Tuesday, 14 April 2015
“The way it works in Belper is this, you have to rent where you want to live, or buy where you don’t want to live,”
I had this really interesting chat with one on my tenants the other day, on renewal of their tenancy agreement. They are a lovely couple, early thirties and I know they have decent jobs in Belper. They have been tenants of ours for quite a while, so I know them quite well. We got talking and I enquired if they ever thought of buying a property for themselves, to which they replied back with the title of this article. It made me think and so I did some more research into the subject which I want to share with you.
After the end of the Second World War, just over a quarter of the UK population owned their own home, the rest rented from private landlords or the local Council. If someone told you in the 1970’s and 1980’s that they rented, they were considered a second class citizen. Everyone wanted to own their own home .. it was the done thing. We think that home ownership will inevitably happen, but it won't.
It all changed in the 1970’s, when two things happened. Firstly, the number of people who owned their own home broke through the 50% barrier in 1971 and by 1981 it was at 57%. Tied in with that, the average house prices in Belper were doubling at one point every four years in the 1970’s so property and profit started to feed off each other.
To put that growth in context, if we were to look at the last 85 years in Belper, in 1930, the average Belper property was worth £454. It took 16 years for Belper property values to double, rising to £1,124 by 1946. Another 15 years and the average Belper property doubled again to £2,134 in 1961. The next doubling only took 10 years, as by 1971 the average Belper property had reached £4,338 in value.
It was (as mentioned above) the 1970’s when things really took off, as by 1975 (ie only four years) they had doubled to £9,079 and they doubled again to £18,175 by 1980. It took another eight years for values to double again, as an average Belper property reached £38,015 in 1988. Twelve years had to pass until the doubled again in 2000 (£78,218) and just six years to double again by 2006, when they reached £157,756 Where are we today? The average property value in Belper currently stands at £207,700.
We could blame Maggie Thatcher for making home ownership the ultimate goal, but what we now need to consider is that the country is turning on its head and we need to, as a Country, love renting again. Some blame the banks, but obtaining a 95% mortgage is hard work, but nowhere near impossible. A typical Belper first time buyer would only need to save £3,000 for a deposit and fees and they could buy a very decent property. For example, you could buy a property in the Alder Road area in Belper, and it would be cheaper each month in mortgage payments than renting.
People might say on the surveys they want to buy, when it comes down to it. If you have been living in a top of the range large property in the Broadway area , but the bank will only lend you enough to buy a smaller property in the Alder Road area, what would you do? Don’t get me wrong, the Alder Road area has really pulled its socks up over the last ten years, but it isn’t the Broadway area, is it? Again, if you were a twenty something, what would you do? Look again at the title of the post ... “The way it works is, you have to rent where you want to live, or buy where you don’t want to live,”
With tenant demand only going in one direction, that is probably why more and more people are getting into buy to let in Belper. With the new rules on pensions and the ability to use them to buy residential rental properties from this month (APRIL) onwards, this could be the time for you to buy a rental property. You must take advice on your pension from a Independent Financial Advisor (there are plenty in Belper) and you must take advice from people who know what to buy (and not to buy) in Belper to ensure you get the best from your investment. One place for such advice is the Belper Property Blog www.belperpropertyblog.co.uk