Talking to an elderly relative recently, he reminded me that
in his day, you could have bought a property for the same price of what a
decent second hand car would sell for today. That his father was buying property
for the same price as a decent 50 inch LCD TV!
Now of course, these are only headline prices and we have had wage growth and inflation. Interestingly, since the Second World War, property values in Melton Mowbray doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.
Now of course, these are only headline prices and we have had wage growth and inflation. Interestingly, since the Second World War, property values in Melton Mowbray doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.
Looking at more recent times, since the start of the
Millennium, these increases in property values have generated large increases
in equity for many homeowners but on the other side of the coin also making
housing unaffordable for other people.
It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating us (although we know what has happened to the Spanish property market over the last few years!). In the 2000’s, the British situation was different in two regards. First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.
It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating us (although we know what has happened to the Spanish property market over the last few years!). In the 2000’s, the British situation was different in two regards. First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.
However, since 2010, the regional pattern has been
completely different in the UK . Compared with
2007 (the last property boom), average property values today in England
and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher,
whereas in Melton Mowbray they are 5.12% lower. The London property market has been like a
different country. Looking specifically
at Melton Mowbray though, it has continued for first time buyers to get on the
housing ladder.
The best measure of the affordability of housing is the ratio of Melton Mowbray Property Prices to Melton Mowbray Average Wages, (the higher the ratio, the less affordable properties are).
The best measure of the affordability of housing is the ratio of Melton Mowbray Property Prices to Melton Mowbray Average Wages, (the higher the ratio, the less affordable properties are).
·
1997 3.15
to 1 (i.e. the average value of a
Melton Mowbray property was 3.15 times higher than the average annual wage in
Melton Mowbray)
·
2000 3.19
to 1
·
2002 5.00
to 1
·
2003 6.00
to 1
·
2007 7.61
to 1
·
2009 6.96
to 1
·
2012 7.22
to 1
·
Today 8.06
to 1
You can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in subsequent years with Melton Mowbray house prices rising but wages not keeping up with them, the ratio started rise. This has meant there has been a deterioration in affordability of property in Melton Mowbray over the last couple of years.
This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house. The local Council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.
With fewer people able to save up the deposit
required by mortgage lenders, more and more people are looking to rent, this
has also resulted in a change in attitudes towards renting over the last
decade. This delay in moving up the property ladder has driven rents up
in Melton Mowbray over the last few years, as more people are seeking
properties to rent.
All these things have combined to make the demand for rental property in Melton Mowbray rise. If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not to buy in Melton Mowbray), pop into our office on Burton Street or give me a call on 01664 569700.
All these things have combined to make the demand for rental property in Melton Mowbray rise. If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not to buy in Melton Mowbray), pop into our office on Burton Street or give me a call on 01664 569700.
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