Is home ownership inevitable in Derby?

“You have to rent where you want to live, or buy where you don’t want to live.”

After the end of the Second World War, just over a quarter of the UK population owned their own home, the rest rented from private landlords or the local Council. If someone told you in the 1970’s and 1980’s that they rented, they were considered a second class citizen. Everyone wanted to own their own home.. it was the done thing. We think that home ownership will inevitably happen, but it won't.

It all changed in the 1970’s, when two things happened. Firstly, the number of people who owned their own home broke through the 50% barrier in 1971 and by 1981 it was at 57%. Tied in with that, the average house prices in Derby were doubling at one point every four years in the 1970’s so property and profit started to feed off each other.

To put that growth in context, if we were to look at the last 85 years in Derby, in 1930, the average Derby property was worth £361. It took 16 years for Derby property values to double, rising to £893 by 1946. Another 15 years and the average Derby property doubled again to £1,696 in 1961. The next doubling only took 10 years, as by 1971 the average Derby property had reached £3,449 in value.

It was, as mentioned above, the 1970’s when things really took off, as by 1975 (only four years later) they had doubled to £7,217 and they doubled again to £14,418 by 1980. It took another eight years for values to double again, as an average Derby property reached £30,221 in 1988. Twelve years had to pass until the doubled again in 2000 (£62,181) and just six years to double again by 2006, when they reached £125,111.  Where are we today? The average property value in Derby currently stands at £174,700.

We could blame Maggie Thatcher for making home ownership the ultimate goal, but what we now need to consider is that the country is turning on its head and we need to, as a Country, love renting again. Some blame the banks, but obtaining a 95% mortgage is hard work, but nowhere near impossible. A typical Derby first time buyer would only need to save £5,000 for a deposit and fees and they could buy a very decent Victorian two up two down in Rose Hill in Derby, and it would be over £100 cheaper a month in mortgage payments than renting.

People might say on the surveys they want to buy, when it comes down to it. If you have been living in a lovely three bed semi in Littleover  for £700 per month, but the bank will only lend you enough to buy a terraced house Rose Hill, and don’t get me wrong, Rose Hill has really pulled its socks up over the last ten years, but, some would say, it isn’t Littleover, is it?

What would you do? Look again at the quote at the top... “You have to rent where you want to live, or buy where you don’t want to live.”

With tenant demand only going in one direction, it is probably why more and more people are getting into buy to let in Derby. With the new rules on pensions and the ability to use them to buy residential rental properties from April onwards, this could be the time for you to buy a rental property. You must take advice on your pension from a Independent Financial Advisor (there are plenty in Derby) and you must take advice from people who know what to buy (and not to buy) in Derby to ensure you get the best from your investment. One place for such advice is the Derby Property Blog!