The Colchester housing market has gone through a sea change in the past decades with the Buy-to-Let (BTL sector) evolving as a key trend, for both Colchester tenants and Colchester landlords.
A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Colchester population. In 1981, the population of the Colchester Borough Council area stood at 138,900 and today it stands at 183,900.
Currently, the private rented BTL sector accounts for 21.9% of households in the town. The Government want to assist people living in those houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of ever more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.
- 67.31% Colchester people owned their own home in 1981
- 22.10% Colchester people rented from the Council or Housing Association in 1981
- 10.60% Colchester rented from a Private Landlord
The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of the Colchester area set to grow to 220,000 by 2037 it is imperative that Colchester Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for all its inhabitants.
The government has announced a variety of initiatives aimed at encouraging the Build-to-Rent (BTR) sector (instead of the BTL sector). These include allowing local authorities to proactively plan for BTR schemes, and making it simpler for BTR developers to offer inexpensive private rented homes.
To do this, the government will invent a distinct affordable housing class for BTR, called “Affordable Private Rent”, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.
Private landlords will not be expected to offer discounts, nor offer 3-year tenancies but it is something Colchester landlords need to be aware of as there will be greater competition for tenants.
Over the last decade we’ve seen the desire for home ownership drop away with young adults accustomed to an ever-increasing range of on demand services including “click and collect” shopping, Amazon and eBay shopping, dating apps, on demand TV from Netflix and so on. For many Colchester youngsters renting is a lifestyle choice, combining the freedom to move without long-term financial obligations or the hassle of property maintenance.
Both the BTL sector and BTR private rented housing in Colchester can play a positive role meeting the accommodation needs of the younger generation in Colchester today.
I’d like to hear what you think about the prospects for the BTR and BTL sectors in Colchester or the Colchester property market in general. Feel free to give me a ring on 01206 862288, email firstname.lastname@example.org. or add your comments below and I’ll get back to you.