When news happens, text BAZ and your photos or videos to 80360. Or contact us by email and phone.
Hampshire residents continue to struggle to get on property ladder
4:00pm Saturday 8th February 2014 in News
TURN back the clock 30 years and getting on the property ladder was a near-inevitable milestone for young people.
Today is a very different story though, and more parents are finding the ‘empty nest syndrome’ a thing of the past with adults staying at home well into their thirties in the hope of saving for an all-important deposit.
However, new research by Lloyds Bank has shown that housing market sales have reached a ten year high, with home sales in England and Wales spiking by 21 per cent in the six months to September 2013, compared to the same six months in 2012.
The South East saw sales exceed 100,000 in that period for the first time since the start of the housing downturn in 2007, and 97 per cent of towns in the region recorded an annual increase in home sales, compared to 32 per cent in 2012.
As encouraging as that sounds, the worry is this push out of the recession into a more fruitful market is the beginning of yet another housing bubble, which in another six months time will leave a new batch of first time buyers struggling to meet their mortgage repayments if interest rates were to rise.
Dr John Marti, deputy director of the management school at Southampton University, said the rise in house sales is good news as it is a sign that people are more confident.
He said: “When people are confident they tend to go out, do things and spend money that they wouldn’t do when they are feeling less so.
“If income starts to rise and inflation does not rise substantially, if it stays about level at two and half to three per cent, and mortgage inflation rates do not rise, house sales and house prices will continue to increase because generally people will start to feel better off and mortgages will appear to be more affordable.”
However, although appearing to be more affordable at the moment and first time buyers are clearly motivated to get a foot on the ladder, it isn’t as simple as putting a deposit down.
Across Hampshire there are thousands of young people having to live at home with their mum and dad as they struggle to save.
Twenty-two-year-old Mike Downing, an electrical engineer, lives at home on Lanham Lane in Winchester, and has been saving for almost five years.
“Getting a mortgage on my own isn’t going to be easy and I will have to buy with somebody else. Getting a deposit saved up takes a long time and it will be about 20 per cent of the house price,” he said.
“I’m saving as much as I can until I can afford somewhere because the quicker I buy somewhere, the more it will be worth a few years down the line. I don’t want to get stuck renting somewhere and not be able to save for a deposit.
“If I was buying on my own I would have to downsize where I want to live and it would be a couple more years until I could afford it.”
It’s not just first time buyers that are being warned about the current property boom.
Stewart Dunn, chief executive of Hampshire Chamber of Commerce, warns that although the upturn of the economy is positive for businesses, an increase in house sales does come with its draw backs.
“The increase in housing sales is encouraging for business confidence but it needs to be treated with caution so that we do not have a housing bubble.
“In terms of key workers the concern is housing in the middle of the cities. It is a question of affordability and whilst the rise is welcome for business confidence, it does have draw backs. The last thing we want is an over inflated economy based on housing.”
It isn’t just a question of finance though, but in fact production.
Dr Marti said that although more people are investing in property, that may not necessarily be due to an economical u-turn, but in fact because demand is higher, and supply is less.
“In Southampton there is a continuing demand for housing and in the last few years we haven’t built too many new houses. Inevitably there is a shortage so when people do want to buy there is less stock available.
“It’s a question of supply and demand, which is always a problem.”
The same can be said for towns and cities across Hampshire, and coupled with the lack of affordability it’s certainly questionable what this ‘spike’ in house sales actually means for not only first time buyers, but those already in the loop.
Those relocating would do well to head north, with research by Adzuna in August 2013 showing the top ten best and worst places to buy property on a budget were all in the South, with Winchester ranked sixth worst.
Comments are closed on this article.