My parents bought their first house in the 1960’s, they
were in their early 20’s. Interestingly, looking at some research by the Post
Office from a few years ago, in the 1960’s, the average age people bought their
first house was 23. By the early 1970s, it had reached 27, rising to 28 in the
early 1980’s.
This year alone, 210 people in Penicuik will turn 28 ... and
dare I say it a similar number will do the same in 2017, 2018 and each year
beyond that ... year in year out, the conveyor belt carries on ... where are
the Penicuik youngsters going to live?
Ask a Penicuik ‘twenty something’ and they will say they
do not expect to buy until they are in their mid thirties, seven years later
than the 1980’s. Some people even say they will never be able to buy a property
and the newspapers have labelled them ‘Generation Rent’, as they are people
born in the 1980s who believe that they have no hope of getting on the property
ladder. One of the major problems facing young Penicuik people is the large
deposit needed to get a mortgage… or is it?
The average price paid for an apartment in Penicuik over
the last 12 months has been £111,500 meaning our first time buyer would need to
save £5,575 as a deposit (as 95% mortgages have been available to first time
buyers since 2010) plus a couple of thousand for solicitors costs. A lot of
money, but people don’t think anything today of spending a couple of thousand
pounds to go on holiday, the latest iPhone upgrade or the latest 4k HD
television. The deposit and solicitors costs could soon be saved if these
‘luxuries’ were with held over for a couple of years but attitudes have
changed.
Official figures, from the Office for National
Statistics, show the average person in Penicuik earns £497 per week meaning they
would still comfortably be able to get a mortgage for apartment.
I was reading a report/survey commissioned by Paragon
Mortgages from the Autumn of last year. The thing that struck me was when
tenants were asked about their long term housing plans, some 35% of
participating tenants intended to remain within the rented sector and 24%
intended to buy a house in the future, with the proportion of respondents
citing the “unaffordability” of housing as the reason for renting privately
increasing from 69% to 74%.
However, time and time again, in the starter home
category of property (i.e. apartments), nine times out of ten, the mortgage
payments to buy a Penicuik property are cheaper than having to rent in Penicuik.
It is the tenants’ perceptions that they believe they can’t buy, so choose not
to. Renting is now a choice. Tenants can upgrade to bigger and better
properties and move up the property ladder quicker than their parents or grandparents
(albeit they don’t own the property). Over the last decade, culturally in the
UK, there has been a change in the attitude to renting and, unless that
attitude changes, I expect that the private rental sector in Penicuik (and Scotland
as well as the UK as a whole) is likely to remain a popular choice for the next
twenty plus years. With demand for Penicuik rental property unlikely to slow
and newly formed households continuing to choose the rental market instead of
purchasing a property, I also forecast that renting will continue to offer good
value for money for tenants and recommend landlords pursue professional advice
and adopt a realistic approach to rental increases to ensure that they are in
line with inflation and any void periods are curtailed.
If you would like to explore how I can help you with your
property investments, or should you require any advice about investing in the
Penicuik property market, wish to enquire about our Investment Analysis
Reports, Property Sourcing, Residential Lettings or Property Management
services, please do not hesitate to contact me on 01968 674601 or at lettings@thekeyplace.co.uk.
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