Boston Rents To Rise Quicker Than Boston Property Prices In Next 5 Years

The next five years will see an interesting change in the Boston property market.

Our recent research has concluded that the rent private tenants pay in Boston will rise faster than Boston property prices over the next five years, creating further issues to Boston’s growing multitude of renters. In fact, my examination of statistics forecasts that:-

 By 2022, Boston rents will increase by 21%, whereas Boston property values will only grow by 17%.

Let us explain why we have come to those conclusions:

Over the last five years, property values in Boston have risen by 16.7%, whilst rents have only risen by 7.1%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Boston tenants will have fewer properties to choose from, which will push rents higher.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tory’s have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is still the ban on letting agent fees which is still to come into force, probably in 2018.

When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

As we have mentioned in previous articles, the number of properties on the market in Boston remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why we believe property values in Boston will only be 17% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Boston people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands, because they have no money, with the average rent for a Boston rental property currently standing at £655 per month …

Over the next five years, I predict the average rent in Boston will rise to £793 per month

These are interesting times. There is still money to be made in buy to let in Boston – Boston landlords will just need to be smarter and more savvy with their investments. If you are looking for such advice and opinion to help you meet those investment goals please give the Boston Lettings Department a call on 01205 352019 or visit our website http://www.hillandclark.co.uk/

 

“How far do people go when moving away from or to Boston?”

For the majority, the response is not very far.

It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from, and to, relatively far away to buy or rent their new home. However, we carried out some research and requested some statistics from the Royal Mail. What came back was fascinating!

Using statistics for the 12 months up to the middle of Autumn 2016, 295 households moved out of Boston (PE21), moving an average distance of 50.47 miles.  The greatest distance travelled was 303 miles when someone moved to St Ives.

Considering there were 538 property sales in PE21 in the year and countless tenant moves, the numbers seems consistent – once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbourhood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.

We then turned my attention to people moving into Boston.

Using the same statistics for the 12 months up to the middle of Autumn 2016, 212 households moved into Boston (PE21), moving an average distance of 46.96 miles. The greatest distance travelled was 357 miles when someone moved from North Kessock in Scotland to Boston.

We have looked at the data of every person moving into Boston and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Boston. As you can see, there are a high proportion of people moving from London and the South.

article 170 map

So, what does all this mean for the landlords and homeowners of Boston?

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.

The estate and lettings industry loves the mantra “location, location, location”. We say it might be helpful to factor in where, and how, far people are moving from, so the property can be sold or let more easily.

Many say knowledge is power and whilst we enjoy writing our blogs on the Boston property market, we also use the information to help our clients buy, let and sell well. So for example, the information gained for this article, will enable our teams to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.

Hard Brexit could cause 2,800 properties to be dumped onto the Boston Property market

With the government still reeling from the results of the general election the job going into negotiations over has potentially become much harder. As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Boston and the rest of the UK. No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.
Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Boston … but nothing could be further from the truth.
Of the 63,736 people who are resident in the Boston Borough District Council area, 54,027 were born in the UK, 1,169 were born in EU countries from West Europe and 6,655 were born in EU countries from the former Soviet States in East Europe – the rest coming from other countries around the world.
The rights of these EU citizens living in the Boston area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Boston will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.
So, what would a hard Brexit do to the Boston property market. It could mean that every EU citizen would have to leave the UK.
In the Boston Borough area, 529 of the 1,169 Western European EU citizens own their own home and (so they would all need to be sold) and 5,260 of the 6,655 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.
Hard Brexit and mass EU Migration would mean c. 2,800 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Boston property values and rents, causing negative equity for thousands of Boston homeowners and many buy-to-let landlords would be out of pocket.
While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.
All we ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Boston (and UK) property market has been built on high levels of homeownership and more recently in the last 10-15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Boston (and the surrounding area) to get work and provide for their families. Many Boston people have invested their life savings into buying a buy to let property.
Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK … politics aside – a hard Brexit is in no one’s interests.

 

OPEN DAY – Saturday 13th May 10.00am -12.00pm at Arlington Court Washingborough Lincoln LN4 1EP

We are delighted to announce that we will be holding an OPEN DAY on SATURDAY 13th MAY between 10.00am – 12.00pm. Call the office on 01205 352019 to register your interest or simply turn up on the day. Take a look at our little property preview by clicking the link.

5.83 Babies Born for Each New Home Built in the Boston area

As more babies are being born to Boston mothers, the increase will continue to add pressure to the over stretched Boston property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 5.83 babies were born for every new home that was built in the Boston Council area in 2016.  I believe this has and will continue to exacerbate the Boston housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Boston rents and Boston property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in 1970’s the average was only one and a half births for every household built the early).  Looking at the local birth rates, the latest figures show we in the Boston Council area had an average of 68.6 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region its 61.3 births per 1,000 women aged 15 to 44.

The number of births from the Boston women between the ages of 20 to 29 are much higher than the national average, but those between 35 and 44 were significantly lower. However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Boston area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing … a huge increase in the need for housing in Boston.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Boston people.

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level, meaning one household becomes two households … demand for property is simply outstripping supply.

The simple fact is more Boston properties need to be built… be that for buying or renting.