Housing market still gloomy? We don't think so.
Posted on 8th May 2018 at 11:30
Over the last few weeks we’ve been taking a look at the English Housing Survey. This is a report published every year by the government which looks at the number of people buying & renting and also tries to establish things like the general condition of housing stock and energy efficiency figures across the country.
We picked up the report with some trepidation as we expected it to reflect the ‘doom & gloom’ we have been hearing about how it is nearly impossible for first time buyers to get on the housing ladder and how renting will be the only option for most. Whilst this may well be the case in some pockets of the country, the general findings supported the fact that property purchase figures weren’t actually too far from where they were over a decade ago.
The number of first time buyers between 2016 and 2017 sits around 670,000 which is very close to the number quoted in 2004-2005. Average age for this sector has increased slightly from 30.3 years old to 33.2 years old but this isn’t too much of a surprise considering the recession has happened in between these dates and that has delayed the decision to buy for most 20 or 30 somethings.
The data comparing peoples spend on homes is a little less clear as the figures quoted for homebuyers do not declare the number of years into the mortgage so their ‘estimate’ of those with mortgages spending 18% of their income on their mortgages may be a little lower than it is in reality. In truth, the percentage of income (and this is backed up by recent Nationwide Building Society stats) is probably closer to 32% which is a good match to what those in the private rented sector are paying too. Tenants generally don’t have to pay for repairs, maintenance, buildings insurance etc. so they may feel slightly better off, but in truth there’s not much in it. Home owners are of course also helped by the fact that mortgage interest rates are currently around 3-4% for first time buyers, compared with 5-7% prior to the credit crunch.
There is certainly an indication that things are improving, and we therefore hope that horror stories of impossible mortgages and people finding themselves unable to make their first property purchase will hopefully become less common. At Strawberry we are seeing a significant increase in confidence amongst local buyers. Whilst this will slowly filter through to vendors (and hopefully we’ll see more properties being put on the market), we’d urge those thinking about moving to get sale-ready and catch the early wave of buyers who are desperate to find their new home now!
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