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.
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