The way it works is, you have to rent where you want to live, or buy where you don’t want to live

 

 

After the end of the Second World War, just over a Quarter of the UK population owned their own home, the rest rented from private landlords or the local Council. If someone told you in the 1970’s and 1980’s that they rented, they were considered a second class citizen. Everyone wanted to own their own home .. it was the done thing We think that home ownership will inevitably happen, but it won't.

It all changed in the 1970’s, when two things happened. Firstly, the number of people who owned their own home broke through the 50% barrier in 1971 and by 1981 it was at 57%. Tied in with that, the average house prices in Cambridge were doubling at one point every four years in the 1970’s so property and profit started to feed off each other.

 To put that growth in context, if we were to look at the last 85 years in Cambridge, in 1930, the average Cambridge property was worth £725. It took 16 years for Cambridge property values to double, rising to £1,792 by 1946. Another 15 years and the average Cambridge property doubled again to £3,402 in 1961. The next doubling only took 10 years, as by 1971, the average Cambridge property had reached £6,918 in value.

It was (as mentioned above) the 1970’s when things really took off, as by 1975 (ie only four years) they had doubled to £14,478 and they doubled again to £28,982 by 1980. It took another eight years for values to double again, as an average Cambridge property reached £60,622 in 1988. Twelve years had to pass until the doubled again in 2000 (£124,731) and just six years to double again by 2006, when they reached £251,567.  Where are we today? The average property value in Cambridge currently stands at £372,400

 We could blame Maggie Thatcher for making home ownership the ultimate goal, but what we now to need to consider that the country is turning on its head and we need to, as a Country,  love renting again. Some blame the banks, but obtaining a 95% mortgage is hard work, but nowhere near impossible. A typical Cambridge first time buyer would only need to save £12,500 for a deposit and they could buy a very decent 1960’s three up two down in Arbury in Cambridge, and it would be over £100 cheaper a month in mortgage payments (on a 40 year mortgage) than renting.

People might say on the surveys they want to buy, when it comes down to it. If you living been living in a lovely two bed apartment in Trumpington for £1100 per month, or even a lovely Victorian terraced in a hip and trendy area of Cambridge for not much more per month, but the bank will only lend you enough to buy a town house in Arbury, and don’t get me wrong, Arbury has really pulled its socks up over the last ten years, but it isn’t Trumpington, is it? What would you do? Look again the title of the post ... “The way it works is, you have to rent where you want to live, or buy where you don’t want to live,”

 That is why more and more people are getting into buy to let in Cambridge. With the new rules on pensions and the ability to use them to buy residential rental properties from April onwards, this could be the time for you to buy a rental property. You must take advice on your pension from a Independent Financial Advisor (there are plenty in Cambridge) and you must take advice from people who know what to buy (and not to buy) in Cambridge to ensure you get the best from your investment. One place for such advice is the Cambridge Property Blog  http://cambridgeproperty.blogspot.co.uk/