Biannual Report - Cubitt & West · 2018-07-30 · For the first half of 2018, Arun Estates –...
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Biannual Report Quarter 1-2 2018 cubittandwest.co.uk
Transcript of Biannual Report - Cubitt & West · 2018-07-30 · For the first half of 2018, Arun Estates –...
Biannual ReportQuarter 1-2 2018
cubittandwest.co.uk
Annual Report 2018
• Marketoverview
Residential House Sales4
• Mortgagereview• Competitionandinnovation• Products
10 Financial Market
• Thequestfornewdevelopmentsites• Creatingbuyersandbuildingchains• CouldtheNewHomesmarketsurvive
withoutHelptoBuy?
8 Development & New Build
• StickortwistwithBuy-to-Let?• Longertenancies• Theperfectstormforrentalprices?
6 Letting and Investment Market
• Proudtogiveback• TheArunWay• What’shappeningin2018?
12 Arun in the Community
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Annual Report 2018
Message fromour Group Managing Director
Forthefirsthalfof2018,ArunEstates–knownlocallytoyouaseitherWard&Partners,Cubitt&West,DouglasAllen,PittisorHadleysLondon–hasseenachallengingmarketwheretheavailablehousingstockhasincreasedasaresultofthenumberofsalesreducing.Onpages4&5,AldoSotgiuexplainswhyacorrectioninpricesisnotnecessarilyabadthingwhilst,lateron,KeithLovelldiscussessomegreatmortgageproductsandinnovationsnowavailable.Onethingofwhichyoucanrestassured:propertythatiswelllocatedandrealisticallypricedwillalwayssellinalmostanymarket.Theadage“location,location,location”isastruetodayasithasalwaysbeen.Developersarestillbuildingandthestockofnewbuildswehaveavailableis14%higherthanthistimelastyear.JasonWillettsdiscussestheneedfor
newlandtobefoundfordevelopmenttosatisfydemand.HealsocommentsonthecontinuedimportanceofHelptoBuytoassisttheNewHomesmarket.JasonBunningdiscussestheissuesfacingtherentalmarketwiththeoverallstockinthemarketplacereducingassomelandlordsdecidetoselltheirrentals.Thisdecisionhasresultedfromvariousgovernmentpoliciesdesignedtosqueezetheprivately-rentedsector.Iwoulddescribethisasa“workingmarket”whereexperienceandgoodadviceareessential.Iwishyoutheverybestofluckinwhateveryourinterestmaybeinthemarketplaceand,ofcourse,ifwecanhelpyouinanywaypleasegetintouch.
I would describe this as a “working market” where experience and good advice are essential.
David Lench FRICS
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How is the south-east’sproperty market?
Market Overview
There is a lot of speculation about the property market, so I am happy to share some thoughts based on our research of over 9,000 homes we have put on the market in the first half of 2018. New properties onto the market rose marginally and, with current available properties in the south-east region 14% higher than the same time last year*, this is great for buyers as they have a wider choice. Consequently, buyers need even more help and advice to steer them in the right direction for a home that really suits their needs. Whilst most customers start their home buying activities online, finding the right home can become a bit of a lottery – so getting advice from an agent that has a good understanding of suitable properties is invaluable to those motivated buyers who might miss out on their dream home, simply by clicking buttons online.*Arun Estates available housing stock Jan-June 2018
Aldo SotgiuManaging Director of Operations
How’s the market?Property on market and buyer activity
Property stock Buyer activity
Q1-Q2 2018 Q1-Q2 2018
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Theaveragesalepriceinthefirst6monthsincreasedby2.94%‡andvariedconsiderably,withsalepricesinKentupbyover4%comparedto0.9%inSussex.Ofcourse,therearelotsoffactorsthataffecttheindividualpricesofpropertiessoit’sdangeroustoapplya“onesizefitsall”scenario.Theacceptedwisdomisthatifyoupriceyourpropertycorrectlytobeginwithyoustandamuchbetterchanceofachievingthebestpossiblesaleprice,soitisimportantforsellersnottobedrawnintothinkingmarketingapropertyatahigherpricetostartwithisgoingtoresultinahighersaleprice.What’smoreimportantissensiblepricingtocreateasmuchbuyerinterestaspossible.Higheravailablehousingstocksandsimilardemandpointstowardssomepricecorrectionneededinthemarket,whichisn’tnecessarilyabadthing.Granted,ifyousellyourhomeinarisingmarketyouwillgetmoreforitbutyouwillalsohavetopaymoreforthenextone.Inshort,housepriceincreasesareslowingdown;thenumberofavailablepropertiesishigherand,whilstbuyeractivityisstillstrong,somepricecorrectionisneededinthemarket.Therearelotsofotherfactorsthataffectbuyerandsellerconfidence–whatremainsaconstant,ispeopleneedingsomewheretolive.
