Northampton’s £10.72 Billion Inheritance from Baby Boomers Won't Save Gen X and Millennials

 

Many Northampton people I talk to in their late 30s to late 40s are relying on the inheritance from their Baby boomer generation parents to help them in their home buying and retirement future.

It is true there is £2 trillion (£2,040,861,524,790 to be exact give or take a few pennies) tied up in equity in the property of everyone in the UK who is aged 65 years and older (to add context to that the NHS costs £181bn per year, well under a tenth of the equity tied up in property).

With additional investments in stocks and shares including buy-to-let properties of around £2 trillion to £3 trillion, it is estimated there is a total of between £4 trillion and £5 trillion that will be inherited in the next two decades from Baby Boomers (born between 1946 and 1964) to both Generation X (born 1965 to 1980) and in some part Millennials (born 1981 to 2000).

This financial realignment, already in motion, is expected to unfold over the next few decades, reshaping the economic landscape for many and offering a glimmer of hope to younger generations facing many financial uncertainties.

The narrative surrounding this monumental transfer of wealth has captured the media's attention, not only due to the staggering magnitude of the figures involved but also because of the potential implications for the financial well-being of younger generations.

 

Many Northampton Generation X and Millennials have navigated a turbulent economic landscape marred by skyrocketing student loan debt, escalating living expenses, and a series of economic downturns, including the Global Financial Crash. 

These challenges have cast a shadow of financial insecurity over this group of people, leaving many to question their prospects for achieving a stable and secure retirement.

So how much equity is tied up in homes locally? Looking at numbers for our Local Authority.

 

West Northamptonshire Baby Boomers own 33,882 homes outright, worth £9,746,055,654 with a further 3,369 homes with a small mortgage on it, worth an additional £969,082,743 (an impressive £10.72 billion in West Northamptonshire alone)

 

 

Despite the allure of this impending wealth transfer, the reality is more nuanced and complex.

A considerable portion of this equity is poised to circulate within already well-off property-owning families. This stark reality serves as a sobering reminder of the wealth disparity that characterises the current economic landscape, tempering expectations of a widespread windfall.

Adding another layer of complexity to this scenario is the looming spectre of healthcare costs for the ageing Baby Boomer population. According to Age UK, on average, it costs around £800 a week for a place in a care home and £1,078 a week for a place in a nursing home. The exorbitant expenses associated with elderly care, including long-term care facilities and home health aides, pose a significant threat to depleting the savings (and equity) of many Baby Boomers, potentially leaving little to be passed on to their heirs.

 

This predicament underscores the precariousness of relying on inheritance as a financial safety net.

 

The Northampton Baby Boomer generation, having reaped the benefits of significant economic growth and wealth accumulation opportunities, particularly in their property and stock market investments, now faces the daunting challenge of ensuring financial resilience in the face of escalating care home and healthcare costs. The dream of bequeathing a substantial inheritance to the next generations may be at risk, as the financial burdens of healthcare threaten to consume a significant portion of their accumulated wealth.

As the nation grapples with an aging demographic and the accompanying financial challenges, the narrative surrounding this wealth transfer necessitates a closer examination, calling for a more nuanced understanding of the interplay between wealth, healthcare, and intergenerational equity.

 

Moreover, younger generations' reliance on inheritance as a means of financial security highlights a deeper systemic issue within the economy.

 

The challenges Northampton Gen X and Millennials face, from the burden of student loans to the volatility of the job market, underscore the need for structural reforms that empower individuals to build financial stability independent of familial wealth.

 

My final thoughts on this are that while a generational wealth transfer narrative offers a compelling vision of financial redemption for Northampton’s younger generations, the reality is fraught with complexities and challenges. Wealth inequality, rising care home costs, and systemic economic barriers necessitate a comprehensive and multifaceted approach to fostering financial security and equity across generations. Every generation needs to take its own personal responsibility regarding their existing housing and living needs and their future retirement needs.

As we navigate this pivotal moment in our country’s history, we must engage in thoughtful dialogue and policy-making that address these critical issues, ensuring a more prosperous and equitable future for all.

Do share your thoughts on the matter with a comment.

 

P.S. Not all is lost for you older Millennials or Generation Y-ers (those born after 2000), as you will inherit an additional £3.4 trillion in equity owned by the Gen X-ers (those born between 1965 and 1980). Yet how much locally?

 

West Northamptonshire Gen X-ers own 15,879 homes outright, worth  £4,567,546,713 with a further 21,274 homes with a mortgage on it, worth £6,119,402,278 (an equally impressive £10.69 billion in West Northamptonshire alone).

 

Average Rents in UK Regions 2024

 

In the lively tapestry of our UK property market, each region stitches its own colourful thread, offering a fascinating snapshot of our nation's diversity – especially when it comes to the average rent prices. In 2024, it's London that's still dancing to its own fast-paced rhythm with an eye-watering average rent of £2,872 per month – a figure that, let's be honest, has most of us gasping!

