Should you buy or rent a house? Buying your own home can be expensive, but could save you money over the years. Renting a property offers less autonomy to live by your own rules, but more flexibility if you need to move.
Yet, there is third way that many people seem to forget, yet it plays an important role in housing people in mid Somerset – social housing.
Analysis of the Numbers
In Mendip, there are 6,330 social housing households, which represents 12.45% of all households in Mendip. There are a further 1,391 families in the Mendip area on the waiting list, which is lower than the figures in the late 1990s.
The numbers peaked in 2012, when it stood at 3,580 families, so today’s numbers represent a drop of 61.1%
Nevertheless, this doesn’t necessarily mean that more families are being supplied with their own council house or housing association property. Six years ago Westminster, through the Localism Act 2011, gave local authorities the authority to limit entitlement for social housing, quite conspicuously dismissing those that did not have an association or link to the locality.
Interestingly, the rents in the social rented segment have also been growing at a faster rate than they have for private tenants. In the Mendip area, the average rent in 1998 for a council house/housing association property was £170 a month.
Therefore, using the average rent increase for England of 108% (England’s average rent being £183.08 a month in 1998 and £381.03 a month today) we can guesstimate an average of approximately £353 per calendar month.
When comparing social housing rents against private rents, the statistics don’t go back to the late 1990s for private renting. So, to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, private rents have increased nationally by a net figure of 19.7%, whilst rents for social housing have increased by 59.1%.
So, what does this all mean for the homeowners, landlords and tenants in Mid Somerset?
Rents in the private rental sector in Mid Somerset will increase sharply during the next five years. Even though the council house waiting list has decreased, the number of new council and housing association properties being built is at a 70 year low. The government crusade against buy-to-let landlords, together with the increased taxation and the banning of tenant fees to agents will restrict the supply of private rental property. In turn, using simple supply and demand economics, will mean private rents will rise – making buy-to-let investment a good choice of investment again (irrespective of the increased fees and taxation laid at the door of landlords). It will also mean property values will remain strong and stable as the number of people moving to a new house (and selling their old property) will continue to remain restricted and hence, due to lack of choice and supply, buyers will have to pay decent money for any property they wish to buy.
Interesting times ahead for the Mid Somerset property market!
About Tom Morgan
Founder of Jungle Property the multi award-winning letting agent based in Glastonbury, Somerset. I am passionate about property and Glastonbury and about providing the very best advice to anyone who wants the best return on a buy-to-let property investment. For an open and brutally honest opinion on anything in the Glastonbury property market please contact me via tom.morgan@jungleproperty.co.uk
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