Dundee Property Owners Are Only Moving Every 14 Years (part 2)
In the credit crunch of 2008/9, the rate of home moving plunged to its lowest level ever. In 2009, the rate at which a typical house would change hands slumped to only once every 18.5 years. The biggest reason being that confidence was low and many homeowners didn’t want to sell their home as Dundee property prices plunged after the onset of the financial crisis in 2008. However, since 2009, the rate of home moving has increased (see the table and graph below), meaning today ..
The average period of time between home moves inDundee has now reached just under 14 years.
This is an increase of 34.3 per cent between the credit crunch fallout year of 2009 and today, but still is a 30.8 per cent drop in moves by homeowners, compared to 15 years ago (The Noughties).
So why aren’t Dundee home owners moving as much as they did in the Noughties?
The causes of the current state of play are numerous. In last week’s article, I talked about how ‘real’ incomes and savings had been dropping. Another issue is the long-term failure in the number of properties being built. Only a few weeks ago in the blog, I was discussing the draconian planning rules meaning housebuilders struggle to locate building land to actually build on.
Back in the 1960’s and 1970’s, as a country we were building on average 300,000 and 350,000 households a year. The Barker Review a few years ago said for the UK to stand still and keep up with housing demand (through immigration, people living longer, a just under 50% increase in the number of households with a single person since the 1980’s and family makeup (ie divorce makes one household now two)) we needed to build 240,000 households a year. Over the last few years, we have only been building between 135,000 and 150,000 households a year.
Finally, as the UK Population gets older, there is no getting away from it that a maturing population is a less mobile one.
So, what does this mean for Dundee homeowners and landlords?
If Dundee people are less inclined to move, or when Dundee homeowners find it hard to sell a property or to acquire a new one, they are less probable to change to an improved job or a more prosperous part of the UK.
Many of the older generation in Dundee are stuck in property that is simply too big for their needs. So as their children and grandchildren struggle to move up the housing ladder, with those young families bursting at the seams in homes too small for them ie overcrowding, we have a severe case of under-occupation, with the older generation - grandparents staying put in their bigger homes, with a profusion of spare bedrooms.
Regrettably, I cannot see how the rate of properties being sold will rise any time soon. Many commentators have suggested the Government should give tax breaks for the older generation to move down market, yet in a recent White Paper on housing, published just weeks before the General Election, there was no reference of any thoughtful and detailed policies to inspire or support them to do so.
This means, there could be an opportunity for Dundee buy to let landlords to secure larger properties to rent out, as the demand for them will surely grow over the coming years. For homeowners, well those in the lower and middle Dundee market will find it a balanced seller’s/buyer’s market, but will find it slightly more a buyer’s market in the upper price bands.
Interesting times ahead!