Starter homes in the East of England

By Ben Gosling of TurnKey Mortgages

Members of older generations were generally able to buy their first homes at a young age, having spent only a relatively short amount of time saving up for them.

Consider that, even just 20 years ago, the average cost for a two-bedroom ‘starter’ property in the East of England was just £45,000. Adjusted for inflation, this would be just shy of £75,000 today; however, the actual cost is around £100,000 more than that. 1

For aspiring homeowners in the region (and indeed anywhere), this means more saving, more debt, more time waiting to get on the property ladder, and more time waiting to trade up once you’re on it. Buying your first home is a bigger decision than ever, and one you need to make sure you get right.

Here are some factors you need to consider:


You cannot borrow a mortgage of any size. Like most secured loans, a mortgage is underwritten according to affordability requirements. Though these vary from lender to lender, you typically cannot borrow more than three times your income (or combined income, in the case of joint applicants).

The average asking price for a two-bedroom home in the East of England is £189,000. This means that, with a 30% deposit (£56,700), you would need a combined income of £44,100 per year to qualify for a mortgage. With a deposit of 20% (£37,800), you would need a combined annual income of £50,400, and if you could only stretch to a 10% deposit (£18,900), you would need to earn £56,700 per year to be able to buy a home.

The Mortgage Market Review

This April, the Financial Conduct Authority will introduce a number of new rules that will make it even tougher to get a mortgage.

This includes additions to the affordability requirements outlined above. In addition to income multiples, lenders will also check that the monthly repayments will be affordable against your monthly pay. This means that the interest rate of your chosen mortgage will be a more prominent factor in the assessment.

Though it is not yet known what figures lenders will work to, it is safe to assume that few will allow your mortgage repayments to exceed 30–40% of your monthly income. As the application will also be ‘stress-tested’ against future interest rate rises, this puts applicants on high incomes and with larger cash savings to put down up-front in a much better position.


Starting a family might still be a distant consideration, and the 850 square foot flat you have your eye on probably seems more than adequate for your needs.

But consider the price gap between your average starter home and the next rung up the ladder – a three-bed home. In the East of England, this gap amounts to about £70,000. This considered, you could be in that home for several years before you can afford to scale up. And it won’t be long before all that space starts to feel a lot less… spacious.

The local area

For the same reasons that space is an important factor when choosing a starter home, you will want to give careful consideration to the local area. A young couple might be perfectly happy living in an area with easy access to nearby pubs, clubs and restaurants, but five years and one birth down the line, the fact that it’s a thirty minute drive from the nearest school will start to be an issue!

Go into your first home with the assumption that you will be there for some time to come. Even if it transpires that you aren’t, you might find that the extra consideration you give the decision will mean that you are much happier for the time that you are there. And if nothing else, it will mean that the property will be easier to sell when it comes time to move on, and another hopeful house-hunter is making the very same decisions that you are now.


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Investing in rural residential property – part two

By Ben Gosling of Commercial Trust

In the first instalment of our article on rural residential property investment, we focussed on the social benefits and drawbacks. In this second part, we come to the nitty-gritty of the matter – the bottom line.

The economics of rural property investment

Due to constraints of space and land in rural areas, rural property is less vulnerable to the vagaries of market forces. (In layman’s terms: because there’s less of it, there’s more demand for it.) This was evidenced during the recession, when rural property experienced both a less severe drop in value and a quicker recovery.

In a report released last October, Halifax cited the ‘rural premium’ (popularly known as the ‘River Cottage effect’) as pushing the cost of idyllic rural properties far beyond that of urban properties [1]. However, the same report noted that rural prices had underperformed urban prices since 2009, with the average price of a rural home rising by only 2% in those four years compared to 10% in urban areas.

This could be due to the rising cost of petrol and public transport, and also to the economic pick-up creating more employment opportunities in the cities. For now, rural property remains stronger than urban property in all but a few regions – but of course, this is just looking at the wider picture.

