Roll
the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal
Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your
Mind up’. Haven’t things changed. The number of homeowners and property
investors who said they wish they had hindsight and bought up every house in Loughborough
all those years ago, especially when you consider what has happened to Loughborough
property values, as…
Loughborough Property Values since 1981 have
risen by 716%.
Not
bad when you consider inflation over the same time period has been 271.9%,
meaning in real terms (i.e. after inflation), property values in Loughborough
are 444.1% higher. It’s no wonder
people can’t afford to buy property anymore and landlords are attracted by
bricks and mortar. Yet the changes to the Loughborough Property market run much
deeper than property value changes as no one could have predicted how the
property market has changed in Loughborough over the last 30 years.
Looking
at the Local Authority data for Charnwood Borough Council in 1981, 19.6% of Loughborough
people lived in a Council House, whilst today its 11.8% ... a massive drop
which can mostly be attributed to Margaret Thatcher allowing Council tenants
the right to buy their Council House. The private rental sector since 1981 has, as
one would have expected, also changed.
The proportion of properties privately rented in the Loughborough area (i.e.
through a private landlord or a letting agency) has almost doubled, rising from
7.9% to 14.1% of property.
So, let
us consider those people who own their own home, surely that has had a massive
drop? In 1981, the proportion of people
who lived in the Charnwood Borough Council area who owned their own home was 72.3%
… and today its … 72.1%. Not the seismic change most of you were expecting
(including myself!).
Homeownership in the
1980’s and 1990’s in Loughborough did in fact rise, but as I have discussed in
previous articles in the ‘Loughborough Property Market Blog’, that was because nearly
every Council tenant was buying their council house. Now there are hardly any
Council houses for the younger generation to move into (because of the right to
buy scheme) so they have no choice but to privately rent.
.. and this is why the
buy to let market in Loughborough is an investment sector that will continue to
grow as councils aren’t building council houses in their thousands each year
(like they were in the 1950’s/60’s and 70’s). The Loughborough property market is constantly
changing and buy to let for too long has been heavily dependent on house price
growth, where yield has been almost forgotten. I see the changes in tax and landlord and
tenant law in a different perspective to the sooth-sayers and see it as
bringing many opportunities where yield will become more important. You might need to change your buy to let targets and your methodology to financing, but this will shine a light on investing in
properties with healthier yields and create more realistic long term buy to let
opportunities, instead of short term growth bets and wagers.
If you would like to discuss the Loughborough property market or chat about any potential investment please feel free to call me on 01509 260777 or email me james.loughborough@belvoir.co.uk
Comments
Post a Comment