East
Midlands property asking prices jumped by more than £4,000 to £181,100 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 Melton 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 Melton’s continual housing supply shortage, (we only built 1,875
properties in the last decade but the population of Melton grew by 2,510), 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 Melton landlords only last week, I said that I believe this is the new
norm in the Melton 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
Melton.
When one
looks at the historic data, in April 2008, there were 720 properties on the
market in Melton compared to today’s 161. Should we be worried? Well in February 2010, there were only 281 properties
for sale in Melton but ten months later in December 2010, this had jumped to 378
properties, for it to drop to 138 properties in November 2013. The number of
properties on the market is a cyclical thing in Melton, 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 Melton 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 Melton
landlords have stepped in and bought property to rent out to them. Melton
landlords have bought 1,487 properties over the last decade (investing
approximately £328 million buying those Melton rental properties), meaning
there were at the last count, 3,054 Melton properties being privately rented
out to tenants.
Melton
tenants are in fact getting a good deal as well, as average rents in Melton 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 Melton .. that is the only answer.
In the
meantime, the demand from Melton tenants for Melton property is only set to
rise over the coming years. If you want some advice and opinion on where (or
not) to buy, please call me on 01664 569700.
Free Property
Investment workshops available in May – email charlotte.baker@belvoirlettings.com
for more information.
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