As I mentioned in a previous article, the average house price in Maidstone is 9.68 times the average annual Maidstone salary. This is higher than the last peak of 2008, when the ratio was 8.47. A number of City commentators anticipated that in the ambiguity that trailed the Brexit vote, UK (and hence Maidstone) property prices might drop like a stone. The point is - they haven’t.
Now it’s true the market for Maidstone’s swankiest and poshest properties looks a little fragile (although they are selling if they are realistically priced) and overall, Maidstone property price growth has slowed, but the lower to middle Maidstone property market appears to be quite strong.
Scratch under the surface though, and a different long-term picture is emerging away from what is happening to property prices. Maidstone people are moving home less often than they once did. Data from the Office of National Statistics shows that the number of properties sold in 2016 is again much lower than it was in the Noughties. My statistics show…
Even though we are not anywhere
near the post credit crunch (2008 and 2009) low levels of property sales, the torpor
of the Maidstone housing market following the 2016 Brexit vote has seen the
number of property sales in Maidstone and the surrounding local authority area
level off to what appears to be the start of a new long term trend (compared
the Noughties).
Interestingly, it was the 1980’s
that saw the highest levels of people moving home. Nationally, everyone was
moving on average every decade. Even though it was during the Labour administration
of the late 1970’s where the right to buy one’s council house started, it was
the Housing Act of 1980 that that really got council tenants moving, as Thatcher’s
Tory government financially encouraged council tenants to buy their council-rented
homes - for which countless then sold them on for a profit and moved elsewhere.
The housing market was awash with money as banks were allowed to offer
mortgages as well as the existing building societies, meaning it made it simpler
for Brits to borrow even more money on mortgages and to climb up the housing
ladder.
But coming back to today, looking
at the property sales figures in the Maidstone area since 2010/11, a new trend
of number of property sales appears to have started. Interestingly, this has
been mirrored nationally. The reasons behind this are complex, but a good place
to start is the growth rate of real UK household disposable income, which has
fallen from 5.01% a year in 2000 to 1.68% in 2016. Also, things have deteriorated
since the country voted to leave the EU as consumer price inflation has risen
to 2.7% per annum, meaning inflation has eaten away at the real value of wages
(as they have only grown by 1.1% in the same time frame).
With meagre real income growth,
it has become more difficult for homeowners to accumulate the savings needed to
climb up the housing ladder as the level of saving has also dropped from 4.26%
of household income to -1.11% (i.e.
people are eating into their savings).
Next week I will be discussing how
these (and other issues) has meant the level of Maidstone people moving home
has slumped to once every 14.5 years.
