Is Lincoln Heading Towards a House Price Crash?

Lincoln house prices rose by 1.4% last month, according to the Land Registry.

This means the annual rate of house price growth in Lincoln has increased to 7.1%.

Looking at the national figures, many people were concerned the UK property market was overheating as spring saw annual growth of 9.9%, the highest rate of house price growth documented since June 2007 (when national house prices were rising by 10.8% p.a.). It was only a matter of a few months later the Credit Crunch hit, and the average value of a UK home plummeted from £190,032 to £154,452 in 18 months, a drop of 18.7%.

Government economic measures such as the Furlough Scheme and the Stamp Duty Holiday have so far shielded the Lincoln property market from the worst economic recession since 1709.

So, the question is, can this growth in Lincoln house prices

continue, or is this the start of a house price crash?

One thing is for sure, looking at the number of For Sale boards going up and turning to sold just as quick, shows this market is not maintainable for the long term. Most of the Lincoln people looking to move home have brought forward their home-moves from 2022/3 to this year because of the Stamp Duty Holiday and the lifestyle choice of wanting a bigger garden/office space at home.

Nonetheless, the doom-mongers in the press say there will be a second wave of house sellers that will flood the Lincoln property market in the autumn and winter when furlough ends. They believe many of the 3.4m people still on furlough will be made redundant when furlough finishes at the end of September 2021 forcing them to move home.

This was the catalyst for the house price slump in 2008/9 mentioned above, when many Lincoln homeowners dumped their homes onto the Lincoln housing market.

After all, many Lincoln homeowners lost their jobs and had

mortgages paying 6% to 7% in interest payments.

However, the devil is always in the detail. The industry groups with the highest take-up rates of furlough are the hospitality (public houses) sector, where 70% of staff are furloughed. 65% of hotel staff are furloughed, and 44% people in the creative arts and entertainment industry are furloughed. Most employees in these sectors are in their 20’s and early 30’s and are tenants, not homeowners. This is going to be more of an issue for landlords than homeowners.

And of those furloughed homeowners who do unfortunately get made redundant later in the year, looking at the last four most recent house price crashes, buyers were wrestling with significant declines in mortgage affordability. For example, back in 1988, average mortgage rates were 13.9% before that crash and in 2007 (the Credit Crunch crash) 6.5%. Whilst today, they are under 2%, meaning the mortgages are a lot more affordable, and most Lincoln homeowners who get made redundant will be able to ride out the storm better.

But surely, if Lincoln house prices are rising, won’t

Lincoln homes become unaffordable?

Well, with low-interest rates, this means Lincoln homes are still relatively affordable. In 1989, the house price to earnings ratio was 5.4 to 1 (i.e. the average house was 5.4 times the average UK salary), whilst today that stands at 8.8 to 1. It’s no wonder some people are concerned there will be a house price crash (as there was in 2008 when that ratio hit 7.5 to 1).

However, it doesn’t matter what the house price to earnings ratio is ….

it is what percentage of your income is required to pay your mortgage.

In 1989, 74.6% of your income was required to service an 80% loan to value mortgage on an average UK home (i.e. you borrowed 80% of the value of your house on a mortgage). In the 1990s that percentage dropped yet rose steadily over the next decade and a half, so by the time we got to 2008, that was an equally eye-watering figure of 61.6% of your income to service an 80% mortgage.

Today, it’s only 35.9% of your income to service an 80% mortgage because of low interest rates.

So, if the issue is not the affordability of houses, what is the problem for Lincoln homeowners?

Interest rates!

Bank of England interest rates will affect what people pay on their mortgage (higher interest rates normally mean higher mortgage payments). Interest rates are used to reduce inflation, so if inflation rises, interest rates also rise to bring inflation back under control.

