Homeownership Amongst Tamworth’s Young Adults Slumps to 56.9%

The degree to which young Tamworth people are locked out of the Tamworth housing market has been revealed in new statistics.

A Tamworth landlord was asking me the other week to what effect homeownership rates in Tamworth in the early to middle aged adult age range had affected the demand for rental property in Tamworth since the Millennium. I knew anecdotally that it affected the Tamworth rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.

As anyone in Tamworth, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.

In the year 2000, 57.6% of Tamworth 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 30.7% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Tamworth person (therefore born in 1962) would have an 85.0% chance of owning his or her own home and a 38 year today in Tamworth (born in 1980) would only have a 66.2% chance of owning their own home.

Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Tamworth has reduced from 78.69% to 56.90%

If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Tamworth. The fact is the figures in Tamworth show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.

The landlord suggested this deterioration in homeownership in Tamworth across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.

I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above.  Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.

So, what does this mean for the rental market in Tamworth?

Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Tamworth landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Tamworth rental market .. drop me line or pop in next time you are passing my office.

If you want to learn about the Tamworth Property Market , one source for information is the Tamworth Property Blog authored by yours truly at https://www.tamworthpropertyblog.co.uk

https://www.facebook.com/Hallandthompsonestateagents/

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

https://www.linkedin.com/in/lorrainethompson2/

http://www.hallandthompson.co.uk

https://twitter.com/hallandthompson

What will the General Election do to 20,781 Tamworth Homeowners?

In Tamworth, of the 30,379 households, 8,519 homes are owned without a mortgage and 12,262 homes are owned by a mortgage. Many homeowners have made contact me with asking what the General Election will do the Tamworth property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections.

UK housing transactions per month since 1995 and the date of the last 5 General Elections.
UK housing transactions per month since 1995 and the date of the last 5 General Elections.

 

 

 

 

 

 

 

 

 

 

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).

UK housing transactions and property values against the General Election since 1995
UK housing transactions and property values against the General Election since 1995

 

 

 

 

 

 

 

 

 

 

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

So finally, what does this mean for the landlords of the 3,300 private rented properties in Tamworth? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Tamworth will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Tamworth, making it imperative that Tamworth landlords are realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy … the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet. If you want to read more about the Tamworth property market – then why not visit the Tamworth Property Market Blog for more information?  https://www.tamworthpropertyblog.co.uk

https://www.youtube.com/channel/UCyF9OUR3g6E8HywCx7tU4DA

http://www.hallandthompson.co.uk

https://www.facebook.com/hallandthompsonestateagents

https://twitter.com/hallandthompson

https://www.linkedin.com/in/lorrainethompson2/