I was having an interesting chat with a Harlow buy to let
landlord the other day when the subject of size of households came up in
conversation. For those of you who read
my Brexit article published on the morning after the referendum, one of the
reasons on why I thought the Harlow 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 Harlow 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, it has steadily over the
years 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 the 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 the Harlow Council area, the average number of occupants per household is 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 at the Harlow Council figures for all tenures
(Owned, Council and Private Rented) a slightly different picture appears...
1 person households in Harlow
|
2 person households in Harlow
|
3 person households In Harlow
|
4 person households in Harlow
|
5+ person households in Harlow
|
30.62%
|
32.26%
|
16.78%
|
13.95%
|
6.40%
|
But it gets even more interesting when we focus on just
private rental properties in Harlow, as it is the rental market in Harlow that
really fascinates me. When I analysed those Harlow Council private rental
household composition figures, a slightly different picture appears. Of the 3,474
Private rental properties in the Harlow Council area,
- 27.8% of Private Rental Properties are 1 person Households
- 27.8% of Private Rental Properties are 2 person Households
- 20.9% of Private Rental Properties are 3 person Households
- 12.2% of Private Rental Properties are 4 person Households
- 6.6% of Private Rental Properties are 5+ person Households
As you can see, Harlow is not too dissimilar from the
national picture but there is story to tell. If you are considering future buy
to let purchases in the coming 12 to 18 months, I would seriously consider
looking at 2 bed apartments/houses. Even with the numbers stated, there are
simply not enough 2 bed apartments/houses to meet the demand. They have to be
in the right part of Harlow 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 read more articles on the Harlow Property
Market and where I consider best buy to let deals are in Harlow, please visit
the Harlow Property Market Blog