What does 2016 have in store for the Cheltenham Property Market?

Cheltenham house prices up or Cheltenham house prices down? ... and if so, by how much? Here are my thoughts for the 33,078 Cheltenham homeowners and landlords.

The average Cheltenham property is 3.3% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, then this is bad news for first time buyers as property affordability continues to decrease.

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Cheltenham landlords in my blog, but I believe the real issue in the Cheltenham property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in February 2011, 1,312 properties were for sale in Cheltenham .. today that figure is 767. On the face of it, this means there is less choice for Cheltenham buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Cheltenham house sellers.

Everything isn’t all doom and gloom though ... again back in February 2011, the average property in Cheltenham took 115 days to find a buyer .. latest figures state this has dropped to 80 days .. a drop of 30% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Cheltenham is the 3 bed, which only takes 63 days to find a buyer (on average) compared to the 1 bed, which takes 94 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Cheltenham in 2016?  I am going to suggest they will rise between 2% and 3% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015!