Wednesday, 17 June 2015

Fewer people are moving house in Grantham

Well the dust has settled and the General Election seems a distant memory, we can get back to a more normal property market, or that is what the London based ‘Fleet Street’ journalists would lead  you to believe.  You see I have been talking to many fellow property professionals in Grantham (solicitors, conveyancers and one the best sources of info – the chap who puts all the estate agent and letting boards up in Grantham, and all of them, every last one of them told me they didn’t see any change over April in business, compared to any other month on the lead up to the Election itself.

 I am now of the opinion that maybe in the upmarket areas of Mayfair and Chelsea, the market went into spasm with the prospect of a Labour/SNP pact with their Mansion Tax for properties over £2,000,000, but in little old Grantham and the surrounding villages, there haven’t been any properties sold above £2,000,000 mark in the last 7 years , and only three above the £1,000,000 mark. 
In a nutshell, the General Election in Grantham didn’t really have any impact on people’s confidence to buy property.  As I write this article, of 380 properties that have come on to the market in Grantham  since the 2nd of April, 141 of them have a buyer and are sold subject to contract, that’s over one in three (37.11% to be precise). 

I think that things are starting to change in the way people in Grantham (in fact the whole of the country as I talk to other agents around the UK) buy and sell property.  Back in the 1970’s, 80’s and 90’s, the norm was to buy a terraced house as soon as you left home and do it up.  Meanwhile, property prices had gone up, so you traded up to a 2 bed semi, then a 3 bed semi and repeated the process, until you found yourself in  large 4 bed detached house with a large mortgage. 

Looking into this a little deeper like I have said in previous articles Grantham people’s attitude to homeownership itself has changed over the last ten years.  The pressure for youngsters to buy when young has gone as renting, not buying, is considered the norm for 20 something’s. This isn’t just a Grantham thing, but, a national thing, as I have noticed that people buy property by trading up (or down) because they need to, not because ‘it’s what people do’.  This does means there are a lot less properties on the market compared to the last decade.

A by-product of less people moving is less people selling their property. My research shows there are a lot fewer properties each month selling in Grantham compared to the last decade.  For example, in February 2015, only 55 properties were sold in Grantham. Compare this to February 2002, and 88 properties sold and the same month in 2003, 83 properties.  I repeated the exercise on different sets of years, (comparing the same month to allow for seasonal variations) and the results were identical if not greater.   

So what does this all mean?  Demand for Grantham property isn’t flying away, but with fewer properties for sale, it means property prices are proving reasonably stable too. Stable, consistent and steady growth of property values in Grantham, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late2000’s might just be the thing that the Grantham property market needs in the long term.

For more thoughts on the Grantham Property Market .. visit the Grantham Property Market Blog

Wednesday, 10 June 2015

Grantham Property Market – Post Election Blues?

With the election now over and the stability of Downing Street secure, with David Cameron and his Blue Tories as the largest party in Westminster, in Grantham (as in the rest of the UK) average wages are beginning to grow faster than inflation. This is good news for the Grantham housing market, as some buyers may be willing or able to pay higher prices given the more certain political outlook and attractive inexpensive mortgage rates. However, sellers who think they have the upper hand due to the lack of property for sale should be aware that we should start to see an increase in the number of people putting their properties on to the market in Grantham giving buyers some extra negotiating power. 

At the last election in May 2010, there were 670 properties for sale in Grantham and by December 2010, this had risen to 763, an impressive rise of 14% in seven months. An increase in the supply of properties coming on to the market could tip the balance in the demand and supply economics seesaw, thus potentially denting prices. However, as most sellers are buyers and confidence is high, this means there will be good levels of property and buyers, well into the summer, as demand will continue to slightly outstrip supply.

Just before we leave the run up to the election, it is important to consider what the uncertainty in April did to the Grantham property market. I mentioned a few weeks ago that property values (ie what properties were actually selling for) had risen by 0.2% in March 2015. Now new data has been released from Rightmove about April’s asking prices of property in Grantham. It shows that pre-election nerves finally came home to roost in the final weeks of electioneering, with the average price of property coming to market only increasing by a very modest 0.7% (April is normally one of the best months of the year for house price growth). 

I am sure our local MP, Nicholas Boles, would agree that the biggest issue is the lack of new properties being built in Grantham. The Conservative manifesto pledged to build 200,000 discounted starter homes for first-time buyers in the next five years. For Grantham to gets its share, that would mean only 33 such properties being built in Grantham each year for the next five years, not much when you consider there are 17,944 properties in Grantham.

Housing is not a big issue for Conservative voters and because London is an increasingly Labour city where the biggest housing issues are found by a country mile, so will it remain on the ‘to do list’ but won’t get recognition it deserves. Until another political party gets back into power, nothing will seismically change in the property market, thus demand for housing will continue to outstrip supply, meaning property values will increase (good news for landlords). However, as rents tend to go up and down with tenant wages, in the long term, rents are still 4.86% lower than they were in 2008 (good news for tenants)... with renting everyone wins! 

For more thoughts on the Grantham Property Market .. visit the Grantham Property Market Blog