My parents bought their first house in the late
1950’s and they were in their early 20’s. Interestingly,
looking at some research by the Post Office from a few years ago, in the 1960’s
the average age people bought their first house was 23. By the early 1970s, it
had reached 27, rising to 28 in the early 1980’s.
This year alone, 1,387 people in Canterbury
will turn 28 and 2,115 in 2017 .. and dare I say 3,198 in 2018 .. year in year
out the conveyor belt carries on .. where are the Canterbury youngsters going
to live?
Ask a Canterbury ‘twenty something’ and
they will say they do not expect to buy until they are in their mid thirties -
seven years later than the 1980’s. Some people even say they will never be able
to buy a property and the newspapers have labelled them ‘Generation Rent’ as
they are people born in the 1980s who have no hope of getting on the property
ladder. One of the major problems facing young Canterbury people is the large
deposit needed to get a mortgage .. or is it?
The average price paid for an apartment in Canterbury
over the last 12 months has been £189,000 meaning our first time buyer would
need to save £9,450 as a deposit (as 95% mortgages have been available to first
time buyers since 2010) plus a couple of thousand for solicitors and survey
costs. A lot of money, but people don’t think anything today of spending a
couple of thousand pounds to go on holiday; the latest iPhone upgrade or the
latest 4K HD television. That amount could soon be saved if these ‘luxuries’
were withheld over a couple of years but attitudes have changed.
Official figures, from the Office for
National Statistics, show the average male in Canterbury with a full-time job
earns £606.80 per week whilst the average female salary is £492.50 a week,
meaning, even if one of them worked part time, they would still comfortably be
able to get a mortgage for an apartment.
I was reading a report/survey commissioned
by Paragon Mortgages from the autumn of last year. The thing that struck me was
that when tenants were asked about their long term housing plans, some 35% of
participating tenants intend to remain within the rental sector and 24%
intended to buy a house in the future, with the proportion of respondents
citing the “unaffordability” of housing as the reason for renting privately
increasing from 69% to 74%.
However, time and time again, in the
starter home category of property (i.e. apartments), nine times out of ten the
mortgage payments to buy a Canterbury property are cheaper than having to rent
in Canterbury. It is the tenant’s perception that they believe they can’t buy,
so choose not to. Renting is now a choice. Tenants can upgrade to bigger and
better properties and move up the property ladder quicker than their parents or
grand parents (albeit they don’t own the property). Over the last decade,
culturally in the UK, there has been a change in the attitude to renting so,
unless that attitude changes, I expect that the private rental sector in Canterbury
(and the UK as a whole) is likely to remain a popular choice for the next
twenty plus years. With demand for Canterbury rental property unlikely to slow
and newly formed households continuing to choose the rental market instead of
purchasing a property. I also forecast that renting will continue to offer good
value for money for tenants and recommend landlords pursue professional advice
and adopt a realistic approach to rental increases to ensure that they are in
line with inflation and any void periods are curtailed. One such place for
advice, comment and opinion is the Canterbury Property Blog www.canterburypropertyblog.com
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