27 Jul

The Unfairness of the Liverpool Baby Boomer’s £11,687,880,000 Windfall? (Part 1)

Recently I was having a chat with one of my second cousins at a big family get-together. The last time I had seen them their children were in their early teens. Now their children are all grown up, have partners, dogs and children. Wow – how time flies!

So, I got talking over a glass of lemonade with my 2nd cousins and a couple of their children, about the times of 15% interest rates and how the more mature members of our family had to endure the 3 day week, 20% inflation and the threat of nuclear annihilation in 4 minutes .. so, foolishly, I said what with all the opportunities youngsters had today, they had never had it so good!

Trust one of my cousin’s children to have gained some financial/economics qualifications before going to Law School, as they debated with me the genuine economic predicament of Millennials and how a combination of student debt, unemployment, global proliferation, EU migration and rising house values is reducing the salaries and outlook of masses of the UK’s younger generation, causing an unparalleled disparity of wealth between the generations. So of course I asked why that was?

They said Millennials were paying the price for the UK’s most spectacular bookkeeping catastrophe to date (bigger than the Bank bailout after the Credit Crunch). Back in the 1950’s and 1960’s, nobody predicted us Brit’s would live as long as we do today, and in such abundant numbers. The OAP pensions that were promised in the past (be that Government State Pension or Company Final Salary Schemes) which appeared to be nothing fancy at the time, are now burdensomely over-lavish, and that is hurting the Millennials of today and will do so for years to come.

Bringing it back to property, the young 2nd cousin once removed ‘soon to be’ lawyer, stated that baby boomers born between 1945 and 1965 have been big recipients of the vast rising house prices over the 1970’s/80’s/90’s and 2000’s. Add to that their decent pensions, meaning cumulatively, their wealth has grown exponentially through no skill of their own.

This disparity of wealth between the older and younger generations could have unparalleled consequences for the living standards of younger Millennials…. So Houston Liverpool – do we have a problem??

Well Liverpool Property Blog readers, you know I like a challenge. I can’t disagree with some of what the younger family member said, but there are always two sides to every story, so I thought I would do some homework on the matter ..

Since 1990, the average value of a property in Liverpool has risen from £57,000 to its current level of £165,100. As there are a total of 108,121 homeowners aged over 50 in Liverpool; that means there has been a £11.69bn windfall for those Liverpool homeowners fortunate enough to own their own homes during the property boom of the 1990s and early 2000’s.

 

 

 

 

 

 

 

 

 

I must admit that the growth in property values in the 1990’s and 2000’s certainly helped many of Liverpool’s baby boomers. The figures do appear to put into reverse gear the perceived wisdom that each generation gets wealthier than the previous one  … and so with all this wealth, the figures do back up the youngsters argument that Millennials are being priced out of home ownership.

Or do they? Are they?

Next week, I will carry on this discussion where I will give the Baby Boomer’s defence to the prosecution’s case!

26 Jul

Kaber Court, L8 6RY – Two Bedroom Apartment – 7.8% Yield

Fantastic investment opportunity in a highly sought after development has just captured my attention! A two bedroom property on the 3rd floor of this exceptionally maintained property in Kaber Court has become available.

I have had a lot of dealings with this property, and in my experience, this property will not be around for long! Properties in this development are highly sought after, and always prove extremely popular with tenants due its close proximity to the City Centre and Otterspool and with the convenience of Brunswick train station at the top of the street, it offers easy transport in, out and around the City.

This property is already rented out to a young professional who is paying £6,900 per annum and is more than happy to stay long term. This brings a gross yield of 7.8% and due to the high volume of tenants wishing to secure a home in the building on a long term tenancy, we do not expect you to ever be without this income regularly or for long periods. Both these figures and the popularity of the properties in the development is more than enough proof that this is a fantastic investment opportunity you don’t want to miss out on!

Click Here to view the property before it is too late!

If you would like any further advice on this property, development or any other properties, then please do not hesitate to contact me on adamr@liverpoolpropertyblog.com

24 Jul

Rockwell Road, West Derby, Liverpool, L12 – Town House with potential

I’ve been looking through zoopla and rightmove and due to a shortage of stock available, I am finding it difficult to find some really good deals. I have however come across a property in West Derby that if purchased at the correct price, then this could be a great purchase if you wanted to either flip it or keep in your buy to let portfolio.

