I was reading the Sunday Papers, as is my want
and, when reading the financial pages, it was announced UK inflation had increased
to its highest level in a year. Inflation, as calculated by the Government’s Consumer
Prices Index, rose by 0.3% over the last 12 months.
The report said it had risen to those ‘heady’ levels by smaller falls in
supermarket and petrol prices than a year ago. If you recall, in early 2015, we
had deflation where prices were dropping!
So what does this mean for the Haywards Heath property market -
especially the tenants?
Back in
November, the Office of National Statistics stated average wages only rose by
1.8% year on year, so when adjusted for inflation, Haywards Heath people are
1.5% better off in ‘real’ terms. Great
news for homeowners, as their mortgage rates are at their lowest ever levels
and their spending power is increasing, but the news is not so good for
tenants.
The average rent that Haywards Heath tenants
have to pay for their Private Rental Properties in Haywards Heath (i.e. not housing association or council
tenants) rose by 2.9% throughout 2015, eating into most of the growth. 2015 wasn’t a one off either. In 2014, rents in Haywards Heath rose by 2.2%
(where salaries only rose by only 0.2%) However, it’s not all bad news for Haywards
Heath tenants, because in 2013 rents rose by 1.8%, (but salaries rose by 2.2%).
It must be noted that the private rents Haywards
Heath tenants have had to pay for Haywards Heath property since 2005 are only 20.1%
higher, not even keeping up with inflation, which over the same time frame,
rose at 27.8% (although salaries were only 22.3% higher over the same time
period)
More and more, talking to 20 and 30 somethings who rent – it’s a choice. Gone are the days where owning your own property
was a guaranteed path to wealth, affluence and prosperity. I know keep mentioning Europe, but some of the highest levels of home ownership are in Romania
at 96.1%, Hungary at 88.2% and Latvia at 80.9% (none of them European economic
dynamos) and even West European countries like Spain at 78.8% and Greece at 74%
(and we know both of those countries are on their knees, riddled with national
debt and massive youth unemployment).
At the other end of the scale, whilst we in the UK
stand at 64.8% home-ownership, in Europe’s powerhouses, only 52.5% of Germans
own a home and only 44% of Swiss people are homeowners. Yet home ownership has not
always been the rule in the UK. In 1918,
only 23% of people were homeowners, with no council housing, meaning in fact,
77% were tenants.
Tenants
have choice, flexibility to move, they don’t have massive bills when the boiler
blows up, and it’s a choice. Haywards
Heath rents are growing, but not as much as incomes. To buy or not to buy is an enormously difficult decision. For
while buying a Haywards Heath home is a dream for the majority of the 20 and 30
something’s of Haywards Heath have, it might not leave them better off in the
long run and it isn’t necessarily the best option for everyone. That is why; demand for renting is only going
in one direction – upwards.
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