The bridge, the road and your tumbling castle.
- Your house and today’s market.
- Factors impacting your house value.
- What you can do about it.
This guide has been produced to give you an idea of how the housing market fits in with the plans of opening the bridge and what to expect if the bridge was to open and traffic was to increase in your area.
- Your house and today’s market.
After a terrifying credit crunch, most people have been able to dust themselves off and slowly make their way back to recovering from the crash. As such there has been a lot of changes in the financial markets to avoid a repeat of the situation. As this can never be guaranteed, a lot of safeguards have been put in place with the creation of new regulators, the FCA and PRA and an overhaul of all regulated financial services products.
Most of us would have read in the papers over the last year the endless hoops homebuyers have to jump through to get a mortgage. From declaring your travel costs to the daily coffee. No, lenders are not clamouring over each other with their cheque book ready to lend you money. The days of self-certification are pretty much gone in most cases. The nerves of lender has slowly been worn out as each new rule from the regulator has been released.
So why does this matter to you? After all, all you want to know is if the lender said yes or no.
It is becoming increasingly difficult to obtain a mortgage compared to what it was like before the markets crashed. So what this means to you and me, is that if we wanted to move, we have to provide more evidence of our income and go through a more invasive interview process.
Lenders measure their risk in percentages. A thing called Loan-to-Value. The % loan against the house’s value. E.g. £100 000 house value and a £50 000 mortgage = a 50% Loan-to-Value ratio.
So, in essence the more deposit you have, the less risk you are. All that is left, is to prove you can afford the loan you want and can repay it.
For most of us our home is viewed as an assets. One that appreciates in equity over years better than any savings account ever could. For some of us it is relied on to provide an income when we retire. With property prices increasing over the last few years this is good news. Combined with the resent pension’s freedoms, most people who have put something away for retirement would be smiling. This is good news for a financially savvy person as your retirement could well be rosy.
This is also desperately needed as the strain on the government’s system to provide for the ageing generation is getting worse. PriceWaterhouseCoopers have released an article estimating that is you were born in 2012, your likely retirement age would be 77.
With people living longer and having less children the amount of people working to support the older generation’s pension is diminishing.
How this affect you?
Well, the average cost currently for a pensioner to survive each year is around £13 000, assuming you are healthy and have little medical bills to pay. If you lived for 20 years after retirement you would need £260 000. If you planned on retiring at 65 you would have had to put away £ 866 per month from the age of 40 to achieve this figure. Most of us have children that are in Secondary school or are starting university at this age. With the cost of living going up and people living longer you can see where this is heading. To top it off this assumes there is no inflation.
This is where the value of your property comes in. If it appreciates steadily, you may be able to release equity in your property to help you fund your everyday life where your retirement plan does not.
There are risks to this. You would reduce if not completely dilute the value of you estate and there would be nothing to leave behind. You can also only typically release 35% of the value of your home. No, your house is not your pension in the way you may have thought.
Clearly you can see that the equity in house plays a vital role in your ability to generate and attain wealth. Protecting it is key to support your standard of living.
- Factors impacting your house value.
- TRRL Supplementary Report 825 by MW Pickett and KE Perret.
This report confirms that property prices increased where there was only a rail way implemented. This was only within a 2 mile radius. Walking distance effectively.
The council have used this in their leaflet to say the road will increase value. Not the case. The report they refer to describes the increase in house value if a railway station is built nearby, NOT a road opening up.
– See Council leaflet. –‘Potentially higher house values*’ Gateways to Prosperity: The long term impacts of new railway stations – University of Southampton research (2010)
From this report you can read the following:
“Similar methods were used by Du & Mulley (2007) who were unable to identify any significant change in property prices as a result of the opening of the Sunderland extension to the Tyne & Wear Metro.”
“There is a general consensus that stations with a higher level and quality of facilities have a greater impact on the surrounding properties (Debrezion et al, 2007). For example, a study of the impacts of the Jubilee Line Extension (an extremely high quality project) found that it had large and significant impacts on both residential and commercial property values around its stations (Chesterton, 2002). However, this does not necessarily mean that upgrading services at a station will have a significant impact on property prices, as Forrest et al. (1996) found no evidence that the replacement of heavy rail with Metrolink services in Greater Manchester had any effect on house prices in the station catchments.”
A meta-analysis of the more general relationship between proximity to rail stations and property values (Debrezion et al, 2007) found that in general stations have a more positive impact on commercial property values than on residential property values within a short distance (¼ mile) of the station. However, all the studies in this meta-analysis considered the effect of railway stations in isolation, and Debrezion et al (2007) point out that when other accessibility modes are included in the underlying studies railway stations are found to have a reduced impact on property values.”
So as you can see very early on in this report, it clearly states the increase is not a guarantee. And it even goes as far as to confirm that in some cases there are no benefits, and that any other accessibility modes reduce the impact the rail way is supposed give.
This is the report the council has used to tell us, our house values will go up. This report simultaneously confirms:
1. House price increase is not guaranteed,
2.opening an additional mode of transport reduces the impact of the railway.
3. Commercial buildings are more likely to benefit.
This is driven by employment opportunities in area, amenities, Infrastructure, Ease of movement. Schools. Security.
Nuneaton is over developed compared to population and job opportunities. We are the most densely populated area per sqm. in the county. And a well-known commuter town.
The scheme promotes taking traffic away from the town centre. This will reduce trade in our town even more.
Coupled with the fact that the CWLEP admitted that at most there would be 200 jobs created due to the bridge opening (as opposed to the 4000 mentioned), you can see the benefits are drastically reduced. Take into account that around a 160 of these 200 have already been created.
