Cheltenham and Gloucester Property Market – should you be buying?

A number of landlords, first time buyers and investors have approached me recently, asking about the Cheltenham and Gloucester property markets. With all these headlines of massive increases in property values in the UK over the last 12 months, should we be worried we are about to have a price crash? 

I am of the opinion that over the last few years, whilst mortgages have been a little more difficult to obtain than the last decade of the 2000’s, this lack of mortgages has produced some pent up demand for property. Now we appear to be on the other side of the financial crisis , and the banks are more willing to lend, this is why sales, prices and first-time buyer numbers have improved so rapidly. It has been like opening a shaken can of fizzy pop. You get the initial fizz of activity, and then it flattens. What we're seeing is a relatively normal market correction, not a quick transition from a recession to a boom.

Property values in Cheltenham have risen by 6.8% in the last 12 months whilst in Gloucester they have risen by 10.3%. When I look at the South West as a whole, prices have risen by 8.7% and nationally by around 9.6% over the same 12 months. Compared to the boom years of 2001 to 2004, when property values increased by 22% in 2001, 24.8% in 2002 and 12.1% in 2003 in Cheltenham and Gloucester, I cannot see why some are concerned about an unsustainable price boom. I believe house prices are rising off a low base and talk of a housing bubble in relation to the national market is overdone. We are seeing continued exceptional property price growth in London combining with modest gains across other regions (including our own in the South West) and creating a picture of a broadening market recovery, and I expect prices to continue to rise steadily in the short term.

Speaking to others, Gloucester (although the same story is being told in Cheltenham), the issue isn’t house price inflation, but a lack realistically priced properties coming onto the market for sale, a lack of supply. In the months of May and June this year 102 and 110 properties respectively came on to the market for sale in Gloucester City centre.  A few months later in September only 65 properties came on to the market. So should you be buying a property in Cheltenham and Gloucester? 

Now is a good time to buy, provided you accept prices may fall again in a few years. It depends on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it. Cheltenham and Gloucester first time buyers preparing to take the plunge should bear these factors in mind. The biggest issue must be that buyers ensure they can take the hit of future interest rate rises and therefore, I ask the first time buyers of Cheltenham and Gloucester to make sure you'd be happy in your new home, because you could be stuck there in five years' time.

Landlords tend to buy for the long term, so these short term movements don’t tend to affect them as much. The lack of supply in Cheltenham and Gloucester of new properties coming onto the market indicates people wanting to buy have to move quickly, and don’t have the luxury of a few weeks to decide to view the property. However, my findings show that first time buyers and landlords in Cheltenham and Gloucester aren’t prepared to pay over the odds for a property to secure it. Maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Cheltenham and Gloucester property markets?