I was having an interesting chat with a
Solihull buy to let landlord the other day when the subject of household sizes
came up in conversation. For those of
you who read my Brexit article published on the morning after the referendum,
one of the reasons on why I thought the Solihull property market would, in the
medium to long term, not be adversely affected, was the fact that the size of
households in the 21st Century is getting smaller – therefore
leading to more properties being required, creating demand for Solihull
property, therefore preventing property prices from dropping.
Looking at the stats going back to the
early 1960’s, when the average number of people in a home was exactly 3, it has
steadily over the years dropped to today’s figure of 2.4 people per household. Now
this doesn’t sound a lot, but if the population remains at the same level for
the next 50 years but we have the same 20% drop in household size, the UK will
need to build an additional 5.28 million properties (or 105,769 per year). When
you consider the Country is only building 139,800 properties a year ... there
won’t be any leeway for people living longer or to allow for immigration. Looking
closer to home, in the Solihull Metropolitan Borough Council area, the average
number of occupants per household is 2.4 people
When we look at the current picture
nationally and split it down into tenure types (i.e. owned, council houses and
private renting, a fascinating picture appears.
The vast majority of homeowners who
don’t have a mortgage are occupied by one or two people (81% in fact), in the
main these residents tend to be older,
with some members of the family having moved out, or a pensioner living
alone. People living on their own are
more likely to live in a Council house (43%) and the largest households (those
with four or more people living in them are homeowners with a mortgage – you
may question this but it can be explained, as homeowners with families tend to
need a mortgage to buy. What surprised me was the even spread of private rented
households and how that sector is so evenly spread across the occupant range – in
fact that sector is the closest to the national average, even though they only
represent a sixth of the population.
When
we look at the Solihull Metropolitan Borough Council figures for all tenures
(Owned, Council and Private Rented) a slightly different picture appears...
·
1
person households -29.17%
·
2
person households - 33.74%
·
3
person households – 15.88%
·
4
person households- 14.62%
·
5+
person households- 6.58%
But it gets even more interesting when we
focus on just private rental properties in Solihull, and it is the rental
market in Solihull that really fascinates me. When I analyse those Solihull Metropolitan Borough Council
private rental household statistics, a slightly different picture appears, of
the 7,795 Private rental properties in the Solihull Metropolitan Borough Council area:
·
31.2%
of Private Rental Properties are 1 person Households
·
32.3%
of Private Rental Properties are 2 person Households
·
18.6%
of Private Rental Properties are 3 person Households
·
11.9%
of Private Rental Properties are 4 person Households
·
5.8%
of Private Rental Properties are 5+ person Households
As you can see, Solihull is not too dissimilar to the
national picture but there is story to tell. If you are considering future buy
to let purchases in the coming 12 to 18 months, I would seriously consider
looking at two bed apartments/houses. Even with the numbers stated, there are
simply not enough two bed apartments/houses to meet the demand. They have to be
in the right part of Solihull and priced realistically, but they will always
let and when you need to sell, irrespective of market conditions at the time,
will always be the target of buyers. To read more articles on the Solihull
Property Market and where I consider best buy to let deals are in Solihull,
please visit the Solihull Property Market Blog
http://solihullpropertyblog.blogspot.co.uk.
