and the challenge facing Daventry's first time buyers 1,226 Daventry Homes were bought by pri...
and the challenge facing Daventry’s first time buyers
1,226 Daventry Homes were bought by private landlords in the last 20 years – Is this the end for first time buyers?
I was enjoying a coffee at the Art Café at the top of Sheaf Street when someone approached me and asked if I was the guy who writes the Property Blog? He reminded me that we had met in my office a few months ago.
He wanted to know my thoughts on the future of the Daventry property market and we discussed it for 20 minutes or so. People are always going to need a roof over their heads and having somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds from our Town have a choice as to what type of roof they have … they can live with parents, rent from the Council, they can rent from a private landlord or they can get a mortgage and buy. In the 1970’s, 80’s and 90’s, the expected thing was to save like mad for two years for the deposit whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently, fewer Daventry youngsters have been buying, rather choosing (or more accurately having) to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are surprising … and I want to share them with you.
Roll the clock back 20 years and Daventry was a different place. There were 6,958 households in Daventry and 4,409 of those were owner occupied. Move to the present and with all the building in the town, the total number of households has increased by a sizeable 41.68% to 9,858. Interestingly, the proportion of owner-occupiers (now totaling 6112) has remained largely the same at 62%.
It is the rented sector that it becomes really interesting… twenty years ago, only 195 properties were privately rented in Daventry … and now it’s 1,421.
The challenges facing twentysomethings in Daventry haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 1,942 to 614 over the same twenty-year period. It is interesting to note that the reduction of the number of council houses (1328) is quite similar to the increase in privately let houses (1226). Demand for decent rented property in Daventry remains very high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Daventry is growing though and there are developments in the pipeline, which we will comment on in future editions.
Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Daventry; those who educate themselves and treat it as a business will not only survive but prosper.
The best way that Daventry landlords can protect their income from property (and mitigate the effects of the tax rises) is to keep the homes they let out in top condition. I have found, especially over the last three or four years, that renting anywhere, tenants have ever growing demands from their rental property, but many are prepared to pay a premium for houses and apartments that meet their high expectations.
You must not forget, letting property in Daventry is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.
As we finished our coffee, he asked finally ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand, it is hard to imagine that Daventry property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase compared to buy to let landlords in the coming decade as the housing market should return to a greater balance but I also believe that in Daventry, the effect will be higher rents.