As the trees turn from green to hues of red and brown, the Canterbury
property market has a confident feel to it. With the underlying fundamentals of
a continued lack of properties being built, a shortage of properties (both in
terms of quantity and quality) coming to the market and the continued low
mortgage rate environment, buyer enquiries from first time buyers and buy to
let landlords is strong and motivation is even stronger, given those
inexpensive lending rates and general demand caused by under supply.
Now of course, there are a few potential hurdles coming
towards us in the coming months that could affect the Canterbury (and UK)
property market. Mrs. May has yet to get her teeth into Brexit negotiations and
we don’t know what the US Presidential elections might do to the money markets
around the world, meaning that on the run up to Christmas, some savvy buyers
may take advantage of the lack of certainty by making cheeky offers, but I
don’t believe these will have a huge impact on property values (like the 2008
Credit Crunch).
You see, property ownership, whether it’s for yourself as a
homeowner or buy to let landlord, is a long-term investment. In fact, focusing
on buy to let, 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. Well, as the Politician
Edmund Burke said in the 18th century, "Those who don't know history are
destined to repeat it." .. in other words, to see the future you must consider
the past.
Since the Millennium, the housing market has had everything
thrown at it. The recent Brexit, last year’s General Election, the near melt down
of the World Economy with the Credit Crunch, The Dot Com boom and bust, the
housing market crisis in 2008, the housing boom of 2001 to 2004 .. the list
goes on. In fact, here is a graph (courtesy of the Land Registry) of average
Property values since the Millennium in the Canterbury City Council area.
Even though we had the Dot Com bubble burst in 2000, two
years later in January 2002, property values in the Canterbury City Council
area have risen from £83,500 (in Jan 2000) to £111,500 .. and kept rising to
October 2007, when they peaked at £212,700. Then we had the Credit Crunch and
property prices continued to fall until June 2009, where they averaged £176,300
.. but look where they are now… £264,200
The point I am trying to get across is long term future property
values are more helpful to landlord investors than the month by month headline
grabbing micro movements in the property market. Look at the graph and you will see the growth
in property values is an upward trend BUT, the average darts about as each
month goes by. So, don’t watch the
property indexes and panic if values drop next month or the month afterwards,
because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail,
values always dropped slightly around Christmas, but people will always need a
roof over their heads, and if they can’t buy and the council aren’t building
anymore .. only buy to let landlords can
meet that demand.
Canterbury landlords are being hit in the pocket with the
new up and coming taxation rules and yes we might have a bumpy ride on the run
up to Christmas (because of the points raised earlier), Brexit or no Brexit, but
the trend will be a slow and steady upward momentum of property values, demand
for rental properties and yields in the Canterbury property market into 2017
and beyond.
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