Just before the 2007 credit crunch that caused property values to plummet, the Rutland property market had peaked with prices hitting the highest levels. Between 2008 and 2010, Rutland property values lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.
Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that Oakham flats are now more affordable than they were before the crunch.
Back in 2007, the average value of an Oakham flat stood at £133,810 and today, it stands at £161,946, a rise of £28,136 or 21%.
However, between 2007 and today, we have experienced inflation (as measured by the government’s ‘Consumer Price Index’) of 25.97% meaning that in real spending power terms Oakham flats are 4.9% more affordable than in 2007. Or, if the average Oakham flat (valued at £133,810 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £168,560 (instead of the current £161,946).
The point I’m trying to get across is that property is more affordable than many people think. First time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.
It really comes down to a choice and if first-time buyers can get over the hurdle of saving the 5% deposit for a mortgage – they will be on to a winner, especially with these ultralow mortgage interest rates. In fact, a mortgage can be between 10% - 30% cheaper per month than the rental payments on the same house.
Back in the 1960’s and 1970’s, renting in Britain was sneered at and there was a stigma attached to it. However, over the last 10 years we have done a complete U-turn in our attitude towards renting, meaning many find renting a better option and now even a lifestyle choice.
Saving the 5% deposit means going without holidays, gym memberships, multiple satellite movie and sports channels, regularly socialising or the latest smart phone. Therefore, instead of saving to put towards a mortgage deposit 20-somethings choose to rent and have their luxuries.
Over the next 10 - 15 years, the people who choose renting over buying will continue to rise.
Therefore, everyone in the area has a responsibility to ensure that an adequate number of quality local rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the expectations of tenants on the finish and specification of their rental home.
Historically, renting a property was only a short-term choice to fill the gap before jumping on the property ladder and therefore, their ‘wants’ were less. Before the millennium, wood chip wall paper and 20-year-old kitchen and bathroom suites were considered the norm – and accepted.
However, tenants’ expectations are becoming more discerning and the tenancy term is increasing (this was backed up recently by stats from a government report), although I have noticed a tendency for many local landlords not to keep the rental payments at the going market rates.
Local landlords will need to be more conscious of tenants ‘needs and wants’ and consider their financial planning for future enhancements to their rental properties over the next 5, 10 and 20 years.
The current and future status of the Stamford and Rutland private rental property market is important, and I frequently help local buy-to-let investors looking to spread their rental-portfolios. I also enjoy meeting and working alongside first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield.
David Crooke, Owner and MD
UPP Property, Sales & Lettings 01572 725 825
No comments:
Post a Comment