๐๐ซ๐๐ง๐ญ๐ก๐๐ฆ ๐๐จ๐ฆ๐๐จ๐ฐ๐ง๐๐ซ๐ฌ๐ก๐ข๐ฉ ๐ซ๐จ๐๐ค๐๐ญ๐ฌ ๐๐ฒ ๐๐๐ ๐ก๐จ๐ฆ๐๐ฌ ๐ข๐ง ๐ญ๐ก๐ ๐ฅ๐๐ฌ๐ญ ๐ ๐ฒ๐๐๐ซ๐ฌ
June 21st, 2022
๐โ๐ ๐บ๐๐๐๐กโ๐๐ โ๐๐ข๐ ๐๐๐ ๐๐๐๐๐๐ก ๐๐ฃ๐๐ ๐กโ๐ ๐๐๐ ๐ก ๐๐๐ฃ๐ ๐ฆ๐๐๐๐ โ๐๐ ๐๐โ๐๐ฃ๐๐ ๐๐๐๐๐ฆ.
- ๐บ๐๐๐๐กโ๐๐ โ๐๐ข๐ ๐ ๐๐๐๐๐๐ ๐๐๐ 33.7% โ๐๐โ๐๐ ๐กโ๐๐ ๐๐ 2017, ๐๐ฃ๐๐ ๐กโ๐๐ข๐โ ๐๐ข๐๐๐๐ ๐กโ๐๐ ๐ ๐๐๐ฃ๐ ๐ฆ๐๐๐๐ , ๐กโ๐ ๐ต๐๐๐ก๐๐ โ ๐๐๐๐๐๐๐ฆ โ๐๐ ๐กโ๐ ๐ข๐๐๐๐๐ก๐๐๐๐ก๐ฆ ๐๐ ๐ต๐๐๐ฅ๐๐ก ๐๐๐ ๐กโ๐ ๐๐๐ ๐ ๐๐ฃ๐ ๐๐๐๐ ๐๐ ๐บ๐ท๐ ๐๐ข๐๐๐๐ ๐กโ๐ ๐๐๐๐๐๐๐๐.
- ๐๐๐ก, ๐ ๐๐๐ ๐ ๐๐๐ ๐๐๐ฃ๐๐ ๐ก๐๐๐๐ ๐๐ ๐กโ๐๐ก ๐บ๐๐๐๐กโ๐๐โ๐ ๐๐๐ก ๐๐ข๐๐๐๐ ๐๐ โ๐๐๐๐๐ค๐๐๐๐ โ๐๐ ๐๐๐ ๐๐ ๐๐ฆ 851 โ๐๐ข๐ ๐โ๐๐๐๐ , ๐ ๐๐ข๐๐ ๐๐ 3.7%.
- ๐โ๐ฆ โ๐๐ ๐๐๐๐ค๐กโ ๐๐ โ๐๐๐๐๐ค๐๐๐๐ โ๐๐ โ๐๐๐๐๐๐๐, ๐๐๐ ๐คโ๐๐ก ๐๐๐๐ ๐๐ก ๐๐๐๐ ๐๐๐ ๐บ๐๐๐๐กโ๐๐โ๐ ๐๐ฅ๐๐ ๐ก๐๐๐ โ๐๐๐๐๐ค๐๐๐๐ (๐๐๐ ๐๐๐๐๐๐๐๐๐ )?
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.
๐๐จ, ๐ฐ๐ก๐๐ญ ๐ข๐ฌ ๐๐๐ก๐ข๐ง๐ ๐ญ๐ก๐ข๐ฌ ๐ ๐ซ๐จ๐ฐ๐ญ๐ก ๐ข๐ง ๐ก๐จ๐ฆ๐๐จ๐ฐ๐ง๐๐ซ๐ฌ๐ก๐ข๐ฉ ๐๐ง๐ ๐ข๐ฌ ๐ข๐ญ ๐ ๐ ๐จ๐จ๐ ๐ญ๐ก๐ข๐ง๐ ?
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 Britainโs 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.
๐๐จ, ๐ฐ๐ก๐๐ญ ๐๐ซ๐ ๐ญ๐ก๐ ๐ฌ๐จ๐ซ๐ญ ๐ง๐ฎ๐ฆ๐๐๐ซ๐ฌ ๐ ๐๐ฆ ๐ญ๐๐ฅ๐ค๐ข๐ง๐ ๐๐๐จ๐ฎ๐ญ ๐ข๐ง ๐๐ซ๐๐ง๐ญ๐ก๐๐ฆ?
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.
- Peopleโs 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).
๐๐จ, ๐ญ๐ก๐ ๐๐ข๐ง๐๐ฅ ๐ช๐ฎ๐๐ฌ๐ญ๐ข๐จ๐ง ๐ก๐๐ฌ ๐ญ๐จ ๐๐โฆโฆ..
How much further could homeownership go in Grantham?
The biggest hurdle could prove to be the supply of available homes.
Many โaccidental landlordsโ 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.
Granthamโs 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.