The long-lasting issues of the Oadby and Wigston property market are laid bare as the final 2018 property transaction figures have just been published and they continue the post-credit crunch trend of fewer people moving.
31.3% fewer Oadby and Wigston people are selling their homes annually since the credit crunch, compared to the post-Millennium years of 2000 to 2005
This is not just an issue of the Oadby and Wigston housing market slowing down since the credit crunch – the challenge is to split out shorter-term factors such as Brexit and the elections from longer-term structural issues in UK society, because when these most recent property transaction figures are viewed against longer-term trends for Oadby and Wigston, they suggest more significant issues in the local housing market.
In the late 1990s, 987 properties were sold annually in the Oadby and Wigston area. In the same area, the Millennium boom saw transactions rise to 1,107 per annum. Property sales then almost halved to 586 per annum in the midst of the global financial crash and subsequent retrenchment of the mortgage market. Post-credit crunch (2012 and beyond) locally, on average, 761 properties have sold annually.
So, whilst there was a recovery from 2013 onwards, it was rather uninspiring when compared to the pre-credit crunch years, with a lacklustre performance in property transactions since the mid-2010s.
You might ask why we should be concerned about the number of property transactions and not the change in property values?
The number of transaction numbers is a far more exact bellwether for the health and potency of the local housing market.
As fewer people have been selling their homes locally, this is not only bad for the Oadby and Wigston housing market but for the whole economy, especially when you consider how many allied businesses (builders, decorators, solicitors, removal vans, estate agents, mortgage arrangers and other people) lose out as a result.
Some say the deficiency in the supply of property, mainly properties affordable for first-time buyers, is the chief reason for transaction figures remaining stubbornly low. Others suggest the absence of suitable housing stock further up the property ladder (particularly bungalows for the older generation), combined with rising demand, is causing a bottleneck in our local housing market.
I know there has been much talk from Westminster about grand home-building programmes, yet we now require them to deliver on these undertakings. Even then, it will be a few decades before we see a seismic shift in the Oadby and Wigston property market.
In the short-term, a quicker improvement may come from modifications to Stamp Duty. First-time buyers don’t need to pay Stamp Duty up to a certain level, yet those Stamp Duty concessions could be extended to mature homeowners looking to downsize. This could liberate a meaningful number of family homes occupied principally by the mature generation – the tax lost through Stamp Duty could perhaps be replenished by a revaluation of the Council Tax bands.
Council Tax bandings were set in 1991 with seven bands, the highest band starting at £320,000 (based on 1991 values). It seems irrational that upper value band, set in the 1991 revaluations, has not been increased, particularly as house prices in London have risen by over 400% during the last 25 years.
That would mean higher tax for those who don’t move and lower tax for those who do – because we believe it would boost a far more liquid Oadby and Wigston property market.
Just a thought about how we might go about mending the local property market – what are your thoughts?