A closer look

Properties in the country tend to be larger than urban properties, and have more land. Comparing average property prices in predominantly built-up settlements to predominantly rural settlements is bound to show a discrepancy. It is more logical to compare properties like-for-like.

A quick trip to the Homes 24 property portal allowed me to compare the average asking price in two postcodes: NR1 (the centre of Norwich, East Anglia’s largest city); and IP25 (the heart of Breckland, one of the least densely populated districts in the United Kingdom).

Four-bedroom properties were, on average, 8.4% more expensive in the rural postcode. One-, two- and three- bedroom properties, however, were all cheaper, with two-bedroomers – the mainstay of the buy to let investor – costing 19.8% less outside of the city.

Rental returns

To the buy to let investor, yields are a more important consideration than up-front cost.

In August 2013, and Move with Us compared average asking prices and average asking rents for two-bedroom properties, and compiled a list of gross rental yields for every postal district in England and Wales[2].

Their research showed that urban areas tend to attract the highest yields for this property type, with more isolated areas trailing far behind. Locations such as the Peak District and Yorkshire Dales only saw returns of around 2% for the average two-bedroom property.

Rural areas tend to attract more homeowners than renters. This, coupled with the income pressures of country life highlighted earlier in the article, will restrict the rent that you can charge for rural properties.

This said, the age of the average renter is climbing, and there does seem to be a growing demographic of older renters who are starting, or already have, a family. These tenants are seeking larger homes that are close to good schools and transport links, but not necessarily close to the hubbub of urban or suburban life.

In short, the question ‘should you invest in rural property?’ does not merit a simple yes/no answer. The standard buy to let rules apply – if you do your homework, research the area, plan your budget and target the right market, then you can make the investment work for you.

[1] Source: Lloyds banking group Rural homes are more expensive than urban homes in all regions 2013

[2] Rental Yield Heat-Map 2013

Posted in Norfolk, Suffolk | Leave a comment

Investing in rural residential property

By Ben Gosling of Commercial Trust

By Ben Gosling of Commercial Trust

It’s easy to see why people invest in property in the East of England. With several thriving towns and cities (including a handful of the UK’s well-known universities), there’s no shortage of demand – and the numbers are there to prove it.

House prices are strengthening, rising by 5.2% between December 2012 and December 2013 [1], and rents are increasing almost in line [2] – meaning that landlords are currently enjoying capital growth alongside decent yields.

The East is also a burgeoning hub of culture and commerce, with the 2011 census showing an 8% population increase over the preceding decade. (As of this date, it is the fourth most populous region in the United Kingdom.)

There is another side to the region, however. The East of England is home to some of the UK’s most beautiful countryside, as well as innumerable rural settlements. Indeed, many Eastern counties are counted among the most desirable rural locations in the country.

So, is this a market to be tapped? In this article, we will examine whether or not it’s worth investing in rural buy to let property.

Rural investment – the social benefits…

Straight off the bat (and into a bush on the village common), there are a few obvious benefits to owning rural property, which include:

  • Familiarity: People tend to either invest locally to themselves, or hire a managing agent who is local, and this means that whoever looks after your property is likely to be very familiar with the area. It’s also easier to build contacts with local businesses and authorities in a less populated area, and to keep track of major local development such as construction initiatives and the emergence of a new big business in the area.
  • Less competition: The bulk of buy to let investment in the UK occurs in urban areas. In rural areas, you will have fewer serious property investors competing for purchases, and fewer landlords competing for tenants.
  • Crime rates: It will likely come as no surprise that crime figures tend to be substantially higher in urban areas than in rural areas, and that the likelihood of being a victim of household crime (such as burglary or vandalism) is also higher in urban areas.

…and the social downsides

There are less glamorous facets of country life, however.

A recent report by the Rural Services Network claims that rural communities pay 15% more in council tax than urban communities [3], despite receiving less government funding [4]. Additionally, isolated areas have fewer amenities and public services such as schools, healthcare facilities, entertainment venues and mobile and broadband access.

