Is The Local Property Market Slowing?

Well, yes and no.  Let me explain...

 

The tightrope of being a buy-to-let landlord is a balancing act many do well at.  Talking to several local landlords they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figures show ‘real pay’ has dropped 1% in the last six months).  Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

 

Historically, during the summer months rents often increase as demand for property surges and tenants are normally prepared to pay more to secure the right property in the right location.  This is particularly good news for local landlords as average Oakham rents have been on a downward trend recently.

 On average, rents in Oakham for NEW tenants moving in have risen 1% for the month, taking overall annual Oakham rents 3.2% higher for the year

 However, some local landlords have also expressed their apprehensions about a slowing of the housing market in our area.  This negativity may be exaggerated, as the other side to property investing is ‘capital values’ (which will also be of interest to all homeowners as well as landlords).  I believe the Oakham property market has been trying to find some level of equilibrium since the New Year. 

 According to The Land Registry, Property values in Oakham are 12.36% higher than they were 12 months ago, rising by 2.56% last month alone!

 

 

NB, this reflects the sales of properties that took place in early spring 2017 and now are only exchanging and completing during the summer months.

 In reality, the number of Oakham properties on the market today has risen by 15.05% since the New Year and that will have a dampening effect on values.  As tenants have had less choice, buyers now have more choice and that will temper Oakham property prices as 2018 approaches.

Even with this uplift in the number of properties for sale in Oakham, property prices will remain resilient in the medium to long term.  The number of properties on the market today is well below the peak of summer of 2008, when there were 194 properties for sale compared to the current level of 107 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Oakham properties for sale will keep prices relatively high, and they will continue to stay at these levels for the medium to long term.

 Less people are moving than a few years ago, resulting in a shortage of property on the market as a whole.  This keeps prices relatively high, but it is also due to a number of other underlying reasons; Firstly, buy-to-let landlords tend not to sell their properties as often as ‘owner-occupiers’, thereby removing the property from the cycle. 

 

 Secondly, Stamp Duty is much higher compared to 10 years ago, triggering increased moving costs.  Next, with a scarcity of local authority housing, demand for private rental property remains buoyant. Then we have the UK’s maturing owner/occupier population, who are less likely to move.  

 

Add to that the lack of new homes being built in the country - the UK needs 240k houses building every year and we are currently only building 145k a year! 

 

And finally, the new mortgage rules introduced in 2014 stipulating how much a person can borrow on a mortgage has also curtailed demand.

 

There may still be some decent property deals to be had in the coming months.  I regularly post the 3 best deals on the Stamford and Rutland property market, irrespective of which local estate agent is marketing it.