In my second post in recent weeks taking a look at Tameside’s new builds, I wanted to revisit the subject of their affordability and whether or not Tamesiders can actually afford to call them home.
Whenever the subject of new build properties crops up in conversation I frequently have with homeowners and property investors, affordability and the reflection on the quality through that price is key.
With the Government’s targets for the annual construction rate of new builds, you’d be forgiven for questioning the actual build quality which for many Tamesiders, is an off-putting factor with regards to buying them.
The rate that these new build properties fly up is remarkably quick nowadays, which for those who are enthusiastic about moving into a new property quickly is great news. But as with many aspects in life, affordability is what truly dictates what we can and can’t do; property is no exception.
With only 9.7% of property sold in Tameside as new builds, you may be wondering why that figure isn’t higher given the number of developments currently cropping up around the borough; as well as the forthcoming developments currently in the planning stages.
In order to assess the affordability of the new build properties, there are two many considerations to look at.
Since 2002, the median average price of a Tameside new build property (which back then was £96,000.00) has jumped to just over the £200,00.00 mark:
Even the Credit Crunch, which saw a hefty drop in house prices for pre-existing Tameside dwellings, failed to substantially alter the growth of house prices for new builds across the borough.
In order to keep up with the rising costs of purchasing a new build property, our earnings as hard working Tamesiders needs to reflect that growth equally. So I did some research into finding out the figures:
Whilst Tamesider’s median annual earnings has increased by 32% from 2002, the median earnings of a Tamesider in 2018 is still only 11% of what is required to purchase a Tameside new build property.
So what does this mean for the homeowners and landlords of Tameside?
Well to start with, first-time buyers in the borough aren’t likely to be earning the 11% required to purchase a Tameside new build. There are plenty of great deals to be found with pre-existing dwellings (something I am always happy to share over a phone call), particularly when it comes to investment properties, but the new builds continue to prove somewhat evasive for the first-time buyer to snap up.
Of course there are Government schemes such as Help-To-Buy in place or Shared Ownership available, but that still doesn’t address or instil the feeling of truly owning your own home.
For landlords and property investors, this poses two interesting outcomes. We all know renting is much more affordable and also the easier up front option for many Tameside tenants, so having the ability to rent a new dwelling can prove somewhat more attractive over renting a pre-existing dwelling. However, the cost of investing in a new build property for an investor or landlord compared to the return on investment hardly seems worthwhile, does it?
If you’re looking at Tameside property in the long-term or from an investment point of view, I’m always happy to discuss the matter over a phone call (07709 505442) or a coffee!