In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is only 1 in 12, whilst according to Shelter 65% of families on the Council House waiting lists had been on those lists for more than a year and 27% had been waiting for more than five years.

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live – or is that an out-dated point of view? To look at this objectively, let’s take a step back.

After WW2, both Tory and Labour governments were building council houses in massive numbers, yet it might surprise you to know that more Council houses were built per year under Tory Governments than Labour ones between the years 1945 and 1970.

Everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour Manifestoes of the late 1950’s (although they lost to the Tory’s). Mrs Thatcher’s idea was based on massive discounts and 100% mortgages for those buying … but this was the real issue that has come back to bite us all these years later! Half the proceeds of the property sales went back to Westminster and the other half went back to the local authority – but the Councils half could only be spent on reducing their debt – not to be spent on building more Council houses.. hence why we have a shortage of council houses.

In 2011, Central Government gave local authorities the power to limit people’s entitlement for social housing (aka Council Housing), hence removing those people that did not have an association or link to the locality.

Today, in Tarporley and the whole of Cheshire West and Chester, the Council House Waiting List has dropped by 61.4% since 2011, meaning

6,204 families are waiting for a Council House in Cheshire West and Chester

Interestingly though, if our local Council House Waiting List had changed by the same amount as the national one, the waiting list figure would be 9,820 instead, because nationally Council House waiting lists are only 38.6% lower than 2011.

So where are these Tarporley families all living and what does this mean for Tarporley homeowners and Tarporley Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list.

This is important as more and more tenants are stopping longer in the Private Rented Sector – the average length of time of a tenant stays in the same property is now 4 years.

Renting is becoming a choice for many, as the years of this Millennium roll on.

So much so, would it surprise you to know that renting a house can be more expensive than buying it as we have these ultra-low mortgage rates and 95% mortgages freely available?

Rents in the Rental Sector in Tarporley will increase steadily during the next five to ten years.

Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low.

The government campaign against buy to let landlords together with the increased taxation and the banning of tenant fees to agents will restrict supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment vehicle again (irrespective of the increased fees and taxation laid at the door of landlords).

..and for home owners (and landlords) Tarporley property values will remain strong and stable in the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Tarporley buyers will have to pay decent money for any property they wish to buy (especially ones in good locations and presented well).

Interesting times ahead for the Tarporley Property Market!

Ian
07501723253 / ian@storeysofcheshire.co.uk

Copyright 2021 Storeys

Would it surprise you to know that in some parts of Knutsford, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply?

Theoretically, in Knutsford there are more than enough bedrooms for everyone – it’s just they are disproportionately spread among the population, with some better-off and more mature households living in large Knutsford homes with many spare bedrooms, and some younger Knutsford families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Knutsford doesn’t have enough housing full stop (otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying), but up until now it hasn’t been clear that Knutsford actually also has the wrong types of properties.

We’re not building the smaller homes in Knutsford that are needed for the starter homes and we aren’t building enough bungalows for the older generations, so they can be released from their larger Knutsford homes, thus allowing those growing Knutsford families to move up the ladder.

Looking at the stats for Knutsford, and WA16 in particular …

When I compared Knutsford (WA16) with the regional stats of the WA postcode, the locality has proportionally 64.8% more apartments, yet 36.4% less semi-detached homes. Looking nationally, Knutsford (WA16) has proportionally 69.8% more detached homes and quite surprisingly, proportionally 29.4% less apartments.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Knutsford over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or the apartments that have been built were of the larger (and posher) variety, even though demand for households (as life styles have changed in the 21st Century) have been more towards the lower to middle sized households.

The builders do want to build, but there’s a deficiency of building land in Knutsford, and if there’s a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% – that isn’t a typo) is built on in this country as a whole with homes – we need the planners to release more land (and then force/encourage builders to build on it – not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning.

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money to cut the grass verges, let alone spend billions on new homes in Knutsford. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

So, what does this mean for Knutsford homeowners and Knutsford landlords?

Changing the dynamics of the Knutsford, regional and national property market will only change in decades, not years.  The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building where the average has been just under 170,000 households a year.

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.

Ian
07501723253 / ian@storeysofcheshire.co.uk

Copyright 2021 Storeys

Of the 4,850 houses and apartments sold in Tarporley (CW6) since 1995, 580 of those have been new homes, representing 2.7% of property sold. So, I wondered how that compared to both the regional and the national picture …and from that, the pertinent questions are: are we building too many new homes or are we not building enough?

Roll the clock back a few years and in 2013 the Government expressed its disappointment that, as a Country, builders weren’t building enough new homes to house our citizens.

They promised to hasten new homes building to the fastest rate since the 1980’s when the Country was building on average 168,100 private households a year.

The Housing Minister stated he wanted the private sector to build in excess of 180,000 households a year, a figure which seemed unachievable at the time. In 2013, private house building was in the depths of a post Credit Crunch dip, with just 96,550 private new homes being built that year.

Yet, in the five years since then, private new-build completions have climbed steadily, rising by 59.5% to 154,100 new home completions in 2018..so on appearances alone, whilst the growth is impressive, the new homes builders haven’t met their targets….. or have they?

In addition to the 154,100 new homes completions in 2018, the private sector also provided an additional 29,700 new households gained from change of use between office, industrial and agricultural buildings to residential homes meaning, last year, the private sector created 183,800 new households.

When we look at the public sector, there were 30,300 Housing Association new homes and 2,950 Council houses built last year, meaning after making a few other minor adjustments, the total number of new households/dwellings created in the UK in 2018 was 222,190.

Most of the growth can be credited to an improving economic framework, though continued help for first time buyers with the Help to Buy Scheme has enabled some younger buyers to bypass the issue of saving for a large deposit for a mortgage when buying a home, thus supporting confidence among new home builders to commit to large building schemes.

Yet there is more to do. The Government wants the Country to return to the halcyon days of the 1960’s where, as a Country, we were building 300,000 additional homes a year  .. and they want that to happen by 2025, a 36% increase from current levels.

In 2019, the country will create 257,500 households, so we are on our way to meeting that target but maintaining this level of house building will be a test.

Even the Governments’ Auditors (the Office of Budget Responsibility) is predicting net additional dwellings will plateau at about 240,000 in the first few years of the next decade.

So, how does Tarporley sit within this framework?

The UK currently has 27.2m households, of which 2.45m (9%) of those have been built since 1995, whereas in Tarporley, of the 6,250 households in CW6, 580 were built since 1995 (representing 9.3% of all households), meaning Tarporley has a higher proportion of new homes building in the last couple of decades than the national figures.

I certainly feel there is an over reliance on the private sector to meet the Country’s housing needs. Local Authority’s need to step up to the plate and build more houses, and its true central government has released more cash for them to do just that, but probably only 20% to 25% of what is required. In the meantime, unless the Country starts to build 300,000 households a year, property prices will retain  and improve their value in the medium to long term – which is good news for Tarporley landlords and Tarporley homeowners.

Ian
07501723253 / ian@storeysofcheshire.co.uk

Copyright 2021 Storeys