good boost to the Hayes (and UK as a whole) property market. Whilst the mortgage guarantee offers a small portion of security for the lenders, it does focus on the riskiest part of the housing market. Many lenders still have cold shivers of the Northern Rock 125% mortgage debacle from a decade ago and those memories still ring true today.

The fact is these types of mortgages will be a higher risk, even if the Government are underwriting them with their smaller deposits, which will come through in bank’s and building societies higher pricing for these mortgages. Also, the lenders are already at near full capacity trying to get hundreds of thousands existing property sales and purchase deals through because of the Stamp Duty rush over the last 9 months. I await the rates in early April and will make comment again.

If you are a Hayes homeowner, potential Hayes first-time buyer or anyone involved in the Hayes property market and you would like to chat about anything I’ve covered in this article or any of my other articles on the Hayes property market, please don’t hesitate to drop me a line.