Not too far off, the South East is keeping up with £1,581 per month, perhaps riding on the coattails of the capital’s vibrancy. And then there’s East Anglia and the South West, holding their own at £1,359 and £1,372 per month respectively, proving that their mix of city life and rural retreats continues to woo tenants.

Now, if your wallet's feeling a bit shy, look towards the North East, which is boasting a rather lower average rent of just £867 per month. Yorkshire and the Humber aren’t far behind, tempting with an average of £957 per month – quite a bargain for the beauty and community spirit they offer.

Wales and East & West Midlands are nestled comfortably in the middle, with £1,035, £1,082 and £1,011 per month respectively. It’s like they’re saying, “We’ve got balance just right.” And let's not overlook Scotland and the North West, with their reasonable £1,046 and £1,018 per month– solid choices for those looking for a blend of tradition and modern living.

So, whether I'm chatting with fellow Northampton locals or casting an eye across the wider Country, it's clear that understanding these varied patches of the property quilt helps us all – whether we’re letting, renting, or simply contemplating this dynamic market. 

It’s not just about knowing the figures; it’s about understanding the stories they tell us.  If you are a Northampton landlord or home owner and are interested in what’s happening, both in the Northampton property market yet also regionally and nationally, then follow my posts on social media, where I give regular property market updates.

Current living trends in Northampton

 

In the ever-evolving landscape of the Northampton property market, understanding the demographics of occupancy rates is pivotal for both buyers and sellers. 

As a Northampton estate agent, I’ve published this heat map from the Office of National Statistics to shed light on the distribution of single-occupant homes across various areas of Northampton from the Census in 2021, providing a unique insight into the current living trends within our community. 

This visualisation, using publicly available information, is particularly invaluable for potential buyers seeking neighbourhoods that resonate with their lifestyle preferences, be it the quietude of a predominantly single-occupant area or the vibrancy of a more diverse community. For Northampton sellers, this map offers a strategic understanding of their property's positioning, potentially attracting the right demographic.  

Moreover, this information can guide developers and buy-to-let Northampton investors in making informed decisions about future projects, ensuring they cater to the evolving needs of residents. By presenting this heatmap, we at Belvoir Northampton aim to empower our clients with comprehensive data, fostering informed decisions in the Northampton property market.

 

 

41 Days to Sell a Property in Northampton

 

Whether you are a Northampton landlord looking to liquidate your buy-to-let investment or a Northampton homeowner looking to sell your home, finding a buyer and then getting the legal work done can take a frustratingly long time.

It is a step-by-step process that can take many months.

One of the worst parts of house selling is not knowing how long you might be stuck at each step. Independent research shows that, in the last 12 months, every estate agent in the UK has taken on average, 67 days from the property coming on the market to be sold subject to contract (STC) and then 113 days to get to completion. That's nearly 26 weeks from the board going up.

The journey is a long one and not guaranteed. Nationally, only 52.8% of UK homeowners who placed their homes on the market in 2023 sold and moved.

Therefore, I will explain each stage of the house-selling procedure in Northampton in this article.

 

Stage 1 – Find Your Buyer

You need to instruct an estate agent (of course, we can help you with that) who will discuss a pricing and marketing strategy to help you find a buyer who fits your circumstances.

 

Independent data states that, in the last three months, it has taken an average of 41 days for a Northampton home to agree to a sale (i.e., sold STC)

 

Yet, as I have stated in my other recent articles, the Northampton property market is like a fly's eye, split into many little micro markets. 

Looking at that independent research (which only focused on Northampton), it was thought-provoking to see how the different price levels (i.e. those different micro markets) are currently performing when we consider the average number of days it takes to find a buyer for a property in Northampton.

Average time to find a buyer in Northampton for sales agreed (SSTC) in the last 3 months (Northampton centre plus a 5-mile radius).

 

·       Under £100k - 51 days

·       £100k to £200k - 39 days

·       £200k to £300k - 41 days

·       £300k to £400k - 38 days

·       £400k to £500k - 39 days

·       £500,000 to £1m - 126 days

·       over £1m - -

 

Then, I looked at the same data and calculated which price band had the highest proportion of properties sold (stc).

