Since the 1960’s more people have
owned their own home than rented but, for many young Hampstead people, the dream
of buying their own home is dying...or is it? Since the turn of the Millennium,
in Hampstead (as in the rest of the Country) there has been a significant
change in the proportion of people who own their own home. In 2001, 34.89% of
homes in Hampstead were owner occupied; today the figure is 30.6%, a significant
decline in such a short time. Buy to let
landlords can find tenants because young people say they cannot afford a
deposit to buy unless they inherit money or are given a loan from the Bank of
Mum and Dad.
In Hampstead, only 20.45% of 25 to 34
year olds have a mortgage. When you compare Hampstead against the national
average of 35.93%, it just shows how different parts of the country have
different housing markets. However, the really interesting fact is this ...Roll the clock back to 1991 and
nationally, 67% of 25 to 34 year olds had a mortgage. After WW2, the supply of
properties being built kept up with demand as millions of council homes were
built (the most being built in 1950s, surprisingly under Tory Governments!).
Also private house building increased in the 1950’s, but especially in the
1960’s and 1970’s, and as the Country
got more prosperous it meant that by 1971, there were more home owners
than renters.
However, since the 1970’s, the
population has grown but the number of new properties being built hasn’t kept
up at the same rate, the result is that there have been huge rises of property
prices in the early ‘70s, the late 80s and more recently between 1999 and 2004.
Interestingly, since the early 1970’s, out of the 34 richest countries in the
world, the UK has seen highest property prices rises.
95% mortgages have been available to
first time buyers since late 2009, but with property prices rising by 575.1%
since the early summer of 1995 in Hampstead, prices headed north and first time
buyers have been saving, the amount they have to save is continually rising at
the same time. The stress on saving even for that kind of deposit, coupled with
the new stricter mortgage rules introduced in 2014, means that most 20/30
something’s in Hampstead are renting instead of buying.
The issue quite
simply comes back down to a lack of new homes being built. In the Hampstead
parliamentary constituency area, only 432 properties a year are being built
whilst the population is rising by 1,605 a year. The supply of new homes has
been limited by planning laws, local councils not having the money to build
council houses, hard hitting green belt limitations, and our old friend
NIMBY’ism. With a rising population and
net migration, especially from the EU, the mismatch between demand and supply
is why we have the problem. Until Politicians have the backbone to realise the
Country needs a lot more decent homes built, the problem will just get worse.
In the meantime, demand for rental
property will continue to grow because people need a roof over their head at
the end of the day ......fact.
If you are thinking of Investing in
the Hampstead or NW3 property market and would like to know more about the
important things to consider, then give me a call on 020 7435 0420. I will give
you my forthright opinion on how to make your investment work best for you.
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact us to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 7435 0420. Pop in for a chat – we are based on Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. The kettle is always on.
Don't forget to visit the links below to view back dated deals and Hampstead Property News.
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