Talking to an elderly relative recently, he reminded me that
in his day, you could have bought a property for the same price of what a
decent second hand car would sell for today and that his father was buying
property for the same price as a decent 50 inch LCD TV! Now of course, these are only headline prices
and we have had wage growth and inflation.
Interestingly, since the Second World War, property values in Plymouth
Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people. It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating us (although we know what has happened to the Spanish property market over the last few years!). In the 2000’s, the British situation was different in two regards. First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.
Plymouth over
the last couple of years. This is one of
the (many) reasons why the younger generation is deciding more and more to rent
instead of buy their own house. The local
Council sold off council houses in the Thatcher years and for many on low
incomes or with little capital, owning a home has simply never been an option.
Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people. It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating us (although we know what has happened to the Spanish property market over the last few years!). In the 2000’s, the British situation was different in two regards. First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.
However, since 2010, the regional pattern has been
completely different in the UK . Compared with
2007 (the last property boom), average property values today in England
and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher,
whereas in Plymouth they are 9.36% lower. The London
property market has been like a different country. Looking specifically at Plymouth
though, it has continued for first time buyers to get on the housing
ladder. The best measure of the affordability
of housing is the ratio of Plymouth Property Prices to Plymouth Average Wages,
(the higher the ratio, the less affordable properties are).
·
1997 2.98
to 1 (i.e. the average value of a Plymouth property was 2.98 times higher than the average
annual wage in Plymouth )
·
2000
2.95 to 1
·
2002 4.04
to 1
·
2003 4.57
to 1
·
2007 6.88
to 1
·
2009 5.52
to 1
·
2012 5.79
to 1
·
Today 6.46
to 1
You can see quite
clearly, even though we had an improvement just after the 2007 property crash
(i.e. the ratio dropped), in following subsequent years with Plymouth house
price’s rising but wages not keeping up with them, the ratio started rise. This has meant there has been a deterioration
in affordability of property in
With fewer people able to save up the deposit
required by mortgage lenders, more and more people are looking to rent, this
has also resulted in a change in attitudes towards renting over the last
decade. This delay in moving up the property ladder has driven rents up
in Plymouth over the last few years, as more
people are seeking properties to rent. All these things have combined to
make the demand for rental property in Plymouth
rise. If you are an existing landlord or someone thinking of become a
first time landlord looking for advice and opinion and what (or not to buy in Plymouth), one source of
information is the Plymouth Property Blog www.plymouthpropertyinsight.co.uk.
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