During my school years, my parents seemed to move every
other year (or it seemed that way). In reality, looking back at the house moves,
we actually moved three times before I left home. However, whilst my parents
kept the removal van people in business whilst I was at school, from research I
have carried out it shows things have changed considerably in Maidenhead over
the last few decades, and interestingly, the trend is getting worse ... for the
removal van people at any rate!
In Maidenhead, there are 25,407 properties. However, after
we remove the 3,494 council houses, 3,652 privately rented houses and 301
houses where the occupants live rent free, that leaves us with 17,960 owned
properties (be that 100% outright, with a mortgage or shared ownership). This
means 70.7% of the properties in Maidenhead are occupied by the owner (the
national average is interestingly 64.2%) but the number of people who have sold
and moved house in Maidenhead, over the last 12 months, has only been 1,186.
This means on these figures, the homeowners of Maidenhead are only moving on
average every 15.14 years.
These are the reasons. Firstly, the cost of moving house has
risen over the last twenty years. Secondly, with many re-mortgaging their
properties in the mid 2000’s before the price crash of 2008, there is a
reluctance or inability in a small minority of homeowners to finance a home sale/purchase,
due to lack of equity. These are both factors driving fewer moves by existing
homeowners.
However, the big effect has been the change in house price
inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to
7 years. Even in Greater London, with its stratospheric property price
increases over the last few years, it has taken 13 years (August 2002 to be
exact) for property values to double to today’s levels.
This change to a relatively low inflation Maidenhead property
market (i.e. Maidenhead property values not rising quickly) is significant because
the long term consequences of sustained low house price growth is that it eats
into mortgage debt more slowly than when property price inflation is higher. Maidenhead
homeowners cannot rely on inflation to shrink their debt in real terms as much
as they did in say the 1970’s and 1980’s.
So what does this all mean for Maidenhead buy to let
landlords? Well for the same reasons existing Maidenhead homeowners aren’t
moving, less ‘twenty something’s’ are buying their first home as well. Maidenhead
youngsters may aspire to own their own home, but without the social pressure
from their peers and parents to buy their first property as soon people reach
their early 20’s, the memory of the 2008 housing crisis and the belief the hard
times either aren't over or the worst is yet to come, current and would-be
homeowners are warming to the idea of renting. I also believe UK society has
changed, with the youngster’s wanting prosperity and happiness; but wanting it
all now... instantly... today... without the sacrifice, work and patience that
these things take. As a society, we expect things instantly, and if it doesn’t
come easy, doesn’t come quick, some youngsters ask if it is really worth the
effort to save for the deposit? Why go without holidays, the newest iPhone, socialising
four times a week and the fancy satellite package for a couple of years, to
save for that 5% deposit if there is no longer a social stigma in renting or
pressure to buy as there was... say... a generation ago?
Even though, in real terms, property prices are 5% cheaper
than they were ten years ago (when adjusted by inflation), 14.4% of Maidenhead
properties are privately rented (nearly double it was twenty years ago). As a
result, the demand for rental properties continues to grow from tenants,
meaning those wishing to invest in the buy to let market, over the long term,
might be on to a good thing?