 

·       Under £100k - 32 sales agreed (SSTC) - 2.89% of the properties Sold STC in Northampton in the last 3 months

·       £100k to £200k - 246 sales agreed (SSTC) - 22.22% of the properties Sold STC in Northampton in the last 3 months

·       £200k to £300k - 458 sales agreed (SSTC) - 41.37% of the properties Sold STC in Northampton in the last 3 months

·       £300k to £400k - 209 sales agreed (SSTC) - 18.88% of the properties Sold STC in Northampton in the last 3 months

·       £400k to £500k - 92 sales agreed (SSTC) - 8.31% of the properties Sold STC in Northampton in the last 3 months

·       £500,000 to £1m - 70 sales agreed (SSTC) - 6.32% of the properties Sold STC in Northampton in the last 3 months

·       over £1m - 0 sales agreed (SSTC) - 0.00% of the properties Sold STC in Northampton in the last 3 months

 

 

 

So, now you have secured a buyer. What is next?

Selling your property in Northampton involves a variety of typical issues and the involvement of a wide and varied range of professionals. 

That means huge differences exist in how long it takes from one Northampton property to another.

 

Stage 2  - Instruct Solicitors (and Mortgage)

Again, we can suggest the best solicitors to sell your Northampton home. As the home seller, your solicitor will prepare your home's initial legal paperwork (with your help) and then send it to your buyer.

 

Stage 3 – Legal Work and Survey

Once your buyer's solicitor receives the paperwork, they apply for local searches from the local authority/land registry (to ensure no roads or airports, etc., are being built in the back garden!). These searches can take several weeks to be returned to the buyer’s solicitor from the local authority/land registry, from which questions will be raised by the buyer’s solicitor to your solicitor. At the same time, the surveyor will check the property to ensure it is structurally sound and worth the purchase price.

 

Stage 4 – Exchange of Contracts

Assuming all the mortgage, survey, and legal work is without any issues, both buyer and seller sign contracts, and the solicitors then perform an "Exchange of Contracts". When contracts are exchanged, the buyer pays a non-returnable deposit, and now both buyer and seller are legally tied in. YET, hold on—we aren't there yet!

 

Stage 5 – Completion

Completion is when the money and keys are handed over. It usually happens a week to a fortnight after the exchange of contracts (yet since lockdown, it can happen at the same time as the exchange of contracts). In essence, the buyer’s solicitor sends the purchase money to the seller’s solicitor, and once that money arrives, the keys will be given to the buyer.

 

In Northampton, it currently takes 116 days from instructing solicitors (Stage 2) to completion (Stage 5)

 

… compared to 113 days nationally.

 

To conclude, you are looking at a good five to six months from putting the for-sale board up to moving out.

If you are thinking of selling your Northampton home or if you are a Northampton landlord wanting to sell your buy-to-let property (with tenants in) and you want an informal, no-obligation chat to ensure you get a decent price with minimal fuss, drop me a message or pick up the phone.

 

House Sales March 2024 versus March 2023

 

This informative graphic illustrates the buoyancy of the property market across the United Kingdom for the early part of 2024, specifically from the 1st of January to the 16th of March, compared to the same period in 2023. 

Over that time frame, there has been a 19.4% increase in UK house sales agreed from 203,254 in 2023 to 242,803 in 2024.

This uplift has been across all regions, with the most significant rise in London, showcasing a remarkable 24.6% increase, which could reflect a strong economic recovery post-pandemic or possibly the effects of changing housing needs as remote work continue to influence homebuyer preferences.

The South East and East Anglia regions also saw substantial growth, with increases of 22.4% and 21.3% respectively, suggesting a continued trend of desirability for these areas, possibly driven by their relative proximity to London while offering more space and value for money. This could also be indicative of the 'ripple effect', where the heat of the London market spreads to surrounding regions.

Notably, the North has witnessed a healthy surge, with Yorkshire & the Humber at 19.6% and the North West at 18.9% and North East at 16.7%, hinting at a decentralisation of market activity, possibly due to buyers seeking more affordable options or the rise of regional economic hubs.

The South West, Midlands (both West and East), show parallel trends with increases of 18.2%, 18.5% and 18.9% respectively, which might reflect regional developments and investments in infrastructure making these areas more attractive to buyers.

Even regions with smaller growth, such as Wales, Northern Ireland & Scotland, with 16.1%, 14% and 13.2% increases respectively, are seeing positive movement, underscoring the nationwide robustness of the property market. 

This graphic represents a UK property market that is thriving post-pandemic, with a significant appetite for home purchases across the UK, likely fuelled by a combination of low-interest rates, changing lifestyle needs, and possibly government incentives.

For more local up to date statistics on the Northampton property market, follow me on social media for regular updates regarding Northampton house prices and transaction levels.

 

Northampton Property Market Review: The March 2024 Annual Update

Northampton homeowner or landlord? Curious about the trends in the Northampton’s property market? One measure is the average price paid for homes bought and sold in Northampton in the last 12 months, on a rolling month by month basis. Each month I like to share this figure, and whilst this figure alone will not tell you much, its trend will. My followers on social media know I write regular articles on the Northampton property market. It is in those articles I expand and clarify what these monthly figures mean to you.

