Alan Munns: Some Ramsgate property more affordable than before 2007/08 crash

The question of land ownership

My research shows that certain types of Ramsgate property are more affordable today than before the 2007/08 credit crunch.

Roll the clock back to 2007 just before the credit crunch hit, which saw Ramsgate property values plummet like a lead balloon, and the Ramsgate property market had reached a peak with the prices hitting the highest level they had ever reached.  Between 2008 and 2010, Ramsgate property values lay in the doldrums and only started to rise again in 2011, albeit quite slowly to begin with.

Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that some Ramsgate property, especially flats/apartments, are now more affordable than they were before the 2007/08 credit crunch.

Back in 2007, the average value of a Ramsgate flat/apartment stood at £131,204 and today, it stands at £149,409, a rise of £18,205 or 13.9%.

However, between 2007 and today, we have experienced inflation (as measured by the Government’s Consumer Price Index) of 25.97% meaning that in real spending power terms Ramsgate apartments are 12.1% more affordable than in 2007. Looking at it another way, if the average Ramsgate apartment (valued at £131,204 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £165,278 (instead of the current £149,409).

The point I’m trying to get across is that Ramsgate property is more affordable than many people think.  Ramsgate first-time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.

It really comes down to a choice and if Ramsgate first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property – they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.

So why aren’t Ramsgate 20-somethings buying their own homes?

Back in the 1960s and 1970s, renting was considered the poor man’s choice in Ramsgate (and the rest of the country) a huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting – meaning that many people find it a better option and a lifestyle choice.

Saving the 5% deposit means going without many luxuries in life (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit many 20-somethings choose to rent.

There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Ramsgate will continue to rise.

Therefore, everyone in Ramsgate has a responsibility to ensure that an adequate number of quality Ramsgate rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the rising expectations of tenants on the finish and specification of their Ramsgate rental property.

I have perceived that in the past, what a tenant wanted from their Ramsgate rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.

However, Ramsgate tenants’ expectations are becoming more discerning as each year goes by.  I have also noticed the length of time a tenant remains in their property is becoming longer (and this was backed up recently by stats from a Government report), although I have noticed a tendency for many Ramsgate landlords not to keep the rental payments at the going market rates  – maybe a topic for a future article for my blog?

The bottom line is this … Ramsgate landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their Ramsgate rental properties over the next five, 10 and 20 years –  e.g. decorating, kitchen and bathroom suites etc etc ..

The present day and future situation of the Ramsgate private rental property market is important, and I frequently liaise with buy-to-let investors looking to spread their Ramsgate rental-portfolios.

I also enjoy meeting and working alongside Ramsgate first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.

Thanet Property Blog