I was having an interesting chat with a Bo’ness buy to
let landlord the other day when the subject of size of households came up in
conversation. For those of you who read my previous articles, one of the
reasons that I think that the Bo’ness property market will be OK in the medium
to long term is the fact that the size of households in the 21st Century are
getting smaller – which would create demand for Bo’ness property and therefore
keep property prices from dropping.
Looking
at the stats going back to the early 1960’s, when the average number of people
in a home was exactly 3, over the years it has steadily dropped by a fifth to
today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the
population remained at the same level for the next 50 years and we had the same
20% drop in household size, the UK would need to build an additional 5.28
million properties (or 105,769 per year) . When you consider the Country
is only building 139,800 properties a year. It doesn’t leave much for people
living longer and immigration, looking closer to home.
In Bo’ness, the average number of occupants per
household is 2.2 people which is 8.3% lower than the national average.
When we
look at the current picture nationally and split it down into tenure types
(i.e. owned, council houses and private renting), a fascinating picture
appears.
The vast
majority of homeowners who don’t have a mortgage are occupied by one or two
people (81% in fact), although this can be explained as residents being older,
with some members of the family having moved out, or a pensioner living alone.
People living on their own are more likely to live in a Council house (43%) and
the largest households (those with 4 or more people living in them) are
homeowners with a mortgage – but again, that can be explained as homeowners
with families tend to need a mortgage to buy. What surprised me was the even
spread of private rented households and how that sector of population are so
evenly spread across the occupant range – in fact that sector is the closest to
the national average, even though they only represent a sixth of the
population.
When we
look Bo’ness figures for all tenures a slightly different picture appears...
But it
gets even more interesting when we focus on just private rental properties in Bo’ness,
as it is the rental market in Bo’ness that really fascinates me. When I
analysed those Bo’ness private rental household composition figures, a slightly
different picture appears as around:
- 25% of Private Rental Properties are 1 person Households
- 40% of Private Rental Properties are 2 person Households
- 17% of Private Rental Properties are 3 person Households
- 11% of Private Rental Properties are 4 person Households
- 7% of Private Rental Properties are 5+ person Households
As you
can see, Bo’ness is dissimilar from the national picture and this should help
determine your investment strategy. If you are considering future buy to let
purchases in the coming 12 to 18 months, I would seriously consider looking at 2
or 3 bed properties. Even with the numbers stated, there are simply not enough 2
or 3 bedroom properties to meet the demand. They have to be in the right part
of Bo’ness and priced realistically, but they will always let and when you need
to sell, irrespective of market conditions at the time, will always be the
target of buyers.
To keep up-to-date with the rented property sector in Bo’ness,
visit my property blog by click here.
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