Nottingham House Price Monopoly...

As we go into January and deal with the lull after the Christmas holiday – if there isn’t anything on the telly, it wouldn’t be unusual to find me enjoying a good game of Monopoly. Buying and renting property – a busman’s holiday you might say! The game was originally invented at the turn of the 20^th Century (1903 to be precise) interestingly the game was initially called ‘The Landlord’s Game’!  After a few years in the wilderness, the game was renamed Monopoly the game we know and love today.

So whether you are a homeowner or landlord in Nottingham, what would a Monopoly board look like today in the city? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Nottingham today.

I have focused on the NG1 postcode, looking at the brown roads on the board, the ‘new’ Old Kent Road in Nottingham today would be Parkview Court, with an average value £55,800 (per property) and Whitechapel Road would be Shakespeare Street, which would be worth £91,800. What about the posh dark blue roads, Park Lane and Mayfair? Again, looking at NG1, Park Lane would be Standard Hill at £270,500 and Mayfair would be Park Terrace at £593,200. Also, I can’t forget the train stations (my favourite), and over the last 12 months, the average price that property within a quarter mile of the station sold for was £113,450.

So that got me thinking, what you would have had to have paid for a property in Nottingham back in 1935, when ‘Monopoly’ was born?

• ·         The average Nottingham detached house today is worth £264,510 would have set you back 478 Pounds 11 shillings and 6 old pence.
• ·         The average Nottingham semidetached house today is worth £147,240would have set you back 266 Pounds and 8 shillings.
• ·         The average Nottingham terraced / town house today is worth £111,510 would have set you back 201 Pounds 15 shillings and 1 old pence.
• ·         The average Nottingham apartment today is worth £129,200 would have set you back 233 Pounds 15 shillings and 2 old pence.

Interesting and a bit of fun… but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis; if you are going to invest in the Nottingham property market, you should consider the Nottingham property you buy to be a medium to long term investment, because buy to let is exactly that – you buy a property in order to rent it out to tenants.

I reminded a soon to be first time landlord from West Bridgford the other week, buy to let in Nottingham (as in other parts of the Country) is very different from owning your own home. When you become a Nottingham landlord, you are in essence running a small business – one with important legal responsibilities. If you would like advice and tips on the Nottingham property market, please contact me on Jaclyn.bartlett@centrickproperty.co.uk.

Nottingham Tenants Pay 38.2% of their Salary in rent

I had the most interesting chat with a local Nottingham landlord the other day about my thoughts on the Nottingham property market. The subject of the affordability of renting in Nottingham came up in conversation and how that would affect tenant demand. Everyone wants a roof over their head, and since the Second World War, owning one’s home has been an aspiration of many Brits.  However, with rents at record highs many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first time buyers deposit.

Therefore, I thought I would do some research into the Nottingham property market and share with you my findings.  Nottingham tenants spend on average just over a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Nottingham is £758 per month.  When the average annual salary of a Nottingham worker stands at £23,813 per year, that means the average Nottingham tenant is paying 38.2% of their salary in rent.

   

You see one the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a severe lack of new properties being built in Nottingham.  It’s the classic demand vs supply scenario where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also Nottingham people aren't moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, in a previous article I said back in spring 2008, there were over 10,800 properties for sale in Nottingham and since then this has steadily declined year on year, so now there are only 3,470 for sale in the City.

So, the planners in Nottingham haven’t allowed enough properties to be built in the city and existing Nottingham homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Nottingham to match demand, these are the reasons houses prices in Nottingham have remained quite buoyant, even though economically, over the last 5 years it was one of the worst on record for the country and the East Midlands region as a whole.

With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people were seeking rental properties.

 It is often said that more people in central Europe rent for longer or never own their own property. The last two census in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and as a country, we are becoming more and more like Germany. That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays often quoted is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that they have a higher personal income than in the UK.  

    

Therefore, if we are turning into a more European model and the youngsters of Nottingham and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Nottingham tenants as wages will start to rise and good news for Nottingham landlords.