So far in 2018 we have seen a continuation of last year’s trend – for the past 5 months now we have we have planted more Sold boards than For Sale boards.
Whilst it is great to have healthy sales, especially at a time when some market commentators are talking the market down, it is worrying that we simply cannot get enough homes to meet demands from buyers.
This trend started at the beginning of 2017 and is affecting all parts of the country to some degree. In April 2017 The Guardian reported that according to a RICS survey (Royal Institute of Chartered Surveyors) Estate Agents had their lowest stock levels since RICS started collecting such data in 1978. The story was picked up by the BBC in July 2017 who also reported unprecedented stock levels. They also commentated on falling prices in London as opposed to rising prices in the North.
So where have all the houses gone?
Demographics can explain a lot, as home ownership is strongest with the Baby Boomers, decreases somewhat for Generation X and then hits a marked decline with the Millennials. For those not familiar with these terms, the chart below (using figures taken from a House of Commons briefing paper of June 2017) explains:
|
Age Range |
Known As |
% Home Ownership 1996 |
% Home Ownership 2016 |
|
25 - 34 |
Millennials |
60% |
39% |
|
35 – 44 |
Generation X |
72% |
58% |
|
45 – 54 |
Generation X |
78% |
68% |
|
55 – 64 |
Baby Boomers |
75% |
74% |
|
65 – 74 |
Baby Boomers |
68% |
78% |
|
Over 75 |
|
57% |
75% |
So Baby Boomers have the homes and they are hanging onto them. Who can blame them when we have such a terrible supply of retirement housing in the UK. Uncertainty over Brexit and anxiety about the economy in general has undoubtedly played it’s part and with low mortgage rates, people are staying put and waiting to see what happens.
Younger buyers are struggling to get their foot on the housing ladder because the prices are beyond reach – even if they could find the homes to buy. First Time Buyers have for several years now, been competing with Buy To Let investors and this has helped push prices further beyond reach, despite some Government schemes such as Help To Buy and the more recent stamp duty changes. Although we have seen fewer investors since the stamp duty reforms last year kicked in, returns are still very good, demand for rentals is very high and so landlords are hanging onto their stocks.
Local housing markets will always have their own nuances and in our area we have the commuter affect to deal with. Being so convenient for the cities such as Leeds and Manchester helps attract buyers and keeps prices buoyant. The down side of this being our limited supply of homes for sale has to satisfy not just the local market, but the influx of commuters and the ever present buy to let investor. No wonder we have a shortage!
The answer surely is to build more homes and build them fast for local, younger people to enter the market and for older people wanting to downsize. But if you manage to find any new developments in our area, will they be building Starter Homes or Bungalows? No, they will be targeting the middle market – just what we do not need.
Tel: 01422 842007
Email: enquiries@clairesheehan-estateagents.co.uk