The last decade was a tough one. Politically for the country, globally in the ascension of climate change, and economically as well with the markets recovering following the Credit Crunch. But what’s happened to the Tameside property market in that time?
In the grand scheme of things, the Tameside property market has “slowed” in the decline of property transactions. The difficulties for young people attempting to get their foot on the ladder has seen a surge in demand for rental properties in the borough. Even with the number of schemes and plans the government has in place to help young people buy their own property, the demand in the rental market has still seen an increase as a result.
To say the Tameside property market has slowed however doesn’t give the true vision of the bigger picture, which mainly impacts current Tameside landlords and homeowners. Whilst the number of transactions across the borough has indeed decreased, the value of a Tameside property on the other hand tells a different story.
The average Tameside property has risen in value from £120,455 to £168,256 in the last 10 years, meaning each Tameside homeowner has seen a profit of £91.74 per week for that decade. Rolling the clock back to the start of the last decade of January 2010, the economy (and housing market) was still in the motion of recovering from the Credit Crunch and the worldwide financial crisis. A decade on and things feel a little different.
Last week I took a look at the pricing of Tameside properties back in the 80’s against income, where the average price of a house in the borough was £17,650.00. With inflation considered, that’s a huge shift compared to the standards of today.
The average price of a Tameside property at the start of the previous decade and indeed the millennium was £48,000.00, rising to end the decade at £145,000.
Even with the credit crunch plaguing property prices at the end of the last decade, the 00’s saw a much larger increase in property prices and values than the seemingly nameless decade spanning from 2010 to 2019.
Of course, if you purchased your property at the start of the 2010’s (or even at the back end of the 00’s), the result is that as a Tameside landlord or homeowner, the chances are that you are now much better off in value and return on that initial property investment.
Yet, there are still issues; mainly a persistent lack of not building enough new homes which curtails the supply and choice of property. Stagnated wages, stiffer mortgage rules and homeowners not moving as much as previous generations are all contributing to the problem. In the UK, the number of homeowners who moved in 2019 was around 14 per cent higher than in 2009, yet this was still just under 50% lower than the average for the noughties.
My thoughts for the future are based primarily on what will happen to interest rates. Throughout the last decade, the Bank of England base rate was 0.5 per cent at the start and was cut to 0.25 per cent in the Summer of 2016. Even with the increase to its current level of 0.75% in the Summer of 2019, it has made borrowing money on a mortgage very cheap indeed.
Nonetheless, bank/mortgage rates will rise again and I am concerned about the effect upon the housing market. Now it won’t be as bad as previous times when mortgage rates went up in the 1970’s and 1980’s (with mass repossession) because the tougher mortgage rules introduced in April 2014 will have ensured borrowers were stress tested on their affordability if interest rates shot up. Most borrowers have been stress tested on their affordability to mortgage rates of up to 6 per cent – 6.5 per cent, which would obviously squeeze household disposable incomes yet stop people losing their homes due to repossession. Whilst I am not giving advice, just personal opinion, if you are one of the 29.3 per cent of homeowners who isn’t on a fixed rate – maybe you should seriously consider doing so?
The 2020’s will be an interesting decade – and if you want to be kept up to date with what is happening in the Tameside property market, make sure you keep checking back on my property blog for all the latest news. If you’d like advice on investing in the Tameside property market and are looking for a free-of-charge second opinion, please do drop me a call on 07709 505 442.