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Horncastle Apartments are 16.8% more affordable than 10 years ago

Article Simon Jory 2018-01-20
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Horncastle Apartments are 16.8% more affordable than 10 years ago

Certain types of Horncastle property are more affordable today than before the 2007 credit crunch.

Just before the credit crunch hit the property had reached a peak with the prices for property hitting the highest level they had ever reached. 2008 saw property prices plummet like a stone. Property values then lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.

Nevertheless, even though property values have now passed those 2007 peaks, figures indicate that Horncastle property, especially flats/apartments, are now more affordable than they were before the 2008 credit crunch.

Back in 2007, the average value of a Horncastle flat/apartment stood at £94,542 and today, it stands at £103,224, a rise of £8,682 or 9.2%.

However, between 2007 and today, we have experienced inflation (as measured by the Government's Consumer Price Index) of 25.97% meaning that in real spending power terms these properties are 16.8% more affordable than in 2007. Looking at it another way, if the average Horncastle apartment (valued at £94,542 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £119,095 (instead of the current £103,224).

Horncastle Property Prices

The point I'm trying to get across is that property is more affordable than many people think. First time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.

It really comes down to a choice and if Horncastle first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property - they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same property.

So why aren't Horncastle 20 somethings buying their own home?

Back in the 1960's and 1970's, renting was considered the poor man's choice with a huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting - meaning that many people find renting a better option and a lifestyle choice.

Saving the 5% deposit means going without many luxuries in life, many of which are now considered as essential (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone - even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit 20 somethings choose to rent.

The simple fact is that over the next 10 to 15 years, the number of people who choose to rent rather than buy will continue to rise.

Therefore, there is a need to ensure that an adequate number of quality rental properties are safeguarded to meet those future demands. Interestingly, over the last few years the expectations of tenants on the finish and specification of their rental property has increased.

In the past, what a tenant wanted from their rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.

However, tenants' expectations are becoming more discerning as each year goes by. The length of time a tenant remains in their property is becoming longer. Although there is a tendency for many landlords not to keep the rental payments at the going market rates.

The bottom line is landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their properties over the next five, ten and twenty years.

The current and future situation of the private rental property market is important. Landlords need to navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.

Sources:

  1. Value of Apartments from ZPG and Land Registry
  2. Inflation from 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.

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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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