UK inflation has just gone through the 2% barrier, and I believe by the end of this year or early next, it will touch 4% or 5%. In normal circumstances, this would trigger the Government (or now the Bank of England) to raise interest rates. Yet, we had a similar scenario in the late 1980s/early 1990s with a spike in inflation to 8.5% due to a shortage of raw materials and labour, but this was soon sorted out, and inflation dropped quite quickly thereafter.

In the coming year, a shortage of raw materials might be an issue. If there is a shortage of raw materials (supply problems are being found in key items such as timber, concrete, aggregates and steel), this will fuel construction and manufacturing costs upwards.

Next, will there be a shortage of labour? Some say it won’t be an issue (as unemployment will be higher), yet there are certain sectors of the economy that have an imbalance of trained staff of specialised jobs or people not wanting work in that type of job in the first place.

For example, many hospitality and dining establishments are reporting a shortage of staff because they were often filled with hard-working European migrants. I have read reports of London restaurants advertising for chefs and waiting staff, who would have received 1000+ enquiries for such jobs pre-pandemic to only be receiving applications that could be counted on two hands this summer. The hospitality and dining sector was hit harder than most, having to stop trading during the three lockdowns and working under firm restrictions. This led to the majority of staff being placed on furlough (as mentioned above, 7 in 10 are still on furlough), which has prompted some to ride out the pandemic in their own country.

The question is – will they return? If not, to entice them back restaurants will have to increase the wages they pay to attract the staff, which in turn will mean they will have to put their prices up (i.e. inflation). If businesses have to put their wages up and the cost of raw materials continues to rise, prices for everything will rise, and at this point, higher interest rates will kick in.

But how will increased interest rates affect the

Lincoln property market?

Thankfully, 91% of all new mortgages being written are fixed interest rate mortgages and 78% of all existing UK mortgages are fixed-rate (compared to 32.8% in the credit crunch) … meaning we won’t have so many houses being dumped on the housing market like we did in the Credit Crunch, because on a fixed rate mortgage if interest rates rise – mortgages don’t follow suit.

And that’s the key … unemployment combined with high-interest rates caused many Lincoln homeowners to put their property on to the market in 2008/9. Tied in with curtailed demand for property, because it was really difficult to get a mortgage (that’s why it was called the Credit Crunch) … we had an oversupply and subdued demand of Lincoln homes – causing house prices to drop by 16% to 19% depending on what type of property you owned.

So, a good bellwether and indicator on what will (or will not) happen to Lincoln property prices is the number of properties for sale at any one time.

There are only 566 properties available to buy in Lincoln today, low when compared to the 14-year average of 976 properties for sale in the city, whilst at the height of the Credit Crunch, there were 1,684 properties for sale at one point in Lincoln.

As we look to the future, if you want a crystal ball of what will happen to the Lincoln property market … you won’t go that far wrong by getting yourself on the property portals and seeing how many properties are for sale.

These are my thoughts … what are yours?

Lincoln Buy-to-Let Landlords Owed £1,615,303 in Unpaid Rent.

Rogues or Saviours?

There is no getting away from the fact that the rise in the number of buy-to-let properties in Lincoln has been nothing short of astonishing over the last twenty years. As a result, many in the press have said Britain is a broken nation, with many twenty and thirty-somethings unable to buy their first home. The press has named this group ‘Generation Rent.’

Lincoln landlords have been accused of scooping up all the smaller Lincoln properties for their buy-to-let property empires. Others blamed the Government (of both persuasions) for pouring petrol on the buy-to-let fire for giving landlords an unfair advantage with the way buy-to-let has been taxed in the past. Many have said these landlords have priced out Lincoln’s ‘Generation Rent’. Many say they are rogues, and you can see why there is little sympathy for landlords, especially as…

Lincoln landlords receive £87,708,756 a year in rent – easy money or what?

So, as we come out of lockdown, I want to make a stand for Lincoln landlords and talk about the magnificent work they have been doing during the pandemic.

