Friday, 30 September 2016

Only 36.7% of Thanet Rented Property have Children living in them.





A few weeks ago I was asked a fascinating question by a local Councillor who, after reading the Thanet Property Blog, emailed me and asked me – “Are Thanet Landlords meeting the Challenges of tenanted families bringing up their families in Thanet?”
What interesting question to be asked.
Irrespective of whether you are tenant or a homeowner, to bring up a family, the most important factors are security and stability in the home. A great bellwether of that security and stability in a rented property is whether tenants are constantly being evicted. Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice for no reason.

Some “left leaning Politian’s” keep saying we need to deal with the terrible insecurity of Britain’s private rental market by creating longer tenancies of 3 or 5 years instead of the current six months. However, the numbers seem to be telling a different story. The average length of residence in private rental homes has risen in the last 5 years from 3.7 years to 4 years (a growth of 8.1%), which in turn has directly affected the number of renters who have children. In fact, the proportion of private rented property that have dependent children in them, has gone from 29.1% in 2003 to 37.4% today.

Looking specifically at Thanet compared to the National figures, of the 14,310 private rental homes in Thanet, 5,249 of these have dependent children in them (or 36.7%), which is interestingly (although expected) below the National average of already stated 37.4%.

Even more fascinating are the other tenure types in Thanet…

·         31.1% of Social (Council) Housing in Thanet have dependent children
·         42.1% of Thanet Owner Occupiers (with a Mortgage) have dependent children
·         5.2% of Owner Occupiers (without a Mortgage) have dependent children

Although, when we look at the length of time these other tenure types have, whilst the average length of a tenancy for the private rented sector is 4 years, it is 11.4 years in social (council) housing, 24.1 years for home owners without a mortgage and 10.4 years of homeowners with mortgages.

Anecdotally I have always known this, but this just proves landlords do not spend their time seeking opportunities to evict a tenant as the average length of tenancy has steadily increased. This noteworthy 8.1% increase in the average length of time tenants stay in a private rented property over the last 5 years, shows tenants are happy to stay longer and start families.

So, as landlords are already meeting tenants’ wants and needs when it comes to the length of tenancy, I find it strange some politicians are calling for fixed term 3 and 5 year tenancies. Such heavy handed regulation could stop landlords renting their property out in the first place, cutting off the supply of much needed rental property, meaning tenants would suffer as rents went up. Also, if such legislation was brought in, tenants would loose their ‘Get Out of Jail card’, as under current rules, they can leave at anytime with one months notice not the three or six month tenant notice suggested by some commenters.  

Finally, there is an extra piece of good news for Thanet tenants. The English Housing Survey notes that those living in private rented housing for a long periods of time generally paid less rent than those who chopped and changed.

Friday, 23 September 2016

New House Building in Thanet slumps by 30.6% in the last year





Let me speak frankly, even with Brexit and the fact immigration numbers will now be reduced in the coming years, there is an unending and severe shortage of new housing being built in the Thanet area (and the UK as a whole).  Even if there are short term confidence trembles fueled by newspapers hungry for bad news, the ever growing population of Thanet with its high demand for property versus curtailed supply of properties being built, this imbalance of supply/demand and the possibility of even lower interest rates will underpin the property market.

When the Tories were elected in 2015, Mr. Cameron vowed to build 1,000,000 new homes by 2020.  If we as a Country hit those levels of building, most academics stated the UK Housing market would balance itself as the increased supply of property would give a chance for the younger generation to buy their own home as opposed to rent.  However, the up-to-date building figures show that in the first three months of 2016 building starts were down.  Nationally, there were 35,530 house building starts in the first quarter, a long way off the 50,000 a quarter required to hit those ambitious targets.

Looking closer to home, over the last 12 months, new building in the Thanet District Council area has slumped.  In 2014/15, for every one thousand existing households in the area, an additional 3.26 homes were built.  For 2015/16, that figure is now only 2.26 homes built per thousand existing households.  Nationally, to meet that 1,000,000 new homes target, we need to be at 7.12 new homes per thousand.

