Talking to an elderly relative recently, he reminded me that in his day, you could have bought a property for the same price of what a decent second hand car would sell for today. Of course we have had wage growth and inflation but interestingly, since the Second World War, property values in Melton Mowbray doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.
Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people
The best measure of the affordability of housing is the ratio of Melton Mowbray Property Prices to Melton Mowbray Average Wages, (the higher the ratio, the less affordable properties are).
- 1997 3.15 to 1 (i.e. the average value of a Melton Mowbray property was 3.15 times higher than the average annual wage in Melton Mowbray)
- 2000 3.19 to 1
- 2002 5.00 to 1
- 2003 6.00 to 1
- 2007 7.61 to 1
- 2009 6.96 to 1
- 2012 7.22 to 1
- Today 8.06 to 1
You can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in following subsequent years with Melton Mowbray house price’s rising but wages not keeping up with them, the ratio started rise.
This has meant there has been a deterioration in affordability of property in Melton Mowbray over the last couple of years. This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house. The local Council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.
With fewer people able to save up the deposit required by mortgage lenders, more and more people are looking to rent, this has also resulted in a change in attitudes towards renting over the last decade. This delay in moving up the property ladder has driven rents up in Melton Mowbray over the last few years, as more people are seeking properties to rent.
All these things have combined to make the demand for rental property in Melton Mowbray rise. If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not to buy in Melton Mowbray), one source of information is the Melton Mowbray Property Blog www.meltonmowbrayproperty.com