Doncaster Property Blog » March 2018

Monthly Archives: March 2018

Doncaster Property News

Doncaster Property Market – The 43.6% ‘New Build Premium’

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According to the National House Building Council (NHBC), more than 9,300 new homes were registered to be built in Yorkshire and Humber last year, a decrease of 3.2% on 2016 levels of 9,700 dwellings. Still good news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.

So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on … homework I want to share with the homeowners and landlords of Doncaster.

You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.

So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Doncaster Metropolitan Borough Council area’s property market when in to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading.


On this second graph, one can see the percentage difference in average price paid between new and existing…


Yet possibly nothing is ever that easy, as there are issues with these statistics.

The overall average for the whole Doncaster Metropolitan Borough Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 43.6%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.

One would have to have a mirror image second-hand Doncaster home and a duplicate new build right next door to each other, then calculate out which Doncaster house buyers or Doncaster buy to let landlords would pay more for? Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay… but then again, it’s like new cars versus cars that have a few hundred miles on the clock … there is always a difference on the forecourt … because things are never wholly equal.

What I do know is that my statistics of the Doncaster property market show that new build Doncaster apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build Doncaster detached houses and second-hand Doncaster detached houses.

However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market.  So, if you want to buy new and the only consideration is money … try buying in a tougher challenging property market.

Doncaster Property News

Doncaster’s ‘Millennials’ set to inherit £201,911 each in property!

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That got your attention … didn’t it!

But before we start, what is Generation X, let alone Generation Z, Millennials, Baby Boomers  … these are phrases banded around about the different life stages (or subcomponents) of our society. But when terminologies like this are used as often and habitually as these phrases (i.e. Gen X this, Millennial that etc.), it appears particularly vital we have some practical idea of what these terms actually mean. The fact is that everyone uses these phrases, but often, like myself, they are not exactly sure where the lines are drawn …until now…

So, for clarity …

Generation Z:              Born after 1996

Millennials:                 Born 1977 to 1995

Generation X:              Born 1965 to 1976

Baby Boomers:            Born 1946 to 1964

Silent Generation:       Born 1945 and before

My research shows there are 12,428 households in Doncaster owned by Doncaster Baby Boomers (born 1946 to 1964) and Doncaster’s Silent Generation (born 1945 and before). It also shows there are 22,159 Generation X’s of Doncaster (Doncaster people born between 1965 to 1976). Looking at demographics, homeownership statistics and current life expectancy, around two-thirds of those Doncaster 22,159 Generation X’s have parents and grandparents who own those 12,428 Doncaster properties.

… and they will profit from one of the biggest inheritance explosions of any post-war generation to the tune of £1.944bn of Doncaster property or £131,521 each but they will have to wait until their early 60’s to get it!

However, it’s the Millennials that are in line for an even bigger inheritance windfall.

There are 18,147 Millennials in Doncaster and my research shows around two thirds of them are set to inherit the 15,625 Doncaster Generation X’s properties. Those Generation X’s Doncaster homes are worth £2.444bn meaning, on average, each Millennial will inherit £201,911; but not until at least 2040 to 2060!

While the Doncaster Millennials have done far less well in amassing their own savings and assets, they are more likely to take advantage of an inheritance boom in the years to come. This will probably be very welcome news for those Doncaster Millennials, including some from poorer upbringings who in the past would have been unlikely to receive gifts and legacies.

However, inheritance is not the magic weapon that will get the Millennials on to the Doncaster housing ladder or tackle growing wealth cracks in UK society, as the inheritance is unlikely to be made available when they are trying to buy their first home…but before all you Doncaster Millennials start running up debts, over 50% of females and around 35% of men are going to have to pay for nursing home care. Interestingly, I read recently that a quarter of people who have to pay for their care, run out of money.

So, if you are a Doncaster Millennial there potentially will be nothing left for you.

Of course, most parents want to give their children an inheritance, the consideration that what you have worked genuinely hard for over your working life won’t go to your children to help them through their lives is a really awful one … maybe that is why I am seeing a lot of Doncaster grandparents doing something meaningful, and helping their grandchildren, the Millennials, with the deposit for their first house.

One solution to the housing crisis in Doncaster (and the UK as a whole) is if grandparents, where they are able to, help financially with the deposit for a house. Buying is cheaper than renting – we have proved it many times in these articles … so, it’s not a case of not affording the mortgage, the issue is raising the 5% to 10% mortgage deposit for these Millennials.

Maybe families should be distributing a part of the family wealth now (in the form of helping with house deposits) as opposed to waiting to the end… it will make so much more of a difference to everyone in the long run.

Just a thought?