These are all factors which decrease the desirability of rural property, particularly to traditional rental demographics. This means that you may suffer longer marketing periods – and more lost revenue – when attempting to fill a property.

Don’t miss the second instalment of this blog, which will focus on the financial benefits and drawbacks of rural property investment.

[1] Source:
[2] Source: (as at 10 February 2014)
[3] Source:
[4] Source:

Posted in Norfolk, Suffolk | Leave a comment

Protecting your home against flooding

Protecting your property from flooding can involve a variety of actions, from inspecting and maintaining the building to installing protective devices and having a flood plan in place.  Gavin Human, Manager of Fine & Country Cambridge offers some advice on what measures to take to minimise the impact of wet weather.

The first thing to consider is the risk level for your property. The Environment Agency has an easily searchable map that provides flood risk assessment by postcode or suburb. See for details.  Additionally, you can speak with your local building official, city engineer, or planning and zoning administrator.  If you are in a high risk area sign up for flood warnings by calling 0845 988 1188.

It is not possible to completely flood proof a property but there are lots of things you can do that may reduce damage.  If you are looking at purchasing property in a flood risk area you may want to pay attention to the measures already in place before putting in an offer, as some protection can be costly.

Some of the more complex considerations include checking the position, and if necessary repositioning electrical system components such as fuse and circuit breaker boxes, meters, switches, and outlets, which are easily damaged by flood water. Having a functioning system makes the clean up process a lot faster and easier. The recommended minimum level is one foot above the 100 year flood level.

Elevation is also the solution for heating, ventilation and cooling equipment, such as a furnaces or hot water heaters. In flood prone houses these elements should be moved away from ground floor or basement areas. If this is not possible, a secondary measure it to build a concrete or masonry block floodwall around the equipment.

Further measures to keep flood water at bay include raising door thresholds to keep out shallow flooding or purchasing purpose built flood boards for external doors and windows that can be installed when flooding is expected. Other commercial solutions include air bricks, covers that can be easily fitted over ventilation bricks when flooding is anticipated.

Drains and pipes should be fitted with non-return valves to prevent waste water from flowing in to the property and if the area is prone to ground water flooding it may be worth sealing floors or replacing wooden floorboards with concrete to block rising water. Even your landscaping can assist.  Make sure your garden areas and driveway act to divert water away from the property.

Most importantly, put a flood plan in place so that you can act quickly in the case of a flood and reduce the impact. Simple considerations include moving anything of value to upper floors or higher shelves. Make copies of all of your important documents and store them in a safe, dry place which is easily accessible. This includes your insurance policy which you should read thoroughly so that you know what is actually covered in the event of a serious flood.  Also make sure you are familiar with how to turn off your utility supplies.

Finally, prepare an emergency kit in case you are trapped or need to evacuate.  This should include blankets, torches, waterproof clothing, food, water, a shovel, a first aid kit, any essential medication and a list of important contact numbers including the national flood line.

Posted in Cambridgeshire, Hertfordshire | Leave a comment

Cambridge’s place on the property map of 2014

Richard Hatch, partner and head of residential at Carter Jonas in Cambridge, paints the local property picture we ring in the new year

The Cambridge market – particularly in the city centre – continues to shine as property hot-spot for residential sales and lettings as we head in to 2014 and the Chancellor’s Autumn Statement at the end of last year (December 5) retained a framework for a positive view of the housing market.

Last year (2013) was definitely the year Cambridge knew it grew with new homes developments setting an impressive pace of sales off-plan.

The London effect hardened its grip on the local market in 2013, particularly at the premium end. London prime in select locations and boroughs continues to perform in isolation from the rest of the UK but Cambridge has a bona-fide effect of its own now.

Through the basic law of supply and demand, those with property to sell in central Cambridge are in a favourable position to present themselves to London’s exiles.

Competitive bidding has been frequent and looks set to continue in certain Cambridge locations – particularly in the range of the £400,000 to £1 million bracket where demand has been at its highest.

