𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦 𝐇𝐨𝐦𝐞𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐫𝐨𝐜𝐤𝐞𝐭𝐬 𝐛𝐲 𝟖𝟓𝟏 𝐡𝐨𝐦𝐞𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐥𝐚𝐬𝐭 𝟓 𝐲𝐞𝐚𝐫𝐬
June 21st, 2022
𝑇ℎ𝑒 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚 ℎ𝑜𝑢𝑠𝑖𝑛𝑔 𝑚𝑎𝑟𝑘𝑒𝑡 𝑜𝑣𝑒𝑟 𝑡ℎ𝑒 𝑙𝑎𝑠𝑡 𝑓𝑖𝑣𝑒 𝑦𝑒𝑎𝑟𝑠 ℎ𝑎𝑠 𝑏𝑒ℎ𝑎𝑣𝑒𝑑 𝑜𝑑𝑑𝑙𝑦.
- 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚 ℎ𝑜𝑢𝑠𝑒 𝑝𝑟𝑖𝑐𝑒𝑠 𝑎𝑟𝑒 33.7% ℎ𝑖𝑔ℎ𝑒𝑟 𝑡ℎ𝑎𝑛 𝑖𝑛 2017, 𝑒𝑣𝑒𝑛 𝑡ℎ𝑜𝑢𝑔ℎ 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑜𝑠𝑒 𝑓𝑖𝑣𝑒 𝑦𝑒𝑎𝑟𝑠, 𝑡ℎ𝑒 𝐵𝑟𝑖𝑡𝑖𝑠ℎ 𝑒𝑐𝑜𝑛𝑜𝑚𝑦 ℎ𝑎𝑑 𝑡ℎ𝑒 𝑢𝑛𝑐𝑒𝑟𝑡𝑎𝑖𝑛𝑡𝑦 𝑜𝑓 𝐵𝑟𝑒𝑥𝑖𝑡 𝑎𝑛𝑑 𝑡ℎ𝑒 𝑚𝑎𝑠𝑠𝑖𝑣𝑒 𝑓𝑎𝑙𝑙 𝑖𝑛 𝐺𝐷𝑃 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑝𝑎𝑛𝑑𝑒𝑚𝑖𝑐.
- 𝑌𝑒𝑡, 𝑎 𝑙𝑒𝑠𝑠 𝑜𝑏𝑠𝑒𝑟𝑣𝑒𝑑 𝑡𝑟𝑒𝑛𝑑 𝑖𝑠 𝑡ℎ𝑎𝑡 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚’𝑠 𝑛𝑒𝑡 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠 ℎ𝑎𝑠 𝑟𝑖𝑠𝑒𝑛 𝑏𝑦 851 ℎ𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑𝑠, 𝑎 𝑗𝑢𝑚𝑝 𝑜𝑓 3.7%.
- 𝑊ℎ𝑦 ℎ𝑎𝑠 𝑔𝑟𝑜𝑤𝑡ℎ 𝑖𝑛 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠ℎ𝑖𝑝 ℎ𝑎𝑝𝑝𝑒𝑛𝑒𝑑, 𝑎𝑛𝑑 𝑤ℎ𝑎𝑡 𝑑𝑜𝑒𝑠 𝑖𝑡 𝑚𝑒𝑎𝑛 𝑓𝑜𝑟 𝐺𝑟𝑎𝑛𝑡ℎ𝑎𝑚’𝑠 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 ℎ𝑜𝑚𝑒𝑜𝑤𝑛𝑒𝑟𝑠 (𝑎𝑛𝑑 𝑙𝑎𝑛𝑑𝑙𝑜𝑟𝑑𝑠)?
With the newspapers full of news about the death of homeownership and the growth in Generation Rent, it must surprise many (as it did with me) that the number of homeowners in Grantham has grown.
To give some context,
The number of homeowners in Grantham dropped between 2011 and 2017 by 87 households, yet between 2017 and 2021, that grew by 851 households.
𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐢𝐬 𝐛𝐞𝐡𝐢𝐧𝐝 𝐭𝐡𝐢𝐬 𝐠𝐫𝐨𝐰𝐭𝐡 𝐢𝐧 𝐡𝐨𝐦𝐞𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩 𝐚𝐧𝐝 𝐢𝐬 𝐢𝐭 𝐚 𝐠𝐨𝐨𝐝 𝐭𝐡𝐢𝐧𝐠?
