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 Stoke on Trent (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 Stoke on Trent 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 Stoke on Trent. Whilst these are important factors and
barriers to homeownership, I also believe there has been a generational change
in attitudes towards home ownership in Stoke on Trent (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
Stoke on Trent population choose to be tenants as it better suits their plans
and lifestyle. Local Government in Stoke on Trent (including the planners –
especially the planners), land owners and landlords need an adaptable Stoke on
Trent residential property sector that allows the diverse choices of these Stoke
on Trent 20 and 30 year olds to be met.
This means, if we applied the same percentages to the
current 36,757 Stoke on Trent tenants in their 16,020 private rental
properties, 14,115 tenants have no plans to ever buy a property – good news for
the landlords of those 6,152 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 Stoke
on Trent 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 Stoke on Trent, we will in fact need an additional 6,866 private rental properties
over the next eight years (or 858 a year) … meaning the number of private
rented properties in Stoke on Trent is projected to rise to an eye watering 22,886
households.
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