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 through a letting agent or private landlord offers less autonomy to live by your own rules with more flexibility if you need to move.
Yet, there is a third way which many people seem to forget, yet it plays an important role in the housing of Northampton people. Collectively known as social housing, social housing is affordable housing, which is let by either Northampton Borough Council or a Housing Association to those considered to be in specific need, at rents below those characteristic in the private rental market.
In Northampton, there are 15,234 social housing households, which represent 16.92% of all the households in Northampton. There are further 4,100 families in the Northampton Borough Council area on their waiting list, which is like what it was in the late 1990’s, its down from a peak in 2011, when it stood at 7,618 families, a drop of 46.1%.
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 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 Northampton Borough Council area, the average rent in 1998 for a council house/ housing association property was £175.80 a month, whilst today its £368.38, a rise of 110% in 19 years.
When comparing social housing rents against private rents, the stats don’t go back to the late 1990’s for private renting, so to ensure we compare like for like, we can only go back to 2005. Over the last 12 years, nationally private rents have increased by a net figure of 19.7%, whilst social housing renting, national rents have increased by 59.1%.
So, what does this all mean for the homeowners, landlords and tenants of Northampton?
Rents in the private rental sector in Northampton 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 supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment vehicle 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 Northampton Property Market!