Today I’m going to look at several popular “home truths” about property ownership in Colchester, and the UK in general, to see whether the statistics back them up.
This home truths blog post was inspired by a conversation with a retired mortgage-free Colchester homeowner concerned about the lack of opportunities for the younger generation to get on the housing ladder. He also finds it morally questionable that landlords make money from the inability of others to buy property and asserts that Colchester buy to let landlords are denying the younger generation home buying opportunities.
They’re all popular sentiments I hear regularly but are they home truths or fake news? From my Colchester property market blog post research, I know around a third of 25 to 30 year olds still live at home so it’s understandable buy to let landlords get blamed for this. However, the numbers tell a different story. Looking at the age of first time buyers since 1990 (when the Office for National Statistics data was first published), the statistics show younger people are not being priced out of the housing market.
Colchester First Time Buyer Housing Market Stats
|First Time Buyer Statistics||1990||2017|
|Average age of first time buyer||33||31|
|First time buyers aged under 25||26.7%||14.9%|
|First time buyers aged between 25 and 34||40%||60%|
Another popular home truth is that the younger generation can’t afford to buy houses so do the numbers back that up or is it more fake news? The house price-to-earnings ratio for first-time buyers has almost doubled over the past 30 years. In 1983 the ratio was 2.8 times joint income and in 2017 it’s 5.4 times joint income.
However it’s another statistic that doesn’t tell the whole story. In 1983 mortgage payments for a Colchester first time buyer (as a percentage of average take home pay) was 29.4%, in 1989 that had risen to 75.9% and today it’s back down to 33.9% – no that isn’t a typo! The numbers clearly show the younger generation is NOT priced out of the Colchester housing market so housing affordability isn’t the problem either.
Home Truths OR Fake News, Who Are You Going to Call?
The government should sort out the housing problem directly. According to my calculations (in earlier blog posts) it would take around £18 billion pounds every year for the next twenty years just to meet the current housing demand. That would equate to raising income tax by 4p in the pound which isn’t a policy advocated by any of the major UK political parties. If the Government haven’t got the will to spend the money how are we, as a nation, going to meet the housing shortfall today and in the foreseeable future? The answer, whether you like it or not, is that private sector landlords already answered the call and have been making up the housing shortfall for the last fifteen years.
Another popular “home truth” that property ownership makes for a more prosperous nation but this isn’t necessarily the case either. Colchester youngsters are still buying houses but they’re buying them later in life. There has also been a lifestyle change with Colchester youngsters part of “Generation Rent” who actively choose to rent over the longer term because it offers them flexibility and freedom from housing maintenance, a sign of the times.
They say you can prove anything with statistics but, as we’ve seen in this post, they don’t make the case for the popular home truths – unless you know better? Add your comments below or email firstname.lastname@example.org. Alternatively give me ring on 01206 862288 to discuss any aspect of the Colchester property market.