My research shows that certain types of Rotherham property are more affordable today than before the 2007 credit crunch.
Roll the clock back to 2007 just before the credit crunch hit which saw Rotherham property values plummet like a lead balloon… the property market had reached a peak with prices for property in Rotherham hitting their highest ever level. Between 2008 and 2010, Rotherham property values lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.
Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that Rotherham property, especially flats/apartments, are now more affordable than they were before the 2008 credit crunch.
Back in 2007, the average value of a Rotherham flat/apartment stood at £99,623. Today, it has risen to £106,971 – this rise of £7,348 amounts to 7.4%.
However, between 2007 and today, we have experienced total price inflation of 25.97% (according to the Government’s Consumer Price Index). This means that in real spending power terms, our apartments are actually 18.6% more affordable than 10 years before. Looking at it another way, if the average Rotherham apartment (valued at £99,623 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £125,495 (instead of the current £106,971).
Rotherham property is more affordable than many people think
The point I’m trying to get across is that Rotherham property is more affordable than many people think. Rotherham first time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.
It really comes down to a choice and if Rotherham first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property they will be on to a winner. This is especially true with these ultralow mortgage interest rates – a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.
So why aren’t Rotherham 20 somethings buying their own home?
Back in the 1960s and 1970s, renting was considered the poor man’s choice in Rotherham (and the rest of the UK). A huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting – meaning that many people find renting a better option and a lifestyle choice.
Saving the 5% deposit means going without many luxuries in life (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit those in their twenties are choosing to rent.
There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Rotherham will continue to rise.
Therefore, everyone in Rotherham has a responsibility to ensure that an adequate number of quality Rotherham rental properties are safeguarded to meet those future demands.
Interestingly, what I have noticed over the last few years are the expectations of tenants on the finish and specification of their Rotherham rental property.
I have perceived that in the past, what a tenant wanted from their Rotherham rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.
However, the expectations of tenants in Rotherham are becoming more discerning as each year goes by.
I have also noticed the length of time a tenant remains in their Rotherham property is becoming longer (and this was backed up recently by stats from a Government Report), although I have noticed a tendency for many Rotherham landlords not to keep the rental payments at the going market rates – maybe a topic for a future article for my blog?
The bottom line is this… Rotherham landlords will need to be more conscious of the needs and wants of tenants and consider their financial planning for future enhancements to their rental properties over the next five, ten and twenty years (e.g. decorating, kitchen and bathroom suites etc.)
The present-day and future situation of the private rental property market is important, and I frequently liaise with Rotherham buy-to-let investors looking to spread their Rotherham rental-portfolios.
I also enjoy meeting and working alongside Rotherham first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition. If I can help, please get in touch!
This will be my final post of 2017 – I hope you have a great Christmas and New Year. I’ll see you in 2018 for more insights into the Rotherham property market. In the meantime, I’ll be fairly active on social media over the Christmas break so please do follow me if you are interested in keeping up with the latest local news.