Since lockdown, it has been (almost) illegal to evict a tenant from private rented property. Yet, in the last few weeks, this ‘ban on evictions’ has begun to be eased, making some commentators forecast a ‘tsunami of homelessness’ as landlords ready themselves to kick out the tenants who cannot pay their rent.

You might say they can afford it, yet I need to highlight an often-untold story in the massive numbers of Lincoln landlords who have co-operated with their Lincoln tenants to evade eviction.

The personal finances of some Lincoln landlords and tenants have been ruthlessly strained during the last 16 months — something that is going to have ramifications on the back pockets of both landlords and tenants, as well as the attraction of being a buy-to-let landlord (more of that later).

799 Lincoln tenants are in arrears with their rent

to the tune of £1,615,303.

That’s money these landlords need to pay their mortgages with and even to live off themselves.

The eviction ban was imposed in March 2020 and the Government has expected private landlords to stand the cost of their tenant’s rent if they could no longer pay. It was estimated over 1 in 5 landlords with mortgages had requested a mortgage payment holiday in 2020. Thankfully, that now stands at 1 in 100 as most Lincoln landlords with shortfalls in rent have been using their own personal savings to cover the mortgage payments.

I have seen so many landlords giving their Lincoln tenants rent breaks and discounts to help them through these times. However, most landlords I talk to acknowledge that it is better to have a tenant paying something rather than a tenant paying nothing, hoping that total rent will start flowing as the economy recovers.

Going into the pandemic, 1 in 25 Lincoln tenants were in arrears, yet that now stands at 1 in 11.

So, are we going to see lots of evictions? I would go as far as to rebuff the idea that we will see a rush to the courts of landlords to obtain possession orders now the eviction ban has been lifted. I have always viewed evictions as a last resort.  

Before the pandemic, it took about 12 months for courts to hear rental repossession cases, so this backlog will be nearer two years (if not more). Nonetheless, the threat of a County Court Judgement (CCJ) often makes tenants pay up as it will demolish their credit rating, making it particularly challenging for them to rent another home.

I feel for those Lincoln tenants under furlough or reduced hours as they have the quandary of wanting to reduce their outgoings by moving to a cheaper rental property, yet whose rental deposits will be sacrificed to cover their rent arrears. However, some have said that because house prices have exploded during the last 16 months, Lincoln landlords should write off their tenants’ arrears as a goodwill gesture.

The issue is, 1,424 Lincoln landlords only have a sole property for rent, so the arrears would have to be funded by their personal savings.

For them, the pandemic experience could be the incentive to sell up for good.

A National Residential Landlords Association survey found around a third of all landlords were now more likely to sell their buy-to-let properties altogether or sell some of them. This would mean fewer properties for tenants to rent, thus driving up the rent.

According to government and industry data, evidence suggests that a tenant who rents a property directly through a landlord and not through a letting agent is between two and three times more likely to go into arrears of 2 months or more. Is this because tenants know that private landlords who advertise directly for tenants on Gumtree and other platforms don’t carry out the checks letting agents do on them?

Many of those landlords are switching the management of their property to an agent, and for those landlords sticking with self-management of their property, there is circumstantial evidence they are starting to become a lot pickier when starting new tenancies. Even though illegal, spurning tenants on benefits is woefully all too common. I also worry there could be a stigma about renting properties to self-employed people because of the erratic nature of their income.

Looking into the future, I envisage a growth in the use of ‘rent guarantor contracts’, whereby the tenant is called upon to provide a 3rd party person to pay the rent if the tenant doesn’t. These are common for student lets and those on certain benefits, and it wouldn’t surprise me if these are used more often for self-employed tenants and regular professional lets.

That is why I believe Lincoln landlords should be celebrated … most of them have been saviours. These are my thoughts – what are yours?

How Eco-friendly are Lincoln Homes?

And how new Gov’t rules will mean draughty low-eco Lincoln homes will drop in value

‘It’s Not Easy Being Green’, was the song that Kermit sang on Sesame Street.

