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Last week the Bank of England increased interest rates to 2.25% and they are expected to be 3.25% by early next year. This increase will make the monthly mortgage payments more expensive for first-time buyers, an issue dubbed by some as the ‘property affordability crunch.’

It will also damage the household budgets of homeowners coming off their fixed-rate mortgages in the next 12 months.

𝐒𝐨 𝐡𝐨𝐰 𝐦𝐚𝐧𝐲 𝐡𝐨𝐦𝐞𝐨𝐰𝐧𝐞𝐫𝐬 𝐚𝐫𝐞 𝐜𝐨𝐦𝐢𝐧𝐠 𝐨𝐟𝐟 𝐭𝐡𝐞𝐢𝐫 𝐟𝐢𝐱𝐞𝐝 𝐫𝐚𝐭𝐞𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐧𝐞𝐱𝐭 𝐲𝐞𝐚𝐫?

Of the 7.97 million homeowners with a mortgage in the UK, 6.1 million of them are on a fixed-rate mortgage at an average rate of 2.04%. Industry statistics show around 1.3 million homeowners are coming off their fixed rate in the next 12 months.

The current crop of fixed-rate mortgage deals available today has already had the recent increase in the base rate ‘priced-in’ for weeks.

The cheapest 5-year fixed rate today for a 65% Loan to Value re-mortgage (i.e., you are borrowing 65% of the value of your home) is a mortgage rate of 3.8% with Royal Bank of Scotland (RBS).

𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐭𝐡𝐞 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐢𝐧 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐚 𝟐.𝟎𝟒% 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞 𝐚𝐧𝐝 𝐚 𝟑.𝟖% 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞?

Say an average Grantham first-time buyer bought their first home in November 2019 on a 25-year mortgage. They had a 3-year fixed-rate mortgage, and let’s assume they fixed it at 2.04% (as mentioned above), meaning their fixed-rate deal finishes next month. They have £260,000 outstanding on their mortgage, and their Grantham house is worth £400,000. They would have been paying £1,107 per month for the last three years (assuming they took out a 25-year repayment mortgage).

On the RBS deal above, they will have to start paying £1,548 per month from November when they come off their initial rate – a rise of £441 per month in mortgage payments. That’s quite a rise and potential blow to their household budgets.

Yet if they pushed back the repayment term from 20 years to, say, 35 years, that reduces the payment to £1,120 per month – something to consider if you are re-mortgaging in the coming 12 months.

𝐖𝐡𝐚𝐭 𝐰𝐢𝐥𝐥 𝐭𝐡𝐞 𝐬𝐭𝐚𝐦𝐩 𝐝𝐮𝐭𝐲 𝐜𝐡𝐚𝐧𝐠𝐞𝐬 𝐦𝐞𝐚𝐧 𝐟𝐨𝐫 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐨𝐰𝐧𝐞𝐫𝐬?

PM Liz Truss and Chancellor Kwasi Kwarteng believe that cutting stamp duty will support economic growth by encouraging more people to move home or jump onto the property ladder.

Stamp duty also has other harmful side effects as it decreases labour market elasticity and curtails people from selling up and buying elsewhere, where the jobs are.

Also, stamp duty makes mature homeowners stay put in their large homes rather than downsizing. This reduction in stamp duty will encourage those mature homeowners to move, thus freeing up their large family homes for the younger families that need them.

The Chancellor doubled the zero-rate stamp duty band from £125,000 to £250,000, passing a stamp duty tax saving of up to £2,500 for all English homebuyers.

Also, tax savings are even more significant for first-time buyers, particularly in areas with high house prices, such as London and the South East. They can save a maximum of £11,250 in stamp duty – with a new zero-rate band of £425,000, based on a higher £625,000 spend cap (i.e., the house they buy can’t be over £625,000 for them to qualify for the tax relief).

So, what effect will these stamp duty changes have on the Grantham property market? Looking at recent events in the local property market is the best place to start.

𝐎𝐟 𝐭𝐡𝐞 𝟏,𝟐𝟐𝟎 𝐭𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐚𝐫𝐞𝐚 𝐬𝐢𝐧𝐜𝐞 𝐉𝐮𝐧𝐞 𝟐𝟎𝟐𝟏, 𝟖𝟏𝟒 𝐰𝐞𝐫𝐞 𝐛𝐞𝐥𝐨𝐰 £𝟐𝟓𝟎,𝟎𝟎𝟎. 𝐓𝐡𝐞𝐬𝐞 𝐰𝐨𝐮𝐥𝐝 𝐧𝐨𝐰 𝐛𝐞 𝐭𝐚𝐱-𝐟𝐫𝐞𝐞!

Unsurprisingly, most housing transactions in Grantham were below the £250,000 threshold, yet irrespective of that point, it’s a saving of up to £2,500 for all future Grantham homebuyers.

Anyone currently buying a house in Grantham and not yet completed their purchase (completion is when you have paid the money for your home and collected the keys) will be in line to make this saving.

Grantham landlords purchasing buy-to-let properties will also save money with the stamp duty cut (but they will still be liable for their second home stamp duty levy of 3%).

Overall, this is a welcome move to help the Grantham property market.

Yet will the stamp duty threshold rise have the seismic effect that the Rishi Sunak stamp duty holiday did in 2021, where just under 40% more people moved home than the long-term

30-year average?

I am sure the stamp duty cut will somewhat offset the rising costs in mortgage rates mentioned in this article and cushion the blow to the property market.

A blow to what you might ask?

Well, many people judge the property market’s health by house prices.

The average value of a Grantham property stands at £261,985 and has risen 28.3% in the last five years. Not bad, eh?

But I believe there is a better way to judge the health of the local property market, and that is the number of people moving home (i.e., housing transactions).

You might be asking yourself why we should be more concerned about the number of property transactions and not the change in property values.

Many economists believe the number of property transactions is a far more accurate bellwether for the health and potency of the local housing market. A greater number of people moving home is better for the whole economy (i.e., what these changes are being made for) than a smaller number of transactions, whilst the same can’t be said for higher house prices.

𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐠𝐨𝐢𝐧𝐠 𝐭𝐨 𝐡𝐚𝐩𝐩𝐞𝐧 𝐭𝐨 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐡𝐨𝐮𝐬𝐞 𝐩𝐫𝐢𝐜𝐞𝐬?

I believe the growth in Grantham house prices achieved in 2021/22 is not sustainable into 2023.

In conjunction with the price cap on energy bills, the stamp duty change, the reversal of the rise in National Insurance and the drop in Income Tax will mitigate house price drops. Yet, I foresee a ‘slight’ realignment in the house prices being achieved in 2023, compared to 2022.

The more significant impact these changes will have is the number of people moving home in the next 12 months.

I have been forecasting a 15% to 20% year-on-year drop in Grantham property transactions in 2023. Following this stamp duty cut and the measures mentioned above, I believe it will be lower, yet around 5% lower.

To conclude, I predict we will have slightly lower house prices and fewer people moving home in Grantham, but not in any way a crash that many thought was on the horizon.

Before I go though, let me share some thoughts on whether stamp duty is a fair tax.

Now, this is almost a topic for a standalone article itself. Some economists believe that removing stamp duty (which raised £14.1bn in tax in 2021) and replacing that lost income to the Exchequer by increasing council tax on more expensive properties would do a lot more than other intended tax cuts to boost economic growth.

According to some commentators, the way UK Government taxes housing is flawed. They suggest instead of taxing an infrequent property transaction particularly harshly (the average stamp duty bill is £10,600), the Government should tax living in a house more, especially those who live in the higher priced properties.

So let us see how viable that could be…

Even if council tax was frozen for bands A to D (the lower priced properties), and the uplift between the more expensive council tax bands was doubled on each step between band D and H (so a typical band E property owner would see their council tax rise from £2,473 to £3,628 per year and a typical Band H see a rise of from £3,435 per year to £5,790 per year), such massive increases in council tax would be political suicide for the wealthy Tory voting homeowners and only raise £5.28bn – a long way from the £14.1bn currently raised.

Now, if the £14.1bn tax raise were spread evenly over all council tax bands, the average band D property would need to rise by £490 per year, and even a band A would increase by an extra £382 a year … something that again would be political suicide.

Yes, stamp duty is flawed. It’s just every other option has more significant flaws.

Anyway, these are just my thoughts. Tell me, people of Grantham, what are your thoughts on the Budget, the stamp duty changes or whether stamp duty is fit for purpose and what you would do if you were the Chancellor to bolster the British property market?

• Inflation (and recessions) can be nerve-racking for people and their hard-earned savings and wealth.
• Yet there are six reasons which make investing in private rental properties a potentially wise investment in these changeable times.
• This article looks at how investing in Grantham property could help you ‘hedge’ against inflation and protect your savings & wealth against the possible recession.

The cost-of-living predicament is threatening many Grantham households’ budgets.

Inflation is running at 7.8%, yet the best savings rates in the market are only 2.75% (because of low Bank of England interest rates). This means that the value of people’s savings is falling fast.

To add insult to injury, the possibility of a recession on the horizon could add another nail in the coffin of people’s wealth and savings.

