It’s now commonly agreed amongst economists and the general public that the dramatic rise in Runcorn property prices of the last six years has come to an end.
Read the national newspapers and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down. Yet in the last 12 months, people have still been moving, buying and selling in Runcorn at levels similar to the last six years. Something tells me we have a case of ‘bad news selling newspapers’.
So instead, let me share with you what exactly is happening in the Runcorn property market, and more specifically, who is moving and why in Runcorn. The majority of sales in Runcorn during the last twelve months were terraced properties, selling for an average price of £97,300. Semi-detached properties sold for an average of £142,900, with detached properties fetching approximately £253,600.
In Runcorn, in the homeowner sector in 2018 (i.e. owner occupation), 274 households moved within the tenure (i.e. sold the home they owned and bought another one) and 53 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).
|Runcorn Home Movers in 2018|
|Moved from Owner Occupation to Private Rented||100|
|Moved from Private Rented to Owner Occupation||127|
|Owner Occupation to Social Housing||14|
|Straight to Owner Occupation||53|
|Left Owner Occupation (i.e. Household Ended)||66|
|Owner Occupation to Owner Occupation||274|
What does this mean for Runcorn buy to let landlords? Looking at the graph, it appears it’s bad news for landlords. 127 households moved into the home-owning (owner occupation) tenure from the private rented sector, while on the other side of the coin, 100 Runcorn households moved to the private rented sector from owner occupation, which appears on the face of it, a reduction in the private sector.
My research has calculated that in 2018, an additional 133 new households in the Runcorn private rental sector were created.
This will continue to grow at those levels for the foreseeable future.
I have one final thought and opportunity for you Runcorn property investors. 66 owner-occupied households in Runcorn were sold last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.
So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market, the Runcorn housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned; returning with a vengeance. Like I say to anyone buying a property, be they a first-time buyer, landlord or homeowner., property is a long game, and if you play the long game, you will always win (although isn’t that true in most aspects of life?).