“An apartment is over £100 grand and a flat under £100k!”, said my friend.

Joking aside, there is no difference, call it what you will, the humble apartment/flat has served Crediton well over the years. The average sale price of an apartment in the town in 2021 was £154,020, making it an excellent first-time buyer purchase and buy-to-let investment.

In this article, I want to look at the apartment/flat in Crediton and how it could solve the county’s housing crisis.

The word ‘Apartment’ derives from the French word ‘Appartement’, which comes from the Italian form of the word, ‘Appartamento’. The core of that Italian word ‘appartare’ means ‘to separate’, as in ‘separate a building’.

The word comes from Roman times when housing costs were so expensive within the city walls in Rome. Savvy property owners split (or separated) their houses into what we know as apartments or flats today.

The word flat is derived from the Old Scottish/Old English word ‘flet’. The flet is the interior of the home. Some also think the phrase stuck as most flats are on one floor, and so by definition, the accommodation is on the flat (i.e. no stairs inside).

The country has an enduring housing shortage. Not enough homes are being built, and even though the Government is aspiring to build 300,000 new homes annually to match demand and keep costs of housing affordable, less than 250,000 were built in 2019, the best rate in the last decade.

And that is why some say the simple solution to Britain’s housing problem is building more apartments/flats.

The British population has been growing by more than half a million every year, for the last twenty years. Yet just over 175,000 homes have been built annually.
One solution is building more apartments – and on the face of it, the facts stack up as they are cheaper to heat, the views are often unique and they use less land.
To look at what we do as a country with our apartments, it’s important to look at Europe to see how they live so that we can compare the percentages of flats/apartments lived in:

• Spain 66.1%
• Switzerland 63.1%
• Greece 59.2%
• Germany 56.3%
• Italy 53.1%
• EU average 46.2%
• Sweden 46.7%
• France 34.0%
• The United Kingdom 14.8%

Quite a stark difference, isn’t it! Now let’s look at Crediton itself.

Of the 3,589 households in Crediton, 20.3% of them (729) are apartments/flats

Even though only 1.2% of the country has residential property built on it (and an additional 3.5% are gardens), building houses is low-density land use. Is it sustainable in the long term to continue to build that way in Britain, a country with a similar population to France yet having less than half its landmass?
If we continue to build just over 5 in 6 new households as houses, surely sooner or later, the precious green belt around our towns and cities will have to go. And I know many of you will say use brownfield sites. Of course, there are brownfield sites, yet…

In the whole of the Mid Devon area, there are only 15 brownfield sites, totalling only 18.9 acres, which would only provide 267 houses – so not many!

The country needs a decent supply of homes for its growing and ageing population. Many of you will frown when it has been suggested, even if it’s for environmental reasons alone, most of these should be apartments/flats.

Don’t get me wrong, the love/hate relationship with the apartment/flat and the British is well-founded. Many apartments/flats in Britain are not suitable for happy family living. The high-rise ghetto council blocks built in the 1960s didn’t help with their poor communal areas, lack of maintenance and lifts that didn’t work.

Why do so many more Europeans live in apartments?

In mainland Europe, the apartments are larger. For example, in Germany, they are 974 sq ft; in Denmark, they are 1,452 sq. ft; in the UK, they are only 793 sq ft. Also, European apartment/flat owners have more storage areas, higher ceilings and better communal areas.

It is a vicious cycle. Poorly made small apartments make families side-step them, which makes new home builders construct apartments unsuitable for families, which means the situation worsens. This results in the British property market trying to expand our towns and cities outwards into the countryside with houses, rather than upwards into the sky.

I am not suggesting 20-storey high-rise tower blocks in Crediton for one second. Looking deeper into the information from Europe, most people live in low-rise three and four-storey purpose-built apartment blocks.

To begin with, these new apartments/flats need to be justly desirable for Crediton families and be seen as such by the local population. The building materials used, communal spaces, the building’s functionality, and design specifications must not only meet but exceed current building specs on houses, or planning permission should withhold.

