The money to buy a new iPhone11 represents just over a fifth of a Warrington first-time buyers mortgage deposit

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Many mature readers of this Warrington property market blog will remember buying their first home as 20 or 30 somethings, probably in Warrington many years ago, yet read the newspapers now and feel it is all doom and gloom for todays’ first-time buyers.

So, I wanted to look at the facts, instead of newspaper headlines.

Back in 1995, the average Warrington first time buyers house cost £30,920, whilst official figures state today it is £98,600

So, looking at today’s property prices, it could be perceived that owning a home is beyond the reach of most Warrington first time buyers and that renting is the only way for younger members of Warrington society to have a roof over their head .. or is it?

100% mortgages (so no deposit needed to be saved) were rife in the 2000’s and Northern Rock were famous for their 125% mortgages (i.e. you borrowed 25% more than what you were paying for the house, again with no deposit). Yet when the credit crunch hit in 2008 such mortgages disappeared overnight – ending the dream of homeownership for many. Yet would it surprise you to hear that 95% mortgages (i.e. the first-time buyer would need to save a 5% deposit) have been available since late 2009 and 100% mortgages (i.e. no deposit) were made available in 2016.

It is £91 per month cheaper to buy a typical Warrington first-time buyer home than to rent the equivalent property.

Prospective Warrington first-time buyers could make a saving of £1,093 per year on average if they moved from renting to owning. My calculations assume that first-time buyers raise a deposit of just 5 per cent and make mortgage payments over 35 years with the Barclays 95% mortgage with a fixed interest rate of 2.48 per cent interest. At this level…

Today, the average deposit needed by a

Warrington first-time buyer is £4,930

Those able to raise that deposit, would pay £348 pm on average in mortgage payments, while the average rent for the same property would be £439 pm and the household income to support such a mortgage would only need to be from £20,816 pa.

Of course, buying your first home is a massive financial commitment and investment with up-front costs to ponder on, yet long-term the financial benefits can be substantial. With annual savings of £1,093 a year, this can really mount up over time and, of course, once the mortgage is paid off, one will have a valuable asset.

Yet, the elephant in the room is the raising of the 5% deposit

Well most first time buyers, even most of you who are now in your 50’s and 60’s may have used the Bank of Mum and Dad to help with the deposit, yet it’s only fair that most parents still expect their offspring to contribute to the deposit and this is where it comes down to choice. I have spoken to many of my friends and family to reconfirm my initial thoughts that it comes down to priorities and choices in life. To save the deposit mentioned above, sacrifices are required to save that amount of money.

According to a survey in 2018, the average millennial goes out two nights a week and spends on average £63.36 per night out, that’s nearly £6,600 per year - a very expensive hobby. Nearly a third of millennials surveyed had smashed their mobile phone in the last 12 months. Then there is the obsession of having the latest tech, with the need to constantly be upgrading one’s mobile phone. In fact, the cost of the brand new iphone11, recently released, is just shy of £900. Even those on contracts can expect to pay upwards of £80 per month for the newest phone upgrade, yet if they kept their old phone after two years, a sim only deal with the same minutes and data would set them back no more than £25 per month … it comes down to choices. Save for a deposit and reduce your expenditure on socialising and mobiles etc and have a valuable asset at the end of your mortgage or continue as you are.

I am not here to make a judgement – everyone is free to make their own choices in life – all I am doing is highlighting the real situation - so you are aware of the full story.

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

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Mending the Broken Warrington Property Market

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The long-lasting issue of the Warrington property market are laid bare as the final 2018 property transaction figures have just been published and they continue the post credit crunch trend of less people moving.

30.9% less of Warrington people are selling their homes annually since the credit crunch, when compared to the post Millennium years of 2000 to 2005

This is not just an issue of the Warrington housing market slowing down since the credit crunch - the challenge is to split out shorter-term factors such as Brexit and the elections from longer-term structural issues of the UK society, because when these most recent property transaction figures are seen against longer-term trends for Warrington, they suggest more significant issues in the Warrington housing market.

In the late 1990’s, 3,646 properties were sold annually in the Warrington area, then in the same area, the Millennium boom saw transactions rise to 4,406 per annum. Property sales then almost halved to 2,207 per annum in the challenge of the global financial crash and subsequent retrenchment of the mortgage market. Post credit crunch (2012 and beyond) locally, on average, 3,042 properties have sold annually.

So, whilst there was a recovery from 2013 onwards, it was rather uninspiring when compared to the pre-credit crunch years, with a lacklustre performance in property transactions since mid 2010’s.

You might ask why we should be concerned about the number of property transactions and not the change in property values?

The number of transaction numbers are a far more exact bellwether for the health and potency of the local housing market.

As less people have been selling their homes locally, this is not only bad for the Warrington housing market but for the economy locally, especially when you consider how many allied businesses (builders, decorators, solicitors, removal vans, estate agents, mortgage arrangers and other people) lose out as a result.