Yet now being green is a normal way of life for most of us. Walking or cycling places instead of taking the car, recycling and even shunning meat are some of the things most Lincoln households are trying to do their ‘bit’ for going green.

Our conduct may have improved but when it comes to our Lincoln homes, there is still a long way to go. It is estimated around a fifth of carbon emissions come from home energy usage (nearly three quarters from heating and lighting). The country is releasing 37% less carbon into the atmosphere than in 1990, yet we have legally binding targets to hit 100% by 2050 — and the Committee on Climate Change has stated the UK will need to eradicate greenhouse gas emissions from homes to meet that target.

Landlords were hit first because since April 2018, the Minimum Energy Efficiency Standards (MEES) regulations with regards to eco-friendliness of the rental properties have required all rental properties to have a minimum Energy Performance Certificate (EPC) rating of ‘E’ or above otherwise it is illegal to let out a property, bar a couple of exceptions. This has meant Lincoln landlords have had to spend many thousands of pounds to improve their rental property’s EPC rating (an EPC rating ofA’ being the best eco rating through to a ‘G’ for the worst – just like washing machine or fridge ratings).

But new Government plans could hit Lincoln homeowners in the pocket as well.

The Government is planning to force banks and building societies to penalise people wanting a mortgage of draughty low-eco homes with an energy performance certificate (EPC) rating of D or lower. For those properties not hitting the correct level of EPC rating, it is suggested some form of levy will be placed on the mortgage provider, who in turn will pass that on to the home buyers in the form of higher mortgage payments. Some are describing this charge as an ‘eco-mortgage levy’.

Just over 6 in 10 (62.6%) homes in Lincoln would be hit by this ‘eco-mortgage levy’, thus potentially reducing the value of those homes

Interesting when you compare this with the national average of 60.6%.

In real numbers, 32,854 homeowners and landlords in our local authority area would either struggle to get a mortgage from a bank or building society or it would cost them more because they were a ‘D’ rating on their EPC or below.

Looking at the stats broken down for Lincoln

  • 43 properties are classified as A on the EPC register
  • 3,487 properties are classified as B on the EPC register
  • 11,764 properties are classified as C on the EPC register
  • 15,398 properties are classified as D on the EPC register
  • 5,780 properties are classified as E on the EPC register
  • 1,186 properties are classified as F on the EPC register
  • 252 properties are classified as G on the EPC register

So, what can Lincoln homeowners and landlords do to improve their EPC rating?

Well surprisingly, it need not cost a lot to improve the EPC rating of your Lincoln home. One of the most inexpensive ways to help improve your Lincoln home’s energy efficiency is low energy light bulbs with an estimated cost of just under £40 per UK property. Other efficiencies can be gained by insulating your hot water cylinder, draught proofing any single glazed windows, increasing your loft insulation, and upgrading your central heating controls, all of which can be done for a total of around £750 to £850 per property.

If you want to know the EPC rating of your home, either google the phrase ‘EPC register’ or send me a message and I will find out for you.

Finally, as Kermit famously also said, “Life’s like a movie. Write your own ending”. If you are a Lincoln homeowner or Lincoln landlord, why not look at your property’s EPC rating and look at the recommendations. You are going to have to spend the money sometime, so why not do it now and enjoy lower energy bills and when you come to sell, you won’t be penalised .. a win-win situation for you and the planet?

Your Great-Great Lincoln Grandfather Would Have Only Paid £269 8s 9½d for his Lincoln Home in 1871

Would it surprise you even more when I said the ratio of house prices to wages are still lower today when compared to 1871?  Yes, you read that correctly, as a proportion of average wages British house prices are 17.6% proportionally cheaper today than they were in 1871.

I wish to talk about the last 150 years of the British property market and later in the article, the Lincoln property market. I will also touch on why, before the 1900s, buying a home in Lincoln was considerably more expensive than today and why that changed.

