East
Midlands property asking prices jumped by more than £4,000 to £177,100 in
February according to Rightmove, an increase of 2.3% from January and 4.7%
higher than a year ago. After the traditionally quiet months of January and
February, the property market has started to warm up, but talking to some Grantham
Estate Agents, they are reporting their lowest ever stocks of quality property
for sale. However, asking prices have no relation to what property sells for
(ie their REAL value), is the issue a lack of supply?
Putting
aside Grantham’s continual housing supply shortage, (we only built 1,666
properties in the last decade but the population of Grantham grew by 2,121), this
is now, according to some people, being exaggerated by an increase in homes
being owned by buy to let investors, who tend to be buying a property as part
of a long term pension plan and are more likely to keep it for longer than an
owner occupier would. I have also seen unwillingness among homeowners looking
to move, to put their own property on
the market as they can find few suitable properties to make it worth their
while going through the whole moving process.
Talking to
some Grantham landlords only last week, I said that I believe this is the new
norm in the Grantham property market, and is the consequence of over 35 years
of not enough homes being built to meet the escalating growth in household
numbers, resulting in a lack of quality homes for sale in many popular areas of
Grantham.
When one
looks at the historic data, in November 2007 there were 1,017 properties on the
market in Grantham compared to today’s 391. Should we be worried? Well in October 2010 there were only 483 properties
for sale in Grantham but seven months later in May 2011, this had jumped to 913
properties, for it to drop to 361 properties in January 2014. The number of
properties on the market is a cyclical thing in Grantham, it always has been
and always will be. As we go into the Spring of 2015, the number of new
properties coming onto the market will increase ... just as the daffodils will
flower.
So are
landlords to blame? Well, on one side of the coin, yes they are. If they buy a
property to rent out, that means someone can’t buy it to live in. However, it
doesn’t matter if someone wants to live in a property if they can’t afford the
deposit and upkeep .. and the youngsters of Grantham still need a roof over
their head. So on the other side of the coin, if the Council aren’t building any
properties and people can’t afford the large deposit for the mortgage, then Grantham
landlords have stepped in and bought property to rent out to them. Grantham
landlords have bought 1,636 properties over the last decade (investing
approximately £242.8 million buying those Grantham rental properties), meaning
there were at the last count, 6,178 Grantham properties being privately rented
out to tenants. Grantham tenants are in fact getting a good deal as well, as
average rents in Grantham are 4.5% below where they were seven years ago. That
sounds like a win-win situation for everyone to me. Stop blaming landlords and
start building more properties in Grantham .. that is the only answer.
In the
meantime, the demand from Grantham tenants for Grantham property is only set to
rise over the coming years. If you want some advice and opinion on where (or
not) to buy, please email on christopher@christopherwatkin.co.uk
