Are landlords to blame for Burton's problematic property market?

East Midlands property asking prices jumped by more than £4,000 to £177,100 in February according to Rightmove, an increase of 2.3% from January and 4.7% higher than a year ago. After the traditionally quiet months of January and February, the property market starts to heat up, but talking to some Burton Estate Agents, they are reporting their lowest ever stocks of quality property for sale. However, asking prices have no relation to what property sells for (ie their REAL value), is the issue a lack of supply?

Putting aside Burton’s continual housing supply shortage; we only built 4,505 properties in the last decade in East Staffs BC but the population grew by 9,813, this is now, according to some people, being exaggerated by an increase in homes being owned by buy to let investors, who tend to be buying a property as part of a long term pension plan and are more likely to keep it for longer than an owner occupier would. I have also seen unwillingness among homeowners looking to move, to put their own property on the market as they can find few suitable properties to make it worth their while going through the whole moving process.

What I would say to that is that I believe this is the new norm in the Burton property market, and is the consequence of over 35 years of not enough homes being built to meet the escalating growth in household numbers, resulting in a lack of quality homes for sale in many popular areas of Burton.

When one looks at the historic data, in March 2008, there were 1014 properties on the market in Burton compared to today’s 507. Should we be worried?  Well in April 2010, there were only 381 properties for sale in Burton but eight months later in November 2010, this had jumped to 783 properties, for it to drop to 464 properties in December 2013. The number of properties on the market is a cyclical thing in Burton, it always has been and always will be. As we go into the Spring of 2015, the number of new properties coming onto the market will increase ... just as the daffodils will flower.

So are landlords to blame? Well, on one side of the coin, yes they are. If they buy a property to rent out, that means someone can’t buy it to live in. However, it doesn’t matter if someone wants to live in a property if they can’t afford the deposit and upkeep.. and the youngsters of Burton still need a roof over their head. So, on the other side of the coin, if the Council aren’t building any properties and people can’t afford the large deposit for the mortgage, then Burton landlords have stepped in and bought property to rent out to them. East Staffs and Burton landlords have bought 3,551 properties over the last decade (investing approximately £630m buying those Burton an East Staffs rental properties) and now house 14,962 Burton and East Staffs people in 6,519 Burton properties. Burton tenants are in fact getting a good deal as well, as average rents in Burton are 4.5% below they were seven years ago. That sounds like a win-win situation for everyone to me. Stop blaming landlords and start building more properties in Burton.. that is the only answer.

In the meantime, the demand from Burton tenants for Burton property is only set to rise over the coming years. If you want some advice and opinion on where to buy or not to buy, please visit our Burton office where we can discuss such matters in greater depth.