During my school years, my parents seemed to move every
other year (or it seemed that way). In reality, looking back at the house moves,
we actually moved three times before I left home. However, whilst my parents
kept the removal van people in business whilst I was at school, from research I
have carried out it shows things have changed considerably in Clacton over the
last few decades, and interestingly, the trend is getting worse ... for the removal
van people at any rate!
In Clacton, there are 22,834 properties. However, after we
remove the 2,123 council houses, 4,249 privately rented houses and 256 houses
where the occupants live rent free, that leaves us with 16,206 owned properties
(be that 100% outright, with a mortgage or shared ownership). This means 71% of
the properties in Clacton are occupied by the owner (the national average is
interestingly 64.2%) but the number of people who have sold and moved house in Clacton,
over the last 12 months, has only been 1,412. This means on these figures, the
homeowners of Clacton are only moving on average every 11.47 years.
These are the reasons. Firstly, the cost of moving house has
risen over the last twenty years. Secondly, with many remortgaging their
properties in the mid 2000’s before the price crash of 2008, there is a
reluctance or inability in a small minority of homeowners to finance a home sale/purchase,
due to lack of equity. These are both factors driving fewer moves by existing
homeowners.
However, the big effect has been the change in house price
inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to
7 years. Even in Greater London, with its stratospheric property price
increases over the last few years, it has taken 13 years (August 2002 to be
exact) for property values to double to today’s levels.
This change to a relatively low inflation Clacton property
market (i.e. Clacton property values not rising quickly) is significant because
the long term consequences of sustained low house price growth is that it eats
into mortgage debt more slowly than when property price inflation is higher. Clacton
homeowners cannot rely on inflation to shrink their debt in real terms as much
as they did in say the 1970’s and 1980’s.
So what does this all mean for Clacton buy to let landlords?
Well for the same reasons existing Clacton homeowners aren't moving, less ‘twenty
something’s’ are buying their first home as well. Clacton youngsters may aspire
to own their own home, but without the social pressure from their peers and
parents to buy their first property as soon people reach their early 20’s, the
memory of the 2008 housing crisis and the belief the hard times either aren't
over or the worst is yet to come, current and would-be homeowners are warming
to the idea of renting. I also
believe UK society has changed, with the youngster’s wanting prosperity and happiness;
but wanting it all now... instantly... today... without the sacrifice, work and
patience that these things take. As a society, we expect things instantly, and
if it doesn't come easy, doesn't come quick, some youngsters ask if it is
really worth the effort to save for the deposit? Why go without holidays, the
newest iPhone, socialising four times a week and the fancy satellite package for
a couple of years, to save for that 5% deposit if there is no longer a social
stigma in renting or pressure to buy as there was... say... a generation ago?
Even though, in real
terms, property prices are 5% cheaper than they were ten years ago (when
adjusted by inflation), 18.6% of Clacton properties are privately rented
(nearly double it was twenty years ago). As a result, the demand for rental
properties continues to grow from tenants, meaning those wishing to invest in
the buy to let market, over the long term, might be on to a good thing? For
advice and opinion on the Clacton Buy To let property market, one source of
information is The Clacton Property Blog www.clactonproperty.blogspot.co.uk
