As Waterlooville First-Time Buyers are Being Locked Out of the Waterlooville Property Market........
Rents Have Risen by 3.0%
With the banks reducing the number of low deposit mortgages (i.e. deposit of 10% and below) since Covid-19 hit in the spring, this has meant that the number of Waterlooville first-time buyers has been decreasing quickly, meaning many of those would-be Waterlooville buyers wanting to make the first step on the Waterlooville property ladder will stay in the Waterlooville rental sector.
This has caused demand to grow amongst Waterlooville renters for larger homes to ride out Covid, as they hunker down for the long haul to wait for normality to return to the property market. This has caused …
Waterlooville rents to rise from £1,285 to the current £1,324
per month over the last 12 months, an increase of 3.0%.
Interestingly, the opposite is happening in Central London, where the rents tenants are having to pay have dropped by 3.8% in the last 12 months, as demand has dropped like a stone. It appears Central London tenants are looking to move out to the suburbs, in search of bigger homes, gardens and green open spaces. For example, the average rent for a 1-bed apartment in St. John’s Wood currently stands at a very reasonable £1,817 per month whilst a 2-bed apartment in Kensington and Chelsea is currently at an average bargain rent of £3,715 per month (yes, they might be low compared to last year, yet for us in Waterlooville, that still seems like a lot of money!). Also, there has been further downward pressure on Central London rents, as many Airbnb landlords have dumped their short-term holiday let properties onto the long-term rental market as the tourism in the capital has dwindled because of the pandemic.
This has been the sharpest drop in Central London rents since the summer of 2009, when the property market was still stumbling from the Credit Crunch.
This means there is a reverse of the trend of the 2010’s (2010 to 2018 to be exact), when initially the London property market was shooting up whilst the rest of the country was in the doldrums. When the rest of the UK did start to rise slowly in 2013, London kicked on even further like a rocket … yet now it appears the opposite is happening.
Getting back to Waterlooville, according to the Land Registry, property values currently stand 3.0% higher than a year ago, this is split down as follows:
Detached Waterlooville homes 3.6% higher
Semi-detached Waterlooville homes 4.3% higher
Townhouse / terraced Waterlooville homes 3.4% higher
Waterlooville apartments / flats 0.9% lower
Yet, do remember, these figures do NOT take into account the prices paid by desperate Waterlooville buyers this summer, often paying top dollar to secure the property. This will only filter through in the figures released in the spring.
So, why are the banks curtailing the number of low deposit mortgages, meaning that first-time buyers must find a much larger down payment before they are able to buy their first Waterlooville property?
The reason is the banks are fearful of a house price crash in 2021 (although if you recall I wrote about that a few weeks ago and the reasons why that is less likely to happen). They too are afraid of the frothy nature of the property market since the end of the first lockdown in late spring. The bank is lending its own money to buyers and no mortgage lender wants to be holding an enormous amount of these types of high percentage mortgages if house prices fall in 2021, because the bank would be saddled with negative equity and repossession on their hands (and we all know what that did to the housing market in the late 1980’s and early 1990’s as repossessions rocketed).