High levels of employment in Cambridge continue to reinforce business confidence in the city and with large multi-national corporations such as ARM, Microsoft and AstraZeneca bringing in more employment, demand will continue with exponential pressure on prices.

The announcement that capital gains tax (CGT) will be imposed on future gains made by non-residents who sell their non-primary residential property in the UK will have a marginal effect in our area in contrast to prime central London stock. What it may well do here – and elsewhere in home hot-spots across the country – is trigger the release of some good quality stock in to the market place ahead of its introduction in April 2015.

By mid-year last year, we were looking at six to seven per cent increase in capital values in central Cambridge in the previous twelve months to June. Year end number crunching continues for 2013 but the suggestion is this level has at least been matched, if not exceeded in the second half of the year.

New build continues to add to the city’s stock – both centrally and on the fringes. This year should finally see out-of-the-ground development at the new settlement of Northstowe.

Centrally, the take up rate of brand new homes off-plan continues to impress. Regency Villas, a boutique development overlooking Parker’s Piece, achieved 100 per cent off-plan reservations just four days after launch.

These rates of reservations are not unexpected in the city centre although there’s a squeeze on future availability of such central locations with most sites build-complete or well on their way to so being.

These high-end, niche new-builds have been watched keenly by those investing in buy-to-let as well as young professionals and escape-to-the city more mature occupiers looking for the kind of revamped metropolitan-influenced, car-free option lifestyle now taking shape in our growing city.

What goes on in any city’s prime residential market always has a ripple effect through all its tiers – whether that be sales or lettings.

The city’s second railway station – scheduled to become operational in 2015 – is likely to boost the market and lift values, in the mid-to-long term, on that side of the city and those related, northern fringe villages such as Impington, Histon and Waterbeach.

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Buying a home: London vs. the East of England

By Ben Gosling of TurnKey Mortgages

According to the latest data from the Land Registry, the average house price in London is now just shy of £400,000. This is the highest in the UK by a significant margin, but sky-high house prices are no longer merely an issue in London.

Due to the steep acceleration of house prices throughout the early and middle years of last decade, the problem of unaffordable housing has spread out of London and the South East to affect the rest of the UK. Even a region like the East of England sees many low and moderate income-earners unable to afford a home of their own.

Starter homes

People are getting their feet on the property ladder later on in life, and the simple fact is that a starter home is no longer what it used to be.

In bygone times, a one-bedroom flat would provide ample room for a single buyer, and possibly even a couple. Nowadays, first time buyers might be looking to start a family, or may have one already. Your typical starter home needs to be spacious, in a good area, with two or perhaps even three bedrooms.

Barring obvious outliers, this is what the average selling price in a given region achieves. In Greater London, depending on the area, £400,000 will get you anything from two- or three-bed flat or maisonette to a three- or four-bed terraced or semi-detached home.

In the East of England, where the average house price is less than half of this, the results are much the same; two- to four-bed houses and flats. In rural areas, the average investment might buy a larger semi- or even fully-detached home, whilst closer to city centres, the average property is more likely to be a flat or bungalow.

Of course, house prices are driven not by necessity or fairness (unfortunately), but by demand. London property is hotly contested, not just by those who wish to live and work there, but by wealthy investors who wish to invest their capital in one of the most quickly appreciating assets in the world. Individuals and families who want to live in the capital will have to live with the notion that home-ownership will probably not be on the cards for some years. In regions such as the East of England, however, things aren’t quite so bleak.

Mortgage affordability

Mortgages for home purchase are underwritten on the basis of affordability. Specifically, the ratio of the total mortgage amount to the income of the applicant(s) must be no higher than 4.0 – that is to say, the mortgage cannot be more than four times larger than the income of the borrower or borrowers.

Looking at the average regional income for London (according to the provisional Annual Survey of Hours and Earnings dataset for 2013, from the office for National Statistics), it’s not hard to see why the capital faces an affordability problem. The average weekly earnings for someone in London are £657.70 per week, or roughly £34,317 per year – whilst the average house price of £396,646 is 11.5 times larger than this!

