Will the kids of Crawley ever buy their own home

The evidence suggests that the Crawley property market may be levelling off but with the continual rise in house prices over the last few years will the kids of Crawley ever be able to buy their own property, a place in Crawley they can call home.

My latest analysis, using the Land Registry and Office of National Statistics, shows that overall, month on month, Crawley property values increased by 0.3%.  The year on year figures showed the value of residential property in Crawley has increased by 8.8% in the year to the end February 2016, taking the average value of a property in the council area to £261,300.

It gets even more interesting when we look at the last few months’ figures and see the patterns that seem to be emerging.

·         January 2016               - a rise of 1.2%

·         December 2015          - a rise of 0.8%

·         November 2015          - a rise of 0.3%

We have talked in many recent articles about the lack of properties being built in Crawley over the last 30 years.  This lack of new building has been the biggest factor that has contributed to Crawley property values still being 272.14% higher than in 1995. At the risk of repeating myself, until the Government addresses this issue, and allows more properties to be built, things will continue to get worse as the UK population grows at just under 500,000 people a year (which is a combination of around 226,000 people because of higher birth rates/people living longer and 259,000 net migration) whilst the country is only building 152,400 properties a year – no wonder demand is outstripping supply.

Another reason intensifying the current level of property values in Crawley, is the fact that people aren’t moving home as much as they used to, meaning fewer properties are coming onto the market for sale, so in consequence, there is a lack of choice of property to buy, meaning people thinking of moving are discouraged from putting their property on the market ... thus perpetuating the problem, as the scarcity of possible properties to buy in order to move also deters people from offering their home for sale.  This unevenness between demand from would-be purchasers and the number of properties coming on to the market for sale is causing pressures in Crawley (and the rest of the UK).

So what of the future of the Crawley property market and today’s young people?   It could be that the property market in Crawley and the country as a whole is changing its attitude about homeownership. Back in the 1960’s, 70’s, 80’s and 90’s, getting on the property ladder was everything.  Since the late 1990’s, we as a country (in particular, the young) have slowly started to change our attitude to homeownership.  It seems we are moving to a more European model, where people choose to rent in their 20’s and 30’s (meaning they can move freely and not be tied to a property), then inherit money in their 50’s when their property owning parents pass away, allowing them to buy property themselves ... just like they do in Germany and other sophisticated and mature European counties, meaning the children of Crawley will end up owning property, just later in life than we did.  So, whatever the vote on the 23rd of June, if you think about it, we might be more European than we think!

5.3% Yield in Maidenbower

With some commentators saying that the sales price increases are coming to a stop we are already seeing reductions in the asking prices of some properties currently for sale.  I spotted this little 2 bedroom house in Dakin Close, Maidenbower that has just had its price reduced by local agent Taylor Robinson.  You can view the details by clicking here:

http://www.rightmove.co.uk/property-for-sale/property-52912459.html

Two bedroom houses like these are pretty sought after in the rental market, rents have increased by more than 25% over the last few years.  Similar houses have rented for £975 in the current market which would give a yield of 5.3% at the current advertised sale price – not bad for a freehold house in that part of town.   

2 bedroom house for sale - Dakin Close, Maidenbower

The second bedroom is small but makes a great room for a child or single person to stay and there is ample parking in Dakin Close itself.  For those without cars there is a frequent bus service a few yards from the house that connects to Crawley town Centre via Three Bridges mainline railway station.  Landlords need to bear in mind the stamp duty payable on the £220,000 asking price would be £8500 but with interest rates still at 0.5% the 5.3% yield on the property looks very attractive.

Homeownership could be affecting your health!

Renting used to be a dirty word in the 60’s and 70’s. You either lived in a ‘Rigsby Rising Damp’ style bedsit with wood chip on the wall and a coin operated electric meter (that buzzed in the night) or you lived in a council house. In the latter part of the 20^th Century, the British were persuaded that rent payments were ‘wasted money’. However, owning often makes less financial sense than renting and as the rate of homeownership is starting to drop substantially, as we roll the clock forward to today, there is no stigma at all to renting .. everyone is doing it. In fact, of the 106,212 residents of Crawley, 40,844 of you rent your house from either the local authority/social provider (ie council house or housing association) or private landlords – meaning 38.45% of Crawley people are tenants.

The idea of homeownership is deeply embedded in the British soul, in fact 63,130 Crawley people live in an owner occupied property (or 59.43%). Housing is at the heart of Government policy, as George Osborne has promised 200,000 new properties a year so first time buyers can buy their first home whilst recently changing the tax laws for buy to let landlords. To get votes, Thatcher (and everyone since) ran election campaigns promising everybody their own home, and as a country, we seem to equate homeownership the goal of British life.

So as more and more people are renting nowadays, are we turning to a more European way of living? Well, I believe, as a country, we are. In fact, homeownership could be affecting your health! The UK, according to Bloomberg, is only the 21^st most healthy country in the world. Germany is at No.10 and Switzerland at No.4 and homeownership is at 52.5% and 44% respectively in those countries (in the UK it is 64.8%).

In the Crawley Borough Council area, 72.87% of homeowners who own their house outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale, 6.59% said their health was ‘bad’ or ‘very bad’. Looking at renting, the census splits tenants into two types – 75.92% of Crawley local authority/social tenants said they were in ‘very good’ or ‘good’ health and 7.98% were in ‘bad’ or ‘very bad’ health …

… whilst ‘private rented tenants’ in Crawley, were the healthiest, as 89.05% of them described themselves in ‘very good’ or ‘good’ health and only 2.82% were in ‘bad’ or ‘very bad’ health

 

Crawley House To Let

I am not suggesting that low homeownership rates in Switzerland and Germany are directly linked to health, nor, do I expect Brits to all go to Berlin, Interlaken or Düsseldorf and realise how happy people are when they don't need to worry about all the stresses which accompany homeownership. The numbers for Crawley do go some way to back up the argument (and they are the same across the whole of the UK). Nonetheless I do think that substantially all of the upside to homeownership in recent years has been a function of monumental rising house prices. Now that's come to an end, it's hard to see why anybody would want to buy?

Renting is here to stay in Crawley and it’s growing incrementally each year. Even with the new tax rules for landlords, buy to let is still a viable investment option for most people in the Town. There has never been a better time to buy buy to let property in Crawley, but buy wisely. Gone are the days that you would make profit on anything with four walls and a roof. Take advice, take opinion, do your homework.