The proportion of 25 to 34-year olds who own their home in Wilmslow has nearly halved in the last 20 years, so what does this mean for all the existing Wilmslow landlords and homeowners together with all those youngsters considering buying their first home?
Well, looking at the numbers in greater detail, in Wilmslow there has been a 45% proportional drop in the number of 25 to 34-year olds owning their own home between 1999 and 2019 .. and a corresponding, yet smaller drop of 21% of 35 to 44-year olds owning their own home over the same time frame.
So, if you were born in the late 1980’s or early 1990’s, the dream of owning a home in Wilmslow has reduced dramatically over the past 20 years as young adults’ wages and salaries are now much lower in relation to Wilmslow house prices. Nationally, average property values have grown by 186.9%, whilst average incomes have only risen by nearly 45%, yet that doesn’t allow for inflation. However, whilst not over the same 20 years (it’s close enough though), the Institute of Fiscal Studies said recently the average British home was just over 2.5 times higher in 2015/6 than in 1995/6 after allowing for inflation; yet the average household income (after tax) of 25 to 34-year olds grew by only 22% in ‘real-terms’ over those 20 years.
Yet, even though property prices are at record highs, on the other side of the coin, the monthly cost of mortgage payments has actually fallen because interest rates have remained low. In 1999, the average mortgage rate paid by UK homeowners was 6.5% whilst today it’s more than halved to 2.6% – a drop of 59%. Many of you reading this will remember the 15% mortgage rates of 1992!
The fact is, mortgage repayments take up a considerably smaller proportion of take home pay, on average, than they did before the Credit Crunch or in the late 1980’s. Although the risk that mortgage rates will increase if the Bank of England put up interest rates might leave some homeowners in a difficult position – hence I might suggest (if you haven’t already) you seriously consider fixing your mortgage rate (remember to take advice from a professional before you do).
|Homeownership in Wilmslow by Age – 1969 to today