Looking back at the last recession (ignoring the 2020 Covid recession), the Stock Market FTSE index dropped 40.1% during the Credit Crunch (2008/9) — scarcely a soothing thought if you worry about a recession looming in the next couple of years.

A recession can have a catastrophic impact on people’s household budgets, as a weaker economy characteristically means that salaries drop, and people get made redundant. So, why do I suggest Grantham rental properties will help to protect your wealth and hedge against inflation?

𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐫𝐞𝐧𝐭𝐚𝐥𝐬 𝐚𝐫𝐞𝐧’𝐭 𝐩𝐞𝐫𝐟𝐞𝐜𝐭, 𝐲𝐞𝐭 𝐢𝐧 𝐦𝐚𝐧𝐲 𝐰𝐚𝐲𝐬, 𝐭𝐡𝐞𝐲 𝐠𝐨 𝐚 𝐥𝐨𝐧𝐠 𝐰𝐚𝐲 𝐭𝐨 𝐡𝐞𝐥𝐩 – 𝐥𝐞𝐭 𝐦𝐞 𝐭𝐞𝐥𝐥 𝐲𝐨𝐮 𝐰𝐡𝐲.

1. One of the most significant benefits of investing in residential property is to hedge against inflation. An ‘inflation hedge’ is an investment that defends against the decreased purchasing power of your money that results from the loss of its worth/value due to inflation.

The last time the UK suffered high and persistent inflation was the 1970s.

In 1973, the average British house was worth £9,942. In 1980, that same house was worth £23,287. If the same £9,934 had been invested instead in the stock market in 1973, it would be worth £19,384 in 1980.

So how did that compare to inflation?

Neither property nor the stock market beat inflation in those seven years (as the goods and services of that £9,942 in 1973 had risen to £25,897 by 1980).

But investing in the stock market between 1973 and 1980, that stock market investor would have lost 25.2% of their investment in ‘real terms’ compared with only 10.1% for property investors.

However, there was the bonus of seven years’ worth of rent!

To give you some idea of what that would be worth in today’s figures, even if the rent didn’t go up during that time frame…

𝐓𝐡𝐞 𝐚𝐯𝐞𝐫𝐚𝐠𝐞 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐥𝐚𝐧𝐝𝐥𝐨𝐫𝐝 𝐰𝐢𝐥𝐥 𝐞𝐚𝐫𝐧 £𝟔𝟐,𝟑𝟐𝟖 𝐢𝐧 𝐫𝐞𝐧𝐭 𝐨𝐯𝐞𝐫 𝐬𝐞𝐯𝐞𝐧 𝐲𝐞𝐚𝐫𝐬.

2. Rental properties have repetitive, regular monthly income, whilst dividends from the stock market are dependent on their profits which, in a recession, can be hit and miss.

3. Existing Grantham landlords know that the rents their Grantham rental properties achieve don’t historically decline during recessions in the medium term.

In 2008, Grantham rents dipped by 5.2%, yet they soon bounced back a year later.

And even if average rents do go down, every tenancy’s rent is fixed at the start of the tenancy. Also, it is infrequent for a tenant to negotiate the rent downwards mid-tenancy even if average rents did drop.

4. Property prices sometimes fall during recessions.

In the 2008 Credit Crunch recession, South Kesteven property values dropped 20.55%.

Dropping from £180,951 at the peak in September 2007 to £143,762 in July 2009 (before they started to rise again).

Yet as I stated above, the FTSE stock market dropped 40.1% with the Credit Crunch. Also in previous recessions, the FTSE Stock market dropped 36% on Black Monday before the early 1990’s recession and 55.3% in 1974

Which sort of drop would you prefer?

5. (Almost) guaranteed rental payments. Insurance can be taken out for rental payments (you can’t get that on stocks and shares). Also, the government will cover most (or all) rent when someone is made redundant and needs to apply for social security.

6. For those Grantham landlords who take a mortgage, inflation can be a benefit. The first is the effect of inflation on mortgage debt. As Grantham house prices rise over time, it reduces the loan to value percentage of your mortgage debt and increases your equity. You will receive a lower interest rate when you re-mortgage in the future because of the lower loan to-value percentage.

Also, as the equity in your Grantham rental property increases, assuming you fix your mortgage, your payments stay the same.

Finally, inflation also helps Grantham buy-to-let landlords because rents tend to increase with inflation. So as rents go up, your fixed-rate buy-to-let mortgage payments stay the same, creating the prospect of more significant profit from your buy-to-let investment.

𝐘𝐞𝐭, 𝐭𝐡𝐞𝐫𝐞 𝐚𝐫𝐞 𝐝𝐨𝐰𝐧𝐬𝐢𝐝𝐞𝐬 𝐭𝐨 𝐫𝐞𝐧𝐭𝐢𝐧𝐠.

Rent arrears can be a worry, though. However, during 2021, landlords who used a letting agent were, according to an investigation from Denton House Research, 272.5% less likely to be in arrears of two months or more.

One of the biggest reasons is the more stringent tenant referencing letting agents tend to do compared to landlords who do it themselves. At our agency, we like to reference tenants carefully for job security, stability, and any history of non-payment on rents, constantly liaising with previous rental properties to see if they were good tenants.

That is why many tenants with a poor tenancy record are attracted to properties that are not through agents, as they know most (not all) DIY landlords don’t reference their tenants as thoroughly as letting agents do. Solid referencing is not a 100% guarantee you won’t get rent arrears or have your rental property trashed, yet it will go a long way to mitigate it.

One of the things about investing in Grantham rental properties is that buy-to-let investors have more control over their returns than stock market investors do. Buy-to-let provides long-term stability and constant income to counterweight the massive swings seen in the FTSE stock market.

Something is reassuring about touching and feeling your investment – the ‘bricks and mortar’.

You must make your own decision when investing in the private rental market in Grantham. If you’d like to chat over the phone for five or ten minutes to discuss where I would be investing in the Grantham property market, don’t hesitate to drop me a message or pick up the phone.

How are you planning for the spectre of a potential recession?

• According to some newspapers and pundits, the property market boom could soon be over with increasing interest rates and inflation.
• In this article, I share the 3 fundamental economic reasons why things are different to the last property market crash.
• The insider’s way to find out if there will be a property crash.
• ..and 4 reasons why buy-to-let landlords are coming back into the Grantham rental market to protect their wealth and hedge against inflation.

With inflation and the cost-of-living crisis, some say this could cause property values to drop, they say, by between 10% and 20% in the next 12 to 18 months.

There can be no doubt that the current Grantham property market is very interesting now.

At the time of writing, there are only 137 properties for sale in Grantham (the long-term 15-year average is between 380 and 400), meaning house prices have gone up considerably.

According to the Land Registry,

𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐩𝐫𝐢𝐜𝐞𝐬 𝐡𝐚𝐯𝐞 𝐢𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐛𝐲 𝟏𝟎.𝟐% (𝐨𝐫 £𝟐𝟑,𝟕𝟎𝟎) 𝐢𝐧 𝐭𝐡𝐞 𝐥𝐚𝐬𝐭 𝟏𝟐 𝐦𝐨𝐧𝐭𝐡𝐬.

So, as Robert Kiyosaki says, ‘the best way to predict the future is to look to the past’. I need to look at what caused the last property crash in 2008 and how that compares to today.

1. 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞 𝐢𝐧 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐑𝐚𝐭𝐞𝐬

One reason mentioned as a possible cause of a crash is the rise in the Bank of England interest rates, affecting homeowners’ mortgages.

Higher mortgage rates mean homeowners will have to pay a lot more on their mortgage payments, leaving less for other household essentials. In 2007 (and the 1989 property crash), many Grantham people put their houses up for sale to downsize to try and reduce their mortgage payments.

Yet the newspapers fail to mention that 79% of British people with a mortgage have it on a fixed interest rate (at an average mortgage rate of 2.03%)

Also, just under 19 out of 20 (93.2%) of all UK house purchases in 2021 fixed their mortgage rate.

So, in the short to medium term (two to five years), most homeowners won’t see a rise in mortgage payments for many years. Also, 27.8% of all UK house purchases were 100% cash (i.e. no mortgage).

Of the 932,577 house purchases registered since February 2021 in the UK, 259,205 of those were bought without a mortgage.

Yet some people say this will be a problem when all these homeowners come off their fixed rate. The mortgage lending rules changed in 2014, and every person taking out a mortgage would have been assessed at the application as to whether they could afford their mortgage payments at mortgage rates of 5% to 6% rates, not the 2% to 3% they may well be paying now.

No pundit says the Bank of England interest rates will go above 2% with a worst-case scenario of 3%. If the Bank of England did raise interest rates to 3%, homeowners would only be paying 4.5% to 5.5% on their mortgages and thus well within the stress test range made at the time of their mortgage application.

This means the probability of a mass selloff of Grantham properties or Grantham repossessions because interest rate rises (both cause house prices to drop) is much lower.

2. 𝐇𝐨𝐮𝐬𝐞 𝐏𝐫𝐢𝐜𝐞 / 𝐒𝐚𝐥𝐚𝐫𝐲 𝐑𝐚𝐭𝐢𝐨

Another reason being bandied about by some people for another house price crash is the ratio of average house prices compared to average wages.

