Prices up, prices down,
prices stable .. the newspapers are full of good news, bad news and
indifferent news about the Brit’s favourite subject after the
weather .. the property market. The thing is the UK does not have one
housing market. Instead, it is a patchwork of mini property markets
all performing in a different way. At one end of scale is London,
which has seen average prices grow in the last twelve months by a
shade under 19% (and again that is an average because some Borough’s
in London have risen by 26%) whilst in the land of Daffodils , by
contrast, Wales only saw a 2% increase in property values (although
in the Merthyr Valleys they dropped by over 11%).
Well we can’t ignore the
rest of the UK, and we can’t forget that the Chancellor’s Stamp
Duty reforms have polarised the London property markets above
£1,000,000 because at the top end of the market, punitive Stamp Duty
charges will dampen demand further. While the Bank of England warned
of the growing London property price bubble in the Spring of 2014,
even talk of a recovery in some areas was premature. In 2015,
irrespective of where you are in the UK, one story will unite the
patchwork quilt of markets – really slow property value growth.
But what about Cheltenham?
Well, we haven’t had the December figures from the Land Registry
yet but the last few months’ activity and prices achieved would
suggest neither house price growth nor drops. In fact, most sellers
are buyers anyway, so if you need to take less for yours, you won’t
have to pay as much for the one you want to buy ... and that is good
news for everyone as most move up market when they move. This is even
better for landlord investors, as they can bag a bargain as well.
The question you should be
asking though is not only is what happening to property prices, but
which price band exactly is selling? I like to keep an eye on the
property market in Cheltenham on a daily basis because it enables me
to give the best advice and opinion on what (or not ) to buy in
Cheltenham.
If you look at Cheltenham
and split the property market into four equalled sized (into terms of
households) price bands. Each price band would have around 25% of the
property in Cheltenham, from the lowest in value (the bottom 25% )
all the way through to the highest 25% (in terms of value). Over the
last two months (63 days to be precise), in the lowest quartile,
(those with asking prices under £145k) 126 properties have come onto
the market in Cheltenham and 22.2% of them (28 properties have a
buyer and sold stc. The next quartile, between £145k to £215k, of
the 195 properties that come on to the market, 34.3% of them (67
properties) have a buyer. The £215k-£340k price range has seen 213
properties come on to the market, and 27.2% of the properties have a
buyer (58 properties). The most expensive 25%, the £340k plus range,
has seen 44 of the 169properties that came on to the market find
buyers (26%). Fascinating don’t you think?
The
next three months’ activity will be crucial in understanding which
way the market will go this year and I honestly
believe we will not see any house price growth or drops this side of
the election. Election or no election, people will always need a roof
over their head and that is why the property market has rode the
storms of Oil crisis in the 1970’s, the 1980’s depression, Black
Monday in the 1990’s, and latterly the Credit Crunch together with
the various house price crashes of 1973, 1987 and 2008.
And why? Because of
Britain’s chronic lack of housing will prop up house prices and
prevent a post spike crash. ... there is always a silver lining when
it comes to the property market!
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