Maybe the Government could incentivise builders to build apartments/flats instead of houses to improve the supply of quality apartments/flats with tax breaks?

Things will take decades to change, yet I thought it was appropriate to discuss the matter in such an environment as this.

These are my thoughts, what are yours?

In Britain, there are 27,071,500 households, of which 17,044,450 are owned, and are worth a total of £3,925,865,212,950 (£3.92 trillion). Over the last 5 years, an average of 86,096 properties sell each month, meaning just over a million UK households move home per year. Therefore, the average British homeowner moves every 16 years 5 months.

These statistics refute a common hypothesis that British neighbourhoods are becoming more fleeting and transitory. On the face of it, they appear to show that, once you have succeeded to buy a property you can call home, there isn’t much motivation to move again.

So, aren’t people moving home so much?

Could it be put down to a certain sense of complacency or apathy to moving home? Whereas we might love our home in Crediton, most of you (including myself) still want to ‘better our lives’ with a bigger house, better area etc, which typically requires us to climb up the Crediton property ladder.

Yet with Crediton house prices having risen by 166.2% in the last 20 years, the cost of going up the next rung on the Crediton property ladder is prohibitive.

Everyone harks back to the 1980’s, when we had an upbeat booming property market as a backcloth, Brits moved home every eight years; so now with the average at just over 16 years this equates to each British homeowner moving around three to four times in their adult lifetime. Maybe we should all call our homes ‘Dunroamin’ and be done with it!

Or does it? 

We have all heard the phrase ‘lies, damn lies and statistics’ … well the stats mentioned above hide some amazing features of the British property market. When homeowners get into their 50’s and 60’s, their tendency to move home drops like a stone. The average length of time a homeowner without a mortgage moves home is 24 years and 7 months (and just under 7 out of ten outright homeowners i.e. without a mortgage are 65 years old or older). 

Yet, homeowners with a mortgage move on average every 10 years and 11 weeks.

So, whilst I cannot determine who has a mortgage and who doesn’t, I can look at how quickly people move home in Crediton.  I have looked at the last 50 property sales in Crediton, and I have found some interesting findings.

On average Crediton homeowners only move every 12 years and 37 weeks.

Nothing interesting about that you might say, when compared to the national average … yet the devil is in the detail.

There appears to be a two speed Crediton property market … look at the top 25% of Crediton home movers, and then the next slice … these Crediton people are moving home really quickly, yet the gap for the next two slices widens tremendously.

• Top 25% quickest Crediton home movers move every 3 years and 43 weeks
• The next 25% quickest Crediton home movers move every 7 years and 36 weeks
• The next 25% quickest Crediton home movers move every 15 years and 21 weeks
• Whilst top 25% slowest Crediton home movers only move every 23 years and 23 weeks

When looking at the properties that fall into the later bands (i.e. the ones that don’t move/sell so often), they tend to be the larger properties where the homeowners have lived for 25/30 years plus.

The lesson we all should learn is that once people get into their 50’s and 60’s, their propensity to move home drops considerably. This means the properties on the lower rungs of the Crediton property ladder do appear to sell quickly (as they are occupied by younger homeowners) yet once Crediton people get older, their tendency to move diminishes. This puts a roadblock on the younger generation wanting to buy the larger Crediton properties these mature homeowners live in.

What is holding the older generation back from selling and downsizing to free up homes for families that desperately need them? Some of it will be apathy, some of it will be holding on to the home that they brought their family up in, yet the bottom line is …

46.5% of the homes owned in Britain have two or more spare bedrooms.

As a nation, we need to rethink how we can encourage older homeowners to sell their large homes to release them to the younger families that desperately need them. Some suggest tax breaks, yet the Government won’t be in the mood to give huge tax breaks as the measures to protect the economy over the last 12 months will ultimately need to be paid back.

