I thought I would take a look at how affordable properties were in Burton 10 years ago compared to today. The research shows that certain types of Burton property are actually more affordable today than they were back in 2007/2008 around credit crunch time..
Back in 2007, just before the credit crunch hit, Burton property values plummet like a lead balloon and the property market reach a peak with the prices for property in the area hitting the highest level they had ever reached. Between 2008 and 2010, Burton property values lay in the doldrums and only started to rise in 2011, albeit, quite slowly to begin with.
Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that property, especially flats and apartments, are now more affordable than they were before the 2008 credit crunch.
Back in 2007, the average value of a Burton flat or apartment stood at £110,321 and today, it stands at £124,426, a rise of £14,105 or 12.8%.
However, between 2007 and today, we have experienced inflation (as measured by the Government’s Consumer Price Index) of 25.97% meaning that in real spending power terms, apartments are 13.2% more affordable than in 2007.
Looking at it another way, if the average apartment (valued at £110,321 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £18,971 instead of the current £124,426.
The point I’m trying to get across is that Burton property is more affordable than many people think. First time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.
It really comes down to a choice and if first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property – they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.
Back in the 1960’s and 1970’s, renting was considered the poor man’s choice in the UK. A huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting – meaning that many people find renting a better option and a lifestyle choice.
Saving the 5% deposit means going without many luxuries in life – such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term. Therefore, instead of saving every last pound to put towards a mortgage deposit, 20 somethings choose to rent.
There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Burton will continue to rise.
Therefore, everyone has a responsibility to ensure that an adequate number of quality rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the expectations of tenants on the finish and specification of their rental property.
In the past, what a tenant wanted from their Burton rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, woodchip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.
However, tenants’ expectations are becoming more discerning as each year goes by. I have also noticed the length of time a tenant remains in their property is becoming greater and this was backed up recently by statistics from a Government Report. Saying that, I have noticed a tendency for many Burton landlords not to keep the rental payments at the going market rates – maybe a topic for a future article for my blog?
The bottom line is this … landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their rental properties over the next five, ten and twenty years – e.g. decorating, kitchen and bathroom suites etc etc ..
The present-day and future situation of the local private rental property market is important, and I frequently liaise with buy-to-let investors looking to spread their rental-portfolios.
I also enjoy meeting and working alongside Burton first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.