Speaking to a Bank Manager
the other day in Hampstead, we got talking about the state of the local
property market and whether we, as a Country, are turning more and more to the
European style of property ownership, where it is the norm to rent as a opposed
to automatically buying once you have an established career path.
Even though a recent
report by the Halifax stated home ownership remains a goal for 85% of twenty to forty five
year olds, there is information emerging that attitudes in the UK towards
renting your own home as opposed to owning it have softened, showing more and
more, that renting is being seen as a life style choice. In fact it is recognised in learned circles that
the cycle of renting is also repeated by the fact that people who grow up
primarily in rented accommodation are themselves more likely to rent than
buy.
The biggest barrier often mentioned to buying a
house is the claim that they are not buying property at the moment
because of a lack of sufficient wages and by the high level of deposits
required to get a mortgage that can be serviced. Though like we said a few
weeks ago, if a couple, both on the average Hampstead salary of £37,431 pa, assuming they had a reasonable credit history they would be
showered with lenders offering them a 95% mortgage (a reasonable credit history means
they haven’t defaulted on loans, paid all their bills on time nor got any
County Court Judgements.
Just because you missed just one credit card payment
wont mean you have messed up your credit score and your ability to get a
mortgage) and they would only need to find £25,000 as a deposit to buy a
very nice one bed apartment in NW3 (not off the High Street but still in a
decent part of the suburb) – and if raising the deposit was an issue, in
Belsize Park, where average prices are a little cheaper with a £20,000 deposit you could buy a decent apartment and the
monthly payments would be cheaper than renting. ..It comes down to the perceived capability of the younger generation in Hampstead to buy
nowadays.
Interestingly, when I looked at the figures, the
average Hampstead tenant has a younger profile (especially the sub 34 year
olds) than the English and Welsh average, as can be seen from the graph below. -
(Source - 2011 Census)
So what does all this mean for Hampstead landlords
and future Hampstead landlords? I honestly believe there is a difference
between the hope and perceived capability of the younger generation to buy
a home. Although home ownership is seen as advantageous by a majority, many
tenants admitted in the Halifax report they are not taking the steps they need
to purchase their own home. More than a third of all properties in the NW3
are rented from Private Sector Landlords.
As the local authority aren’t building any properties in Hampstead, people
still need a roof over the head, and that is why, as I mentioned a few weeks
ago in the NW3 Property Blog, the demand for rental properties will only
continue to steadily rise in the coming decade. In past decades, home ownership
was regarded as being an aspiration, and still is to quite some degree.
However, since the turn of the Millennium, social and economic trends have
changed considerably. For many, renting is necessary and beneficial to the
economy as it enables the UK as a whole to have a more mobile workforce.
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If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me 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 at Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. There is plenty of parking and the kettle is always on.
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me 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 at Ashmore Residential, Suite 7, 25-27 Heath Street, London, NW3 6TR. There is plenty of parking and the kettle is always on.
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