One thing I do know, we as a Country have seen (and will continue to see) a lot of demographic change together with an increasing elderly population, so it’s not just about how many homes we build, but whether we are building the right kind of homes the older generation will want to move into.

Interesting times ahead for the Crediton property market!

If you have a Crediton property to sell or let in the coming weeks, months or years and would like to know how this and other factors will affect you and your property … without obligation, don’t hesitate to give me a call or drop me line.

With most Crediton families home schooling their children in lockdown and the forthcoming Stamp Duty Holiday deadline on the 31st March 2021, less Crediton properties have been coming onto the property market since the new year. This has prompted about a 10% drop in the supply of Crediton homes for sale compared to October 2020.

For the past couple of decades, like clockwork, Crediton estate agents’ busiest times for putting property onto the market is the new year to Easter rush, with a smaller flurry of new properties coming onto the market in the mid/late summer. Yet, since the ending of lockdown 1.0 in the late spring 2020, nothing has been normal about the Crediton property market.

Throughout the summer, the number of properties coming onto the market in Crediton steadily rose to its peak in October and the number of properties then becoming sold subject to contract (stc) rose even higher (and whilst statistics don’t exist for the properties sold stc, anecdotal evidence suggests there were just under 50% more Crediton properties sold stc in the last six months of 2020 compared to the same 6 months in 2019).

However, back to the number of properties for sale.

The first lockdown caused many Crediton homeowners to want to move with the need for extra space to work from home and in some cases larger gardens. This was further exacerbated by Crediton home movers also trying to take advantage of the Stamp Duty Holiday to save themselves money on this tax.

This meant many more Crediton properties came onto the market (more than a “normal” year) in the last 6 months of 2020. However, those Crediton home movers motivated to move for the extra space/save money on the tax, did so in the summer/autumn and have already placed their Crediton home on the market (and are probably by now sold stc rushing to get their house purchases through before the deadline on the tax savings).

So, how does Crediton compare to other property markets, and what does this reduction in Crediton properties on the market mean to Crediton homeowners and landlords?

When I compared that to the national picture, according to Zoopla, there are 12% less properties on the market today (compared to a year ago).

There are currently 47,900 apartments for sale in London compared to January 2020, when there were only 32,600 – a massive rise of 46.9% … all the more interesting when there are only 15.1% more London semi-detached houses for sale and 1.8% more London detached homes over the same 12 month period.

The jump in London apartments for sale is being pushed by an upsurge of London up-sizers eager to trade their city living apartment up to suburban houses, and a small handful of panicky London buy-to-let investors who are wanting to exit the London property market following falling rents for apartments. Looking closer to home, there are …

So, whilst there are some differences between the supply of individual types of property in Crediton (e.g. terraced vs detached houses), the overall reduction in the number (i.e. supply) of properties for sale can only mean one thing, when there is a reduction in the supply of anything and demand remains stable, this will mean continued upward pressure on Crediton house prices in the short term (although I suspect there will be some downward pressure on Crediton terraced houses with that level of increase in supply – maybe some interesting ‘opportunities’ for all you Crediton landlords?).

Lockdown 3.0 will probably cause another wave of Crediton people who want to move home (thus increasing demand). The last property crash (the Credit Crunch in 2009) was caused by a huge increase in the supply of properties for sale when people lost their jobs and interest rates were much higher. People couldn’t afford their mortgages and so dumped their homes onto the market all at the same time – causing an oversupply of property for sale and hence house prices dropped.

It was this increase in the level of property for sale in Crediton (mirrored across the whole of the UK) that caused property prices to drop between 16% and 19% (depending on the type of property) in Crediton over the 12 to 14 months of the Credit Crunch. So, as long there is no sudden change in the demand or supply of properties and interest rates remain at their current ultra-low level – the medium-term prospects for the Crediton property market look good.

If you are a Crediton homeowner or a Crediton buy to let landlord and want to chat about the future of the Crediton property market – do drop me a line, I’d love yo hear from you!