I was having an interesting chat with a Falkirk
buy to let landlord the other day when the subject of size of households came
up in conversation. For those of you who have read my articles about life
after the Brexit vote, one of the reasons on why I thought the Falkirk property
market would, in the medium to long term, be OK, was the fact that the size of
households in the 21st Century was getting smaller – which would create
demand for Falkirk Property and therefore keep property prices from dropping.
Looking at the stats going back to the early
1960’s, when the average number of people in a home was exactly 3, over the
years it has steadily dropped by a fifth to today’s figure of 2.4 people per
household. Doesn’t sound a lot, but if the population remained at the same
level for the next 50 years and we had the same 20% drop in household size, the
UK would need to build an additional 5.28 million properties (or 105,769 per
year) . When you consider the Country is only building 139,800 properties
a year. It doesn’t leave much for people living longer and immigration, looking
closer to home.
In Falkirk, the average number of
occupants per household is 2.1 people which is less than the national average
of 2.4 people.
When we look at the current picture
nationally and split it down into tenure types (i.e. owned, council houses and
private renting, a fascinating picture appears.
The vast majority of homeowners who don’t
have a mortgage are occupied by one or two people (81% in fact), although this
can be explained as residents being older, with some members of the family
having moved out, or a pensioner living alone. People living on their own are
more likely to live in a Council house (43%) and the largest households (those
with 4 or more people living in them) are homeowners with a mortgage – but
again, that can be explained as homeowners with families tend to need a mortgage
to buy. What surprised me was the even spread of private rented households and
how that sector of population are so evenly spread across the occupant range –
in fact that sector is the closest to the national average, even though they
only represent a sixth of the population.
When we look Falkirk figures for all tenures
(Owned, Council and Private Rented) a slightly different picture appears...
But it gets even more interesting when we
focus on just private rental properties in Falkirk, as it is the rental market
in Falkirk that really fascinates me. When I analysed those Falkirk private
rental household composition figures, a slightly different picture appears as
around:
- 38% of Private Rental Properties are 1 person households
- 51% of Private Rental Properties are 2 person households
- 7% of Private Rental Properties are 3 person households
- 3% of Private Rental Properties are 4 person households
- 1% of Private Rental Properties are 5+ person households
As you can see, Falkirk is a bit different from
the national picture as it has more 1 person households and less 3 and 4
bedroom households and the position with 3 and 4 bedroom households is more
extreme in the rental sector. If you are considering future buy to let
purchases in the coming 12 to 18 months, I would seriously consider looking at 3
bed properties. Even with the numbers stated, there are simply not enough 3 bed
properties to meet the demand. They have to be in the right part of Falkirk and
priced realistically, but they will always let and when you need to sell,
irrespective of market conditions at the time, will always be the target of
buyers.
To keep up-to-date with the rented property
sector in Falkirk, visit my property blog by clicking
here .
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