Whether you are contemplating selling your property or simply interested in understanding its current market value, I am here to help. I provide detailed, no-obligation free valuations designed to enlighten and guide your future property related decisions.

Keep yourself informed and a step ahead in understanding the true worth of your property in Northampton. For a hassle-free, comprehensive market evaluation of your home, contact us at 01604 801 962. Let's explore the potential of your Northampton property together.

 

The Northampton Property Market Report for March 2024

 

As a practised estate and letting agent based in Northampton, I like to monitor the Northampton property market, compare it to the UK property market, and then share it with Northampton homeowners and landlords.

For February 2024, the UK property market has seen a continuation of the solid start in the first month of the year. Therefore, in this article, I want to see if that national trend mirrors or differs from the local market in Northampton.

In the first nine weeks of 2024 (up to the 3^rd March 2024), the UK property market recorded 200,823 homes sold subject to contract (stc). This figure is 11.5% higher than the first nine weeks in 2023, where only 180,748 properties were sold stc.

It gets even more interesting when I compare it with two other time frames. Firstly, the average for 2017/18/19 combined for the first nine weeks is 185,192 properties. Secondly, for the first nine weeks of 2020, when we were experiencing the 'Boris Bounce’, the number of house sales was 206,956, which is only 3% more than this year!

 

What about national house prices?

The average price of the property sold stc in the first nine weeks of 2023 was £343,690 with an average of £325/sq.ft.

In 2024, the average sale agreed price was almost identical at £348,414, yet the average pound per square foot was slightly higher at £335/sq.ft.

Such a surge in the property market demands a deeper analysis to understand the underlying factors and what they might mean for local markets, such as Northampton.

 

Key reasons why the UK property market is doing so well

Decrease in Mortgage Rates: A key driver for the heightened activity within the property mortgage industry is the drop in mortgage rates. This change has made property ownership more accessible to a broader population, increasing property sales.

Increase in Salaries: The escalation in average earnings has been pivotal, too. With increased income, people are more likely to invest in property, which is considered a stable and profitable investment.

Increase in Rents: The average rent in the last two years in the UK has gone from £1,405 per calendar month to £1,797 per calendar month, making it cheaper to buy than rent on many occasions.

Low Unemployment Figures: A robust employment market coupled with low unemployment figures has boosted confidence among individuals, prompting them to undertake significant life choices like purchasing a house.

Other Influences: Additional elements also contribute, including shifts in demographic trends, changes in housing preferences following the pandemic, and government policies that might have encouraged the buying of properties.

 

Northampton’s property market: A comparison

Now, I turn my attention to Northampton. Understanding that local markets can behave differently from national trends is vital. (Northampton being NN1-NN7).

In the first nine weeks of 2023 in the Northampton area, there were 858 sales agreed (sold stc), and in comparison, in the first nine weeks of 2024, there were 1,066 sales agreed in the Northampton area (sold stc).

This is a 24.2% increase in

Northampton home sales year-to-date

So, it is better than the national picture, yet it is still very early in the year so things could change. Before diving deeper into this, I wanted to see what had happened in the first nine weeks of the year in the Northampton property market in 2024 and how it compared to 2023.

The average price of the property agreed on a sale (i.e. sold stc) in the first nine weeks of 2023 in Northampton was £316,124 with an average of £305/sq.ft.

In 2024, the average sale agreed price on the properties sold (stc) in the first nine weeks was £306,805, with an average of £299/sq.ft.

 

The future of the Northampton property market

Moving forward, the UK property scene in 2024 holds considerable promise. Yet, for property owners and landlords in Northampton, it's vital to grasp the intricacies of the local market. The focus should be on more than just national movements but also how these trends meld with local and regional dynamics.

As an expert, I urge all Northampton property stakeholders to seek advice tailored to their needs. Knowing the present market value of your property and the strategies for manoeuvring through the 2024 market could be crucial for well-informed decision-making.

Despite a solid kick-off to 2024 for the UK property sector, diving deep into the specifics of the Northampton market is essential to identify both opportunities and potential hurdles. I offer specialised knowledge and advice for Northampton property owners that align with our distinctive market conditions. Whether you're a homeowner contemplating a sale or a landlord considering expanding or downsizing your portfolio, a deep understanding of Northampton's property landscape is critical to strategic planning.

It is essential to recognise that the Northampton property market is ever evolving, and national trends may only sometimes directly reflect local realities. As we progress through 2024, keeping abreast of market changes and adapting accordingly will be vital for any successful property deal. I create lots of content about the Northampton property market, just like the article you are reading now, so if you want to receive them all, please contact the office, and I'll send them to you.

Should you wish to gauge your standing in the Northampton property market or have questions about potential investments, don't hesitate to reach out. I'm here to assist with my expertise and detailed understanding of Northampton's market, guiding you through these dynamic times in our local property scene.