Gloucester Landlords invest £822 million in the Gloucester Property market

South West property asking prices jumped by more than £950 to £268,500 in February according to Rightmove, an increase of 0.4% from January and 5.6% 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 Gloucester 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 Gloucester’s continual housing supply shortage, (we only built 4,598 properties in the last decade but the population of Gloucester grew by 11,803), 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't find few suitable properties to make it worth their while going through the whole moving process.

Talking to some Gloucester landlords only last week, I said that I believe this is the new norm in the Gloucester 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 Gloucester.

When one looks at the historic data, in June 2008, there were 1,758 properties on the market in Gloucester compared to today’s 728. Should we be worried? Well in February 2010 there were only 803 properties for sale in Gloucester but seven months later in September 2010, this had jumped to 1352 properties, for it to drop to 602 properties in December 2013. The number of properties on the market is a cyclical thing in Gloucester, 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 .

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 Gloucester 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 Gloucester landlords have stepped in and bought property to rent out to them. Gloucester landlords have bought 4,041 properties over the last decade (investing approximately £822million buying those Gloucester rental properties), meaning there were at the last count, 8,012 Gloucester properties being privately rented out to tenants. Gloucester tenants are in fact getting a good deal as well, as average rents in Gloucester are only 4.6% above 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 Gloucester .. that is the only answer.

In the meantime, the demand from Gloucester tenants for Gloucester property is only set to rise over the coming years. If you want some advice and opinion on where (or not) to buy, please email me on neil.west@belvoir.co.uk or call me on 01452 387334