Boston Property Owners Reap

£5,208 Yearly Gains Since 2001

 

As we are now nicely into 2024, it's certain the Boston housing market over the last 18 months has been a little more restrained than 2020, 2021 and early 2022, and I believe that the ‘steady as she goes’ outlook will continue into the rest of 2024 and beyond.

 

As property ownership is a medium to long-term investment, it is important to see what has happened to Boston house prices.

 

Since the start of the Millennium (Jan 2001), the average Boston homeowner has seen their property’s value rise by an average of 221%.

 

This is important as house prices are a national obsession and tied into the health of the UK economy as a whole. Most of that gain has come from the overall growth in Boston property values, while some of it will have been enhanced by extending, modernising, or developing their home.

Taking a look at the different types of property in Boston and the profit made by each type, it makes interesting reading:

·         Overall Average for All Homes in Boston. The average price of all homes in Boston in 2001 was £55,818. Now it's 2024, and it has risen to £175,594. This is a total profit of £119,776 (which is £5,208 profit per year per home or an annual growth of 9.6% per year).

 

·         Apartments in Boston. The average price of an apartment in Boston in 2001 was £20,957. Now it's 2024, and it has risen to £87,561. This is a total profit of £66,604 (which is £2,896 profit per year per home or an annual growth of 14.2% per year).

 

·         Terraced/Town Houses in Boston. The average price of a terraced/town house in Boston in 2001 was £36,006. Now it's 2024, and it has risen to £109,490. This is a total profit of £73,484 (which is £3,195 profit per year per home or an annual growth of 8.9% per year).

 

·         Semi-Detached Homes in Boston. The average price of a semi-detached home in Boston in 2001 was £42,136. Now it's 2024, and it has risen to £184,213. This is a total profit of £142,077 (which is £6,177 profit per year per home or an annual growth of 14.8% per year).

 

·         Detached Homes in Boston. The average price of a detached home in Boston in 2001 was £90,721. Now it's 2024, and it has risen to £255,796. This is a total profit of £165,075 (which is £7,177 profit per year per home or an annual growth of 7.9% per year).

 

However, we can’t forget there has been 79% inflation over those 23 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2001, the true ‘spending power’ of that profit has been lower.

 

·         Overall Average for All Homes in Boston. The total 'real profit' (i.e., after inflation has been removed) for the average Boston home is £66,653 for the last 23 years. This equates to £2,898 'real' profit per annum.

 

·         Boston Apartments. The total 'real profit' (i.e., after inflation has been removed) for the average Boston apartment is £37,064 for the last 23 years. This equates to £1,611 'real' profit per annum.

 

·         Boston Terraced/Town Houses. The total 'real profit' (i.e., after inflation has been removed) for the average Boston terraced/town home is £40,893 for the last 23 years. This equates to £1,778 'real' profit per annum.

 

·         Boston Semi-Detached Homes. The total 'real profit' (i.e., after inflation has been removed) for the average Boston semi-detached home is £79,063 for the last 23 years. This equates to £3,437 'real' profit per annum.

 

·         Boston Detached Homes. The total 'real profit' (i.e., after inflation has been removed) for the average Boston detached home is £91,861 for last 23 years. This equates to £3,994 'real' profit per annum.

 

Thus, the annual profit for an average Boston home,

adjusted for inflation, stands at £2,898.

 

I wanted to illustrate that despite the 2008/09 Credit Crunch property market crash, which saw Boston property values plummet by 15% to 20% over 18 months, homeowners in Boston have still fared better over the long term than those renting.

 

Looking ahead, a common question I get asked is about the

future trajectory of the Boston property market.

 

The primary influence on maintaining house price growth in Boston over the medium to long term will be the construction of new homes locally and nationally. Although we have yet to get the figures for 2023, government sources indicate that the number of new households is expected to be between 210,000 and 220,000. Considering the annual need is for 300,000 new households to meet demands arising from factors such as immigration, increased life expectancy, higher divorce rates, and later cohabitation, it’s clear that demand will continue to outstrip supply unless the government heavily invests in building council houses.

 

This can only be good news for Boston homeowners.

 

What about Boston landlords, though?

 

Even though the number of landlords liquidating their property portfolios has increased in the last couple of years and the number of landlords buying is lower than in the 2000s and 2010s, there is still net growth in the size of the private rented sector each year. This is all despite facing higher taxes. The simple fact is many Boston landlords remain keen on expanding their portfolios in the long term.

 

The younger generation in Boston views renting as a choice that offers flexibility and alternatives that homeownership does not provide. This means that demand for rentals will keep growing, allowing landlords to enjoy rising rents and capital appreciation. However, Boston buy-to-let landlords must adopt more thoughtful strategies to maintain profitable returns from their investments.

 

As a Boston buy-to-let landlord, the question for you is how to

ensure this growth continues.

 

Since the 1990s, generating profits from buy-to-let property investments was straightforward. Moving forward, with changes in the tax laws and the balance of power, achieving similar returns will be more effortful. Over the past decade, I've observed the evolution of agents from mere rent collectors to strategic portfolio managers. I, along with a select few agents in Boston, am adept at providing comprehensive, strategic portfolio leadership. This service offers a structured overview of your investment goals across short, medium, and long-term horizons, focusing on your expected returns, yields, and capital growth. If you seek such advice, feel free to contact your current agent or me directly at no cost or obligation.