The higher the ratio, the less affordable property is. In 2000, the UK average house price to average salary ratio was 5.30 (i.e. the average UK house was 5.3 times more than the average UK salary). At its peak just before the last property crash in 2008, the ratio reached 8.64.

The ratio now is 8.85, so some commentators are beginning to think we’re in line for another house price crash. However, I must disagree with them because mortgage rates are much lower today than in 2007. For example,

The average 5-year fixed-rate mortgage in 2007 was 6.19% (just before the property crash), yet today its only 1.79%.

So, whilst the house price/salary ratio is the same as the last property crash in 2008, mortgages today are proportionally 71.1% cheaper.

𝟑. 𝐁𝐚𝐧𝐤𝐬 𝐑𝐞𝐜𝐤𝐥𝐞𝐬𝐬 𝐋𝐞𝐧𝐝𝐢𝐧𝐠

Another reason for a property crash in 2008 was the reckless lending practices in the run-up to that crash.

The first example of reckless lending was self-certified mortgages. A self-certified mortgage is when the lender doesn’t require proof of income.

In 2007, 24.6% of new mortgages were self-certified mortgages.

So, when the economy got a little sticky in 2008, the people that didn’t have the income they said they had to pay for their mortgages (because they were self-certified) promptly put their properties on the market.

The banks’ second aspect of reckless lending was how much they lent buyers to buy their homes. Today, banks want first-time buyers to have at least a 10% deposit, and ideally more. There are 95% mortgages available now (meaning the first-time buyer only requires a 5% deposit), yet they are pretty challenging to obtain.

Back in 2005/6/7, Northern Rock was allowing first-time buyers to borrow 125% of the value of their home. Yes, first-time buyers got 25% cashback on their mortgage!

In 2017, 9.5% of all mortgages were 95%, and 6.1% of mortgages were 100% to 125%.

Meaning that nearly 1 in 6 mortgages (15.6%) taken out in 2007 had a 95% to 125% mortgage.

When the value of a property goes below what is owed on the mortgage, this is called negative equity. A lot of Grantham homeowners with negative equity (or who were getting close to negative equity) in 2008 panicked because of the Credit Crunch and put their houses up for sale.

To give you an idea of what happened last year (2021) regarding mortgage lending, only 2.4% of mortgages were 95%, and 0.2% of mortgages were 100%. This is because the mortgage lending rules were tightened in 2014.

𝐒𝐨 𝐰𝐡𝐲 𝐝𝐢𝐝 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐡𝐨𝐮𝐬𝐞 𝐩𝐫𝐢𝐜𝐞𝐬 𝐝𝐫𝐨𝐩 𝐢𝐧 𝟐𝟎𝟎𝟖?

Well, in a nutshell, a lot more Grantham properties came onto the market at the same time in 2018, flooding the Grantham property market with properties to sell.

Meanwhile, mortgages became a lot harder to obtain (because it was the Credit Crunch), so we had reduced demand for Grantham property.

The price will drop when we have an oversupply and reduced demand for something. Grantham property prices fell by between 16% and 19% (depending on the property type) between January 2008 and May 2008.

So, what were the numbers of properties for sale for Grantham in the last house market crash?

There were 513 properties for sale on the market in Grantham in the Summer of 2007 (just before the crash), whilst a year later, when the Credit Crunch hit, that had jumped to 1,024

This vast jump in supply and the drop in demand caused Grantham house prices to drop in 2018.

Compared with today, there are only 137 properties for sale in Grantham, whilst the long-term 15-year average is between 380 and 400 properties for sale.

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

The Grantham house price explosion since we came out of Lockdown 1 has been caused by a shortage of Grantham homes for sale (as mentioned above) and increased demand from buyers (the opposite of 2008).

However, there are early signs the discrepancy of supply and demand for Grantham properties is starting to ease, yet this takes a while before it has any effect on the property market, so a while before it takes effect.

This will mean buyer demand will ease off whilst the number of properties to buy (i.e. supply) increases. This should gradually bring the Grantham property market back in line with long-term levels, rather than the housing market crash.

My advice is to keep an eye on the number of properties for sale in Grantham at any one time and only start to worry if it goes beyond the long-term average mentioned above.

But before I go, I need to chat about what inflation and the cost of living will do to the Grantham property market.

𝐇𝐨𝐰 𝐰𝐢𝐥𝐥 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐋𝐢𝐯𝐢𝐧𝐠 𝐚𝐟𝐟𝐞𝐜𝐭 𝐭𝐡𝐞 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐏𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐌𝐚𝐫𝐤𝐞𝐭?

There is no doubt that cost-of-living increases will have a dampening effect on buyer demand. If people have less money, they won’t be able to afford such high mortgages. This will slow Grantham house price growth, especially with Grantham first-time buyers.

Yet, the reduction in first-time buyers is being balanced out by an increase in buy-to-let landlord’s buying, especially at the lower end of the market.

This, in turn, will stabilise the middle to upper Grantham property market. This means the values of such properties (mainly Grantham owner-occupiers) will see greater stability in the value of their Grantham home and a buyer for their home should they wish to take the next step on the property ladder.

So why are more Grantham landlords looking to extend their buy-to-let portfolios, even in these economic circumstances?

I see new, and existing buy-to-let Grantham landlords come back into the market to add rental properties to their portfolios. As the competition with first-time buyers is not so great, they’re not being outbid as much.

Yet, more importantly, residential property is a good hedge against inflation.

Firstly, in the medium term, property values tend to keep up with inflation.

Secondly, inflation benefits both landlords and existing homeowners, with the effect of inflation on mortgage debt. As Grantham house prices rise over time, it reduces the loan to value percentage of your mortgage debt and increases your equity. When the landlord/homeowner comes to re-mortgage in the future, they will receive a lower interest rate.

Thirdly, as the equity in your Grantham property increases, your fixed-rate mortgage payments stay the same.

Finally, inflation also helps Grantham buy-to-let landlords. This is because rents tend to increase with inflation. So as rents go up, your fixed-rate buy-to-let mortgage payments stay the same, creating the prospect of more significant profit from your buy-to-let investment.

• Grantham needs 164 additional private rented properties per year to keep up with current and future demand from Grantham tenants.
• Yet over the last 5 years, Grantham has lost 229 private rented homes.
• What are the 5 reasons the supply of private rental properties in Grantham is falling? What does this mean for tenants and landlords in Grantham?

There has been a rise in demand for rental properties and an 8.9% fall in the number of Grantham private rented properties, which has caused Grantham rents to rise by 52% in the last year, a new all-time high.

The National Residential Landlords Association asked the respected economics think tank Capital Economics, to carry out research on the UK rental market. It found that if the current trends in the property market in terms of growth of the population, Brits living longer, the lack of new homes building, the reduction in social housing (aka council housing), then the demand for homes in the private rented sector needs to increase by 227,000 homes per year.

So, based on those numbers, Grantham needs to have an additional 164 private rented properties per year.

The problem is the number of private rental properties in Grantham has reduced from 4297 in 2017 to 4067 in 2021, a net loss of 229.

𝐒𝐨, 𝐰𝐡𝐲 𝐡𝐚𝐬 𝐭𝐡𝐞 𝐬𝐮𝐩𝐩𝐥𝐲 𝐨𝐟 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐫𝐞𝐧𝐭𝐞𝐝 𝐡𝐨𝐦𝐞𝐬 𝐢𝐧 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐛𝐞𝐞𝐧 𝐫𝐞𝐝𝐮𝐜𝐞𝐝?

1. Section 24 Income Tax

Section 24 was introduced in 2017 to level the playing field on the taxation of property between homeowners and landlords. Section 24 stops landlords from offsetting their buy-to-let mortgage costs against the profits from their rental property. Interestingly, no other kind of UK business is affected by Section 24 taxation. In other words, whatever other form of business you might be in, be it butcher, baker or candlestick maker, every other business can offset their finance costs against their profits, except buy-to-let.

The issue caused by Section 24 Tax is that some landlords ended up paying more income tax than they really made in profit after paying their buy-to-let mortgages. This means on the back of rising Grantham house prices in the last five years, some Grantham landlords have sold their buy-to-let investments.

2. 3% More Stamp Duty for Landlords

When someone buys a property, they normally must pay a tax to the Government for the privilege. This tax is called Stamp Duty. Yet landlords must pay an additional 3% stamp duty supplement on top of that when they purchase a Grantham buy-to-let property. Evidence suggests some Grantham landlords have decided to hold off or scale back buying additional buy-to-let properties for their portfolio because of the thousands of extra pounds that landlords have to pay to buy the rental property.

3. Holiday and Airbnb Lets

Some Grantham landlords are converting their long-term rental properties into short-term furnished holiday and AirBnB properties. Whilst the hassle, stress and service levels are much higher, these types of properties do tend to make more money and aren’t as heavily taxed as normal lets. When properties convert to short-term lets, it removes another Grantham property from the general supply chain of long-term rental properties.