Area highlightsWallington–Surrey
Epping–Essex
WallingtoninSurreysawoneofthebiggestpercentageincreasesfromQ42017toQ12018inLandRegistrypricedataat4.6%–movingtheaveragepricefrom£382,989to£400,563.
…Inthesameperiod,Essex‘sEppingalsosawa3.2%increaseoftheaveragepropertyprice,changingto£391,699from£379,483.
+4.14%Kent
+2.69%Surrey
+0.90%Sussex
+2.94%South-east
+3.16%Essex
‡ Arun Estates internal Average Price Change SOLD (stc)
Jul - Dec 2017 vs. Jan - June 2018
South-east prices movement
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Has the penny droppedon the investor market?
Have rents risen in the last 5 years?
Yes–generallyabovehistoricallylowinflationlevels,butmostlyaffordableandreflectiveofaverybuoyantmarketplace.Withfewerpropertieswithintheprivaterentedsectorandconsistentdemand,thislevelofgrowthislikelytogainpaceintheshorttomediumterm.
Stick or twist with Buy-to-Let?
Itwillcomeasnosurprisethatbuy-to-letlandlordsofallkinds–accidentalandprofessional–arestartingtoconsider,inthefaceofseeminglyneverendingnewlegislationandregulation,leavingthebuy-to-letarena.Weseesignsofthisgrowingbutwouldadvisesomecautionatthisstage.
Thereareanumberoffactorstoconsider.Tenantnumbersareover10%upandonlylikelytoincreaseasNilDepositSchemesbecomemorewidespread,allowingpeopletorentwithoutaheftylumpsum.Inaddition,thetenantfeebanforagentslikelytocomeintoforceearlynextyearwillmakeiteveneasiertorent.Againstabackdropofcontractingavailablerentalstock,thelawofsupplyanddemandcouldleadtogreaterrentalyieldsforthosethatholdtheirnerve.
Withfewbetterinvestmentsouttherecurrentlyandthepunitivecostsofre-enteringthemarketposedbytheStampDutysurcharge,cashinginatthisstagecouldbeacostlymistaketorectify.
Jason [email protected]
Longer tenancies
Somewhatagainsttheodds,theArunManagedportfoliohasgrownby13%overthelast12months,helpedinpartbyourdrivetoofferlongertenancies.Morestabilityandsecurityforlandlordsandthepeaceofmindfortenants,particularlythosewithfamilies,allowingthemtoputdownsomeroots,issomethingthatweareverycomfortablewithandthegovernmentiskeentoencourage.Indeed,thereisaconsultationbeingputforwardfollowingonfromthechancellor’shintinlastNovember’sbudgetthatlongertenanciescouldbeencouragedwithtaxincentives,whichwouldbeverywelcomerelief!
£924 +17% Arun avg. rental June 2018
£786 Arun avg. rental June 2013
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The perfect storm for rental prices?
