52% of Nottingham people Rent - Is that Healthy?

Renting in the 1960s and 1970s was deemed unpopular. You either lived in a ‘Rigsby Rising Damp’ style bedsit with wood chip on the wall and a coin operated electric meter or, you lived in a council house. In the latter part of the 20^th Century, the British were persuaded they were wasting their money on rent payments. However, owning a home often makes less financial sense than renting and provides more flexibility.  The rate of homeownership has started to drop as the stigma towards renting diminishes. In fact, of the 274,081 residents of Nottingham, 143,057 of those rent their home from either the local authority/social provider or private landlords – meaning 52.19% of Nottingham people are tenants.

The idea of homeownership has been historically embedded in the British soul, in fact 126,457 Nottingham people live in an owner occupied property. Housing is at the heart of Government policy, with George Osborne promising 200,000 new properties a year. The plan is that this will allow first time buyers to purchase their first home.  Promising everybody their own home, has traditionally been at the heart of election campaigns for all parties and as a country, homeownership is the main goal of British life.

However, despite this more and more people are renting, so are we turning to a more European way of living?  I believe as a country we are, in fact homeownership could be affecting your health! The UK, according to Bloomberg, only lies at number 21 in the list of healthy countries in the world.  Germany is at number 10 and Switzerland number 4 with homeownership at 52.5% and 44% respectively in those countries (in the UK it is 64.8%).

In the Nottingham City Council area, 65.87% of homeowners who own their home outright said they were in ‘very good’ or ‘good’ health whilst, at the other end of the scale, 9.76% said their health was ‘bad’ or ‘very bad’. Looking at renting, the census splits tenants into two types – 69.84% of Nottingham local authority/social tenants said they were in ‘very good’ or ‘good’ health and 11.97% were in ‘bad’ or ‘very bad’ health. Whilst ‘private rented tenants’ in Nottingham, were the healthiest, as 88.98% of them described themselves in ‘very good’ or ‘good’ health and only 3.21% were in ‘bad’ or ‘very bad’ health

I'm not suggesting that low homeownership rates in Switzerland and Germany are directly linked to health, but the stats do seem to suggest that with home ownership there is more stress. The numbers for Nottingham do go some way to back up the argument and they are the same across the whole of the UK. Nonetheless I do think that substantially is of the upside to home ownership and in recent years has been a function of monumental rising house prices. Now that's come to an end, it's hard to see why anybody would want to buy?

Renting is here to stay in Nottingham and it’s growing incrementally each year. Even with the new tax rules for landlords, buy to let is still a viable investment option for most people in the town. There has never been a better time to purchase buy to let property in Nottingham, but buy wisely. Gone are the days that you would make profit on anything with four walls and a roof. When looking for an investment opportunity take advice and opinions on the market. For further advice on the Nottingham property market please email me on jaclyn.bartlett.co.uk

What would Brexit mean to the 53,300 Nottingham Property owners?

If you read all the newspapers, the Brexit debate seems to be focused on central London. Many commentators have said leaving Europe will mean central London would have a lower standing in the world, meaning fewer people will be employed in Central London - with the implication of lower wages and not so many jobs for those in the city. We are in Nottingham however, not Marylebone, Mayfair or any part of Zone 1 London.

Nottingham is home to Nottingham Forest FC, the Lace Market and Torvill and Dean. Whilst the central London property market exploded after 2009, that explosion honestly didn’t affect the Nottingham property market. So, putting central London aside, what would an ‘in’ or ‘out’ vote really mean for the 53,300 property owners of Nottingham?

Initially, over the coming months in the run up to referendum, I believe it will be similar to the run up of last year’s General Election, with short-term uncertainty big decisions will be put on ice and people are less likely to make big money purchases, for example buying a property. However, in the four months up to last year’s election, property values in Nottingham increased by 1.49%, not bad for a country that thought it would get a hung parliament!

Post vote, should the UK opt to leave Brussels there would be a much more noteworthy impact. I believe that a vote to stay in the EU will see the Nottingham property market return to a status quo very quickly, but the contrasting result could lead to some changes. The principal menace to the Nottingham (and UK) housing market could be variation (in an upwards direction) in interest, which could theoretically see the cost of mortgages grow swiftly. This will price many out of the market however two thirds of landlords buy without a mortgage, so this won’t affect them.  According to the Bank of England 80.33% of all new mortgages taken out in 2015 were fixed rate. Looking at mortgages as a whole, according to the Bank of England, 44% of all UK mortgagees have a fixed rate mortgage, but 56% do not so if you aren’t on a fixed rate ... my advice is to talk to your mortgage broker now, as interest rates can only go in one direction!

I suspect whatever decision the electorate of Nottingham and the country as a whole make, over the long term it won’t have a major effect on the Nottingham property market. We have seen off ‘the end of the world’ credit crunch of 2008/9, subsequent property crash, the 1988 Nigel Lawson induced post dual-MIRAS property crash and many more!

Today, property prices are 93.32% higher than 21 years ago in Nottingham and are 5% higher than 12 months ago. So, make your own decision on 23 June 2016 safe in the knowledge that whatever the result, there might be some short term volatility in the Nottingham property market.  In the long term, the Nottingham property market will be just fine, even if it has a little blip in the summer as property investment is a long term strategy.

For more advice and opinion on the Nottingham property market, please contact me on Jaclyn.bartlett@centrickproperty.co.uk