What does the Telford property market really have in store for 2016?
Telford house prices up or Telford house prices down? … and if so, by how much? I’m not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight-talking opinion – so here are my thoughts for the 66,000 (on last count!) Telford homeowners and landlords.
Overall there’s been a 17% drop in the number of properties being advertised in Telford, when comparing January 2015 listings against January 2016 listings. On the face of it, this means there’s less choice for Telford buyers – but it also means with a restricted supply of properties for sale… it keeps property prices high for Telford house sellers. The average Telford property is around 0.5% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (i.e. consumer/retail prices are dropping) and average salary growth is only around 2.5% pa. (Don’t forget, you also get your annual yield of around 6% on average in Telford.) Some commentators have said the higher stamp duty taxes announced a few months ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Telford landlords in my blog.
I believe the real issue in the Telford property market today is the shortage of property to buy. I think from the Spring onwards, we will see an influx of professional landlords selling stock in light of the tax changes… I read a clipping a couple of days ago in The Times which suggested that the National Landlords Association had carried out a survey, and expect to see a dramatic sell off of 500,000 properties in the next 12 months, followed by another 100,000 sold each year until 2021. Half a million properties in a year would double the usual supply of homes! Clearly, 500,000 tenanted properties (throughout the UK) would need to be replaced. Unfortunately George Osbornes “crackdown” on landlords, is likely to sting landlords whom are highly leveraged or unprepared, however for those looking to grow their portfolio there could be an opportunity on the horizon.
So, where does that leave us in Telford in 2016? Everything isn’t all doom and gloom though …due to the current lack of stock latest figures state houses are selling on average 26 days quicker than they did in the previous year .. a drop of 12% in how long it takes to find a buyer.! So, back to the question everyone is asking…. What will happen to property values in Telford in 2016? I am going to suggest that they will only rise slightly between 1% and 2% … nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For me, this year is for those whom haven’t really had an opportunity to secure a “decent” buy to let in the past couple of years.
For more thoughts, opinions and views on the Telford property market, visit my blog www.habitatlettings.co.uk/blog