Overall,rentallevelsremainstableastheyhavebeenforthelastfewyears,however,therearestormcloudsonthehorizon.Traditionally,landlordshavebeenreluctanttoraiserents,preferringtokeepalong-termtenanthappy–however,thepressuretocoverrisingcostsisoverwhelming.Inadditiontothosemeasuresalreadyimplemented,inspringnextyearatenantfeebanislikelytocomeintoforceforlettingagents,withmanyseeinglandlordspickingupthecostsoftheadministrationthatstillneedstobecarriedoutandthesecostsbeingpassedoninincreasedrent.ForArunlandlords,however,our2-yearmanagementfeefreezeshouldprovidethemwithsomemuchneededhelp,stabilityandreassurance.
+13%Arun’sManagedportfoliohasincreased,despitechangesinthemarketplace,June2017-June2018
19 specialist officessupportedbyournetworkof109high-streetbranches
+10% CustomersAgrowingnumberoftenantsseektomakehomewithus.
Less than 4%Weproactivelyhelpstrugglingtenants,sorentarrearsacrossourManagedportfolioareatrecordlowsof3.91%.
Arunstats:Jan-June2017&Jan-June2018
Average rental prices in the south of England
Area Averagerent
1.GreaterLondon £1,586
2.South-east £1,008
3.South-west £805
4.Wales £604
5.WestMidlands £678
6.EastofEngland £911
7.EastMidlands £617
8.North-west £692
9.Yorkshire&Humberside £628
Source:HomeLet,RentalIndexMay2018
1
2
6
3
45
7
9
8
TM
THERENTALINDEX
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The quest for newdevelopment sites
Creating buyers and building chains
Withfootfalllowerthanlastyear,anotherfeatureofthecurrentmarketisthenumberofcustomersapproachingus,eitherwithouthavingyetsoldtheirexistingproperty,orhavingnotevenputitonthemarket.Whileitwouldbeeasytodismisstheseasunmotivatedbuyers,wehavemaintainedandindeedimprovedthesalesratesacrossmanyofourdevelopmentsbyuseof“MakeYourMove,”buildingloyaltytothedevelopmentsthisiswe‘rethedeveloperwouldcontributetowardsmovingcosts.Thisisatrendwebelievewillcontinuefortheremainderoftheyear.
Jason WillettsLand&[email protected]
NewReservation:
+14%Up14%onthesameperiodtolastyear.
Facts of Success.
NewLandSalesarranged:
£34.7 milliondelivering
381 plots
The quest for new development sites
Acrossouroperatingregion,whichconsistsofaround57localauthorities,wehaveseenanumberlooseningtheirgripongreenbeltland.Theyarenowbeingforcedtoconsiderthereleaseoftractsofgreenbeltduetotheirinabilitytodemonstratea5-yearlandsupply,inthefaceofanever-growingdemandfornewhousing.
Thepreferencestillremainstoutilisebrownfield,previouslydevelopedland,butthisisbecomingmorescarce,duetopressuresonavailableland,andashortageinthesupplyofnewhousing.BrightonandHoveCityCouncilhave,overthelasttwoyears,releasedseveralurbanfringesitesfordevelopment.
Meanwhile,therecentembargobyWealdenCouncilonnewplanningapplicationsforhousing,causedbyhighnitrogenlevelsintheAshdownForest,hasfurtherexacerbatedthesupplyproblem.
Q1-22018,ArunNewHomesstats
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79% Unsurprisingly,onaparticularschemeofapartments,offeringHelptoBuyhadanuptakeof79%
ArunNewHomesacquiredlandforthis218-apartment/6-floorlandmarksiteforCrestNicholsonPLC,convenientlylocatedinCrawleytowncentre.Itwasintroducedfromastate-of-the-artremotemarketingsuiteadjoiningourhigh-streetbranch,withasuccessfuloff-plancampaignpriortotheshowhomelaunchinMay2018.
