Thursday, 27 July 2017

Council House Waiting List in Margate Drops by 75.4% in last 3 years






Should you buy or rent a house? Buying your own home can be expensive but could save you money over the years. Renting a property through a letting agent or private landlord offers less autonomy to live by your own rules, with more flexibility if you need to move.

Yet, there is third way that many people seem to forget, yet it plays an important role in the housing of Margate people. Collectively known as social housing, it is affordable housing, which is let by either Thanet District Council or a housing association to those considered to be in specific need, at rents below those characteristic in the private rental market.

In Margate, there are 3,455 social housing households, which represent 12.65% of all the households in Margate. There are a further 1,518 families in the Thanet District Council area on their waiting list, which is similar to the figures in the late 1990’s. The numbers peaked in 2013, when it stood at 6,176 families, so today’s numbers represent a drop of 75.4%.

Nevertheless, this doesn't necessarily mean that more families are being supplied with their own council house or housing association property. Six years ago, Westminster gave local authorities the authority to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.

Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the Thanet District Council area, the average rent in 1998 for a council house/housing association property was £200.76 a month, whilst today its £356.33, a rise of 77% in 19 years.

When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.

So, what does this all mean for the homeowners, landlords and tenants of Margate?

Rents in the private rental sector in Margate will increase sharply during the next five years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low. The government crusade against buy-to-let landlords together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment again (irrespective of the increased fees and taxation laid at the door of landlords).  It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.

Interesting times ahead for the Margate Property Market!

Friday, 7 July 2017

Thanet First Time Buyers Mortgages taking 38.6% of their Wages

I received a very interesting letter the other day from a Thanet resident. He declared he was a Thanet homeowner, retired and mortgage free. He stated how unaffordable Thanet’s rising property prices were and that he worried how the younger generation of Thanet could ever afford to buy? He went on to ask if it was right for landlords to make money on the inability of others to buy property and if, by buying a buy to let property, Thanet landlords are denying the younger generation the ability to in fact buy their own home.
Whilst doing my research for my many blog posts on the Thanet Property Market, I know that a third of 25 to 30 year olds still live at home. It’s no wonder people are kicking out against buy to let landlords; as they are the greedy bad people who are cashing in on a social woe. In fact, most people believe the high increases in Thanet’s (and the rest of the UK’s) house prices are the very reason owning a home is outside the grasp of these younger would-be property owners.

However, the numbers tell a different story. Looking of the age of first time buyers since 1990, the statistics could be seen to pour cold water on the idea that younger people are being priced out of the housing market. In 1990, when data was first published, the average age of a first time buyer was 33, today it’s 31.

Nevertheless, the average age doesn't tell the whole story. In the early 1990’s, 26.7% of first-time buyers were under 25, while in the last five years just 14.9% were. In the early 1990’s, four out of ten first time buyers were 25 to 34 years of age and now its six out of ten first time buyers.

Although, there are also indications of how un-affordable housing is, the house price-to-earnings ratio has almost doubled for first-time buyers in the past 30 years. In 1983, the average Thanet home cost a first-time buyer (or buyers in the case of joint mortgages) the equivalent of 3.0 times their total annual earnings, whilst today, that has escalated to 6.1 times their income.


Again, those figures don’t tell the whole story. Back in 1983, the mortgage payments as percentage of mean take home pay for a Thanet first time buyer was 31.2%. In 1989, that had risen to 78.6%. Today, it’s 38.6% … and no that’s not a typo .. 38.6% is the correct figure.
So, to answer the gentleman’s questions about the younger generation of Thanet being able to afford to buy and if it was right for landlords to make money on the inability of others to buy property? It isn’t all to do with affordability as the numbers show.
And what of the landlords? Some say the government should sort the housing problem out themselves, but according to my calculations, £18bn a year would need to be spent for the next 20 or so years to meet current demand for households. That would be the equivalent of raising income tax by 4p in the Pound. I don’t think UK tax payers would swallow that.
So, if the Government haven’t got the money… who else will house these people? Private Sector Landlords and thankfully they have taken up the slack over the last 15 years.
Some say there is a tendency to equate property ownership with national prosperity, but this isn’t necessarily the case. The youngsters of Thanet are buying houses, but buying later in life. Also, many Thanet youngsters are actively choosing to rent for the long term, as it gives them flexibility – something our 21st Century society craves more than ever.  
END