Rents in Ramsgate rise by 2.9% in the last year
I was reading the Sunday
Papers, as is my want and, when reading the financial pages, it was announced UK
inflation had increased to its highest level in a year. Inflation, as calculated
by the Government’s Consumer Prices Index, rose by 0.3% over the last 12 months. The report said it had risen to the those
‘heady’ levels by smaller falls in supermarket and petrol prices than a year
ago. If you recall, in early 2015, we had deflation where prices were dropping!
So what does this
mean for the Ramsgate property market ... especially the tenants?
Back in November, the Office of National
Statistics stated average wages only rose by 1.8% year on year, so when
adjusted for inflation, Ramsgate people are 1.5% better off in ‘real’
terms. Great news for homeowners, as
their mortgage rates are at their lowest ever levels and their spending power
is increasing, but the news is not so good for tenants.
The
average rent that Ramsgate tenants have to pay for their Private Rental
Properties in Ramsgate (i.e. not housing
association or council tenants) rose by 2.9% throughout 2015, eating into
most of the growth. 2015 wasn’t a one
off either. In 2014, rents in Ramsgate
rose by 2.2% (where salaries only rose by only 0.2%) However, it’s not all bad
news for Ramsgate tenants, because in 2013 rents rose by 1.8%, (but salaries
rose by 2.2%).
… and it must
be noted that the private rents Ramsgate tenants have had to pay for Ramsgate
property since 2005 are only 20.1% higher, not even keeping up with inflation,
which over the same time frame, rose at 27.8% (although salaries were only 22.3%
higher over the same time period)
More and more,
talking to 20 and 30 somethings who
rent – it’s a choice. Gone are the days
where owning your own property was a guaranteed path to wealth, affluence and
prosperity. I know keep mentioning Europe, but some
of the highest levels of home ownership are in Romania at 96.1%, Hungary at 88.2%
and Latvia at 80.9% (none of them European economic dynamos) and even West
European countries like Spain at 78.8% and Greece at 74% (and we know both of
those countries are on their knees, riddled with national debt and massive
youth unemployment).
At the other
end of the scale, whilst we in the UK stand at 64.8% homeownership, in Europe’s
powerhouses, only 52.5% of Germans own a home and only 44% of Swiss people are
homeowners. Looks like eating chocolate,
sauerkraut, renting and good economic performance go hand in hand. Yet, joking aside, home ownership has not always
been the rule in the UK. In 1918, only 23% of people were homeowners,
with no council housing, meaning in fact, 77% were tenants.
Tenants have choice, flexibility to
move, they don’t have massive bills when the boiler blows up, it’s a choice. Ramsgate rents are growing, but not as much as
incomes. To buy or not to buy is an enormously
difficult decision. For while buying a Ramsgate home is a dream
for the majority of the 20 and 30 something’s of Ramsgate have, it might not leave
them better off in the long run and it isn’t necessarily the best option for
everyone. That is why, demand for
renting is only going in one direction – upwards.
END