So, let’s look at some interesting stats to get us started :

– In 1871, each house was occupied by an average of 5.33 people (i.e. for every 100 houses, 533 people lived in them), whilst today that stands at 2.39 people per house.

– In 1871, there were 4.5 million properties in the UK, whilst today that stands at 27.9 million

– In 1871, the weekly average wage was 13s 8½d (68p) whilst today it is £585.50

– In 1871, only 20% of people owned their own home, whilst today its stands at 65%

I stated in the first part of the article it was more expensive to buy in the latter parts of the 19th Century than today. It may only be of historical interest, but back in 1871, the ratio of average house prices to average wages was 10.5 to 1 (i.e. the average house was worth ten and half times the average person’s wage), whilst today it stands at 8.8 to 1.

Interestingly, for the next 45 years, that ratio went on a downward trend relative to wages and only stopped falling after WW1, where the average house was worth only 2.2 times the average wage. This made houses more affordable and set the foundations for the homeowning passion we Brits have today.

So why did this happen, what can we learn from it and what does it mean for Lincoln homeowners and Lincoln landlords?

There are three significant drivers that made property a lot more affordable between 1871 and 1911: the Victorians built more property, made them smaller and people’s wages rose significantly.

– In the 40 years between 1871 and 1911, the number of properties in the UK rose from 4.5 million to 8.9 million. To give you some perspective, there were 18 million properties in the UK in 1981. If the UK had grown by the same rate between 1981 and today that was experienced between 1871 and 1911, there would be 35.6 million households in the UK (and not the 27.9 million mentioned above).

– In 1871, the average plot size of a property was 0.23 acres, yet by 1911, that was down to 0.06 acres (or a plot of 72ft by 40ft). This came about from building smaller types of property (i.e. a change away from larger Georgian detached houses towards the infamous rows of Victorian terraces), and a downshift in the average size of houses within each category.

– The average value of property dropped by 26% between 1871 and 1911, whilst wages rose by 85% over the same period.

So, by 1911, the average Lincoln property had dropped in value from £269 in 1871 to £200.

N.B. – you might have noticed I wrote £269 in a slightly different way in the title of the article. Up to 1971, a pound was split not into 100 pence but 240 pence. There were 12 pence in a shilling and 20 shillings (or 240 pence) in a pound. It was expressed in the form £ s d and spoken as “pounds, shillings and pence”. I dropped that into the title as it’s the 50th anniversary this year of when the UK decimalised its currency (younger readers – do google the story – it’s a fascinating topic).

So back to the property market and at the end of WW1, four in five people still rented, virtually all from private landlords. Politicians were concerned about the poor living standards of people’s homes, and this led to the ‘homes fit for heroes’ 1919 Housing Act which delivered subsidies for local councils to build council houses. The average value of a Lincoln property in 1922 was £315.

The 1930s – By 1930, the average value of a Lincoln property stood at £397. With the country building a third of a million houses per annum, interest rates fixed at 2% and hardly any planning regulations, supply of property was outstripping demand, so the average Lincoln home dropped ever so slightly in value to £367 by 1938.

The 1940s – With the bombing of many towns and cities and housebuilding being stopped because of the war, this created a perfect storm to increase house prices after the war. By 1947, the average Lincoln home had risen in value to £1,228 because just as food was rationed during and after the war, so were building materials. Builders could spend no more than £350 on building materials for a new home (and that lasted until 1954).

The 1950s – The ’50s were all about building council houses – a quarter of a million of them each year. By 1959, the average Lincoln home had risen steadily to £1,704.

The 1960s – This decade saw even more houses being built in the UK, with an average of a third of a million houses a year being built. Lincoln is full of 1960’s council houses and now even more owner-occupied housing, meaning by the end of the decade Britain had as many homeowners as renters. The average Lincoln house had risen in value to £3,126 by 1969.

