Despite the UK economy heading in the right direction with
record low mortgage rates and unemployment
figures dropping, the rate of
property prices rising in Grantham have tempered since the start of the year.
This slow but sure downward trend in the rate of growth has been in evidence
since mid-2014. Property value increases
continue to outpace the growth in salaries, however the gap is closing, helped
by a lift in salaries over the last 6 months. Property values in the East
Midlands region as a whole are 2.9% higher than a year ago. Compare this to the neighbouring regions of
the West Midlands at 3.5% higher and Yorkshire at 1.1%, the majority of the
country continue to see annual house price gains - the exception being Wales
which recorded a slight decline of
-0.6%.
Even with the tempering in house price inflation, it does
not necessarily change my outlook that property prices are likely to be firmer
over the second half of 2015 amid heightening activity in the Grantham property
market. As stated in a previous article,
there is a current shortage of properties on the market, restricting supply,
which in turn will provide stability and support to Grantham property prices.
Therefore, my overall opinion is that Grantham property prices will rise by 5%
over 2015 and roughly the same in 2016.
Property investment is a long term business. Buying the right sort of property is vital. I have recently been speaking with a number of Grantham
landlords about the importance of a balanced portfolio, when buying and renting
out property. The balance between buying properties that offer good monthly
returns (high yields) but quite often offer poor capital growth (i.e. they
don't increase in value that much over the years compared with the average)
verses properties that do go up in value quicker but often offer a lower yield.
So, what type of properties have
performed best over the last few years in Grantham, especially in terms of
their capital growth?
When comparing what the average price of detached, semi
detached, terraced and flats were selling for back at the start of the
Millennium to the present. The results
are quite remarkably different, almost like a bag of Liquorice Allsorts,
as the different types of property have performed poles apart over the last 15
years:
·
Detached Houses
in 2000 were selling on average for £95,957 and so far in 2015, they
have been selling on average in Grantham for £256,717 a rise of 168%
·
Semi -Detached
Houses in 2000 were selling on average for £48,844 and so far in 2015, they
have been selling on average in Grantham for £142,994, a rise of 193%
·
Terraced Houses
in 2000 were selling on average for £43,024 and so far in 2015, they
have been selling on average in Grantham for £114,889 a rise of 167%
·
Flats and
Apartments in 2000 were selling on average for £39,000 and so far in 2015, they have been selling on average
in Grantham for £80,198 a
rise of 106%
Moving
forward, what should new and existing buy to let landlords do with this information?
Well, the questions I seem to be asked
on an almost daily basis by landlords are:
·
“Should I sell my
property in Grantham?”
·
“Is the time
right to buy another buy to let property in Grantham and if not Grantham,
where?”
·
“Are there any
property bargains out there in Grantham to be had?”
Many other Grantham landlords,
who are with both us and other Grantham
letting agents, like to pick up the phone or email us to discuss the
Grantham property market, how Grantham compares with its closest rivals
(Nottingham, Newark and Bingham), and hopefully answer the three questions
above. I don’t bite, I don’t do hard
sell, I will just give you my honest and straight talking opinion and look forward
to hearing from you.
