Why are less Nottingham people moving house?

Recently I have been looking at the number of times the average Nottingham resident moves house in their lifetime, and how this has affected the housing market. From the research I have carried out it shows that things have changed considerably in Nottingham over the last few decades and interestingly the trend is getting worse.

There are 118,820 properties in Nottingham, however after we remove the 34,651 council houses; 28,492 privately rented houses: and 1,762 houses where the occupants are living rent free, this leaves 53,915 properties owned by Nottingham residents (with a mortgage or shared ownership). This means 45.4% of the properties in Nottingham are owner occupied (the national average is interestingly is 64.2%), however the number of people who have sold and moved house in Nottingham over the last 12 months has only been 9,750. These figures suggest that homeowners of Nottingham are only moving on average every 5.52 years.

Influencing factors for this change in behaviour include the cost of moving house, which has risen over the last twenty years. Additionally with many re-mortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability amongst a minority of homeowners to finance a home sale/purchase due to the lack of remaining equity.

However the biggest influence has been the change in house price inflation. Back in the 1970’s and 1980’s house prices were doubling every 5 to 7 years. Even in Greater London with its stratospheric property price increases over the last few years, it has taken 13 years (since August 2002 to be exact) for property values to double to today’s levels.

This change in moving trend, in a relatively low inflation property market such as we are experiencing in Nottingham , is significant because the long term consequences of sustained low house price growth is the lack of ability to reduce mortgage debt (as opposed to when property price inflation is higher and the ratio of equity to debt is greater). Nottingham homeowners cannot currently rely on inflation to reduce their debt in real terms as they did in say the 1970’s and 1980’s.

So what does this all mean for Nottingham buy to let landlords? Well, for the same reasons existing Nottingham homeowners aren’t moving and the appeal to rent is increasing.  Fewer ‘twenty somethings’ are buying their first home. Nottingham youngsters may aspire to own their own home, but there isn’t the social pressure today from their peers and parents to get onto the housing ladder as soon as they reach their early 20’s.  Additionally, fresh in people’s minds is the memory of the 2008 housing crisis and the belief the hard times aren't completely over. There is also the opinion that the culture of the UK society is changing, with the younger generation looking for prosperity and happiness, but without the sacrifice, hard work and patience required to achieve this. As a society we expect things instantly, and if it doesn’t come easily or quickly enough, is it really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package whilst saving for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was a generation ago?

Even though in real terms property prices are 5% cheaper than they were ten years ago (when adjusted by inflation), 24% of Nottingham properties are privately rented, nearly double compared to twenty years ago. As a result, the demand for rental properties continues to grow, which can only mean those wishing to invest in the buy to let market over the long term are on to a good thing. For advice and opinion on the Nottingham Buy to Let property market, please email me at Jaclyn.Bartlett@centrickproperty.co.uk