April Fool’s Day was no joke for some
landlords, as they rushed their buy to let property purchases throughout late
March to beat the extra 3% stamp duty George Osborne imposed on buy to let
properties after the 31st March 2016. Because some investors brought forward
their 2016 property purchases to save the extra tax, speaking to fellow
property professionals in Canterbury, all of us have noticed, since the clocks
went forward, demand to buy in April and May from these landlords has eased.
Then we have the Brexit issue, which is
also having a tempering effect on the Canterbury property market – although if
you recall I wrote about this a few weeks ago, and whilst an exit will have an
effect – it won’t be the end of the world scenario some commentators are
suggesting. In another article I wrote previously, I spoke of the growth rate
of Canterbury property values, and whilst the rate of growth is slowing, Canterbury
property values are still 9% higher year on year, albeit the growth rate month
on month has started to moderate when compared to the heady days of month on
month rises of 2014 and 2015. Interestingly though, a very recent members
survey of the Royal Institution of Chartered Surveyors states that only 17% of
members believed property values would increase over the next Quarter compared
to 44% at the end of 2015.
All this had led to increase in the number of
properties for sale. For example, in the CT1 postcode, which mainly comprises
of Canterbury South and the city centre, there were 278 properties for sale in
the postcode in December (of which 49 came on to the market for the first
time). In January, February and March, 227 properties came onto the market in
the postcode district (or an average of 75 per month), meaning by end of the
first Quarter, there were 295 properties available for homeowners and landlords
alike to buy in CT1 (i.e. a rise of 6.1% more properties for sale). The reason
this is important is because I expected the number to be slightly lower because
of the normal Spring rush in the property market. Interestingly, these figures
are mirrored in neighbouring postcodes throughout the Canterbury area.
Nevertheless, I believe this easing of the Canterbury
property market is a good thing, as investment landlords wont have to pay top
dollar to secure a property because of the lower competition. On the face of
it, this easing should be bad news for the 20,317 Canterbury homeowners, but
nothing could be further from the truth. The majority of homeowners that move,
move up market, (i.e. from a flat to terrace/town house, then a semi and then
detached), so whilst last year you would have achieved a top dollar figure for
your property, you would have had to have paid an even higher top dollar to
secure the one you wanted to buy. The Swings and Roundabouts of the Canterbury
Property Market!
However, all the signals suggest that
whatever the aftermath of the approaching EU referendum, in the long term, the disparity
between demand for Canterbury property and the supply (i.e. the number of
actual properties) will still exercise a sturdy and definitive influence on the
Canterbury property market. It would surprise me that if by 2021, whichever way
we vote in late June, assuming we don’t have another credit crunch or issues
like a major world conflict, property prices will be between 20% to 23% higher
than they are today.
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