Has owning a home become an unattainable dream?

Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age that 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, 6,248 people in Nottingham will turn 28. We can expect 7,719 in 2017 and 10,255 in 2018 - year in year out the conveyor belt carries on. The question is: where are Nottingham younger generation going to live?

Ask the average ‘twenty something’ from Nottingham when they expect to be able to buy their first property and they will likely not until they are in their mid-thirties - seven years older than the average buying for the first time in the 1980’s. Some people are concerned that they will never be able to buy a property and the newspapers have labelled them ‘generation renters’ - they are people who were born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing the first time buyers of Nottingham, is the large deposit needed to get a mortgage. Or is it?

The average price paid for an apartment in Nottingham over the last 12 months has been £119,700 meaning our first time buyer would need to save £5,985 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A good deal of money, however people don’t think twice today about spending a couple of thousand pounds to go on holiday; the latest iPhone upgrade or the latest HD television. That amount could soon be saved if these ‘luxuries’ were withheld over a couple of years - but attitudes and lifestyles have changed.

Official figures from the Office for National Statistics show the average male in Nottingham with a full-time job earns £460.00 per week whilst the average female salary is £395.60 a week, meaning, even if one of them worked part time, a couple would still be able to get a mortgage for an apartment quite comfortably.

I have just read a report, which was commissioned by Paragon Mortgages, from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intended to remain within the rental sector and 24% intended to buy a house in the future, with 74% of respondents citing the “unaffordability” of housing as the reason for renting privately.

However, nine times out of ten in the starter home category (eg. apartments) the mortgage payments on a Nottingham property are cheaper than having to rent in the same area. It is the tenant’s perception that they can’t buy, so they 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 won’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting. Unless that attitude changes, I expect that the private rental sector in Nottingham (and the UK as a whole) will remain a popular choice for the next twenty years plus. This will mean a continued demand for Nottingham rental property, with 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. Should you require advice or tips on the Nottingham property market please email me Jaclyn.bartlett@centrickproperty.co.uk.