Area highlightsCrawley–Sussex
RichmondPark,byHalsburyHomes,isanurbanexpansioninWhitfieldwithPhase1being90,2-,3-,4-&5-bedroomproperties.Thesuccessfulfirstphaseisnowover90%sold/reservedsincelaunch,andwiththenextphaseduetolaunchimminently.
Whitfield–Kent90%
RESERVED OR SOLD
Could the New Homes market survive without Help to Buy?
Inaclimatewheresalesaregenerallyhardertocomeby,thepositivebenefitsofHelptoBuymorethanoutweightheextratimegenerallyinvolvedinprogressingsalesthroughtoexchangeofcontracts.Thisisreflectedinthestatisticalevidencecomingoutofsomeofourmajorschemes,whichclearlyindicatesthatHelptoBuyisstillunderpinningcertainsectorsofthemarket.Thisisparticularlytrueofapartmentschemes.Inonecase,nolessthan79%ofallreservationsweprocessedinvolvedHelptoBuy,whereaswithhousingschemes,thistypicallydropstoaroundathird.
90%RESERVED OR SOLD
(PHASE 1)
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UKbase%rates18%
16%
14%
12%
10%
8%
6%
4%
2%
0
April198
5
May199
3
June
200
0
July200
7
Augu
st2014
March
197
9
Financial view of 2018so far and looking forward
Mortgage Review
TheUKmortgagemarketisinaninterestingplacerightnow.The‘deadcert’raterisethathadbeendiscussedhasn’tarrivedyet.Asaresult,weremainattheincrediblylowrateof0.5%,whichiswherewehavebeensinceMarch2009–exceptforabriefperiodat0.25%betweenAugust2016andNovember2017(seeningraphabove).
Itisunclearifthiswilllastfortoolongas,duringthelatestBankofEnglandMonetaryCommitteeannouncement(21/06/2018),rateswereheldbyavoteof6to3,however,theBank’schiefeconomist,AndyHaldane,votedfora0.25%increase;thiscouldprovesignificantinthecomingmonths,sowatchthisspace.
Keith LovellFinancialServicesManagingDirector
TheBankalsocutthisyear’sgrowthforecastdownfrom1.8%to1.4%,andwentontoexplainthattheysawthisadjustmenttobearesultofthebadweathercausedbythe‘BeastfromtheEast’which,intheiropinion,hadcausedatemporarysoftperiodintheeconomy.
Despitetheabovewordsofcaution,withbothinflationandinterestratesrunningathistoricallylowlevels,therehasbeenanincreaseinconfidenceandinvestmentfromUKmortgagelenders,resultinginasurgeofnewproductsandinnovation.Adaydoesn’tpasswithoutsomementionof“RoboAdvice”or“FinTech”(shortforFinancialTechnology),bothhavebecome‘buzz’wordsandweneedtoensuretheydon’tbecometheEmperor’sNewClothes.
0011
Annual Report 2018YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Competition and Innovation
Thissurgeincompetitioncanbeseen,withmanyITcompaniescomingintothemortgagesectorandmakinghugepromisesofamoreefficientpathforthecustomerthroughboththemortgageandpropertytransactionprocesses.Ifthesepromisescanbedeliveredwewillseethetimetakentopurchaseamortgageand/orproperty
Products
TheenergyandcompetitionaroundtheUKlendingmarketshouldbodewellfortheconsumer.Withmanynewandemerginglenderstakingontheestablishedplayers,weareseeingsomeexcitingchanges,manyofwhicharebeginningtofilterthroughtothecustomer.
Weareseeing90%lending,withratesfromaslowas1.84%†,meaningthe‘BankofMum&Dad’cantakearestfromfeelingresponsibleforfindinga15or20%depositinordertohelptheirchildrenontothefirstrungofthepropertyladder.What’smore,atthetimeofwriting,95%lendingismakingastrongreturn.Boththesemeanthattheprospectofowningyourownhomeiscloserthanithasbeenforsometime.
