‘Generation Rent (Forever)’ – 4,180 Rugby Tenants have no intention of ever buying a property to call home

The good old days of the 1970’s and 1980’s eh … with such lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts … those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?


Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Rugby (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Rugby property ladder.


However, I would say there has been something else at play other than the issue of raising a deposit – having sufficient income and rising property prices in Rugby. Whilst these are important factors and barriers to home ownership, I also believe there has been a generational change in attitudes towards home ownership in Rugby (and in fact the rest of the Country).


Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.


You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Rugby population choose to be tenants as it better suits their plans and lifestyle. Local Government in Rugby (including the planners – especially the planners), land owners and landlords need an adaptable Rugby residential property sector that allows the diverse choices of these Rugby 20 and 30 year olds to be met.


This means, if we applied the same percentages to the current 10,886 Rugby tenants in their 4,771 private rental properties, 4,180 tenants have no plans to ever buy a property – good news for the landlords of those 1,832 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.


.. but does that mean the other third will be buying in Rugby in the next 12 months?


Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Rugby, we will in fact need an additional 2,045 private rental properties over the next eight years (or 256 a year) … meaning the number of private rented properties in Rugby is projected to rise to an eye watering 6,816 households.


For more insight and thoughts like this on the Rugby Property Market – please visit the Rugby Property Blog at http://www.rugbypropertyblog.wordpress.com


Iain Havell

Rugby First Time Buyers borrow £66.6m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.


Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Rugby property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 1,387 properties have sold (and completed) in Rugby, worth £314.2m. Interestingly the number of properties changing hands in Rugby has also dropped when compared to a decade ago.


It might surprise you that first time buyers in 2017 will benefit from a slight decline in Rugby buy-to-let investors.


Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Rugby property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.


Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …


Q4 2015 – £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 – £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 – £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 – £827m buy-to-let mortgages vs £1.42bn for first time buyers


When looking at the figures for Rugby itself, first time buyers have borrowed more than £66.6m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Rugby economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.


Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Rugby market, at this moment in time there are an impressive 184 properties for sale, so lots of choice. All this will be welcome news amongst Rugby first-time buyers with a combination of a proportional reduction in new investors and landlords.


2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Rugby property market like this, you might want to visit the Rugby Property Market Property Blog http://www.rugbypropertyblog.wordpress.com


Iain Havell

With 10,886 people in Private Rented Properties in Rugby – Should you still be investing in Rugby Buy To Let?

If I were a buy to let landlord in Rugby today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Rugby property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Rugby property prices do drop, the downside to that is that first time buyers could be attracted back into the Rugby property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Rugby landlord, almost a blessing in disguise.

Rugby has a population of 69,361, so when I looked at the number of people who lived in private rented accommodation, the numbers astounded me …


Rugby – Accommodation Type and the Number of Occupiers
Owned outright – Rugby Owned with a mortgage – Rugby Shared ownership (part owned and part rented) – Rugby Social rented (aka Council Housing) –  Rugby Private rented – Rugby Living rent free – Rugby
17,163 29,670 651 10,429 10,886 562
24.7% 42.8% 0.9% 15.0% 15.7% 0.8%


Yields will rise if Rugby property prices fall, which will also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Rugby landlords add to their portfolio. Rental demand in Rugby is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Rugby landlords should be aware of: the change in the anthropological nature of these 20 something potential first time buyers.

I have just come back from a visit to my partners relations after a family get together. I got chatting with her nephew and his partner.  Both are in their mid/late twenties, both have decent jobs in Rugby and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? The answers surprised me as 30 something, and it will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not top of the list for these youngsters.

So, as 15.7% of Rugby people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Rugby – because what else are you going to invest in?  Give your money to the stock market run by sharp suited city whizz kids – because at least with property – it’s something you can touch – there is nothing like bricks and mortar!

For more views and opinions on the Rugby Property Market – visit the Rugby Property Market Blog http://www.rugbypropertyblog.wordpress.com

206 Rugby Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.


It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Rugby, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Rugby?


The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.


Funding retirement is important as the life expectancy of someone from Rugby at age 65 (years) is 19.3 years for males and 21.6 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Rugby.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.


So, what of Rugby?  Of the 7,518 households in Rugby, whose head of the household is 65 or over, not surprisingly 5,830 of households were owned (77.55%) and 1,290 (17.16%) were in social housing.  However, the figure that fascinated me was the 206 (2.74%) households that were in privately rented properties.


Anecdotal evidence, by talking to both my team and other Rugby property professionals is that this figure is rising.  More and more Rugby OAP’s are selling their large Rugby homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.


These Rugby OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP – the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn’t leave family members panicking to sell the property to fund care-home fees.


Rugby landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

Iain Havell