I had an interesting conversation with a local Plymouth
accountant the other day. He is quite an observant chap (I know this because I
have known him for a few years, but I suppose you have to be to be an
accountant!). Anyway, he mentioned a few things he had noticed recently in Plymouth,
one that Plymouth property prices had gone up in the last few years but nowhere
near the growth levels that were being achieved in central London, and
secondly, that he thought the number of for sale boards in Plymouth (and more
importantly ones with sold slips on them) had increased over the last couple of
years.
The rate of house price inflation in Plymouth continues to slow with growth of 2% in the 12 months to February compared to 5.9% just over six months ago, according to the latest Land Registry data. However, there is considerable local variation with house price growth ranging from 3% in Cornwall to 3.6% in Devon over the last 12 months.
Whilst Plymouth hasn’t seen the 20%+ per year in house price growth of London over the last couple of years, Plymouth has seen a sharp uplift in the number of properties sold throughout 2014 as base line demand for housing grows, which suggests there is substance to the recent pick-up in house price growth in the City. Since the Second World War in the UK, when the number of properties sold has grown, property values grew soon after. The 16.8% uplift in property transactions in Plymouth in 2014, compared to 2013, indicates the most significant recovery in house market activity in Plymouth (outside London) since 2007.
When you compare Plymouth with London, you could be looking at two different countries. In London, its mid/late teens house price to earnings ratios are impacting demand (i.e. the average property value is often 15 or 17 times the average wage in London, in fact in Knightsbridge the ratio can be 30 to 1). However, the number of people wanting to sell has dropped considerably, meaning that falling sales volumes combined with a general slowdown in activity in the run up to the General Election are resulting in lower mortgage approvals for home purchase.
Transactions are a great indicator for house prices. The acceleration in house price growth in London in the last two years was preceded by three years of rising transactions. A similar pattern is being registered in the Plymouth area, as pent up demand returns to the market supported by low mortgage rates and an improving economic outlook.
The rate of house price inflation in Plymouth continues to slow with growth of 2% in the 12 months to February compared to 5.9% just over six months ago, according to the latest Land Registry data. However, there is considerable local variation with house price growth ranging from 3% in Cornwall to 3.6% in Devon over the last 12 months.
Whilst Plymouth hasn’t seen the 20%+ per year in house price growth of London over the last couple of years, Plymouth has seen a sharp uplift in the number of properties sold throughout 2014 as base line demand for housing grows, which suggests there is substance to the recent pick-up in house price growth in the City. Since the Second World War in the UK, when the number of properties sold has grown, property values grew soon after. The 16.8% uplift in property transactions in Plymouth in 2014, compared to 2013, indicates the most significant recovery in house market activity in Plymouth (outside London) since 2007.
When you compare Plymouth with London, you could be looking at two different countries. In London, its mid/late teens house price to earnings ratios are impacting demand (i.e. the average property value is often 15 or 17 times the average wage in London, in fact in Knightsbridge the ratio can be 30 to 1). However, the number of people wanting to sell has dropped considerably, meaning that falling sales volumes combined with a general slowdown in activity in the run up to the General Election are resulting in lower mortgage approvals for home purchase.
Transactions are a great indicator for house prices. The acceleration in house price growth in London in the last two years was preceded by three years of rising transactions. A similar pattern is being registered in the Plymouth area, as pent up demand returns to the market supported by low mortgage rates and an improving economic outlook.
But before you get the Champagne out, while the uplift in
activity is welcome news, the number of Plymouth property sales in 2014 are
still 24.35% lower than the level seen in 2007 and property values are 10.96%
below the 2007 levels. The ongoing housing recovery is far from broad based and
remains focused on middle to higher value areas within Plymouth where
households have equity and find it easier to access mortgage finance. If you
want to know more about the Plymouth Property Market, please visit the Plymouth
Property Blog www.plymouthpropertyinsight.co.uk
or send me an email to stuart.donnington@donningtonstuart.co.uk
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