4. Greater Legislation for Rental Properties

With more than 150 pieces of legalisation and new laws being added each year, the burden on landlords is huge. On the horizon is the Renters Reform Bill which will remove the no-fault evictions. Also, all rental properties with an Energy Performance Certificate (EPC) rating of below a ‘C’ will have to be improved (i.e money spent on them) by the landlord. This could be more than £10,000 per property. Hence, why some Grantham landlords have been selling their rental properties with low EPC ratings in the last 18 months.

5. Accidental Landlords Selling Up

There are some Grantham landlords who are classed as ‘Accidental Landlords’. In 2008/9, with a slowing property market and house price values dropping in the order of 16% to 19% (depending on the type of property) some Grantham homeowners decided to let their home out as opposed to selling it at a loss. Yet, with the price booms of the last 18 months, many decided to cash in on the higher property prices and sell – again taking another private rental property out of the system.

So, why is the demand for private rented homes in Grantham increasing, even though more people own their homes in Grantham than 5 years ago?

Even with better provision of affordable social housing and higher rates of owner-occupation in Grantham (rising from 59.67% of homes in Grantham being owner-occupied in 2017 to 61.86% in 2021), demand for private rental property continues to outstrip the supply.

𝐓𝐡𝐞𝐫𝐞 𝐚𝐫𝐞 𝐦𝐚𝐧𝐲 𝐫𝐞𝐚𝐬𝐨𝐧𝐬 𝐛𝐞𝐡𝐢𝐧𝐝 𝐭𝐡𝐢𝐬 𝐢𝐧𝐜𝐥𝐮𝐝𝐢𝐧𝐠:

1. People are living longer, meaning not so many properties are coming back into the mix to be recycled for the younger generation.

2. Net migration to the UK has continued at just over a quarter of a million people a year since 2017, meaning we need an additional 115,000 households to house them alone.

3. For the last two years, one in six of the owners of properties that have been sold have moved into rented accommodation instead of buying on because of the lack of properties to buy.

So, what is the outcome of the imbalance between supply and demand on Grantham rental properties?

Quite simply – Grantham rents have rocketed. They are 5.2% higher today than in the spring of 2020 … and that’s on the back of rents being 10.4% higher in spring 2020, compared to spring 2019.

The severe shortage of housing in the private rented sector is pushing up rents in Grantham as demand continues to grow. Many Grantham people are finding it hard work to find appropriate accommodation at a reasonable rent, and with mounting numbers of tenants predicted to continue, this situation will only get worse unless more houses are built.

My heart goes out to those Grantham tenants struggling with the cost-of-living crisis, only to then be hit by higher rents.

Yet, these higher rents are now enticing new landlords back into the Grantham buy-to-let market because of the higher returns.

With higher inflation, property investment has been seen in the past as a safe harbour to invest one’s money. With the bonus of rising yields (because of the increase in rents) together with the nervousness of the Bank of England to increase interest rates too much because of the issues in Eastern Europe, this could be the start of a second renaissance in the Grantham buy-to-let market.

If you have concerns about the issues in legislation and taxation, then the advantage of employing a letting agent, with the choice of property, what you pay for it and how it’s managed, will go a long way to mitigate them.

If you are considering getting into the Grantham buy-to-let market for the first time or expanding your property portfolio (whether you are a client of mine or not) please do not hesitate to give me a call and we can discuss these matters further.

𝑇ℎ𝑒 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚 ℎ𝑜𝑢𝑠𝑖𝑛𝑔 𝑚𝑎𝑟𝑘𝑒𝑡 𝑜𝑣𝑒𝑟 𝑡ℎ𝑒 𝑙𝑎𝑠𝑡 𝑓𝑖𝑣𝑒 𝑦𝑒𝑎𝑟𝑠 ℎ𝑎𝑠 𝑏𝑒ℎ𝑎𝑣𝑒𝑑 𝑜𝑑𝑑𝑙𝑦.

• 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚 ℎ𝑜𝑢𝑠𝑒 𝑝𝑟𝑖𝑐𝑒𝑠 𝑎𝑟𝑒 33.7% ℎ𝑖𝑔ℎ𝑒𝑟 𝑡ℎ𝑎𝑛 𝑖𝑛 2017, 𝑒𝑣𝑒𝑛 𝑡ℎ𝑜𝑢𝑔ℎ 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑜𝑠𝑒 𝑓𝑖𝑣𝑒 𝑦𝑒𝑎𝑟𝑠, 𝑡ℎ𝑒 𝐵𝑟𝑖𝑡𝑖𝑠ℎ 𝑒𝑐𝑜𝑛𝑜𝑚𝑦 ℎ𝑎𝑑 𝑡ℎ𝑒 𝑢𝑛𝑐𝑒𝑟𝑡𝑎𝑖𝑛𝑡𝑦 𝑜𝑓 𝐵𝑟𝑒𝑥𝑖𝑡 𝑎𝑛𝑑 𝑡ℎ𝑒 𝑚𝑎𝑠𝑠𝑖𝑣𝑒 𝑓𝑎𝑙𝑙 𝑖𝑛 𝐺𝐷𝑃 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑝𝑎𝑛𝑑𝑒𝑚𝑖𝑐.
• 𝑌𝑒𝑡, 𝑎 𝑙𝑒𝑠𝑠 𝑜𝑏𝑠𝑒𝑟𝑣𝑒𝑑 𝑡𝑟𝑒𝑛𝑑 𝑖𝑠 𝑡ℎ𝑎𝑡 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚’𝑠 𝑛𝑒𝑡 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠 ℎ𝑎𝑠 𝑟𝑖𝑠𝑒𝑛 𝑏𝑦 851 ℎ𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑𝑠, 𝑎 𝑗𝑢𝑚𝑝 𝑜𝑓 3.7%.
• 𝑊ℎ𝑦 ℎ𝑎𝑠 𝑔𝑟𝑜𝑤𝑡ℎ 𝑖𝑛 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠ℎ𝑖𝑝 ℎ𝑎𝑝𝑝𝑒𝑛𝑒𝑑, 𝑎𝑛𝑑 𝑤ℎ𝑎𝑡 𝑑𝑜𝑒𝑠 𝑖𝑡 𝑚𝑒𝑎𝑛 𝑓𝑜𝑟 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚’𝑠 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠 (𝑎𝑛𝑑 𝑙𝑎𝑛𝑑𝑙𝑜𝑟𝑑𝑠)?

With the newspapers full of news about the death of homeownership and the growth in Generation Rent, it must surprise many (as it did with me) that the number of homeowners in Grantham has grown.

To give some context,

The number of homeowners in Grantham dropped between 2011 and 2017 by 87 households, yet between 2017 and 2021, that grew by 851 households.

𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐛𝐞𝐡𝐢𝐧𝐝 𝐭𝐡𝐢𝐬 𝐠𝐫𝐨𝐰𝐭𝐡 𝐢𝐧 𝐡𝐨𝐦𝐞𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐧𝐝 𝐢𝐬 𝐢𝐭 𝐚 𝐠𝐨𝐨𝐝 𝐭𝐡𝐢𝐧𝐠?

Politicians love it when homeownership rises, as they believe owning a house turns individuals into model upright citizens. It was one of the critical reasons for the Council House sell-off in the 1980s.

Yet the hard data to back this up is unexpectedly slim, whilst other studies hint that homeownership has some harmful costs to the economy, such as reduced entrepreneurial spirit and disinclination to move home to find work.

However, increasing homeownership may be a good foundation for Britain’s economic recovery after the last few years. Homeowners have a greater propensity (than other people) to live in single-family unit homes like townhouses and semi-detached houses.

Greater demand for more single-use homes supports the construction of such dwellings (instead of other types such as small apartment blocks or Homes of Multiple Occupation.) This is important because single-family unit homes tend to be better build quality, have more extensive gardens, and have more local amenities.

𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐬𝐨𝐫𝐭 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐈 𝐚𝐦 𝐭𝐚𝐥𝐤𝐢𝐧𝐠 𝐚𝐛𝐨𝐮𝐭 𝐢𝐧 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦?

In 2017, there were 11,082 Grantham owner-occupied homes. By 2021, this had grown to 11,933 Grantham homes.

Meaning homeownership in Grantham has risen from 59.67% of the households in Grantham in 2017 to 61.86% in 2021, a proportional increase of 3.7%

So, what is behind this growth in homeownership?

1. 95% mortgages have been readily available at low-interest rates now for over a decade. In 2017, first-time buyers also got an exemption from stamp duty. This created a perfect storm of demand, which caused the number of Grantham first-time buyers to rise.
2. Whilst the rise in homeownership in Grantham precedes the pandemic by a couple of years, another factor to the growth relates to the last property market recession of 2008/9 (The Credit Crunch). Between 2009 and 2012, many Grantham homeowners found themselves unemployed and still had to pay mortgages at 6% to 8%. Some were repossessed or had to sell their home at a low price to unshackle themselves from their high mortgage costs. This development, nevertheless, took many agonising years to play out, reducing homeownership until the middle of the last decade.
3. People’s views on the way they live have altered during the lockdowns. In a sphere of stay-at-home instructions and social distancing, the peace of mind of homeownership gives Grantham homeowners the security of tenure.
4. Finally, there has been a long-term change in the demographics of the UK. Millennials (currently aged between 26 and 41) are less likely to be homeowners than their Baby Boomer parents were at the same age. Yet, the British millennial generation is now entering its prime home-buying period as they have saved their deposit and are more likely to inherit money from their grandparents. (The average age of a first-time home-buyer in the UK is 33 compared to 26 in the mid-1990s).

