Last weekend, I was out for a walk in Williamson Park when a smart gentleman approached me. ‘Hello John’, he said, ‘You are the person writes that Property Blog aren’t you? We have met before through your estate agency”. I did then recognise him and, whilst I won’t mention his name, he runs a small but perfectly formed well known independent retailers in the town. It’s amazing who you see when out walking! Anyway, I was at a loose end for five or ten minutes as Mrs JDG was testing her new camera lenses, so we had a chat.
He wanted to know my thoughts on the future of the Lancaster property market, which got me thinking it would make an interesting read for you. Think about it. People are always going to need a roof over their heads to live. It’s a necessity for every single person. The 22 to 30 year olds of the town have a choice to what type of roof they have. They can
A. Try and rent from the Council,
B. They can rent from a private landlord or
C. They can get a mortgage and buy one.
In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently fewer Lancaster youngsters have been buying, choosing to rent instead. This has mainly been from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering. I want to share them with you.
Roll the clock back 20 years and Lancaster was a different place. There were 18,558 households in Lancaster and 12,457 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 9.7% to 20,360 and quite surprising (to me at least) the number of owner-occupiers has decreased to 12,361 (although as a proportion it is only 60.7% compared to 67.1% twenty years ago).
However, it’s rented sector that is truly fascinating. Twenty years ago, only 1,339 properties were privately rented in Lancaster . Today it is 4,352, a rise of 3,013.
The 20 somethings of Lancaster housing difficulties haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 2,795 to 2,207 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Lancaster and those who educate themselves and treat it as a business will survive and prosper.
The best way Lancaster landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, Lancaster tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Lancaster (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.
His final property question was ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand it is hard to imagine Lancaster property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the housing market should return to balance.
Do you have any concerns regarding the changes to landlords from April and in future years? If so, please drop an email at john@jdg.co.uk or call into the office for chat.