The Docklands housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Docklands, the market has certainly changed for both buyers and sellers alike (be they Docklands buy to let landlords, Docklands first time buyers or Docklands owner occupiers looking to make the move up the Docklands property ladder).
Docklands house values are 5.38% higher than a year ago, and the rents Docklands tenants have to pay are 0.3% lower than a year ago
When we compare little old Docklands to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).
However, if we look further back...
Since 2006, Docklands house values are 100.45% higher, yet the rents Docklands tenants have had to pay for their Docklands rental property are 32.8% higher
...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Docklands tenants are 9.2% better off in ‘real spending power terms’.
Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Docklands house values (in red) in the years of 2008 and 2009 ... yet as Docklands property values started to rise after the summer of 2009, see how Docklands rents dipped 6/12 months later (the yellow bars)…. Fascinating!
So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Docklands property.
However, maybe an even more interesting point is for the long-term Docklands buy to let landlords. The performance of Docklands rental income vs Docklands house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).
Whilst, it’s true Docklands landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Docklands buy to let portfolio. More and more I am sitting down with both Docklands landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Docklands portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.