Competitivelong-termfixedratesaremakingawelcomereturnandmanyborrowersaren’tjustlookingatthelowest2-yearfixed,buttakingthetimetoconsidertheirfutureneedsandmakeinformeddecisionsonhowlongtheymightliketoenjoypaymentstability.Again,weareseeingratesfromaslowas2.49%†for10-yearfixedrates
beingsignificantlyreducedandsimplified.Indeed,manycompaniesaretalkingaboutasinglegenericapplicationthatwouldbeacceptabletoawholerangeoflenders–asingledocumentwhichcouldreturnalistofthoselendersthatwouldlendtherequiredamountandtheratesandcostingstheywouldoffer–now,that’stechnologyatitsbest.
forthosewitha40%equity/depositinorfortheirhome.
Nottobeoutdone,manylendersarelookingintotreatingtheirmorematureborrowersfairlyandweareseeingarealchangeinattitudetolendingpastretirement(LaterLifeLending),andadesiretoreallyhelpthosecustomerswhohaveinterest-onlymortgageswithlittleornomeansofpayingofftheoutstandingmortgage.Thisisaveryinnovativeandexcitingspacerightnow.Onethatisverymuchoverdue.
If you are looking for advice, please contact me or one of my team on 01634 731 518.
†Source: Mortgage Brain Classic - Figures correct at 02 Jul 2018
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Arun in the community
The Arun Way
Inadditiontoourcharitableactivitiesatnationalandregionallevel,wealsoplacegreatemphasisonencouragingandsupportinglocalfundraisinginitiativesbyindividualbranchesandmembersofstaff–andwe‘reproudtosaythatin2017weachieved,asacollectiveteam,ourhighesteverannualfundraisingtotal.
Proud to give back
ForArunEstatesandourtradingbrandsofWard&Partners,Cubitt&West,DouglasAllen,PittisandHadleysLondon,helpingothersiscoretoourcompanyvalues.Weareproudthatthroughourcompany’ssuccessandourChairmanPaulRooney’spersonalgenerosity,wehavebeenabletomakeasignificantcontributionbothtocharitableorganisationsandtoindividualfamilies.
£111,1322017
£95,6212016
£103,7992015
£13.7 million since 2010
£102,0002014
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What’s happening in 2018?
However,recordsaretheretobebroken,sothisyear,weaimtodoevenbetter!Wearedelightedtoconfirmthatasacompany,wearecontinuingtoworkwithourprincipalcharitypartners,ActionMedicalResearchforChildren,whothroughvitalmedicalresearcharesavingandchangingchildren’slives.Overthepastyear,ourfundraisingeffortshavebeenspecificallyaimedathelpingtofundthedevelopmentofanewvaccinetoprotectchildrenfrommeningitis.
Eachofouroperationalareasalsohavetheirownlocalcharitythattheycontinuetosupportthroughawiderangeofactivities–frommarathons,ColourandGlitterRunsandparachutejumpsforthemoreenergetic(and/orfoolhardy!),tobake-offs,quiznights,rafflesandothergentlerpursuits.
Asacompany,therealjewelinourcharitycrownistheArunCup,ourownfootballtournament,tobeheldattheGallagherStadiuminMaidstone.TeamsfromDouglasAllen,Cubitt&WestandWard&Partnerswillallbecompetingagainsteachtoseewhocanbringhomethesilverwarethisyearandraisemoremuch-neededfunds.
