Why are fewer Bexley Borough people moving homes?

When I was in school, many of my friends’ parents seemed to move every other year. What was really happening was that some actually moved two or three times before I left home. While they kept the removal van people in business, my research shows that things have changed considerably in Bexley Borough over the last few decades. For the removal van people, the trend is getting worse!

There are 35,103 properties in the Bexleyheath and Crayford area. However, after we remove the 5,548 council houses, 3,435 privately rented houses and 288 rent-free houses we are left with 25,832 owned properties (outright, with a mortgage or with shared ownership). This means that 73.58% of the properties in Bexleyheath are owner-occupied (the national average is 64.2%) but just 638 people have sold and moved house over the last 12 months. These figures indicate that Bexleyheath homeowners move on average just every 40.5 years.

Why?

Well, firstly, the cost of moving has risen over the last twenty years. Secondly, with many having remortgaged their properties in the mid-2000s before the price crash of 2008, some homeowners cannot or are reluctant to finance a home sale/purchase, due to lack of equity. However, the big change in house price inflation is the most important reason. In the 1970s and 80s, house prices doubled every 5 to 7 years. Even in Greater London, with its recent stratospheric price increases, it has taken 13 years for property values to double to today’s levels. 

This change to a relatively low inflation Bexleyheath property market in which values rise slowly is significant. A long term consequence of sustained low price growth is that it eats into mortgage debt more slowly than when price inflation is higher. Bexleyheath homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in the 1970s and 80s.

So what does this all mean for Bexleyheath buy-to-let landlords? Well, just as existing Bexleyheath homeowners aren’t moving, fewer twenty-somethings are buying their first home. Bexleyheath youngsters may aspire to do so, but without social pressure from peers and parents to buy their first property in their early twenties, and with the memory of the 2008 housing crisis and the belief that either the hard times aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe that society has changed. Younger people want prosperity and happiness, and they want it now. They are not interested in sacrifice, work, and patience.  Younger people in Britain today expect things instantly, and if it doesn’t come easy and quick, some ask if saving for a deposit is really worth the effort. If there is not as much pressure to buy and no social stigma to renting, why go without holidays, the newest iPhone, socialising four times a week and a fancy satellite package for a couple of years, to save for that 5% deposit?

Although property prices are 5% cheaper than ten years ago (when adjusted by inflation), 11.7% of Bexleyheath properties are privately rented, almost twice as many as twenty years ago. The demand for rental properties continues to grow, so those wishing to invest long term in the buy-to-let market might be on to a good thing.

For advice and opinion on the Bexley Borough Buy-To-Let property market, one source of information is The Bexley Borough Property Blog: www.bexleyproperty.co.uk or call us on 01322 559955.