Put in other terms, this means that even joint applicants with identical average incomes will need to stump up a 31% deposit between them in order to be able to avoid a home. This amounts to a total of over £120,000, and that’s not even including purchase costs such as fees, stamp duty and the like.

On the flipside, the average house price in the East of England is just £177,975 – still a significant amount, but only 4.5 times larger than the average income of £26,350. Even a sole applicant would only need to stump up a £20,000 deposit to be able to afford a home of their own. Between them, two applicants on average incomes would qualify for a mortgage with the lowest possible cash deposit (just 5%).

For many, saving up such an amount is still difficult, and I wouldn’t want to trivialise the hardships suffered by anyone attempting to get on the UK property ladder, wherever that may be. But if you are an aspiring buyer in the East of England, these calculations hopefully show that the dream of owning a place of your own is not quite as distant as it could be.

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Spruce up to sell in winter time

Winter shouldn’t be a bar to selling a home on the market but at this darkest time of the year what can be done to brighten viewings? Stuart Harris, head of residential in the Cambridge office of national property consultancy Carter Jonas, offers some advice.

Stuart Harris of Carter Jonas

Stuart Harris of Carter Jonas

You don’t need the summer to present your property for sale in its best light and while image isn’t everything, there’s no denying that when it comes to presenting a house for selling, collaboration with your estate agent is crucial.

Sprucing up your home to sell needn’t be expensive but some people ignore the basics when it comes to presenting the property for viewing and there’s only so much an estate agent can do.

The weather in the weeks before last Christmas was particularly wet and rainy and, if the pattern of weather in the new year follows that of the past three winters, it’s worth attending to what should be the normal, seasonal maintenance duties on the property for sale. 

So, the most obvious step is to check you gutters, downpipes and surface water drainage. Are they clear of obstructions and can the water run away freely?  Are there any signs of leaking at joints or overflowing indicating a blockage?  Is there vegetation growing out of the guttering or any chimney stacks?

Is there deterioration to the paintwork on window frames or sills – inside or outside? Look for any condensation forming to double glazed sill units. 

If there are, then it’s wise to get them fixed before, in particular, a viewing in winter.

If for any reason you can’t undertake this work, do make sure that your estate agent is aware of any property maintenance issues that have occurred since the agent was last in the house.  Then, at least the agent can field any queries from the potential purchaser at a viewing.

While we’re talking outdoors, look to the garden.  Rusting barbecue kits from last summer and garden furniture that you’ve not got round to putting away won’t give the best first impression.  

Sheds and fences must look secure and well maintained and there should be no piles of rotting leaves.

While it’s not expected to have an abundance of colour in your garden at this time of year, it may be worthwhile investing in a few tubs with some early flowering spring bulbs or winter pansies to brighten up what may be a viewing on a grey day.

Clean and neat are the watchwords for outside and inside the property too. 

Messy homes don’t sell. If you’re a bit laissez-faire when it comes to clutter, it might be worthwhile renting a storage unit in the short term while your house is being viewed.

Claims of the allure of the smell of freshly roasted coffee or bread or heavy scented flowers in securing a sale are far fetched but the smell of wet dog – or similar – can be off-putting.

Think about the soothing effect of light too.  Strategically placed lamps can give a friendly glow to a room and add to the feeling of ease if, on a viewing, the estate agent and potential buyer can walk in to a room that’s already lit as opposed to fumbling for the light switch.

Keeping a property for sale comfortably heated at this time of year ahead of a viewing is a must.  Having radiators on at a warm, background heat throughout the house is preferable to blasting out in some rooms and being stone cold in the spare room.

And, please, no washing airing over the radiators.

If you are not able to walk around your house in the shoes of a potential buyer, get a trusted friend to act the part.

Failing that, ask the estate agent but remember, any suggestions made are given as a property professional and are not intended as a personal judgment on you or your lifestyle.

After all, it’s in everybody’s interest to secure a sale, at the right price, as swiftly as possible.

Posted in Cambridgeshire, Hertfordshire | Leave a comment