Friday, 26 December 2014

Canterbury Property Market 2014

A number of landlords, who own property in Canterbury, have made contact with me recently asking for my thoughts on the future of the buy to let market in Canterbury. In previous articles, we have talked about Canterbury’s history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values are now 4.3% higher in Canterbury than they were a year ago. Good news all round, but when you consider property values in the city have previously dropped by 17.8% between February 2008 and April 2009, this is not as good as the media would have you believe.  It should be no great surprise to hear that Canterbury property values are starting to slow up as we head in to the New Year.  Property values in the city were growing at 1.3% a month in the Spring months of 2014, but in Autumn months they slowed down considerably to no more than 0.1% a month.

The reality is we have had nearly two years of decent market conditions in Canterbury (as values have increased by 14% in that timeframe) but now all that pent up demand is starting to fade. The big question moving forward is whether the Canterbury market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Canterbury property market.

Looking at the UK as a whole, because we can’t look at Canterbury in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London where we were seeing rises of 2.5% to 3.5% a month in London property values), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Canterbury, long term property values which track peaks and troughs are more helpful to landlord investors. The real life questions I seem to be asked on an almost daily basis by landlords are:-

·        “Should I sell my property in Canterbury, or even buy another?”

·        “Is the time right to buy another buy to let property in Canterbury and if not Canterbury, where?”

·        “Are there any property bargains out there in Canterbury?”

Many other Canterbury landlords, both who are with us and many who are with other  Canterbury letting agents, like to pop in for a coffee to  discuss the Canterbury property market, how Canterbury compares with its closest rivals (Dover, Maidstone, Thanet and Herne Bay), and hopefully answer the three questions above. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

In the meantime may I take this opportunity to wish you all a prosperous 2015.

No comments:

Post a comment