To put those numbers into real chimney pots, over the last 12 months, in the Thanet District Council area,

·         80 Private Builders (e.g. New Homes Builders)
·         60 Housing Association
·         Nil Local Authority

These new house building numbers are down to the fact that not enough is being done to fix the broken Thanet housing market.  We are still only seeing 140 new homes being built per year in the Thanet District Council area, when we need 441 a year to even stand still!

I am of the opinion Messer’s Cameron and Osborne focused their attention too much on the demand side of the housing equation, using the Help to Buy scheme and low deposit mortgages to convert the ‘Generation Rent’ i.e. Thanet ‘20 somethings’ who are set to rent for the rest of their lives to ‘Generation Buy’.  On the other side of the coin, I would strongly recommend the new Housing Minster, Gavin Barwell, should concentrate the Government’s efforts on the supply side of the equation.  There needs to be transformations to planning laws, massive scale releases of public land and more investment, as more inventive solutions are needed.

However, ultimately, responsibility has to rest on the shoulders of Theresa May.  Whilst our new PM has many plates to spin, evading on the housing crisis will only come at greater cost later on.  What a legacy it would be if it was Mrs. May who finally got to grips with the persistent and enduring shortage of homes to live in.  The PM has already referenced the ‘need to do far more to get more houses built’ and stop the decline of home ownership.  However, she has also ruled out any changes to the green belt policy – something I will talk about in a future up and coming article.  Hopefully these statistics will raise the alarm bells again and persuade both residents and Councilor’s in the Thanet District Council area that housing needs to be higher on its agenda.

In the meantime, for more thoughts and opinion on the Thanet Property Market, please visit the Thanet Property Blog. www.thanetpropertyblog.com

Friday, 9 September 2016

34.6% Of Thanet Homes Are One Person Households



I was having an interesting chat with a Thanet buy to let landlord the other day when the subject of size of households came up in conversation.  For those of you who read my Brexit article published on the morning after the referendum, one of the reasons on why I thought the Thanet property market would, in the medium to long term, be OK, was the fact that the size of households in the 21st Century was getting smaller – which would create demand for Thanet Property and therefore keep property prices from dropping.

Looking at the stats going back to the early 1960’s, when the average number of people in a home was exactly 3, it has steadily over the years dropped by a fifth to today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the population remained at the same level for the next 50 years and the we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties ( or 105,769 per year) .. When you consider the Country is only building 139,800 properties a year ... it doesn’t leave much for people living longer and immigration. Looking closer to home...

In the Thanet District Council area, the average
number of occupants per household is 2.2 people

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting, a fascinating picture appears.

The vast majority of homeowners who don’t have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone.  People living on their own are more likely to live in a Council house (43%) and the largest households (those with 4 or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy. What surprised me was the even spread of private rented households and how that sector of population are so evenly spread across the occupant range – in fact that sector is the closest to the national average, even though they only represent a sixth of the population.




When we look at the Thanet District Council figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears...

1 person households in Thanet
2 person households in Thanet
3 person households In Thanet
4 person households in Thanet
5+ person households in Thanet
34.69%
34.56%
14.31%
10.55%
5.89%


But it gets even more interesting when we focus on just private rental properties in Thanet, as it is the rental market in Thanet that really fascinates me. When I analysed those Thanet District Council private rental household composition figures, a slightly different picture appears. Of the 13,072 Private rental properties in the Thanet District Council area,

·         37.8% of Private Rental Properties are 1 person Households
·         27.4% of Private Rental Properties are 2 person Households
·         16.8% of Private Rental Properties are 3 person Households
·         10.8% of Private Rental Properties are 4 person Households
·         7.1% of Private Rental Properties are 5+ person Households


As you can see, Thanet is not too dissimilar from the national picture but there is story to tell. If you are considering future buy to let purchases in the coming 12 to 18 months, I would seriously consider looking at 1,2  bed apartments/houses. Even with the numbers stated, there are simply not enough 1,2 bed apartments/houses to meet the demand. They have to be in the right part of Thanet and priced realistically, but they will always let and when you need to sell, irrespective of market conditions at the time, will always be the target of buyers.