Local homeowners see property values rise by more than 256% over the last 20 years.

In 2018, UK interest rates are expected to stay low - even with the additional 0.25% increase that is expected in May or June. That rise will add just over £20 to the typical £160,000 tracker mortgage, although with 57.1% of all borrowers on fixed rates, it will probably go undetected by most buy-to-let landlords and homeowners.

It’s also unlikely we will see any more interest rate rises due to the fragile nature of the British economy and the Brexit challenge. Even though mortgages will remain inexpensive, with retail price inflation outstripping salary rises, it will still very much feel like a heavy weight to some households.

In 2017, the Stamford and Rutland housing market was a little more subdued than in 2016, and that will continue into 2018. Property ownership is a medium to long-term investment, so looking at that long-term time frame the average Rutland homeowner who bought their property 20 years ago has seen its value rise by more than 256%. 

The majority of that historic gain in values has come from property market growth, although some of that will be homeowners directly adding value by modernising, extending or developing their home.

The following chart compares the different property types in Oakham and the profit made by each type…



Looking at the factors that could affect future local and national house price growth/profit; one important element has to be the building of new homes. This has picked up in 2017 with 217,350 homes coming on to the UK housing ladder in the last year (a 15% increase on the previous year’s figures of 189,690). 

Another factor that will affect property prices in 2018 is the likely shift in the balance of power between buy-to-let landlords and first-time buyers, tipping more towards first-time buyers. The Council of Mortgage Lenders expects the number of buy-to-let mortgages to drop by 34% from levels seen in 2015. This is because of taxes being increased recently on buy-to-lets and harder lending criteria for buy-to-let mortgages. First time buyers will also be helped by The Chancellor eradicating Stamp Duty for all properties up to £300,000 bought by first-time buyers in the recent budget.

Buy-to-let landlords will have to work smarter in the future to continue to make decent returns from their investments. Even with the tempering of house price inflation in 2017, most buy-to-let landlords and homeowners are still sitting on a copious amount of growth from previous years.

However, to ensure this growth continues will require landlords and homeowners to strategically manage their investments and to make informed decisions in relation to return on investments, yield and capital growth requirements over the short, medium and long-term.

If you would like such advice, speak with your current letting agent, or feel free to drop me a line.


David Crooke 
Owner, MD
 david@upp-property.co.uk / 01572 725 825