𝐒𝐨, 𝐭𝐡𝐞 𝐟𝐢𝐧𝐚𝐥 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐭𝐨 𝐛𝐞……..

How much further could homeownership go in Grantham?

The biggest hurdle could prove to be the supply of available homes.

Many ‘accidental landlords’ have been selling their properties recently, which first-time buyers have bought. Accidental landlords put their own homes up for rent in the early to mid-2010s because they could not sell. Now they have been motivated to cash in on the higher Grantham house prices in the last couple of years, which increased the supply of properties to buy for owner-occupation.

Also, the number of houses on the market in the UK available to buy has increased among existing owner-occupiers. In December 2021, there were 355,700 properties for sale yet by March 2022, that had risen to 431,000. This is giving greater confidence to other Grantham homeowners too scared to put their homes up for sale because they are concerned, that they would not be able to find anything. Things are starting to change in that regard.

Also, there are signs of a recovery in British new home building as the number of new housing starts in 2021 hit its highest level since the financial crisis of 2007. Yet with a steady increase in Grantham landlords returning to the market in the last few months, this tide will turn.

Grantham’s home ownership could continue to swell for a while yet!

PS What does this mean to the private rented sector in Grantham? Come back next week as I give some fantastic insights every Grantham landlord will want to read to ensure they remain profitable in the Grantham Buy-to-let market.

• 797 properties have sold in the Grantham area in the last 12 months
• It only takes 45 days to sell a Grantham home, so why does it take 123 days from the sold board going up to the buyer getting the keys?
• With a shortage of solicitors and a sub-standard conveyancing system, this article discusses what Grantham house sellers (and buyers) can do to speed up the house-buying process.

Nationally, the average length of time it takes from agreeing on a sale of a property to the keys being handed over is 111 days (down from 117 days last year), yet in Grantham, we are above the national average at 123 days.

So why does it take just over 17 weeks, when all that is required is the lawyers to look at some paperwork and get a mortgage? Also, what can Grantham homebuyers and sellers do to speed this up?

The legal process to buy and sell a UK property is called conveyancing. The conveyancing system itself hasn’t really changed in hundreds of years. After the housing market was reopened after the first lockdown in the Spring of 2020, the property market returned with a bang, helping with the stamp duty holiday.

In 2021, the number of properties selling in Grantham in some months went up massively, e.g. by 96% (June 2021) and by 65% in March 2021. Many conveyancers and solicitors had to sort the legal paperwork out on upwards of 120 to 150 properties each at any one time.

This glut of sold properties caused by the pandemic that needed their legal work to be sorted exacerbated a problem already present in the conveyancing industry.

For years, conveyancers have complained of overwork and underpay. Conveyancing is seen as the Cinderella of the legal profession. This workload was the straw that broke the camel’s back, making many conveyancers leave the profession and go into better-paid legal work like corporate work.

Also, the legal process of conveyancing has built-in inefficiencies, and the conveyancing profession has been relatively slow to innovate. However, there are some excellent tech solutions that are being slowly rolled out across the industry to make the process more efficient and effective.

What can Grantham home buyers and sellers do to speed up their property sales?

If you are buying or selling your Grantham property as we speak, you won’t be able to wait for the conveyancing profession to be revamped, yet you can be as pre-emptive as possible to get your Grantham house sale through earlier.

In a nutshell, make sure you have all the paperwork on your Grantham home before you put your home on the market. Next, get the ball rolling on your mortgage. If you receive some paperwork, read it, check, and sign it back in a day, do not leave it a week; and finally, always communicate frequently with your estate agent and conveyancer.

When you instruct a solicitor, most will request money to start the ball rolling for searches and disbursements. They won’t lift a finger until that is paid.

You will have to prove who you are in the conveyancing process, so your conveyancer will ask you to show them proof of ID and address. If you are buying, they will need to prove you have the funds/deposit to buy the home (and if your deposit is coming from family/friends, then they are required to write a letter to that effect).

How can the house buying and selling process be improved?

A couple of years ago, the Government set up the Home Buying and Selling Group to find the answer to this problem. Chaired by the well-known property guru Kate Faulkner, it is looking on an amalgamated Seller’s Information Pack (SIPs) and an IT-based single platform to share and communicate that SIP between buyers, sellers, their conveyancers, the estate agent, mortgage providers and brokers and finally surveyors.

The advantage of the SIP is that it can be created before the buyer has been found, meaning property buyers would be more knowledgeable when making an offer. Also, once the sale has been agreed upon, the SIP could be sent straightaway electronically to the buyers’ legal team (from the seller’s legal team) to start the procedure of asking for searches and raising inquiries.

The bottom line is the conveyancing process is not fit for purpose in the 21st Century and change is on the horizon.

So, before the SIP becomes mandatory, there are things everyone can do to ensure everyone gets the home of their dreams quicker.

At my agency, I recommend the seller, us as the agent and the conveyancer start to liaise with each other to get the key information on the property being sold as quickly as possible. Then once a buyer is found, I believe it is vital, as the agent, regularly communicates with all the stakeholders in the sale in the chain to ensure everyone is playing their part to expedite the sale.

In the future, utilising technology and every agent/conveyancer preparing information upfront with the SIP will drastically reduce the time it takes between agreeing to a sale and the keys/monies handed over.

The conveyancing process will have to change to meet the needs of the 21st Century, but how long that will take is the big question

If you would like to chat with me about how we do things differently to ensure your property not only gets the best price and how we do all we can, as agents, to expedite a smooth sale for your Grantham property, do not hesitate to pick up the phone to me or drop me a line at the office.

• The average time to find a buyer for a Grantham property reduced from 75 days in 2020 to 45 days in 2021
• Yet still, just over 1 in 4 Grantham homeowners are on the market after 12 weeks
• Why are so many Grantham homes still on the market after all that time, and what does it mean for the Grantham property market?

You would have needed to have been living in a cave since the end of Lockdown No.1, not to realise the property market has been on fire in Grantham (and the UK as a whole) for the last 18/20 months.

It has been very much a seller’s market, especially in 2021. Yet as we enter the second quarter of 2022, I have noticed a slight rebalancing of the Grantham property market, more towards buyers, something that is good news for everyone (sellers and buyers) locally.

In 2020, it took on average 75 days from the average Grantham property appearing on the property portals (ie Rightmove, Zoopla etc) to the property going sold (STC)

Interesting when compared to the national average of 72 days in 2020. Yet, last year, this was reduced to 45 days in Grantham (51 days nationally).

So, what’s the issue with the Grantham property market on fire?

Well, that was last year, and things have changed slightly since.

Of the properties for sale in Grantham and the 5 miles around it, 25.3% of houses have been on the market for more than 12 weeks.

That doesn’t sound a lot, yet that is an eternity in this market!

So, why are there so many properties on the market in Grantham still for sale after all this time … it usually comes down to one thing … the practice of ‘overvaluing’.

So before I explain what overvaluing is, let me give you some background.

Many agents (not just ourselves), in 2021, were achieving top prices for Grantham property with multiple offers becoming the standard. The property they were selling was only available to buy for days before the owner obtained multiple offers that were not only at a satisfactory level, yet more than they dreamed ever likely.

Although this was great news for Grantham homeowners, this caused fewer homes to come onto to market in the last six months in Grantham, as people were afraid to put their homes on the market without having a property to buy.

With fewer properties coming onto the market, some Estate Agents have become more and more desperate to get a larger slice of this smaller property market. It has seen an unwelcome side of the estate agency profession, the estate agency practice of ‘overvaluing’.

While ‘overvaluing’ is nothing new, the custom has been generally limited to a small number of estate agents. Yet now, it’s become more prevalent and creates uncountable distress and pressure for some Grantham homeowners.

Many Grantham homeowners want to sell quickly to get the property of their dreams. Yet, in many cases, when they do put their property on to the market, they don’t sell quickly enough because of this ‘overvaluing’ (even with the fantastic current property market conditions).

To give you an idea of the issue, 69% of Grantham homes put on the market in the last 30 days have not sold.

There are hundreds of Grantham families having their dreams dashed by ‘overvaluing.’

Therefore, let me look at exactly what overvaluing is, why it’s on the rise and most importantly, the harm overvaluing causes to homeowners like yourself.

You would think the most important thing in estate agency to estate agents is all about finding the best buyer for your home, at the best price, who can make the move with the least amount of hassle.

To us it is, and to many other Grantham estate agents, it is as well. Yet, to some agents, sales aren’t the essential objective. Instead, it is having a vigorous catalogue of properties to sell to generate more future leads.

Deprived of an endless number of new properties for sale, the enquiries estate agents receive will significantly drop, leaving them high and dry without any buyer (or seller leads), the lifeblood of estate agents.

Therefore, some (not all), but some Estate Agents will feed on a homeowner’s appetite to get the highest possible price for their Grantham home by giving them an over-inflated suggested asking price to market their property at (i.e. ‘overvaluing’).
If one Estate Agent can get you an extra £30,000 for your Grantham home, you will take it, aren’t you?

