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Horncastle Home Owners Are Only Moving Every 16 Years (Part 1)

Article Simon Jory 2017-11-02
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Horncastle Home Owners Are Only Moving Every 16 Years (Part 1)

The average house price in Horncastle is 6.54 times the average annual Horncastle salary. This is lower than the last peak of 2008, when the ratio was 7.36. A number of City commentators anticipated that in the ambiguity that trailed the Brexit vote, UK property prices might drop like a stone. The point is - they haven't.

Now it's true Horncastle property price growth has slowed, but the lower to middle Horncastle property market appears to be quite strong.

Scratch under the surface though, and a different long-term picture is emerging away from what is happening to property prices. Local people are moving home less often than they once did. Data from the Office of National Statistics shows that the number of properties sold in 2016 is again much lower than it was in the Noughties. Statistics show...

The Number of Property Sales Per Year in the East Lindsey District Council Area Since 1995
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
2,0892,6153,0892,9043,3633,1963,4293,7873,2243,2512,435
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
3,2593,3321,7391,7391,7971,7101,7432,0762,4622,3592,628
Number of properties sold

Even though we are not anywhere near the post credit crunch (2008 and 2009) low levels of property sales, the housing market following the 2016 Brexit vote has seen the number of property sales in Horncastle and the area level off to what may be the start of a new long-term trend.

Interestingly, it was the 1980's that saw the highest levels of people moving home. Nationally, everyone was moving on average every decade. Even though it was during the Labour administration of the late 1970's where the right to buy one's council house started, it was the Housing Act of 1980 that that really got council tenants moving, as Thatcher's Tory government financially encouraged council tenants to buy their council-rented homes, for which countless then sold them on for a profit and moved elsewhere. The housing market was awash with money as banks were allowed to offer mortgages as well as the existing building societies, meaning it made it easier for us to borrow even more money on mortgage in order to climb up the housing ladder.

But coming back to today, looking at the property sales figures since 2010/11, a new trend for number of property sales appears to have started. The reasons behind this are complex, but a good place to start is the growth rate of real UK household disposable income, which fell from 5.01% a year in 2000 to 1.68% in 2016. Also, things have deteriorated since the country voted to leave the EU as consumer price inflation has risen to 2.7% per annum, meaning inflation has eaten away at the real value of wages as they have only grown by 1.1% in the same time frame.

With meagre real income growth, it has become more difficult for homeowners to accumulate the savings needed to climb up the housing ladder as the level of saving has also dropped from 4.26% of household income to -1.11% (i.e. people are eating into their savings).

Next time I will be discussing how these and other issues have meant the level of Horncastle people moving home has slumped to an average of once every 16 years.

Sources:

  1. Stats on House sales from Land Registry
  2. Stats on Savings - OCED and Office of National Stats
  3. Stats on Years - calculation of Homeowners via the Census and Land Registry info
  4. Stats on Disposable Income - OCED and Office of National Stats

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Simon Jory

Simon Jory

Simon has been in Estate Agency for over 32 years and is a Fellow of the National Association of Estate Agents. Having working in all kinds of changing market conditions he is well placed to advise on how best to sell your home.

Anne Pearce

Anne Pearce

Anne prides herself on working to the highest standards and believes everyone should receive the best possible customer service. With over 20 years' experience she will not miss and opportunity.

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