“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.

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 Northampton were doubling at one point every four years in the 1970’s so property and profit started to feed off of each other.

To put that growth in context, if we were to look at the last 85 years in Northampton, in 1930, the average Northampton property was worth £422. It took 16 years for Northampton property values to double, rising to £1,042 by 1946. Another 15 years and the average Northampton property doubled again to £1,979 in 1961. The next doubling only took 10 years, as by 1971, the average Northampton property had reached £4,024 in value.

It was (as mentioned above) the 1970’s when things really took off, as by 1975 (i.e. only four years) they had doubled to £8,422 and they doubled again to £16,860 by 1980. It took another eight years for values to double again, as an average Northampton property reached £32,266 in 1988. Twelve years had to pass until the doubled again in 2000 (£72,561) and just six years to double again by 2006, when they reached £146,345.  Where are we today? The average property value in Northampton currently stands at £209,200.

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 Northampton first time buyer would only need to save £6,000 for a deposit and they could buy a three up two down in the Thorplands Estate in Northampton, and it would be £650 in rent per month, but only £550 per month in mortgage payments.

People might say on the surveys they want to buy, but when it comes down to it, if you have been living in a lovely modern three bed semi in Weston Favell for £750 per month, but the bank will only lend you enough to buy a town house in Thorplands Estate, and don’t get me wrong, Thorplands Estate has really pulled its socks up over the last ten years, it isn’t Weston Favell, 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 Northampton. 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 Northampton) and you must take advice from people who know what to buy (and not to buy) in Northampton to ensure you get the best from your investment.