I’m sure the term Housing Crisis hasn’t escaped the attention of too many individuals. The 2004 Barker report stipulated that we need to build on average 240-250,000 homes per year in the UK to satisfy demand. Since that time, we have not achieved that number once.
Coupled with the fact that there are less properties on the market than there were 10 years ago, well it’s no wonder property prices are at an all-time high. As per the graph below, back in September 2008, there were 2,094 properties for sale. Roll the clock forwards to September 2018 and there were only 935 properties on the market, a drop in 55%. Furthermore, I heard an interesting statistic the other day, that back in the 80’s and 90’s, home owners would move every 8-9 years whereas nowadays, it’s more like every 15-16 years which I expect, partly explains why there less than half the level of properties on the market today than from days gone by.
So what has caused this paradigm shift? Well one reason will likely be attitudes towards risk, a case of once bitten, twice shy. I wrote a blog a while back in which I emphasised three main elements which drive property prices; Supply vs Demand, Market Sentiment and Availability of Finance. To elaborate, it’s been 10 years since the last recession and the aftermath still burns in our minds. At that time, lending was at an all-time high with far less regulation in the mortgage lending sector than there is today. Also, supply was constrained, in no uncertain terms, by the level of sentiment in the property market.
The above graph is indicative of a market where sentiment was adversely affected by the Credit Crunch and consumer confidence took a hammering shortly after Sept 2008. Within two years, the spike in properties advertised will undoubtedly be down to repossessions/forced sales from landlords and owner occupiers being thrown into negative equity and selling their properties due to an inability to meet their mortgage obligations.
Looking at the most recent set of data from the Land Registry for York (the YO1 postcode in particular), the figures show the indifferent nature of the current York property market. Only 81 York (YO1) Homes changed hands in the last 6 months, 69 of these being flats and apartments, 10 terraced houses, one semi and one detached property.
Without getting too political, the Government needs to seriously consider the supply and demand of the UK property market as a whole to ensure it doesn’t seize up. In the meantime, however, people still need a roof over their head, so as local authorities funding to build new houses is limited, it’s the job of York landlords to take up the slack. It’s worth mentioning, I’ve noticed a distinct ‘flight to quality’ by York tenants, who are prepared to pay premiums for fantastic homes to rent. If you want to know what tenants are looking for and what type of things you as a York landlord need to do to maximise your rental returns – as ever, I’m here if you need me.