The suggestion of pushing the asking price of your Grantham home to 10%, 15% even 20% could be seen by many as a temptation too good to miss. Yet once you are on the market, the agent is trained to slowly get you to reduce your asking price over a lengthy sole agency agreement.

The problem is that the home of your dreams might have sold by the time you reduced your price in 3 months. Also, two Which! (the consumer people) reports in 2017 and 2019 proved you ended up getting less for your home when it did eventually sell (which means you lose money) and finally, the agents know homeowners perceive its hassle to swap agents (which it isn’t).

But Estate Agents only get paid when they sell the house; why do they overvalue?

Would it surprise you that some Estate Agency chains pay their staff a commission when they put the property on to the market, not when it sells? So, their team overinflate their suggested asking prices to get that commission?

Over the last 18 months, with the rising property market, there has undoubtedly been a valid reason for pushing the envelope on the asking price. Yet, yet if every house like yours is on the market or sold subject to contract at £300,000 to £320,000, yours isn’t going to be £355,000, let alone £375,000 – even in this market.

With 69% of Grantham homes still for sale after a month, the market is starting to level out and if you are keen to sell, then let me give you some advice.

Research has shown that if the asking price is initially set too high, it will be ignored by people surfing Rightmove and Zoopla.

(Come on, be honest – you have done that yourself haven’t you?)

When the property is eventually reduced because it has the stigma of being on the property market too long (begging the question of potential buyers that there may be a problem with the property itself hence no interest?), often when it does eventually sell, it will sell for less than what it would have done if it were priced correctly from day one (as per two reports from Which in 2017 and 2019).

Of course, on the other hand, setting the asking price below its market value means potentially leaving money on the table needlessly – hence the need for a good agent.

Putting your Grantham home or buy-to-let investment up for sale at the right price from the beginning is the key to selling within the best time price and for the best time frame to a serious and motivated buyer.

Ask a handful of Estate Agents to value your home, and ask them to back up any valuation of your Grantham with cold hard comparables of similar properties to yours.

Find your own comparables by searching ALL of the property portals (i.e. Rightmove / Zoopla/ Boomin / On The Market).

If you only take away one thing from this article, when you search the portals for comparables, make sure you include under offer/ sold STC properties, as that will triple the comparable evidence.

Thus, by your doing your homework and then working with a dependable, trustworthy and experienced Grantham Estate Agent, who will help to ensure that your Grantham property is put on the market to get you, the homeowner, the best price from day one without overcooking it so you lose out, you will be just fine.

These are my thoughts, let me know if you have any yourself?

The UK is currently experiencing its highest inflation rate since the early 1990s. This increase in prices has been primally come about by the combination of an increase in demand for goods and services from consumers following the lockdown last year together with global supply chain disruptions.

Most economists weren’t too concerned about this increase in the inflation rate as the very same thing happened in the early 1990s following the Credit Crunch with a similar rise in demand and supply chain issues. Thankfully, back in the early 1990s, inflation returned to lower levels quite quickly. However, the situation in Eastern Europe now could change matters.

So, let me look at all the factors and what it means for the Grantham property market.

The crisis in Eastern Europe has sparked even further rises in crude oil prices (which diesel and petrol are made from) gas and grain prices as pressure on supply chains around the world increases.

In my previous articles, I suggested UK inflation would rise to around 7% in the Spring and drop back to 5% in the Autumn and as we entered 2023, approximately 3% to 4%.

Yet, with these issues, inflation could rise to 8% to 9% by late Spring and still be around 6% to 7% in Autumn, well above the Bank of England’s target of 2%.

With Grantham wages rising at only 3% to 4% and inflation at 7%+, Grantham household incomes, in real terms, will fall.

This is because ‘real’ UK household incomes characteristically have been the most consistent lead indicator of growth (or a drop) of house prices. This is because growing inflation erodes the value of money you earn, which reduces its buying power. When the cash in your pocket has lower spending power, people tend to spend less when they buy (and rent) a home (and vice versa).

Next month, Income Tax thresholds will be frozen, and National Insurance contributions are increasing. Collectively, all these issues will create a drop of around 2% to 2.5% in the real disposable incomes of Britain’s households in 2022 (real disposable income – somebody’s take-home wages after tax and then the effects of inflation are considered).

Will Grantham people be more anxious to spend their money?
With less money in people’s pockets, people’s inclination to spend the money they do have could also be curtailed. People’s savings are at an all-time high, yet many will decide to sit on the cash, instead of spending it, especially as Consumer Confidence to minus 26 on the GfK index (whatever that means – but in all seriousness though – more on that below)

All this can only mean there is going to be a house price crash.

𝐈𝐭’𝐬 𝐚𝐥𝐥 𝐝𝐨𝐨𝐦 𝐚𝐧𝐝 𝐠𝐥𝐨𝐨𝐦! – 𝐎𝐫 𝐢𝐬 𝐢𝐭?

My heart goes out to people caught up in the awful humanitarian crisis in Eastern Europe. Yet, I respectfully need to put that to one side for just a moment for the purpose of this article.

This blog is about the Grantham property market, and Grantham people want to know what will happen to the Grantham property market.

In the first half of the article, I looked at the impending fall in real disposable incomes of 2% to 2.5% in 2022. I appreciate it’s going to be tough for many families in Grantham. Yet, it is always important to consider what has happened in previous times.

1982 – a drop of 2.3% in real disposable income
1992 – a drop of 3.7% in real disposable income
2008 – a drop of 5.8% in real disposable income

Yes, it’s going to be tough, yet we got through 1982, 1992 and 2008 – and so we shall in 2022/3

Next, the price of petrol is very high compared to a year ago.

The average price of unleaded petrol is £1.51/litre today, quite a jump from the £1.21/litre a year ago. But, here is an interesting fact, petrol was a lot more expensive (in real terms) in 2011 than today. In TODAY’s money, a litre of unleaded petrol in 2011 would be the equivalent of £1.79/litre. We have some way to go before we get to those levels – and again, the Grantham economy (and property market) kicked on quite nicely after 2011.

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐩𝐞𝐨𝐩𝐥𝐞 𝐬𝐩𝐞𝐧𝐝𝐢𝐧𝐠 𝐨𝐧 𝐭𝐡𝐞𝐢𝐫 𝐫𝐞𝐧𝐭 𝐚𝐧𝐝 𝐦𝐨𝐫𝐭𝐠𝐚𝐠𝐞𝐬?

Housing Costs – Owner occupiers were spending on average 17.3% of their household income on mortgages in 2015, yet in 2021 this had risen, albeit to 17.7% – not a huge increase.

Council House (Social) tenants have seen a drop in their rent from 29.2% in 2015 to 26.7% in 2021, whilst private tenants from 36.4% in 2015 to 31.2% in 2021.

Interesting that private tenants are proportionally 14.29% better off in 2021 than in 2015.

How we spend our money – The average UK home spent 4.2% of their household income on energy in 2021, and that is due to rise to 6.3% after April (and probably 7% in October). Yet, as a Country, we spend 9% of our income on restaurants and hotels and 8% on recreation and culture. As with all aspects of life, it will mean choices, and maybe we will have to forego some luxuries?

Just before I move on from this aspect of the article, again I appreciate I am talking in averages. Many people with low incomes suffer from fuel poverty and they will find the increases in energy prices hard – my thoughts go out to you.
Interest rates – Higher inflation is generally brought under control using higher interest rates, meaning mortgage payments will be higher.

First, 79% of homeowners with a mortgage are on a fixed rate, so any rise won’t be instantaneous. Yet, there will be a bizarre side effect of the issues in Eastern Europe. Surprisingly, though the current situation in Eastern Europe, by its very nature, will bring greater UK inflation, it will also probably defer the Bank of England raising interest rates. This means mortgage rates won’t increase as much as the Bank won’t want to exasperate any pressures to the UK economy in 2023/4 caused by the conflict.

The stock market had priced an interest rate rise to 2% by the end of 2022. I suspect this will now be no more than 1% to 1.25% by Christmas, slowly going up in quarters of one per cent every few months. The crisis in Eastern Europe might even come to be seen as a defence for higher inflation throughout 2022, all meaning everyone’s mortgage will be less.

Next, look at Consumer Confidence Indexes. These indexes are fickle things. I prefer to look at the Organisation for Economic Co-operation and Development Consumer Confidence Index as it has a larger sample range and a longer time frame to compare against. Looking at the data from the mid-1970s, the drop in consumer confidence is big, yet nothing like the drops seen in the Oil Crisis of the mid-1970s, the Recession of the early 1980s, the ERM crisis of 1992 and the Global Financial Crisis of 2008/9. Also, when compared to the other main economies of the world (G7), the UK has always bounced back much more quickly from recessions than the rest of the world when it comes to Consumer Confidence.
What about house prices in Grantham in 2022/3?

Increasing energy prices, rising inflation, an increase in sanctions, and a probable drop in consumer confidence and spending in the aftermath of the conflict will knock the post-pandemic recovery globally, which will lead to a recession around the world, including in the UK.