The WCC meeting held on the 28/10/2014 stated that:
“One of the key outcomes from the scheme is improved accessibility for in excess of 1,000 new homes and Corporate Board believe there should be further consideration as to whether and to what extent some of the up-front investment can/should be reimbursed as part of planning conditions rather than requiring use of scarce Council resources. It is therefore recommended that further advice be sought to explore the possibility of reimbursement through developer contributions.”
As you can see, they clearly are opening the bridge and the road only to build these homes. (Don’t believe me? Read the traffic reports so you can compare it to what the road should look like when the consultation starts)
They are also trying to get the developers to reimburse some of the costs. As this affects the builder’s profits, they would clearly aim for no cost or minimal cost. If they agree.
Not only are they wasting tax payers money on an ill-conceived idea, they want to use more money from the builders, that ultimately come from us buying homes, to reimburse themselves.
If the plans was going to be a huge success, they would have taken a loan against it and pay it back from profits they would get from builders bidding for the contract to build.
As you can see they are flooding the Nuneaton with more and more homes. (Also evident from recent planning meetings, when housing the target was increased)
Before you say: “But they have no choice, current legislation gives builders the upper hand.”
Please do remember that councils have the power and authority to insist the builder supplies the amenities and infrastructure needed to support housing growth. There are no new surgeries, schools or shops provided.
Think about this sitting on Heath End road; because with a 1000 more homes averaging 2.3 cars per household, you will be sitting there much longer simply dropping your kids off, nipping into town or attending a doctor’s appointment.
University of the West of England – Hart, J. and Parkhurst, G. (2011) Driven to excess: Impacts of motor Vehicles on the quality of life of residents of three streets in Bristol UK. World Transport Policy & Practice, 17 (2). pp. 12-30. ISSN1352-7614
Table 4: Risk of pedestrian fatality in a vehicle collision by vehicle speed (IIHS 2000)
Vehicle Speed Risk of Pedestrian Fatality
20 mph 5%
30 mph 45%
From the table above you can see that you chance of dying when hit by a car dramatically increases as speed does. If you have read the reports on the lack of traffic calming measures you will quickly realise that the road will become used more frequently by impatient drivers rushing to get home. For anyone with a child in the area, this will make your heart skip a beat and reconsider letting them walk to school on their own down the current quiet road.
Cyclist. As you are in the road already your risk increases dramatically. With HGV using the road, the chance of you winning a stand-off with it is 0. Especially on the parts of the road that are not wide enough to carry both of you.
Noise and Vibration:
Roads: traffic noise – House of Commons report
‘Roads, railways and airports are the main sources of ambient noise, which can affect the quality of people’s lives. Around half the UK’s population may be exposed to levels above the World Health Organization (WHO) guideline of 50-55 decibels which aims to protect the majority of people from serious annoyance during the daytime. However, the UK does not have national limits on ambient noise, although there are limits on individual aircraft and road vehicles. Local authorities can also impose local limits.’
‘ The report also found that the level of noise produced by heavy traffic, while not usually sustained enough to cause hearing loss, almost certainly contributed to or aggravated stress-related health problems including raised blood pressure and minor psychiatric illness.’
Road engineering journal – Factors that Determine the Reduction in Property Values Caused by Traffic Noise:
The noise created by traffic normally resides in the range of 50 to 95 dB. They conclude the higher the speed the more your house value drops along with the increase in volume.
The difference in price for a house on Heath end road can be vastly different to a similar house on a quite one. If you said to anyone: “Let‘s build a house next to the A444”. You would get a few funny looks more than likely a few colourful words.
The increase in Smell, Fumes, smoke and artificial lighting is 4 out of the 7 measures used to compensate you when a road is built. Other are – noise, vibration. Source:
The Effect of Road Traffic on Residential Property Values:
A Literature Review and Hedonic Pricing Study.
With HGV and all other traffic allowed to travel up and down the road, this will increase dramatically.
- Road width and space between homes influence house prices.
- Ease of travel – able and disabled people.
- Schools, Hospital, Fire services, Shops, Parks. Care facilities – Surgeries, Physio’s. Emergency services.
The lack of basic amenities or being difficult to reach causes desirability of an area to lower. The key driver here is the ability to get somewhere easily, conveniently and reasonably quick.
Rugby relief road EXAMPLE:
A house in Lawford road. Rugby had congestion from south to north. This was due to traffic having to drive through the area.
The relief road was built. This removed traffic from residential area as people could travel around suburbs to the north of Rugby. In turn his made local traffic flow much easier. Getting to school the town centre or the chippy became a joy.
The value in last 4 years of this house went up by 21.9% = £71 100.
This proves a proper relief road not only solves the congestion and travel issues of the town, but adds value to your house and standard of living.
Hence the programme now hailed a reasonable success and backs being patted. (Despite it’s overspend)
In conclusion, you can be certain this proposed new road will do the exact opposite.
- What you can do about it.
- Educate yourself on the project. “Joe Bloggs” who has read the paper will not know anything about the plans real impact. The more you know, the easier the consultation material will be to understand and dissect.
- Realise that this will be stopped by you getting involved. (4 people have caused so much damage to the plan that it had to be rebranded and the consultation locations had to go from 4 to 11, and has been taking out of the area)
- Make yourselves heard. Talk about it.
- Get involved in the consultation.
- Don’t leave it to someone else. Take responsibility for your situation!!!
- Send in your objection letter online at the end of the consultation once we have dissected the plans.
Warwickshire County Council