The 1970s – We experienced the first boom and bust housing bubble in the early 1970s with house prices rising by over 30% a year in the early years of the decade (so the current 10% a year is child’s play!) but prices dropped in 1974. They recovered quickly in the following years, not because of increased demand but due to hyperinflation, making the average Lincoln house price rise to £15,894 by 1980.

The 1980s – This was the decade of council tenants being able to buy their own homes, although few people know it was an idea from Labour. They decided against the idea, but it was seized upon by the Tories, who made it the cornerstone of their 1979 election manifesto. The property market helped improve the economy, and by 1988, Lincoln property values increased to £33,246 (only to drop by 32% a couple of years later).

The 1990s – The housing market crash of the early 1990s was painful for all, exacerbated by mortgage interest rates being raised to 15% on Black Wednesday (16 September 1992) and left there for 12 months. Unemployment went from 1.5m to 3m for the second time in ten years, and many of those homeowners who had taken out large mortgages in the late 1980s housing boom could no longer afford the repayments because of the high interest rates, meaning repossessions went through the roof. The crash also made builders nervous, and they only built 150,000 houses on average a year in this decade. Yet, by the mid-1990s, things started to improve. So much so, the average Lincoln home was worth £62,322 by the turn of the millennium.

The 2000s – The decade of cheap mortgages and the rise of buy-to-let, together with a severe drop in the number of new homes being built, contributed to the UK’s third big housing bubble since WW2. The average Lincoln house price more than doubled to £166,894 by 2008, before the Credit Crunch brought the boom to an end, and a year later (2009), the average Lincoln property had dropped to £148,235.

The 2010s – The property market started to come back to life in the early 2010s with property values steadily rising throughout the decade, yet builders were only building around 135,000 new homes a year. It also might surprise you that by 2015/6, the number of homeowners was starting to rise quite significantly, meaning today, as we enter the 2020s decade, the average value of a Lincoln property now stands at £212,235.

So, now we are back to 2021.

Yes, your Great-Great-Grandfather might have been able to buy their Lincoln house for a shade over £269 in 1871. Taking inflation into account since 1871, that same Lincoln house today would be £32,455.92 yet if his wages had increased by inflation at the same rate, the average wage today would be £81.91 per week, not the current £585.50 per week.

I appreciate there are plenty of other factors involved with this topic, such as the cost of renting, raising a deposit, changing lifestyles and the biggest point, the cost of borrowing money on a mortgage.

All this begs the question, what does the future hold for the Lincoln property market?

It’s obvious since the mid-1980s, house prices have sustained a period of impressive growth (even withstanding a couple of property crashes). The Bank of England has gone on record to say that much of the rise in average house values, comparative to wages, between 1985 and now can be seen because of a sustained, dramatic, and consistently unexpected decline in real interest rates and additionally concludes that: ‘An unexpected and persistent increase in the medium-term real interest rates will generate a fall in real house prices.’

Cheap mortgages and a lack of building have created this situation. So as long as interest rates don’t go back to their long-term average of the 5% to 7% range, or the Government decides to increase building new homes to half a million a year (from the current 240,000 per year) … things will carry on as they are in the medium to long-term.

These are my thoughts … I would love to hear any stories of your family buying property in the late 19th Century or early 20th Century and what they paid for it, together with the affordability of Lincoln property and the future of it.

Demand v Supply

Now is a great time to sell your home as there is a huge shortage of properties available for sale, and house prices are higher than ever.


Housing market demand is up 28.6% yet listed properties to buy are down 20.8% (YTD vs 2020, Zoopla). This is putting upward pressure on house prices, with Nationwide reporting a 10.9% annual increase.


68% of homeowners surveyed at the end of April who were either moving home or considering a move, said this would have been the case even if the stamp duty holiday had not been extended (Nationwide).


As the race for space continues, housing market demand is likely to be maintained, despite the stamp duty deadline.

Source: Dataloft, Zoopla, Nationwide