Politicians love it when homeownership rises, as they believe owning a house turns individuals into model upright citizens. It was one of the critical reasons for the Council House sell-off in the 1980s.
Yet the hard data to back this up is unexpectedly slim, whilst other studies hint that homeownership has some harmful costs to the economy, such as reduced entrepreneurial spirit and disinclination to move home to find work.
However, increasing homeownership may be a good foundation for Britain’s economic recovery after the last few years. Homeowners have a greater propensity (than other people) to live in single-family unit homes like townhouses and semi-detached houses.
Greater demand for more single-use homes supports the construction of such dwellings (instead of other types such as small apartment blocks or Homes of Multiple Occupation.) This is important because single-family unit homes tend to be better build quality, have more extensive gardens, and have more local amenities.
𝐒𝐨, 𝐰𝐡𝐚𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞 𝐬𝐨𝐫𝐭 𝐧𝐮𝐦𝐛𝐞𝐫𝐬 𝐈 𝐚𝐦 𝐭𝐚𝐥𝐤𝐢𝐧𝐠 𝐚𝐛𝐨𝐮𝐭 𝐢𝐧 𝐆𝐫𝐚𝐧𝐭𝐡𝐚𝐦?
In 2017, there were 11,082 Grantham owner-occupied homes. By 2021, this had grown to 11,933 Grantham homes.
Meaning homeownership in Grantham has risen from 59.67% of the households in Grantham in 2017 to 61.86% in 2021, a proportional increase of 3.7%
So, what is behind this growth in homeownership?
- 95% mortgages have been readily available at low-interest rates now for over a decade. In 2017, first-time buyers also got an exemption from stamp duty. This created a perfect storm of demand, which caused the number of Grantham first-time buyers to rise.
- Whilst the rise in homeownership in Grantham precedes the pandemic by a couple of years, another factor to the growth relates to the last property market recession of 2008/9 (The Credit Crunch). Between 2009 and 2012, many Grantham homeowners found themselves unemployed and still had to pay mortgages at 6% to 8%. Some were repossessed or had to sell their home at a low price to unshackle themselves from their high mortgage costs. This development, nevertheless, took many agonising years to play out, reducing homeownership until the middle of the last decade.
- People’s views on the way they live have altered during the lockdowns. In a sphere of stay-at-home instructions and social distancing, the peace of mind of homeownership gives Grantham homeowners the security of tenure.
- Finally, there has been a long-term change in the demographics of the UK. Millennials (currently aged between 26 and 41) are less likely to be homeowners than their Baby Boomer parents were at the same age. Yet, the British millennial generation is now entering its prime home-buying period as they have saved their deposit and are more likely to inherit money from their grandparents. (The average age of a first-time home-buyer in the UK is 33 compared to 26 in the mid-1990s).
𝐒𝐨, 𝐭𝐡𝐞 𝐟𝐢𝐧𝐚𝐥 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐭𝐨 𝐛𝐞……..
How much further could homeownership go in Grantham?
The biggest hurdle could prove to be the supply of available homes.
Many ‘accidental landlords’ have been selling their properties recently, which first-time buyers have bought. Accidental landlords put their own homes up for rent in the early to mid-2010s because they could not sell. Now they have been motivated to cash in on the higher Grantham house prices in the last couple of years, which increased the supply of properties to buy for owner-occupation.
Also, the number of houses on the market in the UK available to buy has increased among existing owner-occupiers. In December 2021, there were 355,700 properties for sale yet by March 2022, that had risen to 431,000. This is giving greater confidence to other Grantham homeowners too scared to put their homes up for sale because they are concerned, that they would not be able to find anything. Things are starting to change in that regard.
Also, there are signs of a recovery in British new home building as the number of new housing starts in 2021 hit its highest level since the financial crisis of 2007. Yet with a steady increase in Grantham landlords returning to the market in the last few months, this tide will turn.
Grantham’s home ownership could continue to swell for a while yet!
PS What does this mean to the private rented sector in Grantham? Come back next week as I give some fantastic insights every Grantham landlord will want to read to ensure they remain profitable in the Grantham Buy-to-let market.