Doncaster Property Blog » April 2018

Monthly Archives: April 2018

Doncaster Property News

Homeownership Amongst Doncaster’s Young Adults Slumps to 48.49%

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The degree to which young Doncaster people are locked out of the Doncaster housing market has been revealed in new statistics.

A Doncaster landlord was asking me the other week to what effect homeownership rates in Doncaster in the early to middle aged adult age range had affected the demand for rental property in Doncaster since the Millennium. I knew anecdotally that it affected the Doncaster rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.

As anyone in Doncaster, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.

In the year 2000, 49.1% of Doncaster 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 26.2% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Doncaster person (therefore born in 1962) would have a 72.5% chance of owning his or her own home and a 38 year today in Doncaster (born in 1980) would only have a 56.5% chance of owning their own home.

Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Doncaster has reduced from 67.05% to 48.49%

If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Doncaster. The fact is the figures in Doncaster show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.

The landlord suggested this deterioration in homeownership in Doncaster across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.

I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above.  Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.

So, what does this mean for the rental market in Doncaster?

Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Doncaster landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Doncaster rental market .. drop me line or pop in next time you are passing my office.

Doncaster Property News

1,087 First Timer Buyers in Doncaster Bought Their First Home in 2017

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A little bit of good news this week on the Doncaster Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. The data shows there were 1,087 first time buyers in Doncaster, the largest number since 2006.

I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% … even 15%. Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49% … they even did a 3 year fixed rate 100% mortgage for 2.89%!

Interestingly, looking at the other end of the market, the buy-to-let investment in Doncaster was subdued, with only 223 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Doncaster – it’s just that the data isn’t available at such a granular level.

In terms of the level of mortgage debt in Doncaster, looking specifically at the DN1 to DN5 postcodes, apart from a slight dip in 2015, there hasn’t been a great deal of change in this over the last couple of years.

This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off with mature mortgaged homeowners in their 50’s and 60’s finally paying off their mortgage.

So, what does all this mean for the Doncaster Property Market?  Well, the stats paint a picture, but they don’t inform us of the whole story. The upper end of the Doncaster property market has been weighed down by the indecision around the Brexit negotiations and rise in stamp duty in 2014, when made it considerably more expensive to buy a home costing more than £1m. The middle part of the Doncaster property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Doncaster property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.

If you are in the market and selling now and want to ensure you get your Doncaster property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Doncaster home isn’t worth as much as you thought, but Doncaster buyers are now unbelievably discerning.

So, if you are thinking of selling your Doncaster property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Doncaster agents, will freely give that advice to you at no cost or commitment to you.