Wednesday, 30 September 2015

Why Are Fewer & Fewer People Moving House in Sunderland?

Years ago, it seemed that people moved all the time, friends of mine always seemed to be packing up and moving on to their next home. I actually read on the internet that the average UK person moves 8 times in their life - or every 9 to 10 years, however, from research I have carried out it shows things have changed considerably in Sunderland in recent years, and interestingly, the trend seems to be getting worse!

In Sunderland, there are 119,758 households. However, after we remove the 32,399 council & social houses, 14,552 privately rented houses and 889 houses where the occupants live rent free, that leaves us with 71,566 owned properties, be that 100% outright, with a mortgage or shared ownership

This means 59.8% of the properties in Sunderland are occupied by the owner (interestingly the national average is 64.2%, Sunderland has a higher proportion of social and privately rented housing than the national average)

There were 1,501 property sales in Sunderland within the last 12 months

Based on those figures that's a shockingly low 2% of Sunderland property owners who sold and moved within the last 12 months (and given the sales figure will also include purchases by investors, the actual number of people moving within Sunderland could be much, much lower)

There are a couple of reasons for this. Firstly, the cost of moving house has risen dramatically over the last twenty years and, secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity

These are both factors leading to driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2012 to be exact) for property values to double to today’s levels

So what does this all mean for Sunderland Landlords?

Well, for the same reasons existing Sunderland homeowners aren’t moving, fewer ‘twenty somethings’ are buying their first home as well. Sunderland young adults may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting

I also believe UK society has changed, with the younger generations wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take

As a society, we now expect things instantly, and if it doesn’t come easy, doesn’t come quick, some young adults ask if it is really worth the effort to save for the deposit?  Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit

Why should they if there is no longer a social stigma in renting or pressure to buy as there was say a generation ago?

Interestingly, 11.9% of Sunderland properties are privately rented based on the latest ONS data, more than double what is was in 2001 (only 5,453 households or 4.7% of the total 116,356 households were privately rented in 2001)

As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing?

If you want to have a free, no obligation discussion about any aspect of the Sunderland property market please feel free to give me a call on 0191 567 8577 or email neil.whitfield@belvoirlettings.com

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