Friday, 21 June 2019

Thanet Council House Waiting List Drops by 52.7% since 2011


In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is only 1 in 12, whilst according to Shelter 65% of families on the Council House waiting lists had been on those lists for more than a year and 27% had been waiting for more than five years. 

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live – or is that an out-dated point of view? To look at this objectively, let’s take a step back.
After WW2, both Tory and Labour governments were building council houses in massive numbers, yet it might surprise you to know that more Council houses were built per year under Tory Governments than Labour ones between the years 1945 and 1970.  
Everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour Manifestos of the late 1950’s (although they lost to the Tory’s). Mrs Thatcher’s idea was based on massive discounts and 100% mortgages for those buying … but this was the real issue that has come back to bite us all these years later! Half the proceeds of the property sales went back to Westminster and the other half went back to the local authority – but the Councils half could only be spent on reducing their debt – not to be spent on building more Council houses.. hence why we have a shortage of council houses.
In 2011, Central Government gave local authorities the power to limit people’s entitlement for social housing (aka Council Housing), hence removing those people that did not have an association or link to the locality.


Today, in Thanet, the Council House Waiting List has dropped by 52.7% since 2011, meaning...


2,423 families are waiting for a Council House
in Thanet


Interestingly though, if our local Council House Waiting List had changed by the same amount as the national one, the waiting list figure would be 3,129 instead, because nationally Council House waiting lists are only 38.6% lower than 2011.

So where are these Thanet families all living and what does this mean for Thanet homeowners and Thanet Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list. This is important as more and more tenants are stopping longer in the Private Rented Sector - the average length of time of a tenant stays in the same property is now 4 years. Renting is becoming a choice for many, as the years of this Millennium roll on. So much so, would it surprise you to know that renting a house can be more expensive than buying it as we have these ultra-low mortgage rates and 95% mortgages freely available?

Rents in the Rental Sector in Thanet will increase steadily during the next five to ten years. Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low. The government campaign against buy to let landlords together with the increased taxation and the banning of tenant fees to agents will restrict 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 vehicle again (irrespective of the increased fees and taxation laid at the door of landlords).  

..and for home owners (and landlords) Thanet property values will remain strong and stable in the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Thanet buyers will have to pay decent money for any property they wish to buy (especially ones in good locations and presented well).

Interesting times ahead for the Thanet Property Market!

Friday, 7 June 2019

Ramsgate Property Market - Do We Have the Right Sort of Ramsgate Homes For the 21st Century?


Would it surprise you to know that in some parts of Thanet, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply? Theoretically, in Thanet there are more than enough bedrooms for everyone - it’s just they are disproportionately spread among the population, with some better-off and more mature households living in large Ramsgate homes with many spare bedrooms, and some younger Ramsgate families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Thanet doesn’t have enough housing full stop (otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying), but up until now it hasn't been clear that Ramsgate actually also has the wrong types of properties. 

We're not building the smaller homes that are needed for the starter homes and we aren’t building enough bungalows for the older generations, so they can be released from their larger Thanet homes, thus allowing those growing Thanet families to move up the ladder.  

Looking at the stats for Ramsgate, and CT11 in particular...


When I compared Ramsgate (CT11) with the regional stats of the CT postcode, the locality has proportionally 49.0% more terraced/town houses, yet 57.3% less detached. Looking nationally, Ramsgate (CT11) has proportionally 48.4% more terraced/town houses and quite surprisingly, proportionally 58.1% less detached homes.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Ramsgate over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or the apartments that have been built were of the larger (and posher) variety, even though demand for households (as life styles have changed in the 21st Century) have been more towards the lower to middle sized households.

The builders do want to build, but there's a deficiency of building land in Ramsgate, and if there's a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% - that isn’t a typo) is built on in this country as a whole with homes - we need the planners to release more land (and then force/encourage builders to build on it - not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning. 

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money to cut the grass verges, let alone spend billions on new homes in Ramsgate. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

So, what does this mean for Thanet homeowners and Thanet landlords?

Changing the dynamics of the Thanet, regional and national property market will only change in decades, not years.  The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building where the average has been just under 170,000 households a year. 

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.