My parents bought their first house in the 1960’s, 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, 158 people in Bo’ness will turn 28 ... and
dare I say it a similar number will do the same in 2017, 2018 and each year
beyond that ... year in year out, the conveyor belt carries on ... where are
the Bo’ness youngsters going to live?
Ask a Bo’ness ‘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 believe that they have no hope of getting on the property
ladder. One of the major problems facing young Bo’ness people is the large
deposit needed to get a mortgage… or is it?
The average price paid for an apartment in Bo’ness over
the last 12 months has been £93,206 meaning our first time buyer would need to
save £4,700 as a deposit (as 95% mortgages have been available to first time
buyers since 2010) plus a couple of thousand for solicitors 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. The deposit and solicitors costs could soon be saved if these
‘luxuries’ were with held over for a couple of years but attitudes have
changed.
Official figures, from the Office for National
Statistics, show the average person in Bo’ness earns £524 per week meaning they
would still comfortably be able to get a mortgage for apartment.
I was reading a report/survey commissioned by Paragon
Mortgages. The thing that struck me was when tenants were asked about their
long term housing plans, some 35% of participating tenants intended to remain
within the rented 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 Bo’ness property are cheaper than having to rent in
Bo’ness. It is the tenants’ perceptions
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 grandparents (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 and, unless that attitude changes, I expect that the
private rental sector in Bo’ness (and Scotland as well as the UK as a whole) is
likely to remain a popular choice for the next twenty plus years.
With demand
for Bo’ness 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.
If you would like to explore how I can help you with your
property investments, or should you require any advice about investing in the
Bo’ness property market, wish to enquire about our Investment Analysis Reports,
Property Sourcing, Residential Lettings or Property Management services, please
do not hesitate to contact me on 01506 828096 or at robert@thekeyplace.co.uk.
Alternatively please feel free to pop in and see me at our
offices at 6 Vicar Street, Falkirk for a chat, the coffee is always on.
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