Saturday, 31 December 2016

Grantham Housing Crisis? Only 2.2% of Grantham Homes Are For Sale

The Grantham Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual after the summer break.

The challenge every Grantham property buyer has faced over the last few years is a lack of choice – there simply hasn't been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Grantham, the market is likely to see upward pressure on property values continue.

For example, in the last month or so, NG31 has seen an average of 108 new properties coming on to the market, not bad when you consider for some months last year, it was as low as the early 60’s. With the average Grantham property value hitting a record high, reaching almost £202,100 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller' average property figure.

As I write this article, 2.26% of Grantham properties are up for sale. In terms of actual chimney pots, that equates to 330 properties on the market in Grantham (within 2 miles of the centre of Grantham) – which, when compared to only a year ago when that figure stood at 328, so not much has changed in the number of properties available to buy. Split down into the type of property, it makes even more fascinating reading...
·      Detached Properties in Grantham  - 140 on the market a year ago compared to 107 on the market now – a decrease of 24%
·      Semi Detached Properties in Grantham - 69 on the market a year ago compared to 75 on the market now - an increase of 9%
·      Terraced Properties in Grantham - 60 on the market a year ago compared to 80 on the market now - an increase of 33%
·      Flats / Apartments Properties in Grantham  - 49 on the market a year ago compared to 55 on the market now - an increase of 12%

This is evidence of strength in the Grantham housing market that many didn't expect. Many believed that the Grantham property market wasn't going to be strong enough post Brexit - as what was a sellers' market before the Brexit vote and Buyers' market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

However, all this will mean property values won't continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This won't be down to Brexit but a re-balancing of the Grantham Property Market – which is good news for everyone.

Thursday, 15 December 2016

Private Renting set to grow by 1,410 Grantham households by 2025

I was having a most interesting chat the other day with a Grantham landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Grantham, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the Grantham Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Grantham.

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Grantham? The fact is, as a country, we are facing a precarious rental shortage and need to get Grantham building in a way that benefits a cross-section of Grantham society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 17,900 households in Grantham, currently 7,500 tenants live in 3,410 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Grantham needs to rise by 1,410 (i.e. 42.8%) .. taking the total number of rented properties in the city to 4,820.

That means Grantham landlords need to buy around 200 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 3,200 people will want to live in all those 'additional' Grantham rental properties – so why is the government penalising landlords?

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Grantham house prices, the majority of new Grantham households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Grantham society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.