A recession is when a Country’s GDP drops in two consecutive quarters. For the last 300 years, there has been a direct link between British house prices and GDP –(i.e. when GDP drops, UK house prices fall). Yet in 2020, the British GDP dropped by nearly 12%, yet house prices went the other way.

But, let me for one minute look at if Grantham house prices did drop by the same extent they did in the Global Financial Crisis of 2008/9?

House prices in Grantham dropped by 17.5% in the Global Financial Crisis, the biggest drop in house prices over 16 months ever recorded in the UK.

𝐓𝐡𝐞 𝐚𝐯𝐞𝐫𝐚𝐠𝐞 𝐯𝐚𝐥𝐮𝐞 𝐨𝐟 𝐚 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐲 𝐢𝐧 𝐒𝐨𝐮𝐭𝐡 𝐊𝐞𝐬𝐭𝐞𝐯𝐞𝐧 𝐭𝐨𝐝𝐚𝐲 𝐢𝐬 𝐰𝐨𝐫𝐭𝐡 £𝟐𝟓𝟕,𝟓𝟐𝟑.

Meaning if Grantham’s house prices dropped by the same percentage in the next 16 months, an average home locally would only be worth £212,456.

On the face of it, not good – until you realise that it would only take us back to Grantham house prices being achieved in February 2020 – and nobody was complaining about those.
Yes, that will mean if they do drop in price, the 5.8% of Grantham homeowners who have moved home since February 2020 would lose out if they sold after that price crash. But how many people move home after only being in their home for a few years? Not many!

The simple fact is that 94.2% of Grantham homeowners will be better off when they move if house prices crash.

And all this assumes there will be a crash.

The simple fact is, the circumstances of 2009 that caused the property crash are entirely different to 2022 (no lending by the banks, higher interest rates and increasing unemployment compared to today’s increased lending, ultra-low interest rates and low unemployment environment).

I do believe with all that’s happening in the world we might see a rebalancing of the Grantham property market later in 2022 and could see the odd month with little negative growth in house prices, yet it will be nothing like 2009.

The expected fall in household spending could be counterbalanced by UK businesses’ plans to invest more in their businesses (with last year’s tax breaks on investing), which will create even more jobs.

Who knows what the future holds? These are just my opinions – what are yours?

• 𝟏,𝟐𝟐𝟎 𝐡𝐨𝐦𝐞𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐒𝐨𝐮𝐭𝐡 𝐊𝐞𝐬𝐭𝐞𝐯𝐞𝐧 𝐚𝐫𝐞𝐚 𝐚𝐫𝐞 𝐞𝐦𝐩𝐭𝐲, 𝐰𝐡𝐢𝐜𝐡 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐬 𝟏 𝐢𝐧 𝟓𝟐 𝐡𝐨𝐦𝐞𝐬
• 𝟔𝟕𝟐 𝐨𝐟 𝐭𝐡𝐨𝐬𝐞 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐞𝐦𝐩𝐭𝐲 𝐟𝐨𝐫 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 𝐬𝐢𝐱 𝐦𝐨𝐧𝐭𝐡𝐬 𝐚𝐧𝐝 𝐚𝐫𝐞 𝐰𝐨𝐫𝐭𝐡 £𝟏𝟕𝟑𝐦𝐢𝐥𝐥𝐢𝐨𝐧
• 𝐖𝐡𝐲 𝐚𝐫𝐞 𝐭𝐡𝐨𝐬𝐞 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐢𝐞𝐬 𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐞𝐦𝐩𝐭𝐲 𝐚𝐧𝐝 𝐝𝐞𝐭𝐞𝐫𝐢𝐨𝐫𝐚𝐭𝐢𝐧𝐠 𝐚𝐧𝐝 𝐰𝐡𝐲 𝐜𝐨𝐮𝐥𝐝 𝐭𝐡𝐚𝐭 𝐛𝐞𝐜𝐨𝐦𝐞 𝐚𝐧 𝐢𝐬𝐬𝐮𝐞 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐰𝐡𝐨𝐥𝐞 𝐨𝐟 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦?

A couple of weeks ago was National Empty Homes Week, so I thought I would find out how many homes are empty in the Grantham area –the numbers surprised me, so I wanted to share my thoughts about them with you.

The latest Government statistics show that 672 properties in South Kesteven have been empty for more than six months. Homes that are left empty for an extended period can affect our locality and occasionally invite anti-social behaviour. With a shortage of housing in the Grantham area, these empty homes must be brought back into use to generate much-needed housing for local Grantham people.

As you can see in the first bullet point, some homes are only empty for a short period of time. Yet, those local properties that stand empty for more than six months and then deteriorate become a problem for our local community.

I appreciate there can be many genuine explanations for why a property may be left empty for a long time. However, with council house waiting lists at high levels and the shortage of both properties to buy and rent in Grantham, we must ask what is being done about this at the Government level and how this could affect the Grantham property market?

The collective value of these 672 long-term (6 months or more) empty houses in South Kesteven are worth £173million. This impacts the Grantham housing market with a lack of properties coming onto the market for sale and rent. This results in house prices being pushed up, making it less affordable for first-time buyers to get on the first step of the housing ladder.

It’s a real shame that many local properties are empty for over six months when there is an increasing demand for accommodation, at a time when there’s such a competitive housing market.

So, one might ask if this issue of long-term empty properties is a new problem? Well not really.
There were 648 homes long-term empty in South Kesteven in 2010.

I know our local authority likes to work with property owners of empty Grantham homes to bring them back into housing stock as it helps with the housing shortage, even with the help of grants if improvement work is needed for the empty home. Yet, they could use enforcement action where a homeowner is incapable or unwilling to bring their property back into use.

So, what is the Government doing nationally? Homeowners are charged a 50% premium on top of their Council Tax if their home has been empty for two years or more. This can rise to a 300% premium if the property has been empty for ten years or more.

However, the bigger question is, why are all these homes in the Grantham and South Kesteven area being left empty?
The real answer is – that they are not.

A handful of the properties belong to the local authority and are in poor condition because the tenant trashed the property. Probate (where the person’s estate is put in order and passed onto the beneficiaries of the will) takes between six and twelve months. Most of these long-term properties are being modernised and renovated, whilst other Grantham properties are part of a deceased estate. In other circumstances, some Grantham homes have been left empty after the owner has been placed into a care home, yet there is no Power of Attorney to put the home onto the market.

There is no ‘one fix all’ to the empty home syndrome in Grantham.

Empty properties in Grantham is not the issue that will be sort the housing crisis were suffer from.

The simple fact is that the population is growing faster than the number of houses being built. We need to build more homes.

Whether that means council houses housing the masses, housing association homes or private landlords, or even owner-occupation, that’s a massive question we could all talk about, day in day out until the cows come home.

So, tell me, what are your thoughts on the matter?

• 51% 𝒅𝒓𝒐𝒑 𝒊𝒏 𝒕𝒉𝒆 𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒑𝒓𝒐𝒑𝒆𝒓𝒕𝒊𝒆𝒔 𝒇𝒐𝒓 𝒔𝒂𝒍𝒆 𝒊𝒏 𝑮𝒓𝒂𝒏𝒕𝒉𝒂𝒎 𝒊𝒏 𝒕𝒉𝒆 𝒍𝒂𝒔𝒕 12 𝒎𝒐𝒏𝒕𝒉𝒔

• 211 𝑮𝒓𝒂𝒏𝒕𝒉𝒂𝒎 𝒉𝒐𝒎𝒆𝒔 𝒉𝒂𝒗𝒆 𝒔𝒐𝒍𝒅 (𝑺𝑻𝑪) 𝒊𝒏 𝒕𝒉𝒆 𝒍𝒂𝒔𝒕 𝒕𝒉𝒓𝒆𝒆 𝒎𝒐𝒏𝒕𝒉𝒔 𝒂𝒍𝒐𝒏𝒆, 𝒕𝒂𝒌𝒊𝒏𝒈 𝒕𝒉𝒆 𝒕𝒊𝒎𝒆 𝒇𝒓𝒐𝒎 𝒕𝒉𝒆 ‘𝒇𝒐𝒓 𝒔𝒂𝒍𝒆 𝒃𝒐𝒂𝒓𝒅’ 𝒈𝒐𝒊𝒏𝒈 𝒖𝒑 𝒕𝒐 𝒔𝒂𝒍𝒆 𝒂𝒈𝒓𝒆𝒆𝒅 𝒕𝒐 𝒂 𝒎𝒆𝒅𝒊𝒂𝒏 𝒕𝒊𝒎𝒆 𝒐𝒇 19 𝒅𝒂𝒚𝒔

• 𝑻𝒉𝒆 £400𝒌 𝒕𝒐 £500𝒌 𝒑𝒓𝒊𝒄𝒆 𝒊𝒏 𝑮𝒓𝒂𝒏𝒕𝒉𝒂𝒎 𝒊𝒔 𝒕𝒉𝒆 𝒎𝒐𝒔𝒕 𝒂𝒄𝒕𝒊𝒗𝒆, 𝒘𝒉𝒆𝒓𝒆 𝒊𝒕 𝒐𝒏𝒍𝒚 𝒕𝒂𝒌𝒆𝒔 7 𝒅𝒂𝒚𝒔 𝒕𝒐 𝒔𝒂𝒍𝒆 𝒂𝒈𝒓𝒆𝒆𝒅, 𝒃𝒖𝒕 𝒕𝒉𝒆 £500𝒌 𝒕𝒐 £1𝒎 𝒊𝒔 𝒕𝒂𝒌𝒊𝒏𝒈 58 𝒅𝒂𝒚𝒔.

