April Fools Day was no joke for some
landlords, as they rushed their buy to let property purchases throughout late
March to beat the extra 3% stamp duty George Osborne imposed on buy to let
properties after the 31st March 2016. Because some investors brought
forward their 2016 property purchases to save the extra tax, speaking to fellow
property professionals in Grantham, all of us have noticed, since the clocks
went forward, demand to buy in April and May from these landlords has eased.
Then we have the Brexit issue, which is also having a tempering
effect on the Grantham property market – although if you recall I wrote about
this a few weeks ago, and whilst an exit will have an effect – it won’t be the
end of the world scenario some commentators are suggesting. In another article
I wrote previously, I spoke of the growth rate of Grantham property values, and
whilst the rate of growth is slowing, Grantham property values are still 4.2%
higher year on year, albeit the growth rate month on month has started to
moderate when compared to the heady days of month on month rises of 2014 and
2015. Interestingly though, a very recent members survey of the Royal Institution
of Chartered Surveyors states that only 17% of members believed property values
would increase over the next Quarter compared to 44% at the end of 2015.
All this had led to increase in the number of properties for
sale. For example in the NG31 postcode, which covers all of Grantham, there were 369 properties for sale in the postcode in December (of which
62 came on to the market for the first time). In January, February and March, 403
properties came onto the market in the postcode district (or an average of 134
per month), meaning by end of the first Quarter, there were 492 properties
available for homeowners and landlords alike to buy in NG31 (i.e. a rise of 33.3% more properties for
sale). These figures are mirrored in neighbouring postcodes throughout the Grantham
area.
Nevertheless, I believe this easing of the Grantham property
market is a good thing, as investment landlords wont have to pay top dollar to
secure a property because of the lower competition. On the face of it, this
easing should be bad news for the 26,313 Grantham homeowners, but nothing could
be further from the truth. The majority of homeowners that move, move up market,
(i.e. from a flat to terrace/town house,
then a semi and then detached), so whilst last year you would have achieved
a top dollar figure for your property, you would would have had to have paid an
even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Grantham
Property Market!
However, all the signals suggest that whatever the aftermath of
the approaching EU referendum, in the long term, the disparity between demand for
Grantham property and the supply (i.e. the number of actual properties) will
still exercise a sturdy and definitive influence on the Grantham property
market. It would surprise me that if by 2021, whichever way we vote in late
June, assuming we don’t have another credit crunch or issues like a major world
conflict, property prices will be between 18% to 23% higher than they are
today.