Some say the deficiency of supply of property, mainly affordable first-time buyer property, is the chief reason why transaction figures remain stubbornly low. Others suggest the absence of suitable housing stock up the property ladder (particularly bungalows for the older generation), combined with rising demand, is causing a bottleneck in our local housing market.

I know there has been much talk from Westminster about grand home-building programmes, yet we now require them to deliver on these undertakings and even then, it will be a few decades before we see a seismic change in the Warrington property market.

In the short-term, a quicker improvement may come from modifications to stamp duty. First time buyers don’t need to pay Stamp Duty up to a certain level, yet those Stamp Duty concessions could be extended to those mature homeowners looking to downsize. This could liberate a meaningful number of mature family homes occupied principally by these mature generation and the tax lost through Stamp Duty could be replenished by a revaluation of the Council Tax bands?

Council Tax bandings were set in 1991 and the seven bands, the highest band starts at £320,000 (based on 1991 values). It seems irrational to us that upper value band, set in the 1991 revaluations, has not been increased, particularly as house prices in London have risen by over 400 per cent during in the last 25 years.

That would mean higher tax for those who don’t move yet less tax for those that do move – because we believe it would boost a far more liquid Warrington property market.

Just a thought of mending the local property market – what are your thoughts?

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
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76.9% of Warrington OAP’s own their own home … and they are worth £2,774.9m

Yes, that number is staggering isn’t it ….

Of the 16,854 households in Warrington where the head of the household is 65 years or older, an astounding 12,967 (or 76.9%) of those are owned, which is just above the national average of 74.1%, which sounds great – yet nothing could be further from the truth.

I chat with many Warrington pensioners who would like to move but cannot, as there is a scarcity of such properties for Warrington mature people to downsize into.  Due to their scarcity and high demand, Warrington bungalows on average get a 12% to 22% premium per square metre premium over two storey properties.  To add insult to injury, a recent NHBC reported that only 1% of new builds in the Country were single storey bungalows (compared to 7% in the mid 1990’s).

Warrington OAP’s are sitting on £2,774.9m of equity in these Warrington homes

In a survey conducted a couple of years ago by YouGov, they established that just over one third of homeowning people aged 65 and over in the Country were looking to downsize into a smaller home. Yet, the Tory’s over the last nine years have appeared to target all their attention on first-time buyers with stratagems such as Starter Homes to safeguard the youngsters of the UK not becoming perpetual members of ‘Generation Rent’.   Equally though, this doesn’t address the long-lasting under-supply of suitable retirement housing essential to the needs of the Warrington’s hastily ageing population.  Lamentably, the Warrington’s housing stock is tragically unprepared for this demographic shift to the 'overextended middle age’, and this has created a new 'Generation Confined’ quandary where older people cannot move.

Also, those older Warrington retirees’ who do live in the limited number of Warrington bungalows are finding it difficult to live on their own, as they are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.

Meaning those older Warrington retirees can't leave their Warrington bungalows, younger Warrington retirees in their larger 2 storey family houses can't buy those Warrington bungalows (occupied by the older retirees) and those Warrington people in the 30’s and 40’s can't buy those larger 2 storey family houses (occupied by the younger retirees) they need to for their growing families ... it’s like everyone is waiting for everyone because of the bottleneck at the top. 

For those wanting to see the complete stats for Warrington as whole …

Warrington’s (and the rest of the UK’s) property prices have soared over the last 50 years because the number of properties built has not kept up with demand.  With restrictive planning regulations, migration, people living longer and excessive divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year since the Millennium to just stand still.

At the turn of the Millennium, the Country was constructing on average 180,000 to 190,000 households a year, that figure dropped in the five years after the Credit Crunch to 135,000 and 145,000 households a year.  Although we built 217,000 last year, we still have all those 19 years to make up for.

The answer …. allow more land for starter homes, bungalows and sheltered accommodation because land prices are stifling the property market as the large building firms are more likely to focus on traditional houses and apartments than bungalows (because they make more money from them).

My thoughts for the savvy Warrington property investors  – until the Government change the planning rules and allow more land to be built on – Bungalows, especially ones that need some TLC after someone has passed away bungalows are a great bet for flipping and even potential rental returns for future property investment as more and more OAP’s will be renting in the decades to come?

If you are looking for an agent that is well established, professional and communicative, whether you’re buying, selling or looking for an investment opportunity, then contact us to find out how we can get the best out of the Warrington property market.

Email me on manoj@hamletwarrington.co.uk or call on 01925 235 338 – we are based on the Warrington Business Park, Long Lane, WA2 8TX. There is plenty of free parking and the kettle is always on.

Don't forget to visit the links below to view back dated deals and Warrington Property News.

CLICK HERE TO FIND OUT HOW MUCH YOUR WARRINGTON HOME IS WORTH FOR FREE
Hamlet Homes Warrington, your local Estate Agent
Follow my Warrington Property Market Blog
Hamlet Homes Warrington LinkedIn Page
Hamlet Homes Estate Agents Warrington Facebook Page
Hamlet Homes Estate Agents Warrington Twitter Page