Should you buy or rent a house?
Buying your own home can be expensive but could save you money over the years. Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, but offers more flexibility to move if you need to.
Yet there is third way that many people seem to forget and it plays an important role. Collectively known as ‘social housing’, it is affordable accommodation which is let by either the local authority or via a housing association, to those considered to be in specific need at rents below those characteristic in the private rental market.
In Stamford, there are 1,399 social housing households, which represent 15.55% of all the households in Stamford. There are a further 2,999 families in the South Kesteven District Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2005, when it stood at 6,509 families, a drop of 53.9%.
Nevertheless, this doesn't necessarily mean that more families are being supplied with their own council house or housing association property. In 2011, Westminster gave local authorities the control to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.
Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the South Kesteven District Council area, the average rent in 1998 for a council house/housing association property was £166.14 a month, whilst today its £350.70, a rise of 111% in 19 years.
When comparing social housing rents against private rents, the statistics don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.
So, what does this all mean for Stamford’s homeowners, landlords and tenants?
Rents in the private rental sector in Stamford will increase sharply during the next 5 years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low.
The government’s crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property, which in turn (using simple supply and demand economics), will mean private rents will rise, and therefore, making buy-to-let investment a good choice again - irrespective of the increased fees and taxation laid at the door of landlords.
It will also mean property values will remain strong as the number of people moving to a new house (and selling their old property) will continue to stay restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.
Interesting times ahead for the Stamford and Rutland Property Market!
For honest advice on buying, selling, renting and managing your homes and property investments in Stamford and Rutland, please call me, I am here to help.
David Crooke, owner
Understanding People and Property
Stamford - 01780 484 554
Rutland - 01572 725 825
No comments:
Post a Comment