incorporating:
LondonDOUGLASALLEN:Chingford 02085246331EastHam 02084728140Walthamstow 02085090092Wanstead 02085303741
HADLEYS:Beckenham 02036332608Bromley 02036332608Chislehurst 02036332608Orpington 02036332608Penge 02036332608PettsWood 02036332608WestWickham 02036332608
EssexDOUGLASALLEN:Barkingside 02085514025Basildon 01268293993Billericay 01277631377Brentwood 01277218525ChadwellHeath 02085970043Chigwell 02085012131Epping 01992560600Hornchurch 01708437777Ilford 02085180044Loughton 02085021326Wickford 01268561287WoodfordGreen 02085056343
Isle ofWight
EastSussexWest
Sussex
Hampshire
Surrey
Greater London
Essex
Kent
Over 100 branches across the south-east
SussexCUBITT&WEST:Arundel: 01903884420Ashington: 01903891444Billingshurst: 01403780807Bognor: 01243867632
Brighton: Fiveways: 01273564444LewesRoad: 01273604377Patcham: 01273541934Saltdean: 01273304453WesternRoad: 01273820600Woodingdean: 01273606121Chichester: 01243786581Crawley: 01293522233Crowborough: 01892613361EastGrinstead: 01342314324HaywardsHeath: 01444411132Horsham: 01403269268Lewes: 01273471231Peacehaven: 01273584511Pulborough: 01798875151Rustington: 01903775576Southwater: 01403731901Southwick: 01273870070Uckfield: 01825768915WestWorthing: 01903700657Worthing: 01903262620
SurreyCUBITT&WEST:Banstead: 01737352233Caterham: 01883331000Cranleigh: 01483271567Dorking: 01306883399Horley: 01293785338Leatherhead: 01372373780Purley: 02086608882Redhill: 01737778866Reigate: 01737222020Shirley: 02086543037Sutton: 02086610330Wallington: 2086470011
HampshireCUBITT&WEST:Emsworth: 01243377888Fareham: 01329281364Havant: 02392492708Petersfield: 01730262931Portsmouth: 02392661213Southsea: 02392296396Waterlooville: 02392267244
KentWARD&PARTNERS:Ashford: 01233639531Barnehurst: 01322335525Bearsted: 01622730955Birchington: 01843842551Broadstairs: 01843602546Canterbury: 01227766669Chatham: 01634841243Cliftonville: 01843227447Dartford: 01322288211Deal: 01304361420Dover: 01304214876Eynsford: 01322862844Faversham: 01795535517Folkestone: 01303256505Gillingham: 01634851191Gravesend: 01474352417Headcorn: 01622890435HerneBay: 01227361226Hythe: 01303267473KingsHill: 01732222211Larkfield: 01732847877Loose: 01622744067Maidstone: 01622683737Meopham: 01474813100NewAshGreen: 01474872466NewRomney: 01797363745PaddockWood: 01892836877Rainham: 1634373531Ramsgate: 01843580314Rochester: 01634830925Sheerness: 01795664651Sittingbourne: 01795427272Snodland: 01634245055Staplehurst: 01580893322Strood: 01634716597Tenterden: 01580766002Tonbridge: 01732770755TunbridgeWells: 01892542767Walderslade: 01634865661Welling: 02083016679WestKingsdown: 01474852816Whitstable: 01227772272
Isle of WightPITTIS:Cowes: 01983292345Freshwater: 01983756222Newport: 01983528888Ryde: 01983564646Sandown: 01983407444Shanklin: 01983868777Ventnor: 01983856417
All are trading names of Arun Estate Agencies Limited. Registered Office: St. Leonard's House, North Street, Horsham,
West Sussex RH12 1RJ. Registered No.2597969 England. VAT No: 450-9134-61
Contacts:t:0800854499e:[email protected]
Residential Sales
Contacts:t:01403215999e:[email protected]
Lettings
Contacts:t:01634731518e:[email protected]
Mortgages Contacts:t:0800854499
Conveyancing
Contacts:t:01795535725e:[email protected]
Recruitment Contacts:t:01795534316e:[email protected]
Head Office
Contacts:t:01634735695e:[email protected]
Corporate Business Contacts:t:01372378948e:[email protected]
Land & New Homes
ArunEstatesincorporating:
Helpingyoumoveforwards
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