Roll the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’. Haven’t things changed. The number of homeowners and property investors who said they wish they had hindsight and bought up every house in Hull all those years ago, especially when you consider what has happened to Hull property values, as…
Hull Property Values since 1981 have risen by 525%.
Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Hull are 253.1% higher. It’s no wonder people can’t afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Hull Property market run much deeper than property value changes as no one could have predicted how the property market has changed in Hull over the last 30 years.
Looking at the Local Authority data for Kingston Upon Hull City Council in 1981, 48.7% of Hull people lived in a Council House, whilst today its 11.8% … a massive drop which can mostly be attributed to Margaret Thatcher allowing Council tenants the right to buy their Council House. The private rental sector since 1981 has, as one would have expected, also changed. The proportion of properties privately rented in the Hull area (i.e. through a private landlord or a letting agency) have almost doubled, rising from 13.1% to 22.5% of property.
So, let us consider those people who own their own home, surely that has had a massive drop? In 1981, the proportion of people who lived in the Kingston Upon Hull City Council area who owned their own home was 38% … and today its … 64.1%. Not the change most of you were expecting (including myself!).
Homeownership in the 1980’s and 1990’s in Hull did in fact rise, but as I have discussed in previous articles in the ‘Hull Property Market Blog’, that was because nearly every Council tenant was buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent.
.. and this is why the buy to let market in Hull is an investment sector that will continue to grow as councils aren’t building council houses in their thousands each year (like they were in the 1950’s/60’s and 70’s). The Hull property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten. I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important. You might need to change your buy to let targets, your methodology to financing or even consider places other than Hull in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities, instead of short term growth bets and wagers.
Like Bucks Fizz said in their song, it’s time to make your mind up. The advice I give to my landlords, and also to you my blog reading friends is this; these changes will make some landlords panic, meaning competition for decent Hull buy to let bargains will reduce as fear of change kicks in and amateur investors flee the market. These opportunities will provide a more stable platform for knowledgeable and wise Hull buy to let landlords to thrive in.
If you want to learn more about the Hull Property Market, feel free to pop in for a coffee at our office for a chat with me, or failing that, email me at hull@belvoir.co.uk.
