Maidstone’s ‘Generation Trapped’ and the £9.05bn legacy

Last week, I wrote an article on the plight of the Maidstone 20 something’s often referred to by the press as ‘Generation Rent’. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Maidstone homeowners and Maidstone landlords alike, as I discussed a couple of months ago, is our mature members of the population of Maidstone. In that previous article, I stated that the current OAP’s (65+ yrs in age) in Maidstone were sitting on £4.01bn of residential property ... however, I didn’t talk in depth about the ‘Baby Boomers’, the 50yr to 64yr old Maidstone people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger Generation Renters.

In Maidstone, there are 7,655 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off. That property is worth, in today’s prices, £2.52bn. There are an additional 7,626 mortgage free Maidstone households, owned by 50yr to 64yr olds, worth £2.51bn in today’s prices, meaning...

Maidstone Baby Boomers and Maidstone OAP’s are sitting

on £9.05bn worth of Maidstone Property

These Maidstone Baby Boomers and OAP’s are sitting on 27,471 Maidstone properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Maidstone (and the Country) homeowners to downsize at the right time will also enable younger Maidstone people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Maidstone and the Planning Dept. should play their part, as should landlords and property investors to ensure Maidstone’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities.

If you are looking for an agent that is well established, professional andcommunicative, then contact us to find out how we can get the best out of your investment property.

Email me on claire.harvey@seekersmaidstone.co.uk or call on 01622 671878. If you are in the area, feel free to pop into the office – we are based on 53 High Street, Maidstone, ME14 1SY. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Maidstone Property News.

LinkedIn, www.linkedin.com/in/claireharveyestateagent
Blog, http://maidstonepropertyblog.blogspot.com/
Facebook, https://www.facebook.com/SeekersHomesUK
Twitter, https://twitter.com/seekershomes
Website, http://www.seekershomes.co.uk/ 

‘Generation Rent (Forever)’ – 6,311 Maidstone Tenants have no intention of ever buying a property to call home

The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts ... those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Maidstone (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Maidstone property ladder.

However, I would say there has been something else at play other than the issue of raising a deposit - having sufficient income and rising property prices in Maidstone. Whilst these are important factors and barriers to homeownership, I also believe there has been a generational change in attitudes towards home ownership in Maidstone (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Maidstone population choose to be tenants as it better suits their plans and lifestyle. Local Government in Maidstone (including the planners – especially the planners), land owners and landlords need an adaptable Maidstone residential property sector that allows the diverse choices of these Maidstone 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 16,435 Maidstone tenants in their 7,008 private rental properties, 6,311 tenants have no plans to ever buy a property – good news for the landlords of those 2,691 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

.. but does that mean the other third will be buying in Maidstone in the next 12 months?

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Maidstone, we will in fact need an additional 3,003 private rental properties over the next eight years (or 375 a year) … meaning the number of private rented properties in Maidstone is projected to rise to an eye watering 10,011 households.

For more insight and thoughts like this on the Maidstone Property Market – please visit the Maidstone Property Blog.

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on claire.harvey@seekersmaidstone.co.uk or call on 01622 671878. If you are in the area, feel free to pop into the office – we are based on 53 High Street, Maidstone, ME14 1SY. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Maidstone Property News.

LinkedIn, www.linkedin.com/in/claireharveyestateagent
Blog, http://maidstonepropertyblog.blogspot.com/
Facebook, https://www.facebook.com/SeekersHomesUK
Twitter, https://twitter.com/seekershomes
Website, http://www.seekershomes.co.uk/ 

Maidstone First Time Buyers borrow £101.6m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

 

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Maidstone property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 2,115 properties have sold (and completed) in Maidstone, worth £616.07m. Interestingly the number of properties changing hands in Maidstone has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Maidstone buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Maidstone property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.  

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Maidstone itself, first time buyers have borrowed more than £101.6m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Maidstone economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Maidstone, at this moment in time there are 692 properties for sale, compared to 527 properties a year ago. All this will be welcome news amongst Maidstone first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Maidstone property market like this, you might want to visit the Maidstone Property Market Property Blog

If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.

Email me on claire.harvey@seekersmaidstone.co.uk or call on 01622 671878. If you are in the area, feel free to pop into the office – we are based on 53 High Street, Maidstone, ME14 1SY. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Maidstone Property News.

LinkedIn, www.linkedin.com/in/claireharveyestateagent
Blog, http://maidstonepropertyblog.blogspot.com/
Facebook, https://www.facebook.com/SeekersHomesUK
Twitter, https://twitter.com/seekershomes
Website, http://www.seekershomes.co.uk/