It’s a spacious three bedroom mid town house located in West Derby that is in total need of total renovation internally but the structure and roof look to be in good condition. The property is spacious and comes with a driveway and rear garden and would make an ideal family home once fully refurbished.

I have recently sold a similar property that was in a good condition although the bathroom and kitchen were over several years old for £85,000 and I’m confident due to the demand, that if the property was refurbished to a good condition, then you could achieve £100,000.

This property is on the market for £69,995 and if you could purchase the property for £60,000 and spent £20,000, then you could increase its value by 20% . If you rented this property out, then I feel you would achieve a rental income of £600 per month, giving you a gross 9% yield.

Click Here to see the property advert with Sutton Kersh

Click Here to see previous sold prices in the road.

If you would like any further information about this property or any other properties, then please do not hesitate to contact me at adamr@liverpoolpropertyblog.com

20 Jul

The Liverpool Property Market, The Beatles, Sweden and 50 year mortgages

50 years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. In the same year Sweden switched from driving on the left-hand side to the right-hand side of the road. The average value of a Liverpool property was £2,189, interest rates were at 5.5% and The Beatles released one of my favourite albums – their Sgt Peppers album … but what the hell has that to do with the Liverpool property market today?? Quite a lot actually … so with my CD Player turned up loud – let me explain my friends!

I have been doing some research on the current attitude of Liverpool first-time buyers.  First-time buyers are so important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent (good news for landlords). If they buy, demand for Liverpool property goes up for starter homes and that enables other Liverpool homeowners to move up the property ladder.

First-time buyers are the lifeblood of the property market. They are, however the most susceptible to interest rate rises and the affordability of mortgages. With that in mind, let us see what is happening to them…

The average value of a Liverpool property is currently standing at £165,056 and UK interest rates at 0.25%. As each year goes by, it appears the age of the everlasting mortgage has started to emerge, prompted by these first-time buyers, eager to get a foot on the housing ladder. I was reading a report a few days ago where some mortgage companies confessed that the battle to gain big returns from the property market has led to mortgages that will take considerably longer than the customary 25 years to pay off.

Over the last few years, it has been commonplace for first-time buyer mortgages to be 30 and 35 years in length as the ‘Bank of Mum and Dad’ have been helping with the deposit (Beatles Sgt Pepper song – “With a Little Help from My Friends”). Now, some high street banks are offering mortgage terms of 40 years. This means first-time buyers could be paying until their mid 60’s – I can hear that other great track from the same album “When I’m Sixty-Four” ringing in my ears! So, a 50-year mortgage does not seem as far-fetched now as it would have been back in the 1970’s. After all life expectancy for a male then was exactly 69 years and today its 79 years and 5 months!

Over the last ten years, Liverpool property prices have continued to rise more than wages, therefore, first-time buyers are looking for bigger loans. If this development continues, the only way repayments can remain reasonable is by increasing the term of the loan.

However, some commenters have said there are worries the mortgage companies are lending money over such a long term, they threaten leaving some first-time buyers with a generation of debt if the house price bubble bursts.  Interestingly, when I looked at what had happened to average property values in Liverpool over the last 50 years, there have been bubbles. First-time buyers should take heart, since as a county we have always recovered from it a few years later.

What if interest rates rise? Well looking at historic UK interest rates, the current rate of 0.25% is at a 300-year low. Mortgages will never be cheaper. I would however, seriously consider fixing the rate to cushion any future potential interest rate rises (since they can only go in one direction when they do change). If Liverpool first-time buyers see buying a home as a long-term decision, based on the last 50 years, they should be just fine!

Before I go, a final thought for property buyers in Sweden, the land of Volvo and Abba. As Swedish property prices are so high, Swedish Regulators announced last year limits on the length of Swedish mortgage terms. They don’t bother with 50-year mortgages (On and On and On – Abba).

No, our Volvo-loving Swedish friend’s average mortgage length is 140 years (this is not a typo). Although such mortgages have had their Waterloo (Abba), regulators have significantly reduced the maximum term of a Swedish mortgage to 105 years. Either way, that’s a lot of Money, Money, Money (Abba again – Sorry!)  to pay back!

Now I will leave you in peace as I listen to the 1980’s Madness song ‘Our House’. My apologies to all the Beatles and Abba fans in Liverpool – a bit of light hearted fun albeit on serious topic.