• 𝒀𝒆𝒕 𝒘𝒉𝒂𝒕 𝒊𝒔𝒔𝒖𝒆𝒔 𝒄𝒂𝒖𝒔𝒆 𝒕𝒉𝒆 𝒑𝒆𝒐𝒑𝒍𝒆 𝒐𝒇 𝑮𝒓𝒂𝒏𝒕𝒉𝒂𝒎 𝒕𝒐 𝒘𝒂𝒏𝒕 𝒕𝒐 𝒎𝒐𝒗𝒆 𝒉𝒐𝒎𝒆, 𝒂𝒏𝒅 𝒘𝒉𝒂𝒕 𝒄𝒂𝒏 𝑮𝒓𝒂𝒏𝒕𝒉𝒂𝒎 𝒑𝒆𝒐𝒑𝒍𝒆 𝒘𝒉𝒐 𝒘𝒂𝒏𝒕 𝒕𝒐 𝒎𝒐𝒗𝒆 𝒊𝒏 2022 𝒅𝒐 𝒕𝒐 𝒆𝒏𝒔𝒖𝒓𝒆 𝒕𝒉𝒆𝒚 𝒔𝒆𝒍𝒍 𝒂𝒏𝒅 𝒇𝒊𝒏𝒅 𝒕𝒉𝒆 𝒉𝒐𝒎𝒆 𝒐𝒇 𝒕𝒉𝒆𝒊𝒓 𝒅𝒓𝒆𝒂𝒎𝒔?

There are 124 properties for sale today in Grantham; roll the clock exactly a year, and the figure was 251  – a drop of 51%. This drop is being dubbed ‘for sale board crunch.’

The ‘for sale board crunch’ has left many prospective Grantham home buyers stressed to find the right Grantham property as the number of properties available to buy has dropped significantly. 

I am sure you know people looking for their next Grantham home, so when they see it on the portals (Rightmove, Zoopla, Boomin, OnTheMarket etc.) the properties are gone in days. 

With demand at an all-time high, many Grantham home buyers are in a state of misery as Grantham house prices have grown in the last few years, forcing many of them to review their plans. 

They are victims of the ‘for sale board crunch’ in the Grantham property market, the likes of which have not been seen since 2007.

Normally when there has been excess demand in the residential sales market, that frothiness has been taken care of by people moving into rented accommodation. However, the number of Grantham properties available to rent is at a 15 year low. 

𝗦𝗼 𝘄𝗵𝘆 𝗶𝘀 𝘁𝗵𝗲 𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗺𝗮𝗿𝗸𝗲𝘁 𝘁𝗵𝗶𝘀 𝘄𝗮𝘆?

Demand for Grantham homes has exceeded the number of properties for sale since the General Election of December 2019. After years of long drawn out Brexit negotiations, homeowners and buyers were more confident about their move. Many Grantham people who put their home move on hold in 2018/19 had more confidence to return to the Grantham market. 

The first lockdown in the Spring of 2020 did nothing to quell this pent up urge, and since the late Spring of 2020, the Grantham property market has been on fire! The lockdown changed what homeowners were looking for in their Grantham homes. Proximity to public transport dropped down the wish list for buyers, and demand for apartments dropped. Whilst properties with larger gardens and rooms that could double up as home offices tended to be at the top of most Grantham buyers’ wish lists. 

𝐀𝐫𝐨𝐮𝐧𝐝 𝟑𝟔% 𝐦𝐨𝐫𝐞 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐢𝐞𝐬 𝐡𝐚𝐯𝐞 𝐬𝐨𝐥𝐝 𝐢𝐧 𝐭𝐡𝐞 𝐥𝐚𝐬𝐭 𝟏𝟖 𝐦𝐨𝐧𝐭𝐡𝐬 𝐭𝐡𝐚𝐧 𝐭𝐡𝐞 𝐥𝐨𝐧𝐠–𝐭𝐞𝐫𝐦 𝟐𝟎–𝐲𝐞𝐚𝐫 𝐚𝐯𝐞𝐫𝐚𝐠𝐞.

Looking at the supply side of the equation. In the last five years, an average of 204,410 new homes per year have been added to the number of properties available to live in the UK. Also, 239,600 properties came back into the market when they became available after their owners had sadly passed away. Yet still, that isn’t enough. The country needs at least 300,000 new dwellings to keep pace with demand.

There is also another issue that has come to light with the cladding issue of apartments. Just over three-quarters of million apartments have issues with cladding. Whilst the issues are being sorted out (which will take many years), they are essentially unsaleable unless a fire safety expert on these buildings signs them as safe. 

These cladding issues prevent these apartments from coming on to the market (thus reducing the supply of properties to buy). It also precludes their owners from moving up the property ladder from their apartment to a house. Also, many first-time buyers who can save a bigger deposit or be gifted cash from the Bank of Mum and Dad are skipping the apartment as their first home and going straight for a house, thus intensifying the lack of larger properties for sale.

𝗦𝗼, 𝗵𝗼𝘄 𝗹𝗼𝗻𝗴 𝗱𝗼𝗲𝘀 𝗶𝘁 𝘁𝗮𝗸𝗲 𝘁𝗼 𝘀𝗲𝗹𝗹 𝗮 𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗻𝗼𝘄?

𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗔𝗽𝗮𝗿𝘁𝗺𝗲𝗻𝘁𝘀 – 𝟱𝟬 𝗱𝗮𝘆𝘀

𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗧𝗲𝗿𝗿𝗮𝗰𝗲𝗱 / 𝗧𝗼𝘄𝗻 𝗛𝗼𝘂𝘀𝗲 – 𝟯𝟵 𝗱𝗮𝘆𝘀

𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗦𝗲𝗺𝗶–𝗗𝗲𝘁𝗮𝗰𝗵𝗲𝗱 – 𝟭𝟰 𝗱𝗮𝘆𝘀

𝗚𝗿𝗮𝗻𝘁𝗵𝗮𝗺 𝗗𝗲𝘁𝗮𝗰𝗵𝗲𝗱 – 𝟭𝟰 𝗱𝗮𝘆𝘀

This means it is a seller’s market in Grantham, empowering them to push up their asking prices in high demand areas. However, most sellers are also buyers, which means the advantage they have in selling their property is turned on its head when they come to buy. 

Many Grantham sellers prefer to find their future Grantham home before putting their current home on the market. That is making the lack of Grantham properties on the market seem even harsher than it may otherwise be.  

The ‘for sale board crunch’ would be somewhat eased if Grantham sellers put their property onto the market whilst they were hunting for their next ‘forever home’.

However, not all Grantham homeowners are doing so, partially because they (wrongly) believe they will be made homeless if they find a buyer and can’t find another property to buy (remember, you are not legally committed to moving until the exchange of contracts/conclusion of missives).

A big issue will be finding a suitable Grantham home. We very much have a chicken and egg scenario. Some homeowners are waiting for the right property to come onto the market before they put their home on the market. This will probably mean that the Grantham property will sell even before the photographs have been taken of your home.   

Yet, many Grantham homeowners are worried if they put their house on the market and it sells, they won’t be able to find another suitable home and thus be homeless? 

𝐂𝐥𝐚𝐬𝐬𝐢𝐜 𝐜𝐡𝐢𝐜𝐤𝐞𝐧 𝐚𝐧𝐝 𝐞𝐠𝐠 – 𝐬𝐨 𝐰𝐡𝐚𝐭 𝐝𝐨 𝐲𝐨𝐮 𝐝𝐨 𝐟𝐢𝐫𝐬𝐭? 

There is another way of doing this. It’s a technique Estate Agents used to use before the internet, and it’s called ‘chain building’. Many Grantham homeowners are contacting me to move home yet don’t want to be made homeless. What we do is slowly build a group of people in a chain over many months. It requires a lot of patience to build a chain downwards and upwards around you.  

There is no cost to this and no legal commitment to go through. It can take six, even twelve months to build a chain of people who are prepared to wait for the chain to form. 

Yet, everyone normally gets their next ‘forever home’ by playing this long game.

Because if you don’t play the long game, build relationships with Grantham Estate Agents (who can build these chains) and only rely on waiting for properties to appear on Rightmove, Boomin, OnTheMarket or Zoopla, you will be sorely disappointed.  

According to national research from Denton House Research, 7 out of 8 people who viewed a house through an Estate Agent in 2021 were not on the mailing list of that agent before they viewed it. 

That means all these Grantham properties, built on a chain builder (as above), will sell, yet won’t appear on Rightmove or Zoopla, meaning you will miss out. 

You must get yourself on the mailing list of our estate agency (and other agents if they do this chain building) so you don’t miss out on your next forever home in Grantham. 

If you would like a chat about anything mentioned in this article, feel free to drop me a message or call me.