Why are less Solihull people moving house?

During my school years, my parents seemed to move every other year (or it seemed that way). In reality, we moved four times before I left home.  From research I have carried out recently it shows that things have changed considerably in Solihull over the last few decades, and interestingly, the trend is getting worse.

There are 50,798 properties in Solihull; however, after we remove the 3,834 council houses, 5,242 privately rented houses and 364 houses where the occupants are living rent free, which leaves 41,358 properties owned by Solihull residents, with a mortgage or shared ownership. This means 81.4% of the properties in Solihull are occupied by the owner above the national average which is interestingly is 64.2%.  The number of people who have sold and moved house in Solihull, over the last 12 months, has only been 2,114. These figures suggest that homeowners of Solihull are only moving on average every 19 years.

Influencing factors for this change in behaviour include the cost of moving house which has risen over the last twenty years and with many re-mortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability amongst a minority of homeowners to finance a home sale/purchase, due to the lack of remaining equity.

However, the biggest influence has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (since August 2002 to be exact) for property values to double to today’s levels.

This change in moving trend, in a relatively low inflation property market such as Solihull is now experiencing, is significant because the long term consequences of sustained low house price growth is the lack of ability to reduce mortgage debt as opposed to when property price inflation is higher and the ratio of equity to debt is greater. Solihull homeowners cannot currently rely on inflation to reduce their debt in real terms as they did in say the 1970’s and 1980’s.

So what does this all mean for Solihull buy to let landlords? Well for the same reasons existing Solihull homeowners aren’t moving and the appeal to rent is increasing.  Fewer ‘twenty somethings’ are buying their first home, Solihull youngsters may aspire to own their own home, but there isn’t the social pressure today from their peers and parents to buy their first property as soon as they reach their early 20’s.  Plus the memory of the 2008 housing crisis and the belief the hard times aren't completely over. I also believe that the UK society has changed, with the younger generation wanting prosperity and happiness, but wanting it all now, without any sacrifice, extra hard work and patience that is required.  As a society, we expect things instantly, and if it doesn’t come easy or quick enough, is it really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package whilst saving for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was a generation ago?

Even though, in real terms, property prices are 5% cheaper than they were ten years ago (when adjusted by inflation) 10.3% of Solihull properties are privately rented, nearly double it was twenty years ago. As a result, the demand for rental properties continues to grow, which can only mean those wishing to invest in the buy to let market, over the long term, are on to a good thing? For advice and opinion on the Solihull Buy to Let property market, please email me jane.morcom@centrickproperty.co.uk